Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

Sector Policy Paper


May 1975

World Bank






Page Introduction .......................................... Summary .......................................... Chapter 1: Characteristicsof Land Reform ............................. Man and Land........................................... Context of Land Reform .......................................... Dimensionsof Land Reform....................................... Chapter 2: Land Reform and EconomicDevelopment ...... ............. Implications for Productivity....................................... Land Reform and Employment ........... ......................... Land Reform and Equity ......................................... Effects on Marketed Surplusand Savings.......... .................. Tenancy Reform ...................... .................... Implementation Issues .......................................... Chapter 3: The World Bank and Land Reform .......................... Changing Concerns.......................................... Technical Assistance...................... .................... LendingOperations.... ...................................... Major Policy Options.......................................... Annexes 1. The Context of Land Reform .................................... Ratios of Population to Land .................................. Population and Production.................................... Distribution of Land........................................ Tenantsand FarmLaborers .................................... Landless Workers .......................................... 2. Experiences with Land Reform ................ .................. Republic of China.......................................... Republicof Korea .......................................... Japan ........ . India...... Iran...... Morocco ........ Yugoslavia ...... Kenya ...... Mexico...... Peru...... 3 5 15 15 16 20 25 27 29 30 31 34 35 38 38 38 40 46

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000million people. At present. there is growing to pressureon land resources increaseoutput. Thus. Ninetenths of this total agriculturalpopulation is in the developingcountries. at least six land-tenuresituations can be delineated.The differencesamong thesetypes point to the varying reforms necessary achievemore equitable land access to 3 . Much of this increase will haveto come from higher output per hectare.Somecountries haveprospectsfor expandingthe frontier of cultivation to absorbmore labor.But one characteristicthat is common to all is a very rapid growth in rural population.the averageman-land ratio is worsening. as the traditional pattern of group ownershipand communalrightsiseroded in favorof individual ownershipwith varyingdegrees equality. In Asia and the Middle East.more labor could be employed in the rural sector through a redistribution of land.although to someextent it is the poorer land that makesup the larger holdings.With food production rising in the developing countries at about the same rate as population. the distribution of income is generally uneven.Where the pattern of land control is skewed. while pressureon the land is increasing.the livelihood of more than half of mankind dependsdirectly on agriculture. the population is moreevenlyspread.maldistribution is reflected in the landlord-tenantproblem.As shown in Chapter1. nonagriculturalemploymentopportunities are not expandingrapidly enough to provide adequateincomesfor all those enteringthe labor market. therefore. Conditions governing agriculture vary enormously in developing countries.Much to of Africa presentsa different problem.INTRODUCTION Land reform is concernedwith changingthe institutional structure governingman'srelationshipwith the land. In other countries.Changingthe pattern of landownershipand redistributing land can contribute to increases output in somecountries but will makelittle difference in in others.The greatestdisparitiesarefound in LatinAmerica. where questionsof access and rights to land are of paramount interestto morethan 2.At the sametime. of In terms of land reform is confrontedwith a rangeof cultural and political situations-based on different patterns of social organization and customs-and with different levels of development. Land is one of the basicfactors of production for food and other agricultural products. while in yet others changingthe rights to land will makelittle direct contribution toward absorbingmore labor. Distribution of landin terms of sizeof holdingsvariesfrom country to country.but rightsof access landare restricted.

where rural population growth and changing technology interact with the existing institutional structures of rural society.Accordingly.this paper focuseson a much narrower aspect-the appropriate role of the World Bank. at 'All references to the World Bank in this paper are to be deemed to refer also to the International Development Association. it is difficult to makegeneralprescriptionswith regardto the form of landholding or pattern of distribution necessary achievethe multipurpose obto jectivesof development. 4 .This dynamismmeansthat a solution which was appropriateten yearsago maybe inappropriate today. The policy guidelines are presented the end of the is dealing with a dynamicsituation. ranging from communes to private ownership.' In pursuing this question. while it is possibleto identify the need for land reform. The fiscal year (FY)of the two institutions runs from July 1 to June 30.Chapter2 examinesthe economic implications of land reform in relation to the goalsof development.Thequantitative backgroundto land reform in terms of population patternsand land distribution is outlined in Annex1. many developing countries are experimenting with a variety of possible solutions-with different forms of rural organizations.and improvedproductivity in specificcountrysituations. A situation that hasseemedrelatively stable and equitable for decadescan become untenable. unless the context requires otherwise. Further. Not surprisingly. Chapter 1 looks at the characteristics land reform in terms of both its rural context and of its component elements. While recognizingthe broad context of the land reform issue. The manifestationsof this interaction are seldom benign for the majority of the land-based population.Chapter 3 reviewsthe Bank'spolicy in relation to land reform. while someexperiences with land reform programsare summarizedin Annex 2.therefore.

economic and social dimensionswhich in turn havesignificantimplications for development. In most instances. In practice. control and usagein order to change the structure of holdings. Where holdingsarefragmented. although in manycountries examplescan be found of more than one type. and the plantation or ranch type. Land reform necessarilyimplies many different kinds of adjustments in an array of situations where there are great variations in individual equity and agricultural productivity. or the replacement of the landlord by the tribe or the community. redistribution of ownership to existing tenants. land reform might involve changing 5 . social or equity considerationsare the main concerns. The other three major types have a modern context: the private ownership of land common in most marketeconomies. improve land productivity and broaden the distribution of benefits. has interlinked political. of The systems land control in developing countriescan be classified into six types.the stateor collectiveownership of socialist countries. and the communal landownershippatternsof manytribal groups (especiallyin Africa). the feudal Latin American systemof large farms. by its very context. when there are exploitative landlord-tenantsystemsof the Asian or Latin American feudal type. When individual ownershipof the market economytype isthe norm but the ' distribution of land is skewed. reform in states with extensivegovernmentcontrol may involve the transferof some l landfrom the stateto individuals. reform may require subdivision of large holdings or transfer to the state. In contrast. reform incorporates changesin the rights of tenants. which is often interspersed with otherforms of presentedin Chapter1. egalitarianism Land reform.Thus. Elsewhere. Where communal lands are eroded or depleted. pressure a limited land baseor an ideologyof on basedon more even distribution of land or income. the appropriate reform might involve a program of supervisedcooperative land managementwithout changing the distribution of land. Three of the six types are found in a traditional context: the feudalisticlandlord and tenant system of some Asian countries.SUMMARY Landreform involvesintervention in the prevailing pattern of landownership. Other variationsof land reform focusmore on the economicuseof than on equity. land reform is pursuedin response political to for pressures socioeconomicchangearising from factors such as approresources priate reform might involveconsolidationof holdingswithout change in the patterns of ownership of land.

it must be recognizedthat a policy for land reform for a given situation cannot be statedin simple terms. others favor communal or collective control over land.Theseholdings account for approximately20% of all cultivated land.Again. and only 7% of all land in holdings. have high degreesof property concentration. Somegovernmentsfavor individual ownership of land. with about 40% less than one hectare. Finally.Table 1:9.The judgments of policy makers differ. as stressedin Chapter 2.The market economy type falls somewhere in between. and the plantation ranch types.havepursueddifferent approaches. alone is not sufficient it for improving land productivity and distribution of income. However. As shown in Annex 1. while land reform in itself may be necessary.the degreeof concentrationvaryingwith the typesof tenuresituation. TheAsian and LatinAmericanfeudal types. Theyalso reflect politics and ideology. The socialist and traditional communal types have low concentrations. Indeed. Individual countries are classifiedon the basisof landownership concentrationin Annex 1. Distribution of Landand Income Although few data are available. Thedistribution of landby size of holding ishighly skewedthroughout the world.suchas in Kenyaand Peru. Changes in patternsof landownership not automaticallyleadto an increase will in output or technological change in agriculture. an estimated80% of all holdings are lessthan five hectaresin size. the organization of the supply of inputs to accompanyany land reform program is essential. Clearly. The casestudiesin Annex 2 showthat reform-minded governments. Considered 6 . and reach far beyond any purely economic calculus.especiallywhere the processof reform leadsto a breakdownof the institutional structure of agricultureand leaves nothing in its place. Any policy involves fundamentaljudgmentsabout the adequacyof an existingsystemand the most appropriate alternative. These will come about only if adequateprovision is madefor the supplyof necessary inputs and mandatory servicesto the usersof the land. Table 1:6.the distribution of landownership is known to be skewed.tenancyarrangements with emphasison providing securityof tenure so as to encourageon-farm investment. thesedo not require redistribution but eventually lead to a more economic use of resources. The typology outlined in Chapter 1 makesit clear that there are situationswhere land reform is a necessary precondition for modifyingthe structureof a societyand raisingagriculturaloutput. the policies followed are not a matter of economicsalone.

separately. Secondly. a concentration of large holdings in a semiarid region may reflect a smaller concentrationof wealth than a concentrationof small holdings in an irrigated area. in most cases. adding to the already heavypopulation pressureon the land.40% of the land (accounting for almost 80% of holdings) is in holdings of lessthan five hectares. firstly. In many. The need to absorb more people in the rural areas differs among developing countries.the pattern in Latin America is particularly skewed. Exceptin a few places. The extremepoverty of manywho live on the land.Less than 20% of holdings(thoseover 50 hectares) account for over 90% of the total area in holdings. Social and Economic Issues The rural population in developingcountriescontinuesto increase by more than 2% per year. But. does not reflect precisely the patterns of distribution of wealth or income.Thisis because. by contrast. Where the problems are most acute-as in parts of Asia-the emergenceof large numbers of landlesslaborers in rural areassuggests that the family farm systemasa meansof spreading work amongfamily members maybe breakingdown.The skewness the distribution of holdings. massiverural underemploymentis accompaniedby high ratesof open unemploymentin the cities and growing inequality in the overall distribution of income. there is a greaterconcentrationof landownershipthan of holdings.the distribution of holdings by size is not the sameas the distribution of ownershipof land.the income of sharecroppers and tenants may be little different from that of landlesslabor. In Asia.and more than one-third of all holdings (those less than five hectares)account for only 1% of the area held (seeAnnex 1. in general.the distribution of income will be more skewedthan the pattern of holdings.and the increasing pressureon the land through population growth highlight the double challengeof rural development:to raiseproductivity and in7 .all landis not homogeneous. so that absorption of more people into agricultural activity requires more intensive cultivation of land already in use. The distribution of holdings by size is frequently usedas a first approximation in estimatingthe distribution of wealth and income in of the agricultural sector. however.The distribution of income in theseregionswill depend betweenowners and tenants largely on the contractualarrangements or sharecroppers.especiallyin partsof Asia (see Annex1).Frequently. Table 1:8).as evidencedby widespreadtenancy.there is no virgin cultivable land left.

thus benefiting those who own land. various reasons.In general terms. quesWhere land is tions of major importance in these circumstances. to provide more employare to ment. Where landownership is skewed.tenancyarrangements such and tenants that landlords are discouragedfrom making investments from applying variable inputs.come in agriculture and.or are by leaving it unused. at the sametime. At the same time.Smallfarmersmayalsosavelessper unit of 8 .The economicbenefits. this will tend to exacerbate inequalities in income distribution. per unit of output.In other cases. The main reason is that smaller holdings are worked with bigger inputs of labor than arelargeholdings. increasesin the population of working age create additional demands for work and income.landownersoften prefer to underutilize land. Access land. Theseeffectson output maybe reinforcedby someof the possible side effects following land reform.and the conditions that governaccess. irrigation and mechanizedoperations(evenon a small scale). market less. the additional food consumedby small farm families might have otherwise been purchasedif membersof the family had moved to the city.however. A strong casecan be madefor land reform (including tenancyreform and consolidation)in situationswhere landwould otherwisebe underutilized in termsof its production potential. in Evidence the effectsof changingfarm size (examined Chapter on 2) indicates that the productivity of land-defined asyield per hectare -is generally higher on smaller holdings than on larger holdings. could serve to augmentoutput. marketable. either by working it themselveson an extensivebasisinstead of through tenantson an intensive basis. however. this may necessitate food imports to meet the needsof urban consumers. These same circumstances(relating to employment and income distribution) give rise to questionsabout the efficiency of land use For under existing arrangements. In some situations. than do large farmers. therefore. the fragmentation of holdings causes great inefficienciesin land useassociated with transportation. often depend on the effectiveness new technology when usedon of small as comparedwith large farms. the additional labor available. Smallholderstend to consume more of their own produce and.On the other hand. The consumption of food by poor growers may also be lesscostly than the consumption of imported or capital-intensiveconsumer goods by the better-off farmers. if used productively. increasingpopulation pressurewill inevitably drive up the price of land. becausehalf the benefits will go to the other party. mere redistribution of land may not sufficeto raisefarmeroutput substantially without accompanying agrarianreformsand new services.

and that thesedebatesare often couched in terms of redistributing political power as well as wealth. and.Japan. Few land reform programs provide for sucha minimum limit despiteevidence.The concentrationof control over land provides a power basefor many groups in developing countries. especiallywhere the landowner controls the access peasants their only sourceof security-land. firstly. and that in the aggregate they may also have larger savingsthan large farmers. but only a few can be said to have implemented it. secondly. Recent Experience with Land Reform Experience with land reform in the past points to the overriding importanceof the political factor in securingmeaningfulchange. Many countries have legislated land reform.income.and 9 .from manyareas.however. in But in a partly urbanizedsetting. thosewho do not work on the land still require and should havesomerights of access the products of to the land. A second factor of importance in making reform effective is the creation of institutionsto implementthe reformsonce legislated. Ambitious programs of land reform will seldom be implementedunlessthere are shiftsin political sentimentand power. A program basedon the prescriptionthat "the benefits should go to those who till the soil" is often reasonable an agrariansociety. Thesesizesmight be designed.It is not surprising. In this respect.therefore.Land is a symbol of authority and a source of political power.asin the Republicof China. A meanof to ingful land reform programwill inevitably destroyor limit the power baseof manypersons. The evidence suggests. to ensurethat smallholdingsare large enoughto provide food sufficient to meetwith a highdegreeof certaintythe minimum physiological needs of the farm family. that allowing farmsto becometoo small (relativeto the bestavailable technology) may be just as unsatisfactoryin terms of equity and efficiencyasan uncontrolledtenancysituation. The food and fiber needs(and the spatial requirements)of the nonfarm population are not infrequentlyoverlookedby the advocatesof land reform.attention should be paid to both a minimum and maximum farm size. that small farmers save proportionately more than urban dwellers.that land reform is often a central issuein political debates. that Kenyaand Mexico. especiallyfor fresh produce.though these maybe directly investedin the smallholding. And in these casesthe reforms were implemented only when there was a change in government in circumstances favoreddrasticchange. to ensure a scale large enoughto provide a salablesurplus to meet the needsof urban consumers.

a community of interestsbetween landownersand officials. A fourth considerationrelatesto the problem of perspective. Becauseof this. may be a critical condition pressfor continuing development. that especially involving local representation. Taiwan and Venezuelasuitableinstitutionswere established to ensurethat land was indeed transferred. While the direct short-run effects of the land reforms in these countries havenot been considered wholly beneficial. incorporating as much forward planning asfeasible.In other countries. the extent and gravity of the 10 . in Japan. in assessing effects of land reform.combinedwith an absence organizedpressure of from the beneficiaries.the effectiveness land reform of may be relatively limited in the short run.The casesof Japanand Mexico are particularly significant in this respect. land reform hasoften proved costly in terms of lost output. The land reform experiencein much of Asia and LatinAmerica suggests someform of rural organization. Minimizing such costs necessitates provision of servicesconcurthe rently with reform implementation. A third conclusionis that land reform is rarely undertakenwithout considerableupheavaland lossof production. As the country experithe encessummarizedin Annex2 reveal. such as are associated with greatersocial mobility and improved political stability.Concern hasusually been focused on new or improved possibilities for production following changes in the tenure situation. for since thesesystemsare almost alwaystied to the operations of the larger farmers who are dispossessed. there is little doubt that the long-run effects for their total societies have been overwhelmingly favorable. rather than because any deficiency inherent in the small relative to the larger of farmers. The restructuring of landholdings is often accompanied by the destruction of traditional deliverysystems input needsand marketing. and manysocioeconomic benefits. This has usually involved organizingthe beneficiariesto create follow-up pressure. largely nullified positive reform efforts. emerge only in the longer run and accrue for many years subsequently.over time. - The World Bankand Land Reform The World Bank has taken an active interest in land reform on a number of occasions. although there is evidence to suggestthat these costscan be kept small and temporary.with emphasison securityof tenure beinga particularly important theme.For example. More recently. contributing substantially the ultimate economicdevelopmentof both to countries.

