Foreign Relations of the United States, 1951, National Security Affairs; Foreign Economic Policy, Volume I

IO Files¹

Position Paper Prepared in the Department of State for the United States Delegation to the 13th Session of the United Nations Economic and Social Council²

restricted

[Washington,] July 20, 1951.

SD/E/551

Land Reform
(Item 4(c))

Problem:

In Resolution 401 (V), adopted at the 312th Plenary Meeting, November 20, 1950, the General Assembly of the United Nations recommended that the Secretary General, in cooperation with the Food and Agriculture Organization, and on consultation with other appropriate specialized agencies, prepare and submit to the 13th Session of ECOSOC an analysis of the degree to which unsatisfactory form of agrarian structure and, in particular, systems of land tenure, in the underdeveloped countries and territories impede economic development and thus depress the standards of living, especially of agriculture workers and tenants, and of small and medium-sized farmers.³

The resolution further requested ECOSOC to continue the analysis referred to above and to prepare recommendations to the General Assembly with a view to improvement of the conditions of the agriculture population, paying special attention to such measures as the following:

a) Institution of appropriate land reform;

b) Appropriate action on the part of the governments concerned to render financial aid to agricultural workers and tenants and to small and medium-sized farmers through cheap agricultural credit facilities, comprehensive technical assistance, and the promotion of rural cooperatives;

c) Construction or development, either by direct government action or suitably financed cooperative groups, of

i) Small factories and workshops for the manufacture, maintenance and servicing of the most essential agricultural machinery and for the storage of spare parts;

ii) Locally-based enterprises for the processing of agricultural products;

d) Taxation policies designed to lighten, to the greatest possible extent, the tax burden on tenants and small and medium-sized farmers;

e) Promotion of family owned and operated farms and of cooperative farms, as well as of other measures to promote the security of tenure and the welfare of agricultural workers and tenants and of small and medium-sized farmers;

The Report “Defects in Agrarian Structure as Obstacles to Economic Development” (E/2003) has been submitted to ECOSOC. What position should the U.S. Delegation take with regard to the conclusions and recommendations in the Report?

Recommendations

The U.S. Delegation to ECOSOC should:

A. Introduce or support a resolution by ECOSOC along the lines; of the attached draft resolution.⁴

B. Comment on the substance of the Report as follows:

1. Support strongly the findings in The Report of the Secretary-General on Land Reform that for many countries the agrarian structure, and in particular the systems of land tenure, prevents a rise in the standard of living of small farmers and agricultural laborers, and that it impedes agricultural development both by preventing the expansion of the food supply and by causing agriculture to stagnate. In this connection, support the thesis that in addition to its importance to economic development and a rise in the standards of living of the population, land reform is essential to human dignity and freedom, as well as to social and political stability, which is a more general objective of the United Nations.

2. Indicate support for the conclusion of the Report of the Group of Experts on Methods of Economic Development on the need for land reform, without subscribing to all its observation (in particular with respect to paragraph 56, since the U.S. is not interested in class legislation and considers that the evils of landlordism referred to can be relieved through legislative and economic measures that will recognize the rights of all classes with respect to the land) and without accepting it as an adequate treatment of the subject (in particular with respect to the distribution of the tax load as it affects the various sectors of the economy including the cultivators of land, and as to institutional problems contributing to insecurity of land tenure).

3. With respect to the types of changes which would be desirable to effect land reform:

a. Distribution of large holdings. Indicate that we favor, and give support to measures aimed at achieving the distribution of large holdings of agricultural land, including state or public lands, through proper legal and economic measures, for operating in family size units wherever such operation will be economically and socially advantageous to the population.

b. Tenancy. While the U.S. believes that ownership is the most desirable objective, we recognize the finding in The Report of The Secretary General that tenancy is not in itself an unsatisfactory form of tenure where rents are not excessive and where security of tenure is safeguarded by legislation. But these conditions are generally lacking in underdeveloped countries where tenancy systems are characterized by exorbitant rental charges and lack of security of tenure. Urge that legislation be enacted and enforced to prevent the charge of exorbitant rentals on agricultural land and assure the cultivator security of tenure.

