Land Tenure and Property Rights in the Agricultural Areas of Kenya:

Economic, Environmental and Social Impacts

“……There is a fundamental connection between secure property rights, freedom and prosperity. Be it property rights to one's self (human capital), to one's investments in land and property (physical capital) or to one's ideas (intellectual capital), secure claims to assets give people the ability to make their own decisions, reaping the benefits of good choices and bearing the costs of bad ones. Without property rights, no other rights are possible…..”

Mike Norton-GriffithsSenior Research FellowODDG/ICRAF

Commercial Leasehold

Large commercial farms, typically with 999 year lease, under the Registration of Titles Act (Cap. 281) 1920

Adjudicated Land

Adjudicated under the Land Adjudication Act CAP 284 1968, intensive smallholder cultivation with clear freehold title

Unadjudicated Land

Unadjudicated land, no firm legal title

Economic Impacts

Major Tenure Types in theAgricultural Lands of Kenya

% Land(*)

% Rural Population

% Net Agricultural

Returns

Leasehold 21 15 32

Freehold 44 67 56

Unadjudicated 35 18 12

Note(*): % of non-Government Land

Agricultural Rents

net returns to land ($NRL)

$NRL = gross revenues – (direct & indirect costs)

as $ ha-1y-1

$ Net Returns to Land$ NRL ha-1 y-1

TenureoFreehold versus Unadjudicated

EnvironmentoElevationoTemperatureoRainfalloAvailable Soil Moisture

InfrastructureoDistance to all weather roads [ ….]o[Distance to principal town] [ …..]

Population 1989oDensityo[ growth rate ]

EffectCoefficient

$Standard

ErrorStd.

Coefficientt p-value

CONSTANT 112.008 11.075 0.000 10.113 0.000

Freehold tenure 90.372 15.408 0.310 5.865 0.000

Elevation and Temperature 16.125 3.304 0.086 4.881 0.000

Freehold tenure * Elevation and Temperature 72.952 5.168 0.251 14.117 0.000

Rainfall and Soil Moisture 31.162 3.551 0.225 8.776 0.000

Freehold tenure * Rainfall and Soil Moisture 2.607 5.116 0.012 0.510 0.610

Distance (km) to all weather roads 0.836 0.197 0.072 4.239 0.000

Freehold tenure * Distance (km) to all weather roads 0.943 0.349 0.055 2.703 0.007

1989 Population (per km2) 0.367 0.094 0.425 3.909 0.000

Freehold tenure * 1989 Population (per km2) 0.283 0.102 0.351 2.770 0.006

EffectCoefficient

$Standard

ErrorStd.

Coefficientt p-value

CONSTANT 112.008 11.075 0.000 10.113 0.000

Freehold tenure 90.372 15.408 0.310 5.865 0.000

Elevation and Temperature 16.125 3.304 0.086 4.881 0.000

Freehold tenure * Elevation and Temperature 72.952 5.168 0.251 14.117 0.000

Rainfall and Soil Moisture 31.162 3.551 0.225 8.776 0.000

Freehold tenure * Rainfall and Soil Moisture 2.607 5.116 0.012 0.510 0.610

Distance (km) to all weather roads 0.836 0.197 0.072 4.239 0.000

Freehold tenure * Distance (km) to all weather roads 0.943 0.349 0.055 2.703 0.007

1989 Population (per km2) 0.367 0.094 0.425 3.909 0.000

Freehold tenure * 1989 Population (per km2) 0.283 0.102 0.351 2.770 0.006

EffectCoefficient

$Standard

ErrorStd.

Coefficientt p-value

CONSTANT 112.008 11.075 0.000 10.113 0.000

Freehold tenure 90.372 15.408 0.310 5.865 0.000

Elevation and Temperature 16.125 3.304 0.086 4.881 0.000

Freehold tenure * Elevation and Temperature 72.952 5.168 0.251 14.117 0.000

Rainfall and Soil Moisture 31.162 3.551 0.225 8.776 0.000

Freehold tenure * Rainfall and Soil Moisture 2.607 5.116 0.012 0.510 0.610

Distance (km) to all weather roads 0.836 0.197 0.072 4.239 0.000

Freehold tenure * Distance (km) to all weather roads

0.943 0.349 0.055 2.703 0.007

1989 Population (per km2) 0.367 0.094 0.425 3.909 0.000

Freehold tenure * 1989 Population (per km2) 0.283 0.102 0.351 2.770 0.006

EffectCoefficient

$Standard

ErrorStd.

