The objective of this article is to investigate why farmers in Kosovo leave land fallow when the total land of their farms is small and households, almost fully dependent on farming for their livelihoods, are large. In order to elicit some of the barriers to land utilization, the article uses a comprehensive survey carried out during the agricultural year 2005/2006 to explore agricultural households’ perceptions of production, market conditions, and general security six years after the end of the military conflict in the former Yugoslavia. Several agro-environmental, household and farm characteristics are employed to empirically approximate the significance of different factors for leaving land fallow. Three different econometric models are used to address the characteristics of the dependent variable distribution by accounting for endogeneity. The main determinants of the share of land left fallow are found to be related to the economic and institutional structure: low profitability of farming; difficulty in accessing production factors and variable inputs; as well as uncertainty regarding property rights in land.