Realizing Efficient Use and Conservation of Land under Private Ownership - A Rebutment to Nobel Economics Laureate Theodore W. Schultz

Rebutting Theodore W. Schultz’s assertions that small farmers are rational, low income countries saddled with traditional agriculture have not the problem of many farmers leaving agriculture for nonfarm jobs, part-time farming is efficient, and economies of scale have no logical basis and not stood the test of time, this paper presents that in (1) the low income countries still saddled with traditional agriculture, (2) the low income countries developing towards the high income economy, and (3) the high income countries, numerous able-bodied part-time and absent farmers earning higher off-farm income tend to under-utilize or idle small (and often fragmented) farms without selling or leasing them to full-time farmers to achieve economies of scale which do have logical basis and stood the test of empirical findings; and indicates that this is a global problem unresolved under private land ownership in both developing and developed countries. Thus small farmers in so doing are not so rational to the societal and their own fundamental interests. The paper also shows that in Central-Eastern Europe and Central Asia under private land ownership or possession many farmers voluntarily remain in collective land operation which perpetuates the low individual incentives. The paper further analyses the dilemmas the EU has been facing in resolving food overproduction, reducing trade-distorting agricultural subsidies and tariffs, keeping self-sufficiency, retaining small farmers in agriculture while strengthening large farmers, and efficient land use; and the crucial imperfections in the EU enlargement process. The paper thus proposes possible solutions on how to protect private land ownership, while transferring under-utilized land to full-time farmers; prevent the high costs of the traditional land consolidation, but still reaching its aims; keep part-time small farmers in agriculture, meanwhile bolstering full-time large farmers; avoid collective land operation, in the meantime benefiting from collective services; boosting EU enlargement but not adding burdens on the EU; retain non-cereal agriculture on ecologically sensitive land, at the same time improving the environment and precluding food overproduction; reduce trade-distorting agricultural subsidies and high tariffs, whereas making full-time farmers viable and competitive; and promote off-farm activities, for the meantime reinforcing agriculture.