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Chapter 5. Alternative approaches to land transformation

5.1. Alternative solutions to land tenure problems
5.2. Alternatives for land redistribution

5.1. Alternative solutions to land tenure problems

5.1.1. Multiple ownership and fragmentation
5.1.2. Insecure forms of tenure
5.1.3. Inefficient system for the registration of ownership

The search for solutions to land-related constraints on agricultural development in Saint Lucia included consideration of proposals regarding land tenure and the alternative approaches to land redistribution put into practice by many countries.1

1 See for Example, Foreman, R.A., op. cit. "Land Settlement Scheme for Saint Lucia," Saint Lucia Government Printing Office, Castries 1958; Mathurin, Emerson D.C., op. cit.; FAO; op. cit.; Allsenbrook, G., "Saint Lucia; A Study on Possible Conversion from The Civil Code of The Laws Of Succession And Land Tenure," CIDA, Saint Lucia; 1978 (mimeo). Lawrence, J.C.D., "Land-Tenure in Saint Lucia," British Development Division, Saint Lucia, 1979 (mimeo); Saint Lucia Land Reform Commission, "Interim Report," Castries, June 1980 (mimeo).

Prior to making recommendations, the Saint Lucia Land Reform Commission made a detailed analysis of the alternative solutions proposed for land tenure problems. The analysis is presented in the Commission's Interim Report.2 Only the main features of this analysis are reproduced here; they provide a general background for the solutions recommended in this report. The implementation of the Pilot Project outlined in Chapter 8 constitutes the first phase of putting these recommendations into practice.

2 Saint Lucia Land Reform Commission, "Interim Report," op. cit.

As was discussed in Chapter 2, land tenure problems in Saint Lucia have been constraining agricultural development for many years. They can be summarized as:

a) A high incidence of multiple ownership of lands due to the characteristics of the inheritance laws.

b) Excessive fragmentation of the Land which occurs when subdivision takes place and leads to uneconomic sizes of holdings.

c) Unsecure forms of tenure (sharecropping, squatting, informal rentals, etc.), which prevent appropriate development of lands.

d) An inefficient system of registration of ownership (deeds registration), which makes dealings in land costly and uncertain.3

3 Ibid.

The alternative solutions to land tenure problems discussed by the Land Reform Commission in its report are summarized in the following sections.

5.1.1. Multiple ownership and fragmentation

The Commission considered impractical the FAO suggestion to amend succession laws to reduce the number of potential heirs to one farming unit.4 Instead, the Commission decided to focus on the problems of multiple ownership (considering them basically a problem of negotiability of land) and recommended the introduction of a Trust for Sale.

4 FAO, op. cit.

The Commission also endorsed a previous recommendation regarding legal provisions to establish the minimum size of agricultural holdings in accordance with ecological conditions. Given this approach, alternative courses of action stressing the economics of small farming and collateral options for reconsolidation of small holdings were not considered.

5.1.2. Insecure forms of tenure

The Commission recommended the introduction of legislation to make land rentals and other forms of unsecure tenure statutory, thereby putting tenants and landlords under the control of the courts. The recommendation emphasised the encouragement of emphyteutic leases to give long-term security to tenants in order to foster land development investment in rented lands.5 This alternative was recommended for short-term actions since the elimination of sharecroppers and tenants, by means of land redistribution on a freeholding basis or by the creation of state farms, was not considered feasible. It was decided that while long-term solutions are preferable the short-term disadvantages of current arrangements must be addressed.

5 A long-term lease by which the tenant is entitled to compensation from the landlord at the end of the tenancy for all improvements made to the land by mutual consent.

5.1.3. Inefficient system for the registration of ownership

After a review of the benefits and disadvantages of various systems of land registration currently in use in the Caribbean, "deeds registration" and "registration by certificate of title", the Commission opted for a system of registration by certificate. It recommended the ODA System, a variation of the Torrens System.6

6 The Overseas Development Administration of the British Government devised this variation and introduced it in Antigua, Montserrat, Cayman Islands, Turks and Caicos Islands, British Virgin Islands and Anguilla.

