Improved Land Rights Might Not Save Farming

As the Tajik government is considering allowing farm owners to trade land leases as a way of raising funds, NBCentralAsia experts warn that farmers are so heavily indebted that they could lose everything in repossessions.



At the end of July, the head of the National Bank of Tajikistan, Murodali Alimardonov, announced that the government is considering bill give people more control over the land by allowing them to buy and sell usage rights.



Land in Tajikistan is owned by the state, and cannot be bought or sold. Farmers hold their land in lease from the state.



The proposed bill would allow lease rights – in the shape of “land certificates” – to be bought, sold and even invested in the banking system. As Akram Kakharov, director of Markaz-Zamin, a government agency involved in land use, explained, the bill envisages that the certificates would entitle the bearer to use a given piece of land either for a fixed term or for life, and to bequeath that right to a family member.



The measure falls short of privatisation, as the state retains the right to reclaim land, as long as it pays compensation. Nevertheless, the aim is to create a fully-fledged land market by 2009, once other legal changes have been made to mortgage and property ownership regulations.



NBCentralAsia experts view these measures as an attempt to ease the huge debt crisis facing the cotton farming sector. Farmers have run up some 400 million US dollars in debt to “futures companies” – firms which lend advance sums on the anticipated cotton crop, paying out in cash and in agricultural inputs such as fertilisers. Although cotton accounts for the bulk of agricultural production in Tajikistan, most farmers do not make enough money from the harvest to cover costs and repay their debt.



Don Van Atta, an expert with the European Union’s support programme for agricultural policy, warns that entire villages could lose their land if the banks took possession after calling in debts for which land certificates have been supplied as collateral. He predicts a vicious circle where the banks refuse to lend adequate sums since the farms are not making a profit, but the latter cannot do so because they cannot access funding.



Economist Hojimuhammad Umarov believes it would have been better to introduce full private ownership of land, allowing a real trade in this asset to develop.



He argues that the issue of certificates has already proved to be marred by corruption, so that a lot of land went to the rich and powerful, and many farmers were left to become hired labour. Umarov fears the law now under consideration will merely exacerbate the divide between the haves and the have-nots.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)