The Cost of Land

Many publications and research reports have illustrated cases of land funds set up by governments to help rural poor people to acquire land. What the literature has not brought forward are the lessons learned by civil society and NGOs in the design and implementation of land fund programmes.

First, FEPP has been an effective intermediary in land valuation processes by drawing on its skills, knowledge and influence to empower the poor to negotiate fair land prices. Market imperfections have been reduced by having an intermediary able to offset the lack of knowledge and experience of poor farmers when negotiating purchase terms and conditions. Such institutional assistance to this group of borrowers has moreover resulted in lower land prices.

Second, land titles are a precondition to accessing land funds. But land titling is a complex matter: it involves legal processes often out of the rural poor's reach unless they receive assistance; it entails multiple steps; it implies numerous direct and indirect costs; and it requires substantial time, including travel to and from land registry offices. FEPP has directly assisted farmers in undertaking and completing these transactions and processes. As this experience shows, success hinges on the capacity of the intermediary, in this case FEPP, to guarantee the security of rights and tenure.

Third, land funds are a necessary but not sufficient condition for land-poor households to become profitable producers. Without access to other factors of production - for instance, skills training and specialized knowledge - and access to markets, the poor will not be able to turn enough profit to service the cost of repayments to the land fund, and the risk of losing the land will escalate. To the extent that land funds normally focus on land purchases, FEPP's experience confirms that their success depends on the availability of complementary resources for users to access related means and factors. The land issue must be viewed in a broader development framework. While this approach is more costly, production support (as the FEPP vision has shown) is essential to sustainability and improved household well-being.

Fourth, designing, using and sustaining the benefits of land funds is a challenging task. Lessons from past land redistribution programmes have shown that powerful, competing interests have often reacquired these lands. FEPP has paid special attention to social mobilization and to establishing or strengthening institutions to provide the poor with accurate knowledge, access to services, the ability to take collective action and the power to represent and protect their interests.

Fifth, land funds often run up against problems with repayments, because poor families seldom receive the support they need to make their land productive and obtain fair market prices for their products. Under FEPP's land fund activities, focus is placed on ensuring that land beneficiaries have access to such support. This results both in higher family incomes and in the financial ability to repay. However, this is a necessary but not always sufficient stimulus for repayment. Through its trusted relationship with its beneficiaries, FEPP has been able to help them understand that repayment leads to subsequent loans, which will further improve the rural economy, with direct and indirect benefits for farmers. The high repayment rate under FEPP is a very important success indicator for land funds.

The FEPP experience bears careful scrutiny as a way of providing access to land. While it cannot substitute for agrarian reform programmes, it can contribute to solving the question of land access and legalization for thousands of rural poor people all over the world.

Use of generated knowledge and strategy for its dissemination :

FEPP's experience with managing a land purchase fund offers important lessons that can be applied to similar situations elsewhere in the world. Although actions to apply these lessons may be rooted in international solidarity initiatives, they must be carried out through institutional arrangements built around organizations with recognized professional capacity in such areas as credit, technical assistance and training.

The FEPP experience has been taken into account in the deft relief negotiation between Honduras and Italy with the idea to build a similar experience in the Central American country. The process is on going; The Coalition involvement could bring the Ecuadorian experience to Honduras and, through training activities, create in the country the appropriate skills for managing a successful land fund.

Specific interest has been expressed by the Government of Bolivia for designing a land fund oriented to indigenous and landless groups. One representative of the Secretariat of the Coalition and the author of the "The Cost of Land", Manuel Chiriboga , promoted the book in a restricted seminar in Santa Cruz- Bolivia attended by the most relevant governmental representatives of land related institutions (National institute of Agrarian Reform, Ministry of Sustainable Development, Secretariat of land, Ministry of Indigenous Issues, Ministry of Forestry), international cooperation institutions and the main representatives of social and economic sectors of Bolivia. The new government will evaluate the opportunity of this activity in their priorities.

"The Cost of Land" has been promoted during the rural week, the yearly World Bank initiative, in Washington in March 2005. The request is more of what the Coalition was expecting; therefore, on the basis of the demand, we have been convinced to reprint the book in both languages English and Spanish.