its preferencesregarding national policy choices and those which are consideredconsistentwith the Bank'sdevelopmentgoalsare set out below as country guidelines. especially where paymentsare in the form of bonds. particularly in areaswhere the political situation was reasonablystable and otherwise conducive to World Bank involvement. Guidelines Country 5 1. (ii) tenancy reform. this may be because relatively few casesof land reform. 2.or specialbranches fund allocationswithin or existing organizations supply credit. Although the Bank's direct action must be limited. In sparselypopulated regionsor countries. and (iii) consolidation. Governmentswhich accept a basiccommitment to land reform should consider three components: (i) redistribution of landownership to reduce the presentmaldistribution. the redistribution of land currently in use. this report concludes that land reform is consistentwith the developmentobjectivesof increasing output. such paymentsusuforeign ownersare involved) ally constitutean internal transfer(unless and. In part. and 3. A commitment to land reform implies simultaneousaction to create or develop an input supply systemto meet the special needs of the beneficiariesof land reform. thus. The Bank'sexperiencethrough project financing of land reform there have been hasbeen very limited. it can only support appropriate efforts within existing structures. inputs and technical services. In addition. it is recognizedthat the Bankcannot force structural change. and that the World Bankshould support reforms that are consistentwith these goals. improving income distribution and expanding employment. to including research extension. This may require either the creation of new institutions.Someexamplesof World Bankinvolvementin land reform programs.However.where necessary.notably in Malawi and Tunisia.specially structured settlementschemescan serveas second-bestsubstitutesfor.are not attractivefor externalfinancing. 11 . In general. or supplements to. But also relevant is the fact that the financial requirementsof land reform tend to be relatively limited. from an equity aswell asa productivity standpoint.employment problems and income disparities in developing countries have causeda new concern over land reform. the amounts involved are usually small. Even where the land transferred is purchased from the previous owners.Thesesameconclusions reflectedin are the subsequent Bankpolicy guidelines.are discussedin Chapter 3.

and (iii) tenancyis discouraged. The abolition of tenancymay not be feasiblein manycountries or regions where the demand for land by the landlessand small regulation of farmers far exceedsthe availablesupply. is an indispensable success. 7. (ii) the beneficiaries belong to the poorest group. 12 . (ii) the size distribution of the new holdingsis equitable. 5. Experiencein EastAsian and some Latin American countries clearly showsthat the organizationof beneficiaries. These effects can accrue if (i) the settlersare the really poor small farmers or landless workersand an input supplysystemis availableto support their operations.both before and condition for its after the enactmentof reform. and a rural works program should be organized for the landless. 6.settlementschemes the same effects as the redistribution of existing holdings. Research should be organized to evolve a low-cost settlement policy. 11. but it should be acceptedthat in such cases the objectives of reform can only be realized if the enterprisesare tax coveredby a progressive systemand the workers participateadequately in the benefitsof the enterprise. and allowed only under specified typesof contracts.There may also be a need for special training facilities. It should be recognizedthat landlessrecipients of land who take up independent farming for the first time may need to be provided with their entire short-term and long-term credit requirements and perhapssome consumption credit for three or four initial crop seasons. 9. It should be recognizedthat a small farm structurecan generate employment to absorb underemployed labor in crowded regions where there is no short-term prospect of absorbingit in nonfarm or technologynow largefarm employment. 8. is redistributed. Where the shortageof land is so acute that even with a low ceiling both smallholders and landless workers cannot be given minimum holdings. preference should be given to smallholdersin the allotment of land. (iii) the extensionand (nonland) input distribution systemfavorsthe beneficiaries. these need not be broken up. Where efficient large-scaleplantations or ranchesexist. as well as leasedland.With a seed-water-fertilizer availablethat is neutral to scale.4. Wherever settlement policy is used to supplement land should be plannedto haveapproximately reform.and (iv) owned and selfoperated land. 10. researchactivitiesand field demonstrationsin suchcircumstances. Equity-oriented land reform should be so programmed that (i) the effectiveceiling on size of holdingsis low.sucha structurecanproduceat least as muchper unit of landasa largefarm structure. In such cases.

When the land-labor ratio becomesfavorable. But where crop sharing cannot be eliminated becauseit provides risk insuranceto sharecroppers.registration of land titles and similarservices. The Bankwill makeit known that it standsreadyto finance special projects and programsthat may be a necessary concomitant of land reform. the conversion of tenants into owners of the land they canbe mademore efficient andequitable if it is combined with cost sharing. so long as the reforms and related programsare consistent with the objectivesstatedin the previous paragraph. in general. through its agricultural and rural development projects. should be undertakenbecause. owner-operatedfarming is likely to be more efficient and equitablethan tenantfarming.tenancy might be a more efficient policy. Generally. ways of providing for a distribution of benefitsconsistentwith the goalsoutlined under (1) above.fixed cash-rent contractsaresuperiorto crop-sharingcontractsbecause they encourage the use of inputs to the optimal level. 3. The Bank will support policies of land reform designed to further theseobjectives. 12. TheBankwill cooperatewith the FoodandAgriculture Organization of the United Nations (FAQ).The incentivescan include the accrual of legal rights in land and the availability of credit and other inputs only if preferred types of tenancy contracts are implemented. technicalservices infrastructureprojand ects designedto meet the specialneedsof land reform beneficiaries. Theseprogramswould include credit. preferably against very low compensationpayments.including appropriate tenurial arrangements projects designedto servethe and needsof smallfarmersand settlers. The Bankwill continue to explore. 13 .the United Nations Development Programme(UNDP)and other organizationsto provide support and assistance member governmentsseekinghelp with the specificato tion and design of land reform programswhere theseare in keeping with the Bank'sobjectives.This support will include financial and technical aid with cadastralsurveys. 4. The World Bankwill give priority in agriculturallendingto those member countries that pursue broad-basedagricultural strategies directedtoward the promotion of adequatenew employmentopportunities. with special attention to the needsof the poorest groups.Suchcontractsshould be promoted with a system of incentivesand deterrents. Guidelines World Bank'sPolicy 1. 2.

the Bankwill encouragesubdivision. The Bank will intensify its efforts through sector and country economicwork to identify and draw attention to the need and opportunities for land reform with respect to existing tenurial situations and their order to avoid adjustments which will increasethe maldistributionof income and cause economichardship.including its social dimensions.the Bankwill foster the adoption of tenancy conditions and sharecroppingarrangementsthat are equitable and conducive to the optimal use of resou rces.The Bank will undertake studies of the costs and benefits of settlement projects. Where land is communally held without regulation of such cases. 14 . 11. The Bank will not support projects where land rights are such that a major shareof the benefits will accrueto high-income groups unlessincreases output and improvementsin the balanceof payin ments are overriding considerations. of small farmerlikely to emerge 7.if sedentary forms of agriculture are possible. The Bankwill pay particular attention to the consequences of the interaction of new technology and the prevailing institutional structures. where increasedproductivity can effectively 9.or pursue land usageand access arrangements that are compatiblewith the long-run productivity of the land and the welfare of the residentpopulation. The Bank will support and encourageresearchrelated to the economicsof land reform in its reflected in the pattern of landownership. will carefully consider whether the fiscal arrangements appropriate to ensure are that a reasonable share of the benefits accruesto the government. 10. 12. 8. with particular attention to developing approaches which will lowerthe cost per family settled.5. Where land is held under someform of tenancy. It will continue its support for programsof economic directed toward the specialneedsof the type and technical research from landreforms.the Bankwill not support to projectswhich do not include land reform. In circumstances be achievedonly subsequent land reform.

cultural.As a result. physical conditions in the temperate areasare suited to sedentaryagriculture.While this right might be of constrainedin the public interest.on the other hand. However. haschangedrights to land and the organizationof work severaltimes over the past 25 yearsas part of a drive to eliminate rural inequality. whereasthe more tropical and arid areasare better suited to shifting cultivation or livestock herding. sell and accumulate privateproperty-including land-is one of the cornerstones the market economy. the smaller the proportion of the population in agriculture and the less significantthe role of land in the economy. held and traded by individuals for private gain. The People'sRepublicof China. in less developed countries with large rural populations. Where land is inherited by the oldest heir and not alternativeopportunitiesand increas15 .Somegovernmentshaveused control over land to implementpoliciesof geographical separationof racialgroups. for instance.The more industrializeda country. To the extent that the statecontrols the land. Similarly.traditions of crop sharingand other arrangements surroundingland usein varying situations.Chapter 1: CHARACTERISTICS OF LAND REFORM Manand Land Man's relationship to land. the right to own land may be vested solely in the stateor in semipublicinstitutions.In countries with mobile populations which have ample opportunities for employment. The political ideologiesof governments also havea bearingon the relationshipbetween people and the land. religious and political. individuals do not have the opportunity to acquire and accumulateland. different systems land managementand patternsof holdingshave of emerged in adjacent zones. laws and customsgoverning inheritancehavean effect on the distribution of land. In addition. The level of economicdevelopmentof a country hasa strong influenceon attitudestoward land.the allocativeprocess mayserveany number of ideological ends. In EasternAfrica. and it is the statewhich organizes and controls the land accordingto its own criteria.are shapedby the interaction of a complex of forces-climatic. the patternof holdings is lessfragmentedthan in societieswhere the customis to divide holdings equally among all heirs. and patternsof landholding and land use. economic. Under some other ideologies. many socioeconomic factorsaffectcustomsof usufruct. land can in generalbe exploited.The right of the individual to is often seenmerelyasone factor of production in a highly developed commercial agriculture.

(6) the agricultural system. Low labor productivity. Low capital intensity. Greateconomicinequality.alsodetermine of the accessibilityof external institutions and servicesto the various groups. FeudalLatinAmericanType High property concentration. Greatsocial inequality. In thesecircumstances. (4) the legal system. while individual status within these groupsdependson the amountand quality of land commanded. (3) the social system. (2)the structure of the economy. it may well provide the margin between destitution and subsistence. Great economicinequality. it is possibleto delineate six main categoriesof land tenure and land use. Landvery scarce. and (7) the national resourcebase. Institutional structurecentralized. Mainly operatedby sharecroppers.(5) the demographic situation. Contextof LandReform The many complex factors that influence the patterns of landownership and land use in different regions of the world may be summarizedas: (1)the political systemand situation.When these interacting elements are taken into account.These are characterizedas follows: 1. producerssee landas more than a factor of production.The institutional structures which formalize the various meansof control and the relationshipbetweencategories land users. High labor intensity. Low land productivity. The established pattern of landownershipis basicto both the social organization and institutional structures in rural pressureon the land. Productionmainlyfor subsistence. 16 . Low level of technology. FeudalAsian Type High property concentration. Great socialinequality. 2. The social hierarchy in most agrariansocietiesreflectsthe kinds of access that different groups have to land. access land may provide at leasta subto sistenceincome.

Low level of technology. Low labor productivity. Labor provided by squatters. Medium socioeconomicinequality. Decentralizedcultivation-usufruct rights for membersof group. Market production oriented. 17 . Low. mediumor high labor productivity. Low land productivity. High level of technology. neighboring smallholdersand migrantworkers. 5. Centralizedor decentralizedcultivation. Socialist Type Propertyright vestedin the stateor a group. 3. Labor-extensive. High landproductivity. Decentralizedcultivation. Low labor productivity. Capital-extensive. Labor-extensive. Capital-intensive. Low. Operatedby owner or manager plus hired labor.Low land productivity. Traditional Communal Type Low property concentration-sovereign rightsvested in community. Market Economy Type Medium property concentration. serfs or sharecroppers.medium or highland productivity. Supportingservicestructureunderdeveloped. Productionfor subsistence. and Institutionalstructurehighly centralized. 4. Productionfor subsistence export. Low capitalintensity.medium or highsocioeconomicequality. Low. Low levelof technology. Institutionsand services dispersed. Medium labor intensity. Medium level of technology. Moderateor high socioeconomic equality. High labor productivity.

and often does. by the feudalistic landlord-tenant systemfound in someAsianand LatinAmericancountriesand. accompanied by extensive poverty and vulnerability to seasonal effects. unlessthere are offsetting changesin technology. by virtue of its privileged position and power. In the landlord-tenant system. land is common property and access it is relatively unrestricted. In a traditional context. on the other.the distribution of income is also highly skewed (see Annex 1. becomeeducatedand innovate both through experimentation 18 . overgrazing and contrast. Great income inequality. Great socialinequality. Medium or high level of technology. Plantation Ranch Type High property concentration-owned by state or foreigners. The two systemsdiffer in their ability to respond to changing external conditions and especiallyto new technology. Table1:11). Tables1:6 and 1:8). Productionmainlyfor export. High landproductivity. by the communal landownership pattern of certain tribal groups in Africa. In the communalsystem. landownership is vested in an elite minority with the majority having access through tenancyarrangements various kinds. more so than the pattern of landholdings. can. Supportingsystems centralized. to Whereasin the feudalistic systemthe distribution of landownership and benefits are highly skewed and classdifferentiation is marked. 6.on the one hand. Both systems are relatively stable under favorable conditions. Low or mediumlabor productivity. land pressuresare reflected in a growing army of landless people and widening income differentials (see Annex 1. In the landlord-tenant system. However.Productionfor marketor subsistence. since holdings (the only category for which the Bank has data) involve leaseholdunits for which rent is paid on a share basis.The ownership of property is of generally highly concentrated.The communalsystemmanifeststhe samepressuresby compressedfallow periods and declining soil fertility. the communalsystemhas relativelyegalitarianland access and class differentiation is lessmarked. The landlord elite. extremes in the pattern of land control are exemplified. but face difficulties as the man-land ratio declines through population growth. Operatedby manager pluswage labor.

While private ownershiphasgenerallybeen compatiblewith technological progressand the economicadjustmentof agriculture. A special type found in a modern context is one which includes the plantations and large ranchesthat often operate in developingcountriesas well as in some has often created inequities as people have been compelled to give up rural pursuitsor havebeen squeezedinto land-scarce rural enclaves. Under private ownership. which is a fundamental aspectof the market economy and common in mostWestern countries. Generally.(in doing so. In the socialistsystem.on the other hand. but the tendency toward a corporate legal structure and dependence on hired labor differentiate them from privatelyowned family farms.Theseform.combinedwith limited opportunities for peopleto move out of agriculture. specialcategory a of the market economy type.however.and the adoption of displacingtenantsthrough mechanization. and the state or collective ownership characteristicof socialist countries. the extremesin patternsof land control are seen respectivelyin the private ownershipof land. its primary concern may be to promote its own narrow interests in terms of wealth and power.)Thecommunalsystemgenerallylackssuchan institutional and tendsto be both static in itstechnologyand relatively mechanism insular. can be bought or sold like any other commodity. However. this right being vested in the state. It hasbeen most unsatisfactory where ownership patternshave become skewedbecauseof the growth of large farms. Although similar in legal and institutional respects. in somerespects. In a modern context. But some variations remain within many socialist systems. often providing for the existenceof private smallholdings in parallel with larger social units.with control determined in accordancewith the objectives of the state. for instance. little or no provision is made for individuals to acquire or accumulateland.private control has been most satisfactory where population pressurecould be offset by colonizing virgin land or moving people out of the rural sector. Suchholdingsare typically operated as family units with little hired labor. but such communitiesseldom manageto remain completely isolatedfrom externalinfluences. land is held by individuals and.thesediffer significantly in their technologyand input mix aswell as in the degreeof market orientation. while usually subject to special restrictions. and the subsequent emergenceof economic 19 .a rangeof subtypesexistswithin this categorywhich reflectsa gradation in size from the predominantly subsistencesmallholdings of many developing countries to the broad acresof North America and Australia.

Usually. In many situations. Further. whether primarily an equity or a production concern. Stateor communal control has led to fewer interpersonal inequities.or medium-sizedfarms and a reduction in the number of large holdings.on the one hand.It is frequently pursuedas a goal in itself. For example. 20 . land reform may become a prerequisiteof development. administrative. Dimensions of LandReform Land reform is thus concerned with the interrelated aspectsof productivity and equity of land use.fiscal or monetary reforms in that it normally relatesto one sector and involveschangesin control of a tangible assetthat not only is fixed in supply but also provides the basicfactor on which most of the people in developing countries dependfor their livelihood. Redistributionof public or private land in order to changethe patterns of land distribution and size of holdings. the landlord cannot capturea profitable share of the return on his investment.dualism. Alternatively. In such circumstances. the prevailing tenure conditions are the major impediment to development.including some of or all of the following: 1. all of which might be large. all land can be nationalizedand regrouped into state-ownedholdings. it is clear that land reform will involve different changes different types in of situations. in some situations. it is often a highly political concern.In other cases. Land reform raises issuesof equity in the context of both the traditional landlord-tenant relationship and the modern skewed ownership pattern. In both these contexts. But. but in a development context is usually seen as a part of agrarian reform or of rural development programs. Land reform differs from political.and on the other. the social environment is characterizedby inequity and oppression to the extent that it destroyshuman motivation to improve productivity or to resolve any problem within existing structures. Landreform caninvolve varyingdegrees change. especiallyin the traditional feudalistic and communalsystems.this involves an increasein the number of small. the tenant cannot find the capital for investmentor lacksthe securityof tenure that would guaranteea return from it. although in most casesnot without some broader economic inefficiencies. a high level of fragmentation can make canal irrigation virtually impossible and seriouslyimpede mechanized operationseven when on a very small scale.the contractualsharearrangementis such that neither landlord nor tenant are able to introduce new technology because.

