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					                         Study on
                    Rural Land Markets
                        in Lao PDR
           Land Policy Study No. 8 under LLTP II




                           Dr.Babette Wehrmann
                            Nuantha Sithipanhya
                           Phounsavath Souphida




Sponsored by: Lao-German Land Policy Development Project
           (German Contribution to the Land Titling Project II in Lao PDR)




                                                    April/May 2007
This study is part of a series of Land Policy Studies conducted in preparation of a
coherent and comprehensive “National Land Policy Statement for Lao PDR”.

The following studies have already been published in this series:


No. 1:       Study on Land Allocation to Individual Households in Rural Areas
             of Lao PDR; December 2004
             Authors: Bouakham Soulivanh, Anothai Chantalasy, Phounsavat
             Suphida, Florian Lintzmeyer, Florian Rock

No. 2:       Study on Land Markets in Urban and Rural Areas of Lao PDR;
             March 2005
             Authors: Bouakham Soulivanh, Anothai Chantalasy, Phounsavat
             Suphida, Florian Lintzmeyer, Florian Rock

No. 3:       Study on Land Tax and Fees Policy in Lao PDR; February 2006
             Authors: Simon Keith, Pheuiphanh Ngaosrivathana, Bouakham
             Soulivanh, Onsy Phimsomphou, Chanh Denuthai

No. 4:       Study on State Land Leases and Concessions in Lao PDR;
             June 2006
             Authors: Gunda Schumann, Pheuiphanh Ngaosrivathana, Bouakham
             Soulivanh, Somboun Kenpraseuth, Khamdeng Onmanivong,
             Khamthanh Vongphansipraseuth, Chithasone Bounkhong

No. 5:       Study on Urban Land markets in Lao PDR; September 2006
             Authors: Babette Wehrmann, Bouakham Soulivanh, Khamdeng
             Onmanivong

No. 6:       Study on Communal Land Registration in Lao PDR;
             February 2007
             Authors: Katrin Seidel, Khamla Phanvilay, Bounlath Vorachit, Lau Mua,
             Somthong Boupphachan, Robert B. Oberndorf

No. 7:       Study on Land Consolidation in Lao PDR; March 2007
             Authors: Pheuiphanh Ngaosrivathana, Khamfanh Keomanivong




______________________________________________________________

                                          ii
_________________________________________________Rural Land Markets in Lao PDR


Table of Contents
1. EXECUTIVE SUMMARY............................................................................................................................... 5
2. INTRODUCTORY REMARK ........................................................................................................................ 6
3. INTRODUCTION............................................................................................................................................. 6
4. METHODOLOGY............................................................................................................................................ 7
5. PREREQUISITES FOR A FUNCTIONING LAND MARKET .................................................................. 8
    5.1 PROPERTY RIGHTS AND TENURE SECURITY .................................................................................................. 8
       5.1.1 Land Possession Documents................................................................................................................. 8
       5.1.2 Land Conflicts .................................................................................................................................... 14
    5.2 REGISTRATION, REGISTRATION FEES AND VALUATION .............................................................................. 14
    5.3 LEGAL FRAME AND LEGAL SECURITY ......................................................................................................... 18
    5.4 RULE OF LAW .............................................................................................................................................. 18
    5.5 GOVERNANCE IN LAND ADMINISTRATION .................................................................................................. 19
6. DEVELOPMENT OF RURAL LAND MARKETS .................................................................................... 19
    6.1 LAND SALES, ALTERNATIVE LAND ACQUISITION AND LAND ACCUMULATION ........................................... 19
    6.2 LAND PRICES............................................................................................................................................... 20
    6.3 LAND SPECULATION .................................................................................................................................... 21
    6.4 LAND LEASES, SHARE CROPPING AND CONTRACT FARMING ...................................................................... 21
    6.5 MORTGAGES ............................................................................................................................................... 23
    6.6 REAL ESTATE .............................................................................................................................................. 25
7. TOOLS TO ASSURE SOCIAL AND ENVIRONMENTAL SUSTAINABILITY OF RURAL LAND
MARKETS .......................................................................................................................................................... 25
    7.1 LAND USE PLANNING .................................................................................................................................. 25
    7.2 PROPER STATE LAND MANAGEMENT AND COMPENSATION ........................................................................ 26
8. PROPERTY TAX IN RURAL AREAS: LAND TAX VERSUS BUILDING TAX .................................. 26
9. CONCLUSIONS ............................................................................................................................................. 27
10. RECOMMENDATIONS.............................................................................................................................. 28
    RECOMMENDATIONS TO INCREASE TENURE SECURITY:..................................................................................... 28
    RECOMMENDATIONS TO AVOID NEGATIVE IMPACTS OF THE LAND MARKET ON THE ENVIRONMENT: ................ 29
    RECOMMENDATIONS TO IMPROVE THE IMPACT OF THE CAPITAL MARKET ON THE LAND MARKET AND LAND
    DEVELOPMENT: ................................................................................................................................................. 29
    RECOMMENDATIONS TO REFLECT ON PROPERTY TAXATION:............................................................................. 29
ANNEX A1: ......................................................................................................................................................... 31
    TERMS OF REFERENCE FOR A LAND MARKET STUDY IN RURAL AREAS ........................................................... 31
      Background ................................................................................................................................................. 31
      Objective...................................................................................................................................................... 31
      Methodology................................................................................................................................................ 31
      Expected Outputs......................................................................................................................................... 32
      Specific Tasks and Scope............................................................................................................................. 32
      Timing.......................................................................................................................................................... 33
      Team Composition....................................................................................................................................... 33
      Remarks ....................................................................................................................................................... 34
ANNEX A2: ......................................................................................................................................................... 35
    WORK PLAN (25.4. – 25.5.2007)....................................................................................................................... 35
    OVERVIEW ON PROVINCES, DISTRICTS AND VILLAGES VISITED ........................................................................ 38
      a) Name of Provinces .................................................................................................................................. 38
      b) Name of Districts..................................................................................................................................... 38
      c) Name of Villages ..................................................................................................................................... 38
ANNEX A3: ......................................................................................................................................................... 39
    LIST OF PEOPLE INTERVIEWED .......................................................................................................................... 39
       NLMA, Vientiane ......................................................................................................................................... 39

                                                                                   3
_________________________________________________Rural Land Markets in Lao PDR

        Savannakhet................................................................................................................................................. 39
        Khammouane Province ............................................................................................................................... 39
        Sayabouri Province ..................................................................................................................................... 40
        Bokeo Province............................................................................................................................................ 41
ANNEX A4: ......................................................................................................................................................... 42
    GUIDING QUESTIONS FOR EXPERT INTERVIEWS ................................................................................................ 42
      Guiding Questions for Provincial Land Management Agency and for District Offices .............................. 42
      Statistics from Provincial Land Management Agency and District Offices: ............................................... 43
      Guiding Questions for Naiban..................................................................................................................... 44
      Statics/Data from Naiban ............................................................................................................................ 45
      Guiding Questions for District Finance Offices (land taxation) ................................................................. 46
      Guiding Questions for Banks (mortgage).................................................................................................... 46
      Statistic/Data from banks ............................................................................................................................ 46
ANNEX A5: ......................................................................................................................................................... 47
    QUESTIONNAIRE FOR VILLAGERS ON RURAL LAND MARKETS............................................................................ 47


List of Tables

TABLE 1: LEGAL RIGHTS, DE FACTO RIGHTS AND PERCEIVED RIGHTS OFLAND OWNERS…..…11
TABLE 2: TYPES OF DOCUMENTS PROVING LAND POSSESSION IN RURAL AREAS…………….....12
TABLE 3: COMPARATIVE OVERVIEW ON REGISTRATION FEES/FEES FOR DOCUMENTS.……..…16
TABLE 4: NUMBER OF REGISTERED SALES, LEASES AND MORTGAGES……………….……….…...17
TABLE 5: COMPARATIVE OVERVIEW ON LAND PRICES ………………………….................................21
TABLE 6: NUMBER OF MORTGAGES WITH LDB AND APB …………………..........................….……...24




                                                                                  4
_________________________________________________Rural Land Markets in Lao PDR


1. Executive Summary

Government’s intention when introducing private property over land and encouraging
land markets generally is to trigger economic development and generate state
income. A prerequisite for both is tenure security. Five different documents occur in
rural area that proof possession rights on land: Land Survey Certificates (sporadic
and systematic), Land Tax Declarations (mainly for construction land, rice fields, and
gardens), Temporary Land Use Certificates (mainly for shifting cultivation to be
converted to permanent use), Naiban’s Certificates on Land Ownership (construction
land, rice fields, and gardens) and Land Tax Receipts (shifting cultivation). There are
no Land Titles apart from some very few urban centres. Currently, the majority of the
rural population holds Land Tax Declarations, or even worse Temporary Land Use
Certificates. Many mountainous people living from shifting cultivation don’t have any
proof of land possession; some of them have got a tax receipt. Although tenure
security is generally given within the village community, people are at risk of loosing
their land when government projects or private investors develop state land areas in
their village. There is also a shortage or even lack of agricultural land due to the
topography of Northern Laos and the resettlement of people. Smaller land conflicts
such as boundary conflicts between neighbours or villages are usually settled at
village level by naibans and elders.

There is an active rural land market (people sell, buy and lease land) which is
however based on nothing else than perceived property rights, in most cases only
supported by Land Tax Declarations – if at all. Only in case of individual bank
mortgage, people apply for a Land Survey Certificate which can easily be received,
however it is very expensive: between 1-3.000.000 kip. The Land Survey Certificate
provides people with all property rights, in most cases even to receive compensation.
The Land Survey Certificate is de facto the “rural title” and should in future also
become de jure a “rural title” as it is easy and fast to deliver and could even be cheap
if done systematically – as proven by the GTZ project activities in Sayabouri (12.000
kip).

There are individual and group bank loans as well as private loans. For individual
bank loans a Land Survey Certificate is required, the other two are accessible with
Land Tax Declaration, sometimes even without any land possession documents.
Mortgages are used for business and agriculture investment, but cannot be used to
acquire land or houses.

Although land prices increase continuously (5-10% per year in remote areas, 20-30%
per year along roads and close to town), there is hardly any land speculation in rural
areas due to a shortage in agricultural land. Land speculation mainly occurs in peri-
urban areas of provincial capitals.


                                           5
_________________________________________________Rural Land Markets in Lao PDR

Government revenue from rural land ownership and land transactions is rather low.
Land tax collection is very cumbersome and only generates little state income. It also
favours rich people without farmland (traders, owners of shops and small factories
etc.). Therefore, a substitution of the land tax by a building tax could be considered in
the future. This, however, can only be done, once every land owner has a Land
Survey Certificate as for the moment the Land Tax Declaration is the most crucial
document proving land ownership. It is understandable that the government also
would like to generate income from land transactions by asking for registration fees.
These fees, however, are much too high and result in land sales only done at the
village level without involving the District Land Offices and avoiding the payment of
any fees.

Based on the study findings, recommendations include the official acceptance of the
Land Tax Declaration as a land ownership proving document, systematic issuing of
Land Survey Certificates, official rules (law, decree, or ministerial instruction) on
clearly defined low fees for sporadic and systematic Land Survey Certificates as well
as for registration of land sales, better follow up and up-grading of Temporary Land
Use Certificates, information campaigns on how to receive Land Survey Certificates,
better protection of farmers in case of contract farming, compensation to all land
users in case of state concessions covering privately used land, and a change in loan
policy.

The Land Survey Certificate should become the “rural title” as it is already called by
the rural population!


