the political economy of agriculture for development today the small versus large scale debate revisited the role of agriculture in economic development and the development politics of promoting smallholder versus large scale agriculture have both been at the center of a long lasting and controversial debate using an innovative methodology which combines a value chain approach with input output analysis the growth multipliers and productivity of both farm types in guatemala are analyzed results show that smallholder agriculture has the same potential to stimulate output growth as large scale agriculture smallholder value chains include mainly informal sectors and create more jobs than commercial agriculture therefore a reorientation of agricultural and land policies toward small scale food producers and within a comprehensive policy of integrated rural development is not only necessary in terms of social equity but also for boosting economic development

optimal farm size in an uncertain land market the case of kyrgyz republic this article applies a real options model to the problem of land development making use of the 1998 2001 kyrgyz household budget survey we show that when the hypothesis of decreasing return to scale holds the relation between the threshold value of revenue per hectare and the amount of land cultivated is positive in addition the relation between the threshold and the amount of land owned is positive in the case of continuous supply of land and negative when there is discontinuous supply of land the direct consequence is that in the first case smaller farms will be more willing to rent land and exercise the option where in the second case larger farms will exercise first the results suggest three main conclusions i the combination of uncertainty and irreversibility is an important factor in land development decisions ii farmer behavior is consistent with the continuous profit maximization model and iii farming unit revenue tends to be positively related to farm size once uncertainty is properly accounted for

the impact of state government subsidies and tax credits in an emerging industry ethanol production 1980 2007 this article examines the effects of state economic development incentives in the emerging ethanol industry we compiled data on ethanol production capacity and subsidies tax credits for all states for the years 1980 2007 a period that covers the complete emergence of the biofuel industry in the united states importantly this time period was characterized by the passage of several state level subsidies and tax breaks aimed at increasing ethanol production hence this panel documents a substantial amount of within state variation in policies from which to identify an effect we find that some incentives directed at ethanol production have a significant effect on a state s production capacity

incentives and moral hazard plot level productivity of factory operated and outgrower operated sugarcane production in ethiopia we investigate the unique contractual arrangement between a large ethiopian sugar factory and its adjacent outgrower associations the only significant difference between the sugarcane production on the factory operated sugarcane plantation and on the outgrower operated plots is the remuneration system and thus the incentives to the workers we compare the productivity of the factory operated plantation with the outgrower operated plots based on a new cross sectional plot level data set that includes all plots that are operated by the sugar factory and its adjacent outgrower associations as sugar cane production depends on various exogenous factors that are measured as categorical variables e g soil type cane variety etc we estimate the production function by a nonparametric kernel regression method that takes into account both continuous and categorical explanatory variables without assuming a functional form and without imposing restrictions on interactions between the explanatory variables in order to obtain meaningful productivity measures we impose monotonicity in input quantities using the constrained weighted bootstrapping cwb method our results show that outgrower operated plots have ceteris paribus a statistically and economically significantly higher productivity than factory operated plots which can be explained by outgrowers having stronger incentives to put more effort into their work than the employees of the sugar factory

farm size land yields and the agricultural production function an analysis for fifteen developing countries abstract the paper analyzes the relationship between factor inputs land yields and labor productivity for farms of different size on the basis of fao farm management data for 15 developing countries for all but three countries a strong negative correlation is found between farm size on the one side and factor inputs and yields per hectare on the other the fitting of unconstrained production functions to the above data suggests that in only few cases the decline in yields for increasing farm size can be attributed to decreasing returns to scale the higher yields observed in small farms are mainly to be ascribed to higher factor inputs and to a more intensive use of land therefore where conspicuous labor surpluses exist the superiority of small farming provides solid arguments in favor of land redistribution such an agrarian reform would determine higher output higher labor absorption and a more equitable income distribution thus contributing in a decisive manner to the alleviation of rural poverty the paper also provides estimates of cross sectional production functions for the 15 countries analyzed empirical relations are found between the output elasticities of land labor and intermediate inputs and physical indicators of their scarcity the paper concludes by proposing a simple method for deriving a long term production function for agriculture

measurement of competitiveness in smallholder livestock systems and emerging policy advocacy an application to botswana farm level cross sectional data of 556 randomly selected livestock producers were used to investigate the competitiveness of smallholder beef farmers in botswana the results show the presence of inefficiency with about 74 of the variation in actual profit from maximum profit profit frontier between farms mainly arising from differences in farmers practices rather than random variability further the mean profit efficiency level of 0 58 suggests that there is a substantial scope to improve beef profitability in botswana significant profit efficiency drivers include among others education distance to market herd size access to information and access to income from crop production considering the importance of livestock sector for wealth creation and poverty eradication in the rural areas where poverty is more pronounced there is a need for appropriate development strategies and policies directed towards addressing these factors in particular there is need to invest in market infrastructure in order to improve market access hence profit efficiency of smallholder livestock farmers

