Farm size and land use efficiency in the Brazilian Amazon

Abstract

This paper investigates the relationship between farm size and land use efficiency in the Brazilian Amazon. Based on data from the 2006 Brazilian Agricultural Census, we estimated a stochastic production frontier model which allowed us to quantify the excessive use of agricultural land. Our results suggest that there is plenty of room for land use intensification, which would allow agricultural expansion without further deforestation pressures. We also observed a “U-shaped” relationship between farm size and land use efficiency. However, the turning point of the relationship is far above the typical size of agricultural establishments in the Brazilian Amazon as land use efficiency reached its minimum level at approximately 8,000 ha. For practical purposes, our estimates are in line with previous results that found a negative relationship between farm size and land use efficiency. This means that the current process of land concentration observed in the region would result in increased land use in-efficiency.