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Most policies designed to reduce land fragmentation involve land consolidation. However, research examining the relationship between agricultural zoning and land fragmentation has not yet been explored. This paper considers the causal impact of an anti-land fragmentation policy on farmland use and farm production inputs relevant to environmental quality using a population-based census survey of farm households in Taiwan. Using the regression discontinuity method, we found that the anti-land fragmentation policy reduced the proportion of farmland used in farm production and environmental conservation by 2.4% and 2.6%, respectively. The policy also impacted the proportion of farmland using fertilizers, irrigation systems, and underground water. Our results show that anti-land fragmentation policies must be carefully designed to avoid negatively impacting farmland use and the environment.