5. Land Reform Comparison between Taiwan and Peru
5.1. First Phase of Evaluation: Land Reform Effects
5.1.2. Effects of the Land Reform in Peru
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46 Decision making and Peasant Participation
With the land reform, peasant participation in civil society was much enhanced. By having an organizational structure with the rent committee and the establishment of an efficient local tenancy, land reforms encouraged the emergence of a greater voice for the peasantry in local and national affairs. According to Smith, the success of the Taiwanese land reform on the peasant participation seemed to be due to the combined pre-war conditioning by the Japanese military government, post-war quasi-governmental required participation in farmers' associations, and extensive programmed efforts by the JCRR (Smith, 1973). This integral reforms of Taiwan involved that peasants acquired control of the land in the form of family farms (Janvry, 1981).
5.1.2 Effects of the Land Reform in Peru
The initial objective of the government was to distributed lands to 1 million families to the year 1975. However, the expropriation of at least 7000 extensive landholdings was only enough to satisfy half a million of families. So, even though the reform progress was constant, it was below the target rate proposed by the government. According to Van der Wetering, an approximately of only 110,000 families received their ownership at the beginning of 1973. This represented 3 million hectares expropriated, an equivalent of just 10% of the total land for crop and livestock; and 17% of the total available land for distribution (Wetering, 1973).
However, as a consequence of the more drastic and rapid enforcement of the land reform performed by Velasco, the 9 largest sugar plantations, and its associated processing plants were expropriated in the coast of Peru. In total, these sugar plantations owned 380,000 hectares, which represented 65% of the total areas of the Peruvian sugar
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cane. This action was interpreted as an attempt to reduce the power of foreign corporations, Peruvian commercial class and trade unions of the sugar sector. As a consequence of the land redistribution, the old power groups gave way to the new groups of organized peasants, where the majority of land redistribution was designated to the SAIS and CAPS. In the following paragraphs we will observe the economic and social effects if this new land redistribution (King, 1977).
5.1.2.1 Economic Effect
Production
It was expected that former permanent workers, now, having control over their own land and supported by the technical assistance provided by the government, could produce more in the cooperatives. However, little improvement was shown in land use or agricultural techniques, and the disinvestment by landlords that were facing expropriations also increased the problem by reducing the rural productivity.
According to Handelman, the total production for basic food and the key export crop stagnated or declined after the reform. During the years of 1961-1965, the absolute production of beef, wheat, cassava, and cotton has declined and there has been a continuous falling in overall per capita agricultural and food production. During the first decade of the land reform, per capita, food production declined approximately 9%.
However, his study suggests that the decrease in production was not due to a bad performance of the CAPS and SAIS or the lands which remained in private hands.
Actually, most of the food produced for the cities have long been provided by units of land too small to have been expropriated. According to the ministry of agriculture, 90%
of the national potato production, 84% of the corn, 90% of the wheat and 95% of onion production comes from units that are below the law's limits of land ownership
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(Handelman, 1981). Moreover, Eguren mentioned that most of the highlands were dedicated to ranching and dairying activities while the coastal estates were mostly dedicated to sugar plantations (Eguren, 2009). Therefore, since over 80% of the CAPS and SAIS lands are composed of pasture and sugar lands, it is not possible to blame, the declines in major food crops, to the mismanagement of the cooperatives or on peasant laziness. It is more possible to think that many of the small and medium farmers may have reduced their investment levels fearing that the government would lower their lands and expropriate their property (Handelman, 1981).
Certainly, the redistribution of land generated a dislocation, which had an impact on the reduction of agricultural outputs. However, declines in productivity can be attributed more directly to decapitalization of farms and the lack of irrigation system than to the fault of the cooperatives. In the sugar estates, where direct expropriation prevented decapitalization or destruction by the former landlords, production grew by 27% from 1968 to 1974 and declined slightly since the fall of sugar prices in 1974.
Experts have observed that in the rural sector of Peru, many cooperatives started their operation with almost none of the necessary farm machinery, trucks, irrigation pumps, or even office equipment since these items had been sold, moved or sabotaged by the former landlords. So, given these unfavorable conditions in the management of large landholdings, the performance on production has not been that bad (Handelman, 1981).
Productivity
Regarding the local sugar plantations, the government decided to maintain its larger production units. In the beginning, they started to work as semi-state farms managed by technocrats from the government, who had little knowledge of the production cooperative model promised by the land reform. Only the unrest, produced by the trade
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union suppression and lack of participation of workers, made the government assign delegates of workers to the plantations’ management. Both, the plantations and its processing plants continued to work efficiently without any technical deterioration or lack of discipline from the worker (Saco, 1970). According to Horton, in his study of the impact of CAPS in four expropriated landholdings, it demonstrated that this new implementation had no significant impact on the work and production organization (Horton, 1973).
On the other hand, problems related to the organization of work started to take place.
This problem was mainly focused on the effective hours of work by the members of the company, who were not even in a good economic situation, working a number of fewer hours, between 4 and 5 hours per day. Recommendations from the Agrarian Reform Agency, regarding the increment of working hours, were many times ignored. As a consequence, this dangerous tendency had an important impact on the productivity of the company as well as the stability of the sector (Chirinos, 1972).
