# **1. Introduction**

Land markets and the institutions supporting them are key drivers of structural change by allowing labor to move out of the agricultural sector and facilitating farm size growth; allowing better operation of financial markets through use of land as collateral; and supporting protection or better use of un- or underutilized land. These aspects are particularly relevant in Africa where the scope for improving land use is enormous and where a desire to foster economic transformation and respond to (foreign or local) investor demands for easier access to land led many countries to establish statutory tenure regimes to overcome the limitations of traditional customary systems, especially following the 2007/08 food crisis. Yet, rigorous evidence on the effect of such policies on productivity and local welfare remains limited. As a result, consensus on how to attract productive large farm investment and ensure its contribution to the economy remains debated. This is a serious constraint especially at a time when expected increases in global commodity prices could lead to quickly accelerating land demand.

To help fill this gap, this paper explores impacts of institutional arrangements on large farm performance in Zambia, a country that instituted policies to attract domestic and foreign investors to its agricultural sector and thus benefit from their capital and know-how long time ago. Two key elements of such policies are (i) a dualistic land tenure regime that allows rights to be formally recognized (and pledged as collateral) on ‘state land’ only; and (ii) establishment of ‘farm blocks’ where investors can access land, infrastructure, and complementary services on favorable conditions. Studies suggest that, possibly due to these policies, Zambia emerged as one of two African countries where more than half of the agriculturally suitable area is owned by large or medium farms (Jayne _et al._ 2014a).<sup>1</sup> The extent to which such policies improved productivity, local economic activity, and equity remains unclear, largely because there are no systematic data on large farms.

We piggy-backed on the 2020 census in Zambia’s Eastern Province to obtain a list of all large farms that can serve as a sample frame, basic evidence on their activities and rights, and a map of cultivated fields. Overlaying this map with survey and sketch plans from the registry that were specifically digitized for this purpose,<sup>2</sup> allows distinguishing farms’ _de facto_ occupation from their _de jure_ rights. An in-depth survey of a representative sample of 3,000 large farms was then conducted to obtain more detailed data for analysis. The census provides an estimate (at most 26%) of the province’s agricultural area owned by large farms.<sup>3</sup> Discrepancies between official records and ground reality are large, consistent with the notion of weak

> 1 Zambia’s National Statistical Agency (Zamstats) defines large and medium farms as those larger than 5 ha and we refer to them as ‘large farms’ throughout the paper.

> 2 Digitization of cadastral data was supported by the Zambia Integrated Landscape Management Project (ZIFLP).

> 3 If applied nationally, even 26% of area owned by large farms would mean that 10 million ha was converted from customary tenure since 1995.

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