Fragmented land

Fragmented Farms

Agriculture in less-developed countries is characterized by small, fragmented farms, low rates of mechanization, and inefficient allocation of land across farmers. Yields are low, contributing to income gaps between rich and poor countries.

Land is not like other commodities, and historically, private markets have been slow to reallocate land. Economic theory suggests several important constraints that can impede efficient land trade. Importantly, they arise even in the presence of tradable property rights. Governments have responded with large-scale centralized land reforms or land consolidation programs, such as Storskiftet and Enskiftet in Sweden, or Denmark's Jordfordelingsloven. But such programs are costly, challenging to implement effectively, and sometimes coercive.

Method

We propose to use the tools of market design to develop new solutions that address key frictions in the land market. In this proposal we describe a three-stage project in Uganda that seeks to 1) measure key properties of the land trade problem, 2) develop a computerized trading platform adapted to those properties, and 3) evaluate its performance, relative to status quo forms of trade, in a realistic field setting.

Goal

The ultimate goal is to help poor rural households achieve a more efficient land allocation through voluntary trade. Better-functioning land markets have the potential to improve the lives of some of the poorest people in the world, and to contribute to the development process.