851G.16/7–3054: Telegram

The Ambassador at Saigon (Heath) to the Department of State


386. An honest land reform program intelligently and aggressively applied may offer one of the best means available for meeting Viet Minh challenge:1

Land reform offers Diem Ministry an opportunity to gain popular support for Vietnamese Government.
If promulgated soon and properly publicized, land reform may attract numerous refugees from Viet Minh zone before bamboo curtain is clamped down tightly.
Land reform cannot be applied if present poor security conditions continue to exist, but in conjunction with better military program than exists today and refugee resettlement it offers practicable means of bringing about restoration of law and order since assurances to peasants that they will be permitted to keep land they occupy may encourage them to cooperate with Central Government.
It may provide only enduring solution to imminent problem of resettling peasant refugees from Tonkin delta.
Earlier Vietnamese land reform programs were largely talk, but if program can be developed that is more than just sham, it will offer one of best propaganda weapons against the Viet Minh. Viet Minh has given much publicity to its own program (see Embassy despatch 302 February 9)2 but its land redistribution plans will be faced with well-known scarcity of land in one of the world’s most densely populated rural areas, whereas land is relatively plentiful in South Vietnam. Also possible that word of mouth reports of a good Vietnamese land reform will circulate in Viet Minh zone and partially overcome barrier, in form of Viet Minh censorship and lack of radios, against conventional type of American or Vietnamese propaganda program.

The Diem Ministry’s present program as set forth two weeks ago by the Ministry of Agriculture is inadequate for present needs, for it requires large amounts of money, trained personnel that is unavailable, and stable political situation. Briefly, it envisages small [plot] projects involving the purchase of several hundred hectares of land, expensive land improvement projects, and numerous social services (see FBIS–S 160200 July 15).

We should urge the government to drop this plan or include it in one providing for expropriation of all land holdings above modest maximum (except for industrial type agricultural enterprises, such as rubber and tea plantations) and grant of provisional land titles to [Page 1895] squatters cultivating small holdings and to all landless peasants and refugees who want to acquire land. The grant of provisional titles should be contingent on payment of a fixed percentage of the crop to the government over a period of ten to twenty years. Landowners might receive compensation for their expropriated land in the form of ten to twenty years bonds, payable in money equivalent each year of a fixed percentage of paddy crop. For example, a landowner might receive ten percent of value of average paddy crop of expropriated land over a fifteen year period, amount paid being determined each year by average selling price of paddy at farm from January to March. This system would offer landowner some protection against inflation.

Most landowners will oppose expropriation, but against their objections following arguments can be made:

Present land reform legislation although full of loopholes, already provides precedents for maximum holdings (in South Vietnam 30 to 100 hectares, a maximum that might be considerably reduced) and for provisional grants to squatter.
Only in well-pacified areas, of which there are few, is large landowner receiving rent. Hence, few would be losing income as a result of expropriation of their property.
The landowner’s hope of receiving rent from his land is contingent on pacification, but pacification itself may be contingent on a more equitable system of land distribution than has existed in the past.
The alternative to a government-sponsored program may be a Communist one. Expropriation of [in] the Viet Minh zone has been tantamount to confiscation.
The traditional land holding system in South Vietnam probably did not encourage progressive agricultural methods. Large landowner did not work land himself, but rented it in small lots to tenants, who acquired no rights to improvements they might have made, or to large farmers, who in turn subleased the land.

There is probably a large amount of land available for redistribution and settlement. One of chief rice export houses last year estimated that twenty to thirty percent of rice land in South Vietnam lay fallow. Furthermore, in most provinces of South Vietnam there has been considerable decrease in population since 1945.

Land reform program will probably have to be started in those areas where there is a reasonable degree of security and land is available for a refugee resettlement program. If past experience with refugees in the Transbassac may be used as an example, we can expect security conditions in areas of resettlement to improve rapidly. Moyer3 is requested to give his suggestions.

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See also Tousfo 122 and mission cable which follows,4 discussing technical aspects of land reform as seen here.

This is joint USOM/Embassy message.

  1. In telegram 482 to Saigon, Aug. 6, the Department expressed agreement with this view and suggested that an expert technician be sent to Vietnam to make an on-the-spot assessment of the problem. (851G.16/7–3054)
  2. Not printed.
  3. Raymond T. Moyer, Regional Director for Far Eastern Operations, Foreign Operations Administration.
  4. Neither printed.