3.with or without physical redistribution of land. resultis generallya redistributhe tion of income away from the former owners of the land to the new owners. This can be done with or without changing the distribution of landownershipin terms of acreageor valuebelongingto eachindividual. dependingon the manner in which the settlers are selectedand the size distribution of the new holdings.the Republicof Korea and Japanmoved from a "feudal Asian" to a "market modern smallholding" type.Thus the Republicof China. The new owners may farm cooperatively or as individuals. These changeswould also include the conversion from customaryto legal rights to land.some going to smallhold21 . although land settlement might be a meansof bringing unusedlandinto production. 4." or arrangements of a subsequent reform.Similarly. Landsettlement.2.Alternatively. By definition.Changesin conby ditions of tenure would include providing security of tenure. even though they might be useful in identifying problems of management.landsettlementon the frontier does not usually constitute land reform. Consolidation of individual holdings. pilot projects cannot be consideredto be land reform for they operate within an existing structural framework. thereby altering the size distribution of holdings or the distribution of income. most changes involve a shift from traditional to modern types. Changesin landownershipand tenurial rights. land reform is seenas a meansof bringingabout structural changes in the agricultural sector. Changesin conditions of tenure without changing ownership or redistributingland. The rightsof thoseworking on the land can be safeguarded law without a changein ownership. by itself.The kind of structural changeinvolved dependson the prevailingtenure type and the proposedalternative. thereby reorganizing the holdings can be regrouped physicalpattern of control. alien-owned "market economy" type holdings of their colonial eras. with some traditional farms retained and some "plantation ranch" type variations in certain areas. therefore. introducing equitable crop-sharing arrangements. cooperative land management. Structural Change In the main. may or may not have an impact on the structure of landholdings in a country. Fragmented into contiguous blocks of land. the or that might be part economicsof various "models. India and Iran moved from a "feudal Asian" toward a "market modern" type. In that need not be redistributedbut tenantsor workerscanbe madeowners of the land they work.Kenyaand Morocco redistributed the large-scale.and so forth.As reflected in the country experiences summarizedin Annex2. Redistributedland can be allocated to new owners or to farmersworking on the land.

land reform may be the only alternative option if economicdevelopmentisto be pursued. availableand increasing credit for their purchase. In any event. such as a land tax. since it involvesmodification of a wide range of conditions that affect the agriculturalsector. A more likely fiscal instrumentto encouragestructuralchangeis a graduatedestate tax which would force estatesto disposeof land to meet their financial obligations. Agrarian Reform Agrarian reform is a much more comprehensive conceptthan land reform.there may be no need for land reform since land is alreadyevenlydistributed. While landtaxesand estatetaxes often are considered significant elements in fiscal policy intended to redistribute income. the useof a fiscal instrument. making general. FiscalMeasures Land taxesand preemptive taxeson income earnedfrom land are often cited as instruments that will obtain the sameends as land reform. On the other hand. providing infrastructureto facilitate agrior cultural production. Thesechangesin tenure systems were in all casesaccompaniedby changes relatedorganizations in and services. will not lead to structural changesin agriculture-at least not in the short run. extension.been quite ineffective. In other cases.suchas fertilizers. increasingallocations to the agricultural sector in order to expandresearch. maynot be it politically feasible to have land reform-although it might be both 22 . Agrarian reform may or may not include land reform.But this is likely to bring about structuralchangeonly over a long period of time.ings of the "market economy" type and someto "plantation ranch" type units. Mexico and Perumoved from a "feudal Latin American" type to a "market modern mixed large and smallholding" type. In situationswhere fiscal measures-whether of a redistributive kind or a typewhich providesa returnto the stateon its investmentare found to be ineffective. such taxesmay provide a disincentiveto investmentwith the potential of increasingproductivity or bringing new land into production. in some instances. and a mixed "market modern" and "socialist" type structure.Thesemodificationsmight include changingprice policiesso as to turn the terms of trade in favor of the agricultural sector. they cannot ensure the same degree of structural reform as can land reform and have. An effective land tax mayhavean impact on land usebut its main purpose is usually to encouragemore intensive production by making it costly either to leaveproductive land idle or to useit below its productive and storagefacilities.

large landholders have accumulated capital and expanded landholdings acquired through the market. Political Dimensions Substantialreform of the structureof holdingsand the distribution of income from the land cannotbe achievedwithout political action.dependingon the prevailing pattern of land control.politically and economically feasible to raise output through the measures involved in agrarianreform. on the other hand. and by thesecannot be changedthrough market operations.becauseit embracesall dimensionsof the rural sector (agricultural and nonagricultural) and is more concernedwith the welfare of rural people than with agricultural output or productivity as an end in itself.where semifeudalconditions prevail. the tendency is for the skeweddistribution to worsen.Where the existingservicesystems and administrativestructureis gearedto working with large-scale farmers. in termsof implementation. Since it hassignificant equity implications. land reform without concurrent rural development activity might causehardshipand economic losses which would outstrip the equity gains associatedwith land redistribution. but it is seldom a sufficient condition for increasingagricultural there is virtually no organized market for land. Elsewhere. Where the ownershipof land directly affects the nature of local institutions and the participation in them by the majority of rural people. RuralDevelopment Broader still is the concept of rural development. For instance. insofar as it stabilizesthe existing relationship between landownersand renters. 23 . the implementation of the policies dependson the political will of the policy makersand the ability of the administratorsto executethis will. since land is only one factor of production.However. land reform may be a necessary concomitant of successful rural development. in most market-oriented economies with a skeweddistribution of land. land reform maybe essential. The point is that land reform may be a necessary condition for agrarianreform. patterns of land rights and tenurial conditions havebeenestablished tradition.Since theseactionsare basedon policiesdeliberately intended to alter the distribution of land and change tenure. Tenancy somesituationsestablishinglocal institutions and smallholder servicesmay be a prerequisite of land reform rather than vice versa.may be a useful precursorof rural development programs. it can seldom be changedwithout actionsthat emanatefrom outside the market. Whatever the prevailing situation.

a meaningfulland reform program will inevitablydestroy or limit the power baseof thesegroups. The political implications of land reform must be taken into account.and the absenceof organizedpressure from the beneficiaries. Where groups derive authority from their land. religiousor private. Because the community of interests between the of bureaucratsand the landowners.The concentration of control over land provides the base for powerful elementsin manynonindustrializedsocieties. that land reform is often a central issuein political debatesand that thesedebatesare often couched in termsof redistributingpolitical power as well aswealth." And the immediate extensionof this postulateto the world's agrarianproblem is that "if certainlandedestates impedethe generalprosperitybecause theyare 24 .of their power. Reforms have stripped large landholders. the Church in Europeas well as in LatinAmerica hasincreasinglyput its weight behind this new concept. The Church's new philosophy regarding the relationship between man and land declared that "private property doesnot constitutefor anyone an absolute and unconditional right. including the CatholicChurch.In other countries. official the bureaucracy was the only implementation agencycontemplated by the reformers. Implications Social Justice for The imbalancebetween the distribution of control over the land and the numbers dependent on it has historically led to increasing pressures change. ambitious programs of land reform will seldom be implemented unlessshiftsare made in political sentiment and power. In the Republicof China and Venezuela-to name three countriessuitableorganizations were established ensurethat landwas indeed to transferred. Experience much of Asiaand LatinAmericasugin geststhat effective popular participation of rural people may be a critical condition of successful land reform. both in precept and in practice.whether they were military. Many countries have legislatedfor land reform but relatively few have achieved it-and these only with a change in government.the implementation of massivereform legislation has dependedon the effectiveorganizationof the beneficiaries. It is not surprising.While the focus on land reform is related to for economicdevelopment. Frequently. then. Formerlyone of the largestlandholdersin the world.suchas India and Pakistan.Land reform can changethe political balance and the power structure in a country.the massive legislationhasproduced no significantreform.the concept of an overriding social function of land justifying the imposition of limitations on private rights appears to be gaining the support of many groups. Japan.

The reforms which havetaken placein thesecountrieshavechangedthe situation. Eachset of policies and investmentsaimed toward one objective has important repercussions with regardto the other two objectives. others. Mexico.such as those affecting power plants or largescale industry.Forthis reason.unusedor poorly used.The issuesinvolved are diffuse and appropriate reform measures vary according to the situation. and more recently Bolivia and Egypt.large numbersof tenants and laborerswere tied to the land and were held in forms of human bondage. Land reform is a complex subject. If the experienceof Mexico-which hashad the longest period of reform-is any indication of the long-run outlook.and thesein turn are relevantconcerns in the formulation of the World Bank'spolicy. are employment oriented.this arosefrom custom. are essentiallyequity oriented." A further facet of land reform that warrantsconsideration in this respectis the potential of a new societalstructurefollowing a reform. Many problems arise in assessing costsand benefits of land the reform. therefore.extensive. tradition or sheer indebtednessto that is often highly political. Chapter 2: LAND REFORM AND ECONOMIC DEVELOPMENT Economicdevelopmenthasthree basicobjectives:rapid economic growth.or becausethey bring hardship to peoplesor aredetrimentalto the interests the country. Somepolicies and related investments. Land reform is in practice predominantly a question of equity and. Nevertheless. In these societies. hassignifiit cant implications for economic development.had semifeudalsocieties similar to many which still prevail in other parts of the world. such as those related to land reform. still others. The reform in Mexico broke a systemthat denied many people any range of choice in the pursuit of a livelihood. the reforms haveled to an increasein socialmobility.the common of good sometimesdemands their is important to determine to what extent land reform might be costly in terms of growth and employment. Theseinclude the definition of an acceptabletime frame for measuringthe effects of the related structural changein the agricul25 . are primarily growth oriented. full employmentand distributive justice. such as those for rural works.and thesemust be taken into accountwhen weighing the potential impact of particular policieson economic development.

85 1.12 0. November and 1973.62 2. XXVII.03 2. forestry.Table 1 Productivity.20 1. No. Monthly 26 .49 1.18 14.64 2.41 3. and column4onUN. No.hunting.21 0.47 5.607 0.22 2.597 0.29 - 0.54 0. in Selected Countries FarmGDP per hectare (US$) Gini's Sizeof FarmGDP Indexof per Employment average Land per holding worker (hectares) Concentration (US$) hectare Country Data year Europe Greece Spain Central America Costa Rica Dominican Republic El Salvador Guatemala Mexico Nicaragua SouthAmerica Argentina Brazil Chile Colombia Paraguay Peru Uruguay Venezuela Asia China.59 4.624 - 0.84 0.85 40. and I MF.03 1.70 20.80 81.35 3.10 79.947 0.Republic of Africa 1961 1962 1963 1971 1961 1964 1960 1963 1970 1960 1965 1960 1961 1961 1966 1961 1960-61 1960 1963 1960 1970 1960 1961 -62 1960 1960 1962 1963 1963 1960 424 90 83 129 186 144 22 55 18 14 18 67 11 50 14 31 841 172 323 187 1.05 0.01 0.59 1.18 1.17 0.10 0.33 4.61 3.unlessotherwise indicated.95 8.20 1.27 6.09 0.28 0.90 37.Republic of Japan Nepal Pakistan Philippines Sri Lanka Thailand Turkey Viet-Nam.188 138 249 200 337 137 243 127 142 360 140 88 48 295 174 180 341 198 101 0.pp.903 285 692 663 479 477 1.03 0.3.18 1. No.04 0.ArabRepublicof 1960-61 1969 Kenya Malagasy Republic 1961-62 Mali 1960 1961 Morocco Senegal 1960 Togo 1961-62 Tunisia 1961-62 Uganda 1963-64 Zambia 1960 - - - exchange rates.89 1.XXVI.agriculture.05 0.17 123.50 0.580 - 0.62 .333 925 410 141 149 581 377 1.96 1.04 4.832 - 0.62 15.05 0.11.05 1.50 22.Republic of India Indonesia Iran Korea.873 0.24 1.23 2.64 6.833 0. 10-11. currency For Bulletin Statistics. August 1973. April 1972.37 208.09 0.and fishing. Sources:Columnsland 3arebased on FAO.67 3.25 118.845 - 0.79 1. Employment and the Distribution of Land.32 2.085 1. 21-23.29 0.09 0.611 - Botswana 1969-70 Egypt.25 1.02 0.05 6.01 0.75 1.32 2.45 2.4.12 1.35 4.10 0.70 8.38 0.52 1. of ibid.34 270. lnternational financialStatistics.473 - 0.88 1.Preduction Yearbook 1971.865 - 0.06 0.936 0.607 - ' 0. 3.Gross DomesticProduct (GDP)in agriculture shownhere includes.see XXVI.60 108.474 0.31 3.720 352 240 250 376 166 155 355 168 681 183 293 98 144 209 189 42 167 68 848 980 951 463 489 492 569 580 1.

in Similar findings can be cited from cross-section studiesin a number of individual countries. Since data are not availableto derive this measure. Several comparative multicountry analyseshave been made of the effect of differencesin distribution of size of holdings on yields.are treated separatelyhere.equity and employmentaswell as on savings and market surplus.The availableevidencesuggests a well-designedland that reform program need not entail unacceptable costsin termsof other objectives.4 acre).output per hectare was 27 .ture sector. A similar study of 40 countries was undertaken by the Bank (see Table1). the yield of paddy averaged36 to 37 bushelsper acre on farms of up to one acreand 33 to 34 bushelson largerholdings. the effects of land reform canbest be examinedby focusingon particular measures.for example.In Sri Lanka. this is not possible as there is no situation where changehas occurred in only one variable-size of farm-over time.In central 1966-67.However.The ideal measurefor comparisonwould take into account the contributions of all factorsof production and so measure total factor productivity. concentrationof land and productivity. Ecuadorand Guatemala. 194 kilogramsper rai on holdings of 140 acres or more (1 rai equals0.2 tons per hectare.Brazil. The nearestalternativeis the comparisonover a definedperiod of the productivity of groups of different-sizedfarms in a given area. One 13-country study undertakenby the FAO analyzedthe relationship among size of holding. Implicationsfor Productivity The effects of land reform on productivity might best be isolated by comparing productivity in a given area before and after reform. yieldswere reportedto decline from 306kilogramsper raion holdings of two to six acres.while farms of more than four hectaresproduced 2. changesin yields per hectare are considered to be the most appropriate substitute. farms of less than two hectares-produced 2.9 tons of paddy per hectare. Both studiesindicatedthat a smalleraverage of holdings size and a lower concentrationof landownershipwere associated with an increase output per hectare.In a systematicanalysis the differencesbetween large of "multifamily" farms and small "subfamily" farms in Argentina. are for analytical convenience.These measures interrelatedbut. its contribution to output and employment-as well asto equity-depends on the speedand effectiveness the reform and of complementary investments. Chile.Small farms in the Philippines-that is. suchasthe effectsof farm size on productivity. Colombia.

as well as studieson Japanand the Republicof China. Colombia.20 8. Agrarian Structure in Latin America. However.20 14. in LatinAmerica 1 Country Year Smallest subfamily farms 2 Largest multifamily farms 3 Ratio ot col.492 304 1. 351 p.862 660 63 16 National monetary perworker unit 40 192 1. land reform can be consonantwith development from a point of view concernedpurely with productivity.23 0.30 2. small-scale producerstend to maximizeoutput by applying labor intensively. found to be three to 14 times greater.while large-scale operatorstend to maximizeprofits by using hired labor only until incrementalproduction coversincrementalcosts. I to col.Table 2 AgriculturalOutputper Hectareand per Worker.on the average.Firstly.there is no claim that all conditions were identical.80 3. 1973.with output per hectareas the relevantcriterion.80 8. Chile.673 74 523 8. there are limited economies of scale in most agricultural production. xxvi. Massachusetts: Lexington Books. Peru.14 0.14 Source: Barraclough and likely to decrease the simple reasonthat. Guatemala. a resume of the CIDA Land Tenure Studies of Argentina. Brazil. The important implication is that reductionsin either the size of holdingsor land concentrationneed not be associated with a reduction in output per hectare. Ecuador. Studies in the Economic and Social Development of Latin America. There is other evidence to support these findings.90 0. for 28 .21 0. Output per worker.171 972 9. as pointed out below. including the results of Bank-sponsored analysisin Mexico. by FarmSize.498 170 334 41 1.197 8.198 84 1. There are two associatedreasonsfor this assumption. however. 2 Argentina Brazil Chile Colombia Ecuador Guatemala Argentina Brazil Chile Colombia Guatemala 1960 1950 1955 1960 1954 1950 1960 1950 1955 1960 1950 National monetary peragricultural unit hectare 2.On the contrary. In broad terms.10 0. the studiessimply indicatethat yieldswere higher on smallfarmsthan on largefarms.on the small farmsthan on the largefarms (see Table2). it appearsthat under controlled circumstances output per hectare is likely to be higher.237 268 1. Lexington.This is usuallyshort of the output per hectarethat would be produced if the goal were maximization of output.Secondly.

