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Sector Policy Paper
Page Introduction .......................................... Summary .......................................... Chapter 1: Characteristicsof Land Reform ............................. Man and Land........................................... Context of Land Reform .......................................... Dimensionsof Land Reform....................................... Chapter 2: Land Reform and EconomicDevelopment ...... ............. Implications for Productivity....................................... Land Reform and Employment ........... ......................... Land Reform and Equity ......................................... Effects on Marketed Surplusand Savings.......... .................. Tenancy Reform ...................... .................... Implementation Issues .......................................... Chapter 3: The World Bank and Land Reform .......................... Changing Concerns.......................................... Technical Assistance...................... .................... LendingOperations.... ...................................... Major Policy Options.......................................... Annexes 1. The Context of Land Reform .................................... Ratios of Population to Land .................................. Population and Production.................................... Distribution of Land........................................ Tenantsand FarmLaborers .................................... Landless Workers .......................................... 2. Experiences with Land Reform ................ .................. Republic of China.......................................... Republicof Korea .......................................... Japan ........ . India...... Iran...... Morocco ........ Yugoslavia ...... Kenya ...... Mexico...... Peru...... 3 5 15 15 16 20 25 27 29 30 31 34 35 38 38 38 40 46
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the livelihood of more than half of mankind dependsdirectly on agriculture. Land is one of the basicfactors of production for food and other agricultural products.Somecountries haveprospectsfor expandingthe frontier of cultivation to absorbmore labor.more labor could be employed in the rural sector through a redistribution of land. while pressureon the land is increasing.As shown in Chapter1.but rightsof access landare restricted.although to someextent it is the poorer land that makesup the larger holdings. the population is moreevenlyspread. Much of this increase will haveto come from higher output per hectare.000million people.maldistribution is reflected in the landlord-tenantproblem.Where the pattern of land control is skewed.The greatestdisparitiesarefound in LatinAmerica. In Asia and the Middle East. Ninetenths of this total agriculturalpopulation is in the developingcountries. nonagriculturalemploymentopportunities are not expandingrapidly enough to provide adequateincomesfor all those enteringthe labor market. therefore. at least six land-tenuresituations can be delineated.Much to of Africa presentsa different problem.But one characteristicthat is common to all is a very rapid growth in rural population. while in yet others changingthe rights to land will makelittle direct contribution toward absorbingmore labor. At present. as the traditional pattern of group ownershipand communalrightsiseroded in favorof individual ownershipwith varyingdegrees equality.one is confrontedwith a rangeof cultural and political situations-based on different patterns of social organization and customs-and with different levels of development. Thus.The differencesamong thesetypes point to the varying reforms necessary achievemore equitable land access to 3 .INTRODUCTION Land reform is concernedwith changingthe institutional structure governingman'srelationshipwith the land.Changingthe pattern of landownershipand redistributing land can contribute to increases output in somecountries but will makelittle difference in in others.At the sametime. where questionsof access and rights to land are of paramount interestto morethan 2. Conditions governing agriculture vary enormously in developing countries.With food production rising in the developing countries at about the same rate as population.the averageman-land ratio is worsening. Distribution of landin terms of sizeof holdingsvariesfrom country to country. the distribution of income is generally uneven. of In terms of land reform policy. there is growing to pressureon land resources increaseoutput. In other countries.
this paper focuseson a much narrower aspect-the appropriate role of the World Bank. while it is possibleto identify the need for land reform.therefore. Chapter 1 looks at the characteristics land reform in terms of both its rural context and of its component elements. at 'All references to the World Bank in this paper are to be deemed to refer also to the International Development Association.Accordingly.one is dealing with a dynamicsituation. unless the context requires otherwise. 4 .Chapter2 examinesthe economic implications of land reform in relation to the goalsof development.where rural population growth and changing technology interact with the existing institutional structures of rural society.and improvedproductivity in specificcountrysituations. Not surprisingly.Chapter 3 reviewsthe Bank'spolicy in relation to land reform. A situation that hasseemedrelatively stable and equitable for decadescan become untenable. ranging from communes to private ownership. The policy guidelines are presented the end of the Summary. The fiscal year (FY)of the two institutions runs from July 1 to June 30. it is difficult to makegeneralprescriptionswith regardto the form of landholding or pattern of distribution necessary achievethe multipurpose obto jectivesof development. many developing countries are experimenting with a variety of possible solutions-with different forms of rural organizations.Thequantitative backgroundto land reform in terms of population patternsand land distribution is outlined in Annex1.This dynamismmeansthat a solution which was appropriateten yearsago maybe inappropriate today.' In pursuing this question. While recognizingthe broad context of the land reform issue. Further. The manifestationsof this interaction are seldom benign for the majority of the land-based population. while someexperiences with land reform programsare summarizedin Annex 2.
when there are exploitative landlord-tenantsystemsof the Asian or Latin American feudal type. land reform might involve changing 5 .SUMMARY Landreform involvesintervention in the prevailing pattern of landownership. improve land productivity and broaden the distribution of benefits. or the replacement of the landlord by the tribe or the community. although in manycountries examplescan be found of more than one type. Land reform necessarilyimplies many different kinds of adjustments in an array of situations where there are great variations in individual equity and agricultural productivity. by its very context.Thus. reform in states with extensivegovernmentcontrol may involve the transferof some l landfrom the stateto individuals. Where communal lands are eroded or depleted. the appropriate reform might involve a program of supervisedcooperative land managementwithout changing the distribution of land. When individual ownershipof the market economytype isthe norm but the ' distribution of land is skewed. Elsewhere. In most instances.an approresources priate reform might involveconsolidationof holdingswithout change in the patterns of ownership of land. redistribution of ownership to existing tenants. Other variationsof land reform focusmore on the economicuseof than on equity. Three of the six types are found in a traditional context: the feudalisticlandlord and tenant system of some Asian countries. social or equity considerationsare the main concerns. egalitarianism Land reform. control and usagein order to change the structure of holdings.as presentedin Chapter1. Where holdingsarefragmented. which is often interspersed with otherforms of tenure.the stateor collectiveownership of socialist countries. the feudal Latin American systemof large farms. and the plantation or ranch type. In practice. land reform is pursuedin response political to for pressures socioeconomicchangearising from factors such as increasedpopulation. reform incorporates changesin the rights of tenants. economic and social dimensionswhich in turn havesignificantimplications for development. The other three major types have a modern context: the private ownership of land common in most marketeconomies. of The systems land control in developing countriescan be classified into six types. pressure a limited land baseor an ideologyof on basedon more even distribution of land or income. In contrast. has interlinked political. and the communal landownershippatternsof manytribal groups (especiallyin Africa). reform may require subdivision of large holdings or transfer to the state.
The casestudiesin Annex 2 showthat reform-minded governments.tenancyarrangements with emphasison providing securityof tenure so as to encourageon-farm investment. the organization of the supply of inputs to accompanyany land reform program is essential. thesedo not require redistribution but eventually lead to a more economic use of resources. as stressedin Chapter 2. Distribution of Landand Income Although few data are available. Table 1:6. Any policy involves fundamentaljudgmentsabout the adequacyof an existingsystemand the most appropriate alternative. Finally. while land reform in itself may be necessary. However. Theyalso reflect politics and ideology. have high degreesof property concentration.especiallywhere the processof reform leadsto a breakdownof the institutional structure of agricultureand leaves nothing in its place.Again.The judgments of policy makers differ.The market economy type falls somewhere in between.the degreeof concentrationvaryingwith the typesof tenuresituation. Individual countries are classifiedon the basisof landownership concentrationin Annex 1. Clearly.Table 1:9. These will come about only if adequateprovision is madefor the supplyof necessary inputs and mandatory servicesto the usersof the land. As shown in Annex 1. TheAsian and LatinAmericanfeudal types. The socialist and traditional communal types have low concentrations. Indeed.the distribution of landownership is known to be skewed. Somegovernmentsfavor individual ownership of land.havepursueddifferent approaches. alone is not sufficient it for improving land productivity and distribution of income. Thedistribution of landby size of holding ishighly skewedthroughout the world. Considered 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. others favor communal or collective control over land. and only 7% of all land in holdings. it must be recognizedthat a policy for land reform for a given situation cannot be statedin simple terms. and the plantation ranch types. the policies followed are not a matter of economicsalone.Theseholdings account for approximately20% of all cultivated land. and reach far beyond any purely economic calculus. an estimated80% of all holdings are lessthan five hectaresin size.suchas in Kenyaand Peru. with about 40% less than one hectare. Changes in patternsof landownership not automaticallyleadto an increase will in output or technological change in agriculture.
so that absorption of more people into agricultural activity requires more intensive cultivation of land already in use.Frequently. Exceptin a few places. firstly. however. in most cases. But.the distribution of income will be more skewedthan the pattern of holdings. In many. The need to absorb more people in the rural areas differs among developing countries.as evidencedby widespreadtenancy. massiverural underemploymentis accompaniedby high ratesof open unemploymentin the cities and growing inequality in the overall distribution of income. there is a greaterconcentrationof landownershipthan of holdings.the distribution of holdings by size is not the sameas the distribution of ownershipof land. Table 1:8). 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.separately. a concentration of large holdings in a semiarid region may reflect a smaller concentrationof wealth than a concentrationof small holdings in an irrigated area. does not reflect precisely the patterns of distribution of wealth or income.and the increasing pressureon the land through population growth highlight the double challengeof rural development:to raiseproductivity and in7 . adding to the already heavypopulation pressureon the land.The distribution of income in theseregionswill depend betweenowners and tenants largely on the contractualarrangements or sharecroppers. by contrast.there is no virgin cultivable land left. The extremepoverty of manywho live on the land.the pattern in Latin America is particularly skewed.all landis not homogeneous. In Asia.the income of sharecroppers and tenants may be little different from that of landlesslabor. in general.40% of the land (accounting for almost 80% of holdings) is in holdings of lessthan five hectares. Social and Economic Issues The rural population in developingcountriescontinuesto increase by more than 2% per year.The skewness the distribution of holdings.and more than one-third of all holdings (those less than five hectares)account for only 1% of the area held (seeAnnex 1. Secondly.Less than 20% of holdings(thoseover 50 hectares) account for over 90% of the total area in holdings.especiallyin partsof Asia (see Annex1).Thisis because. The distribution of holdings by size is frequently usedas a first approximation in estimatingthe distribution of wealth and income in of the agricultural sector.
increasesin the population of working age create additional demands for work and income. this may necessitate food imports to meet the needsof urban consumers. per unit of output. various reasons. marketable. becausehalf the benefits will go to the other party.or are by leaving it unused. Theseeffectson output maybe reinforcedby someof the possible side effects following land reform.landownersoften prefer to underutilize land.In general terms. These same circumstances(relating to employment and income distribution) give rise to questionsabout the efficiency of land use For under existing arrangements. the additional labor available. Smallholderstend to consume more of their own produce and.and the conditions that governaccess. mere redistribution of land may not sufficeto raisefarmeroutput substantially without accompanying agrarianreformsand new services. however. than do large farmers. at the sametime. either by working it themselveson an extensivebasisinstead of through tenantson an intensive basis. The main reason is that smaller holdings are worked with bigger inputs of labor than arelargeholdings. Access land. often depend on the effectiveness new technology when usedon of small as comparedwith large farms. quesWhere land is tions of major importance in these circumstances. irrigation and mechanizedoperations(evenon a small scale). 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.come in agriculture and. market less.The economicbenefits. increasingpopulation pressurewill inevitably drive up the price of land.In other cases. Where landownership is skewed. In some situations. therefore.however. A strong casecan be madefor land reform (including tenancyreform and consolidation)in situationswhere landwould otherwisebe underutilized in termsof its production potential. the additional food consumedby small farm families might have otherwise been purchasedif membersof the family had moved to the city. the fragmentation of holdings causes great inefficienciesin land useassociated with transportation. The consumption of food by poor growers may also be lesscostly than the consumption of imported or capital-intensiveconsumer goods by the better-off farmers. At the same time.Smallfarmersmayalsosavelessper unit of 8 . thus benefiting those who own land. if used productively.On the other hand. could serve to augmentoutput.tenancyarrangements such and tenants that landlords are discouragedfrom making investments from applying variable inputs. this will tend to exacerbate inequalities in income distribution. to provide more employare to ment.
Few land reform programs provide for sucha minimum limit despiteevidence.and that thesedebatesare often couched in terms of redistributing political power as well as wealth. A program basedon the prescriptionthat "the benefits should go to those who till the soil" is often reasonable an agrariansociety. Recent Experience with Land Reform Experience with land reform in the past points to the overriding importanceof the political factor in securingmeaningfulchange.though these maybe directly investedin the smallholding.that land reform is often a central issuein political debates.The concentrationof control over land provides a power basefor many groups in developing countries. A second factor of importance in making reform effective is the creation of institutionsto implementthe reformsonce legislated.therefore. that allowing farmsto becometoo small (relativeto the bestavailable technology) may be just as unsatisfactoryin terms of equity and efficiencyasan uncontrolledtenancysituation.and 9 . firstly.It is not surprising.Japan. and.Land is a symbol of authority and a source of political power. Thesesizesmight be designed. A meanof to ingful land reform programwill inevitably destroyor limit the power baseof manypersons. especiallywhere the landowner controls the access peasants their only sourceof security-land. that Kenyaand Mexico.however. thosewho do not work on the land still require and should havesomerights of access the products of to the land. secondly. And in these casesthe reforms were implemented only when there was a change in government in circumstances favoreddrasticchange. to ensurethat smallholdingsare large enoughto provide food sufficient to meetwith a highdegreeof certaintythe minimum physiological needs of the farm family. especiallyfor fresh produce.income. The food and fiber needs(and the spatial requirements)of the nonfarm population are not infrequentlyoverlookedby the advocatesof land reform. and that in the aggregate they may also have larger savingsthan large farmers. In this respect. that small farmers save proportionately more than urban dwellers. to ensure a scale large enoughto provide a salablesurplus to meet the needsof urban consumers.attention should be paid to both a minimum and maximum farm size. Many countries have legislated land reform.from manyareas. but only a few can be said to have implemented it. The evidence suggests. in But in a partly urbanizedsetting. Ambitious programs of land reform will seldom be implementedunlessthere are shiftsin political sentimentand power.asin the Republicof China.
incorporating as much forward planning asfeasible. and manysocioeconomic benefits. for since thesesystemsare almost alwaystied to the operations of the larger farmers who are dispossessed. This has usually involved organizingthe beneficiariesto create follow-up pressure. although there is evidence to suggestthat these costscan be kept small and temporary. emerge only in the longer run and accrue for many years subsequently. there is little doubt that the long-run effects for their total societies have been overwhelmingly favorable. The restructuring of landholdings is often accompanied by the destruction of traditional deliverysystems input needsand marketing.with emphasison securityof tenure beinga particularly important theme. More recently. The land reform experiencein much of Asia and LatinAmerica suggests someform of rural organization.Concern hasusually been focused on new or improved possibilities for production following changes in the tenure situation. land reform hasoften proved costly in terms of lost output. contributing substantially the ultimate economicdevelopmentof both to countries. such as are associated with greatersocial mobility and improved political stability.The casesof Japanand Mexico are particularly significant in this respect. Becauseof this. - The World Bankand Land Reform The World Bank has taken an active interest in land reform on a number of occasions. Minimizing such costs necessitates provision of servicesconcurthe rently with reform implementation. that especially involving local representation. rather than because any deficiency inherent in the small relative to the larger of farmers.For example. in assessing effects of land reform.In other countries. While the direct short-run effects of the land reforms in these countries havenot been considered wholly beneficial. A third conclusionis that land reform is rarely undertakenwithout considerableupheavaland lossof production.combinedwith an absence organizedpressure of from the beneficiaries. A fourth considerationrelatesto the problem of perspective. largely nullified positive reform efforts. As the country experithe encessummarizedin Annex2 reveal. Taiwan and Venezuelasuitableinstitutionswere established to ensurethat land was indeed transferred.to pressfor continuing development.over time. may be a critical condition forsuccessfullandreform.a community of interestsbetween landownersand officials. in Japan.the effectiveness land reform of may be relatively limited in the short run. the extent and gravity of the 10 .
