# **1. Introduction**

The controversy over the existence of an inverse relationship between farm size and productivity (IR henceforth) is one of the longest standing and more ideologically charged pieces of the agricultural development literature. Should smallholders be found to be more efficient, policies to facilitate the redistribution of land towards small famers may be justified not only on equity but also on efficiency grounds. Binswanger et al. (1995) and Eastwood et al. (2010) provide comprehensive reviews of the arguments and a historical account of the empirical evidence on the IR. In the context of African agriculture, the relationship has been most recently questioned by Collier and Dercon (2009) who maintain that “there are (only) a handful of reasonably careful studies showing the inverse farm-size/productivity relationship in African settings, but also some showing the reverse (i.e. positive) farm-size/productivity relationship”.

A substantial part of the debate, particularly in recent years, has focused on whether the IR may be a statistical artifact, stemming from problems with the available data. The possible role of the omission or imprecise measurement of land quality traits in determining the empirical findings on the IR has been examined by several authors (Walker and Ryan, 1990; Binswanger et al., 1995; Benjamin, 1995; Bhalla and Roy, 1998; Lamb, 2003). Barrett et al. (2010) have probably put an end to that aspect of the controversy convincingly using laboratory tests on soil samples to show that only a minimal part of the IR can be explained by differences in land quality. We are aware of only one study (Lamb, 2003) that attempts to empirically test the robustness of the IR to possible errors in land area measurement. The conclusion of that study, which controls for errors in land measures indirectly by comparing fixed and random effect estimates, is that when errors in self-reported farm size are accounted for the IR can be completely explained by factor market imperfections and differences in land quality.

In this paper, we revisit the role of land measurement error in the IR controversy by drawing on data from a nationally representative household survey from Uganda, in which self-reported land size information were complemented by plot measurements collected using Global Position System (GPS) devices. This allows us to systematically analyze the differences in land area data using both measurements, and discuss the impact of such differences on estimates of agricultural productivity. In particular, we explore: (i) what are the determinants of the bias in land measurement, (ii) whether this bias varies systematically with plot size and landholding, and (iii) whether the data support the IR hypothesis, and the extent to which land measurement error affects the relative advantage of smallholders implied by the IR. Preliminary empirical evidence (Goldstein and Udry, 1999) suggests that the differences between GPS and self-reporting may be substantial, and that such difference varies by farm size. If this intuition is correct, using GPS data can have considerable implications for the much debated and contentious relationship between farm size and productivity.

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