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COVER STORY |
DEUBA'S LAND REFORM With a surprise eight-point special program (borrowed from his predecessor Girija Prasad Koirala’s 14-point national consensus agenda), Prime Minister Sher Bahadur Deuba has shown that politics is also an art of populism. By freezing land transactions, Deuba has won supporters in the main opposition party, but his decision has pushed the nation’s economic activities to the brink. By issuing a decree from parliament that ignores constitutionally guaranteed rights of citizens, Deuba has violated the principles of democracy. At a time when Deuba’s priority list is already filled with enormous challenges, including resolving the Maoist insurgency, what prompted him to engage in populism? By KESHAB POUDEL When Prime Minister Sher Bahadur Deuba, who took office a few weeks ago pledging to bring the Maoist rebels to the negotiating table, announced an eight-point special program on Thursday (August 16) from the House of Representatives podium, he landed himself in a constitutional and political controversy. Although the main opposition party backed the prime minister, two national parties have announced that they will not let the legislature function until Deuba withdraws the decision. Backed by the Rastriya Prajatantra Party (RPP), the Nepal Sadbhavana Party (NSP) has disrupted the proceedings of the house, demanding the withdrawal of the land-reform and land-ceiling components from Deuba’s program. The eight-point national program is not the brainchild of Deuba. It was taken from the 14+3 national consensus agenda tabled by his predecessor, Girija Prasad Koirala, and endorsed by the main opposition CPN-UML.
Even though the agenda makes little economic sense, the land-distribution component seems to have been advanced as a way of popularizing the ruling Nepali Congress party and the Deuba government. Can the Nepali Congress go to the elections after initiating sweeping land reforms? As a large number of Congress voters are landowners, this decision would reduce its vote bank. For the main opposition, the announcement is going to be a new mantra ahead of the local polls. There is going to be a heated competition for populism between the two major parties. Until now, the competition has been for the power that comes with the ballot. However, the Maoists have emerged as a strong political force on the basis of the bullet. In a situation when guns have entered the political arena, populism generated through land reform would have little meaning. After the ruling and main opposition parties agreed to reduce the land ceiling, the party with the guns already started to grab land and distribute it. All political leaders — whether they believe in the ballot or the bullet — are in a race to outstrip each other in terms of populism. But do they understand the economic repercussions of their race? The populism will create false expectations and eventually destroy peace and harmony in the villages. Such measures would have a negative impact on the productivity of land because people will not allow tenants to work on them. Moreover, the uncertainty generated by the decision will affect the national economy for the long time. Following the announcement, expectations among landless peasants have increased. Some farmers even reportedly started to encroach the land of others. Experience has shown that the distribution of small land cannot fulfil the expectations of the landless. Instead, rising expectations will promote discord. In such a situation, the radicals would have nothing to lose. "Distributing land is not a solution and it will not end the disparities in the society," says Padma Lal Devkota, a professor of sociology and anthropology at Tribhuvan University. "The cost of the rift and tension in the society is much higher than the economic benefit of such reform."