c. Cooperatives. Indicate that we favor genuinely voluntary cooperative societies organized for the purpose of enabling the small farmer members to benefit from new developments in techniques of production, large scale purchasing and marketing, credit facilities and from the experience they acquire in social consciousness and responsibility through the democratic process of managing common problems at local level. Indicate that we recommend encouragement and support by governments for these developments. By genuinely voluntary cooperative societies we do not mean organizations joined under pressure and designed merely as a step towards collectivization, under which the independent cultivator is in fact converted into a worker in the employ of the state.

d. Fragmentation. Note that rational cultivation cannot be carried on where farm holdings are split up into numerous different plots scattered over a wide area. The laws of succession have a definite bearing upon fragmentation (according to The Report, the pressure of population appears to be the predominant cause of this defect in the agrarian structure). Cite that several countries (Jordan, Lebanon, India) have made commendable efforts, with some success, towards the consolidation of fragmented holdings, indicating the importance of making increased efforts along these lines.

e. Settlement of title. Note the findings in The Report to the effect that lack of clear title to land leads to continuous disputes over resources, perpetuates insecurity and encourages the waste of land, water, and manpower. It prevents the cultivator from access to more reasonable credit. Urge that the status of ownership be clarified and that procedures and facilities for surveying land, and establishing and registering title to land be expanded and improved so that the cultivator-owner may face a minimum delay in securing evidence of ownership rights.

f. Fiscal Reform. Stress the importance of fiscal reform, with special emphasis on the principle of progressive taxation, as a means of preventing the imposition of inequitable taxes and other related charges on the cultivator of land. Improvement in tax administration would by itself remove some of the inequities of the existing tax systems, and is essential for implementation of a progressive tax system.

g. Agricultural Credit. Stress the importance of credit to the small farmer at reasonable rates. Urge the promotion of cooperative and other facilities which will give the small farmer access to credit at the village or local level and which will at the same time provide him with guidance as to the best methods of using the credit and marketing his produce. Full advantage should be taken of existing public and private credit facilities in such promotion.

4. Research and Education. Support the conclusion in The Report that there is need for an increase in research and an extension of educational and welfare services to the rural population, and that cooperative societies can play a role in providing such services. In this connection, urge

a. The expansion and development of national programs of fundamental education as a means of permitting people to develop their individual capacities to the utmost.

b. The establishment or expansion of national services for agricultural research and for education of the individual producer in the technological and economic aspects of agriculture and rural life.

5. Industrialization. Recognize the thesis in The Report that in countries where the population pressure on the land is excessive, and where the density of the farm population is increasing, in addition to land reform, there is need for greater diversification of production if the problem of surplus labor on agricultural land is to be alleviated and for integration of land reform with economic development plans as a whole. In this connection, however, call attention to the following considerations:

a. To obtain more rapid results in improving the standard of living, even in countries with rural over-population, it is important that, without neglecting diversified economic development, immediate efforts be made to effect land reform and to improve techniques of agricultural production.

b. In some countries, particularly where inadequate natural resources limit the development potential of modern industry, the increase in population may thwart the favorable effect of economic development on the standard of living. Urge, therefore, that the problem of increasing the standard of living in countries with serious rural over-population be considered not merely as a problem of economic development but also as a problem of population growth. (The majority of the EED Commission considers that the Council, itself or through such organs as it may specify, should keep the relationship between population growth and economic development under study as a matter of importance.)

6. Agricultural labor. Emphasize the need for improving the economic, social and legal status of agricultural wage earners. In this connection, stress that in many countries the well-being of self-employed farmers and agricultural wage earners are inseparably interconnected, and that full success of programs aiming at benefiting the small farmer will require parallel and simultaneous improvement in the wages, working conditions, and legal protestations provided for farm wage earners.

