Access to land reconsidered

Optimum allocation of resources is highly important for the development of a society. Economists say that resources are scarce and needs unlimited. This is true in case of land as well.

Who should own land and how should it be allocated among competing demands? What is the optimum security of property rights? Is state intervention justified if allocation of land is not optimum? These are some pertinent questions that have implications for land reforms policy in a country. When land is misallocated among its potential users, perverse incentives are generated. What are the major indicators of misallocation of land in a country?

First, land generally remains underused and may be lying idle despite there being sufficient unmet demand for it. Second, violence and litigation over use of land rights is too frequent. Third, agricultural productivity is low in terms of per acre output etc. Judged against these indicators, allocation of land in Pakistan obviously suffers from severe misallocations and distortions. Absentee-landlordism is still there and productivity is low – almost half that of Indian Punjab in terms of per acre yield.

Comparison in productivity between Indian Punjab and ours is a type of natural experiment. Both have similar quality of land but the difference in productivity between the two is very high. Generally fat subsidies given to Indian farmers are cited as the sole reason for the high agricultural productivity. This is not the whole truth. Optimum allocation of agricultural land among Indian farmers is perhaps another reason we generally lose sight of while analysing the agricultural productivity of Indian Punjab. Landholdings in Indian Punjab are small compared to ours with the result that farmers make optimum use of their land.

Further, violence over land rights and its use is very common in Pakistan. Disputes on land titles drag on in the courts for decades. The case for enhancing access to land being emphasised here is only from an economic perspective, though the implications of highly skewed and inequitable ownership of land are also very damaging for the social and political landscape. But one thing is sure – the correction of distortions in allocation, distribution and access to land can no more be put under the carpet.

Rising populism in politics, the population bulge, heightened awareness about inequality, and the deepening circle of poverty are a few of the potential threats to the status quo. Delaying land reforms is no longer an advisable option. But the question is: how can the distortions in access to land be corrected? Are large-scale expropriative and redistributive reforms on the pattern of the Asian Tigers politically viable? Restructuring land ownership through coercive land reforms seems a remote possibility given the fact that the landed elite dominate the political decision-making in all the major political parties.

Leaving aside the political exigencies, redistributive land reforms in Pakistan are justified from economic and social angles. The land-owning class in Pakistan did not get the large tracts of land which their scions own today through hard work. Rather land owned by them was either a result of their loyalty and services to their colonial masters or from rent-seeking due to the interplay of economic and political power arising out of land power.

The rationale behind the protection of property rights – considered a primary reason for development by the institutionalist economists – is simply the argument that the fruits of hard work and sweat should be protected otherwise people will have no incentive to put in hard work. Even if we fully buy the orthodox discourse on institutions, the case of restructuring land ownership in Pakistan is quite robust. Protection of current land ownership structures is in no way an optimum level of security of property rights.

Pakistan has 2.6 million acres of cultivable land and if it is divided into five-acre lots through restructuring of land ownership, it is estimated that it could create assets for about 900,000 farmers. This way it can go a long way in alleviating poverty in the rural areas of Pakistan. In the past – in 1959 and 1972 – attempts were made to enhance access to land through land reforms in Pakistan but these reforms failed to put a dent in the power of big landlords.

Increasing access to land through state-managed coercive land reforms may not be forthcoming in the near future due to political exigencies. So there is need to explore other ways and policy prescriptions to enhance access to land. Reform of inheritance laws and strict implementation of titling and mutation in accordance with these laws can be one such policy option.

It is no secret that certain groups are virtually excluded from access to land in intra-family transfers through inheritance. Girls in general, divorced women, and women who happen to marry outside the family are excluded from the inheritance of landed property. The exclusion of women should be legally prohibited even if they consent to it at the time of transfer of inherited property.

It is commonly seen that women members consent to be excluded from the landed inheritance due to social pressure and their socialisation in a male-dominated family. They are conditioned to believe that land exclusively belongs to the male members of the family and that dowry is a substitute for their right to inheritance. So what is required is the true understanding of intra-household power plays regarding inheritance. Legal, procedural and enforcement structures need to be revisited to ensure that the weaker members of the family are not excluded from intra-family transfers through inheritance. This will not only enhance access to land in the society but will also empower such sections of the society by eliminating gender-based discriminations.

Another route to enhance access to land is through the creation of common property resources and their prudent management. This route is still unexplored and there is lot of room for experimentation. The vast tracts of unutilised state land can be transferred to landless communities with a title in the name of the community with full authority to manage the land for the benefit of the community members.

Small farmer development corporations can be created where the farmers can have shares. The common property can be managed by professional farmers on behalf of the community members. Reforms of land rental markets are another area that may be instrumental in facilitating access of the people to land. These routes to enhance access to land are, however, not that easy and require serious homework. Some points to be kept in view to make use of these policy options are a high level of social capital, effective leadership to manage common property resources, well-defined and secure property rights through land registration, land titling, and low-cost legal enforcement of property rights.

Progressive taxation of land is another tool that can be used to correct distortions in land markets. Introduction of a progressive ‘land tax’ to reduce rents arising out of the non-agricultural benefits of land ownership can be a good step forward. Such rents generally accrue to big landlords and inflate values of land. Further, conflict resolution in Pakistan through litigation and formal court systems is too expensive and time consuming.

Low-cost local conflict resolution mechanisms can be put in place to make land sales and rental markets work more efficiently. Such land policy reforms will, however, not be effective unless they are embedded in comprehensive policy and institutional reforms.

The writer is a graduate of Columbia University. Email: jamilnasir1969@gmail.com Twitter: @Jamilnasir1