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Is there a farm-size productivity relationship in African agriculture ? evidence from Rwanda
 
Author:Ali, Daniel Ayalew; Deininger, Klaus; Collection Title:Policy Research working paper ; no. WPS 6770
Country:Rwanda; Date Stored:2014/02/06
Document Date:2014/02/01Document Type:Policy Research Working Paper
SubTopics:Wetlands; Banks & Banking Reform; Climate Change and Agriculture; Labor Policies; Agricultural Knowledge and Information SystemsLanguage:English
Major Sector:Public Administration, Law, and Justice; Agriculture, fishing, and forestry; FinanceRel. Proj ID:1W-Land Policies For Growth And Poverty Reduction: Moving Towards -- -- P095390;
Region:AfricaReport Number:WPS6770
Sub Sectors:General agriculture, fishing and forestry sector; General public administration sector; Housing financeTF No/Name:TF095610-Computerization; TF096734-Impact Evaluation of Land Tenure Regularization in Rwanda; TF097647-India Gendered impacts of NREGA; TF098730-BNPP-GENDER; TF092028-GENDER; TF091533-GENDER; TF091531-GENDER; TF092663-EVALUATING THE EFFECTIVENESS OF SUSTAINABLE LAND MANAGEMENT INTERVENTIO; TF098469-New Approaches to securing land tenure in Sub-Saharan Africa
Volume No:1 of 1  

Summary: Whether the negative relationship between farm size and productivity that is confirmed in a large global literature holds in Africa is of considerable policy relevance. This paper revisits this issue and examines potential causes of the inverse productivity relationship in Rwanda, where policy makers consider land fragmentation and small farm sizes to be key bottlenecks for the growth of the agricultural sector. Nationwide plot-level data from Rwanda point toward a constant returns to scale crop production function and a strong negative relationship between farm size and output per hectare as well as intensity of labor use that is robust across specifications. The inverse relationship continues to hold if profits with family labor valued at shadow wages are used, but disappears if family labor is rather valued at village-level market wage rates. These findings imply that, in Rwanda, labor market imperfections, rather than other unobserved factors, seem to be a key reason for the inverse farm-size productivity relationship.

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