Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

Sector Policy Paper


May 1975

World Bank






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

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

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

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

Clearly. the policies followed are not a matter of economicsalone. Considered 6 . and only 7% of all land in holdings.especiallywhere the processof reform leadsto a breakdownof the institutional structure of agricultureand leaves nothing in its place. others favor communal or collective control over land. These will come about only if adequateprovision is madefor the supplyof necessary inputs and mandatory servicesto the usersof the land. Table 1:6. and the plantation ranch 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. Indeed.havepursueddifferent approaches. have high degreesof property concentration. an estimated80% of all holdings are lessthan five hectaresin size. Any policy involves fundamentaljudgmentsabout the adequacyof an existingsystemand the most appropriate alternative. alone is not sufficient it for improving land productivity and distribution of income.suchas in Kenyaand Peru. the organization of the supply of inputs to accompanyany land reform program is essential. Theyalso reflect politics and ideology. Thedistribution of landby size of holding ishighly skewedthroughout the world. as stressedin Chapter 2.Table 1:9. However. with about 40% less than one hectare.The judgments of policy makers differ. Somegovernmentsfavor individual ownership of land. The socialist and traditional communal types have low concentrations.Again.The market economy type falls somewhere in between.the distribution of landownership is known to be skewed. Finally.Theseholdings account for approximately20% of all cultivated land. As shown in Annex 1. and reach far beyond any purely economic calculus. thesedo not require redistribution but eventually lead to a more economic use of resources.the degreeof concentrationvaryingwith the typesof tenuresituation.tenancyarrangements with emphasison providing securityof tenure so as to encourageon-farm investment. Distribution of Landand Income Although few data are available. while land reform in itself may be necessary. it must be recognizedthat a policy for land reform for a given situation cannot be statedin simple terms. The casestudiesin Annex 2 showthat reform-minded governments. TheAsian and LatinAmericanfeudal types. Individual countries are classifiedon the basisof landownership concentrationin Annex 1. Changes in patternsof landownership not automaticallyleadto an increase will in output or technological change in agriculture. evidencedby widespreadtenancy.there is no virgin cultivable land left.and the increasing pressureon the land through population growth highlight the double challengeof rural development:to raiseproductivity and in7 . Social and Economic Issues The rural population in developingcountriescontinuesto increase by more than 2% per year.The distribution of income in theseregionswill depend betweenowners and tenants largely on the contractualarrangements or sharecroppers.The skewness the distribution of holdings.especiallyin partsof Asia (see Annex1).separately. The extremepoverty of manywho live on the land. by contrast. adding to the already heavypopulation pressureon the land. Secondly.the distribution of income will be more skewedthan the pattern of holdings. The distribution of holdings by size is frequently usedas a first approximation in estimatingthe distribution of wealth and income in of the agricultural sector. there is a greaterconcentrationof landownershipthan of holdings. In many.the distribution of holdings by size is not the sameas the distribution of ownershipof land.all landis not homogeneous. however. Exceptin a few places.the income of sharecroppers and tenants may be little different from that of landlesslabor. In Asia.Frequently.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. Table 1:8). in most cases.Less than 20% of holdings(thoseover 50 hectares) account for over 90% of the total area in holdings. in general. But. Where the problems are most acute-as in parts of Asia-the emergenceof large numbers of landlesslaborers in rural areassuggests that the family farm systemasa meansof spreading work amongfamily members maybe breakingdown.the pattern in Latin America is particularly skewed. 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.40% of the land (accounting for almost 80% of holdings) is in holdings of lessthan five hectares. massiverural underemploymentis accompaniedby high ratesof open unemploymentin the cities and growing inequality in the overall distribution of income. so that absorption of more people into agricultural activity requires more intensive cultivation of land already in use. a concentration of large holdings in a semiarid region may reflect a smaller concentrationof wealth than a concentrationof small holdings in an irrigated area.

