There’s a better way
OCT 03 -
Just a few days ago, the Prime Minister made public two reports prepared by high level commissions on land reform. The commissions were formed after the Comprehensive Peace Agreement (CPA). As one of the main issues agreed in the CPA was land reform, it is quite normal that the governments formed after the Constituent Assembly elections have given some attention to land reform even if it could have been done from a populist perspective.
As a large proportion of the population still depends on farming as one of the main sources of livelihood, land reform is naturally important. In this country, land is not only a productive resource but also a source of social and political power and, in the absence of social security, an important asset for future use. Accordingly, people always strive for ownership of land. Investments made in the purchase of land are considered safer, and are also rewarding as compared to other investments. On the other hand, if agricultural land is not in the hands of real farmers who cultivate it, then there is less incentive for them to produce more.
Most industrialised countries in the world implemented land reform a long time ago. When I was working on some issues related to land reform about two years ago, a consultant from Finland told me that this type of land reform was done in Finland and other European countries more than a hundred years ago. This reform, then, enabled most people to take benefits of the modernisation process including education. This also helped in the industrialisation process. In Nepal, this reform process was started only after the downfall of the Rana regime in 1950. The Land Act 1964, which still guides land reform and land administration in Nepal, raised the expectations of the people, but did not bring significant changes in the structure of land ownership except for some positive change in land tenure reform.
For devising land reform policies and implementation strategies, it is equally important to recognise the changes in society and the economy including land ownership patterns. In the past three decades, Nepal has undergone a rapid change in its society, demography, economy and the pattern of land ownership. This change is making it difficult to implement the radical land reform that the leftist parties in the country have been talking about, but never venture to implement it in reality.
A major difficulty in land reform in Nepal is finding an optimum and feasible way that provides social justice to the cultivators of the land but does not create disincentives for efficiency in production. Radical inclinations like redistribution of land without paying compensation to the landowners have rather impeded the reform process. Instead of finding what works for the country, policy makers now are more concerned with glossy theoretical schemes that come from textbooks.
Given that there has been so much change in land ownership patterns in the last 20-30 years, it will be difficult to implement radical land reform that emphasises taking over the land above the ceiling by the government without paying compensation. This will be so as there are no policies for socialisation of other non-land assets. From this perspective, people who have invested in the purchase of land would feel cheated, and they would bring conflict in society. As a result, even those who benefited from the radical land reform process would also not feel secure. Accordingly, this calls for new ways to bring land reform in the country.
Nepal needs to have a good land use policy before starting any land reform process. This will help preserve not only the farmland but also reduce its price. The present tendency of developing housing plots on good farm land will be reduced. In such a situation, even if the government implements land reform or land redistribution, it will have to spend less on acquiring land for redistribution.
In the absence of non-farm employment, landless people who depend on land for their livelihood certainly need access to land and guarantee of their tenancy. In fact, there is plenty of land in Nepal, if the hill slopes and degraded forests are considered, where farming can be done. If such lands are not useful for cereal crops, they are certainly useful for horticulture, bee-keeping, animal husbandry and rearing livestock.
In the absence of possibilities to acquire land through the land ceiling provision because of a rapid decline in the size of land holdings, development of new lands as mentioned above and new farming methods will be very beneficial for many. This should form the main component of any land reform policy. The present practice of landless people demanding land in the plains and urban locations is certainly not guided by their desire to farm, but by other self-interests.
At present, soft policies have also been showing good results without disturbing the society to a great extent. Taking the example of ownership of land by women. It is seen that the policy of tax discounts when buying land has helped in increasing land ownership by women. Studies conducted in Kathmandu have clearly shown this. In Khotang and Udaypur districts, which I visited a month ago, about 40 percent of the land purchased in 2010-11 is in the name of women. Considering this, a progressive tax policy could play an important role in bringing down the price of farmland as well as create disincentives to keep large landholdings. As a result, land becomes cheaper, and poor and small farmers can also buy it.
They would certainly need financial support to buy land, but they will be able to buy more with the same amount of money. If soft policies work well and give the same result as radical policies that could have huge social costs, why not also consider them?
Posted on: 2011-10-03 08:46