l>PART 1: arrival AND general PRINCIPLES
part 1: advent AND GENERALPRINCIPLES 1. Arrival 2. The Nature and Context that LeasingArrangements 3. The Principal problems for Landownersand Tenants 1. Development Background andcontext intends of theGuidelines Layout the theGuidelines lift andcontext1.1 The leasing of land is a far-reaching element of theenvironment in which farming operates transparent the world. Farming leasingarrangements room a fact that life. There is a big variety that sucharrangements, from the small-scale work tenancies and sharecropping agreementscommon in Africa, Asia and also Latin America, to the very mechanized agriculturaltenancies of north Europe and also other OECD areas. While being really different intheir contexts, they room all identified by a similar form, including aseparation in between the ownership and the usage of land.1.2 Leasing uses a means for farming families with tiny orno land and capital to gain access to land. As such, leasing arrangements space anestablished component of the cloth of the agricultural sector, often to the extentthat their significance has actually been overlooked, down-played, or misunderstood.Indeed, the ongoing existence of together arrangements is a matter of problem inregions whereby they are connected with landownership concentration andimbalances of power in favour the landowners.1.3 rather than seek to deal with these structural imbalancesthrough a review of leasing arrangements, part states have actually attempted to replacethem v owner-occupation (see box 1.1). However, together the instance in crate 1.1illustrates, the promotion of owner-occupation has actually not necessarily resulted in thedemise the the leasing arrangement, nor to a greater balance of power in farming.Leasing continues to it is in significant, also where there have been officialattempts to replace it. This department between policy and practice is a majorcharacteristic the the farming sector even where leasing species areofficially sanctioned.BOX 1.1 THE results OF floor TENURE revolutionary ININDIADuring the 1950s, all the Indian says abolished intermediaryrights and also interests in land. Those who were in reality in possession the the landat that time, including tenants and also sub-tenants, were provided riyati(owner-cultivator) status. This expected that 8.8 million beneficiaries gainedaccess to roughly 7.3 million hectares the land.Despite this, it became clear by the 1960s that lot of theland which had been legally kept by landowners because that their own riyatiinterests, was currently being grew through unshened arrangements with,predominantly, sharecroppers. Additional land reform law at the provinciallevel check to give riyati civil liberties to this tenants and also sharecroppers,through the offer of land titles in exchange for an officially established fee,payable in ten installments.However, also this measure did not stop tenancies frombeing created. Follow to recent data indigenous the federal government of India (48th Roundof NSS Report, 1996), over there are now 17.1 million households (15% of every ruralhouseholds) engaged in leasing in or sharecropping floor amounting to 9.4 millionhectares (8% of all agricultural land). Of this 17.1 million tenants andsharecroppers, the is estimated that roughly 84% have no official record oftheir interests, no defense from eviction and, hence, no accessibility toinstitutional credit transaction or various other inputs usually obtained through co-operatives orother official channels.1.4 A recent regeneration of attention in soil leasing is component of awider recognition of the must promote intensive family-based farming, together ameans that harnessing the an international abundance the unused and underutilizedagricultural soil (including land at this time farmed generally with the use ofmachinery). Versus this background, brand-new situations and also opportunities areconstantly evolving, with forms of tenancy enabling landowners and also the land-poorto benefit, together is depicted in crate 1.2.BOX 1.2 soil LEASING together AN EQUALIZER of FARM size IN WESTJAVALand tenure in West Java is largely free of legitimate restriction.While around 70% of farm yard plots space owner-cultivated, the evidence showsthat soil leasing features as one equalizer of farm yard size. This has developed inupland areas, with a move from classic crops to vegetables achievedthrough contract farming i ordered it by intermediaries. The lease industry haspermitted rise in access to land suitable for vegetable cultivationwhereas, prior to vegetable growing, there was no leasing of land in theseareas. Rather than lease floor directly, land-poor farmers take a sub-lease native intermediaries, top top the basis the the vegetable plants will be offered throughthose intermediaries. During the season once the land is not used forvegetables, the intermediaries can frequently lease that out together paddy land. This typeof setup is checked out to be valuable to all parties. The farmer benefit byhaving access to added land away from the village. The landlord gainsthrough lessened transaction costs, together all the sub-leasing is conducted by theintermediary.1.5 In addition, many land-poor sharecroppers - who execute nothave the funding to purchase land, even if that were obtainable - space expressing awish because that greater freedom in the usage of the land they farm. Elsewhere in formercommunist countries, the condolidation that small, fragmentized land holdings thatresulted native the procedure of land restitution and privatization into more viableholdings is limited by the reluctance of plenty of families to sell their newlyacquired land. In every of these cases, improved leasing arrangements can offerpotential solutions.1.6 Leasing additionally has potential for the administration oflarge-scale agriculture in emerged countries. Return not challenged with the extremesof soil concentration and also the lack of accessibility to land found in developingcountries, most arisen nations tho acknowledge benefits to leasingarrangements. This is an especially in separating the expense of purchase landfrom the resources requirements of running an increasingly intensive, mechanizedbusiness. There is likewise an dispute - greatly unproven - the a healthy and balanced leasingsector allows an excellent young farmers to extend and also develop your potential, withresulting services for the sector together a whole.1.7 as a result, soil leasing has actually become an essential issuefor gimpppa.org, as among the many ways in which it addresses its overall concern forfood security and poverty alleviation. The interest of gimpppa.org in land leasing has anumber the dimensions. At the operational level, the goal of fostering anincreasing balance and fairness in landowner-tenant relationsrequires a higher understanding that the facets that should be thought about whenagreeing to a lease. At the