This decision lacks economic justification. Land reform is aimed to encourage farmers to use adequate fertilizer and new technology, not the distribution of land. Distributing land will reduce annual production, as poor farmer can not afford technology and fertilizers. "It is time to use agriculture as a capital-intensive enterprise rather than a labor-intensive one. Agriculture products are very competitive, as the price of wheat, corn and rice continue to decline compared to the Indian products and the government is in no position to subsidize agriculture. What is the use of redistributing land in such a situation?" asks an economist. Political Compromise Deuba’s announcement seems to be inspired by politics more than economics. In a situation where political leaders are weak, they have no alternative to making compromises with the opposition to continue in power. Koirala and his predecessor, Krishna Prasad Bhattarai, have had to make compromises to remain in office. "Such situation is natural when parliament is stable and the prime minister is unstable," says a constitutional lawyer. "The experiences of the last two parliaments have shown that no prime minister can expect to remain in power without fulfilling the wishes of a stable parliament." Koirala announced his 14-point national consensus agenda when he was at the weakest point of his career. At the time, Koirala was prepared to pay any price to remain in office. So in mysterious circumstances, his Nepali Congress and the main opposition CPN-UML reached a 14-point agenda of national consensus. In a series of secret meetings, Koirala reached a consensus with the communist. Suddenly, the communists changed their stand and Koirala was toppled. Deuba announced his eight-point program based on his predecessor’s 14-point agenda. "This is not Prime Minister Deuba's program. It is a program agreed to by Girijababu and opposition leader Madhav Kumar Nepal," says a Congress insider. The opposition of the RPP and the NSP is equally mysterious. They had supported the 14+3 national consensus agenda that Koirala had proposed. The RPP and the NSP seem to have been inspired by extraneous motive to pressure the Deuba government. The actions of both parties have in the past brought opposite results. "The opposition of both parties will help the implementation of land reform," says a political analyst. A coherent land-reform program is the best way to transform society in a country where a large segment of land is held by a small section of the population. But there is no meaning of land reform in a country like Nepal, where such a land ownership pattern exists. No one sees the rationale for Deuba’s announcement. Those who were led to believe that the new prime minister was solely focused on his one-point agenda of ending the Maoist insurgency were startled by Deuba’s announcement. After the announcement of the program, some have lost hope in the prospects of a fruitful dialogue between the government and rebels. Nepal has seen several rounds of uncertainty in the land sector. It took decade to stabilize the land after the first round of land reforms in 1964. The second amendment of act in 1998, which ended dual ownership of land, generated another round of uncertainty. This announcement rocked the entire real state business. Land distribution in Nepal The "Policy Outlook on Land Tenure Situation In Nepal" prepared by Ram P. Yadav in 1999 shows the mode of land holding, farm size, cultivated land and other pattern. The Sample Census of Agriculture taken in 1981 shows extremely skewed land distribution in the country. In 1981, 50.5 percent of households had holdings of less than 9.5 hectares, accounting for only 6.6 percent of the cultivated area. On the other hand, 47.3 percent of the cultivated land was covered by holdings of more than three hectares and owned by only 8.9 percent of households. Ten years later, in 1991, approximately 43.8 percent of households had holding of less than 0.5 hectares, accounting for 11.3 percent of the cultivated area. Thus over the period of a decade, there was some decline in the proportion of households in this category, but the percentage of land owned by this group increased significantly. Also the actual number of households in this category increased by 8.1 percent over the save period from 1,107,902 to 1,198,123.The positive change over time is that the average size of holdings in this category increased from 0.15 hectares in 1981 to 0.25 hectares in 1991. A significant change is observed in the group of holdings of more than three hectares in terms of both percentage of households and the percentage of cultivated land between 1981 and 1991. During this period, the percentage of households having land holdings between 0.5 and 1 hectare increased from 16.2 to 26 and the percentage of total cultivated land in this group increased from 10.8 to 19.2. The trend showed that the over the period of 1981 and 1991, the larger landholdings were converted into numerous smaller holdings, which may have happened largely due to the selling of landed property by large landlords and division of land among the family members due to the Law of Inheritance. History of Land Reform Nepal has experimented various programs to improve the land tenure situation. The implementation of Land Reforms Act 1962 was one of the comprehensive measures. The act, among others, fixed the ceilings on landholdings in different geographical region in the country. According to the