Essays on Agricultural Productivity, Poverty, and Farm Size
This dissertation presents three essays on agricultural productivity and its relationship with farm size and poverty. Chapter 1 addresses the relationship between farm size and productivity, a recurrent topic in development economics. We clarify the common productivity measures used in this literature, their relationships, and their advantages and limitations. Second, we argue that total factor productivity, not land productivity, is the appropriate indicator for most policy questions. Lastly, using a pseudo-panel of Brazilian farms spanning the period 1985-2006, we provide new evidence on the inverse relationship between farm size and productivity. The inverse relationship between size and land productivity is alive and well. The relationship between total factor productivity and size, in contrast, has evolved with modernization during this period. An inverse relationship between farm size and land productivity is neither necessary nor sufficient for an inverse relationship between farm size and total factor productivity.
The hypothesis of a dynamic farm size – productivity relationship is extended to the context of Mexico in Chapter 2, identifying the relationship in a panel of family farms. We find a time invariant inverse relationship between farm size and both land productivity and total factor productivity. Stochastic frontier analysis reveals that, while technical change is expanding the frontier and technical inefficiency is growing for the entire sample, these changes are more pronounced for larger farms. An inverse relationship along the productivity frontier is disappearing in the wake of Mexico’s NAFTA-era reforms to agricultural policy, yet this change has not affected the farm size – total factor productivity relationship due to growing technical inefficiency.
Chapter 3 conducts a counterfactual analysis of the contribution of changing land productivity to poverty alleviation on the farm. Stochastic frontier analysis enables a parametric decomposition of changes to the land productivity distribution in a panel of Mexican family farms. Using the decompositions, the contribution of productivity channels to poverty alleviation are estimated. The counterfactual analysis suggests that raising land productivity through intensification and technical change would be a more pro-poor approach than through increases in technical efficiency.