Land Reforms-lessons from Iranian Experience
By: Tarique Khan Javed
President, Overseas Pakistani Investors Forum.

Poverty and landownership:
Land ownership determines the fate of people in Pakistan. All poor in the country are landless people either in Rural or Urban area. In neighboring countries India, Bangladesh, China and Iran effective reforms were made which have reduced the disparity in land ownership. However in Pakistan this remains an unfinished agenda. Two reforms carried out so far had little effect while the third reform still remains to implemented. Government and politicians pay lip service while millions suffer due to lack of ownership of land.

While lot of talk goes on the reforms carried out in India and China not much is written on the reforms carried out in Iran. Therefore this paper will concentrate on the lessons of reforms in Iran.
  
Background:
Distribution of land ownership in Pakistan and provinces, 1950-55:
During this period 1.2 percent of owners owning 100 acres and above land owned 31.2 percent of all land in Pakistan. While those owning between 25-100 acres constituted 5.7% of land owners and they owned 21.8% of all land. Those owning between 5-25 acres constituted 28.7% of land owners and owned 31.7% of all land. Small farmers owning 5 or less on the other hand comprised 64.4% of land owners but owned only 15.3% of all land.
      
       The two major provinces Punjab and Sindh accounted for 38.5 million acres (or 79%) of land out of total 48.6 million acres for the country. In Punjab 0.7% owners having land above 100 acres owned 23.5% of all land in the province. While in Sindh 8% owned 54.4% of all land. Those owning between 25-100 constituted 4.1% and 16.2% but owned 21.9- 23.2%, respectively.

Land and tenancy reforms in Pakistan upto now:

1. Tenancy Laws Committee, Sindh 1945:

Occupancy rights should be granted to haris who had personally cultivated at least 4 acres of land annually for the same Zamindar for 8 years.

1. Hari Committee, Sindh 1947:

Defended the landlords; famous note of Dissent from one member who argued for radical changes in the land tenure system.

1. Muslim League Agrarian Committee Report 1949:

Abolition of Jagirs; security of tenure for all tenants; share rents should replace rents-in-kind; ceiling on landholdings of 150 acres irrigated and 450 acres for unirrigated; land distribution to tenants and compensation to landlords (report shelved)

1. Punjab Tenancy Act 1950:

No charge by landlords from tenants other than 50 per cent crop share.

1. Sindh Tenancy Act 1950:

Permanent rights of tenancy to long-term tenants; eviction rights to landlords under certain conditions.
 

1. Punjab Protection and Restoration of Tenancy Rights Act 1950:

Eviction of tenants allowed only under specified conditions.

1. Punjab Tenancy (Amendment) Act 1952:

Abolition of occupancy tenancy; transfer of ownership rights to occupancy tenants; share of landlords reduced from 50 per cent to 40 per cent.

1. Executive Order 1955:

Abolition of Jagirs and other revenue-free grants; like other Zamindars, now Jagirdars required paying land revenue. Landlordism remained intact, for not limit to ownership as long as all legal dues paid to the government.
 

1. Challenge to the Executive Order 1955:

Challenge upheld by Sindh High Court.

1. Land and Tenancy Reforms Martial Law Regulation 64, 64A and 64B 1959:

Ceiling on landholdings: 500 acres irrigated, 1,000 acres unirrigated additional land allowed to bring landholding to equivalent 36,000 PIUs; resumed land to be sold first to tenants and then to small farmers; abolition of Jagirs; occupancy tenants made owners; all tenants, haris and tenants-at-will given legal protection; rents to be paid in kind and all charges other than crop share abolished.

