Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249690 
Year of Publication: 
2021
Series/Report no.: 
IFS Working Paper No. W21/35
Publisher: 
Institute for Fiscal Studies (IFS), London
Abstract: 
This paper shows that using yields may not be informative of the relationship between farm size and productivity in the context of small-scale farming. This occurs because, in addition to productivity, yields pick up size-dependent market distortions and decreasing returns to scale. As a result, a positive relationship between farm productivity and land size may turn negative when using yields. We illustrate the empirical relevance of this issue with microdata from Uganda and show similar findings for Peru, Tanzania, and Bangladesh. In addition, we show that the dispersion in both measures of productivity across farms of similar size is so large that it renders farm size an ineffective indicator for policy targeting. Our findings stress the need to revisit the empirical evidence on the farm size-productivity relationship and its policy implications.
Subjects: 
Farm size
productivity
yields
land markets
distortions
agriculture
policy
JEL: 
O12
O13
Q12
Q15
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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