WE WANT DEMOCRACY NOW!

The Pacific Islands Forum’s Ministerial Contact Group on Fiji is to visit the country in the next few weeks to better assess the situation there.

The Group, comprised of the Prime Minister of Tonga, the Foreign Ministers of Australia, Papua New Guinea and New Zealand, and Ministers standing in for the leaders of Tuvalu and Samoa, met today in Auckland.

The group last met in 2008 amid unsuccessful attempts to seek Suva’s co-operation to restore democracy by 2009.

The meeting included a report from the Fiji interim government presented by its Foreign Minister, Ratu Inoke Kubuabola, but the New Zealand Foreign Minister, Murray McCully, says the ministers found no signs of progress.

“The assessment we made is that there isn’t good news. Obviously there aren’t going to be elections before 2014 and some would say there is even doubt about that date. There has obviously been concern about human rights and the rule of law and that wasn’t a very difficult assessment for ministers to make.”

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4 Responses to “WE WANT DEMOCRACY NOW!”

  1. Termite Terrorists Says:

    People can kiss goodbye to democracy and return to the rule of law in Fiji for the feaseable future. Even if there is an election in 2014 (doubtful) it will just be a puppet regime controlled by the incompetent Fiji military. ‘Bhaini’marama is just another two bit dictator as emerges from the swamps of history every now and again. The coup is here to stay and the people who will suffer most will be the poor indians, particularly the sugar farmers and their children – sadly, backing the wrong horse has been a disaster for them – in both the short term and the long term. Classic case of shooting yourself in the foot. Too bad.
    But never fear – there is some hope – the brave Fiji military (whose involvement in any new international peace keeping missions has gone) are on the front of the battlefiled against the termite terrorists!!!
    So we should all sit back, relax, have a laugh and watch the continuing spiralling downwards of the nation – led by a bunch of thugs and supported by world recognised dancing and coup apologists like crosbie walsh, jim anthony, gates, pryde and co – good luck Fiji!!!

  2. rokobatidua Says:

    Man, we need to fix this pufta asap!

