Land Redistribution : Towards a common vision

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Land Redistribution: Towards a common vision

Why do we care about land redistribution today?Part I: Messages from WDR 2008, “Agriculture for Development”Part II: Implications of WDR 2008 strategy for access to land and land redistribution

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Part I. World Development Report 2008

“75% of the world’s poor are rural and

most are involved in farming.

Agriculture remains a

fundamental instrument for

sustainable development and poverty reduction”

Agriculture for Development

Preliminary version in progress

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WDR 2008-Agriculture for Development

Storyline1. Agriculture remains fundamental for

development, and differentially by context,

2. But the powers of agriculture are often under-used.

3. There are new opportunities to use agriculture that open multiple pathways out of poverty,

4. With new (and lingering) challenges to be addressed,

5. Requiring differentiated agendas and improved governance.

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Premise one: There are three worlds for the roles of agriculture in growth and poverty

AZE

BDI

BEN

BFA

BGD

BGR

BLR

BOLBRA

CHL

CHN

CIV

CMR

COL

DOM

ECU

EGY

ETH

GHA

GTM

HND

HUN

IDNIND

IRN

KEN

KHM

LAO

LKAMAR

MDG

MEX

MLIMOZ

MWI

NERNGA

NPL

PAK

PER

PHL

POL

PRY

ROM

RUS

RWA

SEN

SLV

THA

TJK

TUN

TUR

TZA

UGA

UKRVEN

VNM

YEM

ZAF

ZMB

AGO

ARG

CZE

DZA

GIN

MYS

PNG

SDN

SVK

SYR

TCD

TGO

ZAR

ZWE

-0.2

0.0

0.2

0.4

0.6

0.8

0.0 0.2 0.4 0.6 0.8 1.0

Rural poor/total poor, 2002

Agriculture's contribution to growth, 1990-2005

Poverty data from Ravallion et al. 2007

Other predicted poverty data

Dynamic analysis

Urbanized countries

Agriculture-based countries

Transforming countries

70-75

90-96

Indonesia (1970-96)

Brazil (1970-96)

India (1965-94)

China (1981-2001)

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Premise two: There is deep heterogeneity across areas, households, and intra-

householdFavored vs marginal areas

Agro-ecology, market access, growth-povertyHousehold heterogeneity

Smallholders: Market-oriented vs subsistenceRural non-farm enterprises: low vs. high productivityLabor markets: high vs low skillsMigration: out of vs. into poverty

Intra-household differencesGender roles, access to assets

Differentiated impacts of a policy; and differentiated policies in using agriculture for development

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Three functions for agriculture in development

First function: A source of aggregate growth for the agriculture-based countries

Why/how can agriculture (and agroindustry) be a source of aggregate growth for the agriculture-based countries (Sub-Saharan Africa)?

A large sector: 29% of GDP, 65% of labor force

With limited tradability (due to commodity specificity, transactions costs), must invest in agriculture as domestic production determines the price of food and wage costs

Where tradable, current comparative advantage in primary sectors based on resource endowments, weak investment climate for industry

Multiplier effects of agricultural growth on other sectors

Note: With limited tradability, domestic production contributes importantly to food security.

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Urban Poverty

050

100150200250300350400450

SA SSA EAP LAC ECA MENA

million people

19932003

Rural Poverty

050

100150200250300350400450

SA SSA EAP LAC ECA MENA

million people

19932002

Second function: A source of livelihoods for many,

but (1) a huge reservoir of poverty

3 billion rural people, 2.5 billion agricultural population, 1.3 billion agricultural labor force, 800 million smallholder population

2.1 billion rural poor ($2/day), 900 million extreme rural poor ($1/day)

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(2) With rising rural-urban income disparities in the transforming countries which are a source of political tensions

1

1.5

2

2.5

3

3.5

Guatemala

1989-2002

Thailand

1990-2002

Cambodia

1997-2004

China

1985-2001

Vietnam

1992-2001

Indonesia

1993-2002

Bangladesh

1991-2000

India

1989-1999

Pakistan

1999-2001

Ratio of urban to rural median income

Initial year End year

The ratio of median urban to rural income has been rising in transforming countries

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But agricultural growth has unique powers for poverty reduction

GDP growth from agriculture benefits the poorest half 4 times more than GDP growth from non-agriculture

GDP growth from agriculture benefits the poorest half 4 times more than GDP growth from non-agriculture

-2

-1

0

1

2

3

4

5

6

7

Lowest 2 3 4 5 6 7 8 9 HighestExpenditure decilesExpenditure gains induced by 1%

GDP growth (%)

Agriculture

Nonagriculture

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Message 1Accelerating aggregate growth in the agriculture-

based countries (Sub-Saharan Africa) requires achieving a productivity revolution in smallholder farming