policy level over there is a need to explore the species ofconditions under which leasing may be appropriate and the degree to which that canbe used to improve accessibility to land whereby land concentration or fragmentationexist.1.8 if leasing supplies a way of improving access to land,there is as yet reasonably little expertise available about leasing,particularly whereby it involves private land. This relative lack of expertise hasled to significant mistakes gift made, too as more comprehensive opportunities beingmissed. This has had a variety of potential impacts, specifically related toundermining economic and also social breakthrough and maintaining outmoded farmingsystems. If there are existing resources of details on tenancyarrangements, that is evident that there is no single source i m sorry addressesbasic and basic questions such as the following: What room leases? once can- and also potentially need to - they it is in used? What needs to be excellent to develop alease? What social, political and also economic frame needs come be present tosupport the advent of leases? What procedures are important for theeffective implementation and realization the a leasing arrangement? intends of theGuidelines1.9 v these guidelines, gimpppa.org wishes to notify governmentsand others about the main benefits that deserve to be accomplished from leasing. The aim isto provide information and also examples for the advancement of policies and programsthat facilitate access to land for land-poor farmers, in ways that boost boththe productivity and also the sustainability of farming systems. The accuse havebeen prepared based upon the premise that:... It is feasible to devise suitablearrangements which balance the understand of the landowner and the tenant andwhich can improve access to farms and also lead to far better agricultural manufacturing andimproved stewardship of the land.1.10 The guidelines are intended for a broad-based audience ofall those who space interested in leasing arrangements. This audience includespolicy-makers, civil servants and other public officials, ar officers andadvisors, NGOs and landowner and tenant associations.1.11 this guidelines are designed as a state the theart review of the best accessible practice in soil leasing. In usual withother gimpppa.org guidance, this guidelines carry out not represent a blueprint. Rather, theyattempt come promote reasoning about, and evaluation of, the issues facing thosedealing through land tenure. Castle also administer a human body of valuable knowledge fordecision-making. Recognizing the the nature the leases will vary according toindividual circumstances, the major aim the the accuse is to promote agreater understanding of the processes through which that is crucial togo in developing an ideal leasing arrangements.1.12 In order for leasing kinds to encourage sustainablerural livelihoods and much more equitable accessibility to resources, they shoulddemonstrate characteristics such together the following: equitability and also fairness between the next transparency conservation of the legitimate interests in building of both next simplicity low transaction costs certainty sustainability promotion of the leasehold sector together a way of promoting versatility in the sector a minimum the state regulation and intervention1.13 this guidelines are directly relevant to countries thatare promoting reforms that assistance such characteristics, for example, throughadherence to the dominance of law. As these problems are usually found in countrieswith well-developed markets, a variety of the examples presented in theguidelines room of leasing kinds in western Europe, wherein the tenancysystems have actually tested numerous models during the previous two centuries.1.14 Leasing, however, additionally occurs in jurisdictions wherein oneparty in a leasing arrangement may it is in much much more powerful 보다 the other, andwhere little importance might be attached to the preeminence of law. In such cases, thepromotion of great practice in the technical content the leasing kinds willnot remedy an essential imbalances of strength in the relationship between landownerand tenant. Indeed, the framework of arrangements has tendency to suggest that it isnot so much the commitment itself the is at issue, however rather the continuingdisparity that power between landowners and also tenants. In these instances, theguidelines need to be seen to be aspirational quite than normative. Layout that theGuidelines1.15 The remainder of part 1 defines the nature and also contextof leasing arrangements and also identifies principle issues for landowners andtenants. Chapter 2 explains the nature the leases, as well as indicating thetypes of paper definition in which lock are most likely to it is in appropriate. Thing 3 addressesthe have to balance the demands of landowners and tenants. It identifies the needfor adaptability in leasing arrangements, to protect against the an adverse impactsassociated through over- and under-regulation, both of which can result in highlyexploitative relationships between landowners and also tenants.1.16 In component 2 the guidelines deal with an excellent practice inestablishing the facets of a tenancy commitment - the essential aspects thatshould be handle in all lease arrangements. Thing 4 gift the kind offactors that have to be contained in common leasing arrangements, while chapter 5describes the additional or different provisions that need to be applied tolicensing arrangements such together sharecropping. Thing 6 gift recommendationsfor implementing tenancy arrangements.1.17 component 3 that the guidelines identifies the need for goodpractice in contextual issues required for the effective generation andmaintenance the lease arrangements. For some jurisdictions, plenty of or every one of theelements of this arena (such together adherence come the preeminence of law) will already be inplace. Because that others this ar will be mainly aspirational. 