specially structured settlementschemescan serveas second-bestsubstitutesfor. A commitment to land reform implies simultaneousaction to create or develop an input supply systemto meet the special needs of the beneficiariesof land reform.are not attractivefor externalfinancing.Thesesameconclusions reflectedin are the subsequent Bankpolicy guidelines. and (iii) consolidation. the amounts involved are usually small. 2.where necessary. inputs and technical services.However. it can only support appropriate efforts within existing structures. (ii) tenancy reform. Although the Bank's direct action must be limited.or specialbranches fund allocationswithin or existing organizations supply credit. this may be because relatively few casesof land reform. improving income distribution and expanding employment. the redistribution of land currently in use.Someexamplesof World Bankinvolvementin land reform programs. and 3. In part. Even where the land transferred is purchased from the previous owners. In general. and that the World Bankshould support reforms that are consistentwith these goals. In addition. or supplements to. The Bank'sexperiencethrough project financing of land reform there have been hasbeen very limited. from an equity aswell asa productivity standpoint. But also relevant is the fact that the financial requirementsof land reform tend to be relatively limited. this report concludes that land reform is consistentwith the developmentobjectivesof increasing output. especially where paymentsare in the form of bonds. Governmentswhich accept a basiccommitment to land reform should consider three components: (i) redistribution of landownership to reduce the presentmaldistribution. particularly in areaswhere the political situation was reasonablystable and otherwise conducive to World Bank involvement. This may require either the creation of new institutions. such paymentsusuforeign ownersare involved) ally constitutean internal transfer(unless and.notably in Malawi and Tunisia. it is recognizedthat the Bankcannot force structural change. thus. its preferencesregarding national policy choices and those which are consideredconsistentwith the Bank'sdevelopmentgoalsare set out below as country guidelines.are discussedin Chapter 3. In sparselypopulated regionsor countries. 11 .employment problems and income disparities in developing countries have causeda new concern over land reform. Guidelines Country 5 1. to including research extension.
Wherever settlement policy is used to supplement land should be plannedto haveapproximately reform. (ii) the beneficiaries belong to the poorest group. In such cases. as well as leasedland. 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. 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. and (iii) tenancyis discouraged.and (iv) owned and selfoperated land. is an indispensable success. Research should be organized to evolve a low-cost settlement policy. These effects can accrue if (i) the settlersare the really poor small farmers or landless workersand an input supplysystemis availableto support their operations. 8. these need not be broken up. 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. 7.With a seed-water-fertilizer availablethat is neutral to scale. 6. Experiencein EastAsian and some Latin American countries clearly showsthat the organizationof beneficiaries.settlementschemes the same effects as the redistribution of existing holdings. and allowed only under specified typesof contracts. Where efficient large-scaleplantations or ranchesexist. 9.sucha structurecanproduceat least as muchper unit of landasa largefarm structure. (iii) the extensionand (nonland) input distribution systemfavorsthe beneficiaries. researchactivitiesand field demonstrationsin suchcircumstances. 12 . is redistributed. 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. (ii) the size distribution of the new holdingsis equitable. 5. Equity-oriented land reform should be so programmed that (i) the effectiveceiling on size of holdingsis low. Where the shortageof land is so acute that even with a low ceiling both smallholders and landless workers cannot be given minimum holdings. and a rural works program should be organized for the landless.both before and condition for its after the enactmentof reform.4. 11. preference should be given to smallholdersin the allotment of land.There may also be a need for special training facilities. 10.
3. But where crop sharing cannot be eliminated becauseit provides risk insuranceto sharecroppers. TheBankwill cooperatewith the FoodandAgriculture Organization of the United Nations (FAQ). 13 . When the land-labor ratio becomesfavorable. 12. The Bankwill makeit known that it standsreadyto finance special projects and programsthat may be a necessary concomitant of land reform.fixed cash-rent contractsaresuperiorto crop-sharingcontractsbecause they encourage the use of inputs to the optimal level. so long as the reforms and related programsare consistent with the objectivesstatedin the previous paragraph. preferably against very low compensationpayments. through its agricultural and rural development projects.Suchcontractsshould be promoted with a system of incentivesand deterrents.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. 4.tenancy might be a more efficient policy. technicalservices infrastructureprojand ects designedto meet the specialneedsof land reform beneficiaries. The World Bankwill give priority in agriculturallendingto those member countries that pursue broad-basedagricultural strategies directedtoward the promotion of adequatenew employmentopportunities. in general. the conversion of tenants into owners of the land they cultivate. with special attention to the needsof the poorest groups.This support will include financial and technical aid with cadastralsurveys. Guidelines World Bank'sPolicy 1. owner-operatedfarming is likely to be more efficient and equitablethan tenantfarming. The Bankwill continue to explore. should be undertakenbecause. Generally. 2. The Bank will support policies of land reform designed to further theseobjectives. ways of providing for a distribution of benefitsconsistentwith the goalsoutlined under (1) above.including appropriate tenurial arrangements projects designedto servethe and needsof smallfarmersand settlers.registration of land titles and similarservices. Theseprogramswould include credit.it canbe mademore efficient andequitable if it is combined with cost sharing.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.
the Bankwill not support to projectswhich do not include land reform. 14 .in such cases.The Bank will undertake studies of the costs and benefits of settlement projects. the Bankwill encouragesubdivision.if sedentary forms of agriculture are possible. The Bank will support and encourageresearchrelated to the economicsof land reform in its broadestaspects. 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.or pursue land usageand access arrangements that are compatiblewith the long-run productivity of the land and the welfare of the residentpopulation.5. In circumstances be achievedonly subsequent land reform. It will continue its support for programsof economic directed toward the specialneedsof the type and technical research from landreforms.it will carefully consider whether the fiscal arrangements appropriate to ensure are that a reasonable share of the benefits accruesto the government. of small farmerlikely to emerge 7. 8. 6. 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.as reflected in the pattern of landownership. 10.the Bankwill foster the adoption of tenancy conditions and sharecroppingarrangementsthat are equitable and conducive to the optimal use of resou rces. where increasedproductivity can effectively 9. 12.in order to avoid adjustments which will increasethe maldistributionof income and cause economichardship.including its social dimensions. with particular attention to developing approaches which will lowerthe cost per family settled. Where land is held under someform of tenancy. The Bankwill pay particular attention to the consequences of the interaction of new technology and the prevailing institutional structures. Where land is communally held without regulation of access. 11.
Where land is inherited by the oldest heir and not subdivided. whereasthe more tropical and arid areasare better suited to shifting cultivation or livestock herding.While this right might be of constrainedin the public interest. cultural. many socioeconomic factorsaffectcustomsof usufruct. individuals do not have the opportunity to acquire and accumulateland.As a result.land is often seenmerelyasone factor of production in a highly developed commercial agriculture. The level of economicdevelopmentof a country hasa strong influenceon attitudestoward land.Somegovernmentshaveused control over land to implementpoliciesof geographical separationof racialgroups. However. in less developed countries with large rural populations. economic. the right to own land may be vested solely in the stateor in semipublicinstitutions.limited alternativeopportunitiesand increas15 . for instance. haschangedrights to land and the organizationof work severaltimes over the past 25 yearsas part of a drive to eliminate rural inequality. religious and political. In addition. Similarly.on the other hand.are shapedby the interaction of a complex of forces-climatic. the smaller the proportion of the population in agriculture and the less significantthe role of land in the economy. the patternof holdings is lessfragmentedthan in societieswhere the customis to divide holdings equally among all heirs.traditions of crop sharingand other arrangements surroundingland usein varying situations. and patternsof landholding and land use. sell and accumulate privateproperty-including land-is one of the cornerstones the market economy. land can in generalbe exploited. and it is the statewhich organizes and controls the land accordingto its own criteria. physical conditions in the temperate areasare suited to sedentaryagriculture. To the extent that the statecontrols the land.The more industrializeda country. The People'sRepublicof China. The political ideologiesof governments also havea bearingon the relationshipbetween people and the land.The right of the individual to own. different systems land managementand patternsof holdingshave of emerged in adjacent zones. Under some other ideologies.the allocativeprocess mayserveany number of ideological ends. In EasternAfrica. laws and customsgoverning inheritancehavean effect on the distribution of land.In countries with mobile populations which have ample opportunities for employment.Chapter 1: CHARACTERISTICS OF LAND REFORM Manand Land Man's relationship to land. held and traded by individuals for private gain.
it is possibleto delineate six main categoriesof land tenure and land use. Landvery scarce. (4) the legal system. High labor intensity. Great economicinequality. Great socialinequality. Greateconomicinequality. (2)the structure of the economy. 16 . producerssee landas more than a factor of production. it may well provide the margin between destitution and subsistence.When these interacting elements are taken into account. Low capital intensity. and (7) the national resourcebase. while individual status within these groupsdependson the amountand quality of land commanded. FeudalAsian Type High property concentration.The institutional structures which formalize the various meansof control and the relationshipbetweencategories land users. The established pattern of landownershipis basicto both the social organization and institutional structures in rural areas.alsodetermine of the accessibilityof external institutions and servicesto the various groups. Productionmainlyfor subsistence. (6) the agricultural system. Contextof LandReform The many complex factors that influence the patterns of landownership and land use in different regions of the world may be summarizedas: (1)the political systemand situation. Low labor productivity. The social hierarchy in most agrariansocietiesreflectsthe kinds of access that different groups have to land.(5) the demographic situation. Mainly operatedby sharecroppers. Low land productivity. access land may provide at leasta subto sistenceincome. (3) the social system. 2. FeudalLatinAmericanType High property concentration. In thesecircumstances.ing pressureon the land. Institutional structurecentralized. Low level of technology. Greatsocial inequality.These are characterizedas follows: 1.
Centralizedor decentralizedcultivation. Decentralizedcultivation. Labor-extensive. Productionfor subsistence. Capital-intensive. Operatedby owner or manager plus hired labor. 5. Low level of technology.medium or highsocioeconomicequality. Market Economy Type Medium property concentration. Supportingservicestructureunderdeveloped. 17 . Medium labor intensity. Socialist Type Propertyright vestedin the stateor a group. Institutionsand services dispersed. Market production oriented.medium or highland productivity. Moderateor high socioeconomic equality. Low labor productivity. Low capitalintensity. High level of technology. Labor-extensive.Low land productivity. Medium socioeconomicinequality. Productionfor subsistence export. Low. Capital-extensive. Traditional Communal Type Low property concentration-sovereign rightsvested in community. 3. and Institutionalstructurehighly centralized. serfs or sharecroppers. Labor provided by squatters. neighboring smallholdersand migrantworkers. Low land productivity. Low. Low. mediumor high labor productivity. High landproductivity. Low levelof technology. Decentralizedcultivation-usufruct rights for membersof group. High labor productivity. 4. Low labor productivity. Medium level of technology.
The landlord elite.by contrast. unlessthere are offsetting changesin technology. Low or mediumlabor productivity. Table1:11).The ownership of property is of generally highly concentrated. becomeeducatedand innovate both through experimentation 18 . However. High landproductivity. Plantation Ranch Type High property concentration-owned by state or foreigners.the distribution of income is also highly skewed (see Annex 1. Supportingsystems centralized. Great income inequality.on the one hand. to Whereasin the feudalistic systemthe distribution of landownership and benefits are highly skewed and classdifferentiation is marked. Medium or high level of technology. Tables1:6 and 1:8). overgrazing and increasederosion. Productionmainlyfor export. can. and often does. Both systems are relatively stable under favorable conditions. accompanied by extensive poverty and vulnerability to seasonal effects. In a traditional context. Great socialinequality. but face difficulties as the man-land ratio declines through population growth. land pressuresare reflected in a growing army of landless people and widening income differentials (see Annex 1. 6. In the landlord-tenant system.Productionfor marketor subsistence. In the landlord-tenant system. by the feudalistic landlord-tenant systemfound in someAsianand LatinAmericancountriesand. more so than the pattern of landholdings. Operatedby manager pluswage labor. extremes in the pattern of land control are exemplified. In the communalsystem. land is common property and access it is relatively unrestricted. landownership is vested in an elite minority with the majority having access through tenancyarrangements various kinds. since holdings (the only category for which the Bank has data) involve leaseholdunits for which rent is paid on a share basis. the communalsystemhas relativelyegalitarianland access and class differentiation is lessmarked. by virtue of its privileged position and power. by the communal landownership pattern of certain tribal groups in Africa. on the other.The communalsystemmanifeststhe samepressuresby compressedfallow periods and declining soil fertility. The two systemsdiffer in their ability to respond to changing external conditions and especiallyto new technology.