  3. Nostradamus Says:
    Solivakasama: Material for a new thread: Land rents in the news: Raising land rental rates is key to getting land into production. There has to be an incentive, not a decree or another way of exploiting Fijian landowners. Share of revenue from the agricultural (or hotel) product is the way to go. Fiji’s standard is currently among the worst in the World. No wonder no one wants to rent land! Make the share 20-30% of product and all the land anyone wants will be forthcoming. The problem is tenants want “free land” and on this basis no landowner wants to give it to them. http://fijivillage.com/?mod=story&id=0806106fc9af393e4eacc4a4ef2352 NLTB wants new market rate system Publish date/time: 08/06/2010 [16:50] The Native Land Trust Board has forwarded a submission for the removal of ALTA and the implementation of a new rental system based on the market rate. General manager Alipate Qetaki confirmed that their submission has been forwarded to the government’s Land Reform Technical Working Committee. Qetaki said while ALTA exists for now, NLTB would prefer a new market rate system. He added that they are hoping that the new system would be implemented by the end of the month. The following paper is pertinent. Land rentals should be based on percent of revenue (not profit, not unimproved capital value, both of which are easily manipulated). Revenue is more visible – you can see the product and you know the price. REFORMING THE LEASING AND THE USE OF AGRICULTURAL LAND IN FIJI: An Economic Incentive Approach By John Davies and Courtney L. Gallimore John Davies is Professor and Head, Department of Economics, Acadia University, Wolfville, Nova Scotia, Canada. Courtney L. Gallimore is Lecturer, Department of Economics, University of the South Pacific, Suva, Fiji. The authors would like to express their deep gratitude to the numerous individuals consulted throughout Fiji who provided invaluable insights into land issues, the problems they confront and the hopes they nurture. Thanks must also go to those who commented on earlier drafts of this study and cleared up many misconceptions in the process. Of course the authors alone are responsible for any errors or fact or omission. This study, it must be emphasised, reflects the views of the authors alone. It in no way relates to the official position of any institution to which the authors belong or have belonged. The first draft of this report was written and circulated for discussion purposes in September of 1999. With some minor amendments introduced in the light of feedback and also to update certain factual information the Report was published on June 8, 2000, at: http://maorinews.com/karere/leases/cover.htm EXECUTIVE SUMMARY This report argues that current problems surrounding the tenure and the use of native land have at their heart a single primary problem – the failure of leasing contracts under ALTA to be mutually beneficial to both landowner and tenant. Tenants have benefited, but landowners have not. Consequently, as ALTA leases expire, many mataqalis are refusing to renew them, either at all, preferring instead to cultivate their own land, or else not renewing them under the auspices of ALTA. The primary, but not the only, problem for landowners with ALTA is that the rents it prescribes are extremely low. In 1995, ALTA rents averaged $36 per hectare, a figure far below any other country for which the author was able to find details. Thus, for example, the daily rental proceeds from an average 4.2-hectare farm – just over 40 cents per day – are insufficient for its landowner to purchase a newspaper! For sugar land, which carries higher rentals, the average rents per hectare as of March 2000 were $65. Had the rental formulas used in the most tenant-friendly of other countries been applied in Fiji, average rental rates on sugar land would be in the order of $275- over $300 per hectare, not $65 per hectare. ALTA, then, has exploited landowners by denying them rents based on the true economic contribution of their land to agricultural production. Tenants, by contrast, have done exceptionally well under ALTA. Not only have they benefited from low rents, many (non-cane farmers in particular) have managed to avoid paying any rent at all. Indeed, in a good year, only 60% of the total rents contractually payable to the NLTB are actually paid by tenants. The economic position of tenants on sugar leases has also been advanced by: • Subsidies from the European Union. • One of the most advantageous divisions of sugar revenues between miller and grower to be found anywhere in the world. • From a rental formula in ALTA that ensures that none of the EU subsidies, or any windfall gains from devaluation, are shared with landowners. The reason why existing land tenure legislation has so exploited landowners is to be found in the history of the country. While the colonial government recognised Fijian ownership of native land, that recognition was evidently enough of a concession. More pressing, were the needs to maintain sugar profits and colonial finances. These were sustained through the exploitation of labour, and the instrument of exploitation was indenture. But once labour became emancipated and demanded both land security and greater shares of sugar revenues, there was no choice but to follow the path of least resistance and shift the burden of indenture on to land. And currently, the primary instrument of land’s indenture is the ALTA legislation, which effectively emasculates the ability of the NLTB to act as trustee to the landowners. Under the combined influences of ALTA and the indenture of native land, the last 30 years has witnessed a huge transfer of real income from landowner to tenant. Agricultural productivity has also suffered in that there are few positive incentives in the ALTA legislation that encourage tenants to improve farm productivity. Similarly, there are no effective measures in the legislation to discipline tenants who do not farm efficiently or even pay their rent. The most immediate consequence of ALTA is that it provides no incentive to the landowner to lease his land. Given the low rents it permits, even the most inefficient landowner/farmer would lose nothing by cultivating his own land as opposed to leasing it out. And by minimising the potential pool of available leases, a continuation of ALTA constitutes the gravest possible threat to the tenants’ future. For tenants, then, as well as for landowners, ALTA is the problem, not the solution. The study sees the solution to the ALTA problem as lying in the creation of an institutional mechanism that will enable leasing transactions to be based on the informed consent of both landowner and tenant. In the process, leasing arrangements will be mutually beneficial to both parties. The market is proposed as the mechanism that can most expeditiously promote this result. A market orientated land policy has the further advantage of removing the dangerous ingredient of politics from leasing transactions. To achieve market solutions, the study advocates the creation of a land exchange within which all agricultural leasing would be transacted. Within this land exchange, the NLTB would function not simply as trustee to the landowners but also as a broker or agent, providing the specialised knowledge that is necessary for leasing contracts to be based on informed consent. Tenants too would have their own expert counsel to promote intelligent contracts on their part. Within certain limits, market negotiations would be used to determine conditions of tenancy and rent levels. With respect to the structure of rents (as opposed to the level of rents), the study contends that the national interest requires the identification of a rental structure that simultaneously provides the maximal incentive to the landowner to lease out his land, the maximal incentive to the tenant towards sustainable productivity, and rewards the tenant with a demonstrably fair share of gross agricultural proceeds. A structure that achieves these precise objectives, which reconciles the seemingly opposing interests of landlord and tenant is identified within the study. This proposed rental structure combines a fixed rental with a ‘diminishing marginal sharecropping supplement’. The study also recognises that future land policy in Fiji will not just be about leasing. It must also be about facilitating the desire of some mataqalis to resume cultivation of their ancestral lands. It is contended that an extension of the practice of contract farming offers a tried and tested method for successfully integrating subsistence farmers into modern commercial agriculture, something imperative for both the nation and for Fijian landowners when finally they have the opportunity to profit from their land assets. Alongside the need to facilitate the entry of mataqalis into commercial agriculture, is the related need for a policy to mitigate the hardship suffered by tenants whose leases expire; to prevent the homelessness and financial losses currently associated with lease non-renewals. It is suggested that a most effective policy would be to require all future leases be split into a commercial agricultural lease and a separate residential