Message 2

Addressing the disparity problem in transforming countries requires a comprehensive approach to shift to high value agriculture, extend the green revolution to lagging regions, decentralize economic activity to rural

areas, and help people move out of agriculture

Message 1Accelerating aggregate growth in the agriculture-

based countries (Sub-Saharan Africa) requires achieving a productivity revolution in smallholder farming

Message 2

Addressing the disparity problem in transforming countries requires a comprehensive approach to shift to high value agriculture, extend the green revolution to lagging regions, decentralize economic activity to rural

areas, and help people move out of agriculture

3 worlds, 3 functions of agriculture for development

Urbanized countries: including smallholders in modern food markets and creating good rural jobs

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Third function: An important user and often mis-user of natural resources

62.9%

15.4%11.4%

6.6%3.8%

0%

20%

40%

60%

80%

Energy Agriculture(excluding land

use change)

Deforestation Industrialprocesses

Waste

Percent of total GHG emissions

Developing countries

Developed countries

Agriculture uses 85% of water withdrawals and causes most of deforestation in developing countries

Contributes to global warming: 21% (up to 35%) of Green House Gas emissions

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The high cost of weather dependency: The importance of climate proofing

-10-505

101520

1979 1982 1985 1988 1991 1994 1997 2000

GDP growth (%)-2.5-1.5-0.50.51.52.53.5

Rainfall variability (%)

GDP growth (annual %) Rainfall

Zimbabwe’s GDP closely tracks rainfall under normal conditions

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Message 3Development an environment have become

inextricably coupledReducing agriculture’s large environmental

footprint is an inevitable requirement for success, climate proofing of the farming

systems of the poor is urgent, and providing environmental services can be one of the

development contributions of agriculture

Message 3Development an environment have become

inextricably coupledReducing agriculture’s large environmental

footprint is an inevitable requirement for success, climate proofing of the farming

systems of the poor is urgent, and providing environmental services can be one of the

development contributions of agricultureKey for this are removing perverse input subsidies,

better definition of property rights, wider use of conservation technologies, devolution to communities of control over common property resources, research and

investments for farming system resilience, and developing markets for environmental services

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1. Agriculture remains fundamental for development, and differentially by context

2. But the powers of agriculture are often under-used: why?

3. There are new opportunities to use agriculture that open multiple pathways out of poverty

4. With new (and lingering) challenges to be addressed

5. Differentiated agendas and improved governance

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Real international commodity prices have been suppressed by current global trade

policies (% of undistorted price)

Trade share losses to developing countries due to current global trade policies

(% point loss to developing country trade shares)

Under-use as global trade distortions remain pervasive

-3

-4

-4

-5

-7

-12

-15

-21

Sugar

Rice

Processed meat

Wheat

Other grains

Dairy products

Oilseed

Cotton

-9

-2

-18

-21

-5

-7

-34

-27

Sugar

Rice

Processed meat

Wheat

Course grains

Dairy products

Oilseed

Cotton

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Under-use as taxation of agriculture exports remains high in the agriculture-based and

transforming countries

-26

-19-16

5

-49

-25

-50

-40

-30

-20

-10

0

10

20

30

Agriculture-based Transforming Urbanized

Nominal rate of assistance (percent)1980-84 2000-04

ExportablesExportables

Net taxation in the agriculture-based countries: 26% (1980-84) --> 10% (2000-04)

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Under-use as public spending on agriculture is low in the agriculture-based countries

relative to the share of agriculture in GDP

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24

14

29

16

10

0

5

10

15

20

25

30

35


percent

1980 2004

4

10

17

4

1112

0

2

4

6

8

10

12

14

16

18


percent

1980 2004

Public spending on Ag/Ag GDP

Ag GDP/GDP

Transforming countries in 1980 had a much higher share of public spending on agriculture as a share of Ag GDP (10%) than the agriculture-based countries do today

(4%) even though they had similar shares of agriculture in GDP

Transforming countries in 1980 had a much higher share of public spending on agriculture as a share of Ag GDP (10%) than the agriculture-based countries do today

(4%) even though they had similar shares of agriculture in GDP

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Mis-use is also pervasive: Subsidies are now four times larger than public investment in Indian agriculture

0

1

2

3

4

5

6

7

1977 1982 1987 1992 1997 2002

Percentage of AgGDP

Subsidies

Public Investment

19

-

10

20

30

40

50

60

70

80

90

100

1990 1992 1994 1996 1998 2000 2002 2004

% poverty in rural areas

0

2

4

6

8

10

12

14

% ODA to agriculture

Under-use as donor support to agriculture has declined while rural poverty remained

dominant

% rural poverty% rural poverty

% ODA to Ag% ODA to Ag

With turning pointin ODA to agriculture after 2004

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2. But the powers of agriculture are often under-used