Although similar in legal and institutional respects. It hasbeen most unsatisfactory where ownership patternshave become skewedbecauseof the growth of large farms. In a modern context. little or no provision is made for individuals to acquire or accumulateland. land is held by individuals and. and the subsequent emergenceof economic 19 . specialcategory a of the market economy type. the extremesin patternsof land control are seen respectivelyin the private ownershipof land.with control determined in accordancewith the objectives of the state. Under private ownership. Suchholdingsare typically operated as family units with little hired labor. often providing for the existenceof private smallholdings in parallel with larger social units.by displacingtenantsthrough mechanization. While private ownershiphasgenerallybeen compatiblewith technological progressand the economicadjustmentof agriculture. but the tendency toward a corporate legal structure and dependence on hired labor differentiate them from privatelyowned family farms. Generally.(in doing so.it has often created inequities as people have been compelled to give up rural pursuitsor havebeen squeezedinto land-scarce rural enclaves.Theseform.however. its primary concern may be to promote its own narrow interests in terms of wealth and power. However.)Thecommunalsystemgenerallylackssuchan institutional and tendsto be both static in itstechnologyand relatively mechanism insular. and the state or collective ownership characteristicof socialist countries. In the socialistsystem. can be bought or sold like any other commodity. for instance.thesediffer significantly in their technologyand input mix aswell as in the degreeof market orientation. But some variations remain within many socialist systems. while usually subject to special restrictions.and the adoption of externalideas.private control has been most satisfactory where population pressurecould be offset by colonizing virgin land or moving people out of the rural sector.combinedwith limited opportunities for peopleto move out of agriculture.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. which is a fundamental aspectof the market economy and common in mostWestern countries. A special type found in a modern context is one which includes the plantations and large ranchesthat often operate in developingcountriesas well as in some developedcountries. this right being vested in the state.on the other hand. in somerespects. but such communitiesseldom manageto remain completely isolatedfrom externalinfluences.
especiallyin the traditional feudalistic and communalsystems. Alternatively.fiscal or monetary reforms in that it normally relatesto one sector and involveschangesin control of a tangible assetthat not only is fixed in supply but also provides the basicfactor on which most of the people in developing countries dependfor their livelihood. Further. Landreform caninvolve varyingdegrees change.It is frequently pursuedas a goal in itself. all of which might be large. although in most casesnot without some broader economic inefficiencies. Land reform raises issuesof equity in the context of both the traditional landlord-tenant relationship and the modern skewed ownership pattern. the tenant cannot find the capital for investmentor lacksthe securityof tenure that would guaranteea return from it. it is often a highly political concern. in some situations. Stateor communal control has led to fewer interpersonal inequities. Dimensions of LandReform Land reform is thus concerned with the interrelated aspectsof productivity and equity of land use.or medium-sizedfarms and a reduction in the number of large holdings. land reform may become a prerequisiteof development. whether primarily an equity or a production concern.including some of or all of the following: 1. it is clear that land reform will involve different changes different types in of situations. Land reform differs from political.and on the other.on the one hand. the prevailing tenure conditions are the major impediment to development. administrative.In other cases. In such circumstances. In both these contexts. 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. the landlord cannot capturea profitable share of the return on his investment.the contractualsharearrangementis such that neither landlord nor tenant are able to introduce new technology because. all land can be nationalizedand regrouped into state-ownedholdings. 20 . In many situations. But. Redistributionof public or private land in order to changethe patterns of land distribution and size of holdings. Usually. For example.dualism. a high level of fragmentation can make canal irrigation virtually impossible and seriouslyimpede mechanized operationseven when on a very small scale.this involves an increasein the number of small. but in a development context is usually seen as a part of agrarian reform or of rural development programs.
although land settlement might be a meansof bringing unusedlandinto production. resultis generallya redistributhe tion of income away from the former owners of the land to the new owners. Fragmented into contiguous blocks of land. Consolidation of individual holdings.Similarly. with some traditional farms retained and some "plantation ranch" type variations in certain areas. The new owners may farm cooperatively or as individuals. This can be done with or without changing the distribution of landownershipin terms of acreageor valuebelongingto eachindividual. introducing equitable crop-sharing arrangements. Redistributedland can be allocated to new owners or to farmersworking on the land. pilot projects cannot be consideredto be land reform for they operate within an existing structural framework. by itself. thereby altering the size distribution of holdings or the distribution of income. may or may not have an impact on the structure of landholdings in a country. Changesin landownershipand tenurial rights. even though they might be useful in identifying problems of management.2. Structural Change In the main. the or that might be part economicsof various "models. most changes involve a shift from traditional to modern types. 4. India and Iran moved from a "feudal Asian" toward a "market modern" type. Changesin conditions of tenure without changing ownership or redistributingland. Landsettlement. land reform is seenas a meansof bringingabout structural changes in the agricultural sector.The kind of structural changeinvolved dependson the prevailingtenure type and the proposedalternative.and so forth.with or without physical redistribution of land.Kenyaand Morocco redistributed the large-scale. thereby reorganizing the holdings can be regrouped physicalpattern of control.Alternatively. The rightsof thoseworking on the land can be safeguarded law without a changein ownership.Thus the Republicof China.some going to smallhold21 .landsettlementon the frontier does not usually constitute land reform. These changeswould also include the conversion from customaryto legal rights to land. By definition. 3.As reflected in the country experiences summarizedin Annex2." or arrangements of a subsequent reform.land need not be redistributedbut tenantsor workerscanbe madeowners of the land they work. therefore. In that case.Changesin conby ditions of tenure would include providing security of tenure. alien-owned "market economy" type holdings of their colonial eras. dependingon the manner in which the settlers are selectedand the size distribution of the new holdings. cooperative land management.the Republicof Korea and Japanmoved from a "feudal Asian" to a "market modern smallholding" type.
In situationswhere fiscal measures-whether of a redistributive kind or a typewhich providesa returnto the stateon its investmentare found to be ineffective.respectively. the useof a fiscal instrument. extension. availableand increasing credit for their purchase. since it involvesmodification of a wide range of conditions that affect the agriculturalsector. land reform may be the only alternative option if economicdevelopmentisto be pursued. they cannot ensure the same degree of structural reform as can land reform and have. While landtaxesand estatetaxes often are considered significant elements in fiscal policy intended to redistribute income. increasingallocations to the agricultural sector in order to expandresearch. Agrarian reform may or may not include land reform. Thesechangesin tenure systems were in all casesaccompaniedby changes relatedorganizations in and services. in some instances.there may be no need for land reform since land is alreadyevenlydistributed. will not lead to structural changesin agriculture-at least not in the short run.Thesemodificationsmight include changingprice policiesso as to turn the terms of trade in favor of the agricultural sector. An effective land tax mayhavean impact on land usebut its main purpose is usually to encouragemore intensive production by making it costly either to leaveproductive land idle or to useit below its productive capacity.in general. such as a land tax. providing infrastructureto facilitate agrior cultural production.been quite ineffective. maynot be it politically feasible to have land reform-although it might be both 22 .suchas fertilizers. Mexico and Perumoved from a "feudal Latin American" type to a "market modern mixed large and smallholding" type. such taxesmay provide a disincentiveto investmentwith the potential of increasingproductivity or bringing new land into production. A more likely fiscal instrumentto encouragestructuralchangeis a graduatedestate tax which would force estatesto disposeof land to meet their financial obligations. and a mixed "market modern" and "socialist" type structure. making physicalsupplies.But this is likely to bring about structuralchangeonly over a long period of time. In other cases. FiscalMeasures Land taxesand preemptive taxeson income earnedfrom land are often cited as instruments that will obtain the sameends as land reform. On the other hand.training and storagefacilities.ings of the "market economy" type and someto "plantation ranch" type units. Agrarian Reform Agrarian reform is a much more comprehensive conceptthan land reform. In any event.
Where the ownershipof land directly affects the nature of local institutions and the participation in them by the majority of rural people. For instance. since land is only one factor of production. but it is seldom a sufficient condition for increasingagricultural output. RuralDevelopment Broader still is the concept of rural development.where semifeudalconditions prevail. in most market-oriented economies with a skeweddistribution of land. land reform may be a necessary concomitant of successful rural development. land reform maybe essential.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. the tendency is for the skeweddistribution to worsen. land reform without concurrent rural development activity might causehardshipand economic losses which would outstrip the equity gains associatedwith land redistribution. in termsof implementation. 23 . the implementation of the policies dependson the political will of the policy makersand the ability of the administratorsto executethis will. Since it hassignificant equity implications.large landholders have accumulated capital and expanded landholdings acquired through the market.politically and economically feasible to raise output through the measures involved in agrarianreform. Whatever the prevailing situation. The point is that land reform may be a necessary condition for agrarianreform. Tenancy reform.dependingon the prevailing pattern of land control.in somesituationsestablishinglocal institutions and smallholder servicesmay be a prerequisite of land reform rather than vice versa. patterns of land rights and tenurial conditions havebeenestablished tradition. and by thesecannot be changedthrough market operations.as there is virtually no organized market for land. insofar as it stabilizesthe existing relationship between landownersand renters.However.Where the existingservicesystems and administrativestructureis gearedto working with large-scale farmers. Political Dimensions Substantialreform of the structureof holdingsand the distribution of income from the land cannotbe achievedwithout political action. it can seldom be changedwithout actionsthat emanatefrom outside the market. on the other hand.may be a useful precursorof rural development programs.Since theseactionsare basedon policiesdeliberately intended to alter the distribution of land and change tenure. Elsewhere.
Experience much of Asiaand LatinAmericasugin geststhat effective popular participation of rural people may be a critical condition of successful land reform. Japan. In the Republicof China and Venezuela-to name three countriessuitableorganizations were established ensurethat landwas indeed to transferred." And the immediate extensionof this postulateto the world's agrarianproblem is that "if certainlandedestates impedethe generalprosperitybecause theyare 24 . religiousor private. Because the community of interests between the of bureaucratsand the landowners. Reforms have stripped large landholders. that land reform is often a central issuein political debatesand that thesedebatesare often couched in termsof redistributingpolitical power as well aswealth.whether they were military.While the focus on land reform is related to for economicdevelopment.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. The political implications of land reform must be taken into account.the implementation of massivereform legislation has dependedon the effectiveorganizationof the beneficiaries. It is not surprising.The concentration of control over land provides the base for powerful elementsin manynonindustrializedsocieties.suchas India and Pakistan. then. 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 massive legislationhasproduced no significantreform. a meaningfulland reform program will inevitablydestroy or limit the power baseof thesegroups. Implications Social Justice for The imbalancebetween the distribution of control over the land and the numbers dependent on it has historically led to increasing pressures change. including the CatholicChurch.In other countries. Where groups derive authority from their land. the Church in Europeas well as in LatinAmerica hasincreasinglyput its weight behind this new concept. both in precept and in practice.of their power. Many countries have legislatedfor land reform but relatively few have achieved it-and these only with a change in government.and the absenceof organizedpressure from the beneficiaries.Land reform can changethe political balance and the power structure in a country. Formerlyone of the largestlandholdersin the world. 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.
such as those for rural works. Mexico.had semifeudalsocieties similar to many which still prevail in other parts of the world. hassignifiit cant implications for economic development. Theseinclude the definition of an acceptabletime frame for measuringthe effects of the related structural changein the agricul25 . If the experienceof Mexico-which hashad the longest period of reform-is any indication of the long-run outlook. Many problems arise in assessing costsand benefits of land the reform.extensive. are primarily growth oriented. Land reform is a complex subject. full employmentand distributive justice. and more recently Bolivia and Egypt. the reforms haveled to an increasein socialmobility. Land reform is in practice predominantly a question of equity and.such as those affecting power plants or largescale industry.the common of good sometimesdemands their expropriation.and thesein turn are relevantconcerns in the formulation of the World Bank'spolicy. therefore. Nevertheless. still others.or becausethey bring hardship to peoplesor aredetrimentalto the interests the country.large numbersof tenants and laborerswere tied to the land and were held in forms of human bondage." A further facet of land reform that warrantsconsideration in this respectis the potential of a new societalstructurefollowing a reform. Eachset of policies and investmentsaimed toward one objective has important repercussions with regardto the other two objectives. The reform in Mexico broke a systemthat denied many people any range of choice in the pursuit of a livelihood.one that is often highly political. In these societies.this arosefrom custom.it is important to determine to what extent land reform might be costly in terms of growth and employment.and thesemust be taken into accountwhen weighing the potential impact of particular policieson economic development. The reforms which havetaken placein thesecountrieshavechangedthe situation.The issuesinvolved are diffuse and appropriate reform measures vary according to the situation. Somepolicies and related investments. tradition or sheer indebtednessto landlords. Chapter 2: LAND REFORM AND ECONOMIC DEVELOPMENT Economicdevelopmenthasthree basicobjectives:rapid economic growth. are employment oriented.unusedor poorly used. are essentiallyequity oriented.Forthis reason. others. such as those related to land reform.
August 1973.Republic of Japan Nepal Pakistan Philippines Sri Lanka Thailand Turkey Viet-Nam.188 138 249 200 337 137 243 127 142 360 140 88 48 295 174 180 341 198 101 0.333 925 410 141 149 581 377 1.474 0.01 0.03 1.22 2. April 1972. 21-23.085 1. Monthly 26 .38 0.35 4.845 - 0.Gross DomesticProduct (GDP)in agriculture shownhere includes.4. 10-11.20 1.70 8.41 3.02 0.29 0.62 2.03 2.04 0.23 2.903 285 692 663 479 477 1.32 2.Table 1 Productivity.hunting.01 0.54 0.49 1.3. 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.24 1.832 - 0.33 4.32 2. XXVII.17 123.see XXVI.Republic of India Indonesia Iran Korea.61 3.936 0.04 4.09 0. No.50 0.29 - 0.611 - Botswana 1969-70 Egypt.473 - 0.95 8.10 79.865 - 0.50 22.47 5.12 1.85 1.833 0.34 270.18 1.70 20.06 0.59 4.89 1.Preduction Yearbook 1971.09 0.88 1.85 40.79 1.12 0.580 - 0.18 14.60 108.35 3.31 3.947 0.90 37.10 0.67 3. currency For Bulletin Statistics.11.27 6. November and 1973.37 208.873 0. No.62 .09 0.pp.52 1.25 118. of ibid.05 0.624 - 0.XXVI.45 2.05 6.and fishing.28 0.05 1.17 0. Employment and the Distribution of Land.607 0.25 1.64 2. No.03 0.59 1.84 0.18 1.05 0. forestry. and column4onUN.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.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.10 0.20 1.21 0.62 15.607 - ' 0.96 1.597 0.80 81.unlessotherwise indicated. Sources:Columnsland 3arebased on FAO.75 1.05 0.agriculture. lnternational financialStatistics.64 6. 3.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. and I MF.
are for analytical convenience.2 tons per hectare.equity and employmentaswell as on savings and market surplus. farms of less than two hectares-produced 2.9 tons of paddy per hectare. Ecuadorand Guatemala. A similar study of 40 countries was undertaken by the Bank (see Table1). the effects of land reform canbest be examinedby focusingon particular measures.The availableevidencesuggests a well-designedland that reform program need not entail unacceptable costsin termsof other objectives. One 13-country study undertakenby the FAO analyzedthe relationship among size of holding.Small farms in the Philippines-that is.for example.in 1966-67.However. Implicationsfor Productivity The effects of land reform on productivity might best be isolated by comparing productivity in a given area before and after reform.while farms of more than four hectaresproduced 2. yieldswere reportedto decline from 306kilogramsper raion holdings of two to six acres. Several comparative multicountry analyseshave been made of the effect of differencesin distribution of size of holdings on yields.Brazil. in Similar findings can be cited from cross-section studiesin a number of individual countries. Both studiesindicatedthat a smalleraverage of holdings size and a lower concentrationof landownershipwere associated with an increase output per hectare. this is not possible as there is no situation where changehas occurred in only one variable-size of farm-over time. Unfortunately.In a systematicanalysis the differencesbetween large of "multifamily" farms and small "subfamily" farms in Argentina. its contribution to output and employment-as well asto equity-depends on the speedand effectiveness the reform and of complementary investments.ture sector.In Sri Lanka.The ideal measurefor comparisonwould take into account the contributions of all factorsof production and so measure total factor productivity. concentrationof land and productivity. Chile.output per hectare was 27 . suchasthe effectsof farm size on productivity.are treated separatelyhere.In central Thailand. The nearestalternativeis the comparisonover a definedperiod of the productivity of groups of different-sizedfarms in a given area. 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.These measures interrelatedbut. changesin yields per hectare are considered to be the most appropriate substitute. Colombia. Since data are not availableto derive this measure.4 acre).
for 28 . There are two associatedreasonsfor this assumption.20 8. I to col.198 84 1.14 Source: Barraclough and Collarte.673 74 523 8. Chile.197 8. as well as studieson Japanand the Republicof China.on the small farmsthan on the largefarms (see Table2). Guatemala. the studiessimply indicatethat yieldswere higher on smallfarmsthan on largefarms.498 170 334 41 1. Agrarian Structure in Latin America. land reform can be consonantwith development from a point of view concernedpurely with productivity.90 0. There is other evidence to support these findings. including the results of Bank-sponsored analysisin Mexico.862 660 63 16 National monetary perworker unit 40 192 1. small-scale producerstend to maximizeoutput by applying labor intensively.30 2. found to be three to 14 times greater. Colombia.on the average. a resume of the CIDA Land Tenure Studies of Argentina. in LatinAmerica 1 Country Year Smallest subfamily farms 2 Largest multifamily farms 3 Ratio ot col. 351 p.80 3. Studies in the Economic and Social Development of Latin America. Brazil. Massachusetts: Lexington Books. The important implication is that reductionsin either the size of holdingsor land concentrationneed not be associated with a reduction in output per hectare. However.Table 2 AgriculturalOutputper Hectareand per Worker. Ecuador. In broad terms.with output per hectareas the relevantcriterion.This is usuallyshort of the output per hectarethat would be produced if the goal were maximization of output. however.is likely to decrease the simple reasonthat. 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. it appearsthat under controlled circumstances output per hectare is likely to be higher.On the contrary.171 972 9. Output per worker.23 0.80 8.while large-scale operatorstend to maximizeprofits by using hired labor only until incrementalproduction coversincrementalcosts.10 0. Lexington. there are limited economies of scale in most agricultural production.21 0.237 268 1. Peru. xxvi.there is no claim that all conditions were identical.Firstly. by FarmSize. as pointed out below.14 0.492 304 1.20 14.Secondly. 1973.
