Organizational and Economic Mechanism of Land Consolidation: Adapting European Experience to the Conditions of the Agricultural Sector of Azerbaijan

A high degree of land fragmentation and small plot sizes, which emerged as a consequence of post-Soviet land privatization, currently represents a major structural constraint on the modernization of the agricultural sector in the Republic of Azerbaijan. This study aims to theoretically justify and practically design a comprehensive organizational and economic mechanism for land consolidation in Azerbaijan by adapting successful European land management frameworks to national institutional realities. The methodology is grounded in a systemic approach, utilizing comparative institutional analysis of Central and Eastern European models, economic and statistical methods applied to national datasets (2015–2025), and spatial GIS modeling of fragmented plot topologies, while incorporating the conceptual approaches of the domestic academic school.The findings identify critical hotspots of excessive fragmentation in the Guba-Khachmaz, Lankaran-Astara and Ganja-Dashkasan economic regions, where the average farm size ranges between 1.1 and 1.6 hectares. Furthermore, spatial plot scattering is shown to block the adoption of water-saving irrigation technologies in the Central Aran region and trigger soil degradation due to the inability to maintain proper agro-technical standards. The scientific novelty of this paper lies in the development of a novel four-level land consolidation model centered on the establishment of the State Land Bank of Azerbaijan (SLBA) as a specialized financial and credit institution. Three core functions of this body are justified: market-based accumulation of abandoned land shares, subsidized mortgage lending for purchasing adjacent plots, and the formation of a temporary "land pool" for voluntary exchange. Implementing the proposed mechanism is projected to minimize farmers' logistical costs, eliminate boundary disputes, and enhance smallholder profitability by 20–25%. The practical significance of the work lies in the possibility of using its results by the Ministry of Agriculture and the State Service for Property Issues under the Ministry of Economy of Azerbaijan to develop a national roadmap for sustainable land management in the country.