Results for (1) are in cols. 7 and 8 of table 8, complemented by those from the OLS version from the 2021 and 2022 cross sections (in cols. 1-4) and the combined sample using OLS (cols. 5 and 6). In all cases, direct damage from the war is estimated to reduce productivity by about 12%. Indirect war effects differ across regions with point estimates of 29% in the South, 20%, 11%, and 9% in the Center, East and North and 7.5% (significant at 10%) in the West. Coefficients on land, labor, fertilizer, and machinery are highly significant in the OLS regressions, with point estimates of between 0.094 and 0.111 for land, 0.029 and 0.045 for labor, and 0.072 or 0.056 for fertilizer and machinery, respectively. Only fertilizer is significantly different from zero (with a coefficient of 0.051) in the fixed effects regression. Farm fixed effects net of rayon fixed effects provide a measure of farmers’ total factor productivity (TFP). Figure 2 which plots estimated TFP against cultivated area highlights great dispersion in productivity ii αα levels and modest increases in productivity with size.<sup>28</sup> Results from regressing TFP on farm size categories and an indicator variable for formal registration provide two insights. First, differences in TFP across farm size groups are statistically significant, most notably a large gap of 14-20 percentage points between the smallest farm size category and the next (50-120 ha). Differences between subsequent categories are much smaller with gaps of 4 and 5-7 points, respectively, between the 50-120 and the 120-500 ha as well as the 120-500 and > 500 ha category.<sup>29</sup> Second, registered farms’ TFP is not different from that of informal ones overall (table 9, col. 2) or in the same size group (table 9, col. 3). If formality is not associated with differences in TFP, it will be of interest to identify—and possibly affect through policy—factors that differ systematically between formal and informal farms and that may, by affecting either the cost of the benefits from formalization, may be a reason for farms to stay in informality. A model suggests that identifying and eliminating such factors could eliminate deadweight losses and in doing so increase competition, aggregate production, and skilled formal sector wages (Ulyssea 2018).

Restrictions on land given to small farms in the 1990s or early 2000s for ‘permanent use’ under favorable conditions but, until 2022,<sup>30</sup> without mechanisms to acquire ownership rights to such land or transfer it to others, are one candidate. As they are non-transferrable and assigned to individuals, they will not survive the death of the original assignee.<sup>31</sup> creating tenure insecurity that is likely to reduce incentives for landattached investments. Moreover, as most of these rights were assigned 2-3 decades ago, such restrictions

> 28 Appendix table 4 tabulates mean and dispersion of TFP overall and separately for legal entities and ‘informal’ farms. While TFP increases and dispersion decreases with size, for the 50-500 ha categories, the hypothesis of levels and dispersion of TFP being equal between formal and informal farms cannot be rejected.

> 29 Note that credit constraints are estimated to decrease TFP for 50-120 ha farms by 5 points, an estimate that is significant at 10%. 30 Short-term (1 year) leases of land operated under permanent use rights were allowed in March 2022. Legislation adopted in November 2022 provides citizens and legal entities with the right to permanently use a land plot of state or communal property to buy the corresponding land without land auctions. The purchase of agricultural land plots is carried out at a price equal to the normative monetary value of the land plot (UAH 27,500/ha) and the buyer has the right to opt for paying for the land in 10 equal instalments that are indexed to inflation.

> 31 Formally, in case of death, land will revert to the community or state, the tenure while village councils can-and have in some cases-provided permanent use rights to the assignee’s heirs, they are under no obligation to do so.

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