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Sector Policy Paper
Page Introduction .......................................... Summary .......................................... Chapter 1: Characteristicsof Land Reform ............................. Man and Land........................................... Context of Land Reform .......................................... Dimensionsof Land Reform....................................... Chapter 2: Land Reform and EconomicDevelopment ...... ............. Implications for Productivity....................................... Land Reform and Employment ........... ......................... Land Reform and Equity ......................................... Effects on Marketed Surplusand Savings.......... .................. Tenancy Reform ...................... .................... Implementation Issues .......................................... Chapter 3: The World Bank and Land Reform .......................... Changing Concerns.......................................... Technical Assistance...................... .................... LendingOperations.... ...................................... Major Policy Options.......................................... Annexes 1. The Context of Land Reform .................................... Ratios of Population to Land .................................. Population and Production.................................... Distribution of Land........................................ Tenantsand FarmLaborers .................................... Landless Workers .......................................... 2. Experiences with Land Reform ................ .................. Republic of China.......................................... Republicof Korea .......................................... Japan ........ . India...... Iran...... Morocco ........ Yugoslavia ...... Kenya ...... Mexico...... Peru...... 3 5 15 15 16 20 25 27 29 30 31 34 35 38 38 38 40 46
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but rightsof access landare restricted.Where the pattern of land control is skewed. the distribution of income is generally uneven. Conditions governing agriculture vary enormously in developing countries.At the sametime.As shown in Chapter1.Changingthe pattern of landownershipand redistributing land can contribute to increases output in somecountries but will makelittle difference in in others. Land is one of the basicfactors of production for food and other agricultural products.the livelihood of more than half of mankind dependsdirectly on agriculture.With food production rising in the developing countries at about the same rate as population. as the traditional pattern of group ownershipand communalrightsiseroded in favorof individual ownershipwith varyingdegrees equality.Somecountries haveprospectsfor expandingthe frontier of cultivation to absorbmore labor. nonagriculturalemploymentopportunities are not expandingrapidly enough to provide adequateincomesfor all those enteringthe labor market. at least six land-tenuresituations can be delineated. At present. where questionsof access and rights to land are of paramount interestto morethan 2. the population is moreevenlyspread.one is confrontedwith a rangeof cultural and political situations-based on different patterns of social organization and customs-and with different levels of development. In other countries. Thus.the averageman-land ratio is worsening.although to someextent it is the poorer land that makesup the larger holdings.The differencesamong thesetypes point to the varying reforms necessary achievemore equitable land access to 3 .The greatestdisparitiesarefound in LatinAmerica. In Asia and the Middle East.maldistribution is reflected in the landlord-tenantproblem. Much of this increase will haveto come from higher output per hectare.000million people. Distribution of landin terms of sizeof holdingsvariesfrom country to country.INTRODUCTION Land reform is concernedwith changingthe institutional structure governingman'srelationshipwith the land. there is growing to pressureon land resources increaseoutput. while in yet others changingthe rights to land will makelittle direct contribution toward absorbingmore labor. therefore.But one characteristicthat is common to all is a very rapid growth in rural population. while pressureon the land is increasing. Ninetenths of this total agriculturalpopulation is in the developingcountries.Much to of Africa presentsa different problem.more labor could be employed in the rural sector through a redistribution of land. of In terms of land reform policy.
therefore. at 'All references to the World Bank in this paper are to be deemed to refer also to the International Development Association. while it is possibleto identify the need for land reform. unless the context requires otherwise. 4 . The manifestationsof this interaction are seldom benign for the majority of the land-based population. many developing countries are experimenting with a variety of possible solutions-with different forms of rural organizations. While recognizingthe broad context of the land reform issue.Accordingly. A situation that hasseemedrelatively stable and equitable for decadescan become untenable.and improvedproductivity in specificcountrysituations.' In pursuing this question.This dynamismmeansthat a solution which was appropriateten yearsago maybe inappropriate today. it is difficult to makegeneralprescriptionswith regardto the form of landholding or pattern of distribution necessary achievethe multipurpose obto jectivesof development.one is dealing with a dynamicsituation. Not surprisingly.where rural population growth and changing technology interact with the existing institutional structures of rural society.this paper focuseson a much narrower aspect-the appropriate role of the World Bank.Chapter2 examinesthe economic implications of land reform in relation to the goalsof development.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 1 looks at the characteristics land reform in terms of both its rural context and of its component elements. Further. ranging from communes to private ownership.Chapter 3 reviewsthe Bank'spolicy in relation to land reform. while someexperiences with land reform programsare summarizedin Annex 2. The fiscal year (FY)of the two institutions runs from July 1 to June 30.
pressure a limited land baseor an ideologyof on basedon more even distribution of land or income. improve land productivity and broaden the distribution of benefits. Elsewhere. Where holdingsarefragmented. In contrast. When individual ownershipof the market economytype isthe norm but the ' distribution of land is skewed. when there are exploitative landlord-tenantsystemsof the Asian or Latin American feudal type. land reform is pursuedin response political to for pressures socioeconomicchangearising from factors such as increasedpopulation. In most instances. reform incorporates changesin the rights of tenants. egalitarianism Land reform. although in manycountries examplescan be found of more than one type.an approresources priate reform might involveconsolidationof holdingswithout change in the patterns of ownership of land. redistribution of ownership to existing tenants. by its very context. reform in states with extensivegovernmentcontrol may involve the transferof some l landfrom the stateto individuals. social or equity considerationsare the main concerns. the appropriate reform might involve a program of supervisedcooperative land managementwithout changing the distribution of land. The other three major types have a modern context: the private ownership of land common in most marketeconomies.as presentedin Chapter1. of The systems land control in developing countriescan be classified into six types. economic and social dimensionswhich in turn havesignificantimplications for development.Thus. In practice. land reform might involve changing 5 . reform may require subdivision of large holdings or transfer to the state.SUMMARY Landreform involvesintervention in the prevailing pattern of landownership. Other variationsof land reform focusmore on the economicuseof than on equity.the stateor collectiveownership of socialist countries. Three of the six types are found in a traditional context: the feudalisticlandlord and tenant system of some Asian countries. Where communal lands are eroded or depleted. has interlinked political. control and usagein order to change the structure of holdings. the feudal Latin American systemof large farms. and the plantation or ranch type. and the communal landownershippatternsof manytribal groups (especiallyin Africa). Land reform necessarilyimplies many different kinds of adjustments in an array of situations where there are great variations in individual equity and agricultural productivity. or the replacement of the landlord by the tribe or the community. which is often interspersed with otherforms of tenure.
the policies followed are not a matter of economicsalone.suchas in Kenyaand Peru. TheAsian and LatinAmericanfeudal types. and reach far beyond any purely economic calculus.especiallywhere the processof reform leadsto a breakdownof the institutional structure of agricultureand leaves nothing in its place.the degreeof concentrationvaryingwith the typesof tenuresituation. have high degreesof property concentration. as stressedin Chapter 2. and only 7% of all land in holdings. and the plantation ranch types. Considered 6 . Table 1:6.The judgments of policy makers differ.havepursueddifferent approaches.Table 1:9. Distribution of Landand Income Although few data are available. These will come about only if adequateprovision is madefor the supplyof necessary inputs and mandatory servicesto the usersof the land. thesedo not require redistribution but eventually lead to a more economic use of resources. alone is not sufficient it for improving land productivity and distribution of income. Thedistribution of landby size of holding ishighly skewedthroughout the world.the distribution of landownership is known to be skewed. the organization of the supply of inputs to accompanyany land reform program is essential. it must be recognizedthat a policy for land reform for a given situation cannot be statedin simple terms. The typology outlined in Chapter 1 makesit clear that there are situationswhere land reform is a necessary precondition for modifyingthe structureof a societyand raisingagriculturaloutput. As shown in Annex 1. Clearly. Changes in patternsof landownership not automaticallyleadto an increase will in output or technological change in agriculture. others favor communal or collective control over land. an estimated80% of all holdings are lessthan five hectaresin size. The socialist and traditional communal types have low concentrations. with about 40% less than one hectare. The casestudiesin Annex 2 showthat reform-minded governments. Indeed.Theseholdings account for approximately20% of all cultivated land.Again. Somegovernmentsfavor individual ownership of land. Individual countries are classifiedon the basisof landownership concentrationin Annex 1. while land reform in itself may be necessary.tenancyarrangements with emphasison providing securityof tenure so as to encourageon-farm investment. However. Finally. Any policy involves fundamentaljudgmentsabout the adequacyof an existingsystemand the most appropriate alternative.The market economy type falls somewhere in between. Theyalso reflect politics and ideology.
Table 1:8). so that absorption of more people into agricultural activity requires more intensive cultivation of land already in use. a concentration of large holdings in a semiarid region may reflect a smaller concentrationof wealth than a concentrationof small holdings in an irrigated area. Social and Economic Issues The rural population in developingcountriescontinuesto increase by more than 2% per year. massiverural underemploymentis accompaniedby high ratesof open unemploymentin the cities and growing inequality in the overall distribution of income. Exceptin a few places. Secondly. does not reflect precisely the patterns of distribution of wealth or income. by contrast.the distribution of income will be more skewedthan the pattern of holdings.Thisis because.there is no virgin cultivable land left.Less than 20% of holdings(thoseover 50 hectares) account for over 90% of the total area in holdings.40% of the land (accounting for almost 80% of holdings) is in holdings of lessthan five hectares. The distribution of holdings by size is frequently usedas a first approximation in estimatingthe distribution of wealth and income in of the agricultural sector.and more than one-third of all holdings (those less than five hectares)account for only 1% of the area held (seeAnnex 1. there is a greaterconcentrationof landownershipthan of holdings. In many.as evidencedby widespreadtenancy. 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.and the increasing pressureon the land through population growth highlight the double challengeof rural development:to raiseproductivity and in7 . In Asia. adding to the already heavypopulation pressureon the land.especiallyin partsof Asia (see Annex1).Frequently. The need to absorb more people in the rural areas differs among developing countries.separately.the income of sharecroppers and tenants may be little different from that of landlesslabor. however.the distribution of holdings by size is not the sameas the distribution of ownershipof land. in most cases. firstly. But.The skewness the distribution of holdings. The extremepoverty of manywho live on the land.The distribution of income in theseregionswill depend betweenowners and tenants largely on the contractualarrangements or sharecroppers.the pattern in Latin America is particularly skewed. in general.all landis not homogeneous.
In some situations.landownersoften prefer to underutilize land. The consumption of food by poor growers may also be lesscostly than the consumption of imported or capital-intensiveconsumer goods by the better-off farmers. if used productively. mere redistribution of land may not sufficeto raisefarmeroutput substantially without accompanying agrarianreformsand new services. this will tend to exacerbate inequalities in income distribution. this may necessitate food imports to meet the needsof urban consumers. increasesin the population of working age create additional demands for work and income. quesWhere land is tions of major importance in these circumstances. becausehalf the benefits will go to the other party.or are by leaving it unused.come in agriculture and. irrigation and mechanizedoperations(evenon a small scale). however. Where landownership is skewed. increasingpopulation pressurewill inevitably drive up the price of land. various reasons. thus benefiting those who own land. 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.tenancyarrangements such and tenants that landlords are discouragedfrom making investments from applying variable inputs. than do large farmers. These same circumstances(relating to employment and income distribution) give rise to questionsabout the efficiency of land use For under existing arrangements. often depend on the effectiveness new technology when usedon of small as comparedwith large farms. the fragmentation of holdings causes great inefficienciesin land useassociated with transportation.however. to provide more employare to ment. per unit of output.In general terms.The economicbenefits. therefore.On the other hand. Theseeffectson output maybe reinforcedby someof the possible side effects following land reform. market less. could serve to augmentoutput.In other cases. at the sametime. At the same time. A strong casecan be madefor land reform (including tenancyreform and consolidation)in situationswhere landwould otherwisebe underutilized in termsof its production potential. The main reason is that smaller holdings are worked with bigger inputs of labor than arelargeholdings.Smallfarmersmayalsosavelessper unit of 8 . the additional labor available. marketable. either by working it themselveson an extensivebasisinstead of through tenantson an intensive basis. Access land.and the conditions that governaccess. the additional food consumedby small farm families might have otherwise been purchasedif membersof the family had moved to the city. Smallholderstend to consume more of their own produce and.
firstly. thosewho do not work on the land still require and should havesomerights of access the products of to the land. The evidence suggests. Few land reform programs provide for sucha minimum limit despiteevidence.and 9 .The concentrationof control over land provides a power basefor many groups in developing countries.therefore. Many countries have legislated land reform. and.however. but only a few can be said to have implemented it. that allowing farmsto becometoo small (relativeto the bestavailable technology) may be just as unsatisfactoryin terms of equity and efficiencyasan uncontrolledtenancysituation.attention should be paid to both a minimum and maximum farm size. and that in the aggregate they may also have larger savingsthan large farmers. In this respect. Recent Experience with Land Reform Experience with land reform in the past points to the overriding importanceof the political factor in securingmeaningfulchange.Land is a symbol of authority and a source of political power.that land reform is often a central issuein political debates. that Kenyaand Mexico. to ensure a scale large enoughto provide a salablesurplus to meet the needsof urban consumers.asin the Republicof China.It is not surprising. A meanof to ingful land reform programwill inevitably destroyor limit the power baseof manypersons. especiallywhere the landowner controls the access peasants their only sourceof security-land.and that thesedebatesare often couched in terms of redistributing political power as well as wealth. to ensurethat smallholdingsare large enoughto provide food sufficient to meetwith a highdegreeof certaintythe minimum physiological needs of the farm family.from manyareas. A program basedon the prescriptionthat "the benefits should go to those who till the soil" is often reasonable an agrariansociety. And in these casesthe reforms were implemented only when there was a change in government in circumstances favoreddrasticchange. A second factor of importance in making reform effective is the creation of institutionsto implementthe reformsonce legislated. especiallyfor fresh produce. that small farmers save proportionately more than urban dwellers.Japan. in But in a partly urbanizedsetting. secondly.though these maybe directly investedin the smallholding. Ambitious programs of land reform will seldom be implementedunlessthere are shiftsin political sentimentand power. Thesesizesmight be designed. The food and fiber needs(and the spatial requirements)of the nonfarm population are not infrequentlyoverlookedby the advocatesof land reform.income.
