Journal of Food, Agriculture and Environment

The effect of incomplete land tenure contracts on agricultural investment and productivity in Cameroon

Author(s):

Maxime Niee Foning ^1*, Gilles Quentin Kane ², Jean Joël Ambagna ³, Fondo Sikod ⁴, Abayomi Samuel Oyekale ⁵

Recieved Date: 2013-11-10, Accepted Date: 2014-01-06

Abstract:

The aim of this paper was to analyse the effects of secure land tenure contracts on agricultural productivity. These effects will be highlighted through investment. Data from the third Cameroonian household survey (ECAM III) was used to estimate a binary choice model and productivity equation by instrumental variables. Firstly, the results suggest that there is a moral hazard in the investment behaviour of sharecroppers. This result could support the hypothesis of a holdup problem, which would reduce the incentives for agricultural households to make optimal investments. Secondly, the insecurity of land tenure contract would reduce the probability of purchasing modern equipment by about 0.44 and reduce the probability of using fertilizer by about 0.21. However, these investments determine the differences in term of productivity among agricultural household. Thus, the sharecroppers are less productive because they invest less than landlords. Therefore, it seems necessary to implement institutional mechanisms that can help to release the constraints on land access and to ensure the respect for rights and obligations between all the actors involved in agricultural leases.

Keywords:

Security of land tenure contracts, moral hazard, sharecroppers, holdup

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Journal: Journal of Food, Agriculture and Environment
Year: 2014
Volume: 12
Issue: 1
Category: Agriculture
Pages: 234-237

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