Reform of agrarian structures
53. The subject of agrarian reform aroused many interested comments by the delegates. There was general agreement that the reform of the agrarian structure was a proper topic for FAO to consider in endeavoring to fulfill the general aims of the organization: To increase agricultural production, and to promote better rural living. There was also general acceptance of the theme of the joint FAO/UN study presented to the Twelfth Session of the Council, which brought to light the various ways in which certain defects in the agrarian structure, such as small and fragmented holdings, insecurity of tenure, lack of registration of titles to land and water, scarcity of credit, unfair rentals, or inequitable taxes against the interest of sound economic and social use of land, seriously impede economic development. There was explicit and implicit agreement among the delegates on the need for concerted action to remedy these defects in order to raise food production, in line with the exposition of the Director-General in which he outlined the serious world food situation.
54. The Conference noted the resolution on land reform of the Economic and Social Council, which calls upon FAO to assume a major responsibility in dealing with the problem of agrarian structures, and it agreed that the Organization should accept this challenge.
55. The Conference considered that the elimination of defective features from existing agrarian structures is not only essential to economic progress, but that such measures would materially contribute to human dignity and freedom and consequently would secure social stability and further peaceful democratic development. The Conference emphasized the importance of country-wide enthusiasm for the rational utilization of natural resources developed through scientific knowledge to their maximum potential, in order to assure to the farmer a decent standard of living.
56. The Conference called upon Member Governments to examine their own agrarian structure in the light of the ECOSOC resolution and to promote to the fullest, the exchange of information and the spread of education to further popular understanding of rural betterment.
57. It is clear that agrarian reform is a manifold and complex operation, involving not only such measures as listed above, but closely tied in with most other aspects of economic and social life. In line with the main conclusions of the joint FAO/UN study, the Conference concurred in the view that the reform of the agrarian structure must be part and parcel of the general program of economic development. Consequently, many delegates felt that FAO should not treat agrarian reform in isolation, but integrate it with other projects in its program related to economic development in the broadest sense. For instance, it is recognized that the resource characteristics of different agricultural regions have a decisive effect on such features of rural institutions as the optimum size of holdings and the pattern of land utilization.
Relative Governmental and FAO Responsibilities
58. The Conference recognized that in the final analysis basic measures in this field must be taken by the governments themselves, as part of their national programs. However, FAO, charged with the responsibility of promoting world agricultural production and rural living, should be able to assist Member Nations in carrying out rural reform programs.
59. If FAO is to carry out such a program of assistant c, the Secretariat must have available extensive and continuous information on land tenure and all related matters. The Conference therefore requested the Director-General to make appropriate arrangements for the collection and analysis of this information for the maximum benefit to Member Countries. The Conference called upon Member Governments to give to the Secretariat full and detailed information and documentation on these subjects.
60. As emphasized in the discussion, several countries have already valuable experience in many fields of agrarian reform, which they are willing to put at the disposal of other Member Governments. Certain delegations, on the other hand, expressed great interest in measures put into effect in other countries, because of the rural reforms now being planned or in the process of execution in their own countries. The Conference therefore requested the Director-General to make the experience of individual countries in the field of specific reform measures available to all interested governments. To this end, FAO should initiate analytical studies in co-operation with Member Governments, and also assist selected Member Nations in the appraisal of the effectiveness of current measures of land reform in the field.
61. For the purpose of periodical exchange of information and experience among experts in this field the Conference recommended the organization of regional meetings on problems of agrarian structure. A number of Member Governments have already expressed their willingness to be hosts to such meetings.
Utilization of Expanded Technical Assistance Program
62. It is evident that the Expanded Technical Assistance Program can serve as an appropriate framework for carrying out some of FAO's work rural reform. Delegates commented on the desirability of giving high priority within ETAP to projects dealing with agrarian reform. The Conference called on Member Governments engaged in planning economic development projects which involve changes in the agrarian structure, to request FAO for help under the Expanded Technical Assistance Program, either in dealing with particular aspects of their rural institutional structure such as credit, fragmentation, etc., or in planning a general attack on all phases of the problem. It was pointed out that in countries where large programs of technical assistance are now under way, changes in agrarian structures should be considered as an essential supplementary activity, because the effectiveness of many of the technological measures depends on the improvement of existing institutional structures. In this connection, it has been suggested that instead of one expert working in isolation, there ought to be "land tenure teams" tackling simultaneously various aspects of agrarian reform in a problem area. Governments may wish to give this matter consideration, when they submit requests for assistance.