Income
The land reform generated an increment on the peasants’ income. Since the companies became into self-managed companies, the workers, who were at the same time the owners, decided to increase their salaries and participate in the distribution of profits.
So, as a consequence, there was an increase in the living standards, mainly for the workers of CAPS, SAIS and sugar cooperatives. However, there was no equal increase in the income of the most traditional units of production located in the highlands, neither in the minifundista zone, which did not receive any direct benefit from the agrarian reform (Chirinos, 1975).
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Since the haciendas became into cooperatives of production, the workers became into the new owners, benefiting about 80,000 workers. But it was not the same case for the high-level workers since the technical and professional staff abandoned the haciendas together with the hacendados. On the other hand, agro-industrial sugar plantation benefited about 30,000 workers. Due to its big size and complexity, those companies had many agricultural and industrial workers, which were benefited by becoming members of the company. Unfortunately, temporary salaried workers did not receive any benefit. Over time, the cooperatives hired temporary workers, with very low salaries, to perform difficult tasks that were rejected by the members, thus raising the total costs of the company (Eguren, 2009). So, as we can see, permanent workers of the haciendas and people who worked for the sugar cane plantations were the ones who
beneficiated more from the land reform. Neither the reform had an impact on the stationary agricultural workers (15% of the total labor force in rural areas) whose opportunities to work decreased when the latifundia started to reduce (King, 1977).
Finally, regarding the importance of the CAPS and SAIS on employment, Linda Selig Man observed that 75% of the rural population did not qualify to be a member of those companies and therefore, they were excluded of the land reform, without getting any direct or indirect benefit. It was because, on the one hand, they were considered as belonging to groups of informal peasants who were not recognized by the government;
and on the other hand, because they were categorized as temporary workers (Cant, 2012).
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51 Investment
With the acquisition of land ownership, it was expected to generate incentives for the peasants to increase investment in their lands, however, it was not the case in Peru. As Handelman mentioned, many of the small and medium farmers reduced their investment levels since they were afraid that the government would lower their land size and expropriate their property. As a result, the peasant did not make any kind of investment in their lands (Handelman, 1981). In this case, we can see the importance of tenure security, since the possibility of expropriation reduced the peasant willingness to improve their land, reducing the probability to receive the benefits of their work. On the other hand, many landowners from the highlands decided to give their land voluntarily, since their plots were very small and in remote areas, to justify an effort of continuous investment (King, 1977). Finally, the reduction of investment in the cooperatives was due to the increasing distribution of the profits among the partners.
The situation was getting worse, to the point where the only way to pay wages was through the decapitalization of the company. The government provided credit support through the agrarian bank, which alleviated the problem but not for long (Eguren, 2009).
In conclusion, the effects of the land reform in Peru reflected on the previous economic indicators, showed that Peru did not complete the development of its agricultural sector.
The effects of the land reform implementations have been unequal for the workers from the coast and the traditional communities from the highlands. For instances, with the land reform, the cooperatives from the coast increased their production and raise their income since they became into the new owners of the cooperatives. However, the small and medium farmers from the highlands, who provided food for the population, decreased their agricultural output fearing that the government could reduce their land size. Moreover, the region of the highland considered that they did not receive any
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direct benefit from the land reform that could produce an increment on their income.
On the other hand, regarding the indicator of labor and land productivity, the formations of CAPS and SAIS did not produce any significant impact in this indicator. The technicians sent from the government agencies had little knowledge of the production cooperative model promised by the land reform, and their attempts to assist the workers were not enough to produce an increment on productivity for the cooperatives and associations. Moreover, the workers started to reduce their working hours which represented a dangerous tendency in the productivity and stability of the company.
Finally, there was a decrease in the indicators of employment and investment.
Employment in the agrarian sector was reduced because of the reduction of latifundias and the displacement of professional and temporary workers, while the decrease in investments was due to the disincentives of the small and medium farmers to make long-term improvements in their land since, as we mentioned before, farmers were afraid that the government could reduce their land size.
5.1.2.2 Social Effects
Political and Social Stability
According to Eguren, with the land reform, substantial changes took place in the social and political environment. In the social aspect, rural society became relatively democratized due to three main reasons. First, the power structure was modified at the local level, since now the landowners were not at the top of that structure. This new situation in which they no longer had a source that would allow them to collect rents and establish alliances with other landowners, create better democratic conditions for the rural population. Secondly, the government maintained a persistent and radical discourse for the peasants, with the slogan "the employer will not eat more of your
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poverty". The government promoted a series of programs that aimed to give value to the peasant culture. Some examples can be seen in the officialization of Quechua, the transmission of radio and television media in the same language, as well as regional and national competitions in music, dance, and handicrafts. Finally, although the land reform took place in a peaceful process, this reform stimulated the peasant movement.
There were many cases in which peasants expelled landowners from their lands, thus eliminating an entire paternalistic peasant-landowner culture, which placed the hacendado at a peak of unattainable power. All these factors facilitated the approach of
thousands of peasants to modern citizenship. On the other hand, the peasant communities found a new social context in which they no longer had to protect themselves from a rural society controlled by landowners (Eguren, 2009).
