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Investment On Freehold And Trust Farms: Theory With Some Evidence From Kwazulu

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  • Kille, G. S.
  • Lyne, M. C.

Abstract

This paper outlines relationships between exclusive and secure property rights to land, land transfers, farm productivity, access to credit and on-farm investment. A survey of freehold and Trust farmers was conducted in the Madadeni district of KwaZulu to investigate these relationships. Despite the existence of title-deeds, it was found that many of the respondents did not have exclusive use rights to land. Non-exclusive use rights occurred where land was co-owned, mutually occupied by two or more members of a family or registered in the name of a deceased person. Land market activity was generally confined to rental transactions by individuals who had exclusive use of land. In the absence of zoning regulations, several landowners had leased plots to residential tenants, with some farms becoming entirely residential. Results of logit analysis indicate that investment in on-farm improvements is higher where tenure is private and secure. It is concluded that exclusive and secure property rights facilitate the land market, promoting efficiency in agriculture. Recommendations give due consideration to the equity implications of land sale and land rental markets and to the consequences of zoning.

Suggested Citation

  • Kille, G. S. & Lyne, M. C., 1993. "Investment On Freehold And Trust Farms: Theory With Some Evidence From Kwazulu," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 32(3), September.
    • Handle: RePEc:ags:agreko:267583
    DOI: 10.22004/ag.econ.267583
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    References listed on IDEAS

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    1. Migot-Adholla, Shem, et al, 1991. "Indigenous Land Rights Systems in Sub-Saharan Africa: A Constraint on Productivity?," The World Bank Economic Review, World Bank, vol. 5(1), pages 155-175, January.
    2. Nieuwoudt, W. L., 1990. "Efficiency Of Land Use," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 29(4), December.
    3. Collier, Paul, 1983. "Malfunctioning of African Rural Factor Markets: Theory and a Kenyan Example," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 45(2), pages 141-172, May.
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    1. Huy, Hoang & Lyne, Michael & Ratna, Nazmun & Nuthall, Peter, 2013. "Efficiency And Equity Impacts Of The Rental Market For Cropland In Vietnam And Sources Of Transaction Costs Impeding The Market," 2013 Conference, August 28-30, 2013, Christchurch, New Zealand 160264, New Zealand Agricultural and Resource Economics Society.
    2. Mahabile, M. & Lyne, Michael C. & Panin, A., 2005. "An empirical analysis of factors affecting the productivity of livestock in southern Botswana," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 44(01), pages 1-19, March.
    3. Zein Kallas & Teresa Serra & Jos頠 M. Gil, 2012. "Effects of policy instruments on farm investments and production decisions in the Spanish COP sector," Applied Economics, Taylor & Francis Journals, vol. 44(30), pages 3877-3886, October.
    4. Mahabile, M & Lyne, M & Panin, A, 2002. "Factors Affecting The Productivity Of Communal And Private Livestock Farmers In Southern Botswana: A Descriptive Analysis Of Sample Survey Results," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 41(4).
    5. Simms, P., 1996. "A Financial Model To Fund Land Redistribution In The Sugar Industry Of Kwazulu-Natal," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 35(4), December.
    6. Simms, Peter, 1997. "Land Redistribution in South Africa - Some Practical Lessons," 11th Congress, University of Calgary, Canada, July 14-19, 1997 346364, International Farm Management Association.
    7. Sparks, Garreth D. & Ortmann, Gerald F. & Lyne, Michael C., 2011. "PR - An Analysis Of Cooperative Biodiesel Production By Smallholders In Kwazulu-natal, South Africa (p444-462)," 18th Congress, Methven, New Zealand, 2011 345597, International Farm Management Association.
    8. Nell, W.T. & Viljoen, M.F. & Lyne, M.C., 1997. "Towards Developing Financial Management Strategies for Land Reform Beneficiaries in the Bloemfontein-Thab N'Chu Area of the Free State Province of South Africa," 11th Congress, University of Calgary, Canada, July 14-19, 1997 346361, International Farm Management Association.
    9. Ortmann, Gerald F., 2000. "Promoting competitiveness in South African agriculture and agribusiness: The role of institutions," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 39(4), pages 1-33, March.
    10. Huy, Hoang Trieu & Nguyen, Trung Thanh, 2019. "Cropland rental market and farm technical efficiency in rural Vietnam," Land Use Policy, Elsevier, vol. 81(C), pages 408-423.

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