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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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but rightsof access landare restricted.The greatestdisparitiesarefound in LatinAmerica.Where the pattern of land control is skewed. In other countries. In Asia and the Middle East.the livelihood of more than half of mankind dependsdirectly on agriculture.Somecountries haveprospectsfor expandingthe frontier of cultivation to absorbmore labor. Much of this increase will haveto come from higher output per hectare.Changingthe pattern of landownershipand redistributing land can contribute to increases output in somecountries but will makelittle difference in in others. therefore. nonagriculturalemploymentopportunities are not expandingrapidly enough to provide adequateincomesfor all those enteringthe labor market.At the sametime. as the traditional pattern of group ownershipand communalrightsiseroded in favorof individual ownershipwith varyingdegrees equality. Ninetenths of this total agriculturalpopulation is in the developingcountries.000million people.although to someextent it is the poorer land that makesup the larger holdings. of In terms of land reform policy. the population is moreevenlyspread. the distribution of income is generally uneven. Conditions governing agriculture vary enormously in developing countries. Thus.one is confrontedwith a rangeof cultural and political situations-based on different patterns of social organization and customs-and with different levels of development. while pressureon the land is increasing.maldistribution is reflected in the landlord-tenantproblem. Distribution of landin terms of sizeof holdingsvariesfrom country to country. Land is one of the basicfactors of production for food and other agricultural products. where questionsof access and rights to land are of paramount interestto morethan 2. At present.INTRODUCTION Land reform is concernedwith changingthe institutional structure governingman'srelationshipwith the land. at least six land-tenuresituations can be delineated.The differencesamong thesetypes point to the varying reforms necessary achievemore equitable land access to 3 .more labor could be employed in the rural sector through a redistribution of land.But one characteristicthat is common to all is a very rapid growth in rural population.the averageman-land ratio is worsening. while in yet others changingthe rights to land will makelittle direct contribution toward absorbingmore labor.With food production rising in the developing countries at about the same rate as population.Much to of Africa presentsa different problem.As shown in Chapter1. there is growing to pressureon land resources increaseoutput.
where rural population growth and changing technology interact with the existing institutional structures of rural society. at 'All references to the World Bank in this paper are to be deemed to refer also to the International Development Association.this paper focuseson a much narrower aspect-the appropriate role of the World Bank. The manifestationsof this interaction are seldom benign for the majority of the land-based population.and improvedproductivity in specificcountrysituations. Further. Chapter 1 looks at the characteristics land reform in terms of both its rural context and of its component elements.one is dealing with a dynamicsituation. A situation that hasseemedrelatively stable and equitable for decadescan become untenable.Accordingly. while someexperiences with land reform programsare summarizedin Annex 2. Not surprisingly.Chapter2 examinesthe economic implications of land reform in relation to the goalsof development. 4 . While recognizingthe broad context of the land reform issue.Chapter 3 reviewsthe Bank'spolicy in relation to land reform.Thequantitative backgroundto land reform in terms of population patternsand land distribution is outlined in Annex1. while it is possibleto identify the need for land reform. ranging from communes to private ownership. it is difficult to makegeneralprescriptionswith regardto the form of landholding or pattern of distribution necessary achievethe multipurpose obto jectivesof development. many developing countries are experimenting with a variety of possible solutions-with different forms of rural organizations. The fiscal year (FY)of the two institutions runs from July 1 to June 30.therefore.' In pursuing this question.This dynamismmeansthat a solution which was appropriateten yearsago maybe inappropriate today. unless the context requires otherwise. The policy guidelines are presented the end of the Summary.
Where holdingsarefragmented. has interlinked political. egalitarianism Land reform. reform incorporates changesin the rights of tenants. land reform is pursuedin response political to for pressures socioeconomicchangearising from factors such as increasedpopulation. control and usagein order to change the structure of holdings. the appropriate reform might involve a program of supervisedcooperative land managementwithout changing the distribution of land. In contrast. In most instances. land reform might involve changing 5 . The other three major types have a modern context: the private ownership of land common in most marketeconomies. Where communal lands are eroded or depleted. and the plantation or ranch type. Other variationsof land reform focusmore on the economicuseof than on equity. by its very context. improve land productivity and broaden the distribution of benefits.Thus. In practice.as presentedin Chapter1. Land reform necessarilyimplies many different kinds of adjustments in an array of situations where there are great variations in individual equity and agricultural productivity. although in manycountries examplescan be found of more than one type. social or equity considerationsare the main concerns. reform in states with extensivegovernmentcontrol may involve the transferof some l landfrom the stateto individuals.the stateor collectiveownership of socialist countries. pressure a limited land baseor an ideologyof on basedon more even distribution of land or income. the feudal Latin American systemof large farms. economic and social dimensionswhich in turn havesignificantimplications for development. Elsewhere. and the communal landownershippatternsof manytribal groups (especiallyin Africa).an approresources priate reform might involveconsolidationof holdingswithout change in the patterns of ownership of land.SUMMARY Landreform involvesintervention in the prevailing pattern of landownership. When individual ownershipof the market economytype isthe norm but the ' distribution of land is skewed. when there are exploitative landlord-tenantsystemsof the Asian or Latin American feudal type. of The systems land control in developing countriescan be classified into six types. redistribution of ownership to existing tenants. which is often interspersed with otherforms of tenure. Three of the six types are found in a traditional context: the feudalisticlandlord and tenant system of some Asian countries. reform may require subdivision of large holdings or transfer to the state. or the replacement of the landlord by the tribe or the community.
The socialist and traditional communal types have low concentrations. TheAsian and LatinAmericanfeudal types.suchas in Kenyaand Peru. Theyalso reflect politics and ideology. The casestudiesin Annex 2 showthat reform-minded governments. Considered 6 . the policies followed are not a matter of economicsalone.the degreeof concentrationvaryingwith the typesof tenuresituation. alone is not sufficient it for improving land productivity and distribution of income. Distribution of Landand Income Although few data are available. Individual countries are classifiedon the basisof landownership concentrationin Annex 1. others favor communal or collective control over land. Thedistribution of landby size of holding ishighly skewedthroughout the world. thesedo not require redistribution but eventually lead to a more economic use of resources. as stressedin Chapter 2.Again. and only 7% of all land in holdings. Clearly. Table 1:6. The typology outlined in Chapter 1 makesit clear that there are situationswhere land reform is a necessary precondition for modifyingthe structureof a societyand raisingagriculturaloutput. and the plantation ranch types. Somegovernmentsfavor individual ownership of land. Changes in patternsof landownership not automaticallyleadto an increase will in output or technological change in agriculture. with about 40% less than one hectare. the organization of the supply of inputs to accompanyany land reform program is essential. have high degreesof property concentration. Finally.The judgments of policy makers differ.Theseholdings account for approximately20% of all cultivated land. These will come about only if adequateprovision is madefor the supplyof necessary inputs and mandatory servicesto the usersof the land.the distribution of landownership is known to be skewed. However. Any policy involves fundamentaljudgmentsabout the adequacyof an existingsystemand the most appropriate alternative. while land reform in itself may be necessary.The market economy type falls somewhere in between.havepursueddifferent approaches. Indeed. and reach far beyond any purely economic calculus.especiallywhere the processof reform leadsto a breakdownof the institutional structure of agricultureand leaves nothing in its place. an estimated80% of all holdings are lessthan five hectaresin size.tenancyarrangements with emphasison providing securityof tenure so as to encourageon-farm investment. it must be recognizedthat a policy for land reform for a given situation cannot be statedin simple terms. As shown in Annex 1.Table 1:9.
the distribution of holdings by size is not the sameas the distribution of ownershipof land. The distribution of holdings by size is frequently usedas a first approximation in estimatingthe distribution of wealth and income in of the agricultural sector.Frequently. however. The need to absorb more people in the rural areas differs among developing countries. so that absorption of more people into agricultural activity requires more intensive cultivation of land already in use. Social and Economic Issues The rural population in developingcountriescontinuesto increase by more than 2% per year. there is a greaterconcentrationof landownershipthan of holdings. massiverural underemploymentis accompaniedby high ratesof open unemploymentin the cities and growing inequality in the overall distribution of income.and the increasing pressureon the land through population growth highlight the double challengeof rural development:to raiseproductivity and in7 .especiallyin partsof Asia (see Annex1). adding to the already heavypopulation pressureon the land. In many. by contrast.separately. But.40% of the land (accounting for almost 80% of holdings) is in holdings of lessthan five hectares. Secondly.as evidencedby widespreadtenancy.and more than one-third of all holdings (those less than five hectares)account for only 1% of the area held (seeAnnex 1.the pattern in Latin America is particularly skewed. Table 1:8). a concentration of large holdings in a semiarid region may reflect a smaller concentrationof wealth than a concentrationof small holdings in an irrigated area. In Asia. in most cases.the distribution of income will be more skewedthan the pattern of holdings. firstly.all landis not homogeneous. Exceptin a few places. does not reflect precisely the patterns of distribution of wealth or income.the income of sharecroppers and tenants may be little different from that of landlesslabor. The extremepoverty of manywho live on the land.The skewness the distribution of holdings.Less than 20% of holdings(thoseover 50 hectares) account for over 90% of the total area in holdings. in general.The distribution of income in theseregionswill depend betweenowners and tenants largely on the contractualarrangements or sharecroppers.Thisis because. 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.there is no virgin cultivable land left.
Where landownership is skewed. at the sametime. the additional food consumedby small farm families might have otherwise been purchasedif membersof the family had moved to the city. either by working it themselveson an extensivebasisinstead of through tenantson an intensive basis. the additional labor available. various reasons. increasingpopulation pressurewill inevitably drive up the price of land. At the same time.On the other hand. this may necessitate food imports to meet the needsof urban consumers. 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. increasesin the population of working age create additional demands for work and income. marketable. however. quesWhere land is tions of major importance in these circumstances. therefore. These same circumstances(relating to employment and income distribution) give rise to questionsabout the efficiency of land use For under existing arrangements.however. could serve to augmentoutput. than do large farmers. irrigation and mechanizedoperations(evenon a small scale).The economicbenefits. The consumption of food by poor growers may also be lesscostly than the consumption of imported or capital-intensiveconsumer goods by the better-off farmers. if used productively. the fragmentation of holdings causes great inefficienciesin land useassociated with transportation. The main reason is that smaller holdings are worked with bigger inputs of labor than arelargeholdings. market less. Access land. Smallholderstend to consume more of their own produce and. per unit of output.In other cases.tenancyarrangements such and tenants that landlords are discouragedfrom making investments from applying variable inputs. to provide more employare to ment.or are by leaving it unused.and the conditions that governaccess.come in agriculture and. A strong casecan be madefor land reform (including tenancyreform and consolidation)in situationswhere landwould otherwisebe underutilized in termsof its production potential. Theseeffectson output maybe reinforcedby someof the possible side effects following land reform. this will tend to exacerbate inequalities in income distribution. often depend on the effectiveness new technology when usedon of small as comparedwith large farms. becausehalf the benefits will go to the other party.Smallfarmersmayalsosavelessper unit of 8 .landownersoften prefer to underutilize land. In some situations.In general terms. thus benefiting those who own land. mere redistribution of land may not sufficeto raisefarmeroutput substantially without accompanying agrarianreformsand new services.
In this respect. Many countries have legislated land reform.and that thesedebatesare often couched in terms of redistributing political power as well as wealth. Few land reform programs provide for sucha minimum limit despiteevidence.The concentrationof control over land provides a power basefor many groups in developing countries. to ensure a scale large enoughto provide a salablesurplus to meet the needsof urban consumers. Thesesizesmight be designed. A second factor of importance in making reform effective is the creation of institutionsto implementthe reformsonce legislated.that land reform is often a central issuein political debates.income. The food and fiber needs(and the spatial requirements)of the nonfarm population are not infrequentlyoverlookedby the advocatesof land reform.however.therefore. secondly. and that in the aggregate they may also have larger savingsthan large farmers. The evidence suggests. Recent Experience with Land Reform Experience with land reform in the past points to the overriding importanceof the political factor in securingmeaningfulchange. thosewho do not work on the land still require and should havesomerights of access the products of to the land. that Kenyaand Mexico.asin the Republicof China. A meanof to ingful land reform programwill inevitably destroyor limit the power baseof manypersons. to ensurethat smallholdingsare large enoughto provide food sufficient to meetwith a highdegreeof certaintythe minimum physiological needs of the farm family. especiallywhere the landowner controls the access peasants their only sourceof security-land. A program basedon the prescriptionthat "the benefits should go to those who till the soil" is often reasonable an agrariansociety. but only a few can be said to have implemented it. that small farmers save proportionately more than urban dwellers.though these maybe directly investedin the smallholding. And in these casesthe reforms were implemented only when there was a change in government in circumstances favoreddrasticchange. in But in a partly urbanizedsetting. firstly.from manyareas.It is not surprising.attention should be paid to both a minimum and maximum farm size.Land is a symbol of authority and a source of political power.and 9 . Ambitious programs of land reform will seldom be implementedunlessthere are shiftsin political sentimentand power. and. especiallyfor fresh produce. that allowing farmsto becometoo small (relativeto the bestavailable technology) may be just as unsatisfactoryin terms of equity and efficiencyasan uncontrolledtenancysituation.Japan.
with emphasison securityof tenure beinga particularly important theme. The land reform experiencein much of Asia and LatinAmerica suggests someform of rural organization. in Japan. Becauseof this. A fourth considerationrelatesto the problem of perspective. such as are associated with greatersocial mobility and improved political stability. rather than because any deficiency inherent in the small relative to the larger of farmers. As the country experithe encessummarizedin Annex2 reveal.For example. More recently. that especially involving local representation. Minimizing such costs necessitates provision of servicesconcurthe rently with reform implementation. land reform hasoften proved costly in terms of lost output.combinedwith an absence organizedpressure of from the beneficiaries. although there is evidence to suggestthat these costscan be kept small and temporary. This has usually involved organizingthe beneficiariesto create follow-up pressure. Taiwan and Venezuelasuitableinstitutionswere established to ensurethat land was indeed transferred. - The World Bankand Land Reform The World Bank has taken an active interest in land reform on a number of occasions. contributing substantially the ultimate economicdevelopmentof both to countries. The restructuring of landholdings is often accompanied by the destruction of traditional deliverysystems input needsand marketing.The casesof Japanand Mexico are particularly significant in this respect. A third conclusionis that land reform is rarely undertakenwithout considerableupheavaland lossof production. incorporating as much forward planning asfeasible. While the direct short-run effects of the land reforms in these countries havenot been considered wholly beneficial. and manysocioeconomic benefits. for since thesesystemsare almost alwaystied to the operations of the larger farmers who are dispossessed. may be a critical condition forsuccessfullandreform.over time. emerge only in the longer run and accrue for many years subsequently.Concern hasusually been focused on new or improved possibilities for production following changes in the tenure situation. there is little doubt that the long-run effects for their total societies have been overwhelmingly favorable.In other countries. the extent and gravity of the 10 .a community of interestsbetween landownersand officials. in assessing effects of land reform.to pressfor continuing development. largely nullified positive reform efforts.the effectiveness land reform of may be relatively limited in the short run.
