The
Ethiopian Economic Association/ Ethiopian Economic Policy Research Institute
Working paper Series No. 4
Review of
Theories on Land Tenure and Country Experiences
BY
DEJENE
AREDO
January 2003
Contents
2.1. The
Concept of “Property Rights”
2.2.
Transferability and Security
2.3. The
Complexity of Property Rights: Ostrom’s Approach
2.4. The
Demand for and the Supply of Property Right Regimes
2.5. The
Evolutionary Theory of Land Rights (Individualization)
2.6. Common
Property Resources
2.7.
Variations in Property Right Regimes in Sub-Saharan Africa
2.8. Women
and Property Rights in Land
3.2. The
Relationship Between Tenure Security and Transaction Costs
3.3. Land Rental Markets in sub-Saharan Africa
3.4.
Comparing the Economic Effects of Individualization Process and Indigenous Land
Rights
3.5. Why do
Land Markets Fail to Transfer Land to More Efficient Farmers?
3.6. Impacts of Land Markets on Poverty
3.7. Donor Policies and Land Tenure
4.1. Theoretical and Ideological Perspectives on
Land Reform
4.2. Anatomy of Land Reform in Developing
Countries
4.3. Land
Reform Without Political Reform: The Case of China and Vietnam
4.4. Land Reform Reversal in the Former Socialist
Countries
4.5. Land Reform in sub-Saharan Africa
5. A
SUMMARY OF HIGHLIGHTS OF THE LITERATURE
The debate
on the land question in
The purpose of this study is to undertake a comprehensive survey of the theory of land tenure and experiences of developing countries in implementing land reform measures. The study draws from an extended version of the theory of property rights. Previously neglected areas, such as pastoral areas, common property resources, and gender are included in the survey of the theoretical literature. More specifically, the study attempts to ascertain whether or not the following propositions hold in the African context.
i. Private property signifies an absolute right.
ii. Common property signifies a system where the free-rider problem is a major issue.
iii. Property rights can be easily classified into three neat categories: public, private and common property.
iv. Property rights systems that do not contain the right of alienation (transfer) are considered to be ill-defined.
v. Well-defined and secure property rights need to involve the right to alienation (or the right to transfer resources to others).
vi. Tenure systems that do not allow the transfer of rights are inherently inefficient.
vii. Land markets function as smoothly as markets for other factors of production.
viii.
Indigenous land rights systems in sub-Saharan
ix. Land markets can smoothly transfer land from less efficient farmers to more efficient ones.
x. There could be no effective land reform without political pluralism.
xi. Land reform alone is sufficient to bring about agricultural growth.
The rest of the paper is
organized as follows. The second section presents a comprehensive survey of the
latest developments in the theory of property rights. It goes beyond the discussion the standard
concept of property rights and critically investigates the relevance of
accepted established concepts to the conditions of sub-Saharan African
countries. Moreover, the section reviews
theories related to common property resources, gender issues, and issues
associated with property rights in pastoral areas. The section focuses on one
central theme: the complexity of property rights in land in sub-Saharan
Land, in particular agricultural land, has certain specific characteristics, which can be summarized as follows:
i. The supply of land is fixed, whereas the
supply of agricultural labour does increase overtime in most developing
countries.
ii. Land is a gift of nature. Unlike capital, land is not man-made. This fact has far-reaching implications for
issues related to property rights in land.
iii. Land is a fixed asset and a measure of wealth
for those who claim ownership. Land can
be held as livelihood security, as a financial security (e.g. as a hedge
against inflation), as a transfer of wealth across generations and as a
resource for consumption purpose (e.g. country estates held by urban elites for
leisure purposes). The price of land reflects all those demands, services and
uses (Ellis 1992:196). Land is something more than a productive asset.
iv. Property rights in land
involves social
relations, and not relations between man and a thing. These relations assume different forms:
relations between tenants and landlords, the individual and the community, the
peasantry and the state, and so on (Ellis 1992: 196-97).
v. The economic potential of agricultural land
is determined both by its location (distance from the market center and from
infrastructure) and by its quality (i.e. fertility). Besides, no one plot of
land has identical economic potential as another. That is, different plots of
land have different values.
vi. Of all factors of production, land is the
least mobile one. In physical terms, no plot of land can be transferred from
one place to the other. However, agricultural land can be put to alternative
uses subject to physical conditions (like moisture, sunlight, altitude, etc.)
Three
categories of property rights can be distinguished (Eggertsoon 1990: 34):
i. the right to use an asset (user right or usufruct right) which defines the potential uses of an asset that are legitimate for an individual;
ii. the right to earn income from an asset and contract over the terms with other individuals; and
iii. the right to transfer permanently to another party ownership rights over an asset (i.e. to alienate or sell an asset).
According to
Feder and Feeny (1991), property rights are a bundle of characteristics which
comprise exclusivity, inheritability, transferability, and enforcement
mechanisms. Property rights thus define the uses, which are legitimately viewed
as exclusive and also define who the owner of these exclusive rights is (see
also
Property rights involve relations between people and property is not an object. “Agricultural land ownership involves social relations between, for example, feudal lord and serf, landlord and share tenant, etc” (Ellis 1992). Similarly, Ostrom (1998:7) notes that “property rights define actions that individuals can take in relation to other individuals regarding some thing”. That is, perhaps why Marxists go further and use the term “relations of production” in place of what the institutional economists call “property rights.” In this light, it is important to note that property rights play not only economizing roles (see Lin & Nugent 1995: 2307-2310) but also redistributive roles; thus, “property rights are seldom neutral with respect to the distribution of gains of specialization and exchange, i.e., of the economizing functions” (Lin & Nugent 1995: 2310).
The standard literature distinguishes four categories of property rights in land. These are (i) private property; (ii) common property; (iii) state property; and (iv) open access property. Some authors refer to these four-fold classifications as “Control regimes” (e.g. Eggersson, 1996: 161). Each of these has a defined owner, ownership rights, and owner duties as depicted in the following table.
Table
1. Standard Types of
Property Rights Regimes
|
Regime type |
Owner |
Owner rights |
Owner duties |
|
Private
property Common
property (res Communise) State
property Open
access (res nullius)
(Non property) |
Individual Collective Citizen None |
Socially
acceptable uses Exclusion
of non-owners Determine
rules Capture |
Avoidance of socially unacceptable uses Maintenance;
constrains rates of use Maintain
social objectives None
|
Source: (Hanna et al. 1965: 5)
Private property is usually defined in terms of exclusivity and transferability. Private property rights are more exclusive and generally, but not universally, more transferable than are common property rights. The owner of a private property can make socially acceptable uses of his property but has the obligation to avoid socially unacceptable uses.
· Private property, it is sometimes claimed, is the pillar of a civilized society. [However] private property is, of course, a creation of the state. (Feudal lords, in the absence of the nation-state, had to have their own armies to protect “their property”).
·
Nations place many restrictions on private
property. In the
· Private property is not and cannot be an absolute right. Questions of property always involve a dual relation of private and public purposes. Always, the question is not just “What is a private purpose over and against a public purpose?” But, more than that, “Is the private purpose also a public purpose, or merely a private purpose?”
· Free markets are wonderful in an economy with the characteristics that allow markets to operate effectively. But market forces are a function of economic power and control. When economic resources and opportunities are widely distributed, then most economic activity can best be left to individual, private initiative and to market forces.
Common Property (res communies) includes a right to use something in common with others or a right not to be excluded from the use of something. It also includes some expression of equality or equability in the allocation of rights. It may also signify a situation in which people have user rights but not exchange rights (McCay: 1996: 114). We will have more to say on common property in connection with common property resources.
