Land reform in agriculture similar to what privatisation in industry, effectiveness of privatisation and liberalisation in Latin America was generally

disappointed, with no exception in land reform. After decades of land reform, ownership remains low and Latin America exhibits the highest indices of inequality in land ownership in the world. Illustrate and explain why this is and examine its developmental impact. Dorner, P., (1972), “Land Reform & Economic Development”, Penguin, Middlesex. Clark, R.J., (1971), ‘Agrarian reform: Bolivia”, in p. Dorner (ed.), Land Reform in Latin America: Issues and cases, Land Economices Monograph no3. Dorner, P., ( 1971), “Land Reform in Latin America: Issues and cases, Land Economices Monograph no3. Parsons, K.H., (1957), “Land reform in the postwar era”, Land Econ.,vol.33, pp.213227 Owen, W.F., (1966), “ The Double Developmental squeeze on agriculture”, American Economic Review, vol 5, pp.43-70. Sternberg, M. J., (1971), “Agrarian reform and employment, with special reference to Latin Amercia”, Agrarian Reform and Employment, International Labour Office. Thiesenhusen, W. C., (1966), Chile’s experiments in agrarian reform, Land Economics Monograph no.1, University of Wisconsin Press Florces, E., (1971), “ Rural development in Mexico”, in P. Dorner, “Land Reform & Economic Development”, Penguin, Middlesex. Within the context of the last half of the twentieth century, land reform, employment creation and income distribution have become increasingly pressing issues. Early stage of industralisation agriculture comprises the major activity of a large majority of the population. In most of the less industrialised countries in the world, 50 % of more of the population relies directly on agriculture for a livelihood. Thus, overall development must include, must often begin with agricultural development. Without the production of a surplus in agriculture, industrialisation cannot occur unless alternative source of foreign exchange earnings are available from the export of minerals, or from services such as tourism. There are many interactions and interdependencies between agriculture and industry. Provide food supplies for population, and increased demand for higher income per head, it produces a surplus for export to finance capital equipment and



either for individual ownership and operation or for collective use. savings-investment channels. capital transfer through taxation. changes in ownership and control of land and water resources.- - - - - - - other imports needed for development. Agricultural development must provide the increased rural incomes needed to enlarge the demand for industrial products In non-industrialised societies. issuance of land titles to the tillers to provide them with greater security. Specific measures may include: expropriation of large estates and the distribution of land among the tillers. abolition or improvement in tenancy conditions by converting tenants into owners or by reducing rental payments. However the problem of recent decades has been to organize the agricultural sector to hold more labour until such time when this labour can be productively absorbed in other sectors. Land reform often viewed as an instrument primarily for the achievement of greater equity and social justice. reform has the dual purpose of serving as both a redistributive instrument and a vehicle for achieving increased productivity. the widening rural-urban income gap will not occur. Better yields and low costs of agriculture products provides might led to higher purchasing power that result in higher saving-investment rates to increase importation of capital equipments for early stages of industralisation Agricultural sector is vital in promotion of modern sector in terms of capital and labour. The land tenure system reflects social class structures and relations. local and state governments) must be subject to impersonal and objective means of adjudication rather than resolution in a discriminatory manner favouring those individuals or groups with the most influence and power. tenant. with population often pressing on land resources and with technology opening the way for major advances in the levels of living for all people. migration of labour and etc. land represents the principal form of wealth and the principal source of economic and political power. labourer. However. and transformation of tribal and other traditional forms of tenure in the interest of the cultivators of the land Conflicts among the several parties holding an interest in a particular tract of land (owner. To . A restructuring of these rules and procedures involves changes in the political social and economic power positions of several groups within a society Land reform has an essential core meaning which concerns significant and purposeful changes in land tenure. If productivity increased more rapidly in the agricultural sector than in the rest of the economy.

