Does Land Fragmentation Increase the Cost of Cultivation? Evidence from India

Abstract

Although a large literature discusses the productivity effects of land fragmentation, measurement and potential endogeneity issues are often overlooked. This paper uses several measures of fragmentation and controls for endogeneity and crop choice by looking at inherited paddy and wheat plots to show that these issues matter empirically. While crop choice can mitigate effects, fragmentation as measured by the Simpson index increases production cost and fosters substitution of labor for machinery, especially for small and medium farmers. Greater distances between fragments have a smaller effect. Creating opportunities for market-based consolidation could be one step to limit fragmentation-induced cost increases.

Land Fragmentation and Food Insecurity in Ethiopia

“…However, this does not take into account the different size of parcels in hectares, which we denote α k . One measure which incorporates both parcel count and size is the Simpson land fragmentation index (FI), used by both Ali, Deininger, and Ronchi () and Deininger et al (): where K is the number of parcels, and α k their size in square meters. A score of 0 would indicate no land fragmentation, while as K → ∞ FI → 1.…”

“…A number of studies find that land fragmentation is associated with lower agricultural output and reduced productivity in settings as diverse as rural China (Nguyen, Cheng, and Findlay ; Wan and Cheng ; Tan et al ), India (Jha, Nagarajan, and Prasanna ; Rahman and Rahman ; Deininger et al ), Vietnam (Van Hung, MacAulay, and Marsh ) and Rwanda (Ali, Deininger, and Ronchi ), but others find no significant effect on yields (Tan et al ). Land fragmentation tends to be associated with higher production costs, particularly in terms of labor, because of the lost time spent getting to spatially separated parcels (Van Hung, MacAulay, and Marsh ; Tan et al ; Ali, Deininger, and Ronchi ).…”

Geography of smallholders’ tractor adoptions and RD–Induced land productivity: Evidence from household survey data in Ghana

“…Not surprisingly, having own tractors significantly discourage renting-in of equipment (which are also mostly tractors). Lastly, adoption is higher if owned farmland plots are more fragmented, possibly because more fragmentation may mean a higher chance that farmers have at least some plots that are more easily accessible by tractors (this contrasts with Asia where all plots are relatively accessible (eg., Deininger et al 2017)). .000 .000 .000 Source: Authors' estimations.…”

Agrifood market participation, household economies of specialization and diversification: Evidence from Vietnam

“…Because most SFHs have insufficient capital, marginal returns to labor in farming may decline quickly below non-farm wages, at which point, non-farm activities bring in higher returns to additional labor used. Also, because farm plots in Asia including Vietnam tend to be not only fragmented but also scattered spatially, marginal returns to aggregating land may be limited at higher margins for many households (e.g., Deininger et al 2017). At the same time, these SFHs continue some farming because marginal returns to factors (land, labor, etc.)…”