State property refers to
the property owned outright and used exclusively by agents of the state or
property deemed public, over which the state exercises governance as in the
case of rural land in
Open access (res nullius) is the null condition of no property claims or a state of “non-property”. Thus, with open access, owner rights are replaced by a state of anarchy in which anybody can capture the benefits of a resource. Some authors confuse open access with common property. For example, Pindyck and Rubinfeld (1994: 645) asserted that “… common property resources are those to which anyone has free access. As a result, they are likely to be over utilized”. We will deal with this problem elsewhere in this paper.
The standard classification of property regimes into four categories fails to show the transfer mechanism and the extent to which rights are concentrated or distributed over agents. This type of classification will have limited value in improving our understanding of concepts like “the tragedy of the commons” and “popular participation”.
The four types of property regimes identified above are by no means exhaustive (for details see Yeraswork 1995: 33-35). Some authors disagree with the classifications of property rights regimes into private property, state property, common property, etc, and propose alternative models. For example, Eggertsson (1996: 162-171), having concluded that “… researchers have found that these categories are unsatisfactory for dealing with many empirical cases”, proposed alternative classification of his own.
Problems of classification of property rights become more evident when we come to the African case. Prior to colonization, land was rarely owned in the Western sense of exclusive and inalienable firths vested in one individual in exchange for cash. As suggested by the literature (Meek 1946; Okoth Ogendo 1975; Davison 1988), there is confusion of terms related to land rights such as tenure, usufruct, freehold and ownership when they are applied to the African context. Davison (1988) provides conceptual distinctions between these terms in the light of the African context. Tenure applies to holding rights, including land, which is transmitted through inheritance, loan or rental for an established exchange value, and outright sales. Usufruct refers to the right to use land by groups or individuals. Freehold applies to the practice of holding exclusive rights to a piece of land which can be transferred to another by an individual or corporate body. Ownership, in the western sense, refers to land that has cash or commodity value and is registered through a process of entitlement to an individual or corporate group. But, in the African sense, it is problematic to define ownership because in parts of the continent, land, prior to the penetration of capitalism, had an exchange value that was transferred from one individual to another without the benefit of a written deed.
In
Land right systems can be
characterized according to two basic and distinct dimensions: transferability
and security of rights. Using these
dimensions two extreme right regimes can be identified as shown by the two
extreme corners (i.e. the perfect market model in the south-east corner and its
opposite in the south-west corner. In
the idealized market systems assumed in orthodox neoclassical economics, all
land rights are marketable and security of land rights is perfect (see the
south-east corner in Figure 1). At the
other extreme (i.e. the north-west corner of the figure), there lies absolutely
imperfect land market characterized by complete lack of security and
transferability. In between the two extremes, there lie different forms of
property regimes. For example African surveys indicate
regimes where use rights are quite secure but transferability is restricted to
varying degrees. Many African
indigenous land right systems and the rist system in pre-1975
Figure 1: Land
Rights Systems Characterized by Transferability and Security
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![]()
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Perfect
transferable
![]()
![]()
![]()
No security
![]()
![]()
![]()
Source: Adapted from (Hoff 1992:233)
Simple classification of property right regimes into state, private and common property is misleading. Thus, Ostrom (1998) underlines that “the world of property rights is far more complex than simply government, private and common property.”
An alternative and innovative approach to the
analysis of the concept of property right regimes is provided by Ostrom (1998).
This approach is likely robust in showing the complexity of the concept in and
clarifying the confusions surrounding its effect on efficiency.
Based on a comprehensive review of the relevant literature, Ostrom identified five property rights and five classes of property-rights holders as indicated in Table 2.
The five property rights are the following:
This type of anatomy of property rights challenges the commonly held view that property rights systems that do not contain the right of alienation (or (transfer) are considered to be ill-defined. Moreover, it challenges the view that a system that does not allow the transfer of rights is inherently inefficient.
This approach suggests that “much more information must be known about the specific values of a large number of parameters before judgments can be made concerning the efficiency of a particular type of property right” (Ostrom 1998).
The five classes of property rights holders are:
3. Claimants possess the operational rights of access and withdrawal plus the right of managing a resource. Claimants’ rights also include decision making power concerning the construction and maintenance of facilities as well as the authority to devise limits on withdrawal rights. But claimants do not have the right to exclude others from the use of a resource or the right to alienate (or transfer) a resource.
One point we can draw from above is that “well defined and secure property rights do not need to involve the rights to alienation” (Ostrom 1998).
Table 2: Bundles of Rights Associated with
Positions
Rights
|
Owners |
Proprietors |
Authorized Claimants |
Authorized Users |
Authorized
Entrants |
|
Access |
X |
X |
X |
X |
X |
|
Withdrawal |
X |
X |
X |
X |
|
|
Management |
X |
X |
X |
|
|
|
Exclusion |
X |
X |
|
|
|
|
Alienation |
X |
|
|
|
|
Source: (Ostrom 1998)
Do property right
regimes change over time? What factors
explain country-specific evolution of property right regimes? These questions are addressed by Feeny (1988). Using a simple model of induced institutional
change (see Hayami & Ruttan 1971), Feeny attempted to explain changes in
property right regimes in south and southeast Asia.
According to the model of induced institutional change, a demand for institutional change arises when some gain cannot be captured under current institutional arrangements. In the specific case of the system of property rights, an appreciation in the relative price of a factor will induce an increase in the demand for an institution to define property rights in that factor. It will also increase the benefit to be derived from the utilization of that system of property rights. A rise in the relative price of a factor thus will increase the demand for the establishment of a system of property rights to govern the use of that factor (Feen 1988).
The factors that affect the demand for change are the factors that serve to create the potential benefits for the users of institutional arrangements. However, whether change will indeed occur depends on the supply of institutional change, that is, the willingness and capacity of the fundamental institutions of government to provide new arrangements (Feeny, 1988).
The capacity of governments depends partly on the cost of institutional innovation. As in the case of technical change, the cost depends in part on the stock of existing knowledge about the design and operation of institutions. The stock of knowledge, in turn, depends on past experience in economic activities as well as the previously existing set of institutions and the nature and degree of research institutions. Investment in educational institutions and research (especially in legal studies and the social sciences) can affect the supply of institutional change. This can be achieved through both the creation and the borrowing of new ideas in institutional design. In addition to the effect of the stock of knowledge, the cost of supplying new institutions depends on the prices of the factors used in the institutional design. In addition, implementation cost will affect the supply of new property right regimes (Feeny 1988).
In addition, the willingness to provide a new institutional arrangement does depend on the private benefits accruing to and costs incurred by agents of government (i.e. the elite). This implies that the fundamental institutions of a society and the initial distribution of power will have a significant impact on the kinds of institutional arrangements that are supplied. The problem here is that the interests of the elite may not be compatible with social welfare (Feeny 1988). In addition to the interaction of demand and supply factors, new institutional arrangements are also affected by ideology and conventional wisdom. Notions of how the world should and how it does operate affect institutional design (Feeny 1988).
The neo-classical approach of
Feeny (1988) suffers from one major problem, to the extent that developing
economies are concerned. The implicit assumption of a competitive factor market
may not be realistic under conditions of sub-Saharan
The evolutionary theory of land
rights in sub-Saharan
A rise in the price of land
(or natural resources) in relation to the price of labour induces technical
change designed to release the constraints on production that result from an
inelastic supply of land and, at the same time, induces institutional changes
that lead to greater precision in the definition and allocation of property
rights in land.
The evolutionary theory of land rights has thus
strong affinity with the property rights theory, since both approaches take
changes in relative prices as the engine of the transition from communal to
individual tenure, or from general to specific land rights (e.g. see Feeny
1988).
The historical experiences of The United Kingdom (Alchian & Demsey 1973) and several Asian countries (Feeny 1988) are called upon in support of the evolutionary/property rights approach to the analysis of changes in land tenure systems.