2. Introductory Remark

The study on rural land markets is a continuation from last year’s work on urban land
markets. During the previous study, the team visited five provincial capitals, while this
year’s team investigated in the rural areas of four provinces. Many of the findings
concerning the legal frame as well as governance issues are the same and are not
repeated in this study. The findings on the urban land markets are published in the
Land Policy Study No. 5 under LLTP II (Study on Urban Land Markets in Lao PDR).


3. Introduction

Why are we interested in rural land markets? First of all, land transactions reflect the
economic activities in rural areas. Do some people buy more land to extend their
businesses? Are people mortgaging land to invest the money in economic activities?
Do people buy land and speculate with it to make a profit? Is there any accumulation
of land and wealth? Secondly, the state normally wants to profit from these activities
and generate income for the state budget to be invested in the development of the
country. What fees and taxes are taken? Can people afford them? Do people try to
                                           6
_________________________________________________Rural Land Markets in Lao PDR

avoid paying them? These are just some of the questions that have been
investigated on during the research for this study.

A land market can only function in an economically efficient manner if there is private
property, tenure security and clear and transparent information on who owns which
land parcel. Therefore, there should be clearly defined property rights guaranteed by
legal documents proving the ownership or possession of land. This normally requires
a land registration system, including simple surveying, demarcation, adjudication and
registration. All these should be based on a consistent legal frame which provides
legal security. This also requires rule of law. In a perfect situation, the whole land
administration would be characterized by good governance.

The report, therefore, first gives an overview on the prerequisites of rural land
markets and discusses their strength and weaknesses (chapter 5), before providing
an analysis of the land market activities in rural areas (chapter 6).

As functioning land administration does not necessarily lead to social and
environmental sustainability of land markets, a short introduction is given on which
additional land management activities are needed (chapter 7).

Further details on constitutive and regulative instruments for a functioning land
market can be found in the urban land market study (Land Policy Study No. 5).


4. Methodology

The study on rural land markets has been carried out in the four provinces of
Savannakhet, Khammouane, Sayabouri, and Bokeo, including 11 districts and 20
villages. All findings are based on interviews at Provincial Land Management
Agencies, Provincial Finance Departments, District Finance Offices, District Land
Offices, branches of the Lao Development Bank and the Agricultural Promotion
Bank, naibans, village tax collectors, women’s groups and villagers (see Annexes A2
to A5 for the people and institutions visited, the districts and villages that have been
covered, as well as for the guiding questions used for expert interviews and the
questionnaire used to interview villagers).




                                           7
_________________________________________________Rural Land Markets in Lao PDR


5. Prerequisites for a Functioning Land Market
5.1 Property Rights and Tenure Security

Property rights are those rights different people can have over one piece of land.
These include:
   • the right to use the land,
   • the right to control the land which normally means to decide what can be done
      with the land, how it can be used and what uses are not allowed,
   • the right to manage the land which means to decide who is using it at what
      time and what exactly is done with land within the given frame,
   • the right to temporary or permanently transfer the land (to lease, to sell, to
      inherit, to give as gift, to use as collateral),
   • the right to generate income from the land (to grow crop on it, to lease it, to
      mortgage it etc.),
   • the right to exclude others from using the land and
   • the right to receive compensation in case of expropriation.

The law normally defines which property rights people hold in case of land
ownership. The Lao law guarantees all property rights apart form the one to exclude.
Private domestic property is guaranteed by the Constitution (Article 16). The
Constitution and the Land Law further define the property rights national
organisations and individuals can hold in accordance with the laws (Constitution Art.
17, Land Law Art. 52-63 and 71). However, these rights are only considered legal
rights if a person holds a Land Title or a Land Survey Certificate. The possession of a
Land Tax Declaration or Temporary Land Use Certificate only gives the right to use
and to inherit. People holding these documents are not allowed to sell or mortgage –
although they do. Many rural people even use land and feel as owners without
possessing any document. Tenure security in rural areas is therefore not very strong.

5.1.1 Land Possession Documents


Six different documents occur in rural areas that prove possession rights over land:
   • Land Titles (only in a small number of economically active district capitals)
   • Land Survey Certificates (sporadic and systematic),
   • Land Tax Declarations (mainly for construction land, rice fields, gardens),
   • Temporary Land Use Certificates (mainly for shifting cultivation to be
        converted to permanent use),
   • Naiban’s Certificates on Land Ownership (construction land, rice fields,
        gardens) and
   • Land Tax Receipts (shifting cultivation).



                                          8
_________________________________________________Rural Land Markets in Lao PDR

There are no titles apart from some very few which have been issued in district
capitals which are quite urbanized. It can be estimated that about 99% of the rural
areas would not qualify for the current requirements that have to be met to receive a
title. It would also take a long time to issue titles in all rural areas. It has been argued
that standards and therefore costs and time to issue land titles could be lowered.
However, this would include lowering the standards for urban areas too which would
be risky. Because of much higher land values in urban areas, the current criteria,
standards and procedures (including the use of geodetic network coordinates and
permanent boundary markers) should be maintained in these areas. If standards are
lowered for rural areas only, there should be a clear distinction between urban and
rural titles. In that case, however, the rural title would be the same as the current
Land Survey Certificate – just with another name.

The most common document in the two Southern provinces is the Land Tax
Declaration; about 99% of land owners hold this document. In the two Northern
provinces, villagers have much fewer documents, mainly Land Tax Declarations and
Temporary Land Use Certificates. There is very little follow up on Temporary Land
Use Certificates and if they are up-graded, people only receive a Land Tax
Declaration, not a permanent certificate (such as the Land Survey Certificate) as
stated in the law.

Only in the case of requests for mortgages, the rural population will apply for Land
Survey Certificates under the sporadic adjudication scheme. The only province with a
higher number of Land Survey Certificates is Sayabouri where they are also issued
systematically.

While the Land Title provides its holder with the right to use, inherit, lease, sell,
mortgage, exclude others and to receive compensation, the other documents are
legally of less value and only allow for a limited bundle of rights. Yet, the Land Survey
Certificate is the highest land possession document available in rural areas and
people consider and refer to it as the rural “title”. It is issued by either the District
Land Office or – increasingly – by the Provincial Land Management Agency. In order
to improve access to this document, it should be issued by the District Land Offices
on a regular basis. It is the only official document proving land ownership in rural
areas. In addition to use and inheritance of the land, it can be used to sell and
mortgage land.

The Land Tax Declaration (LTD) only allows for use and inheritance. In the past, it
was issued by the District Land Offices; in the future the task of land tax collection
and therefore the issuing of the LTD will be the role of the District Finance Offices.
Both documents – Land Survey Certificate and Land Tax Declaration – are generally
also recognized as a base for compensation. Both documents include a sketch of the
property. In case of the Land Tax Declaration this is either done by the local tax

                                             9
_________________________________________________Rural Land Markets in Lao PDR

collector or an officer from the District Land Office (in the past) based on estimations
or simple surveying. In the case of a Land Survey Certificate, the land has been
surveyed by a land officer either from the provincial or the district office and this is
generally much more accurate – reflecting the real size and measurement of the plot.

The Temporary Land Use Certificate which is issued by the District Agriculture and
Forestry Offices and signed by the District Governors only states that the land has
been started to be used in a permanent way. The land is, however, still considered to
be state land and therefore it cannot be sold or mortgaged and also no compensation
is paid. Similarly, the tax receipt is not considered to be any document to prove land
possession as it does not include details on the location of the parcel. The land tax
receipt is mainly given for tax payment on shifting cultivation land.

The ownership certificate issued by the naiban has a long tradition. Today, it is
mainly used as additional proof/security in combination with the Land Tax Declaration
when people apply for a Land Survey Certificate to get access to a bank loan.

There is a wide gap between legal rights and rights perceived by the land holders. As
can be seen from Table 1, villagers only in possession of Land Tax Declarations
generally feel that they can do anything with the land, apart from mortgaging.
However, as they can easily apply for a Land Survey Certificate in case of mortgage,
they don’t feel limited in whatever they want to do with the land. Only in some places
in Sayabouri province, people felt rather insecure with their Land Tax Declarations,
knowing that they are neither allowed to sell nor to mortgage the land.

None of the documents, issued in rural areas, gives the owner 100% security to
exclude others from the use of the land. While conflicts with other villagers (mainly
boundary and inheritance conflicts) are easily solved by naiban and elders, people
have no security in case of government projects or state concessions (see 5.1.2).




                                          10
                                                           Lao-German Land Policy Development Project

Tab. 1: Legal Rights (x), de facto Rights (+) and Perceived Rights (o) of Land “Owners” derived from different Documents in
Rural Areas

Province                   Right to   Right to       Right to    Right to          Right to         Right to          Right to        Right to          Right to       Other    Duties
                           use the    decide         keep        mortgage          inherit          lease             sell            exclude           receive        rights
                           land       how to         profit                                                                           others from       compen-
                                      use                                                                                             the land          sation
Savannakhet
LSC                           x/+/o       x/+/o          x/+/o      x/+/o                 x/+/o            x/+/o            x/+/o                   o         +/o                Land tax

LTD                           x/+/o       x/+/o          x/+/o o via LSC                  x/+/o              +/o              +/o                   o         +/o                Land tax

Khammouane
LSC                           x/+/o       x/+/o          x/+/o        x/+/o               x/+/o            x/+/o            x/+/o                   o         +/o                Land tax

LTD                           x/+/o       x/+/o          x/+/o   o via LSC                x/+/o              +/o              +/o                   o         +/o                Land tax

Naiban                        x/+/o       x/+/o          x/+/o   o via LSC                  +/o              +/o              +/o                   o              ?                 ---
Certificate
Sayabouri
LSC                           x/+/o       x/+/o          x/+/o          x/+/o             x/+/o            x/+/o            x/+/o                   o         +/o                Land tax

LTD                           x/+/o       x/+/o          x/+/o   Depends on village: in some villages people say, they don’t                        o         +/o                Land tax
                                                                 have any such rights; in others villagers feel that they have all
                                                                 these rights
TLUC                          x/+/o         +/o          x/+/o              ---             +/o                 ?               ---             ---            ---               Land tax

Tax receipt                       o              o           o              ---                o                o                o              ---            ---               Land tax

Bokeo
LSC                           x/+/o       x/+/o          x/+/o          x/+/o             x/+/o            x/+/o            x/+/o                o            +/o                Land tax

LTD                           x/+/o       x/+/o          x/+/o            +/o               +/o              +/o              +/o                o            +/o                Land tax

TLUC                          x/+/o         +/o          x/+/o             ---              +/o                ?                o               ---            ---               Land tax

Tax receipt                       o           o              o             ---                o                o                o               ---            ---               Land tax

No document                     +/o         +/o            +/o             ---              +/o                ?                ?                o              o                     ---
(e.g. rubber plantation)
Legal rights (x) are those which are guaranteed by law.
De facto rights (+) are those which people can implement, disregarding the fact if they are guaranteed by law or not.
Perceived rights (o) are those rights people think or assume they have.
Comparing all available documents proving land possession in rural areas, it
can be stated that the Land Survey Certificate is a kind of “rural title” granting
all property rights, while the Land Tax Declaration is currently the most crucial
document in terms of tenure security for the majority of the rural population.

Table 2 shows the number of Land Survey Certificates, Land Tax Declarations and
Temporary Land Use Certificates issued in the four provinces visited.