1. Land and Tenancy Reforms Martial Law Regulation 115 and amendments 1972:

Ceiling on landholdings: 150 acres irrigated, 300 acres unirrigated to equivalent of 12,000 PIUs +2,000 PIUs for tractor and tube well owners; no compensation to landowners, land redistributed without charge to landless tenants cultivating resumed land; untenanted resumed land redistributed without charge to small owners/tenants with holdings below subsistence; share system remains uncharged ; land revenue; water rates, and seed costs borne by landlords and cost of fertilizers and pesticides to be shared equally; tenants eviction decided by revenue courts if tenants failed to pay rent, failed to cultivate land, sublet tenancy, or rendered land unfit for cultivation.
 

1. Land Reforms Act 1977:

      Landholdings: 100 acres irrigated, 200 acres unirigated or 8,000 PIUs equivalent;    compensation to landowners on resumed land at Rs30 per PIU; redistribution as in 1972.

       This Act was completely ignored by the military government after July 1977.
 
Net Impact of Land reforms after Pakistan:   
As any one can see from the history of land reforms in Pakistan listed above, upto 1959, the Landlords were able to block attempts to change the status quo.
  
 The 1959 reform was the first big blow on paper. However with the help of PIU provision and other loopholes the net impact was not much. Approximately 6,000 owners owned more than the ceiling of 500 acres permitted in 1959. They constituted 0.1 per cent of the owners,   but owned 7.5 million acres or 15.4 per cent of the total land. Table-3.2shows that in all there were only 5,064 declarants, of which only 15 per cent or 763 were affected by the ceiling on individual holdings. The area   of land owned by the affected declarants was 5.5 million acres, of which only 1.9 million (35 per cent)   was resumed. The main portion of their land was retained by the landlords due to numerous provisions made in the law, such as for the transfer of land to dependants and other members of their families, and exemption for numerous categories.

Number of declarants and resumed area under the land reforms regulation of 1959:

The Bhutto Reforms of 1972:

The 1972 reforms were different from those of 1959 in many respects. Unlike in 1959, land resume from landlords did not received in ant compensation and this land was to be free to landless tenants. In addition all those peasants who had acquired land under 1959 reforms and had dues outstanding, had their dues return off and were not required making any further payments.

Of the land declared to be above the ceiling by the landowners, after they had made generous use of the possibilities for getting
Around the imposition, only 42 per cent was resumed in the Punjab, while the figure in the Sindh was 59 per cent, all, 0.6 million acres were resumed, far less than the 1959 figure and constituting only 0.001 per cent of the total farm area in the country.

The problem of the evaluation of the produce Index Units arose once again. The ceiling of the land was defined both in area once PIUs, and the landowner could retain the larger. However, Mahmood Hasssan Khan writes that

“The most serious problem of defining the ceiling in IPUs was that their values had remained unchanged, while almost everything affecting their value had changed drastically in most areas of the Indus Basin. The produce value of an area of land was being grossly underestimated in the Indus Basin, thanks to change in prices, cropping intensities and patterns, irrigation, etc.”
 
The result was that with 12,000 PIUs one could get away with 400 acres in the Punjab and 480 in Sindh. Moreover, with other exemptions for tube wells and tractors, a family could have retained up to 1,120 in Sindh.
           
Although a lot of propaganda was issued about the success of the 1972 reforms, as the resumed land was far less than in 1959, only 50,548 persons benefited from the redistribution of 308,390 acres during 1972-8. Only 1 per cent of the landless tenants and small owners benefited by these measures. Table-3.3 shows that, of the land resumed in 1959, 6 per cent still needs to be distributed even after 38 years, and 39 per cent of the area resumed under the 1972 reforms is still held by the government despite the presence of e large number of landless cultivators.

Progress of implementation of land reforms up to June 1994(hectares):

The issue of land redistribution is in abeyance since than other then talk of distribution of 2.7 million Government land. 
   
Land reforms in India and Bengladesh:
Before the end of British rule Zamindari system was abolished in Bengal, Bihar and Orissa. Congress Party’s manifesto in 1937 promised to abolish Zamindari, Jagirdari and Nawabships and States after independence and this was done.