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

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

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

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

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

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

12.if sedentary forms of agriculture are possible. 11. of small farmerlikely to emerge 7. where increasedproductivity can effectively 9.the Bankwill foster the adoption of tenancy conditions and sharecroppingarrangementsthat are equitable and conducive to the optimal use of resou rces. 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 will carefully consider whether the fiscal arrangements appropriate to ensure are that a reasonable share of the benefits accruesto the government. 8.or pursue land usageand access arrangements that are compatiblewith the long-run productivity of the land and the welfare of the residentpopulation. 10.5. Where land is communally held without regulation of access. the Bankwill encouragesubdivision. 14 . 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.The Bank will undertake studies of the costs and benefits of settlement projects. The Bankwill pay particular attention to the consequences of the interaction of new technology and the prevailing institutional structures.the Bankwill not support to projectswhich do not include land reform. order to avoid adjustments which will increasethe maldistributionof income and cause economichardship.including its social dimensions. with particular attention to developing approaches which will lowerthe cost per family settled. The Bank will support and encourageresearchrelated to the economicsof land reform in its broadestaspects. Where land is held under someform of reflected in the pattern of such cases. In circumstances be achievedonly subsequent land reform. It will continue its support for programsof economic directed toward the specialneedsof the type and technical research from landreforms.

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

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

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

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

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

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

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

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

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

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

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

10 0.96 1.49 1.64 6. 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 0.28 0.70 20.85 1.62 15.17 123.agriculture.05 0.11.03 1. 3.03 2.12 0.18 1. and I MF.04 4.624 - 0. Employment and the Distribution of Land.61 3. November and 1973. Sources:Columnsland 3arebased on FAO. lnternational financialStatistics.unlessotherwise indicated.80 81.37 208.31 3.09 0.88 1.845 - 0.29 0.59 4.936 0.611 - Botswana 1969-70 Egypt.79 1.33 4.832 - 0.09 0.865 - 0.18 1.474 0.20 1.pp.333 925 410 141 149 581 377 1.04 0.see XXVI.03 0.607 - ' 0. August 1973. of ibid.52 1. April 1972. 10-11.Republic of India Indonesia Iran Korea.833 0.01 0.873 0.95 8.25 118.Table 1 Productivity.41 3.32 2.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.85 40.05 1.XXVI.580 - 0.60 108.18 14.25 1.70 8.22 2. No. 21-23. currency For Bulletin Statistics.90 37.085 1.35 4.Preduction Yearbook 1971.Republic of Japan Nepal Pakistan Philippines Sri Lanka Thailand Turkey Viet-Nam.05 0.75 1.05 0.hunting. XXVII.17 0.20 1.23 2.10 0.10 79.84 0.67 3.09 0.903 285 692 663 479 477 1. Monthly 26 . forestry.34 270.24 1.3.64 2.54 0.62 .27 6.and fishing.597 0.50 22.4.Gross DomesticProduct (GDP)in agriculture shownhere includes.32 2.21 0.45 2.89 1.50 0.29 - 0.38 0.720 352 240 250 376 166 155 355 168 681 183 293 98 144 209 189 42 167 68 848 980 951 463 489 492 569 580 1.607 0.473 - 0.59 1. No.947 0.05 6.12 1.06 0.02 0.188 138 249 200 337 137 243 127 142 360 140 88 48 295 174 180 341 198 101 0.47 5.62 2. No. and column4onUN.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 1.35 3.

