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Sector Policy Paper
Page Introduction .......................................... Summary .......................................... Chapter 1: Characteristicsof Land Reform ............................. Man and Land........................................... Context of Land Reform .......................................... Dimensionsof Land Reform....................................... Chapter 2: Land Reform and EconomicDevelopment ...... ............. Implications for Productivity....................................... Land Reform and Employment ........... ......................... Land Reform and Equity ......................................... Effects on Marketed Surplusand Savings.......... .................. Tenancy Reform ...................... .................... Implementation Issues .......................................... Chapter 3: The World Bank and Land Reform .......................... Changing Concerns.......................................... Technical Assistance...................... .................... LendingOperations.... ...................................... Major Policy Options.......................................... Annexes 1. The Context of Land Reform .................................... Ratios of Population to Land .................................. Population and Production.................................... Distribution of Land........................................ Tenantsand FarmLaborers .................................... Landless Workers .......................................... 2. Experiences with Land Reform ................ .................. Republic of China.......................................... Republicof Korea .......................................... Japan ........ . India...... Iran...... Morocco ........ Yugoslavia ...... Kenya ...... Mexico...... Peru...... 3 5 15 15 16 20 25 27 29 30 31 34 35 38 38 38 40 46
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The greatestdisparitiesarefound in LatinAmerica.With food production rising in the developing countries at about the same rate as population. Distribution of landin terms of sizeof holdingsvariesfrom country to country. therefore. In Asia and the Middle East.the averageman-land ratio is worsening.But one characteristicthat is common to all is a very rapid growth in rural population.although to someextent it is the poorer land that makesup the larger holdings.000million people.more labor could be employed in the rural sector through a redistribution of land.Changingthe pattern of landownershipand redistributing land can contribute to increases output in somecountries but will makelittle difference in in others. the population is moreevenlyspread.Much to of Africa presentsa different problem.INTRODUCTION Land reform is concernedwith changingthe institutional structure governingman'srelationshipwith the land. In other countries.At the sametime. At present. while pressureon the land is increasing. nonagriculturalemploymentopportunities are not expandingrapidly enough to provide adequateincomesfor all those enteringthe labor market. at least six land-tenuresituations can be delineated. as the traditional pattern of group ownershipand communalrightsiseroded in favorof individual ownershipwith varyingdegrees equality. while in yet others changingthe rights to land will makelittle direct contribution toward absorbingmore labor. of In terms of land reform policy. there is growing to pressureon land resources increaseoutput. the distribution of income is generally uneven.Where the pattern of land control is skewed.The differencesamong thesetypes point to the varying reforms necessary achievemore equitable land access to 3 .the livelihood of more than half of mankind dependsdirectly on agriculture. Much of this increase will haveto come from higher output per hectare.As shown in Chapter1. 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. Conditions governing agriculture vary enormously in developing countries.but rightsof access landare restricted.one is confrontedwith a rangeof cultural and political situations-based on different patterns of social organization and customs-and with different levels of development.Somecountries haveprospectsfor expandingthe frontier of cultivation to absorbmore labor. Thus. Ninetenths of this total agriculturalpopulation is in the developingcountries.maldistribution is reflected in the landlord-tenantproblem.
The fiscal year (FY)of the two institutions runs from July 1 to June 30.Accordingly.and improvedproductivity in specificcountrysituations. while it is possibleto identify the need for land reform. at 'All references to the World Bank in this paper are to be deemed to refer also to the International Development Association. ranging from communes to private ownership.' In pursuing this question. it is difficult to makegeneralprescriptionswith regardto the form of landholding or pattern of distribution necessary achievethe multipurpose obto jectivesof development. Not surprisingly.Thequantitative backgroundto land reform in terms of population patternsand land distribution is outlined in Annex1. The policy guidelines are presented the end of the Summary.Chapter 3 reviewsthe Bank'spolicy in relation to land reform. 4 .Chapter2 examinesthe economic implications of land reform in relation to the goalsof development. Chapter 1 looks at the characteristics land reform in terms of both its rural context and of its component elements.this paper focuseson a much narrower aspect-the appropriate role of the World Bank. unless the context requires otherwise. While recognizingthe broad context of the land reform issue. many developing countries are experimenting with a variety of possible solutions-with different forms of rural organizations.This dynamismmeansthat a solution which was appropriateten yearsago maybe inappropriate today. The manifestationsof this interaction are seldom benign for the majority of the land-based population.therefore.one is dealing with a dynamicsituation.where rural population growth and changing technology interact with the existing institutional structures of rural society. A situation that hasseemedrelatively stable and equitable for decadescan become untenable. Further. while someexperiences with land reform programsare summarizedin Annex 2.
Land reform necessarilyimplies many different kinds of adjustments in an array of situations where there are great variations in individual equity and agricultural productivity. redistribution of ownership to existing tenants. land reform might involve changing 5 .an approresources priate reform might involveconsolidationof holdingswithout change in the patterns of ownership of land. the appropriate reform might involve a program of supervisedcooperative land managementwithout changing the distribution of land. reform incorporates changesin the rights of tenants. economic and social dimensionswhich in turn havesignificantimplications for development. Other variationsof land reform focusmore on the economicuseof than on equity. of The systems land control in developing countriescan be classified into six types.as presentedin Chapter1.the stateor collectiveownership of socialist countries. although in manycountries examplescan be found of more than one type. which is often interspersed with otherforms of tenure. Where communal lands are eroded or depleted. by its very context. egalitarianism Land reform. the feudal Latin American systemof large farms. In most instances.SUMMARY Landreform involvesintervention in the prevailing pattern of landownership. control and usagein order to change the structure of holdings. In contrast. social or equity considerationsare the main concerns. When individual ownershipof the market economytype isthe norm but the ' distribution of land is skewed. land reform is pursuedin response political to for pressures socioeconomicchangearising from factors such as increasedpopulation. when there are exploitative landlord-tenantsystemsof the Asian or Latin American feudal type. Where holdingsarefragmented. reform may require subdivision of large holdings or transfer to the state. pressure a limited land baseor an ideologyof on basedon more even distribution of land or income. has interlinked political. The other three major types have a modern context: the private ownership of land common in most marketeconomies. or the replacement of the landlord by the tribe or the community. In practice. and the communal landownershippatternsof manytribal groups (especiallyin Africa). Three of the six types are found in a traditional context: the feudalisticlandlord and tenant system of some Asian countries.Thus. improve land productivity and broaden the distribution of benefits. reform in states with extensivegovernmentcontrol may involve the transferof some l landfrom the stateto individuals. Elsewhere. and the plantation or ranch type.
Individual countries are classifiedon the basisof landownership concentrationin Annex 1.The judgments of policy makers differ. it must be recognizedthat a policy for land reform for a given situation cannot be statedin simple terms. with about 40% less than one hectare.Theseholdings account for approximately20% of all cultivated land. The typology outlined in Chapter 1 makesit clear that there are situationswhere land reform is a necessary precondition for modifyingthe structureof a societyand raisingagriculturaloutput. Table 1:6.The market economy type falls somewhere in between. and only 7% of all land in holdings. the organization of the supply of inputs to accompanyany land reform program is essential.Table 1:9. However. others favor communal or collective control over land. Somegovernmentsfavor individual ownership of land. Indeed. These will come about only if adequateprovision is madefor the supplyof necessary inputs and mandatory servicesto the usersof the land. As shown in Annex 1. have high degreesof property concentration. an estimated80% of all holdings are lessthan five hectaresin size. and reach far beyond any purely economic calculus. Thedistribution of landby size of holding ishighly skewedthroughout the world. alone is not sufficient it for improving land productivity and distribution of income.Again.suchas in Kenyaand Peru. The casestudiesin Annex 2 showthat reform-minded governments. thesedo not require redistribution but eventually lead to a more economic use of resources. TheAsian and LatinAmericanfeudal types. Any policy involves fundamentaljudgmentsabout the adequacyof an existingsystemand the most appropriate alternative.havepursueddifferent approaches. Considered 6 . and the plantation ranch types. Distribution of Landand Income Although few data are available. the policies followed are not a matter of economicsalone. Finally.the distribution of landownership is known to be skewed. Clearly. The socialist and traditional communal types have low concentrations.the degreeof concentrationvaryingwith the typesof tenuresituation. while land reform in itself may be necessary. Changes in patternsof landownership not automaticallyleadto an increase will in output or technological change in agriculture.especiallywhere the processof reform leadsto a breakdownof the institutional structure of agricultureand leaves nothing in its place. as stressedin Chapter 2. Theyalso reflect politics and ideology.tenancyarrangements with emphasison providing securityof tenure so as to encourageon-farm investment.
the distribution of holdings by size is not the sameas the distribution of ownershipof land. The extremepoverty of manywho live on the land. firstly.the income of sharecroppers and tenants may be little different from that of landlesslabor. Table 1:8). adding to the already heavypopulation pressureon the land.and more than one-third of all holdings (those less than five hectares)account for only 1% of the area held (seeAnnex 1. does not reflect precisely the patterns of distribution of wealth or income. But.there is no virgin cultivable land left.and the increasing pressureon the land through population growth highlight the double challengeof rural development:to raiseproductivity and in7 . in most cases.The distribution of income in theseregionswill depend betweenowners and tenants largely on the contractualarrangements or sharecroppers.especiallyin partsof Asia (see Annex1).the distribution of income will be more skewedthan the pattern of holdings.Thisis because. a concentration of large holdings in a semiarid region may reflect a smaller concentrationof wealth than a concentrationof small holdings in an irrigated area.The skewness the distribution of holdings. however. In many. massiverural underemploymentis accompaniedby high ratesof open unemploymentin the cities and growing inequality in the overall distribution of income.all landis not homogeneous. In Asia.the pattern in Latin America is particularly skewed. Social and Economic Issues The rural population in developingcountriescontinuesto increase by more than 2% per year. The need to absorb more people in the rural areas differs among developing countries.40% of the land (accounting for almost 80% of holdings) is in holdings of lessthan five hectares. there is a greaterconcentrationof landownershipthan of holdings.Less than 20% of holdings(thoseover 50 hectares) account for over 90% of the total area in holdings. Where the problems are most acute-as in parts of Asia-the emergenceof large numbers of landlesslaborers in rural areassuggests that the family farm systemasa meansof spreading work amongfamily members maybe breakingdown. The distribution of holdings by size is frequently usedas a first approximation in estimatingthe distribution of wealth and income in of the agricultural sector. Secondly.as evidencedby widespreadtenancy.Frequently. Exceptin a few places.separately. by contrast. in general. so that absorption of more people into agricultural activity requires more intensive cultivation of land already in use.
increasingpopulation pressurewill inevitably drive up the price of land. if used productively. In some situations. Smallholderstend to consume more of their own produce and. the fragmentation of holdings causes great inefficienciesin land useassociated with transportation. Theseeffectson output maybe reinforcedby someof the possible side effects following land reform. 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.landownersoften prefer to underutilize land. per unit of output. various reasons. the additional food consumedby small farm families might have otherwise been purchasedif membersof the family had moved to the city.tenancyarrangements such and tenants that landlords are discouragedfrom making investments from applying variable inputs. this may necessitate food imports to meet the needsof urban consumers.however. The main reason is that smaller holdings are worked with bigger inputs of labor than arelargeholdings. could serve to augmentoutput. often depend on the effectiveness new technology when usedon of small as comparedwith large farms.In other cases. At the same time. than do large farmers.On the other hand. 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. this will tend to exacerbate inequalities in income distribution. increasesin the population of working age create additional demands for work and income.come in agriculture and. quesWhere land is tions of major importance in these circumstances. either by working it themselveson an extensivebasisinstead of through tenantson an intensive basis. A strong casecan be madefor land reform (including tenancyreform and consolidation)in situationswhere landwould otherwisebe underutilized in termsof its production potential. therefore. becausehalf the benefits will go to the other party.In general terms. These same circumstances(relating to employment and income distribution) give rise to questionsabout the efficiency of land use For under existing arrangements. Where landownership is skewed. thus benefiting those who own land. to provide more employare to ment. mere redistribution of land may not sufficeto raisefarmeroutput substantially without accompanying agrarianreformsand new services.and the conditions that governaccess. the additional labor available. Access land. however. market less. irrigation and mechanizedoperations(evenon a small scale).Smallfarmersmayalsosavelessper unit of 8 .The economicbenefits. at the sametime.or are by leaving it unused. marketable.
The food and fiber needs(and the spatial requirements)of the nonfarm population are not infrequentlyoverlookedby the advocatesof land reform.income. firstly. and.and that thesedebatesare often couched in terms of redistributing political power as well as wealth. especiallywhere the landowner controls the access peasants their only sourceof security-land. secondly. In this respect. Thesesizesmight be designed. Few land reform programs provide for sucha minimum limit despiteevidence. especiallyfor fresh produce. Ambitious programs of land reform will seldom be implementedunlessthere are shiftsin political sentimentand power.and 9 . in But in a partly urbanizedsetting. Recent Experience with Land Reform Experience with land reform in the past points to the overriding importanceof the political factor in securingmeaningfulchange.that land reform is often a central issuein political debates.attention should be paid to both a minimum and maximum farm size. And in these casesthe reforms were implemented only when there was a change in government in circumstances favoreddrasticchange. that allowing farmsto becometoo small (relativeto the bestavailable technology) may be just as unsatisfactoryin terms of equity and efficiencyasan uncontrolledtenancysituation. The evidence suggests. thosewho do not work on the land still require and should havesomerights of access the products of to the land.however.therefore. A meanof to ingful land reform programwill inevitably destroyor limit the power baseof manypersons.It is not surprising. that Kenyaand Mexico.Land is a symbol of authority and a source of political power.Japan. that small farmers save proportionately more than urban dwellers. Many countries have legislated land reform. A second factor of importance in making reform effective is the creation of institutionsto implementthe reformsonce legislated.though these maybe directly investedin the smallholding.asin the Republicof China.The concentrationof control over land provides a power basefor many groups in developing countries. to ensurethat smallholdingsare large enoughto provide food sufficient to meetwith a highdegreeof certaintythe minimum physiological needs of the farm family. A program basedon the prescriptionthat "the benefits should go to those who till the soil" is often reasonable an agrariansociety. to ensure a scale large enoughto provide a salablesurplus to meet the needsof urban consumers. but only a few can be said to have implemented it.from manyareas. and that in the aggregate they may also have larger savingsthan large farmers.