LandReform and Employment Evidenceexists that the use of labor per hectare is greater on smaller holdings than on larger ones. unlessaccessto these inputs is blocked by institutional arrangements.Brazil.the number of workers per hectareof agricultural land on the smallestfarms (subfamilyunits) hasbeen estimatedto be 30 to 60 times greaterthan on the largest(multifamily) farms. A limited number of studies in Asia and Latin America have also confirmed these findings.In other words.Unfortunately.But inputs other than labor arealso likely to be applied more intensivelyon small farms.7 on small holdings (lessthan 0. man-yearsper hectare declined steadily from 2. in 1968. In developingcountries. fertilizer consumption and grossfixed capital formation per unit of landwere relativelyhigher in countrieswith smalleraverage holdings.the organization of an effective extension-cum-inputsupply systemfor small farmersmust accompany 29 .17 on large farms (500to 1.too. labor absorption varied between 33 and 39 man-days per acre on holdings of less than 30 acres. the greaterthe input of manpower. the larger income would be sharedby an evenlargernumberof families. however. it ranged from 20 to 23 man-daysper acre. In other Latin American countries (Argentina. that in the crosssection of developed countries.The mereredistribution of land and increasein employment may not suffice to raise output substantially. In the Ferozepurdistrict in Punjab (India). Chile and Guatemala). This cross-sectional evidence of the higher productivity of small farms indicates their long-run equilibrium potential.The cross-sectional analysisof the 13 countries previously mentioned shows that manpower per hectareof agricultural land is significantlycorrelatedwith the size of the holding-the smaller the holding. It is interestingto note.Therefore. small farms undoubtedly need much more nonlabor input in order to raiseproductivity. On larger holdings.smaller farmswould employ more labor per hectare. In Colombia. But the realization of this potential is contingent on the supply of nonland inputs being increasedas soon as farm size is decreased.000 hectares) in 1960. the relationship between these other inputs and farm size cannotbe studied in manydeveloping countries JFor want of data.5 hectare)to 0. More intensive labor use is the main reasonwhy small farms are ableto producemore per unit of landthan the largerfarms. This decline in labor productivity only reflectsthe employment and equity benefitsof land reform: the samelandwould supply more people and the income generatedwould be more widely shared. for 1961.

labor-intensive technologies. If rural and urban areasare consideredtogether. the equity effect of land reform will be significant only if: (1) the effective ceiling is low. Smallholdingscanyield high returns to labor provided output per hectare is high-a condition that can only be fulfilled by the application of high-yielding.and (4) owned and self-operatedland as well as leasedland is redistributed. the limitations of redistributingfarmlandaloneappearevenmore serious.agricultural land accountsfor such a large proportion of total wealth that it is usuallythe single mostsignificantdeterminantof the distribution of both income and power. Evenwith this broader focus. (3) the extensionand (nonland) input distribution systemfavorsthe beneficiaries.where much of the wealth existsin the form of financialassets. estateand other real investments apart from assets commodity stocksin the urban and areas is even more skewed than the distribution of farmland in the rural areas. at the same time.If.There. LandReform and Equity The more radical the land reform and the more important the share of agricultural land in relation to total tangible wealth. it not only may not decreasethe inequity of the distribution of total wealth in the country as a whole. However. land reform alone is not sufficient.the redistribution of farmland alone may not improve the distribution of total wealth substantially.and commodity stocksin the hands of traders. Landownersmay easily changethe composition of their assetson the eve of land reform if agricultural land alone is the target of redistributive zeal. without freezing the maximum permissibleownership of urban assets. therefore. It may even increase inequity-in particular. In the rural areas. the the inequity between the town and the village-since it will freeze the maximum permissibleownership of the main rural asset. 30 . Where there is such a system-as in Japan. Evidence this can be seen of in many LatinAmericanand Middle Eastern countrieswhere the large landownersoften dominate both commerceand government. By itself. output per hectareis reform.Thedistribution of real estate. the larger will be the equity effect of the reform program.the Republic of Koreaand the Republicof China-the absorptivecapacityof agriculture tends to be high even though holdingsare small. land reform could havea major equity impact. urban property reform or highly progressive taxation on urban wealth does not accompanyland reform in countries with a substantialand prosperousindustrial-commercialurban sector. (2) the beneficiariesbelong to the poorer groups.

Although the total effect of the redistribution process dependto a largeextent on the costsof increased will output after the redistribution. even if the maximum holding was 20 acres. the marketedsurplus generates As agricultural incomesand so potential cashsavings. The millions of landless families could not be provided for at the sametime. even with a low ratio between the ceiling and the floor holding (5 to 1). In Haiti. (Settlementof the landlesson new land.where land distribution is skewedand population is not dense. mostly food. In thesesituations. evenif holdingsabovea certainsize werecompletely eliminated.The densityof the farm sector is so high in some countries in Asiathat. not enoughland would be availableeither to raisethe acreage of the minifarms to a tolerable minimum or provide for the landless. The solution to rural povertyclearlycannot be found exclusively in the agriculture sector.however.The Population Factor Opportunities for the redistribution of land depend to a great extent on the existingpattern of distribution of holdingsand population density. In Sri Lanka.5 hectaresis availablefor the averagerural family of five.In suchcountries.The marketedsurplus also represents supply of agricultural products.and their migration to urban areas. notably in the Americas. the pressureof population is such that there is not enough land to meet the minimum requirementsof all claimants. a low 10-acreceiling would not sufficeevento bring all miniholdings up to a minimum two-acre size.In Bangladesh.) . As will be shown determinesthe size of the rural market for domesticallyproduced industrial products. where available. there are some might be wise to give land only to the minifarmersand to attackthe poverty problem of the landlessby meansof a massive rural works program.Effects MarketedSurplus Savings on and The redistribution of land can have a pronouncedimpact both on the availability of a marketablesurplus and on aggregatesavingsin rthe agriculturalsector. for the 31 . therewould be enoughlandonlyto givetwo acrestoeachminifarmer.the available land (43 million acres)would be barelysufficient to bring up the size of miniholdings to a minimum of five acres.there areample opportunitiesfor redistributing land so that inequalities can be diminished and the recipients of the land can generate an acceptable minimum income.are the other obvious alternatives. In India.the changein the sizedistribution of holdings will shift the distribution of the sourceof the marketablesurplusand savings. only 1.when possible.too. In other areas.and no land would be availablefor the landless(20-25million households).

for example.the surplus-output ratio would probably decline.farms abovea certain size were eliminated and their land transferredto the small class.5 to 50 acres) contribute the bulk (78%)of the total surplus.but may take the form of increasedon-farm investment in such items as improved housing. Sixty-one percent of the maize farmers in Puebla(Mexico).4% comes from only 1.there may be a sufficient increasein output if. that small farms (2.5 acresor less)sell only 24. however. whereaslarge farms (50acresor more) sell 65. and 51% (with 2. a fall in the surplus could necessitate imports and put an added strain on the balance of payments.But increasingthe marketedsurplus will not necessarily increasesavings. Smallfarm households tend to consumea largerproportion of their smalloutput than do householdswhich havea large enoughacreageto produce in excess domestic requirements. But thesefarm groups produce only 9. The surplus-outputratios of different farm-sizegroups.However. and their sharesof total output and salescan differ widely across countries and regions. Marketed Surplus A reduction in land concentrationthrough land reform could lead to a fall in the marketedsurplus-at leastin the short run. of Thus. In India. hypothetically. a typical sharecroppersells as much as 43% of his output. and 55. The rate of decline. provided that there is a compensatory increasein total output. but there can be no doubt that it would fall.5% of their output.the urban population. If output remainedthe samebut. the ratio of marketedsurplus to production falls asfarm size decreases.7% of the farmers. In Chile.4%.1% (more than 50 acres)con-' tribute 16%.the savings need not be monetized. and another 16% sell 25% or lessof their output. the necessary conditions are fulfilled whereby small farmscan realizetheir full pro32 . Since per acreyields on smallfarms canbe higherthan on largefarms. however. this decline in the market surplus ratio need not result in a decline in total surplus. 6.5% eachof the national output. on the other hand. These differenceswould determine how much the surplus ratio would fall after land reform.wells and access roads.sell no maize at all. Thus.6% of the marketed surplus comes from 70. Datafrom India show.5 acres)contribute only 6% of sales. Where it does. after reform.7%. In Mexico. with adverseeffects on the economy. might not be very great given that the largest and the smallestfarm-sizegroups account for only small proportions of the total output. for example. 48% of the farms (lessthan 2.

is that the farm-size structure created by any land reform program should fix a minimum as well as a maximum farm size. As farm size increases. This addsto the urgencyof introducing effective agrarian reform (including improved technology and services)along with land reform.the correspondingfigureswere lower -2. again. there was no direct measureof the savingsmade.As the surplus-outputratio falls. the savingsrate can be expected to become positive and increase along with it (althoughlarge farmerscanbe "dissavers"too.5% in the smallest size group (0 to 2 acres)and 19. A policy implication.2% on the larger ones. Insofar as the productivity of small farmers was previouslyconstrainedby inadequatenutrition.In a further study in Orissa(India). a decline in the market surplus ratio has a direct distributive dimension which should be offsetagainstthe decline.3% for large farmers. the subsistence consumption of small farmers increases-the extra consumption in kind representinga direct increasein their incomes (nutrition).it can be expected that the behavior of the savingsrate will be similar to that of the marketed surplus. sincethe savings rate represents contribution of the sector to the long-run growth the of both its own productive capacityand that of the rest of the economy. A recent study in the state of Haryana (India) tended to confirm this: the savingsratio was found to be -0. by running down the existing soil fertility). there should also be a positiveeffect on productivity. by using capital for consumption).duction potential. the aggregate savings be precan vented from falling.6% on the smallestfarms.At the lowest end of the farm-sizescale.3% on the larger farms (8 acresand above).24% for small farmers. and 11. It follows that a reduction in concentrationof land will reduce the averagesavingsrate of the farm sector.The minimum farm size clearlyshould 33 . from the welfare point of view. it is necessary to examinethe implications of a changein farm-sizestructureon the aggregate savings rate of the farm sectoras a whole. from the foregoing.For unirrigatedvillages.But. In addition.8.the subsistencefarmerscan be expectedto be net "dissavers"(for instance.5% for medium farmersand 16. Savings In consideringthe productivity effect of land reform. Although the evidence on savingsrates of different classes of farm householdsin developing countries is scant. but the ratio of net capital formation farmas a proportion of incomewas found to be 5.if a compensatory increasein total income can be securedby intensifying inputs per unit of land soonafter land reform.

in turn. However.There is growing evidencefrom the Philippines. to however. There may be situationswhere tenancy reform aims at stabilizing the position of tenantswith respectto rent paid. especially in the temperate production areas.without transferringownership rightsto them.Taiwan and somepartsof Europe. encouragesincreasedsavingsand. but also from experience in parts of Africa where "customary" tradition is convertedinto freehold.since the whole income in excess of' the fixed rentaccrues the actual cultivator. as in Japan. whether through the distribution of the land to those working it or the provision of greatersecurity of tenure and 34 . Ownership control and incomefrom the land is thus redistributed.the problem is to promote more efficient typesof tenancy. security of tenure and labor objectives. landlords and sharecroppers have spontaneously begun trying to combine cost sharingwith crop sharingbecause the combinationis profitable to both."An analogouscriterion can also be derived from the known behaviorof marketedsurplus:the smallholder should haveat leastenoughlandfor positivesales. then the size distribution of operational holdings maynot change. if landlords are allowed to retain land that might be self-operated.With the conversionof tenantsinto owners. for example. that since the seed-fertilizer technology began to of tenure is greaterand incomesfor the farmers are larger. The conversionof tenantsinto owner-operatorsgenerallyleadsto a more efficient and more equitable form of production organization than tenancy. This is seen not only from the reforms in Japanand Taiwan. But one of the criteria for determining the minimum income itself should be that it should at leastenablethe smallholder to ceaseto be a "dissaver. In Kenya. on-farm investment and higher output.and tenantsbecomeowners of the land that they operate. provision the of security of tenure.The expert consensus that fixed cash-rentcontractsare superior to the more is common determinedon the basisof the current national norm of minimum family income.with contracts having well-defined incentivesand deterrents.Crop sharing can be made more efficient and equitable if if is consideredwith cost sharing.Sharecroppers. Tenurial reforms. Here. Tenancy Reform The most successfulland reforms include those whereby tenants become owners of the land they operate. often havea preferencefor crop sharingbecauseit provides risk insurance. hasincreasedon-farm investmentand helped raiseoutput. This. hence.

Sustaineduncertainty about a government'sintentions with regard to the distribution of land adds to the risk of investmentand can hamper capital formation and production.weigh the risksas they perceivethem before makingon-farm investments-the major component of total investmentin agriculture.Very often the greaterpart of national output comes from medium-scalefarmers. LogisticalSupport Secondly. but the returns to the economy are usually higher from labor-intensiveoperations undertakenby smallholders.often thoseamong the lowest income groups. there is a long interval before the public sector can 35 . introduction of a major land reform programusually the disrupts the systemof logistical support from the commercialsector to the farmers. Finally. In some instances.continued uncertainty hasled to disinvestmentin agriculture by owneroperatorsand a flight of capital from the country.This linkage is basedon mutual interests and. In most countries in the world.These farmers. on long-standingbusinessassociation. Implementation Issues If reforms are to generatethe benefits expected of prudent investors. the less likely the accelerationof disinvestment by landownersand. there is a well-established link between commercial bankersand suppliersin the private sector and the larger agricultural producers.the lower the "cost" of the reform. since agriculture is a private sector activity in most countries. Such reforms improve income distribution by shifting income away from the landlordsto small-scale producers. have an effect on development.Often.instead of being displacedwhen landlords find it to their advantage adopt to a different technology. The financial returns to the landlord from using machinesand hired labor may be high. so. production and investmentdecisionsaremade bymillionsof individualsoperating in their own interests. often. several important considerationsmust be taken into account. It follows that the more specific the plans and the more clearly defined the policies regarding land reform.improved rental contracts. The more secure producers tend to invest part of their higher earningsin their holdings-thus raisingthe level of investment in agricultural production-whereas absentee landlords frequently invest in off-farm activities. Firstly.greatersecurity enables tenants to benefit from appropriate technological changes. The redistribution of land frequently leadsto a breakdown of this system.

The breaking up of such holdings may well reduceyields and lower output. When land is fully utilized and yields are alreadyhigh. Part of the reason is that these institutions have not been able to adapt their methodsof operationto the needsof largenumbersof small farmers. In many instances. In somesituations. Unlessthis is done.the appropriate organization of supplies and the evolution of a low-cost delivery systemto reachsmall-scaleproducersis a sine qua non for a sustainedincrease in productivity. Natureof Organizations Thirdly. mostof the inputs are "divisible.and the like. the institutions that have provided servicesin a post-reform period have continued with a bias in favor of larger-sizeoperations. Thus. the beneficiariesof the reform may not be in a position to increasetheir output. it is essentialthat they be designedspecifically to assistthe beneficiariesof reform. Indeed. There are many different forms of organization: cooperatives. high yields and efficient operations may be directly associated with a systemorganizedto function on a large scale (as in certain types of sugar plantations)." thus reducing the importance of scale of operations as a factor in raising productivity. the impact of redistribution of land on productivity and employment may be in question. under certain conditions land reform programs might need adaptation if they are to fulfill the objectivesof development. or-as in Peru-converting the operation into 36 . In this context. it is important to determine the reasons for high yields. by raisingthe wagesof the workers.the reduction of the costsof a land reform program-in terms of production forgone-depends on the rapid reorganizationof the input supplysystem.special credit institutions. productivity will decline and output will fall.agricultural development banks. Adaptation Fourthly.undertake the role previously filled by the private sector. or before the privatesectoradjuststo the new situation. In much of agriculture. A more realistic approach to obtaining widespread benefits would be to leavesuch operationsintact and redistributethe profits from the enterprise. marketing authorities.Without an appropriate organizationfor the provision of inputs.Thiscan be done through taxation. the natureof the organizationsproviding for both the supply of necessary inputs and the marketingof production surplusesis crucial in a post-reform period. Whatever the organizationsthat prevail.

Structural Change Finally. Government reorganizationcan generateenthusiasmand provide opportunitiesfor mobilizingworkers. No matter what the structure.however. can encourage increasedon-farm investment. can be consistentwith all the goals of economic development: raisingproductivity. Many communes. however. other organizations(suchas large-scale state farms) might be intended to save labor.a worker-owned corporation and distributing reform leadsto structural changes within the agricultural sector. by providing securityof tenure. 3. Thisappliesboth to the agriculturalsector as a whole and to the units in which beneficiaries of reforms are organized.This is a condition. 2.the number of small-scale owner operationswill increase. producer cooperativesor communesor large-scalestate farms will emerge. 37 . Experiencehas indicated. In some instances.The creation of adequateincentives is particularly important in a situation where labor is the major input. to the participatingstockholders. The post-reform structure will depend on the ideology of the government.producer cooperatives and other units of production haveflounderedin developingasystem that reflects both equity and incentives. In the long run. out of profits. sustained increases output dependon complementaryinvestments poliin and cies.The most important of theseconcernthe organizationand provision of an adequatesupply of inputs for the beneficiariesand the creation of incentivesto use theseinputs to raiseproduction. However. but raisingoutput depends on more than land and labor. land reform need not leadto a reduction in marketedoutput or savings. There must be an appropriate supply of other inputs. increasing employmentand providing wider others. that is often unfulfilled in rigidly controlled societies. Tenancy reformscanredistribute appropriate systemof management is necessary which enablesthe managers land to makedeciof sionsin a timely fashion-a most important condition in agriculture and one that is dependenton weather. There must be an adequatesystemof incentivesand rewardsif productivity in agriculture is to be increased. Land reform.that: 1. The pattern that evolves may also be tailored to fit the economic environment: the organizationmight be basedon a system which canusesurpluslabor for direct capital formation. although equity oriented.

which recognizeda relationship between land distribution and equity. Problemsof tenurewere seento havean indirect bearingon production. Technical Assistance The Bank hasbeen concernedwith problems associated with land distribution and land reform since the beginning of its operations.Chapter 3: THE WORLD BANK AND LAND REFORM Changing Concerns The position of the World Bank in regard to land reform has changed over the past decade. The paper stated: "In developing countries. maywell be a necessary condition for their realization.and socialjustice.the approach to agricultural development was widened to include the provision of rural credit and on-farm inputs. are of Furthermore.The missionidentified the patternsof landuseand 38 . concernwas growing about distribution of income in the rural areas the relationshipbetween and land distribution and income distribution. mainly becausethey influenced on-farm investment decisions and determined the efficiency of resourceuse. representsmuchhigher land a proportion of totalwealththanin developed countries. however. especially irrigation water.Theobjectivesarenow generallyaccepted to be increased productivity and employment. In the early 1960s. This was reflected in the Agriculture SectorWorking Paperof June1972. One of the first major economic surveys undertaken was that of Colombia in 1955." of is This concern has been reflected both in the technical assistance offered to governments (especiallyin sector survey and economic reports) and in the types and componentsof projects in the lending program.the focus was on providing adequateinfrastructurefor increasingagriculturalproduction. By the end of the 1960s. reflecting a reconsiderationof the objectives of development and the most appropriate strategiesfor attaining thoseobjectives. inegalitarian and patterns of landownership a majorsource incomeinequality." The paperwent on to affirm that: "It is clearthatagricultural development cannotdo all it mightto improverurallife if the distribution landownership highlyskewed. in somesituations. In the early yearsof the Bank'soperations. Land reform canbe corsistentwith theseobjectivesand. the owners landusually of possess politicalandeconomic powerwhich can be exercised waysthat harmthe interests the bulk of the in of ruralpeople.

