Based on IV strategy, the SPK 4-01 entitlement has no positive and statistically significant
impact on any of the expenditure except for that on hydrated lime, as seen in Table 14. From
column (1), a one standard deviation increase in land under SPK 4-01 titles raises the spending
on hydrated lime by 41.84 Bahts. Nevertheless, before discussing the effect of security and
expenditure on hydrated lime, let me briefly discuss the results of other variables of interest.
[Table 14 “Expenditure on hydrated lime – IV results” here]
It is interesting to see that apart from the expenditures that are of long-term and land-related
nature, land security fails to have immediate statistically significant impact. Nonetheless, in
Tables 15 and 16, the coefficients of the share of land under SPK 4-01 titles are found to be
negative and statistically significant. These illustrate negative correlations or causations between
land right security and the application of fertilisers, pesticides and insecticides. This potentially
suggests that land right security that guarantees long-term holdings could also encourage an
avoidance of resource degradation and overinvestment in fertilisers, pesticides and insecticides
that, although they enhance short-term yield, can have detrimental long-term effects on land.
Nonetheless, in both specifications, the p-values for underidentification tests are relatively high,
suggesting that in these cases the instruments are relatively weak.[Table 15 “Labour expenditure on applying fertilizers – IV results” here]
[Table 16 “Labour expenditure on applying pesticides and insecticides – IV results” here]
Hydrated lime (Ca(OH)₂) is a soil additive made from pulverised limestone and is used to
correct acidity of soils. Natural acid sulfate soil28 and lime losses29 lead to a lower pH in soils
than the level that some crops can tolerate. Hydrated lime can increase the pH of acid soils
allowing plants to grow and utilise optimally the available soil nutrients. Additionally, it alsoimproves efficient use of fertilisers, bacterial activity in the soils, and water penetration for acid
soils. Thus, applying hydrated lime is one of the most basic and prerequisite land-related
investment that farmers can undertake to improve the productivity and the possibility of multiple
cropping.
In Thailand, it is approximated that the areas with acid soils cover 9.4 million rais.
According to the Rice Department, rice cultivation in Thailand can suffer from different degrees
of acid soils.30 Moreover, acid soils become much more acid during the summer season, as the
sulfides react with oxygen to form sulfuric acid to a greater extent if the soils are dry, drained
and more exposed to the air. Additionally, troubles from acidity are most common and most
acute in sandy soils, predominantly found in the North East. This is due to the lack of the
capacity for holding liming materials, as a result of their free draining nature. These lands thus
require more frequent liming.Consequently, it is not surprising that the empirical analysis shows that in an immediate run as
land rights are secured, Thai farmers most of whom grow rice, choose among various types of
investment, to increase their expenditures on hydrated lime that directly improves the conditions
of the land, assists the effectiveness of other inputs such as irrigation, and, most importantly,
improves the possibility of multiple cropping and yields, especially in periods out of the
monsoon season when the acid soil problem is most acute.
Partial Land Titling and Soil Quality
It is also interesting to see whether the distribution of SPK 4-01 titles has also contributed
to land improvement. Myyrä et al. (2005), using cross-sectional parcel data from Finland, find
that the mean soil pH is 0.2 pH units higher in lands owned by farmers than in lands cultivated
under lease contracts, which potentially suffers from land tenure insecurity. Similarly, in thissection, I look at the effect on the share of land holdings that have acid soil. In addition to
applying hydrated lime, well-managed and constant surface drainage, which requires
considerable effort, can help mitigate acid sulfate soil problem. In Table 17, the results establish
that an increase in partial land titling statistically and significantly reduces the proportion of land
that has acid soil. This suggests that by strengthening land ownership security, the condition of
land itself is also improved.
[Table 17 “Share of land with acid soil – IV results” here]
Plausible Mechanisms
The empirical analyses in the above sections outline the effects of the improvement in
land right security given by SPK 4-01 titles on various agricultural outcomes. In this section, as a
result, I investigate the mechanisms or channels through which the entitlement has impacts on
second rice productivity, and soil quality.
Second rice productivity
As suggested by the theory, effort inducement, investment and a change in pattern of
production provide mechanisms through which strengthening land right security can enhance
farm productivity. Nonetheless, it is extremely difficult to find a variable capturing effort. Effort,
hence, remains an unobserved and latent channel, which is potentially captured by the residual
terms.
[Table 18 “Mechanisms: Second rice productivity – IV results” here]
In column (2) of Table 18, investment in hydrated lime is added as an additional
explanatory variable for explaining the improvement in second rice productivity. However, it
does not exert any statistical significance. In column (3), I add the proportion of land devoted to
paddy variable. field Its coefficient is positive and statistically significant. This suggests thatwhile holding other inputs such as labourers constant, an increase in the scale of production, i.e.
an expansion of land devoted to rice cultivation, may provide a mechanism generating greater
second rice productivity. Also, in column (3) the coefficient of share of land under SPK 4-01
titles falls approximately by 25 percent, implying that switching to paddy fields provides a part if
not the whole underlying mechanism. Unobserved variables such as effort may be responsible
for the rest of the mechanism.
Soil quality
In this section, I investigate whether the investment in hydrated lime can be a channel
through which strengthening land right security leads to better soil quality, i.e. reducing acid soil.
However, as illustrated in column (2) of Table 19, the investment in hydrated lime has no
statistically significant explanatory power for the proportion of land with acid soil. Nonetheless,
hydrated lime improves land quality by enhancing water penetration for the soil. Thus, the
variable representing the interaction between investment in hydrated lime and access to public
irrigation is added as an additional explanatory variable in column (3). The coefficient of the
interaction term is negative and statistically significant. The absolute value of the coefficient of
share of land under SPK 4-01 titles also falls. This suggests that given access to irrigation, landrelated
investment such as in hydrated lime that is encouraged by greater land right security, can
provide a mechanism through which SPK 4-01 entitlements can lead to an improvement in soil
quality.
[Table 19 “Mechanisms: Share of land with acid soil – IV results” here]