and manysocioeconomic benefits. there is little doubt that the long-run effects for their total societies have been overwhelmingly favorable. While the direct short-run effects of the land reforms in these countries havenot been considered wholly beneficial. The land reform experiencein much of Asia and LatinAmerica suggests someform of rural organization.over time. emerge only in the longer run and accrue for many years subsequently. in assessing effects of land reform.The casesof Japanand Mexico are particularly significant in this respect. rather than because any deficiency inherent in the small relative to the larger of farmers.a community of interestsbetween landownersand officials. Taiwan and Venezuelasuitableinstitutionswere established to ensurethat land was indeed transferred.the effectiveness land reform of may be relatively limited in the short run. incorporating as much forward planning asfeasible. More recently.In other countries. Minimizing such costs necessitates provision of servicesconcurthe rently with reform implementation. The restructuring of landholdings is often accompanied by the destruction of traditional deliverysystems input needsand marketing. Becauseof this. for since thesesystemsare almost alwaystied to the operations of the larger farmers who are dispossessed. land reform hasoften proved costly in terms of lost output. - The World Bankand Land Reform The World Bank has taken an active interest in land reform on a number of occasions. A third conclusionis that land reform is rarely undertakenwithout considerableupheavaland lossof production.with emphasison securityof tenure beinga particularly important theme. such as are associated with greatersocial mobility and improved political stability. A fourth considerationrelatesto the problem of perspective.combinedwith an absence organizedpressure of from the beneficiaries. the extent and gravity of the 10 . contributing substantially the ultimate economicdevelopmentof both to countries. may be a critical condition forsuccessfullandreform.For example. that especially involving local representation. This has usually involved organizingthe beneficiariesto create follow-up pressure. largely nullified positive reform efforts. As the country experithe encessummarizedin Annex2 reveal.to pressfor continuing development.Concern hasusually been focused on new or improved possibilities for production following changes in the tenure situation. in Japan. although there is evidence to suggestthat these costscan be kept small and temporary.
specially structured settlementschemescan serveas second-bestsubstitutesfor. In part. particularly in areaswhere the political situation was reasonablystable and otherwise conducive to World Bank involvement.employment problems and income disparities in developing countries have causeda new concern over land reform. In general. In sparselypopulated regionsor countries. 2. it can only support appropriate efforts within existing structures. improving income distribution and expanding employment. to including research extension.However.where necessary. 11 . Guidelines Country 5 1. Governmentswhich accept a basiccommitment to land reform should consider three components: (i) redistribution of landownership to reduce the presentmaldistribution. Even where the land transferred is purchased from the previous owners. the amounts involved are usually small. this report concludes that land reform is consistentwith the developmentobjectivesof increasing output. inputs and technical services. it is recognizedthat the Bankcannot force structural change. thus. its preferencesregarding national policy choices and those which are consideredconsistentwith the Bank'sdevelopmentgoalsare set out below as country guidelines.notably in Malawi and Tunisia. or supplements to. the redistribution of land currently in use.Someexamplesof World Bankinvolvementin land reform programs. In addition. such paymentsusuforeign ownersare involved) ally constitutean internal transfer(unless and. and (iii) consolidation. Although the Bank's direct action must be limited. and 3. This may require either the creation of new institutions. A commitment to land reform implies simultaneousaction to create or develop an input supply systemto meet the special needs of the beneficiariesof land reform. The Bank'sexperiencethrough project financing of land reform there have been hasbeen very limited. especially where paymentsare in the form of bonds. and that the World Bankshould support reforms that are consistentwith these goals. from an equity aswell asa productivity standpoint.are discussedin Chapter 3.or specialbranches fund allocationswithin or existing organizations supply credit. (ii) tenancy reform. this may be because relatively few casesof land reform.Thesesameconclusions reflectedin are the subsequent Bankpolicy guidelines. But also relevant is the fact that the financial requirementsof land reform tend to be relatively limited.are not attractivefor externalfinancing.
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. Experiencein EastAsian and some Latin American countries clearly showsthat the organizationof beneficiaries. 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.sucha structurecanproduceat least as muchper unit of landasa largefarm structure. 5. (ii) the beneficiaries belong to the poorest group. 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. In such cases.There may also be a need for special training facilities. is an indispensable success. 6.both before and condition for its after the enactmentof reform. 7. is redistributed. Equity-oriented land reform should be so programmed that (i) the effectiveceiling on size of holdingsis low. and allowed only under specified typesof contracts. 12 . 11. (iii) the extensionand (nonland) input distribution systemfavorsthe beneficiaries.and (iv) owned and selfoperated land. and (iii) tenancyis discouraged. It should be recognizedthat a small farm structurecan generate employment to absorb underemployed labor in crowded regions where there is no short-term prospect of absorbingit in nonfarm or technologynow largefarm employment. 10. (ii) the size distribution of the new holdingsis equitable. researchactivitiesand field demonstrationsin suchcircumstances.settlementschemes the same effects as the redistribution of existing holdings.4. Where efficient large-scaleplantations or ranchesexist. and a rural works program should be organized for the landless. These effects can accrue if (i) the settlersare the really poor small farmers or landless workersand an input supplysystemis availableto support their operations. preference should be given to smallholdersin the allotment of land. Wherever settlement policy is used to supplement land should be plannedto haveapproximately reform. these need not be broken up. 8. as well as leasedland. Where the shortageof land is so acute that even with a low ceiling both smallholders and landless workers cannot be given minimum holdings.With a seed-water-fertilizer availablethat is neutral to scale. Research should be organized to evolve a low-cost settlement policy. 9.
13 . When the land-labor ratio becomesfavorable. The Bankwill continue to explore. 3.This support will include financial and technical aid with cadastralsurveys. should be undertakenbecause.Suchcontractsshould be promoted with a system of incentivesand deterrents.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. preferably against very low compensationpayments.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. But where crop sharing cannot be eliminated becauseit provides risk insuranceto sharecroppers. Guidelines World Bank'sPolicy 1. with special attention to the needsof the poorest groups. 12. Theseprogramswould include credit. ways of providing for a distribution of benefitsconsistentwith the goalsoutlined under (1) above.it canbe mademore efficient andequitable if it is combined with cost sharing. 2. through its agricultural and rural development projects. owner-operatedfarming is likely to be more efficient and equitablethan tenantfarming.registration of land titles and similarservices.tenancy might be a more efficient policy. 4.including appropriate tenurial arrangements projects designedto servethe and needsof smallfarmersand settlers. so long as the reforms and related programsare consistent with the objectivesstatedin the previous paragraph. The Bankwill makeit known that it standsreadyto finance special projects and programsthat may be a necessary concomitant of land reform. The World Bankwill give priority in agriculturallendingto those member countries that pursue broad-basedagricultural strategies directedtoward the promotion of adequatenew employmentopportunities. the conversion of tenants into owners of the land they cultivate. in general. Generally. technicalservices infrastructureprojand ects designedto meet the specialneedsof land reform beneficiaries. TheBankwill cooperatewith the FoodandAgriculture Organization of the United Nations (FAQ).fixed cash-rent contractsaresuperiorto crop-sharingcontractsbecause they encourage the use of inputs to the optimal level. The Bank will support policies of land reform designed to further theseobjectives.
5. where increasedproductivity can effectively 9. In circumstances be achievedonly subsequent land reform. It will continue its support for programsof economic directed toward the specialneedsof the type and technical research from landreforms.if sedentary forms of agriculture are possible. 12.the Bankwill not support to projectswhich do not include land reform. 14 .or pursue land usageand access arrangements that are compatiblewith the long-run productivity of the land and the welfare of the residentpopulation. The Bank will support and encourageresearchrelated to the economicsof land reform in its broadestaspects. 10.in order to avoid adjustments which will increasethe maldistributionof income and cause economichardship. Where land is communally held without regulation of access. Where land is held under someform of tenancy. with particular attention to developing approaches which will lowerthe cost per family settled. 11.it will carefully consider whether the fiscal arrangements appropriate to ensure are that a reasonable share of the benefits accruesto the government. The Bankwill pay particular attention to the consequences of the interaction of new technology and the prevailing institutional structures.including its social dimensions.as reflected in the pattern of landownership.in such cases.the Bankwill foster the adoption of tenancy conditions and sharecroppingarrangementsthat are equitable and conducive to the optimal use of resou rces. 6. The Bank will intensify its efforts through sector and country economicwork to identify and draw attention to the need and opportunities for land reform with respect to existing tenurial situations and their economiceffects. 8. of small farmerlikely to emerge 7. The Bank will not support projects where land rights are such that a major shareof the benefits will accrueto high-income groups unlessincreases output and improvementsin the balanceof payin ments are overriding considerations.The Bank will undertake studies of the costs and benefits of settlement projects. the Bankwill encouragesubdivision.
held and traded by individuals for private gain. the patternof holdings is lessfragmentedthan in societieswhere the customis to divide holdings equally among all heirs. cultural.The more industrializeda country.limited alternativeopportunitiesand increas15 .Somegovernmentshaveused control over land to implementpoliciesof geographical separationof racialgroups.In countries with mobile populations which have ample opportunities for employment. and patternsof landholding and land use. In EasternAfrica. the smaller the proportion of the population in agriculture and the less significantthe role of land in the economy. many socioeconomic factorsaffectcustomsof usufruct.Chapter 1: CHARACTERISTICS OF LAND REFORM Manand Land Man's relationship to land. individuals do not have the opportunity to acquire and accumulateland. In addition. whereasthe more tropical and arid areasare better suited to shifting cultivation or livestock herding. To the extent that the statecontrols the land.The right of the individual to own. Similarly. haschangedrights to land and the organizationof work severaltimes over the past 25 yearsas part of a drive to eliminate rural inequality.the allocativeprocess mayserveany number of ideological ends. the right to own land may be vested solely in the stateor in semipublicinstitutions. religious and political. for instance. sell and accumulate privateproperty-including land-is one of the cornerstones the market economy.While this right might be of constrainedin the public interest. land can in generalbe exploited. Where land is inherited by the oldest heir and not subdivided. The political ideologiesof governments also havea bearingon the relationshipbetween people and the land.traditions of crop sharingand other arrangements surroundingland usein varying situations. physical conditions in the temperate areasare suited to sedentaryagriculture. Under some other ideologies. However. The People'sRepublicof China.on the other hand. and it is the statewhich organizes and controls the land accordingto its own criteria.land is often seenmerelyasone factor of production in a highly developed commercial agriculture. The level of economicdevelopmentof a country hasa strong influenceon attitudestoward land. in less developed countries with large rural populations. different systems land managementand patternsof holdingshave of emerged in adjacent zones.are shapedby the interaction of a complex of forces-climatic. economic.As a result. laws and customsgoverning inheritancehavean effect on the distribution of land.
it may well provide the margin between destitution and subsistence.(5) the demographic situation. 2.These are characterizedas follows: 1. FeudalAsian Type High property concentration. In thesecircumstances. Greatsocial inequality. (3) the social system.When these interacting elements are taken into account.The institutional structures which formalize the various meansof control and the relationshipbetweencategories land users. The social hierarchy in most agrariansocietiesreflectsthe kinds of access that different groups have to land. access land may provide at leasta subto sistenceincome. Great socialinequality. FeudalLatinAmericanType High property concentration. The established pattern of landownershipis basicto both the social organization and institutional structures in rural areas. Low labor productivity. Low capital intensity. Low land productivity. (6) the agricultural system.alsodetermine of the accessibilityof external institutions and servicesto the various groups. 16 . while individual status within these groupsdependson the amountand quality of land commanded. Institutional structurecentralized. and (7) the national resourcebase. High labor intensity. Great economicinequality.ing pressureon the land. 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. Productionmainlyfor subsistence. (2)the structure of the economy. Mainly operatedby sharecroppers. producerssee landas more than a factor of production. Low level of technology. (4) the legal system. Greateconomicinequality. it is possibleto delineate six main categoriesof land tenure and land use. Landvery scarce.
Productionfor subsistence export. Low. Operatedby owner or manager plus hired labor. Medium labor intensity. Low capitalintensity. 17 . neighboring smallholdersand migrantworkers. Labor-extensive. and Institutionalstructurehighly centralized. Low labor productivity. Low labor productivity. 3.medium or highsocioeconomicequality. High landproductivity. High level of technology. Socialist Type Propertyright vestedin the stateor a group. Capital-extensive. Medium level of technology. Traditional Communal Type Low property concentration-sovereign rightsvested in community. Moderateor high socioeconomic equality. Labor-extensive. serfs or sharecroppers. Capital-intensive. Decentralizedcultivation. Market Economy Type Medium property concentration. 4. Low. 5. Market production oriented. Productionfor subsistence. Supportingservicestructureunderdeveloped. Labor provided by squatters. Low levelof technology. Decentralizedcultivation-usufruct rights for membersof group. High labor productivity. Low level of technology.medium or highland productivity. mediumor high labor productivity. Institutionsand services dispersed. Medium socioeconomicinequality.Low land productivity. Low. Centralizedor decentralizedcultivation. Low land productivity.
High landproductivity. The two systemsdiffer in their ability to respond to changing external conditions and especiallyto new technology. Medium or high level of technology.The ownership of property is of generally highly concentrated. In the communalsystem. Plantation Ranch Type High property concentration-owned by state or foreigners. In the landlord-tenant system.The communalsystemmanifeststhe samepressuresby compressedfallow periods and declining soil fertility. to Whereasin the feudalistic systemthe distribution of landownership and benefits are highly skewed and classdifferentiation is marked. The landlord elite. the communalsystemhas relativelyegalitarianland access and class differentiation is lessmarked. accompanied by extensive poverty and vulnerability to seasonal effects. In the landlord-tenant system. Tables1:6 and 1:8). and often does. Great income inequality.by contrast. Great socialinequality. landownership is vested in an elite minority with the majority having access through tenancyarrangements various kinds. Table1:11). Both systems are relatively stable under favorable conditions. unlessthere are offsetting changesin technology. In a traditional context. by the communal landownership pattern of certain tribal groups in Africa.the distribution of income is also highly skewed (see Annex 1. more so than the pattern of landholdings.on the one hand.Productionfor marketor subsistence. extremes in the pattern of land control are exemplified. but face difficulties as the man-land ratio declines through population growth. land is common property and access it is relatively unrestricted. Operatedby manager pluswage labor. by the feudalistic landlord-tenant systemfound in someAsianand LatinAmericancountriesand. However. overgrazing and increasederosion. land pressuresare reflected in a growing army of landless people and widening income differentials (see Annex 1. on the other. Low or mediumlabor productivity. since holdings (the only category for which the Bank has data) involve leaseholdunits for which rent is paid on a share basis. becomeeducatedand innovate both through experimentation 18 . can. Productionmainlyfor export. Supportingsystems centralized. by virtue of its privileged position and power. 6.
