LandMarketsUndertheRadar:ACross-CountryAnalysisofMarket

ActivityinSub-SaharanAfricaAyalaWinemanandThomasJayne

March22,2018WorldBankLandandPovertyConference

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EmergenceoflandmarketsLinearmodel:• Customarytenurewithtraditionalmodesoftransfer,minimalmonetarytransactionsforland

• Landvaluesincreasewitho higherpopulationdensityo agriculturalcommercializationo developmentof

complementaryfactormarkets

• Institutionalchangebecomesefficient(Sjaastad 2003)

• Shifttoindividualpropertyrights2

Realityismessier:• Transactionsfor“improvements”ontheland

• Monetarytransactionswithinclanatbelow-marketprices

• Expectationsofnonmonetaryreciprocitywithinmonetarytrades(Chauveau andColin2010)

• Salesdisguisedasloansorrentals

• Landcanmoveinandoutofclanoversight(WinemanandLiverpool-Tasie 2017)

“EmpiricalfocushasbeenplacedonrentalmarketsinSSAastheygenerally

…are...moreprevalentwithintheregion'ssmallholderproductionsystems.”

“Salesofagriculturallandarenotcommoninanystudycountry[includingEthiopia,

Malawi,Tanzania,andUganda],whilelandrentalmarketsareactiveeverywhere.”

Emphasisonrentalmarket,ratherthansalesmarket

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Landtitlesconsiderednecessarytospurlandmarket,providerequisitetenuresecurity(PinckneyandKimuyu 1994;Platteau 1996)

Rentalmarketsviewedasequity-enhancing,salesmarketsassusceptibletoelitecapture(Sitko andJayne2014)

DataLivingStandardsMeasurementStudyIntegratedSurveysonAgricultural(LSMS-ISA)datasets

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• Tanzania(2014/15)• Ethiopia(2015/16)

• Nigeria(2015/16)• Uganda(2013/14)• Malawi(2013/14)

TanzaniaAgriculturalSampleCensusSurvey2007/08

Informationavailable(sometimes)• Modeofplotacquisition• Timeofacquisition• Salesrights,permissionrequired• Paymentsmade

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1. Ratesoflandmarketactivityacrosscountries(andsometimesovertime)

2. Characteristicsofmarketparticipantsacrosscountries

3. Correlatesofmarketactivitywithincountries

ResearchQuestions

4. Politicaleconomyaspotentialexplanationforvariationinmarketactivity

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% of agricultural landholders with…

Malawi2013/14

Ethiopia2015/16

Nigeria2015/16

Purchased land 3.3% 8.0% 8.8%Rented land (incl. sharecropping) 12.6% 26.1% 9.0%

Ethiopia

Malawi

Nigeria

Tanzania

% of agricultural landholders with…

Tanzania 2015/16

Uganda 2013/14

Purchased land 38.4% 39.9%Rented land (incl. sharecropping) 15.8% 17.2%

Tanzania

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%landareaPostingofrentalagreementswithnewcomersinKagera

Source:LSMS2014/15

Tanzania

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0200,000400,000600,000800,000

1,000,0001,200,0001,400,0001,600,0001,800,0002,000,000

Numberplots

Yearacquired

Inherited/Gifted Purchased

% cropping households that...

Source: Agriculture Sample Census2007/08

Source: LSMS2014/15

All Households Rural HouseholdsPossessed purchased land 19.4% 38.5% 38.4%Rented land 10.7% 15.7% 15.03%

%landarea

Yearofacquisitionofinheritedandpurchasedplots

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% Cropping households that possess purchased land, 2008 - 2015

> 60%50-60%40-50%30-40%20-30%10-20%< 10%

2007/08 (Source: ASCS)

> 60%50-60%40-50%30-40%20-30%10-20%< 10%

2014/15 (Source: LSMS Year 4)

% Cropping households that rent land, 2008 - 2015

> 30%20-30%10-20%< 10%

2007/08

> 30%20-30%10-20%< 10%

2014/15

> 30%20-30%10-20%< 10%

2007/08

> 30%20-30%10-20%< 10%

2007/08

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Mode of acquisition (mean values)Inherited Purchased Testa Rented Borrowed Other