However, based on the case of Asian countries, Feeny (1988) challenges this approach. He introduced tensions and disputes into the picture, suggesting the possibility that vested interests may block spontaneous evolution of individual rights. The tension between progressive and conservative forces may lead to disputes. Administrative reforms are required, according to Feeny, to overcome resistance by vested interests. A similar concern was also expressed by Boserup (1965), a pioneering proponent of the idea of spontaneous transition from general to specific rights in land under conditions of growing population pressure. Boserup notes that “each new step on the road to private property in land may well create less and not more security of tenure and vast amount of litigation is the obvious result.”
The evolutionary theory of land rights in developing countries has been challenged on the grounds of historical evidence underscoring tensions arising between those who support the status quo and those who struggle for individual rights. Thus, Platteau (1992: 148) notes:
Historical processes of
transition are always characterized by tensions arising from the clashing of
contradictory forces. The outcome is
necessarily influenced by the way the political power (crystallizing the
existing class structure of society) decides to deal (or to refrain from
dealing) with the newly emerging situation, and by the relative bargaining
power of the social groups/classes that have an interest in maintaining or
breaking the status quo.
In an important workshop on land tenure in
- Formalisation of land tenure through titling is neither necessary nor sufficient for the development of a western-style land market.
- Demands for a formalised land market are generally first voiced by individuals from outside the community, such as officials and merchants who want to acquire land to which they might not be entitled under customary systems.
Formalisation can create greater security of tenure for those who purchase land, facilitating exchanges and increasing land values. However, where markets are not well developed, formalisation of tenure will not produce land sales. Equally, where people have few or no livelihood options outside agriculture, little land is likely to enter the market.
Common property rights should not be confused with open access regimes. That is why Eggertsson (1996: 161) remarked: “I prefer the term ‘communal’ property to the more popular ‘common property’ because the latter is often confused with ‘open access – “unregulated access to productive resources”. One can rather argue that the notion of tragedy of the commons be replaced by the tragedy of open access. The users of common property resources do have time-tested institutional mechanism that regulate the behaviour of individuals and communities (Dejene 1999; Platteau 1992: 120-123).
Common Property Resources (CPR) are extremely important for the livelihoods of peoples in
The resource tenure for the multiple uses of CPR can be considered as one of the bundles of rights and duties, which can be desegregated by resource type (such as grazing, tree felling, irrigation, hunting), resource users (such as dry season, post harvest period, wet season), and nature and strength of rights and duties (such as exclusive use, shared use, permanent rights) (Cousins 2000).
CPR are
associated with a number of difficulties.
Recent years saw an increased pressure on CPR. The state continues to hold legally defined de
jure ownership rights over land (including the command in much of rural
The case of pastoral areas provides interesting illustrations of problems of CPRs. For herders “land belongs to a vast family of which many are dead, few are living and countless numbers are still unborn” (a remark made by a Nigerian herders). That is, land belongs to groups or “family” that is linked by descent or cultural affiliation. Land is not owned in the western sense of users enjoying unlimited rights to exploit and dispose land at will. Land is held in trust by the living for future generation (Lane 1998).
Today, this concept of land tenure is little understood and even less respected by many African governments and western donors. The result has been overriding of customary pastoral land tenure systems contributing to land insecurity and conflict among pastoral peoples (Lane 1998).
Conditions for pastoralists in recent years have worsened considerably. Ever increasing areas that were once communal pastures have been lost to pastoral production. Irrigation schemes, small scale farming and mechanized agriculture have withdrawn large tracts of the most productive land for non-pastoral purposes. Food production per capita and living standards of pastoralists have fallen. Future incomes and welfare are further threatened by increased degradation of land, while a growing conflict of interests is pitting pastoral communities against governments, against each other, and against other land users (Lane 1998).
Historically, pastoral groups have managed conflicts over resources through trial and error. However, with tenure reform and the alienation of pastoralists from their lands, customary methods of negotiation, arbitration and adjudication are breaking down in competition with more omnipotent forces (Lane 1998).
Misconceptions about pastoralists
and their production systems in
Property rights regimes vary from
country to country. For example, in
sub-Saharan
Table 3: Issues of Access, Control and
Management: The African Experience
|
Country |
Author |
Issues of Access (use), Control and Management |
|
|
Lawry (1993) |
Customary land tenure system; sharecropping and leasing have been used to land access. Land is the property of the nation and managed by the community. |
|
|
Saul (1993) |
Land access was governed by lineage-based norms, and the use of land flexible. Land control was corporate-based types and managed by the households. |
|
|
Werbner (1993) |
Elite landholding system is used to access land. Control is by natives, communal and commercial farmers. |
|
|
Bassett (1993) |
Landholders (customary) control land and management has been by native peasants, and migrants and operating project in the area. |
|
|
|
Tribal system of communal tenure and local custom has been in use to access land but land has been controlled by the state. Management is by the community. |
|
|
Machenzie (1993) |
Customary and freehold tenure where used to access land and control was by mbari social organization or patrilineally defined subclan Management was by men with women’s insecure rights to land. |
|
|
Bloch (1993) |
Share cropping (up to 10% of the produce) used to access land. There are other forms. Management of land was by the family. |
Some of the problems women face in accessing and controlling include: loss of customary rights as new technologies make a headway, overburdening with work, constrained access to land, bearing increased responsibility as male migration increases, and limited control of income from farm activities (Dejene 1999; Hilphorst 2000).
The status of women has received
increased attention in the formulation of constitutions and land legislation in
Interesting findings have emerged
concerning the gender dimension of property rights in
Rural land markets have remained relatively inactive in spite of the fact that agricultural land plays a key role in the livelihood of rural people and the predominant role that agriculture plays in the economies of many developing countries. Thus, Bardhan and Udry (1999: 60) note that “compared with the massive influence of the distribution of land on economic and social activities, the extent of actual transactions in land market in a given year is relatively low.” They further note that “the market flow is a trickle compared with the weighty stock, and even the market is often more active in land-lease than in the buying and selling of land.” Although more active than land buying and selling, land-lease market can be restricted by legislation or by the landlord himself because of fear of land reform, which may entitle the tenant to occupancy rights on the land. In cases where legislation prohibits tenancy, it is possible that land-lease be “driven underground” (Bardham and Udry 1999: 62).
Indigenous land transfer
arrangements are evident in sub-Saharan
Tenancy is at the center of the
literature on land market. Tenancy
exists all over the world in different forms.
Latin
R = aY + F
Where:
a = An agreed share of the landlord in the total output;
F = fixed rent, i.e., an agreed fixed sum of money paid to the landlord.
If a = 0 and F>0, this is a fixed rent contract with rent F. If F=0 and a lies between 0 and 1, then this is a sharecropping contract in which the tenant surrenders to the landlord an agreed proportion. Finally, if a = 0 and F<0, this can be interpreted as a “pure wage contract”, where the wage (W) equals –F. In this case, the tenant is not a tenant at all, but a labourer on the landlord’s land (Ray 1998).
Is sharecropping an efficient contractual arrangement? This question is discussed extensively in the literature (e.g. see Ray 1998; Ellis 1998). A most recent study tentatively concludes that: (1) sharecropping leads to under-supply of the tenant’s inputs and (2) a rational landowner trying to maximize the earnings from land lease will always prefer a suitable fixed-rent contract to any share contract (Ray 1998).
If sharecropping (share tenancy) is inefficient and if a fixed-rent system is demonstrably superior to it, then why does sharecropping enjoy such enduring popularity in real world practice? This issue is known as the “Marshallian puzzle” and is extensively discussed in (Ellis 1988; Ray 1998). One way of explaining this puzzle is to introduce risk analysis into land markets. If the tenant is risk-averse, he should prefer the sharecropping contract over the fixed-rent contract. That is sharecropping emerges as a way to share, not just the results of productivities, but the risk that is associated with them as well. A tenant who pays a fixed rent is bound to bear the entire risk of farm operations. He may have an incentive in sharing risk with the landlord. Sharecropping accomplishes this objective by essentially varying the rent payable with the size of the harvest (Ray 1998).