but such communitiesseldom manageto remain completely isolatedfrom externalinfluences. Suchholdingsare typically operated as family units with little hired labor.)Thecommunalsystemgenerallylackssuchan institutional and tendsto be both static in itstechnologyand relatively mechanism insular. and the state or collective ownership characteristicof socialist countries. while usually subject to special restrictions.it has often created inequities as people have been compelled to give up rural pursuitsor havebeen squeezedinto land-scarce rural enclaves.private control has been most satisfactory where population pressurecould be offset by colonizing virgin land or moving people out of the rural sector. However. A special type found in a modern context is one which includes the plantations and large ranchesthat often operate in developingcountriesas well as in some developedcountries. this right being vested in the state. for instance. its primary concern may be to promote its own narrow interests in terms of wealth and power.by displacingtenantsthrough mechanization.and the adoption of externalideas. which is a fundamental aspectof the market economy and common in mostWestern countries.with control determined in accordancewith the objectives of the state. Although similar in legal and institutional respects.however. It hasbeen most unsatisfactory where ownership patternshave become skewedbecauseof the growth of large farms. land is held by individuals and. Generally. specialcategory a of the market economy type. In the socialistsystem.Theseform. in somerespects.on the other hand.thesediffer significantly in their technologyand input mix aswell as in the degreeof market orientation. Under private ownership.(in doing so. While private ownershiphasgenerallybeen compatiblewith technological progressand the economicadjustmentof agriculture. the extremesin patternsof land control are seen respectivelyin the private ownershipof land. and the subsequent emergenceof economic 19 . little or no provision is made for individuals to acquire or accumulateland.combinedwith limited opportunities for peopleto move out of agriculture. But some variations remain within many socialist systems. In a modern context. but the tendency toward a corporate legal structure and dependence on hired labor differentiate them from privatelyowned family farms. can be bought or sold like any other commodity. often providing for the existenceof private smallholdings in parallel with larger social units.a rangeof subtypesexistswithin this categorywhich reflectsa gradation in size from the predominantly subsistencesmallholdings of many developing countries to the broad acresof North America and Australia.
dualism. although in most casesnot without some broader economic inefficiencies. all land can be nationalizedand regrouped into state-ownedholdings. 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. Redistributionof public or private land in order to changethe patterns of land distribution and size of holdings.on the one hand.It is frequently pursuedas a goal in itself. In such circumstances. whether primarily an equity or a production concern. the landlord cannot capturea profitable share of the return on his investment. in some situations. Land reform differs from political. Alternatively.and on the other. Land reform raises issuesof equity in the context of both the traditional landlord-tenant relationship and the modern skewed ownership pattern.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. but in a development context is usually seen as a part of agrarian reform or of rural development programs. Further. it is clear that land reform will involve different changes different types in of situations.including some of or all of the following: 1. In many situations.or medium-sizedfarms and a reduction in the number of large holdings. Stateor communal control has led to fewer interpersonal inequities. administrative. land reform may become a prerequisiteof development.the contractualsharearrangementis such that neither landlord nor tenant are able to introduce new technology because. the tenant cannot find the capital for investmentor lacksthe securityof tenure that would guaranteea return from it. 20 . the prevailing tenure conditions are the major impediment to development. a high level of fragmentation can make canal irrigation virtually impossible and seriouslyimpede mechanized operationseven when on a very small scale. In both these contexts. For example. especiallyin the traditional feudalistic and communalsystems. Dimensions of LandReform Land reform is thus concerned with the interrelated aspectsof productivity and equity of land use. But.In other cases. all of which might be large. Usually. Landreform caninvolve varyingdegrees change.this involves an increasein the number of small. it is often a highly political concern.
The rightsof thoseworking on the land can be safeguarded law without a changein ownership. This can be done with or without changing the distribution of landownershipin terms of acreageor valuebelongingto eachindividual.Thus the Republicof China. By definition.2.Similarly.the Republicof Korea and Japanmoved from a "feudal Asian" to a "market modern smallholding" type.some going to smallhold21 . thereby altering the size distribution of holdings or the distribution of income. dependingon the manner in which the settlers are selectedand the size distribution of the new holdings. Landsettlement. the or that might be part economicsof various "models. cooperative land management.Alternatively. Consolidation of individual holdings. India and Iran moved from a "feudal Asian" toward a "market modern" type. Changesin landownershipand tenurial rights. land reform is seenas a meansof bringingabout structural changes in the agricultural sector. Fragmented into contiguous blocks of land.landsettlementon the frontier does not usually constitute land reform. Changesin conditions of tenure without changing ownership or redistributingland. with some traditional farms retained and some "plantation ranch" type variations in certain areas.and so forth. resultis generallya redistributhe tion of income away from the former owners of the land to the new owners. These changeswould also include the conversion from customaryto legal rights to land.The kind of structural changeinvolved dependson the prevailingtenure type and the proposedalternative. The new owners may farm cooperatively or as individuals. even though they might be useful in identifying problems of management. pilot projects cannot be consideredto be land reform for they operate within an existing structural framework.Changesin conby ditions of tenure would include providing security of tenure. may or may not have an impact on the structure of landholdings in a country. 4.Kenyaand Morocco redistributed the large-scale. most changes involve a shift from traditional to modern types. although land settlement might be a meansof bringing unusedlandinto production.land need not be redistributedbut tenantsor workerscanbe madeowners of the land they work." or arrangements of a subsequent reform.As reflected in the country experiences summarizedin Annex2. Structural Change In the main. therefore. In that case. by itself. introducing equitable crop-sharing arrangements. alien-owned "market economy" type holdings of their colonial eras. Redistributedland can be allocated to new owners or to farmersworking on the land. thereby reorganizing the holdings can be regrouped physicalpattern of control. 3.with or without physical redistribution of land.
respectively. While landtaxesand estatetaxes often are considered significant elements in fiscal policy intended to redistribute income. providing infrastructureto facilitate agrior cultural production. they cannot ensure the same degree of structural reform as can land reform and have. Agrarian reform may or may not include land reform. maynot be it politically feasible to have land reform-although it might be both 22 .training and storagefacilities. such taxesmay provide a disincentiveto investmentwith the potential of increasingproductivity or bringing new land into production. and a mixed "market modern" and "socialist" type structure.suchas fertilizers. An effective land tax mayhavean impact on land usebut its main purpose is usually to encouragemore intensive production by making it costly either to leaveproductive land idle or to useit below its productive capacity. Thesechangesin tenure systems were in all casesaccompaniedby changes relatedorganizations in and services. the useof a fiscal instrument. availableand increasing credit for their purchase. In any event. since it involvesmodification of a wide range of conditions that affect the agriculturalsector.in general.there may be no need for land reform since land is alreadyevenlydistributed. In other cases.But this is likely to bring about structuralchangeonly over a long period of time. in some instances. extension. such as a land tax.Thesemodificationsmight include changingprice policiesso as to turn the terms of trade in favor of the agricultural sector. On the other hand.ings of the "market economy" type and someto "plantation ranch" type units. A more likely fiscal instrumentto encouragestructuralchangeis a graduatedestate tax which would force estatesto disposeof land to meet their financial obligations. land reform may be the only alternative option if economicdevelopmentisto be pursued. In situationswhere fiscal measures-whether of a redistributive kind or a typewhich providesa returnto the stateon its investmentare found to be ineffective.been quite ineffective. making physicalsupplies. will not lead to structural changesin agriculture-at least not in the short run. FiscalMeasures Land taxesand preemptive taxeson income earnedfrom land are often cited as instruments that will obtain the sameends as land reform. Agrarian Reform Agrarian reform is a much more comprehensive conceptthan land reform. increasingallocations to the agricultural sector in order to expandresearch. Mexico and Perumoved from a "feudal Latin American" type to a "market modern mixed large and smallholding" type.
Where the ownershipof land directly affects the nature of local institutions and the participation in them by the majority of rural people. but it is seldom a sufficient condition for increasingagricultural output. and by thesecannot be changedthrough market operations. land reform without concurrent rural development activity might causehardshipand economic losses which would outstrip the equity gains associatedwith land redistribution. RuralDevelopment Broader still is the concept of rural development. land reform maybe essential.becauseit embracesall dimensionsof the rural sector (agricultural and nonagricultural) and is more concernedwith the welfare of rural people than with agricultural output or productivity as an end in itself. on the other hand. Whatever the prevailing situation. Elsewhere. Political Dimensions Substantialreform of the structureof holdingsand the distribution of income from the land cannotbe achievedwithout political action.large landholders have accumulated capital and expanded landholdings acquired through the market.Where the existingservicesystems and administrativestructureis gearedto working with large-scale farmers.where semifeudalconditions prevail. patterns of land rights and tenurial conditions havebeenestablished tradition.may be a useful precursorof rural development programs. For instance. in most market-oriented economies with a skeweddistribution of land. the implementation of the policies dependson the political will of the policy makersand the ability of the administratorsto executethis will.as there is virtually no organized market for land. 23 . it can seldom be changedwithout actionsthat emanatefrom outside the market.politically and economically feasible to raise output through the measures involved in agrarianreform. Since it hassignificant equity implications. the tendency is for the skeweddistribution to worsen. since land is only one factor of production.Since theseactionsare basedon policiesdeliberately intended to alter the distribution of land and change tenure. The point is that land reform may be a necessary condition for agrarianreform.dependingon the prevailing pattern of land control.in somesituationsestablishinglocal institutions and smallholder servicesmay be a prerequisite of land reform rather than vice versa. land reform may be a necessary concomitant of successful rural development. in termsof implementation.However. insofar as it stabilizesthe existing relationship between landownersand renters. Tenancy reform.
Formerlyone of the largestlandholdersin the world. Experience much of Asiaand LatinAmericasugin geststhat effective popular participation of rural people may be a critical condition of successful land reform. Where groups derive authority from their land. ambitious programs of land reform will seldom be implemented unlessshiftsare made in political sentiment and power. that land reform is often a central issuein political debatesand that thesedebatesare often couched in termsof redistributingpolitical power as well aswealth. It is not surprising.suchas India and Pakistan.Land reform can changethe political balance and the power structure in a country. the Church in Europeas well as in LatinAmerica hasincreasinglyput its weight behind this new concept.While the focus on land reform is related to for economicdevelopment. Implications Social Justice for The imbalancebetween the distribution of control over the land and the numbers dependent on it has historically led to increasing pressures change. including the CatholicChurch.In other countries. official the bureaucracy was the only implementation agencycontemplated by the reformers. In the Republicof China and Venezuela-to name three countriessuitableorganizations were established ensurethat landwas indeed to transferred. Reforms have stripped large landholders.the implementation of massivereform legislation has dependedon the effectiveorganizationof the beneficiaries. Many countries have legislatedfor land reform but relatively few have achieved it-and these only with a change in government. Frequently.the massive legislationhasproduced no significantreform.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. both in precept and in practice." And the immediate extensionof this postulateto the world's agrarianproblem is that "if certainlandedestates impedethe generalprosperitybecause theyare 24 . religiousor private.whether they were military. Japan. Because the community of interests between the of bureaucratsand the landowners. The Church's new philosophy regarding the relationship between man and land declared that "private property doesnot constitutefor anyone an absolute and unconditional right. The political implications of land reform must be taken into account. then.The concentration of control over land provides the base for powerful elementsin manynonindustrializedsocieties. a meaningfulland reform program will inevitablydestroy or limit the power baseof thesegroups.and the absenceof organizedpressure from the beneficiaries.of their power.
are employment oriented. full employmentand distributive justice. Somepolicies and related investments. The reform in Mexico broke a systemthat denied many people any range of choice in the pursuit of a livelihood. others.Forthis reason.had semifeudalsocieties similar to many which still prevail in other parts of the world. The reforms which havetaken placein thesecountrieshavechangedthe situation. such as those related to land reform.extensive. the reforms haveled to an increasein socialmobility. If the experienceof Mexico-which hashad the longest period of reform-is any indication of the long-run outlook.the common of good sometimesdemands their expropriation.one that is often highly political. Land reform is a complex subject. and more recently Bolivia and Egypt.such as those affecting power plants or largescale industry. tradition or sheer indebtednessto landlords. Land reform is in practice predominantly a question of equity and.The issuesinvolved are diffuse and appropriate reform measures vary according to the situation.this arosefrom custom.and thesein turn are relevantconcerns in the formulation of the World Bank'spolicy.large numbersof tenants and laborerswere tied to the land and were held in forms of human bondage. Chapter 2: LAND REFORM AND ECONOMIC DEVELOPMENT Economicdevelopmenthasthree basicobjectives:rapid economic growth. Theseinclude the definition of an acceptabletime frame for measuringthe effects of the related structural changein the agricul25 . are essentiallyequity oriented." A further facet of land reform that warrantsconsideration in this respectis the potential of a new societalstructurefollowing a reform. In these societies. Eachset of policies and investmentsaimed toward one objective has important repercussions with regardto the other two objectives. Mexico.it is important to determine to what extent land reform might be costly in terms of growth and employment. still others. are primarily growth oriented. Nevertheless.unusedor poorly used. such as those for rural works.and thesemust be taken into accountwhen weighing the potential impact of particular policieson economic development. hassignifiit cant implications for economic development.or becausethey bring hardship to peoplesor aredetrimentalto the interests the country. therefore. Many problems arise in assessing costsand benefits of land the reform.
085 1.845 - 0.17 123.XXVI.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 1.01 0.59 1.85 1.96 1.38 0.17 0.unlessotherwise indicated.27 6.64 6.09 0.62 .29 - 0.ArabRepublicof 1960-61 1969 Kenya Malagasy Republic 1961-62 Mali 1960 1961 Morocco Senegal 1960 Togo 1961-62 Tunisia 1961-62 Uganda 1963-64 Zambia 1960 - - - exchange rates.18 14.28 0.04 4.20 1.and fishing.03 0.4.88 1.10 0.61 3.12 0. Sources:Columnsland 3arebased on FAO.49 1.20 1.03 2.833 0.580 - 0.832 - 0.62 2.35 3.3.611 - Botswana 1969-70 Egypt.333 925 410 141 149 581 377 1.84 0.18 1.624 - 0.45 2.hunting.10 79.54 0.10 0.80 81.11.Preduction Yearbook 1971.06 0.Gross DomesticProduct (GDP)in agriculture shownhere includes.Table 1 Productivity.50 0. and column4onUN.67 3.720 352 240 250 376 166 155 355 168 681 183 293 98 144 209 189 42 167 68 848 980 951 463 489 492 569 580 1. of ibid. No.90 37.35 4.05 1.936 0.89 1. and I MF.50 22.33 4.607 0. 21-23.947 0.60 108. Monthly 26 . August 1973. forestry.34 270. 10-11. currency For Bulletin Statistics.18 1.29 0.22 2.85 40.03 1.70 20.02 0.Republic of Japan Nepal Pakistan Philippines Sri Lanka Thailand Turkey Viet-Nam.23 2.24 1.95 8.473 - 0.05 0. No.05 0.01 0.see XXVI.873 0.64 2.188 138 249 200 337 137 243 127 142 360 140 88 48 295 174 180 341 198 101 0.Republic of India Indonesia Iran Korea.32 2.05 0.21 0. November and 1973.04 0. XXVII. Employment and the Distribution of Land. 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. April 1972.75 1.09 0.agriculture.607 - ' 0. 3.474 0.59 4.25 118.79 1.09 0.32 2.903 285 692 663 479 477 1.41 3.865 - 0.31 3.12 1.597 0.47 5.05 6.70 8. No.pp.62 15. lnternational financialStatistics.25 1.37 208.52 1.
