Annex 1: Summary of Recommendations on Madagascar Land ...

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Madagascar:

Land and Property Rights Review


June 2006






Preface

Recognizing the importance of a transparent and well-functioning property
rights regime to meet the growing demand for formalization, reduce disputes
and court cases, improve the investment climate, and promote good
governance, the Government of Madagascar has set in motion an ambitious
process of land tenure reform. Consequently, the Poverty Reduction
Strategy Credit has incorporated the formulation of a new Land Policy and
the piloting of decentralized land administration as explicit development
targets. To support this reform process in a timely fashion, the World
Bank undertook to produce this policy note-A Review of Land and Property
Rights. The note attempts to pull together what we know about property
rights in land in Madagascar and make some "just in time" policy
suggestions.

The Review was conducted as a co-production between the Government of
Madagascar and the following Bank technical "families": Private Sector
Development; Environment, Social and Rural Development; Poverty Reduction
and Economic Management; and the Development Research Group. Moving ahead,
it is important that this spirit of "co-production" is maintained so that
the Government's strategic vision is supported in a consistent manner,
which adds up to more than the sum of its individual parts. In this
respect, the Review will hopefully serve as a useful coordination
instrument.

The composition of the team was Saholy Andriambololomanana (AFCO8), Hans
Binswanger (Consultant), Aziz Bouzaher (AFTS1), John Bruce (LEGEN), André
Houssein (Consultant), Hanan Jacoby (DECRG), Bart Minten (Consultant),
Bienvenu Rajaonson (AFTS1), Yolande Razafindrakoto (Millennium Challenge
Account/Madagascar), André Teyssier (Technical Assistant, Madagascar
National Land Tenure Reform Program), Sahondra Rabenarivo (Consultant),
Ganesh Rasagam (AFTPS), Josiane Raveloarison (AFTPS, co-Task Team Leader)
and Rogier van den Brink (AFTS1, co-Task Team Leader). The Peer Reviewers
were Gaiv Tata (MNCA3), Jolyne Sanjak (US-Millennium Challenge
Corporation), Klaus Deininger (DECRG), and Jesko Hentschel (LCSHD).

Several existing and planned Bank lending operations have an immediate
interest in the formulation of a National Land Policy and this study:

i) The Watershed Management Project has co-financed some of the
background work undertaken for this policy note and would be in a
position to finance a certain number of pilots for better land
administration in the project area;

ii) The Governance and Institutional Development Project (Programme de
Gouvernance et de Développement Institutionnel-PGDI) is providing
direct technical support to the policy reform process;

iii) the Rural Development Support Project (Projet Support de Développement
Rural-PSDR) will co-finance further analytical, but action-oriented,
work on the Madagascar experience with land rights formalization and
background work on land taxation; and

iv) the Integrated Growth Poles Project, which would be interested in
financing a pilot in Nosy Be, a tourist area, where land tenure issues
figure prominently in the challenges faced.

The Review's policy suggestions are based on an assessment of the most
salient land and property rights issues in Madagascar within the context of
relevant international experience. The report serves as input into the
preparation of Madagascar's National Land Tenure Program (Programme
National Foncier). A number of background studies were carried out,
including a literature review and an analysis of existing and new empirical
data to make a first attempt at estimating the economic and financial
benefits of formal property rights registration.

The audience targeted consists of policy makers and analysts in Government,
civil society, the private sector, and the development partners. Interest
of the development partners in land administration issues (e.g. EU, FAO,
France, and IFAD) is significant and growing. During the preparation of
this report, intense collaboration took place with the US MDG Challenge
program, which is supporting the land tenure reform program in a major way.


















