lease. The benefits of this are numerous, including the prevention of homelessness currently associated with lease non-renewals, and the ability to make a tenant’s residential investment realisable in cash through the sale of residential leases. This, in turn, would promote the mobility of labour and the general efficiency of the country’s labour market. With respect to the critically important sugar industry, instead of the end of ALTA being the crisis that many fear, in point of fact it offers a wonderful opportunity to modernise and reorganise the industry for the new millennium. It offers a clean break from many of the counter-productive incentives, practices, and attitudes that have been dulling innovation and crippling farm productivity. The move to a market-based leasing system not only maximises leasing opportunities to tenants, it further offers the chance for the best farmers to acquire the best leases and to increase their land holdings. It also permits landowners to engage in sugar production in a larger scale so as to permit realisation of the numerous efficiencies possible under a comprehensive system of contract farming. Given that EU subsidies are declining, and will inevitably be phased out, and that the current division of sugar proceeds between grower and miller has become unsustainable, these developments offer sugar a realistic opportunity of accommodating itself to the market realities of the new millennium. TABLE OF CONTENTS 1. INTRODUCTION – THE STUDY IN PERSPECTIVE 1 2. ARE ALTA RENTS FAIR? 4 3. INDENTURED LAND – THE CAUSE OF THE LANDOWNERS’ EXPLOITATION 12 4. THE EFFECTS OF THE CURRENT ALTA RENT FORMULA 16 4.1 The Economic Consequences of ALTA 16 The Equity Effects of ALTA 16 The Efficiency Effects of ALTA 20 4.2 The Sociological Effects of ALTA 22 4.3 The Political Effects of ALTA 22 5. TOWARDS A SOLUTION TO THE LAND PROBLEMS 24 5.1 Land and Property Rights 24 5.2 Facilitating the Consummation of Mutually Beneficial Leasing Contracts 26 5.3 Housing Former Tenants Whose Leases Have Expired 28 5.4 Efficient Rental Formulas, Share-Cropping and the Problem of Sub-leasing 29 Efficient rents – an example 31 6. LANDOWNERS TAKING BACK THEIR LAND 34 6.1 Contract Farming 35 7. CONCLUSION – THE WAY FORWARD 43 APPENDIX 1 46 APPENDIX 2 49 Mumias Sugar, Kenya  Booker McConnell 49 1. INTRODUCTION – THE STUDY IN PERSPECTIVE It would be difficult to underestimate the magnitude of the problems relating to the use of agricultural land in Fiji. Likewise, it would be difficult to understate the intractability of these problems – of exactly how difficult it has proven to be to discern an enduring solution. And it is not through lack of effort. Each government since independence, as well as the colonial regime before, has had no choice but to grapple with the land issue. Their failure to reach an acceptable solution has resulted in the human tragedy currently unfolding with the expiry of the Agricultural Landlord and Tenant Act (ALTA) leases. The displaced tenants, wondering where to go, what to do; the landowners, incredulous that until now no one had planned for the expiry of leases, and offended over the consternation that seems to accompany any actual exercise of their constitutional rights as land owners; and others, in between not knowing quite what to say. But in contemplating previous policy failures one must be tolerant. For in the land we have the conjunction of economics, politics, history, sociology, ethnicity, law, tradition, and even spirituality. Land effectively distils and volatilises all that is actually and potentially flammable in the nation state of Fiji. It must be treated with caution. The very combustible character of land doubtlessly induces a desire to stay well away from it. This is equally dangerous. The pressures that have been building over the last generation, if ignored, or if bottled up for yet another, could well prove too much to contain. The creation of an enduring policy safety valve, therefore, is absolutely vital. Despite the heated sentiments that appear almost daily in the press, the conditions at the present time are particularly appropriate for the creation of this much needed policy safety valve. The goodwill evinced in the creation of the 1997 Constitution still remains, as does the memory and the general desire never to repeat the 1987 military coups. Fiji has been, and remains, peaceful. Its society and body politic is thankfully free of radical elements. The timing, then, is right and the opportunity must be seized. This study is motivated by a belief that many stakeholders whose livelihood directly, or indirectly, depends on land, and many individuals who are in a position to influence policy, have not fully appreciated the economic realities that cumulatively and qualitatively have been changing landowner behaviour – in particular, the increasing desire of individual mataqalis to be free to determine the disposition of their lands. Not only has this left the nation, by and large, unprepared for the expiry of ALTA, but it has also induced a widespread, but quite probably erroneous belief, that solutions to the land problem may lie in an extension, or a mere modification, of the legal and policy status quo. However, in this study it is suggested that the interests of the principal stakeholders – landowners and tenants – along with the health of the economy as a whole, can only be properly served by a land policy that takes to its very heart the economic incentives that shape and influence the behaviour of individuals. Accordingly, the objective of this study is to develop a land tenure policy explicitly oriented around economic imperatives. While this approach was selected with the particular view of remedying the specific problems generated by Fiji’s unique land tenure system, it is important nonetheless to recognise that, “A massive transformation of land management is occurring worldwide from being located in institutions for “public” decision making to a substantially greater degree of “privatisation” of land management. The moving force behind the privatisation of land management is the politico-economic decision to establish dynamic market economies”. Thus, in experiencing pressure for greater and more sustainable agricultural productivity, and the need to solve the unexpected social and economic side effects relating to its land tenure legislation, it is important to recognise that Fiji is not alone. Conditions in Fiji are unique, but the category of its land tenure problem is not. Accordingly, the study looks at what lessons Fiji may learn form the rest of the world. The intended contribution of this study is in the form of a policy framework, a strategy, as opposed to the tactical and legal details needed to implement a strategy. It is recognised that this is a weakness. But it is also a strength. For it is contended that a vision – that an over-arching strategy – is what is most urgently needed at this stage. That said, the study does not shy away from details. Specifically, the study identifies the national interest regarding agricultural land as being served by the creation of an institutional mechanism that will enable leasing transactions to be based on the informed consent of both landowner and tenant. In the process, leasing arrangements will be mutually beneficial to both parties. And with intelligent, mutually beneficial contracts, the potential for discord will be considerably, if not totally, discharged. The market is proposed as the mechanism that can most expeditiously promote this result. A market orientated land policy has the further advantage of removing the dangerous ingredient of politics from leasing transactions. With respect to rents  the lynch-pin of any leasing transaction  the study contends that within the context of mutually beneficial contracts, and given the magnitude of the tenant community, the national interest requires the identification of a rental structure that simultaneously provides the maximal incentive to the landowner to lease out his land, the maximal incentive to the tenant towards sustainable productivity, and rewards the tenant with a demonstrably fair share of gross agricultural proceeds. A structure that achieves these precise objectives, which reconciles the seemingly opposing interests of landlord and tenant, is identified within the study. The study also recognises that land policy in Fiji is not just about leasing. It is also about the desire of some mataqalis to resume cultivation of their ancestral lands. The study analyses the opportunities and the pitfalls present in this desire, so that again, informed consent can drive the decision. The other side of this coin is the need for a policy to mitigate the hardship suffered by tenants whose leases expire; to prevent the homelessness and financial losses currently associated with lease non-renewals. This too is addressed. In the background to all the above are the twin economic concerns of efficiency and equity. It is contended that the market solutions proposed in this study offer the best guarantee of the kind of land use that will safeguard the interests of the economy in general, and sugar, in particular. Likewise, the market solutions