Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

Sector Policy Paper

LANDREFORM

May 1975

World Bank

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

580 - 0. 10-11.03 1.18 1.49 1.03 2. August 1973. of ibid.32 2.59 4.35 4.45 2.XXVI.01 0.23 2.333 925 410 141 149 581 377 1.17 123. 21-23.903 285 692 663 479 477 1. 3.38 0.21 0.12 0.03 0.611 - Botswana 1969-70 Egypt.50 22.24 1. and I MF. lnternational financialStatistics.60 108.597 0.31 3.52 1.10 79.865 - 0.pp.29 0.4.28 0.ArabRepublicof 1960-61 1969 Kenya Malagasy Republic 1961-62 Mali 1960 1961 Morocco Senegal 1960 Togo 1961-62 Tunisia 1961-62 Uganda 1963-64 Zambia 1960 - - - exchange rates. Monthly 26 .12 1.Republic of India Indonesia Iran Korea.09 0.70 20.05 0.833 0.607 0. April 1972.474 0. No.89 1.607 - ' 0.75 1.25 118.11.473 - 0.62 15.29 - 0.80 81.88 1. No.37 208.and fishing.64 6.unlessotherwise indicated.67 3.35 3.188 138 249 200 337 137 243 127 142 360 140 88 48 295 174 180 341 198 101 0.96 1.25 1.61 3.18 1.947 0.04 0.95 8.34 270.50 0. currency For Bulletin Statistics.27 6.10 0.04 4.79 1.06 0. and column4onUN.10 0.Republic of Africa 1961 1962 1963 1971 1961 1964 1960 1963 1970 1960 1965 1960 1961 1961 1966 1961 1960-61 1960 1963 1960 1970 1960 1961 -62 1960 1960 1962 1963 1963 1960 424 90 83 129 186 144 22 55 18 14 18 67 11 50 14 31 841 172 323 187 1.720 352 240 250 376 166 155 355 168 681 183 293 98 144 209 189 42 167 68 848 980 951 463 489 492 569 580 1.59 1. Sources:Columnsland 3arebased on FAO.02 0.845 - 0.Table 1 Productivity.09 0.01 0.873 0.832 - 0.85 1.70 8.20 1.32 2.624 - 0.hunting.17 0.20 1.47 5.85 40.18 14.62 .agriculture.3.64 2.085 1.Preduction Yearbook 1971.05 1.05 0. No.05 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.Gross DomesticProduct (GDP)in agriculture shownhere includes. forestry.33 4.22 2.62 2.Republic of Japan Nepal Pakistan Philippines Sri Lanka Thailand Turkey Viet-Nam.see XXVI.54 0.05 0.936 0.90 37. November and 1973. Employment and the Distribution of Land.84 0.09 0. XXVII.41 3.

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

351 p.10 0. Brazil.492 304 1.on the average.Firstly.171 972 9. however. a resume of the CIDA Land Tenure Studies of Argentina. as well as studieson Japanand the Republicof China. in LatinAmerica 1 Country Year Smallest subfamily farms 2 Largest multifamily farms 3 Ratio ot col.on the small farmsthan on the largefarms (see Table2).Table 2 AgriculturalOutputper Hectareand per Worker.Secondly. Chile. Studies in the Economic and Social Development of Latin America. The important implication is that reductionsin either the size of holdingsor land concentrationneed not be associated with a reduction in output per hectare.30 2. 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. However. there are limited economies of scale in most agricultural production.while large-scale operatorstend to maximizeprofits by using hired labor only until incrementalproduction coversincrementalcosts.is likely to decrease the simple reasonthat.with output per hectareas the relevantcriterion.23 0. Agrarian Structure in Latin America. for 28 .21 0. land reform can be consonantwith development from a point of view concernedpurely with productivity. the studiessimply indicatethat yieldswere higher on smallfarmsthan on largefarms.80 8.14 0. There is other evidence to support these findings. Lexington. Massachusetts: Lexington Books.This is usuallyshort of the output per hectarethat would be produced if the goal were maximization of output. by FarmSize. xxvi.498 170 334 41 1.673 74 523 8. Peru.237 268 1.14 Source: Barraclough and Collarte. found to be three to 14 times greater. it appearsthat under controlled circumstances output per hectare is likely to be higher.862 660 63 16 National monetary perworker unit 40 192 1. In broad terms.20 14. I to col.there is no claim that all conditions were identical. Output per worker. including the results of Bank-sponsored analysisin Mexico.80 3.197 8.198 84 1. 1973.On the contrary. There are two associatedreasonsfor this assumption. small-scale producerstend to maximizeoutput by applying labor intensively.90 0. as pointed out below.20 8. Colombia. Guatemala. Ecuador.

