2.C. The Likely Impact of the Land Reform Regulation of 1972 on the Land Tenure Situation

In 1972, a new land reform law was enacted with the following main regulations:

  • Ceilings of ownership: 150 acres of irrigated or 300 acres of non-irrigated land, or 12 000 Produce Index Units, whatever is more, plus 2 000 PIUs for ownership of tubewell or tractor.
  • No compensation to landowners for area appropriated, free distribution to tenants and landless.
  • No exception for seed and mechanized farms, but right of prior transfer of land to heirs (wife, sons, daughters, father, mother, children of deceased sons and daughters).
  • The landlord decides which of his plots of land he will surrender.
  • Uncompensated confiscation of former state land of more than 100 acres which was in the hands of civil servants.
  • Security of tenure to tenants who can be evicted only if they pay no rent, misuse the land, do not cultivate properly or sublet.
  • The landowner has to pay all taxes, water rates and seeds, while expenses for fertilizers and pesticides are shared. Extra levies and begar are not allowed.

The likely impact of this law on the land tenure situation will be analysed in two sections in terms of its influence on landlords and its influence on tenants.

The category of landlords can be affected in their ownership rights and in their relation with tenants. It is to be expected that the area above ceilings, which falls under acquisition by the land commission, will be rather limited for the following reasons:

1. The legitimization of transfers to future heirs by the law will reduce considerably the area individually owned. Most landlords have divided their land among family members in anticipation of a land reform. Since, in their earlier manifestos, the important political parties had included a paragraph asking for lower ceilings on land ownership, the new provisions of the land reform were not unexpected. With the large number of legal heirs, even big estates could be brought under ceiling limits.

2. A considerable percentage of the land held by big landlords is waste or unused land. As the right to select the land for surrender is vested with the landlords, they are likely to give up such tracts, thus reducing the size of their holdings, but not their cultivated area and income derived therefrom. Such waste and unused land, on the other hand, is not always fit for redistribution to tenants because of the high expense involved in its reclamation. Often, such land is uncultivated because of shortage of water and therefore cannot be cultivated at all.

3. Permitting alternative application to acres or Produce Index Units as basis for ceilings allows an escape of considerable magnitude because these two attributes are not equal. As PIUs have been determined earlier in 1947, and as the productivity of the land has much increased in the meantime, the application of PIUs will under many conditions, result in 50 percent (or more) larger areas than those limits fixed by law.

Therefore, although it is unlikely that the law will result in a large-scale transfer of ownership from landlords to tenants (perhaps more can be expected from redistribution of government land), it might well induce a further increase in self-cultivation by landowners and the abolishment of tenancy, doing further into commercial farming might compensate for any losses of land incurred through the reform and overcome the impact of tenancy regulations on landlords. As will be explained under the impact of the law on tenants, it is quite possible, legally, to apply an abolition policy to tenancy.

The effects of the agrarian reform on tenants will also be rather limited. As the amount of cultivated land available for distribution will be very limited (except unknown amounts of state land) only few tenants will become owners. (This raises doubts about the provision for free distribution of land under the reform law, as this will benefit a small number of former tenants while discriminating against the mass who will not get anything - not to speak of the capital formation aspect of this arrangement). Even the stipulations to increase security of tenure are not likely to have the desired result. The law asks the landlord to pay the water rate but this does not apply to tubewell water. Above all, it does not stipulate the rent. This means that the tenant cannot be evicted but, by increasing the rent, he may be induced to give up his tenancy. As the new technologies will require changes in the rent system in any case, because of new and different inputs, this can even be done in disguise.

In short, while the latest land reform law, like the one enacted in 1959, will definitely have an important psychological and political effect, it is unlikely that it will have a major direct effect on the tenure situation.