Does setting minimum, maximum land acreage make economic sense?

An aerial view of land tilted for farming in part of the Mau in Rift Valley in this picture of 13th Au,2009. [photo/ Jacob Otieno/STANDARD]

Truth be told, most Kenyans never read the new Constitution. With time, the real issues will emerge including unintended consequences. Whether you read it or not, the moments of truth are slowly emerging. The current issue emanating from the Constitution is setting maximum and minimum acreage for private land (yes private). A bill has been published to that effect and makes an interesting read.

It seeks to actualise Section 68 c (i) of the Constitution of Kenya 2010. It is not clear why we wanted to cap private land ownership. The thinking, according to the bill, is to reduce inequality, promote equitable distribution of land, regulate subdivision of land, and facilitate self-employment, sustainable utilisation of land and promote national security as well as economic stability. Is land the cause of all these problems?

The bill says the minimum and maximum acreage will be determined based on ecology, demographics, culture and other factors. It also provides for zoning and exemptions on acreage for large-scale farming, conservancies, forestry and other investments.

It has a schedule that gives minimum acreage for each ecological zone and counties, and it states that the acreage can be reviewed after eight to 12 years after a scientific study. It is not clear if the current acreage was preceded by such a study. One would really want to know how the minimum and maximum acreage in each county was arrived at. Politically, this bill and the relevant section in the Constitution makes a lot of sense. Land has been at the epicentre of violence in Kenya and also elsewhere. From Mau Mau to the 2008 post-election violence, land has been at the centre.

Any mention of redistribution would excite lots of Kenyans. My greatest concern is how the excess land will be distributed. Would the owners get fair compensation for their property? More curious is whether we can trust the Government with surplus land. We have not trusted it since uhuru. Could that land be used for political patronage? Economically speaking, the bills leaves a lot to be desired. There seems to be a deeply entrenched belief that land shortage and its distribution is at the centre of our problems. If you visited any county such as Nyandarua, where land has been plenty, you will realise that owning land will not solve our economic problems. But some ideas in the bill are noble, for example, setting minimum acreage.

We need to make land economically productive. We could ask some hard questions; why should the Government determine the maximum land you can own? Will it do the same for assets? There are four factors of production. Why is land targeted? The argument that it is finite is not enough. My greatest concern is that once land ownership is regulated, the Government will target the other factors of production.

Minimum wage

Shall we one day have a bill determining the minimum and maximum amount of money we should have in banks and the excess  distributed? What of labour? Shall a bill be tabled to determine the minimum and maximum number of employees we should hire? This law currently has minimum wage, but not maximum.

On entrepreneurship, shall we get a law one day that determines the minimum and maximum number of enterprises one can own, with extra enterprises taken over by the Government and redistributed? This bill should scare every entrepreneur. I see it as a limit to economic freedom. Interestingly, it provides lots of loopholes, because companies, co-operatives, conservancies and forests seem exempt or can be exempted. Will exemptions not provide a route to rent seeking?

Will some people become citizens to own land? I am not sure why the framers of the Constitution sneaked in this line on maximum and minimum acreage. Maybe it was targeting specific people.

I do not want to defend anyone, but land has always been plenty in Kenya and anyone who had money after independence could buy plenty of it. One mzee told me he refused to buy five acres of land in Spring Valley in Nairobi because it was too far away from the city centre! This bill takes us back to land when the world has long moved on. Apple Inc. made profit equivalent to Kenya’s current budget in three months.

Yes, with all the land that we have! In developed countries, only about three per cent of the population is engaged in agriculture. In Kenya it is more than 50 per cent. Should our focus not be on the new economy based on innovation? Which farm in Kenya has made more money than Safaricom, yet some of these farms have been operating for more than 100 years. Setting minimum and maximum acreage of land for private land owners seems to contradict Article 40(2) b of the Constitution. Land acreage joins gender and regional balance as the other emotive issues that dominate public discourse. What will happen when the land has been redistributed? All our economic problems will be over? We shall reach Nirvana? Interestingly, the bill seeks to prevent sub-dividing land into small uneconomical pieces and reverse what we have been doing since independence. Should we really have subdivided large scale farms formerly owned by mzungus? Is the bill coming too late?

The owners of new, small pieces found them uneconomical. No wonder poverty is so prevalent in rural areas, paradoxically where people own land. Kenya’s most wealthy people put money into land after making it elsewhere.

The bill seems to make it easier for the elite to own and keep large swathes of land. The hoi polloi may not be too affected by the new bill because their acreage is too low or they don’t own land. Land is one of the factors of production and should be treated like all the other factors. Too much emphasis on it has made it a problem.

Why don’t we have a bill on the minimum and maximum size of families, which is at the heart of the land problem? If we do not address the real problems and their causes, we shall never solve them. We need a sober debate on this bill. I hope it does not start a class war.