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

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

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

In Mexico.the surplus-output ratio would probably decline.wells and access roads. Datafrom India show. hypothetically.5% of their output.6% of the marketed surplus comes from 70.7% of the farmers.1% (more than 50 acres)con-' tribute 16%. whereaslarge farms (50acresor more) sell 65.the urban population. In Chile.4%. 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.5 to 50 acres) contribute the bulk (78%)of the total surplus. The rate of decline.for example.5% eachof the national output. 6.However. on the other hand. The surplus-outputratios of different farm-sizegroups.7%. Where it does.there may be a sufficient increasein output if.5 acres)contribute only 6% of sales. however. a typical sharecroppersells as much as 43% of his output. a fall in the surplus could necessitate imports and put an added strain on the balance of payments. that small farms (2.the savings need not be monetized. and another 16% sell 25% or lessof their output. Since per acreyields on smallfarms canbe higherthan on largefarms. of Thus. Marketed Surplus A reduction in land concentrationthrough land reform could lead to a fall in the marketedsurplus-at leastin the short run. for example. 48% of the farms (lessthan 2. If output remainedthe samebut.but may take the form of increasedon-farm investment in such items as improved housing.sell no maize at all. after reform.5 acresor less)sell only 24. These differenceswould determine how much the surplus ratio would fall after land reform. with adverseeffects on the economy. and 55. In India. Sixty-one percent of the maize farmers in Puebla(Mexico). Smallfarm households tend to consumea largerproportion of their smalloutput than do householdswhich havea large enoughacreageto produce in excess domestic requirements.But increasingthe marketedsurplus will not necessarily increasesavings. and 51% (with 2. provided that there is a compensatory increasein total output.farms abovea certain size were eliminated and their land transferredto the small class. But thesefarm groups produce only 9. but there can be no doubt that it would fall. Thus. however. and their sharesof total output and salescan differ widely across countries and regions. the necessary conditions are fulfilled whereby small farmscan realizetheir full pro32 .4% comes from only 1. the ratio of marketedsurplus to production falls asfarm size decreases.

This addsto the urgencyof introducing effective agrarian reform (including improved technology and services)along with land reform. It follows that a reduction in concentrationof land will reduce the averagesavingsrate of the farm sector.At the lowest end of the farm-sizescale.if a compensatory increasein total income can be securedby intensifying inputs per unit of land soonafter land reform. Although the evidence on savingsrates of different classes of farm householdsin developing countries is scant.is that the farm-size structure created by any land reform program should fix a minimum as well as a maximum farm size. A policy implication. In addition. the subsistence consumption of small farmers increases-the extra consumption in kind representinga direct increasein their incomes (nutrition).duction potential. there should also be a positiveeffect on productivity.6% on the smallestfarms.But.As the surplus-outputratio falls.The minimum farm size clearlyshould 33 . from the foregoing. 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. but the ratio of net capital formation farmas a proportion of incomewas found to be 5.5% for medium farmersand 16. again. Insofar as the productivity of small farmers was previouslyconstrainedby inadequatenutrition.it can be expected that the behavior of the savingsrate will be similar to that of the marketed surplus.In a further study in Orissa(India). As farm size increases.24% for small farmers.3% for large farmers. the savingsrate can be expected to become positive and increase along with it (althoughlarge farmerscanbe "dissavers"too. and 11.2% on the larger ones. by running down the existing soil fertility).the subsistencefarmerscan be expectedto be net "dissavers"(for instance. it is necessary to examinethe implications of a changein farm-sizestructureon the aggregate savings rate of the farm sectoras a whole.For unirrigatedvillages.the correspondingfigureswere lower -2. from the welfare point of view. Savings In consideringthe productivity effect of land reform. by using capital for consumption).5% in the smallest size group (0 to 2 acres)and 19. A recent study in the state of Haryana (India) tended to confirm this: the savingsratio was found to be -0.8.3% on the larger farms (8 acresand above). a decline in the market surplus ratio has a direct distributive dimension which should be offsetagainstthe decline. there was no direct measureof the savingsmade. the aggregate savings be precan vented from falling.

