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A successful experience in making farm producers’ land use rights secure.
Written by: Michel Merlet
Writing date: September 25, 2008
An important matter for many countries: making land use rights secure
The surface area of farmland that is worked by someone other than the landowner adds up to a considerable amount in many countries, developed and developing1. Ensuring the use rights of agricultural workers who are not landowners constitutes a fundamental matter for millions of farm producers.
Farming by someone other than the landowner, a labour practice which takes many different forms such as loans, rentals and sharecropping, responds to situations that may be radically different depending on the land tenure system in place. This type of practice actually increases the elasticity of use rights and also enables rapid adjustments that would not be effectuated through property yields alone. Such elasticity is utterly essential for family farming economies, since the availability of labour in a family production unit varies over time.
Continental Europe is full of interesting and diverse examples of how the use rights of tenant farmers’ and sharecroppers’ use rights have been made secure. In adopting a modern tenant farming statue in 1786, Denmark became a pioneer figure in this field. Legislation protecting tenant farmers can be found in the majority of European nations in which commercial family farming prevails. Members of the same family sometimes even rent to each other. Renting has neither the same role nor the same implications as inheritances and inheritance laws function differently in different places.
In the mid-twentieth century, France implemented a radical policy ensuring the rights of tenant farmers and sharecroppers.
French tenant farming laws
French tenant farming laws go back to the 1940s (modification of the Napoleonic Code 04/09/43, then 17/10/45, including sharecropping in 1946)2. French agriculture desperately needed to modernise its production techniques.
Nowadays, the texts that deal with the tenant farming statute are part of the Rural Code. In this paper, the essence of their content is presented.
« The meaning of tenant farming statues is two-sided: it limits the social power of the landlord-lessor over ‘their’ purported tenant farmers, and, correlatively, it limits the amount of unearned income resulting from land holdings, or in other words, it limits the revenue that the landowner reaps from the farming activity ».3
The farmer is guaranteed long-term land access
The contracts are either written or verbal. The minimum length of a lease is nine years. There are also long-term leases of 18 and 25 years, as well as career-long leases (the duration is set for the retirement age of the tenant).
The tenant has the right to renew the lease for nine years, except in the event of a serious incident or if the right to reclaim the land is exercised (the lessor may not take back the land unless the land is to be worked by the lessor himself, his spouse, a descendant of legal adulthood, or a minor descendant having been declared legally independent. This person must permanently and actively participate in farm labour, and must personally inhabit the dwellings located on the asset that was reclaimed).
In the event that the tenant dies, the lease continues in the name of his spouse, his descendants, or his older relatives who must either participate in farm labour or had actively participated over the five years prior to the tenant’s death).
If the tenant improves the asset (through labour or investment), the lessor must give compensation once the lease is over.4
Under the conditions of having exercised a farming profession for at least three years and having worked himself the land that is for sale, and under certain conditions having to do with the structures policy, the tenant has priority for buying the land if the owner wishes to sell it (tenant farmer’s pre-emptive right).
The level of unearned income resulting from land holdings is controlled by the State
Prefecture-level decrees in each farming region set the minimum and maximum between which the rent may vary. Both dwellings and farmland are controlled by these decrees.
The rule regulating the changes in rent prices was to set these in kind, as a quantity of the product per hectare. This rule boils down to rents being indexed in relation to agricultural prices.
A specific device for conflict resolution
Specific jurisdiction was designed in order to address the differences between landowners and tenants, allowing the tenant farming statute to be applied effectively. Rural lease courts are the first place where all litigation concerning the statutes of tenant farming and sharecropping are heard. These courts are made up of two leasing landowners and two renting farmers, and are presided over by a claims judge.
Working in conjunction with other development policies
The lease contract is subject to “structures control”, a policy that aims to avoid an over-concentration of land and to maintain viable farms. The contract’s validity is bound by these regulations and by the tenant’s need to obtain a farming permit.
