Abstract
Land rental markets are critical in developing economies as they contribute to efficiency, equity and welfare gains to farmers involved under conditions of low transaction costs. Despite lack of policy consistency in Zimbabwe, A1 and A2 farmers have been involved in these land rental markets, albeit in an informal manner. This study sought to establish the determinants of farmers’ decision to take part in these informal markets. A survey was carried out in Mashonaland East province with a sample of 339 households selected through multi-stage sampling methods and data analysed using a bi-variate Tobit model. Results showed that combined together, the proportion of farmers involved in informal land rental markets are as much as those not participating. Determinants of renting-in were identified as gender, household income, permanent labour, cultivated area, tenure certainty, irrigable land size and crop diversification. Factors affecting renting-out decisions were age, permanent labour, irrigable land size and crop diversification and these results are not in any way different from findings from previous studies. The conclusion was that household characteristics and land endowments factors were strong in decisions to rent-in land while land endowments factors were dominant in decisions to rent-out land. Any future considerations for formalising land rental markets should consider these important factors having a bearing on land rental decisions.
Highlights
Land tenure has been recognised as an important institutional requirement towards full utilization of agricultural land (Hoken 2012)
Permanent labour was lowest for farmers in autarky
Increased specialization in crop production had the effect of increasing the probability of a farmer participating in renting-out of land by 17.6 points
Summary
Land tenure has been recognised as an important institutional requirement towards full utilization of agricultural land (Hoken 2012). According to Awasthi (2009), there is a need for low-cost and supple land tenure systems to maximise on the productive use of land and to generate opportunities for agricultural based economies and increased welfare benefits. Hagos and Holden (2013) postulated that land rental and sales markets were very widespread even though traditionally they have not been regarded as features of land tenure systems. This misperception makes studies on land rental policy and market development and their impacts of considerable interest to both researchers and policymakers. This misperception makes studies on land rental policy and market development and their impacts of considerable interest to both researchers and policymakers. Rahman (2010) noted that land rental demands less capital investments when compared to land sales and, in the process, providing superior inter-temporal tractability and giving a chance to owners working off-farm to benefit from on-farm wealth creation activities
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