Tab. 2: Types of Documents proving Land Possession in Rural Areas1 issued
by Provincial Land Management Agencies (PLMA) and District Land Offices
(DLO)

Northern Provinces
Province/District                       Titles          LSC            LTD           TLUC2            Other
Savannakhet PLMA                      Hardly any              0      Almost for     Very few in
                                         in rural     issued by           every       the past
                                           areas           DLO           parcel
    •   Outhomphone DLO                     Yes,     They don’t      Everybody                 0
                                        number       know LSC
                                       known at
                                          PLMA
    •   Phalansai DLO                          0                0       No data           Some
                                                                                        villages
Observation in villages              In the titling area (peri-urban) all had LSC in the past and now
                                     title. In a remote village, all had LTD; nobody had anything
                                     else. In a village along route 9 (half way to Vietnam), all had
                                     LTD, 5 LSC (for mortgage), no TLUC, no title.
Khammouane PLMA
           2004-2007                  Hardly any             219     Almost for     Very few in     Certificate
                                         in rural                         every     the past                 of
                                           areas                         parcel                     ownership
    •   Hinboun DLO                            0               49    Everybody                 0   by Naiban if
                                                           (2005-                                       a LTD
                                                     2007), now                                         holder
                                                       issued by                                      wants to
                                                     PLMA only                                        apply for
    •   Nong box DLO                        Yes,              143       23.795                 0           LSC
                                         number       until 2005,    (99% of all
                                        known at      since then       parcels)
                                          PLMA         issued by
                                                     PLMA only
    •   Xebangfai DLO                            0             85    Everybody                 0
Observation in villages              Nobody in the 3 villages had ever seen a TLUC. They all had
                                     LTD. Before receiving LTD, people had naiban certificate
                                     only. LSC can easily be applied for, if someone wants to
                                     mortgage land. Land title is preferred to LSC as it is cheaper
                                     (when it comes with the project => systematic registration).


1
  The data from Provincial Land Management Agencies (PLMA) are always for the entire province, including
rural and urban areas. The data from District Land Office also include the entire district; however “urban” areas
in these cases describe rural settlements rather than real towns.
2
  TLUC are issued by Dep. of Agriculture and Forestry. Therefore, no numbers are available from PLMA or
District Land Offices. In the two Southern provinces, budgets for land allocation were limited and therefore the
                                                        12
Southern Provinces

Province/District                  Titles          LSC              LTD           TLUC          Other
Sayabouri PLMA                        No for          10.165       For paddy     For shifting
                                 rural areas                            fields    cultivation
    •   Sayabouri DLO                      0        Done by              Most     Exists, but    Small tax
                                                     PLMA             people          has no    receipt for
                                                                                  relevance         TLUC
    •   Hongsa DLO                          0            5.048     For paddy     For shifting      holders
                                                                        fields    cultivation
    •   Ngeun DLO                           0   About 30%;            Only in     For about
                                                 So far only     urban areas      18-19% of
                                                           for                       shifting
                                                construction                      cultivation
                                                 land; there                            land
                                                     are too
                                                  many rice
                                                       fields
Observation in villages          People in the villages only have LTD for paddy field or TLUC
                                 for shifting cultivation land. Many want LSC because TLUC
                                 does not give any security and LTD cannot be used for
                                 mortgage. Sporadic LSC is too expensive for the people; they
                                 don’t want it. Therefore, systematic LSC (by project) is very
                                 much appreciated. Allows for bank + private mortgage and is
                                 much cheaper than sporadic LSC. TLUC holders in Ngeun
                                 and Honga don’t know of the possibility to apply for LSC after
                                 3 years permanent cultivation. Agriculture and Forestry did not
                                 follow up on TLUC. Outside GTZ project area, TLUC is only
                                 upgraded to LTD!
Bokeo PLMA                         None for           1.000           36.000         18.779
                                 rural areas            only                     (data from
                                                    sporadic                     Agri. Dep.)     Small tax
    •   Houay Xai DLO                     197                         13.405                    receipt for
                                   issued by                            (7012          Since        TLUC
                                   PLMA for      all LSC are     construction          1996,       holders
                                     2 urban       issued by      land, 6393           some
                                     villages          PLMA        agri. land)    upgraded
    •   Pha Oudom DLO                       0                           3.169      into LTD!
                                                                        (2561         or land
                                                                 construction        back to
                                                                    land, 521          state,
                                                                  garden, 87      number of
                                                                      paddy)        TLUC is
    •   Tonpheung DLO                       0                         70% of     decreasing
                                                                      owners
Observation in villages          TLUC holders often don’t know of the possibility to apply for
                                 LSC after 3 years permanent cultivation. In Bokeo they can
                                 only convert them into LTD!
Abbreviations:                                   TLUC: Temporary Land Use Certificate
LSC: Land Survey Certificate                     PLMA: Provincial Land Management Agency
LTD: Land Tax Declaration                        DLO: District Land Office



TLUC was only issued to very few people and not followed up. TLUC were mainly distributed in 1996 for
shifting cultivation plots. There is hardly any follow up – apart from Bokeo where some TLUC have been
converted into LTD and others were taken back.
                                                    13
In the South, almost everybody has a Land Tax Declaration which guarantees good
tenure security and which is used for sales. In case of mortgages, Land Survey
Certificates can be easily applied for. In Khammouane in the past and in
Savannakhet even at present, Land Survey Certificates can be issued at district level
which facilitates access to this document and thereby to mortgage.

In the North, villagers generally have much fewer documents proving their land rights
than in the Southern provinces. Many have no document at all; several only have a
Temporary Land Use Certificate. These are generally only up-graded to Land Tax
Declarations – if at all. Only in the GTZ project area, they are converted directly into
Land Survey Certificates as it is suggested in the implementation decree to the Land
Law and other regulations. In the North, the Land Tax Declaration is often considered
the highest document possible – as nothing else is known to the population.

5.1.2 Land Conflicts


Most land conflicts in rural areas are boundary conflicts (between neighbours or
villages) and inheritance conflicts. In shifting cultivation areas, it occurs that a villager
is using another person’s land. All these conflicts are mediated at village level,
involving the naiban and elders. More problematic are land conflicts due to resettled
people. This generally leads to a shortage or even lack of agricultural land for either
old or new population or both. It also happens that the old owners of agricultural land
sell their parcels, although the new settlers received Temporary Land Use
Certificates while the old owners don’t have any documents. Quite a number of land
conflicts – due to de facto expropriation – are caused by state concessions. Observa-
tions show that villagers have higher chances to receive compensation in case of
private sector investment than in case of a government project. However, land users
without any document hardly ever receive compensation. Land Survey Certificate
and Land Tax Declaration are good bases for compensation, Temporary Land Use
Certificates only in some very few cases.

5.2 Registration, Registration Fees and Valuation

While a title in titling areas only costs 12.000 kip (excluding incentive payments which
can easily reach 400.000 kip), costs for Land Survey Certificates issued under
sporadic adjudication range between 1-3.000.000 kip. Only in GTZ supported project
areas in Sayabouri, Land Survey Certificates under systematic adjudication are
available for 12.000 kip. The high costs for Land Survey Certificates are the main
barrier for rural people to receive a land ownership document which gives them legal
rights to sell, lease and mortgage. In many cases, people also did not know about
Land Survey Certificates or the procedure on how to apply for them. People also
assume that the low costs for titles have been introduced to promote titles. The
difference in costs is a major reason why people would rather wait for the titling

                                              14
project to reach their area than to apply for a Land Survey Certificate under sporadic
adjudication.

District Land officers valuate the land in case of issuing a Land Survey Certificate.
They follow PM Decree 52 as if they would register a land sale. However, generally
people only apply for a Land Survey Certificate without any transaction involved as
they only need the Land Survey Certificate to receive a bank mortgage. Decree 52
defines to take 0.5-4% of the actual (not the declared) land value. Therefore, officers
check the land value by visiting the site and investigating on comparative land prices.
This leads to the extremely high registration costs for Land Survey Certificates.

While there are many reductions on registration fees for urban areas (fees are only
based on 35% of the land value and big land areas can even be reduced up to 50%
(1677/MoF, Art. 41 ), registration fees in rural areas are always based on 100% of the
actual land value. This is neither reasonable nor fair. The consequence is that the
rural population only applies for a LSC in case of mortgage. Low nation-wide fees for
LSC would be useful to further strengthen rural land markets.




                                           15
Tab. 3: Comparative Overview on Registration Fees/ Fees for Documents

Province/District            Land          LSC          LTD          TLUC           Naiban
                             Title                                                 Certificate
Savannakhet PLMA                                        30.000
   • Outhomphone DLO
   • Phalansai DLO
Observation in villages
Khammouane PLMA               12.000
   • Hinboun DLO
   • Nong box DLO
   • Xebangfai DLO
Observation in villages       12.000      1-2.000.000
Sayabouri PLMA
   • Sayabouri DLO
   • Hongsa DLO                        Spor. 100.000
                                       System. 36.000
   •   Ngeun DLO                          70.-100.000
                                       GTZ-supported
                                          LSC: 12.000
Observation in villages                 100.000kip/ha            35.000
Bokeo PLMA
   • Houay Xai DLO                                      39.000
   • Pha Oudom DLO                                      10.000
   • Tonpheung DLO
Observation in villages                   1-3.000.000   60.000            12.000
                                                        40.000
                                                        30.000
                                                         9.000


Already in 2004 reasonable fees for land parcel registration have been proposed
(see Proposed Revision of some Articles in the State Provision on Fees and
Services, No. 1959/MoF and Proposal for the Amendment of the Fees for Land
Parcel Registration, Fees for the Registration of Land Documents, and Survey Fees,
No. 1608/MoF, DoL; both documents are from September 2004 and are supposed to
be integrated into the Presidential Decree No.02 which however is pending since
quite some time): 15.000 kip for systematic and semi-systematic adjudication in rural
areas and 17.000 kip for sporadic adjudication in rural areas. These fees (however as
lump sum and not per sheet) should be applied for systematic and sporadic issuing of
LSC as they cover the cost of the District Land Offices and can easily be paid for by
the rural population. Eventually, fees for sporadic registration have to be slightly
higher to cover costs in remote areas, but should not exceed 30.000 kip.




                                           16
Tab. 4: Number of registered Sales, Leases and Mortgages

Province/District                            Registrations at District Land Office
                                     Sales                 Leases                   Mortgages
Savannakhet                                                               Based on LSC; notary involved
   • Outhomphone
                      2004                        11                 0                                   38
                      2005                        15                 0                                   21
                      2006                        22                 0                                   13
   • Phalansai                                     0                 0
Khammouane
   • Hinboun                                      40                 0                                40
                                                                                 Total amount:       300
                                (This corresponds to                        (49 with LSC at bank, notary
                               about 10% of all land                          involved; 250 with tobacco
                                   sales taking place)                          company based on LTD)
   •   Nong bok                                       0               0                              143
                                   No registrations as
                              people should ask for
                                         title at PLMA
   •   Xebangfai                                      0               0                            up to 85
                                    Sales are done at
                               village level, local tax
                                    collector changes
                                         name in LTD
Sayabouri                                             ?               0 Based on LSC; notary involved
   • Sayabouri                       No registration of sales, leases and mortgages at district level as all
   • Hongsa                  registrations have to be done at the Provincial Land Management Agency
   • Ngeun
Bokeo                          70% based on LTD,                     0   LSC for mortgage for more than
                               30% based on LSC                           20 mil kip; LTD for less than 20
                                                                           mil kip; no notary involved any
                                                                                         more since 2006
   •   Houay Xai                                   ?                 0                                   ?
   •   Pha Oudom                                                     0
                    2004/5                        4-5
                    2005/6                          0                                                  15
                    2006/7                         20                                                  10
   •   Tonpheung                                                     0   People don’t come to DLO, they
                    2006/7                         6                              go directly to the bank


The average price for a Land Tax Declaration is 30.000 kip. Apart from the fact that
people cannot choose to get a Land Tax Declaration or not, nobody complained
about the amount because of the security they receive and the
willingness/acceptance to pay tax.

