Assessing the long-term performance of large-scale land transfers: Challenges and opportunities in Malawi’s estate sector

We use data from the complete computerization of agricultural leases in Malawi, a georeferenced farm survey, and satellite imagery to document challenges and opportunities of land-based investment in novel ways. Covering some 1.35 million hectares or about 25% of the country’s arable area, agricultural estates are an important part of Malawi’s rural economy. However, the analysis shows that 70% of these estates have expired leases, reducing government revenue from ground rent by up to US$35 million or 5% of the total public spending annually. The low quality of spatial records, as indicated by the fact that some 140,000 hectares under estates are subject to overlapping claims could preclude the land market participation, especially under longer-term contracts. Data from a 2006/07 survey suggest that estates’ yield, productivity, and intensity of land use are below those of small farms. While the recently passed land laws create a basis for low-cost systematic demarcation and registration of rights to customary land, our analysis suggests that, to maximize their likely contribution to increasing productivity and welfare rather than conflict, such efforts need to be preceded by a clarification of boundaries and lease status of existing estates and ideally a more detailed study of the reasons underpinning the low productivity.