Relationship Between Communal Leasehold Right and Investment in Small-Scale Farms: A Case Study in Kavango West, Mpungu Constituency

Abstract

The government of the Republic of Namibia enacted the Communal Land Reform Act (Act No. 5 of 2002) to ensure the smooth administration and management of communal land resources. The impact of land reform on agricultural production and investments has had mixed results as to whether security of tenure enhances investment and productivity. This study assesses the level of investments made by beneficiaries of the leasehold rights, determines the relationship between access to leasehold rights and investments, and assesses the perceptions of the farmers on the Communal Land Reform Act using the independent T-test, Binary Logistic Regression model and situation analysis. The results indicate that leasehold tenure rights have positive effects on farmers’ decisions to invest in physical farm infrastructure. Private farmers were found to invest more than farmers in the communal land zone did. Using the situational analysis, the perception of the farmers toward the Communal Land reform Act shows that leasehold land rights are accepted to have impact on investments, while the customary land rights do not have significant impact on investments, and the farmers did not recognise its importance. Awareness campaigns on the importance of customary land registration and the importance of farm investments must be intensified. Further research is recommended on farm investments.

Keywords: farm investment, land reform, security of tenure, leasehold rights, binary logistic