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ALTA: is there light at the end of the tunnel? [The Fiji Times, 10 Sep 1999]

29/03/2012

 Six months ago, most of us in the Joint Parliamentary Select Committee on ALTA and Land were quite optimistic.

After many patient discussions led by Sitiveni Rabuka and Jai Ram Reddy, it was agreed that the NLTB Taskforce Report would be used as the starting point for the discussion, not as the final position.

We were close to agreement that ALTA could be largely retained, but there would need to be changes, to better look after the legitimate interests of the land-owners.

Not everyone was going to be satisfied, either on the land-owners’ side or the tenants.  But the majority of leases were likely to be renewed.

New Government, new negative attitudes from NLTB

Since then, a new Government has come in.  The attitude of some NLTB administrators and many land-owners, have changed for the worse.

Is this a reaction to the results of the 1999 Election?  Have the ALTA leases become a political football, with “solutions” threatening to torpedoFiji’s economic recovery?

Our NFP paper (by Reddy and Narsey)

In January, NFP tabled a discussion paper on ALTA (prepared by Mr Jai Ram Reddy and myself) setting out a framework within which the interests of both the land-owners and tenants could be addressed, while maintaining the country’s welfare.

It recognised that for Fijians, land is their ultimate safety net, the physical embodiment of the all-encompassing concept of vanua.  The paper acknowledged that ordinary landowners had legitimate grievances in not being able to maximise the benefits from their land.

The paper recognised that for Indian tenants also, after generations of toil and improvements, the land represented great social and emotional security, and a crucial source of livelihood.

But it was pointed out that ALTA was not an ethnic problem, with thousands of Fijians already benefiting from the sugar industry.  In the long-term also, given the demographic changes, Indian canefarmers would be largely replaced by Fijian cane farmers, just as Indian canecutters have been largely replaced by Fijians.

Clearly, the future sustainability of Fijian cane-farmers, their profitability, their ability to raise finance on the security of their leases, would also require the beneficial provisions of the ALTA legislation: on length of leases,  rent-fixing mechanisms, and provisions for compensation.

Undermining these ALTA provisions in the short-term interests of land-owners, would also undermine tenant Fijian cane-farmers (now and in the future), and the sugar industry.  The NFP paper strongly argued that ALTA should be retained in substance.

NLTB should renew the leases where the land-owners were agreeable.  NLTB should not use non-renewal as a lever to force a change of the relevant legislation from ALTA to NLTA.

Proposed solutions to the ALTA leases must try to maintain the viability of the sugar industry and continuity of output of cane, given the importance of the sugar industry to the whole economy.

The paper warned that the long term reduction ofLOMEpreferences forFiji’s sugar exports to the European Union, would make many of the marginal cane farms quite unattractive, for both the tenants and the land-owners.

In ten years, both tenants and landowners might be reluctant to occupy the marginal lands.    Short-term solutions (while normally not desirable), should therefore also be considered.

If large numbers of  tenants left the land, there would be major costs for Government in urban areas: for education, health, and housing.  It was better that Government devote funds to retain tenant farmers on the land, and to maintain the sugar industry.

Instead of applying political pressure, Government should be prepared to invest significant funds, in the form of market incentives,  to encourage landowners to freely renew the leases .

(More than $200 millions of tax-payers’ funds had been similarly used to reduce the economic fallout from the NBF disaster).

It seemed that where leases were selling for large premiums, land-owners were not being appropriately rewarded.

If necessary,  Government could assist with the payment of premiums for renewals of leases.  But in general, the rental formula could be adjusted to allow landowners to obtain better rents, where economically sustainable.

Where the tenant could not sustain rent increases, Government could become a buffer. Tenants would pay whatever rent was economically sustainable (under best practice conditions) and land-owners would be paid the reasonable rental required to renew the leases.  Government could provide the difference.

Where landowners were taking land back, they could be helped in their adoption of commercial cane-farming, by the previous tenants, as Fijian farmers on their own had not been very successful.

The paper therefore recommended that NLTB and land-owners investigate the partial reversion of leases where existing tenants were given the lease of house sites, and enough land to engage in subsistence or some canefarming.  The landowners would then farm alongside the previous tenants, with their assistance.

It was advocated that where tenants had to leave, they should receive the full compensation for their legitimate improvements, as ALTA required.

And where improvements were deemed illegal (and compensation was not technically liable), we recommended that Government pay moderate compensation, out of a Revolving Fund.  The incoming tenants could then use the improvements, and repay over the long-term.

It is a gross waste of  resources to see exiting tenants destroying their concrete houses, because there are no arrangements for compensation.  While the bitterness of departing tenants is understandable, such acts of wanton destruction cannot help.

The paper recommended that where tenants had to exit, then Government (Ministry of Agriculture, the CDF unit, the Resettlement Unit etc) assist them with their resettlement on alternative land and economic activities, financed by interest free loans provided through the Fiji Development Bank (with the interest covered by Government).

Current Government strategy will not help renewal of leases

While Government’s offer to give a cash handout of $25,000 per exiting farmer is understandable on humanitarian grounds, this will not encourage land-owners to renew the ALTA leases.

Neither will it help the sugar industry, since many farmers will just take the cash and leave (some apparently overseas).

If this offer was taken up on a large scale (for instance by 4000 farmers over the next five years), the taxpayers would have to fork out some $100 million dollars.

Of course, anyone will be grateful for a $25,000 gift from Government.  (Not to be outdone, an NFP spokesman has asked for a $50,000 cash handout!)

Better strategy to encourage renewal

But economists would ask, why not use a much smaller amount to encourage the renewal of leases, thereby helping a greater number of  tenant farmers and their families, improving landowners’ incomes, while maintaining the viability of the sugar industry?

It is also being asked, what will Government do if any landless family demands the same $25,000 so as to have a good start in life?  Why should tax-payers foot this bill?

Over the years, tax-payers have been hurt when interest groups captured Government and used the tax-payers as “cash cows” for their supporters.   Public funds disappeared for “hurricane relief”, for special help for selected businessmen and for the NBF parasites.

Is this another handout?

Government might remember Opposition parties were extremely critical of the SVT Government’s CDF programme for handing out $50 millions of the tax-payers’ funds as boats, outboard engines, etc to rural villagers.  It was alleged that this amounted to buying of votes.

It is also being asked, is the current government, through this $25,000 handout (which will not help in maintaining the sugar industry), similarly using tax-payers’ funds to strengthen their political support?

Government needs to break the cycle, not create more bad precedence for future governments to follow.

Fruits of the 1997 Constitution

 

Prior to the 1999 Election, some in the current Government proclaimed that the new Constitution was no big deal, and that the SVT and NFP offered nothing constructive on the ALTA problems.

 

It is ironic that Government is enjoying the fruits of the Constitution tree planted by SVT (led by Rabuka) and NFP (led by Reddy).

 

It is also ironic that Government’s latest position on the ALTA issues is a vindication of the cooperative approach taken by Rabuka and Reddy on the ALTA problems, and indeed, of the NFP’s Discussion Paper on ALTA.

 

Let us hope that Fiji’s landowners, canefarmers, taxpayers and economy can also enjoy further harvests from the ALTA tree.

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