D+C Development and Cooperation (No. 2, March/April 2002, p. 12 - 15)

Fostering rural development is a key element of all strategies to combat poverty. This old and often repeated insight was re-discovered at the World Food Summit in Rome in 1996. For more than a decade, rural development had not been a central issue for development policy, and official aid budgets for rural development, agrarian reform, and food security were reduced. However, with the new focus on poverty alleviation, these issues now receive renewed attention.

The decline in funding for agriculture and rural development in the 1990s was quite dramatic.

In 1990, World Bank lending for agriculture represented 18 per cent of total lending, at the time of the World Food Summit in 1996, it stood at 12 per cent, and in 2000 at only 7 per cent. In the Asian Development Bank, lending for agriculture went down from 31 per cent in 1990 to 9 per cent in 1999.1 Bilateral aid of all donors for food security went down from US$7 billion in 1986 to 3 billion in 1999.

The issue of rural development and with it the connected issue of agrarian reform was forgotten, firstly because other development policy issues were more on top of the agenda like economic liberalisation and good governance and secondly because after the end of the Cold War agrarian reform was seen as too rigid a form of state intervention.

Nevertheless, the issue was revived in the last few years because of the persistence of the problems of hunger and malnutrition. According to the latest data of the FAO, 70 per cent of the poor live in rural areas. The World Food Summit was one of places were it was recognized that a further reduction in attention and resources directed to rural development, agriculture and creating access to productive resources for the rural poor would have negative repercussions on any effort towards poverty reduction and hunger alleviation.

Agrarian reform and rural
development are interrelatedt

In its recent report on world rural poverty the International Fund for Agricultural Development, IFAD, gives many examples showing that without assuring adequate access to land, the most basic productive resource, the goal of eradicating poverty, reducing hunger and promoting more broad-based and inclusive rural economic development will remain elusive (IFAD 2001). Around the world, the poorest of the poor are the landless in rural areas, followed closely by the land-poor - those whose poor quality plots are too small to support a family. They make up the majority of the rural poor and hungry. Conservative figures from India indicate that the number of landless persons in rural India is about 170 million, and they alone constitute more than 20 per cent of all the people affected by hunger and malnutrition worldwide.

The redistribution of land to landless and land-poor rural families is one of the most important measures to be taken to foster rural development. Studies of the outcome of virtually every land reform programme carried out in the Third World since 1945 show the land distribution is a very effective way to improve rural welfare. The studies distinguish between "re-distributive" land reforms and "non-egalitarian reforms". When quality land was really distributed to the poor, and the power of the rural oligarchy to distort and `capture´ policies broken, real, measurable poverty reduction and improvement in human welfare was the result. Japan, South Korea, Taiwan, Cuba and China are successful examples given. In contrast, countries with reforms that gave only poor quality land to beneficiaries, and /or failed to alter the rural power structures failed to make a major improvement in rural poverty.

Trends in agrarian reform processes

Struggles over control and ownership of land continue to be a key feature of contemporary political conflicts in different parts of the world. Today in many parts of Africa, Asia, and Latin America, land reform as a human rights obligation, and as a policy measure for social justice and rural economic development, has yet to be fully realised. Furthermore, the rise of neo-liberal policies has created an increasingly unfavourable environment for agrarian reform. There are different trends in land tenure transformation. On the one hand, the implementation of agrarian reform is circumvented in certain countries (Brazil), while in other countries the privatisation of collective sectors (Mexico), or of old communal lands is being pushed (Bolivia, Peru, many African countries). In several cases a dismantling of state farm collectives can be observed (e.g. Eastern Europe, Vietnam). Only a few cases remain where a modest advance in land reform implementation can be observed (Philippines, South Africa) but even these cases are far from being dynamic. Liberalisation policies are challenging the ability of states to fulfil their human rights obligations regarding the right to food, which include access to productive resources as well as the implementation of the commitments made at the World Food Summit.

