Monitoring Paper: Thailand's Land Titling Program
November 06, 2003
The World Bank’s Land Titling Programme in Thailand has been one of the largest land titling programmes implemented throughout the world. The Bank has praised itself for what it sees as the success of the programme in several of its own reports. However, the very people who were supposed to have benefited from this World Bank programme have, instead, become much worse off.
| Rebeca Leonard and Kingkorn Narintarakul Na Ayutthaya |
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| Northern Development Foundation |
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| Chiang Mai, Thailand |
The World Bank’s Land Titling Programme in Thailand was one of the largest land titling programmes implemented throughout the world. The Bank has praised itself for what it sees as the success of the programme in several of its own reports , and this has served as model for Bank programmes in other countries in the region (e.g. Indonesia, Lao PDR, and the Philippines) and around the world. We will examine the scope of this success, with emphasis on the impact of this programme for the alleviation of poverty in the North of Thailand.
After describing the context of land and the rural poverty in the North of Thailand, the paper will provide an outline of the Bank’s land policy objectives and identify the main elements and achievements of the Land Titling Programme. In the second section, the paper explores the impact of the programme on the poor based on the real experiences of groups of farmers in Lamphun province, and challenges the broadly positive conclusions reported in the final evaluation of the 3rd phase of the LTP. As an example of the impact of the programme on local communities, the case of the District of Baan Hong will be presented, comparing expected benefits of land market stimulation, increasing land prices and access to institutional credit with the reality experienced by farmers in the area. There are many questions to be followed up which could provide some interesting areas for additional research.
Access to land for the poorest rural communities
Access to land is fundamental to the livelihoods of poor communities in rural areas. Land continues to serve as a means of providing subsistence needs as well as of income generation. Holding land enables family labour to be put to productive use, and provides a safety net for family members who work in temporary or insecure employment elsewhere. This was particularly evident in Thailand during the economic collapse in 1997 when the sudden threefold rise in urban unemployment was mitigated by the absorption of labour in the rural areas.
Agriculture is still an important sector of the Thai economy employing around 54 per cent of the workforce (out of a total workforce of 33.4 million people) . The poorest sectors of Thai society are those households in rural areas without land or with very meagre land assets (that is with limited areas and poor quality soils). Thailand’s Office of Agricultural Economics estimated in 1995 that the income of the population working in agriculture is about 15 times lower than the income of the population outside the agricultural sector. It was also found that the national average household income in 1999 was 12,729 Baht (or US$318) per month whereas the average income for farming households was no higher than 1,000 Baht (or US$24) per month (Office of Agricultural Economics, 1999). Land also continues to provide important social functions such as identification with family roots, cultural and community identity.
Source: Agricultural Land Reform Office, 1999, from “Final report of the project to study land holdings and utilisation. Economic mechanisms and laws for optimally efficient land use”, Land Institute Foundation, 2000.
The Land Institute Foundation, an independent Thai research organisation, has estimated that over 30 per cent of the 5.5 million households in the agricultural sector have insufficient land to derive a livelihood (in the Northern Region, this is considered to be less than 10 râi or about 1.6 hectares). (See Table: Distribution of land holding in Thailand.).
The numbers of people without land has increased through recent decades not only because of population increase, but also due to a range of other factors. These include the somewhat artificial classification of 50 per cent of the country as national state forest in the 1960s, including areas that were already used for agriculture prior to classification. Large areas of agricultural land have also been taken or kept out of production. This was particularly evident during the high economic growth years of the late 80s and early 90s, when investors began to acquire land on a massive scale speculating on rising land prices. The Land Institute Foundation have estimated that the annual economic cost of underutilised land (including urban areas) to the country is approximately 127.4 million Baht (or around US$3 billion) (LIF, 2000).1
Much of this land was used as collateral to borrow huge sums that were never repaid. Figures from the Bank of Thailand reveal that the total value of non-performing loans (NPLs) could be as high as 2.92 trillion Baht (approx 68 billion US$) over the period 1997-2000. The majority of these loans were in the real estate sector (LIF, 2000: 6-31). As a reaction to the unfolding economic crisis in 1997, the Thai government was compelled to bail out the creditors holding bad debt (especially that owed in foreign currency) under the conditions of emergency IMF loans. Thus the costs of imprudent private lending were transferred onto taxpayers throughout the country.