are discussedin Chapter 3. 2. especially where paymentsare in the form of bonds.specially structured settlementschemescan serveas second-bestsubstitutesfor. inputs and technical services.Thesesameconclusions reflectedin are the subsequent Bankpolicy guidelines. (ii) tenancy reform. The Bank'sexperiencethrough project financing of land reform there have been hasbeen very limited.However.Someexamplesof World Bankinvolvementin land reform programs. A commitment to land reform implies simultaneousaction to create or develop an input supply systemto meet the special needs of the beneficiariesof land reform. from an equity aswell asa productivity standpoint. the redistribution of land currently in use. thus. This may require either the creation of new institutions. it is recognizedthat the Bankcannot force structural change. Governmentswhich accept a basiccommitment to land reform should consider three components: (i) redistribution of landownership to reduce the presentmaldistribution. 11 . In general.are not attractivefor externalfinancing. Guidelines Country 5 1.employment problems and income disparities in developing countries have causeda new concern over land reform.where necessary.notably in Malawi and Tunisia. the amounts involved are usually small. and 3. and (iii) consolidation. In addition. to including research extension. and that the World Bankshould support reforms that are consistentwith these goals. 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. or supplements to. particularly in areaswhere the political situation was reasonablystable and otherwise conducive to World Bank involvement. its preferencesregarding national policy choices and those which are consideredconsistentwith the Bank'sdevelopmentgoalsare set out below as country guidelines. Although the Bank's direct action must be limited. such paymentsusuforeign ownersare involved) ally constitutean internal transfer(unless and. In part.or specialbranches fund allocationswithin or existing organizations supply credit. In sparselypopulated regionsor countries. this may be because relatively few casesof land reform. improving income distribution and expanding employment. Even where the land transferred is purchased from the previous owners. it can only support appropriate efforts within existing structures.
and a rural works program should be organized for the landless. 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.sucha structurecanproduceat least as muchper unit of landasa largefarm structure. as well as leasedland. is redistributed. 6.and (iv) owned and selfoperated land. researchactivitiesand field demonstrationsin suchcircumstances. 9. Where the shortageof land is so acute that even with a low ceiling both smallholders and landless workers cannot be given minimum holdings.There may also be a need for special training facilities. Wherever settlement policy is used to supplement land should be plannedto haveapproximately reform. 8. (iii) the extensionand (nonland) input distribution systemfavorsthe beneficiaries. preference should be given to smallholdersin the allotment of land.settlementschemes the same effects as the redistribution of existing holdings. (ii) the beneficiaries belong to the poorest group. Equity-oriented land reform should be so programmed that (i) the effectiveceiling on size of holdingsis low. These effects can accrue if (i) the settlersare the really poor small farmers or landless workersand an input supplysystemis availableto support their operations. Research should be organized to evolve a low-cost settlement policy.With a seed-water-fertilizer availablethat is neutral to scale. Experiencein EastAsian and some Latin American countries clearly showsthat the organizationof beneficiaries. Where efficient large-scaleplantations or ranchesexist. these need not be broken up. but it should be acceptedthat in such cases the objectives of reform can only be realized if the enterprisesare tax coveredby a progressive systemand the workers participateadequately in the benefitsof the enterprise. 7. 12 . 5. In such cases. is an indispensable success. 11. 10. 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.both before and condition for its after the enactmentof reform. (ii) the size distribution of the new holdingsis equitable. and (iii) tenancyis discouraged.4. and allowed only under specified typesof contracts. It should be recognizedthat a small farm structurecan generate employment to absorb underemployed labor in crowded regions where there is no short-term prospect of absorbingit in nonfarm or technologynow largefarm employment.
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. the conversion of tenants into owners of the land they cultivate. The World Bankwill give priority in agriculturallendingto those member countries that pursue broad-basedagricultural strategies directedtoward the promotion of adequatenew employmentopportunities.including appropriate tenurial arrangements projects designedto servethe and needsof smallfarmersand settlers. TheBankwill cooperatewith the FoodandAgriculture Organization of the United Nations (FAQ). Generally.registration of land titles and similarservices.fixed cash-rent contractsaresuperiorto crop-sharingcontractsbecause they encourage the use of inputs to the optimal level. in general.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. Theseprogramswould include credit.it canbe mademore efficient andequitable if it is combined with cost sharing. preferably against very low compensationpayments.This support will include financial and technical aid with cadastralsurveys. with special attention to the needsof the poorest groups. 12. When the land-labor ratio becomesfavorable. 3.Suchcontractsshould be promoted with a system of incentivesand deterrents. Guidelines World Bank'sPolicy 1. ways of providing for a distribution of benefitsconsistentwith the goalsoutlined under (1) above. 2. 13 .tenancy might be a more efficient policy. 4. But where crop sharing cannot be eliminated becauseit provides risk insuranceto sharecroppers. The Bankwill continue to explore. The Bank will support policies of land reform designed to further theseobjectives. should be undertakenbecause. technicalservices infrastructureprojand ects designedto meet the specialneedsof land reform beneficiaries. so long as the reforms and related programsare consistent with the objectivesstatedin the previous paragraph. through its agricultural and rural development projects. owner-operatedfarming is likely to be more efficient and equitablethan tenantfarming. The Bankwill makeit known that it standsreadyto finance special projects and programsthat may be a necessary concomitant of land reform.
5. The Bankwill pay particular attention to the consequences of the interaction of new technology and the prevailing institutional structures.in such cases. where increasedproductivity can effectively 9.in order to avoid adjustments which will increasethe maldistributionof income and cause economichardship. of small farmerlikely to emerge 7. The Bank will support and encourageresearchrelated to the economicsof land reform in its broadestaspects. 14 . It will continue its support for programsof economic directed toward the specialneedsof the type and technical research from landreforms. 12.or pursue land usageand access arrangements that are compatiblewith the long-run productivity of the land and the welfare of the residentpopulation.it will carefully consider whether the fiscal arrangements appropriate to ensure are that a reasonable share of the benefits accruesto the government.if sedentary forms of agriculture are possible. 6.the Bankwill foster the adoption of tenancy conditions and sharecroppingarrangementsthat are equitable and conducive to the optimal use of resou rces. 10. Where land is communally held without regulation of access. The Bank will not support projects where land rights are such that a major shareof the benefits will accrueto high-income groups unlessincreases output and improvementsin the balanceof payin ments are overriding considerations. In circumstances be achievedonly subsequent land reform.the Bankwill not support to projectswhich do not include land reform. 11. 8. the Bankwill encouragesubdivision. with particular attention to developing approaches which will lowerthe cost per family settled. Where land is held under someform of tenancy.including its social dimensions.The Bank will undertake studies of the costs and benefits of settlement projects. 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.
traditions of crop sharingand other arrangements surroundingland usein varying situations.Chapter 1: CHARACTERISTICS OF LAND REFORM Manand Land Man's relationship to land. Under some other ideologies. and it is the statewhich organizes and controls the land accordingto its own criteria.In countries with mobile populations which have ample opportunities for employment. The level of economicdevelopmentof a country hasa strong influenceon attitudestoward land. In EasternAfrica. The political ideologiesof governments also havea bearingon the relationshipbetween people and the land. cultural. Where land is inherited by the oldest heir and not subdivided.While this right might be of constrainedin the public interest. laws and customsgoverning inheritancehavean effect on the distribution of land.land is often seenmerelyasone factor of production in a highly developed commercial agriculture. economic.are shapedby the interaction of a complex of forces-climatic. land can in generalbe exploited. held and traded by individuals for private gain. In addition. Similarly. and patternsof landholding and land use. The People'sRepublicof China. individuals do not have the opportunity to acquire and accumulateland. haschangedrights to land and the organizationof work severaltimes over the past 25 yearsas part of a drive to eliminate rural inequality. sell and accumulate privateproperty-including land-is one of the cornerstones the market economy. the smaller the proportion of the population in agriculture and the less significantthe role of land in the economy. physical conditions in the temperate areasare suited to sedentaryagriculture.on the other hand. different systems land managementand patternsof holdingshave of emerged in adjacent zones. To the extent that the statecontrols the land.The more industrializeda country. whereasthe more tropical and arid areasare better suited to shifting cultivation or livestock herding.the allocativeprocess mayserveany number of ideological ends. religious and political.The right of the individual to own. for instance. in less developed countries with large rural populations.As a result. However.limited alternativeopportunitiesand increas15 . the right to own land may be vested solely in the stateor in semipublicinstitutions. the patternof holdings is lessfragmentedthan in societieswhere the customis to divide holdings equally among all heirs. many socioeconomic factorsaffectcustomsof usufruct.Somegovernmentshaveused control over land to implementpoliciesof geographical separationof racialgroups.
When these interacting elements are taken into account. FeudalLatinAmericanType High property concentration. (3) the social system.These are characterizedas follows: 1. 16 .The institutional structures which formalize the various meansof control and the relationshipbetweencategories land users. (2)the structure of the economy. Low labor productivity. The social hierarchy in most agrariansocietiesreflectsthe kinds of access that different groups have to land. Productionmainlyfor subsistence. producerssee landas more than a factor of production. while individual status within these groupsdependson the amountand quality of land commanded. 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 level of technology.(5) the demographic situation. and (7) the national resourcebase.ing pressureon the land. (4) the legal system. Landvery scarce. Great socialinequality. Greateconomicinequality. Greatsocial inequality. Great economicinequality. The established pattern of landownershipis basicto both the social organization and institutional structures in rural areas. Mainly operatedby sharecroppers. Low land productivity. 2. it is possibleto delineate six main categoriesof land tenure and land use. FeudalAsian Type High property concentration. (6) the agricultural system. High labor intensity. access land may provide at leasta subto sistenceincome. Low capital intensity. In thesecircumstances. it may well provide the margin between destitution and subsistence.alsodetermine of the accessibilityof external institutions and servicesto the various groups. Institutional structurecentralized.
Low labor productivity. mediumor high labor productivity.medium or highsocioeconomicequality. Low. Decentralizedcultivation-usufruct rights for membersof group. High level of technology. Labor provided by squatters.Low land productivity. Market production oriented. Productionfor subsistence export. 5. Low labor productivity. Labor-extensive. Low. 17 . Institutionsand services dispersed. Traditional Communal Type Low property concentration-sovereign rightsvested in community. High landproductivity. Labor-extensive. Low. Market Economy Type Medium property concentration. Capital-extensive. Low capitalintensity. 4. Decentralizedcultivation. Medium socioeconomicinequality. Low land productivity. Socialist Type Propertyright vestedin the stateor a group. Capital-intensive. Medium labor intensity. neighboring smallholdersand migrantworkers. Moderateor high socioeconomic equality. Supportingservicestructureunderdeveloped. High labor productivity. and Institutionalstructurehighly centralized. Medium level of technology. Low levelof technology. Operatedby owner or manager plus hired labor. 3. serfs or sharecroppers. Productionfor subsistence. Centralizedor decentralizedcultivation.medium or highland productivity. Low level of technology.
accompanied by extensive poverty and vulnerability to seasonal effects. Medium or high level of technology. but face difficulties as the man-land ratio declines through population growth. becomeeducatedand innovate both through experimentation 18 . can. Table1:11). In the landlord-tenant system. land is common property and access it is relatively unrestricted. In a traditional context. Productionmainlyfor export. Operatedby manager pluswage labor.the distribution of income is also highly skewed (see Annex 1.on the one hand. Tables1:6 and 1:8). In the landlord-tenant system. to Whereasin the feudalistic systemthe distribution of landownership and benefits are highly skewed and classdifferentiation is marked.by contrast.Productionfor marketor subsistence.The communalsystemmanifeststhe samepressuresby compressedfallow periods and declining soil fertility. Great socialinequality. High landproductivity. In the communalsystem.The ownership of property is of generally highly concentrated. Great income inequality. The two systemsdiffer in their ability to respond to changing external conditions and especiallyto new technology. on the other. by the communal landownership pattern of certain tribal groups in Africa. The landlord elite. more so than the pattern of landholdings. since holdings (the only category for which the Bank has data) involve leaseholdunits for which rent is paid on a share basis. Plantation Ranch Type High property concentration-owned by state or foreigners. 6. However. Low or mediumlabor productivity. land pressuresare reflected in a growing army of landless people and widening income differentials (see Annex 1. the communalsystemhas relativelyegalitarianland access and class differentiation is lessmarked. Both systems are relatively stable under favorable conditions. and often does. unlessthere are offsetting changesin technology. by virtue of its privileged position and power. overgrazing and increasederosion. by the feudalistic landlord-tenant systemfound in someAsianand LatinAmericancountriesand. landownership is vested in an elite minority with the majority having access through tenancyarrangements various kinds. Supportingsystems centralized. extremes in the pattern of land control are exemplified.
with control determined in accordancewith the objectives of the state. and the state or collective ownership characteristicof socialist countries. can be bought or sold like any other commodity.a rangeof subtypesexistswithin this categorywhich reflectsa gradation in size from the predominantly subsistencesmallholdings of many developing countries to the broad acresof North America and Australia. in somerespects.Theseform. land is held by individuals and. which is a fundamental aspectof the market economy and common in mostWestern countries. its primary concern may be to promote its own narrow interests in terms of wealth and power. Suchholdingsare typically operated as family units with little hired labor.and the adoption of externalideas. In a modern context. Although similar in legal and institutional respects. but the tendency toward a corporate legal structure and dependence on hired labor differentiate them from privatelyowned family farms. for instance. In the socialistsystem. It hasbeen most unsatisfactory where ownership patternshave become skewedbecauseof the growth of large farms. and the subsequent emergenceof economic 19 .)Thecommunalsystemgenerallylackssuchan institutional and tendsto be both static in itstechnologyand relatively mechanism insular.private control has been most satisfactory where population pressurecould be offset by colonizing virgin land or moving people out of the rural sector. often providing for the existenceof private smallholdings in parallel with larger social units. little or no provision is made for individuals to acquire or accumulateland. while usually subject to special restrictions. While private ownershiphasgenerallybeen compatiblewith technological progressand the economicadjustmentof agriculture. this right being vested in the state.thesediffer significantly in their technologyand input mix aswell as in the degreeof market orientation. But some variations remain within many socialist systems.however. Generally. specialcategory a of the market economy type.combinedwith limited opportunities for peopleto move out of agriculture.(in doing so. the extremesin patternsof land control are seen respectivelyin the private ownershipof land. 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. However. but such communitiesseldom manageto remain completely isolatedfrom externalinfluences.it has often created inequities as people have been compelled to give up rural pursuitsor havebeen squeezedinto land-scarce rural enclaves.on the other hand.by displacingtenantsthrough mechanization. Under private ownership.