the effects of land reform canbest be examinedby focusingon particular measures. Chile. its contribution to output and employment-as well asto equity-depends on the speedand effectiveness the reform and of complementary investments.The availableevidencesuggests a well-designedland that reform program need not entail unacceptable costsin termsof other objectives.In a systematicanalysis the differencesbetween large of "multifamily" farms and small "subfamily" farms in Argentina. Ecuadorand Guatemala. suchasthe effectsof farm size on productivity. yieldswere reportedto decline from 306kilogramsper raion holdings of two to six acres. Since data are not availableto derive this measure.output per hectare was 27 . the yield of paddy averaged36 to 37 bushelsper acre on farms of up to one acreand 33 to 34 bushelson largerholdings.Brazil. Unfortunately.Small farms in the Philippines-that is. farms of less than two hectares-produced 2.are treated separatelyhere. Both studiesindicatedthat a smalleraverage of holdings size and a lower concentrationof landownershipwere associated with an increase output per hectare.The ideal measurefor comparisonwould take into account the contributions of all factorsof production and so measure total factor productivity. this is not possible as there is no situation where changehas occurred in only one variable-size of farm-over time.9 tons of paddy per hectare. One 13-country study undertakenby the FAO analyzedthe relationship among size of holding.4 acre).In Sri Lanka. Colombia. The nearestalternativeis the comparisonover a definedperiod of the productivity of groups of different-sizedfarms in a given area. Implicationsfor Productivity The effects of land reform on productivity might best be isolated by comparing productivity in a given area before and after reform.in 1966-67. in Similar findings can be cited from cross-section studiesin a number of individual countries. A similar study of 40 countries was undertaken by the Bank (see Table1). concentrationof land and productivity.equity and employmentaswell as on savings and market surplus.However.These measures interrelatedbut.for example.ture sector. changesin yields per hectare are considered to be the most appropriate substitute.while farms of more than four hectaresproduced 2.2 tons per hectare.to 194 kilogramsper rai on holdings of 140 acres or more (1 rai equals0. are for analytical convenience.In central Thailand. Several comparative multicountry analyseshave been made of the effect of differencesin distribution of size of holdings on yields.
small-scale producerstend to maximizeoutput by applying labor intensively.Secondly.498 170 334 41 1. land reform can be consonantwith development from a point of view concernedpurely with productivity.80 3.is likely to decrease the simple reasonthat. I to col. the studiessimply indicatethat yieldswere higher on smallfarmsthan on largefarms. a resume of the CIDA Land Tenure Studies of Argentina.on the average. xxvi. Guatemala.Firstly.20 8.23 0.90 0. however. Brazil. In broad terms.there is no claim that all conditions were identical. Studies in the Economic and Social Development of Latin America. Ecuador. it appearsthat under controlled circumstances output per hectare is likely to be higher.80 8.237 268 1. Massachusetts: Lexington Books.14 Source: Barraclough and Collarte.492 304 1.30 2.14 0.198 84 1.This is usuallyshort of the output per hectarethat would be produced if the goal were maximization of output.197 8.21 0. in LatinAmerica 1 Country Year Smallest subfamily farms 2 Largest multifamily farms 3 Ratio ot col. Peru. Chile. there are limited economies of scale in most agricultural production.171 972 9. Lexington. including the results of Bank-sponsored analysisin Mexico.On the contrary. Output per worker. 2 Argentina Brazil Chile Colombia Ecuador Guatemala Argentina Brazil Chile Colombia Guatemala 1960 1950 1955 1960 1954 1950 1960 1950 1955 1960 1950 National monetary peragricultural unit hectare 2. found to be three to 14 times greater.while large-scale operatorstend to maximizeprofits by using hired labor only until incrementalproduction coversincrementalcosts. 1973. Colombia. as well as studieson Japanand the Republicof China. The important implication is that reductionsin either the size of holdingsor land concentrationneed not be associated with a reduction in output per hectare. However. 351 p.on the small farmsthan on the largefarms (see Table2).with output per hectareas the relevantcriterion.10 0.Table 2 AgriculturalOutputper Hectareand per Worker. There are two associatedreasonsfor this assumption.862 660 63 16 National monetary perworker unit 40 192 1. by FarmSize. for 28 . as pointed out below. There is other evidence to support these findings.20 14. Agrarian Structure in Latin America.673 74 523 8.
too. fertilizer consumption and grossfixed capital formation per unit of landwere relativelyhigher in countrieswith smalleraverage holdings. in 1968. labor absorption varied between 33 and 39 man-days per acre on holdings of less than 30 acres.in 1961.000 hectares) in 1960.The mereredistribution of land and increasein employment may not suffice to raise output substantially. it ranged from 20 to 23 man-daysper acre. But the realization of this potential is contingent on the supply of nonland inputs being increasedas soon as farm size is decreased. This cross-sectional evidence of the higher productivity of small farms indicates their long-run equilibrium potential. More intensive labor use is the main reasonwhy small farms are ableto producemore per unit of landthan the largerfarms.Unfortunately. LandReform and Employment Evidenceexists that the use of labor per hectare is greater on smaller holdings than on larger ones. the greaterthe input of manpower. 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. A limited number of studies in Asia and Latin America have also confirmed these findings.Therefore. small farms undoubtedly need much more nonlabor input in order to raiseproductivity. that in the crosssection of developed countries. for example. In other Latin American countries (Argentina.But inputs other than labor arealso likely to be applied more intensivelyon small farms.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.smaller farmswould employ more labor per hectare. It is interestingto note.the organization of an effective extension-cum-inputsupply systemfor small farmersmust accompany 29 .the number of workers per hectareof agricultural land on the smallestfarms (subfamilyunits) hasbeen estimatedto be 30 to 60 times greaterthan on the largest(multifamily) farms.In other words. On larger holdings.Brazil.5 hectare)to 0.17 on large farms (500to 1. man-yearsper hectare declined steadily from 2. Chile and Guatemala). unlessaccessto these inputs is blocked by institutional arrangements. In the Ferozepurdistrict in Punjab (India). however. the relationship between these other inputs and farm size cannotbe studied in manydeveloping countries JFor want of data. the larger income would be sharedby an evenlargernumberof families. In developingcountries. In Colombia.7 on small holdings (lessthan 0.
urban property reform or highly progressive taxation on urban wealth does not accompanyland reform in countries with a substantialand prosperousindustrial-commercialurban sector. land reform alone is not sufficient. land reform could havea major equity impact.the redistribution of farmland alone may not improve the distribution of total wealth substantially. It may even increase inequity-in particular. In the rural areas.and (4) owned and self-operatedland as well as leasedland is redistributed. By itself. Evidence this can be seen of in many LatinAmericanand Middle Eastern countrieswhere the large landownersoften dominate both commerceand government.agricultural land accountsfor such a large proportion of total wealth that it is usuallythe single mostsignificantdeterminantof the distribution of both income and power. the larger will be the equity effect of the reform program.where much of the wealth existsin the form of financialassets. estateand other real investments apart from farmiand.There. it not only may not decreasethe inequity of the distribution of total wealth in the country as a whole. (2) the beneficiariesbelong to the poorer groups. Smallholdingscanyield high returns to labor provided output per hectare is high-a condition that can only be fulfilled by the application of high-yielding. labor-intensive technologies.land reform.Thedistribution of real estate. (3) the extensionand (nonland) input distribution systemfavorsthe beneficiaries.and commodity stocksin the hands of traders. Evenwith this broader focus. the equity effect of land reform will be significant only if: (1) the effective ceiling is low. However. LandReform and Equity The more radical the land reform and the more important the share of agricultural land in relation to total tangible wealth.If.financial assets commodity stocksin the urban and areas is even more skewed than the distribution of farmland in the rural areas. 30 . at the same time.the Republic of Koreaand the Republicof China-the absorptivecapacityof agriculture tends to be high even though holdingsare small. If rural and urban areasare consideredtogether. without freezing the maximum permissibleownership of urban assets. the the inequity between the town and the village-since it will freeze the maximum permissibleownership of the main rural asset. output per hectareis high. therefore. Landownersmay easily changethe composition of their assetson the eve of land reform if agricultural land alone is the target of redistributive zeal. the limitations of redistributingfarmlandaloneappearevenmore serious. Where there is such a system-as in Japan.
In other areas. In India. As will be shown later.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.where land distribution is skewedand population is not dense.the available land (43 million acres)would be barelysufficient to bring up the size of miniholdings to a minimum of five acres. where available. for the 31 . therewould be enoughlandonlyto givetwo acrestoeachminifarmer.it determinesthe size of the rural market for domesticallyproduced industrial products.too. The solution to rural povertyclearlycannot be found exclusively in the agriculture sector.The densityof the farm sector is so high in some countries in Asiathat. a low 10-acreceiling would not sufficeevento bring all miniholdings up to a minimum two-acre size.and their migration to urban areas.when possible. not enoughland would be availableeither to raisethe acreage of the minifarms to a tolerable minimum or provide for the landless.In Bangladesh. even if the maximum holding was 20 acres.there areample opportunitiesfor redistributing land so that inequalities can be diminished and the recipients of the land can generate an acceptable minimum income. In Haiti. The millions of landless families could not be provided for at the sametime. In thesesituations.The Population Factor Opportunities for the redistribution of land depend to a great extent on the existingpattern of distribution of holdingsand population density. notably in the Americas.In suchcountries.are the other obvious alternatives.Although the total effect of the redistribution process dependto a largeextent on the costsof increased will output after the redistribution. there are some countries.5 hectaresis availablefor the averagerural family of five. only 1. even with a low ratio between the ceiling and the floor holding (5 to 1).) . the marketedsurplus generates As agricultural incomesand so potential cashsavings. (Settlementof the landlesson new land. mostly food. evenif holdingsabovea certainsize werecompletely eliminated.The marketedsurplus also represents supply of agricultural products. In Sri Lanka.it might be wise to give land only to the minifarmersand to attackthe poverty problem of the landlessby meansof a massive rural works program. the pressureof population is such that there is not enough land to meet the minimum requirementsof all claimants.and no land would be availablefor the landless(20-25million households).the changein the sizedistribution of holdings will shift the distribution of the sourceof the marketablesurplusand savings.however.
Datafrom India show. Thus. however.sell no maize at all. and 55.4% comes from only 1.the urban population. for example. Where it does. might not be very great given that the largest and the smallestfarm-sizegroups account for only small proportions of the total output.However. But thesefarm groups produce only 9. and 51% (with 2. Sixty-one percent of the maize farmers in Puebla(Mexico). and another 16% sell 25% or lessof their output.But increasingthe marketedsurplus will not necessarily increasesavings.5% eachof the national output.5 acres)contribute only 6% of sales.1% (more than 50 acres)con-' tribute 16%. In India. In Chile. The surplus-outputratios of different farm-sizegroups. The rate of decline.for example. 48% of the farms (lessthan 2. whereaslarge farms (50acresor more) sell 65. and their sharesof total output and salescan differ widely across countries and regions. but there can be no doubt that it would fall.wells and access roads. In Mexico. If output remainedthe samebut. Smallfarm households tend to consumea largerproportion of their smalloutput than do householdswhich havea large enoughacreageto produce in excess domestic requirements. a fall in the surplus could necessitate imports and put an added strain on the balance of payments.but may take the form of increasedon-farm investment in such items as improved housing.7%. hypothetically. 6. with adverseeffects on the economy.farms abovea certain size were eliminated and their land transferredto the small class. Marketed Surplus A reduction in land concentrationthrough land reform could lead to a fall in the marketedsurplus-at leastin the short run.4%.5 acresor less)sell only 24. after reform. a typical sharecroppersells as much as 43% of his output.the savings need not be monetized.6% of the marketed surplus comes from 70. on the other hand. Since per acreyields on smallfarms canbe higherthan on largefarms. this decline in the market surplus ratio need not result in a decline in total surplus. that small farms (2.7% of the farmers. however. of Thus.there may be a sufficient increasein output if.5 to 50 acres) contribute the bulk (78%)of the total surplus.5% of their output. These differenceswould determine how much the surplus ratio would fall after land reform. the ratio of marketedsurplus to production falls asfarm size decreases. provided that there is a compensatory increasein total output. the necessary conditions are fulfilled whereby small farmscan realizetheir full pro32 .the surplus-output ratio would probably decline.
This addsto the urgencyof introducing effective agrarian reform (including improved technology and services)along with land reform.5% in the smallest size group (0 to 2 acres)and 19.At the lowest end of the farm-sizescale. In addition.2% on the larger ones. Savings In consideringthe productivity effect of land reform.3% on the larger farms (8 acresand above).8. again. it is necessary to examinethe implications of a changein farm-sizestructureon the aggregate savings rate of the farm sectoras a whole. by using capital for consumption). but the ratio of net capital formation farmas a proportion of incomewas found to be 5.5% for medium farmersand 16.the subsistencefarmerscan be expectedto be net "dissavers"(for instance. the savingsrate can be expected to become positive and increase along with it (althoughlarge farmerscanbe "dissavers"too. from the welfare point of view.duction potential. there should also be a positiveeffect on productivity. It follows that a reduction in concentrationof land will reduce the averagesavingsrate of the farm sector. Insofar as the productivity of small farmers was previouslyconstrainedby inadequatenutrition. 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. the subsistence consumption of small farmers increases-the extra consumption in kind representinga direct increasein their incomes (nutrition). from the foregoing.is that the farm-size structure created by any land reform program should fix a minimum as well as a maximum farm size.3% for large farmers. there was no direct measureof the savingsmade. and 11.In a further study in Orissa(India). by running down the existing soil fertility).if a compensatory increasein total income can be securedby intensifying inputs per unit of land soonafter land reform.24% for small farmers.6% on the smallestfarms. A policy implication.it can be expected that the behavior of the savingsrate will be similar to that of the marketed surplus. a decline in the market surplus ratio has a direct distributive dimension which should be offsetagainstthe decline.The minimum farm size clearlyshould 33 . A recent study in the state of Haryana (India) tended to confirm this: the savingsratio was found to be -0. Although the evidence on savingsrates of different classes of farm householdsin developing countries is scant. the aggregate savings be precan vented from falling.As the surplus-outputratio falls.For unirrigatedvillages.the correspondingfigureswere lower -2.But. As farm size increases.
Tenancy Reform The most successfulland reforms include those whereby tenants become owners of the land they operate. provision the of security of tenure. often havea preferencefor crop sharingbecauseit provides risk insurance.There is growing evidencefrom the Philippines. landlords and sharecroppers have spontaneously begun trying to combine cost sharingwith crop sharingbecause the combinationis profitable to both.without transferringownership rightsto them.be determinedon the basisof the current national norm of minimum family income. Ownership control and incomefrom the land is thus redistributed. for example.and tenantsbecomeowners of the land that they operate.security of tenure is greaterand incomesfor the farmers are larger. This is seen not only from the reforms in Japanand Taiwan. hasincreasedon-farm investmentand helped raiseoutput. The conversionof tenantsinto owner-operatorsgenerallyleadsto a more efficient and more equitable form of production organization than tenancy. as in Japan. In Kenya. in turn. then the size distribution of operational holdings maynot change. However.Sharecroppers. especially in the temperate production areas.the problem is to promote more efficient typesof tenancy."An analogouscriterion can also be derived from the known behaviorof marketedsurplus:the smallholder should haveat leastenoughlandfor positivesales. to however. on-farm investment and higher output. whether through the distribution of the land to those working it or the provision of greatersecurity of tenure and 34 . Here. if landlords are allowed to retain land that might be self-operated. There may be situationswhere tenancy reform aims at stabilizing the position of tenantswith respectto rent paid.With the conversionof tenantsinto owners. that since the seed-fertilizer technology began to spread. hence.Crop sharing can be made more efficient and equitable if if is consideredwith cost sharing.with contracts having well-defined incentivesand deterrents. encouragesincreasedsavingsand.The expert consensus that fixed cash-rentcontractsare superior to the more is common crop-sharecontracts. security of tenure and labor objectives. but also from experience in parts of Africa where "customary" tradition is convertedinto freehold.since the whole income in excess of' the fixed rentaccrues the actual cultivator. This. 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. Tenurial reforms.
