Evolution of cropping patterns and land market activity under liquidity constraint: evidence from Côte d'Ivoire

Bignebat , Celine
        INRA
        , Montpellier .
         UMR 1110 Marchés, Organisations, Institutions et Stratégies d'Acteurs; Colin , Jean-Philippe
        .

Evolution of cropping patterns and land market activity under liquidity constraint: evidence from Côte d'Ivoire

2011

Bignebat , Celine (INRA , Montpellier (France). UMR 1110 Marchés, Organisations, Institutions et Stratégies d'Acteurs) | Colin , Jean-Philippe (Institut de Recherche pour le Développement, Montpellier(France).)

This paper studies the interrelated dynamics of land market and crop substitution in Lower Côte d’Ivoire. The evolution of the cropping pattern from coffee and cocoa to palm tree first and, more recently and now predominantly, rubber tree, is proved to impact the activity of the land market. In fact, on the one hand, the possibility to lease out the planted plots to tenants who plant annual intercrops during the first years of the immature trees generate revenues for the landlord before the beginning of the production and subsequent returns. In the presence of a tough liquidity constraint, this condition may be binding for the investment decision. On the other hand, crop substitution participate thus to the land market activity, in a region where the agricultural frontier is ended, and where a large group of landless migrants is present. However, intercropping is only a transitory strategy and planting trees may be decided at the expense of staple crop cultivation. Drawing on the agricultural household literatures on land market participation and on investment decision in land-related assets, the paper gives the rationale for these evolutions. The conclusions derived from this analysis are then tested on household primary data collected in 2008 in Lower Côte d’Ivoire. We find strong support for a severe liquidity constraint.

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