Land sales are generally not registered with the District Land Office because of the
high registration fees. Land leases are also not registered – same as in urban areas.




                                             17
5.3 Legal Frame and Legal Security

The main requirement for a functioning land market is the existence of tradable
secured property rights. With other words: tenure security is based on legal security.
This again requires a consistent legal frame without any loopholes, overlaps or
contradictions.

The Lao laws generally provide a good base for land administration and therefore for
land markets. However, provision of rules is slightly better for urban land markets
than for rural land markets. Quite a number of issues as for instance the amount of
fees for issuing Land Survey Certificates are left with the provincial administration to
decide. There is a need for a nationwide regulation on who is entitled to issue Land
Survey Certificates and what fees should be charged. It seems best to issue Land
Survey Certificates at the District Land Offices as this makes it easier for people to
apply for them. Provincial Land Management Agencies are too far away and it would
take too much time and transport costs for people to go there. Reasonable fees for
Land Survey Certificates are between 12.000 kip for systematic registration and
30.000 kip for sporadic registration.

There are probably too many decrees, instructions, notifications, proposed
amendments etc. on fees related to land surveying, adjudication, transactions,
mortgages etc. It should be considered to simplify fees as the jungle of regulations on
land related fees favours corruption (see 5.5).


5.4 Rule of Law

Tenure security is based on legal security and this again depends on rule of law.
Rule of law means that it is guaranteed that all citizens are treated fair and equal by
the state and its administration, that the activities of the state are based on fair
constitution and laws, and that state actions are predictable. Rule of law also
guarantees certain liberties to the people and offers them protection (e.g. from violent
expropriation).

The main limits to rule of law in regard to rural land markets are linked to the
resettlement of mountain dwellers and the delimitation of state concessions. The
recent policy change from state leases towards contract farming is a very positive
reaction to the problems of state concessions covering privately or communally used
land and reducing people’s agricultural lands. A solution still has to be found on how
to deal with the resulting land shortage due to resettlements – a reduction of
agricultural land which was unpredictable for the old as well as the new settlers.



                                           18
5.5 Governance in Land Administration

Compared to urban land markets, there is less corruption involved in rural land
transactions. While officers at the Provincial Land Management Agencies charge a
lot of extra money for registration of urban land sales (see urban land market study
for more details on poor governance practices), those involved in rural land markets –
especially naibans and local tax collectors hardly ask for anything more than a very
small fee or a drink. However, land sales are generally not registered at the District
Land Offices – mainly because of high fees and sometimes distance. It is not clear
how much of these fees are formal and how much are informal payments.
Considering the very high fees for sporadic issuing of Land Survey Certificates
mentioned by villagers, it is quite probable that not the entire amount is formal. There
is a strong need for a fixed fee rate that applies for the entire nation and that is
communicated to all villagers!

It is also suggested to revise the new notary fees introduced in October 2006.
Although these have been introduced to reduce the old notary fees, they are very
complicated to calculate. This means that hardly any villager can check if they have
been calculated accurately or if he has been cheated.


6. Development of Rural Land Markets
6.1 Land Sales, alternative Land Acquisition and Land Accumulation

Land Sales occur everywhere, most often based on Land Tax Declarations. The
transaction is done at the village level with the naiban signing the sales contract and
the local tax collector changing the name on the Land Tax Declaration. In
economically active rice producing villages in the South, 3-6 parcels are sold per
year, while in the North a maximum of 2 parcels is transferred annually.

Land is primarily bought to plant rice and build houses; to a lesser degree land
transactions also include gardening plots, small businesses, livestock grazing areas,
and fish ponds. Often an increase in family members is the main reason to buy
additional land. There is generally more demand for agricultural land than supply.

As an alternative to buying agricultural land, a request can be lodged with Agriculture
and Forestry for additional land. This is generally granted for free, except for a 30.000
Kip fee for the documentation. Another option is to clear a new plot of land and to ask
Agriculture and Forestry afterwards to allocate this peace of land to the person who
cleared it. This system of claiming land or getting land allocated and the shortage of
agricultural land in general leads to the low number of land transactions in total.



                                            19
As the main reason to sell land is the need for money (to support the family, for
school fees, to take care of a sick family member or to start a business), land seems
to accumulate with the rich. It could be observed, that in case of emergency sales,
richer relatives buy up the land for a price below market value (about 30% less).
Other reasons to sell land are out-migration or insufficient family labour.

6.2 Land Prices

There is a general increase in land values. Depending on the location and the type of
land, land prices increase differently. Prices for construction land and rice paddies
close to urban areas or along roads increase by 20-30% annually, while plots in
remote rural areas only increase by 5-10% in value per year (reflecting approximately
the inflation rate). Most increases in land values are due to road improvements or
other infrastructure development. The fact of possessing a Land Tax Declaration, a
Land Survey Certificate or even a Land Title has no influence on the price of land.

Table 5 shows that there is much more consistency in prices paid for construction
land throughout the country than there is in rice paddies. The reason is that the soil
quality differs a lot – not only throughout the country but also within one district or
even one village. Land is either paid for in Thai Baht or Kip. Construction land and
big parcels are most often paid for in Baht. Smaller parcels are also paid for in Kip.
To make prices comparative, all prices have been calculated in US $ per m2 for
construction land and in US$ per ha for rice paddies.




                                           20
Tab. 5: Comparative Overview on Land Prices

Province             Construction Land (in US$/m2)                  Rice Paddy (in US$/ha)
                 Urban Area    Along the road        Remote        Along the road      Remote
                               Close to town                       Close to town
Savannakhet                       2.70 – 3.20        0,12 – 0,72                           555,00–
                                                                                          1.250,00
Khammouane                                           0.25 – 0.31                    58,00 – 416,00
Sayabouri            10.00 –                         0,17 – 0,20                    35,00 – 231,00
                      20.00
Bokeo                                   4.34               0,03         1.666,00           166,00


6.3 Land Speculation

There is hardly any land speculation in rural areas. A reason for the limited extend of
land speculation seems to be the shortage of agricultural land. Land speculation only
occurs in peri-urban areas of provincial capitals, not even in or around district
capitals.

Two forms of speculation occur in peri-urban areas: a) speculators leave the land
vacant or b) they lease it back to the old owner who instead of paying a rent,
continues to pay the land tax. In the second case, the land speculator has no running
costs at all and can benefit from 100% of the increase in price when he sells the land
after some years.


6.4 Land Leases, Share Cropping and Contract Farming

Leases rarely occur. They are never registered. People mainly lease land for
business – primarily Chinese shop keepers and Chinese rubber companies. In the
case of rubber contract farming, the naiban is always involved. Some rice paddies
are also leased among villagers. This is usually negotiated without involvement of
naiban. Normally, in that case even the naiban is not involved. There are also a few
cases were common/community land is leased to one person for business purposes
– either someone from the village or an outsider. In the case of community land, the
village community or village committee acts as lessor.

If villagers lease land to each other, this is mainly done for agricultural purposes,
generally rice production. It is normally done in the form of share cropping.

Another form of sharing profit from one property is contract farming which becomes
increasingly popular in Laos. In this case, the land owner keeps his property but he
shares the output in exchange for inputs from a company (such as seeds, fertiliser or
seedlings). This allows investors to undertake production for them without becoming

                                                21
the owner or leaseholder of a property which could often result in long negotiations
about compensation. At first glance, contract farming is therefore advantageous for
both sides: the land owner and the agricultural company. However, as the example of
rubber production in Bokeo shows, it also includes quite a number of risks.

Within the last 10 months, the Provincial Agriculture and Forestry Office (PAFO) in
Bokeo made contracts with seven Chinese rubber companies over 7 x 3.000 ha
(21.000 ha). Although the contracts state that the use of the land is “based on the
willingness of local people“, the next paragraph adds that if people are not willing to
co-operate, there should be „investigations“. The general rules for these co-
operations are a shared input 2 (land and labor) by the farmer + 3 (capital,
technology and marketing) by the company and a profit sharing of 65% (for the
farmer) and 35% (for the company). This involves several risks for the farmer:
   •   Tenure insecurity:
       The farmer has no document over the land which therefore remains state land!
       He is not even given a Temporary Land Use Certificate. The justification by
       PAFO is that this exempts him from paying land tax. This argument is not
       correct however as the holder of a Temporary Land Use Certificate is
       generally exempted from paying land tax for the first three years. In the case
       of a rubber plantation there could still be an upgrade from a Temporary Land
       Use Certificate after three years of permanent use to a Land Survey Certificate
       and a special rule could be introduced that rubber farmers are excluded from
       land tax for another four years – until the first harvest.
   •   Financial risk:
       The price for 65% of the harvest will be based on local and not on world
       market prices. In addition, this price can easily be defined by the company
       itself – resulting in a real share for the farmer of possibly less than 50%.
   •   Contract insecurity:
       Farmers generally do not sign no individual contracts with the company. In
       some cases, there are only company rules with the naiban – even not a
       contract for the village. In other cases, contracts are written in Chinese.

The whole rubber business leads to a high dependency on China: for the farmers,
the local economy and even for the entire province. In addition, it results in
tremendous deforestation. While the Provincial Agriculture and Forestry Office claims
that they would like to see the entire old shifting cultivation land be transformed into
rubber plantation, it becomes more than obvious and visible that huge forest areas
have already been cleared for new rubber plantations. There is an urgent need to
protect small farmers as well as the environment!




                                           22
6.5 Mortgages

Individual bank loans require a Land Survey Certificate, a Land Tax Declaration and
the ownership certificate issued by the naiban. The procedure generally includes the
naiban, the notary offices and the District Land Office. Only in Bokeo notaries are no
longer included since 2006 to shorten the overall process. This coincides with the
introduction of the new notary fees which – as demonstrated in the urban land market
study – allow for a high degree of in-transparency simply because they are too
complicated to calculate (see 5.5).

Banks also offer group loans. These are provided for 5 to 15 families from one
village. In that case, it is sufficient if one of the families possesses a Land Tax
Declaration. In some cases, it is even sufficient to provide a certificate by the naiban
on the planned investment of each family/loan taker. Each family then receives its
own loan. In this case Notaries and District Land Offices are not involved, only the
naiban.

The application procedure for bank loans is similar in every bank and follows this
scheme:
   1.    The applicant writes a letter of request (explaining the objectives) and
         submits it directly to the bank.
   2.    The bank investigates on the possibility of allocating a loan by checking the
         asset to be used as collateral.
   3.    Verification of the documents proving ownership rights.
   4.    Site inspection of the actual property, assessment of the value of property,
         then submission to the Bank Administrative Board for requesting
         authorization. The bank assesses the value of the property by itself based
         on the price defined in the valuation zone (if available), and the actual sales
         prices in the area. A field check is always done using the comparative
         approach (investigating on comparative market prices).
   5.    After receiving authorization, the bank provides a credit loan of the amount
         of 60% of the total property value.
   6.    Documents are passed to the Provincial Land Office.
   7.    Passing the documents to the court is mostly done in Southern provinces,
         while in Northern provinces it was done only prior to 2004. Since then there
         is no more involvement of the court due to the complexity of the process
         and the high fee rates.