63. In accordance with suggestions made during the debate, the Conference recommended the establishment of training centers in the field of agrarian structures, particularly land tenure, as similar centers have already been successfully organized on a number of technical subjects. Such centers are to broaden the training and experience of men, who would work on problems connected with agrarian reform in their own countries. These prospective centers might concentrate on the question of methodology (i.e. how to attack land tenure problems), because instruction in the fundamentals of research and analysis seems to be most badly needed. It is recommended that such training centers be associated with practical demonstrations in which projects featuring sound agrarian structure are stressed. It is hoped that in the operation of such centers full advantage will be taken of possible co-operation between FAO, other international agencies, and the technical assistance organizations of Member Nations.
64. Since agrarian reform cannot be accomplished without adequate capital investment and consequently considerable costs, the problem of the internal and external financing of agrarian reform programs is a very essential one. The Conference, having heard a statement by the representative of the International Bank for Reconstruction and Development, agreed that FAO, in co-operation with the United Nations and its appropriate Specialized Agencies, should explore the possibility of the provision of more effective methods of financing, both through mobilization of the internal resources of the countries concerned and through international institutions, already existing or organized for this purpose, which would provide loans or grants as referred to in the appropriate resolution of ECOSOC (E/2107).
65. In conclusion, the Conference felt that the reform of agrarian structures is such an important factor in carrying out the broad objectives of FAO and those which specifically confront this Conference, as presented in the Director-General's opening statement for Commission I, that agrarian reform should be an important part of the Program of Work of the Organization for the next years to come. The Conference adopted the following resolution:
Resolution No. 8
Reform of Agrarian Structures
Having examined the Report on "Defects in Agrarian Structures as Obstacles to Economic Development," the resolution of ECOSOC thereon, and the Director-General's "Statement on Reform of Agrarian Structures" (C 51 /I-3),
Considers (a) that in many countries the agrarian structure has most serious defects. in particular the uneconomic size of farms, the fragmentation of holdings, the mal-distribution of landed property, excessive rents, inequitable systems of taxation, insecurity of tenure, perpetual indebtedness or the lack of clear titles to land and water; (b) that these defects prevent a rise in the standard of living of small farmers and agricultural laborers and impede agricultural development; (c) that reform of agrarian structure in such countries is essential to human dignity and freedom, and to the achievement of the aims of FAO;
Endorses the Resolution of ECOSOC of 7 September insofar as it applies to FAO; and
Urges Member Governments (a) to take immediate steps to implement that resolution, and to co-operate with FAO in supplying information and participation in such investigations as FAO may undertake; (b) to request the assistance of FAO to carry out reform of their agrarian structure;
Requests the Director-General to:
1. assemble in co-operation with other appropriate organizations on a continuing basis et FAO Headquarters information on land tenure, land reform and allied subjects, with a view to analyzing and making it available to interested Member Governments and institutions:
2. co-operate with Member Nations in the appraisal of the effectiveness of past and current measures of reform of agrarian structure;
3. take the leadership in organizing with other entities of the United Nations such inter-agency arrangements as may be useful and appropriate to enable each UN agency to make its fullest contribution to implementing the ECOSOC Resolution, to provide assistance to governments on all aspects of reform of agrarian structure, and to arrange for the preparation of reports on progress achieved as called for in the ECOSOC Resolution;
4. review the Program of Work of FAO with a view to ensuring a high priority and an integrated approach to those projects in the various divisions which are related to the problems of reform of agrarian structure in the broadest sense in order to keep Member Nations informed of all aspects of the problem under review and to be fully prepared to give assistance to governments in the development of their programs;
5. be prepared to assist governments by provision of technical assistance on programs designed to promote desirable reforms including, land tenure, agricultural credit, agricultural cooperatives, and agricultural extension services and rural industries;
6. seek the co-operation of other international organizations, Member Governments and private bodies on investigations of problems of reform of agrarian structure including the analysis and promotion of methods of external and internal financing of agrarian reform programs;
7. promote the organization of regional conferences or training centers combined with demonstration projects on reform of agrarian structures in co-operation with other national and international organizations and governments of the regions concerned; and
8. report to the Council, as soon as practicable, on initial progress made in implementing those recommendations, on obstacles encountered, and on further possibilities uncovered, and subsequently to report fully to the next regular Conference on progress achieved.