Often. LogisticalSupport Secondly. In most countries in the world. In some instances. several important considerationsmust be taken into account.Very often the greaterpart of national output comes from medium-scalefarmers. introduction of a major land reform programusually the disrupts the systemof logistical support from the commercialsector to the farmers. Implementation Issues If reforms are to generatethe benefits expected of them.This linkage is basedon mutual interests and. Such reforms improve income distribution by shifting income away from the landlordsto small-scale producers. Finally. there is a long interval before the public sector can 35 . but the returns to the economy are usually higher from labor-intensiveoperations undertakenby smallholders. The redistribution of land frequently leadsto a breakdown of this system. the less likely the accelerationof disinvestment by landownersand. there is a well-established link between commercial bankersand suppliersin the private sector and the larger agricultural producers. 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.improved rental contracts. have an effect on development.like prudent investors.weigh the risksas they perceivethem before makingon-farm investments-the major component of total investmentin agriculture. since agriculture is a private sector activity in most countries.These farmers. Firstly. It follows that the more specific the plans and the more clearly defined the policies regarding land reform. The financial returns to the landlord from using machinesand hired labor may be high. so.often thoseamong the lowest income groups. on long-standingbusinessassociation.instead of being displacedwhen landlords find it to their advantage adopt to a different technology. Sustaineduncertainty about a government'sintentions with regard to the distribution of land adds to the risk of investmentand can hamper capital formation and production. often.greatersecurity enables tenants to benefit from appropriate technological changes. production and investmentdecisionsaremade bymillionsof individualsoperating in their own interests.continued uncertainty hasled to disinvestmentin agriculture by owneroperatorsand a flight of capital from the country.
Without an appropriate organizationfor the provision of inputs. There are many different forms of organization: cooperatives. A more realistic approach to obtaining widespread benefits would be to leavesuch operationsintact and redistributethe profits from the enterprise. When land is fully utilized and yields are alreadyhigh. high yields and efficient operations may be directly associated with a systemorganizedto function on a large scale (as in certain types of sugar plantations). mostof the inputs are "divisible. In somesituations. by raisingthe wagesof the workers. or before the privatesectoradjuststo the new situation. Whatever the organizationsthat prevail. Unlessthis is done.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. Thus. or-as in Peru-converting the operation into 36 . the institutions that have provided servicesin a post-reform period have continued with a bias in favor of larger-sizeoperations. it is essentialthat they be designedspecifically to assistthe beneficiariesof reform.Thiscan be done through taxation." thus reducing the importance of scale of operations as a factor in raising productivity.and the like.special credit institutions. Indeed.undertake the role previously filled by the private sector. In many instances.the reduction of the costsof a land reform program-in terms of production forgone-depends on the rapid reorganizationof the input supplysystem.agricultural development banks. marketing authorities. the impact of redistribution of land on productivity and employment may be in question. Part of the reason is that these institutions have not been able to adapt their methodsof operationto the needsof largenumbersof small farmers. the natureof the organizationsproviding for both the supply of necessary inputs and the marketingof production surplusesis crucial in a post-reform period. In this context. Adaptation Fourthly. under certain conditions land reform programs might need adaptation if they are to fulfill the objectivesof development. Natureof Organizations Thirdly. productivity will decline and output will fall. In much of agriculture.The breaking up of such holdings may well reduceyields and lower output. the beneficiariesof the reform may not be in a position to increasetheir output. it is important to determine the reasons for high yields.
can be consistentwith all the goals of economic development: raisingproductivity. by providing securityof tenure. There must be an adequatesystemof incentivesand rewardsif productivity in agriculture is to be increased. land reform need not leadto a reduction in marketedoutput or savings. Government reorganizationcan generateenthusiasmand provide opportunitiesfor mobilizingworkers. increasing employmentand providing wider equity.land reform leadsto structural changes within the agricultural sector.The creation of adequateincentives is particularly important in a situation where labor is the major input.that: 1. 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. 37 . Land reform. Structural Change Finally. out of profits. although equity oriented. however. but raisingoutput depends on more than land and labor. 2.the number of small-scale owner operationswill increase. other organizations(suchas large-scale state farms) might be intended to save labor. No matter what the structure. The post-reform structure will depend on the ideology of the government.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. to the participatingstockholders. Experiencehas indicated. sustained increases output dependon complementaryinvestments poliin and cies. Tenancy reformscanredistribute incomesand.in others.producer cooperatives and other units of production haveflounderedin developingasystem that reflects both equity and incentives. can encourage increasedon-farm investment.however. However. In some instances. 3.a worker-owned corporation and distributing dividends. In the long run. that is often unfulfilled in rigidly controlled societies. There must be an appropriate supply of other inputs. Thisappliesboth to the agriculturalsector as a whole and to the units in which beneficiaries of reforms are organized. Many communes. producer cooperativesor communesor large-scalestate farms will emerge.This is a condition.The most important of theseconcernthe organizationand provision of an adequatesupply of inputs for the beneficiariesand the creation of incentivesto use theseinputs to raiseproduction.
In the early 1960s.the focus was on providing adequateinfrastructurefor increasingagriculturalproduction. 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. Problemsof tenurewere seento havean indirect bearingon production. Technical Assistance The Bank hasbeen concernedwith problems associated with land distribution and land reform since the beginning of its operations." 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." The paperwent on to affirm that: "It is clearthatagricultural development cannotdo all it mightto improverurallife if the distribution landownership highlyskewed.which recognizeda relationship between land distribution and equity. In the early yearsof the Bank'soperations.and socialjustice.Theobjectivesarenow generallyaccepted to be increased productivity and employment. especially irrigation water.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.the approach to agricultural development was widened to include the provision of rural credit and on-farm inputs. The paper stated: "In developing countries. representsmuchhigher land a proportion of totalwealththanin developed countries. inegalitarian and patterns of landownership a majorsource incomeinequality. maywell be a necessary condition for their realization. By the end of the 1960s. Land reform canbe corsistentwith theseobjectivesand. concernwas growing about distribution of income in the rural areas the relationshipbetween and land distribution and income distribution. mainly becausethey influenced on-farm investment decisions and determined the efficiency of resourceuse. the owners landusually of possess politicalandeconomic powerwhich can be exercised waysthat harmthe interests the bulk of the in of ruralpeople. This was reflected in the Agriculture SectorWorking Paperof June1972. in somesituations.The missionidentified the patternsof landuseand 38 . however. are of Furthermore.
however.Largestretches fertile landwere held of by large-scale producersfor livestockraising.More recently. Landlordswere finding it increasinglyprofitable to displacetheir tenantsas machinetechnology provided higher returns.while intensiveagriculture was practiced by "minifundios" on land that was lesssuited for crop production. The mission recommended the governmentthat to it introduce a graduatedland tax as a meansof intensifying land use. More needsto be known about the distribution of land. In Morocco.there hasbeen a growing emphasison the problems of distribution of land and the rightsto land as factors that influence equity aswell as productivity. the mission emphasizedthe possibility of redistributing landas a meansof increasingboth output and equity. This mission recommendedthat the government adopt a presumptive income tax to encouragethe more productive useof land. In Ethiopia. missionsto Ethiopiaand Morocco havedrawn attention to the relationship between the land tenure situation and the distribution of benefits from growth. The two missionsto Colombia were concerned with increasing productivity and intensifying land use.and the policies and programsinstituted to influencethe distribution of land and rural incomes. and that the Bank-as an external lending agency-should adhere to the existingpolicy and not advocatea rapid redistribution of land.conditions governingtenancy. A subsequentagriculture sector mission in 1956 confirmed that the systems land tenure and land usewere barriersto increasingoutof put. recommenda vigorous policy of settlementon reclaimed and clearedland. Despitethis trend.it is only through a thorough analysis conditions of 39 .the problem was seenas one of unevenland distribution and insecurity of tenure. missionsand sector surveyshavebeen conducted in almost all the countries servedby the Bank. The missionswere not concerned with the redistribution of land as a means of encouraging greater equity.Many of these have pointed to patternsof land control and insecurityof tenure as obstacles to raisingagricultural productivity.they took the view that the distribution of land was a matter of national policy and internal politics. Thus.The Bank needs to be better informed about conditions governing rights to land and related institutions in member countries.land distribution by sizeof holding to be major obstacles acceleratto ing agriculturaldevelopment. nor did they consider redistribution as a meansof intensifyingproduction. It did. Rather. Since that time. securityof tenure was consid=ered to be especially significant in the light of the distribution of potential gainsfrom new technologybeing introduced into the country. many reportsdo not give appropriate emphasis to issuesrelated to land reform and development.
within member countriesthat the Bankwill be in a position to discuss policy options with member governments. On the other hand. It is estimatedthat. as is usually the case. has played a minor role in the financing of land reform programs.Loans credits havebeen madeto countries and with widely differing social and political structures. the recordshowsan increasing and awarenessof the implicationsreflected in more frequent useof measures to improve them. Compensationpaid for land is a "transfer payment" from the pub40 . present. individual holdings in India. the Bank has not been totally indifferent to structural and income distribution aspects.as well as countries that follow capitalism.large-scale plantationsand smallscaleproducers. cooperativeproduction units in Tunisia and group farmersin Kenya. however. in the Latin American countries which followed nonconfiscatoryreforms.Fundshavealso been provided for large-scale livestockproducers.thesehavebenefited absentee landlords. Nevertheless. if any.When land is confiscated as part of a revolutionary process-as it was in Mexico and Bolivia-clearly little.large landowners.such as Yugoslavia and Tanzania. In few general. only some9% to 15% of total reform-relatedcashbudgetswent for landowner compensation-though in other casesthe figure could be muchhigher. new guidelines are being developedwhich can form a basisfor discussing issuesin the a systematicway in sector and economic reports.many reports At still do not addressthese problems. whether multilateral or bilateral. Loansand credits have been made for agriculture operating under different forms of tenure-for kombinatsin Yugoslavia. small landowners. projects havesupported land reform as such. The compensationissuetendsto be more important in such countries as Colombia and Venezuela where land is purchased.asexpenditures fora redistributive reform depend mostlyon the levelsand forms of compensationthat are set for the former landowners. external financing. Lending Operations The Bank'slending for agriculturaldevelopmenthasincreased very rapidly in recentyears.One reason is that the processof reform in itself may only require relatively small outlaysof public funds. Evenso.These have included socialistcountries.such as Argentina and Thailand.especiallywhere.paymentis mostly in bonds. public expenditure is involved.tenants and farm workers.kibbutzesin Israel.Public discussionof land reform financing is generally dominated by this issue.the actual amountsinvolved are not substantial.
The problems encountered in financing the Tunisian program underscore some of the difficulties in lending for reform-related projects. the agenciescreatedto deliver the inputs are usuallynew. compensation can haveserious implications for income distribution. The extensionof reform strained the limited administrative capacity.In addition.designand implementationof the agrarianreform. The nationalizedland was to be converted into "units of production" which were to be farmed on a cooperative basis. and the reform program collapsed. consumption and investment-but it does not of itself create any new productive capabilitiesin the country. The Bank subsequently canceledhalf of the loan. The Bank successfullypressedfor substantial improvementsin the conception. was to pay a guaranteedminimum cashwage to the workers out of the farm profits. hasbeen suggested It that the internationalagencies might guaranteebonds issuedto compensatelandlords. 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.lic sector to the landholding groups.this would have the paradoxical effect of giving land bonds greaterstability than that enjoyed by the currenciesof issuing countries. Very often the managerial capacityof the beneficiaries maybe untried. inter alia. However. 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.This was in Tunisia where the Bankprovided a loan of $18 million intended to back a major agrarianreform relating to former French-owned estates. Partlybecause this. internationallending of institutions have refrained from using their resourcesfor financing land purchases. have limited technical capacityand are of questionablefinancialviability.eachunit of production was to be self-financingand.the scarcityof trained manpowerand the rapid paceadoptedin establishingnew cooperatives made it difficult for the production units to start on a sound basisand generatea large enoughcashflow to meet their objectives.If financing were to be through international maintenance-of-value guarantees of bonds and for compensation. however. It was unable. which occupied the most fertile land in that country.Smallholdersopted for private farming and were supported by landownerswho resistedthe takeover of their lands. these institutionsoften provide inputs that were formerly provided by the private sector. The Bankhasprovided generalsupportfor at leastone far-reaching land reform program. the systemhad built-in disincentivesbecause wages were not paid accordingto work.Without doubt. and the whole delivery systemchanges 41 . Furthermore.
Malawi Governmentintroduced three Acts the of Parliamentwhich provided for the allocation.irrigation.The Lilongwe project indicates that Bank assistance can play a role in assistinggovernmentsin the "mechanics" of land reform and in the draftingof legislation. Kenya.The amount involved will be approximately US$1 million by the end of the second phase. Malawi and Malaysia.The need for changeto a more secureand lastingtenure systemwas evident asalmost all uncultivatedlandhad been takenup. individual holdings were of the order of about five acresper family.and the issuance either family or individual of freehold titles. and fragmentation of holdingshad occurredon a substantial scale.equipment.mortgageor transfer of registeredland through the establishment LandBoards. Another Bankproject provided direct financial assistance facilito tate the implementation of land reform as part of the Lilongwedevelopment schemein Malawi. 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. Colombia.outgrower schemes. especiallyin that cashflows generatedby reform projects tend to be lessimmediatethan in other projects.Fiveacreswas deemed to be the minimum holding size capable of providing a family with subsistence presentlevelsof technology. Theseinclude projectsfor land by settlement. and rural credit.000acreshavebeen of allocatedand titles issuedon 60. Sevenof the projects were established public land and on so did not involve any change in the size distribution of existing 42 .To date. and the construction of housing and land registry. A number of other projects have been financed by the Bank involving somechangein distribution of landor in tenurial rightswithin the areaencompassed the project.IDA creditsare beingused for the land survey (both topographicaland cadastral). These Acts also provided for the regulation of the subsequentsale.vehicles.from one basedon the profit motive to one basedin the first instance on social consideration. at As a consequence.and many investments social in overhead are not self-liquidating in the short run. some200.This directly affects their financial viability. It was recognizedduring the preparation of the Lilongwe project that there was an opportunity to changethe existing land tenure pattern of customaryright of usufruct. Ethiopia.Table 3 gives information on ten projects located in Brazil.000acres. provision the of allocation and registrationstaff. consolidation and registrationof holdings.
