Is Land Privatization Bad for The Poor?

By Daniel Teferra (PhD)*


In his article ” Famine ” in Ethiopia,: Key Facts, René Lefort says that land privatization is worse for the poorest farmers. This argument may support the government, but not the farmers.
René Lefort starts out with Amartya Sen’s exchange entitlements thesis. He states that in bad years, Ethiopian farmers “face a food shortage not because the market is lacking, but because they cannot afford to buy it.” A brief reminder about Sen’s theory is in order here.
Amartya Sen compared the value of wage in terms of food prices and found a sharp decline in the exchange rate. He then concluded that many agricultural laborers (15% of the total victims) died during the 1943 Bengal Famine because they could not afford to buy food.
Amartya Sen’s thesis cannot explain Ethiopia. It may be useful for studying how a group, dependent on a single commodity, especially agricultural labor, becomes more vulnerable to famine.
In a subsistence economy like Ethiopia, farmers cannot produce sufficient surplus in good years to ward off famine in bad years because of poor technology. It is, therefore, necessary to free land and capitalize the rural sector.
René Lefort argues that a land market will force the poor farmers to sell their land in bad years and increase the number of food-aid seekers. The argument fails to see that the whole idea of buying and selling is to capitalize the rural sector and create wealth. Capitalization will improve output, employment and income for all, including the poor farmers.
René Lefort believes that privatization is not necessary because tenure security is assured already through “the new 30 years land certificate.” There is, however, a big difference between privatization and issuing a 30 year land certificate. Whether a lease is issued for 30 years or 99 years, it is still a lease. It does not give farmers private ownership right.
Privatization, on the other hand, gives farmers private ownership of the land they work. Legal title will be issued to them.  If tenure security were assured, farmers in Ethiopia would not be fighting the government today. The government cannot take their land away at will if they have legal title.
René Lefort forgets that privatization gives farmers the incentive to spur them to greater productivity.  The truism is true: “Give a man the secure possession of a bleak rock, and he will turn it into a garden; give him a 9 (or 30) year lease of a garden and he will convert it into a desert.”
René Lefort misses another important point.  Through land ownership the farmers hope for status in their communities, the right to act and speak freely, the opportunity to see their children given an education, and the right to share in control over their government.
*Emeritus Professor of Economics, FSU;