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Land tenure and the developing society
W.L. Dickson
Department of Surveys and Lands, Ministry of Local Government and
Lands, Gaborone, Botswana
Introduction
Land tenure systems are one of the many tools used to regulate society. Many species of animals observe very definite rights of tenure either in the individual or in the group. Should these rights be threatened, for example through overpopulation or natural disasters, the individual or group will react fiercely to defend them. The complexities and variations of human society demand equally complex and varying rules of rights of tenure and rights to use land, which is probably the most basic of human resources. It is an old Setswana ideal that the land is like the air, in sufficient quantity, free for everyone to use as they wish. That this ideal is no longer applicable in almost any corner of the world is the basic reason for the increased use of complex rules to control rights in land and the use of land.
The conversion of some communal land to individual holdings took place in Europe 200 or 300 years ago; it is happening now in several African countries, including Botswana. These issues are of major proportions, but other less violent changes in society can affect the tenure rules adopted by the government to suit community views and needs. Economic needs and changing living patterns are examples of this. In Botswana, the Certificate-of-Rights form of tenure was created both to meet an economic need and to face the changing living pattern of large numbers of the population who have moved to an urban way of life.
There are almost unlimited administrative procedures and legislation governing tenure throughout the world, but certain categories should be noted.
Freehold is the highest form of estate in land obtainable by an individual. In theory, it is complete ownership, but, in practice, today it is so tied up with law (such as town and country planning regulations) that the freedom of the freeholder to do what he likes with his land is limited. Nevertheless, the freeholder normally has the right to dispose of his land to whom he pleases, pledge it as security to whom he pleases, and attend to the long-term financial development of his land entirely as his own responsibility and at his own risk. Theoretically, freehold is the most creditworthy of tenures, but even this is subject to current political tendencies and pressures. For example, a freehold issued by a previous administration and contrary to the political opinions of a current government that has promised land reform and new land legislation would probably be viewed as less secure in the short term than a lease issued by a current government.
The essence of a leasehold is that, unlike freehold, it comes to an end after a certain length of time and reverts to the freehold owner who let the land, or to the State. Almost every lease is different. The parts of a lease document will contain a description of the land let, the duration of the lease, the rent or consideration to be paid for the lease, covenants or conditions which the lessee must meet, exceptions and reservations of rights to the lessor, and provisos that the lessee must conform to.
Obviously, the negotiability and value of a lease is directly related to the conditions set out in the lease. A lease may in fact stipulate that it is not negotiable and may not be sublet or ceded to another party. On the other hand, a long lease, fully negotiable with no specific provisos or relations, may be almost indistinguishable in value from a freehold.
Leasehold and freehold are not immutable. A leasehold may have a right or option to convert to freehold. The law of the land may prescribe conditions of conversion. In Britain, certain long leases may be converted to freehold, as the leasehold is now more or less an administrative nuisance; other countries, for example, Tanzania, have converted freeholds to leaseholds by law.
Many other titles will generally conform to the outlines given. Customary title has many attributes of leasehold, that is, it is subject to conditions which will vary from place to place. Because of modern development, efforts have been made in most countries to write and codify customary title. There are other varieties of freehold and leasehold. In Botswana, a right of use is issued, but to all intents and purposes this is a form of leasehold.
Titles and Development
The form of title available can have a profound effect on development. For example, it would not be possible to obtain large investment by an international company in an area where its security for its capital lay solely in unwritten customary law orientated to communal rather than exclusive use. On the other hand, tenure may well be identified as a stumbling block when the real problem lies elsewhere; absolute negotiability of title will not in itself enable a land owner to get development loans if his credit rating is low and his development project dubious. Often, problems lie not in the basic tenure law but in reluctance to use it to its maximum flexibility. Tenure and its application are tools of society and, like any other tool, the correct tool should be used for each job. There is far too little application of basic management principles to land tenure administration. Objectives must be defined. The almost inevitable clashes of objectives must be assessed. In some instances, the desire of a lessor to retain control can be met to his entire satisfaction without much concern to the lessee. In other cases, development will depend on the sacrifice of lessor control to the lessee. Where the lessor or grantor is a private individual, decisions are normally economic. A valuer or land economist can value his options in terms of actual costs and benefits.
