Does Land Fragmentation Increase the Cost of Cultivation? Evidence from India

27 Pages Posted: 20 Apr 2016

See all articles by Klaus Deininger

Klaus Deininger

World Bank - Development Economics Group (DEC); World Bank - Development Research Group (DECRG)

Daniel Monchuk

World Bank

Hari Nagarajan

Institute of Rural Management Anand (IRMA)

Sudhir Singh

World Bank

Date Written: November 1, 2014

Abstract

Although a large literature discusses the productivity effects of land fragmentation, measurement and potential endogeneity issues are often overlooked. This paper uses several measures of fragmentation and controls for endogeneity and crop choice by looking at inherited paddy and wheat plots to show that these issues matter empirically. While crop choice can mitigate effects, fragmentation as measured by the Simpson index increases production cost and fosters substitution of labor for machinery, especially for small and medium farmers. Greater distances between fragments have a smaller effect. Creating opportunities for market-based consolidation could be one step to limit fragmentation-induced cost increases.

Keywords: Agricultural Economics, Labor Markets, Rural Labor Markets, Inequality

Suggested Citation

Deininger, Klaus and Monchuk, Daniel and Nagarajan, Hari and Singh, Sudhir, Does Land Fragmentation Increase the Cost of Cultivation? Evidence from India (November 1, 2014). World Bank Policy Research Working Paper No. 7085. Available at SSRN: https://ssrn.com/abstract=2519300

Klaus Deininger (Contact Author)

World Bank - Development Economics Group (DEC) ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/kdeininger

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Daniel Monchuk

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Hari Nagarajan

Institute of Rural Management Anand (IRMA) ( email )

Anand - 388 001
India

HOME PAGE: http://https://www.irma.ac.in/ifaculty/facultydetails.php?fid=428

Sudhir Singh

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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