Land Market Distortions and Aggregate Agricultural Productivity: Evidence From Guatemala

IFPRI Discussion Paper 1969, 2020

44 Pages Posted: 12 Jan 2021

See all articles by Gerardo Britos

Gerardo Britos

University of Minnesota - Twin Cities

Manuel A. Hernandez

International Food Policy Research Institute (IFPRI)

Miguel Robles

Professor in the Finance Department

Danilo Trupkin

IIEP, Universidad de Buenos Aires-CONICET

Date Written: November 6, 2020

Abstract

Farm size and land allocation are important factors in explaining lagging agricultural productivity in developing countries. This paper examines the effect of land market imperfections on land allocation across farmers and aggregate agricultural productivity. We develop a theoretical framework to model the optimal size distribution of farms and assess to what extent market imperfections can explain non-optimal land allocation and output in-efficiency. We measure these distortions for the case of Guatemala using agricultural census microdata. We find that due to land market imperfections aggregate output is 19% below its efficient level for both maize and beans and 31% below for coffee, which are three major crops produced nationwide. The regions with higher distortions show a higher dispersion in land prices and less active rental markets. We also find that the degree of land market distortions across locations co-variate with road accessibility and ethnicity and, in a lower extent, with education.

Keywords: Guatemala, Latin America, Central America, Land Markets, Agricultural Productivity, Maize, Beans, Coffea, Coffee, Crop Production, Land Market Distortions, Output Inefficiency

Suggested Citation

Britos, Gerardo and Hernandez, Manuel A. and Robles, Miguel and Trupkin, Danilo, Land Market Distortions and Aggregate Agricultural Productivity: Evidence From Guatemala (November 6, 2020). IFPRI Discussion Paper 1969, 2020, Available at SSRN: https://ssrn.com/abstract=3726120 or http://dx.doi.org/10.2139/ssrn.3726120

Gerardo Britos (Contact Author)

University of Minnesota - Twin Cities ( email )

Minneapolis, MN
United States

Manuel A. Hernandez

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Miguel Robles

Professor in the Finance Department ( email )

Av. Salaverry 2020
Región Metropolitana
Lima 18, Santiago Lima 11
Peru

Danilo Trupkin

IIEP, Universidad de Buenos Aires-CONICET ( email )

Av. Córdoba 2122
Buenos Aires, C1120AAQ
Argentina

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