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Inequality and Stagnation in Ethiopian Agriculture

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Inequality and Stagnation in Ethiopian Agriculture View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by IDS OpenDocs Too Much Inequality or Too Little? Inequality and Stagnation in Ethiopian Agriculture Stephen Devereux, Amdissa Teshome and Rachel Sabates-Wheeler * The agricultural sector remains our Achilles heel Following the “creeping coup” that overthrew and source of vulnerability … Nonetheless, we Emperor Haile Selassie during the 1974 famine, remain convinced that agricultural based the Derg implemented a radical agrarian development remains the only source of hope transformation based on redistribution of land. for Ethiopia. (Prime Minister Meles Zenawi 2000) Between 1976 and 1991, all rain-fed farmland in highland Ethiopia was confiscated and redistributed, 1 Introduction after adjusting for soil quality and family size, among A powerful strand of thinking about the causes of all rural households. This land reform was motivated long-term agricultural stagnation in Ethiopia defines not only by the Derg’s Marxist egalitarian ideology, the problem in terms of inequality. Indeed, it is but by its conviction that feudal relations in possible to interpret most Ethiopian agricultural agriculture had exposed millions of highland policy initiatives of the past three decades in terms Ethiopians to intolerable levels of poverty and of divergent views on the extent and consequences vulnerability. Redistribution therefore had both of rural inequality. This article investigates the equity and efficiency objectives. It was implemented hypothesis that (too little rather than too much) as a mechanism not just for breaking the power of inequality has contributed to agriculture’s under- the landlords, but also for eradicating historically performance, and considers the implications for entrenched inequalities in control over land, with policy in terms of four alternative pathways for the aim of achieving sustainable increases in Ethiopian agriculture. agricultural productivity and rural incomes. Was the Derg’s economic analysis flawed? 2 Historical context Hindsight suggests that the land reform was a Any Ethiopian over 40 years old has lived through political success but an economic failure. The Derg three remarkably different political regimes: the period is now remembered as a time of feudal imperial era under Emperor Haile Selassie; militarisation, war and repression, the worst African the socialist military dictatorship of Colonel famine of the twentieth century, economic Mengistu’s Derg; and the market-oriented, Western- stagnation and failed development programmes – aligned democracy of Prime Minister Meles Zenawi. villagisation, state farms, forced resettlement. Each regime has imposed an entirely different set Redistributing land may or may not have been a of policies on smallholder agriculture, where over necessary step for enhancing rural livelihoods, but 80 per cent of the population makes its living, yet it was evidently not sufficient. all three have presided over an agricultural sector The Derg’s land reforms did not extend to the that is stagnant and acutely vulnerable to recurrent right to buy and sell land, which constitutionally drought and other livelihood shocks. belongs jointly to the state and the people. Following IDS Bulletin Vol 36 No 2 June 2005 © Institute of Development Studies 121 Part V Contexts, Pathways and Scenarios the overthrow of the Derg regime in 1991, the Theory and evidence from a variety of contexts Ethiopian People’s Revolutionary Democratic Front suggest that pro-poor redistribution of productive (EPRDF) government maintained the Derg’s assets, especially land, can achieve significant commitment to equality in land ownership. The increases in agricultural productivity. In contexts EPRDF initiated its own redistribution programme of imperfect markets, interventions that increase in the early 1990s, to provide farmland for equality of access to assets should have a positive demobilised soldiers and to correct for the inevitable effect on the productivity of those who are worst inequalities that develop over time as families grow affected by market failures. Eastwood et al . (2004: at different rates, and young adults leave home and 2) hypothesise ‘that very unequal land distribution look for land to start their own farms. Throughout (arising for historical and/or geographic reasons), its rule, however, the EPRDF has maintained an retards agricultural development by concentrating implacable opposition to any suggestion that much land, in countries still facing labour surpluses commercial principles should be introduced to land and capital constraints, into inappropriately large transactions in rural areas. units with high capital/labour