Wednesday, January 20, 2010

Land reform

This is just a question that has been bothering me for a while.

Did the land reform policies of the 1960's and 1970's assist in uplifting the standard of living of rural farmers?

As far as the key agricultural sector-tea was concerned, it was an unmitigated disaster with the net result of overall output dropping and the creation of a powerful new competitor - Kenya. Planters who were driven out of Ceylon played a pivotal role in building Kenya's tea industry.

Quite apart from this, it also sent a very poor message to investors, but this is by the way.

How did rural farmers benefit?, assuming that is, that they were the intended beneficiary.

Does anyone have a view?


Anonymous said...

land reform was an absolute disaster in agricultural productivity. I did not lose any land so dont have an axe to grind, but here goes:

I have seen the best coconut lands in the triangle cut up into small units, and those recipients have cut the trees and built their homes and gardens. We have created a villa class of people who now have aspirations of greatness, but who decimated agriculture and in the case of coconuts, the whole industry has collapsed. No wonder exports have collapsed.

It is all political, as the owners made little from the land and they put all their earnings into the land, to increase yields. Today's owners don't fertilize and try to squeeze every penny from the land with no investment in new planting.

Its a no brainer, I would like to see a comment from one who defends land reform logically.

No one should be entitled to free land. It is not appreciated.

Anonymous said...

yep, complete disaster...

and most of the people who got that land sold it off to richer people... also, the creation of colonies led to a break up of the social web and this led to a higher rate of alcoholism, someone once told me...

Jack Point said...

thanks Anons.

Are there any studies that you know of?

Hopeless said...

Land reform was an ill guided policy by the political novices of Ceylon at that time. Assuming the underlying premise was to redistribute wealth, this could have been easily achieved with taxation and minimum wages. And the idiots of that time should have realised that for a land to prosper it needs more capital investment, and that investment can only be effectively provided by a free market. What a bunch of novices? - these are same piglings that introduced the Sinhala Only act, that precipitated the demise of a one time good ole country.

My dear Jack Point, these are all classic cases of govt intervention - in economy and civil liberty.

I don't have the statistics on the real per capita GDP growth rate for Ceylon, I suggest if you draw a normal distribution and compare the bottom 30 % now and at the time of land reform you might be able to see the impact, albeit partially

But getting back to normative economics, I see Ceylon leaders made many mistakes, some of them irredeemable in my life time (I have circa 40 years to go) - as to evidence, dont we all know what it is

Ceylon my beautiful island, I yearn in a faraway land for your warmth

Jack Point said...

Hopeless, I have been told that some research has been done on this, I will share it as soon as I get my hands on it.

My objective in looking at this is to see what lessons can be drawn, in terms of development and possibly, on Marxism's fascination with land.

Agriculture becomes less important as society develops; intensive farming means that agriculture employs less land and people and as the value addition in agriculture happens further downstream the value of agricultural land drops or remains stagnant while the value of industrial, commercial and residential land increases.

The link between land and wealth creation also becomes more distant in a more diverse economy.

sbarrkum said...

GDP is not all there is to a country. Sometimes just plain stability and a place to call home. Not concrete (or dry wall for that matter) box, on the 10th floor.

My thoughts as you know, is that land reform has brought about social stability in Sri Lanka. Counter example of the US where small farmers were pushed out to Big Ag.

Land Reform, Big Ag and Social Unrest

Jack Point said...

I agree that GDP is a fairly crude measure of output and that it is not the only thing in the country.

I think it is poverty, unemployment and a few other factors (see my post on the Arab unrest)

that leads to social instability. If land reform leads to increased employment agriculture, then we can expect an improvement in social stability. I am not sure if this happened following land reform in Sri Lanka.

Another pertinent question to ask is why food prices are so high in Sri Lanka today, despite large subsidies being given to farmers.

Rice is at Rs.100+ (rice from India or Pakistan could be imported at Rs.40) and a similar problem exists in vegetables.