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A case for uncompensated land expropriation - lessons from history

2018-08-31 07:25
David Masondo

David Masondo

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David Masondo

In the 1950s, South Korea was one of the poorest countries in the world compared to her counterparts such as Ghana, Congo and South Africa. But in the 1980s and 1990s, its agriculture and manufacturing industries were more advanced and contributed towards higher GDP growth figures. This had to do with their ability to use land reform, among other measures, to generate economic growth. 

Unlike Zimbabwe, Namibia and South Africa in the early phases of their political independence, countries such as South Korea and Taiwan embarked on non-market mechanisms, including expropriation of land either without compensation or below the market value to increase agricultural production and economic development through industrialisation.

Both Korea (1910-1945) and Taiwan (1895-1945) were under Japanese colonial rule. Korea was under colonial rule for 35 years and Taiwan for 50 years. In the early years of colonialism, Japan treated Korea and Taiwan as classic colonies in which both countries provided industrial raw materials and agricultural products such as rice and cotton in exchange for manufactured goods, as part of the Japanese colonial economic growth strategy. During the first decade of colonial rule, Japan sought to protect the Korean market as an outlet for their manufactured goods. Korea was prohibited from manufacturing through rules and regulations.

Most Koreans who owned land before the arrival of the Japanese were allowed to retain it during colonialism. In other words, Japanese colonialism did not destroy the pre-colonial Korean landed class. In colonial Taiwan and Korea, almost 80% of the population comprised of tenants (sharecroppers) under absentee Japanese landlords who appropriated on average more than 50% of the surplus harvest, which was largely sold in the export market. Land tenants had the right to occupy and cultivate the land in return for payment of rent, while landlords had ownership rights and surplus. 

Furthermore, the Japanese colonial state also offered the landed classes legal protection of their land based on a Western-styled legal private property agreement and political protection against peasant unrest through a colonial-style oppressive police state.

In response to the 1918 food riots, the colonial state undertook measures to increase food production in Korea and Taiwan, which included investment in irrigation, drainage, seeds and fertilisers. Between 1910 and 1924, there was a 1.5% a year average increase in rice production in Korea. Between 1920 and 1935 rice production increased by 3% a year.

After the defeat of Japan in the Second World War, the American Military Government that occupied Korea between 1945 and 1948 instituted rent controls and formalised leases in writing on previously Japanese controlled land. Between 1950 and 1953, there was a civil war which led to the break between North and South Korea. North Korea took over control of the land from the landlords through mass struggles of the peasantry and without compensation, and has collectivised their agricultural production since 1954.

Land previously owned by Japanese expropriated without compensation

South Korea became fully sovereign in 1948 and undertook land reform, which changed land ownership. The land previously owned by the Japanese was expropriated without compensation and distributed to small farmers and Korean landlords were forced to sell below market price any land above three hectares.

The 1949 South Korea Land Reform Act drafted by left-leaning Minister of Agriculture Cho Bong-am outlawed absentee land ownership, and land ownership was transferred to small farmers. The practice of compulsory agricultural products such as rice, based on a government determined price was also halted; and replaced with small-holder farmer and voluntary market sales. The land reform was accompanied by state support ranging from finance to marketing support.

Just like in South Korea, Taiwan did not expropriate land without compensation, but the state forced landlords to sell all the land above three hectares at a price determined by the state. In 1956, land redistribution had increased farmers’ land ownership by 60% as a result of the land-to-the-tiller programme, which essentially transferred expropriated landlords’ land and
land titles to the tenants.

The growth in agricultural output was not just a mere function of expropriation of land. There was increased investment in rural and agricultural infrastructure such as irrigation and drainage, credit extension services for financing advanced inputs and innovation increased agricultural output in that production of crops such as rice and sugar increased by as much as 50%. In so doing, demand for industries that manufactured agricultural inputs was created, thereby increasing the levels
of industrialisation.

While South Korean and Taiwanese land reforms took place within the context of attempts to ward off socialism influenced by US interests, local forces did play a key role. The USA's aid was not the cause of South Korean and Taiwanese land reform and subsequent agricultural performance, but a function of class interests and strategy of local actors, particularly peasants.

Strength of landless peasants pivotal

After all, during the same period, the Philippines, Thailand and Indonesia under Suharto were given aid by the US, albeit with poor results. The strength of the landless peasants was pivotal. Public ownership of land and the state as custodian As mentioned earlier, all land should be transferred to the people as a whole and the state should act as a custodian. In this policy model, the land becomes public property under the custodianship of the state, and it is leased to South African citizens and non-citizens based on socio-economic needs.

Furthermore, the state should also grant administrative powers for land allocation to different bodies such as community associations, trusts and village committees. 

This would be similar to Mozambique where private ownership of land is prohibited. The land and its associated resources become the property of the public in the hands of the state. Here land is decommodified in that it cannot be sold or mortgaged. The landholders would operate under a democratic lease-holding principle. But residential landholding should be inheritable.

The policy of lease-holding is new in the South African experience of land ownership and tenure policy. Pre-colonial Southern Africa had significant communal ownership of land held in trust by a traditional leader or chief, land was not treated as capital and no individual could exchange land in the market for income.

