A well-known and important exception to the superior performance of owner-operated units of production over those relying on wage labor is in plantation crops, where economies of scale in processing and the need for close coordination of production and processing can make plantations more efficient. The need for quick processing of some harvest products to avoid deterioration, often within 24-48 hours, requires tight adherence to delivery and harvesting schedules and transmits economies of scale in processing to the production stage (Binswanger and Rosenzweig 1986). For this reason, sugar factories and palm oil mills usually run their.