Investment for agricultural development (including forestry and fisheries)
66. Since the last session of the Conference considerable progress has been made in providing funds for agricultural (including forestry and fisheries) development. In the field of domestic capital many governments, notably in Latin America, have been instrumental in establishing new financial institutions specializing in agricultural credit. In some raw material exporting countries measures have been initiated to utilize for development purposes a portion of the additional revenue from high export earnings due to more favorable export prices. Other government measures such as tax relief. foreign exchange allocations, low interest rates and earmarking for agricultural development of the proceeds of a special tax on the value of agricultural holdings have been utilized to speed up agricultural development through financial measures.
67. In the field of international investment, the International Bank for Reconstruction and Development has continued to concentrate its lending activities largely on under-developed countries, as has also the Export-Import Bank of Washington. The Economic Co-operation Administration too has aided agricultural development through its Far East Program, through funds used in dependent territories of OEEC countries and indirectly through release of counter-part funds.
68. The total amount of dollar funds for international loans and grants, for civilian purposes, in 1950/51 was of about the same order of magnitude as in the two previous years, but the portion going to underdeveloped countries was somewhat larger. In respect of non-dollar investments, considerable sums for agricultural development in under-developed areas are included in the Colombo Plan in the Far East and in the development plans for dependent territories in Africa and elsewhere.
69. Although an increasing volume of financial assistance has been rendered by governments to farmers either directly or indirectly, the role of private agencies in providing various types of credit to farmers is still considerable. In economically developed countries this is primarily done by cooperative credit institutions and commercial banks. In many under-developed countries village money lenders and middlemen still provide a considerable part of agricultural credit often at excessive rates of interest.
The Tasks Ahead
70. In spite of progress recorded, much greater efforts are needed if governments and international bodies are to measure up to the requirements of the problem. More rapid economic development in under-developed countries in order to raise. the of productive employment and the living standards of their populations can be achieved only if the volume of investment, both public and private, is considerably increased in the field of agriculture, as well as in other sectors leading to a balanced economy. The vital role of agriculture in the economy of almost every nation needs to be further stressed in arriving at a proper balance between investment in agriculture and in other economic activities, but the decision on how to allocate investment funds is of course, to rest with each country.
71. Investment for agricultural development includes making provision for the financial needs of millions of individual farmers in addition to the financing of large-scale development projects. Increase of production as requested by the Conference, in view of the still insufficient world production of foodstuffs for an ever growing population, can only be achieved if the millions of operators of farms have access at reasonable terms to credit for the modernization of their methods of cultivation and the improvement of seeds and breeding stock. Low-cost credit for small farmers, either individually or on a group basis, is of outstanding importance and particularly in countries where re-distribution of land is needed, since the experience of many countries indicates that land reform alone is of limited value unless accompanied by means to enable the newly-constituted d or enlarged farms to secure the necessary supplies and equipment for efficient production.
72. The Conference considered that further measures should be developed in the following fields:
73. All governments which have not already established their own credit organizations should consider establishment of these as a measure of high priority and most governments, at least in under-developed areas, need to review carefully the adequacy of the funds available to the credit institutions and the terms and conditions under which credit can be made available to farmers, particularly small farmers. FAO should be prepared to meet requests from governments and give the fullest possible assistance to them in organizing more effective credit systems, including the organization of additional regional credit seminars in conjunction with the International Bank and other appropriate agencies, similar to the one being prepared for Latin America. To a greater extent than heretofore, governments should avail themselves of the possibilities of securing technical advice in improving their agricultural credit system under the Expanded Technical Assistance Program.