                                           23
Tab. 6:      Number of Mortgages with Lao Development Bank (LDB) and
Agricultural Promotion Bank (APB)

Province/District                     Individual Loans                 Group Loans
                                    LDB       APB      Total        LDB     APB               Total
Savannakhet
   • Outhomphone                       37                                0
                                    Title in
                                    urban;
                                    LSC in
                               rural areas
                                 Notary +
                                      DLO
                                  involved
Khammouane
  • Nong bok                                         80                                50
                                                    LSC                        Title, LSC
                                               required;                           or LTD
                                                 Naiban,                      with village
                                               Notary +                       guarantee;
                                                    DLO                         Naiban +
                                                involved                           Village
                                                                              committee
                                                                                 involved
Sayabouri
   • Sayabouri                  Loans for
                                   urban
     (serving whole            areas only
     province)
   • Hongsa                            20              8        IFAD fund            110
                                Based on                                for   In the past
                                    LSC                        agriculture,     based on
                                                                 gov. fund     LTD, now
                                                                        for          LSC
                                                                 business
Bokeo
  • Houay Xai                                      155                               450
      (all loan requests of                    Based on                         Based on
      the province are                         LTD: 110                         certificate
      handled by the                            LSC: 40                         by naiban
      provincial branch;                         Title: 5                          on the
      district branches only                                                   purpose of
      gather documents)                                                       investment


Interest rates are the same all over the country: 13 – 15% per year in case of
agricultural loans, 16 – 18% per year if used for businesses. Loans can be received
for 3 different periods: a) less than 1 year, b) 1-3 years, and c) 3-5 years. The short-
term loan is the most popular. The amount of loan varies from 50 million to 1 billion
Kip in case of individual loans, and 5 million to 20 million Kip for each family in the
case of group loans.

In case that a borrower cannot afford to repay the money to the bank, first a
reconciliation meeting will be set up to resolve the problem. If no solution can be
found, the bank will announce the sale of the property to enable the loan taker to pay
back the money to the bank (amount of credit + interest). The rest of the money from

                                                       24
selling the property, if any, will be returned to the loan taker. Only few such cases
have been found. It is, however, more common that people have difficulties in paying
back the loan, so there are delayed payments. That rate is about 5% of total bank
credit releases.

The loan money is used for business investment, such as for trading goods, a small
saw mill, or car repair shop, and for agriculture, such as for small tractors, pigs,
cattle, or rice paddies. The loans cannot be used to buy land or houses (incl. guest
houses). This means that the land market is well supporting a growing capital market,
but the capital market is not supporting the land market.


6.6 Real Estate

There are no real estate agents, middle men or brokers active in rural areas. All
sellers and buyers interviewed either already knew each other or met by accident or
were searching for each other by themselves.


7. Tools to Assure Social and Environmental Sustainability of Rural
Land Markets
7.1 Land Use Planning

In the absence of land use regulations a land market over time leads to the highest
economic use of any piece of land. This means that the use of the land will be
converted into the one which brings the highest profit to the land owner. Although this
is what we expect from the privatization of land and the facilitation of a land market,
we have to be aware of the risks:
   1.     Poor people can easily be driven out of the land market. This is what is
          called market eviction. These people are not evicted, they are also not
          forced to sell their land but they are tempted to receive money for it. Quite
          often they are indirectly forced to sell as the land is their only capital which
          they might need in case of emergency.
   2.     Ecologically sensitive areas such as forests providing water to the village
          are sometimes destroyed by individuals and converted into higher
          economic uses, thereby affecting the well-being of all villagers (e.g.
          reducing water provision) and the environment.

To avoid these and similar social and environmental effects, land use planning at
village, district and provincial level is crucial. For the moment, very few cases of
market eviction have been found. So far there only is a shortage of agricultural land,
but landlessness is not yet a problem. The negative environmental effects of the

                                            25
growing land market are already much more visible. There is an urgent need for more
land use planning, zoning and enforcement of it, including sanctions in case of
disrespecting the protection of forests, watershed areas and the like.


7.2 Proper State Land Management and Compensation

The highest (tenure) insecurity in rural areas derives from the fact that a lot of land is
classified as state land but is actually used by villagers, mainly in case of shifting
cultivation. In that situation, projects on state land – government projects as well as
state concessions leased to private investors – often cover villagers’ land. This even
happens if people have more secured rights over the land by possessing Land Tax
Declarations or even Land Survey Certificates. Although in these cases they mostly
receive compensation, the simple fact that they loose the land they have been
investing in for many years, shows that state land management needs some
improvement. There should be very clear demarcation of state land. It should also be
thought of the introduction of a state land inventory that documents the locations and
boundaries of state land. If this is done, it has however to be done with the strong
participation of the rural population to assure that no privately or communally used
land will be classified as state land.

Certain areas of state land are considered by the villagers to be community land or
common property. They use this land for schools, temples, naiban’s office, market
area as well as for community forest, sacred forest or cemetery forest etc. Although
there seems to be little risk that this land is taken from the village community, all
villagers contacted were in favour of registering these lands as common property to
guarantee that they will remain under village control and management. Clearly
defined boundaries of these community lands would also help to stop encroachment
by individuals.


8. Property Tax in Rural Areas: Land Tax versus Building Tax

Villagers accept to pay land tax and can generally afford the applicable rates. This is
mainly due to the high current rice price. There are very few cases of non payment;
there are just some families whose payment is delayed. Although farmers can afford
to pay land tax, it seems to be unfair that rich business people, who generally
possess very little land, hardly pay any land tax. Given the fact that the collection of
land tax is very cumbersome, time consuming and keeps officers busy who could be
engaged in surveying and issuing Land Survey Certificates, the efficiency and
fairness of the current land tax could be questioned. Therefore, there are some
voices who propose to substitute the current land tax by a building tax. The valuation
of buildings would, however, be very difficult as houses vary a lot in size, material
and standard. Consequently, a building tax would only improve tax collection if it is
                                            26
based on certain types of houses, classified according to style, material, size, and
standard. There is, however, one very crucial issue that has to be considered: for the
moment the Land Tax Declaration is the only widespread document people have to
prove their possession rights over land. Substituting the land tax by a building tax
would abolish Land Tax Declarations and the majority of the rural population would
have no document any more to prove their land ownership. This would over time lead
to countrywide tenure insecurity, in the worse case depriving people of their rights to
receive compensation. If a building tax is considered, it could definitely only be
introduced after Land Survey Certificates have been distributed nationwide to all land
owners. This also shows that more land officers are needed for the issuing of Land
Survey Certificates.


9. Conclusions

Rural land markets in Lao PDR are developing. People sell, lease, share and
mortgage land. However, most of the land transactions are illegal – not because
people don’t want to obey the law, but simply because they have not been provided
with officially recognized land possession documents such as a Land Title or
because of inflated registration fees. It will still take a long time until Land Titles can
be issued in rural areas, too long to provide the necessary security for land
development. It is therefore recommended to convert as soon as possible all existing
Land Tax Declarations into Land Survey Certificates and to follow up much more on
Temporary Land Use Certificates which should – after three years of permanent use
of the land – directly be replaced by Land Survey Certificates.

The goal should be to provide all rural citizens with Land Survey Certificates and
ultimately with Land Titles. The Land Survey Certificate is already called land title by
the rural population. This is what they need and if it is issued systematically they
even could afford it. Probably the best option for Lao PDR would be to have ‘urban
titles’ – the current Land Titles – for urban and peri-urban areas based on very high
standards and parallel to it ‘rural titles’ for rural areas that can be less accurate (e.g.
without geodetic coordinates and no permanent boundary markers) and which are
nothing else than the current Land Survey Certificates. What remains to be discussed
is just the name. Land Survey Certificates are well known outside the land titling area
since many years and all officers are familiar with them. The procedure for issuing
LSC is clear (although some more specification in the regulations is needed on who
is issuing them and what should be the standard fees), the forms are available etc.
However, for the rural population it looks like they are treated as second class
citizens and ultimately many people might still want to receive the highest document
available in the country – the Land Title. In that respect, the terms ‘urban title’ and
‘rural title’ may sound more equal – although the concepts and standards behind
would be different.


                                             27
10. Recommendations

Based on the study findings, a number of recommendations have been identified.
They concern the National Land Management Agency as well as the Ministry for
Agriculture and Forestry, the Ministry of Finance, the Committee for Planning and
Investment, and the banks.


Recommendations to increase tenure security:

   •   Officially recognize Land Tax Declarations as an ownership proving document.
   •   Land Survey Certificates should be issued systematically.
   •   Land Survey Certificates should be issued by District Land Office to facilitate
       access to them. Provincial Land Management Agencies are too far away from
       the people.
   •   District Land Offices need more staff for systematic issuing of Land Survey
       Certificates.
   •   Registration fees for Land Survey Certificates should be reduced. There is a
       need for a decree, a direction or a ministerial instruction setting standard
       nationwide fees for LSC. The new fees definitely have to be integrated into the
       Presidential Decree No.02 which still needs to be officially endorsed. A lump
       sum of 12.000 kip for systematic and not more than 30.000 kip for sporadic
       issuing of Land Survey Certificates is recommended.
   •   Fees for registration of land sales should be reduced to encourage sub-
       registration. Currently, proportional costs for land sales registration in rural
       areas are much higher than in urban areas.
   •   Temporary Land Use Certificates should be up-graded/converted into Land
       Survey Certificates after land has been used permanently for three years.
   •   More information campaigns are needed on
       a) up-grading Temporary Land Use Certificates and
       b) procedures to apply for sporadic Land Survey Certificates.
   •   More cooperation is needed between Land and Agriculture/Forestry offices at
       province and district level, especially in handling/issuing/upgrading Temporary
       Land Use Certificates but also in the case of contract farming.
   •   In case of expropriation, compensation should be paid to all land users.
   •   There should be very clear demarcation of state land, also in rural areas.
   •   A state land inventory should be introduced that documents the locations and
       boundaries of all state land. This has to be done with the participation of the
       rural population to assure that no privately used land will be classified as state
       land.
   •   Boundaries of community land should be demarcated and these lands should
       be registered as common property of the village.

                                            28
   •   Model contracts should be developed for rubber companies doing contract
       farming (rubber plantations) with villagers. Their use should be compulsory.
   •   Contract farmers should receive a Land Survey Certificate for their land
       (rubber plantations).
   •   Special land tax regulations should be introduced for rubber farmers to enable
       them to have secured rights on the land without paying land tax for the first
       seven years of land use, so they start paying land tax in the year of the first
       harvest. One option could be that rubber farmers receive a Land Survey
       Certificate after three years of using the land and are exempted from land tax
       for another 4 years.


Recommendations to avoid negative impacts of the land market on the
environment:

   •   More attention should be given to regional land use planning and village land
       use planning to avoid environmental damage due to private land development.
       Special focus should be given to those areas currently experiencing a rubber
       boom which leads to massive deforestation.
   •   Alternatives to rubber production should be introduced and encouraged that
       are ecologically more sustainable and result in less dependency than the
       cooperation with Chinese rubber companies.


Recommendations to improve the impact of the capital market on the land
market and land development:

   •   People should be allowed to use loans to buy land/houses.


Recommendations to reflect on property taxation:

   •   A study should be done to compare the possible income from building tax
       compared to land tax.




                                           29
Annexes




   30
Annex A1:
Terms of Reference for a Land Market Study in Rural Areas

Background

Growing evidence indicates an active land and property market also in the rural areas
of Lao PDR, where land registration is not yet very widespread. Purchases and sales
of land between farmers appear to be quite commonplace and there is an increasing
demand for investment in agricultural land by urban dwellers with sufficient capital at
hand. In most rural villages there is an active land lease and sharecropping market
driven by land fragmentation, relocation of villagers and other recent phenomena.

The policy of the Government of Lao PDR is to promote and strengthen the land
market in all its facets, but to avoid excessive land speculation or land concentration
in the hands of a few. The intention is to provide the minimum regulation to land
markets to avoid excesses, but to increase its efficiency and equal access
opportunities.