Land concentration continues

Instead, in the rural areas of many countries the most dominant process is not land re-distribution but land concentration. The expansion of agricultural production for export, controlled by producers with bigger sized farms who often own the best land, continually displaces the poor to even more marginal farming areas with poor and easily eroding soils on steep slopes, etc. The situation is often worse on more favourable lands. The better the soil, the stronger the land concentration. Official figures from Brazil show that between 1992 and 1998 those land owners who already had more than 2000 hectares increased the size of their farms by 56 million hectares, while the whole area distributed by state land reform programmes in the same period was only 18 million hectares. Only 21.000 farmers in Brazil, 0,6 per cent of all producers, own 149 million hectares of land (half the size of West-Europe). The concentration trend is faster than the existing land redistribution process. While between 1996 and 2000 the government was able to redistribute land to about 400.000 persons, another 538.000 persons were leaving the land at the same time.2

In recent years the World Bank has taken the lead in promoting and financing comprehensive reforms of land tenure, including titling, cadasters and land registries, land market facilitation, market assisted or negotiated redistributive reforms, and credits, technical assistance and marketing support. The Bank has followed the advice of its own development economists, who have found that severe inequalities in land tenure retard economic growth, poverty alleviation, and efforts to use soils sustainably. In this new policy environment other development policy institutions, bilateral and multilateral are following the lead of the World Bank trying actively to extend these changes to additional countries. A new paradigm for agrarian reform policies has been adopted by these institutions, which is challenged by civil society organisations in the surrounding of the World Food Summit.

Background to the "market assisted" or "negotiated land reform" concept of the World Bank is the idea that many agrarian reform processes are politically blocked by national elites. To speed up the processes the Bank is convinced the partial blockade can be overcome by guaranteeing access to credits by landless or land poor families to allow them to buy land from willing land sellers. While the World Bank attention to the issue has helped to revitalize discussion about the topic of agrarian reform, NGOs have serious concerns about specific elements in the reform packages being implemented today.

• NGOs fear that the reliance on land privatisation and market forces may undercut the potential of land redistribution to contribute to poverty reduction, ending of human rights violations, and achieving ecological sustainability. When commercial lands are privatised increased individual competition may cause the breakdown of communal resource management systems like terraces and small scale irrigation, leading to accelerated land degradation.
• Programmes of land titling, cadasters and the facilitation of land markets may meet the demands of farmers for secure tenure. On the other they entail the risk of land concentration, if not at the same moment an economic environment is created that helps small farmers to survive. The current land concentration process in many countries shows that most agricultural policies are currently not supportive of small farmers.
• The willing seller - willing buyer concept is artificial in many rural societies. The land markets do not function properly due to market imperfections. The negotiation power of huge landowners and landless families if often very unequal with the result that marginal lands are sold at top prices. The buyer starts with a hefty debt burden and may have to sell the land again two years later.

Examples from Brazil and South Africa

The concept is influencing the political developments in the recipient countries. Two brief examples can show the status of agrarian reform policies in the countries of Brazil and South Africa. Moreover they will allow to see the impact of the current model of agrarian reform promoted by the World Bank.

In Brazil, the World Bank model is more and more used to replace the existing redistributive agrarian reform schemes. The annual budget of INCRA, the national agrarian reform administration, stood at 2.6 billion real in 1997 when the World Bank programme started. In 2001, the INCRA budget was only half that amount. Even if it may be unintended, the market assisted agrarian reform is replacing the official scheme of redistributive land reform policies. The figures in Brazil show very clearly that currently more people are leaving the land than profiting from land distribution. In a country with about 5 million landless families and more than 100 mio hectares of good but not used land, the whole process is very slow and eligible families do not get the available fertile lands but are sent to the frontier states to cut down forests. In the seven years of President Cardoso, of all families that have received land, more than 60 per cent were settled in the three frontier states of Para, Maranhão and Mato Grosso.

