Agricultural productivity and land inequality. Evidence from the Philippines

This paper presents the first detailed empirical evaluation of the effect of genetically engineered(GE) crops on land inequality, using three waves of census data covering 21 years and 17 million plots in the Philippines. Exploiting exogenous variations in soil and weather characteristics leading to differences in potential gain from GE corn cultivation, I show that the introduction of this labor- saving technology in 2003 led to an increased in municipality-level landholding and land ownership inequality. This effect is partly driven by a relative increase in agricultural land, is stronger in municipalities that adopted modern agricultural practices later and where credit penetration is higher. While increased land inequality is associated with a higher level of terrorist activity, it does not seem to have any adverse effect on agricultural productivity or economic activity.