In an agrarian economy, land reforms represent the key element in any effective growth strategy. With protectionism and control of foreign trade, agriculture and industry produce for each other in order for an economy to take off. But the government has already ruled out any land reforms

THE prevailing distribution of the means of consumption is only a consequence of the distribution of the conditions of production themselves.” — Karl Marx

IT had been assumed for long that the need for land reforms was recognized as settled. But, apparently, nothing is ever settled. The present government recently reopened the question by attempting to close it, when Prime Minister Jamali told the nation in a televized address that there would be no land reforms during his tenure.

British historian, E.J. Hobsbawm, contrasting the advanced and backward countries, says that while the problems of the former, “serious and, even fundamental though they may be, arise out of the solution of earlier ones”, the problems of the Third World have their roots in the failures, not the successes of the past. (The Spanish Background in The Revolutionaries, 1973, p71).

The blockage of our independent capitalist development and our failure to develop a reasonably satisfactory liberal political system, even of the Third World type, both result from our inability to solve the agrarian problem. In this context, three developments can be said to have had a pivotal character in our post-independence history.

First, Ayub Khan’s land reforms of 1959, though mild and full of loopholes, were not an eye-wash. Their nature was bourgeois. If they had been followed by deeper reforms over intervals, the agrarian problem would have been overcome. Their weakness was that they had been ordained from above without the cooperation of any peasant movement.

Bhutto’s reforms of 1972 and 1977 were characterized by the combination of a radical appearance and a conservative essence. Not only was there, again, no peasant movement behind them, they aimed essentially at saving the landed class and its power.

Second, Bhutto’s mass nationalization of Pakistani industries in 1972 broke the back of our industrial bourgeoisie, which, in the right atmosphere and aided by genuine land reforms, could have ensured not only the country’s independent economic development, but also its political independence.

We had just launched on that path with the assistance of the Soviet Union and China, which were helping us set up the crucial basic industries. Both the hopes, political and economic, were shattered by Bhutto’s action. And it is wrong to imagine that the industrial bourgeois class in whose own interest it was to pursue a policy of self-centered industrial development, can reconstitute itself easily in the present environment of globalization, whose objective is to de-industrialize most of the Third World.

Bhutto’s actions against the capitalist class were taken not in the interest of some socialism, but in that of his own wadera class, as is confirmed by Dr Mubashir Hasan, who tells us (Illusion of Power), that, while Bhutto was on the rampage against the industrial capitalist class, he was not prepared to confront the landed class, not even to impose an income tax upon it.

Third, the army’s outlook in 1958 was more bourgeois than feudal. This was reinforced by the civil service, drawn mainly from the urban middle class. Their alliance, composing the ruling stratum, had acquired a certain autonomy viz-a-viz the classes. However, no ruling stratum can rise above the classes for long. It has to depend on a class in whose interest it rules.

Ayub’s military regime leaned towards the rising bourgeoisie. It, therefore, curtailed the power of the landed class by instituting indirect elections, as, otherwise, this class would have nullified the effort to establish bourgeois rule.

The political weakness of the bourgeoisie was, thus, compensated for by the Basic Democracy system and by the rule of the military-civil bureaucracy on its behalf. However, it appears that the national bourgeoisie was not yet strong enough to provide a stable base for the rule of the military-civil bureaucratic stratum.

After Bhutto destroyed the industrial bourgeoisie, which is usually nationalist, leaving only the commercial and dependent bourgeoisies in the field, the military ruling stratum could stablize its rule only by basing it on the landed class — feudal as well as capitalistic. The City Government system being put in place now, is the institutional expression of this military-feudal alliance.

AGRARIAN RELATIONS: There are two kinds of relationships which combine to complete the cycle of reproduction — technology, i.e. the relationship between the man and nature, and property, or that between man and man.

Land is the free gift of nature. What imparts value to it is the labour applied to it, from food-gathering to scientific cultivation, with constantly improving technique. This ever-rising trajectory is governed by the amount and intensity of labour applied to the process and on the proportion of indirect to direct labour i.e. on the scale of instruments of production available to the worker. The rising application of these means of production increases productivity i.e. they spread the same amount of labour over a greater number of products. Property is a different relationship, being entirely between man and man. It can arise only when an average worker’s labour can produce more than what is necessary for him to live, labour and reproduce himself. This surplus, at a general social level, can be appropriated by some, if they can prevent the access of the workers to the means of production (primarily the land in the case of agriculture), except on the condition that they surrender the surplus to the ones who claim property of land, the claim being enforced by the state. The producers of surplus and its appropriators, thus, from two classes and their mutual relationship is the state, which guarantees the property.

