Market-based land reform: Violence, efficiency, and redistribution in rural Colombia

Date of Completion

January 2004


Economics, General|Economics, Agricultural




The new land reform program in Colombia is based on the presumption that market based land reform will increase overall efficiency while transferring land to small farmers. However, there is lack of empirical evidence to support this assertion. In the case of Colombia the skewed land ownership structure, segmentation of land market transactions, and violence in the rural areas may hinder the success of market based land reform. The fundamental inquiry of this dissertation is to examine how the new land reform program affects farm efficiency and land redistribution. More precisely, the question to be answered is if activation of land markets will promote a more efficient allocation of resources and/or shift land to small farmers, or if in the context of imperfect markets and political violence, will activation of land markets lead to a more concentrated land ownership pattern and/or productive inefficiency. ^ This dissertation provides estimates of farm productivity across farm sizes in a sample of 822 farms in rural Colombia and the direction of farm size-productivity relationship. The study concludes that there is indeed an inverse relationship between farm size and alternative efficiency measures, implying that land redistribution in favor of small and medium farms could simultaneously enhance agricultural production and improve equity in rural Colombia. ^ Estimates of household level technical efficiency and its determinants are calculated estimating a multi-output distance function incorporating a model for technical inefficiency effects, with particular reference to the implication of political violence on household performance. The findings show that violence is a very influential determinant of household productivity performance. In areas where the insecurity is higher, households have lower productive efficiency. ^ Finally, comparison of land rental market, sales market, and the administrative redistribution in terms of total amount of land reallocated and the characteristics of the recipients reveal that land markets can provide access to land by the poor and more productive farmers. However, rental markets are more effective in enhancing productivity than sales markets, which are characterized by significant barriers to entry to the poor. Both rental and sales markets are still relatively thin and do not make a large enough contribution to change the dual property structure in Colombia. ^