Brazil. But the realization of this potential is contingent on the supply of nonland inputs being increasedas soon as farm size is decreased.too. labor absorption varied between 33 and 39 man-days per acre on holdings of less than 30 acres. It is interestingto note. fertilizer consumption and grossfixed capital formation per unit of landwere relativelyhigher in countrieswith smalleraverage holdings. More intensive labor use is the main reasonwhy small farms are ableto producemore per unit of landthan the largerfarms. This cross-sectional evidence of the higher productivity of small farms indicates their long-run equilibrium potential.The mereredistribution of land and increasein employment may not suffice to raise output substantially.But inputs other than labor arealso likely to be applied more intensivelyon small farms. In other Latin American countries (Argentina.17 on large farms (500to 1. man-yearsper hectare declined steadily from 2. On larger holdings. in 1968. the greaterthe input of manpower.Unfortunately. Chile and Guatemala).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.7 on small holdings (lessthan 0.the organization of an effective extension-cum-inputsupply systemfor small farmersmust accompany 29 . This decline in labor productivity only reflectsthe employment and equity benefitsof land reform: the samelandwould supply more people and the income generatedwould be more widely shared. In the Ferozepurdistrict in Punjab (India).5 hectare)to 0. unlessaccessto these inputs is blocked by institutional arrangements. however. LandReform and Employment Evidenceexists that the use of labor per hectare is greater on smaller holdings than on larger ones. for example.smaller farmswould employ more labor per hectare.the number of workers per hectareof agricultural land on the smallestfarms (subfamilyunits) hasbeen estimatedto be 30 to 60 times greaterthan on the largest(multifamily) farms. that in the crosssection of developed countries. In Colombia. the larger income would be sharedby an evenlargernumberof families. A limited number of studies in Asia and Latin America have also confirmed these findings. it ranged from 20 to 23 man-daysper acre. small farms undoubtedly need much more nonlabor input in order to raiseproductivity.000 hectares) in 1960.In other words. In developingcountries. the relationship between these other inputs and farm size cannotbe studied in manydeveloping countries JFor want of data.in 1961.Therefore.
financial assets commodity stocksin the urban and areas is even more skewed than the distribution of farmland in the rural areas. (2) the beneficiariesbelong to the poorer groups. It may even increase inequity-in particular. the larger will be the equity effect of the reform program. LandReform and Equity The more radical the land reform and the more important the share of agricultural land in relation to total tangible wealth. output per hectareis high. land reform alone is not sufficient. By itself. the the inequity between the town and the village-since it will freeze the maximum permissibleownership of the main rural asset.There.and (4) owned and self-operatedland as well as leasedland is redistributed. Evidence this can be seen of in many LatinAmericanand Middle Eastern countrieswhere the large landownersoften dominate both commerceand government. the limitations of redistributingfarmlandaloneappearevenmore serious.If. However.the Republic of Koreaand the Republicof China-the absorptivecapacityof agriculture tends to be high even though holdingsare small.and commodity stocksin the hands of traders.agricultural land accountsfor such a large proportion of total wealth that it is usuallythe single mostsignificantdeterminantof the distribution of both income and power.land reform. at the same time.Thedistribution of real estate. Evenwith this broader focus.where much of the wealth existsin the form of financialassets. land reform could havea major equity impact. therefore. In the rural areas. estateand other real investments apart from farmiand. it not only may not decreasethe inequity of the distribution of total wealth in the country as a whole. If rural and urban areasare consideredtogether. the equity effect of land reform will be significant only if: (1) the effective ceiling is low. Smallholdingscanyield high returns to labor provided output per hectare is high-a condition that can only be fulfilled by the application of high-yielding. (3) the extensionand (nonland) input distribution systemfavorsthe beneficiaries. Landownersmay easily changethe composition of their assetson the eve of land reform if agricultural land alone is the target of redistributive zeal. without freezing the maximum permissibleownership of urban assets.the redistribution of farmland alone may not improve the distribution of total wealth substantially. Where there is such a system-as in Japan. urban property reform or highly progressive taxation on urban wealth does not accompanyland reform in countries with a substantialand prosperousindustrial-commercialurban sector. labor-intensive technologies. 30 .
In thesesituations.the available land (43 million acres)would be barelysufficient to bring up the size of miniholdings to a minimum of five acres.the changein the sizedistribution of holdings will shift the distribution of the sourceof the marketablesurplusand savings.too. even with a low ratio between the ceiling and the floor holding (5 to 1). (Settlementof the landlesson new land. mostly food. a low 10-acreceiling would not sufficeevento bring all miniholdings up to a minimum two-acre size. In Haiti. even if the maximum holding was 20 acres. As will be shown later.) . the marketedsurplus generates As agricultural incomesand so potential cashsavings.however. notably in the Americas. only 1.there areample opportunitiesfor redistributing land so that inequalities can be diminished and the recipients of the land can generate an acceptable minimum income. the pressureof population is such that there is not enough land to meet the minimum requirementsof all claimants. In India. where available.In Bangladesh.The Population Factor Opportunities for the redistribution of land depend to a great extent on the existingpattern of distribution of holdingsand population density. The solution to rural povertyclearlycannot be found exclusively in the agriculture sector. evenif holdingsabovea certainsize werecompletely eliminated.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.and no land would be availablefor the landless(20-25million households).The densityof the farm sector is so high in some countries in Asiathat. not enoughland would be availableeither to raisethe acreage of the minifarms to a tolerable minimum or provide for the landless.when possible.are the other obvious alternatives.where land distribution is skewedand population is not dense. there are some countries.5 hectaresis availablefor the averagerural family of five. therewould be enoughlandonlyto givetwo acrestoeachminifarmer.Although the total effect of the redistribution process dependto a largeextent on the costsof increased will output after the redistribution. In Sri Lanka.In suchcountries. for the 31 .and their migration to urban areas.it determinesthe size of the rural market for domesticallyproduced industrial products.it might be wise to give land only to the minifarmersand to attackthe poverty problem of the landlessby meansof a massive rural works program.The marketedsurplus also represents supply of agricultural products. The millions of landless families could not be provided for at the sametime. In other areas.
These differenceswould determine how much the surplus ratio would fall after land reform.4% comes from only 1.5 acresor less)sell only 24. this decline in the market surplus ratio need not result in a decline in total surplus. Thus. Datafrom India show. on the other hand. the necessary conditions are fulfilled whereby small farmscan realizetheir full pro32 .sell no maize at all. Smallfarm households tend to consumea largerproportion of their smalloutput than do householdswhich havea large enoughacreageto produce in excess domestic requirements. hypothetically. however.1% (more than 50 acres)con-' tribute 16%. provided that there is a compensatory increasein total output.but may take the form of increasedon-farm investment in such items as improved housing. Marketed Surplus A reduction in land concentrationthrough land reform could lead to a fall in the marketedsurplus-at leastin the short run.But increasingthe marketedsurplus will not necessarily increasesavings. Since per acreyields on smallfarms canbe higherthan on largefarms.However. Sixty-one percent of the maize farmers in Puebla(Mexico). of Thus. for example.there may be a sufficient increasein output if. If output remainedthe samebut. The rate of decline. In India. Where it does.5 acres)contribute only 6% of sales.the urban population. But thesefarm groups produce only 9. whereaslarge farms (50acresor more) sell 65. the ratio of marketedsurplus to production falls asfarm size decreases.wells and access roads. The surplus-outputratios of different farm-sizegroups. that small farms (2. In Chile.5% eachof the national output.the surplus-output ratio would probably decline. but there can be no doubt that it would fall.5 to 50 acres) contribute the bulk (78%)of the total surplus. In Mexico. after reform. might not be very great given that the largest and the smallestfarm-sizegroups account for only small proportions of the total output. a typical sharecroppersells as much as 43% of his output. 6.7%. 48% of the farms (lessthan 2.4%.6% of the marketed surplus comes from 70.for example. and another 16% sell 25% or lessof their output. and 55. and 51% (with 2.farms abovea certain size were eliminated and their land transferredto the small class.the savings need not be monetized. with adverseeffects on the economy. and their sharesof total output and salescan differ widely across countries and regions. a fall in the surplus could necessitate imports and put an added strain on the balance of payments.5% of their output.7% of the farmers. however.
again. from the welfare point of view.But.For unirrigatedvillages. Savings In consideringthe productivity effect of land reform. the subsistence consumption of small farmers increases-the extra consumption in kind representinga direct increasein their incomes (nutrition). Although the evidence on savingsrates of different classes of farm householdsin developing countries is scant.8. A policy implication. a decline in the market surplus ratio has a direct distributive dimension which should be offsetagainstthe decline. by running down the existing soil fertility).5% for medium farmersand 16.2% on the larger ones. there was no direct measureof the savingsmade. It follows that a reduction in concentrationof land will reduce the averagesavingsrate of the farm sector.3% for large farmers. A recent study in the state of Haryana (India) tended to confirm this: the savingsratio was found to be -0. As farm size increases. the aggregate savings be precan vented from falling. there should also be a positiveeffect on productivity.the subsistencefarmerscan be expectedto be net "dissavers"(for instance. by using capital for consumption).3% on the larger farms (8 acresand above).if a compensatory increasein total income can be securedby intensifying inputs per unit of land soonafter land reform. 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.5% in the smallest size group (0 to 2 acres)and 19. from the foregoing. 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.6% on the smallestfarms.At the lowest end of the farm-sizescale. This addsto the urgencyof introducing effective agrarian reform (including improved technology and services)along with land reform.24% for small farmers.the correspondingfigureswere lower -2.As the surplus-outputratio falls.In a further study in Orissa(India).The minimum farm size clearlyshould 33 . but the ratio of net capital formation farmas a proportion of incomewas found to be 5. it is necessary to examinethe implications of a changein farm-sizestructureon the aggregate savings rate of the farm sectoras a whole. and 11.is that the farm-size structure created by any land reform program should fix a minimum as well as a maximum farm size. In addition.duction potential. the savingsrate can be expected to become positive and increase along with it (althoughlarge farmerscanbe "dissavers"too.
provision the of security of tenure. whether through the distribution of the land to those working it or the provision of greatersecurity of tenure and 34 . This is seen not only from the reforms in Japanand Taiwan. But one of the criteria for determining the minimum income itself should be that it should at leastenablethe smallholder to ceaseto be a "dissaver. that since the seed-fertilizer technology began to spread. Tenurial reforms. often havea preferencefor crop sharingbecauseit provides risk insurance. if landlords are allowed to retain land that might be self-operated. Ownership control and incomefrom the land is thus redistributed.and tenantsbecomeowners of the land that they operate. The conversionof tenantsinto owner-operatorsgenerallyleadsto a more efficient and more equitable form of production organization than tenancy. This. encouragesincreasedsavingsand. then the size distribution of operational holdings maynot change. but also from experience in parts of Africa where "customary" tradition is convertedinto freehold. However.With the conversionof tenantsinto owners.be determinedon the basisof the current national norm of minimum family income. Here. landlords and sharecroppers have spontaneously begun trying to combine cost sharingwith crop sharingbecause the combinationis profitable to both. hasincreasedon-farm investmentand helped raiseoutput."An analogouscriterion can also be derived from the known behaviorof marketedsurplus:the smallholder should haveat leastenoughlandfor positivesales.Taiwan and somepartsof Europe. security of tenure and labor objectives. There may be situationswhere tenancy reform aims at stabilizing the position of tenantswith respectto rent paid. especially in the temperate production areas. for example. on-farm investment and higher output.Sharecroppers.the problem is to promote more efficient typesof tenancy. hence.The expert consensus that fixed cash-rentcontractsare superior to the more is common crop-sharecontracts.since the whole income in excess of' the fixed rentaccrues the actual cultivator.security of tenure is greaterand incomesfor the farmers are larger.Crop sharing can be made more efficient and equitable if if is consideredwith cost sharing. as in Japan.without transferringownership rightsto them. In Kenya. in turn.with contracts having well-defined incentivesand deterrents. to however.There is growing evidencefrom the Philippines. Tenancy Reform The most successfulland reforms include those whereby tenants become owners of the land they operate.
LogisticalSupport Secondly. Sustaineduncertainty about a government'sintentions with regard to the distribution of land adds to the risk of investmentand can hamper capital formation and production.Often. 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. In some instances.greatersecurity enables tenants to benefit from appropriate technological changes.like prudent investors. The financial returns to the landlord from using machinesand hired labor may be high. the less likely the accelerationof disinvestment by landownersand. It follows that the more specific the plans and the more clearly defined the policies regarding land reform.continued uncertainty hasled to disinvestmentin agriculture by owneroperatorsand a flight of capital from the country.instead of being displacedwhen landlords find it to their advantage adopt to a different technology.often thoseamong the lowest income groups.the lower the "cost" of the reform. so. there is a well-established link between commercial bankersand suppliersin the private sector and the larger agricultural producers. have an effect on development.These farmers. often. Firstly. The redistribution of land frequently leadsto a breakdown of this system. several important considerationsmust be taken into account. Finally.This linkage is basedon mutual interests and. since agriculture is a private sector activity in most countries. production and investmentdecisionsaremade bymillionsof individualsoperating in their own interests. on long-standingbusinessassociation. there is a long interval before the public sector can 35 .Very often the greaterpart of national output comes from medium-scalefarmers.improved rental contracts. Implementation Issues If reforms are to generatethe benefits expected of them. In most countries in the world. Such reforms improve income distribution by shifting income away from the landlordsto small-scale producers. but the returns to the economy are usually higher from labor-intensiveoperations undertakenby smallholders. introduction of a major land reform programusually the disrupts the systemof logistical support from the commercialsector to the farmers.weigh the risksas they perceivethem before makingon-farm investments-the major component of total investmentin agriculture.
