Landowners vs. Tenants: Tenancy Arrangements, Food Security & Agricultural Sustainability in Egypt
Summary
The Landowners and Tenants Law 96/ 1992 abolished the agrarian land reform rulings of the 1950s & 1960s that fixed the land rent. This affected the distribution of cultivated areas by land holding pattern, increasing agricultural land cultivated by the owner. However, this does not mean that agricultural land available for rent has necessarily decreased in rural Egypt. In many cases, agricultural landowners informally rent their land without registering the rental contracts at the village cooperative, which prevents tenants from formally accessing any services, e.g. agricultural inputs, funding, etc. This affects agricultural production and the sustainability of natural resources, land and water, and thus impacts national food security.
Landowners and Tenants Laws
The agrarian reform laws in 1950s and 1960s were issued to balance the skewed land ownership and the power of big landowners, who possessed 65% of the land, while representing only 6% of landowners (Capmas Yearbook 1991). The skewed conditions did not, however, change much after the implementation of the agrarian reform by the early 1960s as about 6% owned of landowners still owned about 50% of the land. However, creating an upper limit on the size of large landholdings increased middle landownerships between more than 5 feddan and less than 50 feddan (Capmas Yearbook 1991).?
Nevertheless, the fundamental impact of the agrarian reform laws was securing tenants’ positions vis-à-vis landowners by fixing agricultural land rents to enable farmers to focus on agricultural production.??Rent contracts used to be registered at the local agricultural cooperative allowing tenants (land holders) to access subsidized agricultural inputs and services, such as seeds, fertilizers, credit, pesticides, and agricultural machinery in addition to marketing their agricultural produce.
In 1997, the Landowners and Tenants Law 96/ 1992 was made effective and tenants were forced to leave their lands – about 900 thousand tenants - that they had been cultivating for decades. The law abolished the agrarian land reform rulings that fixed the land rent and removed all rights of inheritance in perpetuity to let land rents be decided by the market. However, this was done without introducing regulations on rights and duties that would help landowners and tenants reach satisfying agreements, in addition to the absence of any institutional supervision.?
The result was that?the change of the distribution of cultivated areas by land holding pattern in Egypt (see Chart 1 & 2). The percentage of owned holdings i.e. land cultivated by owner and his household has increased from 65% to 85% between 1989/1990 and 2000/2010 respectively, while the percentage of overall rented agricultural land areas decreased from 16% to about 11% over the same period. Whereas land areas rented for cash dropped from 9% to about 4%, and the percentage of sharecropped land areas declined from 1% to about 0.5%, and land areas rented via other rental arrangements decreased from 6% to about 5% 1989/1990 and 2009/2010 (Agricultural Censuses 1989/1990 & 2009/2010).?
These findings do not imply that rental arrangements have diminished in reality in rural Egypt. However, agricultural landowners – seeking to avoid future surprises, binding obligations and wanting to have an upper hand allowing them to dismiss tenants at any time - do not anymore register their rental contracts at the village cooperative, thus, rental contracts are mainly verbally concluded and mostly for one season, which does not encourage incurring any investments.?
These changes in the Egyptian countryside - in the absence of monitoring and supervision -affect agricultural production and the sustainability of natural resources, land and water, and in turn national food security.
Sharecropping versus Cash Rents
There are different types of rental arrangements in rural Egypt based on sharecropping or cash that vary from one governorate/ village to another. However, absent landowners and busy ones prefer to rent part of their land for cash. The common sharecropping arrangements are based on costs and returns of either one-quarter, one-third, and/or one-half for the sharecropper and three-quarters, two-thirds and one-half for the landowner, respectively. Farmers resorting to sharecropping based on one-quarter are very poor and are considered subsistence farmers. These are considered by landowners as laborers more than tenants. Through this rental arrangement landowners are replacing casual laborers with permanent help to overcome labor shortage and/or cost, and thus one-quarter sharecropper in many cases do not have a say regarding what to cultivate.
In contrast, cash tenants have a say in determining the cultivated crop since they are incurring all the costs, regarding irrigation, seeds, fertilizers, etc. Until 1997 the annual rent of agricultural feddan (acre) was estimated at 22 times the current land tax, ranging between LE200-300. However, after the implementation of the law in 1997 the rent per feddan is determined based on the soil quality and/or produced crop, and supply &??demand.?In 2009, the land rent per feddan ranged between 4-5 thousand pounds, while by 2021, the price doubled ranging between 10-12 thousand pounds per year and tenants have to be pay the rent in advance or in installments (El-Bawaba Newspaper, May 2021).?
Sharecroppers mostly cultivate a cereal crop or berseem (clover), while cash tenants who pay high rents focus on the cultivation of cash crops seeking to maximize their returns - the output per unit area - through increasing the use of agricultural inputs, e.g. fertilizers and pesticides, etc. The excessive use of fertilizers negatively affect the soils, especially if coupled with fresh water scarcity that harms soil fertility, crop yields, and livestock and human health in the long run.?
Regarding on-farm water management, the participation of the tenant in on-field ditch (marwa) improvement is based on his willingness to take part in the process. Findings have shown that cash tenants and sharecroppers based on one-half and less do not welcome any additional effort or extra cost to be borne by them since they do not have a legal holding for a specified duration, which affects the application of water management technologies.
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A farmer from Kafr El-Sheikh stated
Since the tenant bears all the costs and receives only one half of the produce, he tends to neglect the land and leaves the weed to grow without collection, which leads to low productivity. Thus, he receives half the produce with minimum effort. In case of marwa improvement, both the tenant and the owner cooperate based on the ability of the tenant and not on equal sharing of cost. However, in most cases sharecroppers are reluctant to participate because they are only sharecroppers.
Even landowners - especially absent ones - are not willing to incur money or apply for a loan to improve on-field ditches (quaternary channels) if their land is rented for cash or sharecropped. They believe that the beneficiary (tenant) should participate in providing necessary cost and effort.
Furthermore, in Egypt, there is a legal difference between agricultural land holding (heyazah) and land ownership (melk). The landowner is the one who has legal documents proving his ownership and if he cultivates the land by himself he is also the holder of the land, while the landholder/ tenant can have a holding proof – registered rent contract – or he can hold the land informally via a verbal agreement with the owner. Only legal holders - either owners or tenants - are recognized by ministries and other institutions. This means that sharecroppers and informal tenants are not acknowledged in any official interaction.
This prevents land holders (tenants) in many cases from accessing agricultural inputs – mainly fertilizers – from the agricultural cooperative. The Ministry of Agriculture through the village agricultural cooperatives hands over subsidized fertilizers to landowners, not to tenants. Some landowners sell the subsidized inputs on the (black) market, and their tenants have to buy what they need from the market at high prices (Abdel Rahman Barakat February, 2022).
Informal rent agreements also limit tenants’ chances of applying and receiving a loan from the Agricultural Bank and other formal financial institutions at subsidized interest rates that would enable them to invest in land and/ or water improvements to increase their incomes and reduce their cost as well as applying suitable climate change adaptation measures. The Agricultural Bank has put the following conditions for farmers to obtain a loan:
·??????The agricultural holding certificate and,
·??????the personal ID,
·??????then the land is inspected, and the necessary loan is provided to the farmer (El-Masry Elyom Newspaper, Febraury 2021).
Therefore, many tenants resort to private lenders or local NGOs that provide them with loans at high interest rates that are mainly used for personal affairs.
Conclusion
Existing tenancy arrangements need to be reviewed and institutional supervision/ support mechanisms have to be put in place. The continuation of such informal arrangements can have major impacts on natural resources, agricultural land and water for irrigation, and thus food production and national food security in the long run.?