Economic impacts of land fragmentation in Butare, southern Rwanda.

Abstract

Butare, where this study was conducted, exhibits one of the highest population densities in Rwanda. Agriculture is the dominant economic sector and provides employment for more than 90 per cent of the working population. As a direct result of population growth, most peasants have small fields (mean of 2.4 hectares per household) and land fragmentation is common. The purpose of this research is to examine the effect of land fragmentation on economic efficiency. This study is based on data collected during 2001 from 200 households in Rusatira and Muyira districts using a standardized questionnaire. Regression analysis shows that area operated is primarily determined by the population-land ratio, non-agricultural employment opportunities, ownership certainty and adequate information through agricultural training. Results from a block-recursive regression analysis indicate that the level of net farm income per hectare, which indirectly reflects greater economic efficiency, is determined by area operated, use of farm information, field extension staff visits, formal education of a farm operator, and the fragmentation of land holdings. Economies of size, whereby large farms reduce their average costs are evident in the data. The results obtained using ridge regression, used to overcome the multicollinearity problem, support the findings of two stage least squares. Better educated farm operators with large and unfragmented farm units, with access to farm information and in regular contact with field extension staff can be expected to generate higher net farm income per hectare and much higher returns to management - a fixed resource. Factors influencing technology adoption by Rwandan coffee farmers, assessed according to extent of adoption of soil testing and use of fertilizer, are also investigated in this study. Twenty per cent of farmers surveyed have adopted both practices, however, forty-nine per cent have adopted neither practice. A chi-square test showed a strong association between the two practices, implying that a farmer who tests soils on his farm is also likely to use fertilizer. Results support expectations that farmers who adopt more recommended technologies and farming practices are more productive and more efficient producers of coffee. A discriminant analysis identified land fragmentation, availability of wealth and liquidity, and education of the principal farm decision-maker as the most important factors influencing the adoption of recommended and appropriate farming practices on coffee farms, followed by gender of farm operator, and farm information acquired by farmers. It is concluded that transformation of Rwandan agriculture requires policies that (a) remove obstacles to the development of an efficient land market in order to reduce land fragmentation and to transfer land to more efficient farmers; (b) improve rural education, strongly associated with off-farm job opportunities, implying that improving education will improve labour mobility from agriculture; (c) improve liquidity and farmers' access to relevant information; (d) strengthen extension facilities to individual farmers; (e) reduce gender discrimination in order to improve farmers' abilities; and (t) promote adoption of recommended farming practices.