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. Land reform raises issuesof equity in the context of both the traditional landlord-tenant relationship and the modern skewed ownership pattern. Land reform differs from political. In both these contexts. But. 20 . a high level of fragmentation can make canal irrigation virtually impossible and seriouslyimpede mechanized operationseven when on a very small scale. all land can be nationalizedand regrouped into state-ownedholdings. whether primarily an equity or a production concern. 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. Dimensions of LandReform Land reform is thus concerned with the interrelated aspectsof productivity and equity of land use. Landreform caninvolve varyingdegrees change. the tenant cannot find the capital for investmentor lacksthe securityof tenure that would guaranteea return from it. land reform may become a prerequisiteof development. Redistributionof public or private land in order to changethe patterns of land distribution and size of holdings. it is clear that land reform will involve different changes different types in of situations.or medium-sizedfarms and a reduction in the number of large holdings. it is often a highly political concern. especiallyin the traditional feudalistic and communalsystems.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. Stateor communal control has led to fewer interpersonal inequities.including some of or all of the following: 1. In many situations. the prevailing tenure conditions are the major impediment to development.this involves an increasein the number of small.on the one hand.dualism. although in most casesnot without some broader economic inefficiencies.In other cases.and on the other. Alternatively. Further.It is frequently pursuedas a goal in itself. In such circumstances. but in a development context is usually seen as a part of agrarian reform or of rural development programs. For example. administrative. all of which might be large. in some situations. Usually.
By definition. India and Iran moved from a "feudal Asian" toward a "market modern" type. Fragmented into contiguous blocks of land. although land settlement might be a meansof bringing unusedlandinto production. Landsettlement.Similarly. cooperative land management. alien-owned "market economy" type holdings of their colonial eras. resultis generallya redistributhe tion of income away from the former owners of the land to the new owners.As reflected in the country experiences summarizedin Annex2. Structural Change In the main. therefore. 4. The rightsof thoseworking on the land can be safeguarded law without a changein ownership.Alternatively. most changes involve a shift from traditional to modern types.The kind of structural changeinvolved dependson the prevailingtenure type and the proposedalternative. The new owners may farm cooperatively or as individuals. thereby altering the size distribution of holdings or the distribution of income.and so forth. land reform is seenas a meansof bringingabout structural changes in the agricultural sector. Changesin landownershipand tenurial rights. In that case.with or without physical redistribution of land. even though they might be useful in identifying problems of management.2.Thus the Republicof China. thereby reorganizing the holdings can be regrouped physicalpattern of control.the Republicof Korea and Japanmoved from a "feudal Asian" to a "market modern smallholding" type.Changesin conby ditions of tenure would include providing security of tenure. with some traditional farms retained and some "plantation ranch" type variations in certain areas. These changeswould also include the conversion from customaryto legal rights to land. may or may not have an impact on the structure of landholdings in a country. 3. Consolidation of individual holdings.Kenyaand Morocco redistributed the large-scale. the or that might be part economicsof various "models. Redistributedland can be allocated to new owners or to farmersworking on the land.landsettlementon the frontier does not usually constitute land reform." or arrangements of a subsequent reform. introducing equitable crop-sharing arrangements.some going to smallhold21 . Changesin conditions of tenure without changing ownership or redistributingland. This can be done with or without changing the distribution of landownershipin terms of acreageor valuebelongingto eachindividual. by itself.land need not be redistributedbut tenantsor workerscanbe madeowners of the land they work. dependingon the manner in which the settlers are selectedand the size distribution of the new holdings. pilot projects cannot be consideredto be land reform for they operate within an existing structural framework.
A more likely fiscal instrumentto encouragestructuralchangeis a graduatedestate tax which would force estatesto disposeof land to meet their financial obligations. the useof a fiscal instrument. they cannot ensure the same degree of structural reform as can land reform and have.there may be no need for land reform since land is alreadyevenlydistributed.respectively. and a mixed "market modern" and "socialist" type structure. Agrarian reform may or may not include land reform.But this is likely to bring about structuralchangeonly over a long period of time. extension. 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.suchas fertilizers. increasingallocations to the agricultural sector in order to expandresearch. Agrarian Reform Agrarian reform is a much more comprehensive conceptthan land reform. In any event. land reform may be the only alternative option if economicdevelopmentisto be pursued. maynot be it politically feasible to have land reform-although it might be both 22 . In situationswhere fiscal measures-whether of a redistributive kind or a typewhich providesa returnto the stateon its investmentare found to be ineffective. making physicalsupplies. will not lead to structural changesin agriculture-at least not in the short run.been quite ineffective. in some instances. Thesechangesin tenure systems were in all casesaccompaniedby changes relatedorganizations in and services. In other cases. While landtaxesand estatetaxes often are considered significant elements in fiscal policy intended to redistribute income.training and storagefacilities.Thesemodificationsmight include changingprice policiesso as to turn the terms of trade in favor of the agricultural sector. since it involvesmodification of a wide range of conditions that affect the agriculturalsector.in general. 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. availableand increasing credit for their purchase.ings of the "market economy" type and someto "plantation ranch" type units. FiscalMeasures Land taxesand preemptive taxeson income earnedfrom land are often cited as instruments that will obtain the sameends as land reform. On the other hand. providing infrastructureto facilitate agrior cultural production. such as a land tax.
For instance. since land is only one factor of production. RuralDevelopment Broader still is the concept of rural development. insofar as it stabilizesthe existing relationship between landownersand renters. Tenancy reform. and by thesecannot be changedthrough market operations. Elsewhere. it can seldom be changedwithout actionsthat emanatefrom outside the market.in somesituationsestablishinglocal institutions and smallholder servicesmay be a prerequisite of land reform rather than vice versa. land reform maybe essential. land reform without concurrent rural development activity might causehardshipand economic losses which would outstrip the equity gains associatedwith land redistribution. but it is seldom a sufficient condition for increasingagricultural output. Since it hassignificant equity implications. Political Dimensions Substantialreform of the structureof holdingsand the distribution of income from the land cannotbe achievedwithout political action.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 point is that land reform may be a necessary condition for agrarianreform. on the other hand. 23 .Since theseactionsare basedon policiesdeliberately intended to alter the distribution of land and change tenure. the implementation of the policies dependson the political will of the policy makersand the ability of the administratorsto executethis will. in most market-oriented economies with a skeweddistribution of land.may be a useful precursorof rural development programs.where semifeudalconditions prevail.as there is virtually no organized market for land. in termsof implementation. patterns of land rights and tenurial conditions havebeenestablished tradition.large landholders have accumulated capital and expanded landholdings acquired through the market. the tendency is for the skeweddistribution to worsen.dependingon the prevailing pattern of land control. Where the ownershipof land directly affects the nature of local institutions and the participation in them by the majority of rural people.Where the existingservicesystems and administrativestructureis gearedto working with large-scale farmers. land reform may be a necessary concomitant of successful rural development.However. Whatever the prevailing situation.politically and economically feasible to raise output through the measures involved in agrarianreform.
both in precept and in practice. a meaningfulland reform program will inevitablydestroy or limit the power baseof thesegroups.the implementation of massivereform legislation has dependedon the effectiveorganizationof the beneficiaries. including the CatholicChurch. the Church in Europeas well as in LatinAmerica hasincreasinglyput its weight behind this new concept. Japan. 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. Frequently. then.In other countries. that land reform is often a central issuein political debatesand that thesedebatesare often couched in termsof redistributingpolitical power as well aswealth.The concentration of control over land provides the base for powerful elementsin manynonindustrializedsocieties.Land reform can changethe political balance and the power structure in a country.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. Experience much of Asiaand LatinAmericasugin geststhat effective popular participation of rural people may be a critical condition of successful land reform. The Church's new philosophy regarding the relationship between man and land declared that "private property doesnot constitutefor anyone an absolute and unconditional right.and the absenceof organizedpressure from the beneficiaries. The political implications of land reform must be taken into account.the massive legislationhasproduced no significantreform.whether they were military.of their power. Reforms have stripped large landholders. It is not surprising. Formerlyone of the largestlandholdersin the world. ambitious programs of land reform will seldom be implemented unlessshiftsare made in political sentiment and power. Many countries have legislatedfor land reform but relatively few have achieved it-and these only with a change in government. Because the community of interests between the of bureaucratsand the landowners. official the bureaucracy was the only implementation agencycontemplated by the reformers.suchas India and Pakistan. 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. Where groups derive authority from their land.
Eachset of policies and investmentsaimed toward one objective has important repercussions with regardto the other two objectives. If the experienceof Mexico-which hashad the longest period of reform-is any indication of the long-run outlook.had semifeudalsocieties similar to many which still prevail in other parts of the world. Mexico.the common of good sometimesdemands their expropriation. such as those for rural works.and thesein turn are relevantconcerns in the formulation of the World Bank'spolicy.one that is often highly political.such as those affecting power plants or largescale industry.and thesemust be taken into accountwhen weighing the potential impact of particular policieson economic development.The issuesinvolved are diffuse and appropriate reform measures vary according to the situation. The reform in Mexico broke a systemthat denied many people any range of choice in the pursuit of a livelihood. are essentiallyequity oriented. the reforms haveled to an increasein socialmobility.large numbersof tenants and laborerswere tied to the land and were held in forms of human bondage. still others. Chapter 2: LAND REFORM AND ECONOMIC DEVELOPMENT Economicdevelopmenthasthree basicobjectives:rapid economic growth. Land reform is in practice predominantly a question of equity and. full employmentand distributive justice.extensive. and more recently Bolivia and Egypt. The reforms which havetaken placein thesecountrieshavechangedthe situation. In these societies. others. Many problems arise in assessing costsand benefits of land the reform.or becausethey bring hardship to peoplesor aredetrimentalto the interests the country. are primarily growth oriented. Theseinclude the definition of an acceptabletime frame for measuringthe effects of the related structural changein the agricul25 . Somepolicies and related investments. hassignifiit cant implications for economic development.this arosefrom custom.Forthis reason. tradition or sheer indebtednessto landlords.unusedor poorly used." A further facet of land reform that warrantsconsideration in this respectis the potential of a new societalstructurefollowing a reform. Nevertheless. such as those related to land reform. therefore. are employment oriented.it is important to determine to what extent land reform might be costly in terms of growth and employment. Land reform is a complex subject.
84 0.25 1.95 8.41 3.85 1. 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.10 0.03 2.50 0.947 0.03 1.3. and column4onUN.865 - 0.70 8.88 1.597 0.05 0. No.64 2. Employment and the Distribution of Land.873 0.10 0.59 4.17 0. of ibid. lnternational financialStatistics.67 3.47 5.79 1.Preduction Yearbook 1971.85 40. No.18 1.17 123.62 15.09 0.45 2.832 - 0. forestry.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.05 0. 3.52 1.24 1. August 1973.agriculture.33 4.03 0.22 2.05 6.Gross DomesticProduct (GDP)in agriculture shownhere includes.833 0.64 6.35 4.11.38 0.96 1. XXVII. November and 1973. Sources:Columnsland 3arebased on FAO.085 1.pp.903 285 692 663 479 477 1. April 1972.XXVI.80 81.54 0.90 37.611 - Botswana 1969-70 Egypt.hunting.05 0.62 2.23 2.02 0.12 1.20 1.32 2. 21-23.06 0.62 .20 1.845 - 0.05 1.01 0. currency For Bulletin Statistics. No. Monthly 26 .21 0.75 1.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.Republic of India Indonesia Iran Korea.09 0.Table 1 Productivity.70 20.10 79.37 208.01 0.18 14.720 352 240 250 376 166 155 355 168 681 183 293 98 144 209 189 42 167 68 848 980 951 463 489 492 569 580 1.and fishing.25 118.27 6.61 3.936 0.unlessotherwise indicated.607 0.28 0.607 - ' 0.50 22. and I MF.09 0.12 0.59 1.29 0.34 270.333 925 410 141 149 581 377 1.89 1. 10-11.474 0.32 2.4.473 - 0.see XXVI.29 - 0.188 138 249 200 337 137 243 127 142 360 140 88 48 295 174 180 341 198 101 0.18 1.Republic of Japan Nepal Pakistan Philippines Sri Lanka Thailand Turkey Viet-Nam.04 0.49 1.60 108.624 - 0.31 3.04 4.35 3.580 - 0.
Chile.Brazil. its contribution to output and employment-as well asto equity-depends on the speedand effectiveness the reform and of complementary investments. One 13-country study undertakenby the FAO analyzedthe relationship among size of holding.In central Thailand.equity and employmentaswell as on savings and market surplus. Unfortunately.9 tons of paddy per hectare.The availableevidencesuggests a well-designedland that reform program need not entail unacceptable costsin termsof other objectives.2 tons per hectare.4 acre). Several comparative multicountry analyseshave been made of the effect of differencesin distribution of size of holdings on yields. The nearestalternativeis the comparisonover a definedperiod of the productivity of groups of different-sizedfarms in a given area. farms of less than two hectares-produced 2.In a systematicanalysis the differencesbetween large of "multifamily" farms and small "subfamily" farms in Argentina. this is not possible as there is no situation where changehas occurred in only one variable-size of farm-over time. the yield of paddy averaged36 to 37 bushelsper acre on farms of up to one acreand 33 to 34 bushelson largerholdings. A similar study of 40 countries was undertaken by the Bank (see Table1). are for analytical convenience.ture sector.These measures interrelatedbut.in 1966-67.are treated separatelyhere. yieldswere reportedto decline from 306kilogramsper raion holdings of two to six acres. concentrationof land and productivity. Both studiesindicatedthat a smalleraverage of holdings size and a lower concentrationof landownershipwere associated with an increase output per hectare. Implicationsfor Productivity The effects of land reform on productivity might best be isolated by comparing productivity in a given area before and after reform. Ecuadorand Guatemala. Colombia.Small farms in the Philippines-that is.In Sri Lanka.output per hectare was 27 . the effects of land reform canbest be examinedby focusingon particular measures.while farms of more than four hectaresproduced 2.to 194 kilogramsper rai on holdings of 140 acres or more (1 rai equals0. changesin yields per hectare are considered to be the most appropriate substitute. suchasthe effectsof farm size on productivity.However. in Similar findings can be cited from cross-section studiesin a number of individual countries.The ideal measurefor comparisonwould take into account the contributions of all factorsof production and so measure total factor productivity. Since data are not availableto derive this measure.for example.
