Tenurial security and agricultural investment.
Bellemare, M. F., Chua, K., Santamaria, J., & vu, K.
Food policy (Forthcoming)
Improvements in tenurial security can lead to improvements in food security by increasing agricultural productivity, often by stimulating agricultural investment. In Vietnam, all lands belong to the state, who assigns use rights to those lands to households and individuals. In 1993, the state gave 20-year use rights to growers of annual crops such as rice and maize producers, and 50-year use rights to growers of perennial crops such as fruit and coffee producers. In 2013, as the use rights of growers of annual crops were set to expire, the Vietnamese government passed a law—the Land Law of 2013—that extended the use rights of all landowners by 50 years. We exploit this largely unanticipated shock to study the effect of the Land Law of 2013 on the investment behavior of growers of annual crops. Using a difference-in-differences design, we find that this improvement in tenurial security is associated with a higher likelihood of investment in irrigation technology or soil and water conservation for owners of annual crop plots, which are mainly used to grow staple crops—a result that is robust to controlling for endogenous switching from annual to perennial crops. Our results also suggest that the long-term effects of the Land Law of 2013 are larger than its short-term effects.