may be a critical condition forsuccessfullandreform. although there is evidence to suggestthat these costscan be kept small and temporary.with emphasison securityof tenure beinga particularly important theme. that especially involving local representation. This has usually involved organizingthe beneficiariesto create follow-up pressure.to pressfor continuing development.In other countries. Minimizing such costs necessitates provision of servicesconcurthe rently with reform implementation. Becauseof this. contributing substantially the ultimate economicdevelopmentof both to countries. and manysocioeconomic benefits.For example. Taiwan and Venezuelasuitableinstitutionswere established to ensurethat land was indeed transferred. - The World Bankand Land Reform The World Bank has taken an active interest in land reform on a number of occasions. emerge only in the longer run and accrue for many years subsequently. incorporating as much forward planning asfeasible. The land reform experiencein much of Asia and LatinAmerica suggests someform of rural organization. land reform hasoften proved costly in terms of lost output.the effectiveness land reform of may be relatively limited in the short run.a community of interestsbetween landownersand officials. there is little doubt that the long-run effects for their total societies have been overwhelmingly favorable. A third conclusionis that land reform is rarely undertakenwithout considerableupheavaland lossof production.Concern hasusually been focused on new or improved possibilities for production following changes in the tenure situation. in assessing effects of land reform. While the direct short-run effects of the land reforms in these countries havenot been considered wholly beneficial. As the country experithe encessummarizedin Annex2 reveal. for since thesesystemsare almost alwaystied to the operations of the larger farmers who are dispossessed. A fourth considerationrelatesto the problem of perspective.over time. such as are associated with greatersocial mobility and improved political stability. The restructuring of landholdings is often accompanied by the destruction of traditional deliverysystems input needsand marketing. More recently. largely nullified positive reform efforts.combinedwith an absence organizedpressure of from the beneficiaries. the extent and gravity of the 10 . in Japan. rather than because any deficiency inherent in the small relative to the larger of farmers.The casesof Japanand Mexico are particularly significant in this respect.
specially structured settlementschemescan serveas second-bestsubstitutesfor. it is recognizedthat the Bankcannot force structural change.are discussedin Chapter 3. this may be because relatively few casesof land reform. it can only support appropriate efforts within existing structures.However.employment problems and income disparities in developing countries have causeda new concern over land reform. 11 .Someexamplesof World Bankinvolvementin land reform programs. Guidelines Country 5 1. improving income distribution and expanding employment. Governmentswhich accept a basiccommitment to land reform should consider three components: (i) redistribution of landownership to reduce the presentmaldistribution. and that the World Bankshould support reforms that are consistentwith these goals. such paymentsusuforeign ownersare involved) ally constitutean internal transfer(unless and. or supplements to. Even where the land transferred is purchased from the previous owners. A commitment to land reform implies simultaneousaction to create or develop an input supply systemto meet the special needs of the beneficiariesof land reform. In part. its preferencesregarding national policy choices and those which are consideredconsistentwith the Bank'sdevelopmentgoalsare set out below as country guidelines. from an equity aswell asa productivity standpoint.or specialbranches fund allocationswithin or existing organizations supply credit. this report concludes that land reform is consistentwith the developmentobjectivesof increasing output. In addition.notably in Malawi and Tunisia. But also relevant is the fact that the financial requirementsof land reform tend to be relatively limited. the amounts involved are usually small. particularly in areaswhere the political situation was reasonablystable and otherwise conducive to World Bank involvement. and (iii) consolidation. This may require either the creation of new institutions. In sparselypopulated regionsor countries. especially where paymentsare in the form of bonds. the redistribution of land currently in use.Thesesameconclusions reflectedin are the subsequent Bankpolicy guidelines. Although the Bank's direct action must be limited. In general. to including research extension.are not attractivefor externalfinancing. 2. The Bank'sexperiencethrough project financing of land reform there have been hasbeen very limited. and 3.where necessary. inputs and technical services. (ii) tenancy reform. thus.
researchactivitiesand field demonstrationsin suchcircumstances. Equity-oriented land reform should be so programmed that (i) the effectiveceiling on size of holdingsis low. These effects can accrue if (i) the settlersare the really poor small farmers or landless workersand an input supplysystemis availableto support their operations. In such cases.There may also be a need for special training facilities. Where the shortageof land is so acute that even with a low ceiling both smallholders and landless workers cannot be given minimum holdings. and allowed only under specified typesof contracts. Where efficient large-scaleplantations or ranchesexist. and a rural works program should be organized for the landless. 11. Research should be organized to evolve a low-cost settlement policy.4.and (iv) owned and selfoperated land. 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. 9. preference should be given to smallholdersin the allotment of land. 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. 5. Experiencein EastAsian and some Latin American countries clearly showsthat the organizationof beneficiaries. these need not be broken up.sucha structurecanproduceat least as muchper unit of landasa largefarm structure.With a seed-water-fertilizer availablethat is neutral to scale. 12 . 7. (ii) the beneficiaries belong to the poorest group. 8. as well as leasedland. and (iii) tenancyis discouraged.settlementschemes the same effects as the redistribution of existing holdings. is an indispensable success. is redistributed. It should be recognizedthat a small farm structurecan generate employment to absorb underemployed labor in crowded regions where there is no short-term prospect of absorbingit in nonfarm or technologynow largefarm employment. but it should be acceptedthat in such cases the objectives of reform can only be realized if the enterprisesare tax coveredby a progressive systemand the workers participateadequately in the benefitsof the enterprise. (ii) the size distribution of the new holdingsis equitable. Wherever settlement policy is used to supplement land should be plannedto haveapproximately reform.both before and condition for its after the enactmentof reform. 10. 6. (iii) the extensionand (nonland) input distribution systemfavorsthe beneficiaries.
13 . so long as the reforms and related programsare consistent with the objectivesstatedin the previous paragraph. The Bank will support policies of land reform designed to further theseobjectives.registration of land titles and similarservices. technicalservices infrastructureprojand ects designedto meet the specialneedsof land reform beneficiaries.the United Nations Development Programme(UNDP)and other organizationsto provide support and assistance member governmentsseekinghelp with the specificato tion and design of land reform programswhere theseare in keeping with the Bank'sobjectives. preferably against very low compensationpayments.including appropriate tenurial arrangements projects designedto servethe and needsof smallfarmersand settlers. Guidelines World Bank'sPolicy 1. Theseprogramswould include credit. with special attention to the needsof the poorest groups. 3.Suchcontractsshould be promoted with a system of incentivesand deterrents.fixed cash-rent contractsaresuperiorto crop-sharingcontractsbecause they encourage the use of inputs to the optimal level. ways of providing for a distribution of benefitsconsistentwith the goalsoutlined under (1) above. should be undertakenbecause. owner-operatedfarming is likely to be more efficient and equitablethan tenantfarming. The Bankwill makeit known that it standsreadyto finance special projects and programsthat may be a necessary concomitant of land reform.This support will include financial and technical aid with cadastralsurveys. 4.it canbe mademore efficient andequitable if it is combined with cost sharing. The Bankwill continue to explore. The World Bankwill give priority in agriculturallendingto those member countries that pursue broad-basedagricultural strategies directedtoward the promotion of adequatenew employmentopportunities. 2. But where crop sharing cannot be eliminated becauseit provides risk insuranceto sharecroppers. TheBankwill cooperatewith the FoodandAgriculture Organization of the United Nations (FAQ).tenancy might be a more efficient policy. in general.The incentivescan include the accrual of legal rights in land and the availability of credit and other inputs only if preferred types of tenancy contracts are implemented. When the land-labor ratio becomesfavorable. the conversion of tenants into owners of the land they cultivate. through its agricultural and rural development projects. 12. Generally.
as reflected in the pattern of landownership.if sedentary forms of agriculture are possible.in order to avoid adjustments which will increasethe maldistributionof income and cause economichardship. It will continue its support for programsof economic directed toward the specialneedsof the type and technical research from landreforms.it will carefully consider whether the fiscal arrangements appropriate to ensure are that a reasonable share of the benefits accruesto the government.the Bankwill not support to projectswhich do not include land reform. Where land is communally held without regulation of access.including its social dimensions. The Bankwill pay particular attention to the consequences of the interaction of new technology and the prevailing institutional structures.in such cases. Where land is held under someform of tenancy. with particular attention to developing approaches which will lowerthe cost per family settled. The Bank will support and encourageresearchrelated to the economicsof land reform in its broadestaspects. 14 . The Bank will not support projects where land rights are such that a major shareof the benefits will accrueto high-income groups unlessincreases output and improvementsin the balanceof payin ments are overriding considerations.the Bankwill foster the adoption of tenancy conditions and sharecroppingarrangementsthat are equitable and conducive to the optimal use of resou rces. In circumstances be achievedonly subsequent land reform. 11. where increasedproductivity can effectively 9. 12. 6. 10. of small farmerlikely to emerge 7.The Bank will undertake studies of the costs and benefits of settlement projects.or pursue land usageand access arrangements that are compatiblewith the long-run productivity of the land and the welfare of the residentpopulation.5. 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. the Bankwill encouragesubdivision.
different systems land managementand patternsof holdingshave of emerged in adjacent zones. Similarly.the allocativeprocess mayserveany number of ideological ends. To the extent that the statecontrols the land. whereasthe more tropical and arid areasare better suited to shifting cultivation or livestock herding. for instance.land is often seenmerelyasone factor of production in a highly developed commercial agriculture. and it is the statewhich organizes and controls the land accordingto its own criteria.In countries with mobile populations which have ample opportunities for employment. the smaller the proportion of the population in agriculture and the less significantthe role of land in the economy. In EasternAfrica. held and traded by individuals for private gain.limited alternativeopportunitiesand increas15 . Under some other ideologies. cultural. religious and political. economic. The political ideologiesof governments also havea bearingon the relationshipbetween people and the land.traditions of crop sharingand other arrangements surroundingland usein varying situations.The more industrializeda country. in less developed countries with large rural populations. many socioeconomic factorsaffectcustomsof usufruct.While this right might be of constrainedin the public interest. In addition. Where land is inherited by the oldest heir and not subdivided. However. the right to own land may be vested solely in the stateor in semipublicinstitutions. The People'sRepublicof China. and patternsof landholding and land use. laws and customsgoverning inheritancehavean effect on the distribution of land.Chapter 1: CHARACTERISTICS OF LAND REFORM Manand Land Man's relationship to land.Somegovernmentshaveused control over land to implementpoliciesof geographical separationof racialgroups.are shapedby the interaction of a complex of forces-climatic.The right of the individual to own.on the other hand. individuals do not have the opportunity to acquire and accumulateland. the patternof holdings is lessfragmentedthan in societieswhere the customis to divide holdings equally among all heirs. physical conditions in the temperate areasare suited to sedentaryagriculture.As a result. haschangedrights to land and the organizationof work severaltimes over the past 25 yearsas part of a drive to eliminate rural inequality. The level of economicdevelopmentof a country hasa strong influenceon attitudestoward land. sell and accumulate privateproperty-including land-is one of the cornerstones the market economy. land can in generalbe exploited.
(6) the agricultural system. The established pattern of landownershipis basicto both the social organization and institutional structures in rural areas. 2.When these interacting elements are taken into account. Low capital intensity. Greatsocial inequality. Productionmainlyfor subsistence. producerssee landas more than a factor of production. (4) the legal system. access land may provide at leasta subto sistenceincome. Institutional structurecentralized. Great socialinequality.These are characterizedas follows: 1. The social hierarchy in most agrariansocietiesreflectsthe kinds of access that different groups have to land. Low labor productivity. Landvery scarce.(5) the demographic situation. it may well provide the margin between destitution and subsistence. In thesecircumstances. (2)the structure of the economy. Greateconomicinequality. Low land productivity. it is possibleto delineate six main categoriesof land tenure and land use.alsodetermine of the accessibilityof external institutions and servicesto the various groups. 16 . High labor intensity. Mainly operatedby sharecroppers. FeudalLatinAmericanType High property concentration. Low level of technology. and (7) the national resourcebase. FeudalAsian Type High property concentration. Great economicinequality. 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.The institutional structures which formalize the various meansof control and the relationshipbetweencategories land users. while individual status within these groupsdependson the amountand quality of land commanded. (3) the social system.ing pressureon the land.
Institutionsand services dispersed. Market Economy Type Medium property concentration. Low levelof technology. Labor-extensive. 4. Medium socioeconomicinequality. mediumor high labor productivity. Low capitalintensity. Low. 17 . Productionfor subsistence. Socialist Type Propertyright vestedin the stateor a group. Medium level of technology. Centralizedor decentralizedcultivation. and Institutionalstructurehighly centralized. Decentralizedcultivation-usufruct rights for membersof group. Decentralizedcultivation. Low. High landproductivity. Traditional Communal Type Low property concentration-sovereign rightsvested in community. Market production oriented. Moderateor high socioeconomic equality. Labor provided by squatters. High level of technology. Operatedby owner or manager plus hired labor. Capital-extensive. Low.medium or highsocioeconomicequality. 3. Low land productivity. serfs or sharecroppers.medium or highland productivity. Productionfor subsistence export. Low level of technology. High labor productivity. Labor-extensive.Low land productivity. 5. Supportingservicestructureunderdeveloped. Medium labor intensity. neighboring smallholdersand migrantworkers. Capital-intensive. Low labor productivity. Low labor productivity.
Great income inequality. by the communal landownership pattern of certain tribal groups in Africa. accompanied by extensive poverty and vulnerability to seasonal effects. Supportingsystems centralized. unlessthere are offsetting changesin technology. The two systemsdiffer in their ability to respond to changing external conditions and especiallyto new technology. and often does. more so than the pattern of landholdings. on the other. Plantation Ranch Type High property concentration-owned by state or foreigners. land is common property and access it is relatively unrestricted. but face difficulties as the man-land ratio declines through population growth.on the one hand. However. landownership is vested in an elite minority with the majority having access through tenancyarrangements various kinds. by the feudalistic landlord-tenant systemfound in someAsianand LatinAmericancountriesand.The communalsystemmanifeststhe samepressuresby compressedfallow periods and declining soil fertility. Medium or high level of technology. to Whereasin the feudalistic systemthe distribution of landownership and benefits are highly skewed and classdifferentiation is marked. Low or mediumlabor productivity. In a traditional context. Productionmainlyfor export. In the landlord-tenant system. In the communalsystem.Productionfor marketor subsistence. Great socialinequality. Table1:11). becomeeducatedand innovate both through experimentation 18 . extremes in the pattern of land control are exemplified. Operatedby manager pluswage labor. Both systems are relatively stable under favorable conditions. In the landlord-tenant system. Tables1:6 and 1:8). 6.by contrast. The landlord elite.the distribution of income is also highly skewed (see Annex 1. by virtue of its privileged position and power. can. since holdings (the only category for which the Bank has data) involve leaseholdunits for which rent is paid on a share basis. the communalsystemhas relativelyegalitarianland access and class differentiation is lessmarked.The ownership of property is of generally highly concentrated. land pressuresare reflected in a growing army of landless people and widening income differentials (see Annex 1. overgrazing and increasederosion. High landproductivity.
