Location and Agrarian Reform Smith

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LOCATION AND AGRARIAN REFORM: THE PERUVIAN EXPERIENCEAuthor(s): Clifford T. SmithSource: Publication Series (Conference of Latin Americanist Geographers), Vol. 5, LATINAMERICA: Search for Geographic Explanations (1976), pp. 141-153Published by: University of Texas PressStable URL: http://www.jstor.org/stable/25765572.

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LOCATION AND AGRARIAN REFORM: THE PERUVIAN EXPERIENCEClifford T. Smith

Centre for Latin-American StudiesUniversity of Liverpool

Debate in the social sciences on the question of agrarian reform in LatinAmerica has pursued a course which is strangely independent of the parallel debate focussing on the problems of regional development. That this should be sois not surprising as long as prescriptions for raising levels of living in poor,peripheral or satellite regions are couched in terms of infrastructural im

provements, industrialization, or the encouragement of urban growth poles. Butin predominantly rural areas it has always been evident that material progressmust depend on agricultural productivity and on the generation of effective markets for agricultural produce. It is in these respects that agrarian reform isperhaps most relevant to problems of regional development. Similarly, but fordifferent reasons, the literature and legislation on agrarian reform has untilrecently neglected the regional dimension, partly because radical hopes have beenpinned to rapid and universal reform in which regional priorities have no place,and partly because efforts have been concentrated on the people rather than theplaces to be affected.

In spatial terms, then, two issues arise. What is the case for a regionalpolicy of land reform? And secondly, what are the implications of agrarian re2form for regional development? It may be well to explore briefly both of theseissues before an examination of the Peruvian experience of land reform since1969.

A regional policy of land reform may take as its point of departure theidea that an ordered, universal, and rapid land reform is impracticable for onereason or another except in truly revolutionary situations - expense, shortageof skilled administrative manpower, political hesitancy, or a desire to avoidwholesale disruption are among the factors that may be involved. A regionalpolicy of land reform implies the concentration of administrative effort in executing a controlled land reform in specific areas, and necessarily involves theestablishment of a scale of regional priorities. There are clearly practical andtheoretical advantages in adopting such a regional policy. It makes for economyin the use of scarce professional resources in the execution of reform, which usually involves substantial work in preliminary studies and assessment, cadastralsurvey, and legal and accounting procedures in the processes of expropriation,valuation and the granting of land to qualified peasant beneficiaries. Secondly,if land reform is to be followed up by improvement of social and physical infrastructure, agricultural extension services and credit facilities, which many regard as an integral part of the total process of agrarian reform, as opposed tomere land reform, then there are clearly economies to be gained by an integratedregional approach. This broad conception of agrarian reform involves a massiveinvestment which has rightly been regarded as likely to be Beyond the capacity ofa poor country to support on a national basis. But the progressive concentrationof effort on a series of areas ranked in a descending scale of priority may makelocalised massive investment a feasible policy.

Thirdly, and arising from this second point, there is an issue of theoretical importance. If it is the case, as is argued below, that agrarian reform maybe expected to generate multiplier effects which stimulate the development ofpoorer, rural and peripheral zones, then a regional policy of land reform is

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needed in order to concentrate such multiplier effects which may otherwise bewidely and thinly dispersed throughout the country.

It is clearly useful and important to distinguish the advantages of a spatial approach to land reform, as opposed to a widespread dispersion of effort,but what specific type of area should be accorded priority? Where should a regional priority be first applied, and what criteria should govern the choice?Clearly, the criteria selected must depend very largely on the political and social purposes of a land reform and its expected economic consequences may welltake second place. Priority may be given, for example, to the expropriation offoreign-owned enterprises or a national landed oligarchy; to areas of peasant unrest and potential disaffection; or to the areas in which peasant land-hunger isparticularly rife. On economic grounds, however, there would seem to be a strongcase for the concentration of effort on those areas, presently under-used and extensively exploited, where accessibility to markets is sufficiently good (orcould easily be made so with a minimal investment) to make it possible to marketthe produce of more intensive land-use systems. We may envisage a hypotheticalspatial economy in which there is a gradient from highly commercialised, efficient and productive land-use systems to a peripheral, traditional system, remotefrom accessible markets, and based on peasant farming with a large subsistenceelement combined with labour-service tenancies on extensively exploited largeestates. In such an economy, priority for reform on economic grounds would behighest in the intermediate areas. Agrarian reform is unlikely to improve greatly, if at all, the efficiency and productivity of land-use systems which are already highly commercialised and capital-intensive, though political motivationsmay be strongest for intervening in such areas. Areas far removed from the mainstream of commercialisation, accessible markets and the turbulence of socialchange or modernization are equally likely to produce a poor return on the effort and investment involved in agrarian reform. But it is in the zones of intermediate character, already touched by the currents of modernization, where thesocial tensions produced by the gap between low productivity and rising expectations, and also the potential for economic development, may be at their maxima.

