Navigating the Debates on Land Holding Systems

Ethiopia is one of the few countries in Africa that has not made significant changes in its basic land policy since the radical land reform of 1975. Exceptions to this have been occasional land redistributions to accommodate the growing population. This is not because the current policy serves the interest of agricultural development better than its alternatives. Various studies suggest that the insecurity of land tenure hampers rights on land, discourages farmers to productively invest in land, and restricts transferability of land, posing significant constraints to agricultural growth and natural resource management. The government, which remains in its firm position that there are no private property rights on land, seems to ignore such findings.

Ever since the proclamation that granted ‘land for the tiller’ in 1975, no land reform has been introduced in Ethiopia that ensures the right of citizens to own land and nurture the growth of a strong private sector. Even under the administration of Prime Minister Abiy Ahmed (PhD), which come to power a year ago and acclaimed for introducing reforms, ranging from improving the business and investment climate to privatizing vital state owned enterprises, the issue is preferably ignored.

Theoretically, as well as in practice, a new land policy is expected when there is a fundamental political change, major structural transformation in the political economy, and during transition. Globally, there have been two types of transitions. The first is when the system of a given country is changed from feudalism to socialism. Good examples are countries like Russia, France, china, South Korea and others.
The other is followed by formerly communist countries that entered a transitional process towards a free market system. This includes all former allies of the Soviet Union, mostly in Asia, Latin America, and Egypt from Africa. Experts who have witnessed changes brought by amending land policy call for a change, citing the land policy in Ethiopia is among the bottlenecks that have been daunting the emergence of a real private sector in the country.

“There can be no economic freedom, while land and all the resources are under the government’s grip,” said Befekadu Degefe (PhD), former President of the Ethiopian Economic Association (EEA), during the 17th international conference on Ethiopian economy held from July 18 to 20, 2019, in Addis Ababa. “The root cause of macroeconomic problems in Ethiopia, including unemployment, low agricultural productivity, and housing shortages, is the land policy. Everybody is talking about the economic problems. But the reasons are deep rooted in that policy.”

The Ethiopian Constitution stresses on state ownership of land. Although there are proclamations that provide some land rights guarantees and some requirements for regional councils, there is no national institution that might serve as a coordinating body at the national level of government for policy discussion and coordination of land administration. “The government’s policy never encourages citizens to work on their land and change their life,” says Befekadu.

A little attention is also given to land tenure security to manage and use the land, as well as engage in transactions, including temporary or permanent transfers, without hindrance or interference from any person or corporate entity. In fact, land use and administration policies of the federal and regional governments present restrictions on the transferability and use of land, even though scholars insist that secured forms of tenure can bring a better output to citizens and the country. The story of Habtamu Alemu, 38, a father of three, is the best example to illustrate this reality.

Habtamu is a farmer near Gore town, western Oromia region. Even though he inherited close to 10ha of land from his father, he cultivates only four hectares. The government took large parts of his land on different times to partially avail it for the youth who have no land, while other parts of his plots are marked for forestry. “We are deprived of owning our own land. Many farmers, including my friends, have become labourers on projects after the government took their land for development paying little compensation money,” he says. “Had I been allowed to sell my land, I would have invested in productive sectors, instead of leading a hand to mouth life by being a farmer.”

Although many argue such a demand should be listened to and land must be privatized, Klaus Deininger, a lead economist in the Development Research Group at the World Bank and specialized in land development, argues that the most appropriate land tenure system varies with time and space. “Privatizing land is recommended when institutions fail to implement a lease system properly and where there is a strong credit demand. Surprisingly, in many developing countries, large amounts of land suitable for private use remains in the hands of the state, which makes very poor use of it. By contrast, occupants who try to increase their level of security by increasing investment on the land remain vulnerable to eviction threats.”

Another researcher, Admos Chimhowu, in his research dubbed “the New African Customary Land Tenure-Characteristics, Features and Policy Implications of a New Paradigm,” argues Sub-Saharan Africa is witnessing a ‘new’ customary tenure over the last three decades, driven by adaptations to changing context but also accelerated by neo-liberal reforms. But the transition from old to new is not complete, according to Chimhowu. “Land is under customary or authority control, not owned by the producers. About two thirds of the 2.2 billion hectares of cultivated land in Sub-Saharan Africa is under customary tenure. Chimhowu underlines better land policies are critical, to improve food security, employment and stability in the region.

But the importance of land reform seems to be overlooked in Ethiopia as empirical evidence suggests. In fact, the Ethiopian government, led by EPRDF, remained firm in its position, opposing land privatization and asserting that it will make farmers landless. The government asserts that if land is privatized, it will be in the hands of a few. In other words, the government believes that privatizing land would create another form of feudalism because farmers would sell their land to investors and become labourers.

Aside the government, opponents of the private land holding system argue that the land issue is politicized more now than ever before. “Currently, the issue is further amalgamated by ethnicity politics. If land is privatized, some might exploit this opportunity by buying land from the minority ethnic groups, which could lose their identity from it,” said a politician who wishes to be unnamed.

Published in 2002, the benchmarking research report on ‘Land Tenure and Agricultural Development in Ethiopia’ depicted all the current problems ahead. Conducted by the EEA and Ethiopian Policy Research Institute, the research underlined major features of the existing land tenure are; declining land size, tenure insecurity and subsistence farming, which are the main reasons for poor agricultural productivity.
The land tenure is also a major impediment to the adoption of sustainable and long-term land improvement and management practices, according to Berhanu Nega (Prof), an economist and politician. “The current policy didn’t benefit the majority and the land is still in the hands of a few people who have a close relationship with government officials,” argues Birhanu, who thinks that the current land policy brings two fundamental problems.

