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Productivity and Efficiency of Small and Large Farms in Moldova

Author

Listed:
  • Lerman, Zvi
  • Sutton, William R.
Abstract
The paper presents a comparative analysis of the productivity of small and large farms in Moldova based primarily on cross-section data from three farm surveys conducted by the World Bank and USAID in 2000 and 2003. The survey data are supplemented where feasible with time series from official national-level statistics. We calculate partial land and labor productivity, total factor productivity, and technical efficiency scores (using Stochastic Frontier and Data Envelopment Analysis algorithms) for the two categories of small individual farms and large corporate farms. Our results demonstrate with considerable confidence that small individual farms in Moldova are more productive and more efficient than large corporate farms. This finding is not restricted to Moldova, as a similar result has been obtained by other authors in Russia (2005) and in the U.S. (2002), where a recent study has found that an increase of farm size reduces, rather than increases, agricultural productivity. Policies encouraging a shift from large corporate farms to smaller individual farms, rather than the reverse, can be expected to produce beneficial results for Moldovan agriculture and the economy in general. The government of Moldova should abandon its inherited preference for large-scale corporate farms and concentrate on policies to improve the operating conditions for small individual farms. At the very least, the government should ensure a level playing field for farms of all sizes and organizational forms, and desist from biasing its policies in favor of large farms.

Suggested Citation

  • Lerman, Zvi & Sutton, William R., 2006. "Productivity and Efficiency of Small and Large Farms in Moldova," 2006 Annual meeting, July 23-26, Long Beach, CA 21085, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea06:21085
    DOI: 10.22004/ag.econ.21085
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    References listed on IDEAS

    as
    1. Lerman, Zvi & Csaki, Csaba & Feder, Gershon, 2002. "Land policies and evolving farm structures in transition countries," Policy Research Working Paper Series 2794, The World Bank.
    2. Csaki, Csaba & Lerman, Zvi, 2001. "Land Reform And Farm Restructuring In Moldova: A Real Breakthrough?," Discussion Papers 15003, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    3. David Epshtein, 2005. "Financial Performance and Efficiency of Corporate Farms in Northwest Russia," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 47(1), pages 188-199, March.
    4. Lerman, Zvi & Kislev, Yoav & Biton, David & Kriss, Alon, 2003. "Agricultural Output and Productivity in the Former Soviet Republics," Economic Development and Cultural Change, University of Chicago Press, vol. 51(4), pages 999-1018, July.
    5. Douglas W. Allen & Dean Lueck, 2004. "The Nature of the Farm: Contracts, Risk, and Organization in Agriculture," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511851, April.
    6. David Epstein, 2003. "Efficiency and Stability of Large Agricultural Enterprises," Eastern European Economics, Taylor & Francis Journals, vol. 41(5), pages 70-92, January.
    7. Lerman, Z. & Brooks, K. & Csaki, C., 1994. "Land Reform and Fram Restructuring in Ukraine," World Bank - Discussion Papers 270, World Bank.
    8. Vasilii Uzun, 2005. "Large and Small Business in Russian Agriculture: Adaptation to Market," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 47(1), pages 85-100, March.
    9. World Bank, 2005. "Moldova : Opportunities for Accelerated Growth, A Country Economic Memorandum for the Republic of Moldova," World Bank Publications - Reports 8698, The World Bank Group.
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    Cited by:

    1. Pavel Ciaian, 2007. "Land Reform and Productivity Gains with Multiple Market Imperfections," EERI Research Paper Series EERI_RP_2007_01, Economics and Econometrics Research Institute (EERI), Brussels.
    2. Vink, Nick, 2014. "Commercialising agriculture in Africa: economic, social and environmental impacts," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 9(1), pages 1-18, February.

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