111 EAAE-IAAE Seminar ‘Small Farms: decline or persistence’ University of Kent, Canterbury, UK 26 th -27 th June 2009 The Economics of Land Consolidation in Family Farms of Moldova * Dragoş Cimpoieş, 1 Zvi Lerman, 2 Anatol Racul 1 1 Department of Management, The State Agricultural University of Moldova, Chişinău 2049, Republic of Moldova. Email: dcimpoies@uasm.md 2 Department of Agricultural Economics and Management, The Hebrew University, Rehovot 76100, Israel. Email: lerman@agri.huji.ac.il Copyright 2009 by Dragoş Cimpoieş, Zvi Lerman and Anatol Racul. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. Abstract The paper investigates the current situation with fragmentation of family farms in Moldova and its effects on family well-being and farm productivity. A key hypothesis is that consolidation of agricultural land in Moldova has beneficial effects in terms of productivity and is desirable in the long run. We examine the case for market-driven land consolidation using data from several recent surveys in Moldova. We show that, in the individual sector, larger farms consume less of their output and attain higher levels of commercialization. Larger individual farms thus have higher revenues from commercial sales and generate higher family incomes. Farm augmentation accordingly makes a positive contribution to the well-being of the rural population. The extent of parcel consolidation is directly correlated with the relative efficiency of farms: consolidated family farms are more efficient than those with fragmented holdings. Hence, land consolidation leads to better economic performance of family farms. Keywords Land consolidation, land fragmentation, land market, family farms, rural incomes, Moldova * This work was financially supported by the state project on land consolidation 069/p, financed by the Academy of Sciences of Moldova.