FARMING & RURAL SYSTEMS ECONOMICS edited ty Werner Doppler and Siegfried Bauer VOLUME 56 Land Property Rights and Agricultural Development in the Highlands of Madagascar: Economic and Environmental Implications Rija Ranaivoarison ISBN 3-8236-1424-X ISSN 1616-9808 D26 Margraf Verlag
TABLE OF CONTENTS 1. INTRODUCTION 1 1.1 Problem Statement 2 1.2 Study's Objectives 3 1.3 Study's Hypotheses 3 1.4 Study's Organization : 4 2. AGRICULTURE AND POLICY IN MADAGASCAR 5 2.1 Introduction 5 2.2 Economic Background 5 2.2.1 Structure and Growth Trends 5 2.2.2 Structure of Import and Export 7 2.2.3 Balance of Payments and Debt 9 2.2.4 Poverty in Madagascar 10 2.3 Madagascar Agriculture Sector 11 2.3.1 General Performance of Agriculture Sector \\ 2.3.2 Growth Trends in Major Sub-Sector 11 2.3.2.1 Food Crop: Rice 12 2.3.2.2 Export Crops 13 2.3.2.3 Fisheries 17 2.3.2.4 Livestock 17 2.3.3 Agricultural Policies 18 2.3.3.1 Post Independence (1960-1975) 18 2.3.3.2 Socialism Period (1976-1985) 19 2.3.3.3 Under Structural Adjustment Program (Since 1985) 19 2.3.4 Constraints to Agricultural Development 21 3. LAND RIGHTS SYSTEM IN MADAGASCAR: FACTS, POLICIES AND PROBLEMS 23 3.1 Structures and Organization of Land Ownership 23 3.1.1 State Ownership 23 3.1.2 Private Ownership 25 3.2 Land Registration 25 3.2.1 Procedure of Land Registration 25 3.2.2 Current Situation of Registration 27 3.2.3 Potential Land Registration Demand 28 3.2.4 Cost of Registration 28 3.3 Mode of Acquisition of Land 29 3.3.1 Inheritance 29 3.3.2 Land Market 30 3.3.3 Land Lease Market 30 3.4 Land Policies in Historical Perspective 31 3.4.1 Pre-Colonial Era 31
3.4.2 Colonial Era, 32 3.4.3 Post-colonial Era 34 3.5 Land Problems in Madagascar 35 3.5.1 Nature of the Problems 35 3.5.1.1 Limited Access to Land 35 3.5.1.2 Insecurity of Land Tenure 35 3.5.2 Factors Causing Land Problems 36 3.5.3 Resulting Effects of Land Problems 38 3.5.3.1 Farm Miniaturization 38 3.5.3.2 Farm Fragmentation 39 3.5.3.3 Reduction of Fallow Period 39 3.5.3.4 Migration 40 3.5.3.5 Links to Poverty 40 3.5.4 Current Changes in Land Policy 41 3.5.4.1 Long Leases 41 3.5.4.2 Creation of "Guichet Unique" 41 3.5.4.3 GELOSE or Secured Local Management of Natural Resources 42 Concluding Remarks 43 4. METHODOLOGY AND DATA ANALYSIS 45 4.1 Study Area 45 4.1.1 Rational for the Choice of the Study Area 45 4.1.2 Characteristics of the Study Area 46 4.1.2.1 Physical Characteristics 46 4.1.2.2 Land Use and Farming Systems 46 4.1.2.3 Access to Institutions 47 4.2 Sampling Design 48 4.3 Data Collection 49 4.3.1 Primary Data 49 4.3.2 Secondary Data 50 4.4 Data Analysis 50 4.4.1 Level of Analysis 50 4.4.2 Descriptive Analysis 51 4.4.3 Causality Analysis 51 5. RESULTS OF FIELD SURVEY 55 5.1 Characteristics of Households 55 5.1.1 Demographic and Educational Characteristics 55 5.1.2 Income Source 55 5.1.3 Farm Size Patterns 57 5.2 Land Rights Categories 58 5.2.1 Mode of Acquisition of Land 59 5.2.1.1 Fixed Rental Land 59
5.2.1.2 Sharecropped Land 60 5.2.1.3 Inherited Land 61 5.2.1.4 Purchased Land 62 5.5.5 Situation of Land Titling in the Study Area 63 5.2.2.1 Farmer with Titled Land 63 5.2.2.2 Farmer's Perceptions over Land Titling 64 5.3 Linking Land Rights and Agricultural Productivity 66 5.3.1 Land Rights and Inputs Use 66 5.3.2 Land Rights Output 69 5.3.3 Land Rights and Investment in Material and Equipment 70 5.3.4 Land Rights and Investment on Soil Conservation Techniques 73 5.3.5 Land Rights and Credit Use 76 5.3.5.1 Descriptive Results 76 5.3.5.2 Factors Explaining the Relationship between Land Rights and Access to Formal Credit 77 Concluding Remarks 78 6. OVERVIEW OF THEORIES AND FACTS 79 6.1 Types of Property Regimes 79 6.1.1 Non-Property Regimes 79 6.1.2 Common Property Regimes 79 6.1.3 State Property