Changing property institutions
Property rights in pastoral and agro-pastoral systems
Property institutions and land tenure rights3 have been studied extensively mainly due to two reasons. Firstly, land is the primary and critical factor of production in agrarian societies. Secondly, ILRI has the objective of developing technologies and promoting policies that expand the production of livestock while at the same time conserving the natural resources. This is evident in a review in 1994 of 18 studies on land tenure systems and related issues in Africa conducted by ILRI staff and their collaborators (see Swallow 1994b).
3. Property is defined here as a stream of benefits that is generated by a resource or other assets while property institutions are the rights, rules, conventions and norms that govern the relationships between people and those benefit streams.
The majority of the earlier studies have been concerned with several questions:
A great deal of research on property institutions in West Africa has focused on evaluating the effects of property institutions on adoption of feed production technologies. Examples are the studies on adoption of fodder banks, alley farming and a study of the processes by which livestock owners obtain feed resources when they begin to adopt dairy production. Other studies focused on farming systems in the Sahel and examined the relationship between property rights and the management of manure (Toulmin 1992; Gavian 1993; Gavian and Fafchamps 1994).
Several studies have focused on theoretical analysis of the prospects for internal governance of common property regimes of natural pastures. The results of the analysis suggest that a group of livestock owners can effectively manage common property rangelands without formal organisations or institutions if the group is relatively small, if entry into the group is relatively slow or difficult and if the members of the group do not discount the future too heavily (Swallow and Bromley 1994). The types of institutions that can be implemented to regulate the use of rangelands depend upon the structure of governance. That is, a common property regime can only be effective if its institutions are compatible with the structure of governance. In many cases, it is more appropriate for African governments to define and enforce boundaries between groups, then help to establish conditions in which internal group dynamics yield efficient resource management outcomes (Swallow and Bromley 1995).
A considerable attention has been given in the literature to the relevance of and the debate around the issue of property institutions, land tenure and agricultural productivity in Africa and in line with this, the policy work of ILRI. For Ethiopia in particular the change in the structure of government in 1991 has created an environment in which property institutions can change rapidly. This environment provided an opportunity to evaluate the effects of different types of property institutions. The evaluation focuses on use and productivity as well as efficiency of land resource, and on how property institutions change in response to external and internal pressures.
The studies by Omiti et al. (1999) and Omiti et al. (2000) on changes in land-use practices reveal some changes. The resurfacing of rural factor markets following the agrarian de-collectivisation in Ethiopia provides some grounds of optimism that freeing-up of the land markets will bring with it more sustainable land use practices. This optimism is due to the observed changes in adoption of soil conservation, tree planting, adoption of crop rotation and fallow practices, and increased use of organic and inorganic fertilisers associated with the new land policy. There also has been a reduction of the imperfections in rural factor markets. Selling, hiring, renting and exchanging of agricultural land, farm labour and animal traction are increasing. These changes were expected to influence agricultural production in many ways; particularly reforms of rural factor markets are encouraged and accorded appropriate policy support.
The opportunity to study the rapid changes in property rights institutions of the Ethiopian case was seized by another research project. The project on land tenure institutions and agricultural productivity in Ethiopia was initiated in late 1993 to identify factors influencing the evolution of land tenure institutions, to determine the effect of land tenure on investment, productivity and efficiency in crop–livestock systems in the Ethiopian highlands, and to assess the impact of land tenure on household access to feed resources.
ILRI researchers used the project output frequently to contribute to the continuing policy debate on land tenure systems and land policy in Ethiopia. For instance, a paper discussing the issue of access to land by private commercial investors (Gavian and Gemechu 1994) was presented at the second workshop of land tenure project in 1994. Another paper on land tenure and farming practices in the highlands of Ethiopia (Gavian and Amare 1996) was presented to the annual conference of the Agricultural Economics Society of Ethiopia in 1996. A third paper presented evidence on ways farmers in one region of the Ethiopian highlands are gaining access to land. The strategies for cultivating and maintaining that resource was presented in 1996 at the sub-regional workshop on Land Tenure Issues in Natural Resource Management organised by the United Nations Economic Commission for Africa (Gavian 1996).
