CentreforLandTenureStudies,27June2011 UMB,Ås,Norway WelfareEffectsofMarketFriendlyLandReformsinUganda

Welfare Effects of Market Friendly Land Reforms in Uganda

Alex. Tatwangire ¹ Stein T. Holden ²

Department of Economics and Resource Management

Norwegian University of Life Sciences, P.O.Box 5003, 1432 Åas, Norway

Centre for Land Tenure Studies, 27 June 2011 , UMB, Ås,

Norway

Introduction Data, Welfare Indicators, and Econometric Models Used

Results and Discussion Conclusions & Policy Recommendations

Outline

1 Introduction

Land Policy Reforms in Uganda Theoretical Framework

2 Data, Welfare Indicators, and Econometric Models Used Data and Descriptive Statistics

Econometric Model Specifications

3 Results and Discussion Prefered Results

Further Robustness Checks

Conclusions & Policy Recommendations

Can the recent land reforms ensure pro-poor land transfers?

Outline

1 Introduction

Land Policy Reforms in Uganda Theoretical Framework

2 Data, Welfare Indicators, and Econometric Models Used Data and Descriptive Statistics

Econometric Model Specifications

3 Results and Discussion Prefered Results

Further Robustness Checks

Conclusions & Policy Recommendations

Introduction Data, Welfare Indicators, and Econometric Models Used

Results and Discussion Conclusions & Policy Recommendations

Theoretical Framework

Land Tenure Systems in Uganda

1

Mailo- Buganda region & parts of Bunyoro

2

Leasehold- period of 49 or 99 years

3

Freehold- parts of Western, Central & Eastern regions

4

Customary

Communal Customary Tenure-Northern & Eastern parts Individual/Family /Clan Customary Tenure- parts of Central, Western, North & South Western

5

Public Land- mainly in urban areas & owned by the Government

Can the recent land reforms ensure pro-poor land transfers?

Modes of Land Access and Welfare impacts in Uganda

Welfare effects for land access- market Vs non-market?

land access/mobilization of family assets- income gains for the poor (Finan et al. 2005)

land markets -transfers land from less able to more skilled land sales & concentration- landless poor

land rental & sales markets - active/not a more unequal distribution in Uganda in 1990s (Deininger and Mpunga 2008)

Objectives - marginal poverty reduction effects of land access:

inheritance

a combination of inheritance and other methods of acquisition

Introduction Data, Welfare Indicators, and Econometric Models Used

Results and Discussion Conclusions & Policy Recommendations

Theoretical Framework

Modes of Land Access and Welfare impacts in Uganda

Welfare effects for land access- market Vs non-market?

land access/mobilization of family assets- income gains for the poor (Finan et al. 2005)

land markets -transfers land from less able to more skilled land sales & concentration- landless poor

land rental & sales markets - active/not a more unequal distribution in Uganda in 1990s (Deininger and Mpunga 2008)

Objectives - marginal poverty reduction effects of land access:

inheritance

a combination of inheritance and other methods of acquisition market access and borrowing

Discuss new policy interventions- new threats of global demand for land?

Can the recent land reforms ensure pro-poor land transfers?

The Role of Tenure Security and Land Markets

Historical circumstances in Uganda- land tenure insecurity & other uninteded cosequences

Tensions & competition - customary Vs legal regulations on land

Restrictions on land transfers - lack of legitimacy/consesus on outcomes

Low agricultural productivity - limited access to

land/credit & low investment on land

Land Reforms, Colonial Period (1900-1962)

The “ 1900 Buganda Agreement”

Mailo land tenure - 8,958 square miles-Buganda Kingdom

9000 square miles of land - protectorate as Crown land

Declared traditional occupants of the land - tenants

Freehold, leasehold, & customary - land tenure systems

Crown Land Ordinance of 1903 - tenants at the will of the Crown

Busulu (annual dues) and Envujo (levy per acre)

Law of 1928- rights of occupants on customary land

Introduction Data, Welfare Indicators, and Econometric Models Used

Results and Discussion Conclusions & Policy Recommendations

Theoretical Framework

Land Reforms, Colonial Period (1900-1962)

The “ 1900 Buganda Agreement”

Mailo land tenure - 8,958 square miles-Buganda Kingdom

9000 square miles of land - protectorate as Crown land

Declared traditional occupants of the land - tenants

Freehold, leasehold, & customary - land tenure systems

Crown Land Ordinance of 1903 - tenants at the will of the Crown

Busulu (annual dues) and Envujo (levy per acre) Law of 1928- rights of occupants on customary land

Can the recent land reforms ensure pro-poor land transfers?

