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Can Land Fragmentation Reduce the Exposure of Rural Households to Weather Variability?

Veljanoska, Stefanija
Ecological economics 2018 v.154 pp. 42-51
agricultural productivity, climate change, credit, farmers, habitat fragmentation, households, insurance, issues and policy, markets, rain, risk, surveys, Uganda
Climate change continuously affects African farmers that operate in rain-fed environments. Coping with weather risk through credit and insurance markets is almost inexistent as these markets are imperfect in the African economies. Even though land fragmentation is often considered as a barrier to agricultural productivity, this article aims at analyzing whether land fragmentation, as an insurance alternative, is able to reduce farmers' exposure to weather variability. In order to address this research question, I use the Living Standards Measurement Study-Integrated Surveys on Agriculture (LSMS-ISA) data on Uganda. After dealing with the endogeneity of land fragmentation, I find that higher land fragmentation decreases the loss of crop yield when households experience rainfall anomalies, but remains detrimental for those households that are not exposed to such irregularities. Therefore, policy makers should be cautious while implementing uniform land consolidation programs.