act, a family can hold cultivated land up to 25 bigha (16.93 hectares) in the Terai and inner Terai, 80 ropani (4.07 hectares) in the hills and mountains and 50 ropani (2.54 hectares) in the Kathmandu valley. The land reform was introduced over several phases. This was the first act that defined landlords, tenants and their rights to the land. In the process of implementation, society has seen many bad experiences. "Nepal does not need land reform right now as there are no disparities on the basis of land holdings. Such steps will further encourage fragmentation of the land," says an economist. According to the census of 1991, only 0.3 percent of households (approximately 8,000) in the country owns more than 10 hectares of total cultivated land, with the average size of land holding of 18.44 hectares. Under this category, in Terai, 0.5 percent of the households (about 5,800) owned 7.0 percent of the Terai land and in the hills and mountains 0.1 per cent of households (about 2,400) owned 4. 5 percent of the total hill and mountain land. The trend of landholdings in the last two decades shows that the number of households and the amount of cultivated land owned in the category of above 10 hectares continue to decline. "Their need to be changes in the definition of ceiling and radical land reform programs in the country," says Dr. Mohan Man Sainju, chairman of Institute of Integrated Development System. The recent decision will have long term positive impacts." Instead of setting land ceilings, a better way would have been progressive increases in taxation. If the taxation in land is reviewed and land tax is set under the land holding, people will start to give away their land. "I don't see such kinds of land reform system bring any social and economic benefit to the people. It will create more rifts in society," says Sunil Bhandari, former MP and a member of the Nepali Congress Central Committee. Former deputy prime minister and powerful Congress Central Committee member Shailaja Acharya called an emergency meeting of the party to discuss the reforms announced by Deuba. "How could Prime Minister Deuba have taken such a drastic decision without consulting the party?" she asks. The other components of the prime minister’s program includes the formation of commissions on women, backward classes and so-called "untouchables", ethnic groups, specific commitments against corruption, elections reforms and effort to rehabilitate Kamaiyas and the landless, which are positive. However, the decision to freeze the buying and selling of land and other property indefinitely obscured the other features. Wracked by lawlessness and growing Maoist violence, the country's economic progress will face another major setback through the freeze on land. The government, which is going to lose revenue worth billions of rupees after the closure of beverage and alcohol production, would have to part with an additional billions of rupees by blocking land transaction. Most importantly, the decision would disrupt the whole banking process. The need for land reform is hardly in doubt, but the question is how much and through which procedures. Revolutionary Leader Despite strong opposition from other parties, leaders of the main opposition hailed Prime Minister Deuba as a revolutionary. "The announcement of Prime Minister Sher Bahadur Deuba is a revolutionary step, as it paves the way to end the disparities in the agriculture sector," said Keshab Badal, politburo member of the CPN-UML and former chairman of the High Level Land Reform Commission. "In a country where a large number of peasants do not have land, the state can redistribute land by taking it away from the landlords." The landowners should redistribute their land to tenants. Large areas of land are lying uncultivated. Some portion of the land is not under the ownership of tenant. There is a problem of ownership of land. "The sooner Deuba tables the bill in parliament, the better it would be for the land-reform program. If the government does not introduce the act in time, it would create more problems in the future," said an economist." It is up to Deuba now to defend his tittle of revolutionary. Dr. Prakash Sharan Mahat, one of the prominent younger generation economists of the Nepali Congress, backs Deuba's initiative. "I am an advocate of this program because it is necessary for socio-economic change," says Dr Mahat, a close adviser to the prime minister. "Prime Minister Deuba discussed land reform issues with party colleagues. I found the prime minister’s arguments convincing," he says. "You can not see major changes through land reform, but it gives a symbolic meaning. The implementation side of land reform is very complicated but it will bring socio-economic health. It would be an illusion to expect that land reform will uplift the people overnight, but this step will bring symbolic gestures," says Dr. Mahat, one of the US trained economists in Deuba's team. Although the announcement has generated some hope in the political sector, it has convulsed the economic sector, forcing banks and financial institutions to stop all transactions,. "If the situation continue for another few more months, the country's economy will suffer heavily," says a senior executive of one of the joint venture banks. Dr. Tilak Rawal, governor of Nepal Rastra Bank (central bank), however, does not see a threat. "The freeze on land transactions will have only a temporary effect on the banking sector, but it will