This excludes expenditureson health.0 13. as estimated in the appraisal reports.500 landless peasants and develop 9.73 million used for agricultural development on the highlands.0 8.300(6t 1.900 hectares.000.5 Publicland INCORA land (involved appropriation land) l Publicland Europeanownedland Publicland Publicland Publicland Publicland Source: World Bank and IDA appraisal reports.3 6.500 partially established settlers. )') The cost per small farmer settled is estimated to be $17.800 6.0 loan loan loan loan credit credit credit loan loan loan 1972 1967 1972 1971 1969 1969 1972 1968 1970 1973 5.0 25.0 n.5 3. .3 4.0 4.6 15.0 14.667 10.1 41. (. figures represent goals rather than actual state of settlement. no data on the farm size of 3.000 2.825 40.500 partially established settlers are given.505 13.0 4.7 9.0 5.a.0(5) 11.000 4. (a) Although 2.214 1.(7 6.500 1.8 4.756 10. Thesecost expenditures are being reviewed and are expected to be Considerablyhigher than originally expected. (6) Includes 2. do not necessarily reflect total economic costsof settlement.830 2.7 9. (8) Excludes $2.423(3) 6.8 29. (3) The costtothe government is$1.6 2.7 21.3(8) 6.0 43.389 3.200 2.1 3. (l) Except for Kenya.3 6.327 2.7nn perfamily settled.9 7.000 hectares. education.800 new settler families are scheduled to be settled on some 280.) Project costs.000.770 3. 3 Irrigation Second Atlantico Development Caqueta Land Colonization Wolamo Agricultural Project LandSettlement and Development Karonga RuralDevelopment Jengka Triangle Second Jengka Triangle Third Jengka Triangle 12.050 5.Table 3 Costs of Selected Settlement Projects Assisted by the World Bank Estimated Total project Country Project Bank or IDA finance Number of families(') project costs per Average farm costs Amnunt (US$ 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.800 now settlers and 3.280(4) 5. (5) The original goal was to settle 2. research and related studies.200 2.9 6. The project is behind schedule. whereas the cost per middle-size farmer remaining in the project area is $100.429 2.6 14.
Clearly. Kenya. inputs and marketingservicesfor the outgrowerswho. the total cost was expected to be $190 million. the Bank'scontributions being almost half that amount.Thecentralunitprovides technicalassistance.holdings. it is only effective when there is a commodity that can be handled througha centralprocessing system.Theten projects were intended to settle no more than 35. under labor-intensive cropping systems. in turn. the size of holdings for outgrowers is small.cocoa inholding in each the Ivory Coast. althoughlarge enough. Theseschemes involve the production of tree crops on smallholdings rather than on large-scaleplantations. the Bank has made a substantialcontribution toward a novel form of tenure through the developmentof "outgrower" schemes.the whole approachto capital-intensive settlementrequiresreexaminationconsideringthe magnitudeof the problem outlined in Annex 1 of this paper. TheBankhasparticipatedin ninesuchprojectscosting$125million. 44 .settlerswere allocated holdingsof from three or four hectaresin Malaysia 40 hectaresin Brazil. the data in Table 3 indicatethe limitationson settlementprojects -as presentlyconceived. Mauritius and Uganda.The average project hasrangedfrom 10 hectaresin Senegal one acre in Kenya.and oil palm in Nigeria. 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. sell their productsthrough the centralorganization. rubber in Indonesiaand Malaysia.The capital requirementof more than $5. In this area. 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. of which the Bank has contributed $68 million and affecting some 120. While this systemhas madea valuablecontribution toward establishing viablesmallholders.000 families.Thesehaveincluded teaprojects in Indonesia. The smallholdings are establishedaround the nucleus of either a processing plant or a plantation. to In the main. on Although the costsper family in a settlementproject can be misleading.000per family limits the prospects of the approach. There are severelimitations on settlementas a meansof reaching large numbersof landlesspeople or relieving pressures the land.Thus.000families.Eachholdingwasdeemed to adequatetcprovide a livelihood and full employmentfor the settler and his family.
the Bankhas insistedon special legislation giving tenantssecurityof tenure. But. In some instances. RuralCredit While in itself farm credit is an important instrumentfor reaching groups of a particular size in agriculture. most were intended to improve the use of water and-bring more land under intensivecultivation. For example. To this end.although in recent yearsthere hasbeen a pronouncedtrend toward lending for smaller producers. flood control and drainage projects. In many instances.Irrigation The Bank has invested about $1.or an average 1.6 of hectaresper family over alI the projects. In other instances. In some instances. or they have failed to introduce legislation which would havemet the conditions specified in the loans.11 projects costing$342million (incorporating a Bankinvestmentof $190 million) are expectedto improve 810.Thus.However.Elsewhere. Most of these resources haveaided largercommercialproducers.000hectaresand benefit more than 500.The average size of holdings in the irrigated areasrangesfrom 10 hectaresin Iraq to one hectarein Korea.000 families. the Bank hasworked with various governmentsin determiningthe mostappropriatesize of holding for the beneficiaries of eachproject.450 million in irrigation. access can be restrictedby tenurial arrangements lending criteria specify that registeredland if projects have titles be usedascollateral for borrowing. irrigation projects are subjectto special regulations or laws regarding the size of holding that can be held by the projects have conbeneficiary.000 million for rural credit. governmentshave failed to implementconditions provided for by existinglegislationon rights to land.Thishighlights 45 . 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. Bankhasmade loans on the condition that the the recipient government takes steps to ensure that the intended beneficiariesdo indeed gain from the investment.an estimated$250 million had been allocatedfor small farmers.By the end of 1973. in practice. Bank-assisted provided more than $1. governmentsconcernedhave not fulfilled obligathe tions regardingthe provision of securityfor tenantsor the allocation of land to low-income groups. Pakistan and Sri Lanka. there is no legal provision regardingsize of holding or because the law has been ignored. this hasbeendifficult to enforce. While these projects covered many facetsof water storageand distribution. in several instances.
one of the major dilemmas confronting an international lending agencyconcerned with promotion of land reform as an instrument of economicdevelopment.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. 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 (4) not lend for projects if tenurial arrangements so bad that are they frustrate the achievementof the Bank'sobjectives. These options are reflected in the policy guidelines provided in this paper. (2) call the attention of the governments the problemsassociated to with the existing tenure system. (3) support land reform proposalswhen they are made officially. 46 . and income from the land.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. It should give overt priority in lending to those countries and projects which meet land reform criteria.Suchpolitical decisionsare not amenableto ready negotiationwith governments the in sameway as are other institutional questions-such as. the settingof public utility rates. The Bankwould seemto be left with only two options. to what extent canthe Bankinfluence the courseof eventsregardingdistribution of land. Firstly.and enter into a dialogue on the subject.
I I I .
35 hectare per person.031 851 13.0 17 32 17 39 64 67 4 51 1. averaging0. 2.041 million hectares under other uses(36. or 51% of the total population.851 million.0 71.9 0.Together.35 0.617 million in the early 1970s.851 4.This represents averageof 3.8 4.90 11.Among other things.Theworld's agriculturalpopulation-defined as populationdependingon agriculture for its livelihood-is estimatedat 1.314 239 4 1.0 15.78hectareof cropland per person in agriculture. The world's population was estimated at approximately 3. The ratio of cropland to agricultural population is the lowest in Asia among all the major regions. 15% in Africa. 49 . 16% in the USSR.78 Source: FAO. 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. respectively.2 100.4%).Of the arable land. per person.7 3.8 14.0 89 77 54 74 1.40 hectareof cropland.456 million hectaresof cropland.defined as arableland and land under permanent crops (10.7 hectares an of land. and 4.Production Yearbook 1972.987 million hectares under permanent pasturage (22.242 1.75 0. madeup of 1.which hasapproximately 32% of the world's cropland. More than 70% of all rural people live in Asia. the tables show that: 1. approximately32% is in Asia.9 18.2 2.6 5. 10% in Europe.01 5.783 2. of The relationship between population and land in all major regions and for 52 selectedcountries is shown in Annex Tables1:1 and 1:2.0 12.the People'sRepublic Table 1:1 Regional Distribution of Land.393million hectares. there is an average 0.14 0. On the basisof these global figures.63 3. Cropland. or closeto 0.753 3.456 10.9 4.8 31.2 100.8%).Annex1 THE CONTEXT OF LAND REFORM Ratios of Population to Land The total land area of the globe is about 13.240 2.6% in SouthAmerica. 19% in North and Central America. and 3% in Oceania.02 1.8%).393 145 232 271 84 463 214 47 1.
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
Most developingcountries haveconsiderable opportunities for increasingemploymentand production in this sector. I-V.Annex 1 situation is correspondinglyworse. 99. 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. Geneva: Columns and 5: FAO. a higher output per has worker in agriculture than Japan. is a country of small holdings and has approximately two workers per hectarewith an averageoutput of $397 per worker and $762 per hectare.Republic of Laos Malaysia Nepal Pakistan Philippines Sri Lanka Thailand Viet-Nam. Japan Table 1:5 Agricultural Labor Force and Production in Selected Asian Countries.Table 1:5 showsthe startling differences in input of agricultural labor and output per hectarein developing countries of Asia on the one hand.LabourForce Projections. 1972. Rome: and p. Sources: Column International 1: Labour Office. This applies to the more densely populated regionsas well as to others. 1971. The increasingpressureof population on the land highlights the issueof absorptivecapacityin agriculture.Republic of Japan 48 92 224 75 261 153 74 229 101 113 107 119 242 192 25 48 117 39 136 80 39 119 53 59 56 62 126 100 71 115 283 146 440 119 366 220 218 178 286 179 241 762 9 15 37 19 58 16 48 29 29 23 38 23 32 100 148 150 126 194 169 75 492 96 215 158 266 150 100 397 37 38 32 49 43 19 124 24 54 40 67 38 25 100 Pt. 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 .The 3 Stateof Food Agricuture. The emphasisin the latter countries will have to be placed more and more on raising yields per hectare. Malaysia..However.Several other countries havea higher ratio of workers to the land than Japan. and in Japanon the other.
or 39% of the total number. About 53.7% of the cropland. are under 1 hectarein size. The most recent data on distribution of holdings by size is given in the worldwide censusof agriculture held in the early1960s. or 78.With very few exceptions.includingall of the larger countries that are membersof the Bank. Thiskind of labor intensity is not likely to be reached.8% of the total land area and 20. the agriculturalsectorin thesetwo countriescould absorb all the labor force expectedby 1985.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). 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. specialand possiblyextraordinarymeasures would haveto be taken to satisfy the expandingdemand for work and income from today'schildren. Suchmeasures include thoserelated to land reform. Basedon the sameassumptionas above. It showsthat: 1. evenif effective birth control could be introduced overnight.Nigeriaand Romania. Ecuador.Table 1:6 combines the two sets of information to give an indication of the distribution of land and cropland by size of holding. theseholdings accountfor approximately6. 55 .land tenure and capital formation. resourcebase.3 million holdings in the 83 countries.1% of the land areaand 3. Nonetheless. 2.4% of the cropland.8% of the total number. 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.Bolivia. poverty and unemploymentproblemsof the developthe ing countriesare unlikely to haveany long-term solutionsthat would not include a reduction in population growth. About 109 million holdings. then theseholdingsoccupy1. becauseof the small size of the irrigated areas in Pakistanand India and other constraintsrelated to technology. Thiscovered83 countries. low incomesand increasingunemployment. 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.however. The censusprovides a breakdown of distribution by size of 138.Annex1 and India. are lessthan 5 hectaresin size.except Afghanistan. urban aswell as rural.9 million holdings.
55 28.00 0.50 5. of pp. 3.00 4.70 4. That is. One million holdingsof 200 hectares more representlessthan or 0. account for 78. both developed and developing.00 3.40 5.000 1.Conversely.20 20.10 1. These data confirm that. covered by the census.92 million were lessthan 5 hectaresin size.2 2. The information on distribution of holdingsby size refersto the 83 countries.50 50.67 0.3% of all the cropland.5 5. approximatelyhalf of theseholdings 56 .200 200.50 10.100 100.and more than three-quartersof all farmland.90 26. disthe tribution of land and cropland is highly skewed.90 19.97 1.00 1.of 122 million holdings in the developing countries.20 20.40 1. when viewed in the aggregate.70 9.10 100.73 13. 34-36.59 38.90 7.In the 64 countriessurveyed.97% of all holdingsaccount for lessthan onequarter of all farmland and slightly more than half of the area under crops.10 10.8% of the total farmland area and 45.then holdingsabove50 hectaresin size.60 5.which represent 3.500 500-1.23 138.60 6.2% of all holdings.8% of all holdingsin the 83 countries.80 5.00 11. Rome: 1971.60 8.40 5.80 9.Report the 1960 on WorldCensus Agriculture. Thus.00 11. farms of this size group account for 66% of the total land area and nearly25% of all cropland.24 7.30 100.000 over and Total 53.30 12.20 3.27 4.If the distribution of holdingsby size in 83 countries represents global picture.20 1.70 11.20 4.40 1.16 0. roughly3% of all holdings(in the aggregate)account for slightly less than half of the arable land and land under permanentcrops.80 6.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 1.40 0. Therewere an estimated16 million holdingsof lessthan 5 hectares in the developedworld: 6 million in Japanand 10 million in Europe.48 0.00 Source: FAO.23 0.80 11.50 51.and if the a distribution of 91% of the land reflectsthe pattern of distribution of all the land.16 100.
0 34.7 91.0 8.5 1.5 21.it is safe to assumethat the census forthcoming in the 1970swill reveal that there are well in excess of 100 million smailholdersin the developingworld.5 Source: FAO.since it excludes holdings of less than 1 hectare. of Rome: 1971. 57 .2 5. it is highly likely that closeto 100million holdings of less than 5 hectaresexistedin 1960. Reporton 1960 the World Census Agricalture.Thus.7 - 47. Ecuador and Bolivia.4 39.7 52. more than half of their holdingsare lessthan 1 hectarein size.5 13.Annex1 were less than 1 hectareand the remainderwere between 1 and 5 hectaresin size. Table 1:7 Distributionof HoldingsaboveOne Hectare. the agricultural population in the developing countries increasedby a reported 190 million persons.4 45. However. Consequently.0 23. or 10 million families.2 6.The most comprehensiveregional and national analysis the 83 countries dealswith for holdings of 1 hectareor more in size and pertains to 84.4 million holdingscovering2.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.at the time of the census.2 17. It is safeto conclude that well in excess 100million holdingsare of less than 5 hectaresin size in the developing world at the present time.7 3.0 99. in all probability.0 40.5 50.0 0.2 73.3 8. Together. Obviously. it does provide an insight into the patternsof distribution of holdings within the major regions. this is not a complete coverage. most of whom were farming on units of less than 5 hectaresin size. Preliminaryindications are that the fragmentationof holdings hasincreasedin manyof the more densely populated countries as well as in countrieswhere the distribution of land is skewed.2 3.7 27.4 78. This conclusionis derived asfollows: The 1960censusindicated that there were approximately92 million smallholdersin developing countries.5 2.1 66.these countries had an agricultural population estimatedto be close to 50 million people.3 0. excluding those in Nigeria.or by more than an estimated 35 million farm families.1 90. Between1960 and 1970.5 90.4 36.242million hectares.The resultsare summarizedin Table 1:7. Afghanistan.4 37.6 23.5 9. The1960census data alsoprovided information on holdingsby size and land areafor different regionsand countries.8 0.