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

198 84 1. Chile. Agrarian Structure in Latin America.197 8. land reform can be consonantwith development from a point of view concernedpurely with productivity.492 304 1. it appearsthat under controlled circumstances output per hectare is likely to be higher. Lexington. by FarmSize.Firstly.On the contrary. 351 p.on the small farmsthan on the largefarms (see Table2). In broad terms.237 268 1.673 74 523 8. Brazil.171 972 9.Secondly. I to col. 1973.80 8. a resume of the CIDA Land Tenure Studies of Argentina.90 0. as pointed out below. Peru.while large-scale operatorstend to maximizeprofits by using hired labor only until incrementalproduction coversincrementalcosts.80 3. there are limited economies of scale in most agricultural production. Massachusetts: Lexington Books.on the likely to decrease the simple reasonthat. There is other evidence to support these findings. small-scale producerstend to maximizeoutput by applying labor intensively. Output per worker. for 28 . Studies in the Economic and Social Development of Latin America. Colombia.with output per hectareas the relevantcriterion. in LatinAmerica 1 Country Year Smallest subfamily farms 2 Largest multifamily farms 3 Ratio ot col. xxvi.862 660 63 16 National monetary perworker unit 40 192 1. as well as studieson Japanand the Republicof China. The important implication is that reductionsin either the size of holdingsor land concentrationneed not be associated with a reduction in output per hectare. found to be three to 14 times greater.14 0. however.30 2.10 0.23 0. including the results of Bank-sponsored analysisin Mexico.there is no claim that all conditions were identical. 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 2.20 8. Guatemala.14 Source: Barraclough and Collarte.498 170 334 41 1. However.Table 2 AgriculturalOutputper Hectareand per Worker.This is usuallyshort of the output per hectarethat would be produced if the goal were maximization of output. There are two associatedreasonsfor this assumption. the studiessimply indicatethat yieldswere higher on smallfarmsthan on largefarms. Ecuador.21 0.20 14.

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

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

there areample opportunitiesfor redistributing land so that inequalities can be diminished and the recipients of the land can generate an acceptable minimum income. even if the maximum holding was 20 acres. mostly food.the available land (43 million acres)would be barelysufficient to bring up the size of miniholdings to a minimum of five acres. The solution to rural povertyclearlycannot be found exclusively in the agriculture sector. where determinesthe size of the rural market for domesticallyproduced industrial products.when possible.In suchcountries. As will be shown later. evenif holdingsabovea certainsize werecompletely eliminated. not enoughland would be availableeither to raisethe acreage of the minifarms to a tolerable minimum or provide for the landless. a low 10-acreceiling would not sufficeevento bring all miniholdings up to a minimum two-acre size.Although the total effect of the redistribution process dependto a largeextent on the costsof increased will output after the redistribution.where land distribution is skewedand population is not dense.and no land would be availablefor the landless(20-25million households). In Sri Lanka. In India. only 1.5 hectaresis availablefor the averagerural family of five. In other areas.and their migration to urban areas.the changein the sizedistribution of holdings will shift the distribution of the sourceof the marketablesurplusand savings. In thesesituations.In Bangladesh.The marketedsurplus also represents supply of agricultural products. (Settlementof the landlesson new land. there are some countries.too. In Haiti. notably in the Americas.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. even with a low ratio between the ceiling and the floor holding (5 to 1).are the other obvious alternatives. The millions of landless families could not be provided for at the sametime. for the 31 .) . the marketedsurplus generates As agricultural incomesand so potential cashsavings.The densityof the farm sector is so high in some countries in Asiathat.The Population Factor Opportunities for the redistribution of land depend to a great extent on the existingpattern of distribution of holdingsand population density. therewould be enoughlandonlyto givetwo acrestoeachminifarmer. the pressureof population is such that there is not enough land to meet the minimum requirementsof all might be wise to give land only to the minifarmersand to attackthe poverty problem of the landlessby meansof a massive rural works program.

