Labor and mechanization on Manitoba farms

Abstract

The main objectives of this study were to determine the economic relationships which exist between labor and machines on farms in two samples drawn from Manitoba. To facilitate this end, multiple regression analysis and the Cobb-Douglas production function were used to estimate the productivity of resources employed in producing the gross farm income. The sample of farms used in the microanalysis consisted of 44 farms in the Carman area and 52 farms in the Western area, around Hamiota. These two widely separated areas give an illustrative view of a large part of the farming industry in Manitoba. The estimated productivity of land in the Carman area is very low... Fertilizer appears to be used to excess in the Western area in light of its estimated productivity... The two factors of production, labor and machinery, were found to be in imbalance... In the Carman area more labor could be profitably employed, relative to machinery, while the opposite situation is true in the Western area. While the factors of labor and machinery are not at the point of least cost combination, the imbalance is relatively small. Any substantial alteration of one factor would require a large compensatory alteration of the other factor. That is, a significant removal of labor from the agricultural sector would require a major lowering of the machinery cost factor of production, if the agricultural sector were to maintain or strengthen its position.