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Land Fragmentation with Double Bonuses -- The Case of Tanzanian Agriculture

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  • Rao, Xudong

Abstract

Land fragmentation, also known as scattered land holdings, is a common phenomenon in agriculture around the world. In some cases, it has even persisted through government-supported land consolidation programs that aim to improve agricultural productivity. This study evaluates the effect of land fragmentation on agricultural production and hypothesizes that it may be beneficial to farmers by diversifying risk onto separate land plots that usually have heterogeneous growing conditions. Applying a stochastic frontier model to the Tanzania Living Standards Measurement Study (LSMS) data, we find evidence to support the risk-reduction hypothesis and indications that land fragmentation may be conducive to efficiency. This second finding may seem counter-intuitive but is also supported by similar studies. We further argue that accounting for risk preferences that are absent from current framework in future research may help explain the double bonuses of land fragmentation.

Suggested Citation

  • Rao, Xudong, 2014. "Land Fragmentation with Double Bonuses -- The Case of Tanzanian Agriculture," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169436, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea14:169436
    DOI: 10.22004/ag.econ.169436
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    1. Mertens, Kewan & Vranken, Liesbet, 2018. "Investing in land to change your risk exposure? Land transactions and inequality in a landslide prone region," World Development, Elsevier, vol. 110(C), pages 437-452.
    2. Lai, Wangyang & Roe, Brian & Liu, Yumei, 2015. "Estimating the Effect of Land Fragmentation on Machinery Use and Crop Production," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205280, Agricultural and Applied Economics Association.

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    Keywords

    Agricultural and Food Policy; Crop Production/Industries; International Development; Land Economics/Use; Production Economics; Productivity Analysis; Risk and Uncertainty;
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