offered, when combined with the suggested modest regulatory constraints, serve the interests of equity; and, in the process, promote friendly relations between landowner and tenant. Of course, one can only hope to arrive at an acceptable policy if the real problems and fears of each party are clearly recognised. Each must know that their concerns have been explicitly taken into account. Equally, it would be foolish to advocate a major change in policy without demonstrating the weakness of the status quo. Consequently, before addressing its policy recommendations, the study explores existing land policy and the effects that it has had on both landowner and tenant. The study does not try to describe in detail the background to agricultural land tenure in Fiji, the ALTA legislation, traditional landowner protocol, etc. This is fully and effectively covered elsewhere. Rather than reinventing the wheel, then, the emphasis here is concentrated on identifying problems associated with adverse economic incentives that permeate the present system and to identify solutions to these problems. By endeavouring to both illuminate, as starkly as possible, the source of the nation’s land problems, and to advance a policy vision that has the potential to address these problems, it is hoped that the present study will constructively contribute to the current debate on the proper use of native land in Fiji – both for today and into the next millennium. 2. ARE ALTA RENTS FAIR? A critical part of the debate about ALTA relates to the appropriateness of the rental payments it prescribes. Representatives from the tenant community have expressed the view that the basis for fixing current rentals is reasonable and that concerns of landowners for greater rental incomes could be met through minor quantitative adjustments to the existing formula . Landowners, however, argue that they are wholly inadequate and that a complete re-writing of the very principles used to fix rents is required. Also, from landowners, we hear questions about the efficacy of the Native Land Trust Board (NLTB) in collecting rents. The following section seeks to analyse the level and structure of agricultural rents with the objective of laying bare those facts and principles that can be used to reach tenable conclusions on the appropriateness of the current ALTA formula. Consider actual rental rates first. ALTA rents are fixed at a maximum level of 6% of the “unimproved capital value” (UIC) of the land. Now whereas “market values” can be established by an auction and are objectively clear to see in the case of freehold title (which, with some important qualifications can serve as a benchmark for market values for native land, as will be shown below), “unimproved capital values” are determined by professional valuers employed to make such determination under the Act. Actually, there should be very little difference, if any, between the market-based “imputed price for land” (ie. the shadow price of land) and the “unimproved capital value of land” and the shadow price of native land, as estimated in Appendix 1 of this study provides figures which are of the same order of magnitude as the UIC values currently used in ALTA. The difficulty, however, is that under ALTA UIC values are only used to fix the MAXIMUM rent level that theoretically could be applied to any lease (ie. the 6% figure): the legislation actually says nothing about the actual rent levels which in practice are applied. The latter task is delegated to a Tribunal, established under the ALTA, and this has the discretion to set the rent on individual leases anywhere in the range of 0-6% of UIC values. And once it has done so tenants can appeal their rental assessment back to the Tribunal and ask for a reduction. The end result is that actual rentals instead of being determined by a clear formula – 6% of unimproved capital values – are actually determined by a political process, by the legal and political power tenants are able to utilise in appealing their rental rates. What makes matters worse is that the 6% UIC figure is widely and erroneously projected to be the actual rent formula when in reality rents are much closer to 1% of UIC values (see footnote 7). What is objective, by contrast, is the actual level of rents payable according to the historical ALTA formula. In October 1995, a total of 201,013 hectares of land were leased under ALTA which were assessed to carry a collective rental of $7,344,455. Accordingly, rental payments averaged $36 per hectare per year. This is equivalent to a dozen bottles of beer, per acre, per year! It is not simply the level of rents that is important, but whether the assessed rents are actually paid. In the above noted year (1995), of the $7.3 million contractually payable on ALTA leases only $4.4 million was actually paid . In other words, during 1995, which was a rather good year for rent collections, only 60% of the rent payable was actually paid by tenants. With respect to the non-payment of rents, a significant pattern exists between cane and non-cane leases. Concerning cane farming, the rent normally does get paid as it is taken off the top as a deduction from the earnings of the cane farmer before the farmer actually receives them. Landowners who lease land to non-cane farmers are not so lucky, and in a good year less than 50% of the total rentals that should be paid, actually are paid. It is difficult to conceive that the situation would be any different had cane farmers the responsibility for directly paying rents. In any event, looking at the total picture, clearly, as a rent collector, the evidence suggests the NLTB is less than adequate! It also indicates that many tenant farmers just do not take seriously their contractual obligation to pay rent. While it clearly tempting to admonish the NLTB for its track record in collecting rents, the real problem lies not with them but with the ALTA legislation and its administration. While the NLTB can seek legal redress against negligent tenants, the process is time consuming. And a favourable adjudication would only allow either the recovery of rental arrears or the eviction of derelict tenants, neither of which would compensate for the expensive legal costs involved. Hence the poor track record of the NLTB in terms of collecting rents is attributable not to any lack of interest or desire, but to a cost benefit analysis of the legal remedies available to them under ALTA. For sugar lands, which comprise about 40% of all agricultural land rentals – but which carry the highest agricultural rents and which generate by far the largest source of agricultural income for the NLTB – as of March 2000, the average rent per hectare was $65 . This figure is approximately 1.15% of the assessed unimproved capital value of average cane land . This demonstrates clearly the practical importance of the political process in determining rents. Equally it attests to just how misleading to the uninformed is the 6% UIC value formula that appears in the ALTA legislation. But what about the level of rents? Is $65 per ha per year appropriate for sugar land? This can be analysed in a couple of ways. First, consider land as an asset like any other asset. Indeed, it is the only asset possessed by many Fijians (their own labour aside). Now, the owner of any asset employed in the market to create wealth is entitled to earn a rate of return on that asset. The Fiji Sugar Corporation (FSC), for example, for many years paid dividends equivalent to a 15% rate of return on the market value of its shareholders’ investment. Few businesses would make investments in productive assets that carried less than a 10% real rate of return. Even the European Community in evaluating the desirability of funding capital works in Fiji judges that they should be able to sustain a 12% rate of return. Of course, most commercial ventures carry with them a degree of risk that the entire investment might be lost. Normally, the greater the anticipated risk, the greater the rate of return expected by investors. Now, when a mataqali invests its land in a venture there is no possibility that the land can be totally lost, so in some respects landowners, when using their land for leasing purposes, invest it in a risk free venture. At the same time there is a risk that tenants might, through poor farming practices, exhaust the land, rendering it next to worthless to the landowner when ultimately he takes possession. But if, for arguments’ sake, we take the extreme case and assume that land investments are totally risk free, then they would approximate, in nature, perpetuities or guaranteed investment certificates backed by the public treasury. These sort of risk free financial instruments normally carry a modest rate of return, usually a real rate in the order of 3%, which, given Fiji’s current inflation rate of 3%, would translate into a nominal rate of 6% per annum. What about the actual economic returns to the asset land? Well, the current market value of an acre of agricultural land is about $4,500 (Fiji Times, May 8, 1998, p.5) which equals $11,120 per hectare. A 10% nominal rate of return on this asset would be over $1,000 per hectare per year. Of course $1,000+ per year may be