The Influence of Governance on Global Agricultural Land Availability

28 June 2011 FDI Team

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This paper began as a roundtable discussion hosted by Future Directions International on the subject of ‘Land Limitations.’ The roundtable, the third in a series of roundtables, was attended by several eminent Western Australian academics and thinkers*. The discussion highlighted a number of challenges to the availability of land that needed to be addressed as part of a holistic solution. Land governance was one such area which presented the need for reform. 

Other papers relating to this roundtable are:

Global Land Limitations

The Future Prospects for Global Arable Land

Key points

  • For many countries, land is the single greatest national resource, and as such it represents an important governance issue.
  • Land governance concerns the rules, processes and structures through which decisions are made about the use and control of land, the manner in which decisions are implemented and the way in which competing interests in land are managed. It is fundamentally about power and the political economy of land.
  • The issue of land tenure presents a significant challenge with the majority of people globally not having legally recognised and documented rights to land.
  • Government action is required for the provision of policies and long-term strategic plans.
  • Policy reforms to improve the governance of land and natural resources can enhance the lives of the poor and vulnerable by recognising and protecting their rights to land and by ensuring that the benefits from these resources are equitably distributed and that the responsibilities for their effective management are equitably shared.
  • The need for land governance is universal, and is not only required in developing nations, but developed ones as well.

 

Analysis

For many countries in the world, land represents the single greatest national resource. Because of this, land is increasingly being recognised as an important governance issue. Many of the challenges faced by governments and nations such as climate change, rapid urbanisation, increased demand for natural resources; food, water and energy insecurity; unsustainable land use and land degradation all contain a clear land dimension. Good land governance is the keystone upon which resolutions to these issues rest, it provides the long term vision, the political and the mobilisation of resources required to meet these challenges. Because land is a valuable but finite resource, it needs to be equitably managed to ensure its optimal use.

Land governance concerns the rules, processes and structures through which decisions are made about the use and control of land, the manner in which decisions are implemented and the way in which competing interests in land are managed. It is fundamentally about power and the political economy of land. This paper will look at a number of examples of areas in which there exists an inefficient and suboptimal use of land which could be resolved by policy reforms which target land governance.

Land tenure and displacement

The issue of security of tenure represents a significant challenge with a majority of the global population not having legally recognised or documented rights to land. Security of tenure is important because it provides protection against the arbitrary curtailment of land rights and enforceable guarantees; results in increased investment and agricultural productivity; improves food security and promotes the more sustainable use of natural resources. However few countries, particularly in the developing world have adequate institutional mechanisms in place for protecting the livelihoods of land users, especially in the context of the large scale acquisition of land for agricultural investment.

In Cambodia, the government introduced a regime of economic land concessions in order to promote the cultivation and development of the agriculture sector. Agribusinesses can apply to access up to 10,000 hectares of land, free of charge for up to 99 years on the condition that they use the land for agricultural production. The result, however, has been the forced evictions and displacement of villagers and individuals, as well as the unsustainable exploitation of Cambodia’s land in favour of export-focused cash crops such as sugar and cassava. Villagers who have lost their land to these concessions have been unable to successfully petition the courts for its return, despite claims that the actions of companies are in direct violation of the Royal Sub-decree on Economic Land Concessions. Recent concerns over high and volatile fuel and food prices have also prompted the large scale acquisition of land, and further compounded the issue of tenure of security, as existing land holders are left without legal recourse in the investors rush to attain land.

One strategy that has been used to address tenure security is the legal recognition of customary forms of tenure; whether they stem from continuous use or the indigenous status of the land user. This has occurred in many parts of the world, but most particularly in Africa. Another strategy has been through large scale land titling programs such as that which occurred in Peru between 1996 and 2004 and in Thailand. The principal governance challenges in these strategies, however, include the delivery of tenure security that is affordable, accessible and sustainable. An additional challenge is the costs of implementing large scale titling reforms which are complicated by skill and resource deficiencies. Because of their lack of institutional foundations, many of these land titling systems, once implemented, lack the incentive to register subsequent transactions and can quickly become dated. There is also considerable vested interest in maintaining the lack of certainty by developers and the landed elite, which hinders the political will to implement change. 

Natural resource management

As with land, an important aspect of governance in relation to minerals and forestry management concerns the interaction between formal and informal (customary) tenure. In many parts of the world access to natural resources is dependent on customary rights, which are notoriously susceptible to disruption in the absence of effective land governance policies.