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. Suchholdingsare typically operated as family units with little hired labor.thesediffer significantly in their technologyand input mix aswell as in the degreeof market orientation. its primary concern may be to promote its own narrow interests in terms of wealth and power.on the other hand. land is held by individuals and. but the tendency toward a corporate legal structure and dependence on hired labor differentiate them from privatelyowned family farms. often providing for the existenceof private smallholdings in parallel with larger social units. In the socialistsystem. the extremesin patternsof land control are seen respectivelyin the private ownershipof land. in somerespects.it has often created inequities as people have been compelled to give up rural pursuitsor havebeen squeezedinto land-scarce rural enclaves. while usually subject to special restrictions. for instance. In a modern context. But some variations remain within many socialist systems. While private ownershiphasgenerallybeen compatiblewith technological progressand the economicadjustmentof agriculture.however. can be bought or sold like any other commodity. Under private ownership. It hasbeen most unsatisfactory where ownership patternshave become skewedbecauseof the growth of large farms.(in doing so. and the subsequent emergenceof economic 19 . and the state or collective ownership characteristicof socialist countries. specialcategory a of the market economy type.)Thecommunalsystemgenerallylackssuchan institutional and tendsto be both static in itstechnologyand relatively mechanism insular.by displacingtenantsthrough mechanization.private control has been most satisfactory where population pressurecould be offset by colonizing virgin land or moving people out of the rural sector.and the adoption of externalideas. but such communitiesseldom manageto remain completely isolatedfrom externalinfluences.combinedwith limited opportunities for peopleto move out of agriculture.with control determined in accordancewith the objectives of the state. However. little or no provision is made for individuals to acquire or accumulateland.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. Generally.Theseform. which is a fundamental aspectof the market economy and common in mostWestern countries. Although similar in legal and institutional respects. this right being vested in the state.
a high level of fragmentation can make canal irrigation virtually impossible and seriouslyimpede mechanized operationseven when on a very small scale.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. In such circumstances. For example.It is frequently pursuedas a goal in itself. Usually.or medium-sizedfarms and a reduction in the number of large holdings.this involves an increasein the number of small.on the one hand. Stateor communal control has led to fewer interpersonal inequities. in some situations.dualism.and on the other. it is clear that land reform will involve different changes different types in of situations. the tenant cannot find the capital for investmentor lacksthe securityof tenure that would guaranteea return from it. but in a development context is usually seen as a part of agrarian reform or of rural development programs. land reform may become a prerequisiteof development. Land reform raises issuesof equity in the context of both the traditional landlord-tenant relationship and the modern skewed ownership pattern. especiallyin the traditional feudalistic and communalsystems. all land can be nationalizedand regrouped into state-ownedholdings. Landreform caninvolve varyingdegrees change. although in most casesnot without some broader economic inefficiencies. administrative. But. whether primarily an equity or a production concern. Alternatively. all of which might be large. Dimensions of LandReform Land reform is thus concerned with the interrelated aspectsof productivity and equity of land use. 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. Land reform differs from political. In both these contexts. Further.including some of or all of the following: 1. In many situations. 20 . the landlord cannot capturea profitable share of the return on his investment.In other cases.the contractualsharearrangementis such that neither landlord nor tenant are able to introduce new technology because. it is often a highly political concern. the prevailing tenure conditions are the major impediment to development.
The new owners may farm cooperatively or as individuals. although land settlement might be a meansof bringing unusedlandinto production.Alternatively.Similarly. Changesin conditions of tenure without changing ownership or redistributingland. Structural Change In the main. even though they might be useful in identifying problems of management.Thus the Republicof China. Landsettlement.The kind of structural changeinvolved dependson the prevailingtenure type and the proposedalternative. Redistributedland can be allocated to new owners or to farmersworking on the land. land reform is seenas a meansof bringingabout structural changes in the agricultural sector.the Republicof Korea and Japanmoved from a "feudal Asian" to a "market modern smallholding" type. by itself. Consolidation of individual holdings.and so forth. with some traditional farms retained and some "plantation ranch" type variations in certain areas. India and Iran moved from a "feudal Asian" toward a "market modern" type. This can be done with or without changing the distribution of landownershipin terms of acreageor valuebelongingto eachindividual. Changesin landownershipand tenurial rights. dependingon the manner in which the settlers are selectedand the size distribution of the new holdings.land need not be redistributedbut tenantsor workerscanbe madeowners of the land they work. may or may not have an impact on the structure of landholdings in a country. pilot projects cannot be consideredto be land reform for they operate within an existing structural framework. In that case.Changesin conby ditions of tenure would include providing security of tenure.Kenyaand Morocco redistributed the large-scale.with or without physical redistribution of land. 3. Fragmented into contiguous blocks of land. resultis generallya redistributhe tion of income away from the former owners of the land to the new owners. 4. introducing equitable crop-sharing arrangements. By definition." or arrangements of a subsequent reform. The rightsof thoseworking on the land can be safeguarded law without a changein ownership.As reflected in the country experiences summarizedin Annex2. thereby reorganizing the holdings can be regrouped physicalpattern of control. These changeswould also include the conversion from customaryto legal rights to land. the or that might be part economicsof various "models. alien-owned "market economy" type holdings of their colonial eras. thereby altering the size distribution of holdings or the distribution of income.2. cooperative land management.some going to smallhold21 . therefore.landsettlementon the frontier does not usually constitute land reform. most changes involve a shift from traditional to modern types.
On the other hand. While landtaxesand estatetaxes often are considered significant elements in fiscal policy intended to redistribute income.But this is likely to bring about structuralchangeonly over a long period of time. providing infrastructureto facilitate agrior cultural production.training and storagefacilities. they cannot ensure the same degree of structural reform as can land reform and have. such taxesmay provide a disincentiveto investmentwith the potential of increasingproductivity or bringing new land into production.suchas fertilizers. maynot be it politically feasible to have land reform-although it might be both 22 . increasingallocations to the agricultural sector in order to expandresearch. such as a land tax. availableand increasing credit for their purchase. In other cases. and a mixed "market modern" and "socialist" type structure.in general. 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.been quite ineffective. In situationswhere fiscal measures-whether of a redistributive kind or a typewhich providesa returnto the stateon its investmentare found to be ineffective. land reform may be the only alternative option if economicdevelopmentisto be pursued. A more likely fiscal instrumentto encouragestructuralchangeis a graduatedestate tax which would force estatesto disposeof land to meet their financial obligations.respectively. making physicalsupplies. extension.there may be no need for land reform since land is alreadyevenlydistributed. will not lead to structural changesin agriculture-at least not in the short run. In any event. Agrarian Reform Agrarian reform is a much more comprehensive conceptthan land reform.ings of the "market economy" type and someto "plantation ranch" type units. in some instances.Thesemodificationsmight include changingprice policiesso as to turn the terms of trade in favor of the agricultural sector. Thesechangesin tenure systems were in all casesaccompaniedby changes relatedorganizations in and services. Mexico and Perumoved from a "feudal Latin American" type to a "market modern mixed large and smallholding" type. FiscalMeasures Land taxesand preemptive taxeson income earnedfrom land are often cited as instruments that will obtain the sameends as land reform. since it involvesmodification of a wide range of conditions that affect the agriculturalsector. the useof a fiscal instrument. Agrarian reform may or may not include land reform.
land reform maybe essential. land reform without concurrent rural development activity might causehardshipand economic losses which would outstrip the equity gains associatedwith land redistribution. and by thesecannot be changedthrough market operations.in somesituationsestablishinglocal institutions and smallholder servicesmay be a prerequisite of land reform rather than vice versa.as there is virtually no organized market for land.politically and economically feasible to raise output through the measures involved in agrarianreform. Political Dimensions Substantialreform of the structureof holdingsand the distribution of income from the land cannotbe achievedwithout political action. but it is seldom a sufficient condition for increasingagricultural output. For instance.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. in most market-oriented economies with a skeweddistribution of land. on the other hand. patterns of land rights and tenurial conditions havebeenestablished tradition. in termsof implementation. insofar as it stabilizesthe existing relationship between landownersand renters.dependingon the prevailing pattern of land control.Where the existingservicesystems and administrativestructureis gearedto working with large-scale farmers. Tenancy reform.where semifeudalconditions prevail. land reform may be a necessary concomitant of successful rural development. RuralDevelopment Broader still is the concept of rural development. Elsewhere.large landholders have accumulated capital and expanded landholdings acquired through the market. Whatever the prevailing situation. The point is that land reform may be a necessary condition for agrarianreform. 23 .may be a useful precursorof rural development programs.Since theseactionsare basedon policiesdeliberately intended to alter the distribution of land and change tenure. Since it hassignificant equity implications. it can seldom be changedwithout actionsthat emanatefrom outside the market. the tendency is for the skeweddistribution to worsen.However. Where the ownershipof land directly affects the nature of local institutions and the participation in them by the majority of rural people. since land is only one factor of production. the implementation of the policies dependson the political will of the policy makersand the ability of the administratorsto executethis will.
Many countries have legislatedfor land reform but relatively few have achieved it-and these only with a change in government.the implementation of massivereform legislation has dependedon the effectiveorganizationof the beneficiaries. ambitious programs of land reform will seldom be implemented unlessshiftsare made in political sentiment and power.While the focus on land reform is related to for economicdevelopment. In the Republicof China and Venezuela-to name three countriessuitableorganizations were established ensurethat landwas indeed to transferred.of their power. Experience much of Asiaand LatinAmericasugin geststhat effective popular participation of rural people may be a critical condition of successful land reform. It is not surprising. official the bureaucracy was the only implementation agencycontemplated by the reformers.In other countries. both in precept and in practice.suchas India and Pakistan. a meaningfulland reform program will inevitablydestroy or limit the power baseof thesegroups. Reforms have stripped large landholders. The Church's new philosophy regarding the relationship between man and land declared that "private property doesnot constitutefor anyone an absolute and unconditional right. that land reform is often a central issuein political debatesand that thesedebatesare often couched in termsof redistributingpolitical power as well aswealth. religiousor private. Frequently.and the absenceof organizedpressure from the beneficiaries." And the immediate extensionof this postulateto the world's agrarianproblem is that "if certainlandedestates impedethe generalprosperitybecause theyare 24 . Japan. then.whether they were military.the massive legislationhasproduced no significantreform. The political implications of land reform must be taken into account. including the CatholicChurch. Because the community of interests between the of bureaucratsand the landowners.Land reform can changethe political balance and the power structure in a country. Where groups derive authority from their land. Implications Social Justice for The imbalancebetween the distribution of control over the land and the numbers dependent on it has historically led to increasing pressures change. the Church in Europeas well as in LatinAmerica hasincreasinglyput its weight behind this new concept.the concept of an overriding social function of land justifying the imposition of limitations on private rights appears to be gaining the support of many groups.The concentration of control over land provides the base for powerful elementsin manynonindustrializedsocieties. Formerlyone of the largestlandholdersin the world.
Chapter 2: LAND REFORM AND ECONOMIC DEVELOPMENT Economicdevelopmenthasthree basicobjectives:rapid economic growth. Nevertheless.or becausethey bring hardship to peoplesor aredetrimentalto the interests the country. Land reform is in practice predominantly a question of equity and. Somepolicies and related investments. are employment oriented.this arosefrom custom. In these societies. The reforms which havetaken placein thesecountrieshavechangedthe situation.Forthis reason.large numbersof tenants and laborerswere tied to the land and were held in forms of human bondage.such as those affecting power plants or largescale industry.it is important to determine to what extent land reform might be costly in terms of growth and employment. hassignifiit cant implications for economic development. Eachset of policies and investmentsaimed toward one objective has important repercussions with regardto the other two objectives.had semifeudalsocieties similar to many which still prevail in other parts of the world. and more recently Bolivia and Egypt. are primarily growth oriented. tradition or sheer indebtednessto landlords. therefore. Many problems arise in assessing costsand benefits of land the reform. Mexico. the reforms haveled to an increasein socialmobility.The issuesinvolved are diffuse and appropriate reform measures vary according to the situation. such as those related to land reform. Theseinclude the definition of an acceptabletime frame for measuringthe effects of the related structural changein the agricul25 . such as those for rural works.and thesein turn are relevantconcerns in the formulation of the World Bank'spolicy. are essentiallyequity oriented. If the experienceof Mexico-which hashad the longest period of reform-is any indication of the long-run outlook.and thesemust be taken into accountwhen weighing the potential impact of particular policieson economic development." A further facet of land reform that warrantsconsideration in this respectis the potential of a new societalstructurefollowing a reform.the common of good sometimesdemands their expropriation. Land reform is a complex subject.extensive. The reform in Mexico broke a systemthat denied many people any range of choice in the pursuit of a livelihood. others. still others.unusedor poorly used. full employmentand distributive justice.one that is often highly political.
611 - Botswana 1969-70 Egypt.10 79.11. currency For Bulletin Statistics.28 0.188 138 249 200 337 137 243 127 142 360 140 88 48 295 174 180 341 198 101 0.Table 1 Productivity. 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.4.09 0.21 0.34 270.832 - 0.03 2.64 6.624 - 0.62 15.see XXVI.12 0.pp.59 4.720 352 240 250 376 166 155 355 168 681 183 293 98 144 209 189 42 167 68 848 980 951 463 489 492 569 580 1.54 0.32 2. and column4onUN.70 8.04 0. 10-11.50 0. No.05 0.38 0.27 6.50 22.33 4.37 208.79 1.41 3.05 6.03 0. August 1973.35 3.32 2.05 1.and fishing.49 1.947 0. 3.62 2.52 1.23 2.XXVI.085 1.936 0.607 0.29 0.25 1. Monthly 26 .01 0.59 1.01 0.05 0.607 - ' 0.Gross DomesticProduct (GDP)in agriculture shownhere includes.18 14.05 0.17 0. Sources:Columnsland 3arebased on FAO.67 3.45 2.Republic of India Indonesia Iran Korea.85 1.12 1.473 - 0.3.865 - 0.60 108.agriculture.unlessotherwise indicated.333 925 410 141 149 581 377 1. No. lnternational financialStatistics.22 2.95 8. forestry.20 1.85 40.03 1.70 20.18 1.75 1.Republic of Africa 1961 1962 1963 1971 1961 1964 1960 1963 1970 1960 1965 1960 1961 1961 1966 1961 1960-61 1960 1963 1960 1970 1960 1961 -62 1960 1960 1962 1963 1963 1960 424 90 83 129 186 144 22 55 18 14 18 67 11 50 14 31 841 172 323 187 1.96 1.62 .845 - 0.31 3.18 1.29 - 0.474 0.88 1. Employment and the Distribution of Land.17 123.Preduction Yearbook 1971.25 118.84 0. No.597 0.Republic of Japan Nepal Pakistan Philippines Sri Lanka Thailand Turkey Viet-Nam.833 0.hunting.47 5.20 1. and I MF.24 1.903 285 692 663 479 477 1. April 1972.873 0.10 0.64 2.ArabRepublicof 1960-61 1969 Kenya Malagasy Republic 1961-62 Mali 1960 1961 Morocco Senegal 1960 Togo 1961-62 Tunisia 1961-62 Uganda 1963-64 Zambia 1960 - - - exchange rates.89 1.35 4. 21-23.10 0. of ibid. November and 1973.09 0.580 - 0.90 37.80 81.04 4.02 0.09 0. XXVII.06 0.61 3.
