35 million ha of agriculturally suitable land is cropped. Of these, 5.5 million ha or some 90.7% of total area is in the smallholder sector which comprises 3.9 million or 99.8% of all farms.<sup>12</sup> By comparison, 8,123 farms (with 2.4% of cropped area) are in the 10-50 ha group and less than 400 above 50 ha. Smallholders cultivate 92% of total cropped area with annual and 1.1% with perennial crops, leaving 5.8% partially fallow. With about 10%, the share of perennials is highest in the 200-1,000 ha size group, declining to 5.4% for the largest size farms. Crop patterns differ markedly by farm size: Smallholders cultivate mainly maize (32%), cassava and pulses (16% each), rice and peanuts (8% each), sorghum (6%) and by vegetables and cotton (4% each). Medium scale farms in the 50-200 group focus on rice, vegetables, and cotton. Large farms focus almost exclusively on sugarcane which makes up 84% of their cropped area.

Descriptive data for the 2002 to 2014 period suggest Mozambique’s small scale sector was rather stagnant (table 2). Mean area cultivated per farm decreased markedly, from 2.4 to 1.7 ha. The share of perennials dropped from 8% to 1%. The share of farmers receiving extension advice decreased from 15% to 10% although extension increased income (Cunguara and Moder 2011). Use of (animal/mechanical) traction, improved seed, and fertilizer remained stable while that of pesticide and manure decreased. There is also a decline in the share of farmers practicing crop rotation (from 35% in 2005 when the question was introduced to 24% in 2014), inter-cropping (88% to 81%), and market integration with the share of farmers selling crops decreasing from 59% in 2002 to 49% in 2014. Modest declines in the share of those with off-farm jobs (17%) or practicing line sowing (45%) also reveal a lack of dynamism in rural areas.

Average national yields fluctuated considerably over time with few clear trends.<sup>13</sup> To assess the extent to which such short-term variation can be attributed to climatic conditions, we use publicly available NOAA data to generate mean precipitation during the growing season for the 146 districts in the sample. Average daily (annual) rainfall in the 1990 to 2001 period is 1.82 (664.3) mm with a standard deviation of 0.57 mm. Compared to this long-term average, smallholders in our sample experienced normal conditions in 2008 and 2012, suffering drought in 2002 and 2005 and flooding in 2014.<sup>14</sup> Table 3 provides descriptive statistics on distances between small and newly established large farms. We note that 41% of small farmers had at least one new large farm (with total cultivated areas of 258 ha) crop up in a 25 km radius, a figure that was, with 82%, 50%, and 11%, respectively, highest in the South, followed by the Center and the North. Nationally, 55% and 74% of small farmers had at least one new large farm (with areas of 467 ha and 966 ha) emerge within a 25-50 or 50-100 km range, respectively. Spillovers that result in yield changes after controlling for practices and purchased input use are likely driven by crop-

> 12 As virtually all of this area is cropped rather than being under pasture, the smallholder sector accounts for 95.6% of cropped area.

> 13 The increase of sugarcane yields, partly due to rehabilitation programs after the war, highlights the potential for catch-up productivity growth. 14 For 2012 and 2014 we have precise GPS coordinates of farms’ location, allowing us to compute rainfall deviations at farm level. Including these instead of the district-level estimates reported above reduces the no. of observations but does not result in any significant change of regression results which are available upon request.

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