2. The Nature and also Context the LeasingArrangements development A range of leasingarrangements Contractual licensearrangements labour tenancy Sharecropping and also other sucharrangements solved renttenancies Reverseagreements Introduction2.1 In mentioning leases and also leasing arrangements, theseguidelines deal with a wide selection of practices and terminologies, which themselvesemerge indigenous both law and custom. Under both common and also civil legislation codes, forexample, a distinction is drawn between a tenancy (which create a legalinterest in the floor in favour of the tenant) and also a patent (which is a contractto purchase services and also giving a right to get in the land.)2.2 In the situation of tenancy arrangements, landowners grantoccupation legal rights to tenants (usually because that a specified period), with paymentbeing in the kind of a addressed or variable rent. There is often an expectationthat the tenant will assume as whole responsibility for the agriculture operationstaking place on the land. This model is usually linked with developednations, where the structure governing the balance that power in between landownerand tenant has actually been established. The has additionally traditionally been used to theleasing of complete farms, which carry out the sole earnings of the tenant. However,the liberalization that tenancy connections in countless countries method that this is nolonger the leading case and also increasingly tenants, sometimes landownersthemselves, rent portions of ranches in bespeak to do their agriculture operationsmore efficient.2.3 In contrast, under license arrangements together assharecropping, the landowner continues to be in legitimate occupation of the floor while thefarming operations are brought out through a sharecropper or labour tenant. Thelandowner sponsor some rights over land, normally in the form of a best to enterthe floor in bespeak to lug out the specified farming operation. In suchcontracts the expectation is that the landowner will continue to make all majordecisions. While, in law, the landowner is purchase a company from thesharecropper (the service being labour and, often, seeds, machine or draughtanimals), the balance of strength is such that the sharecropper is effectivelypaying the landowner because that the ideal to use the land.2.4 The separation between tenancies and also licenses hasimportant legitimate dimensions, particularly related to concerns of security,compensation and also the ability to progressive loan funding independently the thelandowner or local money lender. However, given the absence or dysfunction (inmany countries) of policy and legal frameworks the valuable significance the theseparation is frequently lost. As a result, because that the purposes of these guidelines, allrelationships entailing landowners and also others farming your land will bereferred to as tenancies, with the parties recognized respectively as landowners andtenants. Where essential in the message - and an especially in component 2 - distinctionswill it is in made in between the types of agreements.2.5 the is often the situation that individuals may pat the role oflandowner and also tenant simultaneously. Small-scale landowners might farm your ownland, have actually tenancies of neighbouring land, and participate in sharecroppingarrangements covering various other land. Alternatively, plenty of forms the labourtenancy show off land-poor farmer entering either sharecropping or wagelabour arrangements v landowners in return for a little parcel of land whichthey deserve to farm on your account, properly as tenants. Elsewhere, the communitymay continue to it is in the dominant unit, with households using land together their needsdictate. A variety of leasingarrangements2.6 Tenancy kinds are offered by tenants when land cannotbe purchased, or when they choose not to tie resources into long-term investmentssuch together land purchase, and they can be provided by landowners who desire to avoid wagelabour costs. Some farmers have actually labour and/or capital however do not have the landto completely use this resources. Others have land i beg your pardon they room not working, forexample since of a absence of work or funding or due to the fact that they have actually no interestin engaging directly in farming production. The result, together Box 2.1illustrates, is a wide variety of arrangements, extending from personalrelationships based on usufruct rights to small parcels the land, come fulltenancies the farms, organized as interests in property. Crate 2.1: A selection OF TENANCYARRANGEMENTS2.7 In every case, these various forms the leasing arrangementallow soil to it is in farmed by someone various other than the owner. The means in i m sorry thisis accomplished reflect a number of specific features relating both come therelationship in between the parties, and also to the broader social, social andeconomic environment in i beg your pardon the kinds operate. Probably the single mostsignificant factor for the advancement of different species of arrangements is thestructure the landowning. For example, in plenty of parts that Europe and also Latin America,large-scale landownership (often by absentee landlords) has necessitated thedevelopment of leasing arrangements. In contrast, in the customary tenuresystems of Africa, the shortage that land in ~ a neighborhood level may pressure land-poorfarmers to leaving the community and seek tenancy species in communitieswhere soil is no scarce.2.8 past landownership structures and also custom, one of themore far-ranging factors in identify the species of setup used has beenthe relative breakthrough of markets, reflected generally in the stamin anddirection that the power relationship in between landowner and tenant. In regionswhere the markets (particularly in land and also products) function reasonably well -such together in Europe - tenants have got a degree of independence that has actually beenrecognized and also protected in law. Elsewhere, specifically in components of Asia, tenantshave remained largely dependent upon your landowners, leaving them in a weakposition to protect their rights. One of the main results the this is thatmost european states have actually a extremely formalized lease structure framed within awell-developed and enforceable dominion of law, with built-in safeguards because that bothtenants and landowners. In contrast, plenty of countries in Latin America, Asia andthe Near eastern have regulations controlling leases yet often absence institutionalstructures solid enough come enforce these regulations.2.9 The tenancy arrangements the predominate in a givencontext carry out not always follow a linear developmental pattern (for example, fromlabour tenancy to sharecropping to resolved cash rentals) however tend to selection backand soon from one form of tenancy to another, as conditions change. Inillustrating the variety of tenancies in this manner, therefore, that is notintended to imply that species on the best of the range are in any type of waysuperior, or an ext formal, than those on the left. Rather, the illustrationserves to show where each type of agreement lies in law, as well as in terms ofthe respective source inputs of landowners and also tenants. Agreements ~ above the farleft the the selection are for this reason viewed firmly as personal contracts, v theexpectation the all significant decisions will certainly be take away by the landowner. Incontrast, those on the far right indicate a carry of residential property rights, with theexpectation the the tenant will assume overall responsibility for the farmingoperations occurring on the land.2.10 The most far-reaching positions in the rangeare:1. Contractual patent arrangements, inwhich the landowner determines and also largely undertakes every farmingdecision-making and operations, yet licenses