too much to expect. After all, freehold title is a ‘thin’ market. Accordingly, the demand for freehold, and the price of freehold, may be higher than the value of Native Land. In principle, one could overcome the absence of an explicit market for native land by computing a “shadow price” based on the capitalised value of the income it can generate. Appendix 1 performs just such a calculation using deliberately conservative assumptions so as, if anything, to err on a price that is too low rather than too high. The estimated shadow price for native land is $7,619 per ha., a figure of the same order of magnitude as that established by valuers under ALTA for top quality sugar land. But even according to this shadow price, market based rents would still average over $700 per ha per year. And even the 6% “risk-free” return, when applied to land valued at the shadow price, would still yield over $450 per ha per year. To say that current ALTA rents of $65 per hectare are somewhat modest would be a huge understatement. They amount to an annual nominal rate of return of 0.58%, when land is valued at current freehold prices ($11,120 per ha), or 0.85% at the estimated “shadow price”. Moreover, given the 3% current inflation rate, the real rate of return currently enjoyed by landowners is essentially zero . Now, who in their right minds would invest their assets in projects yielding a zero real rate of return? And which business leader or politician, anxious about the economy, can honestly look landowners in the eye and advocate that in the “national interest” they, the landowners, should continue to lease out their land for essentially nothing? A second approach to judging the appropriateness of current rentals would be to compare rents with the incomes which land can produce. Given current poor farming practices, the yield of cane in Fiji averages out at the rather low figure of 55 tonnes per ha . Now, the price of cane varies considerably depending on market conditions, from less than $50 per tonne to over $80 in the drought year of 1997/98. If we assume a $50 average value, then one hectare can produce 55×50 or $2,750 of income for the farmer. Rent payments, then, would amount to 2.36% of earnings, an utterly insignificant figure. It is instructive to compare the landowners’ effective 2.36% share under ALTA with the practice in other countries. In India, sharecropping based on a 50/50 division of the crop between tenant and landlord has been widely applied, both in the past and at present . Interestingly, a legacy of this practice survives amongst Fiji’s Indian community in the so-called adhiya pe system. This involves a freehold landowner, or, more commonly, a lease holder (who may have retained the lease over his farm and then migrated or gone into another line of business) informally and illegally sub-leasing his farm to another tenant in return for a 50% share of that tenant’s crop. Similar 50/50 splits have been commonly applied in other Asian countries and in Latin America . In Sri Lanka, legislation is in effect that restricts the landlord’s share to 25% (though this restriction has encouraged concealed 50/50 arrangements) . In Africa, where leasing is often done within family units, where land scarcity has not been so pronounced, and where the distribution of income and status has tended to be more equal, rent levels tend not to have been so exploitative. Particularly revealing is the case of Kwazulu in South Africa where, like Fiji, land is leased primarily for sugar cane production and where, as is also true in Fiji, the renter assumes all production costs. Here, the renter pays the landowner between 10-15% of gross income . As economies mature and agricultural productivity increases, and as the “reservation wages” of tenants’ increase (as a result of a greater availability of alternative employment opportunities) the shares going to the landowner also typically decline, but often not by much. Thus, in the state of Louisiana in the USA, tenants on sugar cane lands pay the landowner either one fifth (20%) or one sixth (16.67%) of gross income . Here the tenant, as in Fiji, assumes all production costs. In Queensland, the share going to the landowner is lower still, at only 10% of the value of the cane crop though it is sometimes significantly more if any costs are borne by the landlord. The international comparisons listed above are summarised in Figure 1 below: Figure 1 Rent Payments as a % of Gross Agricultural Production by Country While the figure above shows the rent paid on sugar lands to be completely out of line with international comparisons, the same will also be true for many other crops which both produce a greater dollar value of output per hectare than does sugar, and which also benefit from lower rents than sugar land carries . Indeed, so completely out of line are Fijian agricultural rentals that it is tempting to ask whether this is by accident or design. In this regard, it is sometimes the case that rentals are deliberately suppressed by governments as an instrument of social policy. In Western Europe, social activists have perennially expressed concern over its class structure and the huge imbalance in the distribution of wealth and income  with landowners being at the very top of the wealth/income scale. Responding to this, governments over the last two centuries have rigorously controlled agricultural rentals so as to produce for the landowner a real rate of return varying from only 1.3% in Belgium to 2.5% in France and 3% in the UK. The objectives here were deliberately to make leasing an uneconomic option so as to engineer a progressive transfer of real income from landowner to tenant, and to preserve the concept of the family farm by making it unattractive for investors to profit from the acquisition and letting of land. It should be noted, however, that after the UK joined the common market in 1975, and availed itself of the prevailing agricultural subsidies, land values substantially increased allowing landowners to command a rate of return on let farms of 10%. And when rent controls were relaxed in 1995, rents jumped by a further 50%. But even before the UK relaxed its rent controls, and even in the extreme cases of Belgium and France, the landowners rates of return were still more than double those in Fiji. This leads one to question whether social engineering, the calculated desire to deliberately suppress rents so as to effect an income transfer from landowner to tenant, was not a major component of ALTA. Perhaps the easiest and clearest way to relate ALTA rents to international levels is to go back to the sharecropping principle and compare rent as a proportion of gross income. In this regard it is instructive to note that were rents in Fiji to be set according to 10% of average cane crops – the absolutely lowest level found amongst international comparisons  they would amount to over $275 per hectare, or over 4 times current ALTA rents ! By the same token, it is noteworthy that were the ALTA rent formula actually enforced, in other words were actual rents to be set at 6% of UIC values, the actual rent that would be paid by tenants on sugar land would be $340 per hectare , a figure that is certainly compatible with international standards. Given the above context, the effect of the recent proposals of the Chaudhry government to increase maximum rentals from 6% to 10% of unimproved capital values can be seen clearly. Theoretical maximum rentals on paper would rise from one level that was not enforced – 6% – to another higher level – 10% – that would not be enforced. Thus, it is abundantly clear that – both absolutely and relatively – tenants in Fiji have been remarkably lucky, especially when it is recognised that the incredibly low ALTA rents coincided with a 30-year lease period. And it is not just with regards to rents that tenants – cane farmers in particular  have been lucky. They benefited initially from Commonwealth Preferential prices and then, after 1975, from the EU’s Lome Agreement which, over recent years, has subsidised growers and the FSC to the tune of $2-3 million per week. The Lome Agreement effectively doubles cane farmers’ incomes and, of course, is of major benefit to the shopkeepers in whose stores the cane farmers’ subsidised incomes are spent. But how much of these windfall subsidies go to the landowners? The short answer is none! For the landowners to share in such subsidies – subsidies which really amount to a substantial injection of foreign aid – some mechanism would have to be in place to redirect some of this subsidy money to the landowners. If rents were given a quantum upward adjustment after 1975 to reflect the new higher, subsidised price of sugar, this would have enabled the landowners to share in the EU’s aid package. Appropriately increasing the unimproved capital values of land and ensuring that rents were actually based on such declared values would accomplish such a sharing. This was not done. It was not until after the coups of 1987 that any serious attempt was made to address rent levels and all that accomplished was to bring them up to today’s wholly inadequate levels. The problem, as noted earlier, is that ALTA rents are based not on the