Area (ha) 0.94 1.38 *** 0.80 0.56 1.79Value (100,000s TSh/ha) 6.23 6.59 4.09 5.28 3.53Years held 18.99 13.48 ***1= Plot has title or CCRO 0.03 0.13 ***1= Plot has other documentb 0.09 0.36 ***1= Can leave fallow 0.88 0.89 0.27 0.57 0.861= Can sell 0.71 0.90 ***1= Can sell without approval 0.54 0.78 ***1= Plot dispute in past year 0.04 0.051= Contains fruit tree(s) 0.39 0.43 0.01 0.24 0.32

1= Male owner(s) 0.41 0.38 **1= Female owner(s) 0.28 0.19 ***1= Male & female owners 0.31 0.43 ***1= Urban nonresident owner (>15 km away) 0.02 0.01 0.05 0.02 0.011= Migrant household head 0.24 0.52 0.56 0.35 0.38Observations 1,783 1,261 403 579 265aTuki testfordifferenceinmeanvaluesofinheritedandpurchasedplotsb ‘Otherdocuments’doesnotincludeinformalsalescontracts

Tanzania– Plotcharacteristics(LSMS2014/15)

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Probit Tobit(1) (2) (3) (4)

1= Purchased land in past 5 years

1= Rents in land

Area purchased in past 5 years (ha)

Area rented in (ha)

Land area held 5 years ago (ha) -0.03*** -0.10***Land area held and not rented in (ha) -0.08*** -0.12***1= Female-headed household -0.08*** -0.03 -0.25*** -0.07*HH size 0.01*** 0.02*** 0.05*** 0.03***Age of HH head -0.00*** -0.00*** -0.01*** -0.00***Proportion of crop value produced that was sold 0.08*** 0.06** 0.30*** 0.11**Time to fetch water in dry season (minutes) -0.00 -0.00 0.00 -0.00Asset index 0.01*** -0.00 0.03*** -0.00Tropical Livestock Units 0.00 -0.00** 0.00** -0.00**1= HH draws income from off-farm activities (wage work or business) 0.02 0.04** 0.04 0.07*1= Rural household 0.03 0.00 0.11 0.02Distance to a road (km, average across plots) -0.00 0.00 -0.01 -0.00

Observations 2,090 2,090 2,090 2,090Average partial effects; *** p<0.01, ** p<0.05, * p<0.1

Tanzania– Correlatesoflandmarketparticipation(demandside)

LandmarketactivityacrossTanzania

12Source:ASCS2007/08

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0.2

.4.6

.8Pr

opor

tion

HH

s th

at re

nt o

r pur

chas

e la

nd

.2 .4 .6 .8Proportion HHs that hire/sell agricultural labor

0.2

.4.6

.8

Prop

ortio

n H

Hs

that

rent

or p

urch

ase

land

.3 .5 .7 .9Proportion HHs that sell crops

0.2

.4.6

.8Pr

opor

tion

HH

s th

at re

nt o

r pur

chas

e la

nd

0 500 1000 1500Agricultural persons per square km agricultural land

0.2

.4.6

.8Pr

opor

tion

HH

s th

at re

nt o

r pur

chas

e la

nd

500 1000 1500 2000 2500 3000Average value per square km land (100,000s TSh)

Region-levelscatterplots(LSMS2014/15)

Background:Tanzania• 1961:Nationalizationofland

“Itisquitepossiblethat…ifthepoorAfricanwereallowedtosellhisland,allthelandinTanganyikawouldbelongtowealthyimmigrants,andthelocalpeoplewouldbetenants.”-PresidentNyerere,1958• Landremovedfromtribaloversight,administeredbydemocraticallyelectedVillageCouncils

• 1982:LandmarketrevivedwhenTanzaniaabandonsstatesocialism

• 1999:VillageLandActà Customarylandrightsrecognizedastransferable 14

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> 20%

15-20%

10-15%

5-10%

< 5%

% Landholding households with purchased land

LandmarketactivityacrossEthiopia

> 30%

20-30%

10-20%

< 10%

% Landholding households with rented / sharecropped land

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0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Rural,nopurchasedland

Rural,haspurchasedland

Town,nopurchasedland

Town,haspurchasedland

Proportionofhouseholdincome

Incomeshares

Crop Livestock Agriculturalwage Non-agriculturawage Self-employment Transfers Other

Ethiopia– Descriptivesoflandmarketparticipants(demandside)• 4.4%ofHHswithagriculturallandarebasedinsmalltowns(neitherruralareas

norbigtowns)• 18.7%ofHHsthatpossesspurchasedagriculturallandareintowns• 6.8%ofruralHHs(34.1%oftownHHs)possesspurchasedland