others to execute certainfunctions, regularly involving crop planting and harvesting.2. Work tenancies, in which labourers obtain a tokenwage or re-publishing of output, along with usufruct rights to a small parcel that landfor their very own purposes (usually subsistence);3. Sharecropping and other similar arrangements, inwhich the expectation is that both landowner and tenant share the expense of inputsand receive a share of outputs. This may vary indigenous arrangements which look at verysimilar to contractual labour relationships, come those where the range of theventure more closely each other a complete tenancy; and4. Tenancies, in which over there is a fundamentalseparation in between the understand of the landowner (leasing out land) and also thetenant (leasing in land). As Box 2.1 indicates, the tenancy plan issignificantly different than the other develops of arrangements, principally inthat tenancy entails the deliver of specific property rights.2.11 that is normally presumed the the strength balance is infavour of the landowner, i.e., that one of the key factors in identify wherea certain arrangement fits in the range is the level of straight controlexercised by the landowner. However, in one increasing variety of cases, thereverse instance applies. This is the case, for example, whereby the landownerholds tiny land and/or capital (and, hence, power), when the tenant is alarger operator, either gift a agriculture company, or an individual farmer withaccess come sufficient resources to produce a viable and sustainable unit. Thesignificance of this scenarios lies in challenging the orthodoxy that powerrelations in tenancy arrangements, and the implications that this has actually forguidance top top the essential facets of a tenancy agreement. So-calledreverse arrangements will thus be considered separately in ~ the endof this chapter. Contractual licensearrangements2.12 Contractual patent arrangements, in their miscellaneous forms,are found throughout the world, particularly where over there is a shortage ofresources together as resources or skilled management. In ~ its many basic, thecontractual license arrangement involves the landowner contracting the end (asopposed come leasing out) every or details farming operations. This kind ofarrangement have the right to relate to every farming operations (including marketing theproduce), or it can be limited to certain activities (see crate 2.2, Indonesia).Although not formally a kind of tenancy arrangement, many contracts incorporate somerights over land, usually in the form of a ideal to go into the soil in bespeak tocarry out the stated farming operations.BOX 2.2 license CONTRACTS because that STANDING plants ININDONESIAThe system of Tebasan, as exercised in Indonesia, is based onan agricultural vendor agreeing a license with a farmer to harvest a standingcrop. This is done to ensure that the merchant is able to control the harvestactivities, for this reason effectively preventing both the work and also risk of farming thecrop, and being able to determine its quality prior to purchase.Consideration for the chop (including the license) is commonly part-paid inadvance. The extent of this prepayment will depend upon the degree to i beg your pardon thefarmer and vendor agree on the valuation, in addition to any discount thefarmer is ready to take in order come receive revenue prior to the harvest. Theremainder is paid in installments, post harvest. By utilizing this system, a farmergains access to post-harvest storage, as well as to unshened credit.(Lastarria-Cornhiel, S. And Melmed-Sanjak, J. 1999. Landtenancy in Asia, Africa and Latin America: A look at the past and also a watch to thefuture. Working paper No. 27. Land Tenure Center, university ofWisconsin-Madison) work tenancy2.13 The work tenancy is uncovered in the rural areas of manycountries in Africa and Asia. In many ways, it is comparable to contractual licensearrangements, although rather than obtain a direct payment or fee, theland-poor labourer receives usufruct legal rights to a little parcel of land (andsometimes a dwelling). The labourer frequently has relative freedom to usage the landeither because that subsistence (its initial purpose), or to develop a cash chop forsale. However, it is equally recognized that such develops of tenancy frequently amountto little more than bonded labour, v workers fairly unable come earnenough indigenous the tiny parcels to free themselves from what is regularly anexploitative relationship. Sharecropping and other sucharrangements2.14 Historically, sharecropping has actually been favoured together a meansof putting large land holdings right into production there is no the hazard andadministrative difficulties of hiring fairy labour. In addition, sharecropperfamilies, absolutely in Latin America, have actually also listed labour because that thecultivation that the owner-occupied parts of the estate. Together such, sharecroppinghas been well-known with landowners, as a flexible kind of labour that is createdand disbanded follow to production conditions. Sharecropping is additionally seen tobe low expense and reasonably low-risk because that the landowner, as long as there is asufficient it is provided of potential sharecroppers.2.15 as a result, that is widely recognized that landownershave been able to use sharecropping arrangements together a way of extract cheaplabour native land-poor peasants. Indeed, v the case existing in manycountries the landowners are additionally the only money lenders, as well as the chieflocal law officers, sharecroppers have had to accept every little thing terms have actually beenoffered, in the sure understanding that they would be replaced if they go notcomply (see box 2.3 for an example).BOX 2.3 SHARECROPPING IN PERUAn example of standard sharecropping is the development ofyanaconaje for cotton production and other commercial plants on the coastof Peru after ~ the abolition the slavery and also of Chinese indentured workers.Initially sharecropping was convenient for landowners because little capitaloutlay to be needed, risks were borne greatly by the sharecropper, while thesharecroppers family provided additional labour, specifically during thepeak harvesting time. In this sharecropping arrangements, landowners providedland, seed, oxen and also tools in exchange because that a percentage of the harvest. Theyalso readily available loans in ~ high rates of interest. Sharecroppers were obliged to selltheir re-publishing of the cotton harvest come the landowner at below market price. Thisimbalance brought about the agrarian reforms of 1962 and 1969, which offered the yanaconasthe chance to to buy the land that they had actually been sharecropping.