Research findings from the land inequality initiative

Uneven Ground

Land inequality solutions for resilient, sustainable, and equitable societies

Chapter:
Chapter 4

Due to the distinct characteristics of land as a finite good, which cannot be grown or produced, and whose management has direct consequences for people and the environment, land is not a commodity like any other. Although land can be bought and sold, land markets are not likely to self-regulate. Without regulation, they almost inevitably become markets of exclusion and concentration where inequalities steadily increase.

These unique characteristics mean that land markets developed independently of society cannot work in the common interest. Abolishing all forms of market and entrusting the management of land only to states and governments is not a solution either.

For more resilient, sustainable, and equitable societies, we need to reflect on new ways to address contemporary patterns of land inequality and their drivers (Box 11).

Box 11: Principles for addressing land inequality effectively

  • Any mechanism to reduce land inequality must be compatible with broad social interests, and be accepted by the majority of the population (Merlet, 2020).
  • The construction of institutions and mechanisms responsible for guaranteeing land equality will only be possible with the engagement of all relevant stakeholders. Civil society organisations (CSOs) and local institutions will always have a determining role to play in changing the power relations necessary for the implementation of such mechanisms and institutions (Merlet, 2020; Nguiffo, 2020). Such changes take time.
  • Land inequalities relate to different rights – from ownership to use and control. The focus of mechanisms should not only be on regulating ownership or rental markets. Regulation and oversight of control over land and shareholding mechanisms affecting land will also be necessary.
  • Land inequality interventions should not exist in isolation. Land redistribution efforts, for example, will fail to create sustainable livelihoods, let alone prosperity, and are likely be reversed if control of land policies, markets, and other parts of the agri-food system remains in the hands of a few (Wegerif and Anseeuw, 2020).
  • Context is key. To reduce land inequality in a sustainable manner and to optimise land use in order to serve broad social interests, policies and mechanisms must be tailored to each individual situation.

The policies and measures presented here are not exhaustive and do not claim to be “one size fits all” solutions. Instead, this chapter offers elements to build on and to be adapted to the political, social, cultural, economic, and ecological contexts of specific regions or countries which are in constant and accelerated transformation, particularly through the penetration of market relations and the corporatisation and financialisation of their economies and societies. In addition, beyond these proposed mechanisms and policies, counter-movements are growing, highlighting that there is space for different production and development models and paradigms.


Land redistribution and agrarian reform

While at specific moments in history redistributive agrarian reforms have played a decisive role, they require exceptional social and political conditions to succeed. For instance, they have been effective during revolutions: in Mexico in 1910, in Bolivia in 1953, and in Cuba in 1959. The same happened in China and Vietnam a few decades later. They have also been successful in the aftermath of wars and during a country’s occupation. Examples include Japan, Taiwan, and Korea after World War II (Merlet, 2020; Montesdoeca Chulde and Ramos Bayas, 2020). On the other hand, Latin America is the continent where the most agrarian reforms have taken place over the last century; however, the region remains characterised by the highest rates of land concentration (Bauluz et al., 2020).

Agrarian reform is usually unsuccessful because policies and programmes have short-term, political aims and fail to address the many factors affecting land inequality, without any broad-based aspiration for radical change in agrarian structures. Nor do they consider the general socioeconomic situation of the intended beneficiaries, such as people’s access to credit, support services, and infrastructure (Box 12).

For agrarian reforms to be effective, they must be consistent with a country’s economic and social policy and must include measures to prevent a return to land inequality over time (Merlet, 2020)

Box 12: Agrarian reform and land redistribution in Ecuador – a case of success and failure

In Ecuador the agrarian reforms of the 1960s and 1970s, as well as the Plan Tierras of 2008 to promote food sovereignty and reduce rural poverty, saw land inequality decline by about 10%. However, the country’s Gini coefficient for land ownership has climbed again in the past decade (Figure 11).

Figure 11: Evolution of the Gini land ownership index in Ecuador

figure 11.png

Source: Montesdoeca Chulde and Ramos Bayas (2020).

While Plan Tierras brought benefits to some farmers, it did not significantly alter Ecuador’s land tenure structure. A continuous focus on export agriculture resulted in increased land concentration, while onerous bureaucratic requirements meant that only 26,000 hectares were redistributed, compared with the 2 million hectares pledged. Further obstacles to implementation included miscalculations of land prices and high debts that small-scale farmers had to repay on acquired land. Furthermore, farmers did not receive adequate support to increase agricultural production, or for irrigation or access to markets and credit.