74. Member Nations whose terms of trade have been improving due to more favorable prices for the main commodities might consider carefully the possibilities of obtaining additional funds from these higher earnings and earmarking part of these funds - in addition to normal levies for research and promotion - for improvement of agricultural techniques and economic activities serving agriculture, and generally for investment in agricultural and economic development.
75. The Conference further drew the attention of Member Governments interested in foreign private investment in agriculture to the suggestions in the Resolution of ECOSOC (E/2107 - 6 a, b, c) on measures for attracting private foreign capital.
76. National financial institutions may be aided by external loans, public or private, to provide funds for the importation of machinery and other agricultural requisites. Such loans, if made on a long-term basis, may also provide an opportunity for increasing the domestic funds available to national farm credit institutions, if the domestic funds from the repayments of individual farmers are used for a time as revolving capital for further loans. The Conference noted with pleasure that the International Bank had already assisted such development by making several loans for this purpose.
77. Despite the improvement recorded, the (conference considered that the importance of agricultural development justified a further increase in the volume of international investment devoted to under-developed regions and particularly to agriculture. The Conference noted with pleasure the intention of the International Bank, as indicated in the statement of the Bank's representative, to increase still more its assistance to Member Governments by loans for agricultural development, and the fact that such loans are available not only for specific projects but also for foreign exchange requirements connected with more general programs to expand agricultural production such as land reform, transportation and measures facilitating international migration.
78. In view of the importance of non-self-liquidating projects for agricultural development there is need for "active study of the problems and methods of domestic and external, including international, financing of non-self-liquidating projects in underdeveloped countries including the possibility of supplementing existing international cooperation by means of external grant assistance" ( ECOSOC Resolution E / 2107 - 14, a).
79. The Conference expressed interest in the proposal of the Experts' Report on Measures for the Economic Development of Underdeveloped Countries for the establishment of an international development authority to administer, distribute, and supervise international grants-in-aid.
80. The Conference also took note of the cooperation of FAO with UN in the past in discussing problems of financing agricultural and economic development and authorized the Director-General to participate with UN and other Specialized Agencies in the formulation of practical methods for dealing with the problem of assistance through grants as requested by ECOSOC.
81. FAO, in co-operation with appropriate international organizations, should explore the possibilities of establishing jointly, on a national or regional basis, pilot projects aimed at investigating the technological, sociological and economic problems involved in the reorganization of small peasant farmers on a group basis with the injection of the minimum capital and management necessary for efficient and expanded production.
82. Since lending activities of the International Bank have been hampered in the past by lack of well-prepared and economically feasible loan applications, the Conference was gratified to hear that the Asian Training Center at Lahore for the formulation and economic appraisal of development projects was attended by good results, and wished equal success to other similar centers. FAO should organize such centers in other regions or countries, as requested, and should follow up the work of the three regional centers by appropriate activities in the countries of the participating nations. The Conference adopted the following resolution:
Resolution No. 9
Investment for Agricultural Development
Having noted the progress made in the field of mobilizing domestic investment capital, particularly through establishing financial institutions specializing in agricultural credit, as well as the increased activities of international bodies - in particular of the International Bank for Reconstruction and Development - in providing foreign capital for long-term investment in agricultural and in related economic fields,
Considering that the increase of agricultural production, including fisheries and forestry, requires further and stronger promotion, as well as the expansion of credit facilities for agriculture on the national and the international level,
Believing that such vital tasks of FAO as the more rapid economic development of many of the predominantly agricultural under-developed regions of the world, including, the advancement of improvements in agrarian structures and international migration, cannot be achieved without provision for financing through domestic capital and/or foreign loans, investment funds or grants,
1. as national measures
(a) that governments of countries which do not already possess adequate institutions for providing farmers, fishermen and forest owners with credit at reasonable terms, either individually 07- on a group basis, should assign a high priority to measures facilitating and promoting the establishment of such credit facilities;
(b) that such governments [in improving their agricultural credit systems], should to a greater extent than heretofore seek advice under the Expanded Technical Assistance Program and that the Director-General should give the greatest possible consideration to such requests;
(c) that the Director-General should undertake in co-operation with other international institutions the organization of regional seminars on agricultural credit;
