The inverse productivity-size relationship is one of the oldest puzzles in development economics. Two conventional explanations for the inverse relationship have emerged in the literature: (i) factor market imperfections that cause cross-sectional variation in household-specific shadow prices and thereby induce variation in input application rates; and (ii) the omission of soil quality measurements that are inversely correlated with farm or plot size but positively associated with yields. This study uniquely employs precise soil quality measurements at the plot level with multiple plots per household so as to allow testing of both conventional explanations simultaneously. Our empirical results show that, in these data, only a small portion of the inverse productivity-size relationship is explained by market imperfections and none of it seems attributable to the omission of soil quality measurements.

To understand whether and how inverse relationship between farm size and productivity changes when labor market performance improves, we use large national farm panel from India covering a quarter-century (1982, 1999, 2008) to show that the inverserelationship weakened significantly over time, despite an increase in the dispersion of farm sizes. A key reason was the substitution of capital for labor in response to nonagricultural labor demand. In addition, family labor wasmore efficient than hired labor in the 1982–1999 period, but not during the 1999–2008period.In line with labor market imperfections as a key factor, separability of labor supply and demand decisions cannot be rejected in the second period,except in villages with very low nonagricultural labor demand.

The inverse relationship between land productivity and farm size is an old and puzzling empirical regularity. Most explanations for this relationship rely on market imperfections that jointly determine the farm size and the household's shadow price of some productive inputs. We use plot-level data from the ICRISAT/VLS to assess whether these household-specific theories can explain the puzzle. The data exhibit plots of different sizes being simultaneously cropped by the same household. The inverse relationship is shown to hold true with the same magnitude across the plots of each household, thus cross-household heterogeneity does not suffice to explain the puzzle.

We show analytically and empirically that non-classical measurement errors in the two key variables in a hypothesized relationship can bias the estimated relationship between them in any direction. Furthermore, if these measurement errors are correlated, correcting for either one alone can aggravate bias in the parameter estimate of interest relative to ignoring mismeasurement in both variables, a ‘second best’ result with implications for a broad class of economic phenomena of policy interest. We illustrate these results empirically by demonstrating the implications of mismeasured agricultural output and plot size for the long-debated (inverse) relationship between size and productivity.

This paper explores the evolution of real agricultural wages, machinery use, and the relationship between farm size and productivity in Vietnam during its dramatic structural transformation over the course of the 1990s and 2000s. Using six rounds of nationally representative household survey data, we find strong evidence that the inverse relationship between rice productivity and planting area attenuated significantly over this period and that the attenuation was most pronounced in areas with higher real wages. This pattern is also associated with sharp increases in machinery use, indicating a scale-biased substitution effect between machinery and labor. The results suggest that rural-factor market failures are receding in importance, making land concentration less of a cause of concern for aggregate food production.

“This collection of essays provides a wealth of information and analysis about the Philippine economy and the role of agriculture and economic policy in it. The Philippine experience has been quite different from the highly successful Asian economies, with a long period of low growth until the turn of the century and only then greater success. The authors cover not only the Philippine experience but also place it in its Asian context and that of developing countries more generally. They report on the lessons learned, both positive and negative, from the various economic policies that have been adopted, with regard to both agriculture and to economic inequality. Those interested in Philippine economic development, and Asian development more broadly, will find this an important reference work.”—Anne O. Krueger, Senior Research Professor, Johns Hopkins School of Advanced International Studies; 1st Deputy Managing Director, IMF (2001-6); Vice-President of Economics and Research, World Bank (1982-86)

Feeding the world's growing human population is increasingly challenging, especially as more people adopt a western diet and lifestyle. Doing so without causing damage to nature poses an even greater challenge. This book argues that in order to create a sustainable food supply whilst conserving nature, agriculture and nature must be reconnected and approached together. The authors demonstrate that while the links between nature and food production have, to some extent, already been recognized, until now the focus has been to protect one from the impacts of the other. Instead, it is argued that nature and agriculture can, and should, work together and ultimately benefit from one another. Chapters describe efforts to protect nature through globally connected protected area systems and illustrate how farming methods are being shaped to protect nature within agricultural systems. The authors also point to many ways in which nature benefits agriculture through the ecosystem services it provides. Overall, the book shows that nature conservation and food production must be considered as equally important components of future solutions to meet the global demand for food in a manner that is sustainable for both the human population and the planet as a whole.