Debating land reform

The continuing debate on land reform in the media encourages one to conclude that the issue is not dead, as was suggested in some dismissive statements following an MQM leader’s rather disappointing press conference to explain the party’s bill on the subject. Former Chief Minister Punjab Chaudhry Pervaiz Elahi revealed that he wanted to introduce land reform in the province of Punjab, but stopped short because a study commissioned by him did not find too many large holdings. This could not have been otherwise. Over time, in Punjab, large holdings have been divided up into smaller sizes among family members, friends and servants, which took care of any future threat of land reform.

This disguised division, according to Farooq Tirmizi in “Land reforms serve no purpose” (November 1), is the worst legacy of past attempts at land reform. It distorts land titles, which is antithetical to investment and productivity. Land reform will do nothing for the poor and to blame poverty on skewed distribution and landed aristocracy is wrong. The rural poor have stayed poor because of low productivity of the labour. Encouraging corporatisation would eliminate the ‘laid-back’ landlord, and improve labour productivity which, in turn, will reduce poverty. In the past three-four years, the government has actually talked in the same vein. Corporate farming was announced as a mid-course correction of the growth strategy in 2008 and an agribusiness project was also initiated. It seems the initiative was a non-starter.

Land reform involves issues of rural poverty, inequality and inefficiency. Data indicate that rural poverty is persistent and rising. The largest proportion of the poor of Pakistan resides in rural areas. Their poverty is related to the increasing landlessness. They lack physical and social assets or physical and human capital. Rural areas continue to lag behind in education and health. And the few rural folks who do possess some human capital are more likely to migrate than suffer what Marx described as the “idiocy” of rural life. With little or no assets, the rural poor have become food-insecure. They are the worst hit by economic disasters such as inflation and the most vulnerable to natural and man-made disasters, as is evident from recent the flood. Their livelihoods are not in their control. Secure access to land remains the most powerful antidote to poverty. There is further evidence that income/consumption inequality in rural areas has worsened, as has the inequality in land ownership. Land reform is, therefore, likely to promote equity. Distribution of state land in Sindh is a step in this direction.

Mr Tirmizi attributes the continued inefficiency of agriculture to the impact of past land reforms. However, it is the unreformed pattern of ownership that is the breeding ground for inefficiency. Here lies the explanation for the rising yield gap between Pakistan and the highest yielding country. Agricultural growth has suffered a secular decline since the 60s, despite subsidies and tax-free incomes. The issue is output per acre and not output per unit of labour. Land reform as the key component of an overall rural development strategy allows the benefit of the inverse relationship between the size of land holding and output.

Agriculture, according to Arif Jatoi (as quoted in a report in this newspaper on November 2), who represents a major land-owning family of Sindh, is now a vulnerable business and landowners would willingly sell if offered market prices. In fact, most of them have already moved to the cities. While no one is suggesting expropriation, the statement only reinforces the argument that secure access to land for a large number of self-cultivators is the only way to secure our food future and to ensure poverty reduction.

Published in The Express Tribune, November 5^th, 2010.