7. Rural Industries. With respect to item 2 (c), in GA Resolution 401 (V), refer to the need to encourage industries, both cooperatives and others, in rural areas through which farmers can utilize their spare time to supplement their income from the land. The construction or development of any particular industry, whether to provide employment and income or to meet a demand for certain type of commodities, however, should be promoted within the framework of an over-all program for the economy as a whole, taking into consideration needs, priorities, resources and the availability of capital, both domestic and foreign.

Discussion

Report by the Secretary General—Findings of Defects in the Agrarian Structure. The report prepared by the Secretary General in response to this request of the General Assembly shows that for many countries the agrarian structure, and in particular systems of land tenure, prevent a rise in the standard of living of small farmers and agricultural laborers and impede agricultural development, both by preventing the expansion of the food supply and by causing agriculture to stagnate.

Among the features of the agrarian structure which the reports find to have most serious effects on the standard of living of the agricultural population and economic development are:

1) The uneconomic size of farms.

2) The maldistribution of land ownership with the concentration of large estates insufficiently utilized and the landlessness of a large part of the rural population.

3) The fragmentation of holdings.

4) The high rents and insecurity of tenure characteristic of many tenure systems.

5) Indebtedness and lack of adequate credit facilities for the small farmer.

6) Absence of settled title to land and water.

7) Plantation economies which offer low wages and no share in management to the cultivators.

8) Taxation policies which impose undue burdens on the small farmers and farm laborers, and

9) In general, an unsatisfactory set of incentives for rising and sustained agricultural production.

These features, however, are not all present or of equal importance in all countries.

Possible Remedies for the Defects in the Agrarian Structures. Although the report does not make recommendations, it considers the types of changes which appear likely to have beneficial results on production, on living standards and on investment. (It does not, however, consider the specific practical measures which would have to be instituted to carry these changes into effect.) It is rather cautious in prescribing remedies for the defects it has found in the agrarian structures, and limits itself to the observation that on the basis of the experience of several different types of reforms designed to remedy these defects, certain types of changes are likely to have beneficial results. In this connection, it observed that in the widely varying circumstances found in the underdeveloped countries, the measures noted for special attention in General Assembly Resolution 401 (V), while each of great value, are not all of equal importance for all countries and hence the recommendation of any special measure or group of measures cannot be expected to meet all situations.

According to the report, the changes in the agrarian structure which are likely to have beneficial results include:

Distribution of Large Estates. The distribution of large estates which are extensively cultivated and include much idle land to small farmers and farm workers for operation in smaller units.

The break-up of large estates which are intensively cultivated and are highly capitalized units of production would have adverse effect on production, but so far as plantation crops other than sugar are concerned, the difference in yields between large and small farms is not great enough to outweigh the social advantages (more equal distribution of the products of the land, production of food to meet local needs, and increasing the volume and improving the conditions of employment) which would be gained by resettlement in smaller farms.

In countries where the relationship between population and land is unfavorable and where the density of the farm population is increasing, the distribution of land ownership may improve the condition of the farm population (increasing the cultivator’s share of production) and may be a necessary step in the improvement of agriculture (increasing the cultivator’s ability and willingness to invest), but it cannot overcome the disparity between land and population; it will not enlarge the small holdings, the average farm size will still be very small, and large numbers of uneconomic holdings will still remain.

Consolidation of fragmented holdings. See Recommendation B, 3, d.

Agricultural credit-cooperatives.The creation of special agencies to provide agricultural credit in appropriate forms. Cooperative societies would help toward meeting the credit needs of the small farmer, but in conditions prevailing in the undeveloped countries the multipurpose societies would be more suitable than cooperatives devoted to a single purpose, like the extension of credit.

The report emphasizes that such multi-purpose societies to be effective in dealing with the social and economic needs of the rural people must operate at the local or village level. Specialized institutions or single purpose societies may be needed at the provincial and national levels to coordinate the activities of local societies and to specialize in particular problems affecting the province or the country as a whole.

Settlement of title. Where the lack of clear title is simply the result of administrative inefficiency, it is a matter which can be remedied by legislative action.