To produce a new system of registration of lands (a registered title and cadastre) the following steps are required:

a) A Land Adjudication Tribunal (adjudicator, demarcators, record officials, and surveyors) must be appointed.

b) The adjudication officer must request persons with claim to land within the adjudication area to make a claim and demarcate the boundaries.

c) Demarcation and survey officers should meet with claimants and reach agreement on their rights and boundaries. If no agreement is reached the matter is referred to the Adjudication Tribunal.

d) A demarcation index map must be prepared and show all land parcels with a unique identification. An adjudication record must also be prepared, showing each parcel by number reference to the map, owner of the parcel and registered land rights.

e) After expiration of an appeals period the adjudication record must be declared final and delivered to the Registrar of Lands for compilation.

The Commission also recommended that all land disputes be solved by a Land Court with further right to appeal to the West Indies Associated Court of Appeal.

The implementation of this new system needs to be phased, according to the financial and institutional capacity of the country. The peculiarities of Saint Lucia (British-French legal heritage, topography, high incidence of land disputes, high fragmentation of holdings, etc.), as opposed to the other islands where the system has been implemented, makes previous regional experiences somewhat irrelevant. The requirement for more knowledge of types of tenure problems likely to appear and the need to test surveying methods, map scales, types of registry, etc., led to the proposal of a Pilot Project, whose characteristics are discussed in Chapter 8.

5.2. Alternatives for land redistribution

5.2.1. Basic objectives and options
5.2.2. Indirect intervention
5.2.3. Limited direct interventions
5.2.4. Comprehensive direct interventions
5.2.5. Broad policy options

The alternatives for land redistribution discussed here represent a selection from the options considered. This selection was based on an analysis of the socioeconomic and political context in which the actions are to be implemented. As a result, options involving significant departures from the existing and foreseeable sociopolitical framework have not been considered. Attention has therefore been focused upon alternative actions that are politically viable in the short and medium term within the financial and administrative capacity of the country.7

7 Rojas, E., op. cit.

5.2.1. Basic objectives and options

There is no final definition of the specific objectives the Government will pursue to reduce existing land distribution constraints to agricultural development. However, there is a strong commitment to solve problems of land tenure related to land registration, insecured tenure, family lands and land disputes. In fact, recommendations made by the Land Reform Commission for the resolution of these problems have already been accepted by the Government and implementation is under way. Steps have also been taken to initiate a cadastral survey, an indispensable technical instrument for planning and implementing an integrated land redistribution programme.

All governments in Saint Lucia have emphasized the need to deal with the problems posed by the ownership and distribution of lands, with a view to improving both the productive capacity of the economy and the productivity of the agricultural sector, and to ensure that the landless agricultural workers and the land starved peasant families have access to land for agricultural production.

The land redistribution model envisaged is based upon a strong agro-industrial structure capable of processing locally the production of small- and medium-sized farmers organized in cooperatives, thereby maximizing the employment-creation capacity of the agricultural sector at the local level. This scenario has been pursued by all Saint Lucian governments during the past 15 years.

Fulfillment of the objectives of this land distribution model involves introducing of important changes in the current land distribution structure. These changes can be introduced by means of direct government intervention or by indirect intervention that will guide ongoing market processes towards the desired objectives. The differences between these two options are the time required to achieve the changes and the certainty of their achievement. When well planned and executed, direct intervention by government can attain results more rapidly and with greater certainty than indirect intervention. However, indirect intervention has the advantage of being less disruptive of the ongoing economic processes and much less costly. Of course, combinations of direct and indirect interventions not only are possible but constitute the path often chosen by governments.8

8 Rickman, R., and E. Rojas, "Alternative Approaches to Land Redistribution in Saint Lucia," Technical Report, Ministry of Agriculture/OAS, Castries, August 1981 (mimeo).

