Dr. M. Aminul Islam Akanda :
The cooperative farming in Bangladesh was practiced with pooling of one or a few resources. By and large, a two-tiered cooperative system was applied with its primary one at villages and the federation at Thana level, as per the advice of Dr Akhter Hameed Khan in the late 1950s. Some supply-side factors like irrigation infrastructures and subsidized inputs were the motivating factors in organizing farmers. Weren’t those input-recipient societies failed to turn into ‘vigorous local institutions’? Their outreaches were limited to a number of pilot projects without any nation-wide socio-political goals until 1960s. However, a sudden wave was witnessed after the independence of Bangladesh. Many organizations launched experimental projects following the ‘Cooperating Farming Seminar’ at the Bangladesh Academy for Rural Development (BARD) in 1972. This might be as a reflection of endorsing cooperative farming in the first five-year plan under ‘socialistic pattern of economy’. Not that all, the cooperative ownership was earlier recognized as a separate type resource ownership in article 13(b) in the constitution of Bangladesh.
The cooperative faming in Bangladesh was not successful for excessive experimentations, problems follow-on policies and numerous implementing agencies. Mr. Jasim U. Ahmed in his research (Bangladesh Journal of Agricultural Economics – BJAE, 1-1:88-106, 1978) found most of the experimental projects as closed within two years after commencing for financial loss. Similar ill fate was for a few societies formed by the Bangladesh Agricultural University. They had differential resource pooling for only ‘plot-to-plot irrigation’ to ‘all post-tillage operations as single unit farm’. Professor Muhammad Yunus and Sir Fazle Hossin Abed also tested cooperative approach in delivering credit to the poor, failure of which let them to adopt group-based microcredit. Was the fate unalike for the Integrated Rural Development Program (IRDP) of 1972? The IRDP, which was transformed into the Bangladesh Rural Development Board in 1982, turned into a failure. Wasn’t that the early age of stagnating cooperative farming?
Many farmers were found to prefer simple cooperatives without collectivizing the distribution of returns (BJAE, 3-1:27-50, 1980). Didn’t it indicate a failure in pooling resources? Small and medium farmers in non-land pooling cooperatives often enlarged farm size with rented-in land. They could bend tenancy terms less exploitative using subsidized inputs and irrigation in cooperative farming areas. How long could subsidies favor tenants? The situation was initially changed after opening out of private investment on irrigation system. Professor Koichi Fujita in his agrarian stories in the book ‘Rethinking Economic Development’ presented the shallow tube well (STW) owners as water-lords in early 1990s. He found an over-investment trap in 1999 and lately a competitive irrigation market. On the other hand, sharecropping turned unfavorable to tenants while the 1984 land reform approved one-third share for land, as per my research published in the Journal of International Farm Management (4-2:1-12, 2008). This was a case study under a scenario of strong demand for rented-in land in 2004. However, in a recent field visit, I observed larger supply of landed-out land from absentee farmers and an extensive practice of flexible cash renting.
Rural land market was derisive during the trialing of cooperative farming. It turned into distressed one with an increase in real land price and a fall in capital (land value) output ratio, as per my other article in the Journal of Land and Rural Studies (2-2:36-53, 2014). This trend created high intension of holding land among all types of farmers in the early 1990s. Subsequent hyper hike in land prices made the market desirous even with a very high capital output ratio. Landowners were benefited not from crop output but from capital concentration on farmland until 2013. The stagnation (falling price) thereafter, in addition, offered outrageous low return to landowners. Now, tenancy terms are neither favorable to tenants or to landowners. The tenant is not in a position to accept exploitative terms for easy option in non-farm earning. Many absentee landowners are not worried of return but of managing extant borders of farmland. Would any negotiations solve this boarder-losing problem as per the Coase theorem? The answer is negative under weak-defined sanction and protection rights. Won’t any trustworthy agreement persuade them in consolidating farmland?
Meanwhile, leasing or cash renting made tenancy terms favorable for commercial farming. Some ‘potato projects’ is easily accumulating large areas, which is different from raising farm size with rented-in land by cooperative farmers earlier. Did the farmers consolidating either land or labor get marginal returns?
Hasn’t it let the cooperative activities to change into managing inputs and selling farm products? Accordingly, recent model of the comprehensive village development programs practices collectivizing activities within individual operations. How far does this model differ from growers cooperatives in Japan? Many people, knowingly or unknowingly, argue for large scale farming in Bangladesh following Japanese model. Mr. M. A. Jabber in his column (Bangladesh Observer, 16 September 1974) clarified that cooperative farming in its true sense was never introduced in Japan. The growers’ cooperatives intensified activities into marketing and financial services. I have visited a few large paddy fields during his stay in 2005. Those were operated by farmers belonged to growers’ cooperatives but were created with leased land.
The Japanese Agricultural Cooperative (JA) became the major player in farming community after legitimating the ‘farmland should be owned by farmers’ in the Agricultural Land Act of 1952. When industrialization-led migration created many absentee farmers, the classical farming was found inefficient in their small scattered plots. The ‘farmland consolidation projects’ was undertaken to enlarge paddy plots after enacting the Agricultural Basic Act in 1961. The regulated rent was the tool of consolidating farmland that was organized by group of farmers. Subsequently, the focus changed from ‘possession’ to ‘use’ for increasing the number of retiring farmers. The revised agricultural land act in 2009 allowed a number of non-farm industries to operate consolidated farmland with at least one full-time farmer in the corporation. In April 2014, more non-farming entities were encouraged to start commercial farming. All 47 prefectural governments launched the ‘farmland consolidation bank’ as an intermediary between renters and landowners. Could such a farmland consolidation system be applied in Bangladesh?
This is a land-scare country with 15 million farm holdings. It has average cultivated area of 0.51 hectare per farmer scattered into six plots. Farmers here have not migrated a lot and are active in farming. Japan, long after a downtrend of typical farmers, justified its changes into corporate commercial farming. Bangladesh in any consolidation practices must keep active farmers as active like Japanese did until 2008. Swedish economist Gunnar Myrdal in his book ‘Asian Drama’ even argued for a modified form of welfare capitalism in South Asian agriculture. Will any intensive pooling of resources for cooperative farming fail again? It has a little possibility in this age of low ‘agency problem’ between owners and users in either tenancy or irrigation market. The regulatory framework for cooperatives exists which can be customized for consolidating farmland. Many absentee farmers might be happy with providing leasable land and many labor-surplus farmers with small piece of land might prefer leaving for non-farm earnings. What is essential is a ‘land operation reform’ to ensure marginal factor returns and property rights. Any periphery zoning, in addition, would be effective for conservation of farmland.
(Dr. M. Aminul Islam Akanda, Associate Professor, Department of Economics, Comilla University, Email: [email protected])