On the other hand, in the political context, the authoritarian tendencies of the military government were expressed through the agrarian reform process, as well as the creation of the National Social Mobilization System (SINAMOS). With this program, the government created a very active political apparatus focused on the elaboration and diffusion of its political ideology, "neither capitalist nor communist." SINAMOS functions in rural areas were aimed to compete with the New Left, whose presence in the countryside was very significant. However, during the "second phase" of the government, SINAMOS was deactivated because it concentrated a considerable number of military civilians from the most radical period of the government. According to Eguren, assumptions are made about whether the breakdown of traditional power structures, without being replaced by democratic structures, could have facilitated the development and action of Sendero Luminoso, (which started its violent acts in May 1980, precisely the day on which the elections were held ending twelve years of military government), and whether the state did not fill the power vacuum left. However, other assumptions point out that peasant organization, which represented the beginning of the
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fall of Sendero Luminoso, could have been difficult to achieve without the democratization produced by the breakdown of traditional local power (Eguren, 2009).
Decision Making and Peasant Participation
During the land reform process, there was a difficulty to stimulate the participation of the cooperatives due mainly to excessive state intervention. Since the government had to pay the promised bonds to the former landowners, they had to make sure that those cooperative had a good performance. This produced that the range of participation among the members of the cooperative had to be limited to administrative issues, rather than production techniques and strategies. Therefore, in spite of the introduction of self-owned cooperatives, the methodologies for the management of agrarian farms continued to be governed by a top-down chain of command (Schirmer, 1977).
Significant social changes would have resulted from the ex-haciendas, with members from the assemblies discussing the management of the landholdings, but the technicians from the reform agencies used to take the most important decisions, having usually the similar criteria of the former landlords (King, 1977). As Gitlitz affirmed, “throughout, the reform has been an exercise in rule from the top down, with no participation in decision-making by the concerned sector” (Gitlitz, 1971). This situation formed a long-term risk factor in the management of the company. The first problem was the clash between the peasants and the technicians under their supervision, and secondly, the instability of managers and technicians. Over time, almost all of the CAPS and SAIS ended up separating and dividing into small units among the members (Chirinos, 1975).
According to the results presented in the effects of land reform in each economic and social indicator, a summary table is provided in order to have a complete view of the
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effects of land reform in Taiwan and Peru. As we can observe, in the case of Taiwan, the indicators of “Production”, “Productivity”, “Income”, “Investment”, “Social &
Political Stability” and “Decision Making & Peasant Participation” had a good performance, while “Employment” indicator was the only one that showed a decline in the agrarian sector of Taiwan. On the other hand, we can observe in the case of Peru that the only indicator that had a good performance was “Social & Political Stability”, two economic indicators “Production” and “Income” had different performance according to the region in which the cooperative was located, the indicator of “Decision Making & Peasant Participation” was not achieved completely due to the intervention of technician from the reform agencies, while the indicator of “Productivity” had no significant impact. And finally, the indicators of “Employment” and “Investment”
presented a declined after the land reform implementation in Peru.
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Table 1: First Phase of Evaluation Summary Land Reform Effects in Taiwan and Peru
Source: Yu Kang & Schive (1995), Chen & Wang (1980), Koo (1966), Greenhalgh (1989), Chang (1965), Ho (1987), Chen (1961), Smith (1973), Janvry (1981), Wetering (1973), King (1977), Handelman (1981), Horton (1973), Chirinos (1975), Cant (2012), Eguren (2009), Schirmer (1977) and Gitlitz (1971).
Indicators Taiwan Peru
Production Increase in the agricultural output, due mainly to guaranteed ownership over the land.
Increase in the agricultural production for the cooperatives located in coast but not for the traditional communities from
the highlands. The small and medium farmer reduced its agricultural outputs fearing that government could lower their
lands size and expropriate their property.
Productivity
Increase on the labor and land productivity, due mainly to the government support through technical assistance and provision of agricultural infrastructure.
The formations of CAPS and SAIS did not produce any significant impact on land and labor productivity since
governmental support was not enough.
Income
Increase in the income of tenant farmers, due mainly to the rent reduction program established by the
government.
Workers from the coast increased their income but not the traditional communities from the highlands. The government did not provide fair norms and rules in order to incorporate the peasants from the highlands to the farmer associations, without obtaining any direct benefit from the land reform.
Employment
A decrease of the employment in the agrarian sector, due mainly to the development of the manufacturing industry which absorbs labor from the rural area.
Decrease in employment due to the reduction of latifundias and the displacement of professional and temporary
workers.
Investment
An increase of long-term investments and improvements in land, due mainly to the new situation
of the farmers, with the provision of land ownership and a higher income.
Decrease in investment since small and medium farmers were afraid that the government would lower their land size and
expropriate their property.
Political & Social Stability
Land reform contributed to the political and social stability. Since peasants acquired ownership of the land, they showed more interest in maintaining peace
and order in the community. Moreover, the
and order in the community. Moreover, the