1 1.9 49. If these are excluded from the sample.3 32.Annex 1 The analysisindicates the vast differences in patterns of landholding and land distribution between Asia and the other regions.1 6. are This The data for Africa.3 38.3 40. as presentedin the census.0 9.8 92. by Size and Area.7 46.As much as 34.1 20.2 10.7 50.8 5. South America and Oceania. only 5% of the land in the eight Table 1:8 Distribution of Holdings above One Hectare. The analysisof the distribution of holdings by size on a regional basispoints to the highly skewed distribution in the Americas.9 28. is becausecoverageof that continent in the 1960 censuswas poor.8 95.2 1. of Rome: 1971. 58 .6 20. as shown in Table 1:8. The information confirmsthat a very high proportion of all land-ranging from 86% to 97.2 92.0 0. helps explainthis.7 4. Report the 1960 or WorldCensus Agriculture.5%.4 12.6 30.1 85. in Selected South American Countries %holdings Argentina Brazil Chile Colombia Paraguay Peru Uruguay Venezuela 14. misleading.while the sampling in Zambia was confined to Europeanholdingsand in Tanzania commercialholdto ings.7% of the land.3 1-5hectares % area 5-50hectares % holdings % area 50 hectares % holdings % area 0.5 73.0 Source:FAO.2 94.8 14. and more than 90% in North and Central America.2 42.0 4. 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 40.6 8. At the other end of the spectrum.4% in North and Central America that are less than 5 hectaresin size occupy only 1% and 0.1 37.is in farmsof more than 50 hectaresin size.4% of holdings in South America and 23.0 22. Only 9% of the area in Asia is in holdings of more than 50 hectares.then the land held by smallholdersowning under 5 hectaresis much more than 50% of all land.9 2.1 4.1 6. respectively.1 1.6 6.5 52.of the area under farms. the pattern of holdings in the eight major countries in LatinAmerica.5 3. The 36. with the data on the distribution of holdings by size and acreagefor the 18 countries surveyedheavily weighted by the results in South Africa and Southern Rhodesia.3 87.2 0.3 43.6 51.7% in Europe.3 36.7 36.8 97.5%in the eight countries is in holdingsof more than 50 hectaresin size.5 86.
Republic of Denmark Germany. Rome: 1961. The most skeweddistribution appearsto be in LatinAmerica where the densityof population is relatively low in rural areas. the sametime. countries such as the Republicof China (Taiwan).The Gini coefficient hasbeenestimated for 30 countries which have been grouped into three categories. Economic Research Service: ChangesinAgricultutrein726Developing Nations.the Gini coefficient indicatesa high concentration in six South American countries included in the sample. the distribution of land appears be At to much lessskewedin many areaswith a very high densityof population.Canada.as shown in Table 1:9. notably Asia and Europe. The distribution of land by size of holdings is "a geographical phenomenon" and must be interpreted with caution in a socioeconomic context. Federal Republicof Greece Japan Philippines Sweden Yugoslavia Sources: FAO.Annex 1 countries is in holdings of less than 5 hectares(even though these holdingsconstitutebetween 14% and 74% of all holdings). Land-Tenure:WorldAgriculturalStructure.It is of special interestthat two of the countrieswith a high densityof population and very little concentration of landholdingsare Japanand Taiwan. As can be seen. Washington: 1965.On the other hand. as revealedby a Lorenzcurve. 59 . US Departmentof Agriculture. Study No. 2. p. 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.Japanand Swedenhave a low concentration of holdings. Other data provided by FAO.1948to 1963. 36.ArabRepublic of India Iran Ireland Italy Netherlands Norway Pakistan Turkey United Kingdom UnitedStates Belgium Canada China. 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. Clearly.the distribution of holdingsby sizevarieswidely in different parts of the world.
However.Annex1 100. In other areas.000acresin parts of Northern Australia.however. and rentersenjoy the sameworking conditions asownersof land. in and that this skewness by no meansconfined to LatinAmerica.out of 82 million holdings. All in all. This limited sample indicates that renting and sharecroppingare widespread in all the major regions of the world. and they commonly give as muchas half their output in return for the useof land and services provided by him. 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.yield a far greater income than do 1. The evidence presented here (andelsewhere)indicates. Iran and Egypt. this is true of less than one-quarter of the farms. and the percentageof farms and areasof farmland they occupy. in the 15 countries. the pattern of distribution of land maynot reflectthe prevailing pattern of distribution of wealth or the socioeconomicconditions -2 hectaresof irrigated land in the MedjerdaValley of Tunisia. Table 1:11 indicates the number of landless farm workers in 12 countries. are farmed by tenants or sharecroppers. within countries.Only limited data on theseare available. more than two-thirds of the farms. It also indicatesthat the greatestskewness distribution is in the Americas. the rights of those who rent land are protected by law or custom.Similarly. such as Guatemalaand Tunisia.000 hectares of land usedfor sharecroppingin the semiaridparts of Tunisia'scentral area. In such countries as the Republic of Viet-Nam. close to 29 million are worked by rentersand sharecroppers. rentersand sharecroppers in a verytenuous posiare tion when it comes to negotiating arrangements with the landlord. In mostdeveloping countries. The conditions that govern rental agreementsand crop-sharing arrangements differ throughout the world.In someparts of the world. producing tomatoes. Renting or sharecroppingof land is a common practice in both developedand developing countries.there is heavydependence the on landlord-usually an absenteelandowner-for the provision of pur60 . in other countries. where tenancyis widespread. however. The caveats quality of land and ecologicalconditions governing on land-use patterns must be borne in mind.that mostof the agricultural land and cropland is concentratedin a relativelyfew holdings. occupying much more than half of the land.Table 1:10 givessome information on the number of rentersand sharecroppers in 15 countries.
2 73.a.349 128 381 129 93 27 18 776 Data refer to latest available year in 1960s and. 61 .4 13. Frequently.4 70.8 19.3 61. due to lack of data. 92-97. 25. (4) (5) Includes both Pakistan and Bangladesh. India and Nicaragua are excluded.9 31.6 24. pp. Dominican Republic.334 25.6 n.0 45.3 35.3 33.5 31.4 54. 16.5 28.7 23.392 141 5.253 76 2.020 1.7(5) 13.7 57. 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 31.3 70.a.5. (a) Includes holdings operated under more than one tenure form (21.a.Annex 1 Table 1:10 Tenancyand Sharecropping SelectedCountries(l) in Renting and sharecropping as percentage of total Number of 2 farms( ) -(O Farmland Number of renters 2 and sharecroppers( ) (000) (%) Asia India Indonesia 3 Malaysia( ) 4 Pakistan( ) Philippines Viet-Nam.271 1. 32.India and Pakistan.9 15. chased inputs.1 66.4 32.0 40.4 26.Report the 1968 oe WorldCensus ofAgricolture.9 22.0 n.2 43.1 49.Vol.2(5) 1. do not reflect land reform action on the one hand and changes in the work force on the other. Source: FAO.the tenantsare among the lowest income groups in agriculture.5 n.81). therefore. 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 49. 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.176 1.0 62.350 4.Rome: 1971. (1) 1960 estimates are for former Federation of Malaya. Tenantsand sharecroppers under conditions of great insecurity and are in a weak bargaining position vis-a-visthe landlord.664 62.4 57.
Unless otherwise indicated. 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) 47.237 378 1. 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.013 60. 14. 1972.986 1. YearBookof Labour Statistics 1871.43-294. p. data refer to latest year available in 1960s and.099 1.561 694 3. and Except for India. do not reflect recent reform actions on the one hand and changes in the work force. pp.158 122 179 391 138 72 2. 1971).499 101 557 99 287 9. thus.673 8. Directorate of Economics and Statistics. 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. on the other.. data presented here are estimatedfrom [LO. (2)Agricultural laborers as shown in India: Ministry of Agriculture.865 903 484 210 4. Agricurltureinn Brief (I Ith ed.Annex1 LandlessWorkers The number of landless-farmworkers in developing countries is increasing. 44-301. indian (3) Includes population now belonging to Bangladesh.300 5.
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. 63 . This group is increasingin size. This figure includes an estimated47 million in India aloneabout 32% of the active population in agriculture.and the provisionof employmentfor what is alreadya large rural proletariat may well be one of the greatest challengesfacing national governmentsin the future.but the problemsof reducingnationwide unemployment haveto be seenin a national ratherthan a sectoral context. The nature of this phenomenon has been discussed elsewhere.It is usuallyassumed that the labor force subsists a off holding and joins in some arrangementwith the extended family whereby it shareswork and output.Annex1 (including family membersand headsof familieswith verysmall landholdings) in the 22 countries for which data are provided in Table 1:11. Almost no reliable estimatesexist of the number of unemployed in rural areas. more than half of the workers are essentiallylandless. Structural changes within agriculture can help alleviate underemploymentand open unemployment. There is a vast amount of underemploymentin the rural areasof most countries of the world.In the remainingcountriesof the region.At this juncture. but that the prospect is limited for redistribution of land providing full employment for all the presentand prospectivepopulations in the rural areas of densely populated countries. There are about 10 million suchworkers in LatinAmerica.Evenin Argentinaand Uruguay (with only 15% of the active population depending on agriculture). it should be pointed out that the redistribution of idle land can provide added employment.
Republic China of Taiwan'sland reform program was implementedin three steps.A reduction of rents. evidenceis inadequate allow identification the to of causalrelationships between reformmeasures the one hand and on production. Following the reform. Republic Korea of Land reform in SouthKoreaafter the SecondWorld War consisted of: (1) a reduction of farm rents from 40-60% of production to 33% 64 . and a graduallyincreasinginvolvementof tenant farmers in the administration of the program.such as that between land distribution and a rise in productivity. even though it is often feasible to trace correlations.was followed by the saleof public lands.Annex2 EXPERIENCES WITH LAND REFORM The following summariesillustrate selectedcountry experiencein land reform over the lastthree decades. A land-to-the-tiller programcompletedthe reform in 1953.leavingintact enoughincome to achievea fairly high agricultural savings rate.good agricultural researchand extensionservices.all contributed to the success.Landproductivity is higheston holdings below 0.Theexistence of a thorough cadastralsurvey.The proportion of cultivated land under tenancy leaseswas reduced from 41% to 16%. On the land remainingunder tenancy cultivation. and rural and social stability havebeenenhanced. vast expansion publicly sponsored a of farm credit during the reform period.The shareof total agriculturalincome that is consumed hasincreased only moderately. The smooth implementation of the reform programin Taiwan was due to a stable sociopolitical climate and the many complementary developmentmeasures takenbefore and during the reform. Land reform is a complex process in which severalsocioeconomicvariablesare changedmore or lesssimultaneously.the productivity of agriculturehasincreased. income and social effectson the other. while the proportion of farm families owning all land under their cultivation increasedfrom 33% to 59%. nor should the statementsbe regarded as definitive. written and secureleases were arrangedat much reducedrental rates. in 1949. Their inclusionin this paper should not be taken as indicative of Bankjudgment on what doesor does not constitute land reform. income distribution has become more even.In mostcases.5 hectare.
and promotion of farm chemicalsand new crop varietieswere pushedon a large scale. and (3) a redistribution between 1950 and 1953 of land in excess a ceiling of 3 hectareson Korean of holdings. and private landownershipwas reinforced for the purposeof cash taxation by the central government. however.4 million acres (25% of the total farmland) were distributed to 1.while only 7% were tenants. a secondland reform programwas executed. and may also have removed a constraint on the growth of Japanese agriculture.partly because heavy of land taxes.Theformer tenantsweregiven property rights at an extremely low real cost. Japan The first Japanese land reform program.Labor intensityand land productivity rose quickly.training and extension.Laborproductivity and rural employment increased. The second reform resulted in greater equity.6 million farmers (approximately70% of all farmers).The peasantry wasfreed from bondage. Yields did not fall as a consequenceof the reform. with the result that the agricultural sector could provide savings. in 1948. before the reform.In the late 1940s.Considerablesociopolitical stability has been achieved.Annex 2 in 1945. It. 69% of the farmers owned all the land on which they worked and 24% were part-owners. Subsequent the first reform.But the small size of most farms has now becomea constrainton farm income. cheapfood and surpluslabor to the industrial sector. The first reform did little.Some 1. Largenumbersof smallholderslost their property in the agricultural depressionat the turn of the century. yields had far surpassed prereformlevels. Supplementary programsfor infrastructureimprovement.togetherwith income redistribution in favor of the poorer ruralfamilies. by the 1960s. laid the groundwork for Japan'ssocial and economic transformation. (2) a redistribution. which resulted in a thorough restructuringof rural society.credit services. Owners had to sell all land in excess about one hectareto of the governmentat confiscatoryprices.Afterward.The terms of salewere similarly generoustoward the buyer in both cases.hasbeen estimatedthat. the tenancyproblem grewgradually to worse. 19% of the farmers owned 90% of the land and more than 50% of the farmerswere landless tenants. The economiceffects were not as enormousas thoseassociated with the 65 . of Japanese property confiscated by the military authorities. to distribute property ownership or reduce income inequality-rather it strengthened the landownerclass. in 1868.the power of the feudal lordsto collect taxes from landownerswas broken.