48% of the farms (lessthan 2.the urban population. Sixty-one percent of the maize farmers in Puebla(Mexico). whereaslarge farms (50acresor more) sell 65. provided that there is a compensatory increasein total output.6% of the marketed surplus comes from 70. Thus. however.But increasingthe marketedsurplus will not necessarily increasesavings.However.farms abovea certain size were eliminated and their land transferredto the small class. after reform.5% eachof the national output.5 acres)contribute only 6% of sales. this decline in the market surplus ratio need not result in a decline in total surplus. might not be very great given that the largest and the smallestfarm-sizegroups account for only small proportions of the total output. however. of Thus. the necessary conditions are fulfilled whereby small farmscan realizetheir full pro32 . the ratio of marketedsurplus to production falls asfarm size decreases.5 acresor less)sell only 24.7%. for example. In Mexico.but may take the form of increasedon-farm investment in such items as improved housing.the savings need not be monetized.sell no maize at all.7% of the farmers. But thesefarm groups produce only 9.5 to 50 acres) contribute the bulk (78%)of the total surplus. Datafrom India show. a fall in the surplus could necessitate imports and put an added strain on the balance of payments. and their sharesof total output and salescan differ widely across countries and regions. In India. Since per acreyields on smallfarms canbe higherthan on largefarms.5% of their output. with adverseeffects on the economy. hypothetically. The surplus-outputratios of different farm-sizegroups. The rate of decline.4%. a typical sharecroppersells as much as 43% of his output. In Chile.wells and access roads. but there can be no doubt that it would fall. and 51% (with 2. on the other hand. Marketed Surplus A reduction in land concentrationthrough land reform could lead to a fall in the marketedsurplus-at leastin the short run.there may be a sufficient increasein output if. If output remainedthe samebut. 6. Where it does. Smallfarm households tend to consumea largerproportion of their smalloutput than do householdswhich havea large enoughacreageto produce in excess domestic requirements. These differenceswould determine how much the surplus ratio would fall after land reform.the surplus-output ratio would probably decline. that small farms (2.4% comes from only 1. and another 16% sell 25% or lessof their output.for example.1% (more than 50 acres)con-' tribute 16%. and 55.

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

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

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

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

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

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

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

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

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

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

0(5) 11. research and related studies.3(8) 6.6 2. (l) Except for Kenya. (8) Excludes $2.200 2.280(4) 5. as estimated in the appraisal reports.Table 3 Costs of Selected Settlement Projects Assisted by the World Bank Estimated Total project Country Project Bank or IDA finance Number of families(') project costs per Average farm costs Amnunt (US$ 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.500 landless peasants and develop 9.6 14.0 5.0 43. .3 6.7 9. figures represent goals rather than actual state of settlement.0 8.0 14.830 2.389 3.800 new settler families are scheduled to be settled on some 280. (6) Includes 2.3 4. )') The cost per small farmer settled is estimated to be $17. The project is behind schedule.8 29.429 2.756 10.0 4. Thesecost expenditures are being reviewed and are expected to be Considerablyhigher than originally expected.) Project costs.0 25.7nn perfamily settled.5 Publicland INCORA land (involved appropriation land) l Publicland Europeanownedland Publicland Publicland Publicland Publicland Source: World Bank and IDA appraisal reports.9 6. (3) The costtothe government is$1.500 partially established settlers are given.0 n.050 5. (5) The original goal was to settle 2.73 million used for agricultural development on the highlands.0 4.000.This excludes expenditureson health.800 6.505 13.000 4.1 3.423(3) 6.7 9. (.327 2.214 1.7 21.(7 6.000. education.500 1.800 now settlers and 3.000 hectares.500 partially established settlers. (a) Although 2.0 loan loan loan loan credit credit credit loan loan loan 1972 1967 1972 1971 1969 1969 1972 1968 1970 1973 5.a.5 3.9 7.667 10.300(6t 1.0 13.770 3.000 2. no data on the farm size of 3.8 4.200 2.6 15.3 6. 3 Irrigation Second Atlantico Development Caqueta Land Colonization Wolamo Agricultural Project LandSettlement and Development Karonga RuralDevelopment Jengka Triangle Second Jengka Triangle Third Jengka Triangle 12.825 40.900 hectares. do not necessarily reflect total economic costsof settlement.1 41. whereas the cost per middle-size farmer remaining in the project area is $100.

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

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

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


I I I .