If decision-making is complicated for the private individual, it is far more complicated if the lessor or grantee is the State or local authority, where the valuers and land economists must also consider social and political pressures. Here the professional can advise on the probable results of actions (e.g. rent controlled at a figure below the commercial interest rate would mean a stop to commercial building development), and is able to supply the figures to enable decisions to be made. A more difficult case is where advice has to be given to the effect that, to obtain a long-term benefit, short-term political problems will arise, and the economic factors have to be evaluated so the politicians can weigh them against the political or social factors.
In virtually all decision-making on land development, basic tenure considerations are a first consideration. How can existing tenure systems be used, and, if existing tenure is insufficient, what new legislation is required?
The classic case for new legislation is the move to legalize individual rights out of customary communal tenure. As pointed out earlier, unwritten customary tenure is not a fixed system invented years ago, but has grown and been modified to suit the social conditions of the time and people. What has happened is that modern pressures have made gradual change, based on generations of varying practice, adequate. Rapid legal and written changes have been required. Many customary tenures recognize individual rights but not the right to convey them to other individuals or out of the social group; other customary tenure does not recognize individual rights at all. Generally speaking, where arable fields are concerned, customary tenure will have tended to recognize ongoing individual family rights passed down to children or mutated by family alliances, marriages, etc. Pastoral communities tend towards communal use of grazing. Most countries have now codified these practices; it is the administration and application of the law that is at issue. That an individual right to develop a modern timber business will dispossess the traditional charcoal burner is an issue to be faced, but it is not new. As a Scot, my first teachings on land tenure were of the antisocial, anti-Scottish Enclosure Acts which dispossessed traditional crofters. Generations later, this is still an emotional issue with Scots; but the crofters, through overuse and unskilled use of the land, had destroyed their own environment and were already moving out. Identical problems face many of the world's politicians today. There are no ideal or simple solutions in land administration.
The Botswana Example and Experience
Background
It cannot be claimed that ideal solutions have been found in Botswana; neither will the solutions resorted to by Botswana be directly applicable elsewhere. But the arguments, discussions, and results of deliberations on land tenure among the Workshop participants will be relevant, as the problems may well be the same. I therefore propose to deal with the arguments and decisions relating to a few cases in Botswana.
When Botswana gained independence, there were three categories of land holdings:
There has been no change in tenure in the freehold farms, but two pieces of legislation have had effect. The Land Control Act requires publication of any proposed sale to a noncitizen and consent by the Minister to the transaction. The Transfer Duty Act amendment places a 30 per cent transfer tax on non-citizen sales. The simple objective of these acts is to control the passing of more land to non-citizens while not making such conveyances impossible where, for example, foreign investment is in fact being encouraged. These two acts are applicable to all agricultural land, not only the freehold lands.
The most important tenure change was however effected by the Tribal Land Act, enacted in 1968 but not promulgated until 1972 due to administrative problems. It has been amended several times, since some intentions embodied in the original act were found to be administratively disadvantageous.
In Botswana, tribalism was never a major obstacle to the formation of a national state, as was the case in some other parts of Africa. Botswana (people from Botswana) are very conscious of their tribal affiliations and the land rights they hold under their tribal identity, but this has not prevented the acceptance of an overriding national identity, and the status of tribesman is gradually losing its significance, in comparison with the concept of citizenship.
Very briefly, the Tribal Land Act passed the powers of the chiefs and hereditary tribal authorities to a Land Board, comprising the Tribal Authority, elected representatives, and nominated representatives. Furthermore, the Board is empowered to grant not only customary rights, but common law leases and Grants of Ownership (freehold).
The position is, therefore, that, in theory, in any part of Botswana the equivalent of freehold or any subordinate title can be granted. Contrary to popular belief, legal restrictions on tenure are not in themselves the problem; the problems in land development lie in economic, administrative, and other legal factors applicable to the title.
