LAUSR

Abstract Given the background of the increasing opportunity cost of farming and the popularization of labour-saving technology, increased fragmentation has gradually become a key factor in the devaluation and abandonment of land assets. To systematically identify the costs of fragmentation, we use a series of indicators such as the number of plots, the Simpson index, the plot-homestead distance and the total minimum commuting time from the homestead to all plots to measure the extent of fragmentation. A translogcost function is developed and estimated using survey data from three periods, 2011, 2014 and 2017; the data include an effective sample of 1064 household-year observations involving 6599 plot-year observations in Chongqing, China. The extent of fragmentation in the mountains of southwest China is quite serious compared with that in other countries and regions. The Simpson index is 0.63, and on average, 6.06 mu (1 mu = 666.67 m2 or 1 mu = 1/15 ha) of cultivated land is distributed in 6.16 plots, while the total minimum commuting time from the homestead to all plots is approximately 45 min. An increase of one standard deviation in the number of plots, the Simpson index or total minimum commuting time would lead to cost increases of 7.1 %, 15.1 % and 12.2 %, respectively, if other conditions remain unchanged. The channel for the above result involves the changes in the cost share of inputs caused by fragmentation, which increase the labour cost share and reduce the machinery cost share. There is an inverted U-shaped relationship between farm scale and production cost with an inflection point at 47 mu; that is, costs begin to decrease when the scale exceeds 47 mu. However, the average farm scale is currently only 6.06 mu. In addition, production costs can be significantly reduced by renting-in land and implementing land consolidation. To reduce land system-induced costs in mountainous areas, the government should rationally consolidate land to achieve moderate-scale management, reduce the transaction costs of land transfers and popularize machinery suitable for complex terrain.