and land/labour Prime Minister Meles argues that allowing land ratios’. to become a tradable commodity would inevitably However, under certain circumstances, result in an ‘urbanisation of rural poverty’. When redistribution may not result in productivity gains the next major drought strikes, hungry families with and could even lead to declines. Dercon (2003: 9) nothing else to exchange for food will be forced to argues that ‘if growth requires a certain threshold sell their land and, being displaced, will then migrate of local endowments to take off, then poorly in enormous numbers to cities like Addis Ababa, endowed areas may well find it hard to escape where they will survive in squalor in squatter camps, poverty … in densely populated areas such as with little prospect of securing formal employment. Ethiopia or Bangladesh, redistribution or related This is related to the “land as safety net” argument: policies such as tenure security are unlikely to even if tiny farms are inadequate for self-sufficiency, achieve much more than a dent in poverty levels’. the family plot does provide some proportion of Carter et al. (2004) show that in the context of subsistence needs, and this safety net would be droughts in Ethiopia and hurricanes in Honduras, removed if land can be sold. Ideologically, the EPRDF households that fall below a minimum “asset shares the Derg’s opposition to large landowners, threshold” are unable to engineer successful asset and they believe that commercialising land will accumulation. Scaled up to a community or region, inexorably concentrate ownership in the hands of these poverty traps have implications for asset a minority. In his end-of-year report to Parliament distribution. Unlocking the growth potential of in June 2004, Meles announced that the privatisation asset-poor areas may require policies that encourage of land in Ethiopia would take place only ‘over consolidation of assets into larger holdings (through EPRDF’s dead body’. ownership, cooperatives, pooling or renting). Conversely, redistributing land and other assets 3 Has equalisation in Ethiopia equally in regions that have a very low resource gone too far? base and are densely populated is likely to have Income inequality in Ethiopia is unusually low. The adverse effects on productivity and poverty: some national consumption Gini coefficient in 1999 was inequality may be beneficial for poverty reduction just 0.28, and was lower in rural than urban areas. and efficiency. The government interprets this both as a (negative) So has equalisation gone too far in rural Ethiopia? indicator of widespread poverty, and as a (positive) The combination of land redistributions and outcome of land redistribution. prohibitions against land accumulation, declining access to natural resources and community-level The low level of inequality is consistent with the assets (including grazing land and social capital), overall picture of Ethiopia as a very poor country, and asset sales for food in response to repeated with a low per capita income. In addition, the shocks such as droughts, may have pushed egalitarian land holding system might have hundreds of thousands of households in highland contributed to a more equal income distribution Ethiopia below the minimum threshold of key in rural Ethiopia. (FDRE 2002: 6) productive assets needed for a viable livelihood. 122 Too Much Inequality or Too Little? Inequality and Stagnation in Ethiopian Agriculture According to this view, equalisation of assets in rural communities has contributed to agricultural 4 Pathways for Ethiopian stagnation, and is keeping the majority of Ethiopians agriculture trapped in poverty. Fear of future land Ethiopian policy debates are vigorous and passionate, redistributions – despite government assurances and several current “hot topics” – the Poverty that none are planned – has inhibited investment Reduction Strategy, Productive Safety Nets in agriculture, while legal constraints against buying Programme and Voluntary Resettlement Programme, and selling land have prevented the consolidation among others – impact directly on agricultural of small, ‘sub-subsistence’ plots into larger, livelihoods. Although these debates are often limited commercial farm enterprises. to a narrow, predetermined agenda or are invalidated A national survey in 2001 found that the average by unrealistic assumptions about agricultural growth landholding in rural Ethiopia was approximately prospects, on one point most stakeholders and 1 ha per farming household, but just three-quarters observers agree: there are no obvious remedies for of a hectare in Wollo and Tigray, where half of all the crisis in Ethiopian agriculture. This section households owned less than one-half of a hectare, discusses four broad pathways that a future and 10 per cent were landless
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