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Agricultural Trade Reform, Reallocation and Technical Change: Evidence from the Canadian Prairies

Mark Brown, Shon M. Ferguson, Crina Viju

NBER Working Paper No. 23857
Issued in September 2017
NBER Program(s):The International Trade and Investment Program, The Productivity, Innovation, and Entrepreneurship Program

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.

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Document Object Identifier (DOI): 10.3386/w23857

Forthcoming: Intranational Trade Costs, Reallocation, and Technical Change: Evidence from a Canadian Agricultural Trade Policy Reform, Mark Brown, Shon M. Ferguson, Crina Viju-Miljusevic. in Agricultural Productivity and Producer Behavior, Schlenker. 2018

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