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Land ownership has a strong historical association with social and
political power. This linkage, being so vivid visually, has a psychological
dimension that eludes other forms of concentration of wealth. In developing
countries, therefore, whenever the governments, planners and social
reformers are frustrated with problems of political stability, poverty
alleviation or agricultural productivity the mantra of land reforms
provides a convenient promise. Many developing countries in South
and East Asia, Africa and Latin America have instituted land reforms
with varying degrees of success. Psychologically, the success stories
are remembered and quoted more vehemently while failures are forgotten.
In most cases the success of land reforms, in terms of increased productivity
and consequent poverty reduction, was equally, if not more, a product
of complimentary institutional support provided to small farmers after
land redistribution than land distribution alone. However, land reforms
become a totem of progress in these cases.
In Pakistan, we hear a clamour for land reforms intermittently from
various quarters in spite of three attempts in the past. The socialist
political groups have consistently held that elimination of large
land holdings will pave the way for perfect political representation
of the downtrodden rural poor. Their motivation is academically political
and is least concerned with consequences of productivity and economics.
Next, there are economists who derive their statistical wisdom from
regions where land reforms manifested in higher productivity and rising
incomes of rural poor. Their assertion is that, statistically speaking,
land reforms would enhance productivity since the poor would utilise
their land resource more effectively. Then there is a strong urban
lobby constituting intelligentsia and business community who wish
to see the political strength of the rural power brokers (as mostly
deriving strength from land holding) eroded and the balance of power
tilt towards urban business elites. Mian Nawaz Shareef had put serious
plans of implementing provisions of existing land reforms against
chosen feudal families on the anvil during his second tenure that
could not mature. And finally, there are international donor agencies
who view land redistribution as a shortest route to enabling rural
landless poor to climb out of the poverty pit.
Of course, to counter all these voices for land reforms, the politically
powerful land owners stand united across all political divides to
stall or subvert any further movements towards land reforms. The do
not, and are unable to, plead the case on logical and empirical merit.
Their arguments are transparent in preservation of self-interests
and therefore not convincing enough to generate a need for a neutral
point of view.
Let us review the three land reforms instituted in the past. The first
land reform was enacted in 1959 as Martial Law regulation 64. It restricted
individual holding up 500 acres irrigated land or 36,000 produce index
units, which ever was greater. There were exemptions for livestock/stud
farms, orchards and gifts to heirs. The Regulation abolished all jagirs
and compensation provided for resumed land over the permissible ceiling
of holding. The resumed land was supposed to be provided to tenants
on easy terms.
The next reform was promulgated in 1972, again through Martial Law
Regulation, reducing the ceiling of land holding to 12,000 PIUs, or
150 acres irrigated land whichever was greater with additional allowance
of 2,000 PIUs for tubewell irrigated land. The excess land was resumed
without compensation, and its allotment to sitting tenants free of
charge, was protected under MLR 115 of 1972, which was protected under
Article 268 (2) (sixth schedule) of the constitution. All stud/livestock
farms, shikargahs and orchards exempted earlier were resumed without
compensation and left in custody of the government for utilization
as it deemed fit. Stud farms of State Land were left with GHQ on lease
for horse breeding for the army.
The final and concluding land reforms came in 1977, through Land Reforms
Act 1977, whereby land ceiling was reduced to 8,000 PIUs or 100 acres
irrigated land, or 200 acres unirrigated land or aggregate of both.
This time the owners were to be compensated at the rate of Rs 30 per
PIUs. The administrative structure of implementation of Land Reforms
constitutes a Federal Land Commission and four Provincial Land Commissions.
The Provincial Commissions execute all aspects of Land Reform provisions
while the Federal Land Commission guides, coordinates, resolves disputes
and ensures effective implementation of Land Reforms in all provinces.
According to Federal Land Commission, 1.8 million hectares (or less
than 8 percent of the country's cultivated land area) has been resumed
so far. Of these, 1.4 million hectares have been distributed to 288,000
beneficiaries, many of whom have physical possession but not the title
deeds to the received lands. Apart from the upper ceiling, the Land
Reforms Regulations have placed a lower limit on distribution of lands
that is equally, if not more, consequential in its impact on land
ownership patterns. Land below 12.5 acres (called subsistence holding)
can not be further divided amongst heirs unless they all do so collectively.
As a consequence a very large area in the country is under 'mushtarqa
khata' (joint holding) that can not be bought or sold easily. Most
banks are reluctant to lend against lien of such property since physical
allocation of title is not defined.
Over the past decade, two developments have started a trend that is
counter to the spirit of the Land Reforms enacted earlier. One was
an injunction by the Shariat Appellate Bench of the Supreme Court
proclaiming Land Reforms to be against basic tenets of Islam. It is
not clear what form the execution of this judgement will take. It
cannot be implemented retrospectively but would impede any future
moves to enact further reforms. The second development is the Federal
Government's policy for promotion of Corporate Farming. This exempts
any corporate entity from upper ceiling on land holding either in
lease or ownership form. On the contrary, it provides authority to
the government to appropriate any land for long term lease or sale
to entrepreneurs who wish to invest in corporate farming ventures.
It also provides protection to existing land owners from any future
land reforms on individual land holdings that may be enacted in the
future. By converting joint family farms into corporate entities,
future subdivision of land through Islamic Laws of inheritance or
through resumption in Land Reforms can be pre-empted permanently.
Next week in Part II of this column, we shall look at various elements
of this complex issue of Land Reforms. There are considerations of
equity, productivity, efficiencies and political economies that need
to be taken into account before arriving at any objective point of
view. There are more fundamental questions: for example, is acreage
or PIUs a fair measure of value of agricultural assets? Isn't water
an equally critical element of package, as much as land? And so forth.
We shall begin by taking a look at existing land ownership distribution
curve and then re-establish classifications of size on more realistic
and commercial yardsticks. We shall also look at economies of scale
of different types of agricultural enterprise activities. Having taken
all these factors into consideration, we will try to develop a more
comprehensive outlook towards the issue of Land Reforms.
Iqbal Mustafa
1189 words
18 December 2004
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