Farm Size and Productivity : A "Direct-Inverse-Direct" Relationship

This paper proposes a new interpretation of the farm size-productivity relationship. Using two rounds of the Ethiopian Rural Household Survey, and drawing on earlier work on five countries in Sub-Saharan Africa, the paper shows that the relationshi...

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Main Authors:	Savastano, Sara, Scandizzo, Pasquale L.
Format:	Working Paper
Language:	English English
Published:	World Bank, Washington, DC 2017
Subjects:	AGRICULTURAL PRODUCTIVITY FOOD SECURITY FIRM SIZE RURAL HOUSEHOLD SURVEY LAND POLICY
Online Access:	http://documents.worldbank.org/curated/en/971111498654799959/Farm-size-and-productivity-a-direct-inverse-direct-relationship http://hdl.handle.net/10986/27630

id	okr-10986-27630
recordtype	oai_dc
spelling	okr-10986-276302021-06-08T14:42:47Z Farm Size and Productivity : A "Direct-Inverse-Direct" Relationship Savastano, Sara Scandizzo, Pasquale L. AGRICULTURAL PRODUCTIVITY FOOD SECURITY FIRM SIZE RURAL HOUSEHOLD SURVEY LAND POLICY This paper proposes a new interpretation of the farm size-productivity relationship. Using two rounds of the Ethiopian Rural Household Survey, and drawing on earlier work on five countries in Sub-Saharan Africa, the paper shows that the relationship between farm size and productivity is neither monotonic nor univocal. Most previous studies that tested the inverse farm size-productivity relationship used ordinary least squares estimation, therefore reporting parameter estimates at the conditional mean of productivity. By expanding these important findings to consider the entire distribution of agricultural productivity, the analysis finds sign switches across the distribution, pointing to a “direct-inverse-direct” relationship. Less productive farmers exhibit an inverted U-shape relationship between land productivity and farm size, while more productive farmers show a U-shape relationship that reverses the relationship. In both cases, the relationship points toward a threshold value of farm size; however, the threshold is a minimum for the less productive farmers and a maximum for the more productive ones. To the left of the threshold, for very small farmers, the relationship between productivity and farm size is positive; for the range of middle farm size, the relationship is negative; and to the right of the threshold, the relationship is direct (positive) again. From a policy perspective, these findings imply that efficiency-enhancing and redistributive land reform should consider farm size in the proper context of the present and potential levels of agricultural productivity. The results and their policy implications underline the relevance of the most recent efforts of the international development community to collect more reliable georeferenced data on farm size and agricultural productivity. 2017-07-19T15:37:37Z 2017-07-19T15:37:37Z 2017-06-28 Working Paper http://documents.worldbank.org/curated/en/971111498654799959/Farm-size-and-productivity-a-direct-inverse-direct-relationship http://hdl.handle.net/10986/27630 English en Policy Research Working Paper;No. 8127 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Ethiopia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English English
topic	AGRICULTURAL PRODUCTIVITY FOOD SECURITY FIRM SIZE RURAL HOUSEHOLD SURVEY LAND POLICY
spellingShingle	AGRICULTURAL PRODUCTIVITY FOOD SECURITY FIRM SIZE RURAL HOUSEHOLD SURVEY LAND POLICY Savastano, Sara Scandizzo, Pasquale L. Farm Size and Productivity : A "Direct-Inverse-Direct" Relationship
geographic_facet	Africa Ethiopia
relation	Policy Research Working Paper;No. 8127
description	This paper proposes a new interpretation of the farm size-productivity relationship. Using two rounds of the Ethiopian Rural Household Survey, and drawing on earlier work on five countries in Sub-Saharan Africa, the paper shows that the relationship between farm size and productivity is neither monotonic nor univocal. Most previous studies that tested the inverse farm size-productivity relationship used ordinary least squares estimation, therefore reporting parameter estimates at the conditional mean of productivity. By expanding these important findings to consider the entire distribution of agricultural productivity, the analysis finds sign switches across the distribution, pointing to a “direct-inverse-direct” relationship. Less productive farmers exhibit an inverted U-shape relationship between land productivity and farm size, while more productive farmers show a U-shape relationship that reverses the relationship. In both cases, the relationship points toward a threshold value of farm size; however, the threshold is a minimum for the less productive farmers and a maximum for the more productive ones. To the left of the threshold, for very small farmers, the relationship between productivity and farm size is positive; for the range of middle farm size, the relationship is negative; and to the right of the threshold, the relationship is direct (positive) again. From a policy perspective, these findings imply that efficiency-enhancing and redistributive land reform should consider farm size in the proper context of the present and potential levels of agricultural productivity. The results and their policy implications underline the relevance of the most recent efforts of the international development community to collect more reliable georeferenced data on farm size and agricultural productivity.
format	Working Paper
author	Savastano, Sara Scandizzo, Pasquale L.
author_facet	Savastano, Sara Scandizzo, Pasquale L.
author_sort	Savastano, Sara
title	Farm Size and Productivity : A "Direct-Inverse-Direct" Relationship
title_short	Farm Size and Productivity : A "Direct-Inverse-Direct" Relationship
title_full	Farm Size and Productivity : A "Direct-Inverse-Direct" Relationship
title_fullStr	Farm Size and Productivity : A "Direct-Inverse-Direct" Relationship
title_full_unstemmed	Farm Size and Productivity : A "Direct-Inverse-Direct" Relationship
title_sort	farm size and productivity : a "direct-inverse-direct" relationship
publisher	World Bank, Washington, DC
publishDate	2017
url	http://documents.worldbank.org/curated/en/971111498654799959/Farm-size-and-productivity-a-direct-inverse-direct-relationship http://hdl.handle.net/10986/27630
_version_	1764465594177945600

Farm Size and Productivity : A "Direct-Inverse-Direct" Relationship

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