Are there too many farms in the world? Labor market transaction costs, machine capacities, and optimal farm size

Globally, particularly in developing nations, small farms outperform slightly larger ones. This study delves into the reasons behind this trend—why the connection between farm size and productivity forms a U-shape. It explores why small farms surpass those a bit larger, yet fall short compared to larger farms in high-income countries. Drawing from unique data from an Indian panel survey (ICRISAT VLS), the researchers identify two driving factors: labor transaction costs (hiring extra farm workers) and machinery scale efficiencies. The webinar will showcase their findings, the reasoning behind their conclusion, and their assertion that there's an excess of farms worldwide. Furthermore, they'll discuss the impact on global development and the future of agricultural policies.

SPEAKERS:

Andrew Foster holds the George and Nancy Parker Chair of Economics at Brown University's Department of Economics. His recent work centers on agricultural scale economies, pre-existing risks' influence on education decisions, and interhousehold sorting's impact on educational mobility. He's contributed to studies on income segregation and US long-term care. Andrew is the Editor in Chief of the Journal of Development Economics and directs the Social Science Research Institute at Brown.

Mark Rosenzweig is currently Professor of International Economics at Yale University and a Research Associate of the National Bureau of Economic Research. His research focuses on economic development, its causes and consequences, and international migration. Mark is Co-Editor of the Handbook of Family and Population Economics and of the newest Handbook of Development Economics. He has also recently served as Editor-in-Chief of the Journal of Development Economics. 

Webcast