to 194 kilogramsper rai on holdings of 140 acres or more (1 rai equals0.The ideal measurefor comparisonwould take into account the contributions of all factorsof production and so measure total factor productivity. farms of less than two hectares-produced 2.while farms of more than four hectaresproduced 2. changesin yields per hectare are considered to be the most appropriate substitute.Brazil.4 acre).ture sector.in 1966-67.for example. Chile. Ecuadorand Guatemala.In Sri Lanka. One 13-country study undertakenby the FAO analyzedthe relationship among size of holding.These measures interrelatedbut. Since data are not availableto derive this measure.In a systematicanalysis the differencesbetween large of "multifamily" farms and small "subfamily" farms in Argentina. yieldswere reportedto decline from 306kilogramsper raion holdings of two to six acres. Unfortunately. Colombia.output per hectare was 27 . suchasthe effectsof farm size on productivity. this is not possible as there is no situation where changehas occurred in only one variable-size of farm-over time. Both studiesindicatedthat a smalleraverage of holdings size and a lower concentrationof landownershipwere associated with an increase output per hectare. The nearestalternativeis the comparisonover a definedperiod of the productivity of groups of different-sizedfarms in a given area.Small farms in the Philippines-that is.However. 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. in Similar findings can be cited from cross-section studiesin a number of individual countries.2 tons per hectare. the yield of paddy averaged36 to 37 bushelsper acre on farms of up to one acreand 33 to 34 bushelson largerholdings. its contribution to output and employment-as well asto equity-depends on the speedand effectiveness the reform and of complementary investments.In central Thailand. the effects of land reform canbest be examinedby focusingon particular measures. are for analytical convenience.are treated separatelyhere.9 tons of paddy per hectare. Several comparative multicountry analyseshave been made of the effect of differencesin distribution of size of holdings on yields.The availableevidencesuggests a well-designedland that reform program need not entail unacceptable costsin termsof other objectives. 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 broad terms.14 0. there are limited economies of scale in most agricultural production.237 268 1. Peru. xxvi. Output per worker. small-scale producerstend to maximizeoutput by applying labor intensively.198 84 1.171 972 9. Chile.80 3. the studiessimply indicatethat yieldswere higher on smallfarmsthan on largefarms. Agrarian Structure in Latin America. The important implication is that reductionsin either the size of holdingsor land concentrationneed not be associated with a reduction in output per hectare.on the small farmsthan on the largefarms (see Table2).10 0. There are two associatedreasonsfor this assumption.Table 2 AgriculturalOutputper Hectareand per Worker. Lexington.This is usuallyshort of the output per hectarethat would be produced if the goal were maximization of output.Firstly.197 8. Guatemala. however. However.80 8. as pointed out below. for 28 . Massachusetts: Lexington Books. Colombia. Brazil.on the average.with output per hectareas the relevantcriterion.is likely to decrease the simple reasonthat. found to be three to 14 times greater. it appearsthat under controlled circumstances output per hectare is likely to be higher.On the contrary.20 8. in LatinAmerica 1 Country Year Smallest subfamily farms 2 Largest multifamily farms 3 Ratio ot col. by FarmSize. a resume of the CIDA Land Tenure Studies of Argentina. Studies in the Economic and Social Development of Latin America.30 2.20 14. Ecuador.90 0.492 304 1.23 0.498 170 334 41 1. as well as studieson Japanand the Republicof China.862 660 63 16 National monetary perworker unit 40 192 1.21 0. 351 p.673 74 523 8. land reform can be consonantwith development from a point of view concernedpurely with productivity.there is no claim that all conditions were identical. including the results of Bank-sponsored analysisin Mexico. 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. There is other evidence to support these findings.while large-scale operatorstend to maximizeprofits by using hired labor only until incrementalproduction coversincrementalcosts. 1973.14 Source: Barraclough and Collarte.Secondly. I to col.
too. More intensive labor use is the main reasonwhy small farms are ableto producemore per unit of landthan the largerfarms. On larger holdings. Chile and Guatemala).Therefore.Unfortunately. the larger income would be sharedby an evenlargernumberof families.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. This cross-sectional evidence of the higher productivity of small farms indicates their long-run equilibrium potential.the organization of an effective extension-cum-inputsupply systemfor small farmersmust accompany 29 .In other words.17 on large farms (500to 1. In other Latin American countries (Argentina.The mereredistribution of land and increasein employment may not suffice to raise output substantially. fertilizer consumption and grossfixed capital formation per unit of landwere relativelyhigher in countrieswith smalleraverage holdings. In developingcountries. man-yearsper hectare declined steadily from 2.smaller farmswould employ more labor per hectare. for example. labor absorption varied between 33 and 39 man-days per acre on holdings of less than 30 acres.The cross-sectional analysisof the 13 countries previously mentioned shows that manpower per hectareof agricultural land is significantlycorrelatedwith the size of the holding-the smaller the holding. In Colombia. But the realization of this potential is contingent on the supply of nonland inputs being increasedas soon as farm size is decreased. the greaterthe input of manpower.000 hectares) in 1960. A limited number of studies in Asia and Latin America have also confirmed these findings. small farms undoubtedly need much more nonlabor input in order to raiseproductivity.But inputs other than labor arealso likely to be applied more intensivelyon small farms. however. 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. unlessaccessto these inputs is blocked by institutional arrangements. it ranged from 20 to 23 man-daysper acre. that in the crosssection of developed countries. In the Ferozepurdistrict in Punjab (India).in 1961. the relationship between these other inputs and farm size cannotbe studied in manydeveloping countries JFor want of data.5 hectare)to 0. It is interestingto note.7 on small holdings (lessthan 0.Brazil. LandReform and Employment Evidenceexists that the use of labor per hectare is greater on smaller holdings than on larger ones. in 1968.
By itself. 30 . without freezing the maximum permissibleownership of urban assets. Evenwith this broader focus.the Republic of Koreaand the Republicof China-the absorptivecapacityof agriculture tends to be high even though holdingsare small. In the rural areas. Where there is such a system-as in Japan. at the same time.There.Thedistribution of real estate.and commodity stocksin the hands of traders.If. Landownersmay easily changethe composition of their assetson the eve of land reform if agricultural land alone is the target of redistributive zeal. labor-intensive technologies. output per hectareis high. Smallholdingscanyield high returns to labor provided output per hectare is high-a condition that can only be fulfilled by the application of high-yielding.and (4) owned and self-operatedland as well as leasedland is redistributed.land reform.where much of the wealth existsin the form of financialassets. However. the larger will be the equity effect of the reform program. estateand other real investments apart from farmiand. urban property reform or highly progressive taxation on urban wealth does not accompanyland reform in countries with a substantialand prosperousindustrial-commercialurban sector. land reform could havea major equity impact. the equity effect of land reform will be significant only if: (1) the effective ceiling is low.the redistribution of farmland alone may not improve the distribution of total wealth substantially. the limitations of redistributingfarmlandaloneappearevenmore serious. (2) the beneficiariesbelong to the poorer groups.agricultural land accountsfor such a large proportion of total wealth that it is usuallythe single mostsignificantdeterminantof the distribution of both income and power.financial assets commodity stocksin the urban and areas is even more skewed than the distribution of farmland in the rural areas. therefore. LandReform and Equity The more radical the land reform and the more important the share of agricultural land in relation to total tangible wealth. it not only may not decreasethe inequity of the distribution of total wealth in the country as a whole. land reform alone is not sufficient. If rural and urban areasare consideredtogether. the the inequity between the town and the village-since it will freeze the maximum permissibleownership of the main rural asset. It may even increase inequity-in particular. (3) the extensionand (nonland) input distribution systemfavorsthe beneficiaries. Evidence this can be seen of in many LatinAmericanand Middle Eastern countrieswhere the large landownersoften dominate both commerceand government.
In suchcountries. notably in the Americas. (Settlementof the landlesson new land. In other areas.The Population Factor Opportunities for the redistribution of land depend to a great extent on the existingpattern of distribution of holdingsand population density.In Bangladesh.it might be wise to give land only to the minifarmersand to attackthe poverty problem of the landlessby meansof a massive rural works program. not enoughland would be availableeither to raisethe acreage of the minifarms to a tolerable minimum or provide for the landless. even if the maximum holding was 20 acres. In thesesituations.and their migration to urban areas.Although the total effect of the redistribution process dependto a largeextent on the costsof increased will output after the redistribution.and no land would be availablefor the landless(20-25million households).5 hectaresis availablefor the averagerural family of five.when possible. In India. therewould be enoughlandonlyto givetwo acrestoeachminifarmer. even with a low ratio between the ceiling and the floor holding (5 to 1).there areample opportunitiesfor redistributing land so that inequalities can be diminished and the recipients of the land can generate an acceptable minimum income.The densityof the farm sector is so high in some countries in Asiathat. for the 31 . only 1. a low 10-acreceiling would not sufficeevento bring all miniholdings up to a minimum two-acre size. the pressureof population is such that there is not enough land to meet the minimum requirementsof all claimants. the marketedsurplus generates As agricultural incomesand so potential cashsavings.however.where land distribution is skewedand population is not dense. there are some countries. As will be shown later. The millions of landless families could not be provided for at the sametime.too. In Haiti.are the other obvious alternatives.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 available. In Sri Lanka. mostly food.the available land (43 million acres)would be barelysufficient to bring up the size of miniholdings to a minimum of five acres. evenif holdingsabovea certainsize werecompletely eliminated.the changein the sizedistribution of holdings will shift the distribution of the sourceof the marketablesurplusand savings.The marketedsurplus also represents supply of agricultural products. The solution to rural povertyclearlycannot be found exclusively in the agriculture sector.) .it determinesthe size of the rural market for domesticallyproduced industrial products.
6. Marketed Surplus A reduction in land concentrationthrough land reform could lead to a fall in the marketedsurplus-at leastin the short run.5 acres)contribute only 6% of sales. and 51% (with 2. The surplus-outputratios of different farm-sizegroups.wells and access roads. If output remainedthe samebut.the urban population. and their sharesof total output and salescan differ widely across countries and regions. the ratio of marketedsurplus to production falls asfarm size decreases.the surplus-output ratio would probably decline. Smallfarm households tend to consumea largerproportion of their smalloutput than do householdswhich havea large enoughacreageto produce in excess domestic requirements.5 to 50 acres) contribute the bulk (78%)of the total surplus.7% of the farmers. The rate of decline. on the other hand. but there can be no doubt that it would fall.4% comes from only 1.5% eachof the national output. In Mexico. Datafrom India show. and another 16% sell 25% or lessof their output. with adverseeffects on the economy.6% of the marketed surplus comes from 70. that small farms (2. provided that there is a compensatory increasein total output. this decline in the market surplus ratio need not result in a decline in total surplus.farms abovea certain size were eliminated and their land transferredto the small class. Since per acreyields on smallfarms canbe higherthan on largefarms. These differenceswould determine how much the surplus ratio would fall after land reform. In India. however.7%.sell no maize at all. In Chile.the savings need not be monetized.5 acresor less)sell only 24.there may be a sufficient increasein output if. 48% of the farms (lessthan 2. and 55. hypothetically. whereaslarge farms (50acresor more) sell 65. for example. a typical sharecroppersells as much as 43% of his output.1% (more than 50 acres)con-' tribute 16%. of Thus.but may take the form of increasedon-farm investment in such items as improved housing.But increasingthe marketedsurplus will not necessarily increasesavings. But thesefarm groups produce only 9.However. however. might not be very great given that the largest and the smallestfarm-sizegroups account for only small proportions of the total output. Sixty-one percent of the maize farmers in Puebla(Mexico).5% of their output. after reform.for example. Where it does. a fall in the surplus could necessitate imports and put an added strain on the balance of payments. the necessary conditions are fulfilled whereby small farmscan realizetheir full pro32 . Thus.4%.
6% on the smallestfarms. there was no direct measureof the savingsmade.At the lowest end of the farm-sizescale. 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.8.24% for small farmers. by running down the existing soil fertility). Savings In consideringthe productivity effect of land reform. there should also be a positiveeffect on productivity. Although the evidence on savingsrates of different classes of farm householdsin developing countries is scant. A policy implication. the subsistence consumption of small farmers increases-the extra consumption in kind representinga direct increasein their incomes (nutrition).5% in the smallest size group (0 to 2 acres)and 19.As the surplus-outputratio falls. the savingsrate can be expected to become positive and increase along with it (althoughlarge farmerscanbe "dissavers"too.2% on the larger ones. a decline in the market surplus ratio has a direct distributive dimension which should be offsetagainstthe decline. the aggregate savings be precan vented from falling.3% for large farmers. A recent study in the state of Haryana (India) tended to confirm this: the savingsratio was found to be -0.The minimum farm size clearlyshould 33 . In addition.But.In a further study in Orissa(India). It follows that a reduction in concentrationof land will reduce the averagesavingsrate of the farm sector. it is necessary to examinethe implications of a changein farm-sizestructureon the aggregate savings rate of the farm sectoras a whole.3% on the larger farms (8 acresand above). by using capital for consumption). from the welfare point of view. from the foregoing.the correspondingfigureswere lower -2.is that the farm-size structure created by any land reform program should fix a minimum as well as a maximum farm size. and 11. again. This addsto the urgencyof introducing effective agrarian reform (including improved technology and services)along with land reform.if a compensatory increasein total income can be securedby intensifying inputs per unit of land soonafter land reform.duction potential.the subsistencefarmerscan be expectedto be net "dissavers"(for instance. but the ratio of net capital formation farmas a proportion of incomewas found to be 5.For unirrigatedvillages. As farm size increases. Insofar as the productivity of small farmers was previouslyconstrainedby inadequatenutrition.it can be expected that the behavior of the savingsrate will be similar to that of the marketed surplus.5% for medium farmersand 16.
This is seen not only from the reforms in Japanand Taiwan. But one of the criteria for determining the minimum income itself should be that it should at leastenablethe smallholder to ceaseto be a "dissaver. security of tenure and labor objectives. especially in the temperate production areas. that since the seed-fertilizer technology began to spread. then the size distribution of operational holdings maynot change. Tenurial reforms. for example. hence.With the conversionof tenantsinto owners."An analogouscriterion can also be derived from the known behaviorof marketedsurplus:the smallholder should haveat leastenoughlandfor positivesales.The expert consensus that fixed cash-rentcontractsare superior to the more is common crop-sharecontracts. Here. However. to however. hasincreasedon-farm investmentand helped raiseoutput.be determinedon the basisof the current national norm of minimum family income. often havea preferencefor crop sharingbecauseit provides risk insurance. on-farm investment and higher output.the problem is to promote more efficient typesof tenancy.without transferringownership rightsto them. provision the of security of tenure. Tenancy Reform The most successfulland reforms include those whereby tenants become owners of the land they operate.There is growing evidencefrom the Philippines. The conversionof tenantsinto owner-operatorsgenerallyleadsto a more efficient and more equitable form of production organization than tenancy. whether through the distribution of the land to those working it or the provision of greatersecurity of tenure and 34 .Crop sharing can be made more efficient and equitable if if is consideredwith cost sharing. landlords and sharecroppers have spontaneously begun trying to combine cost sharingwith crop sharingbecause the combinationis profitable to both.and tenantsbecomeowners of the land that they operate.Taiwan and somepartsof Europe.since the whole income in excess of' the fixed rentaccrues the actual cultivator. encouragesincreasedsavingsand. This.Sharecroppers. but also from experience in parts of Africa where "customary" tradition is convertedinto freehold.security of tenure is greaterand incomesfor the farmers are larger. Ownership control and incomefrom the land is thus redistributed.with contracts having well-defined incentivesand deterrents. in turn. 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. as in Japan. In Kenya.
often thoseamong the lowest income groups. 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. LogisticalSupport Secondly. The financial returns to the landlord from using machinesand hired labor may be high. have an effect on development.improved rental contracts. It follows that the more specific the plans and the more clearly defined the policies regarding land reform.like prudent investors.Often.the lower the "cost" of the reform. Implementation Issues If reforms are to generatethe benefits expected of them. In some instances.instead of being displacedwhen landlords find it to their advantage adopt to a different technology. often. production and investmentdecisionsaremade bymillionsof individualsoperating in their own interests.weigh the risksas they perceivethem before makingon-farm investments-the major component of total investmentin agriculture.This linkage is basedon mutual interests and.These farmers.continued uncertainty hasled to disinvestmentin agriculture by owneroperatorsand a flight of capital from the country. but the returns to the economy are usually higher from labor-intensiveoperations undertakenby smallholders. several important considerationsmust be taken into account. there is a long interval before the public sector can 35 . Firstly.greatersecurity enables tenants to benefit from appropriate technological changes. on long-standingbusinessassociation. introduction of a major land reform programusually the disrupts the systemof logistical support from the commercialsector to the farmers. Sustaineduncertainty about a government'sintentions with regard to the distribution of land adds to the risk of investmentand can hamper capital formation and production. since agriculture is a private sector activity in most countries. 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 redistribution of land frequently leadsto a breakdown of this system. Such reforms improve income distribution by shifting income away from the landlordsto small-scale producers.Very often the greaterpart of national output comes from medium-scalefarmers. In most countries in the world. Finally. so.