A detailed policy study on “Land Markets in Urban Areas of Lao PDR” has been
prepared by a team of three consultants in September 2006. The present study is
considered a continuation of this analysis of the land markets in Lao PDR and will
investigate the specific situation in lowland and upland villages in the rural parts of
Lao PDR.


Objective

The objective of this study and reform proposal is to assess the development of the
market in land, its relative efficiency, and to identify constraints to its operation.
Information gathered from the study will aid in the development of policies and
procedures to increase market efficiency and access to all members of the
community. The study will also support legal reform if appropriate and the
development of methodologies for recording information related to land market
transactions.


Methodology

The study would acquire data from selected areas on the types and classifications of
properties being transferred through the market such as vacant land, houses,
commercial properties, agricultural land located in the rural areas, titled vs. untitled
land, property values, etc. The study will also look at efficiency aspects of the market:
formal and informal costs of transactions, procedures for recording transactions,
degree of transparency in the market, access to market information, access to the
property market by different members of the community.

The study will investigate the sales as well as the rental market in the rural areas.
This will include an assessment of the main actors, current land valuation activities,
registration of transactions, including contracts and agreements used in the
                                            31
transactions, as well as formal and informal mortgages. The study will only cover sale
or rental of land units falling under the private land use rights, not state land areas, as
these have been covered in a recent study on “State Land Leases and Concessions”.
The study team will prepare and apply standardized interview formats or guidelines
for semi-structured interviews to be conducted at the various levels and with the
relevant informants from Government offices, the private sector, companies, local
authorities including naiban and villagers involved in land transactions.


Expected Outputs

There will be a number of outputs from this study:
   1. an outline of the methodology of research and a tentative workplan including
      the draft interview guidelines or questionnaires, which will be submitted to the
      German teamleader of LPDP by the end of the first week of mission,
   2. a draft structure of the report at the end of the third week of mission,
   3. a short presentation (30-40 Minutes) of findings and recommendations for
      procedural and regulatory/legislative reforms to improve the efficiency of the
      rural markets during week five, and
   4. a final report of 25-30 pages presenting the main findings and
      recommendations and any policy reform proposal in English language.


Specific Tasks and Scope

   •   Analyse the present legal framework governing land markets in Lao PDR;
       study legal texts, literature and any reports relevant to the research on land
       markets in the country;
   •   Assess what type of land is actually transacted (agricultural or residential,
       paddy or gardens or plantations and how often (statistics)); investigate
       reasons for sale of land by villagers in rural areas, to whom the land is sold
       (inside/outside the village, for agriculture or residential land, for investment or
       for continuation of same land use, etc.); find out whether there is a lot of
       splitting of land within families or whether this is mostly transacted outside the
       clan/family;
   •   Investigate whether it is a problem that only few formal land titles or
       permanent certificates have been issued in rural areas yet; assess feeling of
       land tenure security among villagers in various areas and for different types of
       land parcels; try to answer whether people would prefer to sell/buy on the
       basis of a formal title, and how seller and buyer find each other;
   •   Find out whether titling does increase the number of land transactions
       (compare areas with titling in lowland rural zones with areas outside the
       adjudication zones), possibly posing a risk of increasing landlessness or an
       increasing number of land-poor households; What preventive actions could or
       should be taken?
   •   Find out whether people know about the possibility of requesting sporadic
       adjudication; Is this made use of to any extent in connection with land sales or
       mortgages?
   •   Are there any cases where people have been punished for selling land based
       on TLUCs? What other documents have been used in the transactions? What

                                             32
       form of agreements or contracts have been used for the transactions? Who
       witnesses and how often? Have cases of land conflicts due to unregistered,
       un-witnessed transactions been reported? What are the effects of state land
       leases and concessions allocated in rural village areas?
   •   Analyse the effects of on-going resettlement on the transactions in rural areas;
   •   Assess current registration procedures for land transactions in rural areas
       visited by the team; estimate coverage of first and sub-registration, investigate
       reasons for non-registration, explore official and unofficial payment of
       registration fees (formal vs. informal costs of transaction), compare titled (Land
       Titles and Land Survey Certificates) and untitled areas;
   •   Describe what the local population and local authorities would consider as the
       best possible option for spreading first registration of permanently used
       agricultural and residential parcels; how do they propose to register their
       transactions;
   •   Collect statistics and data on first land registration in all visited districts, on
       land sales, mortgages, private leases etc. for various types of properties
       (building sites, vacant land, houses, commercial properties, agricultural land
       etc.);
   •   Check the availability of any valuation data for rural areas; collect data on
       actual property values within and outside the systematic titling area; assess
       property value increases over the past 3 years; investigate the existence of
       land speculation e.g. with land along road corridors;
   •   Describe and qualify the available market information;
   •   Investigate the use of contract forms and other forms of agreements used for
       land sales and land leases;
   •   Assess the rental market (types of properties leased, types of lessees,
       registration of contracts and taxes/fees involved etc.);
   •   Investigate mortgages (formal and informal) involving plots of land
       (procedures, types of mortgages, use of titles/land certificates as collateral
       etc.);
   •   Investigate present system of land tax collection in the rural areas; would
       people accept a change to a simple property tax collection system based on
       standard rates for the different types of houses?
   •   Draw conclusions and provide policy recommendations with regard to the
       property sales and lease markets and any other issue evolving from this study.


Timing

This study will commence on 23 April 2007 and will be concluded by 25 May 2007 (5
weeks in total or 33 working days).


Team Composition

The study team will consist of three consultants:
1 international consultant with specific experiences in land market analysis and
holding a MSc. or corresponding degree in Land Management, Geography or
Economics;


                                            33
and 2 Lao consultants with experiences in land management, land administration and
land markets, both fluent in English.

The team will work under the overall supervision of the German Teamleader LPDP
and the Director General of the Department of Lands.


Remarks

These TOR refer to the tasks and outputs of the entire team. The individual sharing
of tasks and responsibilities is left to the team members.

GTZ will pay all consultancy fees for this study and provide transport to the provinces
and within Vientiane.

The team will start working in Vientiane and then visit at least 15 rural villages in 6
districts of 4 different provinces during this research work. It is proposed to visit the
Provinces of Sayabouri, Bokeo, Khammouane and Savannakhet.




                                            34
Annex A2:
Work Plan (25.4. – 25.5.2007)

Day       Date      Time      Activities
Wed           25.4.     10 am Team Meeting with Florian Rock: Introduction and
                              Clarification of terms of reference
                         1 pm Team Meeting:
                                  • Introduction of team members
                                  • Identification of resource people who should be met
                                      in Vientiane and in the provinces
                                  • General discussion of methodology
                                  • Preparation of work plan
Thu           26.4.      8 am Pounsavath: preparation of recommendation letters
                              Nuantha: organisation of appointments in Vientiane
                              Babette: background reading
                        10 am Team Meeting: preparation of guiding questions for experts
                         1 pm Team Meeting: preparation of questionnaires for villagers
                         2 pm Meeting at NLMA with Mr. Nouphanh (General Director,
                              Department of Land Policy and Inspection
                         3 pm Team Meeting: preparation of questionnaires for villagers
Fri           27.4.      9 am Meeting at NLMA with Mr, Siphandone (Director,
                              Department of Land)
                         1 pm Finalizing the questionnaires + guiding questions
Sat/Sun   28./29.4.           Background reading
Mon           30.4. morning Travel to Savannakhet (translation of questionnaires)
                    afternoon Provincial Land Management Agency of Savannakhet
Tue            1.5.           3 Villages in Savannakhet Province
                              - Saisaat village, Ou thom phone District
                              - Kipma village, Ou thom phone District
                              - Phalantai village, Phalansai District
Wed            2.5. morning Lao Development Bank
                              1 District Financial Office and District Land Office
                              (Ou thom phone District)
                    afternoon 1 District Financial Office and District Land Office
                              (Phalansai District)
Thur           3.5. morning Travel to Thakek
                    afternoon Provincial Land Management Agency of Khammouane
                              1 District Financial Office and District Land Office
                              (Hinboun District)
Fri            4.5. morning 1 District Financial Office and District Land Office,
                              Agricultural Promotion Bank (Nong box District)
                    afternoon 1 District Financial Office and District Land Office
                              (Xebangfai District)
                              1 village (Houay Lang Mew village in Xebangfai District)
Sat            5.5. morning 2 Villages in Khammouane Province
                              - Xong mueng tai village, Nong box District
                              - Nachampa village, Nong box District
                    afternoon Return to Vientiane
Sun            6.5.           Conclusion from first 2 provinces

                                            35
Day    Date          Time        Activities
Mon           7.5.               Report in Vientiane, Preparation for travel to the North
Tue           8.5.               Travel by road to Sayabouri, Sayabouri Province
Wed           9.5.    morning    Provincial Land Management Agency, Sayabouri Province
                                 Finance Office/District Land Office, Sayabouri District
                     afternoon   2 villages in Sayabouri District:
                                 - Km 38 village (Military village)
                                 - Numtone
Thur      10.5.                  Travel to Hongsa District
                                 1 village in Sayabouri District: ____________________
Fri       11.5.       morning    Finance Office/District Land Office, Hongsa District
                                 LDB and APB Hongsa District
                                 Finance Office/District Land Office, Ngeun District
                     afternoon   2 villages in Ngeun District:
                                 - Houaypneung village
                                 - Khone village
Sat       12.5.                  2 Villages in Hongsa District
                                 - Napoung village
                                 - Houaygnai village
Sun       13.5.                  Travel to Houay Xai, Bokeo Province by boat
Mon       14.5.       morning    Provincial Land Management Agency, Bokeo Province
                                 Agriculture Department: Forest Unit, Bokeo Province
                                 LDB, Bokeo Province
                                 District Land Office, Houay Xai District
                                 2 villages in Houay Xai District
                                 - Numpoung village
                                 - Phimonsin village
Tue       15.5.                  District Land Office, Pha Oudom District
                                 3 villages in Pha Oudom District:
                                 - Houay Dinjee village
                                 - Done savan village
                                 - Phonsavang
Wed       16.5.                  District Land Office, Tonpheung District
                                 1 village in Tonpheung District:
                                 - Houaypheung village
                                 Research on rubber plantations: search for contracts with
                                 Chinese companies
Thu       17.5.                  Travel (flight): Houay Xai to Vientiane
                                 Individual office work: translations, writing memo, book-
                                 keeping, searching for background information, compiling
                                 and interpreting data etc.
Fri       18.5.         10 am    Team Meeting:
                                     • Identification of key findings
                                     • Discussion of presentation
                                     • Preparation of draft structure of the report
Sat       19.5.                  Preparation of summary
Sun       20.5.                  Preparation of presentation
Mon       21.5.          2 pm    Team Meeting:
                                     • Discussion of power point presentation
                                     • Distribution of tasks for report writing

                                             36
Day   Date     Time     Activities
Tue      22.5.  8.30 am Presentation at NLMA
Wed      23.5.          Report Writing
Thu      24.5.  9.00 am Team Meeting: Final discussion
                           • Putting the individual parts of the report together
                           • Clarifying open questions
                           • Follow-up
                           • Feed-back
Fri      25.5.          Finalizing Report