2. as international measures
(a) that the Director-General continue and further strengthen close co-operation with the International Bank for Reconstruction and Development and with other international institutions giving grants or credits, in all their activities with respect to agriculture, fisheries, and forestry and in related economic fields;
(b) that the experts and the staff of FAO employed in technical assistance projects, when submitting their recommendations, attach, if so directed by, the Director-General, an economic and financial analysis of them;
(c) that the Director-General give the fullest possible assistance to governments, if requested, in selecting agricultural, fishery and forestry projects for international financing, and in the preparation of applications for loans 07 grants to the appropriate international institutions;
(d) that the Director-General, if requested either by governments or by an international financial institution, forward his expert appraisal of the projects submitted for financing to this financial institution;
(e) that the Director-General continue his co-operation with the United Nations in the studies and discussions of problems of financing economic development and participate in the formulation of practical methods dealing with the problem of assistance through grants as mentioned in the Experts' Report on Measures for the Economic Development of Underdeveloped Countries;
(f) that the Director-General, if requested, organize in co-operation with other international agencies further training centers for the formulation and economic appraisal of development projects; that he follow up the work of the three regional centers already held, by appropriate activities in the countries of the participating nations, and explore, where found desirable, the possibility of establishing a limited number of small representative projects aimed at investigating problems involved in the establishment or reorganization of small farmers on a group basis, where family farms are not justified;
(a) the Director-General to submit to the Seventh Session of the Conference a report on the amounts of capital provided to agriculture through international finance, and to assemble such information on agricultural credit as is readily available in order to indicate the prevailing trend, keeping the Council informed of the progress in this work;
(b) all Member Nations to assist the Director-General in assembling the information necessary for this work;
(c) the Director-General to give consideration to the possibility of issuing a statement for circulation to banking institution indicating the needs for making capital available for rural development and the range of methods in use.
83. The Conference deemed that the disequilibrium in population distribution in certain parts of the world might constitute an obstacle to the development of world resources. It is therefore incumbent upon each government in preparing agricultural development programs to determine, taking into account not only economic but demographic factors, what optimum relation has to be established in each region between available land and the labor necessary to cultivate this land.
84. The increase in manpower which may be necessary can be obtained either by a redistribution of the labor resources already available in the country or by introducing foreign farmers and farm workers. In different regions of the world, and c specially in Europe, reserves of qualified farmers are available which, if utilized, can bring to other countries not only an increase in manpower hut also invaluable knowledge.
85. While recognizing that in its final analysis migration is basically the responsibility of governments, the Conference noted that these responsible governments co-operating in the international field, had laid on the International Labour Organisation major responsibility in questions relating to international migration. ILO and FAO have maintained close cooperation and have agreed upon a definition of their respective areas of concern and of their responsibility in the field of migration for land settlement. They have also recognized that a number of other international organizations are likewise concerned with various financial, economic or social aspects of migration for land settlement, and that their collaboration on matters within their competence is equally essential to successful planning and execution of settlement projects. Consequently FAO stands ready to respond to requests made by countries for advice regarding specific land settlement schemes. In the past there have been many examples of failure in land settlement; but history also shows numerous examples of success. This success has almost invariably been due to arrangements whereby the new settler has had available to him advice and technical and financial assistance. Many countries will have to establish effective services to help land settlement to produce food and agricultural raw materials rapidly. Many countries will need external financial assistance to carry on their land settlement schemes. The Conference adopted the following resolution:
Resolution No. 10
Takes note with satisfaction that cooperative arrangements have been made between ILO and FAO with a view to developing action in the field of migration for land settlement which contemplates collaboration with other international organizations concerned with various financial, economic and social aspects of such migration,
Requests the Director-General to give full effect to these arrangements, in cooperation with other international organizations where such co-operation might be useful, when advising governments about the promotion of technically sound agricultural development programs calculated to increase food supplies with due regard to demographic factors and to raising the living standards of agricultural populations,
Further requests the Director-General to assist and advise governments of Member Countries, on request, in carrying out specific land settlement schemes.