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

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

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

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

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

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

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

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

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

6 2.0 25.6 15.800 now settlers and 3.0 14.3 6.0 loan loan loan loan credit credit credit loan loan loan 1972 1967 1972 1971 1969 1969 1972 1968 1970 1973 5.500 partially established settlers are given.5 Publicland INCORA land (involved appropriation land) l Publicland Europeanownedland Publicland Publicland Publicland Publicland Source: World Bank and IDA appraisal reports. figures represent goals rather than actual state of settlement.500 partially established settlers.3 6. (3) The costtothe government is$1.770 3. research and related studies.0 5. .825 40.0 13.756 10.300(6t 1.3 4. (.8 29.1 41. (l) Except for Kenya.) Project costs.73 million used for agricultural development on the highlands.389 3.0(5) 11. )') The cost per small farmer settled is estimated to be $17.7 21.8 4. no data on the farm size of 3. The project is behind schedule.0 4.505 13.(7 6. do not necessarily reflect total economic costsof settlement.000 hectares.5 3.7 9.500 1.900 hectares. (6) Includes 2.050 5.This excludes expenditureson health. as estimated in the appraisal reports.7nn perfamily settled.6 14.800 new settler families are scheduled to be settled on some 280.0 8. (a) Although 2. education.200 2.0 43. (8) Excludes $2.Table 3 Costs of Selected Settlement Projects Assisted by the World Bank Estimated Total project Country Project Bank or IDA finance Number of families(') project costs per Average farm costs Amnunt (US$ 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. 3 Irrigation Second Atlantico Development Caqueta Land Colonization Wolamo Agricultural Project LandSettlement and Development Karonga RuralDevelopment Jengka Triangle Second Jengka Triangle Third Jengka Triangle 12.000 4.429 2.a.7 9.667 10.500 landless peasants and develop 9.1 3.327 2. whereas the cost per middle-size farmer remaining in the project area is $100.280(4) 5.9 7.000.9 6.800 6.423(3) 6.200 2. (5) The original goal was to settle 2.000 2.3(8) 6.214 1.830 2.0 4. Thesecost expenditures are being reviewed and are expected to be Considerablyhigher than originally expected.000.0 n.

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

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

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

ANNEXES .

I I I .

0 12. The ratio of cropland to agricultural population is the lowest in Asia among all the major regions.0 89 77 54 74 1. 2.456 million hectaresof cropland.Annex1 THE CONTEXT OF LAND REFORM Ratios of Population to Land The total land area of the globe is about 13.851 million.617 million in the early 1970s.the People'sRepublic Table 1:1 Regional Distribution of Land. per person. averaging0. of The relationship between population and land in all major regions and for 52 selectedcountries is shown in Annex Tables1:1 and 1:2.14 0. or 51% of the total population.987 million hectares under permanent pasturage (22.Among other things.6% in SouthAmerica.This represents averageof 3.35 hectare per person.2 100.456 10.8 31.8 4.7 3.8%).Of the arable land.defined as arableland and land under permanent crops (10. 19% in North and Central America.393million hectares. Cropland.2 100. respectively.0 15.78hectareof cropland per person in agriculture. Agricultural Population and Area per Personin Agriculture Cropland Ruralpopulation Land area DistriDistri(million (million bution bution hectares) hectares (%) (millions) (%) Agricultural population as percentage of total population Cropland area per rural person (hectares) Region Europe USSR Northand Central America SouthAmerica Asia Africa Oceania Total 493 2.01 5.Together. The world's population was estimated at approximately 3.851 4.63 3.90 11.2 2.242 1. or closeto 0. approximately32% is in Asia. 49 .041 million hectares under other uses(36.Production Yearbook 1972.6 5. More than 70% of all rural people live in Asia. 15% in Africa.0 17 32 17 39 64 67 4 51 1. the tables show that: 1. madeup of 1. 10% in Europe.8 14.0 71. and 4.Theworld's agriculturalpopulation-defined as populationdependingon agriculture for its livelihood-is estimatedat 1.02 1.40 hectareof cropland.753 3.031 851 13.4%).9 0.78 Source: FAO. On the basisof these global figures.8%).75 0. there is an average 0.783 2.which hasapproximately 32% of the world's cropland. and 3% in Oceania.9 18. 16% in the USSR.9 4.240 2.314 239 4 1.393 145 232 271 84 463 214 47 1.7 hectares an of land.35 0.

