3. Tenancy Reform

To a limited extent, the laws abolishing intermediaries and establishing ceiling on land ownership have improved the situation of tenants by granting them ownership or occupancy rights. However, considering the widespread tenancy in Asia — 30 to 50 per cent of the land is cultivated by tenants — the impact has been limited. In most countries, therefore, special measures to improve the situation of the masses of tenants had to be implemented. One can distinguish between reforms which aim at improving the situation of tenants by regulating the relations between landlord and tenant and thus preventing exploitation, and reforms eliminating tenancy completely by giving ownership rights to tenants.

The regulatory approach which was applied by most countries involved the enactment of various laws and regulations. Thus, security of tenure was improved by prescription of written lease contracts, registration of lease contracts (Taiwan, Korea, Malaysia), minimum duration lease contracts (Viet-Nam, Korea) and stipulation of reasons for eviction (Taiwan, Ceylon), tenants were sometimes granted permanent and heritable rights, rents were regulated by changes in form of payment — usually converting share-rents into cash-rents or fixed produce-rents (Korea) — and/or by establishing ceilings on rents which were sometimes intended to limit rent to as low as 16 per cent while in other cases the ceiling of 50 per cent merely confirmed the existing level. To increase tenant's incentive, some laws granted them the right to make land improvement and compensation therefore in case of eviction.

The succes of all these regulatory measures is limited. It proved difficult to enforce the reforms and in quite a number of cases the laws remained unimplemented. The basic difficulty is that the tenant has a low bargaining power. A regulatory approach requires alternatives for the tenant. But alternatives can be created in the course of development only. The vested interests of the peasant landlords who are locally more powerful than the former absentees, turned out to be insurmountable for the tenants.

Experience showed that rent regulation, security of tenure and credit programmes have to be organized jointly to be successful. Tenants will not insist on lower rents if they are not sure that the tenure is secure and if they are indebted to the landlord. Most tenancy reforms, however, did not institute supporting services to stop financial dependence on the landlord. Thus, the previous rent of 50 per cent of produce often continues to be charged and security of lease has not improved.

Part of the reason for this failure is the weak administration and the fact that local officials often care more for the interests of landlords than for those of tenants. Where there is a better record of regulatory measures, the administration has usually strongly backed the implementation of the laws assisted by local committees which represent group interests. If tenants' interests are backed by tenants' associations, there is a much better precondition for the successful implementation of tenancy regulations. Experience in Ceylon and Nepal has shown that, with the help of local committees, rent regulation is possible, even in the absence of cadastral records.

In a number of cases, tenants had the opinion either to buy the land or be evicted in order to enable the landlord to cultivate the land himself. If there is no time limit fixed for the landlord's decision to personally take over cultivation, the resulting insecurity is especially great. This provision often proved dangerous and many tenants surrendered their holdings "voluntarily". The lack of proper definition and identification of the tenant constituted a limitation to many tenancy reform laws. As a result, large numbers of tenants who had land under various crop-sharing arrangements did not benefit at all from tenancy reforms.

The limited or sometimes negative results of measures to regulate tenure resulted in the adoption of a different approach in some countries. These countries assumed that under the prevailing socio-economic conditions tenancy is an impediment to society and development and should therefore be eliminated. This abolition approach — sometime selective, sometime total — (in case of absentees or those holding land above the ceilings) has been applied in Japan, Korea, Taiwan, and in some Indian states. Compared to the regulatory approach, tenancy abolition proved much more successful. Apparently, it is possible for the administration to execute tenancy abolition when a political decision has been reached. Abolition has less loopholes for evasion than regulatory measures. However, the provision of the option to tenants to either buy the land or to give up their rights proved a failure in some Indian states and caused much voluntary surrendering of land by tenants.

In some countries, a partial abolition of certain tenancy forms was aimed at by making sub-tenancy illegal. In view of the high demand for rented land, many disguised forms of subtenancy limited the success of these provisions.