there are limited economies of scale in most agricultural production.80 3.is likely to decrease the simple reasonthat. small-scale producerstend to maximizeoutput by applying labor intensively. The important implication is that reductionsin either the size of holdingsor land concentrationneed not be associated with a reduction in output per hectare. by FarmSize.14 0.Table 2 AgriculturalOutputper Hectareand per Worker. There are two associatedreasonsfor this assumption. Ecuador.14 Source: Barraclough and Collarte.on the average. including the results of Bank-sponsored analysisin Mexico. 351 p. Brazil.673 74 523 8. as pointed out below.10 0.237 268 1. the studiessimply indicatethat yieldswere higher on smallfarmsthan on largefarms. Colombia. as well as studieson Japanand the Republicof China.This is usuallyshort of the output per hectarethat would be produced if the goal were maximization of output. In broad terms.171 972 9.198 84 1.20 14.On the contrary. Guatemala.with output per hectareas the relevantcriterion.there is no claim that all conditions were identical. xxvi. I to col. Chile. Lexington.80 8.20 8.Secondly.498 170 334 41 1. Peru.90 0. 1973. 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.Firstly.492 304 1.862 660 63 16 National monetary perworker unit 40 192 1.while large-scale operatorstend to maximizeprofits by using hired labor only until incrementalproduction coversincrementalcosts. however.on the small farmsthan on the largefarms (see Table2). There is other evidence to support these findings. a resume of the CIDA Land Tenure Studies of Argentina. Massachusetts: Lexington Books.30 2. Output per worker. However. Studies in the Economic and Social Development of Latin America.197 8. land reform can be consonantwith development from a point of view concernedpurely with productivity. in LatinAmerica 1 Country Year Smallest subfamily farms 2 Largest multifamily farms 3 Ratio ot col. Agrarian Structure in Latin America. for 28 .21 0. found to be three to 14 times greater.23 0.
for example.the number of workers per hectareof agricultural land on the smallestfarms (subfamilyunits) hasbeen estimatedto be 30 to 60 times greaterthan on the largest(multifamily) farms. In Colombia. A limited number of studies in Asia and Latin America have also confirmed these findings. small farms undoubtedly need much more nonlabor input in order to raiseproductivity.in 1961. however.7 on small holdings (lessthan 0. in 1968. In the Ferozepurdistrict in Punjab (India).too. unlessaccessto these inputs is blocked by institutional arrangements. But the realization of this potential is contingent on the supply of nonland inputs being increasedas soon as farm size is decreased. labor absorption varied between 33 and 39 man-days per acre on holdings of less than 30 acres.the organization of an effective extension-cum-inputsupply systemfor small farmersmust accompany 29 . In other Latin American countries (Argentina. fertilizer consumption and grossfixed capital formation per unit of landwere relativelyhigher in countrieswith smalleraverage holdings.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.5 hectare)to 0.But inputs other than labor arealso likely to be applied more intensivelyon small farms. the relationship between these other inputs and farm size cannotbe studied in manydeveloping countries JFor want of data. More intensive labor use is the main reasonwhy small farms are ableto producemore per unit of landthan the largerfarms.The mereredistribution of land and increasein employment may not suffice to raise output substantially. Chile and Guatemala).17 on large farms (500to 1.In other words. it ranged from 20 to 23 man-daysper acre. In developingcountries. This cross-sectional evidence of the higher productivity of small farms indicates their long-run equilibrium potential. the larger income would be sharedby an evenlargernumberof families.Unfortunately. It is interestingto note. LandReform and Employment Evidenceexists that the use of labor per hectare is greater on smaller holdings than on larger ones. that in the crosssection of developed countries. 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. man-yearsper hectare declined steadily from 2.Brazil.Therefore.000 hectares) in 1960. On larger holdings.smaller farmswould employ more labor per hectare. the greaterthe input of manpower.
Smallholdingscanyield high returns to labor provided output per hectare is high-a condition that can only be fulfilled by the application of high-yielding. without freezing the maximum permissibleownership of urban assets.agricultural land accountsfor such a large proportion of total wealth that it is usuallythe single mostsignificantdeterminantof the distribution of both income and power.financial assets commodity stocksin the urban and areas is even more skewed than the distribution of farmland in the rural areas. it not only may not decreasethe inequity of the distribution of total wealth in the country as a whole. the limitations of redistributingfarmlandaloneappearevenmore serious. Landownersmay easily changethe composition of their assetson the eve of land reform if agricultural land alone is the target of redistributive zeal.and (4) owned and self-operatedland as well as leasedland is redistributed.where much of the wealth existsin the form of financialassets.Thedistribution of real estate. the larger will be the equity effect of the reform program. However. It may even increase inequity-in particular. LandReform and Equity The more radical the land reform and the more important the share of agricultural land in relation to total tangible wealth.and commodity stocksin the hands of traders. output per hectareis high. (2) the beneficiariesbelong to the poorer groups. estateand other real investments apart from farmiand. the the inequity between the town and the village-since it will freeze the maximum permissibleownership of the main rural asset. In the rural areas. urban property reform or highly progressive taxation on urban wealth does not accompanyland reform in countries with a substantialand prosperousindustrial-commercialurban sector. Where there is such a system-as in Japan. 30 . at the same time. the equity effect of land reform will be significant only if: (1) the effective ceiling is low. By itself.land reform.If. If rural and urban areasare consideredtogether. therefore. land reform alone is not sufficient.the Republic of Koreaand the Republicof China-the absorptivecapacityof agriculture tends to be high even though holdingsare small. (3) the extensionand (nonland) input distribution systemfavorsthe beneficiaries.the redistribution of farmland alone may not improve the distribution of total wealth substantially. Evidence this can be seen of in many LatinAmericanand Middle Eastern countrieswhere the large landownersoften dominate both commerceand government. Evenwith this broader focus.There. labor-intensive technologies. land reform could havea major equity impact.
5 hectaresis availablefor the averagerural family of five.) . even with a low ratio between the ceiling and the floor holding (5 to 1). the pressureof population is such that there is not enough land to meet the minimum requirementsof all claimants.however.there areample opportunitiesfor redistributing land so that inequalities can be diminished and the recipients of the land can generate an acceptable minimum income. In India. The millions of landless families could not be provided for at the sametime. mostly food. a low 10-acreceiling would not sufficeevento bring all miniholdings up to a minimum two-acre size.the changein the sizedistribution of holdings will shift the distribution of the sourceof the marketablesurplusand savings.it might be wise to give land only to the minifarmersand to attackthe poverty problem of the landlessby meansof a massive rural works program. As will be shown later.The densityof the farm sector is so high in some countries in Asiathat.Although the total effect of the redistribution process dependto a largeextent on the costsof increased will output after the redistribution.where land distribution is skewedand population is not dense.The Population Factor Opportunities for the redistribution of land depend to a great extent on the existingpattern of distribution of holdingsand population density. there are some countries.In suchcountries. In other areas. even if the maximum holding was 20 acres. where available. (Settlementof the landlesson new land.The marketedsurplus also represents supply of agricultural products. In Haiti.it determinesthe size of the rural market for domesticallyproduced industrial products. In Sri Lanka. not enoughland would be availableeither to raisethe acreage of the minifarms to a tolerable minimum or provide for the landless. The solution to rural povertyclearlycannot be found exclusively in the agriculture sector. for the 31 .are the other obvious alternatives.and no land would be availablefor the landless(20-25million households). only 1. notably in the Americas.Effects MarketedSurplus Savings on and The redistribution of land can have a pronouncedimpact both on the availability of a marketablesurplus and on aggregatesavingsin rthe agriculturalsector. therewould be enoughlandonlyto givetwo acrestoeachminifarmer.and their migration to urban areas.the available land (43 million acres)would be barelysufficient to bring up the size of miniholdings to a minimum of five acres.when possible.In Bangladesh. evenif holdingsabovea certainsize werecompletely eliminated. In thesesituations.too. the marketedsurplus generates As agricultural incomesand so potential cashsavings.
this decline in the market surplus ratio need not result in a decline in total surplus. These differenceswould determine how much the surplus ratio would fall after land reform. Thus.5 acres)contribute only 6% of sales. Where it does. the necessary conditions are fulfilled whereby small farmscan realizetheir full pro32 . that small farms (2. after reform.wells and access roads. Smallfarm households tend to consumea largerproportion of their smalloutput than do householdswhich havea large enoughacreageto produce in excess domestic requirements.there may be a sufficient increasein output if. In India.However. and 51% (with 2.7%. Sixty-one percent of the maize farmers in Puebla(Mexico). Datafrom India show.the urban population. If output remainedthe samebut. provided that there is a compensatory increasein total output. the ratio of marketedsurplus to production falls asfarm size decreases.farms abovea certain size were eliminated and their land transferredto the small class. and their sharesof total output and salescan differ widely across countries and regions.5% eachof the national output. a fall in the surplus could necessitate imports and put an added strain on the balance of payments. might not be very great given that the largest and the smallestfarm-sizegroups account for only small proportions of the total output. on the other hand.5 to 50 acres) contribute the bulk (78%)of the total surplus. however. and 55. The surplus-outputratios of different farm-sizegroups. The rate of decline.the surplus-output ratio would probably decline.sell no maize at all. 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. with adverseeffects on the economy. however. hypothetically. In Mexico. In Chile.5% of their output. whereaslarge farms (50acresor more) sell 65. of Thus.1% (more than 50 acres)con-' tribute 16%. But thesefarm groups produce only 9. 48% of the farms (lessthan 2. Since per acreyields on smallfarms canbe higherthan on largefarms. but there can be no doubt that it would fall.the savings need not be monetized.4%. 6. and another 16% sell 25% or lessof their output.6% of the marketed surplus comes from 70.5 acresor less)sell only 24.7% of the farmers.for example.4% comes from only 1.but may take the form of increasedon-farm investment in such items as improved housing. for example. a typical sharecroppersells as much as 43% of his output.
it can be expected that the behavior of the savingsrate will be similar to that of the marketed surplus.the subsistencefarmerscan be expectedto be net "dissavers"(for instance. Insofar as the productivity of small farmers was previouslyconstrainedby inadequatenutrition. This addsto the urgencyof introducing effective agrarian reform (including improved technology and services)along with land reform. the subsistence consumption of small farmers increases-the extra consumption in kind representinga direct increasein their incomes (nutrition). from the foregoing.6% on the smallestfarms.As the surplus-outputratio falls. A recent study in the state of Haryana (India) tended to confirm this: the savingsratio was found to be -0.The minimum farm size clearlyshould 33 . Savings In consideringthe productivity effect of land reform. In addition. by running down the existing soil fertility).8. by using capital for consumption).duction potential.For unirrigatedvillages. A policy implication.At the lowest end of the farm-sizescale. the savingsrate can be expected to become positive and increase along with it (althoughlarge farmerscanbe "dissavers"too. It follows that a reduction in concentrationof land will reduce the averagesavingsrate of the farm sector.is that the farm-size structure created by any land reform program should fix a minimum as well as a maximum farm size. Although the evidence on savingsrates of different classes of farm householdsin developing countries is scant.3% for large farmers. sincethe savings rate represents contribution of the sector to the long-run growth the of both its own productive capacityand that of the rest of the economy.But. there should also be a positiveeffect on productivity.In a further study in Orissa(India). it is necessary to examinethe implications of a changein farm-sizestructureon the aggregate savings rate of the farm sectoras a whole. As farm size increases. and 11. a decline in the market surplus ratio has a direct distributive dimension which should be offsetagainstthe decline.2% on the larger ones.5% for medium farmersand 16.3% on the larger farms (8 acresand above). but the ratio of net capital formation farmas a proportion of incomewas found to be 5. the aggregate savings be precan vented from falling.the correspondingfigureswere lower -2. there was no direct measureof the savingsmade. again.5% in the smallest size group (0 to 2 acres)and 19. from the welfare point of view.if a compensatory increasein total income can be securedby intensifying inputs per unit of land soonafter land reform.24% for small farmers.
security of tenure and labor objectives. hasincreasedon-farm investmentand helped raiseoutput."An analogouscriterion can also be derived from the known behaviorof marketedsurplus:the smallholder should haveat leastenoughlandfor positivesales.the problem is to promote more efficient typesof tenancy. In Kenya. as in Japan. The conversionof tenantsinto owner-operatorsgenerallyleadsto a more efficient and more equitable form of production organization than tenancy. However.security of tenure is greaterand incomesfor the farmers are larger. if landlords are allowed to retain land that might be self-operated. landlords and sharecroppers have spontaneously begun trying to combine cost sharingwith crop sharingbecause the combinationis profitable to both. Tenurial reforms. then the size distribution of operational holdings maynot change. There may be situationswhere tenancy reform aims at stabilizing the position of tenantswith respectto rent paid. whether through the distribution of the land to those working it or the provision of greatersecurity of tenure and 34 .Crop sharing can be made more efficient and equitable if if is consideredwith cost sharing. This. in turn.since the whole income in excess of' the fixed rentaccrues the actual cultivator.The expert consensus that fixed cash-rentcontractsare superior to the more is common crop-sharecontracts.There is growing evidencefrom the Philippines. for example. provision the of security of tenure. that since the seed-fertilizer technology began to spread. encouragesincreasedsavingsand.without transferringownership rightsto them. especially in the temperate production areas. but also from experience in parts of Africa where "customary" tradition is convertedinto freehold. This is seen not only from the reforms in Japanand Taiwan.and tenantsbecomeowners of the land that they operate.with contracts having well-defined incentivesand deterrents. to however.be determinedon the basisof the current national norm of minimum family income.Sharecroppers. hence. Ownership control and incomefrom the land is thus redistributed. often havea preferencefor crop sharingbecauseit provides risk insurance. Tenancy Reform The most successfulland reforms include those whereby tenants become owners of the land they operate. But one of the criteria for determining the minimum income itself should be that it should at leastenablethe smallholder to ceaseto be a "dissaver.Taiwan and somepartsof Europe.With the conversionof tenantsinto owners. on-farm investment and higher output. Here.