                                       37
Overview on Provinces, Districts and Villages visited

a) Name of Provinces
   1.   Savanakhet
   2.   Khammouane
   3.   Sayabouri
   4.   Bokeo

b) Name of Districts
   1. Ou Thom Phone
   2. Phalansai
   3. Hinboun
   4. Nongbok
   5. Xebangfai
   6. Sayabouri
   7. Hongsa
   8. Ngeun
   9. Houay Xai
   10. Pha Oudom
   11. Tonpheung

c) Name of Villages
   1. Sai Saat
   2. Kipma
   3. Palantai
   4. Houay Lang Mew
   5. Xong Mueng Tai
   6. Nachampa
   7. Km 38
   8. Numtone
   9. Namone
   10. Houay Keung
   11. Houay Din Jee
   12. Xaychalern
   13. Donesavan
   14. Phonsavang
   15. Houaygnai
   16. Napoung
   17. Khone
   18. Houay Pheung
   19. Numpoung
   20. Phimonsin




                                       38
Annex A3:
List of People Interviewed
Name             Surname           Position        Village/            District
                                                   Department

NLMA, Vientiane
Mr. Nouphane      Mahavong         Director        Department
                                   General         Policy
Mr. Siphandone    Sihavong         Director        DOL
                                   General

Savannakhet
Mr. Phouthone     Ngotbounheuang   Deputy 1        PLMA
Mr. Phoukhome     Bounthong        Deputy 2        PLMA
Mr. Bounthai      Phomvilai        Head            Land office
Ms. Panthip       Latsasuck        Head            Registration
                                                   office
Mr. Phitsamai                      Officer         Land office
Ms. Bounyoung     Khomsithone      Officer         Land office
Mr. Khomvue       Phengphachan     Head            District Finance    Ou Thom Phone
                                                   office
Mr. Sounthala     Manivong         Head            District Land       Ou Thom Phone
                                                   unit
Mr. Bounmi        Insishiengmai    Head            District Finance    PhalanSai
                                                   office
Mr. Somnueok      Xayyavong        Head            District Land       PhalanSai
                                                   unit
Mr. ThaVone       Phetsomphone     Officer         District Tax        PhalanSai
                                                   Unit
Mr. Inthava       Chanthavong      Deputy Naiban   Sai sa at Village   Ou Thom Phone
Mr. Pimmasone     Sibounyoung      Naiban          Kipma               Ou Thom Phone
Mr.Sikhery                         Deputy Naiban   PaLantai            Phalansai
Mr. Khamthone     Xayyalard        Head            LAO                 Ou Thom Phone
                                                   Development
                                                   Bank

Khammouane Province
Mr. Sikhai        Khomesavat       Director        PLMA
                                   General
Mr. Koeboun       Xayyavongsa      Head            Province Land
Kuan                                               office
Mr.
Mr.Phetvilat      In Nou la        Deputy          District Finance    Hinboun
                                                   office
Mr. Sin                            Officer         District Land       Hinboun
                                                   unit
Mr. Ari           Sikhomevong      Deputy          District Finance    Nongbok
                                                   office
                                             39
Name             Surname         Position       Village/           District
                                                Department
Mr. Khomesone    Kounlavong      Head           District Land      Nongbok
                                                unit
Mr. Ketmani      Lougvilai       Head of Area   Agriculture        Nongbok
                                                Bank
Mr. Phoumisai    Phoukhomevong   Head           District Finance   Xebangfai
                                                office
Mr. Saisana                      Head           District Land      Xebangfai
                                                unit
Mr. Somsai                       Head           District State     Xebangfai
                                                Assets
Mr. Khomesing                    Naiban         Houay Lang         Xebangfai
                                                meur
Mr. Bountom      Vilaphom        Naiban         Xong mueng tai     Nongbok
Mr.              Dougdala        Deputy Naiban  Xong mueng tai     Nongbok
Soumountha                       1
Mr.Phoukao       Maeksavan       Deputy Naiban Xong mueng tai      Nongbok
                                 2
Ms. Lodchana     Phommasai       Village Women Xong mueng tai      Nongbok
                                 Union
Mr. Soukun       Thommavongsa                  Xong mueng tai      Nongbok
Mr. Khamsing                     Naiban        Houaylangmue        Xebangfai

Sayabouri Province
Mr. Phonesavan   Phomsi          Deputy         PLMA
Mr. Khomepin     Phothiluck      Head of Land   PLMA
                                 office
Mr Somboun       Boausisavat     Head           District           Sayabouri
                                                Administration
                                                office
Mr. Khamphou     Sengla          Head           Land office        Sayabouri
Ms. Chanti       Phosaithilard   Naibai         Km 38              Sayabouri
Mr. Seng         Philavanh       Naiban         Numtone            Sayabouri
Mr. Mounnaled    Southanilasai   Head           Lao Develop-       Sayabouri
                                                ment Bank
Mr. Sailom       Inthanome       Naiban         Namone             Sayabouri
Mr. Laethong     Phommachit      Deputy         Finance District   Hongsa
                                                office
Mr. Aekaparb     Boun khong      Head           Land office        Hongsa
Mr. Chanpheng    Vilaiphan       Head           Lao Develop-       Hongsa
                                                ment Bank
                                 Head           Agriculture        Hongsa
                                                Promotion Bank
Mr. Kingkeo      Pongkham        Head           Finance District   Gneun
                                                office
Mr. Ounkham      Oubonsat        Head           Land District      Gneun
                                                office
Mr. Jongtong                     Naiban         Houaypheung

                                          40
Name             Surname        Position           Village/           District
                                                   Department

Bokeo Province
Mr. Bernhard     Mohns          Senior Advisor/ Lao-German Rural
                                                Development Program
                                                                      Northern Laos
                                IP Teamleader in Mountainous Areas
Mr. Khaokoe      Norsingkham    Director        PLMA
Mr.              Insixengmai    Deputy          PLMA
Khamphouvong
Mr. Khamsai      Boauupin       Deputy             District Finance   Houaysai
                                                   office
Mr. Phophet      Bounthong      Head               District Land      Houaysai
                                                   office
Mr. Sengmun      Koemuengnue    Deputy             Agriculture        Houaysai
                                                   Promotion Bank
Mr. Somphone                    Naiban             Houaydinjee        Houaysai
Mr. Airnoy       Inchanseng     Naiban             Xaychalern         Houaysai
Mr. Phonekoe     Phetkhambang   Head               District Land      Phaoudom
                                                   office
Mr. Chonekham    Somdara        Naiban             Donesavanh         Phaoudom
Mr.Sourivanh                    Lao font           Donsavanh          Phaoudom
Mr. Salerm       Sikhai         Naiban             Phonsavanh         Phaoudom
Mr. Soudavanh                   Head               District Finance   Tonpheung
                                                   office
Mr. Koe          SengSouvanh    Officer            District Finance   Tonpheung
                                                   office
Mrs. Tan         Sengmani       Naiban wife        Houaypheung        Tonpheung
Mr.Mai In        Sengmani       Naiban             Houaypheung        Tonpheung
Mr. Koeinboun    Saiyasan       Deputy Naiban      Houaypheung        Tonpheung




                                          41
Annex A4:
Guiding Questions for Expert Interviews

Guiding Questions for Provincial Land Management Agency and for District Offices

   •   What documents do people have to proof ownership of their land?

   •   Could you tell us about land transactions (sales) in rural areas?
   •   What are the procedures?
   •   What type of land is transferred?
   •   What kind of documents do people use for land transactions (title, LSC, TLUC, tax
       declarations or others)?
   •   What are the reasons for people to sell land?
   •   What are the reasons for people to buy land?
   •   To whom do villagers sell their land (within the village, outside the village, to
       foreigners)?
   •   How do sellers and buyers find each other?
   •   Who is witnessing land transactions?
   •   What kinds of contracts are made?
   •   How many people come here annually to request sporadic adjudication?
   •   How do you inform people about sporadic adjudication and registration?
   •   What would be the best option of spreading first registration of permanently used
       agricultural and residential parcels?
   •   Could you briefly describe the current registration procedure for land transactions in
       rural areas? (Different steps, necessary documents, fees)
   •   What do you estimate is the percentage of land sales and land leases which are not
       registered?
   •   Why do people not register land sales or land leases?
   •   Have there been problems or conflicts among husband and spouse if only one of them
       registered the land on his/her name?
   •   Is titling increasing the number of transactions (sales and leases)?
   •   Is titling increasing the land price (land value)?
   •   Is it a problem that only few titles have been delivered in rural areas?
   •   Can LSC replace the title in rural areas as base for land transactions and in terms of
       tenure security? Why (not)?
   •   How should the state deal with LSC (to secure tenure security and enable land
       transactions in rural areas)?
   •   Are there any cases where people have been punished for selling land based on
       TLUCs?

   •   Could you tell us about land leases in rural areas?
   •   How many cases of land lease? Registered case? Estimated total number of leases?
   •   What are the procedures?
   •   What type of land is transferred? (Use before leasing)
   •   What kind of documents do people use for land transactions (title, LSC, TLUC, tax
       declarations or others)?
   •   To whom do villagers lease their land (within the village, outside the village,
       foreigners)?
                                              42
   •   For what purpose are lessees using the land?
   •   What are the effects of state land leases and concessions allocated in rural areas on the
       villagers? What kinds of mechanisms exist to avoid that farmers loose access to the
       land or forests they have been using in the past? Is there any kind of compensation
       (money or land)?
   •   If rural people want to get a bank mortgage, how do they have to process?

   •   Do you do land valuation in rural areas? For what purpose? How?

   •   How efficient is the current land taxation procedure in rural areas?
   •   How fair is the current land taxation procedure in rural areas?
   •   What do you think of a building tax instead of land tax for rural areas?

   •   How do you estimate the importance of real estate agents and middle men in rural
       areas?

   •   Is there any evidence of landlessness or land-poor households due to increasing land
       sales?
   •   Do you know about land conflicts due to unregistered or unwitnessed transactions?
   •   What other land conflicts exist?
   •   Is there any evidence that people sell state land or communal land?
   •   What would be the best way to deal with communal land?
   •   How do you estimate the scope of land speculation in this province?

   •   What are the effects of on-going resettlements in rural areas? Especially on the
       original local population.


Statistics from Provincial Land Management Agency and District Offices:
   •   Number of titles issued in the rural areas of the province/district. In which villages?
       Ratio: men:women:co-ownership.
   •   Number of LSC that have been issued up to now in the province/district. (Estimate to
       how many % of parcels this number corresponds) In which villages? Ration:
       men:women:co-ownership.
   •   Number of (registered) sales in the rural areas of the district/province
   •   Number of (registered) leases in the rural areas of the district/province
   •   Number of (registered) mortgages in the rural areas of the district/province
   •   Any data on rural land values or land prices (changes over time, especially after
       titling)


Data at province level: by district
Data at district level: by village




                                               43
Guiding Questions for Naiban

   •   Basic data: number of people, households, parcels, land use, kind of soil, ethnic
       groups

   •   What kind of land tenure (state, private, common, customary, use rights…) exist in the
       village?
   •   What documents do villagers have to proof ownership of their properties?
   •   Do people feel secure with the document they have proving their land use rights or
       ownership? (Discussion)

   •   How did the land prices change within the last 5 years? Reasons for change?

   •   Do people sell land? How many?
   •   What are the procedures?
   •   What type of land is transferred?
   •   What kind of documents do people use for land transactions (title, LSC, TLUC, tax
       declarations or others)?
   •   What are the reasons for people to sell land?
   •   What are the reasons for people to buy land?
   •   To whom do villagers sell their land (within the village, outside the village,
       foreigners)?
   •   How do sellers and buyers find each other?
   •   Who is witnessing land transactions?
   •   What kinds of contracts are made?
   •   How many people have requested sporadic adjudication so far?
   •   What do you estimate is the percentage of land sales and land leases which are not
       registered?
   •   Why do people not register land sales or land leases?
   •   Have there been problems or conflicts among husband and spouse if only one of them
       registered the land on his/her name?
   •   Is titling increasing the number of transactions (sales and leases)?
   •   Have there been any titles issued in your village?
   •   Is it a problem that only few / no titles have been issued?
   •   How many LSC have been issued in your village?
   •   How should the state deal with LSC (to secure tenure security and enable land
       transactions in rural areas)?
   •   Are there any cases where people have been punished for selling land based on
       TLUCs only?