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

Country

Cropland (000hectares)

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

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

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

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

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

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

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

Annex 1

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

Latin America EastAsia MiddleEast Africa Totalall regions

1.4 1.8 1.8 2.4 1.9

1.5 2.1 1.8 2.2 2.1

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

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

52

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

LatinAmerica EastAsia MiddleEast Africa All regions

3.1 2.5 3.8 3.0 2.8

1.8 1.9 2.2 1.7 1.9

2.9 2.8 2.7 2.6 2.8

2.5 1.1 1.1 1.2 1.4

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

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

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

It showsthat: 1. the agriculturalsectorin thesetwo countriescould absorb all the labor force expectedby 1985. 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. Thiscovered83 countries.Table 1:6 combines the two sets of information to give an indication of the distribution of land and cropland by size of holding. 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. urban aswell as rural. then theseholdingsoccupy1. 2. are lessthan 5 hectaresin size. 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. 55 .Annex1 and India. resourcebase. theseholdings accountfor approximately6. are under 1 hectarein size.9 million holdings. low incomesand increasingunemployment. Ecuador.Nigeriaand Romania.8% of the total number.7% of the cropland. or 39% of the total number.includingall of the larger countries that are membersof the Bank.With very few exceptions. Suchmeasures include thoserelated to land reform. The censusprovides a breakdown of distribution by size of 138. becauseof the small size of the irrigated areas in Pakistanand India and other constraintsrelated to technology.land tenure and capital formation.except Afghanistan.4% of the cropland. evenif effective birth control could be introduced overnight. specialand possiblyextraordinarymeasures would haveto be taken to satisfy the expandingdemand for work and income from today'schildren.3 million holdings in the 83 countries.however. Thiskind of labor intensity is not likely to be reached. or 78.Bolivia. About 109 million holdings. poverty and unemploymentproblemsof the developthe ing countriesare unlikely to haveany long-term solutionsthat would not include a reduction in population growth. Basedon the sameassumptionas above. The most recent data on distribution of holdings by size is given in the worldwide censusof agriculture held in the early1960s.1% of the land areaand 3.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). Nonetheless. About 53.8% of the total land area and 20.