The World Bank’s land markets
The World Bank’s discussions of land policy invariably begin with the importance of access to land as a primary means of alleviating poverty. The Bank’s analysis of how to promote the access of the poor to land is more controversial. Following its economic approach in other sectors, the Bank’s interest in land titling stems from its objective of empowering individuals to trade land within a free market. A freely operating market is predicted to facilitate the optimum allocation of land by encouraging land transfers to those who can use it most productively.
At least in some cases, theoretically, a market should promote the retention or transfer of land to small-scale farmers, as research has shown that they are able to make more productive use of the land than large scale farming operations. Larger farm holdings operated with wage labour are recognised to incur substantial “efficiency losses” (that includes costs of wages and welfare for labour, management / supervision costs, as well the greater likelihood of lack of motivation of hired labour) compared with family-run small farm operations (Quan, 2000).
A second justification put forward by the Bank for the establishment of land markets is that this should stimulate the supply of cheap formal credit to both rural and urban sectors. The latter is considered essential for agricultural and economy-wide growth, which is expected ultimately to lead to sustained poverty reduction. In theory, land that is easily saleable should be attractive as collateral, as the assessed value should be higher than land held under restrictions or conditions, and also lenders should be able recover funds more cheaply in the event of non-payment. Following this logic, the Bank seeks to promote policy which allows land to be sold as easily as possible, as this would encourage the most efficient lending rates. Full individual ownership of land, as evidenced by a title deed, is the best way to ensure that land is easily saleable.
Although the Bank says that the importance of such markets “has long been realised by researchers and policy makers alike” (World Bank, no date: 62) there is a growing opposition to the Bank’s land commodification policies from local community organisations and civil society representatives as well as other critics of the World Bank who do not share the Bank’s confidence and are questioning the arguments for promoting land markets (Rosset, 2001:5).
Local communities face a number of risks where free markets in land are promoted through national policy interventions. These will only be briefly outlined here as several studies have already presented this kind of analysis, in order to concentrate on presenting the experience in Northern Thailand in more detail thereafter. It should be clear that local markets in land arise often spontaneously, whether or not encouraged by, or even registered in law. Transactions of land need not be harmful to local interests or prejudicial to poorer sections of society, however it is important to realise where the risks lie, particularly during the initial stages of opening markets, in order to seek to reduce them.
Firstly, the playing field is far from level. Established actors in the market have greater access to information about financial opportunities, some are more liquid (have more cash available for investment), and more powerful than others. This is particularly so where there is high economic inequality on a regional or sectoral basis. For example, the purchasing power of investors in the capital cities far exceeds that of smallholder farmers in the rural areas. This imbalance can provide a lucrative opportunity for metropolitan traders which incidentally pushes the price of land high out of reach for the landless, the poor and for future generations of smallholder farmers. The interests of investors and farmers in holding land tend to differ substantially, and their acquisition of land purely as an investment for future use can severely disrupt local development patterns as we will see was the case in North Thailand.
Many countries, including Thailand, pose restrictions on foreign ownership of land, precisely in order to prevent local resources from being controlled by buyers from more affluent countries who can out-bid local entrepreneurs. A parallel could be drawn to argue for appropriate restrictions to be placed on the acquisition of land on a local basis within the country.
