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Land Reforms: An Evaluation of World Bank strategies

Land redistribution is the basic prerequisite for an inclusive, broad-based development that would allow a nation to ensure a decent standard of living for all its citizens. Access to land by the vast majority of the landless rural population in developing countries is an issue of social justice and basic human rights; it involves the right to feed oneself, the right to adequate shelter, the right to employment and, as research has shown, it also guarantees improved environmental protection. Although many national and international institutions agree on the need for agrarian reform in order to reduce poverty and hunger, experiences in many developing countries suggest that little progress has been made under existing land reforms; moreover, the number of landless people exerting pressure on land has now increased. Globalisation has increased the number of displaced farmers, as more land is now being used for the large-scale, commercial, export-led production of cash crops, and this has reduced the demand for wage employment in agriculture. In order to survive, hundreds of farmers have no choice but to encroach on forest land and other fragile environmental areas where the climate and soil do not permit sustainable agriculture. Landless people and rural workers are the most vulnerable group in rural society and, in their struggle to gain access to land and support services, they often have to endure serious violations of human rights.

http://www.iuf.org/iuf/LF/18-3.htm

Mere technological advances and the use of improved seeds, fertilisers, tractors, harvesters, irrigation etc. have failed to provide millions of small and marginal peasants worldwide with even two square meals a day. As a result, many countries have tried to implement land reforms for the express purpose of: abolishing intermediaries enforcing tenancy reforms to regulate rent, secure tenure for tenants, and confer ownership on them implementing ceilings (and floors) on land holdings appropriating surplus land and distributing it among the landless and land poor reorganising agricultural land including consolidation of holdings and prevention of sub-division and land fragmentation, and establishing co-operative farming.
 
Landless people and their struggles have gained world attention. In Zimbabwe, so-called veterans of the liberation war are currently confronting white commercial farmers who control the vast majority of prime land in the country, as the government looks the other way. While this development need not necessarily be beneficial to all black Zimbabweans as a new class of elites may emerge out of it, while the majority of the people sees no improvement, the country will at least see the white settlers losing control over the huge tracts of fertile land they had control over. At the end of the day, one hopes that a land tenure system will be born out of this land liberation struggle.

http://afronet.org.za/theobserver/volume6_4.htm

The success in implementing land reforms has varied from country to country. As pointed out by James Putzel, redistributive land reforms have played an important role in the rapid growth that South Korea and Taiwan Province of Chinawitnessed after World War II. Chinas success in reducing poverty is also the result of land reforms. Even the rise of Japan was founded on the land reforms carried out in the country, something that mainstream economists decline to acknowledge.
 
www.lse.ac.uk/Depts/destin/workpapers/asiasubmission.pdf
 
Abhijit V. Banerjee, in his paper on 'Land Reforms: Prospects and Strategies', has pointed out that redistributive probably promotes equity as well as efficiency. While there may be high costs attached to land redistribution and hence alternatives like tenancy reforms may be tried, there is clearly not enough evidence to say that tenancy reforms are an effective substitute for land reforms. After careful consideration of the costs implied in the process and possible alternative uses of the same resources, it is still worth of our while to try to move to a more equitable distribution. On market-assisted reforms he says that being very expensive, such a program will not be able to achieve a very substantial redistribution in the near future.

http://www.worldbank.org/research/abcde/washington_11/pdfs/banerjee.pdf

However, in most countries the reforms failed to meet the targeted objectives. In many countries like India (unlike in the erstwhile communist countries), appropriation of surplus land was carried out only after compensating the owners of the land. The landlords were often successful in appropriating more than equitable compensation. This put a huge burden on the public exchequer, and the government could take over only a fraction of the land it intended to redistribute. In India, in particular, benami and farzi (fictitious) transfers took place to defeat the ceiling limits. Lack of political will was another major reason, as more often than not the influential politicians themselves owned acres of land above the ceilings. As Wolf Ladenjinsky put it, while officially the states accepted the ceiling programmes, they rejected them in practice. Absence of records was an impediment to proving that a tenant had been cultivating a particular piece of land for the past many days. Difference in quality of land was the chief obstacle to consolidating land holdings. Even in cases where tenants got the ownership, lack of resources made them borrow from their erstwhile landlord (who doubled up as a moneylender) from whom the land was appropriated.
 
Nevertheless, whatever may have been the extent of success, almost every country, at least officially, recognised the need of state-led redistributive land reform in promoting economic development, contributing to equity and growth, challenging socio-political hierarchies, and, in the long run, providing political stability. Countries acknowledged the fact that high absolute ground rent resulting from land monopoly acts as an impediment to productivity increasing investments. Even Monica Das Gupta, Helene Grandvoinnet and Mattia Romani of the World Bank have said that nations have much to gain by initiating such institutional reforms.
 
http://econ.worldbank.org/docs/1194.pdf
 
However, with the advent of the capital-intensive Green Revolution technology and mechanised farming, the efforts at redistributive land reforms were reversed. Even while the technology was proclaimed by many as scale-neutral, just the fact that it was costly made the distribution of gains from the technology uneven, with the rich and prosperous farmers emerging even richer owing to the adoption of the technology. The technology could have benefited the poor farmers if land reforms, and subsequently land consolidation, was completed before the introduction of the technology, and co-operativisation was encouraged by the government through offers of easy credit and expertise to the small peasants to enable them to make the switch to collective farming.
 