Land Reforms, Colonial Period (1900-1962)

The “ 1900 Buganda Agreement”

Mailo land tenure - 8,958 square miles-Buganda Kingdom

9000 square miles of land - protectorate as Crown land

Declared traditional occupants of the land - tenants

Freehold, leasehold, & customary - land tenure systems

Crown Land Ordinance of 1903 - tenants at the will of the Crown

Busulu (annual dues) and Envujo (levy per acre)

Law of 1928- rights of occupants on customary land

Introduction Data, Welfare Indicators, and Econometric Models Used

Results and Discussion Conclusions & Policy Recommendations

Theoretical Framework

From Independence (1962) to 1986

The 1969 Public Land Act - more protection for customary tenants against evictions

The 1975 Land Reform Decree

All land declared public- Uganda Land Commission Abolished mailo & freehold tenure- government leases Restrictions imposed- land transfers on customary land Compensations- terminated occupation on customary land

Uninteded cosequences- land grabbing, unlawful evictions, & disputes, resource dissipation

Can the recent land reforms ensure pro-poor land transfers?

Under the Museveni’s Government (1986 to present)

The 1995 Uganda constitution- all to belong to the citizens

Reinstated- customary, mailo, freehold, & leasehold tenure systems

Provides for- stronger land rights on customary land

The 1998 Land Act

Full land ownership, rights, and tenure security

Land use efficiency & better functioning land markets

Can acquire certificate of customary land ownership

Decentralized institutions of land administration

Introduction Data, Welfare Indicators, and Econometric Models Used

Results and Discussion Conclusions & Policy Recommendations

Theoretical Framework

Under the Museveni’s Government (1986 to present)

The 1995 Uganda constitution- all to belong to the citizens

Reinstated- customary, mailo, freehold, & leasehold tenure systems

Provides for- stronger land rights on customary land

The 1998 Land Act

Full land ownership, rights, and tenure security Land use efficiency & better functioning land markets Can acquire certificate of customary land ownership Decentralized institutions of land administration

Can the recent land reforms ensure pro-poor land transfers?

Under the Museveni’s Government (Continued)

Occupants of mailo/freehold/public- certificates of occupancy

Holders of certificates of customary/lease - convert to freehold tenure

Establishment of a land fund

Land Sector Strategic Plan & new National Land policy- (2004-2010)

tenure security, land access- thru land markets

efficiency of the land administration- modernising

infrastructure/information

Introduction Data, Welfare Indicators, and Econometric Models Used

Results and Discussion Conclusions & Policy Recommendations

Theoretical Framework

Under the Museveni’s Government (Continued)

Occupants of mailo/freehold/public- certificates of occupancy

Holders of certificates of customary/lease - convert to freehold tenure

Establishment of a land fund

Land Sector Strategic Plan & new National Land policy- (2004-2010)

tenure security, land access- thru land markets efficiency of the land administration- modernising infrastructure/information

The land amendment law passed in 2009- cultural dissent

Can the recent land reforms ensure pro-poor land transfers?

Under the Museveni’s Government (Continued)

Occupants of mailo/freehold/public- certificates of occupancy

Holders of certificates of customary/lease - convert to freehold tenure

Establishment of a land fund

Land Sector Strategic Plan & new National Land policy- (2004-2010)

tenure security, land access- thru land markets

efficiency of the land administration- modernising

infrastructure/information

Introduction Data, Welfare Indicators, and Econometric Models Used

Results and Discussion Conclusions & Policy Recommendations

Theoretical Framework

Outline

1 Introduction

Land Policy Reforms in Uganda Theoretical Framework

2 Data, Welfare Indicators, and Econometric Models Used Data and Descriptive Statistics

Econometric Model Specifications

3 Results and Discussion Prefered Results

Further Robustness Checks

Conclusions & Policy Recommendations

Can the recent land reforms ensure pro-poor land transfers?

