Case Study for Land Reform Theory: -----------------Comparative Analysis between China and Zimbabwe Han Xuehui and Zhu Mian Why choose these two countries? 1. China has a considerable achievement in agriculture production and poverty reduction after land reform. 2. Zimbabwe attracts much attention involved not only economical but also other aspects during its reform procedure. 3. With similar conditions but distinct results. Three questions: 1. Whether the land reform theory was proved to be right in real world? 2. Is it sustainable for the result of land reform? 3. Which method is efficient and feasible? (Based on Karl Ove Moene (1992)) R The region which we are focusing on Rs R* RL Regime I Regime II T(Rs) T* T1 Regime III T2 1 T Case I: China (since 1949) Background: No modern agricultural sector, No regular (but temporary) wage labors, various landownership comprise of landlord, smallholders (including rich peasants, middle peasants), landless peasants. Most landlords owned only a little more land than their non-landlord neighbors. Conditions: Land Poor Country, with 0.1 hectares of arable land per capita in 1949, land rent which the smallholders can afford = actual land rent > maximum rent which can keep landless workers on commercial land. Since the rent was so high that landless workers can not afford, they had to keep working on waste land for subsistence or migrate into urban area. Method: Radical reform: redistribute land from landlord to smallholders and landless workers on the principal of absolutely equal; eliminate landlords and government holding the land property. Result: Production increased dramatically. Poverty was reduced efficiently. Land reform procedures in China: Stage I: After Communists came to power in 1949, beginning with a nation-wide land reform, the tenants under an onerous landlord system before were made full owners of individual small farms, and production increased dramatically. Comment: This result proved that the argument that a more egalitarian distribution of landownership reduces poverty where land is scarce. Stage II: Beginning in the mid-1950s, farmers were pressed into steadily larger collective farms. This culminated in the giant communes of the ‘Great Leap Forward’ in 1958, each averaging 20,000people and 4000 hectares of arable land, and three years of sharply declining grain production. Comment: Based on the successful experience in Soviet Union of collective farms. However, this is the one obvious argument for decreasing returns with collective farms. Large farms need to hire labor and share their outputs. Family farms do not. Hired labor will be less productive than family labor unless it is effectively supervised (which may be very costly) or is given the right incentives. Stage III: Major readjustments were begun in 1962, dividing production to the much smaller production team, and allowing about 5 percent of land to be farmed individually as ‘private plots’, though on the basis of usership only rather than private ownership. 2 Stage IV: By 1981, full decollectivization under the ‘Household Responsibility System’ (HRS) was officially sanctioned by the central government, and by 1983 virtually all arable land had been allocated to individual households. The results were striking, as grain production increased by 8.6 percent per year during the first period of the HRS in 1980-84. Comment: from 1960’s China had experienced different type of reform adjustments in order to sustain the successful achievement, including allocate the communal area into individual and allow limited land usership exchange between farmers. Addition: The facts in China that are coincided with the assumptions on the model: During stage I and stage IV, the consequence of land reform is striking. Within these two periods, the restrictions on internal migration from rural area to urban area were relatively loosen, which coincides with the model. Case II: Zimbabwe (since 1980) Background: a dual agriculture and land ownership structure, 6000 white commercial farmers owned 45% of the agricultural land, while the small-scale commercial farming subsector comprising 8 500 black farmers held 5% of the agricultural land. And the communal areas holding 70 000 families occupied less than 50% of the agricultural land. Conditions: Land rich Country, with 0.42 hectares of arable land per capita in 1980. Since there exists racial discrimination before land reform, the landless workers mainly consist of black farmers have no access to get more land. Therefore the situation was similar to the regime I even though the land was richer. Method: Market Reform: Government of Zimbabwe purchased land from the land market and redistributed them to landless workers. Result: not successful as expected Land reform procedures in Zimbabwe: Stage I: In the first three years of independence (1980-1982) the government of Zimbabwe distributed more than 1, 7 million hectares of land (8% of the whole available arable land), with more than a million hectares being distributed in 1982 alone. During the same time, smallholder farmer yields and marketed surpluses increased rapidly despite the severe droughts faced. Comment: During this period, land reform had remarkable effect on agriculture production and poverty reduction. The result confirms Karl’s argument again despite in this case the land scarcity arises from political reasons rather than economical reasons. 3 Stage II: By 1983 the flow of land onto the market had declined and it became a seller’s market. Thereafter, the land delivered was usually not in the right location, or isolated, leading to the fragmented dispersal of resettlement schemes. Market based land acquisition failed to deliver the required amounts and quality of land, as the land that was offered to government was mostly in the marginal areas and overpriced and the government ended up paying exorbitant prices for this poor quality land. In the period 1983- 1990 just over 800 000 hectares of land was distributed. Stage III: from 1990 to 1996, during this time the government of Zimbabwe land reform program almost stagnated mainly due to the unavailability of funds on the part of the government of Zimbabwe to finance the program and also the limited amount of land offered by the farmers on the market for the government of Zimbabwe to purchase and resettle people on. Comment: Market reform rely on more external factors, for instances, foreign aids, to get more land to distribution by market purchase depends on the economy of the country and the fiscal situation of government. Stage IV: The Constitutional Amendment of 1990, made it possible for the government of Zimbabwe to acquire land compulsorily within the law, which resulted in a lot of negative publicity for the country and various efforts were made to stop the government from acquiring these farms. Comment: Although marker reform encounters many problems in Zimbabwe, it still a more reasonable measure to implement in modern times, it consider the benefits of different groups. Besides, in most countries, land owner have more influence on land policy than commons, whether land reform will be success or not depends on how to keep the benefits balance between distinct stakeholders. Conclusion: although China and Zimbabwe have the similar conditions of the land reform, they have different results on account of the implement methods. During the first stage, Zimbabwe was also regarded as a pilot model in South Africa, but the outcome was not sustainable due to have no enough land supply to redistribute. This is not the flaw in the model, but unsatisfied outside conditions. Meanwhile, we can not say that the radical reform was better since it need to accept bitter social chaos and instability. Therefore, in order to get the expected result of land reform, it should pay more attention on various aspects according to the particular circumstance, including the basic conditions, the implement method, etc. 4