Absentee tenants and farmland transfers in sub-Saharan Africa: evidence from Malawi

ABSTRACT

We use a unique dataset from Malawi that matches tenants and their landlord counterparts to document the role played by absentee tenants, i.e. tenants who reside outside the area where the rented land is located. We found that non-local tenants made up 22% of the tenants in our sample. A significant subset of them had higher off-farm income and significantly more assets than did other tenants. Conversely, we found that 76% of landlords rented land because they needed cash. Our results highlight the fact that some rental transactions reinforce power imbalances and may exacerbate risks faced by poorer landlords.

KEYWORDS:

• Absentee tenants
• land renting
• reverse tenancy
• land transfers
• Malawi
• sub-Saharan Africa

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Of the six countries (Ethiopia, Malawi, Niger, Nigeria, Tanzania, and Uganda), only in Niger does average annual new cropland exceed annual land rented. In four countries (Ethiopia, Nigeria, Uganda, and Malawi), annual rented land exceeds new cropland by at least a factor of five.

2 This phenomenon, known as “reverse tenancy”, has also been noted in several other contexts in SSA, including Madagascar (Bellemare 2009; Bellemare 2012), Ethiopia (Gebregziabher and Holden 2011; Ghebru and Holden 2014), and Lesotho (Lawry 1993). In one of the only other matched tenant–landlord studies in SSA, Ghebru and Holden (2014) also found evidence of reverse tenancy. In their sample, efficiency was lower on share-cropped plots where landlords have weaker bargaining power and higher tenure insecurity.

3 http://extwprlegs1.fao.org/docs/pdf/mlw170885.pdf.

4 See Sitko (2010) for a description of clandestine sales of customary land in neighbouring Zambia.

5 It is worth mentioning another system by which rural land in Malawi is sometimes collateralised and may result in eventual transfer. In this system, called pinyolo, assets such as land are sometimes pledged in exchange for cash. Pinyolo exchanges have been criticised as inherently disadvantageous to poor smallholders, who lose their collateral in the case of default. As such, it may be used as a mechanism by which wealthier or more powerful outsiders acquire land in customary areas (Mkandawire 1992; Presidential Commission of Inquiry on Land Reform 1999). In some cases, the lender is allowed to use the asset up to the time the owner repays the money borrowed, a situation which may resemble renting.

6 This selection was based on district-level rental market participation rates calculated from the nationally representative Third Integrated Household Survey (IHS3).

7 Of the 76 absentee tenants who live outside the villages where they rent land, 36% of them are in Lilongwe district, 26% are in the other urban district of Zomba, while 25% and 13% of them are in the rural districts of Nkhotakota and Salima, respectively. Thus, absentee tenants are a majority (but not fully) urban phenomena.

Additional information

Funding

The authors acknowledge funding support from the Bill and Melinda Gates Foundation under the Guiding Investments in Sustainable Agricultural Intensification in Africa (GISAIA) project that funded the data collection used in this article.

Notes on contributors

Jacob Ricker-Gilbert

Jacob Ricker-Gilbert is an Associate Professor in the Department of Agricultural Economics at Purdue University. His research focuses on the economics of sustainable smallholder agricultural intensification. The main topics of his research are (1) evaluating the economic impacts of input subsidies, (2) estimating the impact of farmland markets on agricultural productivity and livelihoods, (3) analysing the economics of smallholder farm households’ post-harvest decisions, and (4) studying how smallholder farm households adapt to climate change.

T. S. Jayne

Thom Jayne is a University Foundation Professor of Agricultural, Food, and Resource Economics at Michigan State University. He is a Fellow of the Agricultural and Applied Economics Association and a Distinguished Fellow of the African Association of Agricultural Economists. His works span numerous topics, including food marketing and price policies, changes in land use patterns, sustainable intensification, employment, and rural transformation.

Jordan Chamberlin

Jordan Chamberlin is a CIMMYT Spatial Economist based in Kenya. He holds a PhD in Agricultural Economics from Michigan State University and an MA in Geography from Arizona State University. He conducts applied research on smallholder farm households, rural development, and policies designed to promote welfare and productivity improvements.