(Lastarria-Cornhiel, S. And also Melmed-Sanjak, J. 1999. Landtenancy in Asia, Africa and also Latin America: A look at the past and a check out to thefuture. Working file No. 27. Land Tenure Center, college ofWisconsin-Madison)2.16 In the most simple form, sharecropping is an covenant toproduce agricultural products, whereby the landowner provides the soil (andsometimes the various other inputs) and the sharecropper provides the work (andoccasionally entry such together seeds). In ~ the end of the farming cycle theharvest is divided in between the parties on a pre-agreed basis. These types ofarrangements permit both the land-poor and also the cash-poor (whether landowner ornot) come farm, as is shown in box 2.4. Although part agreements may be morecomplex, in having added responsibilities, all follow this basicpattern.BOX 2.4 SHARECROPPING IN CHILEThe context because that the use of sharecropping species in Chileis one in which: owner of medium and smallish chateaus do not have sufficient resources or credit transaction to purchase inputs, tools, and also to pay for wage labour; cash crops are high risk (high work needs and low or fluctuating prices); minifundistas, or landless peasants, perform not have sufficient land because that their very own subsistence but do have actually labour come sell. This landless and also land-poor family members do no have capital for renting in soil (cash rents typically being payment in advance, whereas sharecropping rents room paid ~ harvest).The benefit of utilizing sharecropping arrangements, because that bothlandowner and sharecropper, is that a minimum the cash (for either hiring wagelabour or paying cash rent) is required. Landowners supply part inputs inaddition to the land, if sharecroppers placed up the balance of the inputs,including wage work in enhancement to their own household labour. In the centralvalley region of Chile, sharecropping is raising as the result of: the decapitalization of traditional landowners; the boost of small landowners without added capital; low chop prices; increasing numbers the minifundios .(Lastarria-Cornhiel, S. And also Melmed-Sanjak, J. 1999. Landtenancy in Asia, Africa and also Latin America: A look at the past and a see to thefuture. Working paper No. 27. Soil Tenure Center, university ofWisconsin-Madison)2.17 beyond the standard sharecropping agreement, thereare additionally many instances in Latin America and also Africa the equal entry shareagreements. These situations are characterized by the next contributing more orless same shares (often both consisting of some land and other capital), andgaining an ext or much less equal shares of the outputs. This are often intra-familyarrangements that effectively incorporate a number of smallholdings under onemanagement.2.18 back not usual in plenty of parts that the world,partnership farming has end up being established in Europe, together a means ofcombining a variety of skills and accessibility to resources in one business. Quite thanthe normal separation of interests of the landowner and also sharecropper, apartnership suggests a usual business, in i beg your pardon the partner (usually thelandowner and also the tenant) work-related together because that their typical interest. Together a result,resources are successfully pooled in ~ the partnership and all develop ismarketed as a solitary entity. Inputs come the partnership may be uneven (usuallyland and also expertise), as can be incomes, which would reflect the different inputsof the partners.2.19 while partnerships allow the farming companion greatercertainty 보다 under sharecropping, and allow the landowning companion to be lessinvolved in the day-to-day monitoring of the business, the fan of one partyare normally the legal responsibility of the various other party. In addition to a formalcontract, partnerships as such demand both to trust and, ideally, longer-termcontinuity in order come prosper. Addressed renttenancies2.20 solved rent tenancies have the right to be either quick or lengthy term,and have the right to be topic to addressed or variable term lengths. Fixed rental agreements,more 보다 sharecropping or partnerships, are supplied when landowners space absentfrom their estates, and also require an income stream come be generated in theirabsence. Together tenancies space generally restricted to tenants of somesocio-economic was standing (and with access to capital), rather than beinggenerally obtainable to every resource-poor farmers.2.21 In the more developed farming markets of Europe andNorth America, the addressed rent tenancy is a standard car for delegating themanagement that a farm yard from that is owner to a advertisement tenant farmer. Although theactual lengths the the lease term deserve to vary, the level of capital investment issuch that countless tenants remain in occupation because that a number of years, adoptingfarming and also management practices tantamount from owner-farmers.2.22 Equally, solved rent tenancies can be because that bare land, takenon an yearly basis. In these situations it is assumed the tenants already have afarmstead and accessibility to other land, thus using the solved rent tenancy land tosupplement your farming operation, nominally in the short term. Again, practiceindicates that successful tenants tend to stay in occupation of such land forconsiderable periods, despite brief tenancy lengths. Reverseagreements2.23 The conventional design of lease arrangements suspect theinvolvement the a land-rich landowner and also a land-poor working farmer. However, anumber of examples can be uncovered of turning back scenarios, in which owners of smallholdings lease the end their soil to larger scale agriculture operations while alsotaking up payment employment, either on their own land, or elsewhere (see Box2.5).BOX 2.5 reverse LEASING IN MEXICOMexican ejidatarios room smallholder families that havesecure usufruct rights to land adjudicated to the ejido ar underland reform legislation. Typically, they have actually no funding and little access tocredit. If until recently renting ejido land to be illegal, rentals havebeen emerging for decades. In fertile agricultural areas, ejidatarioshave to be renting out their parcels to farming firms that carry incapital, machinery, and also other entry to develop a cash crop. These agribusinessventures are able to consolidate many ejido plots into one medium-sizedparcel. Often, the ejidatarios work-related as wage labourers top top the land theyhave rented out.