Agrarian or Land Reforms ?

Concept, Need, Benefits

Shahid Hussain RajaIndependent Consultant-Public Policy

SANO Consultants Ltd. UKJune 07,2013

Introduction

Agrarian or Land Reforms ?

Need for Agrarian Reforms

Components of Agrarian Reforms

How to bring about Agrarian Reforms

Conclusion

Sequence

Eminent scholars and heads of advocacy groups are very vocal about the need for carrying out land reforms in the country to obtain efficiency and equity gains and make agriculture a dynamic sector of the economy.

Unfortunately the advocates of land reforms confuse these reforms with a related but distinct issue of agrarian reforms.

Land reforms are essentially carried out to distribute lands, state as well as those confiscated from large estate holders, to the landless farmers along with some changes in the tenurial relations

Introduction-1/2

Agrarian reforms, on the other hand, are meant to transform entire socio-economic landscape of the rural areas of a country by introducing fundamental structural and institutional changes in the political economy of a county’s agriculture sector.

While the agrarian reforms are the need of the day, land reforms is an idea whose time has not come, rather gone forever in the face of several socio-economic cum political realities and sheer technological imperatives

Introduction-2/2

None can deny the need for agrarian reforms to improve the quality of life of the farmers by providing them better legal and regulatory framework for sale and purchase of land, empowering the marginalized sections of rural society, gender mainstreaming, improving rural Infrastructure, altering the production relations, rationalizing the role of the middlemen etc

Frankly all these are the issues of improving the governance in the rural areas and are not related to the land reforms as such. However, it is equating the all encompassing concept of agrarian reforms with a narrower concept of land reforms by some people which creates confusion at the conceptual and practical levels.

Need for Agrarian Reforms

Historically land reforms have been carried out at the initial stages of the development process when agriculture is contributing more than half of the GDP of a country as it used to do in Pakistan uptill 1960s.Now it contributes around 20 percent of the GDP and is not a dominant source of wealth notwithstanding its overall economic importance.

India did carry out, albeit at a limited scale, land reforms in its part of Punjab primarily to accommodate the Sikh migrants from Pakistan in the wake of partition. Time to do so in Pakistan was in the 1950s and 1960s when it started its planned development and land reforms could have been made a part of the overall planning process to carry out the needed socioeconomic restructuring of Pakistan.

However we missed the bus due to nature of political economy of the country. Efforts made by the Ayub regime in this respect suffered from design flaws and implementation inadequacies. Same happened to those carried out by Bhutto for the same reasons. While the decision of the appellate bench of the Shariat Court has sealed their fate, the technological imperatives now demand quite the opposite.

Historical Background

Pakistan needs to push its technological frontier in the agriculture sector for enhancing the productivity of its agriculture sector not only to improve the quality of life of those in the rural areas of Pakistan but also of other citizens by ensuring their food security on the one hand and increasing the pace of its industrial sector, for which agriculture provides the raw material and much needed market, on the other.

Both need an efficient, productive and profitable agriculture sector whose growth is sustainable and outputs are competitive. This is possible only and only if we increase the pace of farm mechanisation and technological innovation in all the agricultural operations. In order to introduce technology at commercial scale the size of the farms is the basic condition.

If we redistribute lands and each farmer gets a parcel of land on which a tractor is not even economical, how we can increase our productivity?

Why not land reforms?-1/2

Land reforms for the sake of land reforms or social justice are not a practical public policy option. Granted we can distribute state lands free of costs to the landless tenants and which every successive regime in Pakistan has been doing, we cannot redistribute private lands, confiscated or purchased, to landless farmers on moral grounds or as a sound economic policy.

On what grounds you can confiscate the personal property of

someone? If accepted on the grounds of social justice, then it should also apply to all sectors of the society without discrimination.

Dare you touch the property tycoons, the industrial magnates, the commercial Mafiosi? Purchasing land from the big landlords as suggested by some learned authors at market price and then redistributing it to the landless farmers is a nonstarter, not possible to carry out by a financially bankrupt state

Why not land reforms?-2/2

Formulation of comprehensive Land Use Policy

Improving Agricultural Terms of Trade

Improving Rural Infrastructure

Improving Rural Governance

Environmental Sustainability

Creating Linkages and promoting Investment

Gender Mainstreaming

Production Relations-triple Cs

Components of Agrarian Reforms

Developing a national land use policy for rational use of land resources is the need of the day as valuable arable land is being converted at alarming rates by the property developers and industrial concerns for commercial non farm uses

Infrastructural development, though necessary is also rendering fertile land to brick and mortar

Add to it the declining fertility of our agricultural lands due to non sustainable agricultural practices

Plus the degradation of our lands due to water logging and salinity going on for decades, a negative side effect of our irrigation practices

All these issues needed to be addressed by formulating a long term

comprehensive land use policy by the government

Formulation of Land Use Policy

Agricultural transformation demands restructuring, not merely fine tuning, the political economy of the rural areas which are an integral subset of the overall economic structure of Pakistan.

One of the ways to do so is to improve the terms of trade between agriculture and the other sectors of the economy so that the squeezing of the peasants going on for the last six decades can be reversed.

