Is farming a constant cost industry?

Measurement of cost-size relationships for farming has long been an important area of research in agricultural economics. Much of this research has had a farm management and production economics orientation, and firm-industry interdependencies have often been ignored. Research results stemming from such an orientation should be interpreted with care when used for policy purposes. Pecuniary externalities may be of greater importance than indicated by research to this time. A suggestion is made for treating induced technical change as comparable to a pecuniary externality. Questions are raised on both theoretical and empirical grounds whether farming in the United States should be considered a constant cost industry for policy purposes.