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Does land lease tenure insecurity cause decreased productivity and investment in the sugar industry? Evidence from Fiji

Author

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  • Kumari, Reshmi
  • Nakano, Yuko

Abstract

Does land lease tenure insecurity cause decreased productivity and investment in the sugar industry? To answer this question, this study examined the impact of weak formal tenure lease arrangements on tenants’ investment and the productivity of sugarcane in Ba province, Fiji. After controlling for potential endogeneity in the choice of lease tenure using instrumental variables (IV), it was shown that tenants under insecure lease tenure (expiring in 0–5 years) achieve significantly lower yields of sugarcane, by 6.5–11 tonnes per hectare, and plant smaller areas of new sugarcane, by 0.14–0.25 hectares on average, than do tenants under secure lease tenure. Insecure lease tenure also negatively affects chemical fertiliser use, although this impact is not statistically significant. An intervention to improve tenure security would likely enhance the production efficiency of and investment in the Fijian sugarcane industry.

Suggested Citation

  • Kumari, Reshmi & Nakano, Yuko, 2016. "Does land lease tenure insecurity cause decreased productivity and investment in the sugar industry? Evidence from Fiji," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 60(3), July.
    • Handle: RePEc:ags:aareaj:292457
    DOI: 10.22004/ag.econ.292457
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    Cited by:

    1. Nida Akram & Muhammad Waqar Akram & Hongshu Wang & Ayesha Mehmood, 2019. "Does Land Tenure Systems Affect Sustainable Agricultural Development?," Sustainability, MDPI, vol. 11(14), pages 1-15, July.
    2. Janesh Sami, 2020. "Time Series Dynamics of Sugar Export Earnings in Fiji with Multiple Endogenous Structural Breaks: Implications for EU Sugar and Industry Reforms," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 18(1), pages 169-189, March.
    3. Moleen Monita Nand & Douglas K. Bardsley & Jungho Suh, 2023. "Addressing unavoidable climate change loss and damage: A case study from Fiji’s sugar industry," Climatic Change, Springer, vol. 176(3), pages 1-20, March.
    4. Vu, Ha Thu & Goto, Daisaku, 2020. "Does awareness about land tenure security (LTS) increase investments in agriculture? Evidence from rural households in Vietnam," Land Use Policy, Elsevier, vol. 97(C).
    5. Adewale Henry Adenuga & Claire Jack & Ronan McCarry, 2021. "The Case for Long-Term Land Leasing: A Review of the Empirical Literature," Land, MDPI, vol. 10(3), pages 1-21, March.

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