Gottfried Ablasser

Historically, an important dimension of socioeconomic development the world over has been the settlement of new lands. As most of the globe’s hospitable open spaces have been settled, much of the area remaining has infertile soils, inadequate water, inhospitable climates, and endemic diseases. Because of difficult environmental conditions, the development of new land settlements is becoming particularly complex, and costs are rising. But despite formidable obstacles and hardships associated with land settlement, there continues to be much interest in opening up new lands by private individuals and governments alike. Individual settlers, of course, envisage a better life than in their place of origin. Governments’ motives are varied, and include primarily alleviation of population pressures elsewhere in the country, increases in agricultural production for domestic use and export, and generation of additional employment and incomes. Other reasons may be famine relief, relocation of people as a result of natural disasters or displacement through development projects (e.g., dams), avoiding land reform in settled parts of the country, and consolidation of national boundaries.

The world’s potentially arable land area is estimated to be above 2,500 million hectares, of which some 1,500 million hectares are currently under crop; the majority of the lands with development potential are either virgin territory or sparsely populated areas in Latin America and tropical Africa. While the new areas of 4-5 million hectares brought under cultivation annually are only a small fraction of potentially arable lands worldwide, land development activities often represent major transformations for the countries in which they occur. Some of these have caught the public’s eye and generated controversy—generally out of concern for the environment.

The Bank’s Operations Evaluation Department (OED) in 1985 reviewed 34 completed projects approved over 1961-78 and completed over 1969-84 (including 14 projects completed over 1980-84) which had support of land settlement as one of their major objectives. The 34 projects had an estimated aggregate cost at appraisal of $1.2 billion of which Bank Group lending totaled $597.5 million. The following observations are largely based on the findings of this OED study.

Issues and obstacles

The settlement process generally follows a distinct pattern from the time of arrival of settlers to full maturity of the new community when dependency upon official assistance ends and surplus production and sustainable commercial transactions emerge. From the perspective of the settler, relocating permanently to a new area is challenging and laden with hardship, but it also offers the prospect of a higher standard of living. The characteristics of settlement beneficiaries thus are of crucial importance. Some individuals and families move on their own, while others are chosen by development agencies and often given incentives.

Among development agencies’ principal concerns, after attracting a desirable settler population, is the establishment of appropriate farming systems. The areas being settled often are ecologically fragile, and care must be exercised in their utilization and development. Land use patterns to be introduced in settlement areas not only must be environmentally sound but also must be acceptable to the settlers. Native populations, where some exist, have to be integrated in the settlement process or at least protected against adverse effects of the influx of newcomers.

Development agencies also need to pay attention to nonagricultural economic development and to the phasing of public infrastructure development of the region, while minimizing the budgetary burden on the government. They also need to make sure that there is no undue delay in the withdrawal of settlement agencies once a settlement has taken root. Toward that end, these agencies must help develop adequate self-management skills in settlers, and assist in the formation of settler organizations.

Settlers’ issues and solutions

Settlers may include, besides government-sponsored settlers, spontaneous settlers, and the host populations. Spontaneous settlers, the vast majority of whom have nothing to do with government schemes or Bank-sponsored projects, dominate settlement areas throughout the tropics and subtropics. In some areas, more than 80 percent of all settler households are spontaneous. The selection of sponsored settlers should seek to ensure that they include persons with similar backgrounds who wish to become full-time settlers, and who have the appropriate skills for rural life. Selecting settlers by rounding up reluctant youths and the urban unemployed can only produce disappointing results.

Immigrants in the settlement area must not only adapt to a new environment but also to new farming systems, new neighbors, and management by project officials. Their first years in the settlement area tend to be characterized by hard work and great stress, with their welfare depending on the productivity of the recommended farming system, the efficient maintenance of government-provided facilities, the availability of a wide range of inputs and services, and access to markets and service centers. During that period, usually lasting not less than five years, settlers are not inclined to take risks but prefer to cling to familiar aspects of production and social life.

