the likelihood that they would be willing to adopt the new technologies.

Farmers in SSA typically need improved access to credit and microcredit is relatively well established. However, most is provided through NGOs and may not be sustainable without the injection of funds to cover the relatively high administrative costs. Recently, commercial retail banks have become involved by providing capital to organizations at commercial rates that then provide the microcredit directly to farmers. This involvement of commercial banks may offer a more sustainable longer-term route for providing capital for microcredit. Although in the literature there is a focus on microcredit, access to formal credit is and will remain an important issue for larger-scale farms. The use of formal credit requires banks to be willing to supply the credit, which is more likely to occur in an institutional environment
where farmers have collateral (such as land or fixed assets), property markets are efficient (such that land and property offered as collateral has sufficient value to the bank), and there is an efficient and effective legal system that enables banks to take action if farmers default.

Weather insurance is mentioned in the literature as a potential mechanism for reducing farmers’ financial exposure to highly variable rainfall and hence crop yields. However, problems of moral hazard (farmers may put less effort into their farming activities if they are insured against losses), the difficultly in monitoring farming effort and output, the problem that negative weather shocks to farmers tend to be correlated, and the possible unwillingness of farmers and likely inability of poor farmers to pay the insurance premiums mean that the provision of crop insurance is likely to be limited. So far, weather insurance has not been successful (Dercon et al., 2004). However, some initiatives are being piloted by the World Bank in SSA and Latin America that payout depending on rainfall rather than crop output, thereby eliminating moral hazard (Devereux, 2003). Such insurance

may be more relevant to drought than to climate variability, and the problem of covariance remains (if one farmer is negatively affected the likelihood is that most farmers in the locale will be), suggesting that private companies may not be willing to provide such insurance (Devereux, 2003).

5.5.3.2 Land tenure
In many SSA countries, inadequate land tenure structures are perceived to be a major obstacle to sustainable agriculture, rural development, and equitable access to resources. In general, exploitation (and over-exploitation) of natural resources is inextricably linked to the institutions surrounding access to land, pricing, and regulation. Land reform has often been cited as an approach to reducing environmental degradation (in addition to other benefits)—a way of allocating property rights such that individuals internalize the negative impacts of their actions on the environment, so that farmers can access credit for appropriate investments in managing soil and water, and so that farmers have the confidence to make these investments without concern that they will lose access to the land. However, local institutions have evolved in SSA in response to the lack of formal property rights over resources and need to be understood in this context before costly land reform is undertaken.

Long-term investments in natural resource management have been found to be correlated to secure land tenure and short-term investments to insecure tenure, suggesting that formal land titling would benefit the adoption of investments in natural resource management (Gebremedhin and Swinton, 2003). However, land tenure reform alone rarely brings all the hoped for benefits. Land titles have also been shown to have little impact on reducing environmental degradation and there is plenty of evidence in the literature that land titling does not increase credit transactions, improve production, or increase the number of land sales (Seck, 1992; Melmed-Sanjak and Lastarria-Cornhiel, 1998). Indeed, many benefits from land titling appear to be offset by increased risk of small holders losing their land if titled, high transactions costs of titling land, the reality that with or without title, small farmers rarely access formal credit, and that rural land has little value as collateral to financial institutions.

Indeed, it is not necessarily formal land tenure per se that is important for farmers’ long-term investments, but whether individual farmers perceive their claims to the land that they are farming to be sufficiently secure to make the required investments. That is, secure land tenure is important for providing an appropriate incentive for farmers to adopt technologies that, for example, enhance natural resources, but this security can be obtained without formal land titles. However, women’s weaker rights to land and tenure security do appear as a constraint to meeting sustainability and development goals and more research is needed into how land tenure systems and property rights can be developed that benefit women and minority groups such as pastoralists.

Another impact of formal land titling could be that farmers have an opportunity to consolidate land holdings through buying and selling land, thereby increasing the average size of land holdings. In Tanzania the area of land per household has remained at about 2 ha over the past decade, though the majority of households farm less than