Secondly, contrary to Smith’s basic precept, the collective outcome of market transactions is not necessarily socially desirable and government controls in the public interest can be justified. Joseph Stiglitz, former Chief Economist and Senior Vice President of the World Bank, who left the institution in 2000, illustrates the dangers of relinquishing government control over capital markets. “The IMF contended that the kinds of restraints that Thailand had imposed to prevent a crisis interfered with the efficient market allocation of resources. If the market says, build office buildings, commercial construction must be the highest return activity. If the market says, as it effectively did after liberalisation, build empty office buildings, then so be it; again according to IMF logic, the market must know best. While Thailand was desperate for more public investment to strengthen its infrastructure and relatively weak secondary and university education systems, billions were squandered on commercial real estate. These buildings remain empty today, testimony to the risks posed by excessive market exuberance and the pervasive market failures that can arise in the presence of inadequate government regulation of financial institutions” (Stiglitz, 2000: 101).
In the case of rural land, the highest return activity is not necessarily either the most productive, nor the most environmentally sustainable. Legal measures, such as progressive land taxation and land zoning, to discourage the hoarding of land, to promote smallholder retention of land and other ways of adjusting market incentives towards overall economic and social policy goals have been argued for years by peasant organisations in Thailand. Existing taxes on agricultural land are extremely low in Thailand, amounting to less than a quarter of one percent of land value. These have a negligible effect on land values (Feder et al, 1988). Proposals for reform put forward by academics and People’s Organisations are currently being considered by the Thai government.
Thirdly, the commoditisation of land into easily transferable capital within a national market in itself has an impact not only on the local economy but on the cultural and social relations surrounding land. As pointed out above, in many rural societies, local values of land include not only use values (such as the subsistence value and income-generating potential of land), but a range of other values, according to different contexts. These may emphasise the heritage value of land (as a link with family ascendants or descendants), the importance of maintaining land within a community group, local ecological knowledge, and in some areas, may include obligations within an ongoing relationship with spirits associated with the place. These values cannot easily be associated with an equivalent economic value despite genuine efforts by environmental economists, and therefore risk being lost under a centralised market. If this kind of cultural transformation is what is intended, it would seem inappropriate for it to be undertaken without engaging in a widespread consultation or public debate, let alone for the process to be hurried along, following an international agenda of a donor agency.
The World Bank’s Land Titling Programme in Thailand
The Land Titling Programme originated in the early 1980s in discussions between the government and the agricultural sector of the World Bank on a structural adjustment loan. The programme was divided into four phases. The original aims of the programme were “to accelerate the issuance of title deeds to eligible land holders”, “to improve the effectiveness of land administration, both in Bangkok and in the provinces”, “to produce base maps and cadastral maps in both urban and rural areas on one homogeneous mapping system, and showing all land parcels”, and “to improve the efficiency of the Central Valuation Authority”.
In phase three, authorised by the government on 22 September 1994, the objectives were adjusted to “provide secure land tenure to eligible land owners”, “develop long term sustainability of the Department of Land’s (DoL) institutional capacity”, “improve land administration service delivery”, and “develop an effective national property valuation function”. Phase four of the programme is yet to begin implementation. (See Box 1: Areas covered by the Land Titling Project.)
BOX 1: Areas covered by the Land Titling Project
Phase 1 – Northeastern region (southern 33 per cent of the area) + Upper Northern region (western 50 per cent)
Phase 2 – Lower Northern + Central region (16 provinces, high value rural land) + Northeastern region (6 provinces) + Eastern Seaboard region
Phase 3 – Northeastern region (remaining 10 provinces), Northern region (remaining 7 provinces), Central region (2 provinces)
Phase 4 – Southern region. Yet to begin implementation. The World Bank has suspended loans for Phase 4 as the government will use own revenue for future implementation of the programme.
Overall, US$183.1 million was loaned by the World Bank to cover the three initial phases of the project. To date, 8.7 million land titles have been issued. This is a substantial number, despite being less than the number of titles targeted by the programme. However, as we will see later, this figure can be misleading and should not be taken as evidence that 8.7 million farmers have benefited. Notably, the programme did not set targets for the number of beneficiaries. Each region has been covered largely according to schedule. Delays were reported to have occurred as a result of the difficulties of tracing absentee landlords, as well as the imprecision of boundaries of national forest reserve areas.