However, as a certain level of subsistence is reached, settler farmers assume a risk-taking stance and are inclined to enter into aspects of commercial agriculture. Settlements can be considered as having fully matured when schemes are handed over to a second generation of settlers, and to line departments, local government, and settler organizations.

Settlers’ status on the land they are occupying should be clear. The rapid handing over of titles for land from the government tends to serve as an incentive for settlers to develop it rapidly and efficiently. Communal forms of land holding and production, attempted, for example, in Peru (San Lorenzo), have not been very successful and were considered uncertain at completion of the Panuco project in Mexico. Another key factor in settlement projects is settler participation in management—which requires detailed preparation. Lack of such participation tends to perpetuate project management. But, if they are properly organized, settler communities are better able to compete for development resources with other regions by influencing the formulation and implementation of development policies.

Spontaneous settlers often move into a settlement area after the initiation of an official settlement scheme. Sometimes, they may be the basis for such a scheme. In some areas more than 80 percent of all settler households are spontaneous. They have played a significant role in settlement schemes in Colombia, Indonesia, and Senegal, migrating at their own initiative and at their own expense. But this does not mean that their participation in settlement activities should be entirely unguided. Spontaneous settlers, while still relatively poor, tend to have more resources than government-sponsored settlers and come from somewhat higher income categories. They may, therefore, take command of a disproportionate share of area and facilities. Where their participation can be balanced by poorer families, within a master plan in which sponsored settlers provide the nucleus surrounded by spontaneous settlers and host populations, new land development offers a better chance for poverty alleviation. The most desirable ratio between various types of settlers often becomes an important planning issue.

A native or “host” population in settlement areas often claims some sort of jurisdiction over whatever land and water resources are available in a settlement area. More often than not the host population is weaker both politically and numerically than the settler population. As a result it not only requires special consideration, but also needs to be protected from both development agencies and immigrant settlers. This problem is being increasingly recognized, and the Bank supports attempts by governments to extend benefits of land settlement to native people living in the area. More than one third of the projects in the OED study afforded major benefits to host populations.

Environmental issues

Insufficient attention to the ecological implications of different settlement strategies was evident in some projects reviewed by the OED study. Ex post assessments of the projects’ environmental impact are incomplete. Some assessments have revealed environmental damage in the project area, leaving little room for complacency in current and future projects of this kind. The Bank has recently tightened its guidelines on resettlement and environmental issues and its processes for reviewing compliance with these guidelines.

Of utmost concern is irreversible environmental damage, such as species extinction. For this reason, the environmental and economic impact of replacing existing land and water use systems with new ones, for example through the development of extensive ranching in what were formerly forests, needs to be anticipated and measured carefully. At the project level, site selection, among other things, has to take the environment into account. Inadequate soil surveys, often because of difficult access to the area, can be a major cause not only of poor project performance but also of adverse environmental effects (e.g., erosion, salinity) when inappropriate farming methods are employed. There is also a tendency to underemphasize the need for hydrological surveys, and to overly rely on aerial photographs, topographical maps, and so on, rather than combining their use with ground surveys. Mechanized land clearing and farming in ecologically fragile areas can damage the soil, making it essential to promote the use of manual methods wherever feasible.

Government-sponsored settlement projects can and should serve as pilot efforts to test new production systems and approaches for land settlement areas, as is the case with upland rainfed and swamp reclamation farming systems in the transmigration areas of Indonesia.

Other key issues

Agricultural production and farm income. The review of settlement projects by OED indicated that too little emphasis tends to be placed in settlement schemes on issues relating to agricultural production in comparison to physical infrastructure, some notable exceptions being the Malaysia FELDA projects (see box) and oil palm production in projects in Papua New Guinea. Yields, especially of annual crops, have been disappointing in many settlement projects for many reasons, including ecological constraints and the behavior of settler households. Corrective measures to improve soil fertility tend to be less effective in a tropical environment and often are not economical. Settlers may also be disinclined to follow recommended farming systems because of unfavorable pricing policies, especially where wages provide a better financial return than farming. Where feasible, it makes sense to diversify farming systems to provide food for nonfarm labor and produce for agroindustry.

