Get Agrarian
 By  Shahid Hussain Raja

Land reforms and the imposition of tax on income derived from agriculture, which is presently exempt in the majority of countries like Pakistan, are two issues that attract a lot of attention in the print media, particularly at the time of budget formulation.

While supporting the imposition of agricultural income tax on equity grounds.

I have certain reservations about land reforms, which advocates of these reforms unfortunately confuse with a related but distinct issue of agrarian reforms. 

Land reforms are essentially carried out to distribute lands.

The state’s as well as those confiscated from large estate holders, to landless farmers along with some changes in the tenurial relations.

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

While agrarian reforms are the need of the day, the time for land reforms has gone forever in the face of several socio-economic-cum-political realities and sheer technological imperatives.

Who can deny the need for agrarian reforms to improve the quality of the lives of the farmers by providing them a better legal and regulatory framework for sale and purchase of land, empowering the marginalised sections of rural society, mainstreaming of gender, improving rural infrastructure, altering production relations by promoting cooperative and contract farming, rationalising the role of the middlemen etc?

Frankly, all these are issues of improving governance in rural areas and are not related to 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 that creates confusion at the conceptual and practical levels.

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 in Pakistan until the 1960s.

Now it contributes to 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.

The time to do so in Pakistan was in the 1950s and 1960s when it started its planned development. Land reforms could have been made a part of the overall planning process to carry out the needed socio-economic restructuring of Pakistan.

However, we missed the bus due to the nature of our political economy. Efforts made by the Ayub regime in this respect suffered from design flaws and implementation inadequacies.

The same happened to those carried out by Bhutto for the same reasons. While the decision of the appellate bench of the Shariah Court has sealed their fate, the technological imperatives now demand quite the opposite.

Pakistan needs to push its technological frontier in the agriculture sector to enhance its productivity, 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 if we increase the pace of farm mechanisation and technological innovation in all the agricultural operations. In order to introduce technology at a 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?

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 charge 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 can you confiscate the personal property of someone? If this is acceptable on the basis of social justice, then it should also apply to all the other sectors of the society without discrimination.

Does the authority dare touch the property of tycoons, industrial magnates and the commercial Mafiosi? Purchasing land from the big landlords at market price and then redistributing it to the landless farmers is a non-starter, not possible to carry out by a financially bankrupt state.

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

In this connection, I will draw the attention of the learned advocates of land reforms to some pressing issues needing greater attention of the government and the advocacy groups.

First, there is a dire need of improving the agricultural terms of trade so that robbing the peasants of their rightful share, as has been going on for the last six decades, can be reversed.

There is a need to rationalise the input and output prices and ensure that the farmers get fair returns for their efforts by improving the marketing infrastructure which at present squeezes the farmers and fleeces the consumers.

Second, we need to enhance the productivity of the agricultural sector at the micro and macro levels 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.

Third, we need to make agricultural produce competitive in the rapidly globalising world by reducing cost of production, improving its quality and meeting global food safety standards.

Here advocacy groups can make a substantial contribution by raising the awareness for enforcing stricter food safety standards.

Fourth, there is 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 a legal/regulatory framework with adequate incentives and rewards.

Last but not the least is saving valuable arable land from its conversion at alarming rates by the property developers and industrial concerns through pressure on the government to formulate a comprehensive land use policy.

All the above-mentioned challenges can be tackled only by treating agriculture as a pivot for bringing the needed productivity increase by promoting farm mechanisation to reap efficiency gains, encouraging commercial farming through an appropriate legal/regulatory framework, modernising its marketing channels to ensure fair returns to the farmers and investing in R&D, extension and rural infrastructure.

However, it needs to be emphasised that the gains from this enhanced productivity be made available to all stakeholders without distinction. Urban areas need good public goods and services but so do we.

Visit any village of Sindh or Balochistan, even southern Punjab and see the deplorable conditions of the roads, schools, hospitals and you will realise the gravity of the situation. Yes, we do need reforms – agrarian, not land.
 

May, 2014

Source:  The News