Land decision making and property rights
9 important questions on Land decision making and property rights
What are three ways of management?
- Some natural resources managed by individual households (e.g. soils)
- Other resources managed by local community or state (e.g. irrigation systems)
- No management for some large resources: open access (e.g. seas, pastures, forests)
What is the contribution of economic theory to land issues?
- Apply rural household economics to analyse natural resource management: conservation decisions (& role of land property rights), external effects
- Examine interactions between households in their use and management of collectively managed resources
- Provide rules for valuing costs and benefits of resource conservation
Where does investment decisions depend on?
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Peasants often have a high rate of time preference. What does this mean?
- Severe livelihood stress (poverty, hunger)
- Few assets that can be sold, if needed
- Lack of formal and informal insurances
The higher the amount at which a person switches to next year's amount, the higher the (rate of) time preference
What are other considerations why peasants have a high rate of time preference?
- Insecure (land) rights
- Low and uncertain returns to conservation
- Instable market environment for farm inputs and outputs
What are the reactions on the low population density of societies?
- Land is abundant
- Soil fertility restored through fallow (=braak) periods (shifting cultivation, slash and burn, swidden farming; = zwerflandbouw)
- No need to invest (labour, money) in maintaining soil fertility
Hence:
- No need for ownership security (costs of establishing private rights exceed its benefits
- Right to cultivate land is element of community membership
What are the consequences of a rising population density?
- Fallow cycles becomes too short to fully restore fertility
- Fertility needs to be restored through investments in the land (like manure, composting, planting N-fixing crops, trees, terracing, irrigation)
- Will not be undertaken unless persons who invest in land will also reap (part of) the future benefits
Hence: appropriate property rights need to be guaranteed
What are the impacts of agricultural commercialisation and diffusion of new technologies?
- Increase yields and incomes from land
- May stimulate investments in land
- Hence: need for appropriately guaranteed property rights to ensure that investments will actually be made
Example: tranportation revolution in 19th century (Thai rice; induced formal land registration system in Thailand)
What are the two extensions of the ETLR?
- Land tenure security (land tenure = relationship, whether legally or customarily defined, among people, as individual or groups, with respect to land) is crucial for soil conservation and other investments (irrigation, trees, houses, businesses) in or on the land: may also be provided by communal land ownership
- Investments in or on the land may also be made with the purpose to obtain more secure property rights (hence: land investments may also stimulate tenure security!)
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