prevailing economic realities but on a political process that supersedes a declared but unenforced 6% unimproved capital value formula. This process ensures that essentially none of the hundreds of millions of dollars of EU subsidies since 1975 ever gets passed on to landowners. Similarly, every time the Fiji dollar gets devalued, the Fiji dollar value of sugar sold overseas increases, thereby again increasing the price of cane paid to farmers. And again, the ALTA rent formula, combined with its five year time lag between rent reassessments, ensures that not one cent of these windfall gains gets shared with the landowners. On top of these manifold gains to tenants, it should further be noted that cane farmers in Fiji have achieved for themselves one of the most advantageous divisions of sugar proceeds between grower and miller found anywhere in the world. To quote from a recent World Bank study, “The mill share of proceeds from the sale of sugar and molasses is among the lowest in the world, having dropped to a level insufficient to maintain the mills. The mills currently receive about 28 percent of proceeds, the farmers about 72 percent. FSC has had little leverage to resist this trend, since the issue is largely settled in the political arena, and as a government-owned corporation it has bowed to pressures to increase the share of the growers under the general Master Award System (MAS)”. From the foregoing, it is clear that the ALTA rent formula has been remarkably successful in advancing the financial interests of tenant farmers  cane farmers in particular. They have benefited from rents that are many orders of magnitude lower than in any other country for which the authors were able to find details. They also benefited from a rental formula that allowed tenants to capture the entire benefits of any windfall gains like subsidies or devaluation. They also benefited from one of the most advantageous (to the farmer) divisions of sugar proceeds experienced anywhere in the world. And notwithstanding the economic advantages conferred by these conditions, many tenants (primarily non-cane tenants) have further benefited by consistently avoiding paying any rent at all! Collectively, this set of circumstances testifies to just how incredibly successful the tenant community in Fiji has been in mobilising the political decision making apparatus of the country into passing legislation and regulations that advance its particular interests. Moreover, two recent events further testify to this remarkable political influence. First, is the recent proposal to offer to tenants whose leases are not renewed a government grant of $28,000. This amount is virtually sufficient to purchase a freehold farm! It also typically exceeds the totality of rent that has been paid out by the tenant to landowners since Fiji became a colony in 1874! Second, the general manager of the NLTB was advised not to comment on the very topic – native land leases – under whose purview the NLTB itself is mandated, as trustee to the subsistence landowners. In most democracies, such restriction on free speech, and the violation of the basic human right to express the collective views of organised individuals in a negotiating process, would not only bring down local condemnation, but international opprobrium. The $28,000 payout to evicted tenants caused a predictable uproar amongst the landowning community in that no such relief was initially extended the ‘cash short’ and ‘collateral short’ subsistence landowners, who by dint of repossessing their land, would be embarking on a new and hitherto untried livelihood – commercial agriculture. Responding to this the Chaudhry government did promise new farmers a $10,000 start up grant though no budgetary provisions were made for this and nothing was ever paid out. The essence of the problem, then, is that the manifold financial gains that tenants have enjoyed under ALTA, as detailed above, have come at the expense of landowners. Indeed, it would be no exaggeration to conclude that the ALTA formula has resulted in the wholesale exploitation of landowners. What other possible conclusion is there? But how could landowners end up being the victims of such systematic exploitation when institutions are in place – the NLTB in particular – expressly designed to advance their interests? The remarkable story of the causes of this exploitation is the focus of the following section. 3. INDENTURED LAND – THE CAUSE OF THE LANDOWNERS’ EXPLOITATION In the previous section (Section 2), it was noted that agricultural land rents in Fiji are very low both absolutely and relatively. Indeed, on both counts they are many orders of magnitude below that in any other country for which the author was able to find data. While these low rents have proved an absolute windfall to tenants, for landowners, however, they have amounted to wholesale exploitation. But what are the causes of this exploitation? How is it that landowners have been so victimised when the NLTB is supposed to act in their interests, and, until this year, post independence Fiji has always had Fijian governance? A major part of the problem relates to the fact that the provisions of ALTA, and before that, the Agricultural Landlord and Tenant Ordinance (ALTO), often prevented the NLTB from properly acting in a trustee capacity for the landowners – which is why the NLTB quite naturally wants ALTA abolished . But apart from this legislative straightjacket, it has to be said that those charged with advancing the interests of landowners have not been doing their homework. And this applies not just to the NLTB. Fijian politicians and the BLV have not been nearly as assertive or successful in promoting general Fijian interests as the Indian politicians and labour leaders have been in promoting tenant interests, as noted in the previous section. But over-riding these issues, is a hidden and surprising cause of the land problems that has served decisively to shape current tenure legislation. In order to understand this underlying cause of the land problems we have to revisit the country’s colonial past. Both before and after Cession, European settlers were after Fijian land in order to pursue a variety of agricultural enterprises including cotton and later sugar. And sugar, of course, proved ultimately to be the only successful plantation crop. The Colonial Sugar Refining Company (CSR) emerged as the dominant sugar producer by the end of the nineteenth century and the sole producer after 1926. It leased huge tracts of the best Fijian land and purchased much freehold title . Of course, to produce sugar it needed not just land, but labour. Fijian labour proved unavailable, the Fijian population still collapsing from introduced disease, the chiefs unwilling to release young men for the colonial government’s enterprises, and commoners seeing no sense in toiling in the fields for a monetary pittance that could buy them nothing the village could not produce for much less effort. And so in order to obtain plantation labour the colonial government brought in indentured workers from India, starting in 1879. The circumstances surrounding indenture have exercised a continuing domination over local Indian thought, historical research, political activism, and indeed mythology. The core of the indenture system, which was, and remains, so resented by the Indian community, consisted of a contract between worker and employer (the colonial government underwriting the CSR) which essentially gave the employer exclusive rights over the worker’s labour (and, to a degree, his non-working hours) for a period of five years. The resentment aroused by this bargain developed naturally from the three primary characteristics of the indenture contract. First, during the contract (indenture) period, workers were not free to use their labour as, when, and how they wanted – they were always at the CSR’s beck and call. Second, workers were exploited by being paid a wage that did not reflect their economic contribution to sugar production – they remained poor while the company and colonial coffers prospered. Third, the workers, being uneducated and ill informed, were not aware of the full implications of the indenture contract. Often, they were pressured into agreeing to the indenture contract when they would not have done so had they known the full measure of what it entailed. Of course, workers were also physically abused, though this was not specific to the indenture system, but was a general component of the workers’ lot in the nineteenth and early twentieth centuries. Of the three ingredients of the indenture system, exploitation was undoubtedly the major grievance. Had the indentured labourers been paid European wage levels, or more, and been treated accordingly, in all likelihood the Indian community today would fondly celebrate its indentured past. The recruitment of indentured labour was terminated by the British colonial government in India in 1916, and current contracts of indenture were cancelled by the colonial government in Fiji in 1920. This development served to create a potential labour shortage for the CSR. Also, the end of indenture gave Indians in Fiji the confidence to demand greater freedom and