An Empirical Investigation of the Production Structure of Japanese Agriculture during the Latter Half of the 20th Century : A Single-or Multiple-Product Cost Function Approach?

This paper investigates quantitatively the production structure of the postwar Japanese agriculture, in particular, during the latter half of the 20th century. For this objective, both single- and multiple-product translog total cost functions were estimated for the period 1957-97 using data obtained from Survey Report on Farm Household Economy and Survey Report on Prices and Wages in Rural Villages published annually by the Ministry of Agriculture, Forestry, and Fisheries. The null hypotheses of input-output non-separability and input nonjointness were both strongly rejected, indicating that a (crop-livestock) multiple-product total cost function may be more appropriate to specify the production technology of the postwar Japanese agriculture. Empirical results show that (1) technical change were biased toward labor-saving and machinery-using, (2) the Allen partial elasticity of substitution between machinery and intermediate inputs was decisively negative, indicating that the mechanical and biochemical technological innovations proceeded in an complemental manner, (3) technological change in output space was biased toward livestock-augmenting, which is consistent with the very rapid increase in livestock production compared to crop production during the period under question. (4) Neither scale nor scope economies were found in joint production of crops and live-stock. However, there existed scale economies in single-output production of either crops or livestock. In particular, scale economies in livestock production were very conspicuous, which is consistent with the rapid increase in large-scale livestock farms during the study period. JEL Classification Numbers: O3 (Technological Change); Q16 (Agricultural Technology, Input and Output Biases