Land Ceiling International
Review and Policy
Implications for South Africa
Samuel Kariuki
18 October 2012
International Case Studies
1. Cardinal Case Study – India
2.Other case studies considered: Mexico,
Taiwan, Chile, Romania, Egypt &Philippines
Historical Context
At independence – India inherited a
defective/inefficient agricultural system
Insecure tenancies, inequality in land ownership,
preponderance of tiny uneconomic holdings.
Landlessness as a key indicator of rural poverty in
India
The extreme mal-distribution of land, with nearly
a quarter of the households owing no land at all
Land Ceiling
Land Ceiling - fixing of the maximum size of a holding
that an individual cultivator or a cultivator family may
possess.
Land ceiling help widen the scope of redistributionequality through land ceiling legislation.
Dual focus of reforms: Attain egalitarian outcomes in
distribution of land, whilst simultaneously achieving
agricultural productivity.
Land Ceiling in India: Legal
Framework – Land Ceiling
The ceiling laws were enacted and enforced in two
phases. The first phase covered the period 1960-72
and the latter phase was implemented since 1972 –
present - after adoption of the National
Guidelines.
Ceiling laws vary by state
Outcome of Land Ceiling
In a context where political will to enforce land
ceiling is low, coupled with poor legal and
institutional frameworks to undertake land ceiling:
Circumvention
Contestation,
Corruption
Litigation and
Limited supply of surplus land from the ceiling
threshold
Outcome of Land Ceiling
Key challenges:
Inadequate compensation – ceiling became
unpopular with landowners;
Poor legal frameworks – Circumvention
States often distributed the relatively small
amount of land obtained in relatively large parcels,
benefiting only a small percentage of landless
families;
Outdated and incomplete land records made
implementation of the ceiling legislation more
difficult.
Cont’d
First round of ceiling laws resulted in distribution of
only 0.5 million ha.
It was calculated that with ceiling put at 20 standard
acres, 35 million ha of surplus land would become
available for redistribution among the poor peasantry.
The total amount of ceiling-surplus land distributed to
individual beneficiaries amounted to approximately
3% of India’s agricultural land
Key to note: regional disparities in success
Cont’d
Despite the legal, political and institutional
challenges - in states where more than 5% of the
operational arable land was distributed (e.g.
Jammu, Kerala, West Bengal, Kashmir and Assam),
there was a notable reduction in land
concentration
Land reforms had a positive impact on livelihoods
of the poor
Cont’d
The land ceiling implementation is considered to
have halted any further concentration of land
ownership. Such a view is aptly noted in Appu’s
(1996: 179) assertion that even:
……in the context of the significant growth in
agricultural production since the late sixties
there would have been a scramble for the
purchase of agricultural land resulting in
greater concentration in the ownership of land
but for the existence of ceiling laws.
Cont’d
In West Bengal, 34 percent of all agricultural
households have received ceiling-surplus land
With regard to the implementation of land ceiling
laws, West Bengal’s share of total surplus land
distributed was almost 20 per cent of India’s land
West Bengal is a State where policy efforts have
been directed to distribute land to the landless and
the poor
Cont’d
The acquisition of ceiling-surplus land by the
Government of West Bengal for redistribution was
and still remains a major disincentive for
landowners with relatively large holdings to
purchase land
West Bengal success story vindicate the view that
there is no contradiction between some measure
of egalitarianism and efficiency
Cont’d
The state’s relative success was based on several factors:
the law had fewer loopholes than do most other state
land reform law.
the state government’s political will led to more
effective implementation.
the state government’s emphasis on distributing the
benefits equally and the emphasis on distributing the
benefits widely (but in smaller plots) led to more
grassroots support for the process.
Brief Overview of other Countries
Primary reasons used for imposing land ceilings
have been to break down large land holdings;
In some cases prevent their emergence and to
ensure that there would be more land available for
distribution in a land reform programme.
Chile and Mexico there were serious revolutionary
pressures from peasant farmers who were
exploited on landlord properties.
Brief Overview of other Countries
Romania - land ceiling driven by governments due
to under-utilization of land by landlords who
owned oversized properties. Land was
expropriated by the government from absentee
landlords and foreign citizens.
In the Philippines social and economic inequalities
and disparities triggered rural and peasant unrest
which in turn forced the government to enact a
land ceiling programme
Brief Overview of other Countries
In Taiwan - immigration of people from Japan to
Taiwan after World War II which saw the
population of Taiwan increase
In Egypt44 per cent of all rural inhabitants were
landless
The common theme in all these countries was that
the land ownership inequalities were
unsustainable and had to be redressed to prevent
social unrest in the future
Brief Overview of other Countries
Variation in land ceilings: Taiwan the was very specific,
land cap - 2.9 hectares with no exemptions
Mexico, India, Egypt and Chile allowed flexible land
caps – crop type/regional variation
Land caps in Mexico, India and Chile had loopholes
which actually allowed some landlords to circumvent
the land capping exercise
In Taiwan - legislation was tightly developed and
difficult to circumvent.
Brief Overview of other Countries
Common challenges - litigation from the
landowners e.g. Chile, Mexico, Romania and the
Philippines – ceiling laws contained clauses which
gave the aggrieved landlords opportunities to seek
legal recourse.
Chile and Latin - exercise of imposing land ceilings
focused more on ensuring that the landless had
access to land rather than focusing on the
efficiency of land usage. Lack of supporting
programmes a major issue.
