FARM SIZE AND THE INTENSITY OF LAND-USE IN GUJARAT

This paper investigates why smaller farms appear to use land more inte nsively than larger farms in India. Using data from 400 farms in Gujar at, we find the inverse relationship between output per hectare and fa rm size is explained by regional variations in fertility and labour su pply. Within villages larger farms produce a little more output per he ctare with much less labour per hectare. This is explained by the rela tive abundance of family labour on small farms. Family size impacts po sitively on farm labour demand, suggesting perhaps a wedge between the opportunity cost of family labour and the wage of hired labour.