An Estimation of the Efficient Size of Sugarcane Enterprises for Farmers in Trinidad

This research paper provides an estimation of the efficient size of operation for sugarcane farmers in Trinidad. The estimates were based on a sample of two hundred and twenty-seven farmers selected from a cost of sugarcane production survey. To identify the efficient size of operation the ordinary least square estimation technique was used. The identification of the efficient size of operation allowed a test of the hypothesis that the minimum point on the long run average cost curve was significantly greater than the average enterprise size of six acres. The long run total cost curve was estimated and the cubic functional form provided the best fit based on both the adjusted R2 and the result from the Wald test. The results of the estimation process indicated that the optimal size was 32 acres of sugarcane and that 98% of the farmers operated at less than this size.