Effects of farm size and land tenure on the economic efficiency of rice farming in Korea

Lee, Kwangsuck
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The purpose of this study was to compare the economic efficiencies of different farm size classes and to examine the effect of share tenancy on the use of variable inputs by tenant farmers in rice farming in Korea. ~he research problems originate from the fact that the current change in farming structure in rural Korea appears to conflict with present land law which limits farm land size at 3 hectares and prohibits tenancy practices. The decreased number of farms, the decline in the rural population, and increased tenancy practices in spite of the law require a reconsideration of the current land law with respect to defining appropriate farm size and to evaluating the tenancy prohibition provision. Economic efficiency in relation to farm size was analyzed by the concepts of relative economic efficiency and economies-of-scale. The profit function model was used for the analysis of relative economic efficiency, and the scatter diagram approach and the survivor technique were employed for the economies-of-scale analysis. The results suggest that in producing rice, the average farm size in Korea, which is about1.0 hectare, was smaller than the efficient farm size, which appeared to be 1 to 2 hectares in 1977. Farms cultivating less than 1.0 hectare comprise about two thirds of total farms in Korea. When agricultural income per capita is concerned, farms more than 2 hectares in size could be viable when compared with urban household income per capita and GNP per capita. the allocative efficiency of share tenancy was analyzed by the method of the profit function model. The tenant farmers whose leased lands were more than 50 percent of the total cultivated paddy lands showed that they maximized their own share of total revenue: total value product minus variable input cost and rental payment. This implies that sharecropping practices are not desirable forms of rental arrangements when resource utilization by tenants and the overall farming efficiency are concerned. An econometric demand function for lease land of tenant farmers was estimated by using variables suggested by competitive land rental market theory: i.e., rental payment per unit land, owned land per family labor, and capital per family labor. The result did not support the existence of such a competitive land rental market. the unsanctioned tenancy practices and the presently supply-dominated land rental practices may be factors influencing the tenants' behavior in leasing lands other than those defined in a competitive market theory.
Thesis (Ph. D.)--University of Hawaii at Manoa, 1984.
Bibliography: leaves 160-170.
xiii, 170 leaves, bound ill. 29 cm
Rice farmers -- Economic aspects -- Korea (South), Farms, Size of -- Economic aspects -- Korea (South), Farm tenancy -- Economic aspects -- Korea (South)
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Theses for the degree of Doctor of Philosophy (University of Hawaii at Manoa). Agricultural and Resource Economics; no. 1791
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