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William Gumede Correspondent
African countries will do well to learn from the successful land reform of the East Asian tigers, which were specifically aimed at boosting entrepreneurship, industrialisation and broad-based empowerment, as inspiration.

East Asian developmental states implemented their land reforms more transparently and linked it to their country’s long-term industrialisation. The land reform was also aimed at breaking ancient feudal social, income and power inequalities, between landowners, feudal lords and traditional authorities, and ordinary rural dwellers. In the 1950s, Taiwan introduced what it called “Land to the Tiller” land reforms. The land reforms were done under the slogan “use agriculture to cultivate industry”. The reform unleashed Taiwan’s great industrial development, distributing new assets and wealth to millions more equitably.

In Taiwan, big private landowners were compelled to sell parts of their land that exceeded an official acreage limit. Landowners, who had to sell were paid by being given shares in Japanese companies expropriated after World War II by the Taiwanese government. Land that was expropriated from Japanese owners was sold cheaply to peasants, who were already working on farms. The peasants who bought the land had already farmed, and were keen to become owners and had to pay for it, albeit below market price.

The Taiwanese government introduced an industrial policy, which was based on the country establishing new industries or building up underdeveloped existing ones in carefully selected sectors. The government encouraged farmers, both established and new smallholders, with business skills to change from agriculture to set up new factories in the industries selected by the industrial policies.

In South Korea before its land reforms after World War II, the land tenure system was based on a small elite of landowners owning the land. They either used tenants to cultivate the land or leased the farms out to them.

The land reform in South Korea between 1945 and 1957 changed the agriculture economy from importing rice to becoming self-sufficient. The land reforms — by giving land to impoverished land tenants — brought social equality between the rich and the poor in South Korea, increased and diversified agricultural production and increased rural income by over 50 percent. The transfers were to farm tenants who were already skilled farmers. The government compensated the former owners below market price. The new owners had to buy the land, albeit on cheap terms. The government put a ceiling on how much land anyone could hold.

South Korea introduced two sets of land reform. The American military in control of South Korea following the end of World War II in 1945 introduced the first land reform, which involved putting a ceiling on rent charged to farm tenants to one-third of annual yields. In 1948 the military government transferred farm land expropriated from the Japanese government and Japanese private owners to tenants. A ceiling was put on the land per farm tenant.

The distributed land was sold to the farm tenants on generous terms. In 1950 the new South Korean government introduced a new Land Reform Act, which introduced a new round of redistribution. The new land to be redistributed was purchased by the government and also government-vested lands – which included land owned by absentee landlords, remaining lands confiscated from the Japanese, farmlands not being cultivated, farmlands exceeding a ceiling of 3 chungbo (2.5 acres) per household, and ownerless farms.

The 1950 land reform had the dual intention of turning former owners into entrepreneurs who would create businesses in the manufacturing sectors the government had identified for development. The government also guaranteed low-interest loans for them getting into business. The land was redistributed to recipients under strict conditions. Would-be beneficiaries were assessed based on a scorecard.

The outstanding criteria were that they would actively farm the land. Land was transferred under the redistribution reforms to those farm tenants who were actively farming at the time of the reforms, especially those who were farming small patches of land. Recipients of redistributed land could only sell or donate it when they had paid it off. The government could take the land back from recipients who fell in arrears with their payments.

After World War II, from 1946 to 1950, Japan implemented the redistribution of farmland owned by a few landlords to tenants, and in doing so, equalised wealth, and destroyed the system of all-powerful landlords and poor dependent tenants. The reform demolished the old Japanese customs and traditions and the feudal power structure. The land reform brought about class and social equality.

Under the land reform the farmland of all absentee landlords was subjected to mandatory purchase by government. All village land tenanted out which were over one hectare (four hectares in the Hokkaido prefecture) were also to be bought by government. Farmland over three hectares (12 hectares in Hokkaido) which were farmed by the owners, but were deemed to be unproductive, were also purchased.

The government purchase price for land of landowners and the selling price of the land to tenants were the same. Government payment for land purchase was in government bonds bearing interest of 3,6 percent redeemable within 30 years. Tenant payments for the land could be done in annual instalments over 30 years at 3,2 percent interest or paid in cash.

Subsequent to the land reforms, the Japanese government introduced laws compelling landowners who wanted to sell their leased land, to sell only to tenants. Land ownership was restricted to three hectares (12 hectares in Hokkaido prefecture). Land rent was regulated, and tenant rights enshrined.

African countries wanting to redistribute land can learn something valuable from what happened in those three nations. Beneficiaries of land redistribution must be farmers themselves. Only farms that are not productive, or have absentee owners, must be redistributed. Owners of land must be compensated, but beneficiaries must also pay, preferably on easy terms, or with financial help, to have a real stake in their new asset.

State-owned land which lies fallow must be redistributed. Communal land must be distributed to those cultivating it. This will break the social, class and power inequality between traditional leaders, chiefs and authorities in the rural areas and ordinary rural dwellers. This will also unleash the latent productive energy of Africa’s vast rural peasants, who have no individual ownership of communal land, and therefore no incentives to take calculated risks in cultivating the land more productively.

Land reform must be linked to a country’s long-term industrialisation strategies. Beneficiaries of land must cultivate products the country or the world needs, rather than just any products. The products of the new farmers must be linked into the supply chains of major public and private companies. The new farmers must also focus their new products on exports.

Beneficiaries must get training, especially technical and vocational agricultural training to make them more productive farmers. Beneficiaries of land must secure ongoing support, whether access to cheap finance, technical assistance or to secure markets. — African Independent

• William Gumede is chairman of the Democracy Works Foundation. His latest book is “Restless Nation: Making Sense of Troubled Times.”