Farm Size and the Intensity of Land Use in Gujarat

This paper investigates why smaller farms appear to use land more intensively than larger farms in India Using data from 400 farms in Gujarat, we find the inverse relationship between output per hectare and farm size is explained by regional variations in fertility and labour supply. Within villages larger farms produce a little more output per hectare with much less labour per hectare This is explained by the relative abundance of family labour on small farms. Family size impacts positively on farm labour demand, suggesting perhaps a wedge between the opportunity cost of family labour and the wage of hired labour.