Source: Montesdoeca Chulde and Ramos Bayas (2020).

The space for agrarian reform and redistributive land policies has shrunk in most countries due to the global dominance of liberal economic policy and consequent limits on the role of states (Guereña and Wegerif, 2020; Scoones et al., 2018). However, in countries where economic and land inequalities are profound despite such reforms – such as South Africa, Brazil, and Paraguay – there has been a surge in land occupations, often triggering repressive reactions by the state. This suggests that redistributive land reforms should not be dismissed as an answer to land inequality but rather should be reconceived and relaunched, learning from the past while also adapting to contemporary circumstances (Merlet, 2013). Ongoing land inequality struggles also show that a range of complementary measures are needed to address land inequality.


Land market regulation

Land market regulation refers to a wide range of mechanisms and instruments that govern land transfer and guide the rights of users, owners, and beneficiaries of land and related resources. Examples include price controls on purchase and rental markets, size controls (minimum and maximum), protection mechanisms for renters or owners, pre-emption rights or rights of first refusal, foreign land ownership regulations, and others. These can be applied to owners and renters as well as to users (see Merlet (2020) for further examples).

Entrusting land market regulation to states alone is not a solution.

To address land inequality, societies need to establish governance institutions with a public purpose, reflecting collective rights, and the ability to act with a certain degree of autonomy.

The market is not suppressed through these mechanisms but can be integrated into society and controlled by ad hoc institutions, including representatives of the inhabitants of the territory. Obviously, democratic and inclusive functioning of the governance institution is essential. Its power cannot be exercised by decree, and its legitimacy cannot be miraculously acquired straight away (Merlet, 2020). Examples include the SAFERs in France (Box 13) and the Landgesellschaften in Germany.

Box 13: SAFER – regulating land markets in France

In France, buying and selling farmland is done through a semi-regulated market. Control over the market is operated by SAFER (a national federation of societies for rural land development and rural settlement). Every French region has its local SAFER, which represents national and local authorities and land users. SAFERs were created in the 1960s to oversee the market in rural land and to promote the development of financially sustainable farms. Their mission has evolved over time to include environmental protection and local development, as well as ensuring transparency in the rural property market.

Local SAFERs monitor farmland transactions and intervene when needed to make the sale best suited to the objectives of the law and territorial priorities. A SAFER can buy the land and sell it to the person/entity that best suits public objectives (which may not be the highest bidder). SAFERs intervene only when it is deemed necessary: in 2018, they stepped in and pre-empted sales 1,380 times, fewer than 1% of all sales notified to them. Designed in coherence with other regulatory mechanisms, SAFERs have succeeded in limiting land consolidation and price inflation for farmland. However, they now need to adapt to changes in the agricultural sector, particularly the increased presence of financial interests and the use of financial instruments to own and control farmland.

In a land sector that is becoming more and more corporatised and financialised, a model like the French SAFERs could be an effective way to address concentration of land through shareholding. As Merlet (2020) suggests, new local commissions could be made responsible for monitoring all forms of transfer of rights to use land, whether through purchase, rental, or shareholding.


Land taxes

Land taxes have the potential to be a progressive instrument in addressing land inequality. They exist in a number of forms and can be recurrent (when levied on a regular basis on the use or ownership of land) or non-recurrent (when levied on certain one-off transactions). Non-recurrent taxes include property transfer taxes, normally applied to the sale or purchase of land, gifts, and inheritance, and taxes on capital gains. Land taxes are normally calculated based on land value. They can target land only or include improvements such as infrastructure or buildings. They can also factor in any increase in value due to public investment and access to services (Itriago, 2020).

Taxes on land can have impacts on land inequality directly by discouraging accumulation, reducing speculation, and constraining the intergenerational transmission of inequality, while promoting more effective, sustainable, and environmentally viable land use (Itriago, 2020; Alvaredo et al., 2018; Deininger, 2003). They also have indirect impacts by providing a predictable source of revenue, often to local governments, that can be used for investment in infrastructure and public services (Collier et al., 2018; De Cesare and Lazo, 2008). In addition, land taxes can promote transparency of ownership and accountability for contributions and use of funds (De Cesare, 2012; Deininger 2005).