The choice of the preferred alternatives required recognition of certain broad constraints. These relate to the overall stability of the country's economy and the capacity of the government to implement the recommended actions. Agriculture provides 60 percent of all the country's exports and employs nearly 40 percent of the labour force. Consequently, any decline in agricultural production would have important effects on the whole economy. In this sense, Saint Lucia is ill equipped to cope with the possible short-term drop (which can persist for several years) in agricultural production observed in many countries where direct government intervention has introduced important changes in the land distribution structure. Regardless of the case, both direct and indirect interventions in land distribution structures are very demanding on financial, legal and bureaucratic capabilities of governments. Therefore, analysis and evaluation of the compatibility between policy choices and implementation capabilities is critical for success.

5.2.2. Indirect intervention

Almost all the negative aspects of concentration of land ownership, such as underutilization or scarcity of land for sale in the market, can be affected by indirect actions, particularly taxation and Government regulations. To obtain results, indirect actions rely on the operation of market mechanisms which can be modified by the Government's indirect intervention. Uncertainty in obtaining the desired results and the time lag involved in the operation of these mechanisms are disadvantages of this approach. Indirect interventions, in general, allow the economic system time to adapt to the new circumstances, thus producing less disruption than drastic direct actions. The more important indirect interventions are described in the following paragraphs.

i. Progressive land tax

The predominant negative aspect of concentration of land ownership, the holding of large portions of land unused or underutilized by large holders, can be effectively discouraged by progressively increasing the currently very low land tax rates. Rates in Saint Lucia can be increased substantially without affecting agricultural production but may result in land owners having either to put land into production or to sell it. This option is not only highly feasible, given the extremely low rates of the land tax (up to EC$1 per acre in holdings of over 1 000 acres), but also easy to implement because of the small number of holdings over 10 acres (796 farms in 1974). This increase in rates will supply additional revenue to the Government that can be used to finance direct interventions in the land distribution structure.

ii. Taxation of underutilized lands

Taxation for underutilization of lands is an alternative that can be very effective in encouraging productivity in agriculture. The tax system can also be used to discourage land uses potentially dangerous to the conservation of soils. However, in a complex topography and land capability structure like that of Saint Lucia these alternatives are difficult to implement. Clear technical parameters defining the potential of the different types of lands with regard to updated market trends need to be devised. The relevant soil conservation measures must also be defined. Additionally, clear assessment procedures and rights of appeal must be established together with the development of the necessary technical capabilities at the Department of Inland Revenue.

iii. Financing of land purchases

If the encouragement of land sales through progressive taxation is to be effective, credit for land purchases must be made available through either the banking system or other specialized agencies. Legal advice and surveying may also be required to facilitate land acquisition, at least until a full system of registration of titles is in operation.

iv. Loan guarantees

The Government can guarantee the loans made by local credit institutions to selected farmer-buyers. This system allow farmers to acquire land by borrowing money and then use the land as security for development loans, or vice versa. Control over the utilization of the system through supervised farm development plans is required to ensure that the farmer does not exceed his repayment capacity.

v. Regulation of sales and leases

Creation of flexibility in the land market will require measures to regulate sales and leases to prevent the increased availability of capital for land purchases from generating price increases. Unfair land prices can be regulated by linking credit for land purchase to the assessed value of the land. The assessment should be made by the lending institution and should be based upon the productive potential of the land and the value of the capital investment made on the land. Imposition of fairly high land taxes would require some tenancy protection measures to prevent landlords from passing tax increases on to their tenants. By linking rents to the pre-tax levels and introducing a system for readjustment according to inflation rates in all the statutory tenancies some protection could be provided. The problem is not very extensive because in 1974 only 2.8 percent of the total land in holdings was held in tenancy, but it may affect a fair proportion of small holders (18.3 percent of total holders were renting land in 1974).

vi. Regulation of land subdivisions

A more active land market may generate pressures to subdivide lands beyond a minimum economic size. This will rarely happen when land is acquired for agricultural purposes, particularly when this is done by means of a loan. However, the subdivision of agricultural land may occur and result in conversion to urban uses. In situations where agriculture is highly profitable this problem tends to be minimal. Nevertheless, government control over all land subdivision is advisable to minimize the drain of lands from agriculture.