With the creation of Pakistan therefore Pakistan (West) remained the only area of the subcontinent to retain elements of medieval Feudal, Sardari and Jagirdari system. Therefore there is a view that the Landlords, Sardars and Jagirdars of West Pakistan supported the creation of Pakistan to avoid the fate of their counter parts in India.

One of the causes of breakup of Pakistan:
East Pakistan (Bengladesh) had no significant large landlords and the society was fairly flattened, in contrasted to very large holdings in West Pakistan. The vast difference in land owning pattern led to vast cultural differences. This also led to throwing up very different types of leadership. While East Pakistan was represented
By middle class; the leadership of West Pakistan comprised of very large Landlords, Sardars and Jagirdars. Interaction and accommodation between the two set of people proved very difficult and contributed to the dismemberment of the country.

Land reform Prospect in Pakistan:
In 2002 Prime Minister Jamali of Muslim League declared that the issue of land reforms was over in Pakistan and that the current holdings were optimum for productivity.

Other than 2.7 million Government land distribution which comes in to discussion from time to time there is no talk of land reform in Pakistan since 2002. Even distribution of Government land is delayed on one pretext or the other while the millions of poor landless people keep pleading.

Optimum Economic land holding?
Given the large number of available landless peasants in the Country, who also constitute the bulk of poor in the Country, the question of how much each family should own becomes pertinent.

If land could be provided to these landless peasants they would come out of the poverty trap and contribute in a major way reduction in Poverty level in the Country.

The question arises as to what constitutes an optimum land holding, so the total production is not effected and at the same time social justice is provided.

Is the current applicable ceiling of 200 acres alright and there is no need to change it given the natural redistribution of land with the passing of land from one generation to another?

Some Economist urge that while Pakistanis have a Feudal mind set which is opposite of democratic mind set, its economy is no more Feudal rather it is Capitalist. Land holdings have become smaller with the passage of time as each large holding of the past got divided and sub divided among heirs, as per Islamic Law. Some Economist even worries that too small holdings might become economically unviable and retard over all production.

On the other hand some Economist believe that Feudal large land holding still exist and is the source of all Economic, Political and Social injustices in Pakistan and land reform is an urgent need. World Bank officials in a recent report (March 2007) have termed unfair land and water distribution as major cause of poverty in the Country.

They urge that to create a just society it is imperative that landless peasants are given land on an urgent basis. This, they believe will not only alleviate rural poverty but also increase the production of these lands.

While I have no doubt that morally and socially it is imperative that land less peasants of the Country be given land and this can only happen by repossessing large tracks of land from large land owners, I have concern over the productivity issue. Will these small holding be economically viable or not?

Land Reform in Iran during Monarchy:
During Monarchy nearly half the population of Iran lived on land many households still near subsistence level. Land also remained an important source of wealth. Some 200,000 families owned nearly half the arable land in the country.
 
Under the Monarchy, a major land reform program had been  carried  out. The great estates were broken up, about half the arable land in the country was distributed, and nearly two million village families received land. A class of peasant properties emerged. However, 1.2 million agriculture laborers received no land at all. Among those who received land, over 70 percent received too little for basic subsistence. Land ownership remained concentrated. Of 2.5 million rural landholders, 1 percent owned 21 percent of the land. Many of the larger landowners continued to work the land with agricultural workers or tenant farmers.

Moreover, in the late 1960s and 1970s, both government policy and the activities of agricultural entrepreneurs encouraged the reconsolidation of holdings and the commercialization of agriculture. While the smallest holdings grew more fragmented, the middle-sized and larger units (20 hectares and above) came to account for a larger share of the total land under cultivation. The government encouraged consolidation through its credit and loan polices, evicted some 60,000 peasants from villages to make room for huge agribusinesses (of over 5,000 hectares), established with foreign investments, and persuaded some 300,000 reluctant villagers to pool their land in large farm corporations and production cooperatives. In villages near large cities, much land lay fallow, as urban investors bought up agricultural properties for speculative purposes. These developments aroused dissatisfaction among the poorest peasants.