the firm size farm size and transaction costs the case of hazelnut farms in turkey this study analyzes the effects of transaction costs on the size of hazelnut farms in turkey the study finds that higher land slope and higher variance of rain as transaction cost increasing natural effects lead to smaller hazelnut land holdings high slope and weather variation can increase the costs of monitoring the laborers make moving inputs or output up and down harder limit the use of machinery and reduce contractual performance of labor contracts for farm production functions land is a complex input with measurable interactions with nature contrary to common production theory approaches that take natural properties of land as given the study develops a production function that incorporates natural properties such as slope and rain variance the study utilizes two separate data sets for the estimations the first data set explores the characteristics of hazelnut farmers while the second one analyzes the regional characteristics of hazelnut farms

evaluating the impact of mexico s land reform on agricultural productivity abstract in mexico land reform law and the terms of credit access suggest a priori that farmers in the land reform ejido sector should be less productive than private farmers analysis of studies comparing the productivity of individual ejido parcels and small private holdings however reveals no significant difference between the two sectors between tenure categories there is a de jure but not a de facto difference in small farmers control over resources partly because farmers circumvent restrictions implicit in the land reform the case for formal privatization of the ejido sector may be less compelling than has been suggested

agrarian structures urbanization and inequality summary this study examines the impact of agrarian structures on income inequality over the long run first it exhibits the relationship between land and income distribution by developing a theoretical model based on harris and todaro 1970 and lewis 1954 high land inequality increases income gini coefficients in the urban sector as well as the rural sector not only by creating congestion in the urban subsistence sector but also by feeding the growth of the urban reserve army of labor which pulls down the wages in the urban capitalist sector next the study investigates the empirical relationship between land inequality level of urbanization and income inequality using cross country datasets the estimation results support the theoretical model and indicate that the level of land inequality has a significant impact on determining the level of urbanization and urban and overall income inequalities moreover the analysis finds that overurbanization increases income inequality the empirical analysis controls for institutional factors like education inequality and the level of democracy the results present a stronger evidence on the land inequality s influence through urbanization than through education and democracy these results suggest that policymakers should have a broader view as to the importance of agrarian policies a progressive land reform or and subsidies protecting small peasantry can also reduce urban income inequality and poverty over the long run

land reform as commenced business the evidence against stopping abstract in the new paradigm institutions are long term endogenous thus the aims of land reform must be compatible with replace or substitute for initial incentives and power structures many reforms e g compulsory collectives are not redefinition of land reform is therefore needed yet the case for private land redistribution with ceilings remains the inverse relationship rests firmly on lower cost labor transactions in small farms though large but competitive transport or processing firms which enjoy lower cost capital transactions may be needed crucial is the impact of the postreform structure on livelihoods especially for the growing rural majority near landless workers new style market based reforms have potential probably best combined with old style ceilings substantial compensation with urban taxpayers sharing costs alternative off farm prospects and progressive taxes on large landholdings or bequests

modern value chains and the organization of agrarian production empirical studies of agrarian production in developing countries often find that small farms possess a productivity advantage over larger farms eswaran and kotwal 1986 famously derive this inverse farm size productivity relationship from the structure of agrarian production the focal prediction of their model is that in otherwise equivalent economies a more egalitarian land distribution raises both output and producer welfare the traditional spot procurement system implicit in the eswaran and kotwal model however diverges fundamentally from modern contractual procurement practices we therefore develop a new model of agrarian production in order to determine whether the introduction of a modern value chain alters the welfare effects of land redistribution the inverse farm size productivity relationship persists in our model but we find that more egalitarian land distribution leads to nonmonotonic changes in producer welfare we also find that the introduction of a modern sector can harm the laboring classes

the future of small farms trajectories and policy priorities summary while smallholder development has in the past led to reductions in poverty and hunger does this still apply in today s more globalized world this paper reviews the debates on the contemporary role of agriculture in development and the case for small farms in light of the rise of supermarkets lower commodity prices and liberalized trade agricultural research funding environmental change hiv aids and changing policy ideas although the answers vary greatly by context for many low income countries smallholder development remains a key option the policy agenda however has changed in addition to providing public goods the growing challenge is to overcome market failures which is largely a matter of institutional innovation

