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Amidst the growing concern about agricultural underdevelopment in developing countries, this study addresses the causes and trends of land fragmentation. It analyses the impact of land fragmentation on input use efficiency, crop yield and production efficiency, especially with reference to a mountain district in Nepal. Necessary information was obtained from discussions with groups and individual land users and a questionnaire survey covering 184 households representing different degrees of land fragmentation. The analyses focused on two staple crops, namely, maize and paddy. The analysis revealed an increasing trend in the number of land parcels and a decreasing trend in the size of land parcels, primarily due to the heredity tradition of equal division of land among the inheritors. Other factors such as land purchase have also contributed to land fragmentation. Yield analysis revealed that small parcels are more productive than large parcels, because of higher applications of inputs. Consistent with this, small parcels also appeared to have a higher production efficiency than large parcels-considering both benefit and cost of purchased inputs-indicating a positive impact of land fragmentation on farmers' income. However, an analysis considering also the cost of inputs produced on the farm revealed an opposite trend, that is, on large land parcels, production is more efficient than on small parcels. In view of the need to also recover the cost of the inputs produced on-farm, it is concluded that land fragmentation-leading to small plots-has a negative impact on production efficiency, thereby constraining agricultural development.

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