In examining Botswana's problems and answers, it must be remembered that Botswana uses a deeds registry system, not a land register, to record title. The controversy over the advantages of a deeds or land register has raged among land surveyors and land administrators for years. Today, conditions have, I think, gradually brought the consensus of expert opinion in favour of the land register. Some day, Botswana may have to enact legislation to convert land titles from a deeds to a land registry. Malawi did this some years ago, but it is a very difficult and time-consuming task and not to be thought of until there are enough staff to see it through.
The Effect of Tenure Conditions in Rural Areas
The Land Control Act and Transfer Duty Act have obviously had an effect on the international negotiability of Botswana farms, but only in one case has the existence of these acts even had to be considered in terms of development projects. It would appear the acts are achieving their aim without much effect on rural development programmes, although obviously they affect individuals and land values. The big step forward in tenure was the powers granted in the 1968 Tribal Land Act. Like so many other countries, Botswana found that range improvement, cattle breeding improvements, and good ranching administration were almost impossible under communal grazing patterns. The Government then brought out its Tribal Grazing Land Policy in 1975. This policy aimed at dividing the tribal lands into commercial farms, communal areas, and reserved areas. This is a planning, not a legal, division. Within the commercial farms, secure individual leasehold title would be issued, with the rents and other benefits arising from this to be used for the improvement of the communal areas.
It was held by some that entirely new tenure legislation would be required for the Tribal Grazing Land Policy. However, the Tribal Land Act contains adequate provisions for secure title. One section (paragraph 26), nevertheless, does require consent of the law before ceding a right. This clause might well be deleted from the act, since control conditions can be and are normally part and parcel of a lease agreement. Given that the land boards had powers to issue leases, certain problems emerged.
The land boards wished to retain a great deal of control and issue relatively short leases. To obtain credit negotiability, long leases were required. The arguments for and against negotiability and lease length were hotly pursued. In the end, it was held that the whole object of the Tribal Grazing Land Policy depended on security of tenure in its widest sense. Long leases of 50 years with a second 50 years on option were granted on terms very favourable towards the lessee, including even a right to compensation for improvements on voluntary termination (a concession which may well raise great difficulties in the near future). Paragraph 26 of the main act was covered by writing in pre-agreement to resale by approved mortgagor or creditors.
It was found that, contrary to what was originally thought, the areas zoned for commercial farms had fairly intensive existing customary use rights. The extinguishing of these rights became and is a very difficult and emotional issue. To avoid compensation and dispossessions, a series of measures seeking to limit the commercial leases by retention of customary rights were proposed. Like the arguments on retention of Land Board control, these arguments failed as they would have defeated the prime objective of the Tribal Grazing Land Policy, since scrub cattle could not be allowed to mix with a prize breeding herd. How existing customary users are to be compensated is still a problem. Some may have to move their cattle into communal areas; hunters and gatherers are in an even more difficult situation.
The commercial ranches were expected to assist in development of the communal areas by providing income to the Land Board which could be used to improve communal areas and by drawing off the herds of big cattle owners from the communal areas, leaving more grazing for the small communal farmer. In the event, rents were pitched so low (to enable lessees to devote income to development and debt service) that government expenditure on the ranches far exceeds income. Admittedly, five-year reviews are provided for, but unless swinging rent hikes are permitted, it is unlikely that economic rentals will be reached for years. As pointed out previously, the number of persons dislodged from the commercial areas is far greater than foreseen and they will present an inflow into the communal areas. Moreover, there is no obligation in the leases for lessees to move stock out of communal areas, and although initially they may do so, exercise of communal rights by commercial lessees cannot be prevented.
The Government has provided very generous conditions through the land boards to commercial ranches, yet the difficulty of obtaining credit is still quoted as a major development problem. There are two reasons for this: technical and financial.