Regimes go 6.1.4 Private Property Regimes 80 6.2 Hardin's "Tragedy of the Commons" gj 6.3 The Property Rights School (Transaction Cost Approach) g2 6.3.1 Basic Assumptions g2 6.3.2 Empirical Evidence g4 6.3.3 Empirical Results in Sub-Saharan Africa Countries g4 6.3.4 Policy Implication g4 6.3.5 Limitation of Property Rights School g5 6.4 The Evolutionary Theory of Land Rights School g6 6.4.1 Basic Assumptions g6 6.4.2 Policy Implication g9 6.4.3 Empirical Evidences g9 6.4.4 Limitations of the Evolutionary Theory of Land Rights School g9 6.5 Overview of Research Methodology 91 6.5.1 Measurement of Tenure Security 9j 6.5.2 Econometric Method of Testing 92 7. THE MODEL'S STRUCTURE AND EMPIRICAL SPECIFICATION 97 7.1 Theoretical Framework 97 7.2 Identification of Indicator Variables 99 7.2.1 Indicators of Land Rights 99
7.2.1.1 Approaches to Measure the Land Rights 99 7.2.1.2 Land Rights Indexes in the Study Area 101 7.2.2 Investment Variable 102 7.2.2.1 Investment in Agricultural Equipment 102 7.2.2.2 Investment in Soil Conservation Technologies 105 7.2.2.3 Investment in Soil Fertility Enhancement and Maintenance... 107 7.2.3 Economic Indicators 108 7.2.3.1 Indexes of Productivity 108 7.2.3.2 Other Index of Productivity 110 7.2.3.3 Economic Indexes in Study Area 114 7.2.4 Indicators of Plot 115 7.2.4.1 Plot Slope 115 7.2.4.2 Soil Quality 115 7.2.4.3 Soil Degradation 116 7.2.5 Indicators of Household 116 7.2.5.1 Labor 116 7.2.5.2 Land Fragmentation 117-7.2.5.3 Cash Income 117 7.2.5.4 Farm Size 117 7.2.5.5 Dependency Ratio 118 7.2.5.6 Access to Credit and Extension Services 118 7.2.5.7 Migrant Status 118 7.2.5.8 Education Level and Age of the Household Head 119 7.3 Method of Estimation 120 7.3.1 Level of Estimation 120 7.3.2 Estimation Approaches 120 7.3.2.1 Systematic Comparison 120 7.3.2.2 Indicator Trend Function 121 7.3.2.3 Econometric Regression 121 7.3.2.4 Complex System Modeling 123 7.3.3 Rationale for the Choice of Estimation Approach 123 7.3.3 Models Specification 124 7.3.3.1 Investment in Capital Equipment Equation 124 7.3.3.2 Investment on Soil Conservation Measures Equation 125 7.3.3.3 Soil Fertility Maintenance and Enhancement Equation 129 7.3.3.4 Agricultural Productivity Equation 129 7.3.4 Strengths and Limitations of the Methodology 130 8. ECONOMIC ESTIMATION OF LAND RIGHTS IMPACT 133 8.1 Impact of the Land Property Rights on Agricultural Investment 133 8.1.1 Impact on Investment in Equipment 133 8.1.1.1 Impact to Land Property Rights 134 8.1.1.2 Impact of other Factors 135 8.1.2 Impact Investment in Soil Conservation Measures 136
8.1.2.1 Impact of Land Property Rights 137 8.1.2.2 Impact of other Factors 139 8.1.3 Impact on Investment in Soil Fertility Enhancement and Maintenance 141 8.1.3.1 Impact on Chemical Fertilizer Use 142 8.1.3.2 Impact on Manure Use 144 8.2 Impact of Land Property Rights on the Productivity 145 8.2.1 Impact of Land Rights by Using Tornqvist Index of Efficiency 145 8.2.2 Impact of Land Rights by Using Total Factors of Productivity Index 146 8.2.3 Impact of Other Factors 149 Concluding Remarks 150 9. FACTORS AFFECTING FARMERS'DECISIONS OF PARTICIPATION IN LAND TITLING 151 9.1 Methodological Approaches to Analyze the Farmer's Decision of Participation in Land Titling 151 9.2 Rationale for Choice of Methodological Approach 153 9.3 Specification of the Empirical Model 154 9.3.1 Indicators of Participation in Land Titling 154 9.3.2 Independent Variables 155 9.3.3 Empirical Models 156 9.3.4 Estimation Procedure 158 9.4 Empirical Results and Discussion 158 Concluding Remarks 161 10. CONCLUSIONS AND POLICY RECOMMENDATIONS 163 10.1 Summary of Major Findings 163 10.2 Policy Recommendations 166 10.2.1 Short- and Medium Term Priorities 166 10.2..1 Subsidized Credit for Titling 167 10.2..2 Create New Branch Offices 167 10.2..3 Collective Land Titling 168 10.2..4 Gradual Approach of Implementation of Land Titling 168 10.2..5 Promotion of Private Partnership 169 10.2..6 Use of Geographic Information System (GIS) 170 10.2.2 Long-Term Priorities 171 10.3 Recommendations for Further Research 172 ZUSAMMENFASSUNG (SUMMARY IN GERMAN) 175 REFERENCES 183
