The Effect of Land Scarcity on Farm Structure: Empirical Evidence from Mali

We analyze the individualization of farm units in Mali in the sense of a transformation of purely collective farms into mixed units in which private plots coexist with collective fields. Since a moral-hazard-in-team problem plagues production on the latter and the household head extracts his income from it, he faces a trade-off between efficiency and capture. We show, within the framework of a patriarchal farm household model, that private plots become profitable for the head once land becomes sufficiently scarce. Specifically, greater land scarcity raises both the probability to find private plots in afarm and the share of farmland allocated to these plots. On the basis of firsthand data collected in southern Mali, we test and confirm the two predictions yielded by the above theory. Moreover, we show that a higher number of married men within the household has the same effect as land scarcity, thus suggesting an interesting refinement of the moral-hazard-in-team argument.