Brief Overview of other Countries
Romania, Egypt and Taiwan - had a smaller ceiling
threshold, experienced fragmentation problems as
their land caps were very small
Philippines – involved varied stakeholders in
determining a fair price for the land acquired.
Mexico, India, Chile and the Philippines experienced
unsuccessful land reform because of the wrangling
between the landlords and the implementing agencies
over the “fair”price of the land.
Absence of reliable land records – made
implementation difficult e.g. Philippines
Lessons for South Africa from India’s
Land Ceiling Experience
Most discussions on land ceiling have concentrated on the
distributional (equity) aspects of the measure.
Successful implementation of land reform requires efficient
administration and legislation that is retroactive and the
political will to effectively enforce the law.
Land reform is as difficult an economic exercise as it is a
political undertaking - involves a realignment of economic
and political power.
Cont’d
Resistance to land reforms expected from land
owners – ceiling
The political will of the landowning class is as
much a challenge to the redistributive process as
are the existing legal and structural dimensions of
the current landholding regime.
Define the issues narrowly in legislation
Take note of unanticipated outcomes
Cont’d
Prioritize and fund implementation of new
legislation- Much can be lost between legislative
intent and implementation.
Plan dispute resolution and rights enforcement
system- Land rights are valuable only if they can be
enforced
Improve land records to provide more secure tenure
to the poor.
International Lessons for South Africa:
Policy Options with regard to Land Ceilings
Land ceilings viewed as a possible tool to enforce
one of the pillars of the 3-tier tenure system
proposed in the Green Paper, namely “Freehold
with limited extent”.
Efforts towards redistribution through an
unregulated land market that is touted “robust”
have failed to meet the expected targets of land
reform.
Cont’d
South Africa’s agricultural trend - increasing land
consolidation patterns and the limited availability
of arable land.
Trend towards land consolidation clearly negates
the broad principles and underlying philosophy
that informs the 2011 Green Paper.
Cont’d
Comparative analysis attests that land ceilings have
been imposed in contexts where structural inequity to
land ownership is high.
With increasing concentration in ownership of
landholding in South Africa, land ceiling could
possibly halt this trend if set at a higher threshold to
avert unabated accumulation of freehold agricultural
land.
In 1996, it was estimated that South Africa had 60 000
farm units. By 2002, this had reduced to 45 000 units.
Number of Farming Units
Number of farming units per province
12000
Number of farming units
10000
8000
1993
6000
1996
2002
4000
2007
2000
0
Eastern Cape
Free State
Gauteng
Kwazulu Natal
Limpopo
Province
Mpumalanga North West
Northern
Cape
Western Cape
Policy Options
1. Enact Land Ceilings in conjunction with other
land reform policy instruments aimed at averting
unfettered concentration of agricultural land
holdings
Land ceilings are a potential tool to use in conjunction
with other land reform tools in averting the
unregulated concentration of agricultural land
ownership.
Obviously, such a discussion must be informed by the
experiences noted in countries that have pursued land
ceilings in contexts of high inequities to land
ownership.
Cont’d
Ceilings laws should not be implemented as “stand
alone” reforms but as a package of reforms that
complement the overall objectives of “Freehold
with limited extent”.
Part of a package of policy tools –regulating the
acquisition of agricultural land by non-South
Africans, land tax.
Key question – determination of ceiling threshold?
Cont’d
One lesson learnt from the Romanian, Taiwanese
and Mexican experience is the necessity of having
limits which are neither too big nor too small.
However, large land caps reduce the amount of
land available for distribution thus negating the
purpose of land reform.
Complex ownership structures of farms,
circumvention and litigation by land owners.
Issues to consider
Legal and institutional framework that underpins
land ceiling must be clearly formulated and devoid
of shortfalls.
To institute a differentiated approach to ceiling?
Rationale of such an approach will have to be
made while taking into account questions of
commercial viability.
Cont’d
Justification for creating exemption categories that
could be commodity sector specific, regional
specific, agro-ecological specific, land-use specific
or ownership type specific (e.g. shareholding
enterprises) must be made and this often
generates controversy from the landowning class.
Have a clearly defined legal and institutional
framework that will not be open to manipulation,
circumvention and unnecessary litigation.
Cont’d
With a strong commitment to implementation
and a willingness to commit investments in
smallholder agriculture, ceilings can revitalise the
agricultural sector, contribute to poverty reduction
and be instrumental in stemming trends of
increasing accumulation of land assets and
widening disparity.
Cont’d
Land information systems must be effective not
only at determining the true owners of land at the
time the policy goes into effect, but also at
continually monitoring land transactions to ensure
current recordkeeping.
2. Do not impose Ceiling Laws on
Agricultural land holdings
In terms of the submissions (e.g. ABC) made to the
work stream sub-committee on land ceiling,
arguments not in favour of land ceiling have been
made on the basis that the costs associated with
ceiling outweigh the expected benefits.
Although land ceilings are easier to legislate than,
for example, a land tax, there are difficulties in
determining the maximum or minimum, size of
land holdings (i.e. the economies of farm size).
Cont’d
Ceiling laws have been expensive to enforce, have
imposed costs on landowners who took measures
to avoid them, and have generated corruption,
excessive rent seeking, tenure insecurity, and red
tape. If the land ceilings result in excessive rentseeking the benefits may greatly decrease or even
become negative.
Cont’d
The costs incurred in terms of the implementation
experience – litigation, circumvention, corruption,
poor legal and institutional infrastructure to
enforce ceiling laws vindicate the view that ceiling
may not achieve its intended objectives.