However, many of the world’s most unequal countries have zero or very low land taxes (Alvaredo et al., 2018). Developing countries, in particular, underuse land taxes as a source of revenue or as part of a broader agenda for socially and environmentally sustainable growth. Obstacles to implementing land taxes may be political or be due to administrative inefficiencies. Legal and technical constraints include incomplete land registration systems that are not capable of tracking changes in the market value of land. The lack or scarcity of information on land transactions and changes in value often makes estimating tax rates challenging, and this can undermine the inequality-reducing effect of land taxation. Additionally, decentralisation is often still limited, with sub-national levels of government registering a low tax collection and management capacity, due to policy and institutional constraints.

To make land taxes an effective pro-equity policy instrument, investments to improve coordination between the different levels of governance are often necessary (Itriago, 2020). Taxation is also becoming more difficult in a corporatised and globalised world as shareholdings and transfers are generally not taxed, which makes newer types of land ownership and control invisible for taxation purposes.

Also, many of the companies investing in large-scale land acquisitions and the extractive sector are registered in tax havens (Borras Jr et al., 2014), making it essential to address tax evasion and avoidance with greater transparency and coordinated international efforts (Guereña and Wegerif, 2019).


Corporate and investor accountability

Mechanisms that are used to hold companies to account for their actions and investments exist at different levels, from international to national, sectoral, or covering more specific segments of agricultural value chains (see Nguiffo, 2020, for a detailed list and description of standards, principles, and guidelines). However, they are generally voluntary, with weak oversight.

A recent assessment of large-scale international land investments in the agricultural sector by G20 countries confirms that accountability and transparency on land issues are very low (Flaschsbarth et al., 2020). The study found that the company operating the land in question was publicly known in fewer than 20% of land deals. In only 15% of G20 investments was the exact location of the land communicated, and in fewer than 10% of purchases did investors publish the purchase price or leasing fee. It is striking that for 90% of the deals there was no information on consultation with communities. This lack of transparency around land investments is consistent with the increase in the use of complex corporate structures, cross-shareholdings, and financial market interests in land, as described in Chapter 3.

Transparent reporting by investors and accountability are unlikely to happen without enforcement. While numerous aspirations are set out in the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises, or the Principles for Responsible Investment in Agriculture and Food Systems of the Committee on World Food Security (CFS), among others, such mechanisms lack impact.

Little will change without compulsory compliance and reporting requirements and national governments (especially of investor countries) holding companies registered in their jurisdictions to account.

Vitally important is to require respect for free, prior, and informed consent (FPIC) as a right recognised under international law for indigenous peoples, giving communities the choice to give or withhold consent to a project planned on their land (Oxfam, 2019).

In addition, public entities need to be fully transparent. Public support, including development finance for investments or projects, should be contingent on the release of all relevant information.

It should be mandatory for companies and investors to publicise their shareholdings in other companies and initiatives owning, accessing, and controlling land and land-related activities. At the same time, countries should restructure their land registries to include information regarding institutional ownership and control of land through sophisticated financial instruments, including listed and unlisted funds.

There is a need for stronger national laws and policy frameworks which compel investors to follow the highest due diligence standards and human rights and environmental protection standards. It is not acceptable that legal frameworks at country level are less stringent than international ones, nor that corporate actors often have more secure tenure rights than small-scale farmers, pastoralists, hunter-gatherers, and local communities. Corporate rights are protected by international treaties that protect foreign investment and give businesses direct access to international redress (Cotula, 2020). Although they lack enforcement powers, the current international mechanisms are useful indications for legislative reform and offer avenues for advocacy to donors, communities, and CSOs. There is also a need to support more independent and innovative monitoring of companies and investors operating in agriculture and land-related activities, as well as of shareholding and control of production. Investments should be made in data collection, capacity building, and training, including for civil society, as well as mechanisms for redress.


Responding to horizontal land inequality: collective and women’s land rights

Collective land rights and tenure refers to systems in which a group holds secure rights to own, manage, and/or use land and natural resources autonomously, according to customary or established rules and norms. Secure collective rights enable such groups to better resist external pressures and increase their potential to use land to meet their social and ecological needs (Guereña and Wegerif, 2019). As such, collective land rights contribute to reducing inequality, both within communities and between communities and external actors, including surrounding populations (Bautista Durán and Bazoberry Chali, 2020).

Although it will not reverse land inequality, protecting collective land rights assures the well-being, livelihoods, and the ability to retain land of at least 2.5 billion people worldwide, mostly indigenous peoples and local communities.

It also reinforces the stewardship role that these populations and territories play with regard to climate change, global biodiversity management, bio-cultural conservation, and justice, including territorial and gender justice.

