Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

Sector Policy Paper

LANDREFORM

May 1975

World Bank

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

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

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

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

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

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

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

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

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

7. as well as leasedland. preference should be given to smallholdersin the allotment of land. 9. Where the shortageof land is so acute that even with a low ceiling both smallholders and landless workers cannot be given minimum holdings. Where efficient large-scaleplantations or ranchesexist. is an indispensable success. In such cases. and a rural works program should be organized for the landless. 6. 11. (ii) the size distribution of the new holdingsis equitable. 12 . these need not be broken up. (ii) the beneficiaries belong to the poorest group. These effects can accrue if (i) the settlersare the really poor small farmers or landless workersand an input supplysystemis availableto support their operations. 10.sucha structurecanproduceat least as muchper unit of landasa largefarm structure.4.and (iv) owned and selfoperated land.both before and condition for its after the enactmentof reform. researchactivitiesand field demonstrationsin suchcircumstances.settlementschemes the same effects as the redistribution of existing holdings. Equity-oriented land reform should be so programmed that (i) the effectiveceiling on size of holdingsis low. Wherever settlement policy is used to supplement land should be plannedto haveapproximately reform. 5. Experiencein EastAsian and some Latin American countries clearly showsthat the organizationof beneficiaries. and (iii) tenancyis discouraged. 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. Research should be organized to evolve a low-cost settlement policy. 8. 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. (iii) the extensionand (nonland) input distribution systemfavorsthe beneficiaries. and allowed only under specified typesof contracts. 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.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. is redistributed.With a seed-water-fertilizer availablethat is neutral to scale.

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

The Bank will undertake studies of the costs and benefits of settlement projects.5.including its social dimensions. 11. 14 . 6. 10. 8. The Bank will support and encourageresearchrelated to the economicsof land reform in its broadestaspects. Where land is communally held without regulation of access. Where land is held under someform of tenancy.in such cases.it will carefully consider whether the fiscal arrangements appropriate to ensure are that a reasonable share of the benefits accruesto the government.as reflected in the pattern of landownership.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.the Bankwill foster the adoption of tenancy conditions and sharecroppingarrangementsthat are equitable and conducive to the optimal use of resou rces. It will continue its support for programsof economic directed toward the specialneedsof the type and technical research from landreforms. 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 economiceffects.the Bankwill not support to projectswhich do not include land reform. where increasedproductivity can effectively 9. 12. the Bankwill encouragesubdivision.in order to avoid adjustments which will increasethe maldistributionof income and cause economichardship. In circumstances be achievedonly subsequent land reform. 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. with particular attention to developing approaches which will lowerthe cost per family settled. of small farmerlikely to emerge 7.or pursue land usageand access arrangements that are compatiblewith the long-run productivity of the land and the welfare of the residentpopulation.

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

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

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

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

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

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

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

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

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

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

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

21-23.02 0.832 - 0.580 - 0. of ibid.873 0.18 1.333 925 410 141 149 581 377 1.62 2.Republic of India Indonesia Iran Korea.62 15.and fishing.624 - 0.88 1.54 0.611 - Botswana 1969-70 Egypt.unlessotherwise indicated.03 0.64 6.70 8. No.84 0.34 270.05 0.59 4.pp.89 1.28 0.80 81.12 1. November and 1973.52 1.64 2.47 5.20 1.11. No.3.90 37. 3.04 0.61 3.31 3.10 0.947 0. August 1973.09 0.474 0. 10-11.17 0.09 0.05 1.XXVI.10 79.24 1.Gross DomesticProduct (GDP)in agriculture shownhere includes.32 2.70 20.Preduction Yearbook 1971.09 0.67 3.597 0.01 0.12 0.see XXVI.23 2.10 0.20 1.18 1. April 1972.37 208.75 1.833 0.33 4.96 1.05 0.59 1.720 352 240 250 376 166 155 355 168 681 183 293 98 144 209 189 42 167 68 848 980 951 463 489 492 569 580 1.607 - ' 0. XXVII.903 285 692 663 479 477 1.35 4.845 - 0.03 1.35 3.29 0.25 1.05 6.95 8.85 1.27 6.60 108. and I MF.03 2.29 - 0.17 123.50 22.18 14.06 0.607 0. currency For Bulletin Statistics.agriculture.04 4.45 2.4.32 2. Employment and the Distribution of Land.22 2.85 40.473 - 0.25 118. 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.01 0.05 0. lnternational financialStatistics.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 1.188 138 249 200 337 137 243 127 142 360 140 88 48 295 174 180 341 198 101 0.Republic of Japan Nepal Pakistan Philippines Sri Lanka Thailand Turkey Viet-Nam.50 0.79 1.936 0.41 3.Table 1 Productivity.hunting.62 .21 0. Sources:Columnsland 3arebased on FAO.38 0.865 - 0. and column4onUN. forestry. No.085 1.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. Monthly 26 .49 1.

