Rent-To-Own Land Program in Progress

Rent-To-Own Land Program in Progress

28 Oct, 2016 - By

One of the things keeping poor rural families in extreme poverty is lack of land.  They generally have to rent it. To afford the rent they have to work relatively unproductive land that needs lots of improvement.  Once they have worked it well and made the land productive, the landlord generally increases the rent or simply hires cheap labour to work his land. The renters never get to realize the benefit of working extra hard to make the land productive.  You can see that land ownership is crucial.

The Rent-to-Own Land Program aims to ensure that farmer groups can borrow money to buy land.   Our partner holds the title to the land until it is paid off and then transfers title to the group.  We have had experience with one farmer group having great success with this model and we wanted to run a pilot project to see how we might be able to scale up the model.

With the $30,000 raised for the project our partner  – PRR in Honduras – was able to procure parcels of land of varying size and quality for 4 farmer groups.   All together they purchased about 25 acres for the participants.  These participants consisted of 28 women and 25 men.  These represent the 53 families that will directly benefit from the program in the first 4 year cycle.  If growing conditions are reasonable over the period, it is expected that the groups should pay off the land in 4 years and then another cycle of land purchase for different groups will take place.

If all goes according to plan, at the end of 8 years (two cycles) we will have helped approximately 100 families become land owners – lifting themselves permanently out of extreme poverty.  And the cost of this?  Since the land will have been paid back before ownership is transferred to the farmer groups, the only real cost to the program is the loss of interest on the $30,000 over the 8 years.  At 5% this would come to about $14,000.  If we divide that by 100 families you get $140 per family.  Pretty incredible isn’t it?  Of course those numbers won’t be the exact outcome, but even if they are close (and we believe they will be) then it will be an awesome value to ensure that people are lifted permanently out of extreme poverty for just $140 per family.

It is clear that this is a longer term project and it will be a while before we can give reports on this that show meaningful results but we wanted to share that the pilot is well under way and the possible outcome looks excellent.  I hope you are as pleased and excited about the possibilities that the Rent-to-Own Land Program brings as we are. I know the participants in the program most certainly are.  Land ownership has only ever been an impossible dream for these poor farmers.

Below is a table showing the group names and where they purchased land, who was involved and the cost of the land. You will notice that one parcel is a lot bigger and a lot less expensive than the rest.  That is the poorest and least productive parcel of land in the program.  It will take the most work and is the biggest risk for the farmers to undertake but if they work hard and are lucky with the weather they will also have the greatest gains.  Time will tell and this variation will give us lessons learned for future land purchases.

renttoownland

I know it sounds like this might just be the answer but we have to remember that all the participants have been involved with the program for several years. They have all participated in trainings on soil and water conservation, community building, agricultural research and more. This has increased their capacity to the point that they are able to take a piece of non-productive land and make it into a model of highland farming.   That is what our regular program in Honduras is all about and it is just as important as ever.


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