Land Reform – Linking Research
to Better Outcomes
Mwangi wa Gĩthĩnji
University of Massachusetts-Amherst
The Changing Global Landscape in Rural Development
International Conference
University of Pretoria – Post Graduate School of Agriculture and Rural
Development
Farm Inn, November 25, 2010
Why Land Reform?
Land Tenure Systems
 Land Redistribution


Political Question
◦ “Land to the Tiller”

Development Question
◦ Equity and Growth
Understanding African Economies, Structural
Transformation and the Need for Redistributive
Land Reform

Formal Sector
◦ Export Enclave
Economies – Colonial
inheritance
 Mining
 Commercial Agriculture
 Services and Public
Adminstration
 Higher Productivity
 Higher incomes
 Relatively Capital Intense

Reserve Labour Sectors
◦ Small / Subsistence
Agriculture
◦ Informal Sector
 Low Productivity
 Low income

Improvements in Health
/Nutrition resulting in
increased population growth
rates

Failure of Formal Sector to
absorb new entrants leads
to increased supply of
labour in small holder
agriculture and informal
sector. Depresses labour
incomes there and holds
down formal wage incomes.
Growth translates into
higher profits.
A Typical African Economy
Assume Country has labour force
of 10 Million
 70% in agriculture
 20% in informal
 10% in formal
 Assume growth with zero
productivity growth
 2% increase in Labour force
 No unemployment

Impact of 6% growth with no
Labour Productivity increases
Year
Labourforce
Formal
Informal
Rural
Reserve
Labour
As % of
Labourforce
1
2
3
4
5
6
7
8
9
10
10
10.2
10.4
10.6
10.8
11.0
11.3
11.5
11.7
12.0
1
1.06
1.1
1.2
1.3
1.3
1.4
1.5
1.6
1.7
2
2.0
2.0
2.1
2.1
2.1
2.2
2.2
2.2
2.3
7
7.1
7.2
7.3
7.5
7.6
7.7
7.8
7.9
8.0
90%
90%
89%
89%
88%
88%
87%
87%
86%
86%
Impact of 6% growth with 0.55*
Employment elasticity of Growth
•Average of South
Africa and Kenya
•Roughly 30%
marginal
productivity
change
Year
Labourforce
Formal
Informal
Rural
Reserve
Labour
As % of
Labourforce
1
2
3
4
5
6
7
8
9
10
10
10.2
10.4
10.6
10.8
11.0
11.3
11.5
11.7
12.0
1
1.033
1.067
1.102
1.139
1.176
1.215
1.255
1.297
1.339
2
2.0
2.1
2.1
2.1
2.2
2.2
2.3
2.3
2.3
7
7.2
7.3
7.4
7.6
7.7
7.8
8.0
8.1
8.3
90%
90%
90%
90%
89%
89%
89%
89%
89%
89%
Implications of Low Employment
Creation


Growth Alone in the African
context will not lead in the
short to medium term to
decreases in the reserve
pool of labour
Reserve labour will suppress
labour incomes increasing
income inequality (wage vs
profit share) – further
increases in inequality

Policy must attack reserve
labour at its source plus
improve employment
creation.
 Land Redistribution
and Agricultural
Transformation
 Industrialization

Virtuous Cycle of Demand
Driven Development
Land Reform –Historical Conditions
of Success
•Clarity of Aim – Creating New Small Holder Commercial Farmers
•Literacy
•Business Training
•Extension /Mentoring – Youth and Women
•Success of mentors because they are multidiscplinary
•Reasonable Cost to New Farmers / Requires Some Confistication
•Rural Infrastructure
•Labour Intensive
•Owned by rural population / wealth creation
•Price Incentives to shift Production
•Research sensitive to whom new farmers are –
•products they produce
•On farm trials
•Understanding Of Global Conditions
•Competitors /Trends and Markets
•WTO
•Institutional Innovation
Institutional Innovation- The KTDA
Story – Learning from our
successes
•KTDA began as single development organization designed to reap returns to scale for
small scale farmer and specifically designed to develop tea industry.
•Made Kenya top exporter of black tea based on small holder production
•Political Commitment of government –Why?
•
Rural Middle class
•
Relatively equal regional distribution compared to other crops
•Flexibility of Institution
•
From Single Tea Development Authority to Farmer Owned Private Company
that manages all Smallholder tea factories
•Tea Research Institute and Tea Board (regulatory authority)
•Returns to Scale and Lower Costs
•fall in unit costs of production kshs. 4000 in 1965 to 226 in 1988 in 1975 prices
•Low fertilizer prices 15% below
• Learning across factories/ Continous Learning /Extension /Expanding Tea Production
•Central purchase allows for easier credit provision
Connecting Research and Better
Outcomes
•Defining the Debate – Structural Transformation not just rural development
•Defining a National and Regional Research Program –A New Approach to
Funding
Needs
Assessment
Research
Constituencies
Government
Rural Households
Agricultural Industry
Collaborative
National Research
Program
Field Research
Issues with Second Stream of
Funding
•Applied Research that is Policy Driven receives same credit as
journal driven research
•Restructure Faculty time to value Applied Research
New Questions
•Institutional Innovation
•Human Capital for Trade/ Flexibility
•Appropriate Technological Innovation
•World Trade Organization – Trade and Law
•Reassessing Microfinance