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Andrew Petcoff Colton J.R. Noll.  Quick History  What is Land Reform?  Inequality  Benefits  Costs  Examples  Conclusion.

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Presentation on theme: "Andrew Petcoff Colton J.R. Noll.  Quick History  What is Land Reform?  Inequality  Benefits  Costs  Examples  Conclusion."— Presentation transcript:

1 Andrew Petcoff Colton J.R. Noll

2  Quick History  What is Land Reform?  Inequality  Benefits  Costs  Examples  Conclusion

3  The Americas were discovered in 1492  Discovery of valuable minerals lead to encomiendas -Ecomienda is when large tracts of land where granted to Conquistadors for exchange of a portion of the output  Few people hold the majority of land

4  Also known as Agrarian Reform is a process which the government takes land and then distributes the land to the land workers

5  Provide small landowners access to land, agricultural credit, housing, education, warehouses, and technical assistance.  Three letter word affects the economy as a whole…TAX.

6  Def: The branch of economic theory concerned with the social desirability of alternate economic states.  Pareto Efficient: An allocation at which the only way to make one person better off is to make another person worse off.

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8  All the points on the contact curve are Pareto efficient (A,B).  C is not efficient.  With A or B it is not possible to move the point along the contact curve without making either the small or large farmer worse off.  With C it is possible to increase the resources to make one farmer better off without

9  Welfare Theorem 1: A competitive economy automatically allocates resources efficiently without the need of help from the government.  Welfare Theorem 2: If society determines that current distribution of resources is unfair, it only needs to transfer resources in a way to be deemed fair. Then let the market work and it will be efficient.  Pareto efficient is not the same as socially acceptable.

10  Redistributes land from wealthy to poor  Leads to “political” stabilization  Breaks political power of wealthy  Ex. Less than 10% of agricultural holds contain 77% of the Brazil’s farmland  Ex. 1% of landholdings encompass 80% of agricultural land in Paraguay Threat of land reform makes inefficient farming by latifundistas become more efficient.

11  Farmers have stronger incentive to work harder. -Can employ family members and avoid having to hire seasonal labor at a low wage rate with low human capital.  Chance to own their own plot of land.  Give illusion of equality.

12  Higher tax rates.  Lives.  Redistribution of land costs. (i.e. Economies of Scale.)  Does not help the poorest of the poor.  Does not work in democratic systems.  Cash cropping to subsistence farming.  Environmental costs.

13  Land Reform was included in the 1917 Constitution  Nothing really happened until the 1930s during the Cardenas administration  At this time almost half the farm land was affected  Slowed down until the mid 70s

14  Land was divided into what were called “ejidos.”  Communal property rights on land from large estates  Land could be farmed collectively or by individuals of the community  Access passed through families but remained in the community  Each Ejidos was between 1 – 10 hectares of land  Made investments ineffective

15  85% of the land given to peasant farmers from was not suitable for crop producing.  The government pushed irrigation reforms (1946) but only to large scale farmers because the economies of scale farming.  Large Farms still produce 70% of Mexico’s marketable foods  The small farmers depend on what they produce for food. Some are able to sell crops for cash.  Land Reform policy considered a success (did not hurt agriculture growth)

16  Established by a militant government under the leadership of Juan Alvarado.  Reform motivated by desire to: 1) calm rioters and 2) break political power of latifundistas.  Government broke-up successful plantations in coastal regions.  CAPs., sharecropping & renting were forbidden.

17  ISI controls: discriminate against the agricultural sector through exchange rate policy, imposing price controls, subsidizing food importers, all which reduced the profitability of farmers.  Land Reform policy was a failure

18  Land Reform is a Political tool  It needs more than land redistribution to be successful  Amount of underused land is in short supply  Poorest of the poor are not better off l9F8VjY&feature=PlayList&p=B38919C D9E&playnext_from=PL&playnext=1& index=2

19  Latin America’s Economy: Diversity, Trends, and Conflicts. Eliana Cardoso and Ann Helwege (1992).  atin_America atin_America  explorer.com/land_reform.htm explorer.com/land_reform.htm  d=1016 d=1016

20  Agrarian_Reform_In_Peru Agrarian_Reform_In_Peru  reform_in_Mexico reform_in_Mexico   Rosen, Harvey S., and Ted Gayer. Public Finance. New York: McGraw-Hall/Irwin, 2008.


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