Chile. The nearestalternativeis the comparisonover a definedperiod of the productivity of groups of different-sizedfarms in a given area. the effects of land reform canbest be examinedby focusingon particular measures. in Similar findings can be cited from cross-section studiesin a number of individual countries.to 194 kilogramsper rai on holdings of 140 acres or more (1 rai equals0. Ecuadorand Guatemala. changesin yields per hectare are considered to be the most appropriate substitute.2 tons per hectare. its contribution to output and employment-as well asto equity-depends on the speedand effectiveness the reform and of complementary investments. A similar study of 40 countries was undertaken by the Bank (see Table1).output per hectare was 27 .9 tons of paddy per hectare. farms of less than two hectares-produced 2. this is not possible as there is no situation where changehas occurred in only one variable-size of farm-over time.equity and employmentaswell as on savings and market surplus. One 13-country study undertakenby the FAO analyzedthe relationship among size of holding.However.The ideal measurefor comparisonwould take into account the contributions of all factorsof production and so measure total factor productivity. are for analytical convenience. yieldswere reportedto decline from 306kilogramsper raion holdings of two to six acres. Since data are not availableto derive this measure. Implicationsfor Productivity The effects of land reform on productivity might best be isolated by comparing productivity in a given area before and after reform.while farms of more than four hectaresproduced 2. Colombia. concentrationof land and productivity.In a systematicanalysis the differencesbetween large of "multifamily" farms and small "subfamily" farms in Argentina.ture sector.In central Thailand.In Sri Lanka.These measures interrelatedbut.Brazil. Both studiesindicatedthat a smalleraverage of holdings size and a lower concentrationof landownershipwere associated with an increase output per hectare.Small farms in the Philippines-that is. suchasthe effectsof farm size on productivity. Several comparative multicountry analyseshave been made of the effect of differencesin distribution of size of holdings on yields.for example.4 acre). Unfortunately.The availableevidencesuggests a well-designedland that reform program need not entail unacceptable costsin termsof other objectives.are treated separatelyhere. the yield of paddy averaged36 to 37 bushelsper acre on farms of up to one acreand 33 to 34 bushelson largerholdings.in 1966-67.

a resume of the CIDA Land Tenure Studies of Argentina.14 Source: Barraclough and Collarte.862 660 63 16 National monetary perworker unit 40 192 1. Massachusetts: Lexington Books. it appearsthat under controlled circumstances output per hectare is likely to be higher. land reform can be consonantwith development from a point of view concernedpurely with productivity. Brazil. 351 p. there are limited economies of scale in most agricultural production. the studiessimply indicatethat yieldswere higher on smallfarmsthan on largefarms.90 0.20 14.198 84 1. small-scale producerstend to maximizeoutput by applying labor intensively. Lexington.673 74 523 8. The important implication is that reductionsin either the size of holdingsor land concentrationneed not be associated with a reduction in output per hectare. Output per worker. 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 2.171 972 9. Guatemala.on the small farmsthan on the largefarms (see Table2). by FarmSize.This is usuallyshort of the output per hectarethat would be produced if the goal were maximization of output.Firstly.30 2. for 28 .492 304 1.while large-scale operatorstend to maximizeprofits by using hired labor only until incrementalproduction coversincrementalcosts. 1973. There is other evidence to support these findings. Colombia. Agrarian Structure in Latin America.on the average.Table 2 AgriculturalOutputper Hectareand per Worker. Studies in the Economic and Social Development of Latin America. as pointed out below.23 0. as well as studieson Japanand the Republicof China. however. Peru. xxvi.80 8.Secondly. including the results of Bank-sponsored analysisin Mexico. However.On the contrary. Chile. I to col.is likely to decrease the simple reasonthat.237 268 1. Ecuador.498 170 334 41 1.20 8.21 0.80 3. in LatinAmerica 1 Country Year Smallest subfamily farms 2 Largest multifamily farms 3 Ratio ot col.10 0. found to be three to 14 times greater. In broad terms.there is no claim that all conditions were identical.14 0. There are two associatedreasonsfor this assumption.197 8.with output per hectareas the relevantcriterion.

however. This cross-sectional evidence of the higher productivity of small farms indicates their long-run equilibrium potential.Therefore. in 1968.17 on large farms (500to 1. In developingcountries.Unfortunately.But inputs other than labor arealso likely to be applied more intensivelyon small farms. Chile and Guatemala). small farms undoubtedly need much more nonlabor input in order to raiseproductivity. In other Latin American countries (Argentina.in 1961. the greaterthe input of manpower. In the Ferozepurdistrict in Punjab (India). man-yearsper hectare declined steadily from 2. LandReform and Employment Evidenceexists that the use of labor per hectare is greater on smaller holdings than on larger ones. 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. In Colombia.The mereredistribution of land and increasein employment may not suffice to raise output substantially.the organization of an effective extension-cum-inputsupply systemfor small farmersmust accompany 29 . A limited number of studies in Asia and Latin America have also confirmed these findings. unlessaccessto these inputs is blocked by institutional arrangements. It is interestingto note. that in the crosssection of developed countries. More intensive labor use is the main reasonwhy small farms are ableto producemore per unit of landthan the largerfarms.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. fertilizer consumption and grossfixed capital formation per unit of landwere relativelyhigher in countrieswith smalleraverage holdings. it ranged from 20 to 23 man-daysper acre. the relationship between these other inputs and farm size cannotbe studied in manydeveloping countries JFor want of data. On larger holdings.In other words.smaller farmswould employ more labor per hectare.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. the larger income would be sharedby an evenlargernumberof families. But the realization of this potential is contingent on the supply of nonland inputs being increasedas soon as farm size is decreased. for example.5 hectare)to 0.too.000 hectares) in 1960. labor absorption varied between 33 and 39 man-days per acre on holdings of less than 30 acres.7 on small holdings (lessthan 0.Brazil.