Another output of the project dealt with the relative efficiency of alternative land-tenure contracts. Gavian and Ehui (1999) argued that the production efficiency of alternative land-tenure contracts was measured using the concept of interspatial total factor productivity. The paper tested the hypothesis that land under varying configurations of property rights will be farmed at different levels of production efficiency. The analysis indicated that although the informally contracted lands were farmed 10–16% less efficiently, farmers of such lands actually apply inputs more intensively. However, no empirical basis was found to support the hypothesis that land tenure is a constraint to agricultural productivity.
A recent paper that re-examined the technical efficiency of the alternative land tenure contracts has employed the production frontier model to explain differences in technical efficiency of crop production in the mixed crop–livestock system of the Ethiopian highlands (Ahmed et al. 2002). The paper identified significant differences in technical efficiency between plots owner cultivated or rented on the one hand and those sharecropped, borrowed or given as a gift on the other. This difference was attributed to the level of restrictions imposed on the tenant in the sharecropping and borrowing agreements. These agreements involve factor exchanges and labour and traction supply by the tenant. The findings suggest that technical inefficiency may arise because of the distortions in other markets (labour, credit) interacting with land market.
Examining the evolution since 1991 in land rental markets of the highlands of northern Ethiopia, Benin et al. (2003d) showed that changes in the production environment and natural resource endowments, changes in human capital, access to credit, commercialisation of cereal production, and tenure security are the major forces contributing to the changes in land rental arrangements. Reduction in production risk, through increased availability of moisture or reduced degradation of soil, has reduced the need for risk-pooling arrangements associated with sharecropping in favour of fixed-rent leases. Furthermore, increasing commercialisation of cereals has caused an increase in use of land rental arrangements in general, while an increase in access to credit has caused an increase in use of fixed-rent leases. These results suggest that land tenure arrangements are indeed dynamic and do evolve in response to technological change, market development, population pressure and agricultural commercialisation.
Examining other factors that affect changes in crop yield, Benin et al. (2003d) showed further that increase in use of alternative land rental arrangements has had a positive impact on changes in average cereal yields. This is consistent with the theory that land rentals allow land to be used by farmers who are more capable to earn the highest return from it through mobility of scarce factors of production. The paper suggests that land tenure arrangements have evolved in a manner that eliminates Marshallian inefficiencies associated with share tenancy.
A related issue is how tenure security influences investment in land improvement and productivity. An application of the double hurdle statistical analysis to data from the Tigray Region of Ethiopia reveals different causal factors for soil conservation adoption vs. intensity of use (Berhanu and Swinton 2001). Farmers' reasons for adopting soil conservation measures vary sharply between stone terraces and soil bunds. Long-term investments in stone terraces were associated with secure land tenure, labour availability, proximity to the farmstead and learning opportunities via the existence of local food-for-work projects. By contrast, short-term investments in soil bunds were strongly linked to insecure land tenure and the absence of local food-for-work projects.
Public conservation campaigns on private plots reduced adoption of both stone terraces and soil bunds. Whereas capacity factors largely influenced the adoption decision, expected returns carried more influence for the intensity of stone terrace adoption (measured as metres of terrace per hectare). More stone terracing was built where fertile but erosion-prone silty soils in higher rainfall areas offered valuable yield benefits. Intensity of terracing was also greater in remote villages where limited off-farm employment opportunities reduced construction costs. These results highlight the importance of the right kind of public interventions. Direct public involvement in constructing soil conservation structures on private lands appears to undermine incentives for private conservation investments. When done on public lands, however, public conservation activities may be exemplary in encouraging private soil conservation. Secure land tenure rights clearly reinforce private incentives to make long-term investments in soil conservation.
In Ethiopia, particularly in the Amhara Region, one source of tenure insecurity is the frequent land redistribution, which has been ongoing since 1974 in an attempt to equalise land holdings and quality across households. However, its short- and long-term effects may have mixed impacts on farmers' land management and productivity. Expectations of future land redistribution may undermine farmers' incentive to invest in land improvements and soil fertility, since farmers' ability to reap the benefits of such investments is undermined. Redistribution might, however, improve access to land of households that have relative surpluses of other important factors of production, such as labour, oxen or cash to purchase inputs, particularly in the context of prohibited land sales and restricted lease markets that exist in Ethiopia. Thus, land redistribution may increase intensity of land management and use of purchased inputs, which may in turn increase productivity.