higher wages, as indeed they showed in 1920 with a willingness to use industrial action to achieve these goals . Faced with this, the CSR needed a strategy both to increase the effective supply of labour effort and to discharge the incentive to strike. The solution chosen by the CSR was to abolish the plantation system, subdivided its lands into 4 ha plots, invite the Indian labourers to sub-lease these plots, and run them as independent, small-scale family farms . The theory was that the extra effort and motivation that predictably would be forthcoming from free, independent farmers would more than make up for the inability to further recruit indentured workers. Equally, it would obviate the need for the CSR to pay the higher wage rates it was being forced to pay the now free labourers employed on its estates. This fundamental change in business practice marked the birth of the current small leasehold cane farming system. Under the small leasehold system, the demand for Fijian land now had new voices. Alongside the CSR, which had been arguing that its long-term profitability could best be served by the permanent alienation of leased native land, the Indian smallholders, their union and political representatives, and indeed the government in India, were also demanding land security . The economy too depended on sugar revenues and colonies must turn a profit . And so the pressure mounted for Fijians to accommodate these demands, for it was now in the national interest of the country to ensure the full and proper utilisation of land. Ratu Sukuna echoed the national interest argument in his selling of the NLTB concept in 1936. Equally, he emphasised the prevailing reality that unless Fijians accepted the idea of the NLTB, over which they were to have control, the colonial government would introduce direct and much stronger controls over native and leased land. And so Fijians, always ready to make sacrifice for their country, eventually agreed with the suggestions of how they may serve the national interest as it was presented to them: they assented to the concept even though few knew the full import of what was happening. Henceforth, discretion over the right to lease was removed from the individual mataqalis and invested with the NLTB . And leasing, in turn, was further and decisively influenced by colonial policy and the legislation governing leasing obligations between the NLTB and the thousands of smallholder tenants – ALTA being but the latest version. It is this precise set of historical circumstances that served to create the conditions by which native Fijian landowners were exploited. The end of the indenture of labour, which marked the beginning of smallholder farming, did not mark the end of the indenture system. The principle and the practice of indenture were simply shifted on to land. Sugar profits and colonial finances required exploitation and the instrument of exploitation was indenture. But once labour became emancipated and demanded both land security and greater shares of sugar revenues, there was no choice but to shift the burden of indenture on to land. And the primary instrument of land’s indenture has been the circumscription of the NLTB by ALTA legislation. INDENTURED LAND, THAT, AND THAT ALONE, IS THE ROOT CAUSE OF THE LANDOWNERS’ EXPLOITATION Lest anyone doubt the reality of this, consider the three principles of indenture and see how they relate to land: Principle 1. Landowners are not free to use their land, as, when, and how they want. Since 1940, not only has exclusive control over native land been removed from the owning mataqalis and been invested with the NLTB, but the discretion of the NLTB in acting in a trustee capacity for the landowners has been decisively constrained, initially by colonial policy and then by the overtly pro-tenant legislation, ALTO and ALTA. Principle 2. Landowners are exploited by being paid rentals that do not reflect the economic contribution of land to sugar or other agricultural production. As mentioned earlier, landowners are receiving a rate of return on their land that bears no resemblance to market value. They remain poor while the users of their land have prospered comparatively. Principle 3. Landowners were, and many still are, ill informed on the full implications of leasing contracts. Many have no idea of what they could be getting, or their rights and responsibilities. Overt threats, the national interest argument, and patriotism for noqu vanua were used to pressure the BLV and landowners into agreeing to a complex legislative framework governing leasing contracts when they would not have done so had they known what ultimately it entailed . In short, the systematic exploitation of landowners that has been witnessed over the last two generations and more can be traced to an inability of Fijian leadership to wield the kind of political power that capital and labour were able to muster to serve their interests. For the colonial government, investing Fijians with nominal land ownership was enough of a concession. Confronted by the demands from capital and labour for land security, and for maintained or greater economic returns, officialdom followed the path of least resistance. They effectively indentured Fijian land for the benefit of the other groups. And thus it remains today. The cumulative effects of land’s indenture have been to precipitate the widespread desire of mataqalis to be free individually to decide the disposition of their lands. On top of this, the nation has witnessed manifold pernicious economic and social effects that have flowed directly from ALTO and ALTA. And these effects, ultimately, are as damaging to the tenant as to the landowner. These effects will be discussed in Section 4 below. 4. THE EFFECTS OF THE CURRENT ALTA RENT FORMULA It was noted earlier that current ALTA rents are far below those of any other country for which the authors were able to find details. Further, before rent payments actually reach the ordinary landowner, certain deductions are made from gross rental incomes, as specified under Native Land Trust Act Cap 134 section 11.1. These relate to the NLTB’s management fee of 25% (which has been reduced to 20% as of January 1, 1999) and a ‘chiefly take’ of 30% (comprising 5% to the Turaga ni Taukei, 10% to the Turaga ni Yavusa, and 15% to the Turaga ni Mataqali). Once these leakages have been subtracted, the amount of rental income actually arriving in the hands of ordinary landowners, if anything arrives at all, is rarely more than a pittance. Much has been made of these ‘leakages’ from the rental income stream and there is little doubt that efficiency and accountability of both the NLTB and the turagas –especially if they hold more than one office  can and must be improved. At the same time, much of this criticism is used no doubt to deflect attention from the ridiculously low level of rents that tenants actually have been paying. But what are the effects of this current ALTA rental system? The consequences of ALTA are both numerous and diverse in scope, embracing economic, sociological, and political dimensions. 4.1 The Economic Consequences of ALTA The economic consequences can be broken down into two types. First, there are equity effects, relating to the distribution of income. Second, there are efficiency effects relating to the extent to which the country uses its scarce land resources in ways that allow the greatest value of goods to be produced, something which thereby permits the greatest total incomes to be earned. The Equity Effects of ALTA Whereas exchanges at the market level are necessarily mutually beneficial – a seller would not sell unless he saw his interests being served by the sale and likewise for the buyer – landowners in Fiji have had virtually no discretion in determining the use of their principal asset, land. Indeed, the combined effect of colonial policy, ALTO, and ALTA have effectively indentured land by tying the hands of the NLTB in properly acting as trustee to the landowners, as described above. Consequently, while tenants under this system have been free to decide whether to accept, to refuse, or to terminate a lease, landowners have not. Control over their land has been removed from them. They have been placed, by law, in the position of silent witnesses to the leasing of their land. Under this system where landowners have been essentially coerced into accepting exchanges, the nature of which has been determined by others, the exchanges have not been mutually beneficial. Tenants have gained at the landowners’ expense. In the process real income – consumption and investment opportunities  has been transferred from the landowners to the tenants throughout the 30-year operation of ALTO and ALTA. The amount of this transfer of income is quite staggering. Thus, if one accepts that proper market rentals would, very conservatively, be in the order of $300 per ha per year, as opposed to the $65 that is presently paid by tenants on sugar land, this income transfer would amount to nearly $19 million in the current year alone; and applies only to the 40% of all agricultural land devoted to sugar . And over the 30-year life of ALTA the cumulative income transfer to cane tenants from