National Policy Ep28: Your Land, Their Law: The New Bill May Compel You to Pay Rent on Your Own Land.
When you are looking for means to invest in agriculture, land is a key factor of production that has an essential function in the agricultural sector compared to other sectors. However, in recent years, land mobility has become an increasing concern attributed to rising concentration and rivalry for land ownership, restricting the general competitiveness of the agri-food sector and limiting potential for new entrant farmers to acquire land and the opportunities that come with it.
You might be owning land, let us say ancestral land, it is wise to be aware of the changes that are happening in the policies of the land so that you are not caught unawares and make adjustments where necessary. In a village, hinged among hills and fertile plains, you as a farmer are tending to your ancestral land that has been passed down through generations, and represents more than just a source of livelihood. You need to understand factors that might render you losing it. It epitomizes heritage, identity, and a sense of belonging. This land can be categorized as freehold land.
While land leasing is growing into a more popular form of land tenure as an alternative to owning land for agriculture, to subsidize production on your freehold land, you must look into recent changes in the law amendments regarding land ownership and utilization, which will in long way have a major effect on agricultural yield and sustainability.
You may be asking yourself, “What is freehold land?” and “What is leasehold land?”. The two terms should have a huge contribution to how land is utilized at the end of the day and affect the choices you make to benefit from land. At some point you are likely to invest in agriculture or expand your production capacity, you will be compelled to go for leasing of land to achieve this goal. In this article, you will learn some of the changes that are happening on land laws in Kenya and how they are likely to shape food production.
What is Freehold land?
Freehold tenure offers you absolute ownership of land and property, while leasehold land tenure offers ownership for a defined period, which is capped at 99 years according to the constitution of Kenya. The absolute ownership guaranteed by freehold land tenure allows you, the owner, to have control of the property for an indefinite duration (Williamson et al., 2010), and you can use the land to your liking to do your projects without time constraints, and the land can be passed down to generations after you.
You are also not required by law to make any rent payments but should pay land rates where applicable. Do you know that the recently proposed Land Laws Amendment Bill 2024 is likely to bend this clause and freedom? The bill is aimed at amending the Land Registration Act of 2012 to change the land ownership laws in Kenya.
This affects mostly land bordering the urban areas and which can have a snowball effect on rural areas as well, considering there devolution impact on development. The new clause will force freehold land owners, property owners who enjoy free ownership for perpetuity and can use the land for any purposes, to pay land rent.
“The owner of any freehold land, situate within the boundaries of any urban area or city, shall pay an annual land levy equivalent to land rent charged on comparable leasehold land or property of the same size in the same zone: provided that any owner of freehold land that is put to agricultural use may be exempted from the annual land levy.” Read part of the bill.
The exemption from annual levy is not absolute as per say because of the clause ‘May’ which leaves the statement as something that is optional. This is an open gap that threatens farming community and can have a huge impact of food security.
If, according to the Bill, the Land Act 2012 amendments, you shall pay an annual land levy on freehold land equivalent to leasehold land, then you are deprived of the essence of owning the same piece of land. What this means, is, you are being conditioned to leasing land rather than owning land because of the extra burden imposed on you. You will pay the sum for ownership when buying plus the rent fee, whereas someone with a leasehold only pays the lease fee.
This done through policies and laws in what I see as something that is blinding to farmers who are always working tirelessly to own a piece of land so that they have full control on their projects for the longest time possible and be environmental stewards. On leasehold land, you are mostly bound by the lessor’s conditions.
This is radical move that changes the country’s taxation, which departs from traditional practice where land rates were primarily imposed on property with leaseholds, predominantly in urban areas.
What is leasehold?
According Williamson et.al, (2010) leasehold is defined as ‘property right created by a lease, which is a contract by a landlord (the lessor) giving exclusive possession to a tenant (lessee) for an agreed period of time’… and on certain terms and conditions. Notably, this is different from freehold land, which is a free tenure with maximum rights permissible within the tenure system for an indefinite duration (Williamson et.al, 2010).
For farming purpose, your hands are a bit tied but you can agree on the terms through legal process with the lessor. Leasehold can allow to do some long term projects as opposed to local leasing, where you live in fear of being shortchanged by the land owner. This happens often to women due to vulnerability and youths when they are new entrants into farming ventures.
What Transferring National Land Commission to Cabinet Secretary will do
The bill proposes to shift some key roles of the National Land Commission to the Cabinet Secretary (CS). The Commission has been acting and an independent mandated to oversee matters land. Transferring its powers to CS who is appointed through political channels is a bit skeptical and shutters windows for proper decision making processes.
The bill has also given the CS authority to acquire land compulsorily where for purposes of development. This also might open floodgate for land grabbing if the mandate is left to one person due to subjection influenced by personal interests rather than objectivity.
“Whenever the national or county government is satisfied that it may be necessary to acquire land under section 110, the respective Cabinet Secretary or County Executive Committee Member shall submit a request for acquisition of the land to the Cabinet Secretary to acquire the land compulsorily,” reads the Bill in part.
One day you might wake up and be told that County wants to do a project on your farm land. There is need to state the situations that may necessitate compulsory land acquisition and how public participation. You might have seen some farm lands being compromised for a mega government projects leaving the farmer stranded and losing sources of their livelihoods.
Land Acquisition is also Affected
A block has been added make lack not smooth as you may have thought. For to own a land, the land rates must be paid for. The Bill proposes to amend the Land Registration Act of 2012 to block the registration of any land for which land rate has not been paid. There are chances that the rates might be backdated. This will stifle the process further.
This means that if a freeholder is, selling a parcel of land and transferring it to the new owners, the process will only be registered if the land rate has been paid. On the side, it is an indication that as a freehold land owner, the government is charging you land rates in the long run for owning a land.
