Land Tenure, Tenure Security and Farm Efficiency: Panel Evidence from the Philippines

This article tests the relationships among formalised property rights, land tenure contracts and productive efficiency in farming. Using four rounds of panel data from 230 rice farms in the Philippines, we measure the effects of land tenure arrangements on farm efficiency using a stochastic production frontier model. We test for the allocative efficiency of observed land rental markets. We also test how land tenure security affects farmers' investment decisions. Results suggest that, despite the presence of formalised titles, the rental market remains inefficient at allocating land. In contrast, the unformalised tenure contracts used by farmers appear to provide tenure security.