Land consolidation as a factor for rural development in Moldova

Abstract

This article draws on data from several recent surveys in Moldova to examine the question of land consolidation within the process of agrarian reform. It suggests that larger individually owned farms produce higher family incomes than smaller ones and thus farm augmentation makes a positive contribution to the well being of the rural population. Also, for farms of a given size, productivity increases as the number of parcels decreases. The article then proceeds to discuss the actual use of various market mechanisms for land consolidation, including leasing as well as buying and selling of land. According to various surveys, farms with leased land are in fact larger than farms that rely on owned land only. The article argues that land consolidation leads to better economic performance, while land leasing is actually used as a market mechanism for consolidation, which benefits both lessees, through increased farm incomes, and lessors, through income from lease payments for their land.