Agricultural productivity is influenced by various factors: soil fertility, nature of seed, supply of inputs like irrigation, fertilizers, farm size and more. Other things remaining constant, farm size and agricultural productivity are positively correlated.
Studies around the globe have concluded that fragmentation of land into smaller parcels poses a negative impact in agricultural productivity as a result of increase in cost of production per unit output. Additionally, farm size fragmentation hinders commercialization and modernization of agriculture since transporting machineries and other inputs to a number of fragmented land parcels is not cost effective and similarly transporting harvested products from various farms increases the final cost of the product as well.
In Nepal, land fragmentation is deep-rooted in traditional practice of inheritance wherein parental land is divided equally among heirs. With an average holding of 0.68 hectare at present, division of parental land among the heirs is only going to further worsen the land-holding situation. According to Agriculture Census conducted by Central Bureau of Statistics, average land holding has declined to 0.68 hectares in 2011/12 from 1.11 hectares in 1961/62.
Consolidation of land can be a solution to land fragmentation; fragmented parcels of land held by different farmers can be treated like a single plot for commercial and large scale farming. Land consolidation can be achieved through a number of measures; mutual agreement, purchase and sales are commonly used measures. Latter option―purchase and sales—may not be feasible in Nepalese context primarily due to two reasons. Firstly, poor farmers may not be able to buy others’ land and secondly, small parcels of land that farmers hold serves a means by which they earn their livelihood. So, mutual agreements among farmers holding small parcels of land can be a better alternative for land consolidation as this mutual agreement would include land pooling of various fragmented holdings so as to form a single plot of land.
Land consolidation has been successful in many countries, most notably in Taiwan where agricultural productivity increased by 32 % after consolidation. In Moldova and Bulgaria, farmers with small and fragmented land have come together to form a cooperative. They conducted farming jointly, shared benefits and bore costs proportionally.
Nepalese farmers who hold small parcels of land may come together and get organized to lessen the impact of land fragmentation on agricultural productivity. If farmers could consolidate their small parcels through mutual agreement, economy of scale in agriculture is likely to be achieved which ultimately benefits farmers as cost of production per unit output will decline with joint farming. Further, Land Act 2021 also sanctions such consolidation. As per the act, ten or more farmers who intend to do collective farming will be given financial and technical assistance.