LIST OF TABLES Table2.1 Madagascar GDP Growth Rates, 1985-2000 6 Table 2.2: Livestock Production, 1995-1999 17 Table 2.3: Trends of Slaughtering, 1995-1999 18 Table 3.1: Distribution of Titled Land by Provinces, 1999 27 Table 3.2: Cost of Land Registration by Activity 28 Table 4.1: Characteristics of Road Infrastructure 48 Table 5.1: Means and Standard Deviation of Selected Socioeconomic Characteristics of Survey Households, by Region 56 Table 5.2: Correlation Between Farm Size and Households Characteristics 58 Table 5.3: Distribution Pattern of Land in the Sample 58 Table 5.4: Correlation Between Size of Land with other Variables 64 Table 5.5: Correlation Between Title Status Variable and others Variables... 64 Table 5.6: Correlation Between Willingness To Pay and others Variables... 66 Table 5.7: Value of Inputs per Are in Malagasy Franc (MgF) by Title Status and Mode of Acquisition of Land 68 Table 5.8: Correlation Between Output and others Variables 69 Table 5.9: Value of Output per Are in Malagasy Franc (MgF) by Title Status and Mode of Acquisition of Land 70 Table 5.10: Ownership of Agricultural Material and Equipment 71 Table 5.11: Correlation Between Value of Equipment per Household in Malagasy Franc (MgF) and others Variables 73 Table 5.12: Proportion of Different Type of Soil Conservation 74 Measures Table 5.13: Adoption Rate of "Ditch and Hedge" 74 Table 5.14: Farm Household Characteristics of Respondents to "Ditch and Hedge" 75 Table 5.15: Proportion (%) of Households and Loan Size by Credit Source 76 Table 5.16: Proportion (%) of Households per Farm Size Receiving Formal Loan 76 Table 6.1: Studies of Impacts of Land Titling on Agricultural Productivity in Africa 85 Table 6.2: Study Cases of Evolutionary Theory of Land Rights in Africa... 90 Table 6.3: Models Testing the Links Between Tenure Security, Investment on Land, and Agricultural Productivity in Sub-Saharan Africa Countries 96 Table 7.1: Frequency Distribution of Sample Households According to Land Rights 101 Table 7.2: Land Rights Indexes by Region, 2000 101 Table 7.3: Methods of Measurement of Relative Technical Efficiency Level 111 Table 7.4: Economic Indexes by Region, 2000 114 Table 8.1: Determinants of Investment in Equipment 135 Table 8.2: Proportion of Different Type of Soil Conservation Measures 136
Table 8.3: Adoption Factors of "Ditch and Hedge" 138 Table 8.4: Double Hurdle Model for Factors Affecting the Intensity of Investment in " Ditch and Hedge" 140 Table 8.5 Use of Chemical Fertilizer and Manure at Farm Level, by Region 142 Table 8.6: Determinants of the Fertilizer Use on Lowland 143 Table 8.7: Tornqvist Index, by Region 145 Table 8.8: Determinants of Farmer's Productivity 146 Table 8.9: Total Factor of Productivity Index, by Region 147 Table 8.10: Determinants of Farmer's Productivity...! 148 Table 9.1 Participation Rate in Land Titling 155 Table 9.2: Indexes of Participation in Land Titling by Region, 2000 155 Table 9.3: Description of Variables Explaining the Participation in Land Titling 156 Table 9.4: Determinant Factors of Farmer's Decision of Participation in Land Titling 159 Table Al.l: Characteristics of TFP Index Variable 193 Table A1.2: ANOVA Test for TFP Index Variable 193 Table A1.3: Multiple Comparisons of TFP Index with Tamhane Test 193 Table A1.4: ANOVA Test for TFP Index Variable 194 Table A2.1: Likelihood Ratio Test of for Model Specification 195