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

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

the ratio of marketedsurplus to production falls asfarm size decreases. however.the savings need not be monetized. Thus. and 51% (with 2. of Thus. and their sharesof total output and salescan differ widely across countries and regions. In Mexico. but there can be no doubt that it would fall.7% of the farmers. Datafrom India show.4%. In India. 48% of the farms (lessthan 2.there may be a sufficient increasein output if. These differenceswould determine how much the surplus ratio would fall after land reform. But thesefarm groups produce only 9.sell no maize at all. with adverseeffects on the economy.5 to 50 acres) contribute the bulk (78%)of the total surplus.the urban population.However. this decline in the market surplus ratio need not result in a decline in total surplus.6% of the marketed surplus comes from 70. In Chile.5% eachof the national output.1% (more than 50 acres)con-' tribute 16%.5 acres)contribute only 6% of sales. hypothetically. on the other hand.the surplus-output ratio would probably decline. Smallfarm households tend to consumea largerproportion of their smalloutput than do householdswhich havea large enoughacreageto produce in excess domestic requirements.farms abovea certain size were eliminated and their land transferredto the small class. and another 16% sell 25% or lessof their output. might not be very great given that the largest and the smallestfarm-sizegroups account for only small proportions of the total output. If output remainedthe samebut. Where it does.but may take the form of increasedon-farm investment in such items as improved housing. a typical sharecroppersells as much as 43% of his output. The surplus-outputratios of different farm-sizegroups. and 55. for example. The rate of decline. Since per acreyields on smallfarms canbe higherthan on largefarms.wells and access roads. the necessary conditions are fulfilled whereby small farmscan realizetheir full pro32 . Sixty-one percent of the maize farmers in Puebla(Mexico).But increasingthe marketedsurplus will not necessarily increasesavings. after reform.for example. that small farms (2.5 acresor less)sell only 24.4% comes from only 1. provided that there is a compensatory increasein total output. 6. a fall in the surplus could necessitate imports and put an added strain on the balance of payments. however.5% of their output. whereaslarge farms (50acresor more) sell 65. Marketed Surplus A reduction in land concentrationthrough land reform could lead to a fall in the marketedsurplus-at leastin the short run.7%.

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

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

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

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

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

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

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

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

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

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

(3) The costtothe government is$1. 3 Irrigation Second Atlantico Development Caqueta Land Colonization Wolamo Agricultural Project LandSettlement and Development Karonga RuralDevelopment Jengka Triangle Second Jengka Triangle Third Jengka Triangle 12.0 loan loan loan loan credit credit credit loan loan loan 1972 1967 1972 1971 1969 1969 1972 1968 1970 1973 5. (.280(4) 5.0 25. no data on the farm size of 3.800 now settlers and 3.900 hectares.9 7.3 6.050 5. as estimated in the appraisal reports.800 new settler families are scheduled to be settled on some 280.0 n. . education.1 3. research and related studies.0 4.5 3.500 partially established settlers are given. )') The cost per small farmer settled is estimated to be $17.667 10.0 4.300(6t 1.7 9.8 4.Table 3 Costs of Selected Settlement Projects Assisted by the World Bank Estimated Total project Country Project Bank or IDA finance Number of families(') project costs per Average farm costs Amnunt (US$ 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.7 21. figures represent goals rather than actual state of settlement. (8) Excludes $2.429 2.000.(7 6.0 43.756 10.8 29.500 partially established settlers.0 13.0 8.a.) Project costs.6 15.0 14.000 2. The project is behind schedule.3(8) 6.500 landless peasants and develop 9.9 6.0(5) 11. do not necessarily reflect total economic costsof settlement.800 6.000 4.423(3) 6.200 2.7 9.000.770 3. whereas the cost per middle-size farmer remaining in the project area is $100.214 1.500 1.1 41. (6) Includes 2.0 5.3 6. (5) The original goal was to settle 2.200 2. (a) Although 2.389 3.505 13.73 million used for agricultural development on the highlands.000 hectares.825 40.6 2.830 2.5 Publicland INCORA land (involved appropriation land) l Publicland Europeanownedland Publicland Publicland Publicland Publicland Source: World Bank and IDA appraisal reports.6 14.This excludes expenditureson health.327 2.7nn perfamily settled. (l) Except for Kenya. Thesecost expenditures are being reviewed and are expected to be Considerablyhigher than originally expected.3 4.

