Agribusinesses, smallholder tenure security, and plot-level investments
This working paper (PDF) by the United Nations University World Institute for Development Economics Research (UNU-WIDER) investigates how a decrease in the share of land held by an agribusiness in a village affects smallholder plot-level tenure security and investments in rural Tanzanian villages. A large number of agribusinesses that acquired agricultural land in many sub-Saharan African countries have reduced or ceased their operations in recent years. Drawing on a panel of 5,101 plots, the results show that a decrease in the share of land held by an agribusiness significantly increases the probability that a plot has tenure security and raises the time spent on the plot. This last result is not driven by changes in tenure security but is likely due to a learning effect that comes from employment on the agribusiness. Taken together, the study reveals the importance of taking a comprehensive impact assessment of agribusinesses on local populations. Agribusinesses can have productivity-enhancing effects on smallholders, but can also have adverse impacts such as raising uncertainty once they cease their operations. To mitigate these adverse impacts, the existing land framework should be revised to ensure that smallholders are able to reclaim their land if agribusinesses do not come into fruition or cease their operations. In addition, more information should be provided to smallholders via the village assemblies and councils on the implications that arise from the coming of agribusinesses.