Climate change represents one of the new policy challenges to both land governance and natural resource management. The Reduction of Emissions and Forest Degradation in Developing countries initiative makes addressing the tenure issues of customary landholders essential. REDD is a recent UN initiative which is being adopted throughout the developing world and represents a significant opportunity for both climate change mitigation and sustained financial benefits to customary and indigenous communities from preserving their lands.

Formal administration of land is typically sectoral with little coordination or interaction across boundaries. Land, water, forest and fisheries policies are all prepared and administered independently from one another. However, the interdependencies in natural resource management are compelling. These interdependencies have to be managed so that the benefits, burdens and responsibilities are negotiated and unambiguous.

Another issue complicating the governance of natural resource management is the increasing role in the sector played by domestic and international investors. This has resulted in new revenue streams for developing countries such as Africa, which has had record inflows of foreign direct investment since 2007. Foreign purchase of land, also known as ‘land grabs’ are occurring throughout the world as investor countries with limited water and arable land capabilities, such as South Korea, rush to ensure their future food and resource security. This has also increased competition between investors and local communities over the land in which these resources and minerals are located. The Papua New Guinea government is modeling a solution to this competition of interests, by acting as a mediator between the community and investors to facilitate a mutually satisfactory and sustainable deal. In many cases, however governments have a vested interest in overseas investments, as they are beneficiaries of corrupt corporate arrangements. In Ghana, illegal logging is endemic, simply because of its profitability.

In Australia and elsewhere, where land and natural resources can be the subject of native title claims, the federal government has introduced the concept of Free Informed Prior Consent requiring that the consent of indigenous communities is obtained prior to approval of activities on indigenous lands. This is a key example of a land governance model that recognises the tension between customary and formal ownership and seeks to address that conflict.

Informal settlements

Effective land governance in the case of informal settlements promotes both land and food security. Informal settlements (urban neighbourhoods built outside of conventional property ownership and land market systems) have been caused by rapid urbanisation and population growth, combined with the inadequate coping ability of developing countries to the growing housing needs of people in urban areas. Despite the many challenges informal settlements represent, to land resources, health and urban planning, informal settlements are actually the predominant model of urban development and urban growth in developing countries. In Latin America, for example, informal settlements represent the fastest growing segment of the metropolitan population. It is estimated that 900 million people currently live in informal settlements, however census information is notoriously difficult to collect from these transient populations, and it has been suggested that this figure is a conservative estimate. Informal settlements and their concentration of population cause a tremendous strain on the land, and result in a rapid depletion of already limited land resources such as clean water and arable land. The land governance required to address the problem of informal settlements is twofold: solutions which upgrade the existing settlements; and solutions which prevent the growth of new settlements.

In Latin America, many cities are confronted with the reality that ‘regularising and upgrading’ only perpetuates informal settlements and does not address the fundamentally dysfunctional nature of urban land markets. Reforms which address predatory pricing and the lack of accessibility of formal land markets will make significant inroads in the appeal of informal land markets.

Land disputes and conflict

The critical issue for land governance in relations to land disputes and conflict is not whether there is conflict but if there is a mechanism to ensure that dispute resolution occurs and is enforced. In countries which have to develop the rule of law, the resolution of land disputes are hampered by weak and ineffective court systems, in which entrenched landed interests can hijack the proceedings.

For many countries, a key governance issue for determining the likelihood and duration of conflict is the interface between formal and customary rights and structures related to land. It is the experience of many countries that resolving this tension and strengthening the security of tenure is essential to reducing land disputes. The large scale certification process which occurred in Ethiopia in 2005 has significantly reduced the recorded rate of conflict in recent years. The use of alternative dispute resolution has also proved affective, so long as they are integrated with existing state legal systems. In Tajikistan, Third Party Arbitration Courts have been used to good effect in resolving land disputes, although they have yet to be institutionalised into the broader legal framework.

More problematic, however, is the issue of violent conflict over land. There are a myriad of reasons as to why conflict over land may become violent, but more often it occurs where competition for natural resources or access to land interacts with latent political and social forces present in society. Widespread and protracted conflicts can result in the displacement of vast numbers of people. Not only does this burden the land and resources of the host community, but at the end of the conflict, displaced people returning home may find that others occupy their property. This can result in several, legitimate competing claims to a single tract of land as a result of successive displacement. To further compound this issue, violent conflict often results in significant changes to land tenure and its administration. From a governance perspective, the solution lies in ensuring that dispute resolution solutions  are maintained and restored following conflict. In Rwanda, land and property disputes are handled by the Gacaca courts, a traditional institution restored after the genocide.