opportunity- . pp214) The need to earn foreign exchange through farm-produced exports adds to the importance of increasing agricultural production Increased productivity alone when achieved within a tenure structure of great inequalities. The rapid population growth has led to increased rural to urban migration. The redistribution of property rights in land can break down certain rigidities within a society and set the stage for a different organization in the agriculture sector. With sufficient land of their own. There are economic requirements of productivity increases. there are social dimensions of improved health. “To the individual peasant family their hold on the land has long been both the hallmark of their status and the elementary basis of their survival. of course. Lack of opportunites in the agricultural sector serve as a push factor. but it alone will not achieve development (Clark. agricultural credit. employment creation. a better income distribution. Land reform improves equitable distribution. frequently a one-sided emphasis on production increase with a neglect of institutional issues has exacerbated existing inequalities. a modern phenomenon. peasants have throughout the centuries agitated and fought for more secure rights to the land they tilled. many have experienced a deterioration in employment opportunities in both rural and urban sectors. research and extension. mobile. Creative destruction is less severe in a relatively open. and processing and storages. without land countless millions have suffered literal starvation.- - - - - - achieve the latter. marketing. input supply. and an agricultural surplus for the generation of capital of both foreign and domestic origin. education and other services in the countryside. land reform must be accompanied by changes in the pre-reform structure of supporting services. and breaking up old class structures of the traditional system. does not improve the lives of the great mass of peasants. finally. 1971) Land reform is becoming increasingly urgent in many of the less industrialized countries. Land reform is not. Although employment opportunities in the urban sectors are insufficient. Secondly. the potential benefits indicated by earning differentials as well as by increased access to health and educational services serve as a pull factor in the migration process. some have lived well.” ( Parsons 1957. Land tenure reform and its potentialities mst be viewed within the overall requirements of development. there are the political needs of establishing full economic and political citizenship for the exclude masses and their integrations into a cohesive nation which will encourage the creation of a new relationship between them and their government.

The degree of land ownership concentration also varies sidely. Diversity in tenure issues and approaches to reform . . in LA countries about 3-4 percent of the landowners with the largest holdings own 60-80 percent of the agricultural land (Sternberg.In much of Latin America.US development also required production of an agricultural surplus and the release of labour from agriculture to meet the demands of the growing industrial sector.Because land reform represent a mean of redistribution of political power and influence . litigation and inaction . . .Lack of specific criteria for land-taking procedures with resulting delays. it is not regarded as being for purchase or sale. The US placed primary emphasis on new technology to increase the productivity of land and especially the productivity of labour.Irregular and inadequate financing provided in national budgets for agencies charged with implementing the reform Land reforms in historical perspective .oriented society than they are in a class structured system with rigid institutions that support these basic inequalities.The lack of ‘strong’ peasant organization.there were nations found it necessary to restructure their land tenure systems in the process of economic development . 1971) . But the means employed were entirely different from those used by the soviet union a century later. the present tenure structures originated with the Spanish colonial system. and relied on immigration and the competition among many small producers for allocation of production factors among alternative uses.The economic and political power associated with landed interests is one of the key obstacles to land reform which inevitably involves tough political decisions and confrontations.In LA. land is seldom looked upon as a commodity. and these basic forms were re-inforced after independence from the Spanish Crown. that lead to hard implementation of land reform . land is regarded as community property and exploited in kinship units. Obstacles to reform .Complex and excessively legalistic procedures .

