Does land title increase agricultural investments and productivity? Evidence from Togo

Abstract

Purpose. This paper assesses the effect of land title on agricultural investment and productivity in Togo. The purpose is to provide empirical evidence on the importance of land titles and so to encourage governments to promote land registration and facilitate small producers’ access to land titles. Results. The results show that land title positively affects investment decision of farmers and recursively the agricultural productivity. The possession of land title and customary rights increases the probability of investment respectively by 13 % and 21 % compared to farmers who do not have any rights on the land they exploit. The investment in turn, determines the level of productivity of the farmers. Scientific novelty. The scientific novelty of this paper is to show that the possession of the land title does not have a direct effect on productivity. This effect passes through the investment which itself depend on credit. The recursive model estimated by instrumental variable regression approach appeared as an appropriated model to understand the effect of land security on the agricultural productivity. Practical value. Since 2018, Togolese government has adopted a land code recognizing the land title as the main guarantee of land security likely to stimulate more agricultural investment and productivity. The results seem to indicate that legal land institutions do not protect the security of land tenure better than traditional institutions. Households, therefore, still essentially refer to local habits and customs that are accepted by their entire community. Public authorities must therefore recognize that local rights are as efficient as legal rights conferred by land title. However, to stimulate land titles demand, Government must remove constrainsts in land market. Specifically, he must struggle against corruption which plagues the country’s legal land institutions.