Impacts of large-scale land acquisitions on smallholder agriculture and livelihoods in Tanzania

Abstract

Improving agricultural productivity is a foundational sustainability challenge in the 21st century. Large-scale land acquisitions (LSLAs) have important effects on both well-being and the environment in the Global South. Their impacts on agricultural productivity and subsequent effects on farm incomes, food-security and the distribution of these outcomes across households remain under-investigated. In particular, prior studies do not sufficiently attend to the mechanistic nature of changes in household agricultural practices that affect LSLA outcomes. To address these challenges, we use a novel household dataset and a quasi-experimental design to estimate household-level changes in agricultural productivity and other LSLA outcomes in Tanzania. We use causal mediation analysis to assess how four common mechanisms—contract farming, land loss, market access and technology adoption around LSLAs—influence agricultural productivity. We find that households near LSLAs exhibit 20.2% (95% CI: 3.1%–37.3%) higher agricultural productivity, primarily due to increased crop prices and farmer selection of high-value crops. Importantly, the direction and magnitude of effect sizes associated with the different mechanisms vary. The presence of contract farming explains 18.1% (95% CI: 0.56%, 47%) of the effect size in agricultural productivity, whereas land loss reduces agricultural productivity by 26.8% (95% CI: −71.3%, −4.0%). Market access and technology adoption explain little to no portion of the effect size on agricultural productivity. Despite higher agricultural productivity mediated by contract farming, we do not find increased household incomes or food security. Plausible explanations include limited market access, higher crop prices restricting food access and elite capture of contract farming concentrating income effects to a few households. Our results stand in contrast to assumptions that technological spillovers occur through LSLAs and are the principal drivers of LSLA-induced agricultural transformation. We find instead that access to contract farming and high-value crops lead to greater agricultural productivity, but also that benefits related to these mechanisms are unequally distributed.