Why fixed-rent systems
predominate in
A lot has been written on share
tenancy in developing countries.
However, few studies provide enlightening observations. The following
provides conclusions of a comprehensive study of share tenancy in
The relationship between security
and transaction costs is defined in (Lyne et al 1997: 60-61) in the
following terms. While it is often
claimed that tenure is secure under indigenous systems operating in
One study (Lyne et al.
1997) investigated rental markets for agricultural land in regions of
sub-Saharan
Individualization refers to land registration and titling. Individualization has, at the theoretical level, certain advantages. For example, Bardhun and Udry (1999: 60-61) note the following:
The individualization of tenure and transferability rights enforced on the basis of public records and cadastral surveys can reduce uncertainties and thus encourage investment and allow for a more efficient reallocation of land. Investment may also be encouraged by the easier convertibility of land into liquid assets, and the emergence of credit market may be helped by land rendered collateralizable.
Arguments in favour of land titling can be summarized as follows: These are allocative effects (resulting in more efficient use of land available) and dynamic effects (resulting in land conservation and improvement). Gains from more efficient use of land arise from two sources: (1) more profitable crops can be grown and (2) land can be transferred from less capable and less dynamic farmers to more capable and dynamic farmers. In addition, there could be what is known as the “collateralization effect” of land titling (i.e., using land as a collateral for loans) (Platteau 2000).
Put
differently, conventional economic theory argues in favour of granting freehold
title on the following three grounds: (1) the freehold system encourages
long-term investment in land because of the security it provides; (2) titled
land can be used as collateral to secure loans from the formal sector; and (3)
agricultural output increases resulting from increased access to land by more
efficient farmers (World Bank, 1989; Swynnerton, 1954).
Pinckney and Kimuyu (1994) have
attempted to challenge this argument, using empirical evidence from
The authors claimed that their
findings are “in broad agreement with other studies conducted in
In many developing countries the public sector has limited capacity to undertake cadastral surveys and register land titles. In addition, vested interests tend to manipulate the process of land registration in their own favour. That is why the evolution of private property rights in land has often been associated with the dispossession of the indigenous use rights of poor farmers, with heightened social tensions and the creating of new uncertainties, and in general with a proliferation of litigation and other transaction costs (Boserup 1965, Bordham & Udry 1999).
On the other hand, the
productivity effects of indigenous land tenure systems in sub-Saharan
With few exceptions, land rights are not found to be a significant factor in determining investment in land improvements, use of inputs, access to credit, or the productivity of land. These results cast doubt on the need for ambitious land registration and titling programs at this time.
In a similar fashion, Migot-Adholla and others (1993), who undertook a survey in the same countries as Hazell (1993), concluded that “At best, there is a weak relationship between individualization of land rights and yields in the regions surveyed.”
3.5. Why
do Land Markets Fail to
|
Following the literature (e.g. Bery & Cline
1979; Ray 1998; Binswanger et al. 1995; Ellis 1988) let’s assume there is an
inverse relationship between land size and productivity. In other words, we assume that small farms
are more efficient than big ones. In
that case, efficiency criterion dictates that land should be reallocated
through market mechanisms, in such a way that land be transferred from less
efficient farmers to more efficient ones.
However, in the real world land market often fails to function that
way. The problem is that large landlords
do not voluntarily sell their land to small family farmers.
According to Bardham and Udry (1993), land ownership does not pass from the large to the small farmer because of the following reasons. Holding land may offer some tax advantages or speculative opportunities or be generally a safe investment vehicle (particularly when non-agricultural investment opportunities are limited or risky) for the rich. Similarly, large landholdings may give their owner special social status or political power in a lumpy way. In addition, land is often used as a preferred collateral in the credit market and thus serves more than just as a productive asset. This implies high prices of land as compared to the capitalized value of the agricultural income stream for even the more productive small farmer. With low household savings and severely imperfect credit markets, the more efficient farmer may thus be incapable of affording the going market price of land. There will be no scope for mutually profitable land sales from landlords to tenants (or farm labourers), as the latter will be unable to borrow enough to finance the purchase. The land market is bound to remain thin.
In connection with this issue, Bardham and Udry raise an interesting point. In poor countries, they argue, land sales go the opposite way to what is suggested by the evidence of the more efficient small farmer: land passes from distressed small farmers to landlords and money-lenders. Further, they argue that this process deepens as the traditional reciprocity based risk-coping mechanisms get weaker and farmers may have to depend more on land sales in time of crisis. Thus, in general, the authors note that imperfection of the insurance or credit market may prevent the land market from bringing efficient allocation. However, the authors provided no empirical evidence in support of their assertions.
There is no
clear correlation between the development of land markets and increasing
concentration of land in a few hands.
There is also insufficient evidence to assess the impact of land markets
on levels of landlessness, in different circumstances. Growing land concentration has been reported
from
Nevertheless it
is possible to identify certain situations where land markets concentrate
ownership and accelerate landlessness.
This may occur, for example, where land markets develop in chaotic
fashion in peri-urban areas. This is
sometimes linked to abuse of power by traditional authorities who alienate
community lands to outsiders (e.g. cases in
There is a need to examine land markets from a gender perspective. Poorer women may suffer in cases where their spouse alienates family land, but the better off may be able to acquire land in their own right when markets in land develop (Toulmin & Quan 1999).
The importance of land markets as a means to provide better access to credit has been seriously overstated. Only for larger landholders and where banking systems and formal credit markets are well developed does this link seem to hold. For smallholders, borrowing within the community, or micro-credit schemes, provide more reliable and efficient sources of finance, neither of which depend on the existence of transferable land titles (Toulmin & Quan 2000).
Donor policies change from time to time. For example, the World Bank’s land policies have involved, since 1975, as summarized below (Deininger 1998; Migot-Adholla 1999; Toulmin & Quan 2000).
In 1975, the World Bank issued a Land Reform policy paper which recommended:
· formal land titling as a precondition of “modern development”;
· the abandonment of communal tenure systems in favour of freehold title and sub-division of the commons;
· widespread promotion of land markets to bring about efficiency-enhancing land transfers; and
· support for land redistribution on both efficiency and equity grounds.
In the light of practical experience and continuing policy debate since 1975, the World Bank has considerably revised its assessment and guidance, and now recognises that:
· communal tenure systems can be a more cost-effective solution than formal individual title, if transparency and local accountability can be assured;
· the circumstances in which land titling is an optional solution are much more limited than had been thought where credit is not widely available to the rural poor; titling is likely to be biased in favour of the rich and precautions against land-grabbing need to be taken; and
· widespread market distortions limit the effectiveness of land markets in enhancing efficiency and equity; greater benefits should be expected from the development of land rental markets instead.
Following the end of the Cold War, debates about private versus public ownership of land have become less polarised. More flexible alternatives to universal private titling on the one hand, and public ownership on the other, can now be proposed, such as market assisted land reform.
Nevertheless, the Bank maintains that the key principles outlined in the Land Reform Policy paper remain valid:
· the desirability of owner occupied farms on equity and efficiency grounds;
· the relative inefficiency of farming based either on wage labour or collective ownership;
· the need to promote markets for sale, purchase and rental of land; and
· the desirability of land reform.
The World Bank continues to view a framework of secure, transparent and enforceable property rights as the critical precondition for investment and economic growth. But they now recognise that property rights need not necessarily be individualised, and that security can be provided within customary tenure systems.
Within
· land policy reforms (as opposed to tenure reform, more narrowly conceived) to reflect this new understanding, and to eliminate conflicts between parallel sets of rights;
· pilot programmes to register and adjudicate customary rights and provide titles on a community basis; and
· piloting of negotiated and market-based programmes for land redistribution.
In addition, the Bank now places more emphasis on gender rights, on those of pastoralists, the importance of encouraging stakeholder participation in land policy processes, partnerships with civil society and building capacity of local institutions for decentralised land management.
