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Journal of Productivity Analysis

, Volume 22, Issue 3, pp 185–205 | Cite as

Scale Economies and Efficiency in U.S. Agriculture: Are Traditional Farms History?

  • Catherine Paul
  • Richard Nehring
  • David Banker
  • Agapi Somwaru
Article

Abstract

The structural transformation of agriculture in recent decades has raised serious concerns about the future of the family farm. This study examines the economic performance of U.S. farms, to explore the potential of smaller farms to compete with larger entities, and ultimately to survive in this rapidly changing environment. We use deterministic and stochastic frontier methods and survey data to measure and evaluate factors underlying scale economies (SEC) and efficiency (SEF) of corn-belt farms for 1996–2001. Our results suggest that family farms are both scale and technically inefficient. Potential for the exploitation of significant scale and scope economies, and some greater technical efficiency, seem to be driving trends toward increased farm size and dwindling competitiveness of the small family farm.

Keywords

Economic Performance Technical Efficiency Structural Transformation Small Farm Small Family 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  • Catherine Paul
    • 1
  • Richard Nehring
    • 2
  • David Banker
    • 2
  • Agapi Somwaru
    • 2
  1. 1.Department of Agricultural and Resource Economics, and Member of the Giannini FoundationUniversity of CaliforniaU.S.A
  2. 2.Natural Resource Economics Division, Economic Research ServiceU.S. Department of AgricultureU.S.A

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