Estimations of Economies of Scale for Rice Farming in Hokkaido

This paper examined the economies of scale of rice farming in Hokkaido using a translog cost function. The results showed that even though rice farming operations in Hokkaido have maintained economies of scale of over 15 ha, when the low price of Hokkaido-grown rice was taken into account it became clear that rice farmers have continued to operate at a deficit. The estimates also showed that even if smaller economies of scale were introduced, rice farming would still not turn a profit. To resolve this dilemma, the best approach would be to aim at achieving rice prices found elsewhere in Japan by improving quality through R&D and other counter measures