April 15, 2008
Land Reform
EDIT (05/02/2008): This post has been republished by the following websites:
In Defence of Liberty - A website with a collection of libertarian writings. You can find the post here.
Repormang Agraryo - A blog devoted to agricultural concerns. You can go directly to the post here.
-end of edit-
The following was written for Minimal Government Thinkers, Inc. It is a think-tank that advocate libertarian ideals. These include free markets, minimal government interference, personal freedom, and personal responsibility.
The Tragedy of Land Reform
With the rice crisis and the impending expiration of the Comprehensive Agrarian Reform Program, the issue of land reform has once more been thrust into the forefront of news reports. People are now analyzing CARP, and the things that could have been done by the government to improve the lot of farmers who were supposed to be the beneficiaries of the program. Comments have been made about the old age of farmers, and the lack of interest of the younger generation to take up the profession of their fathers. What could save us from all these problems?
The answer is simple: Abandon land reform. That statement is easy for the writer, who has no political career, but it would be disaster for any politician who hopes to remain in power or even be promoted. Every Philippine President since Quezon has used land reform to buy support from the masses, and a lot of rebellions since the Spanish era can be traced to complaints by disenfranchised farmers. People have taken it for granted that land reform, with massive government support, is the solution to the problem of landless farmers and recurrent rice crises.
Social Justice
But what is land reform? Is it not fair to distribute to the farmers the same land that they have tilled for generations? Why should we care about the exploitative landowners? And is it not the duty of the government to help the poor farmers?
The idea behind land reform is that of correcting the great social injustice heaped upon our farmers. For hundreds of years, they have been little more than serfs, tied to the land that they till, generation after generation. Giving them the land will be fair compensation for their sufferings, stretching all the way back to the Spanish era, when they have been taken advantage of by friars, politicians, and other members of the elite. I am not about to dispute nor belittle the suffering of our farmers. Coming from a farming family with a very small plot of land in Tarlac (whose title can be traced to the American period, before any meaningful land reform), I understand the powerful hunger for land that drives farmers to the arms of revolutionaries and politicians. They are given a pittance for their labors, cheated on the prices of their produce, and compelled to burden their descendants with debts just to keep their farms going when everything needed (grain, feed, fertilizer) are given to them by landlords at prices they cannot afford.
But will it be just to give them the land? That after all is the rightful property of the landowners, however monstrous they may be. Is it just to provide a blanket law to affect all landowners whether they were good or bad to their tenants? Cloaking land reform under the banner of social justice violates our democratic process of due process. Current landowners will be punished for crimes that might or might not have been committed by their ancestors. They may or may not be doing the same things to their tenants, but can’t we just punish the erring landowners for practices that violate our labor laws? We are a civilized nation that will not punish someone for being the son of a child rapist simply because he was born into the wrong family, but we meekly accept the verdict imposed on all those who own land without question. The same principle is involved, but somehow the proponents of land reform were able to isolate the agricultural situation from the greater scheme of things.
I’ve heard another argument. The Spanish friars and conquistadors stole the land from our ancestors and compelled them to slave away for the benefit of the landowning class. Since the property is stolen in the first place, then we can get it back from them to serve the cause of justice. This argument is really irritating, because the current legal framework was not in existence then, and therefore all property transfers from parent to child since that time are legal and cannot be declared illegal ex post facto. But we don’t have to nitpick. All land before the time of the Spaniards was more or less communal. So how can anyone own the land, except for the people themselves? The problem is further complicated by the fact that the Republic of the Philippines traces its descent not from the barangay polities that the Spaniards found, but from the Spanish colonial structure. In short, there is no legal nor moral means by which to redress any perceived injustice that happened 500 years ago. It would be as absurd as ejecting every single white American from the United States and giving their land back to the Indians.
The Economies of Scale
If we cannot rationalize land reform through populist and socialist polemics, perhaps land reform could be justified in terms of productivity. After all, small private plots in the Soviet Union managed to supply most of the food needs of that country when their collective agricultural system was lurching from one disastrous harvest to another. It also has the added benefit of equitably distributing the revenues once earned by large estates to the farmers who would get the full profit of their labors.