recommenda vigorous policy of settlementon reclaimed and clearedland.Largestretches fertile landwere held of by large-scale producersfor livestockraising. securityof tenure was consid=ered to be especially significant in the light of the distribution of potential gainsfrom new technologybeing introduced into the country. This mission recommendedthat the government adopt a presumptive income tax to encouragethe more productive useof land.Many of these have pointed to patternsof land control and insecurityof tenure as obstacles to raisingagricultural productivity. A subsequentagriculture sector mission in 1956 confirmed that the systems land tenure and land usewere barriersto increasingoutof put.conditions is only through a thorough analysis conditions of 39 . The missionswere not concerned with the redistribution of land as a means of encouraging greater equity.while intensiveagriculture was practiced by "minifundios" on land that was lesssuited for crop production.The Bank needs to be better informed about conditions governing rights to land and related institutions in member countries.there hasbeen a growing emphasison the problems of distribution of land and the rightsto land as factors that influence equity aswell as productivity. nor did they consider redistribution as a meansof intensifyingproduction. missionsand sector surveyshavebeen conducted in almost all the countries servedby the Bank.they took the view that the distribution of land was a matter of national policy and internal politics. however. More needsto be known about the distribution of land. The mission recommended the governmentthat to it introduce a graduatedland tax as a meansof intensifying land use.the problem was seenas one of unevenland distribution and insecurity of tenure. many reportsdo not give appropriate emphasis to issuesrelated to land reform and development. It did.and the policies and programsinstituted to influencethe distribution of land and rural incomes. Since that time. Despitethis trend. and that the Bank-as an external lending agency-should adhere to the existingpolicy and not advocatea rapid redistribution of distribution by sizeof holding to be major obstacles acceleratto ing agriculturaldevelopment. Rather. In Morocco. Thus.More recently. the mission emphasizedthe possibility of redistributing landas a meansof increasingboth output and equity. The two missionsto Colombia were concerned with increasing productivity and intensifying land use. In Ethiopia. missionsto Ethiopiaand Morocco havedrawn attention to the relationship between the land tenure situation and the distribution of benefits from growth. Landlordswere finding it increasinglyprofitable to displacetheir tenantsas machinetechnology provided higher returns.

When land is confiscated as part of a revolutionary process-as it was in Mexico and Bolivia-clearly little.One reason is that the processof reform in itself may only require relatively small outlaysof public funds. the Bank has not been totally indifferent to structural and income distribution aspects.such as Argentina and Thailand. cooperativeproduction units in Tunisia and group farmersin Kenya. Compensationpaid for land is a "transfer payment" from the pub40 .the actual amountsinvolved are not substantial. external financing. whether multilateral or bilateral. only some9% to 15% of total reform-relatedcashbudgetswent for landowner compensation-though in other casesthe figure could be muchhigher. has played a minor role in the financing of land reform programs. in the Latin American countries which followed nonconfiscatoryreforms. if any. as is usually the case. Lending Operations The Bank'slending for agriculturaldevelopmenthasincreased very rapidly in recentyears. In few general. present. projects havesupported land reform as such.asexpenditures fora redistributive reform depend mostlyon the levelsand forms of compensationthat are set for the former well as countries that follow capitalism.These have included socialistcountries.Fundshavealso been provided for large-scale livestockproducers.large-scale plantationsand smallscaleproducers.tenants and farm workers. small landowners.such as Yugoslavia and Tanzania.thesehavebenefited absentee landlords.Loans credits havebeen madeto countries and with widely differing social and political structures. Evenso.kibbutzesin Israel. the recordshowsan increasing and awarenessof the implicationsreflected in more frequent useof measures to improve them. On the other hand.paymentis mostly in bonds. The compensationissuetendsto be more important in such countries as Colombia and Venezuela where land is purchased. however.many reports At still do not addressthese problems. new guidelines are being developedwhich can form a basisfor discussing issuesin the a systematicway in sector and economic reports. Nevertheless. It is estimatedthat. individual holdings in India.Public discussionof land reform financing is generally dominated by this issue. public expenditure is involved.large landowners.within member countriesthat the Bankwill be in a position to discuss policy options with member governments. Loansand credits have been made for agriculture operating under different forms of tenure-for kombinatsin Yugoslavia.especiallywhere.

however. these institutionsoften provide inputs that were formerly provided by the private sector. Very often the managerial capacityof the beneficiaries maybe untried. Furthermore. The problems encountered in financing the Tunisian program underscore some of the difficulties in lending for reform-related projects. the agenciescreatedto deliver the inputs are usuallynew.this would have the paradoxical effect of giving land bonds greaterstability than that enjoyed by the currenciesof issuing countries. The Bank subsequently canceledhalf of the loan. and the whole delivery systemchanges 41 .designand implementationof the agrarianreform. hasbeen suggested It that the internationalagencies might guaranteebonds issuedto compensatelandlords.If financing were to be through international maintenance-of-value guarantees of bonds and for compensation. The extensionof reform strained the limited administrative capacity.Without doubt. which occupied the most fertile land in that country. The financial viability of these projects dependsto a great extent on the managerialcapacityof the beneficiariesof the reform and the development of an efficient service systemfor them.eachunit of production was to be self-financingand. consumption and investment-but it does not of itself create any new productive capabilitiesin the country. to influence the major political decision either to take all the land in Tunisia under state managementor to put it all under the control of cooperatives. internationallending of institutions have refrained from using their resourcesfor financing land purchases. compensation can haveserious implications for income distribution. However.Smallholdersopted for private farming and were supported by landownerswho resistedthe takeover of their lands. The Bankhasprovided generalsupportfor at leastone far-reaching land reform program. The nationalizedland was to be converted into "units of production" which were to be farmed on a cooperative basis. It was unable.This was in Tunisia where the Bankprovided a loan of $18 million intended to back a major agrarianreform relating to former French-owned estates. Partlybecause this. inter alia. the systemhad built-in disincentivesbecause wages were not paid accordingto work. was to pay a guaranteedminimum cashwage to the workers out of the farm profits. The Bank successfullypressedfor substantial improvementsin the conception.lic sector to the landholding groups.the scarcityof trained manpowerand the rapid paceadoptedin establishingnew cooperatives made it difficult for the production units to start on a sound basisand generatea large enoughcashflow to meet their objectives. have limited technical capacityand are of questionablefinancialviability. and the reform program collapsed.In addition.

and the issuance either family or individual of freehold titles.irrigation. consolidation and registrationof holdings. These Acts also provided for the regulation of the subsequentsale.vehicles.This directly affects their financial viability.000acreshavebeen of allocatedand titles issuedon 60. It was recognizedduring the preparation of the Lilongwe project that there was an opportunity to changethe existing land tenure pattern of customaryright of usufruct.000acres. Kenya.and many investments social in overhead are not self-liquidating in the short run. some200.Fiveacreswas deemed to be the minimum holding size capable of providing a family with subsistence presentlevelsof technology.outgrower Another Bankproject provided direct financial assistance facilito tate the implementation of land reform as part of the Lilongwedevelopment schemein Malawi.IDA creditsare beingused for the land survey (both topographicaland cadastral). Sevenof the projects were established public land and on so did not involve any change in the size distribution of existing 42 .To date. Malawi and Malaysia. at As a consequence.The Lilongwe project indicates that Bank assistance can play a role in assistinggovernmentsin the "mechanics" of land reform and in the draftingof legislation.Table 3 gives information on ten projects located in Brazil. and fragmentation of holdingshad occurredon a substantial scale. Colombia. and rural credit.The amount involved will be approximately US$1 million by the end of the second phase. Theseinclude projectsfor land by settlement. individual holdings were of the order of about five acresper family. Malawi Governmentintroduced three Acts the of Parliamentwhich provided for the allocation. LandSettlement The Bank hasfinanced a number of settlement projects in which infrastructure was made available together with other servicesfor families settled in the project area. and the construction of housing and land registry.from one basedon the profit motive to one basedin the first instance on social consideration.mortgageor transfer of registeredland through the establishment LandBoards. especiallyin that cashflows generatedby reform projects tend to be lessimmediatethan in other projects. provision the of allocation and registrationstaff.The need for changeto a more secureand lastingtenure systemwas evident asalmost all uncultivatedlandhad been takenup. Ethiopia. A number of other projects have been financed by the Bank involving somechangein distribution of landor in tenurial rightswithin the areaencompassed the project.

3 6. (8) Excludes $2.0 n.3 6.389 3. research and related studies.0 25.800 now settlers and 3. . (a) Although 2.9 7.6 15.667 10.500 partially established settlers are given. do not necessarily reflect total economic costsof settlement.0 4.8 29.200 2.) Project costs.327 2.(7 6. (6) Includes 2.0 5.0 13.0 43.Table 3 Costs of Selected Settlement Projects Assisted by the World Bank Estimated Total project Country Project Bank or IDA finance Number of families(') project costs per Average farm costs Amnunt (US$ millions) Lnanor credit Date to be family(') (US$) size Settlement on (US$ millions) settled (hectares) Brazil Colombia Ethiopia t Kenya Malawi Malaysia Alto Turi Land Settlement Project AtlanticoNo. education.200 2.0(5) 11.214 1.830 2.1 41.429 2.423(3) 6.5 Publicland INCORA land (involved appropriation land) l Publicland Europeanownedland Publicland Publicland Publicland Publicland Source: World Bank and IDA appraisal reports. The project is behind schedule.300(6t 1.500 1.280(4) 5.825 40.000 2.500 partially established settlers.505 13.000. (3) The costtothe government is$1.6 14.000.000 hectares. 3 Irrigation Second Atlantico Development Caqueta Land Colonization Wolamo Agricultural Project LandSettlement and Development Karonga RuralDevelopment Jengka Triangle Second Jengka Triangle Third Jengka Triangle 12. as estimated in the appraisal reports. Thesecost expenditures are being reviewed and are expected to be Considerablyhigher than originally expected. whereas the cost per middle-size farmer remaining in the project area is $100.3 4.8 4.3(8) 6. figures represent goals rather than actual state of settlement.000 4.6 2.800 6.7 21.0 4.5 3.900 hectares.770 3.0 loan loan loan loan credit credit credit loan loan loan 1972 1967 1972 1971 1969 1969 1972 1968 1970 1973 5.756 10.800 new settler families are scheduled to be settled on some 280.9 6.a. no data on the farm size of 3. (5) The original goal was to settle 2.500 landless peasants and develop 9. )') The cost per small farmer settled is estimated to be $17.050 5.0 14. (.7nn perfamily settled.7 9.1 3.0 8.73 million used for agricultural development on the highlands.7 9. (l) Except for Kenya.This excludes expenditureson health.

holdings. In this area. sell their productsthrough the centralorganization. There are severelimitations on settlementas a meansof reaching large numbersof landlesspeople or relieving pressures the land. Kenya.The capital requirementof more than $5. rubber in Indonesiaand Malaysia.cocoa inholding in each the Ivory Coast.the whole approachto capital-intensive settlementrequiresreexaminationconsideringthe magnitudeof the problem outlined in Annex 1 of this paper. The smallholdings are establishedaround the nucleus of either a processing plant or a plantation. It was suggested that the benefits be distributed through the raisingof wagesand the paymentof dividends to the workers. the data in Table 3 indicatethe limitationson settlementprojects -as presentlyconceived.000families. it is only effective when there is a commodity that can be handled througha centralprocessing system.Thecentralunitprovides technicalassistance.settlerswere allocated holdingsof from three or four hectaresin Malaysia 40 hectaresin Brazil.The average project hasrangedfrom 10 hectaresin Senegal one acre in Kenya. employ a to family and produce enough of a high unit value commodity to yield an income well in excess that earnedby producersof staple comof modities who have holdings of a similar size. the size of holdings for outgrowers is small. TheBankhasparticipatedin ninesuchprojectscosting$125million. the total cost was expected to be $190 million. on Although the costsper family in a settlementproject can be misleading. in turn.Clearly. of which the Bank has contributed $68 million and affecting some 120.Thus. to In the main. under labor-intensive cropping systems. Mauritius and Uganda. Theseschemes involve the production of tree crops on smallholdings rather than on large-scaleplantations. inputs and marketingservicesfor the outgrowerswho. Outgrower Schemes The problems of distributing the gains from plantation development were mentioned earlier.and oil palm in Nigeria.Eachholdingwasdeemed to adequatetcprovide a livelihood and full employmentfor the settler and his family. 44 .Thesehaveincluded teaprojects in Indonesia. While this systemhas madea valuablecontribution toward establishing viablesmallholders.000 families. althoughlarge enough.000per family limits the prospects of the approach. the Bank'scontributions being almost half that amount. the Bank has made a substantialcontribution toward a novel form of tenure through the developmentof "outgrower" schemes.Theten projects were intended to settle no more than 35.

this hasbeendifficult to enforce. To this end. irrigation projects are subjectto special regulations or laws regarding the size of holding that can be held by the projects have conbeneficiary.Thus.or an average 1.Elsewhere. or they have failed to introduce legislation which would havemet the conditions specified in the loans.000 million for rural credit.The average size of holdings in the irrigated areasrangesfrom 10 hectaresin Iraq to one hectarein Korea.000hectaresand benefit more than 500. In other instances.although in recent yearsthere hasbeen a pronouncedtrend toward lending for smaller producers.000 families.By the end of 1973. in several instances. Bankhasmade loans on the condition that the the recipient government takes steps to ensure that the intended beneficiariesdo indeed gain from the investment. But. For example. Bank-assisted provided more than $1. In some instances. While these projects covered many facetsof water storageand distribution. In some instances. access can be restrictedby tenurial arrangements lending criteria specify that registeredland if projects have titles be usedascollateral for borrowing.450 million in irrigation. Most of these resources haveaided largercommercialproducers. flood control and drainage projects.6 of hectaresper family over alI the projects. the Bank hasworked with various governmentsin determiningthe mostappropriatesize of holding for the beneficiaries of eachproject. in practice. governmentshave failed to implementconditions provided for by existinglegislationon rights to land. in Mexico the Bank-supported formed to the law which limits the size of irrigated holdings to a problems have arisen because maximum of 10 hectares. Pakistan and Sri Lanka.11 projects costing$342million (incorporating a Bankinvestmentof $190 million) are expectedto improve 810. there is no legal provision regardingsize of holding or because the law has been ignored. governmentsconcernedhave not fulfilled obligathe tions regardingthe provision of securityfor tenantsor the allocation of land to low-income groups. most were intended to improve the use of water and-bring more land under intensivecultivation.the Bankhas insistedon special legislation giving tenantssecurityof tenure. In many instances.Thishighlights 45 .Irrigation The Bank has invested about $ estimated$250 million had been allocatedfor small farmers.However. RuralCredit While in itself farm credit is an important instrumentfor reaching groups of a particular size in agriculture.

The Bankwould seemto be left with only two options. (3) support land reform proposalswhen they are made officially. to what extent canthe Bankinfluence the courseof eventsregardingdistribution of land. (2) call the attention of the governments the problemsassociated to with the existing tenure system. It should give overt priority in lending to those countries and projects which meet land reform criteria. and income from the land. These options are reflected in the policy guidelines provided in this paper.That is. 46 . while the potential for usingthe Bank'sinfluence to pressor even force the issueof structural reform on member countries is severelycircumscribed. the settingof public utility countries where governmentsare not interested in land reform the Bankshould: (1) studythe situation in all cases. for instance.UsingBankfinanceto gain a developmental impact through land reform involves highly complex issuesat the project of the major dilemmas confronting an international lending agencyconcerned with promotion of land reform as an instrument of economicdevelopment. and (4) not lend for projects if tenurial arrangements so bad that are they frustrate the achievementof the Bank' countriesthat are interestedin pursuingland reform the Bankcangive support in the form of technical assistance finance for reformand related projects.and enter into a dialogue on the subject. in the sovereignstatesthat are membersof the Bank? Major Policy Options The Bankhasto recognizethat its leverageis limited as it seeksto redefineits positionwith regardto land reform. Firstly.Suchpolitical decisionsare not amenableto ready negotiationwith governments the in sameway as are other institutional questions-such as. Secondly.