landowners would be well over half a billion (1999 dollars), and much more with the application of compound interest! And this is for sugar land alone! The effect of this income transfer has been manifold. Certainly the material standard of living of rural Fijians has suffered in consequence. Opportunities for investing in rural schools, in university scholarships, in agricultural or commercial ventures, in training facilities for village sports teams, in investing to improve their own land, in buying various financial assets etc. have all been compromised . And by diminishing the range of activities possible in village communities, it has undoubtedly accelerated the migration of the young to urban areas with all its attendant economic and social problems. More generally, the income transfer has served effectively to rob the rural Fijian community of the resources needed to cushion the hugely difficult task of transforming its traditional subsistence based economy into a more productive and self-sustaining market based economy able to meet the growing aspirations of its increasing population. While the picture sketched above describes the long term effects of the income transfer, perhaps the most immediate effect is to induce landowners not to agree to any extension of leases under ALTA. It creates the perfect incentive for mataqalis to farm their land themselves as opposed to continuing to lease it at uneconomic rent levels. Even the most inefficient landowner/farmer would lose nothing in the process. Thus, by creating such incentives, ALTA effectively minimises the pool of potential leases available to tenants. Accordingly, instead of tenants’ interests being advanced by a continuation of ALTA, as many mistakenly believe, they are actually threatened by it. For tenants, then, as well as for landowners, ALTA is not the solution, it is the problem! Of course, equity issues arise not just from the level of rents but also from the decision of mataqalis not to renew expiring leases. Is it fair for tenants to be evicted when their families may have worked the same soil for close on a century and when they may have made certain improvements to the soil? The former point directly touches on one of the most sensitive aspects of land policy. Do the mataqalis have ownership rights over their land in practice or only in principle? After all, if existing tenants have some implied usage rights by virtue of extended occupancy, then the discretion of the actual owners is subverted. Additionally, any implied extended occupancy rights that benefit existing tenants discriminate against new potential farmers who may be frozen out of land leasing options . The equity aspects of lease non-renewals, then, are not a clear-cut issue. Notwithstanding the multifaceted nature of equity, it must be emphasised that the termination of a lease marks the termination of a tenant’s livelihood, and the beginning of a new source of income for the landowner. Now, whether it is reasonable to expect tenants to plan for the termination of their leases is a matter of debate. What is undeniable, however, is that tenants have enjoyed certain conditions that will not be available to those landowners who eventually take over and farm their own land. Since 1975, tenant farmers have enjoyed sugar incomes inflated by the preferential prices possible under the Lome agreement. As the European and world economies gradually phase out trade preferences, farmers’ incomes will become predicated upon world market prices for sugar  which are only one third of the preferential prices Fiji currently receives on that part of its total sugar sales (50%) earmarked for Europe. Thus, landowners contemplating entering the cane farming business upon the termination of leases will never experience the real cane prices enjoyed by their former tenants. Similarly it is doubtful whether the current division of sugar revenues between miller and farmer, which has been so advantageous to the latter, is sustainable in the long run. During the course of ALTA, then, existing tenants have benefited from low rents, high sugar prices and a very favourable division of sugar revenues. Together, these provide a cushion facilitating the adaptation of tenants to a post agricultural life , something that contrasts markedly with the afore-noted absence of a cushion for rural Fijians trying to adapt to the imperatives of a modern market economy. Consider now the compensation provisions stipulated under ALTA. They require tenants to be compensated by landowners for any ‘improvements’ made to the land they lease, like buildings, drainage, irrigation, fencing etc. Is this fair and equitable? If such improvements were of a permanent or long-term nature, and would serve to increase the rental incomes earned by landowners upon the replacement of the investing tenant by a new tenant, or would increase the income of the landowner were he to farm his own land, then clearly former tenants have an arguable case for compensation. At the same time, tenants would only undertake such investments if they were judged profitable. So, unless tenants are patently irrational, they would already have captured the benefits of their investments, in higher profit streams, prior to the end of their leases. (This is especially true with investments that have limited scope and duration.) In such instances, there would be no blanket case for compensation. Landowners, it is true, may benefit from their tenants investments. At the same time it must also be pointed out that all acts of investment will necessarily benefit parties other than the direct investor. The “multiplier” effects that radiate from any investment expenditure create flows of downstream income that are transmitted throughout the economy. It is ludicrous to conceive that the original investor has any right at all to these downstream incomes  let alone a moral right to receive compensation from the indirect beneficiaries of his investment sufficient again to recover the initial investment costs. Consequently a convincing case for compensation would require a demonstration of at least the following two conditions: 1. The tenant’s investment demonstrably resulted in a permanent improvement that directly allowed the landowner to earn a higher income therefrom; and 2. The tenant was not able to recover the costs of this investment during the currency of his tenure. And even in the presence of these two conditions there is still no guarantee that compensation would be warranted. One would have to ask why the tenant was not able to recover his investment costs. Was it bad planning, poor implementation, or an ill-conceived idea from the outset? Certainly, there is no way that a landowner could be held accountable for failings such as these. It should also be pointed out that the practice of compensation for improvements has a rather unsavoury history. It was first introduced in 1916 (the year that marked the end of labour’s indenture) in Ordnance No.23. The colonial government fully realised that landowners were never in a position to pay the assessed compensation and thus, “[t]his procedure affords an effective check to any general movement to refuse renewal of leases” . Compensation, then, was used as an instrument to lever lease renewals. At the present time, when leases are expiring, some of the current claims for compensation exceed the totality of rent that has ever been paid by tenants on their lease since the Deed of Cession in 1874 – the very beginnings of colonial rule and land leasing in Fiji. Given the previously noted absurdly low level of rents, this is not difficult – even a modest building would often suffice. What ALTA and its predecessor legislation has done then, is to provide simultaneously for the payment of compensation and also for rents – rents which are set at such levels to make it impossible for compensation to be paid. The instrumental role of compensation provisions are therefore still alive and well in ALTA. Moreover, the same instrumentality is there to serve other ends too. Thus, the compensation of tenants by landlords for ‘improvements’ can be used in the legislation to offset any possible liability from negative investments by tenants – like soil degradation caused by repeated cane burning, failure to apply proper crop rotation, poor ploughing practices leading to erosion and loss of topsoil etc. These practices, which are all endemic today, were also matters of concern before ALTA . Thus the provisions in ALTA for the compensation of tenants offers a mechanism by which tenants can try to insulate themselves from the consequences of bad husbandry. In short, the idea that tenants have a right to compensation for improvements is invariably complex and necessarily conditional. And what further complicates the issue is that not only does it occur in a body of legislation, ALTA, that is overtly pro-tenant in orientation, but it has also been used historically as a device for dis-em
  4. Nostradamus Says:

    The full text of the Davies Gallimore paper can be found at:

    http://maorinews.com/karere/leases/contents.htm

    I see that in the posting above it has been truncated.

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