It follows that the more specific the plans and the more clearly defined the policies regarding land reform. there is a long interval before the public sector can 35 .instead of being displacedwhen landlords find it to their advantage adopt to a different technology. The redistribution of land frequently leadsto a breakdown of this system. Such reforms improve income distribution by shifting income away from the landlordsto small-scale producers. on long-standingbusinessassociation.Very often the greaterpart of national output comes from medium-scalefarmers. 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.the lower the "cost" of the reform. often.greatersecurity enables tenants to benefit from appropriate technological changes.like prudent investors. production and investmentdecisionsaremade bymillionsof individualsoperating in their own interests. The financial returns to the landlord from using machinesand hired labor may be high. Sustaineduncertainty about a government'sintentions with regard to the distribution of land adds to the risk of investmentand can hamper capital formation and production.improved rental contracts. LogisticalSupport Secondly. so. since agriculture is a private sector activity in most countries.continued uncertainty hasled to disinvestmentin agriculture by owneroperatorsand a flight of capital from the country. there is a well-established link between commercial bankersand suppliersin the private sector and the larger agricultural producers. Firstly.Often.weigh the risksas they perceivethem before makingon-farm investments-the major component of total investmentin agriculture.This linkage is basedon mutual interests and. introduction of a major land reform programusually the disrupts the systemof logistical support from the commercialsector to the farmers. but the returns to the economy are usually higher from labor-intensiveoperations undertakenby smallholders.often thoseamong the lowest income groups. Implementation Issues If reforms are to generatethe benefits expected of them. the less likely the accelerationof disinvestment by landownersand. In most countries in the world. several important considerationsmust be taken into account. In some instances. have an effect on development.These farmers. Finally.
or-as in Peru-converting the operation into 36 . Whatever the organizationsthat prevail. the natureof the organizationsproviding for both the supply of necessary inputs and the marketingof production surplusesis crucial in a post-reform period. productivity will decline and output will fall. Natureof Organizations Thirdly.agricultural development banks. In this context. it is important to determine the reasons for high yields. the impact of redistribution of land on productivity and employment may be in question. Adaptation Fourthly.undertake the role previously filled by the private sector.special credit institutions. under certain conditions land reform programs might need adaptation if they are to fulfill the objectivesof development. In much of agriculture. Part of the reason is that these institutions have not been able to adapt their methodsof operationto the needsof largenumbersof small farmers. Unlessthis is done. by raisingthe wagesof the workers.Without an appropriate organizationfor the provision of inputs. In many instances. mostof the inputs are "divisible.the appropriate organization of supplies and the evolution of a low-cost delivery systemto reachsmall-scaleproducersis a sine qua non for a sustainedincrease in productivity. the institutions that have provided servicesin a post-reform period have continued with a bias in favor of larger-sizeoperations. the beneficiariesof the reform may not be in a position to increasetheir output. high yields and efficient operations may be directly associated with a systemorganizedto function on a large scale (as in certain types of sugar plantations). Indeed. A more realistic approach to obtaining widespread benefits would be to leavesuch operationsintact and redistributethe profits from the enterprise. or before the privatesectoradjuststo the new situation." 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 somesituations. When land is fully utilized and yields are alreadyhigh.and the like. it is essentialthat they be designedspecifically to assistthe beneficiariesof reform.Thiscan be done through taxation. marketing authorities.the reduction of the costsof a land reform program-in terms of production forgone-depends on the rapid reorganizationof the input supplysystem. There are many different forms of organization: cooperatives. Thus.
the number of small-scale owner operationswill increase. However. There must be an adequatesystemof incentivesand rewardsif productivity in agriculture is to be increased.that: 1. but raisingoutput depends on more than land and labor. 37 . The post-reform structure will depend on the ideology of the government. Thisappliesboth to the agriculturalsector as a whole and to the units in which beneficiaries of reforms are organized. that is often unfulfilled in rigidly controlled societies.The creation of adequateincentives is particularly important in a situation where labor is the major input.in others. Tenancy reformscanredistribute incomesand.This is a condition. increasing employmentand providing wider equity.The most important of theseconcernthe organizationand provision of an adequatesupply of inputs for the beneficiariesand the creation of incentivesto use theseinputs to raiseproduction. In some instances.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. can encourage increasedon-farm investment. can be consistentwith all the goals of economic development: raisingproductivity. 2. sustained increases output dependon complementaryinvestments poliin and cies. Government reorganizationcan generateenthusiasmand provide opportunitiesfor mobilizingworkers.land reform leadsto structural changes within the agricultural sector. although equity oriented. Structural Change Finally.producer cooperatives and other units of production haveflounderedin developingasystem that reflects both equity and incentives. Many communes. Land reform. In the long run. land reform need not leadto a reduction in marketedoutput or savings. 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. by providing securityof tenure. 3. producer cooperativesor communesor large-scalestate farms will emerge. to the participatingstockholders. There must be an appropriate supply of other inputs. No matter what the structure. other organizations(suchas large-scale state farms) might be intended to save labor. Experiencehas indicated. out of profits.a worker-owned corporation and distributing dividends.however. however.
Technical Assistance The Bank hasbeen concernedwith problems associated with land distribution and land reform since the beginning of its operations. Land reform canbe corsistentwith theseobjectivesand.The missionidentified the patternsof landuseand 38 .Theobjectivesarenow generallyaccepted to be increased productivity and employment.and socialjustice." The paperwent on to affirm that: "It is clearthatagricultural development cannotdo all it mightto improverurallife if the distribution landownership highlyskewed.the focus was on providing adequateinfrastructurefor increasingagriculturalproduction. representsmuchhigher land a proportion of totalwealththanin developed countries. however.the approach to agricultural development was widened to include the provision of rural credit and on-farm inputs. In the early yearsof the Bank'soperations. maywell be a necessary condition for their realization." of is This concern has been reflected both in the technical assistance offered to governments (especiallyin sector survey and economic reports) and in the types and componentsof projects in the lending program. mainly becausethey influenced on-farm investment decisions and determined the efficiency of resourceuse.which recognizeda relationship between land distribution and equity. reflecting a reconsiderationof the objectives of development and the most appropriate strategiesfor attaining thoseobjectives. One of the first major economic surveys undertaken was that of Colombia in 1955. especially irrigation water. The paper stated: "In developing countries. inegalitarian and patterns of landownership a majorsource incomeinequality. Problemsof tenurewere seento havean indirect bearingon production.Chapter 3: THE WORLD BANK AND LAND REFORM Changing Concerns The position of the World Bank in regard to land reform has changed over the past decade. in somesituations. This was reflected in the Agriculture SectorWorking Paperof June1972. In the early 1960s. concernwas growing about distribution of income in the rural areas the relationshipbetween and land distribution and income distribution. the owners landusually of possess politicalandeconomic powerwhich can be exercised waysthat harmthe interests the bulk of the in of ruralpeople. By the end of the 1960s. are of Furthermore.
More needsto be known about the distribution of land.the problem was seenas one of unevenland distribution and insecurity of tenure. The mission recommended the governmentthat to it introduce a graduatedland tax as a meansof intensifying land use. The missionswere not concerned with the redistribution of land as a means of encouraging greater equity. the mission emphasizedthe possibility of redistributing landas a meansof increasingboth output and equity.and the policies and programsinstituted to influencethe distribution of land and rural incomes.More recently.Many of these have pointed to patternsof land control and insecurityof tenure as obstacles to raisingagricultural productivity. It did.they took the view that the distribution of land was a matter of national policy and internal politics. Since that time. The two missionsto Colombia were concerned with increasing productivity and intensifying land use. Landlordswere finding it increasinglyprofitable to displacetheir tenantsas machinetechnology provided higher returns. missionsand sector surveyshavebeen conducted in almost all the countries servedby the Bank. recommenda vigorous policy of settlementon reclaimed and clearedland. Despitethis trend. This mission recommendedthat the government adopt a presumptive income tax to encouragethe more productive useof land. In Ethiopia.The Bank needs to be better informed about conditions governing rights to land and related institutions in member countries.conditions governingtenancy. nor did they consider redistribution as a meansof intensifyingproduction. A subsequentagriculture sector mission in 1956 confirmed that the systems land tenure and land usewere barriersto increasingoutof put. however. In Morocco.it is only through a thorough analysis conditions of 39 . many reportsdo not give appropriate emphasis to issuesrelated to land reform and development. Rather. securityof tenure was consid=ered to be especially significant in the light of the distribution of potential gainsfrom new technologybeing introduced into the country.Largestretches fertile landwere held of by large-scale producersfor livestockraising.land distribution by sizeof holding to be major obstacles acceleratto ing agriculturaldevelopment. missionsto Ethiopiaand Morocco havedrawn attention to the relationship between the land tenure situation and the distribution of benefits from growth.while intensiveagriculture was practiced by "minifundios" on land that was lesssuited for crop production. Thus.there hasbeen a growing emphasison the problems of distribution of land and the rightsto land as factors that influence equity aswell as productivity. and that the Bank-as an external lending agency-should adhere to the existingpolicy and not advocatea rapid redistribution of land.
Loansand credits have been made for agriculture operating under different forms of tenure-for kombinatsin Yugoslavia.These have included socialistcountries. however.Loans credits havebeen madeto countries and with widely differing social and political structures. external financing.many reports At still do not addressthese problems.the actual amountsinvolved are not substantial.paymentis mostly in bonds. the recordshowsan increasing and awarenessof the implicationsreflected in more frequent useof measures to improve them. Nevertheless.asexpenditures fora redistributive reform depend mostlyon the levelsand forms of compensationthat are set for the former landowners.such as Yugoslavia and Tanzania. Evenso. the Bank has not been totally indifferent to structural and income distribution aspects.such as Argentina and Thailand. public expenditure is involved.thesehavebenefited absentee landlords. new guidelines are being developedwhich can form a basisfor discussing issuesin the a systematicway in sector and economic reports. The compensationissuetendsto be more important in such countries as Colombia and Venezuela where land is purchased.within member countriesthat the Bankwill be in a position to discuss policy options with member governments. It is estimatedthat. In few general. if any.large landowners.Fundshavealso been provided for large-scale livestockproducers. cooperativeproduction units in Tunisia and group farmersin Kenya.When land is confiscated as part of a revolutionary process-as it was in Mexico and Bolivia-clearly little. whether multilateral or bilateral.One reason is that the processof reform in itself may only require relatively small outlaysof public funds. in the Latin American countries which followed nonconfiscatoryreforms. has played a minor role in the financing of land reform programs. individual holdings in India.large-scale plantationsand smallscaleproducers. Compensationpaid for land is a "transfer payment" from the pub40 .as well as countries that follow capitalism. small landowners.kibbutzesin Israel. Lending Operations The Bank'slending for agriculturaldevelopmenthasincreased very rapidly in recentyears. as is usually the case. On the other hand.tenants and farm workers.Public discussionof land reform financing is generally dominated by this issue. only some9% to 15% of total reform-relatedcashbudgetswent for landowner compensation-though in other casesthe figure could be muchhigher.especiallywhere. projects havesupported land reform as such. present.
The problems encountered in financing the Tunisian program underscore some of the difficulties in lending for reform-related projects. hasbeen suggested It that the internationalagencies might guaranteebonds issuedto compensatelandlords. was to pay a guaranteedminimum cashwage to the workers out of the farm profits.Without doubt. compensation can haveserious implications for income distribution. However.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. The Bankhasprovided generalsupportfor at leastone far-reaching land reform program. which occupied the most fertile land in that country. The nationalizedland was to be converted into "units of production" which were to be farmed on a cooperative basis. however. Partlybecause this. consumption and investment-but it does not of itself create any new productive capabilitiesin the country. Very often the managerial capacityof the beneficiaries maybe untried. The Bank successfullypressedfor substantial improvementsin the conception.Smallholdersopted for private farming and were supported by landownerswho resistedthe takeover of their lands. the agenciescreatedto deliver the inputs are usuallynew. inter alia.In addition. and the whole delivery systemchanges 41 .eachunit of production was to be self-financingand. Furthermore.If financing were to be through international maintenance-of-value guarantees of bonds and for compensation. The financial viability of these projects dependsto a great extent on the managerialcapacityof the beneficiariesof the reform and the development of an efficient service systemfor them. internationallending of institutions have refrained from using their resourcesfor financing land purchases.designand implementationof the agrarianreform. these institutionsoften provide inputs that were formerly provided by the private sector.this would have the paradoxical effect of giving land bonds greaterstability than that enjoyed by the currenciesof issuing countries. and the reform program collapsed. have limited technical capacityand are of questionablefinancialviability. the systemhad built-in disincentivesbecause wages were not paid accordingto work. The Bank subsequently canceledhalf of the loan. It was unable.This was in Tunisia where the Bankprovided a loan of $18 million intended to back a major agrarianreform relating to former French-owned estates.lic sector to the landholding groups. 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 extensionof reform strained the limited administrative capacity.
The Lilongwe project indicates that Bank assistance can play a role in assistinggovernmentsin the "mechanics" of land reform and in the draftingof legislation.Fiveacreswas deemed to be the minimum holding size capable of providing a family with subsistence presentlevelsof technology. consolidation and registrationof holdings.The need for changeto a more secureand lastingtenure systemwas evident asalmost all uncultivatedlandhad been takenup. and fragmentation of holdingshad occurredon a substantial scale. Ethiopia. some200. individual holdings were of the order of about five acresper family.This directly affects their financial viability. especiallyin that cashflows generatedby reform projects tend to be lessimmediatethan in other projects.000acres. Sevenof the projects were established public land and on so did not involve any change in the size distribution of existing 42 . Malawi and Malaysia.vehicles.IDA creditsare beingused for the land survey (both topographicaland cadastral). Kenya. 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. at As a consequence. These Acts also provided for the regulation of the subsequentsale. and rural credit. Malawi Governmentintroduced three Acts the of Parliamentwhich provided for the allocation. provision the of allocation and registrationstaff.irrigation.000acreshavebeen of allocatedand titles issuedon 60.from one basedon the profit motive to one basedin the first instance on social consideration. A number of other projects have been financed by the Bank involving somechangein distribution of landor in tenurial rightswithin the areaencompassed the project.equipment. It was recognizedduring the preparation of the Lilongwe project that there was an opportunity to changethe existing land tenure pattern of customaryright of usufruct.mortgageor transfer of registeredland through the establishment LandBoards. Colombia. Another Bankproject provided direct financial assistance facilito tate the implementation of land reform as part of the Lilongwedevelopment schemein Malawi.Table 3 gives information on ten projects located in Brazil. Theseinclude projectsfor land by settlement.and many investments social in overhead are not self-liquidating in the short run.To date.and the issuance either family or individual of freehold titles.outgrower schemes.The amount involved will be approximately US$1 million by the end of the second phase. and the construction of housing and land registry.
3 Irrigation Second Atlantico Development Caqueta Land Colonization Wolamo Agricultural Project LandSettlement and Development Karonga RuralDevelopment Jengka Triangle Second Jengka Triangle Third Jengka Triangle 12.3 6. (l) Except for Kenya.800 6.Table 3 Costs of Selected Settlement Projects Assisted by the World Bank Estimated Total project Country Project Bank or IDA finance Number of families(') project costs per Average farm costs Amnunt (US$ 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. (6) Includes 2. no data on the farm size of 3.0 8.0 25.500 partially established settlers are given.0 n.0 5.900 hectares.000 hectares. as estimated in the appraisal reports.000 4.1 41.000. do not necessarily reflect total economic costsof settlement. education. whereas the cost per middle-size farmer remaining in the project area is $100.0 43. (5) The original goal was to settle 2.8 4.7 9.200 2.423(3) 6.500 partially established settlers.0 13. figures represent goals rather than actual state of settlement.8 29.389 3. Thesecost expenditures are being reviewed and are expected to be Considerablyhigher than originally expected.6 2.770 3.7 9.3 4.73 million used for agricultural development on the highlands.5 3.800 new settler families are scheduled to be settled on some 280. (8) Excludes $2.0(5) 11. research and related studies.0 14.500 landless peasants and develop 9.000.300(6t 1.800 now settlers and 3.830 2.000 2.6 14.(7 6.500 1.0 4. The project is behind schedule.a.0 4.505 13.9 7.280(4) 5.3(8) 6.327 2. )') The cost per small farmer settled is estimated to be $17.3 6.825 40.200 2.050 5.0 loan loan loan loan credit credit credit loan loan loan 1972 1967 1972 1971 1969 1969 1972 1968 1970 1973 5.1 3.756 10.429 2.This excludes expenditureson health.7nn perfamily settled.7 21.214 1. .667 10.9 6. (. (3) The costtothe government is$1.) Project costs.5 Publicland INCORA land (involved appropriation land) l Publicland Europeanownedland Publicland Publicland Publicland Publicland Source: World Bank and IDA appraisal reports. (a) Although 2.6 15.
