Colombia's Land Devlopment Policy

This article analyzes the policy of land appropriation in Colombia since the enactment in 1993 of a new land appropriation law, Law 41. The law's goal is to regulate ownership of land and land reclamation infrastructure, which consists of irrigation, drainage and flood control works. The law was passed in the context of an opening economy, which demanded a strong agricultural sector in order to face external competition.

The law was seeking to modify the conditions of existing land reclamation and irrigation projects, which were traditionally constructed and administered by the government with virtually no participation from water users. Lawmakers intended the new law to maximize the benefits of public investments in irrigation by giving greater management roles to water user associations (WUAs) in monitoring construction quality and making investment decisions, since they would ultimately be partially or fully fiscally responsible. Unfortunately, this intention was not realized in the law's practical application.

Decision-makers

The law created the Land Reclamation Supreme Council, which is comprised of representatives from the highest levels of the Ministry of Agriculture, National Planning Department, Ministry of Environmental affairs, Financial Fund for the Agricultural Sector, Colombian Geographic Institute, Indian communities, WUAs, Colombian Farmers Association, and Colombian Peasants Association. The Council represents the main organizations related to land reclamation, which enables it to better direct policy and to ensure that land reclamation works are executed faster than in the past.

However, the Technical Secretary of the Council is in charge of the National Institute of Land Reclamation (INAT) and, consequently, projects that are selected by the Council often reflect the interests of INAT, despite the Law's promotion of WUAs participation. In fact, selected projects are often those that had been waiting in INAT's offices for a long time. Rather than assembling once or twice a year to hear and evaluate project proposals presented by WUAs, the conventional top-down approach remains entrenched.

The law also called for a direct subsidy for small farmers. But, when implemented, the primary infrastructure for an irrigation district is fully paid for by the government. For secondary works, the subsidy is 70 percent and for tertiary works on independent farms it is 30 percent. Thus, it seems that subsidies are handed-out to anyone regardless of their land-holding size.

Finances

In 1991, the government estimated that the cost per irrigated hectare in Colombia was about $2,500; five years later the cost per hectare had risen considerably. As of 1996, the estimated cost for governmental investment was $6,500 according to INAT. Regardless of the exact cost, however, a qualitative question remains: In current circumstances--characterized by budget constraints and low international prices for our agricultural products--what kind of agricultural crops can support those kinds of costs?

While we do not have an answer yet, we know from empirical observation that subsidies are received by the stronger groups of farmers, and serve as a means of transferring society's funds to already wealthy groups. A study carried out by the World Bank in 1995 concluded the cost of $4,000 per irrigated hectare to be expensive (The World Bank 1995). Colombia needs to find a way to improve how investments are made, because the cost for society is quite high. The real cost for the economy calculated by aggregating the entire public budget for land reclamation divided by the number of hectares actually irrigated showed that the cost per hectare is actually around $30,000.

Private Contractors

Private contractors are the builders of irrigation projects. They contract with WUAs and government representatives under rules and legislations tailored to private sector contracts. Although private contractors are faster than those in the public sector, there is a loss of control of public funds. When a WUA decides on a drainage and irrigation project, they select the contractor and then present the project to the Land Reclamation Supreme Council. When the Council approves the project, the only function of the government is to pay to the contractor. While this arrangement has the potential to accelerate the construction of irrigation projects, it can also become a new source of corruption.

Community Participation through WUAs

Law 41 of 1993 declared that WUAs are responsible for promoting and developing land reclamation projects. Although the rule was made with the best intentions, community participation is limited to the selection of contractors and to requests for public money from the government. Since the law indicates that the users should pay a part of the costs, it was expected that the cost of government would decrease; however, as noted above, the costs have not fallen but risen considerably.

Cost recovery, subsidies and incentives

Cost recovery, subsidies and incentives are the most important aspects of the new legislation. It was thought that the government would recover their investments totally or partially, but reality shows a very different, often disappointing, picture. After the new Law, costs rose as never before, none of the investment has been recovered, and incentives became a new way to give subsidies to all the beneficiaries.

The agricultural sector needs support and it should be assisted by the government in order to make a stronger sector with possibilities to face external competition. However, it should not become a heavy burden for the government. This will be possible only when the private sector assumes its responsibilities in promoting solutions for their problems and covering part of the costs.

Conclusions

Though many decisions now lie with WUAs, in Colombia these decisions could become a source of corruption. So long as land development is viewed as physical infrastructure provided through unlimited investments paid by the government, our farmers will not feel the need to improve their mode of production.

My experience shows that participatory schemes are not as inclusive in practice as they are presented in theory. While participation is important, investments should be limited in order to select the best situations. If we do not send clear signals to potential beneficiaries, these schemes will be understood as a way to take advantage of public funds without establishing a goal of self-sufficiency.

Our message to WUAs is that they should promote the best investments, taking into consideration that the public budget is not unlimited. The poorest segments of society demand better income distribution. We should not forget that a polarized income distribution undermines social cohesion, and will make it more difficult to maintain stability.

Manuel Alvaro Ramírez Rojas
Economist, Magister Universidad de los Andes Colombia
Calle 26 No. 13-19 Piso 7
Departamento Nacional de Planeación.
Fax: (571) 2816737
E-mail: mramirez@dnp.gov.co

References

The World Bank, ``Colombia Review of Agricultural and Rural Development Strategy," November 22, 1995, Annex B, p. 64