The strongest prescription for promoting the process of income generation and distribution for low income rural population is a radical reform of asset holdings, especially land reform which, in a broader sense, is supposed to include all measures needed to readjust various rights and obligations of land ownership and use with a view to increasing agricultural productivity and improving the position of the peasantry through reducing the concentration of land ownership, ensuring better terms of cultivation for tenants, and creating viable land units. The major land reforms in Pakistan can be divided into two parts:

a) Under the Martial Law regime of Ayub Khan, (1958), and

b) Under the Bhutto regime (1972).

3.1.1 Land reform of 1958

At the time of the imposition of Martial Law in 1958, agriculture in Pakistan faced three basic problems: (i) absentee landlordism, (ii) exploitation of tenants, and (iii) uneconomic units of farming. The new regime appointed a Land Reform Commission with the main task of investigating the problems relating to the ownership and tenancy of agricultural land and recommending measures for ensuring better production, distribution and protection of tenants’ rights. The recommendations of the Commission were announced for implementation under Martial Law regulation on 7th February 1959. The salient features were as follows:

(a) Ceiling on ownership

No one could possess more than 500 acres of irrigated land or 1,000 acres of unirrigated land or 36,000 Produce Index Units¹ though allowances were made for retaining some land for dependent females, garden, and livestock farms. The surplus land thus acquired was to be sold to the cultivating tenants or landless labourers and the receipts used for compensating the landlords.

¹ A land unit capable of producing a specified amount of output.

(b) Protection of tenants’ rights

i) The existing ratio, 40:60, of the division of produce as well as government dues between landlord and tenant was kept intact.

ii) A tenant could not be evicted on the ground that the landlord wished to cultivate the land himself. He could be evicted only if he failed to pay the rent or refused to cultivate land without adequate reason, or he had sublet his land.

iii) In case of eviction, the tenant would be entitled to an emolument reflective of land improvements made and indemnities resulting from dislocation.

(c) Economic and subsistence holdings

To do away with sub-division and fragmentation of land, the Land Reform Commission defined the size of holding (50 acres in Punjab and 64 acres in Sind) which could be profitably cultivated. Besides, a subsistence holding (12H acres in Punjab, 16 acres in Sind) was also defined, so that no division of land should result in land holding below this level.

(d) Other provisions

These included abolition of jagirs,¹ consolidation of holdings, Land Utilization Act (if a land was left uncultivated continuously for a period of 4 crop seasons, the government will acquire it and give it on a 10-year lease for cultivation), and credit facilities (a sum of Rs. 30 million was allocated for taccavi²loans during 1959/60).

¹ The term jagir is used for Fiefdom/Family Estate generally comprising large area allotted under the British rule.

²Taccavi loans are rural credit advanced by revenue officials.

The land reforms of 1959 were well motivated, particularly in promoting the economic welfare of the poor peasants. The reforms helped the landless farmers firstly by providing them with a piece of land, albeit small, through the distribution of land resumed and secondly by ensuring adequate protection of tenants’ rights. Over 2.5 million acres of land was resumed of which almost 95 per cent was sold to the cultivating tenants or landless labourers.³ One evidence to this effect is found in the expansion that occurred in the number of small farms during the Sixties. The proportion of small farms in total increased from 34.0 per cent in 1960 to 43.6 per cent in 1972 while the proportion of large farms declined from 13.2 per cent to 10.8 per cent.⁴ Also, according to the tenure classification based on the Pakistan Agricultural Censuses of 1960 and 1972, the number of small farms being cultivated under owner-cum-tenant format increased from 14.39 per cent in 1960 to 18.92 per cent in 1972.⁵

³ Ministry of Food and Agriculture, Government of Pakistan, Agricultural Statistics of Pakistan, 1981. Islamabad 1982.

⁴ ARTEP, Employment and Structural Change in Pakistan. Issues for the Eighties. Bangkok, 1983.

⁵Ibid.

Although the rapid growth in agricultural production during the sixties (6.4 per cent per annum) was brought by the entire set of agricultural policies of that era including the land reforms, the latter established an institutional framework necessary for ensuring a fair share of this produce to small farmers and landless labourers. Although there is no evidence for a direct link between the reforms and improvements that took place in the distribution of income in the rural areas during that period, it may be worthwhile to note these improvements. The Gini concentration ratio for household income declined from .36 in 1963/64 to .30 in 1969/70. The income share of the bottom 20 per cent households rose from 6.6 per cent in 1963/64 to 8.6 per cent in 1969/70 and further to 8.9 per cent in 1970/71.¹ The wage data also yields a similar evidence. Real wages of permanent agricultural workers in the Punjab Province, for example, rose by 18 per cent during 1966-1973.²

¹ Shall Jain, Size Distribution of Income, World Bank, 1975.

² S. Guisinger, et al., Wages and Relative Factor Prices in Pakistan. Mimeo., 1977.

3.1.2 Land reform of 1972

The Bhutto government announced some further measures of land reform on 1st March, 1972 to be implemented by 1st July 1972. The major provisions were as follows:

(a) The upper limit on individual’s ownership of land was reduced further from 500 acres to 150 acres in the case of irrigated land and from 1,000 to 300 acres of unirrigated land or an area equivalent to 15,000 Produce Index Units. All exemptions of the 1959 reform were withdrawn though any transfer of affected areas (after 20th December 1971) by way of gift, etc., was to be considered as void. Land above this limit was to be resumed by the government without any compensation, and would be distributed to the tillers free of cost.

(b) All state land would be reserved exclusively for landless tenants or owners with below-subsistence holdings.

(c) Eviction of tenants was only to be allowed if they failed to pay rent to the landlord.

(d) The water rate and the cost of seed was to be paid by the landlord and not by the tenant.

(e) In order to increase productivity, an integrated programme was to be initiated to supply improved seeds, fertilizers, credit, and to provide marketing facilities.

Since the ceiling on land ownership in the 1972 reform was much smaller than that in the 1959 reform, it was supposed to redistribute more land. But it was found that the area redistributed in 1972 was only half of that in 1959. The area resumed amounted to 1.834 million acres, area disposed to 1.178 million acres and the numbers of persons benefitted to 92,841.¹ The reform was thus inadequate for making a dent on rural poverty. Moreover, the agriculture sector achieved a very low growth rate (2 per cent per annum) during the regime period of 1972-1977. There was also a deterioration in income distribution. The Gini concentration ratio for rural household income which was .308 in 1971/72 increased to .325 in 1979.² Three aspects of the reforms can be considered responsible for its inability to make a noticeable impact on poverty.

¹ Ministry of Food and Agriculture, op. cit.

² These figures were computed by the author from the Federal Bureau of Statistics, Government of Pakistan, Household Income and Expenditure Surveys, 1971/72 and 1979.

i) Acquisition of land without compensation, though hailed by the peasantry, was resisted by the land owners who, by using their influence and by way of bribes, managed pre-dated transfers of land to their relatives and thereby evaded surrendering the surplus land.

ii) Too many concessions to the tenants led to a larger proportion of landlords going into self-cultivation, thereby doing no help to the tenant class.

iii) The new system introduced in the reform of keeping the record of rights in land by patwaris³ and revenue officers provided them an opportunity to exploit the poor illiterate farmers by taking away a sizeable portion of their meagre income in bribes for doing this job.

³ Local officials of the Revenue Department engaged in keeping land records and collecting data.