Land fragmentation and agricultural commercialization: New insights from Cameroon

Abstract Land fragmentation (LF) is a salient feature of smallholder agriculture. However, its implications for agriculture and the livelihoods of smallholders remain ambiguous as studies report both negative and positive effects. In this study, we add to the literature by analyzing how LF is associated with agricultural commercialization, which has not been studied so far. This is important because commercialization is an essential facet of agricultural transformation with several implications for the livelihood of smallholders. Specifically, we hypothesize and test a potential non-linear relationship between LF and commercialization, using unique survey data from Cameroon. Estimating non-linear models, we find a robust non-linear (inverted U-shape) relationship between LF and commercialization. As LF starts increasing, it is initially associated with higher commercialization up to a threshold beyond which further increases in LF are associated with lower commercialization. We further show that the possible mechanisms through which LF operates are crop diversification and the use of modern inputs like pesticides and inorganic fertilizers, where we also find these inverted U-shape patterns. In addition to different U-shape tests that confirm these results, the results are also robust across different indicators of LF, different estimators, and are unlikely to be driven by unobserved factors. These findings suggest that LF could also have positive benefits and thus these patterns may be relevant for policy makers when designing consolidation policies. In addition, modeling the relationship between LF and other outcomes would provide more insights for targeted policies.