456 million hectaresof cropland.4%).7 3.240 2.Together.75 0.Theworld's agriculturalpopulation-defined as populationdependingon agriculture for its livelihood-is estimatedat 1. averaging0.40 hectareof cropland.02 1.0 17 32 17 39 64 67 4 51 1.Among other things.8 31.242 1.2 100.2 100. madeup of 1.851 million.90 11.393 145 232 271 84 463 214 47 1.8 14. Cropland. there is an average 0. 10% in Europe.753 3.01 5.0 71.78hectareof cropland per person in agriculture. respectively.987 million hectares under permanent pasturage (22.0 89 77 54 74 1. 16% in the USSR.6 5.031 851 13.0 15. and 3% in Oceania.456 10.851 4. and 4.This represents averageof 3.393million hectares.35 0. The ratio of cropland to agricultural population is the lowest in Asia among all the major regions. More than 70% of all rural people live in Asia.78 Source: FAO.Annex1 THE CONTEXT OF LAND REFORM Ratios of Population to Land The total land area of the globe is about 13.Of the arable land.783 2. 15% in Africa.0 12. 49 . approximately32% is in Asia.8%).8%). per person.8 4.314 239 4 1. 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.defined as arableland and land under permanent crops (10. 2. The world's population was estimated at approximately 3.14 0.617 million in the early 1970s. 19% in North and Central America. of The relationship between population and land in all major regions and for 52 selectedcountries is shown in Annex Tables1:1 and 1:2. the tables show that: 1. or closeto 0.the People'sRepublic Table 1:1 Regional Distribution of Land.9 18.35 hectare per person.2 2.which hasapproximately 32% of the world's cropland.6% in SouthAmerica.041 million hectares under other uses(36. On the basisof these global figures.9 4.9 0.Production Yearbook 1972.7 hectares an of land.63 3. or 51% of the total population.

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


Cropland (000hectares)

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

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

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

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

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

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

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

Annex 1

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

Latin America EastAsia MiddleEast Africa Totalall regions

1.4 1.8 1.8 2.4 1.9

1.5 2.1 1.8 2.2 2.1

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

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


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

LatinAmerica EastAsia MiddleEast Africa All regions

3.1 2.5 3.8 3.0 2.8

1.8 1.9 2.2 1.7 1.9

2.9 2.8 2.7 2.6 2.8

2.5 1.1 1.1 1.2 1.4

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

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

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

land tenure and capital formation. Thiskind of labor intensity is not likely to be reached.Bolivia. or 78. or 39% of the total number. 2.Annex1 and India. 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. evenif effective birth control could be introduced overnight. theseholdings accountfor approximately6.includingall of the larger countries that are membersof the Bank. then theseholdingsoccupy1. About 109 million holdings. About 53.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). urban aswell as rural. specialand possiblyextraordinarymeasures would haveto be taken to satisfy the expandingdemand for work and income from today'schildren. The most recent data on distribution of holdings by size is given in the worldwide censusof agriculture held in the early1960s. becauseof the small size of the irrigated areas in Pakistanand India and other constraintsrelated to technology.Table 1:6 combines the two sets of information to give an indication of the distribution of land and cropland by size of holding. 55 . Thiscovered83 countries. resourcebase.8% of the total land area and 20. low incomesand increasingunemployment.1% of the land areaand 3.Nigeriaand Romania. Ecuador.7% of the cropland. are under 1 hectarein size. Basedon the sameassumptionas above.4% of the cropland.8% of the total number. The censusprovides a breakdown of distribution by size of 138.9 million holdings. It showsthat: 1. the agriculturalsectorin thesetwo countriescould absorb all the labor force expectedby 1985.however. poverty and unemploymentproblemsof the developthe ing countriesare unlikely to haveany long-term solutionsthat would not include a reduction in population growth.except Afghanistan. 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. 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. Suchmeasures include thoserelated to land reform.3 million holdings in the 83 countries.With very few exceptions. are lessthan 5 hectaresin size. Nonetheless.

