7.4.1 Resource conservation
7.4.2 Economic efficiency
7.4.3 Stability
7.4.4 Equity
7.4.5 Relevant exercises
Tenure policy bears on four of the five national policy objectives of concern to the policy analyst: resource conservation, economic efficiency, stability and equity. With regard to the fifth objective, economic independence, the relevant issues are similar to those raised under economic efficiency.. In the past, policy analysis has focused principally on the effects of tenure, and specifically communal grazing tenure, on resource conservation and economic efficiency. Most analyses have not given much attention to the stability and equity issues arising in tenure policy, with the effect that some of the more important tenure reforms in the range sector have been promulgated without the benefit of a complete understanding of the issues at stake.
In this segment of the manual we will present first the conventional critiques on the relationships between tenure and resource conservation and economic efficiency. analysis of the relationship between tenure and economic efficiency is complex, and will receive special attention. Relationships between tenure policy and stability and equity will be taken up in subsequent discussions of experiences with state-led tenure reforms, where their importance became apparent in the course of implementation.
Most livestock in sub-Saharan Africa are grazed on communal pastures. Many analysts describe pasture tenure in Africa in terms of open access. Open access, uncontrolled grazing, is considered to be a principal cause of overgrazing and land degradation. Grazing land is a renewable resource. It regenerates at rates determined by natural factors, such as soil fertility and especially rainfall, and by management factors such as intensity of use. Any given area of land has a carrying capacity, the number of livestock which it can sustain while maintaining biologically optimum levels of forage production. Overgrazing is defined as a reduction in forage production below the biological optimum, when considered in terms of some unit of time. Degradation will result when natural forage productivity is reduced more or less permanently, because of long-lasting damage to the productivity of the resource base. This might be due, for instance, to soil erosion caused by chronic overgrazing or change of vegetation composition towards less desirable forage species (Jarvis, 1984).
Maintaining optimum levels of long-term forage production requires that livestock numbers be maintained at carrying capacity. Livestock holders who wish to maximise the forage production and livestock over the long term must make their short-term stocking decisions consistent with long-term maximisation criteria. On communal rangelands this would require individual users to group together to determine the optimum number of total livestock to be allowed on the range, and to distribute grazing rights among all users so that the total number of livestock does not exceed carrying capacity. Experience has shown that, in the absence of strong institutional controls over individual stocking decisions, it is difficult to achieve this kind of co-operative outcome. In communal use situations an individual herder has no incentive to limit his or her stock numbers in order to conserve the range resources, if other herders are able to increase their herds to take advantage of the additional forage made available by one farmer's decision to hold down stock numbers. Hardin (1968) described the logic of over-exploitation of common resources, including communal pastures, as the tragedy of the commons.
"As a rational being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or less consciously, he asks, 'What is the utility to me of adding one more animal to my herd?' This utility has one negative and one positive component.The positive component is a function of the increment of one animal. Since the herdsman receives all the proceeds from the sale of the additional animal, the positive utility is nearly +1.
The negative component is a function of the increment of one animal. Since, however, the effects of overgrazing are shared by all herdsmen, the negative utility for any particular decision-making herdsman is only a fraction of -1.
Adding together the component partial utilities, the rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd."
For Hardin, the only practical solution to this dilemma was to internalise the costs and benefits of pasture use by converting communal pasture lands to individual tenure.
Land tenure also has implications for economic efficiency. objective of economic efficiency implies maximising the current national income and securing an acceptable rate of growth in it. National income is maximised when the net social value of output is maximised; that is, the gross social value of the benefits of an activity exceed the gross social costs by the widest possible margin. Although there are often divergences between social and private values, we shall assume for the moment that the two values correspond. Thus, net social value is equal to profit and economically efficient land tenure is one where profits are highest. Two main conditions must be fulfilled for a land tenure system to be economically efficient:
· Land is allocated to that activity whose marginal product is most valuable to society. Imagine a hectare of land which can be used for the production of either milk or wool. If it is used for milk production the net value to society (i.e. the gross value minus production costs) per additional unit of output is $ 90; if used for wool production, $ 95. In this case, an economically efficient land tenure system would be one which allocates land to someone who is prepared to produce wool rather than milk.· In whatever activity the land is used, it is combined with the other factors of production (e.g. human labour or capital in the form of livestock) in proportions such that the value to society of the marginal unit used of each factor is at least as high as it could be in other activities. If the marginal value would be higher in another activity, then more of that factor should be attracted to that activity.
In what follows, we shall focus on the issue of the optimum combination of land and capital in the form of livestock, i.e. on stocking rate. Overgrazing occurs when, as a result of there being too many animals on the range, profits (i.e. the difference between the value of output and the costs of production), are below the maximum achievable level. Jarvis (1984) suggests that overgrazing occurs whenever the present value of all future livestock production is below its potential as a result of an excessively high current stocking rate.