Collective governance can range from legally recognised and documented community land holdings through to non-statutory and undocumented rights (Box 14). In all cases, FPIC is a crucial principle. Not only does it give communities a choice to consent or to withhold consent, it also enables them to negotiate the conditions under which the use of their land will be designed, implemented, monitored, and evaluated. This is also embedded within the fundamental right to self-determination of all peoples. Nevertheless, this principle is not always respected, particularly in relation to large-scale developments or extractive projects (Bautista Durán and Bazoberry Chali, 2020).

Box 14: The benefits and challenges of acquiring and exercising collective rights in the Philippines

In the Philippines, after the People Power Revolution of 1986, indigenous peoples were offered the opportunity to reclaim ancestral domains. MILALITTRA, an organisation of the indigenous Talaandig tribe in the province of Bukidnon in Mindanao, was one of the first indigenous peoples’ organisations in that region to claim formal recognition of tenure rights for the community and for individual households.

With the Philippines’ enactment of the Indigenous Peoples Rights Act, MILALITTRA was awarded a Certificate of Ancestral Domain Title in 2003, which empowered the community to govern their own land. With this recognition, the community was able to exercise rights over the land, prevent intrusion by illegal occupants and investors, regulate the felling of trees in the forests, and settle disputes among community members. The community could also collaborate with other stakeholders and institutional partners.

However, competing interests from other sectors have threatened to undermine the community’s enjoyment of its hard-won collective rights. With rapid economic growth in the Philippines and the limited availability of land, ancestral domains have become attractive to business interests for the establishment of special economic zones, agricultural investments, mining, and tourism. Increasing commercial pressure has seen many community members sell off land without the consent of tribal leaders or the community.

Source: Ravanera et al. (2020).

Securing women’s land rights is essential to achieving gender justice and global goals on gender equality, but this is challenging, including for communally held land. In general terms, gender equality in land rights only exists when 1) women and men can acquire rights that are equally secure; 2) women and men can equally enjoy and exercise their land rights; and 3) women’s and men’s land rights are equally protected when they are threatened (Scalise, 2020).

In negotiations with other parties over communally held land, recognition of women’s land and governance rights requires specific attention, including in processes seeking their FPIC. Rural women’s inheritance rights are a critical component of their economic security, especially upon the death of a spouse, partner, or parent. Without legal protections, women are extremely vulnerable to property grabbing and other forms of domestic violence, including physical abuse, and to forced marriage upon the death of a husband or domestic partner – and thus to land inequalities and other injustices (Lakidi Achan, 2020).

Achieving gender equality in land rights involves a complex combination of actions, including reform laws favouring women’s and men’s equal opportunities to acquire rights, as well as encouraging adaptation of social norms, attitudes, and behaviours. Supporting women’s self-directed decision-making and optimal use and stewardship of land is also needed so that they have equal opportunities to generate value from land (Box 15). If women are to benefit from measures related to land rights, it is also important to specifically address discriminatory aspects affecting women in other areas of the agri-food system, such as access to markets, credit, and support services.

Box 15: Women in Communal Land Associations in Uganda

In Uganda, the government has promoted the formation of Communal Land Associations (CLAs) as a response to securing community land tenure. The formation of the CLAs has included community sensitisation on gender issues and the inclusion of women in land governance. This has triggered a profound change in attitudes towards women’s land ownership among both women and men. Women can now formally own communal land. Additionally, allocating a quota of seats on communal land management committees to women has increased their voice and capacity to influence decision-making, significantly narrowing the gender gap on land rights at community and household levels.

Source: Lakidi Achan (2020).

Through numerous international commitments (International Labour Organization (ILO) Convention No 169, CEDAW, the VGGTs, the SDGs), the implementation of land reform programmes, and the development of new types of legal and technical instruments, governments and organisations around the world are stepping up commitments, funding, and resources for securing collective tenure and women’s land rights. These commitments and resources must be fostered, strengthened, and expanded, for example through the Beijing+25 Action Coalitions and processes. But these advances alone, while promising, remain insufficient to address the global challenges that women face. Weak implementation of existing national and international commitments is jeopardising the progress made. Without increased attention and effort, horizontal land inequalities will persist.


Counter-movements and alternatives: from inclusive food chains and collective action to agroecology

To respond effectively to land inequality, it is essential to interrogate and challenge support for elite- and corporate-driven growth, commodification of land and natural resources, and the global push for greater productivity and ever greater returns on investment in the agri-food sector. The mechanisms discussed in this chapter can potentially halt and reverse land inequality, but will be difficult and time-consuming to implement. Alternative strategies are therefore required that can support democratised and more equitable agri-food systems.