The capital requirementof more than $5. inputs and marketingservicesfor the outgrowerswho.Theten projects were intended to settle no more than 35. Kenya. rubber in Indonesiaand Malaysia. the total cost was expected to be $190 million. on Although the costsper family in a settlementproject can be misleading.Thesehaveincluded teaprojects in Indonesia.Thecentralunitprovides technicalassistance. Outgrower Schemes The problems of distributing the gains from plantation development were mentioned earlier. It was suggested that the benefits be distributed through the raisingof wagesand the paymentof dividends to the workers. 44 .the whole approachto capital-intensive settlementrequiresreexaminationconsideringthe magnitudeof the problem outlined in Annex 1 of this paper. 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.000families. Theseschemes involve the production of tree crops on smallholdings rather than on large-scaleplantations. the Bank'scontributions being almost half that amount. The smallholdings are establishedaround the nucleus of either a processing plant or a plantation. althoughlarge enough.The average project hasrangedfrom 10 hectaresin Senegal one acre in Kenya. the Bank has made a substantialcontribution toward a novel form of tenure through the developmentof "outgrower" schemes.settlerswere allocated holdingsof from three or four hectaresin Malaysia 40 hectaresin Brazil. While this systemhas madea valuablecontribution toward establishing viablesmallholders. Mauritius and Uganda.and oil palm in Nigeria.holdings. to In the main.Thus. the size of holdings for outgrowers is small.000per family limits the prospects of the approach.Clearly. under labor-intensive cropping systems. the data in Table 3 indicatethe limitationson settlementprojects -as presentlyconceived. in turn. sell their productsthrough the centralorganization. of which the Bank has contributed $68 million and affecting some 120. In this area.Eachholdingwasdeemed to adequatetcprovide a livelihood and full employmentfor the settler and his family.cocoa inholding in each the Ivory Coast. There are severelimitations on settlementas a meansof reaching large numbersof landlesspeople or relieving pressures the land. it is only effective when there is a commodity that can be handled througha centralprocessing system.000 families. TheBankhasparticipatedin ninesuchprojectscosting$125million.
Thishighlights 45 .000hectaresand benefit more than 500. Bankhasmade loans on the condition that the the recipient government takes steps to ensure that the intended beneficiariesdo indeed gain from the investment. flood control and drainage projects.the Bankhas insistedon special legislation giving tenantssecurityof tenure. in practice.although in recent yearsthere hasbeen a pronouncedtrend toward lending for smaller producers.The average size of holdings in the irrigated areasrangesfrom 10 hectaresin Iraq to one hectarein Korea.6 of hectaresper family over alI the projects.By the end of 1973.However. To this end. in several instances. In some instances. governmentsconcernedhave not fulfilled obligathe tions regardingthe provision of securityfor tenantsor the allocation of land to low-income groups.11 projects costing$342million (incorporating a Bankinvestmentof $190 million) are expectedto improve 810. In many instances.or an average 1. 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. RuralCredit While in itself farm credit is an important instrumentfor reaching groups of a particular size in agriculture.Elsewhere. Bank-assisted provided more than $1.Thus. access can be restrictedby tenurial arrangements lending criteria specify that registeredland if projects have titles be usedascollateral for borrowing. In other instances.000 million for rural credit. Most of these resources haveaided largercommercialproducers. the Bank hasworked with various governmentsin determiningthe mostappropriatesize of holding for the beneficiaries of eachproject. While these projects covered many facetsof water storageand distribution. there is no legal provision regardingsize of holding or because the law has been ignored. this hasbeendifficult to enforce. In some instances. But.Irrigation The Bank has invested about $1. governmentshave failed to implementconditions provided for by existinglegislationon rights to land. Pakistan and Sri Lanka. or they have failed to introduce legislation which would havemet the conditions specified in the loans.000 families. irrigation projects are subjectto special regulations or laws regarding the size of holding that can be held by the projects have conbeneficiary.450 million in irrigation.an estimated$250 million had been allocatedfor small farmers. most were intended to improve the use of water and-bring more land under intensivecultivation. For example.
The Bankwould seemto be left with only two options. the settingof public utility rates.Suchpolitical decisionsare not amenableto ready negotiationwith governments the in sameway as are other institutional questions-such as. in the sovereignstatesthat are membersof the Bank? Major Policy Options The Bankhasto recognizethat its leverageis limited as it seeksto redefineits positionwith regardto land reform. for instance. and income from the land. (3) support land reform proposalswhen they are made officially. These options are reflected in the policy guidelines provided in this paper.and enter into a dialogue on the subject. It should give overt priority in lending to those countries and projects which meet land reform criteria.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. (2) call the attention of the governments the problemsassociated to with the existing tenure system. and (4) not lend for projects if tenurial arrangements so bad that are they frustrate the achievementof the Bank'sobjectives.That is.in countries where governmentsare not interested in land reform the Bankshould: (1) studythe situation in all cases. Secondly.in countriesthat are interestedin pursuingland reform the Bankcangive support in the form of technical assistance finance for reformand related projects. to what extent canthe Bankinfluence the courseof eventsregardingdistribution of land. 46 . Firstly.one of the major dilemmas confronting an international lending agencyconcerned with promotion of land reform as an instrument of economicdevelopment.
I I I .
8%). Cropland.314 239 4 1.8 4.which hasapproximately 32% of the world's cropland.393million hectares.78hectareof cropland per person in agriculture.This represents averageof 3.753 3.2 100.78 Source: FAO.851 4.6 5. The world's population was estimated at approximately 3.851 million.0 12.456 10.0 17 32 17 39 64 67 4 51 1. or 51% of the total population. the tables show that: 1.90 11.7 3.35 hectare per person.6% in SouthAmerica.8 14. per person.783 2.0 89 77 54 74 1.Theworld's agriculturalpopulation-defined as populationdependingon agriculture for its livelihood-is estimatedat 1.2 2.35 0. averaging0. and 3% in Oceania. and 4. or closeto 0. The ratio of cropland to agricultural population is the lowest in Asia among all the major regions.240 2.0 15.Together.defined as arableland and land under permanent crops (10.9 18.8 31.02 1.456 million hectaresof cropland. approximately32% is in Asia.63 3.the People'sRepublic Table 1:1 Regional Distribution of Land.9 4. madeup of 1. 19% in North and Central America. 16% in the USSR.617 million in the early 1970s. of The relationship between population and land in all major regions and for 52 selectedcountries is shown in Annex Tables1:1 and 1:2. there is an average 0.393 145 232 271 84 463 214 47 1.4%). respectively.987 million hectares under permanent pasturage (22.041 million hectares under other uses(36. More than 70% of all rural people live in Asia.Of the arable land.Production Yearbook 1972. 15% in Africa.242 1.14 0. On the basisof these global figures.40 hectareof cropland. Agricultural Population and Area per Personin Agriculture Cropland Ruralpopulation Land area DistriDistri(million (million bution bution hectares) hectares (%) (millions) (%) Agricultural population as percentage of total population Cropland area per rural person (hectares) Region Europe USSR Northand Central America SouthAmerica Asia Africa Oceania Total 493 2.01 5.8%).7 hectares an of land.031 851 13.0 71.75 0. 10% in Europe. 2.9 0.Annex1 THE CONTEXT OF LAND REFORM Ratios of Population to Land The total land area of the globe is about 13.2 100. 49 .Among other things.
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
The emphasisin the latter countries will have to be placed more and more on raising yields per hectare..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. is a country of small holdings and has approximately two workers per hectarewith an averageoutput of $397 per worker and $762 per hectare. Rome: and p. The increasingpressureof population on the land highlights the issueof absorptivecapacityin agriculture. 1971.Several other countries havea higher ratio of workers to the land than Japan. Malaysia. Japan Table 1:5 Agricultural Labor Force and Production in Selected Asian Countries. This applies to the more densely populated regionsas well as to others. 1970 Agricultural workers per 100 hectares Netagricultural production per hectare (US$) Country Indices Japan = 100 Indices Japan = 100 Output per worker (US$) Indices Japan = 100 Burma India Indonesia KhmerRepublic Korea.while one country.Most developingcountries haveconsiderable opportunities for increasingemploymentand production in this sector. I-V.Republic of Laos Malaysia Nepal Pakistan Philippines Sri Lanka Thailand Viet-Nam.The 3 Stateof Food Agricuture. 99.Table 1:5 showsthe startling differences in input of agricultural labor and output per hectarein developing countries of Asia on the one hand. and in Japanon the other.LabourForce Projections. Geneva: Columns and 5: FAO. Sources: Column International 1: Labour Office. a higher output per has worker in agriculture than Japan.However. 1972. 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 .Annex 1 situation is correspondinglyworse.
then theseholdingsoccupy1. theseholdings accountfor approximately6. urban aswell as rural.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). are under 1 hectarein size. Suchmeasures include thoserelated to land reform.land tenure and capital formation.includingall of the larger countries that are membersof the Bank. Nonetheless. 55 . evenif effective birth control could be introduced overnight.except Afghanistan.Bolivia.Nigeriaand Romania.3 million holdings in the 83 countries.8% of the total number. About 53. or 39% of the total number.With very few exceptions. 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. poverty and unemploymentproblemsof the developthe ing countriesare unlikely to haveany long-term solutionsthat would not include a reduction in population growth.however. 2. Thiskind of labor intensity is not likely to be reached.7% of the cropland. The most recent data on distribution of holdings by size is given in the worldwide censusof agriculture held in the early1960s. are lessthan 5 hectaresin size.8% of the total land area and 20. low incomesand increasingunemployment.Table 1:6 combines the two sets of information to give an indication of the distribution of land and cropland by size of holding. It showsthat: 1. or 78.4% of the cropland. Thiscovered83 countries.9 million holdings.1% of the land areaand 3. 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. The censusprovides a breakdown of distribution by size of 138. 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. becauseof the small size of the irrigated areas in Pakistanand India and other constraintsrelated to technology.Annex1 and India. About 109 million holdings. Ecuador. resourcebase. Basedon the sameassumptionas above. the agriculturalsectorin thesetwo countriescould absorb all the labor force expectedby 1985.
40 5.60 8.55 28.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 1.3% of all the cropland.60 6. Thus.and if the a distribution of 91% of the land reflectsthe pattern of distribution of all the land.20 3. of pp.00 11.20 20.If the distribution of holdingsby size in 83 countries represents global picture.500 500-1.200 200.2 2.and more than three-quartersof all farmland.2% of all holdings. These data confirm that.80 6.73 13.00 4. farms of this size group account for 66% of the total land area and nearly25% of all cropland.000 over and Total 53.00 3.50 50.23 138.92 million were lessthan 5 hectaresin size.40 1.80 11. 34-36.48 0.10 100. 3. The information on distribution of holdingsby size refersto the 83 countries. Therewere an estimated16 million holdingsof lessthan 5 hectares in the developedworld: 6 million in Japanand 10 million in Europe.8% of all holdingsin the 83 countries.100 100. both developed and developing.70 9.80 5. account for 78.In the 64 countriessurveyed.000 1.which represent 3.80 9.then holdingsabove50 hectaresin size.50 51.10 10.90 7.40 0.20 1.24 7.40 5.70 4.00 1.Report the 1960 on WorldCensus Agriculture.8% of the total farmland area and 45.20 4. One million holdingsof 200 hectares more representlessthan or 0.23 0.27 4.5 5.20 20.90 26.90 19.60 5.30 12. disthe tribution of land and cropland is highly skewed.Conversely.50 5.of 122 million holdings in the developing countries.97% of all holdingsaccount for lessthan onequarter of all farmland and slightly more than half of the area under crops.67 0.97 1.00 Source: FAO.50 10.10 1. roughly3% of all holdings(in the aggregate)account for slightly less than half of the arable land and land under permanentcrops. Rome: 1971.16 0.00 0.00 11. when viewed in the aggregate.70 11.59 38. covered by the census.16 100.30 100.40 1. That is. approximatelyhalf of theseholdings 56 .
7 52.2 73.4 36.0 40.The most comprehensiveregional and national analysis the 83 countries dealswith for holdings of 1 hectareor more in size and pertains to 84.6 23. the agricultural population in the developing countries increasedby a reported 190 million persons.2 5. However. of Rome: 1971. Ecuador and Bolivia. 57 . in all probability.0 8.0 0.2 3.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. Obviously.3 0.3 8.4 39.5 9.0 23.these countries had an agricultural population estimatedto be close to 50 million people.4 37.242million hectares.1 90.4 78.4 45.2 6.5 21.5 2. most of whom were farming on units of less than 5 hectaresin size.or by more than an estimated 35 million farm families.2 17.since it excludes holdings of less than 1 hectare. Preliminaryindications are that the fragmentationof holdings hasincreasedin manyof the more densely populated countries as well as in countrieswhere the distribution of land is skewed.7 - 47.5 13. It is safeto conclude that well in excess 100million holdingsare of less than 5 hectaresin size in the developing world at the present time. The1960census data alsoprovided information on holdingsby size and land areafor different regionsand countries. Consequently.0 34.5 1. more than half of their holdingsare lessthan 1 hectarein size.5 50.8 0. This conclusionis derived asfollows: The 1960censusindicated that there were approximately92 million smallholdersin developing countries. Afghanistan. Together.7 91.7 3.1 66. it does provide an insight into the patternsof distribution of holdings within the major regions.Annex1 were less than 1 hectareand the remainderwere between 1 and 5 hectaresin size. Reporton 1960 the World Census Agricalture.4 million holdingscovering2.at the time of the census. Table 1:7 Distributionof HoldingsaboveOne Hectare. this is not a complete coverage. or 10 million families.5 90.5 Source: FAO. it is highly likely that closeto 100million holdings of less than 5 hectaresexistedin 1960.7 27.0 99.it is safe to assumethat the census forthcoming in the 1970swill reveal that there are well in excess of 100 million smailholdersin the developingworld.Thus. excluding those in Nigeria. Between1960 and 1970.The resultsare summarizedin Table 1:7.
