Abstract:By using the clustering analysis to classify the 109 sample farmlands in Shanxi Province into two types, then by using TCF function to define input and output of farmlands to calculate economies of scale separately. The results indicate that the first type of family farmlands, with relatively much better operation experience and lower education background and with smaller land area and more labor input, has better economic performance but lower operation potential and does not realize the economies of scale, that the second type of family farmlands, with higher education background, bigger area of operation land and more capital factor input, has lower operation performance but bigger operation potential and completely realize the economies of scale. With regard to the first type of family farmlands, labor cost should be appropriately reduced or per capita output should be raised and scale operation should be appropriately enlarged in order to realize the scale of economies. As for the second type of family farmlands, modern agriculture should be developed based on present scale to studiously raise economic performance. Governments should encourage the farm households to participate in land transfer, enlarge direct subsidy to family farmlands, and actively cultivate modernized family farmlands and professional peasants in order to boost the upgrading of business main body of the family farmlands and the optimization of factor input structure.