Intranational Trade Costs, Reallocation and Technical Change: Evidence from a Canadian Agricultural Trade Policy Reform

Reprint No. 2019:51

Author(s): Mark Brown, Shon Ferguson and Crina Viju-MiljusevicYear: 2019 Title: Agricultural Productivity and Producer Behavior Chapter: 4Editor(s): Wolfram SchlenkerPublisher: University of Chicago PressCity: Chicago, IL Pages: 125–156
Online article (restrictions may apply)
Preliminary version

We decompose the impact of trade reform on technology adoption and land use to study how aggregate changes were driven by reallocation versus within-farm adaptation. Using detailed census data covering over 30,000 farms in Alberta, Saskatchewan and Manitoba, Canada we find a range of new results.

We find that the reform-induced shift from producing low-value to high-value crops for export, the adoption of new seeding technologies and reduction in summerfallow observed at the aggregate level between 1991 and 2001 were driven mainly by the within-farm effect. In the longer run, however, reallocation of land from shrinking and exiting farms to growing and new farms explains more than half of the aggregate changes in technology adoption and land use between 1991 and 2011.

Brown, Mark, Shon Ferguson and Crina Viju-Miljusevic (2019), "Intranational Trade Costs, Reallocation and Technical Change: Evidence from a Canadian Agricultural Trade Policy Reform". Chapter 4, pp. 125–156 in Wolfram Schlenker, eds., Agricultural Productivity and Producer Behavior. Chicago, IL: University of Chicago Press.

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