1 37. in Selected South American Countries %holdings Argentina Brazil Chile Colombia Paraguay Peru Uruguay Venezuela 14.1 1. helps explainthis. 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 40.4 12.Annex 1 The analysisindicates the vast differences in patterns of landholding and land distribution between Asia and the other regions. South America and Oceania.6 30.5 52.1 1. The 36. only 5% of the land in the eight Table 1:8 Distribution of Holdings above One Hectare.0 9. is becausecoverageof that continent in the 1960 censuswas poor.0 0.then the land held by smallholdersowning under 5 hectaresis much more than 50% of all land.of the area under farms. of Rome: 1971.2 92. Only 9% of the area in Asia is in holdings of more than 50 hectares.3 32.5 86.1 85.1 4.3 36.3 43.2 42.As much as 34.5 3.1 6.2 0. as shown in Table 1:8. and more than 90% in North and Central America.8 92. Report the 1960 or WorldCensus Agriculture.7% in Europe. are This The data for Africa. 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 Source:FAO.7 46.8 95. misleading.while the sampling in Zambia was confined to Europeanholdingsand in Tanzania commercialholdto ings.0 4.3 1-5hectares % area 5-50hectares % holdings % area 50 hectares % holdings % area 0.6 8.7% of the land. At the other end of the spectrum.8 14.2 94. 58 .0 22.9 2.8 5.5%.6 6. the pattern of holdings in the eight major countries in LatinAmerica.2 1.9 49. The analysisof the distribution of holdings by size on a regional basispoints to the highly skewed distribution in the Americas. as presentedin the census.6 51. by Size and Area.3 87.7 4.4% in North and Central America that are less than 5 hectaresin size occupy only 1% and 0. If these are excluded from the sample.3 40.5%in the eight countries is in holdingsof more than 50 hectaresin size. respectively.4% of holdings in South America and 23.7 36.8 97.2 10.6 20.9 28.3 38.5 73.1 20.1 6. The information confirmsthat a very high proportion of all land-ranging from 86% to 97.7 50.is in farmsof more than 50 hectaresin size.
As can be seen. countries such as the Republicof China (Taiwan).Japanand Swedenhave a low concentration of holdings. Other data provided by FAO. 59 . 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.Annex 1 countries is in holdings of less than 5 hectares(even though these holdingsconstitutebetween 14% and 74% of all holdings). 2. The distribution of land by size of holdings is "a geographical phenomenon" and must be interpreted with caution in a socioeconomic context. Rome: 1961. Land-Tenure:WorldAgriculturalStructure. 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 is of special interestthat two of the countrieswith a high densityof population and very little concentration of landholdingsare Japanand Taiwan.Canada. US Departmentof Agriculture.Republic of Denmark Germany.The Gini coefficient hasbeenestimated for 30 countries which have been grouped into three categories. Washington: 1965. Study No. p. the distribution of land appears be At to much lessskewedin many areaswith a very high densityof population. 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.1948to 1963. Economic Research Service: ChangesinAgricultutrein726Developing Nations.the Gini coefficient indicatesa high concentration in six South American countries included in the sample.as shown in Table 1:9.On the other hand. notably Asia and Europe. The most skeweddistribution appearsto be in LatinAmerica where the densityof population is relatively low in rural areas. as revealedby a Lorenzcurve. Clearly.the distribution of holdingsby sizevarieswidely in different parts of the world. the sametime. 36.
and the percentageof farms and areasof farmland they occupy.000acresin parts of Northern Australia. in the 15 countries. where tenancyis widespread.Annex1 100.Similarly. The conditions that govern rental agreementsand crop-sharing arrangements differ throughout the world. more than two-thirds of the farms.In someparts of the world. In such countries as the Republic of Viet-Nam. The evidence presented here (andelsewhere)indicates. All in all. and they commonly give as muchas half their output in return for the useof land and services provided by him. Table 1:11 indicates the number of landless farm workers in 12 countries. the rights of those who rent land are protected by law or custom. The caveats quality of land and ecologicalconditions governing on land-use patterns must be borne in mind. Renting or sharecroppingof land is a common practice in both developedand developing countries. however. the pattern of distribution of land maynot reflectthe prevailing pattern of distribution of wealth or the socioeconomicconditions -2 hectaresof irrigated land in the MedjerdaValley of Tunisia.there is heavydependence the on landlord-usually an absenteelandowner-for the provision of pur60 . In mostdeveloping countries.that mostof the agricultural land and cropland is concentratedin a relativelyfew holdings. and rentersenjoy the sameworking conditions asownersof land. are farmed by tenants or sharecroppers. This limited sample indicates that renting and sharecroppingare widespread in all the major regions of the world. such as Guatemalaand Tunisia.out of 82 million holdings. Iran and Egypt. in and that this skewness by no meansconfined to LatinAmerica. this is true of less than one-quarter of the farms. It also indicatesthat the greatestskewness distribution is in the Americas.Table 1:10 givessome information on the number of rentersand sharecroppers in 15 countries. occupying much more than half of the land. close to 29 million are worked by rentersand sharecroppers.000 hectares of land usedfor sharecroppingin the semiaridparts of Tunisia'scentral area. in other countries.Only limited data on theseare available. However.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.yield a far greater income than do 1. within countries. rentersand sharecroppers in a verytenuous posiare tion when it comes to negotiating arrangements with the landlord. producing tomatoes.
5 28.4 32.6 24.a.334 25.Annex 1 Table 1:10 Tenancyand Sharecropping SelectedCountries(l) in Renting and sharecropping as percentage of total Number of 2 farms( ) -(O Farmland Number of renters 2 and sharecroppers( ) (000) (%) Asia India Indonesia 3 Malaysia( ) 4 Pakistan( ) Philippines Viet-Nam.3 70.0 n.Vol.664 62. pp. (4) (5) Includes both Pakistan and Bangladesh.6 n.India and Pakistan.2 43.5. chased inputs.176 1. Tenantsand sharecroppers under conditions of great insecurity and are in a weak bargaining position vis-a-visthe landlord.3 35.9 15.the tenantsare among the lowest income groups in agriculture.1 66. therefore.0 62. Source: FAO. India and Nicaragua are excluded.2(5) 1.a.253 76 2. Republic of Total Middle EastandNorthAfrica Egypt Iran Tunisia Total Latin America Caribbean and Chile Colombia Dominican Republic Guatemala Nicaragua Trinidad Tobago and Total (a) 27.3 31.4 70.0 45. 61 .Rome: 1971. due to lack of data.392 141 5.7 57.349 128 381 129 93 27 18 776 Data refer to latest available year in 1960s and.4 54. (a) Includes holdings operated under more than one tenure form (21. Frequently. 16.350 4. 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.0 40.4 57.8 19. 92-97.3 49. 32.7(5) 13. do not reflect land reform action on the one hand and changes in the work force on the other.9 31. 25.2 73.1 49.5 n.3 33.4 26.271 1.5 31.9 22.7 23.4 13.81).Report the 1968 oe WorldCensus ofAgricolture. (1) 1960 estimates are for former Federation of Malaya. Another widespreadcharacteristicis the absenceof written registeredagreementsgoverning the conditions of tenancy and the rights of tenants (eventhough there may be lawsstipulating typically operate what these should be).3 61.020 1.a. Dominican Republic.
44-301. do not reflect recent reform actions on the one hand and changes in the work force.499 101 557 99 287 9. Unless otherwise indicated.300 5. p.561 694 3.986 1. Approximately100 million personsare farmwage workers Table 1:11 Landless Farm Workers in Selected Countries(l) Landlessworkers as % of active population in agriculture Active agricultural population as % of total active population Number of landless workers Asia 2 India( ) Indonesia 3 Pakistan( ) Total East Africa Middle andNorth Algeria Arab of Egypt.158 122 179 391 138 72 2. indian (3) Includes population now belonging to Bangladesh. 1971). Directorate of Economics and Statistics. YearBookof Labour Statistics 1871. Agricurltureinn Brief (I Ith ed.. 14. and Except for India. data presented here are estimatedfrom [LO. 1972. data refer to latest year available in 1960s and. on the other.099 1.Annex1 LandlessWorkers The number of landless-farmworkers in developing countries is increasing. thus. pp.865 903 484 210 4.43-294.013 60. 62 .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.237 378 1. Republic Iran Morocco Tunisia Total LatinAmerica Caribbean and Argentina Brazil Chile (1971) Colombia Costa Rica Dominican Republic Ecuador Honduras Jamaica Mexico (1970) Nicaragua (1971) Peru Uruguay Venezuela Total (1) 47. (2)Agricultural laborers as shown in India: Ministry of Agriculture.673 8.
but the problemsof reducingnationwide unemployment haveto be seenin a national ratherthan a sectoral context.and the provisionof employmentfor what is alreadya large rural proletariat may well be one of the greatest challengesfacing national governmentsin the future. There are about 10 million suchworkers in LatinAmerica.Annex1 (including family membersand headsof familieswith verysmall landholdings) in the 22 countries for which data are provided in Table 1:11. There is a vast amount of underemploymentin the rural areasof most countries of the world. 63 .At this juncture.It is usuallyassumed that the labor force subsists a off holding and joins in some arrangementwith the extended family whereby it shareswork and output. but 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. The emergenceof a landless wage-earningclassconfirms that a growing rural labor force hasto rely on work outside the traditional sectors for its livelihood. the proportion ranges from a minimum of about one-fourth in Brazil and Hondurasto a maximum of approximatelytwo-thirds in Chile. This group is increasingin size. The nature of this phenomenon has been discussed elsewhere.Evenin Argentinaand Uruguay (with only 15% of the active population depending on agriculture).In the remainingcountriesof the region. more than half of the workers are essentiallylandless. Structural changes within agriculture can help alleviate underemploymentand open unemployment. This figure includes an estimated47 million in India aloneabout 32% of the active population in agriculture. it should be pointed out that the redistribution of idle land can provide added employment. Almost no reliable estimatesexist of the number of unemployed in rural areas.
nor should the statementsbe regarded as definitive. A land-to-the-tiller programcompletedthe reform in 1953.Annex2 EXPERIENCES WITH LAND REFORM The following summariesillustrate selectedcountry experiencein land reform over the lastthree decades. while the proportion of farm families owning all land under their cultivation increasedfrom 33% to 59%. The smooth implementation of the reform programin Taiwan was due to a stable sociopolitical climate and the many complementary developmentmeasures takenbefore and during the reform. evidenceis inadequate allow identification the to of causalrelationships between reformmeasures the one hand and on production.such as that between land distribution and a rise in productivity.Theexistence of a thorough cadastralsurvey.5 hectare.good agricultural researchand extensionservices. and rural and social stability havebeenenhanced.The shareof total agriculturalincome that is consumed hasincreased only moderately. Republic China of Taiwan'sland reform program was implementedin three steps.the productivity of agriculturehasincreased. Following the reform.was followed by the saleof public lands.The proportion of cultivated land under tenancy leaseswas reduced from 41% to 16%. and a graduallyincreasinginvolvementof tenant farmers in the administration of the program.In mostcases.Landproductivity is higheston holdings below 0. income distribution has become more even. even though it is often feasible to trace correlations. Republic Korea of Land reform in SouthKoreaafter the SecondWorld War consisted of: (1) a reduction of farm rents from 40-60% of production to 33% 64 .A reduction of rents.leavingintact enoughincome to achievea fairly high agricultural savings rate.all contributed to the success. income and social effectson the other. On the land remainingunder tenancy cultivation. in 1949. Their inclusionin this paper should not be taken as indicative of Bankjudgment on what doesor does not constitute land reform. Land reform is a complex process in which severalsocioeconomicvariablesare changedmore or lesssimultaneously. vast expansion publicly sponsored a of farm credit during the reform period. written and secureleases were arrangedat much reducedrental rates.
credit services.Considerablesociopolitical stability has been achieved.while only 7% were tenants. The economiceffects were not as enormousas thoseassociated with the 65 . The first reform did little. the tenancyproblem grewgradually to worse. The second reform resulted in greater equity. 19% of the farmers owned 90% of the land and more than 50% of the farmerswere landless tenants.But the small size of most farms has now becomea constrainton farm income. however.training and extension. and may also have removed a constraint on the growth of Japanese agriculture. cheapfood and surpluslabor to the industrial sector.Afterward. a secondland reform programwas executed.Theformer tenantsweregiven property rights at an extremely low real cost. with the result that the agricultural sector could provide savings.In the late 1940s. of Japanese property confiscated by the military authorities. Owners had to sell all land in excess about one hectareto of the governmentat confiscatoryprices. laid the groundwork for Japan'ssocial and economic transformation. which resulted in a thorough restructuringof rural society. by the 1960s. Supplementary programsfor infrastructureimprovement.Laborproductivity and rural employment increased. before the reform. yields had far surpassed prereformlevels.Labor intensityand land productivity rose quickly. Japan The first Japanese land reform program. to distribute property ownership or reduce income inequality-rather it strengthened the landownerclass. and private landownershipwas reinforced for the purposeof cash taxation by the central government. It.hasbeen estimatedthat.The peasantry wasfreed from bondage.6 million farmers (approximately70% of all farmers). in 1868. and (3) a redistribution between 1950 and 1953 of land in excess a ceiling of 3 hectareson Korean of holdings. Subsequent the first reform. Yields did not fall as a consequenceof the reform.Annex 2 in 1945.togetherwith income redistribution in favor of the poorer ruralfamilies. Largenumbersof smallholderslost their property in the agricultural depressionat the turn of the century.The terms of salewere similarly generoustoward the buyer in both cases.partly because heavy of land taxes.the power of the feudal lordsto collect taxes from landownerswas broken. in 1948. (2) a redistribution. 69% of the farmers owned all the land on which they worked and 24% were part-owners.4 million acres (25% of the total farmland) were distributed to 1. and promotion of farm chemicalsand new crop varietieswere pushedon a large scale.Some 1.
they gradually turned into powerful landlords. Under the tenancy reforms. By 1961. in 'The zamindars were revenue collectors during the Moghul period.and (4)consolidation of fragmentedholdings. Actual rents have not come down. 3 million tenants. Rural incomes have. with the result that policy implementation varies widely.their economic position hasnot been greatly improved. most important of whom were the zamindars. therefore. (3) to ceilingson landownership and distribution of surplus. Although the reform increasedincome equality among farmers.At the time of the reform.Securityof tenure appearsin general to haveworsened. is largely recommendedand coordinated by the Central Governmentand the Planning Commissionand executedby the individual stategovernments.(2) tenancyreformdesignedto fix maximumrents. Land productivity did increase after 1947. A total of Rs. pursued since 1950-51.350 million was paid in compensation. Under the British.an increase farm incomethrough diversification into horticulture and animal husbandry. 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. subtenantsand sharecroppershad.4. price supports notwithstanding.Annex 2 first reform.however. The four major types of reform havebeen: (1) the abolition of the zamindari' system. acquired ownership under purchase agreementsof 7 million acres. amongother objectives. Agricultural policy is now of aimedat. the tenancy problem had already been relieved through a reduction of excess rural population by the war and absorption into industry. The landlords who were forced to sell excessproperty were mostly smallholders themselves.Sincetenants continue to pay revenuedirectly to the government. however. the intermediary rent and tax collectors.the problems of fragmentation and undersizedfarms.had been abolished. but the farmersconcernedare often limited to lowskilled work.to improve security of tenure and to give the right of purchase the tenant. lagged behind. by 1961. 66 . The abolition of the zamindari systeminvolved 173 million acres.Part-timework outside the farm is an outlet.An attempt to create larger farming units through cooperativeshashad little effect. The second reform worsened.mainly in the form of bonds. India Land reform in India. Two-thirds of the owners were required to sell lessthan one hectareand only 6% more than five hectares. it hampered equalizationof rural and urban incomes.
