Providing land funds

Providing sufficient financing for land
Increasing land funds

Description

Governments and NGOs have implemented land funding programs on a pilot basis in order to develop a successful non-conflictive model by which the rural poor can buy land from willing sellers in the market.

A land funding program should; a) have a good degree of autonomy to ensure that it will reach the needy regardless of their political affiliation; b) provide for full titles, legally registered since the beginning to avoid property right problems that may possibly arise in the subsequent stages of the program; and c) include institution building for the effective functioning of a land funding agency.

Context

In many cases, poor farmers do not have the experience nor the knowledge of land legislation to negotiate a purchase, so that sellers trie to take advantage of them.

Implementation

Some governments have established land financing programs either through land reform institutions (as in Colombia) or as a land bank or a land fund (as in El Salvador in early 1990s and Honduras in mid-1980s respectively). NGOs have also implemented land funding programs to provide the rural poor with the purchasing power to buy land in the market. Programs such as the Fondo Populorum Progressio (FEPP) in Ecuador and FUNDACEN in Guatemala (both are ongoing projects).

Counter-claim

1. The provision of subsidies has been a common feature in programs of governments' and NGOs'. Either by means of negative interest rates or through direct subsidies, net transfers of resources in various degrees occur at the expense of the programs' initial capital. As a result, the programs' capacity to self-perpetuate is diminished considerably. Similarly, there has been an extreme reliance on donor funds as opposed to a more business sound, for profit oriented approach. Because of this, programs have serious difficulties to continue their operations once their start capital has dissipated.