500 500-1.16 0.60 6. 3.8% of the total farmland area and 45.000 over and Total 53. Thus.90 26.20 20.92 million were lessthan 5 hectaresin size.16 100.80 5.10 1.and more than three-quartersof all farmland.and if the a distribution of 91% of the land reflectsthe pattern of distribution of all the land.40 5.00 1.00 Source: FAO.8% of all holdingsin the 83 countries.10 100.50 51.40 1.59 38. farms of this size group account for 66% of the total land area and nearly25% of all cropland.2% of all holdings. of pp.50 10. covered by the census.which represent 3.00 3. both developed and developing.48 0.000 1.00 11.70 4.100 100.00 11.73 13. Therewere an estimated16 million holdingsof lessthan 5 hectares in the developedworld: 6 million in Japanand 10 million in Europe.10 10. Rome: 1971.80 11.90 19.00 0.then holdingsabove50 hectaresin size.80 9.30 12.200 200.60 8.97% of all holdingsaccount for lessthan onequarter of all farmland and slightly more than half of the area under crops.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 1.50 50.70 9. The information on distribution of holdingsby size refersto the 83 countries.23 138. approximatelyhalf of theseholdings 56 .80 6.24 7.Report the 1960 on WorldCensus Agriculture.In the 64 countriessurveyed.60 5. roughly3% of all holdings(in the aggregate)account for slightly less than half of the arable land and land under permanentcrops.20 4.40 5.20 3.90 7.If the distribution of holdingsby size in 83 countries represents global picture.2 2.Conversely.67 0. These data confirm that. account for 78.70 11.20 1.20 20. That is. disthe tribution of land and cropland is highly skewed.23 0.00 4. One million holdingsof 200 hectares more representlessthan or 0. when viewed in the aggregate.40 0. 34-36.3% of all the cropland.97 1.50 5.55 28.5 5.30 100.27 4.40 1.of 122 million holdings in the developing countries.

Obviously.2 3. Afghanistan.7 - 47. of Rome: 1971.since it excludes holdings of less than 1 hectare. more than half of their holdingsare lessthan 1 hectarein size.0 34.6 23.4 39.1 66.0 23.0 0. or 10 million families.8 0.The resultsare summarizedin Table 1:7. Between1960 and 1970. this is not a complete coverage.4 78.5 Source: FAO.Thus. Together.7 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. it is highly likely that closeto 100million holdings of less than 5 hectaresexistedin 1960.242million hectares.5 13.4 million holdingscovering2. Table 1:7 Distributionof HoldingsaboveOne Hectare. Preliminaryindications are that the fragmentationof holdings hasincreasedin manyof the more densely populated countries as well as in countrieswhere the distribution of land is skewed.2 6.7 is safe to assumethat the census forthcoming in the 1970swill reveal that there are well in excess of 100 million smailholdersin the developingworld.0 the time of the census.0 8.Annex1 were less than 1 hectareand the remainderwere between 1 and 5 hectaresin size. the agricultural population in the developing countries increasedby a reported 190 million persons. 57 .3 0.5 21.2 73. This conclusionis derived asfollows: The 1960censusindicated that there were approximately92 million smallholdersin developing countries.3 8.4 37.The most comprehensiveregional and national analysis the 83 countries dealswith for holdings of 1 hectareor more in size and pertains to 84.or by more than an estimated 35 million farm families. However.7 3.2 5. it does provide an insight into the patternsof distribution of holdings within the major regions. excluding those in Nigeria. It is safeto conclude that well in excess 100million holdingsare of less than 5 hectaresin size in the developing world at the present time.these countries had an agricultural population estimatedto be close to 50 million people.7 27. Ecuador and Bolivia.2 17. in all probability. most of whom were farming on units of less than 5 hectaresin size.5 90.5 50.1 90.5 9. Consequently.4 45.5 1.5 2. Reporton 1960 the World Census Agricalture. The1960census data alsoprovided information on holdingsby size and land areafor different regionsand countries.0 99.4 36.

