3. Tenancy Reform
To a limited extent, the laws abolishing intermediaries
and establishing ceiling on land ownership have improved the
situation of tenants by granting them ownership or occupancy
rights. However, considering the widespread tenancy in Asia
— 30 to 50 per cent of the land is cultivated by tenants
— the impact has been limited. In most countries, therefore,
special measures to improve the situation of the masses of
tenants had to be implemented. One can distinguish between
reforms which aim at improving the situation of tenants by
regulating the relations between landlord and tenant and thus
preventing exploitation, and reforms eliminating tenancy completely
by giving ownership rights to tenants.
The regulatory approach which was applied by most countries
involved the enactment of various laws and regulations. Thus,
security of tenure was improved by prescription of written
lease contracts, registration of lease contracts (Taiwan,
Korea, Malaysia), minimum duration lease contracts (Viet-Nam,
Korea) and stipulation of reasons for eviction (Taiwan, Ceylon),
tenants were sometimes granted permanent and heritable rights,
rents were regulated by changes in form of payment —
usually converting share-rents into cash-rents or fixed produce-rents
(Korea) — and/or by establishing ceilings on rents which
were sometimes intended to limit rent to as low as 16 per
cent while in other cases the ceiling of 50 per cent merely
confirmed the existing level. To increase tenant's incentive,
some laws granted them the right to make land improvement
and compensation therefore in case of eviction.
The succes of all these regulatory measures is limited.
It proved difficult to enforce the reforms and in quite a
number of cases the laws remained unimplemented. The basic
difficulty is that the tenant has a low bargaining power.
A regulatory approach requires alternatives for the tenant.
But alternatives can be created in the course of development
only. The vested interests of the peasant landlords who are
locally more powerful than the former absentees, turned out
to be insurmountable for the tenants.
Experience showed that rent regulation, security of tenure
and credit programmes have to be organized jointly to be successful.
Tenants will not insist on lower rents if they are not sure
that the tenure is secure and if they are indebted to the
landlord. Most tenancy reforms, however, did not institute
supporting services to stop financial dependence on the landlord.
Thus, the previous rent of 50 per cent of produce often continues
to be charged and security of lease has not improved.
Part of the reason for this failure is the weak administration
and the fact that local officials often care more for the
interests of landlords than for those of tenants. Where there
is a better record of regulatory measures, the administration
has usually strongly backed the implementation of the laws
assisted by local committees which represent group interests.
If tenants' interests are backed by tenants' associations,
there is a much better precondition for the successful implementation
of tenancy regulations. Experience in Ceylon and Nepal has
shown that, with the help of local committees, rent regulation
is possible, even in the absence of cadastral records.
In a number of cases, tenants had the opinion either to buy
the land or be evicted in order to enable the landlord to
cultivate the land himself. If there is no time limit fixed
for the landlord's decision to personally take over cultivation,
the resulting insecurity is especially great. This provision
often proved dangerous and many tenants surrendered their
holdings "voluntarily". The lack of proper definition
and identification of the tenant constituted a limitation
to many tenancy reform laws. As a result, large numbers of
tenants who had land under various crop-sharing arrangements
did not benefit at all from tenancy reforms.
The limited or sometimes negative results of measures to
regulate tenure resulted in the adoption of a different approach
in some countries. These countries assumed that under the
prevailing socio-economic conditions tenancy is an impediment
to society and development and should therefore be eliminated.
This abolition approach — sometime selective, sometime
total — (in case of absentees or those holding land
above the ceilings) has been applied in Japan, Korea, Taiwan,
and in some Indian states. Compared to the regulatory approach,
tenancy abolition proved much more successful. Apparently,
it is possible for the administration to execute tenancy abolition
when a political decision has been reached. Abolition has
less loopholes for evasion than regulatory measures. However,
the provision of the option to tenants to either buy the land
or to give up their rights proved a failure in some Indian
states and caused much voluntary surrendering of land by tenants.
In some countries, a partial abolition of certain tenancy
forms was aimed at by making sub-tenancy illegal. In view
of the high demand for rented land, many disguised forms of
subtenancy limited the success of these provisions.