80 5.70 4.20 20.20 4. 34-36.and if the a distribution of 91% of the land reflectsthe pattern of distribution of all the land.90 7.48 0. account for 78. That is. These data confirm that.80 6.60 5.00 11.23 138.and more than three-quartersof all farmland.50 5.55 28.10 10.00 Source: FAO.30 12.40 5.8% of the total farmland area and 45.40 5.200 200.of 122 million holdings in the developing countries.00 3.Report the 1960 on WorldCensus Agriculture.10 100.60 8. when viewed in the aggregate.00 1.40 1.00 4.60 6.23 0.2 2.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 1.92 million were lessthan 5 hectaresin size. Thus.00 0.70 11.50 50.20 1. disthe tribution of land and cropland is highly skewed.100 100. roughly3% of all holdings(in the aggregate)account for slightly less than half of the arable land and land under permanentcrops.10 1.24 7.Conversely.97% of all holdingsaccount for lessthan onequarter of all farmland and slightly more than half of the area under crops.5 5. of pp.2% of all holdings.30 100.50 10. farms of this size group account for 66% of the total land area and nearly25% of all cropland.20 20.20 3. both developed and developing. Therewere an estimated16 million holdingsof lessthan 5 hectares in the developedworld: 6 million in Japanand 10 million in Europe.90 26.In the 64 countriessurveyed.then holdingsabove50 hectaresin size.If the distribution of holdingsby size in 83 countries represents global picture.50 51.80 9.73 13.67 0.00 11. 3.16 100.which represent 3.59 38. The information on distribution of holdingsby size refersto the 83 countries. covered by the census.40 0.000 over and Total 53. approximatelyhalf of theseholdings 56 . Rome: 1971.16 0.97 1.8% of all holdingsin the 83 countries.000 1.27 4.3% of all the cropland.70 9.90 19.40 1. One million holdingsof 200 hectares more representlessthan or 0.500 500-1.80 11.

3 8. Reporton 1960 the World Census Agricalture.Annex1 were less than 1 hectareand the remainderwere between 1 and 5 hectaresin size.0 34.The resultsare summarizedin Table 1:7.The most comprehensiveregional and national analysis the 83 countries dealswith for holdings of 1 hectareor more in size and pertains to 84.by Size and Area 1-5hectares % holdings % area 5-50hectares % holdings % area 50 hectares % holdings % area Europe North and Central America South America Asia Africa Oceania 50. The1960census data alsoprovided information on holdingsby size and land areafor different regionsand countries.4 36. 57 . Preliminaryindications are that the fragmentationof holdings hasincreasedin manyof the more densely populated countries as well as in countrieswhere the distribution of land is skewed. This conclusionis derived asfollows: The 1960censusindicated that there were approximately92 million smallholdersin developing countries.0 99. this is not a complete coverage. excluding those in Nigeria.5 1.0 0.4 78. it is highly likely that closeto 100million holdings of less than 5 hectaresexistedin 1960.5 2.2 3. the agricultural population in the developing countries increasedby a reported 190 million persons.it is safe to assumethat the census forthcoming in the 1970swill reveal that there are well in excess of 100 million smailholdersin the developingworld. it does provide an insight into the patternsof distribution of holdings within the major regions.4 39.0 23.1 90. Together. or 10 million families. Ecuador and Bolivia.2 73.4 37.5 90.4 45.these countries had an agricultural population estimatedto be close to 50 million people. It is safeto conclude that well in excess 100million holdingsare of less than 5 hectaresin size in the developing world at the present time.0 8.or by more than an estimated 35 million farm families.6 23.5 21.7 3.3 0.since it excludes holdings of less than 1 hectare.8 0.5 Source: FAO. Table 1:7 Distributionof HoldingsaboveOne Hectare. more than half of their holdingsare lessthan 1 hectarein size. Obviously.7 91. in all probability.4 million holdingscovering2.2 17. However.1 66. Consequently.7 27. of Rome: 1971.5 50. Between1960 and 1970.0 40.Thus. Afghanistan.242million hectares.2 5.at the time of the census.5 13.7 - 47.5 9.2 6.7 52. most of whom were farming on units of less than 5 hectaresin size.

