specific technology, i.e. require not just establishment of any large farm in the vicinity but one that actually grows the same crop. Table A1 in the appendix reports relevant descriptive statistics. The share of small farms who had a large farms growing the same crop newly established within a distance of 25 (50-100) km is 33% (64%) in maize, 13% (34%) for cassava, 3% (8%) in sorghum, 15% (30%) for peanuts, 5% (23%) for rice, and 7% (24%) for sugarcane with regional variations in line with what was discussed earlier.

# **3.2 Comparing productivity and modern input use between large and small farms**

Beyond spatial proximity, a high potential for catch-up as evidenced by large gaps between large and small farms will be conducive to spillovers. Based on 2014 data, table 4 shows clear differences between large and small farms in terms of cultivation practices, access to water and improved inputs, and adoption of measures to conserve soil fertility such as use of organic manure, fertilizer, and yields.<sup>15</sup> These, together with evidence on the spatial distribution of production in figures 2 and 3, are discussed below.

Maize, the main staple, is grown by 55% of large (with mean areas of 18, 14, and 7 ha in the North, Center, and South, respectively) and 83% of small and medium producers (76%, 92%, and 86% in Center, South, and North, respectively). Average yields are among the lowest in Africa without significant difference between large and small producers, despite vast differences between them in the share of area irrigated (19% for large vs. 1% for small and medium farmers), improved seed use (40% vs. 9%), and application of fertilizer (29% vs. 2%), pesticide (21% vs. 1%), and manure (17% vs. 1%).

Cassava is grown by 53% of small & medium producers on an average area of 0.4 ha per farm, compared to 12% of large ones with an average of 1.9 ha. In line with the crop’s limited input requirements, smallholders obtain much higher yields than large farms (2.9 vs. 0.8 t/ha with yields above 3 t/ha in the South and Center). Neither large nor small farms use significant levels of modern inputs. The same is true for sorghum, a crop that is grown by 24% of smallholders (about one-third each in the North and the Center) but only 7% of large farms, about 16% of which use improved seeds.

Although domestic rice consumption is growing rapidly,<sup>16</sup> the crop is grown by few (5% of large and 13% of small) farmers. Average large farm yields are, with 0.8 vs. 0.5 t/ha, about 60% above those for small farms, partly due to higher use of irrigation (86% vs. 3%), improved seed (73% vs. 5%), fertilizer (73% vs. 3%) and pesticides (68% vs. 1%),. Sugarcane is the main large farm crop with (monetary) yields about double those by smallholders but large differences among large farms (19.3 vs. 22.0 MT/ha in Center vs. South) mirrored by those of smallholders (15.1 vs. 14.2 and 6.7 MT/ha in North, South, and Center).

# **3.3 Estimating yield regressions**

> 15 Unfortunately, a failure to record quantities of purchased inputs applied by large farms makes it impossible to compute profits.

> 16 Rice consumption more than doubled from 2000 to 2010 to 550,000t of which 63% is imported and demand is expected to increase at 7% per year over the next decade or so.

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