Economies of farm size in the Carman area of Manitoba

Abstract

The central objectives of this study were to determine whether there is a functional relationship between the size of the farm firm and its unit cost; to ascertain what is the optimum size of the farm firm; and to determine whether the family farm is consistent with the optimum size of firm in agriculture. In this study improved acreage and volume of output were used as criteria of farm size. Data from the records of 41 crop farms in the Carman Area of Manitoba were used in the empirical analysis. Synthetic budgeting and regression analysis were the techniques used in estimating the relationship between the size of farm firm and its unit cost, as well as in determining the optimum size of the farm firm. The results of this study show that where improved acreage is the criterion of size, the optimum size of farm firm is 883 acres. On the other hand, where volume of output is the criterion, the optimum size farm produces approximately $34,000. worth of output. This study also indicates that the family farm is consistent with the optimum size of firm in agriculture.