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The paper reveals that ever since the 1950s, after the first land reform of distributing landownership (or possession under public ownership) to small farmers, the irrational and polyopolisticland use by able-bodied part-time and absent small farmers earning higher off-farm income butunwilling to lease the under-producing land beyond their family consumption need to full-timefarmers, has been a global obstacle with both public and private land ownership, traditional andmodern agriculture, fragmented small and consolidatorily enlarged land, low and high incomeeconomies, food under-self-sufficiency and overproduction, and developing and developedcountries, even if land property rights have been well defined and sale/lease allowed. [Polyopoly isinvented by the author to denote the control of a resource by many sellers in contrast to monopoly(by one seller) and oligopoly (by a few sellers)]. This is mainly due to low rents, avoidance ofmisuse by tenants, jealousy in preventing neighbors from prospering, and hobby use. In thosecountries where this land reform has not been completed, there are also large landowners whoexercise it. The full-time farmers, without right to use such under-utilized or idled land, have tosubsist on their tiny farms, cut forests for more land, or quit agriculture for cities or developedcountries. The land of the emigrants is ineffectively used by their old parents, wives or children, orjust idled, without being leased to the remaining able-bodied full-time farmers. Numerousdeveloping nations have to import food with scarce foreign exchanges or ask for donations to copewith food shortage (such as in Africa), while many industrialized nations have provided hugesubsidies to maintain farmers on agriculture which may cause overproduction. The WTO Director-General Lamy has persuaded the developed countries to lose agriculture (which is the fundamentalstrategic lifeline and no country can drop) in exchange for much more industry/services marketaccess of the developing countries (which they cannot afford). Hence the Doha negotiations havebeen blocked. In the recent years, many relatively rich countries, including those with much underutilizedland at home, have bought or rented in land from poor (including African) countries,affecting the latter’s sovereignty or crowding their small farmers out of agriculture, causing neocolonialism.This obstacle has thus harmed agriculture, rural development, income distribution,government expenditure, competition, trade, environment, etc. It has become the most fundamentalmicroeconomic root of the three persisting global macroeconomic problems: food under-selfsufficiency,overproduction and agricultural protectionism. It has turned to be the mostfundamental root (though not the unique one) when the rural facilities are backward (such as innumerous developing countries currently), and the unique root when the rural facilities areadvanced (such as in many developed countries presently). The global food shortage crises since2005 have exposed and confirmed this obstacle.Comparative evidences in Northern and Southern Africa; Asia; Latin America; Central-Eastern Europe and Central Asia; Western Europe; North America and Oceania are presented.Accordingly, the paper challenges the myths of Schultz: (1) small farmers are rational; (2)low income countries saddled with traditional agriculture do not have the problem of many farmersleaving agriculture for nonfarm jobs; (3) part-time farming can be efficient; (4) economies of scaledo not exist in agriculture; and (5) investment in human capital counts much more than institutionalchanges and is the key to agricultural growth. It indicates that Hirschman has ignored that thisobstacle has hampered the linkage effects.The paper has dug out the internationally neglected laws for efficient and competitive landuse in the USA and Western Europe. In the USA, covering all the states, (1) there is a time effect on1-56turning occupied private property into ownership - adverse possession, which means that if a privateperson has occupied a private property (e.g., farmland) without agreement of the owner, while theowner has not sued the occupier during a limited period, then this property will belong to theoccupier. (2) There is a ‘squatters' rights’ law for turning occupied public land into privateownership, which denotes that if a person (squatter) has occupied a public land for over 25 yearsand paid taxes, the Secretary of the Interior may issue a patent for 160 acres of such land upon thepayment of not less than 1.25 dollars per acre. These laws are still exercised. Their mainsignificance is to encourage the efficient use of the idled private and public land resources. Theirmain imperfections are that (1) If the private landowner has found that his idled land is being usedby another farmer without his agreement within the limitations period, he may sue to get the landback, while still idling it. (2) Even if an adverse possessor or squatter has successfully gainedownership of a private or public land, he may idle or under-utilize it later on, without leasing it tothose farmers who wish to produce sufficiently on it. (3) People in general may not wish to loseprivate property including farmland even if they do not use it. In Western Europe, (1) there has beena law to give right to other farmers to produce sufficiently on any under-producing land (i.e., lessthan 40% of the normal output): in the EU Council Regulations 1963/262, 1967/531 and 1963/261;Italy 4 August 1978 (still valid but not applied); and Switzerland from the Middle Ages that anyfarmer can bring his cattle to graze in the private pastures of the Alps (still valid but not applied). Itsmain shortcoming is that it obliges landowners to lease out all their inefficiently used land, so thatpart-time and absent landowners would not be able to produce for family consumption and keepfarming skills; and once lost off-farm jobs, would either have no access to their land rented out, orhave to withdraw it within the contractual period, affecting the lessees. (2) There has also been alaw to oblige landowners to either use their land or lease it out for sufficient production: inGermany 31 March 1915 (until 1961); UK 6 August 1947; Norway 18 March 1955, 25 June 1965,and 31 May 1974 (still applied due to continuing under-self-sufficiency with the cold weather), andDenmark 17 July 1989. Its main shortcomings are that it may cause overproduction, plus the abovementionedone. Both laws have been suspended at the overproduction stage.Improving these laws, and consistent with the ‘Charter of Fundamental Rights of the EU’Article 17 Right to Property, the paper raises Proposals: (I) give full-time farmers access to theunder-producing land beyond family consumption need of part-time and absent farmers, and (II)convert the environmentally sensitive farmland back to the nature once a country has encounteredconstant overproduction. They would, without affecting private land ownership, simultaneouslyreach eight aims: (1) minimize/abolish/prevent protectionism, while (2) avoiding overproductionand (3) irrational production abandonment; (4) boost competitive full-time large farmers, whereas(5) not crowding part-time and absent small farmers out of agriculture; (6) reach/maintain basicself-sufficiency in cereals, meanwhile (7) promoting multi-functionality of other agricultural andrural sectors and (8) improving the environment. They would be useful also for public landownership. Hence launching a second land reform – land use reform.By adopting them, the developed countries will not lose agriculture after abolishingprotectionism, and thus have no need to ask the developing countries to open unaffordably moreindustry/services market, hence the unique way for a breakthrough in the WTO Doha negotiations.They could also avoid both land waste and neo-colonialism.(1) Those countries which havenot realized rational and competitive farmland use should do so first at home, rather than unfairlyusing the land of other countries. (2) Farmland sale into foreign ownership should not be allowed,so as to protect the national sovereignty. (3) Farmland lease should be allowed as this will not affectthe national sovereignty. (4) The host country should first cater the need of the domestic farmers forfarmland, at least for family consumption, rather than letting them landless or hold insufficient land,while leasing farmland to foreigners. If their land beyond family consumption need is underproducing,then the other domestic and foreign farmers could be allowed to compete for use.They have received over 200 international responses as appreciation or attention, see theauthor’s fifth FAO publication (http://www.icarrd.org/en/proposals/Zhou.pdf).
Paper presented at the UNU-WIDER (United Nations University – World Institute for DevelopmentEconomics Research) Project Conference on African Development: Myths and RealitiesAccra, Ghana, 10-11 December 2009