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New opportunities to use agriculture for development last

25 yearsImproved macro-economic conditions favorable to agricultural growth in SS-AfricaDynamic demand for a “new agriculture” of high value products and non-traditional exports; expanding regional markets for staple foodsInstitutional innovations: land administration, financial services, governance, producer organizationsTechnological innovations: yields and resistance, IT, conservation agriculture, GMOs, breeds and vaccinesExpanding sources of income in the rural non-farm economy

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Opportunities: New actors and new roles

A redefined role for the state and a new commitment to agriculture (NEPAD 10%)

Regulation, decentralization, and partnershipsIncreasing role of the private and corporate sectors

Agribusiness and the supermarket revolutionThickening of civil society

Rapid increase in producer organizations, role NGOsA renewed donor interest in agriculture and new philanthropy

New opportunities for public-private-civil society partnerships in using agriculture for development, and a new political economy

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Conclude: Opportunities open multiple pathways out of poverty for rural

households

Pathways out of poverty: not by agriculture alone

Smallholder farming

Agricultural wage employment; wage and self-employment in the rural non-farm economy

Migration and remittances

Recognize important gender dimensions to each pathway at the household level

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Message 4Toward a comprehensive approach

The new opportunities for agriculture open multiple pathways out of poverty for

rural populations as commercial smallholders, workers in agriculture and

the rural non-farm economy, and migrants. It is also providing opportunities to improve the livelihoods and food security of large

numbers of subsistence farmers and unskilled farm workers

Message 4Toward a comprehensive approach

The new opportunities for agriculture open multiple pathways out of poverty for

rural populations as commercial smallholders, workers in agriculture and

the rural non-farm economy, and migrants. It is also providing opportunities to improve the livelihoods and food security of large

numbers of subsistence farmers and unskilled farm workers

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Improving governance to implement agriculture-for-development agendas

Weakness of governance as a hurdleGovernance weakest in agriculture-based countries

Governance weak in agriculture vs other sectors

Global governance needed for successful national agendas, but deficient

Improving governance at national, local, and global levelsNational and local: Inter-sectoral coordination, Min of Ag., decentralization

Global: Coordinate sectoral agencies for complex and inter-related issues (trade, poverty and security, climate change, health, IPGs)

Coordinate with new corporate and philanthropic actors

Message 5: Using agriculture for development requires fixing the current serious deficiencies in local, national,

and global governance for agriculture

Message 5: Using agriculture for development requires fixing the current serious deficiencies in local, national,

and global governance for agriculture

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5. Requiring differentiated agendas and improved governance.

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From opportunities to objectives: a policy diamond

Socio political context Governance

Macro fundamentalsAgricultural policy

Socio political context Governance

Macro fundamentalsAgricultural policy

3Improve livelihoods in

subsistence agriculture and low skill rural

occupations

4Increase employment in

agriculture and the RNFE; enhance skills

1Access to markets

Establish efficient value chain

2Enhance smallholder

competitivenessFacilitate market entry

Pathways out of poverty:

farming, labor, migration

Social transition Social transition

Demand for Ag products

Demand for Ag products

With indicators for diagnostic, monitoring, and evaluation

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Part II: Implications of WDR 2008 strategy for access to land and land

redistribution1. First function of agriculture for

development: Growth in agriculture-based countries

Access to land for market entry: Shift from subsistence farming to commercial smallholder

Land reform• Land redistribution• Subsidies to land purchase: LMALR

Land markets• Land sales market• Land rental market

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Enhance the competitiveness of commercial smallholders

Security of property rights: certification of rights (Mexico, Ethiopia), customary tenure, conflict resolution, modern land administrationDeterminants of total factor productivityLevel playing fields for smallholder competitivenessEconomies of scale and market access: producer organizations

--> The challenge of “complete” land reforms

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2. Second function of agriculture for development: Poverty reduction value of access to land

Commercial smallholder pathwaySubsistence farming as platform for diversified household income strategy (RNFE, migration)Land markets for exit/entry flexibility:• Shift to work in the rural nonfarm economy• Seasonal and permanent migration• Role of social safety nets as complements to

markets (distress sales)

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3. Third function of agriculture for development:

Environmental sustainability and provision of environmental services

Beyond poverty and land mining (role of farm size, water control): long term view (discount rate)Property rights and markets for environmental services: common property resources, devolution, capacity to manage, local and global markets for servicesResilience of farming systems: climate proofing and adjustment to energy prices

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Land Redistribution : Towards a common vision