I I I .

and 4.8 4. On the basisof these global figures.393 145 232 271 84 463 214 47 1.0 12.02 1.617 million in the early 1970s.Production Yearbook 1972. of The relationship between population and land in all major regions and for 52 selectedcountries is shown in Annex Tables1:1 and 1:2.Together.90 11.456 10. The world's population was estimated at approximately 3. averaging0.2 100.8%). approximately32% is in Asia. 16% in the USSR.78 Source: FAO.314 239 4 1.2 100.851 4.0 17 32 17 39 64 67 4 51 1.9 0.041 million hectares under other uses(36. and 3% in Oceania. or closeto 0.7 3.9 18.14 0.753 3.This represents averageof 3.4%).240 2.defined as arableland and land under permanent crops (10.031 851 13. Cropland.7 hectares an of land.987 million hectares under permanent pasturage (22. The ratio of cropland to agricultural population is the lowest in Asia among all the major regions.the People'sRepublic Table 1:1 Regional Distribution of Land.Annex1 THE CONTEXT OF LAND REFORM Ratios of Population to Land The total land area of the globe is about 13.75 0. 19% in North and Central America. More than 70% of all rural people live in Asia.0 89 77 54 74 1.Theworld's agriculturalpopulation-defined as populationdependingon agriculture for its livelihood-is estimatedat 1.456 million hectaresof cropland. madeup of 1. the tables show that: 1. or 51% of the total population.0 71.8%).40 hectareof cropland.78hectareof cropland per person in agriculture.783 2.2 2. per person. 10% in Europe.393million hectares.8 14. 49 .01 5.6% in SouthAmerica.0 15.63 3. respectively.8 31.35 hectare per person.6 5. Agricultural Population and Area per Personin Agriculture Cropland Ruralpopulation Land area DistriDistri(million (million bution bution hectares) hectares (%) (millions) (%) Agricultural population as percentage of total population Cropland area per rural person (hectares) Region Europe USSR Northand Central America SouthAmerica Asia Africa Oceania Total 493 2.242 1.851 million. 2.which hasapproximately 32% of the world's cropland. there is an average 0. 15% in Africa.Among other things.Of the arable land.35 0.9 4.

Annex 1 Table 1:2 Cropland in Relation to Population, by Country
Total population (000) Agricultural population (000) Hectares cropland of per person of: Total Agricultural population population


Cropland (000hectares)

Africa Angola 900 Ghana 2,835 Ivory Coast 8,859 Nigeria 21,795 Rwanda 704 Uganda 4,888 Zaire 7,200 Asia Bangladesh 9,500 Burma 18,941 China,People's Republic of 110,300 China,Republic of 867 India 164,610 Indonesia 18,000 Japan 5,510 Korea,Democratic Republic of 1,894 Korea,Republic of 2,311 Malaysia 3,524 Nepal 2,090 Pakistan 24,000 Philippines 8,977 Thailand 11,415 Viet-Nam,Democratic Republic of 2,018 Viet-Nam,Republic of 2,918 Europe Denmark 2,678 German Democratic Republic 4,806 Germany, FederalRepublic of 8,075 Hungary 5,594 Italy 14,930 Poland 15,326 Portugal 4,370 Romania 10,512 Spain 20,601 Sweden 3,053 United Kingdom 7,261 USSR 232,809 Yugoslavia 8,205 Latin America Argentina 26,028 Bolivia 3,091 Brazil 29,760 Chile 4,632 Colombia 5,258 Cuba 3,585 Guatemala 1,498 Haiti 370 Mexico 23,817 Peru 2,843 PuertoRico 236 Uruguay 1,947 Venezuela 5,214 North America Canada 43,404 UnitedStates 176,440 Oceania Australia 44,610

5,501 8,832 4,916 76,795 3,609 8,549 17,493 71,000 27,584 850,406 14,520 550,376 119,913 103,540 13,674 32,422 10,931 11,040 60,000 38,493 35,814 20,757 18,332 4,921 17,257 61,682 10,310 53,667 32,805 9,630 20,253 33,290 8,046 55,711 242,768 20,527 24,353 4,931 93,565 9,780 21,117 8,407 5,180 4,867 50,670 13,586 2,784 2,886 10,997 21,406 205,395 12,552

3,568 4,840 3,986 45,423 3,277 7,342 13,701 60,000 17,570 568,921 6,171 372,605 83,230 21,329 7,275 17,300 6,176 10,112 35,000 26,752 27,398 16,108 13,620 595 2,133 3,514 2,484 9,735 9,940 3,523 10,503 11,222 754 1,540 77,322 9,651 3,704 2,873 40,869 2,484 9,541 2,755 3,246 3,754 23,617 6,189 387 482 2,887 1,712 8,216 1,049

0.16 0.29 1.80 0.32 0.20 0.57 0.41 0.13 0.69 0.13 0.06 0.30 0.15 0.05 0.14 0.07 0.32 0.19 0.40 0.23 0.32 0.10 0.16 0.54 0.28 0.13 0.54 0.28 0.47 0.45 0.52 0.62 0.38 0.13 0.96 0.40 1.07 0.63 0.32 0.47 0.25 0.43 0.29 0.08 0.47 0.21 0.09 0.67 0.47 2.03 0.86 3.55

0.25 0.59 2.22 0.48 0.21 0.67 0.53 0.16 1.08 0.19 0.14 0.44 0.22 0.26 0.26 0.13 0.57 0.21 0.69 0.34 0.42 0.13 0.21 4.50 2.25 2.30 2.25 1.53 1.54 1.24 1.00 1.84 4.05 4.71 3.01 0.85 7.03 1.08 0.73 1.86 0.55 1.30 0.46 0.10 1.01 0.46 0.61 4.04 1.81 25.4 21.5 42.53

Source: Dovring,Folke. landReform: andMeans. Background Ends A Studyprepared the WorldBank. for

Annex 1 of China and India havean agricultural population of close to 1,000 havea further 178 and million, while Indonesia,Bangladesh Pakistan million. Of the Asian countries, in terms of hectares per person, Burma hasthe most favorable ratio of cropland to rural population (1.08),followed by Pakistan(0.69),Malaysia(0.57)and India (0.44), comparedwith Indonesia(0.22), People'sRepublicof China(0.19) the and Bangladesh (0.16).The leastfavorable ratio is in the Republicof Korea and the Democratic Republicof Viet-Nam (eachwith an estimated 0.13). It is notable that the Republic of China (Taiwan)and Japanhave ratiosof 0.14 and 0.26arable hectaresper person in agriculture. Japanis the only developedcountry with such a low ratiowell below the 1.63of Europeand 5.02of North and CentralAmerica. 2. SouthAmericaaccountsfor 4% of the world's agriculturalpopulation and 5.8% of the world's cropland. Although 13% of the land area of the world is in South America, almost half of that area is in forests and woodlands, 20% is in pasturelandand only 5% or 6% is in cropland. However,as only 39% of the population is in agriculture, there is an averageof 1.14 hectaresof arable land per rural person.Argentinaand Uruguay have high ratios of agricultural land to rural population, the most favorablein the developingworld (7.03 and 4.04, respectively). Venezuela,Chile, Bolivia, Mexico and Cuba have ratios of more than 1 hectareper person in agriculture; Brazil, Colombia, Peru and the crowded Central American republics have ratios of lessthan 1 hectareper rural person.Haiti with 0.10 hectare per person in agricultureappearsto have the most unfavorableratio in the world. 3. Africa has13% of the world's rural population and closeto 15% of the world's cropland, with an averageof 0.90hectareof cropland per person in agriculture; 67% of the population dependson agriculture, a higher proportion than in anyother region.The mostfavorable ratio in tropical Africa appearsto be in the Ivory Coast,with 2.22 hectaresper person in agriculture.Uganda,Ghana,Nigeriaand Zaire have between 0.50 hectareand 0.70 hectare per person-in agriculture. Rwanda,with 0.21 hectareper person in agriculture, is one of the few countries in tropical Africa where the pressureon land resourcesis greaterthan the average Asia. in This brief summaryindicatesthe wide rangeof population densities in rural areasin different regionsand countriesof the developing world. The data show that, by and large, countrieswith a high proportion of population in agriculture have less favorable ratios of population to land. They are also among the poorest countries.Further, they are the countries in which population is increasingrapidly and where it is particularly difficult to raiseagricultural output. 51

Annex 1

Population Production and
The population in the rural areasof developing countries,while declining relative to total population, is increasingin absolute numbers. Despite rapid migration out of agriculture, and despite the explosivegrowth of population in certainareas,the rate of growth of the rural population has increasedin all regions of the world other than Africa. Table 1:3 showsthe trends in rates of growth between 1950-60and 1960-70,with overall growth rates rising from 1.9% to 2.1%, and the largest regional rate of increasebeing the one from 1.8% to 2.1% in EastAsia (where population density is alreadygreat in rural areas).
Table 1:3 Rural Population Growth, by Region
Annual percentage rate 1950-60 1960-70

Latin America EastAsia MiddleEast Africa Totalall regions

1.4 1.8 1.8 2.4 1.9

1.5 2.1 1.8 2.2 2.1

Source: Davis, Kingsley. WorldUrbanization,1960-70. Vol. 1,1969.

The larger number of people hasadded to the pressure populaof tion on the land. Historically,this pressure been relievedthrough has the expansionof acreage along a frontier of cultivation. Indeed,it was the expansion of the frontier in the new lands of North America, Argentina, SouthAfrica and Australiathat helped relieve population pressures the first period of generalizedpopulation growth in the in late eighteenthcentury. In theseareas,population growth was accelerated by an influx of migrants to rates comparable to those found today in many of the poorer countries. However, since the frontier is fast disappearing mostof the poorer countries,so arethe opporin tunities for low-cost expansion of acreage under cultivation. The changingsituation is difficult to document at an aggregate level, but Table 1:4 gives some perspectiveson trends in the expansion of cropped areas and production. The rate of expansionin acreagefell, in the aggregate, the 1950s in and the 1960s. The only exceptionis LatinAmericawhere the acreage under cultivation grew from a rate of 1.8% to 2.5% per year. In all other areas,the expansionof acreageslowed down, halving in the


Annex 1 Table 1:4 Cropped Area and Production Trends, by Region
Average annualgrowthrate 1953-55 1962-63 to 1961-63 1969-71 to Production Area Production Area

LatinAmerica EastAsia MiddleEast Africa All regions

3.1 2.5 3.8 3.0 2.8

1.8 1.9 2.2 1.7 1.9

2.9 2.8 2.7 2.6 2.8

2.5 1.1 1.1 1.2 1.4

Source:FAO.Reportanthe Wo1id 1960 CensusofAgricalture. 1971. Rome:

Middle Eastfrom 2.2% per year to 1.1%. When the rates of population growth are compared with rates of increasein acreageunder cultivation, it appearsthat the rural population increasedat about the same rate as the cropped area during the 1950s,but increased more than one-and-a-halftimes as fast as the cropped area during the 1960s. As shown in Table 1:4, production increased the sameratedurat ing the 1950sas during the 1960s.A rate of increasein output consistentwith an increasein rural population indicatesa decline in the rate of growth of output and incomes from 0.9% per year in the 1950sto 0.7% per year in the 1960s. the sametime, asaverageper At capita income was increasingat a declining rate, yields per acre rose very moderately-in this instance,an increase around 0.4% a year of in the 1950sand 1960s. The increasein population and slow expansionof the area under cultivation have caused a deterioration in man-land ratios. This deterioration, arising from constraintson the low-cost expansionof acreage under cultivation, makesit increasingly difficult to accelerate growth rates of output and income in agriculture. This is because raisingyields requiresa higher level of technologyand management as comparedto increasingoutput or expandingacreageunder cultivation. It is only in recent years that a concerted effort has been made to develop technologiesto raiseyields of staple crops grown in the developing areas.Hitherto, these efforts have been confined to a handful of crops, and the successes attained havebeen limited to a relatively small areaof the developingworld. In somefortunate countries,such as Nigeria, someland resources still availablefor are future developmentthrough an expansionof acreageunder cultivation. But many other countries have little or no unused land, so the 53

Table 1:5 showsthe startling differences in input of agricultural labor and output per hectarein developing countries of Asia on the one hand.LabourForce Projections. I-V. This applies to the more densely populated regionsas well as to others.Republic of Japan 48 92 224 75 261 153 74 229 101 113 107 119 242 192 25 48 117 39 136 80 39 119 53 59 56 62 126 100 71 115 283 146 440 119 366 220 218 178 286 179 241 762 9 15 37 19 58 16 48 29 29 23 38 23 32 100 148 150 126 194 169 75 492 96 215 158 266 150 100 397 37 38 32 49 43 19 124 24 54 40 67 38 25 100 Pt.Republic of Laos Malaysia Nepal Pakistan Philippines Sri Lanka Thailand Viet-Nam.However.Most developingcountries haveconsiderable opportunities for increasingemploymentand production in this sector. Rome: and p.. Sources: Column International 1: Labour Office.The 3 Stateof Food Agricuture. Geneva: Columns and 5: FAO.Several other countries havea higher ratio of workers to the land than Japan. Japan Table 1:5 Agricultural Labor Force and Production in Selected Asian Countries. Malaysia. The increasingpressureof population on the land highlights the issueof absorptivecapacityin agriculture. the point to be emphasized is that if the level of labor intensityof two workers per hectare prevailing in Japancould be attained in countries such as Pakistan 54 .while one country. 99. 1971. and in Japanon the other. 1972. 1970 Agricultural workers per 100 hectares Netagricultural production per hectare (US$) Country Indices Japan = 100 Indices Japan = 100 Output per worker (US$) Indices Japan = 100 Burma India Indonesia KhmerRepublic Korea. a higher output per has worker in agriculture than Japan.Annex 1 situation is correspondinglyworse. is a country of small holdings and has approximately two workers per hectarewith an averageoutput of $397 per worker and $762 per hectare. The emphasisin the latter countries will have to be placed more and more on raising yields per hectare.

are under 1 hectarein size. Basedon the sameassumptionas above.8% of the total number. Ecuador.3 million holdings in the 83 countries. theseholdings accountfor approximately6. Nonetheless.1% of the land areaand 3. becauseof the small size of the irrigated areas in Pakistanand India and other constraintsrelated to technology. resourcebase.includingall of the larger countries that are membersof the Bank.7% of the cropland.except Afghanistan. are lessthan 5 hectaresin size. or 78. If the pattern in the 83 countries is the same as in the 64 countriesfor which there are data on distribution of size and distribution of land. Distribution Land of The ratio of population to land tells us nothing about the distribution of land among the rural population: countries with denserural populations mayhavea more evendistribution of landthan countries with sparsepopulations. It is reasonably clear that whatever is done will only partially satisfy the ever-risingdemandfor work and income in the manydeveloping countriesthat arefacedwith the generalproblemsof high population growth. 2. specialand possiblyextraordinarymeasures would haveto be taken to satisfy the expandingdemand for work and income from today'schildren.With very few exceptions. The most recent data on distribution of holdings by size is given in the worldwide censusof agriculture held in the early1960s. About 109 million holdings.Nigeriaand Romania. 55 . or 39% of the total number.8% of the total land area and 20. urban aswell as rural.Annex1 and India.Bolivia. Suchmeasures include thoserelated to land reform. the agriculturalsectorin thesetwo countriescould absorb all the labor force expectedby 1985. then theseholdingsoccupy1.Table 1:6 combines the two sets of information to give an indication of the distribution of land and cropland by size of holding. low incomesand increasingunemployment. The censusprovides a breakdown of distribution by size of 138. Thiskind of labor intensity is not likely to be reached. About tenure and capital formation. Thiscovered83 countries.4% of the cropland.however.9 million holdings. poverty and unemploymentproblemsof the developthe ing countriesare unlikely to haveany long-term solutionsthat would not include a reduction in population growth. It showsthat: 1.Thereis also a breakdownof the distribution of land and cropland by size of holding for 64 countries (which account for all but 9% of the land in the 83 countriescovered in the census). evenif effective birth control could be introduced overnight.

55 28.00 1.20 1.23 0.80 5. 34-36.If the distribution of holdingsby size in 83 countries represents global picture.10 1.27 4.10 100.90 19.5 5.50 5.40 1.and if the a distribution of 91% of the land reflectsthe pattern of distribution of all the land. account for 78.00 Source: FAO. of pp.23 138.20 20.40 5.00 11.60 6.30 100.90 7.16 0.48 0.100 100.50 51.Annex1 Table 1:6 Distribution Holdings Size and Percentage of by of Total Holdings:Distributionof Holdings by Percentage Landand Cropland of Sizedistribution (hectares) Number holdings of Percentage (millions) distribution All farmland in holding (%) Cropland in holding (5Y) Under 1 1.67 0.000 1.40 0.of 122 million holdings in the developing countries. covered by the census.70 9.00 4.10 10.92 million were lessthan 5 hectaresin size.2% of all holdings. These data confirm that. both developed and developing.73 13.3% of all the cropland.Conversely.90 26.80 9.59 38. when viewed in the aggregate.30 12. disthe tribution of land and cropland is highly skewed.50 50.16 100. One million holdingsof 200 hectares more representlessthan or 0. Therewere an estimated16 million holdingsof lessthan 5 hectares in the developedworld: 6 million in Japanand 10 million in Europe.40 5.2 2.20 20.24 7.80 11. farms of this size group account for 66% of the total land area and nearly25% of all cropland.00 3.70 4.200 200.97 1. The information on distribution of holdingsby size refersto the 83 countries.20 3.which represent 3.20 4. Rome: 1971.and more than three-quartersof all farmland.8% of all holdingsin the 83 countries.80 6.70 11.60 5. approximatelyhalf of theseholdings 56 . roughly3% of all holdings(in the aggregate)account for slightly less than half of the arable land and land under permanentcrops.In the 64 countriessurveyed.40 1.500 500-1.00 11. That is.Report the 1960 on WorldCensus Agriculture.97% of all holdingsaccount for lessthan onequarter of all farmland and slightly more than half of the area under crops. 3.then holdingsabove50 hectaresin size.60 8. Thus.8% of the total farmland area and 45.50 10.000 over and Total 53.00 0.

