The Economics of Farm Fragmentation: Evidence from Ghana and Rwanda

Abstract

Farm fragmentation, in which a household operates more than one separate parcel of land, is a common phenomenon in Sub-Saharan Africa. Concerned by the perceived costs of fragmented as opposed to consolidated holdings, several countries have implemented land consolidation programs. But these interventions overlook the benefits that land fragmentation can offer farmers in managing risk, in overcoming seasonal labor bottlenecks, and in better matching soil types with necessary food crops. This article uses household data from Ghana and Rwanda to discuss the incidence and causes of fragmentation. It then formally tests the relation between fragmentation and land productivity and risk reduction. The conclusion is that consolidation programs are unlikely to lead to significant increases in land productivity and may actually make farmers worse off. Policymakers should focus instead on reducing the root causes of fragmentation: inefficiencies in land, labor, credit, and food markets.