Land tenure issues can be
analysed from different theoretical and ideological perspectives. Based on the experience of
The structuralist school
does not focus on land tenure issues.
However, a strand of this school argues that low productivity of
agriculture and its unresponsiveness to economic incentives (due to the latifundo
/minifundio system
of ownership and organization in
The dependency theory (Dos Santos 1970; 1973) with its extension to internal colonialism considers existing tenure as a major constraint on agricultural growth. In the periphery, says Prebisch (1980: 183), “industrialization is superimposed on a land tenure regime which acts as a brake on the penetration of techniques and productivity, to the detriment of development”. Although dependency theory does call for redistributive land reforms, it recognizes that political prospects for reform became more remote when the traditional landowning class joined forces with the ruling class in the metropolitan countries of the West (Dorner 1992).
Institutionalism argues in favour of redistributive land reform on the grounds of expected efficiency and equity gains arising from the reform (see Dorner 1971). This theory is built around the hypothesis of an inverse relationship between land size and yields. If output per unit of land is indeed higher on small land, redistribution in favour of small holders would not only boost aggregate production but would also establish greater equity and create employment opportunities in rural areas. In addition, given high income elasticity of demand for industrial goods, smallholders would spend a substantial portion of incremental income on industrial goods. That is, the growth of the industrial sector would be favoured under conditions of a systematic and enduring state intervention (Dorner 1992).
The liberation theology
approach, which originated primarily with Catholic theologians in
Neo-liberalism focuses more on macroeconomic policy reforms and market liberalization rather than on the question of land reform per se. As indicated elsewhere in this paper, the neo-liberal school favours land titling and registration measures. In principle, it favour the freehold system.
A distinction is often made between agrarian reform and land reform. Land reform generally refers to a reorganization of tenure arrangements and landholdings that often assumes two basic forms: the break up of large holdings and their redistribution and the consolidation of fragmented holdings into a single field. Agrarian reform often combines some types of land reform with specific interventions designed to promote rural development such as the expansion of extension services, agricultural credit, and improved infrastructure to rural producers.
In a comprehensive study of thirty six countries across the world, Sobhan (1993) concluded that the only countries where rural poverty was ameliorated in a short period of time and the foundation laid for permanent, all-round development were those which carried out comprehensive, egalitarian agrarian reforms (see Annex 1).
Table 4: Summary of Land Reform Country
Experiences in
|
Country, Legal Provisions
and No. of Reforms |
The Magnitude of
Redistribution & Type of Rights |
Peasant Organization and
Cooperatives |
Impact
|
|
|
Major
redistribution took place in the 1930s.
Almost 18 million ha. were distributed to
814, 537 peasants. In the 1960s about
25 million ha. distributed. Private property granted
but the state retained the right to expropriate the land when deemed
necessary. |
Originally distributed to individual ejido
(village) members. Later created
collective ejidos; but back to individual units. |
Reforms
affected a significant redistribution of incomes and assets in favour of
groups of rural poor. Decline in production of basic food crops with dramatic
increases in export crops due to agricultural policies favouring export and
unfavorable internal terms of trade for agricultural products |
|
(4
reforms) |
On
the basis of 1964 reform peasants were given title to a plot of land of their
own. The 1970 decree did not allocate
land parcels. Use right granted. |
By
a special decree of 1970 producer cooperatives were established. |
Some
gains for peasants who had the land before were recorded. On balance, the medium and larger producers
seem to have benefited the most, through greater access to credit. The traditional hacienda form of production
organization radically changed. |
|
(2
reforms) |
Major
redistribution of land was effected after the military takeover by reform of
1969. By 1972, 38.3% of agricultural
land had been redistributed to 21% of all agricultural families. Use right
granted. |
The
expropriated land was assigned to groups to be organized via different forms
of production cooperatives. Later,
beginning 1981 the cooperatives were sub-divided into individual holdings |
Results
were quite mixed. Latifundio was
eliminated and power of the landed oligarchy reduced, benefits were
uneven. Many pre reform peasant
holdings were neglected not provided credit, inputs and technical
assistance. Price controls kept food
prices low in the cities discouraging production. |
|
Chile: The three phases of land
reform provided, first, land redistribution followed by a period of expanded
and accelerated reform, and then, a reversal of the reform and the return of
many of lands to previous owners. (3
reforms) |
Cooperative
ownership combined with private ownership, also, use right granted. |
During
the first phase a temporary production cooperative called asentamiento was
established for three years. |
During
the reform period, annual agricultural growth rate was above 2% greater than
that of pre-reform period. On balance,
the reform was characterized by modest success: there was significant
redistribution of wealth and income; changes in social relations and advances
in participatory development. But this
was abruptly ended and reversed in 1973. |
|
|
There
were 15,676 beneficiaries in 118 collectives with an average of 4.l0 hectares
per beneficiary. Individual and
collective ownership. |
118
collectives were organized. In 1985,
modified organization established. |
The
experience with collectives strengthened the capabilities of reform
beneficiaries to manage their own affairs and use their land in productive
manner. Many of those who received
land now become managers and farmers. |
|
(1
reform) |
The
reformed sector includes only 8% of the nation’s farm land and 10% of rural
families. Families ownership and use right. |
Peasant
organizations were established. Three
national compensino associations are among the best in |
Land
reform has limited impact. |
|
(2
reforms) |
Almost
30,000 families received titles. State, cooperative and individual
ownerships, use right. |
Rural
peasant organization, rural workers organization. |
Agricultural
performance was good up to 1984.
Increased local participation. |
|
(1
phase reform) |
Expropriated
estates over 500 ha were farmed by producers
cooperatives. |
Production
cooperatives organized. |
The
effort of land reform can be criticized as being too little, too late, and
too constricted. For the rural poor in
|
|
(3
periods) |
In
1962-67 very little land was expropriated.
As of 1978 only 1.6% of the cultivated land was redistributed to
27,568 families. Use right granted. |
A
peasant association emerged; collective farms were organized. |
A
yearly decrease in budget in real terms up to 1978. |
|
(2
reforms) |
Over
8 million hectares of land has been distributed to 150,000 families (over 35%
of the rural families). Individual
ownership granted, also use right. |
Peasant
unionization, the national peasant federation was set up. |
(Information
not available) |
|
(1
reform) |
Land
redistribution was complete by 1955.
About half of the |
Production
cooperatives were set up. |
A
considerable degree of integration of the masses of peasants in to the
national economy society and policy emerged. |
Source: Compiled from Dorner (1992: 35 –50)
4.3. Land Reform without Political Reform: The
Case of
|
Is tenure reform possible without political reform? This question has remained controversial among economists from socialist countries. For example, Kornai (1992) argues that the question of state power is critical for economic development. He asserts that:
There can be no comprehensive and consistently radical transformation in other spheres while the key feature of the old classical structure, the communist party’s power, remains.
Kornai’s assertion has been
questioned by Szelenyi (1998) on the basis of evidence drawn from former and
present socialist countries. In particular, Szelnyi notes “that Kornai’s all or
nothing hypothesis is at least incomplete” as evidenced by the case of
Finally, how do we categorize the
Chinese economy, socialist or capitalist?
One authoritative study (Muldavin 1998) has the following answer. When we come to the Chinese case, the utility
of drawing a sharp line in the sand to distinguish socialist from capitalist
formation is questionable. The hybrid
and distinctive character of
Like
A comparative analysis of land reform reversal in Central and East European countries (CEECs) has suggested the following conclusions (Swinnen and Mathijs 1997):
i.
Most CEECs have chosen to restitute collective farm
land to former owners. Moreover, former owners who kept legal rights to their
land were restituted property rights on their land without exception. Former
owners who lost their legal ownership title were restituted land only in
ii.
