3.1 Land reforms
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:
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.
(b) Protection of tenants’ rights
(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).
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
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
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:
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.
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