Can land redistribution policies promote rural growth?

Many people in rural areas have little access to arable land, making it difficult to escape from poverty. A reform of land redistribution policies could be effective in reducing rural poverty, particularly in countries with large amounts of unused state land and under-used private land.

Independent research looks at market-based land reform in South Africa. Redistributing land can increase agricultural output; when small-scale farmers have secure access to arable land – in the form of land titles, long-term rental or improved tenure – they are likely to increase their investment in land. This enables them to produce more food and raise their income. Expanded land-use or ownership rights also increase farmers’ access to sources of credit. The benefits of more balanced land ownership may contribute to faster economic growth in a country.

One approach to land redistribution is compulsory land reform, where land is bought from the current owners (often at a level below market prices) and shared more evenly, usually amongst small-scale farmers. However, previous compulsory land reform processes have often been damaging:

• Wealthy landowners sometimes use measures such as sub-dividing land or offering unproductive land for purchase.
• Resistance to the compulsory taking of land can cause political instability and oppressive state responses.
• Many schemes have been inefficient, due to an expansion of time-consuming land reform bureaucracies.
• Two of the most useful functions of land markets – allowing more efficient producers to increase their land and encouraging inefficient farmers to quit agriculture – are often blocked.

A market-based approach depends on the demand for land, as it involves voluntary exchanges between willing buyers and land sellers. Rather than depending on the government to identify people willing to buy or sell land, those who are most keen to farm more productively are likely to identify trading partners.

To tackle South Africa’s chronic rural poverty, the post-apartheid government set a target of the voluntarily transfer of 30 percent of the country’s total arable land to three million farmers between 1994 and 1999. However, by the end of 2000, less than 0.8 percent of the country’s arable land had been sold by private landowners.

In 2001, the programme was reorganised to provide more financial assistance, to deliver agricultural extension support and to improve access to irrigation. A new requirement that farmers receiving land should make a contribution (cash or labour) to obtain a grant has led to concerns that the poorest people may be priced out of the programme. However, it is hoped that offering different grant sizes will facilitate the emergence of competitive small and medium sized farms.

Despite early problems, South Africa’s experience has demonstrated that market-based land reform can:

• ensure that more land is actually farmed
• improve agricultural efficiency and increase farmer incomes
• allow farmers receiving land to obtain private loans
• reach more sections of the rural poor
• be cost-effective and affordable for developing counties – it has delivered results while only requiring one per cent of South African government expenditure.

Market-based land reform can help to reduce poverty but it must be complemented by policies to increase agricultural productivity and promote integrated rural development. These policies must address problems such as the availability of credit, the provision of relevant extension services and technology, and access to irrigation and markets. State involvement is needed to assist very poor landless families to join market-led schemes.

Source(s):
‘Innovative approaches to rural development: moving from state-controlled towards market-based land reform’ by Frederico Neto, Natural Resources Forum, 28, pp. 50-60, 2004

id21 Research Highlight: 22 February 2005

Further Information:
Frederico Neto

Contact the contributor: fredarticles@yahoo.com

Other related links:
'Land reform in Zimbabwe – good for poor black farmers?'

'The crisis of land distribution in Southern Africa'

'Land rights in Africa: protecting the interests of vulnerable groups'

'Africa’s changing landscape: new policies to resolve conflicts over land'

'Land disputes in Afghanistan – is enough being done to end the conflict?'

IRIN Web Special on land reform in Southern Africa

Land Rights in Africa (OXFAM)