The analysisof the distribution of holdings by size on a regional basispoints to the highly skewed distribution in the Americas. only 5% of the land in the eight Table 1:8 Distribution of Holdings above One Hectare.1 4.Annex 1 The analysisindicates the vast differences in patterns of landholding and land distribution between Asia and the other regions. and more than 90% in North and Central America.0 9.5 73. misleading.then the land held by smallholdersowning under 5 hectaresis much more than 50% of all land. are This The data for Africa. The 36.2 10.7% of the land. respectively.5%in the eight countries is in holdingsof more than 50 hectaresin size.8 97.8 5. is becausecoverageof that continent in the 1960 censuswas poor.of the area under farms.3 43.1 6.2 92. helps explainthis.while the sampling in Zambia was confined to Europeanholdingsand in Tanzania commercialholdto ings. If these are excluded from the sample.7 50.2 42.9 49.5%.0 Source:FAO.4 12.3 1-5hectares % area 5-50hectares % holdings % area 50 hectares % holdings % area 0.5 86.7 36.8 92.5 52.7 4. South America and Oceania.3 36. At the other end of the in farmsof more than 50 hectaresin size.6 8.0 22. Report the 1960 or WorldCensus Agriculture.6 30.1 20.8 95.2 0. as shown in Table 1:8.4% of holdings in South America and 23.6 6.5 3.6 20.3 32.1 6.1 37. in Selected South American Countries %holdings Argentina Brazil Chile Colombia Paraguay Peru Uruguay Venezuela 14. the pattern of holdings in the eight major countries in LatinAmerica. The information confirmsthat a very high proportion of all land-ranging from 86% to 97.0 0.1 1.9 28.9 2. Only 9% of the area in Asia is in holdings of more than 50 hectares.8 14.6 51.2 1.7 46. by Size and Area.7% in Europe.0 4.3 40. of Rome: 1971.1 1.1 85.4% in North and Central America that are less than 5 hectaresin size occupy only 1% and 0. 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. 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.3 38.As much as 34. as presentedin the census. 58 .2 94.3 87.

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

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

Frequently. Dominican Republic.81).3 31.4 32.2(5) 1. due to lack of data.Rome: 1971. (1) 1960 estimates are for former Federation of Malaya.7 57.5 31. chased inputs. pp.3 35.0 62.5 28.3 61.Report the 1968 oe WorldCensus ofAgricolture. (a) Includes holdings operated under more than one tenure form (21.9 22.a.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.3 33. 61 . Source: FAO.8 19.9 15.6 n.1 49.4 26.4 70. India and Nicaragua are excluded. 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).253 76 2.a. (4) (5) Includes both Pakistan and Bangladesh. 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.India and Pakistan. 25.2 43.4 57.9 31.350 4.the tenantsare among the lowest income groups in agriculture. 32.349 128 381 129 93 27 18 776 Data refer to latest available year in 1960s and. do not reflect land reform action on the one hand and changes in the work force on the other.176 1.5.2 73.6 24.4 54. therefore.271 1. 92-97.3 49.334 25.7 23.0 n.392 141 5.1 66. 16.664 62.0 40.3 70.Vol.0 45.7(5) 13.4 13.5 n.a. 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. Tenantsand sharecroppers under conditions of great insecurity and are in a weak bargaining position vis-a-visthe landlord.020 1.

do not reflect recent reform actions on the one hand and changes in the work force.013 60. 1972.912 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 1.237 378 1. data presented here are estimatedfrom [LO. thus.986 1. YearBookof Labour Statistics 1871. on the other. pp. Unless otherwise indicated.300 5. Agricurltureinn Brief (I Ith ed. p.. 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. (2)Agricultural laborers as shown in India: Ministry of Agriculture.865 903 484 210 4.Annex1 LandlessWorkers The number of landless-farmworkers in developing countries is increasing.499 101 557 99 287 9.43-294. 44-301. indian (3) Includes population now belonging to Bangladesh. 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.561 694 3. 1971). data refer to latest year available in 1960s and.158 122 179 391 138 72 2. 14. and Except for India.673 8. Directorate of Economics and Statistics. 62 .