Essentially, the programme was aimed at the acceleration of the land titling process. Thailand’s Land Code of 1954 used to require individuals to present at the very least an occupancy certificate (Bai Yeub Yam) in order to acquire a land title deed. The land titling programme amended the Land Code to remove this requirement and quicken the official process to approve land title deeds. “The DoL was hard pressed to meet the demand for land records in the form of land use certificates, title deeds and property maps. …[At] the rate in which title deeds had been produced since DoL was established in 1901, and with current resources, the DoL would take 200 years to complete the registration of rights in land throughout Thailand. Even with a proposal to expedite the surveying and mapping in support of land registration, the time estimate was still 85 years.” (Rattanabirabongse, et al, 1996).
As the titling process was not simply a matter of clarification of land rights, but a platform for the establishment of a land market, it was regarded as important that a uniform register providing complete coverage be established. “The purpose of a land registry is to provide an authoritative record of the status of land ownership. It is therefore essential that this institution be complete and defines unambiguously the status of individual parcels. The ensuing desire to establish a unified framework that covers both rural and urban areas has been a main reason for most of the Bank’s land administration projects to adopt programmatic approaches that would accomplish the overall objective in phases.” (World Bank, no date: 11)
Given the perceived urgency to achieve complete coverage, changes were made to the national code in order to make the titling process easier. Thus, the Land Code was modified to allow the NS3K (Nor Sor Saam Kor) utilisation certificates to be upgraded to full title deed NS4 (Nor Sor Sii) on request, without a field survey (s 58 tri). The Land Code also allows full land title to be issued when there were no documents of occupancy or land claim reservation certificates (ss 58 bis, 27 tri and 59 bis). While those applying should have had possession of the land since before the Code came into force, minimal proof needs to be offered to the local Department of Lands official to support such a claim. Most official project documents highlight the safeguards designed into the survey and titling process, such as 30-day prior and subsequent notice at the house of the village head, as well as at various relevant Land Offices. Another change to the law involved the replacement of the Provincial Governor as the authorising officer on title deeds with the Provincial land officer or his branch office head.
According to an internal review of the programme, this change in the law was a “bold step perhaps, but necessary to complete the project in 20 years” (Rattanabirabongse, no date: 1). However, by allowing for faster processing of land titling applications, the authorities provided an ideal opportunity for investors and state officials to abuse the system, particularly during the high economic growth period.
Important omissions
The Land Titling Programme, while aimed at increasing land tenure security for existing landholders, did not attempt to address two critical issues of importance to low income farming groups in Thailand. The first was the issue of forest tenure. The Thai land titling programme dealt exclusively with “non-forest lands”. This is because all lands denominated as forest are considered as state property whether or not communities have been living and farming in those areas for several generations. The state was ostensibly reluctant to offer secure rights for fear of legalising forest destruction. Consequently, some of the poorest farming groups in the country, including Thai farmers and ethnic minority groups who occupy forests, especially in the highland areas, have been left in a precarious legal position . They continue to be threatened with eviction or forced restriction of their agricultural practices, harassed by officials. This prolongs the opportunity for politicians to cast ethnic minorities as scapegoats for all manner of national problems. The land titling programme did not seize the chance to ‘regularise’ the land rights of this large group of people, many of whom have occupied their village lands for hundreds of years.
A second important omission was that no provision was made in the planning or preparation of the project for the recognition or registration of rights to village commons or common property resources. The Land Titling Programme was aimed at the registration of existing land rights in order to give them validity under the national legal framework. However, the only option open was the registration of individual rights.
While, in theory, local tenure systems that recognise common rights to community resources could continue to exist extra-legally as before. The legalisation of individual rights alone creates a danger that common rights lose their legitimacy, leading to the break-up of community-based resource management systems. It was foreseeable that some, if not all common lands would be appropriated under individual claims. Without protection from misappropriation, this was possible by both powerful insiders and outsiders to the community. As the case studies from Lamphun province in the following section illustrate, many false claims of individual ownership over commonly held land were made with minimal notice to local communities and with little bureaucratic difficulty.