Reflecting on community owned land, there is need for such bills to highlight such grave matter that affect smallholder farmers, especially the youth and women. Many a time it has brewed disputes among communities, which affected peace and food production. In some instances families encounter internal displacement where women and children are affected the most.
According to the document by Landesa and KLA about 70 per cent of the land in the country is community held. And in order for women and men who live in community land areas to feel tenure secure, the land needs to be protected, recognized and registered in the name of the community.
“Incidentally, most smallholder farmers are in rural areas where land tenure security is challenged by myriads of issues such as succession, land boundary disputes and associated conflicts, customs and traditions that deny women access to land and informal land transactions among others,” the document states.
While the Constitution of Kenya and the subsequent enactment of the Community Land Act, 2016, providing the legal means for this, implementation has been slow and ineffective.
“Therefore, there is need for collective dialogue, through a caucus, on how to best unlock community land registration, as a means of protecting the rights of the women and men who live within them,” the document states.
The caucus, made up of representation from the Ministry of Lands as well as the National Lands Commission and the Council of Governors, needs to facilitate tenure security for smallholder farmers, who they say are responsible for 70 percent of food consumed in the country.
What Land Experts are Saying
Some experts have expressed their concerns about the bill and its impact on taxes. It makes it appear oppressive to already tax-burdened citizens. There are also other issues with land which have not been taken care of, like inequalities in land allocation, rampant corruption, landlessness and poor land use planning.
“We further wish to remind the public and the President that, before land reforms, land governance processes, which were presided over by the then Ministry of Lands, were riddled with rampant land grabbing, severe land insecurity, poor accountability, inequalities in land allocation, rampant corruption, landlessness and poor land use planning,” said Mwenda Makathimo from National Land Coalition in an interview with Citizen TV.
You are running a risk of being disposed land if this bill is to pass. If you will not be able to afford the land rates, then it means your land will not be registered, without which, it is like you don’t own it.
"Imposing this annual levy on land that is freehold property essentially has the effect of converting freehold property into leasehold property and by that, running the risk of dispossessing many Kenyans who may not afford to pay the levy and this includes indigenous people whose lands are ancestral," Eva Makori, Acting Regional Coordinator, International Land Coalition (ILC) Africa(Citizen TV).
Food Security Threatened
Instances like the Bill seeking to take away the power from an independent commission will be retrogressive, and this could leave Kenyans counting losses should there be a need for compulsory acquisitions. Living in fear that your land can be taken away demotivates you from being productive on your land.
Fear is a barrier to progress. We have many people, especially the youth and women, who now will be less motivated to invest their resources in farming. The lessor the investments by local people in food production, the more the country will struggle to meet food demand. You will definitely face the heavy lifting on the consumer end when the prices of food are skyrocketing, amid prolonged scarcity and dependency on imported food.
The agriculture sector contributes approximately 33 percent of Kenya's Gross Domestic Product (GDP) meaning it is the backbone of the economy. Therefore, more attention should be given to land, which is a factor of production that provides 90% of the food we consume.
Land fragmentation, already a critical issue, leading to smaller, less productive plots of agricultural land in most of the arable lands. How can this smallholder farmer in Bogeka Ward, Kisii County, be able to raise funds from her production to meet the farmer levy and she is already struggling with access to inputs? The government, you must consider the needs of the majority who make the numbers of the GDP count.
When you introduce levy on freehold land and drive people to go for leasehold as the better solution, you will be interfering with food sovereignty, culture and indigenous knowledge. The main disadvantage with leasehold, the lessor has more say on what you can produce on that land, including the method of production, the seeds, and other farm inputs.
This is likely to raise cost of production and render you out of production, where effect is felt by the household and other indirect consumers. Furthermore, insecure land tenure discourages investment in agricultural technology and long-term planning, further exacerbating food insecurity
You are already experiencing the impacts of climate change and adding land rates to freehold would place a significant financial burden on small-scale and subsistence farmers who will struggle to pay the levy, risking loss of their ancestral lands.
The new reality of paying an equivalent levy as someone who owns a shopping mall in an urban area is very unrealistic. This leads me to a question, "Are you off the levy hook if you are doing urban farming in an urban area?" The levy is a bottleneck to your investment in urban farming and utilizing a small space for intensive food production that contributes to food and nutrition. The bill says you may be exempted from paying the levy, which means it is optional.
We need a change in our policies to promote sufficient food production rather than taking away the factors of production. Such a bill is killing the spirit of entrepreneurship that is vital for creating employment, improving food production, and driving community development.
In conclusion, the proposed amendments to the Land Registration Act pose significant challenges for smallholder farmers and landowners across Kenya. By imposing annual land levies on freehold properties, the Bill threatens to erode the very foundation of land ownership and security that many families have relied on for generations.
Such changes could hinder agricultural productivity, discourage investment in sustainable farming practices, and ultimately impact the nation’s food security. It is crucial for all stakeholders, especially those in rural communities, to stay informed and engaged in the legislative process to protect their land rights and livelihoods.
As the debate around this Bill unfolds, a balanced approach that safeguards the interests of both the government and the citizens must be prioritized to ensure that land remains a source of stability and prosperity for future generations
References
The Land Laws (Amendment) (NO. 2) BILL, 2023.
GOK (2018): The Land Act No.6 of 2012 (Revised edition, 2018), Government Printers, Nairobi
Institution of surveyors of Kenya (2018): Handbook of Land Laws, Publication of ISK
The Land Registration Act, 2012.
GOK (2010): The Constitution of Kenya, 2010, Government printers, Nairobi
Tanga W.R and Mramba, S.J. (2008): Manual on land Law and Conveyancing in Tanzania.
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