Impacts of land reform on farm production and income distribution in the agricultural sector of Sindh Province of Pakistan

Poverty is a widespread problem in Pakistan, especially in rural areas. Its causes are believed to rest partly on the highly differentiated structure of land ownership. The government of Pakistan has initiated several programs to reduce the disparity in rural farm incomes by providing production incentives, particularly to small farmers. In practice, most of these benefits went to the more affluent land owners who had access to the necessary complementary inputs.

There have been three land reform programs designed to increase rural incomes through boosting agricultural productivity and reducing rural unemployment in Pakistan. The outcome of these reforms has never been evaluated. Reliable research has yet to be conducted to measure their economic impact. Lack of information makes it extremely difficult for policy makers in Pakistan to formulate appropriate agricultural policies. There is, therefore, a need for more precise information on the impact of past programs on the major problems affecting Pakistan.

The objectives of this study were to analyze the effects of land reforms on agricultural productivity, employment, and income distribution in Pakistan. Eight hypotheses were developed with regard to the relationships between farm size, factor productivity, and employment. Regression models were estimated to test hypotheses to achieve these objectives. The models were tested for validation of regression results. The Lorenz curve and the Gini coefficient were developed to measure income inequality differences in two periods, i.e., 1972 and 1980, one before the land reform of 1973 and another after the reform of 1977. The two income distribution indices were evaluated using chi-square test for goodness-of-fit.

The study revealed that agricultural productivity has an inverse relationship to farm size and that employment increased as a result of the land reform programs. It was also found that the magnitude of inequality index of income distribution decreased after the land reforms were introduced.

The study concludes that there is a need for further research to determine the optimal level of farm size for Pakistani conditions.