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 40.2 92.3 36.6 6.6 20.3 40.0 22.1 4.2 42.5%. Report the 1960 or WorldCensus Agriculture.4 12.Annex 1 The analysisindicates the vast differences in patterns of landholding and land distribution between Asia and the other regions.1 1.7 36.7% in Europe. in Selected South American Countries %holdings Argentina Brazil Chile Colombia Paraguay Peru Uruguay Venezuela 14. The information confirmsthat a very high proportion of all land-ranging from 86% to 97.0 Source:FAO.is in farmsof more than 50 hectaresin size.As much as 34. At the other end of the spectrum.7 50.6 51.2 0.8 14.4% of holdings in South America and 23.then the land held by smallholdersowning under 5 hectaresis much more than 50% of all land.8 5. misleading.5 86.5 3. respectively.1 1.while the sampling in Zambia was confined to Europeanholdingsand in Tanzania commercialholdto ings.7 4. 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.1 37.5%in the eight countries is in holdingsof more than 50 hectaresin size. South America and Oceania.3 38.1 6.9 49.3 87.2 94. The 36.8 97.1 20.5 73.7% of the land. as shown in Table 1:8. Only 9% of the area in Asia is in holdings of more than 50 hectares. The analysisof the distribution of holdings by size on a regional basispoints to the highly skewed distribution in the Americas.3 32. of Rome: 1971. are This The data for Africa.9 2. If these are excluded from the sample.8 95.2 10.7 46.1 85.1 6.0 0.2 1.8 92. by Size and Area.3 1-5hectares % area 5-50hectares % holdings % area 50 hectares % holdings % area 0. helps explainthis. is becausecoverageof that continent in the 1960 censuswas poor. and more than 90% in North and Central America. the pattern of holdings in the eight major countries in LatinAmerica.0 4. as presentedin the census.6 8. 58 .5 52.of the area under farms.0 9. only 5% of the land in the eight Table 1:8 Distribution of Holdings above One Hectare.4% in North and Central America that are less than 5 hectaresin size occupy only 1% and 0.9 28.3 43.6 30.

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

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

4 70. Source: FAO.5 28.3 61. Frequently.a.81).6 n.2(5) 1.334 25. 25. (4) (5) Includes both Pakistan and Bangladesh.3 35.0 45. pp.664 62. 61 .3 70.271 1.6 24.2 43.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.4 26.7 23.Vol. 32. therefore.1 49.3 33. 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.253 76 2.2 73.the tenantsare among the lowest income groups in agriculture.8 19.4 32.5 n.9 15.349 128 381 129 93 27 18 776 Data refer to latest available year in 1960s and.5 31.Report the 1968 oe WorldCensus ofAgricolture. Dominican Republic.176 1.3 49. Republic of Total Middle EastandNorthAfrica Egypt Iran Tunisia Total Latin America Caribbean and Chile Colombia Dominican Republic Guatemala Nicaragua Trinidad Tobago and Total (a) 27.392 141 5.0 n. (a) Includes holdings operated under more than one tenure form (21. do not reflect land reform action on the one hand and changes in the work force on the other.3 31.4 13.0 40.a. due to lack of data.7(5) 13.020 1.4 54.1 66. chased inputs.Rome: 1971.9 22.7 57.5.India and Pakistan. Tenantsand sharecroppers under conditions of great insecurity and are in a weak bargaining position vis-a-visthe landlord.350 4. India and Nicaragua are excluded. (1) 1960 estimates are for former Federation of Malaya. 92-97.9 31.a.4 57. 16. Another widespreadcharacteristicis the absenceof written registeredagreementsgoverning the conditions of tenancy and the rights of tenants (eventhough there may be lawsstipulating typically operate what these should be).0 62.

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. 62 . 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) 47.099 1.. 14.499 101 557 99 287 9. 44-301.300 5. 1972. Unless otherwise indicated.237 378 1.865 903 484 210 4.986 1. and Except for India. 1971).561 694 3. thus. data presented here are estimatedfrom [LO. (2)Agricultural laborers as shown in India: Ministry of Agriculture. p. data refer to latest year available in 1960s and. Directorate of Economics and Statistics.Annex1 LandlessWorkers The number of landless-farmworkers in developing countries is increasing.43-294.158 122 179 391 138 72 2. on the other.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. do not reflect recent reform actions on the one hand and changes in the work force. YearBookof Labour Statistics 1871.673 8.013 60. Agricurltureinn Brief (I Ith ed. pp. indian (3) Includes population now belonging to Bangladesh.