The second reform worsened. by 1961.Sincetenants continue to pay revenuedirectly to the government. therefore. in 'The zamindars were revenue collectors during the Moghul period. most important of whom were the zamindars.An attempt to create larger farming units through cooperativeshashad little effect. is largely recommendedand coordinated by the Central Governmentand the Planning Commissionand executedby the individual stategovernments. Two-thirds of the owners were required to sell lessthan one hectareand only 6% more than five hectares. price supports notwithstanding.4.Securityof tenure appearsin general to haveworsened. however. India Land reform in India.and (4)consolidation of fragmentedholdings. more than half of the area occupied by holdings. lagged behind. but some observers regardthis asessentially continuationof a long-term trend a (1895-1939) startedby the first reform. the intermediary rent and tax collectors. The landlords who were forced to sell excessproperty were mostly smallholders themselves. subtenantsand sharecroppershad.their economic position hasnot been greatly improved.(2) tenancyreformdesignedto fix maximumrents.however.Annex 2 first reform. Rural incomes have.mainly in the form of bonds. A total of Rs. amongother objectives. with the result that policy implementation varies widely.350 million was paid in compensation.an increase farm incomethrough diversification into horticulture and animal husbandry. the tenancy problem had already been relieved through a reduction of excess rural population by the war and absorption into industry. Land productivity did increase after 1947. Although the reform increasedincome equality among farmers. By 1961. 3 million tenants. (3) to ceilingson landownership and distribution of surplus. Under the tenancy reforms. it hampered equalizationof rural and urban incomes. 66 . acquired ownership under purchase agreementsof 7 million acres.the problems of fragmentation and undersizedfarms. Agricultural policy is now of aimedat. Actual rents have not come down. The abolition of the zamindari systeminvolved 173 million acres. The four major types of reform havebeen: (1) the abolition of the zamindari' system.Part-timework outside the farm is an outlet. but the farmersconcernedare often limited to lowskilled work.to improve security of tenure and to give the right of purchase the tenant. they gradually turned into powerful landlords. pursued since 1950-51. Under the British.At the time of the reform.had been abolished.
is required.Landownershave been permitted to resumeland above legal ceilingsfor personal cultivation.Only about 1 million acresout of all gifted land haveactually been given to landlesslaborers.Evenif a ceiling is imposed. together with accessible marketingchannelsto small farms in general.but most of the donatedparcelsare still in the handsof the donors. Therefore. Tenantswere rotated annually. Thereappearsto be scopefor somedistribution which will also assistagricultural production becausethe yield per acre in India is higher on small farms.Uttar Pradesh Haryana. 56% of the holdings.and particularly to tenantswith secureleases. The.approximately2 million acreshave been taken over by the government in order to settle tenantsand landlesslaborers.and to promote more efficient typesof tenancy contracts. were rented.the landacquiredis sufficient to give minimal holdingseither to the minifarmersor the landlessbut not both. of and It is well recognizedin India that the reform measures dealingwith securityof tenureand acreage ceilingsareonly partiallyenforced.A further 4.it will be better to legalize someforms of tenancywhich exist on a largescale. Consolidation of land parcels has been more successful and has resultedin a rationalizationof holdings covering 69 million acres.Annex2 some statesthey have even increased.and ownerswere often absenteelandlordswho contributed little to agriculturalproduction. Provisionof thesefacilities is as essentialas further land distribution for attaining the income equity and productivity objectivesof India's land reform. Iran Iran's land reform started in 1962. A large extensionof credit at reasonable to terms. As long as population pressurecontinues.It appearsto havecontributed to a growth in productivity in the northern states Punjab. it will be unrealisticto try to abolishtenancy in the short run. a practice which hampered agricultural investmentand causedexploitative useof the soil. Under the ceilings legislation. which has allowed them to escapethe reforms.2 million acreswere formally pledged to the Bhoodan(gift) movement. Unreported casual tenancyand shareagreements havemultiplied.All kinds of tenants should also be registeredand given access credit and inputs. covering 62% of the area under cultivation. and is likely to presentfewer problems.largest estatesoccupied relativelymore fertile lands. Former landownerswere partly compensatedupon expropriation by cash paymentsrangingfrom 10% to 20% of the estimatedvalue 67 . Before the reform.and that manyof the statelegislatures not anxiousto havesuch radical are land reform.
The early accomplishmentsof the credit program were striking. Morocco The Moroccan Government has undertakena series of measures aimed at land reform since independencein 1956.The costs to the Governmentwere limited to thoseincurred in carryingover the acquisition coststo the time of final reimbursement. (3) purchasingthe tenants' rights. Virtually all of Iran's 50. The third and final stageof the reform. total lending by the Agricultural Bank tripled between 1960and 1965. Many measures were set up in a somewhat improvised fashion. and increasedsupply of quality seedsand fertilizers. The objective of these measures to facilitate an increasein agricultural production is 68 .000villageshave undergone land reform and more than 3 million families have received land. (2) selling to the tenants. credit and extensionservices. Continuation of the existing inequities of land distribution was regardedas one of the costsof ensuringa speedyenactmentof the reform. landownershipwas limited to a maximum of one village per owner. with the balancepaid in bonds in annual installments. In the second stage. it is believedthat the land reform program on balancehad adverseshort-run effects on output. Excess land was expropriated and distributed to the tenants. The reform favored tenants and sharecroppersinsofar as it conferred ownership on them or enhanced their security of tenure.which was practicallycompleted in 1971.but this growth leveledoff after 1966. there was also considerable interferencewith the normal flow of irrigation water from streamsand storageplacesstill controlled by landlords.The beneficiarieswere to repaythe governmentthe expropriation price plus 10% to cover administrativecharges. The ownershipand tenancy reforms havebeen complementedby rural cooperatives. Because they were basedon the existingdistribution of holdings. During the first stageof the reform. It created uncertainty which discouragedinvestment in improvements.Annex 2 of their holdings. The landlord had five options for the area in excess the maximum allowed to him. (4) dividing the land with the tenants in the same ratio as the customary crop sharing. aimed at conversionof all 30-year leases into smallholdings.As these paymentsfell behind. and (5) forming an agricultural unit for joint operation by the owner and the tenants.the limit of one village was reduced further to plots of 20-100 hectares(depending on the natureand location of the land). Although agricultural output increasedby a total of 18% in the first five yearsof the reforms. the Central Bankfunded the difference. to wit: (1) of leasingto the tenantsfor 30 years.the reforms did not assistthose who were landless.
the impact of land distribution alone on the problem of rural poverty hasbeen small. the beneficiariesof land reform have generally quickly achieved high yields and acceptable incomes.althoughsomeother state-ownedland and traditional collective land is involved. about 300. Thirty-one thousand hectareswhich were mainly used by foreignersfor researchpurposes were recoveredby 1960.000hectares. It providesfor the restrictionof inheritance rights to limit fragmentation. The main constrainton the program hasbeen the unavoidablecomplexity of supervisingits implementation consideringthe Government'smanpower resources. and to seeka suitable formula for distributing land under tree crops. Distribution to smallholdersand landlessfamilies was slow until 1967 and then gatheredmomentum up to 1972. 181.about 900. is aimed at facilitating the developmentof irrigated agriculturein welldefined developmentzones. The Government'smain priority now is to accelerateland distribution. and a further 220. The Agricultural Investment Code. The target for the third Five-Year Planis to distribute 395.when legislation was introduced subjecting such transfersto Government approval.000 hectareswere foreign-owned.000hectares(3% of the cultivated area)had been distributed to over 11.was recovered by the Government in 1973. published in 1969.while land under tree crops (mainly orangegroves)remainedunder Government control and ownership.Land consolidation hasalso been successful and hasso far benefited almost 200.intensified extension supportand the provision of modern inputs.Annex2 and to improve the distribution of rural incomes.1966 and 1972 provides for land consolidation and distribution of land to smallholdersand landless families throughout the country. an improvement in the tenure position of membersof traditional collectives.amountingto about 370. of this area.Legislationpassed in 1962. At the time of independencein 1956.mainly before 1963. Remaining foreign-ownedland.000hectares were sold privatelyto Moroccans. By the end of 1972. mainly formerly foreign-owned.000hectaresof land under field crops. Land distribution is so far basedmainly on former foreign-owned land. Through the establishmentof cooperatives.and the adoption of modern cultivation techniques. Distribution so far hasbeen limited to land underfield crops.The achievementof the distribution target for land 69 .000hectaresof "official colonization" landswere takenover by the Government between 1963 and 1965. However. between 1974 and 1977. while maintaining high technical standardsof managementon the distributed land.000families. the number of beneficiariesso far is only about 1% of farm families with lessthan 2 hectares.000hectares.
However. and vasttractsof mountain pastures still undertraditional.The implementationtook two decades.when all large estates.9 hectares.Thisis related to the location of holdings on the better soils and its priority treatment in the allocation of inputs such as fertilizers. but the former landownerswere allowed to retain ratherlargeholdings. The kombinats.Annex2 under field crops alone would. 70 . to The socialistsectoris reportedlythe mrst productive.a ceiling of 10 hectaresof arable land or its equivalent was imposed on private holdings. are In 1953.and have expanded about40% of all smallholdings.the privatesectorof individualownerswho cultivate their own land remainsimportant. and the tenants of the Turkish landownersreceivedownership rights. Yugoslavia was undertakenin 1919.while the other half was retainedas state property. the bulk of agricultural output still originates from the large group of small farms.and by 1956accountedfor only about 10% of all land under cultivation. Aside from the socialistsector. equipment useand output sales.The average holding in the private sector is now only 3. machineryand expertise. by the end of the plan.Half of the seizedland was distributed to the poor and landless.The generalcooperatives mainly associations are for joint input purchases. The stateand collective farms createdin the late 1940salong Soviet lines expandedto approximately25% of the total cropland. In the north. In the The first land reform in Yugoslavia south and west. the size of the large estateswas reduced. which resemble worker-managed the industrialfirms.The reforms have resulted in a sizable redistribution of rural income and an increasein peasantparticipation in rural decision making. The socialistsector includesstatefarms. Collective farms were allowed to disband after 1952. enable the program to cover 9% of cultivated areaand 5% of farm familieswith lessthan 2 hectares.collectiveforms of usage.however. all land in excess 25-35 hectaresper farm. and the farm property of of Germans and other aliens. bondage was abolished. consistingof both the cooperatives and the farms outside the socialistsector. The second land reform started in 1945.whereas producer cooperathe tives havedeclined.were expropriated.and resulted in a transfer of ownership of almost 25% of the farmlandto more than 33% of the peasants. particularly sincethe mid-1950s. form the largest and fastest-growing socialistelement. producer cooperatives and general cooperatives.
the reformshavecreateda class of prosperoussmallholders. Mexico Having its roots in the revolution of 1910-15. Incomesof the ejidatarios arealmost certainlybetter than would havebeen the case without reform. Sincethen. the ejidos haveincreased output about as fast as hasthe private sector.occupying altogether lessthan 4% of total arable land.An activeextensionprogramhasenabled smallholdersto increase the production of coffee. (2) resettlement African farmerson of the large farmspreviouslyowned by Europeans.In particular. those that were already relatively well-to-do have profited.Socially.Annex2 Kenya Land reform was initiated in Kenyaby the colonial administration in 1954 and expanded by the Government after independencein 1963. promotion of cash (3) cropping and dairying. Closeto 90 million hectareshavebeen distributed between1915 and 1972 to about three million ejidatarios. 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. but substantial regional differences persist in natural 71 .1976 hasbeen plannedasa terminalyear for land reform. The reform aimedat solvingseveralproblemsat the sametime.and (4) diversificationof export output. wheat. More than 1 million acresof land formerly cultivated by Europeans were opened up to Kenyansmallholders. pyrethrum. and increasedproduction for the market.and the rightsto about 7 million acreswere adjudicatedand consolidated. The landless amount to approximately16% of the rural population. despite the considerableconcentration of ownership that persistsin the private sector.Theseprimary beneficiaries of the reform represented 53% of all farmersand 26% of the rural labor force. notwithstanding political friction and a lack of qualified personnel. Theseincluded: (1) adjudicationand consolidationof holdingsunder cultivation by African farmers. dairy products and beef. Somethree million landlessrural workers remainand. the agrarianreform in Mexico createdvillage groups (ejidos)with usufruct rightsto land. Total production by the ejidos grew very slowly during the first decadeof their establishment. maize. It was estimated in 1973 that approximately25% of all smallholdingswere less than one hectareand about 50% less than two hectares. The implementation and results of the reforms have been quite successful. while the poorest smallholders and nomadshave benefited much less from the reform.
The government bonds given to the former owners can be.200farm units containing 12 million hectares. and to redistribute theseto 500.000families.about three-quartersof the target area still remainedto be expropriatedand reallocatedbefore the end of 1975.however.and is the basicunit of agriculturalreform in the Sierra. Following the land redistribution during the 1930s. In 1967-68. TheSAISisa unique form of farm organization. In 1972. the concentration may have fallen back as a result of the distribution of another 35 million hectares during the last decade.the top 20% of the ejidatarios accountedfor only 45% of all ejido income.8 million hectaresof this area.while in a few casesland hasbeen to added to the holdings of Indian communities. income was more evenly distributed.Only a small number of individual farms has been assigned former tenants. used for investmentin industry to supplementtheir other resources.productiveand profitable sugarcomplexes the north coast. but the bulk hasbeen placed in the handsof workerowned cooperatives.implementation is well behind schedule.Since then.TheSAISrepresents attemptto an 72 .More such investment and a mechanism for selectiveconsolidation of small farms will be required to ensure that the impact of the reform is maximized. The agrarianreform law of 1964concentratedon redistribution of inefficiently managedlatifundia (large landed estates)in the Sierra. While the top 20% of private farmersreceived60% of all privatefarm income.the concentration of landownershipincreasedagainbetween1940and 1960. Despite the priority given by the government. a total of 4. Peru Betweenthe start of land reform in 1963 and 1972. to which the land title is then transferred. Expropriatedlands that havenot yet been resettledcontinue to be operatedunder direct governmentsupervisionuntil a cooperativeor SAIS(Sociedad Agricola de InteresSocial) farm organizationhasbeen formed.Annex 2 resourceendowment and in the extent of public investmentin complementary infrastructure. Rural income distribution is still skewed.The more fundamental reform law of 1969was the basisfor the expropriation of the large.50% of the farmers earnedonly 20% of all farm income (including personalincome from sourcesother than agriculture). Four different categoriesof farm organizationscan receive redistributed land.Among ejidatarios.The target for the current Five-Year Planis to expropriate26.Over 100. Well managedproductive units were exempted.7 million hectareshas been expropriated.000families have been settled on 2.A of limit was establishedon the size of holcdings (150 hectareson the coast).
employmentopportunities in agriculturewill increase only from 1.000 families. agrarianreform is providing the basisfor socialand economicchange. roads. 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. Evenif all land which can be expropriatedis redistributed.000families with insufficient land to provide adequatesubsistence eligible to are benefit through the land reform program. However.The SAIS.unemployment problem. In this manner.will still lack a minimum subsistence landholding. and are to be used in community development projects involving schools.6 million. Nearly800.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.Membershipof eachSAISunit consists the cooperaof tive of the production unit and of the communities surrounding it.surplus manpower is given employment. power reticulation and housing. while the number seekingwork in agriculture will rise from 1.Managementof the SAISis in the handsof professional employees. the governmentis faced with problems of maintaining or raising productivity levels attainable only through exploitation of scale economies.9 million to 2.population and economic potential.the proposed solution to this dilemma. * In anyattemptto meet socialneedsthrough redistributinglandand income in the Sierra.1 million.Haciendaproduction is almost entirely basedon extensivegrazing of mountain pastures. 73 . the share of each group is determined by the land reform agency. It can be regardedas a second-degree cooperativewhosemembersaresocialbodies instead of individuals. The land reform programalone will not be able to solvethe rural . Eachgroup contributesto the capitalof the enterpriseon the basisof resources. The debt assumed eachSAISunit is to be repaid from profits in by 20 years following a five-year grace period.32million to 1.about 500. and the rather meagerprofits can be usedin developingbadly neededphysicalinfrastructure.the full market value of expropriatedlivestock hasto be paid in cashwhile fixed capital is to be paid for largely in agrarianbonds. Evenif the optimistic targets for 1975 are met. 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.mostly in the Sierra.therefore. Legally. accountedin 1972 for 10% of the families benefiting from the agrarianreform program. Profitsare allocatedto each membercommunity in relation to its sharein the SAIS.
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