The first one is the average land ownership per family becomes less than one hectare, which make it impossible for farmers to feed their families let alone produce surplus. This is because farmers are obliged to distribute their land when their children became adults. The other fundamental problem, according to Berhanu, is that the government redistributes land even if the law entails that one person could have up to 10ha. “This pushed farmers to refrain from environmental protection. Farmers think that their land will be possessed by the government so there is no need to protect the land and the environment by planting trees,” Berhanu tells EBR.

Brightman Gebremichael, Assistant Professor of law and Head of the Institute of Land Administration at Bahir Dar University, the only land research institute in Ethiopia, also thinks that the existing land policy is outdated and remains an obstacle for the growth of the agriculture sector. He argues that the agriculture sector has remained subsistence because farmers could not use their land as collateral to access money from banks in order to change their lives. “Theoretically, the existing land policy of Ethiopia has certain defects in securing the land rights, which undermine the contribution of land to the economy,” Brightman says.

“The vague and politically motivated interpretation of ‘public use’ clause to expropriate land rights, the inadequate compensation schemes, and the absence of procedural safeguards have contributed to the insecurity of land tenure, which in effect discourages productive use of land and further investment of capital and labor,” Brightman says.

Of course, though land is a political-economy matter, it is a bit different in Ethiopia where it is a tool more to the politics than to the economic agenda, according to experts. “The government loses its controlling power over the people once land is privatized and everybody is free to be a master of her/his destiny,” elaborates Brightman. “Land has been used as a political weapon during the imperial, the Dergue and the current regimes in Ethiopia.”

Many landholders in Ethiopia fail to invest in their plots and reap more benefits from improved land productivity mainly because of the unpredictabilty of government reaquisition of land. Many people have lost their land for development or investment, usually with low compensation from the government. Although the parliament, in the past fiscal year, passed a bill that would increase compensation payment to farmers, experts say this won’t bring a change in national output unless farmers are empowered to own their land. As Nobel laureate economist, Amartya Sen, argued land ownership is a sign of economic freedom, similar to political freedom.

Brightman is also concerned that land insecurity poses a threat to human rights, specifically in realizing the right to food, work, subsistence, culture and adequate housing. “The debate should be shifted from land ownership to securing land tenure. This boosts economic growth by avoiding the possibility of unnecessary resource disbursements to protect the land rights as it avoids the fear of loss.”

On the other hand, some argue that securing land rights would contribute a lot to political stability. Especially, at a time when the government is attempting to ensure good governance, experts say a private land tenure system has positive implications by empowering landholders, according to Brightman. Empowering landlords can be realized when there is due process of the law and payment of adequate compensation. However, the government has no legal framework to uphold the landholders’ freedom to exercise land rights and limit state interference.

But there are those who doubt land security would bring the desired result in countries like Ethiopia as it did in Asian and European countries, even though it is linked with agricultural productivity. “Agriculture has been unproductive not because of the land policy; it is because the sector is subsistence.” Fitsum Aseffa (PhD), Minister of the National Planning Commission, tells EBR.

Brightman also shares the same concern. “Even if African countries like Ethiopia introduce the best land reform, they might not succeed as the land reforms in Russia, China or South Korea. This is because Africa has less access to agricultural input and technology,” he argues.
Proponents of a public land holding system argue privatization of land does not necessarily and automatically guarantee security of land tenure. This is because the state can perpetuate insecurity of land tenure by using its power of land-use regulation and taxation as well as through land expropriation, which exists in the countries that guarantee land security and provide strong protection to property rights. But this does not necessary mean that a public land holding system perpetuates land tenure insecurity.

The difference between public and private holding systems is associated with the alienation right (sale of land). Security of land tenure can be realized even without having the right to sell land, according to Brightman, who thinks the land policy should be contextualized with the particular country’s reality. “With an equalization effect, it is possible to equate other forms of land ownership with private ownership by granting the landholder the right to sell the property rights on the land and not the land itself. I recommend a joint venture ownership, which will make land a share property of the government and the landholder.”

On the contrary, some experts advise that Ethiopia can adopt a use-based land policy, by determining where and when to use different land policies and calculating the cost and benefit. Berhanu, for instance, recommends three types of ownership that can exist together. “The first one is, land should be protected and be under government control for purposes like environmental protection. The second one is, communal land that is the common property of the society for grazing and other activities. The rest of the land should then be privatized, explains Berhanu. “This will allow the building of a modern economy and improving the lives of the people.”

The land use policy, which is now under preparation, categorizes the whole land of Ethiopia to some 22 sectors, like land for agriculture, industry, urban, forestry and water bodies. Based on this classification, Ethiopia’s Integrated Land Use Planning and Policy Development Project Office, established during the tenure of the former Prime Minister Hailemariam Desalegn, is undertaking a study to come up with a new land administration system. The office is expected to finalize the national land use master plan in three years and transform itself into a regulatory authority to oversee the implementation of the master plan.

“The master plan will determine the purposes of every plot,” says Bulcha Berecha, Senior Legal Service Expert at the Project Office. “This has nothing to do with land tenure and land ownership though.”

Bulcha believes land is more of a political issue. “Privatizing land could potentially boost productivity by avoiding fear of expropriation, but under the current circumstances, it will be catastrophic. It needs a huge institutional capacity to run the land registration, transfer, documentation and other process. There is no such capacity as of now,” he says.

In a similar manner, the administration of Abiy announced its decision last month to introduce a legal framework that would allow small-holder farmers to lease their land, although this cannot be considered as a major policy reform. While many who expected too much and fast changes are disappointed with the scope of the reform, others still seem happy with the bit by bit reform.

8th Year • Sep.16 – Oct.15 2019 • No. 78