Research and extension functions have tended to be weak in settlement schemes. Credit also is essential and generally has been provided, mainly for productive purposes. Credit to alleviate hardship apparently has been unavailable. Experience suggests that grants be kept to a minimum provided credit is available from the time of settlers’ arrival. More attention also needs to be paid to fostering marketing institutions.

Farm incomes, therefore, have generally not reached their potential. Data on settler incomes are notoriously weak, but indications are that the majority of settlers, nevertheless, have been achieving incomes above their country’s average for rural areas. Where poverty occurs, this may be as a result of harsh pioneering conditions and household misfortunes as well as failure on the part of the settlement agency to perform as expected. Incomes can be improved by paying greater attention to aspects of production during project implementation and by strengthening agricultural services. Incomes are also affected by project design. Diversification of farm production, for example, as well as working for wages and other off-farm activities, offer settlers opportunities to cope with poverty, and to move beyond subsistence through a more productive allocation of family labor. One risk is the possibility of settlers slipping back into poverty after several years of farming because of declining soil fertility. In some instances, plots are abandoned for this reason.

Phasing of investments. Investments should be phased, with the first phase viewed as a pilot project that should be carefully monitored and evaluated to improve subsequent phases. The installation of some types of infrastructure, for example, can be delayed, while that of others cannot. The costs of delays have been demonstrated by inadequate road links in the Nepal Settlement project and problems with potable water supply in some Malaysia FELDA projects. Proper phasing of investments not only makes management of settlement projects easier, but it also can help to reduce costs. Phasing can and should be designed to stimulate settler initiative. For example, loans for capital items such as draft animals, and even provision of additional land, might be made dependent on successful accomplishment of initial development objectives. Phasing also affects settlers’ incomes. Adequate infrastructure provided at the right time tends to accelerate the development of settlement schemes, thus shortening the initial lean years and lifting households above subsistence levels sooner than with ill-timed or unbalanced infrastructure investments.

Cost reduction and recovery. Land settlement projects tend to be capital intensive, rarely costing governments less than $10,000 per household. Ways to reduce these costs include choosing locations closer to towns, rehabilitating existing market and regional towns rather than building new towns, and reducing housing provided by projects. After road construction, housing is the next most expensive item. Project-designed and financed housing frequently has proven socially inappropriate. An alternative to project-built housing is some combination of project assistance and settler labor. Costs can also be cut through greater coordination and involvement of the private sector.

Cost recovery is a major problem with land settlement projects. In order to achieve better cost recovery, explicit policies need to be made known to settlers at the time of recruitment, and charges should actually be collected. Even where settler households are able to pay land development and water charges, they may refuse to do so because of what they perceive to be poor operation and maintenance of facilities. Payments should be seen as being used to operate and maintain settlement infrastructure. Therefore, a portion of the funds collected should be handed over to settler organizations. The marketing of farm output through the project or settler cooperatives and arranging group liability through settler organizations also can improve collection of charges. But more important, the emphasis on cost recovery must be carefully implemented according to the ability of settlers to pay.

Management. One of the main issues related to project success and replicability in land settlement is management. Sound management involves not just adequate planning and efficient operation and execution of development responsibilities but also the ability to work with and eventually hand over a settlement scheme to other essential agencies during the latter stages of scheme development. Both highly centralized parastatal organizations and autonomous project management units have been successfully employed in settlement schemes. However, while parastatals appear to have the advantage during the early stages of the settlement process, they are apt to resist handing over management responsibilities at a later stage. Another problem arises when line agencies refuse to take over responsibilities for infrastructure and services which they did not create, suggesting the need to involve such agencies at an early stage of settlement planning and possibly implementation.