then. social and cultural cleavages exists between a prosperous land-owning elite and the mass of peasants with little or no land. private property interests are strong and individualized property in land is the rule. The formulation of land reform and development policies must be based on knowledge of a country’s resources. employment and productivity Distribution . Great economic. distribution.Land reform alone cannot effectively involved in economic development.In the process of modernization. in Chile. infrastructures investments may need to be created. social and political power relations between individuals and groups. There is evident that no single policy formula will be appropriate under these widely varying conditions. the approaches to land reform have also varied widely. Indeed they must change to permit the incorporation of new ideas. . As a consequence of some of these inherent differences. for example. Land reform evaluation. institutions also change. and expanded opportunities for participation in a commercial. as the land tenure system is reformed.- - - In much of Asia and LA. a side range of other programmes must be intensified or modified in order to best serve the new system. the major objectives of the reform agency are not integrated and incorporated into the working and controlling philosophies of the traditional agencies and ministries. have been the major means of land acquisition for land reform purposes. with the introduction of technology. These variations can be illustrated by the way in which different nations have dealt with two major issues which must be addressed in any land reform effort. and affect directly their interdependence as well as the achievement of reasonable order from the ever-present and potential conflicts growing out of these relations . providing a better distribution of land resources and security on the land for the individuals and groups involved. new techniques. exchange-oriented economy. and new .institutions govern the economic. and its institutions. In some cases. its people. 1966). the government used lands acquired in the past and transformed them from government run estates into individual family farms (Thiesenhusen. Nor can such policy be simply prescribed on the basis of ideological dicta. Confiscation and expropriation. agrarian reform remains an ad hoc activity.In many countries. Limitations of land reform . increased specialization and productivity.

credit and roads. whereas industrial expansion is more in the nature of establishing new activities without an old structure to modify. In rural economies. land is expropriated or confiscated and redistributed in order to achieve this. During the transformation. education. Under conditions of mass unemployment and under-utilisation of resources. Until several centuries ago. before the widespread use of capital and industrial production techniques. and their influence largely shapes the goals and policies that are formulated through such processes. given time for the multiplier effect to register its full impact. there is little question but that power in all societies was associated with the ownership or control of land So long as economic development continues to expand opportunities and improve incomes in alternative employments. development is often much more disruptive in agriculture since it involves changes in a pre-existing structure. workers live on the farms of their employers. These are interacting phenomena with new production processes placing pressure on existing institutions and institutional change altering the directions of development In agrarian societies. It may seem reasonable to argue that changes in the distribution of income and the distribution of political power have analogous possibilities. there are no decisive economies of scale so that family and large farms can co-exist. A highly skewed pattern of income distribution may result in a lower level of effective demand and consequently in a lower level of total national income. US famers have created highly potent political organizations in areas such as control over monopoly power in farm factor and product motion and subsidization. aid for research. and in a farm sector dominated by large landholdings modernization may even decrease employment opportunities. those who control the land resources are able to influence the political processes in a measure disproportionate to their numbers. In many types of large scale agriculture. social and political levers of power.- - - - - - modes of organization. Development is less likely to increase the demand for labour in farming than in industry. loss . it consists of profound changes in power patterns via changes in the distribution of resources and income-earning opportunities. a more equal distribution stimulates demand. the basic thrust has been to break the political and economic power of the landlords. the power of one party over the other in a landlord-tenant relation is limited. Thus land reform involves more than modification at the margins. Wherever land reform has been successfully implemented. thus enlargining the total inceom ‘pie’. those who control the use of land also control the economic.

.In seven LA countries data for the decade of 1950s shows that 11 million people of a total natural increase in rural areas of 19 million migrated to the cities. another has implemented a more modest but still substantial reform programmed (Venezuela). wealthy Mexicans with liquid capital sent it abroad and thereby aggravated the balance-of-payments deficit. geared to pre-reform production and tenure conditions will not fit the needs of new. 2 the more . yet this squeeze on agriculture cannot continue indefinitely. employment available to such workers is usually the most insecure. governments must gain access to a substantial pool of investment funds. and they are often the most poverty stricken of all rural classes.Apparent or real declines in post-reform production are usually temporary and are not surprising. . Reform that associated with major political and social revolutionary upheavals can be a disruptive process. Employment . There were only two ways to increase the domestic rate of capital formation 1. agriculture must be a major source of savings. the classic painful and expedient recourse of squeezing agriculture as much as possible. reformed system.Mexico has carried out a comprehensive land reform. Also many other services are needed once land is redistributed. Government policies must be designed for extracting an invest-able surplus from agriculture while at the same time providing for public investments in the agricultural sector . the agricultural sector has contributed to overall development by releasing workers for employment in industry.Especially in the early phases of industrialisation. . urban unemployment and underemployment are major problems in most of the developing countries. there is a need for a substantial net capital flow from agriculture to other sectors. in those countries where the agricultural sector is large relative to the total economy.of job means loss of home and home community. in most LA countries migration from farm to city is proceeding much more rapidly than the growth in urban employment opportunities.In all cases of developing countries today. the old services structures. on the contrary. Productivity . it must be accompanied by public investments designed to improve the conditions of life and to increase productivity in the farm sector. there is need for a large scale public investment program.Flores (1971) write “ the fact remains that between 1910-1941 no foreign capital entered Mexico.Historically. . consequently.