However, this surplus produced on land has a special nature, since the land is, so to say, spatially fixed, unlike the means and objects of labour produced by man. Therefore, the equal doses of labour and other inputs applied to different plots of land may result in different yields.

And, since the total surface of land brought under cultivation will be determined by the demand for the product, the price of the product will be determined by the product of the poorest plot of land required for cultivation. Thus, the surplus yielded by the better lands over and above the worst one, or the differential rent, will be treated as a free gift of nature, although, in reality, it will be as much a gift of labour as any other product.

It will be appropriated by the landlord in his capacity as the owner of the land and, therefore, of its qualities yielding the free gift. By the same token, the price of this surplus will not enter the determination of the price of the product. However, this does not mean that it will not enter the social cost of production, since the product representing the differential rent, being actually the product of labour, will be exchanged against other products of social labour and, thus, take away from the social stock an equivalent value.

Secondly, this does not mean that the worst land under cultivation will not yield a rent. Here a rent will still be charged, but for the monopoly of land-ownership. It will be paid out of the general social surplus and will be in the nature of monopoly profit which is not shared out among the capitalists to form the average profit.

As a result, the agricultural produce as a whole exchanges in a developed capitalist market not at its price of production (cost of production plus the average profit), but at its value. (Karl Marx, Capital, Moscow, 1962, Vol. III, p748).

This system is modified when it operates in backward countries, because there the social system, in transiting from the pre-capitalist to the capitalist mode, fails to make a clean break. It, instead, carries many of the pre-capitalist features with it, which results in a sort of ‘combined development’.

For instance, a modern Pakistani agricultural unit producing for the world market will have that produce evaluated according to the total value incorporated in the produce. But the labour-power on the estate itself will stand in a dependent relationship to the land-owner.

The value of this labour power in the case of the agricultural wage-worker or the total income of the tenant-peasant, as the case may be, will be determined by price of the labour power concerned, which has been fixed by the pre-capitalist mores and carried over into the capitalist production.

But the land-owner will not be able to retain the surplus thus received, when selling the product in the world capitalist market. The reason would be that the world market evaluates the value of the labour power used in the production in the backward countries not on a theoretical basis of world average, but on its actual price in the backward country itself.

The low wages or the cost of reproduction of labour power, specially in the agrarian field in the latter will, thus, reduce the price of produce of the backward country in the world market below its value. The ‘combined’ social system in the backward country, thus, itself ensures the payment of a tribute by the backward to the advanced countries through the law of equal exchange prevalent in the world capitalist market.

POSSIBLE SOLUTIONS: The original proposal of the Fabian Society on the question of land rent in 1896 (for, admittedly a very advanced country) was for its nationalization, while leaving the possession of the land in private hands. This would amount to modifying distribution without modifying the property system. The same effect was sought to be achieved by the Social Democrats in some European countries by means of high taxation, which could, of course, be always modified in the reverse direction.

Our agrarian problem is not amenable to such palliatives. We need transfer of resources, of means of production, not of the products. We need something on the pattern of China. Easier said than done. After all, their agrarian crisis had lasted about one hundred and fifty years before it was tackled by a comprehensive social revolution, covering the whole society.

Pakistan started out as a purely non-industrial economy, though desirous of growth. The West Pakistani landed class had no sympathy with the Pakistan Movement which was bourgeois in nature. It had grafted itself onto it in its later stages in order to escape the prospect of land reforms at the hands of the Indian Congress. But it neither desired industrialization nor understood it. Hamza Alavi recently (Dawn, March 23, 2003) quoted a finance minister, drawn from among it, as complaining in 1958 that Pakistan’s problems were due to “over-industrialization”.

The report of the Agrarian Committee of the Muslim League (1949) had recognized early that the tenants in West Pakistan did not enjoy either the statutory or the occupancy rights available to the tenants in the rest of northern British India since 1849. But it did not recommend any transfer of the land from the “landlords who do not directly till the soil” to those who did. It only wanted better protection to the occupancy tenants. (Land Reforms in Pakistan, 1987, p95). The situation has not changed basically since then.

The policy to industrialize the country was pursued by bureaucrats led by Ghulam Mohammad. They were quantitatively-oriented and not much given to structural questions. However, land reforms appeared necessary to them because the agrarian system inherited by us failed to provide us with either adequate exports or adequate food.

Green Revolution, which could give higher yields with larger farms and more inputs, saved the situation for a while. But it became obvious that the solution lay with “raising the yield per acre of smaller farms. (Strategic Issues in Pakistan’s Economic Policy, Akmal Hussain, 1990, p178). In a country where 88 per cent of the total number of farms were of less than 25 acres, taking only 57 per cent of the farm area and being over-half tenant-operated, structural change was imperative.