The second spatial issue of importance is the relationship between agrarianreform and regional development. There are clearly theoretical grounds for arguing that agrarian reform can generate multiplier effects that will help to reducestriking regional disparities of income and levels of living such as exist in3Peru. The poverty of many areas is certainly a product of their low productivity and lack of economic opportunities for development. Regional land reform (asopposed to agrarian reform in the full sense) may remove some of the barriers toincreasing rural productivity, but it cannot, per se, raise productivity. Ithas, however, been argued that rural poverty is the result, in part, of a posi4tive drain on potential rural income , an argument closely associated with theconcepts of rural dependence and urban domination.^

The major economic components of this drain may be outlined, though itgwould be difficult to quantify them with any accuracy: (1) the result of unfavourable terms of trade as between agricultural and industrial prices at thefarm-gate; (2) high costs of marketing and distribution, involving very often aflow of profits to urban-based middlemen; (3) the depletion of the human capitalof the rural periphery as a result of the migration of skilled, educated andenterprising manpower to the cities: (4) payment from country to town of interest on loans and mortgages; (5) the impact of taxation, in so far as there is anet flow from the countryside to the towns; and finally, (6) the export of unrequited revenue in the form of rents and profits transferred, especially byabsentee landowners, from the countryside in which they are earned to the cities

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where they are spent, saved or invested.How far land reform may be expected to affect this situation depends pri

marily and always on the stimulus it gives to increasing productivity, and itmust always depend, too, on the way in which the land reform is applied. Theabolition of large-scale ownership, and with it the practice of absentee ownership, may be expected to stem the drain of rents and profits to the towns, butthis is only one element among many. Changes towards a more egalitarian incomedistribution should increase demand for the range of goods and services availableat lower order urban centres at the expense of demands for specialised goods and7services available, by definition, only at higher order urban centres. A regional concentration of land reform would thus be expected to generate the maximum multiplier from such indirect, but positive effects. Yet it must be stressedthat the impact of land reform on other components of the drain of revenue fromthe countryside depends to a very large extent on the way in which land reform iscarried out, and indeed, on the wider context of agricultural policy as a whole.Farm-gate prices and the prices of industrial products in the countryside reflecteconomic policy as a whole; the impact of land reform on migration would appearto be unpredictable, depending to a large extent on how reform is administered;land reform, per se will not affect the costs of marketing and distribution; andregional gains from other sources may be offset by the need to pay for land andequipment by the beneficiaries of reform.

The Regional Approach in Peru's Agrarian ReformThe concept of regional approach to agrarian reform in Peru appeared ini^

tially in the legislation of 196 2 when a short-lived military administration focussed its efforts in this direction on the province of La Convencion in theDepartment of Cuzco, where the apparent threat of a rural guerrilla movement mayhave stimulated the move to alleviate disaffection by the promise of an agrarianreform. A regional approach was taken much further in the more ambitious andQwidely publicized reform law (15037) of 1964 during the Belaunde regime, whichformalised a regional policy, established the idea of Zones of Agrarian Reform,and designated the sierra departments of Cuzco, Puno, Junin and Pasco in southern9and central Peru as the priority areas for systematic action. The choice ofthese areas was, in principle, governed by the idea that these were regions inwhich peasant need was greatest and large estates predominated, but all were regions with a history of peasant unrest. In many respects, however, the reformlaw of 1964 was tentative and half-hearted, excessively respectful of vested interests, and ineffectively executed. The efficient and highly productive sugarestates of the coastal zone were specifically excempt from the 1964 law, for example, and during the four years of its operation, before the military coup of1968 , no more than 300-350,000 ha had been redistributed to the benefit of approximately 10,000 families, though estimates vary of what was, in fact, achieved.10