. . social. J. peasants may feel that the goal is social justice. too often an afterthought to industrialisation.By 1977 over 43 percent of all the farm had been turned over to Ejidos. At the societal level. land reform is often seen as a means to forestall or eliminate potential threats of a thorough-going social revolution by the landless. where plantation-style estates abounded. J. and economic goals simultaneously.. New York. this explains largely the paradox of the success and failure of Mexican agriculture: the penury of the peasants and slum dwellers and the impressive agricultural.2 billion people involved in agriculture as producers. while another 800 million lived in rural areas. At the political level. This is how public works were financed and how huge government deficits were covered until 1942.Rural roads often are unpaved - In evaluating land reform schemes. industrial. “The Process of Economic Development”. L. Chapter 11 Agriculture and development By 1993 there were over 2.enterprising transfer of workers from agriculture at subsistence wages in activities which would eventually increase the productive capacity of the system.Agriculture is either neglected or relegated to a subordinate position in development strategies. it is important to keep in mind the fact that such programmes typically seek to achieve a combination of political. (1997). and urban growth p518 Cypher. land reform was a fait accompli of the armed struggle. care needs to be exercised in assessing the outcome of a land reform programme. M. There is a strong inverse relationship between a nation’s level of per capita income and the size of the rural population. Routledge. 78% of the population in nations with per capita income below US $400 per year were located in the rural sector. Inadequate infrastructural investment . Land reform in Mexico . that ..result from Mexican peasant revolution 1910-1917. and Dietz. they disregard the big picture issues such as “ is this socialism?” at the economic level.

during the 1980s oil crisis the government adopted a neo-liberal reduced state intervention policy that reduce the size of government investment. agrarian reform came before any significant industrialisation had taken place and was a key ingredient in the subsequent successful industrialisation process. able to block or delay any sort of reform of the land tenure system. “Why East Asia overtook Latin America: agrarian reform. eliminated subsidsed credits to ejodatarios. a mere 2. the private commercial farmers received 85% of all agricultural credits granted by financial intermediaries. - In South Korea and Taiwan.. selling or mortgaging the land. political. to benefit from government-created irrigation projects specifically aimed at large farms. They were able to finance irrigation projects themselves. were able to produce 40% of the food on 20% of the land. Then however.000 Ejidos which provided land to 43 % of all the farm families held only 16% of the irrigated land. Third World Quarterly. From 1970-1976. it managed to hold on to power during the first stages of the industrialisation process. smallholder. industrialisation and development”. for example. agricultural output growth exceeded 6% per annum.5% of all landholders. and economic success. From 1938-1951. the large land-holders. Kay. Even when the landlord class could no longer prevent an agrarian . C. because . Vol 23.6 million tons. Most agrarian reforms in Latin America happened after industrialisation - While in South Korea and Taiwan the landlord class was swept from power at the time of the agrarian reform in Latin America. rent and obtain credit from their lands. between 1956-1969. electricity prices were increased. No 6. At first it appeared that ejido system was a social. Large landholders had a near monopoly on credit. they had managed to hold on to and control the best land. They were able to do so. Mexican agricultural growth virtually stopped. which granted on fertilizers. 19701979 there were 689. Failure of small scale Mexican agriculture was due to several factors.000 tons and 1980-1989.- - villages responsible for distributing land to their members that prohibited from renting. agricultural output per capita fell by more than 15% Gain imports soared. pp 1073–1102. In 1992 swept of institutions allowed ejidatarios to sell. particularly in agrarian sector. 1 neglecting agriculture. the figure climbed to 2. (2002). or in the more likely instance. 2. Unfortunately the 28. despite land redistribution.