The military-civil bureaucratic stratum that assumed power directly in the coup of 1958, felt independent enough of the landed class to launch land reforms in 1959. The maximum holding allowed by them per land-holder was 500 acres irrigated, or 1,000 acres unirrigated land, with Produce Index Units (PIU) derived from the pre-independence revenue settlements and many other loopholes.

This left the land-holders with most of their lands. Only the very big land-lords declared excess land, of which only about a third was resumed by the government. However, the principle had been established that the old agrarian structure was an impediment to industrialization and could be treated like any other property.

The reforms of 1972 lowered the ceiling to 150 acres for irrigated, or 300 acres for unirrigated land, and removed some of the loopholes. It also took land away without compensation. But the entitlement was again for the individual, and not the family. So the landholders surrendered some uncultivated land.

In spite of its radical facade, the so-called reform made no dent in the formidable power, economic or political, of the landed class. Not only did the PIUs of the ‘40 again carry the permissible holdings far above the ceiling, but only half of even the declared surplus land was resumed, its total being actually less than one-third of that of 1959. The exercise, launched with radical, even revolutionary, rhetoric, was practically an eye-wash.

Bhutto did not want to break the large land-owners. Obviously he wished to reform the landowners, not deal with them as a class posing objectively a barrier to progress. This benign attitude to the landed class, combined with his ferocious assault upon the industrial bourgeoisie, blocked the doors both to progress and the strength of the country.

Today, we have hit an impasse. The ability of the agriculture in the advanced economies to sell its produce at value, erects a barrier to the transfer of unrequited value from the agriculture to other spheres. But the same principle leads to its exploitation in our case.

The differentiation between the two great branches of the economy has resulted not in their feeding each other’s prosperity, but to the annexing of the land-owning class to the modern economy, while leaving the tenants and rural workers in essentially a pre-capitalist situation. Here the absolute rent protects not the agriculture from exploitation, but the landowner from the rural proletariat.

Labour is the source of all wealth. But as long as the distribution of this wealth is determined by access to the means of production, whether natural or man-made, distribution cannot take place except by the distribution of these means of production — primarily the land in the case of agriculture.

The creation by the French Revolution of a class of small bourgeois farmers was the Revolution’s most basic contribution to the inauguration of the modern age. Japan took the same path, as did other ‘miracles’, such as China (including Taiwan), South Korea and India. If Indian industry soars today in a self-centered spiral, it is basically because of thorough land reforms.

The land reforms give purchasing power to the bourgeois farmers and the rural workers in order to buy the industry’s products. The growing industry, in turn, absorbs the labour power expelled by the agriculture as its mechanization grows. The prosperity of the one aids that of the other. Any part of the purchasing power kept out of this exchange arising form differentiation, as, for example, the wasteful expenditure of the landed class, becomes a barrier to industrialization, and, therefore, to development. The counterpart to the concentration of land is the sick industry or plain de-industrialization.

The difficulties of land reforms in our present-day society should not be under-estimated. The fall of the planned collectivist society has left the field to the neo-classical ideology. Of course, the rise of rural bourgeoisie should not be against the bourgeois ideology. But its installation today requires political action to modify property rights, which is unacceptable to the ideology of the monopoly capitalist stage.

The proposal of corporate farming is another variety of the same monopoly capitalist outlook. Structurally, it is meant to preserve the concentration of land ownership. Economically, these land-damaging and peasant-hostile enterprises can only be enclaves of advanced capitalisms, producing for them. The only benefit to accrue from them for the locals will be the wages, not very high.

Politically, their alliance with the big local landowners will reinforce the latter, and contribute to consolidating the backwardness of the host country. As important, these foreign corporations will go on moving from one patch to another, as they exhaust them. They will be one of the forms of mobile capital — capital errant — which has visited such devastation in its industrial form on the Third World.

The establishment of this form of linkage between the local farming and the world market, not in the shape of sale of local products abroad, as hitherto, but by the acquisition on part of the globalized capital of the agricultural production process itself, will be a new form or degree of peripherilization.

And the dumping of foreign foods here to the detriment of local food production, as now proposed, will, by linking our agrarian economy to the world market, sub-sector by sub-sector, complete the process of neo-colonialization.

The struggle that our peasant pursues is not for some kind of socialism. It is for capitalist development of the country, only that this development has to be independent, so that the wealth produced here is not subject to haemorrhage, so that the surplus produced here is used for the development of the country itself.

The land reforms represent the key link in this process. But they have to be combined with some degree of protectionism and control of foreign trade, so as to prevent our agricultural produce from entering the world market at a price below its value. But, above all, both our agriculture and industry have to produce mainly for each other in order for the country to take off. Only a part of the surplus should enter the foreign trade to enable us to obtain the goods and technology that we do not produce.