In South Africa the whole agrarian reform process is still very slow. In the agrarian reform legislation from 1994 three different components were planned. (1) Those land owners, who lost their land during the apartheid time have the right to "land restitution". (2) For the landless South Africans a land distribution scheme was planned to overcome the extreme and concentration as a result of the apartheid regime. (3) For the black South Africans using land under tribal authority a tenure reform was envisaged. The whole process is very slow. Up to 1999 of more than 68.000 cases under the "land restitution" scheme only 12.000 have been solved. (4) The whole land redistribution was facing the problem that traditional property rights were guaranteed and the landless were offered loans to buy land on the market. Up to 1999 not more than 800.000 hectares were sold. Concerning the tenure reform so far no law has been passed. The already slow process came to a halt in 1999, when President Thabo Mbeki took over. Since then a moratorium on land distribution was declared to review the existing scheme. Now only farms with a certain size (more than 1000 hectares) are considered for land distribution, the reason being to create efficient farm size structures. Small farmers have to form buying cooperatives, which is often very difficult, because people are not coming from rural communities and have to build artificial new cooperatives without knowing them beforehand. For most of the black South Africans, access to land is still a dream. Recently a movement of the landless has started to work, similar to the MST-movement in Brazil, and first land occupations have started. The example of South Africa shows that it is close to impossible to solve the problem of an apartheid land structure by a market-led agrarian reform process. It means that the black South African have to buy back their land, that they have lost under Apartheid.

The two example provide two insights. The market-based process is a fragile one. It can help to overcome some shortages in agrarian reform administration, but it should not replace traditional re-distributive processes. Even if this may not be intended, the facts in many countries show that the World Bank advice and the World Bank loans are factually used to replace the traditional processes.

Old challenges, new questions

The discussions on the issue of agrarian reform reflect the conflictive nature of the respective processes. A set of different types of arguments are normally used to avoid agrarian reform policies or to contest the whole idea of agrarian reform in general.

(1) Agrarian reform policies are often contested at the national level, because they involve the redistribution of property. Even if fair compensation is paid, which would be best practice, agrarian reform often requires expropriation measures, since large landowners seldom offer enough land on a voluntary basis. This often causes resistance amongst the economically powerful sectors of society, often those who are also members of parliament, who own local radio stations etc. It is therefore of utmost importance that a government pursues its agrarian reform policies with strength and conviction. Showing that agrarian reform is a human rights obligation can be a very strong argument politically to pursue policies against the resistance of powerful actors.

(2) A second argument often used stems from economic development theory. It says that if a society invests most in the powerful and more entrepreneurial parts of the society, which in the rural sector would be in large agricultural units such as plantations etc., to achieve export earnings, the long term development of societies will be faster and in the long run the trickle down effect would ensure that it benefits the poor. This is neither true, like many examples show (those countries who successfully introduced agrarian reforms like South Korea and Taiwan, developed much faster), nor valid generally (national conditions vary tremendously). It is apparent that even in countries that have a booming economy, poverty is growing fast and the situation of poor people is deteriorating (this has been illustrated by many UNCTAD reports from the last few years). The human rights approach requires the orientation of policies towards guaranteeing and implementing the rights of the most vulnerable groups immediately, an approach which is all too often forgotten in development logic. There is, however, a growing recognition of the need to eradicate poverty as the first and most important step towards any form of development.

Myths about hunger and
food security

(3) A third argument often used to challenge agrarian reform policies comes from a different angle, the discussions about achieving food security. Food security is often equated with the production of sufficient quantities of food, be it internationally (global food security) or at the national level (national food security). The increase in global population is recognised as a threat to food security, because yields must increase. Many agricultural scientists believe that an adequate production of food worldwide can only be obtained through "modern" agriculture, meaning intensive production with many agricultural inputs like fertiliser etc. based on large scale farms, which are supposed to be more productive. The argument itself is not very convincing, as we will see. Moreover, this equation is lacking any human rights analysis of the situation.