In the majority of CEECs, state farms are leased, pending
sale of the land. The main exceptions
are the restitution of state farm land in
iii. Non-land assets have typically been privatised through other procedures than those used for land. In many cases they were privatised using vouchers which can be turned into capital shares in the new co-operative farm or used for purchasing non-land assets for private use.
iv. Privatisation does not necessarily lead to full transfer of all property rights to new (private) owners. In other words, the post-reform effective property rights distribution is only partially determined by the land privatisation legislation.
v. Following the enactment of necessary legislation, state and collective farms have been transformed into a wide variety of farm organisations, such as producer co-operatives, joint stock companies, limited liability companies, partnerships and individual farms.
vi. Large-scale production organizations still dominated agricultural production in several CEECs. Many new land owners lease their land to the large-scale successor organisations of the collective and state farms.
The remarkable variations in privatisation and land reform in CEEC, were based on the following principles (Swinnen & Matiji 1997): The choice of privatisation and land reform process is determined mostly by legal and historical characteristics of agricultural assets, the pre-collectivisation asset ownership distribution, the nature of post-collectivisation asset ownership and the ethnicity of the former owners. These characteristics affect the distributional effects of various privatisation options and the political consequences of the privatisation choice.
Land reform in sub-Saharan
i)
Land
nationalisation
Most African countries, following independence, vested land rights ultimately in the state or president. The purposes of nationalisation were to assert the power of the state over traditional chiefs and allow the appropriation of land for development, in the belief that the state would be best placed to manage and distribute land in the interests of all. Although the political power of indigenous chiefs and courts has been marginalised by land nationalisation, the impacts have been uneven, depending on the extent to which the state has been able to exert its own authority. In practice, many states have maintained multiple tenure systems, including public ownership, customary tenure and leasehold, and freehold title.
ii) Tenure reform: land registration and
titling
The introduction of
formal titles, through granting of individual leases of freeholds, has been
introduced, notably in
iii) Agrarian reform: Land redistribution and
resettlement
In other cases
where inherently inequitable dualistic systems of land tenure have
predominated, such as
iv) Agrarian collectivisation
Following the
overthrow of colonial or feudal regimes, socialist oriented African
governments, notably in
De facto changes in tenurial relations have also occurred as a result of land development and conservation programmes rather than because of an explicit demand for land reform. For example, project led resettlement or land registrations have occurred as a result of major infrastructure or irrigation development. Another example is the creation of parks or reserves where local people have been displaced, or their land and resource rights have been restricted.
More recent approaches to land
reform in sub-Saharan
Land tenure reform in
In addition, land registration in
· increased concentration of land ownership, especially in the hands of the recipients of former settler land, and those influential enough to manipulate the registration process in their own interests;
· the weakening of customary rights, within households and between different social groups, resulting in diminished security of tenure for non-title holders, notably wives, children and landless farmers who can no longer rely on secondary claims or kinship ties to guarantee access to resources. Particularly, registration has brought about increased insecurity amongst women, especially widows, those without off-farm incomes, and those with no male heirs;
· heightened inequalities in land ownership and agricultural incomes, leading to increased landlessness through land sales, and growing rural-urban migration;
· rising rural unemployment, caused by reduced opportunities for share-cropping and tenancy opportunities;
· diminished food security and increased vulnerability to drought amongst groups whose access to land has been diminished by the titling process;
· increased level of disputes resulting from individual rights being imposed on pre-existing systems of multiple rights; and
· the inability of poorer farmers to acquire title, since the costs are often greater than the benefits.
For
the direct beneficiaries, land titling has provided very secure tenurial
rights, and the early phases of the programme were indeed accompanied by
increases in farm income for recipients of title. However, it is difficult to disaggregate the
impacts of tenure reform from the many other agricultural development
programmes carried out in the post independence period. While debate about the effects of land
registration and titling continues, the policy implications of
· the process of registration has been very costly, and the net benefits ambiguous;
· tenure reform alone is not likely to enhance small holder production without a range of associated measures; and
· land titling tends to generate damaging impacts on the position of the poor.
The major findings of the study can be summarized under the following headings:
(a) Customary Land
Tenure Systems
Recent studies challenge the widely held notion about the insecurity of customary tenure systems and suggest, on the contrary, that long term investment is quite possible under indigenous property rights regimes.
Security is related to transaction costs. Customary tenure is secure when it refers to the ability to use land for a certain period and for a defined purpose. The security of land has three dimensions: breadth, duration and assurance. Transaction costs as perceived by farmers, such as cost of litigation, establishing rights, unpredictable judgment, and uncertainly in general are expected to vary inversely with security of tenure.
The following is a summary of some of the recent findings about the advantages of customary arrangements (Toulmin & Quan 2000: 35-36): (1) customary tenure frequently includes heritable use rights which can by its nature, provide incentives for longer term investments in land improvement and (2) customary property rights can be very secure, even if not defined at the individual level (defined at the community or clan level, they are more relevant to subsistence-oriented, low population density societies).
Whether or not land is registered and titled (or
nationalized or not) informal land markets are emerging along with formal
markets in many parts of
There is a confusion regarding the “commons.” A distinction should be made between a regime of “open access” in which users are not excluded and ‘common property,” in which exclusion is possible through institutional means. Common or collective ownership does not necessarily lead to the destruction of the resource base of a society.
(b) Land reform and Impact on Agriculture
Land reform is a complicated and serious matter that needs, among other things, careful preparation and popular participation. Land reform can be an expensive business. One study (Adams et al. 2000) notes that land tenure reform is a time consuming process requiring thorough public consultation and careful preparation.
A comprehensive study of reforms in thirty six countries concluded that the only countries where rural poverty was ameliorated in a short period of time and laid the foundation for permanent, all round development were those which carried out comprehensive, egalitarian agrarian reform (Sobhan 1993). Moreover, land reform is effective if it is accompanied by other institutional innovations and appropriate policy reforms. Also, supportive infrastructure should be in place.
(c) Land Markets
Cross-country evidence suggests
inverse relationship between land size and productivity. This suggests that there would be efficiency
gain by transferring land (through the invisible hand) from inefficient
producers to efficient ones. But there
is little evidence that markets encourage the transfer of large land holdings
to small farmers, as would have been expected from economic theory, given the
efficiency of small operators. More-often than or not, land markets appear to
encourage land concentration. This can
be explained in terms of market distortions.
The development of a competitive market is prevented, among other
things, by the following factors: (1) in practice the market value of land
often exceeds that of income stream that can be derived from it; (2) alongside
speculative value which land frequently acquires, a variety of hidden subsidies
and tax incentives can artificially inflate land values; and (3) in many
sub-Sahara African countries, small farmers are unable to enter the land market
because of limited access to formal credit facilities. Moreover, the literature
(e.g. Bardhan & Udry 1999) suggests that rural land markets are highly
restricted. Land is not easily transacted, unlike other productive resources.
Contrary
to what conventional economic theory provides, recent literature (e.g. Platteau
1992; 2000) shows that, in
Concerning informal land markets, the following range of transactions is identified in the literature: buying and selling, land borrowing, land mortgaging; land exchanges, land rental, land pooling and other informal arrangements (Toulmin & Quan 2000: 45). Rental markets provide greater accessibility for the poor because of their low transaction costs. Rentals, leases and loans do not involve the permanent alienation of land, Sharecropping is not necessarily as exploitative. The informal land market is very flexible. It meets the varying needs of the poor in multiple ways.
Land rentals have advantages where land is scarce and customary institutions influence security of tenure and transaction costs. Renting tends to close inter-household productivity gaps by transferring land to farmers who can use it more effectively. But, it has been observed that land markets may fail to transfer land from big to small farmers where the latter are considered to be more efficient than the former.