2 3.7 - 47. Obviously.5 9.5 90. Table 1:7 Distributionof HoldingsaboveOne Hectare.0 0.Annex1 were less than 1 hectareand the remainderwere between 1 and 5 hectaresin size.2 5. most of whom were farming on units of less than 5 hectaresin size.1 90.or by more than an estimated 35 million farm families.7 91.5 Source: FAO.The resultsare summarizedin Table 1:7.7 3. or 10 million families.2 6.4 37.0 8. It is safeto conclude that well in excess 100million holdingsare of less than 5 hectaresin size in the developing world at the present the time of the census.3 0. Afghanistan.7 27.Thus.5 1.2 17.0 23.4 million holdingscovering2.0 40.0 99.5 13.since it excludes holdings of less than 1 hectare.3 8.4 36.2 73. 57 . it does provide an insight into the patternsof distribution of holdings within the major regions. excluding those in Nigeria. Between1960 and 1970. Reporton 1960 the World Census Agricalture. Preliminaryindications are that the fragmentationof holdings hasincreasedin manyof the more densely populated countries as well as in countrieswhere the distribution of land is skewed.these countries had an agricultural population estimatedto be close to 50 million people. in all probability. Consequently. The1960census data alsoprovided information on holdingsby size and land areafor different regionsand countries.4 45.242million hectares.7 52. of Rome: 1971.8 0.5 50. Ecuador and Bolivia.4 78. the agricultural population in the developing countries increasedby a reported 190 million persons.5 Size and Area 1-5hectares % holdings % area 5-50hectares % holdings % area 50 hectares % holdings % area Europe North and Central America South America Asia Africa Oceania is safe to assumethat the census forthcoming in the 1970swill reveal that there are well in excess of 100 million smailholdersin the developingworld.0 34. However.The most comprehensiveregional and national analysis the 83 countries dealswith for holdings of 1 hectareor more in size and pertains to 84.1 66. Together. this is not a complete coverage. This conclusionis derived asfollows: The 1960censusindicated that there were approximately92 million smallholdersin developing countries. more than half of their holdingsare lessthan 1 hectarein size.4 39.5 2.6 23. it is highly likely that closeto 100million holdings of less than 5 hectaresexistedin 1960.

is becausecoverageof that continent in the 1960 censuswas poor. with the data on the distribution of holdings by size and acreagefor the 18 countries surveyedheavily weighted by the results in South Africa and Southern Rhodesia. The analysisof the distribution of holdings by size on a regional basispoints to the highly skewed distribution in the Americas. helps explainthis.2 92.3 38.6 6.0 Source:FAO.0 4. The information confirmsthat a very high proportion of all land-ranging from 86% to 97.8 97.1 20.8 14.5 86. misleading. as presentedin the census. of Rome: 1971. The 36.2 0.7 36. At the other end of the spectrum.3 1-5hectares % area 5-50hectares % holdings % area 50 hectares % holdings % area 0.7 50.3 87.1 6. 58 .6 30.6 20.Annex 1 The analysisindicates the vast differences in patterns of landholding and land distribution between Asia and the other regions. as shown in Table 1:8. Only 9% of the area in Asia is in holdings of more than 50 hectares.7% of the land. If these are excluded from the sample. in Selected South American Countries %holdings Argentina Brazil Chile Colombia Paraguay Peru Uruguay Venezuela 14.9 2.4 12. The contrast between Asia and the Americas is highlighted by the fact that 78% of the holdings larger than 1 hectare in Asia are less than 5 hectaresin size and occupy 40.7 46.2 10.while the sampling in Zambia was confined to Europeanholdingsand in Tanzania commercialholdto ings.As much as 34.2 42. the pattern of holdings in the eight major countries in LatinAmerica.0 0.8 92.then the land held by smallholdersowning under 5 hectaresis much more than 50% of all land.3 32.7 4. respectively.3 43.5 3. Report the 1960 or WorldCensus Agriculture.1 1. are This The data for Africa.8 95.7% in Europe.5 73.1 4.1 1.2 94.0 9.8 5.3 36.6 8. South America and Oceania.5%in the eight countries is in holdingsof more than 50 hectaresin size.4% of holdings in South America and 23.5%. by Size and Area.2 1. and more than 90% in North and Central America.1 37.1 6.1 85.6 in farmsof more than 50 hectaresin size. only 5% of the land in the eight Table 1:8 Distribution of Holdings above One Hectare.9 28.9 49.5 52.4% in North and Central America that are less than 5 hectaresin size occupy only 1% and 0.3 40.0 22.of the area under farms.

It is of special interestthat two of the countrieswith a high densityof population and very little concentration of landholdingsare Japanand Taiwan.ArabRepublic of India Iran Ireland Italy Netherlands Norway Pakistan Turkey United Kingdom UnitedStates Belgium Canada China.Canada.Republic of Denmark Germany.On the other hand. Study No. A further partial measureof concentrationof holdings is given by the Gini coefficient-an index of concentration based on the departure of an existing pattern of holdings from an even distribution. The most skeweddistribution appearsto be in LatinAmerica where the densityof population is relatively low in rural areas.Annex 1 countries is in holdings of less than 5 hectares(even though these holdingsconstitutebetween 14% and 74% of all holdings). US Departmentof Agriculture. It may indicate little about the international distribution of wealth or income-5 hectaresof irrigated land in Japan would certainly yield an income well in excessof that yielded by Table 1:9 Concentration of Land Ownership in Selected Countries High concentration Medium concentration Low concentration Argentina Brazil Colombia Iraq Peru Spain Uruguay Venezuela Austria Egypt. The distribution of land by size of holdings is "a geographical phenomenon" and must be interpreted with caution in a socioeconomic context. the sametime. countries such as the Republicof China (Taiwan). shown in Table 1:9. p.the Gini coefficient indicatesa high concentration in six South American countries included in the sample. 2.1948to 1963. as revealedby a Lorenzcurve. Clearly. notably Asia and Europe. Land-Tenure:WorldAgriculturalStructure. Rome: 1961. Federal Republicof Greece Japan Philippines Sweden Yugoslavia Sources: FAO.the distribution of holdingsby sizevarieswidely in different parts of the world. the distribution of land appears be At to much lessskewedin many areaswith a very high densityof population. Other data provided by FAO.The Gini coefficient hasbeenestimated for 30 countries which have been grouped into three categories.Japanand Swedenhave a low concentration of holdings. Washington: 1965. 59 . Economic Research Service: ChangesinAgricultutrein726Developing Nations. As can be seen.

where tenancyis widespread.Table 1:10 givessome information on the number of rentersand sharecroppers in 15 countries. Table 1:11 indicates the number of landless farm workers in 12 countries. All in all. however.however. the rights of those who rent land are protected by law or custom. and they commonly give as muchas half their output in return for the useof land and services provided by him. such as Guatemalaand Tunisia.yield a far greater income than do 1.000 hectares of land usedfor sharecroppingin the semiaridparts of Tunisia'scentral area. The conditions that govern rental agreementsand crop-sharing arrangements differ throughout the world. It also indicatesthat the greatestskewness distribution is in the Americas.there is heavydependence the on landlord-usually an absenteelandowner-for the provision of pur60 .000acresin parts of Northern Australia. rentersand sharecroppers in a verytenuous posiare tion when it comes to negotiating arrangements with the landlord.Annex1 100. close to 29 million are worked by rentersand sharecroppers. is Tenants and FarmLaborers The distribution of holdingsby size and population densitiesgives no indication of the statusof thosewho hold the land or the numbers of the landless. in the 15 countries. in and that this skewness by no meansconfined to LatinAmerica.Only limited data on theseare available.In someparts of the world. occupying much more than half of the land. this is true of less than one-quarter of the farms. within countries. and the percentageof farms and areasof farmland they occupy.Similarly. In other areas. In mostdeveloping countries.that mostof the agricultural land and cropland is concentratedin a relativelyfew holdings. The evidence presented here (andelsewhere)indicates. Iran and Egypt. in other countries. Renting or sharecroppingof land is a common practice in both developedand developing countries. producing tomatoes. In such countries as the Republic of Viet-Nam. and rentersenjoy the sameworking conditions asownersof land. are farmed by tenants or sharecroppers. the pattern of distribution of land maynot reflectthe prevailing pattern of distribution of wealth or the socioeconomicconditions -2 hectaresof irrigated land in the MedjerdaValley of Tunisia. However.out of 82 million holdings. The caveats quality of land and ecologicalconditions governing on land-use patterns must be borne in mind. This limited sample indicates that renting and sharecroppingare widespread in all the major regions of the world. more than two-thirds of the farms.

9 15. Source: FAO.4 32.7 57. due to lack of data.0 62. therefore.271 1.0 n.Vol.Report the 1968 oe WorldCensus ofAgricolture.334 25.0 45.a.a.2(5) 1. do not reflect land reform action on the one hand and changes in the work force on the other. 16. Another widespreadcharacteristicis the absenceof written registeredagreementsgoverning the conditions of tenancy and the rights of tenants (eventhough there may be lawsstipulating typically operate what these should be).3 70.7 23.1 66. (1) 1960 estimates are for former Federation of Malaya.4 13.3 31.2 73.0 40. Dominican Republic.3 49.4 26.9 22.664 62.253 76 2.9 31.350 4.176 1.5.8 19. Tenantsand sharecroppers under conditions of great insecurity and are in a weak bargaining position vis-a-visthe landlord. chased inputs.5 31.3 61.6 24.a. 25. (4) (5) Includes both Pakistan and Bangladesh. 61 .India and Pakistan. 92-97. Republic of Total Middle EastandNorthAfrica Egypt Iran Tunisia Total Latin America Caribbean and Chile Colombia Dominican Republic Guatemala Nicaragua Trinidad Tobago and Total (a) 27. Frequently.392 141 5.5 n.5 28.Rome: 1971.4 70.81).1 49.3 33.the tenantsare among the lowest income groups in agriculture.6 n. The insecurity of tenants has been highlighted by their displacementon short notice when technological change has made it more profitable for landowners to mechanizetheir operations-as hashappenedin Ethiopia.4 57. pp.Annex 1 Table 1:10 Tenancyand Sharecropping SelectedCountries(l) in Renting and sharecropping as percentage of total Number of 2 farms( ) -(O Farmland Number of renters 2 and sharecroppers( ) (000) (%) Asia India Indonesia 3 Malaysia( ) 4 Pakistan( ) Philippines Viet-Nam.7(5) 13.3 35. (a) Includes holdings operated under more than one tenure form (21.4 54.020 1.2 43. India and Nicaragua are excluded. 32.349 128 381 129 93 27 18 776 Data refer to latest available year in 1960s and.

data refer to latest year available in 1960s and.673 8. indian (3) Includes population now belonging to Bangladesh. YearBookof Labour Statistics 1871. (2)Agricultural laborers as shown in India: Ministry of Agriculture.300 5.986 1. 62 .. Agricurltureinn Brief (I Ith ed. data presented here are estimatedfrom [LO.013 60. Unless otherwise indicated.158 122 179 391 138 72 2.099 1. thus. 1971).561 694 3.865 903 484 210 4. Approximately100 million personsare farmwage workers Table 1:11 Landless Farm Workers in Selected Countries(l) Landlessworkers as % of active population in agriculture Active agricultural population as % of total active population Number of landless workers Asia 2 India( ) Indonesia 3 Pakistan( ) Total East Africa Middle andNorth Algeria Arab of Egypt. and Except for India. p.499 101 557 99 287 9. do not reflect recent reform actions on the one hand and changes in the work force.43-294.Annex1 LandlessWorkers The number of landless-farmworkers in developing countries is increasing.237 378 1. Directorate of Economics and Statistics. 1972. Republic Iran Morocco Tunisia Total LatinAmerica Caribbean and Argentina Brazil Chile (1971) Colombia Costa Rica Dominican Republic Ecuador Honduras Jamaica Mexico (1970) Nicaragua (1971) Peru Uruguay Venezuela Total (1) 47. 14. on the other. pp.912 32 20 29 30 60 38 25 19 20 33 51 26 66 42 53 25 39 27 41 49 43 30 55 33 35 68 70 70 68 56 55 46 61 46 58 15 44 28 45 45 61 54 67 27 39 47 46 17 26 39 pp. 44-301.

At this juncture. The nature of this phenomenon has been discussed elsewhere. The emergenceof a landless wage-earningclassconfirms that a growing rural labor force hasto rely on work outside the traditional sectors for its livelihood. more than half of the workers are essentiallylandless. but that the prospect is limited for redistribution of land providing full employment for all the presentand prospectivepopulations in the rural areas of densely populated countries. This group is increasingin size.It is usuallyassumed that the labor force subsists a off holding and joins in some arrangementwith the extended family whereby it shareswork and output.and the provisionof employmentfor what is alreadya large rural proletariat may well be one of the greatest challengesfacing national governmentsin the future.but the problemsof reducingnationwide unemployment haveto be seenin a national ratherthan a sectoral context. Structural changes within agriculture can help alleviate underemploymentand open unemployment. Almost no reliable estimatesexist of the number of unemployed in rural areas.In the remainingcountriesof the region.Evenin Argentinaand Uruguay (with only 15% of the active population depending on agriculture). the proportion ranges from a minimum of about one-fourth in Brazil and Hondurasto a maximum of approximatelytwo-thirds in Chile. it should be pointed out that the redistribution of idle land can provide added employment.Annex1 (including family membersand headsof familieswith verysmall landholdings) in the 22 countries for which data are provided in Table 1:11. This figure includes an estimated47 million in India aloneabout 32% of the active population in agriculture. There are about 10 million suchworkers in LatinAmerica. There is a vast amount of underemploymentin the rural areasof most countries of the world. 63 .

even though it is often feasible to trace correlations. vast expansion publicly sponsored a of farm credit during the reform period.such as that between land distribution and a rise in productivity.Annex2 EXPERIENCES WITH LAND REFORM The following summariesillustrate selectedcountry experiencein land reform over the lastthree decades.The shareof total agriculturalincome that is consumed hasincreased only moderately. in 1949. nor should the statementsbe regarded as definitive. Republic Korea of Land reform in SouthKoreaafter the SecondWorld War consisted of: (1) a reduction of farm rents from 40-60% of production to 33% 64 .5 hectare.The proportion of cultivated land under tenancy leaseswas reduced from 41% to 16%. while the proportion of farm families owning all land under their cultivation increasedfrom 33% to 59%. The smooth implementation of the reform programin Taiwan was due to a stable sociopolitical climate and the many complementary developmentmeasures takenbefore and during the reform.Landproductivity is higheston holdings below 0.was followed by the saleof public lands.In mostcases. and a graduallyincreasinginvolvementof tenant farmers in the administration of the program. Their inclusionin this paper should not be taken as indicative of Bankjudgment on what doesor does not constitute land reform. income and social effectson the other.the productivity of agriculturehasincreased. income distribution has become more even.A reduction of rents. and rural and social stability havebeenenhanced.good agricultural researchand extensionservices. On the land remainingunder tenancy cultivation. evidenceis inadequate allow identification the to of causalrelationships between reformmeasures the one hand and on production. A land-to-the-tiller programcompletedthe reform in 1953. Land reform is a complex process in which severalsocioeconomicvariablesare changedmore or lesssimultaneously.Theexistence of a thorough cadastralsurvey. Republic China of Taiwan'sland reform program was implementedin three steps. written and secureleases were arrangedat much reducedrental rates.leavingintact enoughincome to achievea fairly high agricultural savings rate.all contributed to the success. Following the reform.

and may also have removed a constraint on the growth of Japanese agriculture.Annex 2 in 1945. yields had far surpassed prereformlevels.4 million acres (25% of the total farmland) were distributed to 1. and (3) a redistribution between 1950 and 1953 of land in excess a ceiling of 3 hectareson Korean of holdings. Owners had to sell all land in excess about one hectareto of the governmentat confiscatoryprices. before the reform.Theformer tenantsweregiven property rights at an extremely low real cost.6 million farmers (approximately70% of all farmers).Considerablesociopolitical stability has been achieved.The terms of salewere similarly generoustoward the buyer in both cases. however.while only 7% were tenants.Some 1. The second reform resulted in greater equity. The first reform did little.hasbeen estimatedthat. which resulted in a thorough restructuringof rural society. of Japanese property confiscated by the military authorities. Largenumbersof smallholderslost their property in the agricultural depressionat the turn of the and extension. to distribute property ownership or reduce income inequality-rather it strengthened the landownerclass. 69% of the farmers owned all the land on which they worked and 24% were part-owners. a secondland reform programwas executed.In the late 1940s. in 1948. laid the groundwork for Japan'ssocial and economic transformation. 19% of the farmers owned 90% of the land and more than 50% of the farmerswere landless tenants. by the 1960s. Yields did not fall as a consequenceof the reform.Afterward. in 1868.togetherwith income redistribution in favor of the poorer ruralfamilies. Supplementary programsfor infrastructureimprovement.But the small size of most farms has now becomea constrainton farm services. and promotion of farm chemicalsand new crop varietieswere pushedon a large scale.The peasantry wasfreed from bondage. Subsequent the first reform. (2) a redistribution.Labor intensityand land productivity rose quickly. The economiceffects were not as enormousas thoseassociated with the 65 . with the result that the agricultural sector could provide savings.the power of the feudal lordsto collect taxes from landownerswas broken. Japan The first Japanese land reform program. It. the tenancyproblem grewgradually to worse.partly because heavy of land taxes.Laborproductivity and rural employment increased. and private landownershipwas reinforced for the purposeof cash taxation by the central government. cheapfood and surpluslabor to the industrial sector.

