The productivity of smallholder farmers in developing countries is hindered by the considerable insecurity that they face in terms of both informal land tenure and crop theft. This column explores how farm security facilitates agricultural development, showing that insecurity can cause distortions in the use of productive resources. The big challenge for policy-makers is how to reduce the vulnerability of smallholder farmers in order to increase agricultural productivity.
Recent work evaluating scalable land tenure security interventions, as well as exploring the security of farms against theft suggests that the need to guard insecure land and crops distorts the application of agricultural resources.
In what follows, I outline how reducing two aspects of the vulnerability faced by smallholder farmers – insecure land tenure and insecure crops – empowers them to reduce the amount of time and resources that they have to allocate to unproductive activities.
The details of the context – especially farmers’ social relationships, their access to off-farm economic opportunities, and their access to land markets – are crucial for understanding the specific ways that smallholder farmers may respond to interventions that address the challenge of insecurity.
Addressing insecurity of land tenure
An evaluation of land tenure in Ghana shows that registration of informal land claims in a peri-urban setting, with off-farm economic opportunities, does not lead to an increase in agricultural investments or borrowing. Instead, households decrease their landholdings and reallocate labor to non-farm economic activities, especially when tenure is particularly vulnerable. This is consistent with labor being allocated partly to prevent land expropriation.
A similar analysis of tenure formalization – though one in which land tenure is secured but not tradable – finds increased investment in long-term agricultural improvements, such as perennial crops and tree planting. This is particularly true for households headed by women, who generally have weaker tenure security.
When looking at within-farmer reallocation of resources across plots included in the ‘treatment’ area and those just outside, the study finds that households headed by women are more likely to leave plots with improved security fallow and reallocate labor to relatively less secure plots. Men, who have stronger tenure security, are more likely to leave plots outside the treated area fallow.
These studies provide evidence that formalization of land tenure can successfully reduce one type of insecurity facing smallholder farmers. In turn, this affects their productivity by reducing the need to allocate labor to secure plots with informal tenure.
The impact depends on access to land markets: where land titles can be transferred, this reallocation leads to reduced agricultural production and increased off-farm activity, while formalization without transferable rights leads to reallocation of released guard labor from newly secured land to other plots.
Addressing vulnerability to theft and crop-burning
Other recent research shows that agricultural production is further distorted by an aspect of farm security that has received less attention: the vulnerability of smallholder farmers to crop theft. In developing countries, there are significant direct costs of this type of vulnerability, where firms spend a non-negligible amount on unproductive security labor and where farmers give gifts to neighbors to build relationships and deter theft.
The threat of theft may also influence other production decisions. Qualitative work indicates that criminals are believed to target certain crops more than others, and particularly agricultural practices that are high-value or uncommon. In addition, leaving the farm is seen to increase risk of theft, which means that farmers may miss off-farm economic opportunities.
In recent research, I explore the impact of securing farms against theft in Kenya, by matching farmers with trusted farm watchmen. Treated farmers were more likely to have started growing a new crop, or allocated more land to a crop, where improved security was the reason, as well as reporting that they increased their crop sales at off-farm markets.
Improved security increased the value of agricultural production per acre, although intriguingly, it is unlikely that this is driven by reduced theft. The strongest effect comes from crops that are not highly vulnerable to being stolen – such as cassava, which is a root crop with an attached shrub and requires effort to harvest.
Consistent with the studies of land tenure security, this suggests that reducing the vulnerability of high expected theft crops may allow farmers to reallocate their time, no longer spent on guarding work, towards other crops.
One of the most fascinating aspects of this type of insecurity is that it appears to relate to social preferences targeting those who experiment with agricultural practices. A study in Ethiopia shows that ‘money-burning’ behavior in a game with incentives is negatively correlated with real-life agricultural innovation. This suggests that insecurity punishes those who innovate and invest in profitable technology.
This is consistent with the study of watchmen where security primarily affects high-value crops or practices that are different from the norm. Interventions that can reduce this type of insecurity would therefore allow farmers to reduce their guard labor, as well as reducing the risk of investing in agricultural innovation, and improve their productivity.
Julian Dyer joined the department of Economics at the University of Exeter as a Lecturer after completing a PhD in Economics at the University of Toronto. He is an empirical microeconomist, and he studies the economics of development in Sub-Saharan Africa.