Thus.undertake the role previously filled by the private sector. the beneficiariesof the reform may not be in a position to increasetheir output. under certain conditions land reform programs might need adaptation if they are to fulfill the objectivesof development. Part of the reason is that these institutions have not been able to adapt their methodsof operationto the needsof largenumbersof small farmers.the reduction of the costsof a land reform program-in terms of production forgone-depends on the rapid reorganizationof the input supplysystem. the natureof the organizationsproviding for both the supply of necessary inputs and the marketingof production surplusesis crucial in a post-reform period.agricultural development banks. A more realistic approach to obtaining widespread benefits would be to leavesuch operationsintact and redistributethe profits from the enterprise. or-as in Peru-converting the operation into 36 . the impact of redistribution of land on productivity and employment may be in question. When land is fully utilized and yields are alreadyhigh. marketing authorities. Unlessthis is done. it is essentialthat they be designedspecifically to assistthe beneficiariesof reform. productivity will decline and output will fall. There are many different forms of organization: cooperatives. it is important to determine the reasons for high yields." thus reducing the importance of scale of operations as a factor in raising productivity.The breaking up of such holdings may well reduceyields and lower output. In much of agriculture. Whatever the organizationsthat prevail.Without an appropriate organizationfor the provision of inputs. Adaptation Fourthly.and the like. or before the privatesectoradjuststo the new situation. Indeed.the appropriate organization of supplies and the evolution of a low-cost delivery systemto reachsmall-scaleproducersis a sine qua non for a sustainedincrease in productivity.Thiscan be done through taxation. high yields and efficient operations may be directly associated with a systemorganizedto function on a large scale (as in certain types of sugar plantations). mostof the inputs are "divisible.special credit institutions. the institutions that have provided servicesin a post-reform period have continued with a bias in favor of larger-sizeoperations. In many instances. Natureof Organizations Thirdly. In somesituations. by raisingthe wagesof the workers. In this context.
can encourage increasedon-farm investment.producer cooperatives and other units of production haveflounderedin developingasystem that reflects both equity and incentives. increasing employmentand providing wider equity. that is often unfulfilled in rigidly controlled societies. 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. can be consistentwith all the goals of economic development: raisingproductivity. but raisingoutput depends on more than land and labor.The most important of theseconcernthe organizationand provision of an adequatesupply of inputs for the beneficiariesand the creation of incentivesto use theseinputs to raiseproduction. to the participatingstockholders. Government reorganizationcan generateenthusiasmand provide opportunitiesfor mobilizingworkers.a worker-owned corporation and distributing dividends. by providing securityof tenure.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. other organizations(suchas large-scale state farms) might be intended to save labor. producer cooperativesor communesor large-scalestate farms will emerge. however. The post-reform structure will depend on the ideology of the government. Many communes. sustained increases output dependon complementaryinvestments poliin and cies. 2. There must be an appropriate supply of other inputs.the number of small-scale owner operationswill increase. 3. There must be an adequatesystemof incentivesand rewardsif productivity in agriculture is to be increased. 37 .however.that: 1. although equity oriented. Thisappliesboth to the agriculturalsector as a whole and to the units in which beneficiaries of reforms are organized. However. Experiencehas indicated. Land reform. Tenancy reformscanredistribute incomesand.This is a condition. land reform need not leadto a reduction in marketedoutput or savings.land reform leadsto structural changes within the agricultural sector.in others. out of profits.The creation of adequateincentives is particularly important in a situation where labor is the major input. In some instances. In the long run. Structural Change Finally. No matter what the structure.
the owners landusually of possess politicalandeconomic powerwhich can be exercised waysthat harmthe interests the bulk of the in of ruralpeople.Theobjectivesarenow generallyaccepted to be increased productivity and employment. One of the first major economic surveys undertaken was that of Colombia in 1955. This was reflected in the Agriculture SectorWorking Paperof June1972. especially irrigation water.and socialjustice. mainly becausethey influenced on-farm investment decisions and determined the efficiency of resourceuse." The paperwent on to affirm that: "It is clearthatagricultural development cannotdo all it mightto improverurallife if the distribution landownership highlyskewed. Problemsof tenurewere seento havean indirect bearingon production. The paper stated: "In developing countries." 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. however. maywell be a necessary condition for their realization. Land reform canbe corsistentwith theseobjectivesand.the focus was on providing adequateinfrastructurefor increasingagriculturalproduction. representsmuchhigher land a proportion of totalwealththanin developed countries. concernwas growing about distribution of income in the rural areas the relationshipbetween and land distribution and income distribution. in somesituations.which recognizeda relationship between land distribution and equity. are of Furthermore. inegalitarian and patterns of landownership a majorsource incomeinequality.The missionidentified the patternsof landuseand 38 . In the early 1960s. reflecting a reconsiderationof the objectives of development and the most appropriate strategiesfor attaining thoseobjectives.Chapter 3: THE WORLD BANK AND LAND REFORM Changing Concerns The position of the World Bank in regard to land reform has changed over the past decade. In the early yearsof the Bank'soperations. By the end of the 1960s. Technical Assistance The Bank hasbeen concernedwith problems associated with land distribution and land reform since the beginning of its operations.the approach to agricultural development was widened to include the provision of rural credit and on-farm inputs.
missionsto Ethiopiaand Morocco havedrawn attention to the relationship between the land tenure situation and the distribution of benefits from growth.More recently. The two missionsto Colombia were concerned with increasing productivity and intensifying land use. This mission recommendedthat the government adopt a presumptive income tax to encouragethe more productive useof land. A subsequentagriculture sector mission in 1956 confirmed that the systems land tenure and land usewere barriersto increasingoutof put.The Bank needs to be better informed about conditions governing rights to land and related institutions in member countries.while intensiveagriculture was practiced by "minifundios" on land that was lesssuited for crop production. The missionswere not concerned with the redistribution of land as a means of encouraging greater equity.there hasbeen a growing emphasison the problems of distribution of land and the rightsto land as factors that influence equity aswell as productivity.conditions governingtenancy. In Ethiopia. nor did they consider redistribution as a meansof intensifyingproduction. Since that time. The mission recommended the governmentthat to it introduce a graduatedland tax as a meansof intensifying land use.Largestretches fertile landwere held of by large-scale producersfor livestockraising. Rather. In Morocco. Despitethis trend.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. More needsto be known about the distribution of land. Landlordswere finding it increasinglyprofitable to displacetheir tenantsas machinetechnology provided higher returns.it is only through a thorough analysis conditions of 39 . Thus. It did. recommenda vigorous policy of settlementon reclaimed and clearedland. however. 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.and the policies and programsinstituted to influencethe distribution of land and rural incomes. missionsand sector surveyshavebeen conducted in almost all the countries servedby the Bank. many reportsdo not give appropriate emphasis to issuesrelated to land reform and development. the mission emphasizedthe possibility of redistributing landas a meansof increasingboth output and equity. securityof tenure was consid=ered to be especially significant in the light of the distribution of potential gainsfrom new technologybeing introduced into the country.they took the view that the distribution of land was a matter of national policy and internal politics.
the recordshowsan increasing and awarenessof the implicationsreflected in more frequent useof measures to improve them.within member countriesthat the Bankwill be in a position to discuss policy options with member governments.as well as countries that follow capitalism. if any. has played a minor role in the financing of land reform programs. Nevertheless. external financing. as is usually the case. Evenso.Loans credits havebeen madeto countries and with widely differing social and political structures. small landowners.paymentis mostly in bonds.Public discussionof land reform financing is generally dominated by this issue. projects havesupported land reform as such. In few general. present.asexpenditures fora redistributive reform depend mostlyon the levelsand forms of compensationthat are set for the former landowners.thesehavebenefited absentee landlords. in the Latin American countries which followed nonconfiscatoryreforms. public expenditure is involved. only some9% to 15% of total reform-relatedcashbudgetswent for landowner compensation-though in other casesthe figure could be muchhigher.tenants and farm workers.many reports At still do not addressthese problems. whether multilateral or bilateral.Fundshavealso been provided for large-scale livestockproducers. individual holdings in India. cooperativeproduction units in Tunisia and group farmersin Kenya.One reason is that the processof reform in itself may only require relatively small outlaysof public funds.large landowners.especiallywhere.When land is confiscated as part of a revolutionary process-as it was in Mexico and Bolivia-clearly little. however. Loansand credits have been made for agriculture operating under different forms of tenure-for kombinatsin Yugoslavia.These have included socialistcountries. Lending Operations The Bank'slending for agriculturaldevelopmenthasincreased very rapidly in recentyears. It is estimatedthat. The compensationissuetendsto be more important in such countries as Colombia and Venezuela where land is purchased.such as Yugoslavia and Tanzania.kibbutzesin Israel. On the other hand. Compensationpaid for land is a "transfer payment" from the pub40 .large-scale plantationsand smallscaleproducers.the actual amountsinvolved are not substantial. the Bank has not been totally indifferent to structural and income distribution aspects. new guidelines are being developedwhich can form a basisfor discussing issuesin the a systematicway in sector and economic reports.such as Argentina and Thailand.
Smallholdersopted for private farming and were supported by landownerswho resistedthe takeover of their lands. and the reform program collapsed. The Bankhasprovided generalsupportfor at leastone far-reaching land reform program. The problems encountered in financing the Tunisian program underscore some of the difficulties in lending for reform-related projects. Furthermore. was to pay a guaranteedminimum cashwage to the workers out of the farm profits. the agenciescreatedto deliver the inputs are usuallynew. inter alia. 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. which occupied the most fertile land in that country.If financing were to be through international maintenance-of-value guarantees of bonds and for compensation.Without doubt.eachunit of production was to be self-financingand. and the whole delivery systemchanges 41 . hasbeen suggested It that the internationalagencies might guaranteebonds issuedto compensatelandlords. consumption and investment-but it does not of itself create any new productive capabilitiesin the country. It was unable.the scarcityof trained manpowerand the rapid paceadoptedin establishingnew cooperatives made it difficult for the production units to start on a sound basisand generatea large enoughcashflow to meet their objectives.This was in Tunisia where the Bankprovided a loan of $18 million intended to back a major agrarianreform relating to former French-owned estates. 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 Bank successfullypressedfor substantial improvementsin the conception. however. Partlybecause this.In addition. However. The nationalizedland was to be converted into "units of production" which were to be farmed on a cooperative basis.lic sector to the landholding groups.designand implementationof the agrarianreform. have limited technical capacityand are of questionablefinancialviability. The extensionof reform strained the limited administrative capacity. compensation can haveserious implications for income distribution.this would have the paradoxical effect of giving land bonds greaterstability than that enjoyed by the currenciesof issuing countries. internationallending of institutions have refrained from using their resourcesfor financing land purchases. The Bank subsequently canceledhalf of the loan. Very often the managerial capacityof the beneficiaries maybe untried. these institutionsoften provide inputs that were formerly provided by the private sector. the systemhad built-in disincentivesbecause wages were not paid accordingto work.
vehicles. Theseinclude projectsfor land by settlement.from one basedon the profit motive to one basedin the first instance on social consideration. Malawi and Malaysia.outgrower schemes. individual holdings were of the order of about five acresper family.000acres.and the issuance either family or individual of freehold titles. It was recognizedduring the preparation of the Lilongwe project that there was an opportunity to changethe existing land tenure pattern of customaryright of usufruct.equipment.IDA creditsare beingused for the land survey (both topographicaland cadastral). Ethiopia. some200.Fiveacreswas deemed to be the minimum holding size capable of providing a family with subsistence presentlevelsof technology. and the construction of housing and land registry.The amount involved will be approximately US$1 million by the end of the second phase. Another Bankproject provided direct financial assistance facilito tate the implementation of land reform as part of the Lilongwedevelopment schemein Malawi.mortgageor transfer of registeredland through the establishment LandBoards. especiallyin that cashflows generatedby reform projects tend to be lessimmediatethan in other projects.irrigation.Table 3 gives information on ten projects located in Brazil.The need for changeto a more secureand lastingtenure systemwas evident asalmost all uncultivatedlandhad been takenup.000acreshavebeen of allocatedand titles issuedon 60.The Lilongwe project indicates that Bank assistance can play a role in assistinggovernmentsin the "mechanics" of land reform and in the draftingof legislation. consolidation and registrationof holdings. at As a consequence. These Acts also provided for the regulation of the subsequentsale. and fragmentation of holdingshad occurredon a substantial scale. 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. A number of other projects have been financed by the Bank involving somechangein distribution of landor in tenurial rightswithin the areaencompassed the project.This directly affects their financial viability.To date. Sevenof the projects were established public land and on so did not involve any change in the size distribution of existing 42 . Colombia. provision the of allocation and registrationstaff. Kenya. Malawi Governmentintroduced three Acts the of Parliamentwhich provided for the allocation.and many investments social in overhead are not self-liquidating in the short run. and rural credit.
214 1.500 partially established settlers. (. research and related studies. education.280(4) 5.3(8) 6.200 2.423(3) 6.0 14.7 9.000. (a) Although 2.825 40.800 new settler families are scheduled to be settled on some 280.0 25. as estimated in the appraisal reports.0 8.3 4. Thesecost expenditures are being reviewed and are expected to be Considerablyhigher than originally expected.756 10. figures represent goals rather than actual state of settlement.000 4. (l) Except for Kenya.429 2.900 hectares.73 million used for agricultural development on the highlands.667 10.500 partially established settlers are given.6 2.000 hectares.300(6t 1.800 6. (3) The costtothe government is$1.500 landless peasants and develop 9.9 7.1 3.050 5.5 3.389 3.0 loan loan loan loan credit credit credit loan loan loan 1972 1967 1972 1971 1969 1969 1972 1968 1970 1973 5.5 Publicland INCORA land (involved appropriation land) l Publicland Europeanownedland Publicland Publicland Publicland Publicland Source: World Bank and IDA appraisal reports. )') The cost per small farmer settled is estimated to be $17.a.7 21.1 41.6 14. (6) Includes 2.0 n.0 4. whereas the cost per middle-size farmer remaining in the project area is $100.) Project costs.8 4.7 9.This excludes expenditureson health.0 13. (8) Excludes $2.7nn perfamily settled.000 2.9 6.000.3 6.800 now settlers and 3.0(5) 11.830 2. .Table 3 Costs of Selected Settlement Projects Assisted by the World Bank Estimated Total project Country Project Bank or IDA finance Number of families(') project costs per Average farm costs Amnunt (US$ 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.770 3. 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.(7 6.0 5. do not necessarily reflect total economic costsof settlement.200 2.500 1.505 13.327 2.8 29. (5) The original goal was to settle 2.3 6. The project is behind schedule.0 43.6 15. no data on the farm size of 3.0 4.
Theten projects were intended to settle no more than 35. althoughlarge enough. employ a to family and produce enough of a high unit value commodity to yield an income well in excess that earnedby producersof staple comof modities who have holdings of a similar size. the data in Table 3 indicatethe limitationson settlementprojects -as presentlyconceived. it is only effective when there is a commodity that can be handled througha centralprocessing system.holdings. Mauritius and Uganda. rubber in Indonesiaand Malaysia.the whole approachto capital-intensive settlementrequiresreexaminationconsideringthe magnitudeof the problem outlined in Annex 1 of this paper. the size of holdings for outgrowers is small. on Although the costsper family in a settlementproject can be misleading.Thecentralunitprovides technicalassistance.000per family limits the prospects of the approach. in turn. It was suggested that the benefits be distributed through the raisingof wagesand the paymentof dividends to the workers. Kenya. the Bank has made a substantialcontribution toward a novel form of tenure through the developmentof "outgrower" schemes.Thus. sell their productsthrough the centralorganization. TheBankhasparticipatedin ninesuchprojectscosting$125million. The smallholdings are establishedaround the nucleus of either a processing plant or a plantation.Clearly. In this area.000families. Theseschemes involve the production of tree crops on smallholdings rather than on large-scaleplantations. There are severelimitations on settlementas a meansof reaching large numbersof landlesspeople or relieving pressures the land. 44 .Thesehaveincluded teaprojects in Indonesia.and oil palm in Nigeria. under labor-intensive cropping systems. the total cost was expected to be $190 million.settlerswere allocated holdingsof from three or four hectaresin Malaysia 40 hectaresin Brazil. While this systemhas madea valuablecontribution toward establishing viablesmallholders. inputs and marketingservicesfor the outgrowerswho. the Bank'scontributions being almost half that amount. to In the main.000 families.Eachholdingwasdeemed to adequatetcprovide a livelihood and full employmentfor the settler and his family.The average project hasrangedfrom 10 hectaresin Senegal one acre in Kenya.The capital requirementof more than $5. Outgrower Schemes The problems of distributing the gains from plantation development were mentioned earlier.cocoa inholding in each the Ivory Coast. of which the Bank has contributed $68 million and affecting some 120.