Impacts of the programme
The evaluations of the World Bank programme summarise the positive impact of the programme as follows. There has been a substantial increase (127%) in the price of land, vastly increased access (132%) to institutional credit, increased use of bought farm inputs (117%), increased yields in newly titled areas, and an increase in the areas used for farming, when compared with areas that had not yet been titled under the programme. The high fiscal benefits for the Department of Lands was also considered significant.
The experiences of farmers in Baan Hong district, Lamphun province in Northern Thailand provide a different perspective. In this district, seven villages and adjoining farmland were established at the boundaries of an area of 15,000 râi (2,400 hectares) of common land.
Access to these community lands had been governed under local tenure arrangements until the introduction in the 1960s of a Land Allocation Programme. This attempted to distribute certificates to parcels of land on the basis of a grid map, irrespective of any existing use of this area, the suitability of each parcel for agriculture, or the proximity of the parcels to the beneficiary’s other lands. The plots were only identified by numbers on a map, so few families were absolutely sure where they were allowed to farm. Sometimes, villagers were allocated a piece of land that was not suitable for farming, so they moved elsewhere. In practice, available land was put to use by the farmers, but often not in accordance with the papers that were issued to them.
As a result of the confusion caused, the creation of competing official claims to land, and the impracticality of access, few farmers could actually use the land officially allocated to them though they retained the bai jong (certificate). In the 1970s, the Department of Lands, in an attempt to resolve the disputes, fixed another map that confused the matter even further. Recognising the procedural mistakes made earlier, therefore, the government revoked all certificates issued during the allocation programme, in one administrative stroke in the mid-1980s, with the intention of re-registering the land rights at a later stage.
As a result, in the 1980s, few formal claims were recognised over this land, and there was a need for clarification of land rights in this area. Unfortunately, however, the Land Titling Programme did not present the local farmers with the opportunity to secure title to these lands, as they were not involved when the project officers came round to issue title.
Misappropriation of land in Baan Hong district
As the economy grew in the late 1980s and early 1990s, financiers began looking for secure long-term investments for their accumulating capital and found that buying up rural land areas was an ideal investment. Such land could be acquired cheaply, issued with title, with every likelihood in the economic climate of the times that it would swiftly rise in value. In Lamphun province, titles for extensive areas of land were issued during the height of the economic growth period in 1990-1993 without the knowledge of local communities who became aware of the alienation of their community lands only when fences started appearing in the fields.
The entire 15,000 râi in Baan Hong District described above, that was previously held in common by local communities and that was supposed to be allocated to local people, is now titled under the names of non-resident companies and wealthy individuals from outside the community. Local farmers have vigorously challenged the legality of the title deeds. Villagers state there was no notice of intention to survey the area and issue title either posted in the village or announced over the village loudspeaker. Research into the title deeds shows that many were issued on the basis of incomplete survey information, sometimes under false names, and from non-existent or long dead sellers (in at least one case, the space for the name and address of the seller was simply left blank).
Thus, villagers in Baan Hong were prohibited from using their community land, around which fences were constructed in or around 1990. Seeing such fences and boundary markers appearing in the lands they had traditionally claimed for village use, people from Sritia village rose up in protest at the illegal transfer of this land to outsiders. A youth leader involved in the protests was shot and killed by unknown gunmen.
Continued protest by farmers eventually led to the establishment of a joint government and community representative investigation committee in 1997, to look into the acquisition of land in state land areas around the country . Despite findings that such transfers were illegal, official action has yet to be taken to revoke the deeds.
The majority of plots in the Baan Hong area were left abandoned, possibly kept fallow to allow for quick sales when the time and price was right, or perhaps simply because it lay low on the titleholders priorities. By 1997, the entire area had been mortgaged, and, during the financial meltdown, duly became non-performing loans. Local communities themselves facing hardship during the economic depression, continued to be excluded from the land.
