Is land reform off the menu? – III

Land and housing reforms: Innovations and opportunities due to the floods: The destruction of life and property of people due to floods have developed the need and rationale for launching some innovative policies by the government. Some real resource transfer has to take place from the actual or/and potential domain of the rich and the powerful. Roti, kapra aur makan are the key concepts which the ruling party has not abandoned. There are others on the political spectrum that may, even though grudgingly, support non-traditional and innovative actions. Classical land reforms are out of fashion and out of sync. There is no possibility of forcibly taking away some or all of the land owned by the big landlords.

This may be a dream of arch-communists but there are practical, philosophical and ideological issues involved in such confiscation. But there are other possibilities to provide some means or assets to the poor, especially in the context of the current floods.

Government does not have the money or the power that comes as a result of a revolution. Whatever flood assistance that the federal and provincial governments would be able to give to the flood victims would be out of the aid and assistance of community. However, the government has surplus land and the power to change land use, and appreciate its value. It can divert the surplus so generated to the landed aristocracy and the politically or socially powerful elite as has been the case in the past, or divert the surplus to the poor. We shall examine how this can be done.

First of all, there is government land mostly in rural areas, which can be gifted to the landless and also to the flood victims of a certain category. More land could be developed as well. Due to the increased supply of water as a result of new storage dams, more land would come into the irrigation system, which should be passed on to the landless poor. However, this is a rather long-term measure to be implemented when new dams are built and commissioned. Government is already distributing under-utilised forest land among the landless.

Some conditional land leases should be issued to the flood victims of the Kachcha land who are cultivating land parcels there and are also living there. Because they do not have titles, they did not leave their places for the fear of Qabza by others. There are flood control issues due to which permanent and water restricting structures should not be built. Necessary flood control measures could be built in the land leases and the amendments in the law if required.

Under new irrigation schemes, whenever these come up, tradable water rights could be awarded to the landless, which he could sell to the willing customer or use it as his collateral or share in the distribution of agricultural output and profits. In this way, he becomes partner in place of surf.

In urban land laws, provisions for high-rise building societies could be introduced, where virtual plots in the third dimensions are allotable. Real estate developers could be encouraged to develop multipurpose projects, where in lieu of subsidised land or free land use conversion, a certain percentage of 3-D plots are allotted to the poor. Currently a lot of money changes hands on conversion of agricultural or residential land to the commercial one. Some fee does go to the local or provincial government but most of the surplus is siphoned away by the builders, landowners and the social and political elite. So the name of the game is to create policy or innovation surplus and divert it to the poor.

There is a lot of government land that is available on the periphery of Karachi near Sohrab Goth (outside Karachi limits) and in district Thatta that could be allotted to the flood victims especially from the inundated towns of Jacobabad, Larkana and Thatta. If Sindh has to develop regional economies are to be established, as has happened around Lahore. Karachi, itself, would benefit from the regional economic development as Lahore has. Karachi’s economy has been stagnating for many years. One of the reasons is lack of close geographical interactions and resource reservoirs. Everybody would benefit. However the idea would fail if it is used for political and ethnic manipulation and advantage.

I would like to add a caveat here. Last PML (N) government headed by Nawaz Sharif introduced an innovative housing policy and strategy for urban areas by transferring surplus government land and plots for low-cost public housing projects. A good innovative project was, however, reportedly marred by construction scams. There was no need of involving government in construction by a party which believes so much in private sector. That project perhaps is revived in one form or the other. Some residual land or assets may still be there. Musharraf government quietly put a lid on it. No NAB case has been filed with respect to this project apparently. May be, there is one or a few.

Elsewhere, I have proposed buying surplus land from large landowners of 500 acres plus and creating an economic and tax regime that may facilitate such land transaction between the two. It would be quite feasible to acquire substantial under-utilised land from the large landowners. I would not repeat that here for time and space reasons. But who would bell the cat. Government of the day is forced to face one crisis after the other. Innovative policies require peace of mind and a supportive political regime.

URBAN LAND REFORMS – HOUSING FOR ALL Last PML (N) government launched a housing scheme, whereby it acquired unutilised land from government departments and agencies to build houses for the general public. The mistake they committed was of involving government in construction activity and business. A good initiative turned into a scam and had to be abandoned. The scheme could have been revived after neutralising the government involvement in construction. It was abandoned altogether, in true Pakistani tradition of disowning, good and bad, of the outgoing and gone governments.

As there are rural landless, there are urban landless also. They live in Katchi abadis, squatters, and in perpetually rented houses. Some of them may have paid rents that may have eventually far exceeded the total value of the houses they lived in. There is a sizeable population of urbanites who can build their houses through affordable loans, provided a piece of land is made available to them at near-free prices. The right to acquire land or space for living, working and tilling ought to be recognised or at -least promoted. This proposal is restricted to housing although its variants could be developed for developing space for small enterprises and entrepreneurs.

Land is scarce in urban areas. The erstwhile single or two floor housing is uneconomic and infeasible. There is no land for such plotting to meet the huge unkempt demand or it may throw such dwellers so much away from markets and workplaces that their substantial times and incomes would be dissipated in transport cost ; from frying pan into fire, replacing house rents by transport fares and costs. This also puts burden on government’s ability to pay the foreign exchange required for the ensuing oil imports.