Table of contents

Preface 2
1. Executive Summary 2
Land tenure and land markets 2
Current property rights regimes 3
The economic benefits of the current land titling system 4
Natural resource issues 6
Private sector issues 6
Reforms under way 7
Continuing the reforms 9
Implementation strategy for the decentralization of land administration
12
Conclusion 16
2. Introduction 18
Titling is not always necessary 19
If not titling, then what? 20
The challenges for land tenure reform 23
3. An overview of land tenure and land markets 26
Data used 26
Suitable arable and irrigated land is scarce 26
Farms are small, but evenly distributed 27
Poverty and land ownership are linked 27
Most land is inherited, but active land purchase markets have emerged in
high value areas 29
Subdivided plots do not show lower productivity 31
Land rental markets are limited, but important for the poor 32
4. History of land tenure 36
The customary regime 36
The statutory regime during the colonial period 37
Individual title (1896) 39
Customary ancestral land (1896) 40
Native cadastre (1929) 40
"Colonization" perimeters 40
Native reserves 40
The statutory regime after independence 40
Land grants, sales and leases out of state land 41
Relative tenure security (GELOSE) 42
Land under formal property rights regimes 42
Figure 1: The complex mosaic of existing property rights regimes 43
Conclusion 43
5. Current property rights regimes 46
Property rights registration: time and cost 46
Extra-legal property rights registration: "Petits papiers" 48
6. Land Titling 52
Titling does not facilitate land sales 56
Titling has no impact on the land rental market 57
Titling does not reduce conflicts over land 57
Titling has no impact on access to credit 58
The economic benefits of titling are modest 59
Policy implications 59
7. Preventing open access to natural resources 63
Open access is the root cause of the problem 63
International Experience with Co-Management of Natural Resources 64
Existing legal and policy options for reducing open access in Madagascar
66
Policy Recommendations 67
8. Facilitating land access by the private sector and Modernizing
Administration of Titled Land 68
Titled land is at a premium 68
Investors have difficult access to state land-titled or untitled, through
purchase or lease 70
Existing property rights administration is complicated and not transparent
70
The international Experience on Reforming Land Titling Systems 72
Leasehold property rights 75
Direct acquisition of land by foreigners 76
Mortgages 77
The Zone Franche Industrielle 78
Sector Specific Regulations 79
Other regulations 81
Cost of property rights registration 83
9. Reform agenda, implementation strategy, And Recommendations 86
Overview 86
Legal and regulatory reforms Already accomplished 89
Completing the reform Process 90
Strategies for Accelerating Implementation 93
10. Piloting and Implementation strategy for decentralized land
administration 96
Principles 96
Uniformity in functions, but diversity in implementation mechanisms 96
Sustainability 100
Learning by doing 101
One single implementation program 103
Proposed World Bank assistance 104
Conclusion 104
Annex 1: Summary of Recommendations on Madagascar Land Policy and
Administration 106
Annex 2: Provisional costing of pilots 108
Annex 3: Background Reports 112
References 114

List Of Tables

Table 1: Land availability 27
Table 2: Agricultural land ownership by expenditure quintile (land owners
only) 28
Table 3: Type of ownership by expenditure quintile* 29
Table 4: Land and Land Tenure Data from EPM 2001 29
Table 5: Land Documentation for Rice Plots by Mode of Acquisition (Lac
Alaotra) 30
Table 6: Tenure systems by expenditure quintile for land cultivators*
32
Table 7: Rice yields under various tenure arrangements (EPM 2001) 33
Table 8 Formal registration: time and cost 47
Table 9: Property rights by expenditure quintile 48
Table 10: Land documentation in Lac Alaotra region 54
Table 11: Perceived Benefits of Land Titles by Formal Credit Status 55
Table 12: Perceived Problems of Land Documentation 56
Table 13 A First typology of the various land tenure situations 98
Table 14 Decentralized land administration pilots and land tenure
typologies 100
Table 15 Investment and operating costs for Guichets Fonciers, or "One-
Stop Shops" 110
Table 16 Costs of issuing Certificats Fonciers 111





























1. Executive Summary



The Government of Madagascar is committed to address the dysfunctional
nature of the existing land administration system and the high demand for
some form of formalization of property rights in urban and certain rural
areas. This political commitment to reform is clearly illustrated by a
number of recent Government actions, including the adoption of a tight
timetable for legal and policy refo