together with accessible marketingchannelsto small farms in general. which has allowed them to escapethe reforms.largest estatesoccupied relativelymore fertile lands. covering 62% of the area under cultivation.A further 4.approximately2 million acreshave been taken over by the government in order to settle tenantsand landlesslaborers. The.Evenif a ceiling is imposed.All kinds of tenants should also be registeredand given access credit and inputs.and to promote more efficient typesof tenancy contracts. Tenantswere rotated annually. of and It is well recognizedin India that the reform measures dealingwith securityof tenureand acreage ceilingsareonly partiallyenforced. Consolidation of land parcels has been more successful and has resultedin a rationalizationof holdings covering 69 million acres. Therefore. a practice which hampered agricultural investmentand causedexploitative useof the soil.but most of the donatedparcelsare still in the handsof the donors.Uttar Pradesh Haryana.and ownerswere often absenteelandlordswho contributed little to agriculturalproduction. A large extensionof credit at reasonable to terms.It appearsto havecontributed to a growth in productivity in the northern states Punjab.it will be better to legalize someforms of tenancywhich exist on a largescale.and particularly to tenantswith secureleases. Unreported casual tenancyand shareagreements havemultiplied. Under the ceilings legislation. and is likely to presentfewer problems. Provisionof thesefacilities is as essentialas further land distribution for attaining the income equity and productivity objectivesof India's land reform. Thereappearsto be scopefor somedistribution which will also assistagricultural production becausethe yield per acre in India is higher on small farms. were rented. Before the reform.and that manyof the statelegislatures not anxiousto havesuch radical are land reform.Annex2 some statesthey have even increased. As long as population pressurecontinues.Only about 1 million acresout of all gifted land haveactually been given to landlesslaborers. Former landownerswere partly compensatedupon expropriation by cash paymentsrangingfrom 10% to 20% of the estimatedvalue 67 . Iran Iran's land reform started in 1962.is required.the landacquiredis sufficient to give minimal holdingseither to the minifarmersor the landlessbut not both.Landownershave been permitted to resumeland above legal ceilingsfor personal cultivation.2 million acreswere formally pledged to the Bhoodan(gift) movement. it will be unrealisticto try to abolishtenancy in the short run. 56% of the holdings.
landownershipwas limited to a maximum of one village per owner. to wit: (1) of leasingto the tenantsfor 30 years. Continuation of the existing inequities of land distribution was regardedas one of the costsof ensuringa speedyenactmentof the reform. there was also considerable interferencewith the normal flow of irrigation water from streamsand storageplacesstill controlled by landlords. with the balancepaid in bonds in annual installments. The third and final stageof the reform.the reforms did not assistthose who were landless. The reform favored tenants and sharecroppersinsofar as it conferred ownership on them or enhanced their security of tenure. Many measures were set up in a somewhat improvised fashion. The early accomplishmentsof the credit program were striking. (2) selling to the tenants. aimed at conversionof all 30-year leases into smallholdings. the Central Bankfunded the difference.The beneficiarieswere to repaythe governmentthe expropriation price plus 10% to cover administrativecharges. Morocco The Moroccan Government has undertakena series of measures aimed at land reform since independencein 1956. (3) purchasingthe tenants' rights. During the first stageof the reform.000villageshave undergone land reform and more than 3 million families have received land. and increasedsupply of quality seedsand fertilizers.Annex 2 of their holdings.As these paymentsfell behind. It created uncertainty which discouragedinvestment in improvements. and (5) forming an agricultural unit for joint operation by the owner and the tenants.but this growth leveledoff after 1966. The objective of these measures to facilitate an increasein agricultural production is 68 . Excess land was expropriated and distributed to the tenants. The landlord had five options for the area in excess the maximum allowed to him. it is believedthat the land reform program on balancehad adverseshort-run effects on output.which was practicallycompleted in 1971. Because they were basedon the existingdistribution of holdings. The ownershipand tenancy reforms havebeen complementedby rural cooperatives. (4) dividing the land with the tenants in the same ratio as the customary crop sharing. credit and extensionservices. total lending by the Agricultural Bank tripled between 1960and 1965.The costs to the Governmentwere limited to thoseincurred in carryingover the acquisition coststo the time of final reimbursement. In the second stage. Virtually all of Iran's 50. Although agricultural output increasedby a total of 18% in the first five yearsof the reforms.the limit of one village was reduced further to plots of 20-100 hectares(depending on the natureand location of the land).
the impact of land distribution alone on the problem of rural poverty hasbeen small.when legislation was introduced subjecting such transfersto Government approval.The achievementof the distribution target for land 69 . At the time of independencein 1956.Annex2 and to improve the distribution of rural incomes. The Government'smain priority now is to accelerateland distribution. Through the establishmentof cooperatives.and the adoption of modern cultivation techniques.about 900. The Agricultural Investment Code.while land under tree crops (mainly orangegroves)remainedunder Government control and ownership.mainly before 1963. The main constrainton the program hasbeen the unavoidablecomplexity of supervisingits implementation consideringthe Government'smanpower resources. Land distribution is so far basedmainly on former foreign-owned land.Legislationpassed in 1962.000 hectareswere foreign-owned. 181. The target for the third Five-Year Planis to distribute 395. between 1974 and 1977.intensified extension supportand the provision of modern inputs.000hectaresof "official colonization" landswere takenover by the Government between 1963 and 1965. published in 1969.000hectares.000hectares(3% of the cultivated area)had been distributed to over 11. and a further 220. and to seeka suitable formula for distributing land under tree crops. is aimed at facilitating the developmentof irrigated agriculturein welldefined developmentzones. However. the number of beneficiariesso far is only about 1% of farm families with lessthan 2 hectares. Distribution so far hasbeen limited to land underfield crops.was recovered by the Government in 1973.000hectares were sold privatelyto Moroccans.000hectaresof land under field crops.000families. an improvement in the tenure position of membersof traditional collectives. Thirty-one thousand hectareswhich were mainly used by foreignersfor researchpurposes were recoveredby 1960. about 300.althoughsomeother state-ownedland and traditional collective land is involved. Distribution to smallholdersand landlessfamilies was slow until 1967 and then gatheredmomentum up to 1972.000hectares. the beneficiariesof land reform have generally quickly achieved high yields and acceptable incomes. while maintaining high technical standardsof managementon the distributed land. mainly formerly foreign-owned.1966 and 1972 provides for land consolidation and distribution of land to smallholdersand landless families throughout the country.Land consolidation hasalso been successful and hasso far benefited almost 200. By the end of 1972. It providesfor the restrictionof inheritance rights to limit fragmentation.amountingto about 370. of this area. Remaining foreign-ownedland.
The second land reform started in 1945. by the end of the plan. equipment useand output sales. but the former landownerswere allowed to retain ratherlargeholdings.The reforms have resulted in a sizable redistribution of rural income and an increasein peasantparticipation in rural decision making. and the tenants of the Turkish landownersreceivedownership rights.Thisis related to the location of holdings on the better soils and its priority treatment in the allocation of inputs such as fertilizers.9 hectares.whereas producer cooperathe tives havedeclined. producer cooperatives and general cooperatives. In the north. enable the program to cover 9% of cultivated areaand 5% of farm familieswith lessthan 2 hectares.however. machineryand expertise.and resulted in a transfer of ownership of almost 25% of the farmlandto more than 33% of the peasants.Annex2 under field crops alone would. form the largest and fastest-growing socialistelement. In the The first land reform in Yugoslavia south and west.and have expanded about40% of all smallholdings.The generalcooperatives mainly associations are for joint input purchases.were expropriated. the size of the large estateswas reduced. and vasttractsof mountain pastures still undertraditional. the bulk of agricultural output still originates from the large group of small farms. all land in excess 25-35 hectaresper farm. 70 .The average holding in the private sector is now only 3. However.Half of the seizedland was distributed to the poor and landless. which resemble worker-managed the industrialfirms.the privatesectorof individualownerswho cultivate their own land remainsimportant. Yugoslavia was undertakenin 1919. particularly sincethe mid-1950s. to The socialistsectoris reportedlythe mrst productive.and by 1956accountedfor only about 10% of all land under cultivation. are In 1953.when all large estates.collectiveforms of usage.a ceiling of 10 hectaresof arable land or its equivalent was imposed on private holdings. Aside from the socialistsector. The stateand collective farms createdin the late 1940salong Soviet lines expandedto approximately25% of the total cropland. Collective farms were allowed to disband after 1952. The socialistsector includesstatefarms. and the farm property of of Germans and other aliens.while the other half was retainedas state property. bondage was abolished. The kombinats.The implementationtook two decades. consistingof both the cooperatives and the farms outside the socialistsector.
despite the considerableconcentration of ownership that persistsin the private sector. The implementation and results of the reforms have been quite successful.In particular. It was estimated in 1973 that approximately25% of all smallholdingswere less than one hectareand about 50% less than two hectares. The landless amount to approximately16% of the rural population. More than 1 million acresof land formerly cultivated by Europeans were opened up to Kenyansmallholders.1976 hasbeen plannedasa terminalyear for land reform.the reformshavecreateda class of prosperoussmallholders. promotion of cash (3) cropping and dairying.occupying altogether lessthan 4% of total arable land. Theseincluded: (1) adjudicationand consolidationof holdingsunder cultivation by African farmers. The reform aimedat solvingseveralproblemsat the sametime. Incomesof the ejidatarios arealmost certainlybetter than would havebeen the case without reform. those that were already relatively well-to-do have profited. and increasedproduction for the market.Socially. Mexico Having its roots in the revolution of 1910-15. the agrarianreform in Mexico createdvillage groups (ejidos)with usufruct rightsto land. pyrethrum. while the poorest smallholders and nomadshave benefited much less from the reform. but substantial regional differences persist in natural 71 . notwithstanding political friction and a lack of qualified personnel. wheat. maize. Sincethen. (2) resettlement African farmerson of the large farmspreviouslyowned by Europeans. dairy products and beef. The economic benefits of the adjudication and consolidation of holdings seemto have been greater than those of resettlementon largefarms. Most of the ejidos wereformed in the late 1930s and havebeen operated on an individual rather than collective basisby the ejidatarios. Total production by the ejidos grew very slowly during the first decadeof their establishment.An activeextensionprogramhasenabled smallholdersto increase the production of coffee.and the rightsto about 7 million acreswere adjudicatedand consolidated.and (4) diversificationof export output.Annex2 Kenya Land reform was initiated in Kenyaby the colonial administration in 1954 and expanded by the Government after independencein 1963. Somethree million landlessrural workers remainand. Closeto 90 million hectareshavebeen distributed between1915 and 1972 to about three million ejidatarios. the ejidos haveincreased output about as fast as hasthe private sector.Theseprimary beneficiaries of the reform represented 53% of all farmersand 26% of the rural labor force.
Expropriatedlands that havenot yet been resettledcontinue to be operatedunder direct governmentsupervisionuntil a cooperativeor SAIS(Sociedad Agricola de InteresSocial) farm organizationhasbeen formed.however.The target for the current Five-Year Planis to expropriate26.50% of the farmers earnedonly 20% of all farm income (including personalincome from sourcesother than agriculture). to which the land title is then transferred. In 1972. a total of 4.8 million hectaresof this area.while in a few casesland hasbeen to added to the holdings of Indian communities.TheSAISrepresents attemptto an 72 .the top 20% of the ejidatarios accountedfor only 45% of all ejido income. The agrarianreform law of 1964concentratedon redistribution of inefficiently managedlatifundia (large landed estates)in the Sierra. and to redistribute theseto 500.The more fundamental reform law of 1969was the basisfor the expropriation of the large.the concentration of landownershipincreasedagainbetween1940and 1960. The government bonds given to the former owners can be. Well managedproductive units were exempted. Following the land redistribution during the 1930s.000families.More such investment and a mechanism for selectiveconsolidation of small farms will be required to ensure that the impact of the reform is maximized. In 1967-68.Since then.000families have been settled on 2.Annex 2 resourceendowment and in the extent of public investmentin complementary infrastructure.Only a small number of individual farms has been assigned former tenants. Peru Betweenthe start of land reform in 1963 and 1972. income was more evenly distributed. Despite the priority given by the government. Rural income distribution is still skewed.productiveand profitable sugarcomplexes the north coast. the concentration may have fallen back as a result of the distribution of another 35 million hectares during the last decade.7 million hectareshas been expropriated.implementation is well behind schedule. used for investmentin industry to supplementtheir other resources. Four different categoriesof farm organizationscan receive redistributed land. but the bulk hasbeen placed in the handsof workerowned cooperatives.Among ejidatarios.200farm units containing 12 million hectares.Over 100. TheSAISisa unique form of farm organization.about three-quartersof the target area still remainedto be expropriatedand reallocatedbefore the end of 1975.and is the basicunit of agriculturalreform in the Sierra. While the top 20% of private farmersreceived60% of all privatefarm income.A of limit was establishedon the size of holcdings (150 hectareson the coast).
000families with insufficient land to provide adequatesubsistence eligible to are benefit through the land reform program. Debt repaymentmay becomean onerousburden on those units whose profit potential is limited by their physicalcapacityto expandlivestocknumbersand by the need to employ high-quality technical services.1 million. However. and are to be used in community development projects involving schools.9 million to 2.the full market value of expropriatedlivestock hasto be paid in cashwhile fixed capital is to be paid for largely in agrarianbonds. power reticulation and housing.the proposed solution to this dilemma. Legally. 73 . The land reform programalone will not be able to solvethe rural . The debt assumed eachSAISunit is to be repaid from profits in by 20 years following a five-year grace period. agrarianreform is providing the basisfor socialand economicchange. In this manner.surplus manpower is given employment. Eachgroup contributesto the capitalof the enterpriseon the basisof resources.The SAIS.Annex2 solvethe problem of providing agricultural and social development opportunities to the membersof the traditional Indian communities without jeopardizing the relatively high production and economies of scaleattainableon expropriated haciendas. Evenif all land which can be expropriatedis redistributed.therefore. * In anyattemptto meet socialneedsthrough redistributinglandand income in the Sierra. employmentopportunities in agriculturewill increase only from 1.Managementof the SAISis in the handsof professional employees.unemployment problem. while the number seekingwork in agriculture will rise from 1. 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.6 million. accountedin 1972 for 10% of the families benefiting from the agrarianreform program.32million to 1.000 families. roads. Profitsare allocatedto each membercommunity in relation to its sharein the SAIS.about 500. and the rather meagerprofits can be usedin developingbadly neededphysicalinfrastructure. It can be regardedas a second-degree cooperativewhosemembersaresocialbodies instead of individuals. 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.will still lack a minimum subsistence landholding.mostly in the Sierra.population and economic potential. Evenif the optimistic targets for 1975 are met.Haciendaproduction is almost entirely basedon extensivegrazing of mountain pastures. Nearly800. the governmentis faced with problems of maintaining or raising productivity levels attainable only through exploitation of scale economies.
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