5.2.3. Limited direct interventions

The Government may intervene in the land distribution structure to solve specific natural resource problems, alleviate problem situations in small communities, or take advantage of land acquisition opportunities such as the sale of estates. The scope of these actions may be limited either spatially or by the type of action required. No single action in isolation will save the complex land distribution problems of the country. However, a combination of Government actions may constitute good pilot projects to test the feasibility of innovative ideas, train personnel in land redistribution undertakings, and show effective results in the short term. Included among limited direct interventions are the following:

i. Reconsolidation and resettlement provides a solution to the land scarcity problem faced by full-time farmers who hold less than five acres. According to 1973/74 figures, there were nearly 3 250 full-time farmers unable to participate optimally in agriculture as a result of not having sufficient land to farm (average size of farms, 1.17 acres).

Currently these 3 250 farmers control no more than 3 800 acres. A total of 16 250 acres would be needed to supply each farmer with 5 acres. Reconsolidation would involve displacement of some of the full-time holders in order to redistribute their portion of the 3 800 acres. Another 12 450 acres previously in large holdings must then be added to resettle of the remaining 2 490 farmers. Although this alternative is conceivable, it is not feasible in terms of the inherent implementation difficulties involved and the social disruptions that might be generated. Solutions of this type must be confined to small areas for selected groups of farmers, where resettlement of some of them on new lands alleviates the scarcity of land for those who remain. Given the number of people and the amount of land involved in Saint Lucia, direct intervention is advisable only on a very small scale and in selected areas. In the final analysis, if land markets are made more flexible and population continues to pull out of agriculture, the rural problem will be gradually alleviated by land transfers within this group of farmers.

New and diversified complementary sources of employment at the local level (agro-industries) may reduce pressure on land by simply reducing the number of small holders engaged in full-time farming. If all the available land existing in 1973/74 holdings were distributed equally, the 22 300 acres of good agricultural land would accommodate approximately 4 500 holders at five acres each. Another 2 700 holders could be accommodated on the 40 000 acres of marginal land, but 3 200 holders would still be left with no land.

ii. Redistribution of unused estates

Acquisition of estates that are for sale provides the Government with another type of opportunity to undertake limited direct intervention in the redistribution of lands. The precise contribution to redistribution that this type of intervention can make is related to the kind of participation that those who are going to farm the land will have. Various alternatives can be used, each involving different degrees of integration of the farmers into the undertaking:

a) Individual operations: Land is distributed among farmers on a freehold basis. Capital is provided by loans on an individual basis and each small farmer operates independently, repaying the loans directly to the lending agency.

b) Joint operations: Like individual operations, except that for specific tasks both land and labour are pooled and paid according to the amount of labour and capital provided (e.g., harvesting of crop, irrigation).

c) Joint farming: Much the same as joint operations except that the pooling of resources and joint operations center on farm enterprises operated in common (e.g., bananas in common, food crops individually).

d) Cooperative farming: Land and capital are cooperatively owned and individuals will have reversion rights. Wages are paid according to the amount of work performed, and payments on land and capital are made on the basis of contributions by individuals to the cooperative farming venture.

e) Collective farming: All farm enterprises are operated collectively. Land and capital are owned collectively, ordinarily without reversion rights. Wages are paid with no payment for land or capital individual members may have contributed.

f) Government farms: Land and capital are owned by government, while management and labour are hired.

A combination of these types of integration may be used to suit specific circumstances. The final decision on the degree of integration may vary according to institutional and technological requirements.