it is only effective when there is a commodity that can be handled througha centralprocessing system. It was suggested that the benefits be distributed through the raisingof wagesand the paymentof dividends to the workers. inputs and marketingservicesfor the outgrowerswho. Outgrower Schemes The problems of distributing the gains from plantation development were mentioned earlier. the Bank has made a substantialcontribution toward a novel form of tenure through the developmentof "outgrower" schemes.Clearly.Thecentralunitprovides technicalassistance. TheBankhasparticipatedin ninesuchprojectscosting$125million. 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. Theseschemes involve the production of tree crops on smallholdings rather than on large-scaleplantations.The capital requirementof more than $5.Eachholdingwasdeemed to adequatetcprovide a livelihood and full employmentfor the settler and his family. in turn. In this area. the Bank'scontributions being almost half that amount.000per family limits the prospects of the approach. althoughlarge enough.settlerswere allocated holdingsof from three or four hectaresin Malaysia 40 hectaresin Brazil. of which the Bank has contributed $68 million and affecting some 120.000 families. under labor-intensive cropping systems. There are severelimitations on settlementas a meansof reaching large numbersof landlesspeople or relieving pressures the land. rubber in Indonesiaand Malaysia. the size of holdings for outgrowers is small.000families. the data in Table 3 indicatethe limitationson settlementprojects -as presentlyconceived. 44 .cocoa inholding in each the Ivory Coast. to In the main. Kenya.Thus. Mauritius and Uganda.the whole approachto capital-intensive settlementrequiresreexaminationconsideringthe magnitudeof the problem outlined in Annex 1 of this paper.Theten projects were intended to settle no more than 35. The smallholdings are establishedaround the nucleus of either a processing plant or a plantation. While this systemhas madea valuablecontribution toward establishing viablesmallholders.Thesehaveincluded teaprojects in Indonesia.The average project hasrangedfrom 10 hectaresin Senegal one acre in Kenya. the total cost was expected to be $190 million.holdings. sell their productsthrough the centralorganization.and oil palm in Nigeria. on Although the costsper family in a settlementproject can be misleading.

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

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

ANNEXES .

I I I .

2 2.242 1.0 15.0 17 32 17 39 64 67 4 51 1.393million hectares.01 5. the tables show that: 1.which hasapproximately 32% of the world's cropland. 10% in Europe.90 11.8 4.Theworld's agriculturalpopulation-defined as populationdependingon agriculture for its livelihood-is estimatedat 1.8%).031 851 13.78 Source: FAO.63 3.753 3. Cropland. and 3% in Oceania.2 100. averaging0.2 100.851 4.35 hectare per person. of The relationship between population and land in all major regions and for 52 selectedcountries is shown in Annex Tables1:1 and 1:2.This represents averageof 3.6% in SouthAmerica.6 5.851 million.456 million hectaresof cropland.8 31.617 million in the early 1970s. 49 . per person.240 2. approximately32% is in Asia. madeup of 1.the People'sRepublic Table 1:1 Regional Distribution of Land.314 239 4 1.783 2.defined as arableland and land under permanent crops (10.7 3.0 71.9 0.Together.9 18.7 hectares an of land.Annex1 THE CONTEXT OF LAND REFORM Ratios of Population to Land The total land area of the globe is about 13. More than 70% of all rural people live in Asia.0 12. 19% in North and Central America.8%). respectively. The ratio of cropland to agricultural population is the lowest in Asia among all the major regions.Among other things.02 1.4%).Production Yearbook 1972.0 89 77 54 74 1. On the basisof these global figures. or closeto 0.041 million hectares under other uses(36.393 145 232 271 84 463 214 47 1. and 4.78hectareof cropland per person in agriculture. 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. or 51% of the total population.9 4. The world's population was estimated at approximately 3.456 10. 15% in Africa. 2. 16% in the USSR.Of the arable land. there is an average 0.75 0.987 million hectares under permanent pasturage (22.35 0.14 0.8 14.40 hectareof cropland.

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

Country

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

52

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

.Republic of Laos Malaysia Nepal Pakistan Philippines Sri Lanka Thailand Viet-Nam. Malaysia. Rome: and p.Table 1:5 showsthe startling differences in input of agricultural labor and output per hectarein developing countries of Asia on the one hand.The 3 Stateof Food Agricuture.Most developingcountries haveconsiderable opportunities for increasingemploymentand production in this sector.while one country.Several other countries havea higher ratio of workers to the land than Japan. is a country of small holdings and has approximately two workers per hectarewith an averageoutput of $397 per worker and $762 per hectare. This applies to the more densely populated regionsas well as to others.Annex 1 situation is correspondinglyworse. The increasingpressureof population on the land highlights the issueof absorptivecapacityin agriculture. and in Japanon the other. 1972. Japan Table 1:5 Agricultural Labor Force and Production in Selected Asian Countries. 1970 Agricultural workers per 100 hectares Netagricultural production per hectare (US$) Country Indices Japan = 100 Indices Japan = 100 Output per worker (US$) Indices Japan = 100 Burma India Indonesia KhmerRepublic Korea. The emphasisin the latter countries will have to be placed more and more on raising yields per hectare. a higher output per has worker in agriculture than Japan. 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 . Geneva: Columns and 5: FAO.However. I-V. Sources: Column International 1: Labour Office.LabourForce Projections. 99.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. 1971.

