Reforming the leasing and the use of agricultural land in Fiji

1. INTRODUCTION – THE STUDY IN PERSPECTIVE

It would be difficult to underestimate the magnitude of the problems relating to the use of agricultural land in Fiji. Likewise, it would be difficult to understate the intractability of these problems – of exactly how difficult it has proven to be to discern an enduring solution. And it is not through lack of effort. Each government since independence, as well as the colonial regime before, has had no choice but to grapple with the land issue. Their failure to reach an acceptable solution has resulted in the human tragedy currently unfolding with the expiry of the Agricultural Landlord and Tenant Act (ALTA) leases. The displaced tenants, wondering where to go, what to do; the landowners, incredulous that until now no one had planned for the expiry of leases, and offended over the consternation that seems to accompany any actual exercise of their constitutional rights as land owners; and others, in between not knowing quite what to say.

But in contemplating previous policy failures one must be tolerant. For in the land we have the conjunction of economics, politics, history, sociology, ethnicity, law, tradition, and even spirituality. Land effectively distils and volatilises all that is actually and potentially flammable in the nation state of Fiji. It must be treated with caution. The very combustible character of land doubtlessly induces a desire to stay well away from it. This is equally dangerous. The pressures that have been building over the last generation, if ignored, or if bottled up for yet another, could well prove too much to contain. The creation of an enduring policy safety valve, therefore, is absolutely vital.

Despite the heated sentiments that appear almost daily in the press, the conditions at the present time are particularly appropriate for the creation of this much needed policy safety valve. The goodwill evinced in the creation of the 1997 Constitution still remains, as does the memory and the general desire never to repeat the 1987 military coups. Fiji has been, and remains, peaceful. Its society and body politic is thankfully free of radical elements. The timing, then, is right and the opportunity must be seized.

This study is motivated by a belief that many stakeholders whose livelihood directly, or indirectly, depends on land, and many individuals who are in a position to influence policy, have not fully appreciated the economic realities that cumulatively and qualitatively have been changing landowner behaviour – in particular, the increasing desire of individual mataqalis to be free to determine the disposition of their lands. Not only has this left the nation, by and large, unprepared for the expiry of ALTA, but it has also induced a widespread, but quite probably erroneous belief, that solutions to the land problem may lie in an extension, or a mere modification, of the legal and policy status quo. However, in this study it is suggested that the interests of the principal stakeholders – landowners and tenants – along with the health of the economy as a whole, can only be properly served by a land policy that takes to its very heart the economic incentives that shape and influence the behaviour of individuals. Accordingly, the objective of this study is to develop a land tenure policy explicitly oriented around economic imperatives.

While this approach was selected with the particular view of remedying the specific problems generated by Fiji’s unique land tenure system, it is important nonetheless to recognise that,

"A massive transformation of land management is occurring worldwide from being located in institutions for "public" decision making to a substantially greater degree of "privatisation" of land management. The moving force behind the privatisation of land management is the politico-economic decision to establish dynamic market economies".

Thus, in experiencing pressure for greater and more sustainable agricultural productivity, and the need to solve the unexpected social and economic side effects relating to its land tenure legislation, it is important to recognise that Fiji is not alone. Conditions in Fiji are unique, but the category of its land tenure problem is not. Accordingly, the study looks at what lessons Fiji may learn form the rest of the world.

The intended contribution of this study is in the form of a policy framework, a strategy, as opposed to the tactical and legal details needed to implement a strategy. It is recognised that this is a weakness. But it is also a strength. For it is contended that a vision – that an over-arching strategy – is what is most urgently needed at this stage. That said, the study does not shy away from details.

Specifically, the study identifies the national interest regarding agricultural land as being served by the creation of an institutional mechanism that will enable leasing transactions to be based on the informed consent of both landowner and tenant. In the process, leasing arrangements will be mutually beneficial to both parties. And with intelligent, mutually beneficial contracts, the potential for discord will be considerably, if not totally, discharged.

The market is proposed as the mechanism that can most expeditiously promote this result. A market orientated land policy has the further advantage of removing the dangerous ingredient of politics from leasing transactions. With respect to rents - the lynch-pin of any leasing transaction - the study contends that within the context of mutually beneficial contracts, and given the magnitude of the tenant community, the national interest requires the identification of a rental structure that simultaneously provides the maximal incentive to the landowner to lease out his land, the maximal incentive to the tenant towards sustainable productivity, and rewards the tenant with a demonstrably fair share of gross agricultural proceeds. A structure that achieves these precise objectives, which reconciles the seemingly opposing interests of landlord and tenant, is identified within the study.

The study also recognises that land policy in Fiji is not just about leasing. It is also about the desire of some mataqalis to resume cultivation of their ancestral lands. The study analyses the opportunities and the pitfalls present in this desire, so that again, informed consent can drive the decision. The other side of this coin is the need for a policy to mitigate the hardship suffered by tenants whose leases expire; to prevent the homelessness and financial losses currently associated with lease non-renewals. This too is addressed.

In the background to all the above are the twin economic concerns of efficiency and equity. It is contended that the market solutions proposed in this study offer the best guarantee of the kind of land use that will safeguard the interests of the economy in general, and sugar, in particular. Likewise, the market solutions offered, when combined with the suggested modest regulatory constraints, serve the interests of equity; and, in the process, promote friendly relations between landowner and tenant.

Of course, one can only hope to arrive at an acceptable policy if the real problems and fears of each party are clearly recognised. Each must know that their concerns have been explicitly taken into account. Equally, it would be foolish to advocate a major change in policy without demonstrating the weakness of the status quo. Consequently, before addressing its policy recommendations, the study explores existing land policy and the effects that it has had on both landowner and tenant.

The study does not try to describe in detail the background to agricultural land tenure in Fiji, the ALTA legislation, traditional landowner protocol, etc. This is fully and effectively covered elsewhere. Rather than reinventing the wheel, then, the emphasis here is concentrated on identifying problems associated with adverse economic incentives that permeate the present system and to identify solutions to these problems.

By endeavouring to both illuminate, as starkly as possible, the source of the nation’s land problems, and to advance a policy vision that has the potential to address these problems, it is hoped that the present study will constructively contribute to the current debate on the proper use of native land in Fiji – both for today and into the next millennium.

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