Farmland Consolidation: A Natural Experiment from France

This paper studies the causal economic effects of farmland consolidation using large-scale consolidation reforms in France between 1945 and 2008. For identification, it exploits a spatial discontinuity in the intensity of consolidation following a sharp geological shift in soil composition in the South and West of the greater Paris agricultural basin. The results suggest that farmland consolidation leads to long-term growth in agricultural productivity, farm size and local population. It also generates large positive spillover effects to non-agricultural employment. Yet, these economic gains are not a free lunch as consolidation reforms have adverse effects on biodiversity and lead to increased water pollution levels.