%cropvaluesold

6.4%

10.1%

18.8%

18.6%

• Averageparcelsize=0.39ha• AveragepurchasedparcelsizeheldbyruralHH=0.39ha;heldbytownHH=0.12ha

Source:EvansSchoolPolicy&AnalysisResearchGroup,UniversityofWashington

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LandmarketactivityacrossNigeria

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Mode of acquisition (mean values)

Inherited Purchased Allocated Rentedb BorrowedArea (ha) 1.64 1.47 1.65 3.20 2.28Value (log 100,000s naira/ha) 2.29 2.26 1.51 1.78 1.98

Years held 23.75 15.90 15.65 6.06 11.16

1= Plot has title or CCRO 0.06 0.31 0.041= Plot has other documenta 0.05 0.31 0.031= Can sell 0.80 0.93 0.40

1= Male owner(s) 0.81 0.89 0.781= Female owner(s) 0.11 0.05 0.141= Male & female owners 0.08 0.06 0.08

1= Urban holder 0.10 0.17 0.08 0.30 0.18Observations 4,112 331 436 436 495

Nigeria– Plotcharacteristics

aThesedocumentsdonotoverlapwithtitlesb Rentalincludesbothcashandin-kindpayments(presumablyinclusiveofsharecropping)

Gapsinourknowledge• “Rules”oftheinformallandmarket(Winemanand

Liverpool-Tasie 2017)• Supplysideofthesalesmarket

• Ifmotivatedbydistress,asuccessfulresponseorapovertytrap?

• Landsalesandmigration(WinemanandLiverpool-Tasie 2018)

• Consequencesoflandsalesmarket

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• Typology oflandacquisitions• Definitionsof“sale”,“rental”,

“informalmarket”(Benjaminson andLund2003)

Thankyou!

ExtraSlides

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ComparisonofTanzaniaASCS(2007/08)andLSMS(2008/09and2012/13)

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0.1

.2.3

.4Pr

op. H

Hs

with

rent

ed la

nd (2

008/

09 L

SMS)

0 .05 .1 .15 .2Prop. HHs in region with rented land (2007/08 ASCS)

0.1

.2.3

.4Pr

op. H

Hs

with

rent

ed la

nd (2

012/

13 L

SMS)

0 .05 .1 .15 .2Prop. HHs with rented land (2007/08 ASCS)

0.2

.4.6

.8Pr

op. H

Hs

with

pur

chas

ed la

nd (2

012/

13 L

SMS)

.1 .2 .3 .4 .5Prop. HHs in region with purchased land (2007/08 ASCS)

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.2.4

.6.8

Prop

ortio

n H

Hs

that

rent

or p

urch

ase

land

.4 .5 .6 .7 .8Proportion HHs that hire/sell agricultural labor

.2.4

.6.8

Prop

ortio

n H

Hs

that

rent

or p

urch

ase

land

.6 .7 .8 .9 1Proportion HHs that sell crops

.2.4

.6.8

Prop

ortio

n H

Hs

that

rent

or p

urch

ase

land

100 200 300 400 500Agricultural persons per square km agricultural land

.2.4

.6.8

Prop

ortio

n H

Hs

that

rent

or p

urch

ase

land

500 1000 1500 2000 2500 3000Average value per square km land (100,000s TSh)

Region-levelscatterplotswithoutZanzibarorDares Salaam

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Mode of acquisition (mean values)Inherited Purchased Allocated Rented Otherb

Area (ha) 0.34 0.36 0.44 0.37 0.55Rental value (1,000s birr/ha)a 9.41 8.90 7.63 4.94 7.881= Plot has certificate 0.54 0.43 0.82 0.271= Has been left fallow 0.19 0.15 0.19 0.161= Contains tree crop(s) 0.29 0.43 0.12 0.02 0.13

1= Male seller(s) 0.16 0.26 0.10 0.121= Female seller(s) 0.11 0.10 0.15 0.111= Male & female sellers 0.72 0.64 0.75 0.751= Town owner, parcel does not contain the homestead 0.01 0.02 0.01 0.01 0.051= Migrant household headc 0.01 0.06 0.04 0.04 0.05Observations 1,783 1,261 403 579 265

Ethiopia– Plotcharacteristics

aRentalvalueestimatesexcludeparcelsthatcontainthehomestead.Theseareeitherestimatedor,forrentedplots,observed.b Borrowedplotsarelumpedinwith‘other’.c Migrant=Headborninadifferentregion