bring more positive results," Dr. Rawal said at a public function. The legal tangle Constitutional lawyers argue that the decision is against the spirit of the constitution. "The announcement is unconstitutional and illegal as the present constitution guarantees the rule of law and the government is not above the law. The government cannot freeze transaction of land without introducing an act," says advocate Harihar Dahal, a former president of Nepal Bar Association. Deuba's announcement to freeze the transaction of land is against the spirit of the Constitution of Kingdom of Nepal 1990. "The announcement to impose the restriction in the property is a clear violation of the constitution. The constitution under Article 17 clearly guarantee the right of property of every citizens," says advocate Sunil Adhikary. The government can restrict the transaction of land but the law must back it. "The government can restrict the ceiling of the land but it must be in conformity with the law. The recent announcement is not based on any law," says advocate Prakash Wasti. After Deuba’s announcement, more than half a dozen cases have been filed at the Supreme Court demanding that the notification on freezing land transactions be quashed. People are going to the district courts to safeguard their property from government intervention. Constitutional provision Article 17 under the Right to Property says: (1) All citizens shall be, subject to the existing laws, has the right to acquire, own, sell and otherwise dispose of property. (2) The state shall not, except in public interest, requisition, acquire or create any encumbrance on, the property of any person. (3) The basis of compensation and procedure for giving compensation for any property requisitioned, acquired or encumbered by the state in the public interest shall as prescribed by law. Others say the directive principles and policies of the state can allow the government to take such steps. The Supreme Court has already defended the right of the state to acquire land through an act when it gave its verdict on Land Reform Amendment Act 1998. Clause 5 of State Policies of the constitution says the state shall create conditions for economic progress of the majority of the people, who are dependent on agriculture, by introducing measures which will help in raising productivity in the agriculture sector on the principles of industrial growth by launching land reform programs. The existing law must back every action of the government. Right to property means to acquire, sell, share, transfer, mortgage, rent or dispose of it in any manner at any time. But here the prime ministerial declaration and the government notification explicitly say that the government has decided to freeze all kinds of transaction pertaining to land until the new law is made. Do they not differentiate between existing provisions of the law and future provisions? Are the people such fools to believe them? If the government can do these things without the law, then why do they need laws at all? If everything can be done without law, isn’t this akin to Jung Bahadur Rana’s ‘hukumi system’ (rule by decree)? The Pashupati Area Development Trust and the Koshi Tappu Wildlife Reserve have laws to restrict the use of land. In this case, the freeze covers the whole country and all kinds of land, for which there is no law. Can the economy be held hostage for an indefinite period? How deeply would transactions be effected? The asset of many Nepalis is land. What will happen to land given as collateral? For particular uses of land, the government may put some reasonable restrictions under the relevant laws. In the urban areas, one can not built a house without the approval of the municipality, but this provision is not required in villages. However, Prime Minister Deuba issued a flat decree in parliament. Nepal's economic sector has been shaken following the announcement and nothing can undo the tension generated by the decision. The populist statement is slowly losing its impact. Even the government withdraws its decision, it will take many years for the land sector to stabilize. ‘The Decision Is Against The People Of Terai’ — BADRI PRASAD MANDAL BADRI PRASAD MANDAL, parliamentary party leader of Nepal Sadbhavana Party sees Prime Minister Sher Bahadur Deuba's land reform policy as a hoax. Mandal has demanded a ceiling on property rather than on land. Mandal’s party has declared that it would continue to disrupt the parliamentary proceedings until the government withdraws the decision. Excerpts: At a time when the ruling and main opposition parties are describing the Prime Minister Deuba's announcement as a revolutionary step, why is your party opposition it? We are not alone in opposing Prime Minister Deuba's announcement. The Rastriya Prajatantra Party has formally decided to join us. MPs representing the Terai and other regions who are in the two largest political parties are also with us. If the main political parties allow their MPs to follow their conscience, more than 95 percent of the legislatures will support us. In the Terai, land fragmentation would further reduce production levels. After all, how much land do the people in the Terai have? The announcement of Prime Minister Deuba is against the interests of Madhesi community. It will turn many people living in the Terai landless. But main opposition party leader Madhav Kumar Nepal claims that this is a revolutionary decision. How do you look at it? We are demanding