| || || Prasad, Biman Chand.|
| || || Property rights, economic performance and the environment in Fiji : a study focusing on sugar, tourism and forestry |
Author:Prasad, Biman Chand.
Institution: University of Queensland
Subject: Land tenure -- Economic aspects -- Fiji , Sugarcane industry -- Fiji -- Effect of land tenure on , Tourism -- Fiji -- Effect of land tenure on
Call No.: Pac HD 1265 .F5 P73 1998
Copyright:10-20% of this thesis may be copied without the authors written permission
Abstract: The uncertainty of property rights in natural resources in Fiji is not a new problem. However, it has been pointed out that since the mid-1980s, the new economic policies pursued by Fiji have increasingly been frustrated by the nature of property rights in natural resources and in particular, property rights in land. The discussion of the nature of property rights in land has always been a politically sensitive issue, Eighty-three percent of the land in Fiji is owned by the indigenous Fijians and is deemed inalienable. The nature of property rights in land has been highlighted as a major constraint to the economic performance of the key economic sectors in Fiji. This thesis therefore, explores several theoretical and practical issues in relation to the nature of property rights in land. More specifically, this study analyses the impact of property rights on the Fijian economy in relation to the sugar, tourism and the forestry sectors. The major contribution of this study is that it provides an economic perspective to the problem of property rights in land in Fiji. This study also represents the first attempt to analyse in detail the impact of the nature of property rights on the performance of the Fijian sugar, tourism and the forestry sectors. Specifically the contributions of this study include the following. First, it presents an analysis of the role of the institutions that govern the nature of property rights in land. These include the Native Lands Trust Board (NLTB) and the Agricultural Landlord and Tenants Act (ALTA). The ALTA legislation is considered in detail and some of the strengths and weaknesses of the legislation are highlighted. Within the framework of ALTA legislation the method of rent determination and the level of rent charged by the NLTB are analysed. The role of NLTB is discussed using the neoclassical microeconomic model that shows the consequences of the operation of NLTB in the land market in Fiji. A simple model is developed using the production data to analyse the production disparities amongst the Fijian farmers and the non-Fijian tenants and its implications for the sugar industry. Second, the study makes an empirical contribution by using farm-level data from the sugar industry to find the impact of secured and unsecured leases on production and investment in the sugar industry and by identifying the implications of these leases for the conservation and management of the land quality. The empirical contribution is further extended to determine the impact of sharecropping in the sugar industry, A simple model of sharecropping is postulated to find the differences between fixed rent contracts and sharecropping arrangements, Third, another key sector in the Fijian economy is the tourism industry. Despite various tax and financial incentives, the level of investment in this industry has remained sluggish. This study reviews the investment climate in Fiji for the development of the tourism industry. It points out that the insecure and ill-defined property rights may be responsible for the lack of investment in the hotel industry. Fourth, a rent-capture model based on previous studies is postulated and is used to find the level of rent capture in the forestry sector. The forestry sector accounts for about 1.5 percent of the GDP, however, in terms of (he environment and the involvement of the Fijian landowners it is very significant. Landowners in the past have questioned the benefits from this sector and whether the level of royalty paid to the owners reflects the value of the resource. The results show that landowners receive very low levels of revenue and there is a significant level of 'high grading' that has implications for the environment. This thesis addresses one of the most controversial issues in Fiji and provides significant insights into how the performance of key sectors in the economy may have been affected by the nature of property rights. From the analysis, it can be concluded that uncertainty of property rights in land has affected the level of production and investment in the sugar, tourism and the forestry sectors. This study demonstrates that desirable conservation of natural resources and management of the environment is undermined by ill-defined property rights for the use of natural resources.