Relationship between land size and productivity: empirical evidence from paddy farms in irrigation settlements of Sri Lanka

Abstract

Irrigation settlements in Sri Lanka were characterized by equal sized allotments among settlers at the time of their establishment. Over time, informal land markets were created and land fragmentation and consolidation occurred simultaneously. This resulted in cultivation of a number of small plots by an individual farmer as well as that of large extents by one or more farmers. This paper assesses the effects of such sub-divisions and consolidations on paddy land productivity in irrigation settlements in Sri Lanka. Specific objectives were to examine the effects of land size on land productivity, labor productivity and use of machinery in paddy farming. Primary data gathered from 1,230 lowland plots covering 935 paddy farms from three irrigated settlements in Anuradhapura district were used for the analysis. Land and labour productivities of plots and farms were regressed against land size and other plot-specific and farm-specific characteristics respectively to test the nature of relationships between productivity and land size. Bivariate probit models were estimated to determine the effects on land size on the likelihood of machinery use in paddy farming. The results of the econometric estimation of the above models provided mixed results with respect to the inverse relationship between land size and productivity found in many developing countries. Though the relationship between plot size and land productivity was clearly positive, an inverse relationship between farm size and land productivity was noted as land size increased beyond a certain limit. The relationship between labor productivity and land size was also similar: labor productivity first increased with land size and then decreased. This observation was equally valid for both plots and farms. The results further indicated that mechanized farms were more productive and that the likelihood of mechanization increases with farm size. Measures to consolidate small land plots until they reach their maximum potential are recommended in order to enhance agricultural productivity in irrigated settlements in Sri Lanka.