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Abstract

Given recent concerns expressed about the structural transformation of agriculture and the health of the family farm this study provides a measure of the economic health of small and large farms at the state level. We use nonparametric frontier methods to measure and explain changes in the efficiency, productivity, and technological change of U.S. farms, employing USDA's annual 1996 to 1999 surveys of farms. Our results for the corn and cotton states analyzed identify particularly weak economic performance of small farms in Iowa, Louisiana, Oklahoma, and Wisconsin and of large farms in Missouri, Oklahoma, and South Carolina. Our results also indicate strong performance of small farms in several states. Thus, these results give policy makers a more detailed and up to date view of the overall economic health of the agricultural sector in the states analyzed than has previously been possible with aggregate state level analyses.

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