In Brazil. landlords have been able to forestall any significant agrarian reform process - agriculture has been an essential source of accumulation for industr y and the state was effectively and ruthlessly central to the whole process Land reform was also seen as a means of making agriculture more attractive to rural labour thereby. instead of economic incentive that initiated land reform movement in Latin America. making it able to respond in a flexible manner to changing internal and external circumstances. although abolishment of landlordism was a significant change in Latin America’s agrarian structure. emphasis on the state’s ability to transform the land tenure system and agrarian social relations as well as on its ability to encourage entrepreneurs hip and a positive interaction between agriculture and industr y. According to Kay (2002). the hope being that rural out migration might decline. Latin America’s deficient statecraft as compared to South Korea’s and Taiwan’s is partly the result of its more polarised and entrenched class structure and paradoxically its superior natural resource endowment. Moav and Volrath. This was a desired goal as Latin American industrialisation had been unable to provide sufficient employment - Governments also hoped that food output would rise. research based on 20th century in the US shows that areas with favourable geographic endowment tend to associated with higher level land ownership inequality. Furthermore. due to its cultures and institutions that rooted ever since colonial time. implementation of institutional changes and fiscal spending. thereby avoiding increases in food prices and hence pressure for higher wages from industrial workers. Increases in food output would also help to keep agricultural imports in check and thus free scarce foreign exchange earnings for essential imports required by domestic industry. unequal distribution of land discourages efficient production from the agriculture sector. even today.reform it often managed to curtail its implementation or even reverse the process with agrarian counter-reforms. it was political. United Nation Economic Commission for Latin America and the Caribbean states that Latin America is the world’s most unequal region. . - According to Galor. it also adversely affected the promotion of human capital.

and Land reform in Latin America began in early 1980s. and the Great Divergence” Journal of Economic Literature . and little government support. with export taxation. Reliance on ISI and reluctance to open up agriculture sector to the world reduce demand for agriculture produces. the emergence of Human Capital Promoting Institutions. According to Binswanger and Deininger(1997). governments in Latin America wanted to implement a more balance growth policy. Binswanger. overvalued exchange rates. thus more resources had been allocated to the modern sector. pp 1958-2005 Galor. Land reform in Latin America also aimed to make agriculture more attractive and to reduce rural out-migration.Kay (2002) insisted that land reform took place in Taiwan and South Korea before industrialisation. however factor price equalisation in modern and traditional sectors did not happen. more than 33% of land in Colombia and Brazil was hold by two percent of farmers in their countries. Moav. Higher wage earnings from industry and the lack of opportunity in agriculture led to the rural-urban migration of labour. with comparative advantages in primary agriculture products. the opposite for Latin America. suggested by the Harris-Todaro model. agricultural production was inefficient Colombia has been characterised by very unequal land distribution. Volrath (2006) “Inequality in land ownership. vol 35. Deininger “ Explaining Agricultural and Agrarian Policies in Developing Countries” Journal Of Economic Literature. industrial protection. due to the sharp decline in international commodity prices Family farms were the mainstreams of agrarian structure in Argentina. with unfavourable taxation and export tariff from agriculture to finance the development in the modern sector. The timing of industrialisation led to the differ in policy implementations.

Kay. industrialisation and development’Third World Quaterly. 1073-1102 . pp. No 6. Cristóbal (2002) ‘ Why East Asia overtook Latin America: agrarian reform. vol 23.