To register a mortgage against a farm, the lease must be registered. To register a lease it must be surveyed. In fact, this presents few real problems. The leases are deliberately let initially on sketch plans prepared by the Land Utilisation Planning Groups who demarcate the ranch corners. The first duty of the lessee is to clear and demarcate his boundaries. If there are problems with the farm boundaries, they will show up at this stage where remedial action is easy. Once the boundaries are cleared, survey is simple, apart from the very large size of the farms, most of which are 8 km x 8 km (6,400 ha). The act is even drawn to permit flexibility in survey standards. With modern equipment, this is of little consequence; precision is not a major cost factor compared with logistical and ground preparation costs. Aerial survey for groups of farms is a possibility. The problem might be scarcity of surveyors (there is no scarcity yet as only one survey request has been made) and cost. But cost has to be seen in perspective against the other costs incurred in development of commercial ranches. The real problem is financial attitudes. Pastoral farming in Botswana is notoriously hazardous as far as a regular income is concerned, owing to the very unreliable rainfall. Financial agencies like regular payments. Interest rates everywhere are high, and this risk puts interest rates on farming into the highest bracket. Foreclosure on a failed farm is not likely to result in recouping fully the value of the improvements. Financial houses, therefore, are very cautious and would sooner lend on urban projects, despite the Government's commitment to rural development as the top priority. In the State lands, farms are being offered on similar terms and face similar problems. The point to note is that it is not legal problems but decisions on how to use legal powers that is at issue.
In addition and supplementary to the Tribal Grazing Land Policy, the Government has initiated an Arable Land Development Project, which at the moment is being pursued under customary tenure. There is no reason, however, why arable farmers should not utilize the provision of the Tribal Land Act and take out registerable leases. In some parts of the country, this will almost certainly start being an issue soon. As arable areas leased are likely to be much smaller, many of the problems of the Tribal Grazing Land Policy will not arise. Improvements for which loans may be requested will include items such as equipment (epossessable) and fertilizer (annual). Financing thus may be easier to obtain. Nevertheless, the basic criterion will continue to be creditability rather than tenure itself.
The rural villages in Botswana are in the Tribal Territories, and most land in them is held under customary tenure. Commercial users are supposed to hold a lease or grant. Although labelled villages, several of these settlements exceed 20,000 in population and require all the usual social services. The Government itself does take out leases for government use and this is one case that show how the act can be used. The problems are lack of (knowledgeable and trained) staff in land boards to process and record the leases and enforce the act.
The complaint that credit cannot be obtained to build, for example, a house under the Tribal Land Act, strictly speaking, is not true. A registered lease can be taken out and a mortgage registered against it. However, this does not mean to say the owner will find a loan easy to obtain, even with the pre-agreement of the Land Board to transfer (as in the Tribal Grazing Land Policy). Section 26 of the Tribal Land Act is admittedly still problematic in this regard, but market forces are far more important. Transfers between customary right holders with the permission of the Land Board do occur, but this issue and that of compensation for extinguishing common law rights have just not been tackled in sufficient depth. Customary law is not designed for Western concepts of credit, but alternatives do exist. So far, these alternatives have been developed in Botswana's urban areas, but the principle to be acepted is the same; the application of flexibility and imagination to existing tenure law often permits the desired development without total revision of the law being necessary.
Conclusion
Land tenure acts in themselves are not enough. Secure title theoretically enabling the holder to enjoy the highest of credit facilities can only be given by reducing the control of the authorities. As the creditability of the holder may be more important for credit, if such credit is not forthcoming, is reducing authority control worthwhile? Probably, the answer is yes, not necessarily for reasons of obtaining credit but for the basic reason that bureaucracy tends to be a dead hand (I speak as a lifelong career bureaucrat).
Further, land legislation depends entirely in its implementation upon recording systems and the trained staff who run them. However many planners, lawyers, top bureaucrats, and academic intelligences are available, land tenure development exercises are going to depend on trained working staff to administer, process, and, above all, to record rights. Any title is only as secure as the recording of the documents which prove it. Even this is only a start; trained people on the ground must not only be available, but available in numbers which are not swamped by the plans and planners.