Benin (2003) and Benin and Pender (2001) found that crop yields in the Amhara Region were significantly higher particularly in villages where the last major land redistribution took place in 1997/98. Benin (2003) also found that plots on which households felt more secure (i.e. expecting to operate the plot for the next five years) were associated with higher crop yield, suggesting that security of tenure may be associated with other yield-enhancing management practices. Together, these results suggest that improving tenure security can bring about substantial increment in crop productivity.
However, the positive impact associated with the last land redistribution exercise should not be interpreted as justification for continuing it. Although, the exercise increased productive capacity per unit area of land, by improving access to land of households with excess capacity, the long-term (insecurity) effects, which were not adequately studied, may outweigh the positive short-term effects. Thus, more sustainable ways of improving access to land will be important. It should be noted that the Amhara regional government has adopted a land use policy that stops future land redistribution. It will therefore be necessary to educate farmers on the implications of such a policy in order to build up their confidence and increase their sense of tenure security.
The importance of the relationship between property rights, risk, technology and productivity in SSA was reflected in the workshop held by ILRI and IFPRI researchers in 1994. The workshop catered to plan collaborative research on property rights and to summarise the results of studies previously conducted by ILCA and others. It also attempted to identify priorities for future research, and to consider and evaluate specific proposals for future research areas of complementarities and/or overlaps with other past or current projects (Swallow 1994a). It can be argued that subsequent work on property rights at ILRI was built on this workshop, e.g. resource use and property rights under risk.
A project entitled 'Property rights, risk and livestock development' was initiated in 1996 and ended in 1999, as a collaborative venture between ILRI, IFPRI and the Göttingen Research Institute for Rural Development. The goal of the project was to support appropriate reforms of property institutions and land policies in the semi-arid areas of SSA. The project objectives include:
ILRI's property rights research further focused on the semi-arid area in southern Ethiopia—the Borana rangelands. The area is characterised by extensive livestock production system, and it is a valuable source of livestock both for draft power and for export. Despite the region's high ecological potential vis-à-vis livestock production, the success of development effort remains limited due to the pressure of privatisation of crop production and grazing on the rangelands. The trends are hypothetically attributed to various factors, including demographic and market forces. The semi-arid nature of the area creates a concern about the potential capacity of the area to support a fully privatised system on a sustainable basis.
A recently completed study in the area focuses on the effects of environmental risk; market variables and population pressure on land use and property rights, and seeks to identify pathways for development (Kamara 2001). The theoretical basis of the study is developed mainly from property rights theory, focusing on efficiency and interest group theory of institutional change. The empirical results largely conform to the principal hypotheses about the driving forces of institutional change in Borana.
Community level co-operation in resource management is determined by demographic factors, heterogeneity in wealth, off-farm income and social capital variables. Rainfall variability affects stock densities only in areas of high rainfall variability. Market variables do not crucially determine stock densities or community level co-operation, but affect land allocation to crops. Population and non-co-operation further induce a change in land use. Changes in property rights are explained by policy variables such as the ban on wildfire, the creation of peasant associations, sedentarisation programmes and development interventions.
The study infers that the Borana system is in transition, with evidence of departure from traditional pastoralism to a semi-sedentary system with increasing reliance on crops and private grazing. There is a marked potential for market improvement in Borana without adversely affecting the stability of the system. The study further highlights the need for a re-animation of a traditional authority in resource management and the relevance of programmes that reduce heterogeneity among the Borana pastoralists. The study concludes that the agro-ecological diversity of the Borana rangelands calls for selective policies that support a mixture of crop–livestock integration and extensive livestock production as necessary, rather than a 'one policy fits all' approaches.