(Lastarria-Cornhiel, S. And also Melmed-Sanjak, J. 1999. Landtenancy in Asia, Africa and also Latin America: A look in ~ the past and also a see to thefuture. Working paper No. 27. Soil Tenure Center, university ofWisconsin-Madison)2.24 turning back sharecropping kinds can also be discovered inwhich many tiny landowners, who do not have accessibility to sufficient resources tofarm efficiently, get in an covenant with a single huge scale sharecropper.Equally, a type of reverse sharecropping is practised in components of CentralEurope, v those obtaining land under restitution picking to allow the localco-operative to regulate it, in return because that employing them and providing castle witha re-superstructure of the develop from their land (see crate 2.6).BOX 2.6 turning back SHAREFARMING IN CENTRALEUROPEIt is known that for some main European countries,changes in residential property rights, particularly landownership, lie at the love of thetransition to a industry economy. However, adhering to 70 year of cumulative andstate-run agriculture, the mere restitution of land, on whatever basis isdecided, will certainly not instantly create an economy of small-scale commercialfamily farmers. Indeed, numerous of those claiming land have actually sought simultaneouslyto shield your ownership native the pressures of contraction by one of two people leasing theirland to, or arranging a reverse share cropping agreement with, the co-operative.In Romania, for example, land obtained through restitution deserve to either be soldimmediately, or much more can it is in purchased, as much as a preferably of 100ha. However, theaverage lot dimension under restitution is simply 4-5ha, through most new owners joiningproducer co-operatives ~ above a lease or sharefarming basis. A kind of collectivemanagement has thus been developed through leasing and also reverse sharefarmingcontracts, which offers a gradual change in management, also if theredistribution that ownership has actually been rapid.(Brooks, K.M. 1993. Property legal rights in land, pp.125-136 in Braverman, A., Brooks, K.M. And Csaki, C. (eds) The agriculturaltransition in main and east Europe and the previous USSR. Washington,DC: civilization Bank). 3. The Principal worries for Landownersand Tenants development Balancing the requirements of landownersand tenants Tenancy termlength Tenants and familysuccession rejuvenation Introduction3.1 at the main point of effective leasing arrangements is anunderlying assumption about the tripartite relationship between landowners,tenants and also the state. This relationship is essentially one that mutualresponsibility, in which each party has certain duties to perform. The mostfundamental of this duties loss on the state, in producing an appropriateframework within which the landowner and also tenant can operate.3.2 despite the variations in tenancies, over there is muchcommonality in ~ the range of the individual agreement. At the main point of most of thearrangements are the worries of risk, security and trust. Even under the mosthighly regulation systems, the landowner/tenant partnership is still dependentupon the level of to trust that deserve to be established in between the parties. Where thereis trust, the tenant in specific will gain more freedom and also incentive tooperate, regardless of the nature of the yes, really lease arrangement. Equally,where over there is a absence of trust, the idea of the joint venture ishard come sustain. Balancing the requirements of landownersand tenants3.3 when recognizing the family member isolation and also poorbargaining position of plenty of tenants, great practice guidance have to be based onestablishing a far better balance that power, which allows both parties to achieveobjectives which room acceptable (if not ideal) to them. In ~ this framework,the principal worries to be addressed by both landowners and tenantsare: the size of the lease term, in addition to the security provided by the tenancy; the degree of freedom and control afforded to every of the parties; and also the flexibility and also financial implications of this combination of term, security, freedom and control.3.4 thus the two fundamental issues relating to every tenancyarrangements are security for the tenant and flexibility because that the landowner. Thismeans the the promulgation of good practice is essentially came to withachieving a sustainable balance between these competing claims. When leasesbecome extremely regulated and protected, lock are typically unpopular withlandowners, that perceive the their power and flexibility is being circumscribedby the state. As soon as informal or under-regulated, however, tenancies space seen todeny the security desired by tenants. That is also argued the informal andunder-regulated arrangements avoid the landowner indigenous stipulating or enforcingrequirements for sustainable use of the land, sometimes known asbeneficial occupancy.3.5 quite than being part of a continually in which thelandowner seeks much shorter terms and less formality, while the tenant looks for theopposite, the problems are more complicated and multi-dimensional. These are modelled,in streamlined form, in the figure below. In each case, the matrix sets thelength of lease term against the level the formality of the arrangements. Theupper left-hand quadrant thus refers to short-term informal arrangements, whilethe the opposite quadrant, the lower right, refers to long term formalarrangements.3.6 for each quadrant, positive and an adverse factors forlandowners are noted in crate 3.1 and also those because that tenants are presented in Box3.2.BOX 3.1 LEASE ISSUES and also POSSIBILITIES:LANDOWNERSPositiveNegativeINFORMAL brief TERM· flexibility to exploitlease markets· short cost· big degree ofcontrol· huge share the farmoutput· Uncertainty· better requirement forlandowner to be associated in the farming· Potential inability to findand retain an excellent tenants· need to pay forinputsINFORMAL long TERM· Someflexibility· fairly lowcost· Retaincontrol· big share of farmOutput· Uncertainty· need for an excellent tenant,preferably a neighbouring farmer· long term inputrequirementFORMAL brief TERM· Certainty· Predictableincome· Some freedom from dailyroutines· Retain flexibility in themedium to lengthy term· expense of setup upagreement· Potential high cost offinding new tenantsFORMAL long TERM· Certainty· Security· Steady and predictableincome flow· liberty from everyday farmingroutines· reduced income· absence offlexibility· absence ofcontrol· lift of Stateintervention and control· perhaps expensiveterminationBOX 3.2 LEASE ISSUES and also POSSIBILITIES:TENANTSPositiveNegativeINFORMAL quick TERM· low transactioncost· access toland· Potential accessibility to capitaland various other landowner inputs· adaptability to exploitproduct markets· Littlecertainty· tiny or nofreedom· No impetus toinvest· tiny status· short incomeINFORMAL lengthy TERM· short cost· access toland· Potential accessibility to otherfactors of production· Littlefreedom· Littlecertainty· tiny incentive toinvest· low incomeFORMAL quick TERM· some security· Certainty· Potential expense of settingup agreement· lack of impetus toinvest· Limitedfreedom· uncertainty aboutfutureFORMAL long TERM· protection (lessee andfamily)· Independent accessibility tocapital· motivation toinvest· flexibility tofarm· Certainty· Transparency· bound tolocation3.7 crate 3.1 and also 3.2 illustrate that, if landowners appearto gain much more from informal short-lived tenancies and also tenants from formallong-term tenancies, there are potential confident