Where title to land has a communal character (as in the DOT’s in Africa) and it is usufructuary rather than absolute, settlement of title is not merely a question of legal reform, but also a question as to what kind of tenure it is desirable to establish. This question, the report states, cannot be answered without consideration of wider social and economic issues and of the merits of various adaptations of traditional tenures used in schemes for cooperative cultivation.

Water rights. Adequate legislation on water rights so that the cultivator of land may have access to water as a right where shortage of water is the main factor limiting agricultural production.

Tax reform. Owing to the difficulties encountered in the administration of income taxation on agricultural activities, it would appear that while the long run objective should be the establishment of progressive income taxation, there are other forms of taxation which are susceptible of short run reforms. Among these, the report suggests, are improvement in the administration of the land tax and enactment of specific tax relief measures applicable to small farmers.

Another objective of tax reform which the report suggests, is the promotion of cultivation by taxation of uncultivated land and by means of specific tax exemptions to encourage the cultivation of the more desirable products while discouraging less desirable products by heavy tax rates.

The report recognizes that reform of the tax structure must take into account the relationship between broader objectives of social and economic policy and the narrower aspects of tax machinery. Where governments are able to remove defects in the agrarian structure, the report adds, the tax burden borne by the cultivator is more tolerable, but the revision of an inequitable tax system ordinarily merits the attention of government simultaneously with other measures of reform.

Research and education. The report also emphasizes the need for an increase in research and an extension of educational and welfare services to rural communities. In this it envisages an important role for the cooperative societies. The cooperative movement can provide rural leaders as a link between the rural community and the government; it can act as a focus for many local activities and can stimulate the demand for health services, agricultural education and other rural amenities. Such demand, it observes, is the one essential condition for advance.

The need for multi-sided approach to land reform. In conclusion, the report stresses that changes in the land tenure system are more likely to lead to a rise in the standard of living of the farmer and farm workers when they form part of a general program for the improvement of the agricultural organization than when they are taken in isolation. Many of the benefits which might be expected from reform in the tenure system will be nullified if steps are not taken to provide appropriate facilities and services to the newly established small farmer either individually or as a member of an association.

Legislation on rental charges and security of tenure. In particular with regard to the problems of high rent and security of tenure, the report is not optimistic that legislative measures adopted for this purpose in isolation can be successful. It has found that under the conditions prevailing in many of the undeveloped countries (pressure of population on land) control of rent by legal restrictions as to maximum rates has proved extremely difficult to enforce. The same is true of legislation to provide conditions of secure tenure.

Suggestions to governments. The report ends with certain suggestions specifically directed towards governments in countries where agrarian conditions “constitute a barrier to economic development”.

Such governments are urged to study agrarian problems in light of their own economic and social objectives and to base policy decisions on thorough scientific investigations. It also suggests that the relevant experience of other nations be examined. The opportunity for governments to avail themselves of the facilities of the United Nations and its specialized agencies is brought out strongly in connection with the need to assess the relative merits of measures already available and to coordinate possible measures with broader plans for economic development.

Additional material on land reform in specific countries, including Japan, Korea, the Soviet area, and Trust Territories has been made available to the Delegation.

1. Master files of the Reference and Documents Section of the Bureau of International Organization Affairs of the Department of State, comprising the official U.N. documentation and classified Department of State records on U.S. policy in the United Nations.
2. This was one of a large dossier of position papers prepared for the U.S. Delegation to the 13th Session of the U.N. Economic and Social Council, held in Geneva, July 30–September 21. Regarding that ECOSOC session and American activity there, see the editorial note, infra.
3. For the text of the U.N. Resolution under reference here, see Department of State Bulletin, December 4, 1950, p. 888 or Yearbook of the United Nations, 1950 (New York, United Nations Department of Public Information, 1951), pp. 461–462.
4. The attached draft resolution is not printed here. It was subsequently circulated to ECOSOC at Geneva on September 3 as U.N. Doc. US/E/285, September 5.