Economies of Size and Scale in Agriculture: An Interpretive Review of Empirical Measurement

Hallam, Arne

doi:10.2307/1349565

Cited by 63 publications

(39 citation statements)

References 40 publications

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“…Economic size as measured by total output has a positive effect on ef ciency in Hungary but not in Bulgaria-which suggests that larger family farms are more ef cient than smaller ones. This is consistent with the general wisdom that the average cost curve in agriculture is L-shaped (Hallam, 1991).…”

Section: Family Farmssupporting

confidence: 91%

Human Capital, Gender and Organisation in Transition Agriculture: Measuring and Explaining the Technical Efficiency of Bulgarian and Hungarian Farms

Mathijs¹,

Vranken²

2001

Post-Communist Economies

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Based on survey data on Bulgarian and Hungarian crop and dairy farms, a double-peaked distribution of technical efficiency is observed. Several factors explain differences in efficiency. Human capital matters not only through age and education but also through gender, as farms with a higher proportion of women are more efficient. Contracting with upstream processors increases efficiency through facilitating the adoption of technology and access to credits. The superiority of family farms over corporate farms is confirmed for crops but not for dairy produce.

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Section: Family Farmssupporting

confidence: 91%

Human Capital, Gender and Organisation in Transition Agriculture: Measuring and Explaining the Technical Efficiency of Bulgarian and Hungarian Farms

Mathijs¹,

Vranken²

2001

Post-Communist Economies

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“…A factor productivity can be improved by its scale of use (economies of scale), but the increase in farm size may also unlock opportunities to capitalize on new techniques, technologies and practices that can improve productivity (economies of size). This distinction between economies of size and economies of scale (Hallam, 1991) supported the rationale that smaller farms were more likely to gain competitiveness by investing to improve their technical efficiency (adopting good technologies and/or practices) rather than by increasing their size (Sheng et al, 2014;Singbo and Larue, 2014). The evidence from our beef cattle farms suggested that the increase in size had entailed taking on equipment and organizational practices (fully mechanized forage harvesting and distribution chain) that had no effect on productivity (no economies of size), which had incentivized the farmers to grow bigger in a move to amortize these new technologies (economies of scale).…”

Section: Discussionmentioning

confidence: 94%

Productivity and technical efficiency of suckler beef production systems: trends for the period 1990 to 2012

Veysset

Lherm

Roulenc

et al. 2015

Animal

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Over the past 23 years (1990 to 2012), French beef cattle farms have expanded in size and increased labour productivity by over 60%, chiefly, though not exclusively, through capital intensification (labour-capital substitution) and simplifying herd feeding practices (more concentrates used). The technical efficiency of beef sector production systems, as measured by the ratio of the volume value (in constant euros) of farm output excluding aids to volume of intermediate consumption, has fallen by nearly 20% while income per worker has held stable thanks to subsidies and the labour productivity gains made. This aggregate technical efficiency of beef cattle systems is positively correlated to feed self-sufficiency, which is in turn negatively correlated to farm and herd size. While volume of farm output per hectare of agricultural area has not changed, forage feed self-sufficiency decreased by 6 percentage points. The continual increase in farm size and labour productivity has come at a cost of lower production-system efficiency -a loss of technical efficiency that 20 years of genetic, technical, technological and knowledge-driven progress has barely managed to offset.

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“…The "L" shaped curve implies that agriculture is a quasi-constant cost industry. The presence of increasing returns to size at low or moderate levels, particularly for livestock operations (Hallem, 1991), implies that firms of this size must either leave the industry or grow to a size consistent with minimum long run average cost. Therefore, growth infirm size is a natural consequence of economies of size.…”

Section: Technologymentioning

confidence: 99%

Economics of Structural Change in Agriculture

Goddard

Weersink

Chen

et al. 1993

Canadian J Agri Economics

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Economies of Size and Scale in Agriculture: An Interpretive Review of Empirical Measurement

Cited by 63 publications

References 40 publications

Human Capital, Gender and Organisation in Transition Agriculture: Measuring and Explaining the Technical Efficiency of Bulgarian and Hungarian Farms

Human Capital, Gender and Organisation in Transition Agriculture: Measuring and Explaining the Technical Efficiency of Bulgarian and Hungarian Farms

Productivity and technical efficiency of suckler beef production systems: trends for the period 1990 to 2012

Economics of Structural Change in Agriculture

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