(d) Policy and land legislation
The literature is silent on concrete measures to be undertaken to address problems of poverty in the context of land reform process. Equity concerns have, of course, received attention in the debate on land rights (e.g. see Platteau 1992; 2000). One study suggests, among other things, that the following means could be used to develop pro-poor agenda (Toulmin & Quan 2000:25):
(1) aiming for more equal pattern of land distribution, to promote both more equitable and improved security to land users;
(2) adopting a pluralistic approach, which seeks to converge customary and formal tenure systems.
(3) identifying diverse ways in which reforms in land relations can be approached; and
(4) strengthening consultation processes, debate within civil society, and easier access to the official policy and legislative processes.
Governments should take into account the following points in formulating land policies (Toulmin & Quan 2000):
1.
There are many approaches to addressing land policy and
tenure changes in
2. Governments have been forced to recognise the relatively limited role they can play in direct allocation and management of land. Nevertheless, they retain an important set of tasks concerning the framework of law and underlying principles. They must establish the authority of those institutions given the powers to manage land and resolve conflicts. Also, there may be need for a significant redistribution of land between different groups.
3. Law needs to draw upon the values and aspirations held by society, and cannot be drafted in a vacuum. Hence, widespread consultation processes are needed to permit effective engagement by a broad range of actors, in discussion of proposed legal reforms and the institutional options for implementation.
4. Reforms to land tenure and administration have major political implications. Choices must be made about attribution of responsibilities and rights, such as between reliance on established customary systems and the establishment of elected local government structures. In each case, there will be pros and cons, with neither choice offering a perfect solution. Thought must be given to providing checks and balances on the powers attributed, whichever institutional option is chosen.
5. Many land reform programmes have begun with pilot measures to test out their feasibility and need for amendment before launching a nation-wide approach. Use of pilot schemes seems much more appropriate than trying to do everything at once, since it allows for a focus on priority areas where land issues have become acute, as well as learning how best to tailor reforms to fit local conditions.
6. Governments face tight budgetary constraints and need to consider the costs of land reform measures in the light of their likely benefits. There may be considerable advantages to building on existing institutions, modified as necessary, rather than trying to establish a brand new set of structures which require staff, operating budgets, and time to establish their legitimacy.
Basic Assumptions and Principles Underlying the Choice of
Land Policy Reforms Options
1. Peasants are, in general, rational economic agents.
2. Rural people do have useful indigenous knowledge systems and culture-appropriate institutions, which can be considered as a form of social capital.
3.
No across-
the-board and uniform property right regime is appropriate to
4. Law needs to draw upon the values and aspirations held by society, and cannot be drafted in a vacuum. Hence widespread consultation and popular participation are needed.
5. The implementation of land policy reforms should began with pilot measures to test out their feasibility and need for amendment before launching a nation-wide approach.
6. Policy makers must recognize that they have to play a relatively limited role in direct allocation and management of land in areas where people’s mobility is high (such as pastoral areas).
Some Basic Observations about Land Tenure in
It is
important to state some of the outstanding features of land tenure in
(i) The pre-1975 period was characterized by great diversity of official property right regimes.
(ii) The proclamation of 1975 did not do away with all sorts of rights that had existed during the imperial era. Customary rights have survived to this date in the pastoral areas and in areas where share-shifting cultivation is practiced. Informal land markets have not only persisted, but have become increasingly common in the densely populated plough-complex areas of the highland.
(iii)
Unlike many other developing
countries, land inequality is not a major problem in rural
For
Specific Categories of Land there should be Specific Property Rights
There are different categories and uses of land as indicated in Figure 2. I propose that, in general, different types of property rights correspond to different categories of land. There is a need to distinguish between different categories of land, such as land in the densely populated areas, land used by pastoralists, shifting cultivations, and land under state farms, or land designated as protected areas.
For specific categories (or uses) there exist specific modes of access to land. For example, in most of the pastoral areas access to land is defined by customary tenure systems. A more or less similar principle applies to shifting cultivation. In the mixed farming systems, where peasants operate land (and where statutory laws can be enforced through peasant administrations), two type of property right regimes function side by side. These are the official right regime (which is based on the proclamation of March 1975) and informal mode of access to land (such as sharecropping, rentals, land mortgage, etc.).
There is a long menu of property rights to choose from in solving problems arising from a given tenure arrangement. By way of an example, consider the case of state farms, which draws from the experiences of East and Central European countries. Policies that attempt to redefine mode of access to land currently under state farms can consider some of the following options, as the case may be: (a) lease to private investors, (b) restitute to former owners, (c) split them into small plots and lease to individual peasants, (d) retain them for the purpose of R & D, and so on.
Consider the case of land in sub-urban areas. Land in such areas can be characterized as follows: (a) proximity to infrastructure and to market centers; (b) a high degree of land use intensity and cultivation of high value crops; (c) land-saving and labour-intensive dairy farms; (d) extremely high demand for land and ever-rising land prices; and (e) increased conflict and tension over land due to urban encroachment on farm land. Because of their specific problems and opportunities, sub-urban areas need specific types of tenure policy reforms.
Is there
a Need for
There is a
need for land policy reforms in
(a) Land under peasant occupation:
· Insecurity of holdings exists in some areas. This has resulted in soil mining and limited incentive to invest in land.
Figure 2: Different Categories and Uses of Land in
2.
|

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|
Rural Land |
|
Sub-urban areas |
|
Urban Land |
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|
Land occupied by peasant cultivators |
|
Land used by pastoralists and shifting cultivators |
|
Land under state farms |
|
Protected areas |
|
Other uses |
|
Land for individual residential houses |
|
Land for use by civil society organizations |
|
Land for public uses (including civil service) |
|
Land used for business activities |
|
Other uses |
· Existing policy does not allow farmers to use land as a collateral to secure credit.
· There is progressive diminution of plot size under increased population pressure (resulting in uneconomic size of holding and limited technology transfer).
· There has been growing number of landless households (though their number is small as compared to Asian and Latin American countries).
· Land is partly under utilized due to lack of complimentary inputs (in particular, female-headed households lack adult labour, even if they get access to land).
· Land price or rent is likely high, in the informal sector, because sellers or “landlords” charge excessively high prices.
· Communal grazing lands are, in some cases, given to investors.
(b) Land in the pastoral areas and land in areas where shifting cultivation is practiced
· Conflict over resources rages and production falls as fallow or grazing land is considered as virgin land and leased to investors.
· Investment is constrained partly because of “harassment” created by local people.
· Repeated incidences of interethnic and intercommunal conflicts over resources have become a major problem.
· Deforestation and other types of environmental degradations have resulted from expansion of commercial farms, mining, overgrazing, burning of forests, etc.
· There have been increased logging in forest areas.
· In some cased, investors are not using land for intended purposes. And there are reports indicating underutilization of land allocated to investors.
(c)
· Open access to resources and the free-rider problems have resulted in the destruction of the environment.
· Potential income from tourism is lost as the area under national parks is reduced and no attempt has been made to promote co-management of resources between the state and local communities.
· In some cases, priority forest areas are given to investors.
· Productivity in commercial farms, in some cases, is not much better than the peasant section.
· Investors have, in general, failed to generate adequate employment opportunities for the local people.
· Range lands are sold to investors.
(d) State Farms
· No effective mechanisms are designed for the disposal of the remaining state farms.
· State farms are, in general, inefficient.
The Debate Concerning Property Rights in Land
The debate
about land issues in
Formal
and Informal Modes of Access to Land in
Before considering alternative policy options, it is important to appreciate the current mode of access to land in both rural and urban areas. Contrary to what many people think, currently, there are a multiplicity of modes of access to land as indicated in Figure 3. Land can be accessed through both formal (official) and informal (indigenous) means. The informal means can be considered as efficiency response mechanisms given the limitations of official rights. Informal transactions are innovative institutional mechanisms that con not simply be dismissed as “illegal” practices. There is a need to harmonize informal markets with appropriate statutory laws.