For this purpose we have to rationalize the prices of the inputs farmers use as well as those of commodities they produce, ensuring that the farmers get fair returns for their efforts by improving the marketing infrastructure, provision of subsidy on inputs and selective procurement when the prices of agricultural commodities crash as well as the introduction of crop insurance scheme

Agricultural Terms of Trade

Urban areas do need good public goods and services but so do the rural areas.Visit any village of Sindh or Baluchistan, even South Punjab and see the deplorable conditions of roads, schools, hospitals and you can realise the gravity of the situation

No doubt the government has invested a lot in farm to markets roads, construction of health facilities, schools and also rural electrification

However there are complaints of substandard workmanship and their fast wear and tear due to paucity of maintenance funds

Similarly there are complaints of shortage of staff to man these health and educational schools. 'Ghost Schools’ was a term not invented in the air; it has a solid evidence

Improving Rural Infrastructure

◦ There is an urgent need to take adaptive and mitigating measures to ensure sustainability of the agriculture sector in the face of looming threat of climate change by promoting environment friendly good agricultural practices through creating awareness and promulgating legal/regulatory framework with adequate incentives and rewards.

◦ Similarly adjusting the cropping pattern and fine-tuning the planting and harvesting schedules, practicing crop rotation and diversifying crop mix, developing more varieties responsive to climate change, and adapting irrigation practices and fertilization regimes.

Environmental Sustainability

It is not an easy task to dismantle centuries old rural governance structure and replace it with modern, formal contract based rural public management in a short period but can be done in long term

Start with education, literacy and skill formation which will shake the foundations of this feudalistic structure

Establish alternate dispute resolution mechanism to replace the informal system heavily dependent on big landlords, supported by the police and the patwari

Local bodies elections be held as per fixed schedule which will bring in the leadership interested in improving rural infrastructure, the best guarantee of their fast journey to urban culture

Improving Rural Governance

◦ Sustained growth of the rural economy lies in the development of efficient and effective agri-based supply chains that link the agriculture sector with their corresponding upstream and downstream links in the rural nonfarm(RNF) to the national and international markets

◦ RNF provides 40-60% of incomes/jobs in rural areas, much of its activity occurs in the trading, services and processing sector having strong forward and backward linkages with agriculture.

◦ Informal and low capital using entities catering mostly to domestic markets, RNF presents opportunities for providing value addition to primary production at the farm level

Improving Rural non-farm sector 1/2

RNF is hampered by the numerous middle level low capital using players who add little or no value to products and services

For creating linkages between non-farm rural enterprises with

agri-based supply chains, we have to establish modern agricultural produce wholesale markets in public-private partnership with cold storages, pack houses, customs facilities etc.

At the same time government should Introduce warehouse receipt system for easy realization of sale proceeds to farmers and encourage processing and value addition of agricultural produce to fetch better value, and to reduce post-harvest losses

Improving Rural non-farm sector 2/2

We need to enhance the productivity of the agriculture at micro and macro level by increasing efficiency in all agricultural operations through public as well as private sector investment in R&D, extension services, rural infrastructure, marketing, value addition etc.

Unfortunately, the flow of investment funds towards agriculture, which has recently picked up, is still far below the desired levels.

we need to make agricultural produce competitive in the rapidly globalizing world by reducing cost of production, improving its quality and meeting global food safety standards. raising the awareness of the opinion leaders and decision makers to enforce strict food safety standards.

Motivating domestic and foreign investors to invest in seed production, fruit and vegetable processing, agri-infrastructure development and encouraging development of commercially viable non-farm rural agriculture enterprises

Promoting Investment

Rural women are under three pressures-nature, society and family, all treat them unfairly in terms of status, ownership of resources , job opportunities and empowerment

Improving healthcare and family planning facilities to relieve them of excessive child bearing burden should be the top priority

Launching of special rural female literacy and education campaign by offering attractive monetary rewards would help in their empowerment and reduce domestic violence

Ensuring women’s access to resources and assets, including ownership of land by creating awareness about their rights and strict enforcement of legal framework priority

Providing equitable opportunities to women by developing

marketing oriented skills and remunerative employment in the rural areas;

Gender Mainstreaming

Although it is not possible to replace the centuries old production relations of land cultivation in the rural areas of Pakistan in the short term, efforts can be made to introduce the three modern forms of farming

Contract farming-encouraging agri-based processors to supply inputs & technology packages to farmers on deferred payment with buy-back of produce at guaranteed prices

Cooperative farming-piloting variations of successful coop-models (with refinements to traditional coops)

Corporate farming-promoting lease of commercially viable tracts of land to corporate level entrepreneurs who are willing to practice high-tech export oriented agriculture and share profits with the owners

However all the above three need comprehensive legislation about contract making/dispute resolution as well as their strict implementation through a specially created institutional infrastructure

Production Relations

All over the world and throughout the history industrial revolution has occurred after the agricultural revolution and not vice versa

Treat agriculture as a pivot for bringing this agricultural revolution by carrying out fundamental structural and institution changes in the political economy of Pakistan agricultural sector

Promote farm mechanization to reap efficiency gains, encourage commercial farming through appropriate legal/regulatory framework, modernize its marketing channels and invest in R&D, extension and rural infrastructure.

However it needs to be emphasized that the gains from this enhanced productivity be made available to all stakeholders without distinction by providing them good governance and ensuring fair returns to the farmers

Conclusion

Thanks