and negative aspects to eachof the arrangements. Because that example, landowners gain flexibility, control and also alarger re-publishing of farm output from informal short-lived tenancies. However, theyhave to balance this versus the have to be an ext involved in the farming,uncertainty about their net share of the output (given the they have actually alreadyprovided most of the non-labour inputs), and the difficulty of retaining a goodtenant. In the alternative, the lower gross income, loss of control and also lack offlexibility characterized by the officially long-term plan needs come bebalanced versus the security and also certainty the a predictable income provided bya good tenant who has actually some incentive to invest in the land.3.8 A different balance the outcomes deals with tenants. In general,they will benefit most indigenous the security, certainty and also transparency that a formallong-term tenancy. However, casual short-term tenancy may existing arelatively low cost route come land for a land-poor farmer. Indeed, the is usuallythe just route. Offered the most likely involvement the the landowner in the farmingregime, this kind of tenure may also provide the necessary accessibility to capitalwith which come farm. Informal short-lived tenancies also administer a level offlexibility lacking from much longer terms, permitting established farmers, inparticular, to make use of market opportunities, or to make up for a potentiallypoor harvest or other shortfall on their own land. This has been the situation inEngland and also Wales complying with the liberalization in 1995 the the tenancy regimewhich assisted in short-term tenancies.3.9 Ultimately, the inquiry of which duration and also level offormality are most suited to a particular person will rely upon theircircumstances. The noticeable disposition the landowners to temporary leases ispredicated, because that example, top top the supposition the there room plenty of willing andable tenants to complete for the tenancy. In contexts whereby this is not the case,as in an agricultural depression in a occurred country, the landowner couldwell be much more intent on encouraging a tenant to stay - in part by offeringlong-term security. Equally, the noticeable disposition of tenants come secure longterm tenancies is predicated top top an presumption that they are all qualified andwilling to take on this commitment.3.10 box 3.1 and also 3.2 often tend to imply that both landownersand tenants are often ideal served by longer terms quite than much shorter ones. Inparticular, much longer terms tend to carry out a greater level that certainty andsustainability than shorter terms. There also tends to it is in a greater separationof interests and influence between landowner and also tenant, which allows the tenantgreater flexibility while guaranteeing a fairly low-risk return to thelandowner. Against this, landowners often insurance claim that much longer terms areunacceptable if castle diminish their adaptability to exploit market opportunities,quite regularly specifically regarded non-agricultural development. Rather apartfrom questions around the desirability of shedding land native agriculture, the ispossible to include break clauses to leases, enabling the landowner come resumepossession for specific defined activities, such together non-agriculturaldevelopment.3.11 It should be recognized, however, the this market-orientedperspective ignores the relative power imbalances in between landowners and tenants(recognizing the this is not constantly in favour of the former). At the extreme,such power imbalances deserve to render irrelevant the very idea of choice, and oftrade-offs between the optimistic and negative aspects the lease duration and also levelof formality. This have the right to lead to an enduring absence of security in thelandowner/tenant relationship, specifically if there is restricted security because that theparty in the weaker loved one position.3.12 In reaching a balance in between the requirements of landowners andtenants, problems such together tenancy hatchet lengths, sequence by family members members inthe situation of the tenants death, and also lease renewal become significantelement that policy. Over there are plenty of examples the statutory controls to regulateminimum term lengths, when in other instances a strong customary tradition has actually beenestablished. However, over there is small apparent consistency end what representsgood practice. Tenancy termlength3.13 whereby term lengths are imposed, together in much of northernEurope because that example, these tend to reflect minimum terms that deserve to be bothextended to longer periods, and also renewed before termination. In all these casesthe minimum state are lengthy (in the bespeak of 10 years), if agreed terms of 18to 25 years room not uncommon. In most cases, regeneration of the tenancy isautomatic, uneven either that the parties seeks termination, follow to certainpre-defined terms . Few countries impose best tenancy lengths, back inDenmark tenancies space terminated after ~ 30 years.BOX 3.3 LEASE rejuvenation IN ENGLAND and also WALESAgricultural Holdings plot 1948, section 2.Restriction on letting agricultural land for much less thanfrom year come yearWhere any type of land is let to a human for usage as farming landfor an interest much less than a tenancy from year to year, the agreement will takeeffect, with any type of necessary modifications, together if it to be an agreement for theletting that the land because that tenancy indigenous year come year.Agricultural Holdings plot 1948, ar 3.Tenancies for two years or more, uneven terminated bynotice, to continue as tenancies native year come yearA tenancy that an agricultural holding because that a ax of 2 yearsor an ext shall, rather of terminating on the expiration of the term for which itwas granted, proceed (as indigenous the expiration of that term) together a tenancy fromyear come year unless, not less than one year nor much more than 2 years prior to thedate resolved for the expiration that the term, a written notification has been provided byeither party to the various other of your intention to end the tenancy.Agricultural Holdings (Notices come Quit) act 1977, section2(1).Service that a Counter-noticeA tenant in receipt the a an alert to stop may, within one monthof the giving of the notice to quit, offer on the landlord a counter-notice inwriting requiring that the issue be referred to the agricultural Land Tribunal(ALT) for the area in i beg your pardon the hold is situated. The notice to battered willthen just be precious if the ALT consents come its procedure on one of the limitedgrounds stated in ar 3 of the 1977 Act.3.14 complying with the English and Welsh tenure revolutionary containedin the farming Tenancies act 1995, the place for new farm tenancies isthat there is flexibility of contract, consisting of term length and also