south african land policy the legacy of history and current options abstract the highly dualistic farm structure of south africa and the low productivity of native african farmers have been the result of systematic distortions in land allocation output markets the provision of infrastructure agricultural credit and services the dualistic structure did not emerge because of genuine economies of scale in the large commercial sector other countries in latin america and africa that once supported a dualistic farm size structure through similar distortions have either implemented large scale land reforms or have experienced decades of peasant revolts and civil war the paper compares these international experiences to south africa and outlines judicial and market assisted approaches to south african land reform

the future of small farms summary interest in agriculture for growth and poverty reduction reawakened in the early 2000s made all the keener by the sudden rise in cereals prices on world markets in 2007 08 but is it still possible to drive agricultural growth through small farms as happened in the green revolution whether small farms have a future was debated at a workshop held in wye united kingdom in june 2005 it concluded that small farm development is not just desirable for poverty reduction but also feasible even in changing circumstances and particularly those of more concentrated supply chains with more demanding buyers that said while much that needs to be done is straightforward such as provision of public goods fostering the institutional innovations to allow small farmers to deal with the emerging supply chains will require patient work tailored to specific circumstances the future of all smallholders may well not lie in farming but the measures to stimulate the rural nonfarm economy and provide jobs for those leaving farming a favorable rural investment climate provision of public goods institutional development are largely the same as those for agricultural development as well

on price risk and the inverse farm size productivity relationship abstract the oft observed inverse relationship between farm size and productivity has elicited several explanations having important policy and theoretical implications using advances in the analysis of price risk effects on producer behavior and a simple two period model of an agricultural household that both produces and consumes under price uncertainty at the time labor allocation decisions are made this paper demonstrates analytically that a non degenerate land distribution and price risk can together produce an inverse relationship even absent any of the more common explanations empirical evidence from madagascar confirms the plausibility of this intuitive explanation for the phenomenon

economic efficiency in polish peasant farming an international perspective one decade following the market transition in poland the agricultural sector still exhibits low productivity policy makers often describe the sector as fragmented and inefficient to understand why small scale farming in poland is inefficient despite longstanding secure property rights a survey of economic efficiency in southern agriculture was conducted and compared with limited studies of efficiency in poland the most important issues particularly related to farm size and efficiency are price risk uncertainty and low rural development comparative studies across regions with varying institutional arrangements and economic organization are powerful but must be made carefully and critically

is there a farm size productivity relationship in african agriculture evidence from rwanda whether the negative relationship between farm size and productivity that is confirmed in a large global literature holds in africa is of considerable policy relevance this paper revisits this issue and examines potential causes of the inverse productivity relationship in rwanda where policy makers consider land fragmentation and small farm sizes to be key bottlenecks for the growth of the agricultural sector nationwide plot level data from rwanda point toward a constant returns to scale crop production function and a strong negative relationship between farm size and output per hectare as well as intensity of labor use that is robust across specifications the inverse relationship continues to hold if profits with family labor valued at shadow wages are used but disappears if family labor is rather valued at village level market wage rates these findings imply that in rwanda labor market imperfections rather than other unobserved factors seem to be a key reason for the inverse farm size productivity relationship

are efficient linear taxes inequitable abstract i explore the household weights in the bergson samuelson social welfare functions which have a turning point at an efficient linear tax structure the inverse optima a tax structure is defined to be inequitable if every inverse optimum has weights that increase with household productivity over part of the productivity range i find that the inequity of an efficient tax structure depends on the normality of leisure on the number of households and on the natureof household demands an efficient indirect tax structure is not inequitable if the expenditure share of each taxed commodity is constant across households this has welfare implications for the choice of tax instrument to finance a project accepted under benefit cost analysis

rural market imperfections and the farm size productivity relationship evidence from pakistan the subject of this article is the relationships between farm size and productivity and between farm size and profitability in the developing countries the recent controversies over the inverse size output relationship are reviewed and a framework is provided that explains the inverse relationship based on plausible assumptions about imperfections in the markets for labor land credit and risk from this framework a set of testable hypotheses are derived the hypotheses are tested on recent farm level panel data from pakistan a strong inverse relationship between farm size and yield is present in the sample even when household fixed effects are used to account for unobserved heterogeneity moreover the suggested market imperfections framework is consistent with the data

is small beautiful farm size productivity and poverty in asian agriculture the debate on the relationship between farm size and productivity has gone through a complete circle in the 1960s it was perceived that small farms were efficient because they can fully use their resources particularly family labor and they can monitor their production activities closely but in the 1970s and 1980s as many asian countries rapidly moved towards industrialization and urbanization small farms were considered a major obstacle in this process