Iran on the eve of the revolution:
One the eve of the revolution, the agriculture picture was thus a mixed one. There existed a state-sponsored sector of agribusiness and farm corporations that was inefficient and unpopular; a growing commercial sector that was profitable and reasonably efficient; a limited number of moderately well well-off peasant proprietors; a large majority of subsistence –level farmers: and a mass of landless rural workers.  There existed a reservoir of resentment against the large landowners and a great deal of land hunger. 

Islamic revolution  1979-1989:
In the villages and in the countryside, the abortive land reform program left its mark in three areas. In terms of land distribution, the impact of the program was limited. During eight months of activity and until the partial suspension of the land reform law in November 1980, the land transfer committees distributed to villagers 150,000 hectares of barren land and 35,000 hectares of arable land; they also leased to villagers on a temporary basis 850,000 hectares of disputed land. The committees returned to their original owners deeds to 515,000 hectares of land the farmers were cultivating in common in the agricultural cooperatives established under the former regime. Finally, the committees transferred 60,000 hectares of barren land to government organizations for distributin among graduates and other potential farmers.  
 
In May 1985, Parliament approved a law to give peasant cultivators ownership over 630,000 hectares of land whose legal status was in dispute. This was land distributed under the abortive land distribution law and other measures whose legality was uncertain. Some of the land had been seized by peasants in the post-revolution turmoil. Because this disputed land had remained largely uncultivated, Parliament’s action reflected an interest as much in setting an irksome problem and improving agricultural production as in distributive justice. As a result of the new measures, over 100,000 village families gained land and some 5,300 landowners lost it.

Iran in recent time, redistributed land during period 1979 to 1989. The modus apprendi used by the Islamic regime was let local Councils decide while the Central Government endorsed their recommendation. In most cases 5 acres were allotted to each family while the old land lord families were given 25 acres to maintain their dignity.

The process involved lot of bloodshed as the Land lord class resisted and fought with the Local Pasdaran or Gaurds and Committee members however they were eventually crushed with the help of Locals who benefited. Landed class also used Clerics like Shariat Madari to denounce the move as UN Islamic which indeed it was. However Ayatollah Khomeini while remaining silent and  above these arguments, allowed Young radical Clerics to argue that Islam also calls for a just society in which no neighbour should stave  and that all land belongs to ALLAH and thus to the people.

The reforms radically changed the land ownership pattern in Iran. Under Shah Rule 97% land belonged to 3% people and remaining 3% was shared by 97% people. After reform
The holding pattern was turn upside down. This is the reason why after KAABA, the mausoleum of Imam Khomeini is the only place on earth where people perform Tawaf 24 hours a day.

Conclusion and recommendations:

A land Plan for Pakistan on 20- 80 basis:
 In my opinion for Pakistan the optimum level of land ownership per family is 20 acres. A family comprising husband wife and three children can not till more than this. While the holding is large enough to provide surplus for sale in the market. The size is such that family can afford a tube well if needed and also own a tractor which may be shared with neighbours at a price.

The land may be allocated on the basis of NICs and B forms. The allottees to sigh an undertaking that they will till the land and in case they leave for towns the land will be taken back. This is the practice in China now where the lease is granted for 30 years on this condition of domicile.

20 acres per family given at a 30 years lease with all government taxes to be agreed before hand and not subject to change as was done in 1793 Permanent Settlement for Bengal provides the best set up for optimum production, social justice and political stability. This will alleviate poverty in Rural Areas in a major way.

In Urban Areas also based on NIC and B form each land less family may be provided a 80 sq.yard land, at small upfront payment and remaining payment over 20-30 years in quarterly installment. Almost all families will be able to afford such land and then gradually build their houses, value of which will rise with passage of time. This will alleviate poverty in Urban Areas, as the rent eats up a large chunk of poor family’s income and it does not give them ownership of property and thus they never come out of poverty trap.