Land Reform

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 Land Reform
• Concerned with the interrelated aspects of
productivity and land use.
• Deemed essential in LDCs where land is viewed as
more than just a factor of production.
• Land reform targets a fixed factor of production
(land) and is sector specific with the aim of
providing land (which is the basic factor) on which
most people in developing countries rely on.

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 Context of land reform
• Land reform involves change in any of the following;
1. Redistribution of land in order to change the pattern of
land distribution (shift the minority whites and bring in
the majority blacks) holding and size of holding (the
maximum farm size)
2. Consolidation of individual holdings i.e regrouping land
into continuous blocks.
3. Changes in land ownership and tenure rights without
physical redistribution of land e.g. Zimbabwe and
Mozambique which declared all land a national property.
4. Changes in the conditions of tenure without changing
ownership or redistributing land.

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Land reform and economic development

• The justification of land reform lies in its ability

to contribute towards economic development.
• The structural change that accompanies land
reform affect economic development through
four major factors namely;
– productivity,
– employment,
– market surplus
– equity.

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 Land reform & productivity
• The best alternative to analyze the implications of land reform on
productivity is a direct comparisons of the productivity of groups
of different sized farms in a given area.
• The point of interest is to see how land size and concentration
affect yields/hectare or productivity.
• In the preceding chapter we established there is an inverse
relationship between farm size and productivity
• Two factors can explain these findings that there are limited
economies of scale in agriculture and that small scale holders
tend to maximise output by applying labour intensively while
large farmers hire labour only up to a point where MPL = W.
• Although output per worker would decline as a result of output
maximization by small scale holders, overall output would
increase enhancing the product contribution of agriculture to
economic development.

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 Land reform and employment
• As noted above, small scale holders maximize
output by the intensive application of labour.
• Thus land reform may result in increase application
of labour thereby increasing the employment levels.
• However the success of intensive application of
labour to maximize output hinges on the supply and
use of other non-land inputs such as fertilizers and
pesticides if a substantial increase in output is to be
realized.

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 Land Reform and market surplus
• Agric surplus provides food for the urban population while at the
same time generating income for farmers. With this increase in
income, farmers become an important market for industrial
commodities.
• Thus generation of a marketed surplus is very crucial to the
extent that the success of a land reform process may be judged
according to this criterion.
• Small scale holder farmers consume most of their output leaving
them with little or no surplus. On the other hand, large scale
farmers consume only a small portion of their output hence the
rest is available for the market.
• It is therefore imperative that a minimum farm size policy be put
in place to ensure the generation of marketed surplus. The farm
size should be such that it is large enough to generate a marketed
surplus while at the same time ensuring output is maximised.

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 Land reform and Equity
• Land reform brings about structural change especially in the
land holding structure hence it can be used to address the
issues of equity.
• The extent of its success depends on the importance/role of
land as a form of tangible wealth, existing pattern of
distribution of land holdings and the population density.
• If agricultural land accounts for a large portion of wealth, its
distribution then becomes the most important determinant of
both income and power distribution.
• Also, when the distribution of land is skewed and the
population is not dense, there are ample opportunities for
land redistribution to redress issues on inequalities.
• Addressing these inequalities will guarantee some minimum
income for the new land holders.

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 Implementation Issues.
• Agriculture is a private sector activity therefore production
and investment decisions are made by millions of people who
act in their self interest.
• These people weigh their risks before they make farm
investments.
• Uncertainty about the government’s intensions and the land
reform process in general would hamper production and
investment in agriculture.
• The government should have clearly defined policies
regarding land reform so that the risks associated with policy
reversals are done away with.
• Awarding of tenure can be used to solve this problem.

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 Implementation issues
• There are also other key factors that should aid the process
of land reform.
1. Logistical support: land reform disrupts the logistical
support, based on mutual interest, from the commercial
sector (especially financial institutions) to the farmers. The
success of land reform depends on the immediate
rebuilding of support infrastructure.
2. Nature of organizations: it is essential that the organisation
providing support to agriculture be designed specifically to
assist the beneficiaries of land reform. This requires the
removal of a bias towards large scale farmers.

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 Implementation issues
3. Adoption: it is important to determine the reasons for high
yields. In situations where high yields and efficient
operations are directly associated with large scale
operations, output can be maintained only by keeping those
large scale farms intact rather than breaking the land into
small scale holdings.
4. Structural change: the pattern of land reform should be
tailored to fit the economic environment. There must be an
appropriate supply of inputs. An adequate system of
incentives and rewards for increased productivity and an
adequate management system.

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