The impact of farmland readjustment and consolidation on structural adjustment: The case of Niigata, Japan

Abstract

Improving agricultural productivity is a pressing challenge for rapidly growing economies. Farmland concentration among core famers is instrumental for reaping the economies of scale. However, farmland fragmentation often serves as a barrier to such structural adjustments. This paper studies Farmland Improvement Projects in Japan, which physically mitigate farmland fragmentation by merging and enlarging small plots and consolidating land parcels among farmers. I employ community-level panel data to make use of difference-in-differences matching estimators, in order to measure the projects’ impacts. I find positive effects of the projects on structural adjustment, in the form of machinery-work outsourcing.farmland improvement project, farmland concentration, farmland fragmentation, structural adjustment, Japan