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Farm size and productivity growth in the United States Corn Belt

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  • Key, Nigel
Abstract
In recent decades, agricultural production in the U.S. has continued to shift to large-scale operations, raising concerns about the economic viability of small and midsized farms. To understand whether economies of size provided an incentive for the consolidation of production, the study estimates the total factor productivity (TFP) of five size classes of grain-producing farms in the U.S. Heartland (Corn Belt) region. Using quinquennial Agricultural Census data from 1982 to 2012 the study also compares TFP growth rates across farm sizes to gain insight into whether observed productivity differences are likely to persist. The finding of a strong positive relationship between farm size and TFP suggests that consolidation of production has contributed to recent aggregate productivity growth in the crop sector. The study estimates the extent to which sectoral productivity growth can be attributed to structural change versus other factors including technological change. The study also explores some tradeoffs associated with policies that raise the productivity of small versus large farms.

Suggested Citation

  • Key, Nigel, 2019. "Farm size and productivity growth in the United States Corn Belt," Food Policy, Elsevier, vol. 84(C), pages 186-195.
    • Handle: RePEc:eee:jfpoli:v:84:y:2019:i:c:p:186-195
    DOI: 10.1016/j.foodpol.2018.03.017
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Agricultural productivity growth; Total factor productivity; Scale economies; Farm structure;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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