Land ceilings may go for corporates

Published July 19, 2004

When the outgoing Prime Minister, Mr. Jamali, had announced in his one and only speech he delivered as country's PM that there would be NO land reforms , people took it as a phase that would pass with the prime minister given their short tenures in the office.

As people waited out his stay, the idea to lift farm ceilings to make way for corporate farming remained in the works. It now appears more likely that the farm ceilings may be lifted (Dawn, 9-7-04).

Clearly, the big farm interests have not only come to prevail on the one-track minds that seek foreign investment at all costs as this is what they are paid for, the view that President Musharraf held early 2002 when he indicated his awareness in Tokyo about the need for land reforms to bring about true development also appears to be getting crowded out.

In response to a question during a meeting with Pakistanis in Tokyo, the President had said that he was aware of the need for land reforms but this was not a front he could open immediately since he was battling on several fronts already.

While the front of land reforms was to wait in 2002, in 2004 it will be closed for a long time to come unless the lifting of land ceilings for corporate farming is qualified.

The Board of Investment (BOI) has not been successful in attracting fixed investment in a way big enough to justify its existence. Corporate farming is, therefore, its major bet through which it will show results on the sole variable of foreign investment that it is responsible for and which is also its evaluation criterion.

Since this board is evaluated on the basis of only one means of development, this means of foreign investment has become the end for the BOI. This goal for BOI, if achieved in a manner that will exclude people further by lifting land ceilings, is actually inconsistent with the goal of inclusive overall development.

But this is not the concern of the BOI focused too much on its own organizational goal and reason for being even though it is both vertically and horizontally inconsistent with development which is growth plus reduction in inequities and unemployment as well as poverty alleviation/eradication through broad-based inclusive development.

While the BOI would be fixated on its own aims and objectives, part of the responsibility for the above inconsistency rests with the policy makers. The economic policy elite in the country are no less sold to the idea of foreign investment as a major driver for growth since they too subscribe to conventional economic thought mostly rendered obsolete for the third world.

The economic model exported to us after independence focused on foreign capital inflows to fill our savings gap. Since these inflows did not show the desired results in terms of development, this model, still believed in by Finance Minister Shaukat Aziz was superceded and augmented by developments in economic thought meant specifically for the third world.

Unfortunately, these are little known or appreciated in the policy corridors due to which there is little or no effort to mobilize and channelize disguised domestic savings through the deployment of human resources the country is naturally endowed with.

For this purpose though, there not only has to be a ceiling on land holdings but land ownership by the tiller backed by strong government support can not only lead to efficient and productive farming (small farms being more productive in LDCs) but also to eventual graduation of the subsistence farmer to mixed and then commercial farming.

In parallel would take place the transformation of the economy from agricultural to industrial and services as the farm restructuring would generate purchasing power at the rural level and thereby demand for manufactured goods and services. Surplus would also be generated and the country would then also gear up for international competition.

Instead of the above sure route to development, all efforts remain prematurely focused on mobilizing a resource which is scarce in the country, that is, capital.

In the process, the abundant human resource remains ignored, bypassed, and factored out of all development schemes we call strategies. Since strategic direction is mission- and goal-driven, our "direction" is as unclear or short-term as the goals are.

So, if the goal is to have foreign investment, we must have it even if it is at the continued expense of the bulk of the rural population who are likely to be marginalized for a longer period of time than would otherwise be the case if land ceilings are lifted across the board and their fate sealed thus.

Since development for our policy makers means mostly growth and trade balances, they look for short routes to high rates of growth through agriculture which corporate farming would help them attain.

To this extent again, the policy elite and the BOI are in harmony. Also, now in a liberalizing trade environment, the issue of market access for agricultural products and dumped imports would disturb our trade balance since we never planned long-term for it.

One minister for agriculture around 2000-01 tried to connect our smaller farmers to international markets but he was elbowed out. Our lack of foresight has now brought us to a situation when quick-fix solutions are sought to looming trade issues before they grow out of proportion.

The goal then becomes solution to trade issues for which corporate farming and lifting of land ceilings are seen as quicker means to the end of trade balance. The BOI proposes investment in cultivable land not used thus far but which, in their view, can only be cultivated in cooperation with foreign investors.

So, the foreign investment goal will be achieved for the BOI, the growth and trade balance goals will be achieved for the finance ministry, and the profit motive of the big farmer will be well-served.

While there is a congruency of organizational and economic goals between the BOI and the finance ministry, there is political harmony between the finance ministry and the big farmlords.

Thereby, there is political harmony between the finance minister thus far and the prime minister-to-be contesting from Thar (and Attock). He is, however, likely to continue the legacy of the outgoing PM thus promoting the big farm interests even more strongly than they ever did themselves.

This also shows that even the best of MNC professionals (or private bankers) can rise to the helm only if they promote the big interests in the home country as well. If land ceilings are lifted across the board, the clouds under which the marginalized peasantry, the landless, and the jobless remain are likely to become even darker.

Corporate farms will be technology- and capital-intense and labour-saving. They may be having whatever organized form; they will not be able to generate employment at a rate that would absorb the rural labour force and its rapid growth.

The soil degradation and environmental decay aspects also require attention. Corporate farming may make the BOI and the finance minister look good on paper as discussed above, the result will still not be development if the multitude remain bypassed.

And, it will not be sustainable development if environmental decay occurs that can be partially offset by technology provided it is deployed for this third world country by the foreign investors.

True development requires constructive engagement and empowerment of the bulk of the people. This is possible only if the people are engaged in their places of origin by first beginning to till the land of which they must have actual ownership.

It is a pity that no thought was ever given to parceling out the hitherto unused but cultivable land to the landless and then investing in its development. Now that the same has been earmarked for corporate farms, could the land ceiling not be relaxed for this land only if the die of corporate farming has been cast in stone?

Imposition of land ceilings (150 acres irrigated and 300 acres unirrigated) is at least of symbolic significance, the lacunae notwithstanding. Removal of the ceilings across the board in the country would legitimize big farmers' power whose continued exercise would lead to their growth in prosperity in conjunction with the growth in poverty of the majority.

This stark dualism, if politically difficult to address currently, should at least be contained through political will that was exercised thus far by maintaining the land ceilings.

Giving up of this minimalist approach is a complete sellout in the interest of growth rates that may impress the uninitiated but that are no solution to the sordid reality of deprivation, misery, squalor, and poverty.

For, growth distributes only in favour of the owners of assets and means of production whose distribution is likely to get even more skewed through the relaxation of land ceilings for those who have been the prime beneficiaries anyways since independence.