In many instances. high yields and efficient operations may be directly associated with a systemorganizedto function on a large scale (as in certain types of sugar plantations). the impact of redistribution of land on productivity and employment may be in question. There are many different forms of organization: cooperatives. Unlessthis is done. In somesituations. A more realistic approach to obtaining widespread benefits would be to leavesuch operationsintact and redistributethe profits from the enterprise. Part of the reason is that these institutions have not been able to adapt their methodsof operationto the needsof largenumbersof small farmers. the beneficiariesof the reform may not be in a position to increasetheir output.The breaking up of such holdings may well reduceyields and lower output. In much of agriculture. Natureof Organizations Thirdly." thus reducing the importance of scale of operations as a factor in raising productivity. it is important to determine the reasons for high yields. or-as in Peru-converting the operation into 36 . or before the privatesectoradjuststo the new situation. marketing authorities. Whatever the organizationsthat prevail. Adaptation Fourthly. by raisingthe wagesof the workers.and the like. the institutions that have provided servicesin a post-reform period have continued with a bias in favor of larger-sizeoperations. Thus. productivity will decline and output will fall.the reduction of the costsof a land reform program-in terms of production forgone-depends on the rapid reorganizationof the input supplysystem.the appropriate organization of supplies and the evolution of a low-cost delivery systemto reachsmall-scaleproducersis a sine qua non for a sustainedincrease in productivity. it is essentialthat they be designedspecifically to assistthe beneficiariesof reform.Thiscan be done through taxation. mostof the inputs are "divisible. Indeed. When land is fully utilized and yields are alreadyhigh. under certain conditions land reform programs might need adaptation if they are to fulfill the objectivesof development.Without an appropriate organizationfor the provision of inputs. the natureof the organizationsproviding for both the supply of necessary inputs and the marketingof production surplusesis crucial in a post-reform period.undertake the role previously filled by the private sector.agricultural development banks. In this context.special credit institutions.
however. There must be an appropriate supply of other inputs. Land reform.in others.The creation of adequateincentives is particularly important in a situation where labor is the major input. can encourage increasedon-farm investment.producer cooperatives and other units of production haveflounderedin developingasystem that reflects both equity and incentives. by providing securityof tenure. In the long run. can be consistentwith all the goals of economic development: raisingproductivity. land reform need not leadto a reduction in marketedoutput or savings. 37 . other organizations(suchas large-scale state farms) might be intended to save labor. to the participatingstockholders. Many communes. but raisingoutput depends on more than land and labor.that: 1. Experiencehas indicated.the number of small-scale owner operationswill increase. that is often unfulfilled in rigidly controlled societies.a worker-owned corporation and distributing dividends. however. Government reorganizationcan generateenthusiasmand provide opportunitiesfor mobilizingworkers. although equity oriented. In some instances. The post-reform structure will depend on the ideology of the government. Thisappliesboth to the agriculturalsector as a whole and to the units in which beneficiaries of reforms are organized. 2.land reform leadsto structural changes within the agricultural sector.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. Tenancy reformscanredistribute incomesand. 3. 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. No matter what the structure. However. sustained increases output dependon complementaryinvestments poliin and cies.The most important of theseconcernthe organizationand provision of an adequatesupply of inputs for the beneficiariesand the creation of incentivesto use theseinputs to raiseproduction. increasing employmentand providing wider equity. producer cooperativesor communesor large-scalestate farms will emerge. out of profits. There must be an adequatesystemof incentivesand rewardsif productivity in agriculture is to be increased. Structural Change Finally.This is a condition.
which recognizeda relationship between land distribution and equity. By the end of the 1960s. reflecting a reconsiderationof the objectives of development and the most appropriate strategiesfor attaining thoseobjectives. Technical Assistance The Bank hasbeen concernedwith problems associated with land distribution and land reform since the beginning of its operations. Land reform canbe corsistentwith theseobjectivesand. are of Furthermore.and socialjustice.Theobjectivesarenow generallyaccepted to be increased productivity and employment. mainly becausethey influenced on-farm investment decisions and determined the efficiency of resourceuse. representsmuchhigher land a proportion of totalwealththanin developed countries. The paper stated: "In developing countries. in somesituations. In the early yearsof the Bank'soperations. especially irrigation water.The missionidentified the patternsof landuseand 38 . One of the first major economic surveys undertaken was that of Colombia in 1955. In the early 1960s.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." 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. maywell be a necessary condition for their realization. concernwas growing about distribution of income in the rural areas the relationshipbetween and land distribution and income distribution. Problemsof tenurewere seento havean indirect bearingon production. inegalitarian and patterns of landownership a majorsource incomeinequality." The paperwent on to affirm that: "It is clearthatagricultural development cannotdo all it mightto improverurallife if the distribution landownership highlyskewed. This was reflected in the Agriculture SectorWorking Paperof June1972. the owners landusually of possess politicalandeconomic powerwhich can be exercised waysthat harmthe interests the bulk of the in of ruralpeople. however.the focus was on providing adequateinfrastructurefor increasingagriculturalproduction.
land distribution by sizeof holding to be major obstacles acceleratto ing agriculturaldevelopment. missionsto Ethiopiaand Morocco havedrawn attention to the relationship between the land tenure situation and the distribution of benefits from growth. Thus. 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. however. Since that time.The Bank needs to be better informed about conditions governing rights to land and related institutions in member countries. It did. and that the Bank-as an external lending agency-should adhere to the existingpolicy and not advocatea rapid redistribution of land.there hasbeen a growing emphasison the problems of distribution of land and the rightsto land as factors that influence equity aswell as productivity.they took the view that the distribution of land was a matter of national policy and internal politics.More recently.and the policies and programsinstituted to influencethe distribution of land and rural incomes. The two missionsto Colombia were concerned with increasing productivity and intensifying land use. recommenda vigorous policy of settlementon reclaimed and clearedland. securityof tenure was consid=ered to be especially significant in the light of the distribution of potential gainsfrom new technologybeing introduced into the country. More needsto be known about the distribution of land.Many of these have pointed to patternsof land control and insecurityof tenure as obstacles to raisingagricultural productivity. the mission emphasizedthe possibility of redistributing landas a meansof increasingboth output and equity.while intensiveagriculture was practiced by "minifundios" on land that was lesssuited for crop production. Landlordswere finding it increasinglyprofitable to displacetheir tenantsas machinetechnology provided higher returns. In Ethiopia.Largestretches fertile landwere held of by large-scale producersfor livestockraising. This mission recommendedthat the government adopt a presumptive income tax to encouragethe more productive useof land. many reportsdo not give appropriate emphasis to issuesrelated to land reform and development.conditions governingtenancy. A subsequentagriculture sector mission in 1956 confirmed that the systems land tenure and land usewere barriersto increasingoutof put. In Morocco. Despitethis trend. nor did they consider redistribution as a meansof intensifyingproduction. Rather. The mission recommended the governmentthat to it introduce a graduatedland tax as a meansof intensifying land use.it is only through a thorough analysis conditions of 39 .the problem was seenas one of unevenland distribution and insecurity of tenure.
the Bank has not been totally indifferent to structural and income distribution aspects.paymentis mostly in bonds. in the Latin American countries which followed nonconfiscatoryreforms. small landowners. the recordshowsan increasing and awarenessof the implicationsreflected in more frequent useof measures to improve them. Nevertheless.large-scale plantationsand smallscaleproducers. whether multilateral or bilateral. individual holdings in India.large landowners. present.asexpenditures fora redistributive reform depend mostlyon the levelsand forms of compensationthat are set for the former landowners.tenants and farm workers.One reason is that the processof reform in itself may only require relatively small outlaysof public funds.within member countriesthat the Bankwill be in a position to discuss policy options with member governments. On the other hand. Evenso.many reports At still do not addressthese problems. cooperativeproduction units in Tunisia and group farmersin Kenya.as well as countries that follow capitalism.Fundshavealso been provided for large-scale livestockproducers.the actual amountsinvolved are not substantial. only some9% to 15% of total reform-relatedcashbudgetswent for landowner compensation-though in other casesthe figure could be muchhigher. public expenditure is involved.such as Yugoslavia and Tanzania.such as Argentina and Thailand.These have included socialistcountries. new guidelines are being developedwhich can form a basisfor discussing issuesin the a systematicway in sector and economic reports. It is estimatedthat. has played a minor role in the financing of land reform programs. Lending Operations The Bank'slending for agriculturaldevelopmenthasincreased very rapidly in recentyears.thesehavebenefited absentee landlords. external financing. if any. Loansand credits have been made for agriculture operating under different forms of tenure-for kombinatsin Yugoslavia. projects havesupported land reform as such.Public discussionof land reform financing is generally dominated by this issue. however. The compensationissuetendsto be more important in such countries as Colombia and Venezuela where land is purchased. In few general.kibbutzesin Israel. as is usually the case.Loans credits havebeen madeto countries and with widely differing social and political structures.When land is confiscated as part of a revolutionary process-as it was in Mexico and Bolivia-clearly little.especiallywhere. Compensationpaid for land is a "transfer payment" from the pub40 .
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. 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. Very often the managerial capacityof the beneficiaries maybe untried.this would have the paradoxical effect of giving land bonds greaterstability than that enjoyed by the currenciesof issuing countries. The Bankhasprovided generalsupportfor at leastone far-reaching land reform program. have limited technical capacityand are of questionablefinancialviability. hasbeen suggested It that the internationalagencies might guaranteebonds issuedto compensatelandlords.Smallholdersopted for private farming and were supported by landownerswho resistedthe takeover of their lands.If financing were to be through international maintenance-of-value guarantees of bonds and for compensation. The Bank successfullypressedfor substantial improvementsin the conception. and the whole delivery systemchanges 41 . compensation can haveserious implications for income distribution. and the reform program collapsed. was to pay a guaranteedminimum cashwage to the workers out of the farm profits. the systemhad built-in disincentivesbecause wages were not paid accordingto work.Without doubt.designand implementationof the agrarianreform. however. inter alia. the agenciescreatedto deliver the inputs are usuallynew.lic sector to the landholding groups. internationallending of institutions have refrained from using their resourcesfor financing land purchases.eachunit of production was to be self-financingand. consumption and investment-but it does not of itself create any new productive capabilitiesin the country. these institutionsoften provide inputs that were formerly provided by the private sector.In addition. The Bank subsequently canceledhalf of the loan.the scarcityof trained manpowerand the rapid paceadoptedin establishingnew cooperatives made it difficult for the production units to start on a sound basisand generatea large enoughcashflow to meet their objectives.This was in Tunisia where the Bankprovided a loan of $18 million intended to back a major agrarianreform relating to former French-owned estates. The problems encountered in financing the Tunisian program underscore some of the difficulties in lending for reform-related projects. Partlybecause this. which occupied the most fertile land in that country. Furthermore. It was unable. However. The extensionof reform strained the limited administrative capacity. The nationalizedland was to be converted into "units of production" which were to be farmed on a cooperative basis.
irrigation. provision the of allocation and registrationstaff.The need for changeto a more secureand lastingtenure systemwas evident asalmost all uncultivatedlandhad been takenup.The Lilongwe project indicates that Bank assistance can play a role in assistinggovernmentsin the "mechanics" of land reform and in the draftingof legislation.IDA creditsare beingused for the land survey (both topographicaland cadastral).equipment.The amount involved will be approximately US$1 million by the end of the second phase.outgrower schemes. and rural credit. These Acts also provided for the regulation of the subsequentsale.vehicles. Malawi and Malaysia.000acres.Table 3 gives information on ten projects located in Brazil.from one basedon the profit motive to one basedin the first instance on social consideration.000acreshavebeen of allocatedand titles issuedon 60.This directly affects their financial viability. and fragmentation of holdingshad occurredon a substantial scale. and the construction of housing and land registry. Malawi Governmentintroduced three Acts the of Parliamentwhich provided for the allocation. Another Bankproject provided direct financial assistance facilito tate the implementation of land reform as part of the Lilongwedevelopment schemein Malawi. individual holdings were of the order of about five acresper family. Colombia.and the issuance either family or individual of freehold titles. consolidation and registrationof holdings. LandSettlement The Bank hasfinanced a number of settlement projects in which infrastructure was made available together with other servicesfor families settled in the project area. Kenya. Ethiopia.mortgageor transfer of registeredland through the establishment LandBoards. Theseinclude projectsfor land by settlement.Fiveacreswas deemed to be the minimum holding size capable of providing a family with subsistence presentlevelsof technology. It was recognizedduring the preparation of the Lilongwe project that there was an opportunity to changethe existing land tenure pattern of customaryright of usufruct. some200.To date.and many investments social in overhead are not self-liquidating in the short run. A number of other projects have been financed by the Bank involving somechangein distribution of landor in tenurial rightswithin the areaencompassed the project. Sevenof the projects were established public land and on so did not involve any change in the size distribution of existing 42 . especiallyin that cashflows generatedby reform projects tend to be lessimmediatethan in other projects. at As a consequence.