ceiling on property but not on land. In the name of land reform, the Nepali Congress and CPN-UML are trying to protect their property. There are wide disparities in the distribution of property. If you evaluate the position of the people in terms of property, you can see how big these disparities there. The value of Prime Minister Sher Bahadur Deuba's newly built house at Budhanilkantha is worth thousands of bigahas of land in Terai. Likewise, the value of the house of the main opposition party leader is also worth thousand of hectares of land in the Terai. The value of land and property in the Kathmandu valley in other urban areas are much higher than the land in the remote hills and the Terai. If seen in terms of value, is not a hoax to claim such a step as revolutionary. The commission money the ruling party and main opposition parties acquired through the Lauda Air and China South-West deals can purchase entire Terai districts like Morang and Rautahat. What is your demand then? We want a ceiling on property. If country's two major parties are really sincere, they can introduce an act on property ceiling. After Deuba’s announcement, the people in the Terai have lost the opportunity to engage in small business by placing their land as a collateral to get money. Since the announcement, all land activities have stopped, small farmers and poor peasants with a small land have nothing left to claim as theirs. This decision is against the poor people and the people of the Terai . Nepal Sadbhavana Party sees the decision is another shock after the citizenship fiasco. Your party has six members in parliament and the RPP has 11. How can you stop house proceedings for a long time? We will not allow the speaker to enter into regular business. The speaker has to ask his marshals to throw us out. If the issue is so serious, why have the ruling and opposition parties supported the move? Since the main opposition party is run by a group of people representing the hills, they do not understand the problems of Madhesis. Had they been really sincere to the cause of the people in the Terai, they would not have supported the program. But so many top leaders in the Nepali Congress like Krishna Prasad Bhattarai and Girija Prasad Koirala, and Madhav Nepal, K.P. Sharma Oli and Bharat Mohan Adhikary in CPN-UML have been elected from the Terai. Why are they supporting the move? All the major political parties seem to realize the drawbacks of the decision. Senior Congress leaders have already demanded the party's central committee meeting. Moreover, there are signs of a revolt in the main opposition party. Minister of Information and Culture Jaya Prakash Gupta, who is also the spokesman of the cabinet, has defended the move as constitutional and has expressed confidence that your party would eventually accept it. How do you look at it? Regardless of what the government says, the announcement is against the spirit of the constitution and existing law. The announcement curtails the fundamental rights of the people. More than half a dozens of petitions have already been filed in the Supreme Court. So you will continue to your opposition? We have support from all communities including those in the cities. If the government does not withdraw its decision, it will have to be prepared to face dire consequences. The political leaders must understand that Nepal is not country of particular group of people representing small urban areas like Kathmandu. ‘Land Is The Property Of The State’ — JAYA PRAKASH GUPTA Minister of Information and Communication JAYA PRAKASH GUPTA is also the spokesman of the cabinet. He holds the views that the state has to take some radical steps in the interest of the larger community. Prime Minister Deuba's announcement on land reform is a part of the process to improve the life of common people, he says. Excerpts from Gupta's comments on Nepal Television’s Bahas Program: It is said that the government’s land-reform decision is against the spirit of the constitution. How do you defend your decision? The government can freeze the land it wants, as land is the property of the state. The government is doing so under the constitution and existing laws. Even in the Pashupati area, the government has put a freeze on the transaction of land for certain period. When I was chairman of Koshi Tappu Wildlife Reserve, I froze the transaction of land and property for the certain period in Udayapur, Saptari and Sunsari. When will you table the bill in the parliament? We will table the bill during this session and hope it will be passed within a month. So the freeze on the land transaction is just temporary. The land is owned by the state. So the freeze is not in violation of the act or constitution. Even if this is a revolutionary step, why did you not consult with other parties? Had the government not announced the decision, there would have been the possibility of misuse of property and land. So the decision is just temporary. We understand that freezing transactions temporarily would harm small farmers who want to do something by selling their land. Don't you think this decision would hit the national economy? I don't think it will do any big harm. If we stop interpreting the decision on a personal basis, I don't see anything is going to happen. The government took this decision with a broader national perspective. The state has right to confiscate land. We are not doing it for ourselves. |
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