While these projects covered many facetsof water storageand distribution.6 of hectaresper family over alI the projects.the Bankhas insistedon special legislation giving tenantssecurityof tenure.11 projects costing$342million (incorporating a Bankinvestmentof $190 million) are expectedto improve 810.The average size of holdings in the irrigated areasrangesfrom 10 hectaresin Iraq to one hectarein Korea.Irrigation The Bank has invested about $1.By the end of 1973.000 families. or they have failed to introduce legislation which would havemet the conditions specified in the loans. But.000hectaresand benefit more than 500. 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. this hasbeendifficult to enforce. In some instances.000 million for rural credit. flood control and drainage projects. Pakistan and Sri Lanka.or an average 1. Bankhasmade loans on the condition that the the recipient government takes steps to ensure that the intended beneficiariesdo indeed gain from the investment. Most of these resources haveaided largercommercialproducers. governmentsconcernedhave not fulfilled obligathe tions regardingthe provision of securityfor tenantsor the allocation of land to low-income groups. in practice.However. For example.Elsewhere. In some instances. governmentshave failed to implementconditions provided for by existinglegislationon rights to land. RuralCredit While in itself farm credit is an important instrumentfor reaching groups of a particular size in agriculture.Thishighlights 45 .although in recent yearsthere hasbeen a pronouncedtrend toward lending for smaller producers.Thus. the Bank hasworked with various governmentsin determiningthe mostappropriatesize of holding for the beneficiaries of eachproject. In many instances. most were intended to improve the use of water and-bring more land under intensivecultivation. in several instances. In other instances. access can be restrictedby tenurial arrangements lending criteria specify that registeredland if projects have titles be usedascollateral for borrowing.an estimated$250 million had been allocatedfor small farmers. To this end.450 million in irrigation. there is no legal provision regardingsize of holding or because the law has been ignored. irrigation projects are subjectto special regulations or laws regarding the size of holding that can be held by the projects have conbeneficiary. Bank-assisted provided more than $1.
That is. and income from the land. Firstly. These options are reflected in the policy guidelines provided in this paper. the settingof public utility rates. 46 . in the sovereignstatesthat are membersof the Bank? Major Policy Options The Bankhasto recognizethat its leverageis limited as it seeksto redefineits positionwith regardto land reform.one of the major dilemmas confronting an international lending agencyconcerned with promotion of land reform as an instrument of economicdevelopment.Suchpolitical decisionsare not amenableto ready negotiationwith governments the in sameway as are other institutional questions-such as. It should give overt priority in lending to those countries and projects which meet land reform criteria. for instance. The Bankwould seemto be left with only two options. Secondly.in countries where governmentsare not interested in land reform the Bankshould: (1) studythe situation in all cases. (2) call the attention of the governments the problemsassociated to with the existing tenure system.and enter into a dialogue on the subject. and (4) not lend for projects if tenurial arrangements so bad that are they frustrate the achievementof the Bank'sobjectives. to what extent canthe Bankinfluence the courseof eventsregardingdistribution of land.in countriesthat are interestedin pursuingland reform the Bankcangive support in the form of technical assistance finance for reformand related projects. (3) support land reform proposalswhen they are made officially.UsingBankfinanceto gain a developmental impact through land reform involves highly complex issuesat the project level. while the potential for usingthe Bank'sinfluence to pressor even force the issueof structural reform on member countries is severelycircumscribed.
I I I .
8 14. the tables show that: 1. averaging0. or closeto 0.0 12.78 Source: FAO. there is an average 0. More than 70% of all rural people live in Asia.031 851 13. 16% in the USSR. madeup of 1.8 4.456 million hectaresof cropland.the People'sRepublic Table 1:1 Regional Distribution of Land.78hectareof cropland per person in agriculture. respectively.851 million.75 0. 49 .0 71.Theworld's agriculturalpopulation-defined as populationdependingon agriculture for its livelihood-is estimatedat 1.783 2.Annex1 THE CONTEXT OF LAND REFORM Ratios of Population to Land The total land area of the globe is about 13.9 0.393 145 232 271 84 463 214 47 1.753 3. The world's population was estimated at approximately 3. and 3% in Oceania.314 239 4 1.8%). 19% in North and Central America.0 89 77 54 74 1.Of the arable land. of The relationship between population and land in all major regions and for 52 selectedcountries is shown in Annex Tables1:1 and 1:2.defined as arableland and land under permanent crops (10.4%).456 10.2 2.02 1.which hasapproximately 32% of the world's cropland.8 31.617 million in the early 1970s. and 4.Production Yearbook 1972.9 18.7 3.90 11.393million hectares.240 2.6% in SouthAmerica.Together.0 17 32 17 39 64 67 4 51 1.40 hectareof cropland. or 51% of the total population.7 hectares an of land.987 million hectares under permanent pasturage (22.63 3. The ratio of cropland to agricultural population is the lowest in Asia among all the major regions.9 4.2 100. 2. 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.This represents averageof 3. Cropland.242 1.01 5.35 hectare per person.0 15.35 0.2 100. 15% in Africa.041 million hectares under other uses(36.14 0.8%).Among other things. per person.851 4. approximately32% is in Asia.6 5. 10% in Europe. On the basisof these global figures.
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
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
Population Production and
The population in the rural areasof developing countries,while declining relative to total population, is increasingin absolute numbers. Despite rapid migration out of agriculture, and despite the explosivegrowth of population in certainareas,the rate of growth of the rural population has increasedin all regions of the world other than Africa. Table 1:3 showsthe trends in rates of growth between 1950-60and 1960-70,with overall growth rates rising from 1.9% to 2.1%, and the largest regional rate of increasebeing the one from 1.8% to 2.1% in EastAsia (where population density is alreadygreat in rural areas).
Table 1:3 Rural Population Growth, by Region
Annual percentage rate 1950-60 1960-70
Latin America EastAsia MiddleEast Africa Totalall regions
1.4 1.8 1.8 2.4 1.9
1.5 2.1 1.8 2.2 2.1
Source: Davis, Kingsley. WorldUrbanization,1960-70. Vol. 1,1969.
The larger number of people hasadded to the pressure populaof tion on the land. Historically,this pressure been relievedthrough has the expansionof acreage along a frontier of cultivation. Indeed,it was the expansion of the frontier in the new lands of North America, Argentina, SouthAfrica and Australiathat helped relieve population pressures the first period of generalizedpopulation growth in the in late eighteenthcentury. In theseareas,population growth was accelerated by an influx of migrants to rates comparable to those found today in many of the poorer countries. However, since the frontier is fast disappearing mostof the poorer countries,so arethe opporin tunities for low-cost expansion of acreage under cultivation. The changingsituation is difficult to document at an aggregate level, but Table 1:4 gives some perspectiveson trends in the expansion of cropped areas and production. The rate of expansionin acreagefell, in the aggregate, the 1950s in and the 1960s. The only exceptionis LatinAmericawhere the acreage under cultivation grew from a rate of 1.8% to 2.5% per year. In all other areas,the expansionof acreageslowed down, halving in the
Annex 1 Table 1:4 Cropped Area and Production Trends, by Region
Average annualgrowthrate 1953-55 1962-63 to 1961-63 1969-71 to Production Area Production Area
LatinAmerica EastAsia MiddleEast Africa All regions
3.1 2.5 3.8 3.0 2.8
1.8 1.9 2.2 1.7 1.9
2.9 2.8 2.7 2.6 2.8
2.5 1.1 1.1 1.2 1.4
Source:FAO.Reportanthe Wo1id 1960 CensusofAgricalture. 1971. Rome:
Middle Eastfrom 2.2% per year to 1.1%. When the rates of population growth are compared with rates of increasein acreageunder cultivation, it appearsthat the rural population increasedat about the same rate as the cropped area during the 1950s,but increased more than one-and-a-halftimes as fast as the cropped area during the 1960s. As shown in Table 1:4, production increased the sameratedurat ing the 1950sas during the 1960s.A rate of increasein output consistentwith an increasein rural population indicatesa decline in the rate of growth of output and incomes from 0.9% per year in the 1950sto 0.7% per year in the 1960s. the sametime, asaverageper At capita income was increasingat a declining rate, yields per acre rose very moderately-in this instance,an increase around 0.4% a year of in the 1950sand 1960s. The increasein population and slow expansionof the area under cultivation have caused a deterioration in man-land ratios. This deterioration, arising from constraintson the low-cost expansionof acreage under cultivation, makesit increasingly difficult to accelerate growth rates of output and income in agriculture. This is because raisingyields requiresa higher level of technologyand management as comparedto increasingoutput or expandingacreageunder cultivation. It is only in recent years that a concerted effort has been made to develop technologiesto raiseyields of staple crops grown in the developing areas.Hitherto, these efforts have been confined to a handful of crops, and the successes attained havebeen limited to a relatively small areaof the developingworld. In somefortunate countries,such as Nigeria, someland resources still availablefor are future developmentthrough an expansionof acreageunder cultivation. But many other countries have little or no unused land, so the 53
1971. a higher output per has worker in agriculture than Japan. and in Japanon the other. I-V. Japan Table 1:5 Agricultural Labor Force and Production in Selected Asian Countries.Annex 1 situation is correspondinglyworse. Malaysia.However.The 3 Stateof Food Agricuture..while one country. This applies to the more densely populated regionsas well as to others. 1972.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. Rome: and p. Sources: Column International 1: Labour Office. 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 .Republic of Laos Malaysia Nepal Pakistan Philippines Sri Lanka Thailand Viet-Nam. is a country of small holdings and has approximately two workers per hectarewith an averageoutput of $397 per worker and $762 per hectare. The increasingpressureof population on the land highlights the issueof absorptivecapacityin agriculture. The emphasisin the latter countries will have to be placed more and more on raising yields per hectare.Several other countries havea higher ratio of workers to the land than Japan. 99.LabourForce Projections. Geneva: Columns and 5: FAO.Most developingcountries haveconsiderable opportunities for increasingemploymentand production in this sector.Table 1:5 showsthe startling differences in input of agricultural labor and output per hectarein developing countries of Asia on the one hand. 1970 Agricultural workers per 100 hectares Netagricultural production per hectare (US$) Country Indices Japan = 100 Indices Japan = 100 Output per worker (US$) Indices Japan = 100 Burma India Indonesia KhmerRepublic Korea.
The censusprovides a breakdown of distribution by size of 138. low incomesand increasingunemployment.9 million holdings.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). Basedon the sameassumptionas above. becauseof the small size of the irrigated areas in Pakistanand India and other constraintsrelated to technology. 55 . or 39% of the total number.7% of the cropland. Suchmeasures include thoserelated to land reform. 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.except Afghanistan.land tenure and capital formation. It showsthat: 1. theseholdings accountfor approximately6. resourcebase. Distribution Land of The ratio of population to land tells us nothing about the distribution of land among the rural population: countries with denserural populations mayhavea more evendistribution of landthan countries with sparsepopulations. It is reasonably clear that whatever is done will only partially satisfy the ever-risingdemandfor work and income in the manydeveloping countriesthat arefacedwith the generalproblemsof high population growth. specialand possiblyextraordinarymeasures would haveto be taken to satisfy the expandingdemand for work and income from today'schildren. 2. evenif effective birth control could be introduced overnight. Thiskind of labor intensity is not likely to be reached. urban aswell as rural.8% of the total number.Table 1:6 combines the two sets of information to give an indication of the distribution of land and cropland by size of holding. then theseholdingsoccupy1. or 78.4% of the cropland. The most recent data on distribution of holdings by size is given in the worldwide censusof agriculture held in the early1960s. poverty and unemploymentproblemsof the developthe ing countriesare unlikely to haveany long-term solutionsthat would not include a reduction in population growth. About 109 million holdings.8% of the total land area and 20. About 53. Nonetheless.With very few exceptions. are under 1 hectarein size.includingall of the larger countries that are membersof the Bank. are lessthan 5 hectaresin size.1% of the land areaand 3.3 million holdings in the 83 countries. Ecuador.Annex1 and India.Bolivia. the agriculturalsectorin thesetwo countriescould absorb all the labor force expectedby 1985. Thiscovered83 countries.Nigeriaand Romania.however.
16 0. when viewed in the aggregate. approximatelyhalf of theseholdings 56 .59 38.27 4.55 28.40 0.00 0.then holdingsabove50 hectaresin size.48 0.30 100.and if the a distribution of 91% of the land reflectsthe pattern of distribution of all the land.20 1.Conversely.80 11. 3.5 5.00 Source: FAO.90 19.50 50.92 million were lessthan 5 hectaresin size. disthe tribution of land and cropland is highly skewed.8% of all holdingsin the 83 countries.70 4.000 over and Total 53.00 11.30 12.60 5.40 5.8% of the total farmland area and 45.24 7.97 1.60 8.In the 64 countriessurveyed. The information on distribution of holdingsby size refersto the 83 countries.20 20.3% of all the cropland.and more than three-quartersof all farmland.90 26. 34-36. covered by the census. That is.90 7.10 100.10 1. Rome: 1971.00 11.000 1.60 6.73 13. of pp.20 4.20 3.500 500-1.40 5.67 0.20 20.80 9.2 2.23 138.10 10. Therewere an estimated16 million holdingsof lessthan 5 hectares in the developedworld: 6 million in Japanand 10 million in Europe.50 51.40 1.50 5.23 0.16 100.80 5.40 1.00 4.2% of all holdings.80 6. roughly3% of all holdings(in the aggregate)account for slightly less than half of the arable land and land under permanentcrops.If the distribution of holdingsby size in 83 countries represents global picture.Report the 1960 on WorldCensus Agriculture.97% of all holdingsaccount for lessthan onequarter of all farmland and slightly more than half of the area under crops. These data confirm that.50 10.00 1.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. both developed and developing. Thus. One million holdingsof 200 hectares more representlessthan or 0.of 122 million holdings in the developing countries.00 3.200 200.70 11. account for 78.which represent 3. farms of this size group account for 66% of the total land area and nearly25% of all cropland.100 100.70 9.