Land reform by communities
Understandably perhaps, villagers have not been very impressed by the various processes which were intended to secure their land rights over the past decades. It has taken a substantial amount of research on the part of non-governmental groups and lawyers to identify the current official owners of specific plots of land. Many deeds have passed through several hands in the early 1990s, increasing in value upon every transfer. In some cases, it seems that the transfers have been deliberately obscured, with properties returning to their original owners after seven or eight transactions (though now registered in the name of a company rather than an individual).
In frustration at the lack of action by local officials to recover the land, local people began to organise themselves and take the matter into their own hands. In 1997, villagers in WiangNongLong and Baan Hong Districts took the decision to occupy lands that had been left abandoned for several years. Neighbouring communities, similarly desperate for land for subsistence, followed suit and cases of land occupation increased throughout the province and elsewhere. Today, a total of 3,798 families have joined the land occupation movement putting over 14,305 râi (about 2,150 hectares) of abandoned land to agricultural use in 23 areas of Lamphun, Chiang Mai and Chiang Rai provinces. (See Table: Participation in land occupation, Lamphun Province.)
Source: Northern Farmers Alliance, Secretariat Group, “Factsheet on Land”, 2002.
Community based land reform
Case Study 1: Repossession of public land, Sritia village, Baan Hong district
In Sritia village, in 1998, villagers decided to mobilise together as a community to recover 3,000 râi (480 hectares) of neighbouring land that had been transferred to companies but had been abandoned for years. The vast majority, 560 of the 580 families, in the village took part in this activity. A committee was formed to manage the process. Areas were delineated to be reallocated as community forest (800 râi or 128 hectares in total) and as farmland for individual families (giving 2.5 râi to each).
All of these individual plots have been planted with longan and other fruit trees – reasonably long term investments in spite of the lack of official tenure security. Transfers or sales of these territories to relatives in the village or other community members have already taken place.
The involvement of the community in the land allocation, through a representative committee, seeks to emphasise transparency and fairness in the allocation of land. Villagers must support the community’s action to establish their rights. All members of the community hold their land on condition that they put their land to use. They are prohibited from selling to outsiders.
Case study 2: Sustaining land tenure, Raidong, Baan Hong
Villagers in 3 villages of Baan Hong District including Raidong took action to occupy 426 râi of illegally-transferred land in their district in November 2000. Around 280 families joined the occupation within the first month and together worked to clear the land for planting. Each family was allocated 1.25 râi (0.2 ha) of land (though an extra 0.04 ha was allowed for committee members in recognition of their work on behalf of the group).
The villagers have agreed upon regulations for the management of this land and these have been amended and developed over the past three years. Exchange of land was not allowed at first, but following some informal swapping of plots, the group decided that there had to be some kind of allowance for those who wanted to sell, or resign from the movement, eg if they fell ill etc.. Thus, the rules were changed to allow villagers to return the plot to the committee in exchange for a nominal sum of money. Over the last 2-3 years, around 10 plots have been returned. Currently, purchases of this land must be paid for at a standard price, which has been set deliberately low by the committee in order not exclude the poor from the local community. Criteria for identifying who is entitled to purchase have also been established.
As there is no provision under the Thai Land Code for common property, the villagers decided to create their own community tenure regime. Contributions were made by each family to pay for a survey map identifying the boundaries of the entire area and the dimensions of each individual plot. The villagers have published their own certificates, which indicates the location of the individual landholdings, the neighbouring plot holders, the rights of the titleholder, with 4 signatories. Villagers explain that the main motivation behind their ‘community title’ is to ensure long term access. As community title is not officially recognised, it cannot be used as collateral. The community therefore decided to set up their own ‘land bank’ or savings fund to facilitate small loans.
An important motivation to join the movement was severe indebtedness. This has been exacerbated by vulnerability to the declining prices and increasing costs of their main product: lo###
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