5.2.4. Comprehensive direct interventions

As an alternative to the restricted scope of limited direct interventions discussed previously, the Government may choose to speed up the land redistribution process aiming at a nationwide impact. These comprehensive direct interventions can be of two types: 1) land purchase and disposal programmes that speed up and stimulate the conditions of a competitively functioning land market (land bank), or 2) elimination of certain types of holdings nationwide.

i. Land bank

To speed up the land redistribution process that is slowly taking place through market mechanisms, the Government may decide to increase the land supply on the market to match the foreseeable demand. To facilitate the process the Government may form a land bank that would acquire properties for sale on the open market (or expropriate land, when necessary), which in turn would be sold to small farmers in appropriate sizes once the land is developed. Besides this function of adjusting supply of land to demand, the land bank may fulfill other tasks. The most important would be to ensure full and rational land utilization and prevent subdivision of lands below viable economic size. The land bank can fulfill these aims by attaching conditions to the transfer of land to small farmers. A convenient system is to effect the transfers by lease for the number of years required to pay for the land. During the lease period the farmer must comply with the farm production plan as a condition for continuing in the programme. At the end of the established period the land becomes a freehold under a final limitation giving the land bank first choice of the property in case of sale and the right to acquire it for reallocation to one heir, with compensation to the others, should the holder have died.

A complement to the above action could be land acquisition by the farmer form the land bank using capital borrowed through various types of credit schemes. Again, underutilization and uneconomic subdivision of land may be prevented by attaching the final limitation conditions to the loan agreement before full title to the land is granted.

ii. Elimination of very large land holdings

The elimination of large estates can be attempted by Government on a nationwide basis by determining a maximum economic scale (related to size) for large holdings and operating according to the following alternatives:

a) Acquisition of all lands in excess of the determined maximum size whenever a large estate is for sale.

b) Expropriation of all underutilized lands on large estates that exceed the defined limit.

c) Expropriation of all lands in excess of the maximum defined size without regard to their utilization status.

These alternatives involve various degrees of direct intervention, and their selection will have to be made on the basis of an objective evaluation of the implementation capacity of the government. The lands acquired can then be redistributed using one of the alternatives already discussed (Section 5.2.3, ii).

Government leasing of underutilized lands on large estates for direct development is a land utilization improvement alternative that poses serious management problems. Although direct intervention may be justified if dangerously high underutilization of lands in large estates is detected, indirect interventions may be more effective.

5.2.5. Broad policy options

Selection of one, or a set, of alternative modifications of the land distribution structure must be made with the understanding that their implementation may initiate different long-term development trends. The existing land distribution pattern in Saint Lucia is inefficient and therefore incapable of sustaining long-term diversified agricultural development. The pattern represents a situation of inequitable distribution of opportunities among the population. A more efficient and equitable pattern will be difficult to establish because of restricted availability of land resources and population pressures. Two broad policy options are open in, this respect.

One is provision to existing holders of farm holdings of sufficient size to guarantee the generation of enough surplus for reinvestment and development facilitating agricultural development by achieving optimum farm sizes. It must be noted that in this option the proportion of the rural population in the wage earning labour force will increase. In this circumstances the agricultural or primary sector is unable to absorb all the rural labour force, then it is necessary to consider policies for development of secondary and tertiary activities to absorb surplus labour

The alternative to this pattern of development is one in which capital and labour remain undivided, as in the cooperative models already outlined in Section 5.2.3, ii. Achievement of this type of development will require far reaching changes in the organizational arrangements of agricultural production simultaneously with the changes required in land distribution patterns.

Realization of the multiple benefits of a more egalitarian development of agriculture is dependent upon choices that the Government makes on land redistribution and on its efforts to promote new forms of organizing the systems of production. Land redistribution can only play a meaningful role within the wider context of other agricultural development activities. The benefits of a land redistribution process can only be fully enjoyed if an integrated transformation of the agricultural sector occurs. Existing constraints on marketing, capital and the availability of inputs must also be removed to achieve the transformation.

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