Figure 7.1 illustrates the short-term relationship between productivity per animal (measured in terms of annual weight gain per animal) and stocking rate (measured in terms of number of animals per ha). At low stocking rates, feed is abundant. But as stocking rate increases, animals begin competing for feed. At this point, average productivity per animal declines. At N', each animal will be consuming only enough forage to maintain itself, and will gain no weight.
Figure 7.1. Weight gain per animal as a junction of stocking rate.
Figure 7.2 presents the same information as Figure 7.1, but superimposed is the relationship between productivity per ha and stocking rate. This second relationship is obtained by multiplying the average productivity per animal by the number of animals at each stocking rate. At low stocking rates, productivity per ha rises with stocking rate. At higher stocking rates, declines in productivity per animal offset increases in the number of animals. The productivity per ha rises to a maximum (at point Ñ) and then declines to zero (at point N').
Figure 7.2. Weight gain per ha as a junction of stocking rate.
At what stocking rate or "density" is economic efficiency (the level of national income) maximised? In the hypothetical case in which livestock production occurred without inputs (or costs) except land, then, in the short term at least, economic efficiency would be maximised at the stocking rate where per ha output is maximised (Ñ). In reality, however, land is not the only input to livestock production. Other inputs are livestock, labour, water, veterinary supplies and so forth, and these inputs have costs.
Costs are introduced in Figure 7.3 - initially just the costs of livestock, which we can for the moment consider as equal to the interest foregone on the capital invested in the herd. If we assume that all the weight gained by the animals will eventually be sold and that every kg of weight gain has the same value, then the "value of livestock output" curve in Figure 7.3 is identical to the "weight gain per ha" curve in Figure 7.2.
In Figure 7.3, maximum profit occurs at the stocking density where the output value curve is at its maximum vertical distance above the cost curve (point N*). Here, total profit is equal to q*-c*. Thus, N* is the economically optimal number of animals to graze. Note that this point is to the left of the stocking density at which output per ha is maximised (Ñ). Unless costs per animal stocked are zero (a practical impossibility), the profit maximising stocking rate will always be lower than the output maximising stocking rate. N+ is the open-access equilibrium, the point at which profits are zero. In an open-access situation, this is the stocking level beyond which rational herders will add no livestock to the range, because the value of output per animal is exceeded by per animal costs.
Figure 7.3. Value of livestock output and costs of herding as functions of aggregate herd size.
Some aspects of these relationships merit further discussion. First, the precise values of N*, Ñ, N+, and N' will vary depending upon the average gain per animal, the price of the gain and the costs per animal. The distribution of animal locations will always be the same.
The model predicts open-access ranges will be stocked more heavily than those under individual tenure. It also suggests that if controls are put in place to limit access to communal ranges, thereby reducing stocking density, then total output and profits will be higher than they would be under open access. Any stocking density to the left of N+ but to the right of Ñ will yield higher output and higher profits than will the open-access equilibrium.
Why does the stocking density under open access exceed the levels at which economic efficiency and profits are maximised? Profit maximisation is achieved at stocking densities below maximum total output. Where there is no control over access to the commons, new entrants will know that they will benefit by adding livestock to the range. As long as the aggregate stocking density remains below the open-access equilibrium livestock production is profitable, although net profit will be less than the maximum. In terms of the model, profit maximising stocking density will more likely result when an individual or some grazing authority has exclusive control over the range. The profit maximising stock density will be maintained where potential users can be prohibited from adding their stock to the range. Once that restriction is removed, the animals added will shift the stocking density above that yielding maximum profit.
The relationship between weight gain per head, output per ha, and costs and profits at different stocking densities is illustrated in Table 7.1. Results are hypothetical but realistic. The table shows how, on a 10-ha piece of land, stocking rate and weight gain per head determine levels of output, costs and profits. also determine stocking densities under different forms of tenure if stockholders are profit maximisers.
Table 7.1. Maximum, optimum and de facto stocking rates.
Note: 1 kg weight gain = $ 1. Costs are $ 30/animal irrespective of stocking rate.
* = Level of maximum profit (optimal)/ha (N*).
** = Level of maximum output/ha (Ñ).
+ = Limit (de facto) at which existing stockowner with one animal will add one further animal.
++ = Limit (de facto) at which new stockowner will introduce one animal.
De facto = What will probably happen in practice when there is no unity of control and benefit.
