Land tenure security, crop choices, and agricultural input investment decisions: Evidence from nationally representative data in Nigeria
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International Food Policy Research Institute
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Land tenure security is widely regarded as essential for agricultural investment and productivity growth. However, causal evidence on its effects across multiple farm decisions remains limited, particularly in sub-Saharan Africa. This study investigates how tenure security is associated with crop portfolio choices and input investment decisions among smallholder farmers in rural Nigeria. It measures tenure security using a composite index, drawn from wave 5 of the Nigeria Living Standards Measurement Study-Integrated Surveys on Agriculture (LSMS-ISA), that captures plot-level perceived security of ownership, and household reported risk of land loss, ownership security, and duration of ownership. The study employs two complementary approaches: a multivariate probit model to capture the joint and correlated nature of crop adoption decisions, and limited information maximum likelihood instrumental variables (LIML-IV) estimation to establish association between land tenure and input investment decisions. Results reveal significant but heterogeneous effects. Greater tenure security increases the probability of cultivating grains and cereals by 29.8 percentage points, while reducing the likelihood of growing legumes and pulses by 24.6 percentage points and horticulture by 11.4 percentage points respectively, which suggests a substitution effect toward grain specialization. On input investments, LIML-IV estimates indicate that a one-unit increase in the tenure security index raises organic fertilizer use by 9.93 percent, inorganic fertilizer use by 6.57 percent, and pesticide use by approximately 0.89 percent. These findings are robust to Lewbel’s heteroskedasticity-based identification strategy. Heterogeneity analysis reveals stronger investment effects among youth-headed households, while impacts on female-managed plots are statistically insignificant, pointing to persistent gender barriers. The study highlights the need for integrated policies that combine tenure formalization with crop diversification support, gender- and youth-sensitive land governance, and input market development in order to maximize the productivity gains from land rights reform in Nigeria.
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land tenure, tenure security, property rights, farm inputs, statistics, land ownership, investment