ECONOMIES OF SCALE IN AGRICULTURE: A REEXAMINATION OF THE EVIDENCE

It is generally accepted that agricultural production is characterized by increasing returns to scale. In this paper we examine the evidence allegedly supporting this assertation and come to the conclusion that the hypothesis of increasing returns is not warranted. The essence of our argument is that if increasing returns were important we would have seen huge "food factories" dominating the industry. Instead, the dominating form of organization is the family unit and farms come in a multitude of sizes--as can be expected in a constant cost industry.


Issue Date:
1991
Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/13652
PURL Identifier:
http://purl.umn.edu/13652
Total Pages:
30
Series Statement:
Staff Paper P91-43




 Record created 2017-04-01, last modified 2020-10-28

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