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Growing Inequality


Cattle raising in Paraguay. Much of the land in Latin America is used to rear livestock for export.

Half the world’s population are farmers, and most of them are poor. Some two thousand million people eke out a living in the villages and country­side of the Third World. Yet for all their numbers, their lives remain hidden.

Most of us will never hear from the Guatemalan peasant farmers scraping away at the steep eroded hillsides: they are not that vociferous. One Indian share­cropper submerged in debt to a money­lender looks much like another: their problems seem montonously similar.

These are the people whom develop­ment has passed by. Of the hundreds of millions who live in absolute poverty in the Third World, 85 per cent are in the rural areas.

They have seen little of economic growth. Over the last fifteen years output of goods and services in developing countries increased at five per cent per year. And overall food supplies kept pace with population - per capita food production increased 0.2 per cent per year from 1970 - 76. But the growth has been unequal: within rural areas the gap between rich and poor has steadily widened.

As a recent report from the Food and Agriculture Organisation of the United Nations put it: ‘If the goal of development is growth with equity - nationally and internationally - then it can be seen that the struggle is not being won, and the main burden of present trends falls upon the rural poor.’

Q: But surely if there is more for everyone there is more for the poor?

In principle, yes; in practice, no. In any society that is grossly unequal it is almost impossible to distribute new wealth fairly. If there is a steep gradient between rich and poor then any additional resource - be it food or money or equipment - will inexorably roll down towards the rich.

Take the case of Abdul Malek in Bangladesh (see p. 26) . He has no land of his own so he has little choice but to work for one of the largest landowners in the village. The landowner is richer than Abdul, but more than that he is in a very strong position to borrow yet more money from either a bank or the government. Abdul on the otherhand has few assets other than the tattered clothes he wears; he is nothing like such a good credit risk.

The landlord now thinks that he might borrow money to buy a tractor. It is a sensible move because he will be able to have his land ploughed more quickly and probably increase his production. But what happens to Abdul and all the other landless labourers who presently drive the bullock ploughs? They lose their jobs. So here you have an increase in production causing an increase in inequality.

Q: Would it be safer if everyone owned their land?

Land reform is certainly a vital part of the answer. Just how vital can be judged from the tooth and nail resis­tance with which it has been met. In places like post-Allende Chile it has even been set into reverse. Land reform can disturb the power structure at every level from top to bottom and be just as divisive among the poor as between the rich and the poor.

In the Indian village of Kanjhawla (p.22) an attempt to redistribute common land among the Harijan ,untouchables’ has drawn a bitter reaction from another caste rather less poor.

Opposition from the super-rich owners of huge estates is more predictable. In Latin America in 1973, two per cent of the farming population controlled 47 per cent of agricultural land. The rulers of the haciendas and the fincas would seem to have a lot to lose from land reform. And indeed they have. But they would also have much to gain from an orderly reform that preserved the capit­alist system. That is not a view they seem to take.

Q: Is violent revolution the only answer?

For some countries that looks like the only way - as it was for China and for Cuba. In Guatemala it is difficult to see anything other than a Nicaragua­style battle overthrowing the entrenched landlords. But violence is not the only way. Intelligent capitalism is also quite capable of adapting to radical change. South Korea, even if something of a special case, has produced one of the world’s most successful land reforms: only three per cent of the rural workers there now have no land. But whether it comes to the countryside through violence or through legislation, land reform on its own will never be enough. If a society is shot through with inequal­ity in every other corner of life then the gains from sharing the land will rapidly be eroded.

Q: But can’t people with land stand on their own feet?

Not if they are being sniped at from all directions. Nor indeed if the land they have been given is too poor. Some of the cooperatives set up after land reform in Peru found that the land was not quite what it had seemed. The departing owners had stripped it of all kinds of assets, from cattle to woodland.

The farmers must also have the skill and training to use the land. In Peru many of the experienced managers and technicians left with the landowners. The vacuum of resources and skill re­mains and many of the co-operatives make a loss.

And growing food is only part of the process of making a living from the soil. If a landless labourer in India does manage to get a couple of hectares with which to work, he might still look round and wonder just how much better off he is. He will still be too poor to warrant anyone lending him much money except the local moneylender, at usurious rates. Then one bad harvest, the moneylender forecloses and the new farmer loses his land.

Q: Is Land Reform pointless?

No. If a government actively supports the farmers against the stiff opposition that they will meet then reform can work.

South Korea has shown some of the ways. These involve persistent and aggressive intervention by government that would be labelled as ‘creeping communism’ had it not come from one of the most free-wheeling capitalist countries in the world.

The state controls both the marketing of crops and the sales to farmers of items like fertilizers and there has been strict and effective control over sales of land to ensure that the size of holding does not creep up. An effective reform needs constant vigilance. The livelihood of the small farmers will always be at risk.

Q: Why are the small farmers always at risk?

Because so many things which dominate their lives are outside their control. And the number of those things has steadily increased as farming has been ‘modernised’. The Green Revolution certainly boosted crop yields for the farmers who could afford to make the changes, but it also vastly increased the sales of fertilizers and pesticidies: usage of fertilizers in the Third World has tripled since 1965. The farmer has little control over the price of these or their effectiveness.

Anisar Alguilar (p.20) is a Bolivian peasant farmer who discovered to his cost the result of giving in to pesticide salesmen. In the hope of increasing his yield of tomatoes he used a pesticide which eventually resulted in the destruc­tion of his entire crop. Now that he has returned to more natural methods of combatting pests his yields may be lower but they will be under his control.

Then there is the price that the farmer gets. When he grows primarily to feed his own family, market prices are not important. But modernisation has increas­ingly drawn the small farmer into the production of cash crops like coffee or oil seed. The price of such commodities is notoriously fickle and the farmer may eventually discover that his revenue covers neither the cost of production nor the investment he might have made in irrigation or equipment. He goes into debt and again his land is at risk. Thomas Japp (p.13), a banana farmer in Jamaica, finds that the price he gets for his fruit in no way covers the daily expenses he has to meet.

Q: Would it help if we paid more for bananas or coffee?

At present, probably not. A high proportion would remain in the rich world. Developing countries currently receive on average only 15 per cent of what the final consumers pay for their major primary exports (excluding oil). Much of that trade is through multinat­ional corporations. Unilever, the Anglo­Dutch giant, is responsible for the pur­chase of up to 70 per cent of the fats and oils sold in the world. It is the actions of these companies which ultimately affect the rewards for each person along the production chain.

The principle which operates within the corporate sphere is the same as that which operates within a village. The wealth flows downhill to those in a position of power, including ourselves.

Power, may only mean having the cash to pay for a hamburger. Central America is an important source of supply for the burger chains of the United States. Indeed much of the livestock in Mexico is raised for export. And in a country where 80 per cent of the child­ren in the rural areas are under-nourished, those livestock now consume more basic grains than the country’s entire population.

Q: How do you make sure that food stays where it is needed?

By giving the people the ability to grow and keep their own food. For the peasants of the Third World that means: Radical land reform that gives people control over their own food production, either as individuals or groups.

Equal access for all to the resources needed to make that land work - credit, transport, irrigation, marketing.

Strict control over corporations, national and multinational, to ensure that the benefits of agricul­ture remain with the farmers and with the producing countries. Aggressive programmes of rural development which specifically afm to break down inequality and active resistance to any scheme which, even if it might offer the promise of increased production, will also increase inequality.

More and more governments and agencies are proclaiming the importance of rural development and land reform. But, given the hard political issues to be faced, there is a real danger that their declarations will remain empty slogans.

Two thousand million people are a lot to ignore. But it has happened before and it can happen again.

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