Land Tenure Arrangements in Pakistan: Evidence from Farm Level Data

Abstract

The restructuring of land tenure arrangements has gained much importance in recent years due to its influence on the sustainable use of resources, agricultural production and rural employment. Land tenure structure in Pakistan is complex and wide, and these arrangements are critical in shaping the farmer’s decision to invest in Sustainable Land Management Practices (SLM). In Pakistan, various kinds of tenancy have been found: owner cultivation, fixed rent arrangements and sharecropping. The study has analyzed the determinants of land tenure structures in Pakistan using farm-level data of 295 farmers from three districts of Punjab: Gujranwala, Khanewal and Faisalabad, using linear probability estimation. The comparison of inputs and outputs under these tenancy arrangements has revealed considerable variation and policy implications. The empirical results showed that cultivated area, ownership of assets and institutional arrangements significantly influence tenancy arrangements. Large farmers with abundant resources are more likely to be owners while farmers with limited resources tend to be involved in a lease contract or sharecropping. Access to credit facilities and extension services enhances the chances of secured land rights and ownership. The study has strong policy implications for a more equitable land tenure system, which can be brought about by improving the more flexible institutional mechanisms and improving access to productive resources.