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Abstract
The inverse relationship between farm size and productivity has almost become a 'stylised fact' in the economic development
literature. Most of the studies contributing to this preception have been flawed by methodological shortcomings and the
request is that these studies be treated with caution. Using recent farm survey data from the wine producing areas of the
Western Cape of South Africa, this study attempts to overcome some of the methodological problems, distinguishing between
partial and total productivity measures. Using data envelopment analysis, most of the wine grape producers were found to
operate under constant returns to scale. Co-operative membership seemed to overcome the economies of scale associated with
processing and marketing. The inverse relationship between farm size and both land productivity and total factor productivity
is weak, not consistently negative and differs between regions. Thus, caution must be used when advocating rural development
policies based on the inevitability of an inverse relationship existing in all sectors and production regions of agriculture.
© 1998 Elsevier Science B.V. All rights reserved.