Whoever thought about this seriously misunderstood the landlord-tenant relationship beyond that of exploiter-exploited of Marxist dialectics. The landlord, however maligned, provides capital, the necessary infrastructure and technology transfer to assure the continued productivity of his land. Most importantly, he provided the interface between the dealer and the farmer, providing for both of them the best possible prices for their produce.
For some reason, big estates are anathema to a lot of people, who see in them the source of wealth and power for a decadent elite. But looking beyond the political blinds of socialists, one sees a player in the rice market who is at the mercy of market forces. What does this mean? Cutthroat competition compels these farms to become more and more productive even as they reduce the costs of production to enable them to reduce the market prices of their products. The result would be quality rice in abundance at ridiculously cheap prices. Consider the huge farmlands in the United States that have been able to provide not just for the US, but to much of the world. How do they do this? Scientific methods and the application of relevant technology.
But it’s not enough to just have farmers adopt the latest technological wonders. There are questions of capital infusion, technical know-how, and the often overlooked aspect of relevance. Technology is expensive, and it’s not just about tractors. It includes scientific methods of care and protection for crops, and the knowledge to apply them properly. But with the costs of technology, the farmer must also address the practical aspect of benefits versus costs. It would be absurd to expect a farmer to invest hundreds of thousands of pesos for improving farmland that cannot pay for the cost of technology by its own produce. It’s better to invest the money in a large farm that can absorb the costs better and produce enough to justify the investment.
Sure, the farmers of adjacent plots can form cooperatives to finance and maintain their technological innovations. But how feasible is this? This means that the technology and materials would become communal property, and decades of collectivized agriculture has shown that incentives of caring for materials vanish when no one owns these materials. Even if all the farmers in a hypothetical village would band together and act responsibly, how long will this last? All it takes is one farmer willing to sell out, and all their efforts would be for naught.
The Government and Land Reform
Even before the Roman Empire, land reform has been used by politicians to manipulate people into submission. History since before the Roman Empire has been replete with examples of wily leaders who were able to grab or hold on to power through the use of land distribution to buy support from the masses. Even if we are to consider most of these people as sincere in their aspirations to help the landless, has it done good to the farmers that they are supposed to help?
Whenever the government undertakes an activity, this activity must be controlled and monitored by a bureaucracy. One cannot just say chuck the bureaucracy away, because this provides the means to implement the policies of the government with the necessary check and balance to assure the public that taxpayers’ money is not being wasted. Inevitably, these bureaucrats would see more merit in maintaining the forms and guidelines around them than in keeping the actual goals of the project in mind. After all, their performance and chances for promotion are based on these pieces of paper. It would be too much to expect people to act contrary to the incentives that pander to their self-interest.
Thus the farmer is dehumanized. He becomes a number or a name that simply fills out the proper space in the correct form. It becomes more tragic in a country such as the Philippines, where land reform has been used to throw a bone to the farmers hungry for land, and they are held hostage by what suits the government in power. Even in countries where land reform has been said to succeed, such as in Taiwan, it was done with much suffering for both landlords and peasant farmers. They are denied the freedom to decide their fate. How much land should they have? How should they go about raising their crops?
And it’s not just the farmers. Productivity for such small-sized farms can only maintained through heavy government subsidies. This is unfair for taxpayers, who are compelled to buy at full price rice and sugar that they have already paid for through their taxes. Unfair because they bought the lands to distribute to farmers, and not all of these lands would be farmed. As farmers age and their progeny decide to seek their fortunes in other fields, we are left with increasingly small farmlands with dwindling productions that cannot sustain an expanding population.
What is the solution? I am not calling for the government to compel farmers to remain farmers. That defeats the purpose of a democracy where everyone should be free to decide their own fate. Rather, the government should stop meddling in agriculture and let the market decide. A lucrative agricultural industry would lure many to try their hand in it. They should be allowed to do so, without limits on the growth of their business. Let those who wish to stay in agriculture prosper, and this prosperity can only happen only if they are given enough land to enjoy the benefits of technological advances in profitable ways. Abolish land reform.