Denys Nizalov held a seminar at Stockholm Institute of Transition Economics

Yesterday, on May 14, 2013, KSE Assistant Professor and Senior Economist Denys Nizalov presented at the seminar at the Stockholm Institute of Transition Economics. The topic of the seminar was “Are mega-farms the future of global agriculture? Exploring the farm size-productivity relationship for large commercial farms in Ukraine”.

Abstract: With farms cultivating tens or hundreds of thousands of hectares, Ukraine is often used to ‘prove’ the existence of economies of scale in agricultural production, with implications for the global structure of the industry. Panel data for almost all of the country’s farms above 200 ha in the 2001-2011 period provides no evidence of economies of scale but strongly suggest that higher yields and profits are due to unobserved effects at rayon (district) and farm level. Productivity growth was mostly driven not by farm expansion but by exit of unproductive ones and new entry. Such change was significantly creative destruction. Higher shares of Initial farm structure at rayon level, Higher initial shares of area under farms above 3,000 or 5,000 ha at rayon level significantly reduce subsequent exit and entry.