Making Rural Land Markets Work

1
Making Rural Land Markets Work

• John Farrington, ODI
• and Consultant to DFIDs RNRA Team
• 19 July 2007

2
Key message

• Better access to land can play a large part in
  addressing the four big challenges for growth
  identified by DFIDs 2006 White Paper improving
  the pace, equity and sustainability of growth,
  and enhancing mobility.
• In some areas, customary tenure and land
  reallocation remain important, but for the
  majority, access is via the market

3
The costs of market inefficiency

• Economic growth tends to accelerate when people
  can access land fairly and efficiently, and when
  land tenure is secure.
• Excessive legal and regulatory frameworks that
  impede land markets rob India of 1.3 annual GDP
  growth ( 10bn/yr).
• Poor access to land was recently highlighted as
  the biggest barrier to business by 57 of
  enterprises in Ethiopia, 35 in Bangladesh, and
  25 in Tanzania and Kenya.

4
Rental markets

• Pervasive, with typically over 40 of farms in S
  Asia involved either as tenants or landlords
• Pervasive even where banned (eg parts of India
• Sharecropping being rehabilitated
• Evidence that well-functioning rental markets add
  to equity without loss of productivity or
  environmental sustainability

5
Factors impeding the functioning of markets

• Too few have up-to-date and accurate individual
  title, and/or unable to defend it
• Title does not reflect ground reality
• Transactions impeded by inefficiency and/or
  excessive taxation
• Rights of women or minorities not provided for in
  title or market-related regulations
• Inequitable access to information
• Tenants either over- or under-protected

6
Conclusions

• For the majority of the rural poor, access to
  land can be made more equitable and secure only
  if land ownership and rental markets are
  improved. This will also strengthen the hand of
  the rural poor in relation to conversion of
  land to urban or infrastructural uses.
• To reduce or remove the factors impeding market
  functioning is a challenging, but by no means
  impossible, task for governments and donors