Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1181: Agricultural Trade Reform, Reallocation and Technical Change: Evidence from the Canadian Prairies

Mark Brown , Shon Ferguson () and Crina Viju
Additional contact information
Mark Brown: Statistics Canada, Postal: Ottawa, Canada
Shon Ferguson: Research Institute of Industrial Economics (IFN)
Crina Viju: Institute of European, Russian and Eurasian Studies, Postal: Carleton University, Ottawa, Canada

Abstract: 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 summer fallow 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.

Keywords: Agricultural Trade Liberalization; Export Subsidy; Technical Change; Farm Size; Firm Heterogeneity

JEL-codes: F14; O13; Q16; Q17; Q18

35 pages, September 26, 2017

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