Such strategies have been emerging, sometimes at the initiative of for-profit businesses as well as social entrepreneurs or communities of agricultural producers and food consumers, endeavouring to make current production models and value chains more inclusive. Inclusive food chains, for example, are fostering fair participation of smallholder producers, workers, and low-income communities in modern agri-food value chains (Oberlack et al., 2020). Collective action strategies are another model, based on shared values and interests, which have proven to be key for enforcing transformation (Ostrom, 1990). The degree of inclusiveness of businesses, markets, and value chains varies depending on the distribution of voice and representation, ownership, and benefits among the different stakeholders involved (Vermeulen and Cotula, 2010; Chamberlain and Anseeuw, 2018). Although incorporation into global supply chains can create new dependencies and can end up perpetuating extractive models, aggravating patterns of inequality related to land, Oberlack et al. (2020) underscore that, when carefully and responsibly planned and adopted, such strategies can contribute to reshaping beneficial ownership and making market access more advantageous for low-income smallholders and communities (Box 16).

Box 16: Tan Dat Cooperative – collective action for inclusive food chains in Vietnam

Tan Dat Cooperative in Trung Ngai – one of the poorest communes in Vietnam’s Mekong Delta – was initiated in September 2017. In this area, families owned on average less than one hectare of land, which was traditionally used for rice production. After three major land reforms and a process of land consolidation, the land was fragmented and productivity limited, aggravated by climate change, diseases, and land degradation. Fluctuating market prices also reduced farmers’ ability to sustain themselves.

To join Tan Dat Cooperative, member families contributed capital either in cash or by giving easement over their land. Specialised work teams were formed, composed as far as possible of cooperative members themselves, to take care of rice production, input supply, and marketing. Profits from the cooperative’s business operations were shared among members, minus a contribution to its development fund.

Since 2017, all members have enjoyed tangible and economic benefits, the land’s value has increased, and they are also applying principles of agroecology. Tan Dat has obtained organic certification to European standards for 60 hectares of rice, building a strong reputation and a growing customer base.

Source: Oberlack et al. (2020).

As well as changes driven by industry, there are growing counter-movements and public policies to support more equitable, sustainable, and democratic food systems. These include improvements in public market spaces, protection of national agricultural produce and food markets from international commodity market pressures, public investment in research and development for improved ecologically sound inputs, such as seed and livestock genetic stock, public investment in small-scale and appropriate storage and processing technology, and support for farmer-to-farmer learning and sharing of agroecological farming practices. These movements involve the promotion of farmers who are secure on their land and are able to get reasonable returns from employing agroecological, or at least low-external-input, production practices, linked with local markets. The territorial approaches they embrace allow for more inclusive and democratic processes. These kinds of strategy are supported by the CFS, the Milan Urban Food Policy Pact, which has been adopted by 120 cities, and the New Urban Agenda adopted at the UN General Assembly in 2016 (UN General Assembly, 2017; CFS, 2016).

Over the past few decades there has been a strong turn, especially in richer countries, towards alternative food networks and a non-corporate response to the challenge of feeding a growing and increasingly urban population.

This often involves short supply chains and local markets, as well as food policy initiatives that attempt to build more socially and ecologically sustainable alternative food systems (Pimbert, 2015; Nasr and Komisar, 2012; Wiskerke and Viljeon, 2012). Farmers also develop niche markets that draw on local and regional qualities, and are creating new opportunities for rural development (Schneider et al., 2015; van der Ploeg et al., 2012).

Agroecological movements have also grown significantly and offer a different farmer- and land-focused way of organising production and food systems.

They are building social movements, rooted in farmers’ organisations, defending the land rights of independent family farmers, and pushing for change, as well as implementing different practices on the land (HLPE, 2019; La Via Campesina, 2018; Loconto et al., 2018). The Slow Food movement, which has members in over 160 countries globally, articulates and organises around a vision for food that is not about industrial production and corporate profits but instead sees food as linked to culture, politics, and the environment. It aims to preserve food culture and “ensure everyone has access to good, clean and fair food” (Slow Food, 2020).

These alternatives and movements contribute to the capacity of the global food system to support a growing world population while preserving healthy ecosystems. They build greater autonomy from corporate systems and increase the room for manoeuvre of food chain actors in reducing their dependency (van der Ploeg, 2008).