The inverse relationship between farm size and productivity is widely accepted as a 'stylised fact' of agriculture in developing countries, a generalised phenomenon observed in widely differing agro-climatic conditions and agrarian structures. This study uses primary fieldwork data to examine the factors which give rise to such a relationship, and the impact of economic and technological change on the inverse relationship in the context of Egyptian agriculture. In doing so, the author provides a new political economy approach to understanding the factors behind the inverse relationship and to examine how the inverse relationship breaks down in the dynamic context.