lease renewal.Evidence shows that while standard (i.e. Pre-existing) lease structurecontinues to be followed, most new tenancies are for reasonably short terms, andmake no delivery at every for regeneration at the end of the term. Typically, privateleases of bare land room attracting three-year terms, if for entirety farms (lessthan 10% of all leases) the average term size is 7 years. Tenants and also familysuccession3.15 reasonably little has actually been composed about great practicewith respect come tenants and succession. Where succession provisions carry out operate,these civil liberties are often limited to those living and working on the land, and also aretypically no transferable to a 3rd party. However, in instances where successionprovisions carry out not operate, over there are comes to that the death of the tenant canlead to the eviction of the entire family, also if all or several of them wereworking the land and also are skilled farmers in their very own right. In manycountries, women play a an essential role in farming and also there is growing awareness ofthe importance of ensuring their access to land v inheritance.3.16 This raises inquiries of public policy, around the extentto i m sorry tenants and their households should receive statutory defense fromeviction, and over what period of time. In response to the death of the tenant,there is a widely shared concern that the tenants family should be allowedto remain on the land, in ~ least during the remainder of the tenancy, or untilmore permanent arrangements can be made. In numerous cases, however, this is notlikely to it is in a long duration of time.3.17 when tenant family members live ~ above the land the they work,eviction causes certain hardship. However, there room relatively few countrieswhich look for to sell longer-term protection, one of two people through regulation or custom(although watch Box 3.4 for an instance of customary succession in Uganda).Reference is often made to the fact that good tenants and also theirfamilies room unlikely to it is in evicted, since the landowner is i can not qualify to be ableto find far better ones. However, when this can possibly be the case for somelandowners and also tenants, particularly in situations where there room relativelyfew potential tenants, proof does not imply that the is the generalcase.BOX 3.4 CUSTOMARY sequence IN UGANDAIn the beforehand 1900s, the floor tenure system in the Buganda areaof early american Uganda was changed from a customary system based on achiefs domain over land and also community members legal rights to farm yard it, toa system approaching freehold tenure. The result ownership, vested in thechiefs and known together the mailo estates, was already farmed by peasants. Thesepeasants were enabled to stay on the land, effectively converting castle fromcustomary usufructory holders right into tenants of private property.In an initiative to stop eviction of these tenants, legislationwas pass in the 1920s giving them some protection of tenure, if alsoestablishing the amount of rental to be paid and the rights and also responsibilitiesof the parties. As a result, eviction (only by court order) is now limited to aminimum that causes, such together failure to salary rent for three years. In typical withthe usufructory system, this ideal is inheritable, return it can not be offered orotherwise transferred without the owners permission. The result systemis hence a mix of private property civil liberties overlain with customary norms andpractices.(Lastarria-Cornhiel, S. And also Melmed-Sanjak, J. 1999. Landtenancy in Asia, Africa and Latin America: A look in ~ the past and a see to thefuture. Working paper No. 27. Floor Tenure Center, university ofWisconsin-Madison) Renewal3.18 good practice indicates that fairly than automaticallyapplying a lease rebirth or not, a variety of components should be thought about inorder to reach an equitable decision. The considerations presented listed below are anamalgam the practices and does no relate specifically to any kind of one country orsituation. However, an excellent practice in any individual nation would it is in to ensurethat both landowners and tenants room clear about the grounds for regeneration andresumption.3.19 One factor to consider in countless systems is the level to whichthe tenant has followed the essential problems of the lease. If thetenant has actually failed come discharge this duty, the landowner have to be may be torecover possession.3.20 another consideration that is often recognised is thesituation and also needs that the landowner and also family. A solid argument is frequently madethat the landowner have to be complimentary to resume farming at the finish of the lease. Inother cases, the is accepted that the landowner should be able to resumepossession if the floor is compelled for a family member come commence (or returnto) farming. In India, the preceding lease duration is well-known as adisability period, during which the next generation of thelandowners family is prepare to farm yard the land. A case may also be madefor permitting the landowner the best to resume possession of the land for thepurposes of amalgamating that with various other land.3.21 Yet an additional consideration is whether the tenant requiresland to continue to be in the family home. This might apply in the case when the tenancyincludes a household home, which would have to be vacated if the lease were notrenewed. Linking lease rejuvenation to the existence of the tenants homeprovides an incentive for landowners to forbid tenants native erecting homes,however temporary and fragile, and also to remove those already in place. Together aresult, the hatchet home would require large interpretation, come includenot only physical structures, but likewise parcels of floor which administer the solelivelihood for the tenant and also tenants family, whether they actually livethere, or not. A further consideration in favour that the tenant is that renewalshould be granted if it would be unfair, or inequitable, not to do so.3.22 In assessing the considerations noted above, the is clearthat plan on lease renewal must driven mostly by equity; what is perceivedto be fair between landowner and also tenant. While preserving a presumption that thelandowner should have the ability to regain possession the the land, over there is recognitionthat such a prioritization must only happen under specific circumstances when landowner or landowners household require usage of the land because that directproduction.
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Other than this, countless countries identify the insurance claim of the tenant toremain in occupation. However, an especially in arisen countries, landownershave search to get extra civil liberties of repossession, largely connected to theirability to manipulate the advertisement potential that conversion come non-agriculturalusage.