350 million was paid in compensation. Actual rents have not come down. pursued since 1950-51. more than half of the area occupied by holdings. amongother objectives. The abolition of the zamindari systeminvolved 173 million improve security of tenure and to give the right of purchase the tenant. by 1961. The four major types of reform havebeen: (1) the abolition of the zamindari' system. the intermediary rent and tax increase farm incomethrough diversification into horticulture and animal husbandry. Under the British. most important of whom were the zamindars.and (4)consolidation of fragmentedholdings. (3) to ceilingson landownership and distribution of surplus. India Land reform in India. lagged behind.An attempt to create larger farming units through cooperativeshashad little effect. however. therefore.4. in 'The zamindars were revenue collectors during the Moghul period. Under the tenancy reforms. with the result that policy implementation varies widely. 3 million tenants. The landlords who were forced to sell excessproperty were mostly smallholders themselves. subtenantsand sharecroppershad. By 1961. 66 . but the farmersconcernedare often limited to lowskilled work. but some observers regardthis asessentially continuationof a long-term trend a (1895-1939) startedby the first reform. price supports notwithstanding. The second reform worsened.At the time of the reform.Securityof tenure appearsin general to haveworsened. they gradually turned into powerful landlords. Rural incomes have. acquired ownership under purchase agreementsof 7 million acres. A total of Rs. Agricultural policy is now of aimedat.(2) tenancyreformdesignedto fix maximumrents. it hampered equalizationof rural and urban incomes.Part-timework outside the farm is an outlet. Land productivity did increase after 1947. Two-thirds of the owners were required to sell lessthan one hectareand only 6% more than five hectares.the problems of fragmentation and undersizedfarms.Sincetenants continue to pay revenuedirectly to the government.however.Annex 2 first reform.their economic position hasnot been greatly improved. the tenancy problem had already been relieved through a reduction of excess rural population by the war and absorption into industry.mainly in the form of bonds. is largely recommendedand coordinated by the Central Governmentand the Planning Commissionand executedby the individual stategovernments.had been abolished. Although the reform increasedincome equality among farmers.

2 million acreswere formally pledged to the Bhoodan(gift) movement.Evenif a ceiling is imposed.the landacquiredis sufficient to give minimal holdingseither to the minifarmersor the landlessbut not both.but most of the donatedparcelsare still in the handsof the donors. covering 62% of the area under cultivation.and that manyof the statelegislatures not anxiousto havesuch radical are land reform.largest estatesoccupied relativelymore fertile lands.Annex2 some statesthey have even increased. Thereappearsto be scopefor somedistribution which will also assistagricultural production becausethe yield per acre in India is higher on small farms.All kinds of tenants should also be registeredand given access credit and inputs.It appearsto havecontributed to a growth in productivity in the northern states Punjab.and ownerswere often absenteelandlordswho contributed little to agriculturalproduction. a practice which hampered agricultural investmentand causedexploitative useof the soil. Tenantswere rotated annually. of and It is well recognizedin India that the reform measures dealingwith securityof tenureand acreage ceilingsareonly partiallyenforced. which has allowed them to escapethe reforms.A further 4. and is likely to presentfewer problems. Unreported casual tenancyand shareagreements havemultiplied. Former landownerswere partly compensatedupon expropriation by cash paymentsrangingfrom 10% to 20% of the estimatedvalue 67 .it will be better to legalize someforms of tenancywhich exist on a largescale. together with accessible marketingchannelsto small farms in general. Consolidation of land parcels has been more successful and has resultedin a rationalizationof holdings covering 69 million acres.and to promote more efficient typesof tenancy contracts. As long as population pressurecontinues. Therefore. A large extensionof credit at reasonable to terms. Iran Iran's land reform started in 1962.Only about 1 million acresout of all gifted land haveactually been given to landlesslaborers.Landownershave been permitted to resumeland above legal ceilingsfor personal cultivation. Provisionof thesefacilities is as essentialas further land distribution for attaining the income equity and productivity objectivesof India's land reform. 56% of the holdings.and particularly to tenantswith secureleases. were rented. required.approximately2 million acreshave been taken over by the government in order to settle tenantsand landlesslaborers.Uttar Pradesh Haryana. Before the reform. Under the ceilings legislation. it will be unrealisticto try to abolishtenancy in the short run.

Excess land was expropriated and distributed to the tenants. aimed at conversionof all 30-year leases into smallholdings. The landlord had five options for the area in excess the maximum allowed to him.which was practicallycompleted in 1971.000villageshave undergone land reform and more than 3 million families have received land. (4) dividing the land with the tenants in the same ratio as the customary crop sharing. landownershipwas limited to a maximum of one village per owner. to wit: (1) of leasingto the tenantsfor 30 years. with the balancepaid in bonds in annual installments. and (5) forming an agricultural unit for joint operation by the owner and the tenants.the reforms did not assistthose who were landless. (2) selling to the tenants.The costs to the Governmentwere limited to thoseincurred in carryingover the acquisition coststo the time of final reimbursement. The early accomplishmentsof the credit program were striking.The beneficiarieswere to repaythe governmentthe expropriation price plus 10% to cover administrativecharges.but this growth leveledoff after 1966. (3) purchasingthe tenants' rights. The ownershipand tenancy reforms havebeen complementedby rural cooperatives. Virtually all of Iran's 50.As these paymentsfell behind. Because they were basedon the existingdistribution of holdings. Morocco The Moroccan Government has undertakena series of measures aimed at land reform since independencein 1956. and increasedsupply of quality seedsand fertilizers. there was also considerable interferencewith the normal flow of irrigation water from streamsand storageplacesstill controlled by landlords.the limit of one village was reduced further to plots of 20-100 hectares(depending on the natureand location of the land). The third and final stageof the reform. it is believedthat the land reform program on balancehad adverseshort-run effects on output. Although agricultural output increasedby a total of 18% in the first five yearsof the reforms. In the second stage. Many measures were set up in a somewhat improvised fashion. total lending by the Agricultural Bank tripled between 1960and 1965.Annex 2 of their holdings. The reform favored tenants and sharecroppersinsofar as it conferred ownership on them or enhanced their security of tenure. During the first stageof the reform. Continuation of the existing inequities of land distribution was regardedas one of the costsof ensuringa speedyenactmentof the reform. the Central Bankfunded the difference. credit and extensionservices. It created uncertainty which discouragedinvestment in improvements. The objective of these measures to facilitate an increasein agricultural production is 68 .

181. an improvement in the tenure position of membersof traditional collectives.1966 and 1972 provides for land consolidation and distribution of land to smallholdersand landless families throughout the country. Land distribution is so far basedmainly on former foreign-owned land. At the time of independencein 1956.and the adoption of modern cultivation techniques. By the end of 1972.Legislationpassed in 1962. of this area. the impact of land distribution alone on the problem of rural poverty hasbeen small. Thirty-one thousand hectareswhich were mainly used by foreignersfor researchpurposes were recoveredby 1960.000hectaresof "official colonization" landswere takenover by the Government between 1963 and 1965. The main constrainton the program hasbeen the unavoidablecomplexity of supervisingits implementation consideringthe Government'smanpower resources. while maintaining high technical standardsof managementon the distributed land.about 900. the number of beneficiariesso far is only about 1% of farm families with lessthan 2 hectares. and a further 220.when legislation was introduced subjecting such transfersto Government approval.althoughsomeother state-ownedland and traditional collective land is involved.000hectares.while land under tree crops (mainly orangegroves)remainedunder Government control and ownership.Land consolidation hasalso been successful and hasso far benefited almost 200. Distribution so far hasbeen limited to land underfield crops. It providesfor the restrictionof inheritance rights to limit fragmentation. The target for the third Five-Year Planis to distribute 395. However. is aimed at facilitating the developmentof irrigated agriculturein welldefined developmentzones. published in 1969. The Agricultural Investment Code.Annex2 and to improve the distribution of rural incomes. about 300.000hectares(3% of the cultivated area)had been distributed to over 11. and to seeka suitable formula for distributing land under tree crops.000families.was recovered by the Government in 1973.000hectaresof land under field crops. Distribution to smallholdersand landlessfamilies was slow until 1967 and then gatheredmomentum up to 1972.amountingto about 370. the beneficiariesof land reform have generally quickly achieved high yields and acceptable incomes.000hectares were sold privatelyto Moroccans. between 1974 and 1977.000hectares. The Government'smain priority now is to accelerateland distribution.mainly before 1963.The achievementof the distribution target for land 69 .000 hectareswere foreign-owned. mainly formerly foreign-owned. Remaining foreign-ownedland.intensified extension supportand the provision of modern inputs. Through the establishmentof cooperatives.

to The socialistsectoris reportedlythe mrst productive. machineryand expertise. and the farm property of of Germans and other aliens.The reforms have resulted in a sizable redistribution of rural income and an increasein peasantparticipation in rural decision making. are In 1953.The average holding in the private sector is now only 3. bondage was abolished. 70 .the privatesectorof individualownerswho cultivate their own land remainsimportant.however. which resemble worker-managed the industrialfirms. form the largest and fastest-growing socialistelement. The kombinats. consistingof both the cooperatives and the farms outside the socialistsector.and by 1956accountedfor only about 10% of all land under cultivation. but the former landownerswere allowed to retain ratherlargeholdings.Annex2 under field crops alone would. and vasttractsof mountain pastures still undertraditional. producer cooperatives and general cooperatives. Yugoslavia was undertakenin 1919. In the north.collectiveforms of usage.when all large estates. Collective farms were allowed to disband after 1952. enable the program to cover 9% of cultivated areaand 5% of farm familieswith lessthan 2 hectares. In the The first land reform in Yugoslavia south and west.Half of the seizedland was distributed to the poor and landless.The implementationtook two decades.and have expanded about40% of all smallholdings. the bulk of agricultural output still originates from the large group of small farms.Thisis related to the location of holdings on the better soils and its priority treatment in the allocation of inputs such as fertilizers. all land in excess 25-35 hectaresper farm. However. the size of the large estateswas reduced. Aside from the socialistsector.were expropriated.whereas producer cooperathe tives havedeclined. and the tenants of the Turkish landownersreceivedownership rights.9 hectares.a ceiling of 10 hectaresof arable land or its equivalent was imposed on private holdings.while the other half was retainedas state property.and resulted in a transfer of ownership of almost 25% of the farmlandto more than 33% of the peasants. equipment useand output sales. The second land reform started in 1945.The generalcooperatives mainly associations are for joint input purchases. by the end of the plan. The stateand collective farms createdin the late 1940salong Soviet lines expandedto approximately25% of the total cropland. The socialistsector includesstatefarms. particularly sincethe mid-1950s.

promotion of cash (3) cropping and dairying.and (4) diversificationof export output.In particular. Somethree million landlessrural workers remainand.the reformshavecreateda class of prosperoussmallholders. Sincethen. while the poorest smallholders and nomadshave benefited much less from the reform. but substantial regional differences persist in natural 71 . dairy products and beef.An activeextensionprogramhasenabled smallholdersto increase the production of coffee. despite the considerableconcentration of ownership that persistsin the private sector.Theseprimary beneficiaries of the reform represented 53% of all farmersand 26% of the rural labor force. the ejidos haveincreased output about as fast as hasthe private sector. Theseincluded: (1) adjudicationand consolidationof holdingsunder cultivation by African farmers. The implementation and results of the reforms have been quite successful.occupying altogether lessthan 4% of total arable land. The economic benefits of the adjudication and consolidation of holdings seemto have been greater than those of resettlementon largefarms.and the rightsto about 7 million acreswere adjudicatedand consolidated. More than 1 million acresof land formerly cultivated by Europeans were opened up to Kenyansmallholders. Mexico Having its roots in the revolution of 1910-15. The reform aimedat solvingseveralproblemsat the sametime. notwithstanding political friction and a lack of qualified personnel. pyrethrum. maize. Most of the ejidos wereformed in the late 1930s and havebeen operated on an individual rather than collective basisby the ejidatarios. Total production by the ejidos grew very slowly during the first decadeof their establishment. those that were already relatively well-to-do have profited. the agrarianreform in Mexico createdvillage groups (ejidos)with usufruct rightsto land.Annex2 Kenya Land reform was initiated in Kenyaby the colonial administration in 1954 and expanded by the Government after independencein 1963. The landless amount to approximately16% of the rural population. wheat. (2) resettlement African farmerson of the large farmspreviouslyowned by Europeans. Incomesof the ejidatarios arealmost certainlybetter than would havebeen the case without reform. It was estimated in 1973 that approximately25% of all smallholdingswere less than one hectareand about 50% less than two hectares.1976 hasbeen plannedasa terminalyear for land reform.Socially. and increasedproduction for the market. Closeto 90 million hectareshavebeen distributed between1915 and 1972 to about three million ejidatarios.

income was more evenly distributed.A of limit was establishedon the size of holcdings (150 hectareson the coast). Peru Betweenthe start of land reform in 1963 and 1972. Well managedproductive units were exempted. Despite the priority given by the government. The government bonds given to the former owners can be.TheSAISrepresents attemptto an 72 .the top 20% of the ejidatarios accountedfor only 45% of all ejido income.however. TheSAISisa unique form of farm organization.about three-quartersof the target area still remainedto be expropriatedand reallocatedbefore the end of 1975. In 1967-68. but the bulk hasbeen placed in the handsof workerowned cooperatives.000families have been settled on 2.More such investment and a mechanism for selectiveconsolidation of small farms will be required to ensure that the impact of the reform is maximized. Following the land redistribution during the 1930s.000families. Expropriatedlands that havenot yet been resettledcontinue to be operatedunder direct governmentsupervisionuntil a cooperativeor SAIS(Sociedad Agricola de InteresSocial) farm organizationhasbeen formed.7 million hectareshas been expropriated. In 1972. the concentration may have fallen back as a result of the distribution of another 35 million hectares during the last decade.productiveand profitable sugarcomplexes the north coast.The target for the current Five-Year Planis to expropriate26.while in a few casesland hasbeen to added to the holdings of Indian communities.and is the basicunit of agriculturalreform in the Sierra.the concentration of landownershipincreasedagainbetween1940and 1960.Among ejidatarios.Annex 2 resourceendowment and in the extent of public investmentin complementary infrastructure.The more fundamental reform law of 1969was the basisfor the expropriation of the large.8 million hectaresof this area.Over 100. to which the land title is then transferred.50% of the farmers earnedonly 20% of all farm income (including personalincome from sourcesother than agriculture). used for investmentin industry to supplementtheir other resources. a total of 4.200farm units containing 12 million hectares. While the top 20% of private farmersreceived60% of all privatefarm income. Four different categoriesof farm organizationscan receive redistributed land. and to redistribute theseto 500. The agrarianreform law of 1964concentratedon redistribution of inefficiently managedlatifundia (large landed estates)in the Sierra.Since then. Rural income distribution is still skewed.Only a small number of individual farms has been assigned former tenants.implementation is well behind schedule.

Evenif all land which can be expropriatedis redistributed.9 million to 2.Haciendaproduction is almost entirely basedon extensivegrazing of mountain pastures. The land reform programalone will not be able to solvethe rural .Membershipof eachSAISunit consists the cooperaof tive of the production unit and of the communities surrounding it. Legally. and the rather meagerprofits can be usedin developingbadly neededphysicalinfrastructure.The SAIS.the proposed solution to this dilemma. the share of each group is determined by the land reform agency. while the number seekingwork in agriculture will rise from 1.1 million.surplus manpower is given employment.will still lack a minimum subsistence landholding.population and economic potential.the full market value of expropriatedlivestock hasto be paid in cashwhile fixed capital is to be paid for largely in agrarianbonds. It can be regardedas a second-degree cooperativewhosemembersaresocialbodies instead of individuals. Debt repaymentmay becomean onerousburden on those units whose profit potential is limited by their physicalcapacityto expandlivestocknumbersand by the need to employ high-quality technical services. employmentopportunities in agriculturewill increase only from 1.unemployment problem.32million to 1.mostly in the Sierra. roads. 73 . agrarianreform is providing the basisfor socialand economicchange.about 500. * In anyattemptto meet socialneedsthrough redistributinglandand income in the Sierra. The debt assumed eachSAISunit is to be repaid from profits in by 20 years following a five-year grace period. the governmentis faced with problems of maintaining or raising productivity levels attainable only through exploitation of scale economies. Nearly800. and early experiences land distribution in the Sierra indicated a of high risk to production if haciendaswere taken over as community land or subdivided into small sheep ranches. accountedin 1972 for 10% of the families benefiting from the agrarianreform program.000 families. However.therefore.Annex2 solvethe problem of providing agricultural and social development opportunities to the membersof the traditional Indian communities without jeopardizing the relatively high production and economies of scaleattainableon expropriated haciendas. Evenif the optimistic targets for 1975 are met.6 million. Eachgroup contributesto the capitalof the enterpriseon the basisof resources. power reticulation and housing. In this manner. Profitsare allocatedto each membercommunity in relation to its sharein the SAIS. and are to be used in community development projects involving schools.Managementof the SAISis in the handsof professional employees.000families with insufficient land to provide adequatesubsistence eligible to are benefit through the land reform program.

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