Promoting Agricultural Entrepreneurs against Food Shortage, Overproduction and Protectionism in Northern Africa and Other Regions of the World - A Critique to Nobel Laureate Schultz and Nominee Hirschman
Creators: name: Zhou, Jian-Ming
name: Zhou, Jian-Ming
Publisher: name: Unknown
Year: 2008
Subjects: Agribusiness
International Relations/Trade

description: The paper reveals that ever since the 1950s, after the first land reform of distributing land ownership (or possession under public ownership) to small farmers, the irrational and polyopolistic land use by able-bodied part-time and absent small farmers earning higher off-farm income but unwilling to lease the under-producing land beyond their family consumption need to full-time farmers, has been a global obstacle with both public and private land ownership, traditional and modern agriculture, fragmented small and consolidatorily enlarged land, low and high income economies, food under-self-sufficiency and overproduction, and developing and developed countries, even if land property rights have been well defined and sale/lease allowed. [Polyopoly is invented 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 of misuse by tenants, jealousy in preventing neighbors from prospering, and hobby use. In those countries where this land reform has not been completed, there are also large landowners who exercise it. The full-time farmers, without right to use such under-utilized or idled land, have to subsist on their tiny farms, cut forests for more land, or quit agriculture for cities or developed countries. The land of the emigrants is ineffectively used by their old parents, wives or children, or just idled, without being leased to the remaining able-bodied full-time farmers. Numerous developing nations have to import food with scarce foreign exchanges or ask for donations to cope with food shortage (such as in Northern Africa), while many industrialized nations have provided huge subsidies to maintain farmers on agriculture which may cause overproduction. This obstacle has thus harmed agriculture, rural development, income distribution, government expenditure, competition, trade, environment, etc. It has become the most fundamental microeconomic root of the three persisting global macroeconomic problems: food under-self-sufficiency, overproduction and agricultural protectionism. It has turned to be the most fundamental root (though not the unique one) when the rural facilities are backward (such as in numerous developing countries currently), and the unique root when the rural facilities are advanced (such as in many developed countries presently). The global food shortage crises since 2005 have exposed and confirmed this obstacle. Evidences in Northern and Southern Africa; Asia; Latin America; Central-Eastern Europe and Central Asia; Western Europe; North America and Oceania are presented. Many governments and international organizations have exercised measures to promote agricultural and rural development (early retirement, young farmers, training, infrastructure, irrigation, land consolidation, fine seeds, better quality, higher yields, localized production, small and large machinery, organic farming, anti-pollution, credits, contract farming, information, market access, off-farm activities, etc.), but overlooked that the rational and competitive land use is the basis without which other measures would not function well (if at all). Accordingly, the paper challenges Schultz’s assertions: (1) small farmers are rational; (2) low income countries saddled with traditional agriculture do not have the problem of many farmers leaving agriculture for nonfarm jobs; (3) part-time farming can be efficient; (4) economies of scale do not exist in agriculture; and (5) investment in human capital counts much more than institutional changes and is the key to agricultural growth. It indicates that Hirschman has ignored that this obstacle has hampered the linkage effects. 1-58 The paper has dug out internationally neglected laws for efficient and competitive land use in the USA and Western Europe. In the USA, covering all the states, (1) there is a time effect on turning occupied private property into ownership - adverse possession, which means that if a private person has occupied a private property (e.g., farmland) without agreement of the owner, while the owner has not sued the occupier during a limited period, then this property will belong to the occupier. (2) There is ‘squatters' rights’ law for turning occupied public land into private ownership, which denotes that if a person (squatter) has occupied a public land for over 25 years and paid taxes, the Secretary of the Interior may issue a patent for 160 acres of such land upon the payment of not less than 1.25 dollars per acre. These laws are still exercised. Their main significance is to encourage the efficient use of the idled private and public land resources. Their main imperfections are that (1) If the private landowner has found that his idled land is being used by another farmer without his agreement within the limitations period, he may sue to get the land back, while still idling it. (2) Even if an adverse possessor or squatter has successfully gained ownership of a private or public land, he may idle or under-utilize it later on, without leasing it to those farmers who wish to produce sufficiently on it. (3) People in general may not wish to lose private property including farmland even if they do not use it. In Western Europe, (1) there has been a law to give right to other farmers to produce sufficiently on any under-producing land (i.e., less than 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 any farmer can bring his cattle to graze in the private pastures of the Alps (still valid but not applied). Its main shortcoming is that it obliges landowners to lease out all their inefficiently used land, so that part-time and absent landowners would not be able to produce for family consumption and keep farming skills; and once lost offfarm jobs, would either have no access to their land rented out, or have to withdraw it within the contractual period, affecting the lessees. (2) There has also been a law to oblige landowners to either use their land or lease it out for sufficient production: in Germany 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), and Denmark 17 July 1989. Its main shortcomings are that it may cause overproduction, plus the above-mentioned one. Both laws have been suspended at the overproduction stage. Revising these legislations, the paper provides effective and appropriate Proposals (I) giving full-time farmers access to the under-producing land beyond family consumption need of part-time and absent farmers, by creating a Dual Land System, and (II) converting the environmentally sensitive farmland back to the nature obligatorily once a country has encountered constant overproduction. They would, without affecting private land ownership, simultaneously reach eight aims: (1) minimize/abolish/prevent protectionism, while (2) avoiding overproduction and (3) irrational production abandonment; (4) boost competitive full-time large farmers as entrepreneurs, whereas (5) not crowding part-time and absent small farmers out of agriculture; (6) reach/maintain basic self-sufficiency in cereals, meanwhile (7) promoting multi-functionality of other agricultural and rural sectors and (8) improving the environment. They would be useful also for public land ownership. Hence launching a second land reform – land use reform. Especially, the full-time farmers could increase farm size, achieve economies of scale, reduce costs, become viable or more competitive, hence fully playing their entrepreneurship to produce for the national and global markets, without seeking protectionist subsidies or foreign aid. The analyses and Proposals have been presented at 15 conferences in Asia, Europe and Latin America; nine seminars in four European countries; a press conference for WTO in Geneva; nine publications by EU Commission; and received 211 responses as appreciation/attention from Nobel economics laureates, governments, farmer organizations and international organizations of the EU, EU accession countries, Japan, Switzerland, Canada, USA; CABI, OECD, WTO; UN, CSD, FAO, IMF, UNCTAD, UNEP and World Bank during 18 February 2002 – 4 November 2008 [see the author’s fifth FAO publication (http://www.icarrd.org/en/proposals/Zhou.pdf) pp. 7-57].
description: Paper presented at the International Conference of 'Entrepreneurship and Land and Rural Development' Faculty of Economic and Management Sciences, University of AbouBekr BELKAID TLEMCEN Tlemcen, Algeria, 3-4 December 2008