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Highlights • Higher weighted average size of the land parcel increases farm productivity. • Agricultural training, conventional production type increases farm productivity. • Land fragmentation is an important determinant of farm productivity. • Januszewski index has U-shape relation to farm productivity. Abstract The rising population of the world increases the need for raw materials and food. The more efficient production methods help to reduce the shortage of production and to mitigate climate change. This paper analyses the relationship between land fragmentation and farm productivity. The results show that land fragmentation measured using the Januszewski index has U-shape relationship to farm productivity: there are larger farms with many parcels which are productive, but their parcels are scattered and smaller farms, with few parcels that are also productive. We found an indicator which describes the differences in farms' productivity based on their land use – the area-weighted mean size of the parcels of one farm. This indicator is a statistically significant determinant of farm productivity. Other significant variables that are related to higher productivity are farm owners' education, farm size, farming system and production type. Agricultural land policies should consider multiple indicators and analyse different production types to intervene more effectively. [ABSTRACT FROM AUTHOR]