7 27.at the time of the census.5 Source: FAO.The resultsare summarizedin Table 1:7.2 17.Thus.3 8.Annex1 were less than 1 hectareand the remainderwere between 1 and 5 hectaresin size. more than half of their holdingsare lessthan 1 hectarein size.4 39.7 3.4 36.5 13. this is not a complete coverage.7 52. Together. it is highly likely that closeto 100million holdings of less than 5 hectaresexistedin 1960. of Rome: 1971. Consequently.0 8.8 0.5 90.it is safe to assumethat the census forthcoming in the 1970swill reveal that there are well in excess of 100 million smailholdersin the developingworld.4 37.0 40.since it excludes holdings of less than 1 hectare. This conclusionis derived asfollows: The 1960censusindicated that there were approximately92 million smallholdersin developing countries.0 34. the agricultural population in the developing countries increasedby a reported 190 million persons. Preliminaryindications are that the fragmentationof holdings hasincreasedin manyof the more densely populated countries as well as in countrieswhere the distribution of land is skewed. Obviously. Table 1:7 Distributionof HoldingsaboveOne Hectare. Reporton 1960 the World Census Agricalture.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. Between1960 and 1970.5 9.4 45.or by more than an estimated 35 million farm families.2 3.4 million holdingscovering2. However.5 50.0 0.242million hectares. or 10 million families.1 90.2 73.5 21.7 91.6 23.2 5. Afghanistan. most of whom were farming on units of less than 5 hectaresin size. Ecuador and Bolivia.3 0. 57 .5 2. in all probability.these countries had an agricultural population estimatedto be close to 50 million people.7 - 47. It is safeto conclude that well in excess 100million holdingsare of less than 5 hectaresin size in the developing world at the present time. excluding those in Nigeria. it does provide an insight into the patternsof distribution of holdings within the major regions. The1960census data alsoprovided information on holdingsby size and land areafor different regionsand countries.0 99.1 66.2 6.5 1.0 23.4 78.The most comprehensiveregional and national analysis the 83 countries dealswith for holdings of 1 hectareor more in size and pertains to 84.
as presentedin the census.2 0.1 85. Report the 1960 or WorldCensus Agriculture. misleading. as shown in Table 1:8.9 28.8 5.0 Source:FAO. At the other end of the spectrum. 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. are This The data for Africa.2 42. The analysisof the distribution of holdings by size on a regional basispoints to the highly skewed distribution in the Americas.1 20.7 36.6 20.As much as 34.1 1. 58 .6 6.5%.5 86.4% in North and Central America that are less than 5 hectaresin size occupy only 1% and 0.8 95.7% of the land.6 8.3 43.while the sampling in Zambia was confined to Europeanholdingsand in Tanzania commercialholdto ings. only 5% of the land in the eight Table 1:8 Distribution of Holdings above One Hectare.7 50.9 49.7 4.is in farmsof more than 50 hectaresin size.8 14. is becausecoverageof that continent in the 1960 censuswas poor.3 87. of Rome: 1971.0 4.6 30.5%in the eight countries is in holdingsof more than 50 hectaresin size.3 1-5hectares % area 5-50hectares % holdings % area 50 hectares % holdings % area 0.Annex 1 The analysisindicates the vast differences in patterns of landholding and land distribution between Asia and the other regions.9 2.1 6.4% of holdings in South America and 23.then the land held by smallholdersowning under 5 hectaresis much more than 50% of all land. The 36.3 36.2 1.of the area under farms.0 0.7% in Europe.7 46.1 1.3 32. in Selected South American Countries %holdings Argentina Brazil Chile Colombia Paraguay Peru Uruguay Venezuela 14.1 4.2 94.1 6.0 22.3 38. and more than 90% in North and Central America.2 10. South America and Oceania.8 92. The information confirmsthat a very high proportion of all land-ranging from 86% to 97. 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.0 9. respectively.3 40.5 3.6 51.4 12. by Size and Area. the pattern of holdings in the eight major countries in LatinAmerica.2 92.8 97.1 37. Only 9% of the area in Asia is in holdings of more than 50 hectares. helps explainthis. If these are excluded from the sample.5 73.5 52.
the Gini coefficient indicatesa high concentration in six South American countries included in the sample. 36. The distribution of land by size of holdings is "a geographical phenomenon" and must be interpreted with caution in a socioeconomic context. Land-Tenure:WorldAgriculturalStructure. Federal Republicof Greece Japan Philippines Sweden Yugoslavia Sources: FAO.ArabRepublic of India Iran Ireland Italy Netherlands Norway Pakistan Turkey United Kingdom UnitedStates Belgium Canada China.The Gini coefficient hasbeenestimated for 30 countries which have been grouped into three categories. Rome: 1961.Japanand Swedenhave a low concentration of holdings. Washington: 1965. as revealedby a Lorenzcurve.Canada. 59 . notably Asia and Europe. p. US Departmentof Agriculture.as shown in Table 1:9. countries such as the Republicof China (Taiwan).On the other hand.Annex 1 countries is in holdings of less than 5 hectares(even though these holdingsconstitutebetween 14% and 74% of all holdings). Economic Research Service: ChangesinAgricultutrein726Developing Nations.1948to 1963. Other data provided by FAO. As can be seen.It is of special interestthat two of the countrieswith a high densityof population and very little concentration of landholdingsare Japanand Taiwan. 2.the distribution of holdingsby sizevarieswidely in different parts of the world.Republic of Denmark Germany. Clearly. Study No. The most skeweddistribution appearsto be in LatinAmerica where the densityof population is relatively low in rural areas. the sametime. 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. It may indicate little about the international distribution of wealth or income-5 hectaresof irrigated land in Japan would certainly yield an income well in excessof that yielded by Table 1:9 Concentration of Land Ownership in Selected Countries High concentration Medium concentration Low concentration Argentina Brazil Colombia Iraq Peru Spain Uruguay Venezuela Austria Egypt. the distribution of land appears be At to much lessskewedin many areaswith a very high densityof population.
this is true of less than one-quarter of the farms. within countries. However. such as Guatemalaand Tunisia. In such countries as the Republic of Viet-Nam. more than two-thirds of the farms. and the percentageof farms and areasof farmland they occupy.Only limited data on theseare available. The caveats quality of land and ecologicalconditions governing on land-use patterns must be borne in mind. and rentersenjoy the sameworking conditions asownersof land.however. is Tenants and FarmLaborers The distribution of holdingsby size and population densitiesgives no indication of the statusof thosewho hold the land or the numbers of the landless. In other areas. The conditions that govern rental agreementsand crop-sharing arrangements differ throughout the world. in the 15 countries. This limited sample indicates that renting and sharecroppingare widespread in all the major regions of the world.000 hectares of land usedfor sharecroppingin the semiaridparts of Tunisia'scentral area.yield a far greater income than do 1. rentersand sharecroppers in a verytenuous posiare tion when it comes to negotiating arrangements with the landlord. the rights of those who rent land are protected by law or custom. All in all. are farmed by tenants or sharecroppers.there is heavydependence the on landlord-usually an absenteelandowner-for the provision of pur60 . Renting or sharecroppingof land is a common practice in both developedand developing countries. 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.000acresin parts of Northern Australia.Similarly. The evidence presented here (andelsewhere)indicates. occupying much more than half of the land. It also indicatesthat the greatestskewness distribution is in the Americas. in and that this skewness by no meansconfined to LatinAmerica.out of 82 million holdings.In someparts of the world. and they commonly give as muchas half their output in return for the useof land and services provided by him. where tenancyis widespread.Table 1:10 givessome information on the number of rentersand sharecroppers in 15 countries. in other countries. In mostdeveloping countries. close to 29 million are worked by rentersand sharecroppers. producing tomatoes. however. Table 1:11 indicates the number of landless farm workers in 12 countries. Iran and Egypt.Annex1 100.that mostof the agricultural land and cropland is concentratedin a relativelyfew holdings.
3 35.3 61. Republic of Total Middle EastandNorthAfrica Egypt Iran Tunisia Total Latin America Caribbean and Chile Colombia Dominican Republic Guatemala Nicaragua Trinidad Tobago and Total (a) 27.271 1.7 57.0 62.392 141 5.3 33.5 n.Rome: 1971.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.a.7 23.350 4.4 70.664 62.Report the 1968 oe WorldCensus ofAgricolture.2(5) 1.6 n.253 76 2.a.8 19.020 1.4 54.Vol.9 31. Tenantsand sharecroppers under conditions of great insecurity and are in a weak bargaining position vis-a-visthe landlord. 32. do not reflect land reform action on the one hand and changes in the work force on the other.2 73.4 26.9 22.4 57.1 66. (a) Includes holdings operated under more than one tenure form (21. chased inputs.1 49. India and Nicaragua are excluded.0 45.3 49.4 32. 25.5 31.176 1. 92-97.349 128 381 129 93 27 18 776 Data refer to latest available year in 1960s and. Source: FAO.334 25. (1) 1960 estimates are for former Federation of Malaya.4 13. Dominican Republic.3 31.9 15.India and Pakistan. Frequently. 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).a.0 40. (4) (5) Includes both Pakistan and Bangladesh. The insecurity of tenants has been highlighted by their displacementon short notice when technological change has made it more profitable for landowners to mechanizetheir operations-as hashappenedin Ethiopia.6 24.0 n.81). therefore.the tenantsare among the lowest income groups in agriculture.3 70. 16.5. 61 .2 43. pp. due to lack of data.7(5) 13.5 28.
865 903 484 210 4. Directorate of Economics and Statistics.013 60. do not reflect recent reform actions on the one hand and changes in the work force.43-294. (2)Agricultural laborers as shown in India: Ministry of Agriculture.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.158 122 179 391 138 72 2.561 694 3. 1971). data presented here are estimatedfrom [LO.300 5. data refer to latest year available in 1960s and.099 1. 44-301. 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.Annex1 LandlessWorkers The number of landless-farmworkers in developing countries is increasing.. on the other. pp.499 101 557 99 287 9.673 8. Agricurltureinn Brief (I Ith ed. p. Unless otherwise indicated.237 378 1. YearBookof Labour Statistics 1871. indian (3) Includes population now belonging to Bangladesh. Approximately100 million personsare farmwage workers Table 1:11 Landless Farm Workers in Selected Countries(l) Landlessworkers as % of active population in agriculture Active agricultural population as % of total active population Number of landless workers Asia 2 India( ) Indonesia 3 Pakistan( ) Total East Africa Middle andNorth Algeria Arab of Egypt. and Except for India.986 1. thus. 1972. 14.
the proportion ranges from a minimum of about one-fourth in Brazil and Hondurasto a maximum of approximatelytwo-thirds in Chile.and the provisionof employmentfor what is alreadya large rural proletariat may well be one of the greatest challengesfacing national governmentsin the future. This figure includes an estimated47 million in India aloneabout 32% of the active population in agriculture. This group is increasingin size. The nature of this phenomenon has been discussed elsewhere. Structural changes within agriculture can help alleviate underemploymentand open unemployment. 63 . There are about 10 million suchworkers in LatinAmerica.At this juncture. 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.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). There is a vast amount of underemploymentin the rural areasof most countries of the world.In the remainingcountriesof the region. The emergenceof a landless wage-earningclassconfirms that a growing rural labor force hasto rely on work outside the traditional sectors for its livelihood.Annex1 (including family membersand headsof familieswith verysmall landholdings) in the 22 countries for which data are provided in Table 1:11.It is usuallyassumed that the labor force subsists a off holding and joins in some arrangementwith the extended family whereby it shareswork and output. more than half of the workers are essentiallylandless. Almost no reliable estimatesexist of the number of unemployed in rural areas. it should be pointed out that the redistribution of idle land can provide added employment.
written and secureleases were arrangedat much reducedrental rates. Land reform is a complex process in which severalsocioeconomicvariablesare changedmore or lesssimultaneously.The proportion of cultivated land under tenancy leaseswas reduced from 41% to 16%.Landproductivity is higheston holdings below 0. Their inclusionin this paper should not be taken as indicative of Bankjudgment on what doesor does not constitute land reform. On the land remainingunder tenancy cultivation. nor should the statementsbe regarded as definitive. and a graduallyincreasinginvolvementof tenant farmers in the administration of the program.all contributed to the success.leavingintact enoughincome to achievea fairly high agricultural savings rate.Theexistence of a thorough cadastralsurvey. evidenceis inadequate allow identification the to of causalrelationships between reformmeasures the one hand and on production. while the proportion of farm families owning all land under their cultivation increasedfrom 33% to 59%.good agricultural researchand extensionservices. Republic China of Taiwan'sland reform program was implementedin three steps. A land-to-the-tiller programcompletedthe reform in 1953.A reduction of rents. and rural and social stability havebeenenhanced. even though it is often feasible to trace correlations.5 hectare. 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. 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 .the productivity of agriculturehasincreased. in 1949.was followed by the saleof public lands.In mostcases. income and social effectson the other.The shareof total agriculturalincome that is consumed hasincreased only moderately. income distribution has become more even. Following the reform.Annex2 EXPERIENCES WITH LAND REFORM The following summariesillustrate selectedcountry experiencein land reform over the lastthree decades.such as that between land distribution and a rise in productivity. vast expansion publicly sponsored a of farm credit during the reform period.
the power of the feudal lordsto collect taxes from landownerswas broken. Owners had to sell all land in excess about one hectareto of the governmentat confiscatoryprices. Japan The first Japanese land reform program.Afterward. and (3) a redistribution between 1950 and 1953 of land in excess a ceiling of 3 hectareson Korean of holdings.Laborproductivity and rural employment increased.In the late 1940s. in 1868. in 1948. Yields did not fall as a consequenceof the reform. The first reform did little.But the small size of most farms has now becomea constrainton farm income. Subsequent the first reform. The second reform resulted in greater equity. Supplementary programsfor infrastructureimprovement. and may also have removed a constraint on the growth of Japanese agriculture.Annex 2 in 1945. before the reform.The peasantry wasfreed from bondage. the tenancyproblem grewgradually to worse. and private landownershipwas reinforced for the purposeof cash taxation by the central government.Considerablesociopolitical stability has been achieved. with the result that the agricultural sector could provide savings.Some 1.4 million acres (25% of the total farmland) were distributed to 1.hasbeen estimatedthat. 19% of the farmers owned 90% of the land and more than 50% of the farmerswere landless tenants. (2) a redistribution.credit services. It.Theformer tenantsweregiven property rights at an extremely low real cost.while only 7% were tenants.The terms of salewere similarly generoustoward the buyer in both cases. 69% of the farmers owned all the land on which they worked and 24% were part-owners. yields had far surpassed prereformlevels. to distribute property ownership or reduce income inequality-rather it strengthened the landownerclass. by the 1960s.6 million farmers (approximately70% of all farmers).Labor intensityand land productivity rose quickly.togetherwith income redistribution in favor of the poorer ruralfamilies. of Japanese property confiscated by the military authorities.training and extension. and promotion of farm chemicalsand new crop varietieswere pushedon a large scale.partly because heavy of land taxes. laid the groundwork for Japan'ssocial and economic transformation. Largenumbersof smallholderslost their property in the agricultural depressionat the turn of the century. which resulted in a thorough restructuringof rural society. The economiceffects were not as enormousas thoseassociated with the 65 . however. a secondland reform programwas executed. cheapfood and surpluslabor to the industrial sector.
