Abstract
One often-postulated driver of cross-country disparities in agricultural labor productivity is differences in farm size. This project aims to provide some of the first experimental evidence on the returns to land consolidation in low-income countries. In doing so, we also test the impact of a commonly proposed (but rarely empirically tested) solution to the “too many small farms” problem: large, less credit constrained private-sector companies could be better positioned to consolidate land than smallholder farmers themselves. We partner with a Kenya-based company that leases small, adjacent plots of land from farmers, which it then consolidates to enable investments that demand scale, including irrigation, tractors, and professional managers. Using a randomized encouragement design that randomizes borehole location, we will measure the impacts of the induced land consolidation on agricultural productivity, with the ultimate goal of exploring land consolidation in the context of a structural change model. Further, we will study the structural adjustment in labor markets that land consolidation may unlock, by collecting data on employment outcomes of farmers potentially released from their land.