A study of land rental markets and institutions in communal areas of rural KwaZulu-Natal.
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Date
1996
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Abstract
Most rural households in KwaZulu engage in wage employment and have little incentive to
make good use of their arable land for crop production. Crop incomes are low relative to
off-farm incomes and many households find it cheaper to buy food than to grow it
themselves. However, this does not explain why - despite intense population pressure and
acute poverty - arable land is left idle in KwaZulu. The anomaly arises because there is no
rental market to transfer unused arable land to people who can and would farm it. A rental
market offers farmers an opportunity to expand their operations for either subsistence or
commercial production while other households, unwilling or unable to farm, earn rental
income from land they previously left idle. More important, these efficiency and equity
gains are not achieved at the expense of creating a landless class.
Initially it was hypothesised that land rental in K waZulu was constrained by high transaction
costs, including risk. It seemed that potential lessors were reluctant to lease land out as they
risked losing their land permanently. Institutional changes were introduced in the Upper
Tugela Catchment to promote an active land rental market. Tribal authorities agreed to
support the market and to uphold rental contracts in customary courts. Despite this
assurance, households were reluctant to enter into lease agreements. Many households were
willing to lease land out, but few were prepared to farm additional land. The fundamental
problem was insecure land tenure. Survey data gathered in the Upper Tugela Catchment and
at Tugela Ferry revealed that livestock were invading arable lands during the summer and
damaging crops. In effect, crop farmers had lost their exclusive rights to arable land.
The first step taken to improve tenure security in the Upper Tugela Catchment was to reinstate
customary rules, particularly those assigning exclusive rights to arable land. Tribal
councillors agreed to the establishment of a representative 'Rules Committee', whose initial
task was to define an annual 'planting date' after which all livestock had to be removed from
arable lands. Dispute procedures were also clarified and compensation rates set for crops
damaged by stray livestock. Results the following season were encouraging as the numbex
of respondents suffering crop damages caused by stray livestock declined from 71 to 31 per
cent.
Overall, efforts to reduce risk perceptions and to improve tenure security raised the number
of rental transactions from three to 17 - an increase from four to 25 per cent in the number
of households engaged in rental transactions. The average area rented increased from 0.63
hectares to 1.71 hectares. Lessees farmed their land more intensively than lessors. They
applied inputs at five times the rate that lessors did, made greater use of contractor services,
and invested much more in tractors, ploughs and planters. Equity also improved. Land
transferred from larger to smaller farmers, while income transferred from wealthier to poorer
households.
Description
Thesis (Ph.D.)-University of Natal, Pietermaritzburg, 1996.
Keywords
Land tenure--KwaZulu-Natal., Farms, Small--KwaZulu-Natal., Farm tenancy--KwaZulu-Natal., Theses--Agricultural economics.