An attempt to create larger farming units through cooperativeshashad little effect. The abolition of the zamindari systeminvolved 173 million acres. amongother objectives. (3) to ceilingson landownership and distribution of surplus. The second reform worsened. Although the reform increasedincome equality among farmers.4.Sincetenants continue to pay revenuedirectly to the government. is largely recommendedand coordinated by the Central Governmentand the Planning Commissionand executedby the individual stategovernments. with the result that policy implementation varies widely. therefore. price supports notwithstanding. Actual rents have not come down. subtenantsand sharecroppershad. A total of Rs. by 1961. lagged behind. The four major types of reform havebeen: (1) the abolition of the zamindari' system.to improve security of tenure and to give the right of purchase the tenant. more than half of the area occupied by holdings. but some observers regardthis asessentially continuationof a long-term trend a (1895-1939) startedby the first reform. Rural incomes have. most important of whom were the zamindars. The landlords who were forced to sell excessproperty were mostly smallholders themselves.mainly in the form of bonds.an increase farm incomethrough diversification into horticulture and animal husbandry. 3 million tenants. in 'The zamindars were revenue collectors during the Moghul period. it hampered equalizationof rural and urban incomes. 66 .the problems of fragmentation and undersizedfarms. acquired ownership under purchase agreementsof 7 million acres. but the farmersconcernedare often limited to lowskilled work.however.and (4)consolidation of fragmentedholdings. India Land reform in India. Agricultural policy is now of aimedat. Land productivity did increase after 1947. the intermediary rent and tax collectors.At the time of the reform. however.their economic position hasnot been greatly improved.had been abolished.Annex 2 first reform.Part-timework outside the farm is an outlet. Two-thirds of the owners were required to sell lessthan one hectareand only 6% more than five hectares. the tenancy problem had already been relieved through a reduction of excess rural population by the war and absorption into industry. pursued since 1950-51.Securityof tenure appearsin general to haveworsened. they gradually turned into powerful landlords.350 million was paid in compensation. By 1961. Under the tenancy reforms.(2) tenancyreformdesignedto fix maximumrents. Under the British.
a practice which hampered agricultural investmentand causedexploitative useof the soil.the landacquiredis sufficient to give minimal holdingseither to the minifarmersor the landlessbut not both. Before the reform.A further 4. Unreported casual tenancyand shareagreements havemultiplied.Only about 1 million acresout of all gifted land haveactually been given to landlesslaborers. were rented.2 million acreswere formally pledged to the Bhoodan(gift) movement.it will be better to legalize someforms of tenancywhich exist on a largescale. 56% of the holdings. together with accessible marketingchannelsto small farms in general. Iran Iran's land reform started in 1962. which has allowed them to escapethe reforms. 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.Evenif a ceiling is imposed. Therefore. As long as population pressurecontinues.It appearsto havecontributed to a growth in productivity in the northern states Punjab. Tenantswere rotated annually.and ownerswere often absenteelandlordswho contributed little to agriculturalproduction. Provisionof thesefacilities is as essentialas further land distribution for attaining the income equity and productivity objectivesof India's land reform. and is likely to presentfewer problems.is required. Under the ceilings legislation.Landownershave been permitted to resumeland above legal ceilingsfor personal cultivation.largest estatesoccupied relativelymore fertile lands. it will be unrealisticto try to abolishtenancy in the short run. A large extensionof credit at reasonable to terms. of and It is well recognizedin India that the reform measures dealingwith securityof tenureand acreage ceilingsareonly partiallyenforced.and particularly to tenantswith secureleases. covering 62% of the area under cultivation.but most of the donatedparcelsare still in the handsof the donors.Annex2 some statesthey have even increased. Former landownerswere partly compensatedupon expropriation by cash paymentsrangingfrom 10% to 20% of the estimatedvalue 67 .approximately2 million acreshave been taken over by the government in order to settle tenantsand landlesslaborers.and to promote more efficient typesof tenancy contracts.All kinds of tenants should also be registeredand given access credit and inputs. The.Uttar Pradesh Haryana.and that manyof the statelegislatures not anxiousto havesuch radical are land reform.
As these paymentsfell behind. Virtually all of Iran's 50. (2) selling to the tenants.which was practicallycompleted in 1971.the reforms did not assistthose who were landless. it is believedthat the land reform program on balancehad adverseshort-run effects on output.but this growth leveledoff after 1966. the Central Bankfunded the difference. there was also considerable interferencewith the normal flow of irrigation water from streamsand storageplacesstill controlled by landlords. Many measures were set up in a somewhat improvised fashion. The reform favored tenants and sharecroppersinsofar as it conferred ownership on them or enhanced their security of tenure. Morocco The Moroccan Government has undertakena series of measures aimed at land reform since independencein 1956. During the first stageof the reform. In the second stage. credit and extensionservices. The third and final stageof the reform. total lending by the Agricultural Bank tripled between 1960and 1965. The early accomplishmentsof the credit program were striking. The landlord had five options for the area in excess the maximum allowed to him. It created uncertainty which discouragedinvestment in improvements. and increasedsupply of quality seedsand fertilizers.000villageshave undergone land reform and more than 3 million families have received land.the limit of one village was reduced further to plots of 20-100 hectares(depending on the natureand location of the land). (4) dividing the land with the tenants in the same ratio as the customary crop sharing. (3) purchasingthe tenants' rights. Continuation of the existing inequities of land distribution was regardedas one of the costsof ensuringa speedyenactmentof the reform. Although agricultural output increasedby a total of 18% in the first five yearsof the reforms. to wit: (1) of leasingto the tenantsfor 30 years. Because they were basedon the existingdistribution of holdings. The ownershipand tenancy reforms havebeen complementedby rural cooperatives. and (5) forming an agricultural unit for joint operation by the owner and the tenants. Excess land was expropriated and distributed to the tenants. with the balancepaid in bonds in annual installments. aimed at conversionof all 30-year leases into smallholdings.The costs to the Governmentwere limited to thoseincurred in carryingover the acquisition coststo the time of final reimbursement.Annex 2 of their holdings. The objective of these measures to facilitate an increasein agricultural production is 68 . landownershipwas limited to a maximum of one village per owner.The beneficiarieswere to repaythe governmentthe expropriation price plus 10% to cover administrativecharges.
is aimed at facilitating the developmentof irrigated agriculturein welldefined developmentzones. At the time of independencein 1956.Legislationpassed in 1962.amountingto about 370.000hectares. of this area. and a further 220.000hectares(3% of the cultivated area)had been distributed to over 11. between 1974 and 1977. However.althoughsomeother state-ownedland and traditional collective land is involved.000hectares. It providesfor the restrictionof inheritance rights to limit fragmentation. while maintaining high technical standardsof managementon the distributed land. the beneficiariesof land reform have generally quickly achieved high yields and acceptable incomes. The Agricultural Investment Code.000hectares were sold privatelyto Moroccans. the impact of land distribution alone on the problem of rural poverty hasbeen small.Annex2 and to improve the distribution of rural incomes. Land distribution is so far basedmainly on former foreign-owned land.000hectaresof "official colonization" landswere takenover by the Government between 1963 and 1965. Distribution to smallholdersand landlessfamilies was slow until 1967 and then gatheredmomentum up to 1972.000hectaresof land under field crops.The achievementof the distribution target for land 69 .while land under tree crops (mainly orangegroves)remainedunder Government control and ownership.when legislation was introduced subjecting such transfersto Government approval. The main constrainton the program hasbeen the unavoidablecomplexity of supervisingits implementation consideringthe Government'smanpower resources.intensified extension supportand the provision of modern inputs.000 hectareswere foreign-owned. and to seeka suitable formula for distributing land under tree crops. 181. The Government'smain priority now is to accelerateland distribution. The target for the third Five-Year Planis to distribute 395.000families. mainly formerly foreign-owned. published in 1969.about 900. about 300.1966 and 1972 provides for land consolidation and distribution of land to smallholdersand landless families throughout the country.mainly before 1963. Thirty-one thousand hectareswhich were mainly used by foreignersfor researchpurposes were recoveredby 1960.and the adoption of modern cultivation techniques. Distribution so far hasbeen limited to land underfield crops.was recovered by the Government in 1973. an improvement in the tenure position of membersof traditional collectives.Land consolidation hasalso been successful and hasso far benefited almost 200. By the end of 1972. Through the establishmentof cooperatives. Remaining foreign-ownedland. the number of beneficiariesso far is only about 1% of farm families with lessthan 2 hectares.
The reforms have resulted in a sizable redistribution of rural income and an increasein peasantparticipation in rural decision making. which resemble worker-managed the industrialfirms. 70 .Thisis related to the location of holdings on the better soils and its priority treatment in the allocation of inputs such as fertilizers.Annex2 under field crops alone would.while the other half was retainedas state property.and resulted in a transfer of ownership of almost 25% of the farmlandto more than 33% of the peasants.and have expanded about40% of all smallholdings. but the former landownerswere allowed to retain ratherlargeholdings. form the largest and fastest-growing socialistelement.collectiveforms of usage. equipment useand output sales. However.when all large estates.whereas producer cooperathe tives havedeclined. Aside from the socialistsector. are In 1953. In the north. and vasttractsof mountain pastures still undertraditional. and the farm property of of Germans and other aliens.a ceiling of 10 hectaresof arable land or its equivalent was imposed on private holdings. consistingof both the cooperatives and the farms outside the socialistsector.the privatesectorof individualownerswho cultivate their own land remainsimportant. to The socialistsectoris reportedlythe mrst productive.The implementationtook two decades. by the end of the plan. particularly sincethe mid-1950s.The average holding in the private sector is now only 3. enable the program to cover 9% of cultivated areaand 5% of farm familieswith lessthan 2 hectares. bondage was abolished. The second land reform started in 1945.however.and by 1956accountedfor only about 10% of all land under cultivation. In the The first land reform in Yugoslavia south and west.Half of the seizedland was distributed to the poor and landless.were expropriated. Yugoslavia was undertakenin 1919. The socialistsector includesstatefarms.The generalcooperatives mainly associations are for joint input purchases. and the tenants of the Turkish landownersreceivedownership rights.9 hectares. The stateand collective farms createdin the late 1940salong Soviet lines expandedto approximately25% of the total cropland. machineryand expertise. the bulk of agricultural output still originates from the large group of small farms. Collective farms were allowed to disband after 1952. producer cooperatives and general cooperatives. the size of the large estateswas reduced. The kombinats. all land in excess 25-35 hectaresper farm.
wheat. those that were already relatively well-to-do have profited. More than 1 million acresof land formerly cultivated by Europeans were opened up to Kenyansmallholders. Theseincluded: (1) adjudicationand consolidationof holdingsunder cultivation by African farmers.Theseprimary beneficiaries of the reform represented 53% of all farmersand 26% of the rural labor force. while the poorest smallholders and nomadshave benefited much less from the reform. It was estimated in 1973 that approximately25% of all smallholdingswere less than one hectareand about 50% less than two hectares. despite the considerableconcentration of ownership that persistsin the private sector. Mexico Having its roots in the revolution of 1910-15. Incomesof the ejidatarios arealmost certainlybetter than would havebeen the case without reform.and (4) diversificationof export output. dairy products and beef. Somethree million landlessrural workers remainand. 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.and the rightsto about 7 million acreswere adjudicatedand consolidated. but substantial regional differences persist in natural 71 .In particular. Sincethen. The reform aimedat solvingseveralproblemsat the sametime. and increasedproduction for the market.Socially.An activeextensionprogramhasenabled smallholdersto increase the production of coffee. Most of the ejidos wereformed in the late 1930s and havebeen operated on an individual rather than collective basisby the ejidatarios. The implementation and results of the reforms have been quite successful. the ejidos haveincreased output about as fast as hasthe private sector. notwithstanding political friction and a lack of qualified personnel. Total production by the ejidos grew very slowly during the first decadeof their establishment.1976 hasbeen plannedasa terminalyear for land reform.the reformshavecreateda class of prosperoussmallholders. The landless amount to approximately16% of the rural population. pyrethrum.occupying altogether lessthan 4% of total arable land. maize. The economic benefits of the adjudication and consolidation of holdings seemto have been greater than those of resettlementon largefarms. (2) resettlement African farmerson of the large farmspreviouslyowned by Europeans. the agrarianreform in Mexico createdvillage groups (ejidos)with usufruct rightsto land. Closeto 90 million hectareshavebeen distributed between1915 and 1972 to about three million ejidatarios.
but the bulk hasbeen placed in the handsof workerowned cooperatives.however. to which the land title is then transferred.A of limit was establishedon the size of holcdings (150 hectareson the coast).Among ejidatarios.8 million hectaresof this area. In 1972. a total of 4. Rural income distribution is still skewed. While the top 20% of private farmersreceived60% of all privatefarm income. TheSAISisa unique form of farm organization. Peru Betweenthe start of land reform in 1963 and 1972. The government bonds given to the former owners can be.about three-quartersof the target area still remainedto be expropriatedand reallocatedbefore the end of 1975.while in a few casesland hasbeen to added to the holdings of Indian communities. Despite the priority given by the government.Since then. Four different categoriesof farm organizationscan receive redistributed land.More such investment and a mechanism for selectiveconsolidation of small farms will be required to ensure that the impact of the reform is maximized.The more fundamental reform law of 1969was the basisfor the expropriation of the large. In 1967-68.the top 20% of the ejidatarios accountedfor only 45% of all ejido income. Well managedproductive units were exempted.TheSAISrepresents attemptto an 72 .implementation is well behind schedule.Over 100. The agrarianreform law of 1964concentratedon redistribution of inefficiently managedlatifundia (large landed estates)in the Sierra. the concentration may have fallen back as a result of the distribution of another 35 million hectares during the last decade.000families have been settled on 2.The target for the current Five-Year Planis to expropriate26. Expropriatedlands that havenot yet been resettledcontinue to be operatedunder direct governmentsupervisionuntil a cooperativeor SAIS(Sociedad Agricola de InteresSocial) farm organizationhasbeen formed. Following the land redistribution during the 1930s.50% of the farmers earnedonly 20% of all farm income (including personalincome from sourcesother than agriculture).Annex 2 resourceendowment and in the extent of public investmentin complementary infrastructure.the concentration of landownershipincreasedagainbetween1940and 1960.Only a small number of individual farms has been assigned former tenants. used for investmentin industry to supplementtheir other resources. income was more evenly distributed.productiveand profitable sugarcomplexes the north coast. and to redistribute theseto 500.000families.7 million hectareshas been expropriated.and is the basicunit of agriculturalreform in the Sierra.200farm units containing 12 million hectares.
population and economic potential. power reticulation and housing.the full market value of expropriatedlivestock hasto be paid in cashwhile fixed capital is to be paid for largely in agrarianbonds. the governmentis faced with problems of maintaining or raising productivity levels attainable only through exploitation of scale economies.The SAIS. while the number seekingwork in agriculture will rise from 1. Legally.000families with insufficient land to provide adequatesubsistence eligible to are benefit through the land reform program. 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. However. 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. Nearly800.surplus manpower is given employment.000 families. roads.will still lack a minimum subsistence landholding. and the rather meagerprofits can be usedin developingbadly neededphysicalinfrastructure. 73 . the share of each group is determined by the land reform agency.Membershipof eachSAISunit consists the cooperaof tive of the production unit and of the communities surrounding it. and are to be used in community development projects involving schools. The land reform programalone will not be able to solvethe rural . Eachgroup contributesto the capitalof the enterpriseon the basisof resources.therefore.6 million. * In anyattemptto meet socialneedsthrough redistributinglandand income in the Sierra. In this manner.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. agrarianreform is providing the basisfor socialand economicchange. employmentopportunities in agriculturewill increase only from 1. Profitsare allocatedto each membercommunity in relation to its sharein the SAIS.Haciendaproduction is almost entirely basedon extensivegrazing of mountain pastures.1 million.32million to 1. It can be regardedas a second-degree cooperativewhosemembersaresocialbodies instead of individuals. Evenif the optimistic targets for 1975 are met. accountedin 1972 for 10% of the families benefiting from the agrarianreform program.9 million to 2.Managementof the SAISis in the handsof professional employees.mostly in the Sierra.the proposed solution to this dilemma. Evenif all land which can be expropriatedis redistributed. The debt assumed eachSAISunit is to be repaid from profits in by 20 years following a five-year grace period.about 500.unemployment problem.
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