With very few exceptions. About 109 million holdings.8% of the total land area and 20. low incomesand increasingunemployment. 2.land tenure and capital formation.however.Nigeriaand Romania. 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.Table 1:6 combines the two sets of information to give an indication of the distribution of land and cropland by size of holding. or 78.9 million holdings.includingall of the larger countries that are membersof the Bank.3 million holdings in the 83 countries. 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. becauseof the small size of the irrigated areas in Pakistanand India and other constraintsrelated to technology.1% of the land areaand 3. or 39% of the total number.except Afghanistan. are lessthan 5 hectaresin size. Thiscovered83 countries.Bolivia. resourcebase.7% of the cropland. The censusprovides a breakdown of distribution by size of 138. then theseholdingsoccupy1.Annex1 and India.8% of the total number. specialand possiblyextraordinarymeasures would haveto be taken to satisfy the expandingdemand for work and income from today'schildren. are under 1 hectarein size. evenif effective birth control could be introduced overnight. It showsthat: 1. 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. 55 . urban aswell as rural. Suchmeasures include thoserelated to land reform.4% of the cropland.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). Thiskind of labor intensity is not likely to be reached. The most recent data on distribution of holdings by size is given in the worldwide censusof agriculture held in the early1960s. the agriculturalsectorin thesetwo countriescould absorb all the labor force expectedby 1985. poverty and unemploymentproblemsof the developthe ing countriesare unlikely to haveany long-term solutionsthat would not include a reduction in population growth. Ecuador. Nonetheless. theseholdings accountfor approximately6. Basedon the sameassumptionas above. About 53.

73 13.90 19.00 11.00 3. Therewere an estimated16 million holdingsof lessthan 5 hectares in the developedworld: 6 million in Japanand 10 million in Europe.90 7.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 1.500 500-1. That is.20 1. The information on distribution of holdingsby size refersto the 83 countries.00 4.200 200.20 3.2 2. 34-36.000 1.20 20.70 4.and if the a distribution of 91% of the land reflectsthe pattern of distribution of all the land. covered by the census.40 1. when viewed in the aggregate.00 11.30 12.If the distribution of holdingsby size in 83 countries represents global picture.2% of all holdings.40 5.70 9.92 million were lessthan 5 hectaresin size.and more than three-quartersof all farmland. These data confirm that.50 10. account for 78.8% of all holdingsin the 83 countries.10 1.16 100. farms of this size group account for 66% of the total land area and nearly25% of all cropland.24 7.10 10.20 4.97% of all holdingsaccount for lessthan onequarter of all farmland and slightly more than half of the area under crops.00 0.70 11.which represent 3.80 6.59 38.23 138. disthe tribution of land and cropland is highly skewed.of 122 million holdings in the developing countries.8% of the total farmland area and 45.5 5. Rome: 1971.80 5.50 5.100 100. both developed and developing. Thus.55 28.50 51.Report the 1960 on WorldCensus Agriculture.3% of all the cropland.60 5.10 100.60 8.40 1.50 50.60 6.80 9.40 0.23 0.97 1.48 0.40 5.90 26.30 100.000 over and Total 53. 3. One million holdingsof 200 hectares more representlessthan or 0.then holdingsabove50 hectaresin size.16 0.00 1.Conversely. 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.27 4.20 20.In the 64 countriessurveyed. of pp.67 0.00 Source: FAO.80 11.

7 91.0 8.2 73.2 17.it is safe to assumethat the census forthcoming in the 1970swill reveal that there are well in excess of 100 million smailholdersin the developingworld.4 45. This conclusionis derived asfollows: The 1960censusindicated that there were approximately92 million smallholdersin developing countries. most of whom were farming on units of less than 5 hectaresin size.The most comprehensiveregional and national analysis the 83 countries dealswith for holdings of 1 hectareor more in size and pertains to 84.5 2.7 3.4 36.2 5.2 6.4 78.5 9. Reporton 1960 the World Census Agricalture. it does provide an insight into the patternsof distribution of holdings within the major regions.or by more than an estimated 35 million farm families. 57 . it is highly likely that closeto 100million holdings of less than 5 hectaresexistedin 1960.7 27.4 37.4 39. Preliminaryindications are that the fragmentationof holdings hasincreasedin manyof the more densely populated countries as well as in countrieswhere the distribution of land is skewed.7 - 47. Together. this is not a complete coverage.Thus.5 Source: FAO.3 0.0 34. Between1960 and 1970.these countries had an agricultural population estimatedto be close to 50 million people. in all probability. Obviously. the agricultural population in the developing countries increasedby a reported 190 million persons.5 1.4 million holdingscovering2.8 0.3 8. Table 1:7 Distributionof HoldingsaboveOne Hectare.by 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 50. Ecuador and Bolivia.0 40.5 50. The1960census data alsoprovided information on holdingsby size and land areafor different regionsand countries. excluding those in Nigeria.Annex1 were less than 1 hectareand the remainderwere between 1 and 5 hectaresin size.0 99.1 66.at the time of the census.2 3. It is safeto conclude that well in excess 100million holdingsare of less than 5 hectaresin size in the developing world at the present time. Afghanistan.5 13.0 23.6 23.242million hectares. more than half of their holdingsare lessthan 1 hectarein size.The resultsare summarizedin Table 1:7.5 21. Consequently.7 52.0 0.5 90. of Rome: 1971.since it excludes holdings of less than 1 hectare. or 10 million families.1 90. However.

