Secure tenure rights increase economic returns in African agriculture

May I point out one quite extraordinary oversight in the World Economic Forum (WEF) report "Realizing a New Vision for Agriculture" which is that the importance of tenure and property rights is completely ignored. The word "tenure" is mentioned twice, in a single graphic, while property rights receive no mention at all.

The literature, especially on Africa, is rich with studies demonstrating the strong positive economic, environmental and social benefits associated with secure property and tenure rights in the agricultural sector. For example, my data from Kenya (which I presented at my seminar the other day) shows that the net economic returns to land (from agricultural production) are 2.28 times higher on land with secure tenure and property rights compared with untenured land. This "tenure effect" on Agroforestry-type activities (investment in tree crops, woodlots, windrows, hedgerows etc) was even greater, around 4.6, while the extent to which land users adopted soil conservation practices was also a function of strong tenure.
Of particular interest was the positive synergistic effect on net returns to land from being deeply embedded within strongly tenured land and the negative effects of being deeply embedded within weakly tenured land. It is also clear that the "tenure effect" on economic returns is fully developed within 10 years.

It is also of interest that in Kenya gender discrimination over property rights (much beloved in development agendas) is as strong on untenured land as on tenured land – yet the tenure effect still shows through.

Kenya is in these respects no different to most other SSA countries and these striking economic, environmental and social gains in Kenya's agricultural sector that are associated with strong tenure and property rights did not come about through any interventions from the World Bank, UNDP, FAO, WEF or any other development agency. They came about through the private investment decisions of some 3 million independent economic units (aka tenured farmers) responding to market forces. Nairobi alone purchases well over $1.5bn annually in agricultural goods and services from the agricultural and range lands of Kenya, dwarfing all agricultural "development" flows, which creates a rising demand for both quantity and quality of production. It is clear that farmers with secure tenure can respond more quickly to such economic opportunities.

I personally cannot think of any other intervention in the agricultural sector which can more than double economic productivity within a 10 year time span along with significant environmental gains. The fact is that secure tenure and property rights change land-user perspectives away from resource mining and towards investment in sustainable resource use, and it is only when land rights are secure that the cycle of poverty can be broken.

Author: Mike Norton-Griffiths, Senior Research Fellow, World Agroforestry Centre (ICRAF), Nairobi, Kenya

FMF Policy Bulletin/ 31 May 2011