Coefficientt p-value

CONSTANT 112.008 11.075 0.000 10.113 0.000

Freehold tenure 90.372 15.408 0.310 5.865 0.000

Elevation and Temperature 16.125 3.304 0.086 4.881 0.000

Freehold tenure * Elevation and Temperature 72.952 5.168 0.251 14.117 0.000

Rainfall and Soil Moisture 31.162 3.551 0.225 8.776 0.000

Freehold tenure * Rainfall and Soil Moisture 2.607 5.116 0.012 0.510 0.610

Distance (km) to all weather roads 0.836 0.197 0.072 4.239 0.000

Freehold tenure * Distance (km) to all weather roads 0.943 0.349 0.055 2.703 0.007

1989 Population (per km2) 0.367 0.094 0.425 3.909 0.000

Freehold tenure * 1989 Population (per km2) 0.283 0.102 0.351 2.770 0.006

Tenure Effect(Freehold versus Unadjudicated)

Dummy Freehold Tenure = 0 $NRL = $126

Dummy Freehold Tenure = 1 $NRL = $288

TENURE EFFECT (aebe) 2.28

Environmental Impacts

Tenure and Investment in Woody Vegetation

Machakos District; % Land with Erosion Control(terracing, bunds, contour ploughing or tied ridging)

Social Impacts

EffectCoefficient

$Standard

ErrorStd.

Coefficientt p-value

CONSTANT 112.008 11.075 0.000 10.113 0.000

Freehold tenure 90.372 15.408 0.310 5.865 0.000

Elevation and Temperature 16.125 3.304 0.086 4.881 0.000

Freehold tenure * Elevation and Temperature 72.952 5.168 0.251 14.117 0.000

Rainfall and Soil Moisture 31.162 3.551 0.225 8.776 0.000

Freehold tenure * Rainfall and Soil Moisture 2.607 5.116 0.012 0.510 0.610

Distance (km) to all weather roads 0.836 0.197 0.072 4.239 0.000

Freehold tenure * Distance (km) to all weather roads 0.943 0.349 0.055 2.703 0.007

1989 Population (per km2) 0.367 0.094 0.425 3.909 0.000

Freehold tenure * 1989 Population (per km2) 0.283 0.102 0.351 2.770 0.006

Embedded Land Tenure -5.564 1.762 -0.089 -3.157 0.002

Freehold tenure * Embedded Land Tenure 7.837 1.818 0.185 4.311 0.000

Embedded Land Tenure * 1989 Population (per km2)

0.034 0.018 0.282 1.909 0.056

Freehold tenure * Embedded Land Tenure * 1989Population (per km2)

0.009 0.019 0.079 0.485 0.628

Economic, Environmental and Social Impacts

Unadjud Freehold Tenure Effect

Net returns to land ($ ha-1 y-1) $126 $288 2.28 Woody crops, woodlots etc (ha km-2) 5.4 25.6 4.7 Hedgerows (km km-2) 5.2 23.6 4.5 Social cost from embedding -$40 $30 $70 Social "tax" -32% +10%

Lessons to be Learned?

1. Strengthening tenure and property rights is possibly the single most effective intervention to address rural poverty.

Lessons to be Learned?

1. Strengthening tenure and property rights is possibly the single most effective intervention to address rural poverty.

2. This is not to say that people with private, freehold tenure will never be poor – only that they would be even poorer without private tenure.

Lessons to be Learned?

1. Strengthening tenure and property rights is possibly the single most effective intervention to address rural poverty.

2. This is not to say that people with private, freehold tenure will never be poor – only that they would be even poorer without private tenure

3. BUT, private tenure and strong property rights are not a panacea on their own – they require a free market economy flourish.