7 4.4% of holdings in South America and 23.0 Source:FAO. only 5% of the land in the eight Table 1:8 Distribution of Holdings above One Hectare.6 8.9 2.8 14.6 30.5%in the eight countries is in holdingsof more than 50 hectaresin size. respectively. by Size and Area.1 6.4 12.2 94.1 85. and more than 90% in North and Central America. The 36.1 6. The information confirmsthat a very high proportion of all land-ranging from 86% to 97. 58 .5%.0 22. is becausecoverageof that continent in the 1960 censuswas poor.Annex 1 The analysisindicates the vast differences in patterns of landholding and land distribution between Asia and the other regions. of Rome: 1971.8 97.1 4.8 95.5 3.0 4.1 20.7 36.7 50.is in farmsof more than 50 hectaresin size.3 38.8 92. 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 40.3 36. helps explainthis.5 52.5 73.1 1.1 1.6 51.2 10.3 32. The analysisof the distribution of holdings by size on a regional basispoints to the highly skewed distribution in the Americas.6 6.3 40.7% in Europe.9 28.5 86.7% of the land.9 49.2 92.then the land held by smallholdersowning under 5 hectaresis much more than 50% of all land.As much as 34.while the sampling in Zambia was confined to Europeanholdingsand in Tanzania commercialholdto ings. If these are excluded from the sample.of the area under farms. Report the 1960 or WorldCensus Agriculture.3 1-5hectares % area 5-50hectares % holdings % area 50 hectares % holdings % area 0. 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.4% in North and Central America that are less than 5 hectaresin size occupy only 1% and 0. as presentedin the census.6 20.2 1.7 46.2 0.0 0.2 42.0 9.3 87. South America and Oceania. in Selected South American Countries %holdings Argentina Brazil Chile Colombia Paraguay Peru Uruguay Venezuela 14. as shown in Table 1:8.8 5.3 43. Only 9% of the area in Asia is in holdings of more than 50 hectares.1 37. are This The data for Africa. At the other end of the spectrum. the pattern of holdings in the eight major countries in LatinAmerica. misleading.

Federal Republicof Greece Japan Philippines Sweden Yugoslavia Sources: FAO.ArabRepublic of India Iran Ireland Italy Netherlands Norway Pakistan Turkey United Kingdom UnitedStates Belgium Canada China.On the other hand.Annex 1 countries is in holdings of less than 5 hectares(even though these holdingsconstitutebetween 14% and 74% of all holdings). the distribution of land appears be At to much lessskewedin many areaswith a very high densityof population. Rome: 1961. the sametime. As can be seen. notably Asia and Europe. 2.Japanand Swedenhave a low concentration of holdings. 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. p. Economic Research Service: ChangesinAgricultutrein726Developing Nations. The most skeweddistribution appearsto be in LatinAmerica where the densityof population is relatively low in rural areas. as revealedby a Lorenzcurve. 36.Canada.It is of special interestthat two of the countrieswith a high densityof population and very little concentration of landholdingsare Japanand Taiwan.the Gini coefficient indicatesa high concentration in six South American countries included in the sample. Land-Tenure:WorldAgriculturalStructure. Washington: 1965. Other data provided by FAO.as shown in Table 1:9. countries such as the Republicof China (Taiwan). 59 . US Departmentof Agriculture. 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 distribution of holdingsby sizevarieswidely in different parts of the world. The distribution of land by size of holdings is "a geographical phenomenon" and must be interpreted with caution in a socioeconomic context.The Gini coefficient hasbeenestimated for 30 countries which have been grouped into three categories. Clearly.1948to 1963. Study No.Republic of Denmark Germany.

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

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.the tenantsare among the lowest income groups in agriculture.4 54.1 49.3 31. India and Nicaragua are excluded.3 70.176 1.4 32.Vol. (4) (5) Includes both Pakistan and Bangladesh. 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).India and Pakistan.334 25.0 40.5 31.3 35. Source: FAO.2 73.a.0 45.1 66.5 28. 32. 92-97.4 70.4 13.3 61.271 1.0 n.7 57.6 n.349 128 381 129 93 27 18 776 Data refer to latest available year in 1960s and.4 57.Report the 1968 oe WorldCensus ofAgricolture. Dominican Republic.0 62.350 4. chased inputs. Tenantsand sharecroppers under conditions of great insecurity and are in a weak bargaining position vis-a-visthe landlord.81).2 43. Republic of Total Middle EastandNorthAfrica Egypt Iran Tunisia Total Latin America Caribbean and Chile Colombia Dominican Republic Guatemala Nicaragua Trinidad Tobago and Total (a) 27.020 1.9 31.664 62.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.8 19.3 49. due to lack of data. 16. (a) Includes holdings operated under more than one tenure form (21. pp.5 n. 61 .392 141 5. therefore.9 22.7(5) 13.Rome: 1971.7 23.5.a.a.9 15.4 26. Frequently.253 76 2.3 33. 25.6 24. do not reflect land reform action on the one hand and changes in the work force on the other. (1) 1960 estimates are for former Federation of Malaya.2(5) 1.

