Nepali Times
The government’s great land grab


As a landowner, it would be natural for me to be horrified at the prospect of losing property to cover up the government's failure to reduce poverty. But my outrage goes beyond just loss of land. I am horrified that the political parties that have opposed the edicts (RPP Sadbhavana) are trying to outdo the others by asking for a cap on cash.

Did the head of a democratically-elected government consult his cabinet or senior party members, or even a legal adviser before taking such a major step? Did he feel the need to make sure that the edict fell within the greater social agreement called the Constitution?

Most societies move forward economically by creating new wealth. Here it is forcible redistribution on a scale that needs to be so large that it will open a gaping wound in the economy. Just look at the math: if half the population below the poverty line is to benefit, the land they own must sustain at least their food requirement. This is about one bigha (0.67 ha) in the tarai with at least some of it irrigated in the dry season. If there are two million families below the poverty line then the government needs one million bigha to be given to the poor.
Having land is of course not enough, the farmers will need inputs, equipment and irrigation. How is all this going to be funded: with bank loans? The government certainly doesn't have the money. So there has to be another round of property grabbing-this time of liquid assets.

Most Nepalis with meagre property are already spooked. They are withdrawing cash and investing in gold. Even if the government takes the money that the banks have not been able to invest (about Rs 45 billion) they will have enough to actually give every poor family a lump sum of Rs 20,000 to get started.
The poor would of course make better use of this money than the banks ever did. Taking idle money from banks and putting it to use in uplifting the poor is every bit as noble as taking land from those who have more than the optimum holding. After all, excess liquidity in the bank means that the money is idle: as idle as a field staying uncultivated. There will always be poorer people who can make more productive use of any asset that a richer person. But is this reason enough to redistribute assets in a society? The prime minister, in his new radical avatar, and the communist parties say yes. This is land-grabbing.

And just how rich are the new landowners going to be? Five katha (0.1 ha) of land that the Congress Party is willing to give to the poor will yield 1,000 kg of grain in one year provided the land is irrigated. For an average family this will mean an income of up to Rs 10,000 a year. And forget vegetables-the market is so small that even a small increase in supply causes prices to tumble below cost of production. The UML's ceiling of 4.5 bigha (3 ha) with irrigation will yield about Rs 180,000 a year. This translates to Rs 500 a day: even less than the daily turnover of my neighbourhood paan shop.

Meanwhile, zamindars whose property has been taken away will henceforth have no incentive to invest in land levelling, irrigation, or augmenting soil fertility. After all, land grabbing will need so much money to implement, will redistribute poverty and this will entail even more land grabbing in future by succeeding government who will need to be even more "revolutionary" to stay in power. The farmers will be wiser to sell off the remaining land and invest the money in a bank across the border in India.

The government's agenda appears to be set by the Maoists. The Congress wants to be more communist than the communists and probably wishes to take the wind out of their sails. It may work, but at the end there may be nothing left to govern. By being like the Maoists, the Congress is showing the same tendency to wreck something that works rather than fix something that doesn't. The Maoists have done the same by threatening private schools: it is too much of an effort to reform and rebuild under-achieving government schools, so their answer is to close better private schools. The government fails to provide quality education to all, so does that mean no parents can or should work to provide better education for their children?

This country's ruling elite has messed up the country. So, one way is to junk the whole lot and start afresh like the Maoists want to do. The other is to have new rules to govern the behaviour of those who govern to make them more accountable. And we all need to be politically more active to keep check on politicians. Politics is too important to leave just to politicians.

(11 JAN 2013 - 17 JAN 2013)