   •   Do people lease land? How many people in the village lease land?
   •   What are the procedures?
   •   What type of land is leased?
   •   What kind of documents do people use to lease land?
   •   What kind of contracts do they prepare?
   •   Who is witnessing a lease arrangement?
   •   To whom do villagers lease their land (within the village, outside the village, to
       foreigners)?
                                               44
   •   Are there any state concessions in your village?
   •   If yes: What are the effects of state land leases and concessions on the villagers?
   •   What kinds of mechanisms exist to avoid that farmers loose access to the land or
       forests they have been using in the past? Is there any kind of compensation (money or
       land)?

   •   How many villagers have a bank or private mortgage?
   •   If villagers want to get a bank mortgage, how do they have to process?
   •   How many private money lenders are in the village?
   •   Have there been cases in the village where people could not pay back a loan? What
       happened to them?

   •   How is the land valued (in case of registration or mortgage or sale)?

   •   How efficient is the current land taxation procedure?
   •   How fair is the current land taxation procedure?
   •   What do you think of a building tax instead of land tax for rural areas?

   •   Is there any evidence of landlessness or land-poor households due to increasing land
       sales?
   •   Do you know about land conflicts due to unregistered or unwitnessed transactions?
   •   What other land conflicts do exist?
   •   Is there any evidence that people sell state land or communal land?
   •   What would be the best way to deal with communal land?
   •   How do you estimate the scope of land speculation in your village?

   •   Are there any resettled people living in your village?
   •   If yes: What are the effects on the original local population?


Statics/Data from Naiban
   •   Number of land sales
   •   Number of land leases
   •   Number of titles
   •   Number of LSC
   •   Number of TLUC
   •   Number of other documents proving land use rights
   •   Number of mortgage (Bank mortgage and private mortgage)
   •   Any data on land prices




                                               45
Guiding Questions for District Finance Offices (land taxation)

   •   How efficient is the current land taxation procedure in rural areas?
   •   How fair is the current land taxation procedure in rural areas?
   •   How are you now doing land taxation after it has been separated from land
       administration?
   •   Do you think that it will cause a problem that land taxation has been separated from
       land administration?
   •   What do you think of a building tax instead of land tax for rural areas? Building tax:
       fixed rate on each type of house (Explanation and discussion)



Guiding Questions for Banks (mortgage)
   •   Is there any demand for mortgage from rural people? How many people have been
       asking for it in the last years? Trend (increase, stable or decrease)?
   •   If rural people want to receive a bank loan (mortgage), how do they proceed?
   •   What documents (evidence of ownership) do they have to provide?
   •   Can LSC provide enough security to receive a loan?
   •   Which institutions are involved?
   •   How do you value the land?
   •   Is there any possibility to receive a loan/credit in case of group property (common
       property) or shifting cultivation?
   •   What is the common period of a credit (years)?
   •   What are the minimum and maximum amounts of a credit for the rural population?
   •   For what purpose do people use the loan? Are there any restrictions?
   •   What is the interest rate (% per year)?
   •   How high is the return rate?
   •   What happens if a person cannot pay back the loan?
   •   Prognosis: how will the credit market develop in the future (short/middle/long-term)?


Statistic/Data from banks
   •   Number of mortgages




                                               46
Annex A5:
Questionnaire for villagers on rural land markets

Name of the village: __________________________________________________________

Name of the interviewer: _______________________________________________________
-----------------------------------------------------------------------------------------------------------------

1. For what purposes are you using land in and around the village?

Rice paddy
Shifting cultivation
Fruit trees
Plantation
Gardening
Grazing
Forest / Logging
Forest / Non-Timber Production
Fish raising
Residential use
Commercial use
Other

1.1 If other use: what kind of use? _______________________________________________

2. What rights do you have on the land?

                  Right Right         Right   Right Right Right                Right     Right       Right to
                  to    to            to keep to      to    to                 to        to          receive
                  use   decide        the     inherit lease sale               mort-     exclude     com-
                        how           harvest                                  gage      others      pensation
                        to use        or sell                                            from        in case of
                                      it                                                 the         expropri-
                                      (keep                                              land        ation
                                      profit)
Rice paddy
Shifting cult.
Fruit trees
Plantation
Gardening
Grazing
Forest
Non-Timber
Fishing
Residential
Commercial
Other

2.1 If other: What kind of use? __________________________________________________
                                                        47
3. What kind of proof of use right or ownership do you have?

                         Title    LSC      TLUC       Tax    Naiban Contract Lease Other:
                                                      bill   Certi- b/w      con-
                                                             ficate buyer + tract
                                                                    seller
Rice paddy
Shifting cultivation
Fruit trees
Plantation
Gardening
Grazing
Forest / Logging
Forest / Non-Timber
Production
Fishing
Residential use
Commercial use
Other

3.1 If other: What kind of proof? ________________________________________________

3.2 What kind of proof of use right or ownership would you like to have? Why?
___________________________________________________________________________

3.3 What’s the problem of receiving it?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________


4. Do you feel secure on your land?

Yes
No

4.1 Please, explain why (not):
___________________________________________________________________________
___________________________________________________________________________


5. Did you ever ask for sporadic registration?

Yes
No

5.1 Please, explain why (not):
___________________________________________________________________________
___________________________________________________________________________
                                                 48
6. Did you ever buy land?

Yes
No

If yes, continue with 6.1
If no: Why not? _____________________________________________________________
Would you buy land on the basis of a formal title? ___________________ Continue with 7.

6.1 What was the procedure (steps including kind of contract and people/institutions
involved)?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

6.2 Did you involve the naiban?

Yes
No

6.2.1 Why (not)?
___________________________________________________________________________
___________________________________________________________________________

6.2.2 If yes, how much did you pay? Formal:___________________ Informal:____________

6.3 Did you register the land at the province or district land office after you bought it?

District
Province
No

6.3.1 Why (not)?
___________________________________________________________________________
___________________________________________________________________________

6.3.2 If yes, how much did you pay? Formal: P:______D:_____Informal: P: ______D:______

6.4 Did you involve a notary?

Yes
No

6.4.1 Why (not)?
___________________________________________________________________________
___________________________________________________________________________

6.4.2 If yes, how much did you pay? Formal: __________________ Informal:____________


                                                 49
6.5 How did you find a seller?
___________________________________________________________________________
___________________________________________________________________________

6.6 Who was witnessing the land transaction?
___________________________________________________________________________
___________________________________________________________________________

6.7 How much money did you pay per m2 (amount and parcel size)?
___________________________________________________________________________
___________________________________________________________________________

6.8 What was the reason to buy the land?
___________________________________________________________________________
___________________________________________________________________________

6.9 For what purpose are you using the land?
___________________________________________________________________________
___________________________________________________________________________


7. Did you ever sell land?

Yes
No

If yes, continue with 7.1
If no, continue with 8.

7.1 What was the procedure (steps, including kind of contract and institutions involved)?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

7.2 How did you find a buyer?
___________________________________________________________________________
___________________________________________________________________________

7.3 Who was witnessing the land transaction?
___________________________________________________________________________
___________________________________________________________________________

7.4 How much money did you receive per m2 (amount and parcel size)?
___________________________________________________________________________
___________________________________________________________________________

7.5 What was the reason to sell the land?
___________________________________________________________________________
___________________________________________________________________________

                                            50
7.6 To whom did you sell the land (within the village, outside the village, foreigners)?
___________________________________________________________________________
___________________________________________________________________________

7.7 For what purpose is the land used by the new owner?
___________________________________________________________________________
___________________________________________________________________________


8. Did you ever lease land to someone?

Yes
No

If yes, continue with 8.1
If no, continue with 9.

8.1 What was the procedure (steps, including kind of contract and institutions involved)?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

8.2 Whom did you involve? And how much did you pay?

                    Yes, involved    Not involved     Formal fee        Extra money
Naiban
District office
Provincial office
Notary
other

8.2.1 If other, who? ___________________________________________________________

8.3 How did you find a person to lease land from you?
___________________________________________________________________________
___________________________________________________________________________

8.4 Who was witnessing the land lease?
___________________________________________________________________________
___________________________________________________________________________

8.5 To whom did you lease the land (within the village, outside the village, foreigners)?
___________________________________________________________________________
___________________________________________________________________________




                                            51
9. Did you ever lease land from someone?

Yes
No

If yes, continue with 9.1
If no, continue with 10.

9.1 What was the procedure (steps, including kind of contract and institutions involved)?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

9.2 How did you find a person to lease land from?
___________________________________________________________________________
___________________________________________________________________________

9.3 Who was witnessing the land lease?
___________________________________________________________________________
___________________________________________________________________________

9.4 For what purpose are you leasing the land? What was the reason to lease it?
___________________________________________________________________________
___________________________________________________________________________


10. Did you ever mortgage your land?

Yes, bank
Yes, private
No

If yes, continue with 10.1
If no, continue with 11.

10.1 What is the duration of the loan? ____________________________________________

10.2 What is the interest rate? ___________________________________________________

10.3 What was the procedure (steps, including kind of contract and institutions involved)?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________




                                             52
10.4 Whom did you involve? And how much did you pay?

                    Yes, involved     Not involved     Formal fee         Extra money
Naiban
District office
Provincial office
Notary
other

10.4.1 If other, who? __________________________________________________________

10.5 Who was witnessing the mortgage contract?
___________________________________________________________________________
___________________________________________________________________________

10.6 For what purpose are you using the money form the loan?
___________________________________________________________________________
___________________________________________________________________________


11. Are there any cases where people have been punished for selling land based on TLUCs? If
yes, please explain:
___________________________________________________________________________
___________________________________________________________________________


12. Are there any state concessions in your village?

Yes
No

If yes, continue with 12.1
If no, continue with 13.

12.1 What are the effects of state land leases and concessions on the villagers?
___________________________________________________________________________
___________________________________________________________________________

12.2 Is there any compensation?

Yes
No

12.2.1 If yes, what kind / how much?_____________________________________________


13. Is there any evidence of landlessness or land-poor households due to increasing land
sales? If yes, please explain.
___________________________________________________________________________
___________________________________________________________________________


                                               53
14. Do you know about land conflicts due to unregistered or unwitnessed transactions? If yes,
please explain.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________


15. What other land conflicts do exist?
___________________________________________________________________________
___________________________________________________________________________


16. Is there any evidence that people sell state land or communal land? If yes, please explain.
___________________________________________________________________________
___________________________________________________________________________


17. What would be the best way to deal with communal land and water bodies?

Register as state land
Register as common property
Privatize
Distribute individual use rights certificates, but keep common use
Other
If other, what?
___________________________________________________________________________
___________________________________________________________________________


18. How do you estimate the scope of land speculation in your village?
18.1 Value increase: __________________________________________________________
___________________________________________________________________________
18.2 How many people speculate with land?________________________________________


19. Are there any resettled people living in your village? If yes: What are the effects on the
original local population?
___________________________________________________________________________
___________________________________________________________________________

20. What do you think of a building tax instead of land tax for rural areas?
___________________________________________________________________________
___________________________________________________________________________


21. Information on interviewee
Sex:                                         Age:      < 18 years [   ]
     Male                                           18 – 40 years [   ]
     Female                                         40 – 60 years [   ]
                                                       > 60 years [   ]

                                               54

				
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