1. Defects in Land Tenure System and Land Reform Measures

Asia is no uniform region but is made up of countries with different cultural and historical backgrounds, levels of economic and social development and density of population. Keeping this limitation in mind, land tenure problems can be summarized as follows:

In most areas of Asia density of population is high in relation to cultivable land. Ownership of land, however, is often concentrated in the hands of few landlords who usually do not cultivate their land as one large farm, but rent it to numerous small tenants. They hardly take the opportunity to influence the management of the holdings by the tenants who are often untrained. Often the owners do not even live on their land but in the cities, and limit their activities to rent collecting. Due to the high demand for land concomitant to the rise in population, even small landowners sometimes find it profitable to lease their land and live on the rent as petty landlords.

The most prevalent form of tenancy in Asia is sharecropping, where the rent is determined as a share of the product. Usually, the tenant has no security as contracts are not laid down in written form and are often on a one-year basis only. The rent is frequently as high as 50 per cent of the harvest, even is the landlord does not share costs of cultivation. Increasing pressure of population on land was the main reason for the development of so-called intermediaries, persons who stand between landlord and tenant and are more or less without any economic functions, but who nevertheless collect a share of production and thus increase the rent of the actual tiller. In some countries, administrative procedures, especially tax policy, have led to the formation of a class of tax-collectors with right to revenue and/or land; at the beginning this right was often given as remuneration for services, later it became a mere rent.

Insecurity of tenancy and the fact that share tenants receive only a part of the proceeds of their investment, leads the tenant to cultivate the land less intensively and hinders investments in agriculture. The low income, drawn from the small holdings, is the cause for general poverty and indebtedness. In addition, if the landlord acts as money-lender, he has full power over his tenants.

Even in areas with owner cultivation, the situation is often not much better. Population growth and the inheritance system led to a continuous reduction of farm size. Often farms become reduced below the size of an economic holding so that they cannot supply satisfactory subsistence for the families, especially if fragmentation of plots, less intensive use of land and low level of technical training of the peasants are taken into consideration. If these small holders incur debts, the high interest rate may cause a loss of ownership.

Due to limited land and primitive techniques of farming, peasants usually lack sufficient work and underemplyment is widespread. This holds especially true for the landless labourers who are employed during the rest of the time. A large number of them migrate to the cities hoping for better employment: usually they are not successful, so that the employment problem is only transferred from the rural to the urban areas.

The contribution of such an agrarian structure to capital formation and general ecconomic development is limited. The greater part of the population is too poor to pay taxes and landlords use their political influence to prevent rigid tax laws. Even their private profits often do not promote economic development because they are devoted to luxury and conspicuous consumption or are transferred abroad. The masses of the peasantry have neither the possibility nor the incentive to increase their production. The whole rural economy is in stationary condition and hinders the dynamic growth of agriculture. The consequences are not limited only to the economic aspects but reach into the social and political fields as well.

In order to attain the desired development of economy and society, the rural sector needs the right institutional framework:

In the economic field, production and productivity have to be increased and resources have to be transferred to other sectors.

The prevailing agrarian structure is obstructing this because of:

• uneconomic size of holdings;
• fragmentation of fields;
• lack of credit and marketing facilities resulting in low investment;
• lack of incentive because of tenure systems;
• low mobility of men, land and capital;
• lack of technical training and knowledge of peasants.

On the social side, the aim is to increase the standard of living of the rural population and to improve their position in society.

The agrarian structure counteracts these aims by:

• maldistribution of ownership causing unequal distribution of income and wealth;
• poor output of petty holdings leading to meagre incomes;
• exploitation by and dependence on the landlord;
• indebtedness to money-lenders;
• insufficient opportunities for work and unemployment.

The political goals are: changes in the power structure, removal of feudal structures, political freedom and justice. But the agrarian structure results in:

• concentration of power in the hands of landlords;
• economic power based on control of resources and means of production;
• political power based on economic power;
• distribution of income and wealth according to power instead of contribution to production.

Problems resulting from the agrarian structure are not new. A land tenure system is the institutional framework which society creates to make agricultural production possible and which reflects the level of development in society, economy and technology. As the last three are continuously changing, the institutional framework for agricultural production has therefore to be constantly adapted to the new situation. Because of the persistent nature on institutions, such adaptation usually takes place with a time lag after the high pressure for reform or revolution makes changes inevitable and external forces create a favourable climate for reform. Such a situation developed in the region after the Second World War, when many Asian countries became independent. During the last twenty years, quite a number of reform measures have been applied in different countries proving more or less successful. They can be grouped under three headings: abolition of intermediaries, ceilings and redistribution of land and tenancy reform.