Colonial powers introduced and enforced private ownership based on free-holding of the land. However, it was not immediate. The officials of the Dutch East Indian Company who landed in the Cape in 1652 under the leadership of Jan van Riebeeck became the first white farmers, but farmed state land operating on a lease-basis.

Similarly, in many colonial countries such as Tanganyika, land was publicly owned under the control of the colonial governor, who had the power to allocate occupancy rights. It was only until 1834 that white settler farmers could hold land in leasehold farms in South Africa. 

The Cape Governor, Sir John Cradock, changed the land tenure system from leasehold farms to freehold farms because he believed that they could develop the land if they owned it privately.

Public land ownership allows socio-economic development

In what ways could public land ownership potentially grow the economy? Public ownership of land enables the people through the state to democratically direct and influence land allocation and use for their own socio-economic development.

Public land ownership guarantees farmers access to a plot of land free of charge, thus reducing set-up costs. Interested domestic or foreign investors can also have access to land at a cheaper rate than what private landowners charge. Furthermore, urban citizens can secure the same through ground lease arrangements, thus making housing cheaper.

The market dependent mechanism to redistribute land does not only enable those who have money to acquire expensive land leaving a majority of the people without land for socioeconomic activities such as production, housing and agriculture; but also gives the owners of land the right to speculate on land to the detriment of economic growth and development.

Land redistribution has played a significant role in reducing inequality, unemployment and poverty. It has income distributional effects in favour of land reform beneficiaries, provided they engage in productive economic activities such as food production. Any increase in food output potentially decreases food inflation, thus making access to food much easier. This in turn, decreases food imports and increases exports, and enables the use of foreign exchange for importing essential industrial inputs. 

Land reform also has the potential to decrease rural migration to urban areas, which creates the unplanned expansion of urban areas. Public ownership of the land has enabled China to drive its economic development faster.

Land redistribution can potentially reduce unemployment and retrenchment during periods of economic crisis. Laid off workers can use land to engage themselves in economic activities. For instance, during the 1973 global economic crisis, many workers in Taiwan returned to farming and avoided living in cramped squatter camps.

Politics of land expropriation and the balance of power

The success or failure of any reform is a function of the balance of power between contending forces. Accordingly, the success of uncompensated land expropriation will be a function of the balance of power. If the opposition to the expropriation of land is stronger, it will not happen. Since expropriation of land without compensation will face opposition, it is therefore important to build a popular movement for land and agrarian reform.

Even if the law will permit expropriation without compensation, without the demand from below, it will not happen. In fact, the land demand so far has not been backed by an organised landless people's movement, except in urban areas where the land demand is largely driven by housing needs associated with the desire to be closer to economic opportunities.

Under the willing buyer, willing seller, policy, which depends on the power of landlords, market mechanisms (particularly the selling price) are used as an instrument to resist land redistribution. Uncompensated expropriation, which does not depend on the market, would be resisted through non-market means such as the threat of counter-revolutionary violence.

Actually, there is already an opposition or fight-back strategy against uncompensated land expropriation. One such tactic is the distortion of the history of dispossession in which there is denial that there was ever forced dispossession.

It is being suggested that most of the land was voluntarily transferred through treaties between the colonisers and colonised. There is also counter research to oppose the 2017 state land audit, presenting state land as being owned by blacks, implying that the state is a black state and not for all South Africans.

There is also an attempt to use failed post-land transfer projects such as the Makgoba Tea Estate (previously known as Sapekoe Tea Estate and the Zebediela Citrus Estate in Limpopo), in which farming has collapsed, to discredit land reform, including uncompensated expropriation. The opponents of land reform deliberately do not cite relatively successful land transfer projects such as the Nodunga Communal Property Association in Kwazulu-Natal, which struck a deal with the sugar producing company Tongaat Hulett, and the Mkhuzane community and Mondi, both of which continue to undertake productive farming.

Linked to political-economic strategies to discredit land reform efforts is the caricatured presentation of Zimbabwe. It is beyond the scope of this article to provide a more detailed assessment of Zimbabwean land reform. Indeed, violence and destruction of property and farming, including displacement of farm workers, and hyperinflation were part of Zimbabwe’s Fast Track Land Reform (FTLR) programme in the early 2000s.

However, it would be worthwhile to examine Zimbabwean land reform objectively and not from the perspective of the opponents of land reform, including uncompensated land expropriation.

Under the FTLR programme, almost 8 million hectares of land was allocated to 4 500 new farmers. This was a major achievement given the fact that at independence over 15 million hectares were large commercial farms, under a colonial settler commercial farmer community composed of 6 000 farmers. The beneficiaries of the Zimbabwean land reform programme were not only the politically connected, but also ordinary Zimbabwean citizens. 

Furthermore, there was no complete collapse of food production in certain areas such as maize, in which production continued not only under the new land beneficiaries, but also old commercial farmers.

- Dr David Masondo is a member of the ANC NEC. This is an extract from an article he wrote in Umrabulo, the ANC's quarterly magazine.

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

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