Abstract
Abstract Panel data from Rwanda allow us to explore costs and benefits from land fragmentation in a non-mechanized setting using two methodological improvements, namely (i) a terrain-adjusted measure of travel time/cost required to visit all parcels to measure fragmentation; and (ii) instrumental variable (IV) approaches that use measures for inherited/allocated parcels and past displacement as instruments. Results suggest that fragmentation as measured by travel cost negatively affect yield, intensity of labor use, and technical efficiency while reducing yield variability. With some 7 percent increase in yields, the size of the estimated impact of potential consolidation remains modest, suggesting that in an unmechanized setting such as the one studied here, the costs of programs to reduce fragmentation may outweigh the benefits.
Highlights
Concern about land fragmentation as a constraint to agricultural productivity has long featured prominently in the policy debate
The paper relies on Global Positioning System (GPS) information on location and altitude of each of the parcels operated by a household together with a Digital Elevation Model (DEM) to calculate friction-adjusted travel time between the homestead and all of the household’s parcels
Following a brief discussion of the instruments used, this section shows that instrumental variable (IV) estimates for yield, labor intensity, and variability of yield produce results that are more consistent than un-instrumented ones, that the cost distance measure routinely outperforms variables used to capture fragmentation in the literature, and that consistent results are obtained for a two-step approach to measure technical efficiency
Summary
The literature on impacts of fragmentation has often assumed these to be identical across settings and, in part a consequence, used crude proxies to measure this phenomenon. Variability in parcel altitude provides an additional dimension that may be relevant for risk reduction and diversification benefits from fragmentation As they do not incorporate information on relative plot location, the above measures are at best a noisy proxy for the cost of having to travel between plots. Conceptual Issues and Existing Evidence Studies that include the number of plots cultivated or the Simpson index of land fragmentation that ranges from zero to one, with higher values corresponding to higher fragmentation but that fail to account for risk-reduction benefits, often find negative effects of fragmentation. If options to diversify risk via insurance are limited and labor cost low, benefits from fragmentation may outweigh associated costs (Sengupta 2006) This explains why returns of programs to consolidate holdings, often together with land use planning, in developed countries are reported to have been high (Simons 1987). While pointing toward risk reduction as a potential reason for persistence of fragmentation, links between fragmentation and variability of output remain tentative at best (Blarel et al 1992)
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