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

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

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

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

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

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

The main constrainton the program hasbeen the unavoidablecomplexity of supervisingits implementation consideringthe Government'smanpower resources. 181.000hectares were sold privatelyto Moroccans.1966 and 1972 provides for land consolidation and distribution of land to smallholdersand landless families throughout the country.000hectares(3% of the cultivated area)had been distributed to over 11. is aimed at facilitating the developmentof irrigated agriculturein welldefined developmentzones. the number of beneficiariesso far is only about 1% of farm families with lessthan 2 hectares. The target for the third Five-Year Planis to distribute 395.was recovered by the Government in 1973. Land distribution is so far basedmainly on former foreign-owned land.Land consolidation hasalso been successful and hasso far benefited almost 200. an improvement in the tenure position of membersof traditional collectives. However. Thirty-one thousand hectareswhich were mainly used by foreignersfor researchpurposes were recoveredby 1960. and to seeka suitable formula for distributing land under tree crops. Distribution so far hasbeen limited to land underfield crops. At the time of independencein 1956.000hectaresof land under field crops. By the end of 1972. published in 1969.while land under tree crops (mainly orangegroves)remainedunder Government control and ownership.intensified extension supportand the provision of modern inputs. The Agricultural Investment Code.The achievementof the distribution target for land 69 . It providesfor the restrictionof inheritance rights to limit fragmentation. and a further 220. the beneficiariesof land reform have generally quickly achieved high yields and acceptable incomes.althoughsomeother state-ownedland and traditional collective land is involved.amountingto about 370. the impact of land distribution alone on the problem of rural poverty hasbeen small.000hectaresof "official colonization" landswere takenover by the Government between 1963 and 1965.000 hectareswere foreign-owned.Legislationpassed in 1962.mainly before 1963. Distribution to smallholdersand landlessfamilies was slow until 1967 and then gatheredmomentum up to 1972. Remaining foreign-ownedland. of this area. while maintaining high technical standardsof managementon the distributed land. mainly formerly foreign-owned.and the adoption of modern cultivation techniques. The Government'smain priority now is to accelerateland distribution.Annex2 and to improve the distribution of rural incomes.000hectares. between 1974 and 1977.000hectares. Through the establishmentof cooperatives.about 900. about 300.when legislation was introduced subjecting such transfersto Government approval.000families.

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

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

implementation is well behind schedule.Only a small number of individual farms has been assigned former tenants. The government bonds given to the former owners can be. Peru Betweenthe start of land reform in 1963 and 1972.Among ejidatarios. and to redistribute theseto 500. Rural income distribution is still skewed. a total of 4.000families have been settled on 2.200farm units containing 12 million hectares.The target for the current Five-Year Planis to expropriate26. Well managedproductive units were exempted. used for investmentin industry to supplementtheir other resources.and is the basicunit of agriculturalreform in the Sierra.while in a few casesland hasbeen to added to the holdings of Indian communities. In 1967-68.Since then. 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. the concentration may have fallen back as a result of the distribution of another 35 million hectares during the last decade. to which the land title is then transferred.A of limit was establishedon the size of holcdings (150 hectareson the coast).productiveand profitable sugarcomplexes the north coast. Four different categoriesof farm organizationscan receive redistributed land. income was more evenly distributed.Over 100.the top 20% of the ejidatarios accountedfor only 45% of all ejido income.50% of the farmers earnedonly 20% of all farm income (including personalincome from sourcesother than agriculture).TheSAISrepresents attemptto an 72 . Following the land redistribution during the 1930s.7 million hectareshas been expropriated. TheSAISisa unique form of farm organization.the concentration of landownershipincreasedagainbetween1940and 1960.8 million hectaresof this area.about three-quartersof the target area still remainedto be expropriatedand reallocatedbefore the end of 1975. Expropriatedlands that havenot yet been resettledcontinue to be operatedunder direct governmentsupervisionuntil a cooperativeor SAIS(Sociedad Agricola de InteresSocial) farm organizationhasbeen formed.however. The agrarianreform law of 1964concentratedon redistribution of inefficiently managedlatifundia (large landed estates)in the Sierra.The more fundamental reform law of 1969was the basisfor the expropriation of the large.000families. In 1972. Despite the priority given by the government.Annex 2 resourceendowment and in the extent of public investmentin complementary infrastructure. While the top 20% of private farmersreceived60% of all privatefarm income.

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

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