The Implications of Rising Land Value on Land Tenure Security

Experience from Kalangala Oil Palm Growers’ Trust – Uganda

Land and Poverty Conference 2016Scaling up Responsible Land Governance14-18 March, 2016 | Washington, DC

Ministry of Agriculture, Animal Industry and FisheriesVegetable Oil Development Project

Nelson Basaalidde1, Connie Magomu Masaba2, Richard Nick Kabuleta2,

Samuel Mabikke3, Solomon Mkumbwa3, Danilo Antonio3, John Gitau3, Harold Liversage4

1. Kalangala Oil Palm Growers Trust (KOPGT) Uganda 2. Vegetable Oil Development Project (VODP) Uganda3. Land and GLTN Unit, United Nations Human Settlement Programme (UN-Habitat)4. International Fund for Agricultural Development (IFAD)

Introduction• Kalangala is a rural District – 70,000 people

• Comprised of 84 Islands of Lake Victoria.

• Oil Palm is on the main Island (Bugala) and 2 smaller Islands.

• Kalangala depends on: Fishing, Lumbering, Agriculture, Livestock and lately tourism for livelihood.

• Predominant cash crop is now oil palm.

• The 3 Islands have turned into a market economy, due to oil palm.

• Accordingly, land has therefore become a major tradeable asset.

Land Tenure Systems

1. Customary

2. Mailo

3. Freehold

4. Leasehold

o Most land is held under Mailo Land Tenure

o Some leaseholds on public land

o Many “absentee landlords” and tenants

Land Tenure in Kalangala

Kalangala Oil Palm Growers Trust (KOPGT).• Established and registered in 2005.

• Target to establish 4,700 ha of oil palm plantations among oil palm growers in Kalangala District.

• In partnership with GoU, OPUL and the Growers.

• KOPGT has a Board of Trustees (BOT) and an operational Secretariat with a team of 28 staff.

• KOPGT offer extension services and financial services to oil palm growers

• Own 10% shares in the private company for the farmers.

• IFAD, GoU and farmers fund KOPGT to run.

The Business Model.

• Tripartite agreement signed in 2005.• Palm Oil Mill capacity – 20 tons of fruits per hr.• Oil Extraction at 20 – 22% of fruits is palm oil.• Hybrid: Nucleus estate/contract farming/joint venture• Smallholders: 1,600 farmers (578 women) harvest ffb & sell to OPUL;

cultivate 3860ha

Producers (Oil Palm Farmers)

Public (GoU) Private Sect (OPUL)

KOPGT

Overview of the Oil Palm PPP

GoU: Purchased and leases land for nucleus estate; support smallholder involvement thru KOPGT); transportation infrastructure

Oil Palm Uganda Limited (OPUL): Buys ffbs; manages nucleus estate of 6500ha and oil palm mill

Kalangala Oil Palm Growers Trust (KOPGT): Intermediary between OPUL and Farmers and GoU;

Investment in Oil Palm Project Investment in Oil Palm Project

• IFAD Loan (USD 52M),

• GOU (USD14M),

• Private sector (USD70M),

• Farmers (USD3.9M)

• KOPGT (USD3.0M),

• Reflows (US 4.4M)

• Total funding USD 147million

Early results/ImpactFarmers:

578 women participating in project as farmers in their own rightIncreased incomes ($390/month per Ha for mature plantations)Improved land rights (landless and women, purchase of land, demonstration of legitimate access to land)Women building houses, educating their children and setting up off farm businesses

Community:Creation of employment (2,000 employed on nucleus estate, 500 in farmer gardens and 1,600 directly as farmers)Improved infrastructure (e.g. 750 km of road network and ferry service) and services (e.g. financial and public)Production in other crops, livestock and complementary agricultural activities, tourism and other non-agricultural enterprises is expanding

Implications on Land Value • Agricultural Land value has increased ten-fold.

• An acre cost UGX 200,000 in 2005,

• Today an acre costs approx UGX 2.5 million.

• A land market has emerged on the 3 Islands.

• Improved roads infrastructure, electricity, etc.

• Increasing land conflicts.• Landlord vs. Tenant

• Tenant vs. Tenant (boundaries)

• Tenant vs. Government

• Neighbouring Districts are demanding from Government to grow oil palm.

• Returns on Oil Palm are higher than other cash crops.

KOPGT interventions• Farmer driven mapping process

Mapping land, rights and claims using the Social tenure Domain Model (STDM) tool

GLTN/UN-Habitat provided technical supportSix implementing blocks on the main Island have been

mapped.1,200 farmers’ parcels with oil palm planted have been

mapped and registered by KOPGT.

• Arbitration in cases of conflict to find remedies.• Sensitisation of the affected tenants and landlords on the

law and documentation.• Owners and tenants have confidence in KOPGT

Lessons LearnedEffective partnership between rural smallholders and the private sector with positive development outcomes is possible

Tenure security important for long term poverty reduction

Simple practical steps can facilitate poor women and men in accessing land.

Lessons LearnedGovernments can play a positive role in agricultural investment projects (policy environment, mobilising smallholders, infrastructure and building trust)Choice of the business partners important -willingness to support smallholders Inclusion of smallholders in all decision-making processes (e.g. BOT) has been key to the project’s successBuilding partnerships takes time

Impact – local economy

Impact – national economy

The oil palm tree

On-farm grading and loading of fruits for delivery to the palm oil mill.On-farm grading and loading of fruits for delivery to the palm oil mill.

Thank you for listening.