Plots-in-the-air, or plots in 3-D, call these by whatever names can be a solution. The concept is already there but it comes about when an apartment has been built and recorded as a property with the relevant registrars. The minor yet vital innovation, I am proposing is carving plots in the air and registering these as property. A law may have to be introduced for transaction of such property. Government can acquire unutilised public land for this purpose as was done earlier, or convert adjoining rural lands into public housing schemes. Four to ten storey plotting can be done. Plots can be awarded to the eligible on balloting basis. A plot of 1000 sq yards could be treated as a housing society, that otherwise would require large tracts of unavailable land.

Government need not enter into construction as tried to do vain fully earlier. The allottees can form an elected housing society with powers to borrow and build. Rules can be developed for its working and legal status, registration and transaction. A batch of 100,000 houses/plots could be planned in the first phase of three to five years. If successful, it can be extended into a recurring policy. The proposal has a potential of increasing the house-building rate by several times, may be 4 to 7. The proposal hardly puts burden on government coiffeurs. It is self financing except for the increased housing credit that may have to be allocated or facilitated.

Elections are due in two years time. Political parties may consider this proposal for incorporating this in their manifestos or the present government can do a beginning in this respect pre-empting innovation by others and possibly enhancing its chances for re-election.

CONCLUSION Land reforms need not be construed or feared as harbinger of a French or Communist revolution. Nor should it be as phony and ineffective as the previous two schemes fared. Landlessness has been ascribed to be the major reason for rural hunger and poverty. Land reforms in Pakistan can have very desirable effects on Pakistan’s wellbeing and stability through three simultaneous effects; a) reducing poverty; b)increase in land utilisation and productivity; c)increase in food output; d) diversity in political power bases; and e) promotion of social cohesion having a direct bearing on reduction of terrorism .

There have been several misnomers that have been proved to be incorrect by data and experience; a) that large farms have higher productivity, and consequently food output would suffer as a result of land redistribution; and b) a minimum plot size of 10-12 acres would be required to be distributed among the landless. It has been found that smaller farms are more productive because of full application of family labour. Large farms do not even cultivate all their land. On an average, 20 percent of the agricultural land remains unutilised in Pakistan. Out of this, 15,000 large farms of 500 acres and more utilise only 50 percent of their land. Small farms of under1-3 acres, for obvious reasons, utilise 10 percent of their land. Also, as mentioned earlier, small plots of 1-2 acre may prove to be very viable, if distributed in clusters of 50-100 acres. Cereal crop agriculture is not the only option. Landless beneficiaries can engage in horticulture (vegetables) and livestock activities. Thus massive redistribution of land may not be required to make a significant impact on landlessness.

There are a number of options, all of which may be employed; a) revival and implementation of the earlier land reform regulations with possible adjustments; b) levying of taxation on unutilised farm areas, encouraging land rentals or/and levying of agricultural income tax on at least the 15,000 large land owners; c) development and distribution of government culturable wasteland. Currently most of this land goes to the elite and powerful, as rewards of various types and kinds.

Furthermore, land reforms are not only land distribution. Tenancy reforms such as stability and security of tenure, written and registered contracts and reasonable land rents and crop-sharing terms ought to be introduced and enforced. Market mechanism can never be of much help, as we have a large and growing population and labour would always be in surplus. Government policy and laws are a must for providing equitable reward for labour and the poor, who do not have any bargaining power. In India and Japan and elsewhere, limitations on land rent have been imposed and enforced. In most countries, a maximum share of 25 percent of gross produce is a general norm. In Pakistan, these terms are much harsher. An annual or biennial sample survey needs to be done to monitor these issues, before prescribing any policy or regulation in this respect.

Lately, some market based reforms have been proposed. It is argued that unimplemented land reforms have created ambiguous ownership conditions. It is argued that the land owner or purported land-owner, neither utilises the land himself and nor does he give it out on rent, fearing that the land may be expropriated, de-facto by the tenants or de-jure by the government. A clear-cut policy in this respect may encourage the land-owners to rent their unutilised or under-utilised land. However, one has to be very careful about these market based reforms. Often, it has resulted in the ejectment of small tenants, and emergence of commercial agriculture, furthering more landlessness and inequity and instability. A perverse market based initiative was recently launched by Hosni Mubarak of Egypt, who almost reversed the Land Reforms of Jamal Abdal Nasir’s era which resulted in eviction and ejectment of hundreds of thousands of small tenants.

Tenancy and Land lordship or Feudalism are archaic institutions signifying old order and subsistence agriculture and personalised power. Modern agriculture is based mostly on owner-farmer who self-cultivates and resides on the land, or there is corporate farming on a limited scale that employs well paid agricultural workers. Ultimately, the existing land relations have to go away, if this country has to progress. Both policy and market mechanism should be employed to discourage absentee landlord and effect land distribution among the landless.

Concluding, government should start with developing and distributing culturable waste land in small plots of 1-2 acres, preferably as a part of 50-100 acre contiguous or near contiguous land .Initially 10,000 such schemes involving 1 million acres of culturable wasteland could be distributed. Also a 500 yards plot scheme for permanent residence of the landless could be introduced without causing any fear among the landed class.