The implementation of a tenant farming law in France was made possible by the existence of powerful farmers’ organisations and a favourable balance of power at the national level. This policy obtained the desired results; for the most part, it contributed to the modernisation of family farming in regions where the majority of landowners did not work their own land. In addition, the tenant farming law did not cause a drop in the amount of land rented to tenant farmers. The unearned income resulting from land holdings was reduced to a symbolic minimum and the farmers obtained the security necessary for long-term investments. All of this was achieved without having had to resort to an agrarian reform.
Nevertheless, it is interesting that tenant farming is most developed in regions having large annual crops. Conversely, tenant farming is less common in areas where perennial crops, such as vines, prevail. Evaluating land improvement for perennial crops is quite complicated.
Guaranteeing agricultural producers’ right to work the land without being landowners resolves the problems with equal inheritances across a generation and contributes to a sort of resource management that is more sustainable and compatible with the greater interest. This can happen by making renters’, sharecroppers’ or right-holders’ rights more secure, like in the French case with the tenant farming statute. Such a land policy, which is interesting and effective in certain contexts, requires adequate legislation. Only if there are powerful farmers’ organisations that are able to fight for the support of these sorts of laws and to demand their application could these policies be effective. Also, sometimes specific jurisdiction needs to be established so that justice is available for small farmers in such delicate matters.
The Spanish tenant farming policy, which was inspired by what happened in France, had very different effects. Landowners reacted by refusing to yield their lands to be worked by others. Because of this, land access is even more difficult for small farmers in certain regions. The relative weakness of Spanish farmers’ organisations as compared to French agricultural organisations is most likely one of the reasons that explains this relative failure.
Ensuring tenant farmers’ use rights can have distinct effects and can cause some problems in regions where the modernisation of agriculture promoted the consolidation of large farms that rent farmland to a large number of small landowners. This policy would then privilege large productions rather than family farming.
Reorganising property by creating decision-making bodies that deal specifically with land management is another way to correct the problems related to land transfers from one generation to another. The status of these bodies can take a number of different forms, legal, civil society groups, stockholding groups, land holders’ groupings 5, cooperatives. They then rent the land that producers need. Farmers’ rights must be guaranteed, and their production units must correspond to society’s requirements.
In the English juridical context, or Common Law, the land trust produces similar results. The different types of property rights are managed separately and can take on many varied forms.
1According to the FAO, the proportion of farmland being worked by someone other than the landowner (including situations when both the landowner and someone else works the land) in 1970 was at 63% in North America, 41% in Europe, 32% in Africa, 16% in Asia, and only 12% in Latin America. Source: A. de Janvry, K. Macours et E. Sadoulet, « El acceso a tierras a través del arrendamiento » In El acceso a la tierra en la agenda de desarrollo rural. Banco Interamericano de Desarrollo (Sustainable Development Department Technical Papers Series ; §RUR-108), 2002.
2Conceived of during the Peoples’ Front (Front Populaire), the tenant farming statute was then passed by the Chamber of Deputies but then rejected by the Senate, in which the landed gentry were well represented. (Pierre Coulomb, La politique foncière agricole en France)
3Pierre Coulomb, op cit.
4Early on, the portion of the investment that the tenant farmer could recover at the end of the lease was rather small; it increased starting in 1960, when the law reinforced the possibilities for the tenant to invest and to modernise the farm, all the while seeking not to go against the financial interest of the landowner (Coulomb, op cit.)
5« Groupements Fonciers Agricoles » or « Groupements Fonciers Pastoraux »
Coulomb, Pierre. La politique foncière agricole en France. in Cahiers Options Méditerranéennes, vol. 36. CIHEAM - Institut Agronomique Méditerranéen, Montpellier (France).
Rivera, Marie-Christine. FNSAFER, Paris. Le foncier en Europe. Politiques des structures au Danemark, en France et au Portugal. in Cahiers Options Méditerranéennes, vol. 36. CIHEAM - Institut Agronomique Méditerranéen, Montpellier (France).
Chambres d’Agriculture. APCA. Etudes économiques.
Merlet, Michel. Cahier de propositions Politiques foncières et réformes agraires. FPH, APM, IRAM, 2001.
Commentaires de Robert Levesque sur la première version de la fiche.