the median rent of US$53/ha & year that, as per the last household survey, smallholders are willing to pay,<sup>1</sup> could generate annual income of some US$50 million, equivalent to almost 5% of Malawi’s public revenue.

Beyond failing to live up to expectations in terms of productive development, estate development also does not seem to have reduced tenure insecurity: with 22% of farmers concerned about losing their land and 21% fearing encroachment, tenure insecurity is high. It is particularly pronounced among the poor, households not born in the village or engaged in land transactions or who had a land dispute in the past, and in villages close to an estate with no more land to be distributed. By comparison, impacts of matrilineal inheritance, a factor emphasized in the recent literature, seem modest at best. Including fear of land loss in a production function suggests that insecure tenure is associated with a 12% point output reduction for women but not for men. In principle, comparing the present value of productivity gains due to program-induced reductions in tenure insecurity to program costs would allow to decide if systematic regularization can economically justify an alternative to demand-driven estate development. This implies that if a tenure regularization program as implemented in Rwanda at a cost of US$5 to US$6 per parcel (Nkurunziza 2015) could eliminate insecurity in Malawi, its benefits would be more than sufficient to recoup the costs. Carefully designed and evaluated pilots that pay particular attention to women’s rights and overlap with estate leases could help not only to deal with the issue of estate lease renewal, but also inform implementation of recently adopted Land Bills. If success can be demonstrated and regulations to implement at larger scale passed, they could provide significant economic benefits.

The remainder of the paper is organized as follows. Section two puts Malawi’s land tenure system in context by describing its evolution, highlighting questions to be analyzed, and drawing out their relevance for recent debates on land legislation. Section three presents the sample and descriptive evidence on smallholders’ and estates’ intensity of land use and productivity and the size and potential lease fees from estates. Section four discusses econometric results on determinants and productivity impacts of perceived tenure insecurity by male and female users. Section five concludes by drawing out implications for policy and future research.

# **2. Context, issues, and link to the literature**

While dating back to colonial times, Malawi’s dualistic agrarian structure was reinforced by the creation of estates on more than 20% of the country’s area in the late 1980s and limitations on smallholders’ market participation. While the latter were eased in the 1990s, debates on land tenure remained inconclusive and opinions on next steps remained divided. Quantitative evidence can help put issues in perspective and point

> 1 Data are from the 2010/11 Third Integrated Household Survey (IHS3). We chose willingness to pay because it is slightly lower than the median rent paid (US $55/ha and year) and because it is based on responses from close to 90% of the sample rather than only those participating in markets. 3