Under individual tenure, the single herder or enterprise will stock the land at a level of 0.3 head/ha (3 animals/10 ha) - the point at which aggregate profits are maximised. This is less than the stocking rate of 0.4 animals/ha (4 animals/10 ha) at which the gross value of output per ha is at maximum. Under open access, the stocking rate is unlikely to stabilise at either the maximum profit or the maximum output level because individual enterprises do not bear the costs of the decline in all animals' productivity caused by adding an additional animal to the grazing area. Herders will continue adding livestock to the range as long as the benefit for doing so outweighs the cost. For enterprises with no animals on the range (but entitled to put some) this, for the situation shown in Table 7.1, is true of all stocking rates below and including 0.6 head/ha. However, if an enterprise already has one animal on the range, it will add another at all stocking rates below and including 0.5 head/ha (but not 0.6) because at the level of 0.6 head/ha the joint profit it makes from two head (i.e. 2 x $ 35.00) is less than the profit it makes on its single animal (i.e. $ 72.50) at the lower stocking rate.
The analyses presented above suggest that stocking rates are higher and levels of economic efficiency and profit (but not necessarily total output) are probably lower under open access than they would be under individual tenure. Although much lower stocking rates are expected with individual tenure than with other tenure forms, they may not correspond to carrying capacity. Carrying capacity is a biological optimum. The stocking rate associated with the economically efficient optimum (N* in Figure 7.3) may diverge from this for a variety of reasons. This may be especially true if individual herders attempt to maximise short-term profits without concern for long-term consequences. Thus, there may still be scope for public policy intervention to encourage resource conservation, even under individual tenure.
Despite the lower stocking rates and improved resource conservation associated with individual tenure, reforms which attempt to convert communal tenure to individual tenure are likely to have implications for two other policy objectives, stability and equity.
Areas of livestock production in Africa tend to be characterised by low and variable rainfall. Rainfall varies in time and in space. On a year-to-year basis, a given area of rangeland may receive highly variable levels of rainfall. Forage production will, of course, vary with rainfall. Livestock producers in many arid and semi-arid regions of Africa maintain their herds at stable levels by moving livestock among areas which have received relatively higher rainfall levels. Livestock may range over extensive areas and follow regular patterns. For instance, during dry seasons, stock may be kept near permanent water sources. During rainy seasons, stock may be dispersed to pasture areas where ephemeral water supplies have been recharged by rainfall. Such opportunistic grazing strategies may in fact contribute to optimal utilisation of available forage in areas where forage production varies significantly in space and time (Sandford, 1982). Long-distance nomadism and transhumant pastoralism are rational adaptations to variability in forage production over extensive grazing lands.
If, under such circumstances, livestock were maintained within individual "blocks" of land, the number of livestock which could be maintained within the blocks on a year-to-year basis would be highly unstable. The smaller the block of land, the greater the inter-year instability in the number of animals which can be kept. If stable levels of production were to be maintained, the carrying capacity of the area would be determined by the amount of forage produced in low rainfall years. If herd size were permitted to increase to the carrying capacity of the block during high rainfall years, or even to average long-term carrying capacity, the stockowner would be forced to dispose of a high percentage of the herd, probably at depressed prices, during low rainfall years, assuming that he or she wished to maintain proper stocking rates.
These principles are illustrated in Table 7.2. Areas A, B and C are contiguous blocks of land which can either be allocated separately under an individual form of land tenure or merged together to form a single block under a common property or open-access system. On average (i.e. over several years) block C can support somewhat more animals than block A, which in turn can support more animals than block B.
The table contrasts three different scenarios. In scenario one, there is no inter-annual variability in rainfall or carrying capacity. In scenario two, there is inter-annual variability but each block varies between years in the same direction and to the same degree, i.e. rainfall varies in time but not in space. In scenarios one and two, there is nothing to choose, in terms of stability, between individual tenure and common property or open-access tenure.
In scenario three, however, rainfall varies not only over time but also over space. Block A may be having a "good" year while block C is having a "bad" one. It now makes a great deal of difference (almost 100%) to the maximum number of animals which can be kept in the "worst" year, whether animals are kept in three small blocks or in one large one, since the latter option would allow them to move further afield in search of better conditions. Herders would be realising higher levels of overall long-term average income by moving among the three grazing areas in pursuit of available forage. Open access and common property tenures, more so than individual tenures, permit herders to move over extensive areas in pursuit of available forage. The importance of mobility to livestock production in areas where rainfall is spatially variable is borne out by the fact that in some areas where individual grazing units have been demarcated and titled, herders will still graze their stock outside their own areas, as grazing conditions warrant.
Where land is a principal input to production, land tenure will have crucial implications for equity. In theory, open-access tenure should be more equitable than individual tenure or even common property. The smallest holder, regardless of his or her social affiliation, will have an opportunity to put livestock on the communal range. In practice, however, largeholders get a disproportionate amount of the communal forage by virtue of their large aggregate holdings. Smallholders may face labour constraints which limit their ability to range over extended areas.