1972. and Except for India. Unless otherwise indicated. indian (3) Includes population now belonging to Bangladesh. 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) 47.300 5. pp.Annex1 LandlessWorkers The number of landless-farmworkers in developing countries is increasing. (2)Agricultural laborers as shown in India: Ministry of Agriculture.673 8.43-294.158 122 179 391 138 72 2. 14. 1971).499 101 557 99 287 9. p.561 694 3. 44-301. thus. data refer to latest year available in 1960s and. Directorate of Economics and Statistics.237 378 1.986 1.. 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.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.099 1. on the other. do not reflect recent reform actions on the one hand and changes in the work force. Agricurltureinn Brief (I Ith ed. data presented here are estimatedfrom [LO.865 903 484 210 4. YearBookof Labour Statistics 1871. 62 .013 60.

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

the productivity of agriculturehasincreased.The shareof total agriculturalincome that is consumed hasincreased only moderately.In mostcases. income and social effectson the other. in 1949.5 hectare.was followed by the saleof public lands. 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 . Land reform is a complex process in which severalsocioeconomicvariablesare changedmore or lesssimultaneously.Theexistence of a thorough cadastralsurvey. On the land remainingunder tenancy cultivation.such as that between land distribution and a rise in productivity. written and secureleases were arrangedat much reducedrental rates.The proportion of cultivated land under tenancy leaseswas reduced from 41% to 16%. 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.A reduction of rents. income distribution has become more even. Following the reform. and a graduallyincreasinginvolvementof tenant farmers in the administration of the program. nor should the statementsbe regarded as definitive. even though it is often feasible to trace correlations. and rural and social stability havebeenenhanced. vast expansion publicly sponsored a of farm credit during the reform period. Their inclusionin this paper should not be taken as indicative of Bankjudgment on what doesor does not constitute land reform.Annex2 EXPERIENCES WITH LAND REFORM The following summariesillustrate selectedcountry experiencein land reform over the lastthree decades. evidenceis inadequate allow identification the to of causalrelationships between reformmeasures the one hand and on production.leavingintact enoughincome to achievea fairly high agricultural savings rate. while the proportion of farm families owning all land under their cultivation increasedfrom 33% to 59%. A land-to-the-tiller programcompletedthe reform in 1953.Landproductivity is higheston holdings below 0. Republic China of Taiwan'sland reform program was implementedin three steps.all contributed to the success.good agricultural researchand extensionservices.

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

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

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

The costs to the Governmentwere limited to thoseincurred in carryingover the acquisition coststo the time of final reimbursement. During the first stageof the reform. to wit: (1) of leasingto the tenantsfor 30 years. The third and final stageof the reform. it is believedthat the land reform program on balancehad adverseshort-run effects on output. The reform favored tenants and sharecroppersinsofar as it conferred ownership on them or enhanced their security of tenure. The early accomplishmentsof the credit program were striking. Continuation of the existing inequities of land distribution was regardedas one of the costsof ensuringa speedyenactmentof the reform. landownershipwas limited to a maximum of one village per owner.the limit of one village was reduced further to plots of 20-100 hectares(depending on the natureand location of the land). Because they were basedon the existingdistribution of holdings. and (5) forming an agricultural unit for joint operation by the owner and 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. (3) purchasingthe tenants' rights. and increasedsupply of quality seedsand fertilizers.As these paymentsfell behind. Morocco The Moroccan Government has undertakena series of measures aimed at land reform since independencein 1956. The objective of these measures to facilitate an increasein agricultural production is 68 . It created uncertainty which discouragedinvestment in improvements.which was practicallycompleted in 1971. total lending by the Agricultural Bank tripled between 1960and 1965. Virtually all of Iran's 50. the Central Bankfunded the difference.Annex 2 of their holdings. with the balancepaid in bonds in annual installments. Many measures were set up in a somewhat improvised fashion.but this growth leveledoff after 1966.The beneficiarieswere to repaythe governmentthe expropriation price plus 10% to cover administrativecharges. there was also considerable interferencewith the normal flow of irrigation water from streamsand storageplacesstill controlled by landlords. Although agricultural output increasedby a total of 18% in the first five yearsof the reforms. Excess land was expropriated and distributed to the tenants. (2) selling to the tenants. In the second stage.the reforms did not assistthose who were landless. (4) dividing the land with the tenants in the same ratio as the customary crop sharing.000villageshave undergone land reform and more than 3 million families have received land. credit and extensionservices. The ownershipand tenancy reforms havebeen complementedby rural cooperatives.

