While the frontier production function does not substantiate the notion of fragmentation negatively affecting overall output fragmented land plots may have a higher probability of being left idle. Table 3 uses survey weights to provide evidence on the approximate magnitudes involved based on the LSMS survey. The total amount of cropland not used for non-productivity related reasons is estimated at 173,885 ha or about 12% of the total. Some two thirds of this land has not been cultivated for at least 5 years. Interestingly, idling of land does not seem to be concentrated in areas that are marginal; in fact 54% is in the coast and 31% in the central part of the region, with only 13% in the mountains. Also, while about 20% of the affected area remains fallow due to poor soil quality, the remainder is about equally split between economic factors, i.e., the lack of resources to access variable inputs or machinery and location of the plot being too far from the homestead.

Reasons for cropland to be abandoned are of interest in two respects. First, with less than half a percent, the share of area where plot sizes are judged to be uneconomically small is negligible, suggesting that publicly supported consolidation efforts that predominantly target this type of plots are unlikely to fully address the issue. Second, transfer of the roughly 80% of idle plots that are neither unproductive nor too small through rental markets could make owners better off and same time improve efficiency of land use.

Table 4 characterizes households who leave land idle by the reason for doing so and the length of time for which land has been idle.<sup>13</sup> Columns 1 and 2 suggest that households leaving land idle own larger amounts of land (1.28 ha vs. 0.76 by „full land users‟)<sup>14</sup> and are less poor (12% vs. 19%). They enjoy better access to infrastructure and extension and -somewhat paradoxically given that a lack of resources is a key reason for leaving land idle- live in places with much better credit access. At the same time, they are smaller and have lower levels of agricultural assets. They rely on non-agricultural sources of income more heavily than the mean farmer; in fact the share of their agricultural income is 10 points below the national average. Their level of productivity, in terms of total output or profit per ha, is half or less of the national average. Both the size of area affected -with the amount of idle land more than three times what is currently transferred through leases- and characteristics of households with fallow land thus suggest that land leasing could significantly improve productivity in rural areas. Exploring the reasons for the apparent failure of land rental markets on such a massive scale will thus be of great policy relevance.

# **4.3 Descriptive evidence on land markets**

As a first step towards such analysis, table 5 displays descriptive statistics for households depending on whether they remained in autarky, demanded, or supplied land to rental (col. 1-3) and sales (col. 4-6)

> 13. We report figures for land left uncultivated because of lack of resources (economic reason) and inappropriate location (structural reason). 14. The fact that that households leaving land idle have slightly larger plots on average than those cultivating all of their land (0.31 vs. 0.28 ha) casts doubt on potential of consolidation programs to effectively address the causes underlying abandonment of productive land.

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