Land governance in developed countries

Land governance is not only required in developing countries. It is equally important to developed countries, because land is a universally valued asset and finite resource. However, the suite of policies which comprise land governance inevitably differ between developing and developed countries according to their differing needs. The case of land governance in Australia is illustrative of the universal need for land governance solutions. Comparatively, Australia is in an enviable position to the rest of the world in terms of available arable land. In 2005, Australia was rated 203rd out of 206th in the world in terms of population density, just before Mongolia and Greenland. However Australia’s relative wealth of land may have contributed to a false sense of complacency, which has attributed in part to the piecemeal and ad hoc changes to the land sector that have been seen in the last three decades, which have failed to keep pace with changing trends and new challenges.

With regards to the question of land tenure, the Australian system is as much in need of reform as other countries, particularly in the field of pastoral leases. Much of Australia’s abundant grazing land is subject to pastoral leases that are governed by various legislative regimes, and conditions. The pastoral leaseholder has limited property right in contrast to those with freehold land. The relative insecurity of tenure on leasehold land, as compared with freehold land makes it very difficult for leaseholders to raise the requisite capital needed for improvement. Furthermore, leasehold arrangements prohibit diversification and entrepreneurial activity, resulting the inefficient use and underdevelopment of leasehold land.

Australia’s land governance arrangements are complicated by federalism, which disperses government control and responsibility for land, conservation and agriculture across a number of different bodies and agencies. This complex federal arrangement, with its predilection towards political conflict and inertia, as well as myriad of other interests and agendas in the land sector, necessitate a renewed emphasis on land governance in Australia. Land governance it critical in order to address issues of land tenure, the productive use of arable land, conservation and meeting the future challenges posed by climate change, which have proved nearly impossible to resolve under the current system. With government being the largest owner of land in Australia, the onus is thus on the Federal and State governments to spearhead these necessary changes to land management and governance. Under the current leasehold arrangement the potential of arable land and long-term best land management practice will not be realised.

Conclusion

Land is an increasingly valuable asset in the context of a rapidly rising global population and finite resources. Like anything of value, it is vulnerable to exploitation and misuse without proper management and regulation. Good land governance ensures efficient and equitable usage. Effective land governance mechanisms underpin the resolution of every land issue, in particular issues of informal settlements, land rights, security of tenure and natural resource management. There is a need for strong national governments and leadership to make national priorities in the land sector. This national ownership of reforms is essential to both their success and sustainability, as is international co-operation of land governance issues which span countries and continents. Reforms to land governance, particularly in areas where there are interests vested in maintaining the status quo, may take years to implement, or even decades. However, the process of reform is almost as important as the content of reform, as rapidly changing international circumstances prompt timely responses to some of these more critical challenges. In addition, political will, a broad coalition for change and sustained grassroots engagement are all fundamental to the eventual success of these reforms.

By Prue Campbell

FDI Research Intern

Global Food and Water Research Programme

Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.

 

*Workshop Participants

Mr Rob Delane

Director General, WA Department of Agriculture and Food.

Professor Carlos Duarte

Director, The University of Western Australia Oceans Institute.

Major General John Hartley AO (Retd)

CEO and Institute Director Future Directions International, Workshop Chairman

Mr Bill Hutchinson

Director, SECAU Security Research Centre, Edith Cowan University, Perth.

Mr Gary Kleyn

Future Directions International Global Food and Water Crises Research Programme Manager.

Mr Liam McHugh

Future Directions International Strategic Analyst.

Mr Peter Nixon

International Chairman, Nuffield Scholars.

Mr Joe Poprzeczny

Journalist, WA Business News and News Weekly.

Mr Geoff Puttick

CEO of Pre-Paid legal and board member of the WA Arab Chamber of Commerce.

Mr Leon Ryan

Nuffield Scholar and Accumulations Manager, Gavilon Grain Australia.

Winthrop Professor Kadambot Siddique

Chair in Agriculture and Director, The University of Western Australia Institute of Agriculture.

Winthrop Professor Richard Weller

The University of Western Australia School of Architecture, Landscape and Visual Arts.

Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.

Published by Future Directions International Pty Ltd.
Suite 5, 202 Hampden Road, Nedlands WA 6009, Australia.