.1 3. (l) Except for Kenya. (6) Includes 2.770 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 12.800 new settler families are scheduled to be settled on some 280. (5) The original goal was to settle 2.a.0(5) 11.214 1.3 6.0 25.3 4.800 now settlers and 3.73 million used for agricultural development on the highlands.0 14.6 15.8 4.280(4) 5.900 hectares. education.8 29.429 2.9 6.500 landless peasants and develop 9.3 6.500 1.825 40.200 2.500 partially established settlers. figures represent goals rather than actual state of settlement.327 2.389 3.000. (a) Although 2. do not necessarily reflect total economic costsof settlement.0 n.6 14.0 43. (3) The costtothe government is$1.200 2. as estimated in the appraisal reports.500 partially established settlers are given.0 13.Table 3 Costs of Selected Settlement Projects Assisted by the World Bank Estimated Total project Country Project Bank or IDA finance Number of families(') project costs per Average farm costs Amnunt (US$ 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.000 4. (.800 6.) Project costs.050 5.5 Publicland INCORA land (involved appropriation land) l Publicland Europeanownedland Publicland Publicland Publicland Publicland Source: World Bank and IDA appraisal reports.7 9. (8) Excludes $2.0 loan loan loan loan credit credit credit loan loan loan 1972 1967 1972 1971 1969 1969 1972 1968 1970 1973 5.756 10. Thesecost expenditures are being reviewed and are expected to be Considerablyhigher than originally expected. research and related studies.6 2.300(6t 1.7nn perfamily settled.0 4. no data on the farm size of 3. )') The cost per small farmer settled is estimated to be $17.3(8) 6.(7 6. whereas the cost per middle-size farmer remaining in the project area is $100. The project is behind schedule.7 9.000 hectares.This excludes expenditureson health.0 5.7 21.505 13.000 2.5 3.000.423(3) 6.830 2.667 10.1 41.0 4.9 7.0 8.
under labor-intensive cropping systems. of which the Bank has contributed $68 million and affecting some 120.000families. the data in Table 3 indicatethe limitationson settlementprojects -as presentlyconceived. 44 . Outgrower Schemes The problems of distributing the gains from plantation development were mentioned earlier.Theten projects were intended to settle no more than 35.Thus. Kenya.cocoa inholding in each the Ivory Coast. the total cost was expected to be $190 million. the size of holdings for outgrowers is small.000per family limits the prospects of the approach. Mauritius and Uganda. rubber in Indonesiaand Malaysia. TheBankhasparticipatedin ninesuchprojectscosting$125million. The smallholdings are establishedaround the nucleus of either a processing plant or a plantation. Theseschemes involve the production of tree crops on smallholdings rather than on large-scaleplantations.settlerswere allocated holdingsof from three or four hectaresin Malaysia 40 hectaresin Brazil. While this systemhas madea valuablecontribution toward establishing viablesmallholders. in turn. inputs and marketingservicesfor the outgrowerswho. It was suggested that the benefits be distributed through the raisingof wagesand the paymentof dividends to the workers.Eachholdingwasdeemed to adequatetcprovide a livelihood and full employmentfor the settler and his family.the whole approachto capital-intensive settlementrequiresreexaminationconsideringthe magnitudeof the problem outlined in Annex 1 of this paper.and oil palm in Nigeria. it is only effective when there is a commodity that can be handled througha centralprocessing system. to In the main.Thesehaveincluded teaprojects in Indonesia.000 families. There are severelimitations on settlementas a meansof reaching large numbersof landlesspeople or relieving pressures the land.The average project hasrangedfrom 10 hectaresin Senegal one acre in Kenya. sell their productsthrough the centralorganization.holdings. on Although the costsper family in a settlementproject can be misleading. In this area.The capital requirementof more than $5. althoughlarge enough. the Bank has made a substantialcontribution toward a novel form of tenure through the developmentof "outgrower" schemes. 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.Clearly. the Bank'scontributions being almost half that amount.Thecentralunitprovides technicalassistance.
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. in practice.or an average 1. flood control and drainage projects.11 projects costing$342million (incorporating a Bankinvestmentof $190 million) are expectedto improve 810.although in recent yearsthere hasbeen a pronouncedtrend toward lending for smaller producers.Elsewhere. Bankhasmade loans on the condition that the the recipient government takes steps to ensure that the intended beneficiariesdo indeed gain from the investment.450 million in irrigation. To this end.By the end of 1973.Thus. Most of these resources haveaided largercommercialproducers.the Bankhas insistedon special legislation giving tenantssecurityof tenure. In other instances.6 of hectaresper family over alI the projects.However. access can be restrictedby tenurial arrangements lending criteria specify that registeredland if projects have titles be usedascollateral for borrowing.000hectaresand benefit more than 500. In some instances. irrigation projects are subjectto special regulations or laws regarding the size of holding that can be held by the projects have conbeneficiary.an estimated$250 million had been allocatedfor small farmers. In some instances.Irrigation The Bank has invested about $1. But. the Bank hasworked with various governmentsin determiningthe mostappropriatesize of holding for the beneficiaries of eachproject. in several instances. Pakistan and Sri Lanka. there is no legal provision regardingsize of holding or because the law has been ignored.000 families. or they have failed to introduce legislation which would havemet the conditions specified in the loans. In many instances. While these projects covered many facetsof water storageand distribution. governmentsconcernedhave not fulfilled obligathe tions regardingthe provision of securityfor tenantsor the allocation of land to low-income groups. most were intended to improve the use of water and-bring more land under intensivecultivation.Thishighlights 45 . governmentshave failed to implementconditions provided for by existinglegislationon rights to land.The average size of holdings in the irrigated areasrangesfrom 10 hectaresin Iraq to one hectarein Korea. this hasbeendifficult to enforce. Bank-assisted provided more than $1.000 million for rural credit. RuralCredit While in itself farm credit is an important instrumentfor reaching groups of a particular size in agriculture. For example.
one of the major dilemmas confronting an international lending agencyconcerned with promotion of land reform as an instrument of economicdevelopment.That is. It should give overt priority in lending to those countries and projects which meet land reform criteria. Secondly. (3) support land reform proposalswhen they are made officially. and income from the land. Firstly. the settingof public utility rates.in countriesthat are interestedin pursuingland reform the Bankcangive support in the form of technical assistance finance for reformand related projects. to what extent canthe Bankinfluence the courseof eventsregardingdistribution of land. These options are reflected in the policy guidelines provided in this paper.in countries where governmentsare not interested in land reform the Bankshould: (1) studythe situation in all cases. (2) call the attention of the governments the problemsassociated to with the existing tenure system.UsingBankfinanceto gain a developmental impact through land reform involves highly complex issuesat the project level. and (4) not lend for projects if tenurial arrangements so bad that are they frustrate the achievementof the Bank'sobjectives.and enter into a dialogue on the subject.Suchpolitical decisionsare not amenableto ready negotiationwith governments the in sameway as are other institutional questions-such as. for instance. The Bankwould seemto be left with only two options. 46 . while the potential for usingthe Bank'sinfluence to pressor even force the issueof structural reform on member countries is severelycircumscribed. in the sovereignstatesthat are membersof the Bank? Major Policy Options The Bankhasto recognizethat its leverageis limited as it seeksto redefineits positionwith regardto land reform.
I I I .
0 12.9 4.02 1.75 0.041 million hectares under other uses(36.0 71.8 14.63 3.393 145 232 271 84 463 214 47 1.753 3.14 0.8 4. approximately32% is in Asia. 15% in Africa.Theworld's agriculturalpopulation-defined as populationdependingon agriculture for its livelihood-is estimatedat 1.617 million in the early 1970s.78 Source: FAO.90 11.242 1.78hectareof cropland per person in agriculture. 19% in North and Central America.Among other things.4%). averaging0.240 2.8%).314 239 4 1. Agricultural Population and Area per Personin Agriculture Cropland Ruralpopulation Land area DistriDistri(million (million bution bution hectares) hectares (%) (millions) (%) Agricultural population as percentage of total population Cropland area per rural person (hectares) Region Europe USSR Northand Central America SouthAmerica Asia Africa Oceania Total 493 2. respectively. 16% in the USSR.851 million.851 4.6 5.456 10.9 0. 2. and 4. 10% in Europe. 49 .2 2.0 15.7 hectares an of land.Annex1 THE CONTEXT OF LAND REFORM Ratios of Population to Land The total land area of the globe is about 13. or 51% of the total population. of The relationship between population and land in all major regions and for 52 selectedcountries is shown in Annex Tables1:1 and 1:2.40 hectareof cropland.This represents averageof 3.6% in SouthAmerica.456 million hectaresof cropland.35 hectare per person.0 89 77 54 74 1.2 100.which hasapproximately 32% of the world's cropland. madeup of 1. The world's population was estimated at approximately 3.Production Yearbook 1972.35 0.8 31. On the basisof these global figures.783 2.Of the arable land. or closeto 0. More than 70% of all rural people live in Asia. Cropland.Together. The ratio of cropland to agricultural population is the lowest in Asia among all the major regions.393million hectares.7 3.9 18.01 5.031 851 13. per person.defined as arableland and land under permanent crops (10.the People'sRepublic Table 1:1 Regional Distribution of Land.8%). and 3% in Oceania.2 100.987 million hectares under permanent pasturage (22.0 17 32 17 39 64 67 4 51 1. the tables show that: 1. there is an average 0.
Annex 1 Table 1:2 Cropland in Relation to Population, by Country
Total population (000) Agricultural population (000) Hectares cropland of per person of: Total Agricultural population population
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
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. a higher output per has worker in agriculture than Japan.Most developingcountries haveconsiderable opportunities for increasingemploymentand production in this sector. 1971. I-V. and in Japanon the other. 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.However. This applies to the more densely populated regionsas well as to others. 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.while one country.Several other countries havea higher ratio of workers to the land than Japan. The emphasisin the latter countries will have to be placed more and more on raising yields per hectare.Annex 1 situation is correspondinglyworse.Table 1:5 showsthe startling differences in input of agricultural labor and output per hectarein developing countries of Asia on the one hand. The increasingpressureof population on the land highlights the issueof absorptivecapacityin agriculture.LabourForce Projections.Republic of Laos Malaysia Nepal Pakistan Philippines Sri Lanka Thailand Viet-Nam. 1972. Malaysia. is a country of small holdings and has approximately two workers per hectarewith an averageoutput of $397 per worker and $762 per hectare. Rome: and p.. Geneva: Columns and 5: FAO. Sources: Column International 1: Labour Office. Japan Table 1:5 Agricultural Labor Force and Production in Selected Asian Countries.
8% of the total number.Nigeriaand Romania.With very few exceptions. 55 .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).1% of the land areaand 3. Thiscovered83 countries.Table 1:6 combines the two sets of information to give an indication of the distribution of land and cropland by size of holding. then theseholdingsoccupy1. About 53. are under 1 hectarein size. evenif effective birth control could be introduced overnight.3 million holdings in the 83 countries. Ecuador. 2.Annex1 and India.except Afghanistan. are lessthan 5 hectaresin size.however. Suchmeasures include thoserelated to land reform. resourcebase. theseholdings accountfor approximately6. The most recent data on distribution of holdings by size is given in the worldwide censusof agriculture held in the early1960s. or 39% of the total number. or 78. Basedon the sameassumptionas above. Thiskind of labor intensity is not likely to be reached. 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. If the pattern in the 83 countries is the same as in the 64 countriesfor which there are data on distribution of size and distribution of land. It showsthat: 1. low incomesand increasingunemployment.Bolivia.land tenure and capital formation.7% of the cropland. the agriculturalsectorin thesetwo countriescould absorb all the labor force expectedby 1985.8% of the total land area and 20. About 109 million holdings.9 million holdings. becauseof the small size of the irrigated areas in Pakistanand India and other constraintsrelated to technology. urban aswell as rural. specialand possiblyextraordinarymeasures would haveto be taken to satisfy the expandingdemand for work and income from today'schildren. 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.includingall of the larger countries that are membersof the Bank. poverty and unemploymentproblemsof the developthe ing countriesare unlikely to haveany long-term solutionsthat would not include a reduction in population growth. Nonetheless.4% of the cropland. The censusprovides a breakdown of distribution by size of 138.
account for 78.50 10. The information on distribution of holdingsby size refersto the 83 countries. Therewere an estimated16 million holdingsof lessthan 5 hectares in the developedworld: 6 million in Japanand 10 million in Europe.20 1. of pp. farms of this size group account for 66% of the total land area and nearly25% of all cropland.00 3.97 1.20 20.00 1. covered by the census.8% of all holdingsin the 83 countries.40 5.23 138.00 11. both developed and developing.70 9. 34-36.60 5.70 4.73 13.10 1. when viewed in the aggregate.000 1.then holdingsabove50 hectaresin size.100 100.97% of all holdingsaccount for lessthan onequarter of all farmland and slightly more than half of the area under crops.2 2.50 5.and if the a distribution of 91% of the land reflectsthe pattern of distribution of all the land.3% of all the cropland.8% of the total farmland area and 45.00 Source: FAO.5 5.16 100.10 100.90 26.500 500-1. These data confirm that.2% of all holdings.40 1.Annex1 Table 1:6 Distribution Holdings Size and Percentage of by of Total Holdings:Distributionof Holdings by Percentage Landand Cropland of Sizedistribution (hectares) Number holdings of Percentage (millions) distribution All farmland in holding (%) Cropland in holding (5Y) Under 1 1.40 1.000 over and Total 53.80 5.20 4.90 19.200 200.If the distribution of holdingsby size in 83 countries represents global picture. 3. disthe tribution of land and cropland is highly skewed.92 million were lessthan 5 hectaresin size.23 0.59 38.60 8.16 0.60 6. Rome: 1971. One million holdingsof 200 hectares more representlessthan or 0.20 3.55 28.30 100.Conversely.90 7.Report the 1960 on WorldCensus Agriculture.In the 64 countriessurveyed.67 0.70 11.48 0. Thus.40 0.80 6.10 10.20 20.24 7.27 4.40 5.and more than three-quartersof all farmland. roughly3% of all holdings(in the aggregate)account for slightly less than half of the arable land and land under permanentcrops. approximatelyhalf of theseholdings 56 .80 9.30 12.00 11.00 0.80 11.50 51.of 122 million holdings in the developing countries.which represent 3.50 50.00 4. That is.
2 17.2 73.The most comprehensiveregional and national analysis the 83 countries dealswith for holdings of 1 hectareor more in size and pertains to 84.2 5.5 1.4 39.4 37. of Rome: 1971. excluding those in Nigeria. the agricultural population in the developing countries increasedby a reported 190 million persons.8 0.since it excludes holdings of less than 1 hectare.7 3.4 78. However.7 27. Afghanistan.3 0. Ecuador and Bolivia. The1960census data alsoprovided information on holdingsby size and land areafor different regionsand countries.5 21.4 36. it does provide an insight into the patternsof distribution of holdings within the major regions.5 50. this is not a complete coverage.it is safe to assumethat the census forthcoming in the 1970swill reveal that there are well in excess of 100 million smailholdersin the developingworld. most of whom were farming on units of less than 5 hectaresin size.5 Source: FAO.these countries had an agricultural population estimatedto be close to 50 million people.0 8. Obviously.at the time of the census.5 13.1 90.7 - 47. Reporton 1960 the World Census Agricalture.5 90. Table 1:7 Distributionof HoldingsaboveOne Hectare.or by more than an estimated 35 million farm families.1 66.7 91.0 23.0 34.3 8.0 0. more than half of their holdingsare lessthan 1 hectarein size.4 million holdingscovering2.6 23. Consequently.0 40. Preliminaryindications are that the fragmentationof holdings hasincreasedin manyof the more densely populated countries as well as in countrieswhere the distribution of land is skewed. or 10 million families.7 52.242million hectares.The resultsare summarizedin Table 1:7. in all probability.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. It is safeto conclude that well in excess 100million holdingsare of less than 5 hectaresin size in the developing world at the present time.5 9. This conclusionis derived asfollows: The 1960censusindicated that there were approximately92 million smallholdersin developing countries.2 6. it is highly likely that closeto 100million holdings of less than 5 hectaresexistedin 1960.5 2. 57 . Together. Between1960 and 1970.4 45.Thus.2 3.0 99.Annex1 were less than 1 hectareand the remainderwere between 1 and 5 hectaresin size.