Theoretical Framework

A household utility maximization problem- s.t. a set of constraints

access to land from different sources- constraint access to additional land- benefits exceed costs Farm size adjusted- mainly through the market Land access thru inheritance- influenced to a small extent

inherited land per adult-equivalent- changes over time.

constraints of cash, liquidity & labor endowment-

Introduction Data, Welfare Indicators, and Econometric Models Used

Results and Discussion Conclusions & Policy Recommendations

Data and Descriptive Statistics Econometric Model Specifications

Outline

1 Introduction

Land Policy Reforms in Uganda Theoretical Framework

2 Data, Welfare Indicators, and Econometric Models Used Data and Descriptive Statistics

Econometric Model Specifications

3 Results and Discussion Prefered Results

Further Robustness Checks

Conclusions & Policy Recommendations

Can the recent land reforms ensure pro-poor land transfers?

Data and Field Sampling

2001 IFPRI survey: 450 households in 107 communities.

2003 REPEAT survey: 94 out of 107 communities, 333 households out of the 450 2005 REPEAT survey: 20 households dropped out

dropped 4 households-contradicting land access values

balanced panel data of 309 households; 927 observations, 26

Introduction Data, Welfare Indicators, and Econometric Models Used

Results and Discussion Conclusions & Policy Recommendations

Data and Descriptive Statistics Econometric Model Specifications

Household Welfare Indicators, 2005 prices

Real income per adult equivalent, the sum of :

value of home crop production net of the cost of inputs value of home produced livestock that were consumed cash income from sale of livestock/livestock products net of livestock production costs

cash income from seasonal and monthly off-farm activities.

Real expenditure per adult equivalent

cash expenditure for consumption & value of consumption of home produced goods

Can the recent land reforms ensure pro-poor land transfers?

Outline

1 Introduction

Land Policy Reforms in Uganda Theoretical Framework

2 Data, Welfare Indicators, and Econometric Models Used Data and Descriptive Statistics

Econometric Model Specifications

3 Results and Discussion Prefered Results

Further Robustness Checks

Conclusions & Policy Recommendations

Introduction Data, Welfare Indicators, and Econometric Models Used

Results and Discussion Conclusions & Policy Recommendations

Data and Descriptive Statistics Econometric Model Specifications

Econometric Models Estimated

land owned, operated, and acquired through the market- endogenous

Main Method

residual component method- based on Holden et al. (2009; 2011)

residual component asset variable (=productive asset - predicted asset)

Method for Robustness Check

The standard IV two-stage least squares (2SLS) method

a linear combination of five instruments

Can the recent land reforms ensure pro-poor land transfers?

Outline

1 Introduction

Land Policy Reforms in Uganda Theoretical Framework

2 Data, Welfare Indicators, and Econometric Models Used Data and Descriptive Statistics

Econometric Model Specifications

3 Results and Discussion Prefered Results

Further Robustness Checks

Conclusions & Policy Recommendations

Outline

1 Introduction

Land Policy Reforms in Uganda Theoretical Framework

2 Data, Welfare Indicators, and Econometric Models Used Data and Descriptive Statistics

Econometric Model Specifications

3 Results and Discussion Prefered Results

Further Robustness Checks

Conclusions & Policy Recommendations

Outline

1 Introduction

Land Policy Reforms in Uganda Theoretical Framework

2 Data, Welfare Indicators, and Econometric Models Used Data and Descriptive Statistics

Econometric Model Specifications

3 Results and Discussion Prefered Results

Further Robustness Checks

Conclusions & Policy Recommendations

Introduction Data, Welfare Indicators, and Econometric Models Used

Results and Discussion Conclusions & Policy Recommendations

Summary

Increasing land scarcity has made land access an important poverty and welfare indicator in Uganda.

Land, whether accessed through the market or non-market ways plays an important role in enhancing household welfare.

Better land access through the market has a stronger welfare-improving effect than better land access through inheritance.

Can the recent land reforms ensure pro-poor land transfers?

Challenges of Land Reforms in the Face of Global Land Grab

Revise the land law- to protect land ownership & rights of the citizens

Re-establish customary law courts- ease access to justice Strengthen the customary regulations - land transfers without undermining cultural interests

Use state land fund- surveying & registering titles land owners/occupants

Regulate land grabbing & displacement of vulnerable land owners-powerful local elites

Restrict foreign investments on farmlands- out-grower schemes

Modernize service delivery in the land sector- inefficiency,

Promote land governance/administration

Define clear conditions on foreign land acquisitions- protect national interests

Hold foreign investors accountable- ensure food security, employment, & effecient use of land

Promote transparency on land deals on farmland- suspicions & exploitation

Consult with citizens and land owners/occupants - to ensure consensus, social legitimacy, and co-operation

Guarantee tenure security for forein investments on land- meet all the agreed conditions

Public education- land administration, access, registration

and distress sales