Land Reform – Are East Asian successes replicable?

Mario du Preez

Given the frequent reference to the failed land reform policies in Zimbabwe and Venezuela, inter alia, it is unsurprising that commentators would eventually hold East Asian land reform successes up to the light and declare that Zimbabwe and Venezuela’s efforts were mere aberrations, even outliers. The East Asian success story is posited as an elixir and many observers conclude that land reform can work in South Africa provided it is based, by and large, on the East Asian recipe.

Most opinion pieces and verbal utterances on East Asian land reform success are, however, heavily weighted with historical context and magisterial depictions of the actual process, along with a few scatterings of prescriptions, mainly about government intervention and support. Few, if any, confront the uncomfortable fact that this record of success cannot be generalised. And so, maybe it’s time to settle an account with socialist illusions by adopting a more comparative focus. (I will confine my contribution to the land reform successes achieved by South Korea and Taiwan, the standard-bearers, if you will.) Six salient features deserve special attention.

First, South Korea and Taiwan were mainly rural countries at the start of their respective land reform drives. For example, during the mid-1940s, in excess of 80% of the South Korean population lived in rural areas. As a result, no special effort or concessions were necessary to encourage South Koreans to take up farms and farming – they were mostly already there. South Africa’s population, by contrast, is highly urbanised – in 2017, 65.78% of all people lived in urban areas and cities, and all indications are that urbanisation is set to continue (according to the World Factbook, South Africa’s average annual rate of urbanisation will be 1.97% over the next few years). South Africa’s highly urbanised population may prove an enduring and significant stumbling block to its land reform process. Up to now, over 90% of land claim beneficiaries have preferred financial compensation instead of land parcels, which reveals a seismic reluctance to take up farming.

Second, unlike South Africa, which is dominated by a farmer-owned agricultural land system, South Korea was dominated by the landlord-tenant system, where most of the arable land was worked by tenants and a few hired labourers, and the landlords were mainly uninfluential, at best, or totally absent, at worst. As such, land reform in South Korea was classified as a ‘typical land-to-the-tiller programme’. Some may be tempted into arguing that the South African case is not that different: the farm owner represents the landlord and the farm workers represent the tenants. This may be true to a limited extent but unlike most farm labourers in South Africa, tenants in South Korea managed the entire farming enterprise. In addition, tenants in South Korea and Taiwan were decidedly integrated into the market due to the elevated level of commercialisation, especially after the 1920s changeover from extensive to intensive farming. A not too subtle difference.

Third, South Korea received major international support for its land reform programme, specifically from the United States (and mainly due to geopolitical considerations). In the case of Taiwan, the Sino-American Joint Commission on Rural Reconstruction directed American financial and technical aid for the land reform project – this happened without too much American political interference. Although Theresa May tentatively supported South Africa’s land reform programme during her recent state visit, Donald Trump does not appear to do so. A perusal of international news, emanating from other parts of the world, also reveals a trenchant scepticism, instead of insouciance, about South Africa’s land reform trajectory. This view may have been aided, in part, by South Africa’s ongoing dalliance with land expropriation without compensation as a policy measure.

Fourth, agrarian reform in South Korea was underpinned by both the operation of a competent state bureaucracy (especially in terms of their ability to design and implement policies conducive to development, what some refer to as ‘statecraft’) and the keeping of accurate records on tenure affairs and land ownership. Taiwan employed a land classification system (twenty-six grades were used) and kept meticulous cadastral records.  In stark contrast, it is common knowledge that record keeping by local and national government departments in South Africa is deplorable. For a start, agricultural reports issued by StatsSA fail to disaggregate farms based on output values and hectarage. Moreover, the 2007 commercial farming census (the last one of its kind) only included farms that were VAT registered and, thus, underestimated farm ownership figures. Finally, smallholder farming data is negligible, at best. In terms of statecraft, it is important to note that agricultural policy is not made and implemented in a vacuum. In fact, it is supposed to form part of a coherent, inclusive, complementary and over-arching policy framework. In this regard, South Korea and Taiwan were able to engineer a positive interface between agriculture and industry, subsequent to the design and implementation of an apt industrial policy. This positive interface allowed these countries to respond in a timeous and flexible manner to varying peripheral and internal conditions. The governments of these two countries also devised and implemented adequate complementary agricultural policies. I think I am in danger of understating the case if I said anything about the incompetency of South Africa’s state bureaucracy. But I will try in any way: The South African government knows very little about successful policy implementation, but compared to their bureaucratic acumen, their comprehension of policy implementation is truly outstanding.

Fifth, Taiwan’s success was predicated on the provision of dedicated technical and administrative support carried out by a well-conceived agricultural extension arrangement. This led to the wide-scale adoption of enhanced farming methods. In addition, emphasis was placed on the establishment of an effective credit system and marketing services, which operated via institutionalised service cooperatives. Taiwan also invested heavily in modern irrigation and drainage systems. In contrast, South Africa’s Department of Agriculture released a report in 2008, which showed that, in total, 8 out of 10 extension officers were ‘insufficiently qualified’ to operate as either subject matter experts or farming advisors. In addition, available extension staff in 2007 and 2013 equalled 2155 and 2210 individuals, respectively. These numbers are substantially less than the target of 9 000 officers quoted as part of the Extension Recovery Programme launched in 2011. The cloud of low (now negative) economic growth, falling tax revenue collection and an ever-increasing budget shortfall hangs over potential future government investments in agriculture (such as the irrigation and drainage ones that took place in Taiwan).

Sixth, the authoritarian control (i.e. state paternalism) in the land reform process as was exercised by the governments of South Korea and Taiwan is often downplayed. Under this dispensation, new taxes were imposed on the former tenants, they were forced to pay higher input prices, and produce prices were lower than those received before the land reform. One wonders how the beneficiaries of South Africa’s land reform project would feel about these types of intercessions, especially in lieu of the widespread culture of non-payment and free allocations (just ask Eskom, I guess)? Also, would they approve of the capturing of agricultural surpluses (by the state) for disbursement to industry?

In summary, by espousing the virtues of East Asian land reform successes, some political commentators may be striving for a mass inculcated credulity. But be warned, as the above comparative analysis shows, it may prove costly to take refuge in the false security of political consensus.

Mario du Preez is an economist living in Exeter, England.