In designing tenure reform policies, the policy makers should, among other things, consider this question: which type of property right is appropriate to a specific category of land? For example, land in pastoral areas could be accessed in different ways as compared to land in the densely populated mixed farming areas in the highlands. Figure 4 indicated tentative policy options with respect to land tenure reform.
Specific Research Issues to be Considered in Designing Land Policy Reforms
Should policy makers recognize collective tenure as an appropriate property regime in registering and giving legal force to customary tenure arrangements in pastoral areas and in areas where shifting cultivation is practiced?
1.
Does the holding size matter as
long as yields are high and as non-farm income-generating activities are
available?
2. What roles should be attached to agribusiness and contract farms in boosting cash incomes of farmers?
3. To what extent can long lease arrangements (with state ownership of land) be taken as an alternative to the present system?
4.
Can privatisation be considered
as an option in
5.
Is land tenure reform alone
enough for
Figure 3: Formal
and Informal Modes of Access to Land in
|
2. Access to Land |
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|
Urban
|
|
Sub-urban area |
|
Rural |
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|
Official access through the lease system |
|
Official access without lease (e.g., land accessed before lease policy) |
|
|
|
Other modes of access |
|
Access through P.As |
|
Access through lease system (e.g., investors |
|
Resettled areas |
|
|
|
Customary rights in pastoral areas and shifting cultivation |
|
Other modes of access |
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|
Land sales (i.e. “house” sales) |
|
Lease |
|
Mortgages |
|
Sharecropping |
|
Land rentals |
|
Mortgage |
|
Sales |
|
Others |
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Figure 4: Land
Legislation Policy Options in
2.
Options
|

|
Urban
|
|
Sub-urban area |
|
|
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|
Give long lease (for investment and new individual houses) |
|
Privatise land |
|
Grant land to civil society organizations |
|
Restitute former owners for nationalized land only |
|
Other options |
|
Give long lease & harmonize it with the informal market for peasant area |
|
Allow free hold system (for peasant areas & virgin land) |
|
Recognize customary rights in the pastoral areas & shifting cultivation |
|
Other options |
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Annex 1: Redistributive Impact of Agrarian
Reforms
|
Country |
1 |
2 |
3 |
4 |
5 |
|
|
% of Land Distributed to Total Agricultural Land |
% of Land Reform Beneficiaries to Total Agricultural Households |
Post-Reform Distribution of Land (Gini Coefficient) |
Landless/ Land poor as % of Total Agricultural Households |
Social Transition Status |
||
|
1 |
|
50 (1952) |
65 (1952) |
N.A. |
Negligible |
Feudalism to Socialism |
|
2 |
|
50 (1953) |
72 (1953) |
N.A. |
Negligible |
Feudalism/Capitalism to Socialism |
|
3 |
|
54 (1946) |
N.A. |
N.A. |
Negligible |
Feudalism/Capitalism to Socialism |
|
4 |
|
52 (2983) |
N.A. |
N.A. |
Negligible |
Capitalism to Socialism |
|
5 |
|
41 (1965) |
71 (1965) |
N.A. |
N.A. |
Feudalism to Peasant |
|
6 |
|
25 (1951) |
66 (1951) |
0.30 (1960) |
38 |
Feudalism/Capitalism to Peasant |
|
7 |
|
25 (1959) |
29 (1965) |
N.A. |
N.A. |
Feudalism/Capitalism to Peasant |
|
8 |
|
N.A. |
N.A. |
0.43 (1977) |
N.A. |
Feudalism to Peasant |
|
9 |
|
43 (19790) |
66 (1970) |
0.938 (1970) |
60+(1970) |
Feudalism/Capitalism to Capitalism/Peasant |
|
10 |
|
30 (1970) |
34 (1970) |
N.A. |
85 |
Feudalism/Capitalism to Capitalism/Peasant |
|
11 |
|
47 (1973) |
13 (1973) |
N.A. |
53 (1973) |
Capitalism to Capitalism/Peasant/State |
|
12 |
|
37 (1976) |
37 (1986) |
N.A. |
75 |
Feudalism / Capitalism to |
|
13 |
|
25 (1982) |
16 (1982) |
N.A. |
32 |
Capitalism to Capitalism/Peasant/State |
|
14 |
|
15 (1987) |
10 (1986) |
N.A. |
95 |
Feudalism to Capitalism/ Peasant |
|
15 |
|
27 (1966) |
33 (1966) |
0.65 (1971)[4] |
N.A. |
Feudalism to |
|
16 |
|
58 (1972) |
N.A. |
0.72 (1973)1 |
N.A. |
Capitalism to State |
|
17 |
|
39 (1974 |
25 (1979) |
N.A. |
N.A. |
Feudalism / Capitalism to Capitalism/Peasant |
|
18 |
|
5 (1982) |
Retained in State Sector |
N.A. |
N.A. |
Capitalism/Tribal to State/Tribal |
|
19 |
Tunisia (C) |
18 (1964) |
N.A. |
N.A. |
N.A. |
Capitalism to Capitalism/Peasant/State |
|
20 |
Kenya (C) |
N.A. |
3 |
0.77 (1981) |
32 |
Capitalism/Tribal/ Peasant |
|
21 |
Zimbabwe (C) |
18 (1984) |
N.A. |
N.A. |
N.A. |
Capitalism/Tribal to Capitalism/Tribal/ Peasant |
|
22 |
Bangladesh (C) |
Less that 0.1 |
Less than 0.1 |
0.60 (1983084) |
78 (1981) |
Feudal to Feudal/ Capitalist/ Peasant |
|
23 |
India (C) |
1.5 (1986) |
2 (1981) |
0.62 (1977) |
55 (1980) |
|
|
24 |
Pakistan (C) |
3 (1972) |
210(1972) |
0.54 (1980) |
34 (1980) |
Feudal to Feudal/ Capitalist/ Peasant |
|
25 |
Sri Lanka (C) |
41 (1972) |
Retained in State Farms |
0.62 (1982) |
43 (1980) |
Feudal/ Capitalist to Feudal/ Capitalist/ Peasant/ State |
|
26 |
Indonesia (C) |
N.A. |
296 |
0.53 (1973) |
66 (1971) |
Feudal/ Capitalist/ to Feudal/ Capitalist/ Peasant |
|
27 |
Thailand (C) |
N.A. |
N.A. |
0.46 (1975-76) |
13 (1978) |
Feudal/ Capitalist/ to Feudal/ Capitalist/ Peasant |
|
28 |
Philippines (C) |
8.68 |
16.87 |
0.61 (1980) |
78 (1972) |
Feudal/ Capitalist/ to Feudal/ Capitalist/ Peasant |
|
29 |
Costa Rica (C) |
2 (1980) |
32 |
0.83 (1973) |
64 (1981) |
Capitalist |
|
30 |
El Salvador (C) |
15 (1982) |
15 |
0.61 (1971) |
41 (1975) |
Capitalist to Capitalist/ Peasant |
|
31 |
Guatemala (C) |
16 (154) |
N.A. |
0.85 (1979) |
60 (1971) |
Capitalist |
|
32 |
Honduras (C) |
4 (1981) |
14 (1981) |
0.78 (1974) |
41 (1970) |
Capitalist |
|
33 |
Panama (C) |
15 (1970) |
12 (1970) |
0.78 (1974) |
N.A. |
Capitalist |
|
34 |
Ecuador (C) |
N.A. |
N.A. |
N.A. |
75 |
Feudal/ Capitalist to Capitalist |
|
35 |
Colombia (C) |
N.A. |
101 |
0.86 (1970-71) |
66 |
Feudal/ Capitalist to Capitalist |
|
36 |
Venezuela (C) |
6 (1973) |
35 (1973) |
0.92 (1971) |
40 (1973) |
Feudal/ Capitalist to Capitalist/Peasant |
Source:
(Sobhan 1993) A=
Radical Agrarian Reforms
B= Inegalitarian Reforms with Social Transitions
C= Inegalitarian Reforms without Social
Transitions