Table 7.2. Capacity of three areas to support livestock under different rainfall scenarios.
|
|
Rainfall (mm) and number of animals for which there is sufficient feed |
Number of animals which can be kept in the worst year | ||
|
|
Years | |||
|
Area |
1 |
2 |
3 | |
|
Scenario one: Rainfall does not vary from year to year | ||||
|
A |
400 |
400 |
400 |
400 |
|
B |
300 |
300 |
300 |
300 |
|
C |
500 |
500 |
500 |
500 |
|
Total |
1200 |
1200 |
1200 |
1200 |
|
Scenario two: Rainfall varies from year to year and is highly correlated between areas | ||||
|
A |
400 |
600 |
200 |
200 |
|
B |
300 |
450 |
150 |
150 |
|
C |
500 |
750 |
250 |
250 |
|
Total |
1200 |
1800 |
600 |
600 |
|
Scenario three: Rainfall varies from year to year and is not highly correlated between areas | ||||
|
A |
400 |
600 |
200 |
200 |
|
B |
150 |
300 |
450 |
150 |
|
C |
750 |
250 |
500 |
250 |
|
Total |
1300 |
1150 |
1150 |
600 |
Many land-improving investments involve economies of scale. For example, it costs only a third as much per ha to put a perimeter fence round a 100-ha square block of land as around a 10-ha square block. Similar economies can apply to other investments, e.g. livestock water supplies. Not only may it be more economically efficient to install such facilities on large common property or open-access blocks than on smaller individual ones, but also forcing poor producers to accept the individual tenure of small blocks which they cannot afford to develop may make them uncompetitive producers and drive them out of business. Where a general land reform is contemplated, which would convert large areas of communal land to individual tenure, smallholders could effectively be denied access to grazing land altogether.
Exercise 7.1: Land tenure theory (estimated time required: 1 hour).
Question 1. The data in Table 7.3 relates stocking rate in animals per ha to weight gain in kg live weight per head. In addition, it is known that 1 kg of weight gain is worth $ 1.00 and that the costs per animal remain constant at $ 27.50, irrespective of the stocking rate applied. Complete Table 7.3 as per Table 7.1 above and graph the results as per Figures 7.2 and 7.3.
Table 7.3. Stocking rate, weight gain and output value.
|
Stocking rate |
Weight gain |
|
Value ($)/10 ha |
Value ($)/marginal animal | ||||
|
animal/ha |
kg/head |
kg/ha |
output |
costs |
profit |
output |
costs |
profit |
|
0.1 |
200.00 |
|
|
|
|
|
|
|
|
0.2 |
177.80 |
|
|
|
|
|
|
|
|
0.3 |
155.60 |
|
|
|
|
|
|
|
|
0.4 |
133.30 |
|
|
|
|
|
|
|
|
0.5 |
111.10 |
|
|
|
|
|
|
|
|
0.6 |
88.90 |
|
|
|
|
|
|
|
|
0.7 |
66.70 |
|
|
|
|
|
|
|
|
0.8 |
44.50 |
|
|
|
|
|
|
|
|
0.9 |
22.20 |
|
|
|
|
|
|
|
|
1.0 |
0.00 |
|
|
|
|
|
|
|
Question 2. Assuming intentions to maximise profits, derive the following:· The stocking rate limit for an individualised land tenure system.
· The de facto limit at which an existing owner with one animal will add one further animal.
· The de facto limit at which a new stock owner will introduce one additional animal.
|
Important points (7.2-7.4) · Tenure refers to the nature and range of rights that individuals have to land, water and other natural resources in relation to rights exercised by other individual, social groups and the state. · Land tenure policy is concerned with effects of different tenure arrangements on range and livestock productivity and distribution of grazing rights. · Three major land tenure systems in Africa are: - individual · There are different forms of individual tenure. Of these, customary tenure is most prevalent and involves exclusive use rights on a long-term basis with no right for buying and selling the land. · Common property tenure involves collective use, subject to rules of access. · Open-access tenure also involves collective use of land but without defined individual property rights. · Tenure policy has important implications on four national policy objectives: resource conservation, economic efficiency, equity and stability. · Open-access tenure with uncontrolled grazing causes overgrazing and land degradation in Africa. · Since most grazing lands are communal, a strong institutional control over individual stocking rates is essential. · An economically efficient land tenure system should fulfil two conditions: - It must ensure that land is allocated to that activity whose marginal product is most valuable to society, - It must ensure that in whatever activity the land is used, it is combined with other factors of production in such a proportion that each factor gives more return than if used for any other activity. · Studies in Africa have shown that economic efficiency and profit are lower under an open-access system than under individual or common property tenure. · In Africa, where most areas under livestock production are characterised by low and variable rainfall, communal land tenure provides greater stability of income than individual tenure. · Both communal and individual tenure may cause equity problems. Open-access tenure is more equitable than common property and individual tenure. |