In the absence of such support the small landowners simply found it uneconomical to cultivate and often sold their plots back to the richer farmers. These small landowners joined the stream of landless labourers, ensuring a steady supply of cheap agricultural labour to work on the lands of the richer farmers. With international donor agencies, including the World Bank, backing and funding Green Revolution technology, whatever success the countries depending on these agencies had achieved in the area of redistributive land reforms was overturned. These countries then started witnessing what may be called reverse land reforms, meaning increasing concentration of land holdings in the hands of big farmers. And the technology being capital-intensive getting jobs on farm became even more difficult for the burgeoning class of agricultural labourers.
 
Of late, even the World Bank has realised the importance of redistributive land reforms. It has finally accepted the contention that inequitable access to land impedes growth, and that institutional factors are as important as technological ones in improving agricultural productivity. The initiatives of the World Bank in pushing forward these reforms include titling, registries, land market facilitation, market-led redistribution and credit, technical assistance, and marketing support. Governments and aid agencies are following the lead of the Bank, aggressively implementing some or all of these reforms. From South Africa, Guatemala, Honduras, Mexico, Columbia, and Brazil, to the Philippines, Thailand, Indonesia, India, and countless others, various combinations of these reforms are either being carried out or their possible implementation is a hot topic of national debate.
 
However funding from private and international donors comes with too many strings attached. The World Bank's obsession with establishment of land markets and market-assisted land reforms has, more often than not, nullified even the best of its intentions to redistribute land in many developing countries, particularly those in Latin America and Africa. The Policy Research Report (PRR) of the Bank on 'Land Institutions and Policy' reflects such an obsession.

http://lnweb18.worldbank.org/ESSD/essdext.nsf/24DocByUnid/
3F99BD0221CBDA6285256BE20074D2FA/$FILE/PRR_English.pdf


Commenting on the World Bank's Policy Research Report, Armin Paasch says that it is remarkable that even the Bank has accepted that market-assisted land reforms have failed in South Africa and Colombia. What is surprising is that even then the PRR fails to analyse critically the reasons of the failure, and continues with the same set of prescriptions in other countries. The Bank blames local factors for the failures. Even in Brazil, where the reforms have been hailed as a success by the Bank, preliminary evidence of other independent analyses however suggests the opposite.

http://lnweb18.worldbank.org/ESSD/essdext.nsf/24DocByUnid/
6DFA63C5C737598885256C9F004FB99C/$FILE/APaasch.pdf

 
What is worrying is the fact that national governments cannot do without such loans and aids from the Bank and private and international donors as they mostly suffer from lack of resources needed to carry out the reforms.
 
donor_13.pdf
 
The emphasis laid by the Bank on market-assisted mechanisms of land redistribution is going to nip the objectives of such redistribution in the bud. Under the World Bank scheme loans and credits would be granted to the landless to buy land at market rates from wealthy landowners and to acquire fertilizers and technical assistance for new, marketable crops.

http://www.globalexchange.org/wbimf/ips040601.html

As Peter Rosset, the Director of Food First, has pointed out, market-assisted reforms are bound to fail because they place a heavy burden on poor people to repay expensive loans, often from harvests from poor soils as landowners often choose to sell the most marginal and ecologically fragile plots that they own. The market-assisted reforms are often viewed as an instrument of rewarding landlords rather than for improving the livelihoods of the landless poor.

http://www.foodfirst.org/pubs/backgrdrs/2001/w01v7n1.html
 
Rosset has further warned that market-assisted land reforms, championed by institutions such as the World Bank, are threatening sustainable land redistribution in a growing number of countries. "The market responds to money, not human need, and it is hard to see how the poor will benefit," says Rosset. In his report, "Tides Shift on Agrarian Reform: New Movements Show the Way," Rosset critiques World Bank-led land reforms and highlights mass movements driving alternative reforms from below.

http://www.thirdworldtraveler.com/Reforming_System/Agrarian_Reform.html
 
Market-led policies proscribed by the World Bank and the IMF have in fact prevented land reforms from taking place in countries like South Africa and eliminated traditional community based land tenure systems in Melanasia to make it possible to individually own, buy and sell land.

sacountryrep.pdf
 
http://www.geocities.com/kk_abacus/mnpapua.html

Kenyan human rights activists are adding their voices to those already opposed to the World Bank driven land reforms, which they say, seek to make land "just another commodity" to be subjected to the whims of market forces, at the expense of millions of landless peasants.

http://www.afrol.com/News/ken008_landreform2.htm
 
And as Susana Lastarria-Cornhiel found out, market-assisted land reforms and privatisation of land holdings have also acted against the interests of women with women-led households in particular being the worst affected.

http://www.aucegypt.edu/academic/src/conference/papers/
Privatization of Land Rights.pdf

 
The aim of land reforms is to facilitate changes in land ownership and occupational rights. Such changes will alter the income distribution, social status and political power structure. However, the model of land reforms being espoused by the World Bank is in no way going to achieve the above objectives, nor is it going to mitigate the abject poverty of the landless and the marginal farmers. National governments need to expropriate land holdings above the ceiling and distribute these among the landless and the marginal farmers free of cost, and provide these new owners with adequate credit facilities so that they do not fall back into indebtedness through borrowing from the same people who owned the land before.

May 3, 2002.

 

© International Development Economics Associates 2002