1 6. as shown in Table 1:8.2 0.7% of the land.5 52. The analysisof the distribution of holdings by size on a regional basispoints to the highly skewed distribution in the Americas.2 10.8 92.of the area under farms. If these are excluded from the sample.1 85.7 46.7 36.5 3. At the other end of the spectrum. misleading.1 4.4 12. helps explainthis.6 8. respectively. and more than 90% in North and Central America. only 5% of the land in the eight Table 1:8 Distribution of Holdings above One Hectare.5 86.1 1.7 4.7 50.is in farmsof more than 50 hectaresin size.8 14.0 Source:FAO.8 5.1 6.Annex 1 The analysisindicates the vast differences in patterns of landholding and land distribution between Asia and the other regions.6 30.3 36.3 38.0 22. is becausecoverageof that continent in the 1960 censuswas poor.3 43.9 49.5%. are This The data for Africa.while the sampling in Zambia was confined to Europeanholdingsand in Tanzania commercialholdto ings. 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 40.7% in Europe.1 20.2 1. 58 .5 73. 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. South America and Oceania.9 28.6 20.9 2.1 37. Report the 1960 or WorldCensus Agriculture.0 9. of Rome: 1971.4% in North and Central America that are less than 5 hectaresin size occupy only 1% and 0. the pattern of holdings in the eight major countries in LatinAmerica.then the land held by smallholdersowning under 5 hectaresis much more than 50% of all land.4% of holdings in South America and 23.8 97.0 4.8 95. as presentedin the census.2 94.3 87. in Selected South American Countries %holdings Argentina Brazil Chile Colombia Paraguay Peru Uruguay Venezuela 14. The information confirmsthat a very high proportion of all land-ranging from 86% to 97.2 92. Only 9% of the area in Asia is in holdings of more than 50 hectares.6 51.1 1. by Size and Area.5%in the eight countries is in holdingsof more than 50 hectaresin size.3 32.3 40.As much as 34.6 6. The 36.3 1-5hectares % area 5-50hectares % holdings % area 50 hectares % holdings % area 0.0 0.2 42.
It is of special interestthat two of the countrieswith a high densityof population and very little concentration of landholdingsare Japanand Taiwan. p. Federal Republicof Greece Japan Philippines Sweden Yugoslavia Sources: FAO. as revealedby a Lorenzcurve. Land-Tenure:WorldAgriculturalStructure. 36. US Departmentof Agriculture.the distribution of holdingsby sizevarieswidely in different parts of the world. The most skeweddistribution appearsto be in LatinAmerica where the densityof population is relatively low in rural areas. notably Asia and Europe.the Gini coefficient indicatesa high concentration in six South American countries included in the sample. As can be seen.as shown in Table 1:9. countries such as the Republicof China (Taiwan). Study No.Annex 1 countries is in holdings of less than 5 hectares(even though these holdingsconstitutebetween 14% and 74% of all holdings). Clearly.Canada.ArabRepublic of India Iran Ireland Italy Netherlands Norway Pakistan Turkey United Kingdom UnitedStates Belgium Canada China. Other data provided by FAO. 59 . Washington: 1965. the sametime. the distribution of land appears be At to much lessskewedin many areaswith a very high densityof population. 2.On the other hand.The Gini coefficient hasbeenestimated for 30 countries which have been grouped into three categories.1948to 1963. Economic Research Service: ChangesinAgricultutrein726Developing Nations. The distribution of land by size of holdings is "a geographical phenomenon" and must be interpreted with caution in a socioeconomic context.Republic of Denmark Germany. 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. 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. Rome: 1961.
Renting or sharecroppingof land is a common practice in both developedand developing countries. in the 15 countries. in and that this skewness by no meansconfined to LatinAmerica.In someparts of the world. Table 1:11 indicates the number of landless farm workers in 12 countries. Iran and Egypt. The conditions that govern rental agreementsand crop-sharing arrangements differ throughout the world. This limited sample indicates that renting and sharecroppingare widespread in all the major regions of the world. in other countries. this is true of less than one-quarter of the farms.Only limited data on theseare available.yield a far greater income than do 1. however.000 hectares of land usedfor sharecroppingin the semiaridparts of Tunisia'scentral area. close to 29 million are worked by rentersand sharecroppers. 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.out of 82 million holdings. and they commonly give as muchas half their output in return for the useof land and services provided by him. In such countries as the Republic of Viet-Nam. All in all. occupying much more than half of the land. and the percentageof farms and areasof farmland they occupy. more than two-thirds of the farms. and rentersenjoy the sameworking conditions asownersof land.there is heavydependence the on landlord-usually an absenteelandowner-for the provision of pur60 . within countries.that mostof the agricultural land and cropland is concentratedin a relativelyfew holdings.Annex1 100.000acresin parts of Northern Australia. 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. In other areas. such as Guatemalaand Tunisia. the rights of those who rent land are protected by law or custom. where tenancyis widespread.Similarly. It also indicatesthat the greatestskewness distribution is in the Americas. The caveats quality of land and ecologicalconditions governing on land-use patterns must be borne in mind. rentersand sharecroppers in a verytenuous posiare tion when it comes to negotiating arrangements with the landlord. are farmed by tenants or sharecroppers. However.however. The evidence presented here (andelsewhere)indicates. In mostdeveloping countries.Table 1:10 givessome information on the number of rentersand sharecroppers in 15 countries. producing tomatoes.
7(5) 13.Vol.253 76 2.1 49. (a) Includes holdings operated under more than one tenure form (21.9 15.0 45.5 n.9 22.5 31.0 40.8 19. (4) (5) Includes both Pakistan and Bangladesh. 61 . 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.334 25.0 n. pp.3 31.020 1.1 66.4 70.9 31.3 61.349 128 381 129 93 27 18 776 Data refer to latest available year in 1960s and.2 73.4 26.7 23.664 62. Frequently.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.2(5) 1.6 24. chased inputs. 16. Source: FAO. therefore. 32.3 49.5 28.3 70. Dominican Republic.India and Pakistan. (1) 1960 estimates are for former Federation of Malaya.176 1. do not reflect land reform action on the one hand and changes in the work force on the other. due to lack of data.Rome: 1971. 25.4 57.6 n.a. 92-97.81).5.a.392 141 5.271 1.4 32. 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 35.a.Report the 1968 oe WorldCensus ofAgricolture. India and Nicaragua are excluded.the tenantsare among the lowest income groups in agriculture.0 62. 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).4 13.7 57.4 54.3 33. Tenantsand sharecroppers under conditions of great insecurity and are in a weak bargaining position vis-a-visthe landlord.350 4.2 43.
on the other. 14. data presented here are estimatedfrom [LO.013 60. YearBookof Labour Statistics 1871.912 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.Annex1 LandlessWorkers The number of landless-farmworkers in developing countries is increasing. 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. 44-301. and Except for India. Unless otherwise indicated. indian (3) Includes population now belonging to Bangladesh. Directorate of Economics and Statistics.986 1.499 101 557 99 287 9..561 694 3. 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) 47.300 5. p.43-294. 1971). 1972. 62 .673 8.865 903 484 210 4. Agricurltureinn Brief (I Ith ed. thus.237 378 1. do not reflect recent reform actions on the one hand and changes in the work force. pp.158 122 179 391 138 72 2.099 1. (2)Agricultural laborers as shown in India: Ministry of Agriculture. data refer to latest year available in 1960s and.
There are about 10 million suchworkers in LatinAmerica.but the problemsof reducingnationwide unemployment haveto be seenin a national ratherthan a sectoral context. The nature of this phenomenon has been discussed elsewhere. it should be pointed out that the redistribution of idle land can provide added employment. more than half of the workers are essentiallylandless. This group is increasingin size.It is usuallyassumed that the labor force subsists a off holding and joins in some arrangementwith the extended family whereby it shareswork and output. 63 . 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. Almost no reliable estimatesexist of the number of unemployed in rural areas. This figure includes an estimated47 million in India aloneabout 32% of the active population in agriculture.Annex1 (including family membersand headsof familieswith verysmall landholdings) in the 22 countries for which data are provided in Table 1:11.At this juncture. There is a vast amount of underemploymentin the rural areasof most countries of the world.Evenin Argentinaand Uruguay (with only 15% of the active population depending on agriculture). the proportion ranges from a minimum of about one-fourth in Brazil and Hondurasto a maximum of approximatelytwo-thirds in Chile.In the remainingcountriesof the region. The emergenceof a landless wage-earningclassconfirms that a growing rural labor force hasto rely on work outside the traditional sectors for its livelihood. Structural changes within agriculture can help alleviate underemploymentand open unemployment.and the provisionof employmentfor what is alreadya large rural proletariat may well be one of the greatest challengesfacing national governmentsin the future.
income and social effectson the other.good agricultural researchand extensionservices. A land-to-the-tiller programcompletedthe reform in 1953.leavingintact enoughincome to achievea fairly high agricultural savings rate. Republic China of Taiwan'sland reform program was implementedin three steps. Land reform is a complex process in which severalsocioeconomicvariablesare changedmore or lesssimultaneously. evidenceis inadequate allow identification the to of causalrelationships between reformmeasures the one hand and on production.In mostcases. income distribution has become more even.Landproductivity is higheston holdings below 0. in 1949. and rural and social stability havebeenenhanced. Following the reform. and a graduallyincreasinginvolvementof tenant farmers in the administration of the program.such as that between land distribution and a rise in productivity.all contributed to the success. even though it is often feasible to trace correlations.Annex2 EXPERIENCES WITH LAND REFORM The following summariesillustrate selectedcountry experiencein land reform over the lastthree decades. written and secureleases were arrangedat much reducedrental rates. On the land remainingunder tenancy cultivation.the productivity of agriculturehasincreased. nor should the statementsbe regarded as definitive.5 hectare.A reduction of rents. Their inclusionin this paper should not be taken as indicative of Bankjudgment on what doesor does not constitute land reform.The proportion of cultivated land under tenancy leaseswas reduced from 41% to 16%.Theexistence of a thorough cadastralsurvey. 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 . vast expansion publicly sponsored a of farm credit during the reform period. while the proportion of farm families owning all land under their cultivation increasedfrom 33% to 59%. The smooth implementation of the reform programin Taiwan was due to a stable sociopolitical climate and the many complementary developmentmeasures takenbefore and during the reform.was followed by the saleof public lands.The shareof total agriculturalincome that is consumed hasincreased only moderately.
It. of Japanese property confiscated by the military authorities.But the small size of most farms has now becomea constrainton farm income.6 million farmers (approximately70% of all farmers). before the reform. in 1868. and (3) a redistribution between 1950 and 1953 of land in excess a ceiling of 3 hectareson Korean of holdings. cheapfood and surpluslabor to the industrial sector. Largenumbersof smallholderslost their property in the agricultural depressionat the turn of the century. laid the groundwork for Japan'ssocial and economic transformation. which resulted in a thorough restructuringof rural society. and may also have removed a constraint on the growth of Japanese agriculture. The first reform did little.while only 7% were tenants.Annex 2 in 1945. The economiceffects were not as enormousas thoseassociated with the 65 .Labor intensityand land productivity rose quickly. (2) a redistribution. and promotion of farm chemicalsand new crop varietieswere pushedon a large scale. in 1948.credit services. with the result that the agricultural sector could provide savings.Theformer tenantsweregiven property rights at an extremely low real cost.training and extension. Yields did not fall as a consequenceof the reform.the power of the feudal lordsto collect taxes from landownerswas broken. The second reform resulted in greater equity.4 million acres (25% of the total farmland) were distributed to 1.Afterward. yields had far surpassed prereformlevels.The peasantry wasfreed from bondage. by the 1960s.In the late 1940s.Some 1. the tenancyproblem grewgradually to worse. to distribute property ownership or reduce income inequality-rather it strengthened the landownerclass.hasbeen estimatedthat. Japan The first Japanese land reform program.Laborproductivity and rural employment increased.togetherwith income redistribution in favor of the poorer ruralfamilies. 19% of the farmers owned 90% of the land and more than 50% of the farmerswere landless tenants. Owners had to sell all land in excess about one hectareto of the governmentat confiscatoryprices. 69% of the farmers owned all the land on which they worked and 24% were part-owners. Supplementary programsfor infrastructureimprovement.Considerablesociopolitical stability has been achieved. however.partly because heavy of land taxes. a secondland reform programwas executed.The terms of salewere similarly generoustoward the buyer in both cases. and private landownershipwas reinforced for the purposeof cash taxation by the central government. Subsequent the first reform.
