Conditions for Rural Development

9.6.3 Conditions for Rural Development: We can draw three conclusions regarding the necessary conditions for the realisation of a people-oriented agricultural and rural development strategy. 1. Land Reform Conclusion 1: Farm structures and land tenure patterns must be adapted to th...

9.6.3 Conditions for Rural Development: We can draw three conclusions regarding the necessary conditions for the realisation of a people-oriented agricultural and rural development strategy. 1. Land Reform Conclusion 1: Farm structures and land tenure patterns must be adapted to the dual objectives of increasing food production and promoting a wider distribution of the benefits of agrarian progress, allowing further progress against poverty. Agricultural and rural development that benefits the poor can succeed only through a joint effort by the government and all farmers, not just the large farmers. A first step in any such effort, especially in Latin America and Asia, is the provision of secured tenure rights to the individual farmer. The small farm family’s attachment to their land is profound. It is closely bound up with their innermost sense of self-esteem and freedom from coercion. When they are driven off their land or they are gradually impoverished through accumulated debts, not only is their material well-being damaged, but so is their sense of self-worth. It is for these humane reasons, as well as for reasons of higher agricultural output and the simultaneous achievement of both greater efficiency and more equity, that land reform is often proposed as a necessary first condition for agricultural development in many developing countries. In most countries, the highly unequal structure of land ownership is a key determinant of the existing highly inequitable distribution of rural income and wealth. It is also the basis for the character of agricultural development. When land is very unevenly dis-tributed, in quality as well as in quantity, rural peasants can have little hope for economic advancement through agriculture. Land reform usually entails a redistribution of the rights of ownership or use of land away from large landowners in favour of cultivators with very limited or no landholdings. It can take many forms: the transfer of ownership to tenants who already work the land to create family farms (Japan, South Korea, Taiwan); transfer of land from large estates to small farms or rural cooperatives (Mexico); or the appropriation of large estates for new settlement (Kenya). All go under the heading of “land reform” and are designed to fulfil one central function: the transfer of land ownership or control directly or indirectly to the people who actually work the land. Tenancy reform, as in West Bengal, can also yield favourable efficiency and distributional benefits. There is widespread agreement among economists and other development specialists on the need for land reform. Inequality is increasing in Africa. The Economic Commission for Latin America (ECLA) has repeatedly identified land reform as a necessary precondition for poverty-reducing agricultural and rural progress. A Food and Agriculture Organisation (FAO) report concluded that in many developing regions, land reform remains a prerequisite for development. The report argued that such reform was more urgent today than ever before, primarily because (1) income inequalities and unemployment in rural areas have worsened, (2) rapid population growth threatens to exacerbate existing inequalities, and (3) recent and potential technological breakthroughs in agriculture (the Green Revolution) can be exploited primarily by large and powerful rural land-holders and hence can result in an increase in their power, wealth, and capacity to resist future reform.66 Finally, as noted earlier, from a strict view of economic efficiency and growth, there is ample empirical evidence that land redistribution not only increases rural employment and raises rural incomes but also leads to greater agricultural production and more efficient resource utilisation. Significant though often limited land reforms have already been implemented in many countries, but some countries have still seen little reform. Unfortunately, very small or landless farmers cannot directly purchase land from the big landowners because of market failures. Credit markets do not function well enough to provide a potentially efficient family farmer with a loan; even if they did, the price of latifundio and other estate and plantation land is too high because land ownership confers many benefits beyond the income from farming activities, such as disproportionate political influence. If programmes of land reform can be legislated and effectively implemented by the government, the basis for improved output levels and higher standards of living for rural peasants will be established. Unfortunately, many land reform efforts have failed because governments (especially those in Latin America) bowed to political pressures from powerful landowning groups and failed to implement the intended reforms. But even an egalitarian land reform programme alone is no guarantee of successful agricultural and rural development. This leads to our second conclusion. Land reform: A deliberate attempt to reorganise and transform agrarian systems with the intention of fostering a more equal distribution of agricultural incomes and facilitating rural development. 2. Supportive Policies Conclusion 2: The full benefits of small-scale agricultural development cannot be realised unless government support systems are created that provide the necessary incentives, eco-nomic opportunities, and access to needed credit and inputs to enable small cultivators to expand their output and raise their productivity. Though land reform is essential in many parts of Asia and Latin America, it is likely to be ineffective and perhaps even counterproductive unless there are corresponding changes in rural institutions that control production (e.g., banks, moneylenders, seed and fertiliser distributors), in supporting government aid services (e.g., technical and educational extension services, public credit agencies, storage and marketing facilities, rural transport and feeder roads), and in government pricing policies with regard to both inputs (e.g., removing factor price distortions) and outputs (ensuring market-value prices for farmers). Even where land reform is less necessary but where productivity and incomes are low (as in parts of Africa and Southeast Asia), this broad network of external support services, along with appropriate governmental pricing policies related to both farm inputs and outputs, is an essential condition for sustained agricultural progress. 3. Integrated Development Objectives Conclusion 3: Rural development, though dependent primarily on small-farmer agricultural progress, implies much more. It encompasses: (a) efforts to raise both farm and non-farm rural real incomes through job creation, rural industrialisation, and other nonfarm opportunities and the increased provision of education, health and nutrition, housing, and a variety of related social and welfare services; (b) a decreasing inequality in the distribution of rural incomes and a lessening of urban–rural imbalances in incomes and economic opportunities; (c) successful attention to the need for environmental sustainability—limiting the extension of farmland into remaining forests and other fragile areas, promoting conservation, and preventing the harmful misuse of agrochemicals and other inputs; and (d) the capacity of the rural sector to sustain and accelerate the pace of these improvements over time. The achievement of these four objectives is vital to national development. More than half of the population of the developing world is still located in rural areas. By restoring a proper balance between urban and rural economic opportunities and by creating the conditions for broad popular participation in national development efforts and rewards, developing nations will have taken a giant step toward the realisation of the true meaning of development.