mainly formerly foreign-owned.intensified extension supportand the provision of modern inputs. Thirty-one thousand hectareswhich were mainly used by foreignersfor researchpurposes were recoveredby 1960.althoughsomeother state-ownedland and traditional collective land is involved. The Agricultural Investment Code.1966 and 1972 provides for land consolidation and distribution of land to smallholdersand landless families throughout the country.000 hectareswere foreign-owned. It providesfor the restrictionof inheritance rights to limit fragmentation. 181. However. between 1974 and 1977.The achievementof the distribution target for land 69 .Land consolidation hasalso been successful and hasso far benefited almost 200. an improvement in the tenure position of membersof traditional collectives. Remaining foreign-ownedland.Annex2 and to improve the distribution of rural incomes. The Government'smain priority now is to accelerateland distribution. about 300. Distribution to smallholdersand landlessfamilies was slow until 1967 and then gatheredmomentum up to 1972. while maintaining high technical standardsof managementon the distributed land.000hectares were sold privatelyto Moroccans.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. By the end of 1972. published in 1969. Land distribution is so far basedmainly on former foreign-owned land.000families.Legislationpassed in 1962.000hectares.amountingto about 370.and the adoption of modern cultivation techniques. the impact of land distribution alone on the problem of rural poverty hasbeen small. and a further 220.000hectares.mainly before 1963. Distribution so far hasbeen limited to land underfield crops. The target for the third Five-Year Planis to distribute 395.about 900. At the time of independencein 1956. Through the establishmentof cooperatives.when legislation was introduced subjecting such transfersto Government approval.000hectaresof land under field crops.was recovered by the Government in 1973. of this area. the number of beneficiariesso far is only about 1% of farm families with lessthan 2 hectares. the beneficiariesof land reform have generally quickly achieved high yields and acceptable incomes.000hectares(3% of the cultivated area)had been distributed to over 11.while land under tree crops (mainly orangegroves)remainedunder Government control and ownership. and to seeka suitable formula for distributing land under tree crops. is aimed at facilitating the developmentof irrigated agriculturein welldefined developmentzones.

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

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

The government bonds given to the former owners can be.while in a few casesland hasbeen to added to the holdings of Indian communities.000families. Four different categoriesof farm organizationscan receive redistributed land. In 1972.Since then.about three-quartersof the target area still remainedto be expropriatedand reallocatedbefore the end of 1975.productiveand profitable sugarcomplexes the north coast.8 million hectaresof this area. Expropriatedlands that havenot yet been resettledcontinue to be operatedunder direct governmentsupervisionuntil a cooperativeor SAIS(Sociedad Agricola de InteresSocial) farm organizationhasbeen formed. Peru Betweenthe start of land reform in 1963 and 1972. a total of 4.Over 100. Well managedproductive units were exempted.however. Following the land redistribution during the 1930s. Rural income distribution is still skewed. but the bulk hasbeen placed in the handsof workerowned cooperatives.More such investment and a mechanism for selectiveconsolidation of small farms will be required to ensure that the impact of the reform is maximized. used for investmentin industry to supplementtheir other resources. to which the land title is then transferred.The more fundamental reform law of 1969was the basisfor the expropriation of the large.000families have been settled on 2. The agrarianreform law of 1964concentratedon redistribution of inefficiently managedlatifundia (large landed estates)in the Sierra.implementation is well behind schedule.the concentration of landownershipincreasedagainbetween1940and 1960. In 1967-68.7 million hectareshas been expropriated.A of limit was establishedon the size of holcdings (150 hectareson the coast).Among ejidatarios. While the top 20% of private farmersreceived60% of all privatefarm income.The target for the current Five-Year Planis to expropriate26.200farm units containing 12 million hectares.Annex 2 resourceendowment and in the extent of public investmentin complementary infrastructure. TheSAISisa unique form of farm organization.Only a small number of individual farms has been assigned former tenants.50% of the farmers earnedonly 20% of all farm income (including personalincome from sourcesother than agriculture). and to redistribute theseto 500. income was more evenly distributed. Despite the priority given by the government. the concentration may have fallen back as a result of the distribution of another 35 million hectares during the last decade.and is the basicunit of agriculturalreform in the Sierra.TheSAISrepresents attemptto an 72 .the top 20% of the ejidatarios accountedfor only 45% of all ejido income.

6 million. 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.will still lack a minimum subsistence landholding.9 million to 2. The land reform programalone will not be able to solvethe rural . Eachgroup contributesto the capitalof the enterpriseon the basisof resources. It can be regardedas a second-degree cooperativewhosemembersaresocialbodies instead of individuals.surplus manpower is given employment. the share of each group is determined by the land reform agency. and the rather meagerprofits can be usedin developingbadly neededphysicalinfrastructure. Profitsare allocatedto each membercommunity in relation to its sharein the SAIS. roads. accountedin 1972 for 10% of the families benefiting from the agrarianreform program.The SAIS. * In anyattemptto meet socialneedsthrough redistributinglandand income in the Sierra. Evenif the optimistic targets for 1975 are met. agrarianreform is providing the basisfor socialand economicchange.mostly in the Sierra.the full market value of expropriatedlivestock hasto be paid in cashwhile fixed capital is to be paid for largely in agrarianbonds. 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. The debt assumed eachSAISunit is to be repaid from profits in by 20 years following a five-year grace period.Haciendaproduction is almost entirely basedon extensivegrazing of mountain pastures. However.the proposed solution to this dilemma. employmentopportunities in agriculturewill increase only from 1.000families with insufficient land to provide adequatesubsistence eligible to are benefit through the land reform program. while the number seekingwork in agriculture will rise from 1. the governmentis faced with problems of maintaining or raising productivity levels attainable only through exploitation of scale economies.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 all land which can be expropriatedis redistributed. Legally. In this manner.therefore. and are to be used in community development projects involving schools.32million to 1.about 500.unemployment problem.Membershipof eachSAISunit consists the cooperaof tive of the production unit and of the communities surrounding it. Nearly800.population and economic potential.Managementof the SAISis in the handsof professional employees.000 families. power reticulation and housing. 73 .1 million.

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