3 million tenants.the problems of fragmentation and undersizedfarms. Under the British. pursued since 1950-51. the tenancy problem had already been relieved through a reduction of excess rural population by the war and absorption into industry. lagged behind.Annex 2 first reform.had been abolished. amongother objectives. India Land reform in India. is largely recommendedand coordinated by the Central Governmentand the Planning Commissionand executedby the individual stategovernments.Securityof tenure appearsin general to haveworsened.350 million was paid in compensation. The four major types of reform havebeen: (1) the abolition of the zamindari' system. but the farmersconcernedare often limited to lowskilled work. Actual rents have not come down.Part-timework outside the farm is an outlet. in 'The zamindars were revenue collectors during the Moghul period.Sincetenants continue to pay revenuedirectly to the government. Rural incomes have. it hampered equalizationof rural and urban incomes. The second reform worsened. most important of whom were the zamindars.At the time of the reform.their economic position hasnot been greatly improved. Although the reform increasedincome equality among farmers. Land productivity did increase after 1947. The abolition of the zamindari systeminvolved 173 million acres. with the result that policy implementation varies widely.to improve security of tenure and to give the right of purchase the tenant. therefore. subtenantsand sharecroppershad.and (4)consolidation of fragmentedholdings. Two-thirds of the owners were required to sell lessthan one hectareand only 6% more than five hectares. however. Under the tenancy reforms. more than half of the area occupied by holdings. (3) to ceilingson landownership and distribution of surplus.(2) tenancyreformdesignedto fix maximumrents.an increase farm incomethrough diversification into horticulture and animal husbandry. acquired ownership under purchase agreementsof 7 million acres. the intermediary rent and tax collectors.4. they gradually turned into powerful landlords. 66 . Agricultural policy is now of aimedat. but some observers regardthis asessentially continuationof a long-term trend a (1895-1939) startedby the first reform.however.mainly in the form of bonds.An attempt to create larger farming units through cooperativeshashad little effect. A total of Rs. by 1961. price supports notwithstanding. The landlords who were forced to sell excessproperty were mostly smallholders themselves. By 1961.
and to promote more efficient typesof tenancy contracts. together with accessible marketingchannelsto small farms in general. The. Provisionof thesefacilities is as essentialas further land distribution for attaining the income equity and productivity objectivesof India's land reform. it will be unrealisticto try to abolishtenancy in the short run.All kinds of tenants should also be registeredand given access credit and inputs. which has allowed them to escapethe reforms.It appearsto havecontributed to a growth in productivity in the northern states Punjab.but most of the donatedparcelsare still in the handsof the donors.Only about 1 million acresout of all gifted land haveactually been given to landlesslaborers.Evenif a ceiling is imposed. As long as population pressurecontinues. 56% of the holdings.and ownerswere often absenteelandlordswho contributed little to agriculturalproduction.largest estatesoccupied relativelymore fertile lands.A further 4. Consolidation of land parcels has been more successful and has resultedin a rationalizationof holdings covering 69 million acres.and particularly to tenantswith secureleases. Before the reform.and that manyof the statelegislatures not anxiousto havesuch radical are land reform.Landownershave been permitted to resumeland above legal ceilingsfor personal cultivation. A large extensionof credit at reasonable to terms. Therefore. Tenantswere rotated annually. Thereappearsto be scopefor somedistribution which will also assistagricultural production becausethe yield per acre in India is higher on small farms.is required.2 million acreswere formally pledged to the Bhoodan(gift) movement. Under the ceilings legislation. were rented.Annex2 some statesthey have even increased.approximately2 million acreshave been taken over by the government in order to settle tenantsand landlesslaborers.the landacquiredis sufficient to give minimal holdingseither to the minifarmersor the landlessbut not both. Former landownerswere partly compensatedupon expropriation by cash paymentsrangingfrom 10% to 20% of the estimatedvalue 67 . Unreported casual tenancyand shareagreements havemultiplied. covering 62% of the area under cultivation.it will be better to legalize someforms of tenancywhich exist on a largescale. a practice which hampered agricultural investmentand causedexploitative useof the soil. of and It is well recognizedin India that the reform measures dealingwith securityof tenureand acreage ceilingsareonly partiallyenforced.Uttar Pradesh Haryana. Iran Iran's land reform started in 1962. and is likely to presentfewer problems.
total lending by the Agricultural Bank tripled between 1960and 1965. (3) purchasingthe tenants' rights. Continuation of the existing inequities of land distribution was regardedas one of the costsof ensuringa speedyenactmentof the reform. the Central Bankfunded the difference. (4) dividing the land with the tenants in the same ratio as the customary crop sharing.As these paymentsfell behind. Because they were basedon the existingdistribution of holdings. During the first stageof the reform.The costs to the Governmentwere limited to thoseincurred in carryingover the acquisition coststo the time of final reimbursement. The objective of these measures to facilitate an increasein agricultural production is 68 . Morocco The Moroccan Government has undertakena series of measures aimed at land reform since independencein 1956. The ownershipand tenancy reforms havebeen complementedby rural cooperatives. The early accomplishmentsof the credit program were striking. aimed at conversionof all 30-year leases into smallholdings.The beneficiarieswere to repaythe governmentthe expropriation price plus 10% to cover administrativecharges. Although agricultural output increasedby a total of 18% in the first five yearsof the reforms. and (5) forming an agricultural unit for joint operation by the owner and the tenants. credit and extensionservices. Virtually all of Iran's 50. with the balancepaid in bonds in annual installments.which was practicallycompleted in 1971. Many measures were set up in a somewhat improvised fashion.but this growth leveledoff after 1966. It created uncertainty which discouragedinvestment in improvements. In the second stage. there was also considerable interferencewith the normal flow of irrigation water from streamsand storageplacesstill controlled by landlords. to wit: (1) of leasingto the tenantsfor 30 years. Excess land was expropriated and distributed to the tenants.Annex 2 of their holdings. (2) selling to the tenants. The reform favored tenants and sharecroppersinsofar as it conferred ownership on them or enhanced their security of tenure.the limit of one village was reduced further to plots of 20-100 hectares(depending on the natureand location of the land).000villageshave undergone land reform and more than 3 million families have received land. The third and final stageof the reform.the reforms did not assistthose who were landless. landownershipwas limited to a maximum of one village per owner. it is believedthat the land reform program on balancehad adverseshort-run effects on output. and increasedsupply of quality seedsand fertilizers. The landlord had five options for the area in excess the maximum allowed to him.
while maintaining high technical standardsof managementon the distributed land. published in 1969. and to seeka suitable formula for distributing land under tree crops. between 1974 and 1977. of this area.000hectaresof "official colonization" landswere takenover by the Government between 1963 and 1965. and a further 220.about 900.000hectares were sold privatelyto Moroccans.Legislationpassed in 1962. is aimed at facilitating the developmentof irrigated agriculturein welldefined developmentzones.000families. the number of beneficiariesso far is only about 1% of farm families with lessthan 2 hectares. Distribution so far hasbeen limited to land underfield crops. the impact of land distribution alone on the problem of rural poverty hasbeen small.000hectaresof land under field crops.1966 and 1972 provides for land consolidation and distribution of land to smallholdersand landless families throughout the country. 181. However. The main constrainton the program hasbeen the unavoidablecomplexity of supervisingits implementation consideringthe Government'smanpower resources.mainly before 1963. Distribution to smallholdersand landlessfamilies was slow until 1967 and then gatheredmomentum up to 1972. an improvement in the tenure position of membersof traditional collectives.and the adoption of modern cultivation techniques. the beneficiariesof land reform have generally quickly achieved high yields and acceptable incomes. Through the establishmentof cooperatives.000 hectareswere foreign-owned. The Government'smain priority now is to accelerateland distribution. mainly formerly foreign-owned.when legislation was introduced subjecting such transfersto Government approval.000hectares. It providesfor the restrictionof inheritance rights to limit fragmentation.althoughsomeother state-ownedland and traditional collective land is involved. Land distribution is so far basedmainly on former foreign-owned land.Annex2 and to improve the distribution of rural incomes.while land under tree crops (mainly orangegroves)remainedunder Government control and ownership.intensified extension supportand the provision of modern inputs.000hectares(3% of the cultivated area)had been distributed to over 11. By the end of 1972.Land consolidation hasalso been successful and hasso far benefited almost 200. The target for the third Five-Year Planis to distribute 395.was recovered by the Government in 1973.amountingto about 370. The Agricultural Investment Code.The achievementof the distribution target for land 69 . Thirty-one thousand hectareswhich were mainly used by foreignersfor researchpurposes were recoveredby 1960. about 300. Remaining foreign-ownedland. At the time of independencein 1956.000hectares.
whereas producer cooperathe tives havedeclined. bondage was abolished. 70 .and by 1956accountedfor only about 10% of all land under cultivation. Collective farms were allowed to disband after 1952.however.were expropriated. to The socialistsectoris reportedlythe mrst productive.and have expanded about40% of all smallholdings.Half of the seizedland was distributed to the poor and landless.Thisis related to the location of holdings on the better soils and its priority treatment in the allocation of inputs such as fertilizers. the bulk of agricultural output still originates from the large group of small farms. and the farm property of of Germans and other aliens. but the former landownerswere allowed to retain ratherlargeholdings.The average holding in the private sector is now only 3. the size of the large estateswas reduced. which resemble worker-managed the industrialfirms.9 hectares.collectiveforms of usage. machineryand expertise. In the north. enable the program to cover 9% of cultivated areaand 5% of farm familieswith lessthan 2 hectares. particularly sincethe mid-1950s.while the other half was retainedas state property. The stateand collective farms createdin the late 1940salong Soviet lines expandedto approximately25% of the total cropland.and resulted in a transfer of ownership of almost 25% of the farmlandto more than 33% of the peasants. However.The generalcooperatives mainly associations are for joint input purchases. and the tenants of the Turkish landownersreceivedownership rights.a ceiling of 10 hectaresof arable land or its equivalent was imposed on private holdings. all land in excess 25-35 hectaresper farm. and vasttractsof mountain pastures still undertraditional. equipment useand output sales. by the end of the plan. The socialistsector includesstatefarms. Aside from the socialistsector. producer cooperatives and general cooperatives.when all large estates. consistingof both the cooperatives and the farms outside the socialistsector. form the largest and fastest-growing socialistelement.The implementationtook two decades.The reforms have resulted in a sizable redistribution of rural income and an increasein peasantparticipation in rural decision making. In the The first land reform in Yugoslavia south and west. are In 1953. The second land reform started in 1945. Yugoslavia was undertakenin 1919.the privatesectorof individualownerswho cultivate their own land remainsimportant.Annex2 under field crops alone would. The kombinats.
despite the considerableconcentration of ownership that persistsin the private sector. The reform aimedat solvingseveralproblemsat the sametime. promotion of cash (3) cropping and dairying. those that were already relatively well-to-do have profited. More than 1 million acresof land formerly cultivated by Europeans were opened up to Kenyansmallholders.occupying altogether lessthan 4% of total arable land. Closeto 90 million hectareshavebeen distributed between1915 and 1972 to about three million ejidatarios. Most of the ejidos wereformed in the late 1930s and havebeen operated on an individual rather than collective basisby the ejidatarios.and (4) diversificationof export output. It was estimated in 1973 that approximately25% of all smallholdingswere less than one hectareand about 50% less than two hectares. Mexico Having its roots in the revolution of 1910-15. Total production by the ejidos grew very slowly during the first decadeof their establishment. Incomesof the ejidatarios arealmost certainlybetter than would havebeen the case without reform. Theseincluded: (1) adjudicationand consolidationof holdingsunder cultivation by African farmers.the reformshavecreateda class of prosperoussmallholders.Theseprimary beneficiaries of the reform represented 53% of all farmersand 26% of the rural labor force.Socially. wheat.and the rightsto about 7 million acreswere adjudicatedand consolidated. Somethree million landlessrural workers remainand. the agrarianreform in Mexico createdvillage groups (ejidos)with usufruct rightsto land. maize.An activeextensionprogramhasenabled smallholdersto increase the production of coffee. The economic benefits of the adjudication and consolidation of holdings seemto have been greater than those of resettlementon largefarms.In particular. dairy products and beef. The landless amount to approximately16% of the rural population. but substantial regional differences persist in natural 71 . notwithstanding political friction and a lack of qualified personnel. pyrethrum. the ejidos haveincreased output about as fast as hasthe private sector. Sincethen.Annex2 Kenya Land reform was initiated in Kenyaby the colonial administration in 1954 and expanded by the Government after independencein 1963. and increasedproduction for the market. The implementation and results of the reforms have been quite successful. while the poorest smallholders and nomadshave benefited much less from the reform.1976 hasbeen plannedasa terminalyear for land reform. (2) resettlement African farmerson of the large farmspreviouslyowned by Europeans.
The agrarianreform law of 1964concentratedon redistribution of inefficiently managedlatifundia (large landed estates)in the Sierra.More such investment and a mechanism for selectiveconsolidation of small farms will be required to ensure that the impact of the reform is maximized.A of limit was establishedon the size of holcdings (150 hectareson the coast).200farm units containing 12 million hectares.000families.Since then.Among ejidatarios. Rural income distribution is still skewed.50% of the farmers earnedonly 20% of all farm income (including personalincome from sourcesother than agriculture).The target for the current Five-Year Planis to expropriate26.while in a few casesland hasbeen to added to the holdings of Indian communities.the concentration of landownershipincreasedagainbetween1940and 1960. and to redistribute theseto 500.Annex 2 resourceendowment and in the extent of public investmentin complementary infrastructure.about three-quartersof the target area still remainedto be expropriatedand reallocatedbefore the end of 1975. While the top 20% of private farmersreceived60% of all privatefarm income. Following the land redistribution during the 1930s.The more fundamental reform law of 1969was the basisfor the expropriation of the large.Only a small number of individual farms has been assigned former tenants.the top 20% of the ejidatarios accountedfor only 45% of all ejido income. used for investmentin industry to supplementtheir other resources.productiveand profitable sugarcomplexes the north coast.Over 100.000families have been settled on 2. Peru Betweenthe start of land reform in 1963 and 1972. The government bonds given to the former owners can be. In 1972.however.and is the basicunit of agriculturalreform in the Sierra. In 1967-68. Despite the priority given by the government. to which the land title is then transferred. the concentration may have fallen back as a result of the distribution of another 35 million hectares during the last decade.implementation is well behind schedule.TheSAISrepresents attemptto an 72 . income was more evenly distributed.7 million hectareshas been expropriated. a total of 4. Expropriatedlands that havenot yet been resettledcontinue to be operatedunder direct governmentsupervisionuntil a cooperativeor SAIS(Sociedad Agricola de InteresSocial) farm organizationhasbeen formed. TheSAISisa unique form of farm organization. Four different categoriesof farm organizationscan receive redistributed land.8 million hectaresof this area. Well managedproductive units were exempted. but the bulk hasbeen placed in the handsof workerowned cooperatives.
unemployment problem. In this manner.the full market value of expropriatedlivestock hasto be paid in cashwhile fixed capital is to be paid for largely in agrarianbonds.Managementof the SAISis in the handsof professional employees. It can be regardedas a second-degree cooperativewhosemembersaresocialbodies instead of individuals. Legally.000families with insufficient land to provide adequatesubsistence eligible to are benefit through the land reform program. The debt assumed eachSAISunit is to be repaid from profits in by 20 years following a five-year grace period. accountedin 1972 for 10% of the families benefiting from the agrarianreform program. 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.about 500.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. Profitsare allocatedto each membercommunity in relation to its sharein the SAIS. However.the proposed solution to this dilemma. the share of each group is determined by the land reform agency. Eachgroup contributesto the capitalof the enterpriseon the basisof resources. roads.The SAIS.Membershipof eachSAISunit consists the cooperaof tive of the production unit and of the communities surrounding it.population and economic potential. employmentopportunities in agriculturewill increase only from 1.Haciendaproduction is almost entirely basedon extensivegrazing of mountain pastures.32million to 1.will still lack a minimum subsistence landholding. the governmentis faced with problems of maintaining or raising productivity levels attainable only through exploitation of scale economies. and are to be used in community development projects involving schools.surplus manpower is given employment. Debt repaymentmay becomean onerousburden on those units whose profit potential is limited by their physicalcapacityto expandlivestocknumbersand by the need to employ high-quality technical services. Nearly800. 73 . and the rather meagerprofits can be usedin developingbadly neededphysicalinfrastructure. Evenif all land which can be expropriatedis redistributed.1 million. while the number seekingwork in agriculture will rise from 1. The land reform programalone will not be able to solvethe rural .6 million.9 million to 2. power reticulation and housing. agrarianreform is providing the basisfor socialand economicchange.mostly in the Sierra.000 families.therefore. * In anyattemptto meet socialneedsthrough redistributinglandand income in the Sierra.
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