A growing interest in the potentialities of local collective action for the development of poor countries is caused by the limitations and failure of both the market and the state. The literature, emphasising this potential, covers a wide range of situations. The most outstanding of these include those involving the creation of a local public good, those entailing appropriation problems in the presence of ecological externalities (most notably in the case of common property resources), and those concerned with the emergence of voluntary mechanisms for the provision of credit and insurance. Within ILRI's focus, economists encounter many situations such as the case of rangeland management, disease control and even natural resource management at community level.
The analysis of the aspects of individual adoption of a technology that produces mixed public–private goods and public goods with indivisibilities is the other dimension in property right research at ILRI. In one publication, the case of public good problem of watershed development in the Ethiopian highlands—Ginchi—was presented in a simple game-theoretical model to study the logic of voluntary contributions to an indivisible public good; namely a central drainage channel (Gaspart et al. 1998). This approach emphasised the difference between the problem under attention and the classical representation of public good provision, i.e. the Prisoner's Dilemma, which emphasises the joint role of leadership and private interests as key determinants of individual contributions, thereby illustrating the game-theoretical model and providing well-founded guidelines for similar collective actions.
The most striking result of the study is that there is indeed a clear positive relationship between the magnitude of personal stakes and the amounts of effort spent on building the site. In other words, in the equilibrium selection process, a social norm of the kind 'from each according to his expected gains' seems to have been at work to favour co-ordination of individual efforts. Even though it concerns only five households, leadership appears as the most statistically significant explanatory factor, and only a narrow interpretation can trace its impact back to purely self-interested motives of a material nature.
Another study in this area focused on 'pour-on' application to control trypanosomosis in cattle (Swallow et al. 2000). Farmers who treat their cattle with pour-on obtain private benefits. Animals that receive these treatments carry fewer ticks, and may receive fewer bites from tsetse and other biting flies. Private treatment of animals with the pour-on also generates local public benefits; namely suppression of the numbers of tsetse and other biting and nuisance flies in the local area. Thus, the public good benefits of the treatment will depend upon the strength of the local institutions governing pour-on use, and how neighbours are expected to respond to changes in others' behaviour. The study developed and applied a model of household demand for pour-ons that considers the private and local benefits that they generate. The study concluded that kebeles (the lowest administrative units in Ethiopia) and other similar local government administrations are important focus of co-operation. Even though these units were not formally involved in the control programme, co-operation is costly, and factors increasing the costs or risks of co-operation will reduce the likelihood of successful co-operation. The pilot tsetse-control trial in south-western Ethiopia was changed in two ways because of the insights obtained from this study. First, two new treatment centres were opened in low co-operation areas. Second, the dates when pour-on treatments will be given are now announced at least a month in advance. These lessons will extend to other locations where this approach to pour-on delivery and use is attempted.
Similar to pour-on treatment, a technology that produces a mixed public–private good, ILRI's research on property rights investigated the determinants of collective action and its effectiveness in managing community natural resources (see Benin and Pender 2002; Berhanu et al. forthcoming). The importance of these studies is that management of community woodlots is similar to that of communal grazing land and primary source of livestock feed in many areas. Thus, successful management of common resources is important for sustainable land management through reducing the risk of deforestation and use of manure as a source of fuel. The studies suggest that collective actions may be more beneficial and more effective when managed at a more local unit, i.e. village-level rather than at higher municipal level. They also suggest that collective actions are more productive when the role of external organisations is more demand-driven, and when the actions are promoted in intermediate population density communities that are more remote from markets. In higher population densities and areas closer to markets, private-oriented approaches are likely to be more effective.
Besides the extensive focus of ILRI's research on property rights on land and its property institutions, intellectual property rights is now re-emerging as a new type of property rights. While the research work focused on understanding and use of property rights institutions for better and sustainable use of natural resources, ILRI as well as other research institutions are required to develop rules and legal apparatus to protect the use of the products—the technology and knowledge generated from its research. In reviewing the impact of research on maintaining resistance to trypanosomes, it has been pointed out that the research impact of biotechnology depends on whether the ownership rights, and delivery of research output are completely private or public. Intellectual property rights are likely to influence both levels and distribution of research benefits. With the emerging revolutions in science, biotechnology and genomics and globalisation, ILRI will increasingly deal with issues of property rights.