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

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

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

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

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

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

Distribution so far hasbeen limited to land underfield crops. Land distribution is so far basedmainly on former foreign-owned land.000hectaresof "official colonization" landswere takenover by the Government between 1963 and 1965.when legislation was introduced subjecting such transfersto Government approval.while land under tree crops (mainly orangegroves)remainedunder Government control and ownership. the beneficiariesof land reform have generally quickly achieved high yields and acceptable incomes.000hectaresof land under field crops. 181.althoughsomeother state-ownedland and traditional collective land is involved.amountingto about 370.000families.and the adoption of modern cultivation techniques.000 hectareswere foreign-owned.about 900. published in 1969. and a further 220. between 1974 and 1977. Thirty-one thousand hectareswhich were mainly used by foreignersfor researchpurposes were recoveredby 1960. The target for the third Five-Year Planis to distribute 395. and to seeka suitable formula for distributing land under tree crops.Land consolidation hasalso been successful and hasso far benefited almost 200.was recovered by the Government in 1973. The main constrainton the program hasbeen the unavoidablecomplexity of supervisingits implementation consideringthe Government'smanpower resources. The Government'smain priority now is to accelerateland distribution. The Agricultural Investment Code. an improvement in the tenure position of membersof traditional collectives.000hectares were sold privatelyto Moroccans. mainly formerly foreign-owned.intensified extension supportand the provision of modern inputs. However. By the end of 1972. It providesfor the restrictionof inheritance rights to limit fragmentation. At the time of independencein 1956.Annex2 and to improve the distribution of rural incomes. the number of beneficiariesso far is only about 1% of farm families with lessthan 2 hectares. the impact of land distribution alone on the problem of rural poverty hasbeen small. Distribution to smallholdersand landlessfamilies was slow until 1967 and then gatheredmomentum up to 1972. Through the establishmentof cooperatives. while maintaining high technical standardsof managementon the distributed land.000hectares.The achievementof the distribution target for land 69 . Remaining foreign-ownedland.mainly before 1963.Legislationpassed in 1962. about 300. of this area.000hectares. is aimed at facilitating the developmentof irrigated agriculturein welldefined developmentzones.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.

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

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

Despite the priority given by the government.TheSAISrepresents attemptto an 72 . Following the land redistribution during the 1930s.Since then. In 1967-68.The more fundamental reform law of 1969was the basisfor the expropriation of the large.The target for the current Five-Year Planis to expropriate26. income was more evenly distributed.the concentration of landownershipincreasedagainbetween1940and 1960.A of limit was establishedon the size of holcdings (150 hectareson the coast).More such investment and a mechanism for selectiveconsolidation of small farms will be required to ensure that the impact of the reform is maximized. to which the land title is then transferred.the top 20% of the ejidatarios accountedfor only 45% of all ejido income. used for investmentin industry to supplementtheir other resources. The government bonds given to the former owners can be. The agrarianreform law of 1964concentratedon redistribution of inefficiently managedlatifundia (large landed estates)in the Sierra.Only a small number of individual farms has been assigned former tenants. the concentration may have fallen back as a result of the distribution of another 35 million hectares during the last decade.while in a few casesland hasbeen to added to the holdings of Indian communities.Over 100.Annex 2 resourceendowment and in the extent of public investmentin complementary infrastructure.about three-quartersof the target area still remainedto be expropriatedand reallocatedbefore the end of 1975.and is the basicunit of agriculturalreform in the Sierra.50% of the farmers earnedonly 20% of all farm income (including personalincome from sourcesother than agriculture). Expropriatedlands that havenot yet been resettledcontinue to be operatedunder direct governmentsupervisionuntil a cooperativeor SAIS(Sociedad Agricola de InteresSocial) farm organizationhasbeen formed. Four different categoriesof farm organizationscan receive redistributed land.Among ejidatarios.000families.7 million hectareshas been expropriated. In 1972. Peru Betweenthe start of land reform in 1963 and 1972.however.200farm units containing 12 million hectares. Well managedproductive units were exempted. Rural income distribution is still skewed. While the top 20% of private farmersreceived60% of all privatefarm income.8 million hectaresof this area. but the bulk hasbeen placed in the handsof workerowned cooperatives. TheSAISisa unique form of farm organization. and to redistribute theseto 500.implementation is well behind schedule.productiveand profitable sugarcomplexes the north coast.000families have been settled on 2. a total of 4.

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

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