In the military regime which followed the coup of 1968 and the collapse ofthe Belaunde government, agrarian reform has been one of the most important policies to validate the claim of the regime to be the creator of a Peruvian Revolution. The new agrarian reform law of June 24th, 1969 envisaged much more rapidand drastic change than was ever contemplated in the law it superceded.11 Themajor sugar estates were the initial target, and were taken over within weeks ofthe annoucement of the reform under a clause which made agro-industrial complexesliable to expropriation in totality. Details are not appropriate here, but inmany other respects the new law was more rigorous than the old, opening the wayfor the wholesale expropriation of large estates, especially those which were

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inefficiently exploited, idle or abandoned. Procedures were speeded up, and ina number of ways the onus of action was put upon the landowner to prove why hisland should not be expropriated rather than on the state to prove why it should.Compensation was much less generous than under the old law, and was to be paidlargely in low-yielding bonds rather than in cash, with an ingenious provisionintended to encourage industrial investment by former proprietors, using agrarianbonds as part of the initial investment.What was more important, however, was that the reform has been put intoeffect. Even by the end of 1969 more had been achieved than during the previousfour years, with 1,137,229 ha expropriated and 472,461 ha adjudicated to 12,631families. By the end of May 1972, 3,925,000 ha had been expropriated, 3,104,00012ha adjudicated, and 101,251 families had benefitted. Recent reports indicatethat 5.5 million ha had been expropriated by the end of 19 73, and 3,240,600 ha13adjudicated to 131,712 families by the end of March, 1974. Even at this rate,however, it seems unlikely that land reform would be completed by the target dateof 1975.

The case for a regional application of land reform was increasingly recognised by the military administration, though it seems from the progress of eventsthat political considerations (very much to the fore in the expropriation of thecoastal sugar estates), administrative convenience and the pressure of events preceded the formulation of an explicit policy based on intellectual and theoreticalgrounds. The new law accepted the concept of Zones of Agrarian Reform established during the previous regime, confirmed those already established and rapidlyadded a new list which included most of the coastal departments: the departmentsof Lambayeque and La Libertad together with the coastal provinces of Ancash andLima, thus comprehending the area in which the coastal sugar estates are concentrated. The shift of emphasis from the sierra to the coast was thus emphasised,but during the course of 19 70 further zones were declared, creating a network ofZones covering the whole country (see Fig. 1). Each Zone, equipped with a regional office, is further divided into Sectors, again following the pattern established during the Belaunde regime. In principle, the division into Sectors is intended to make possible a system of regional priorities within each Zone, to be determined in principle on a basis of need, taking three major factors into account:the extent of large landholdings, the existence of campesino pressure on resourcesand also the extent of campesino consciousness of the need for land reform.

How has the regional policy worked so far? By June, 197 2, according to Vande Wetering, only 17 percent of the potential area subject to redistribution had14been reallocated. The greatest progress had then been made in two kinds ofarea: in the northern coastal zone, centre of the great sugar estates, and in thesierra departments of the centre. This very general pattern is confirmed by adetailed study of the location of estates decreed to be affected by land reformbased on official announcements made in the daily official gazette, El Peruano,from which it is also evident that although in the early stages of the reform,the estates affected by reform were often dispersed and scattered over a widearea, there was an increasing tendency in 1971 and 197 2 to execute the land reform on a much more systematic and regional basis.

The most recent data available at the time of writing is a summary, at theprovincial level, of land adjudicated up to the end of July, 1974, and this provides the evidence for Figure 2, providing some indication of the regional emphasis so far given to land reform. In the coastal zone the predominantly cottongrowing areas of the extreme north have been affected by land reform in additionto the sugar region of the northern coast. Further south, reform has been carried

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out systematically in the traditional cotton and wine producing region in theDepartment of lea, but it is also evident that the southern coast has been verylittle affected, and the proportion of agricultural land affected by reform inthe neighbourhood of Lima itself is relatively low.

In the sierra, reform has been concentrated in four broad zones of activity:in the Departments of Puno and Cuzco in southern Peru, and in the central sierradepartment of Junin, formerly home of the great estates of the Cerro de Pasco Corporation. All of these are areas designated during the Belaunde regime as Zonesof Agrarian Reform, where there already existed, therefore, a cadre of skilledadministrative personnel and accumulated local knowledge which paved the way forrapid action under the new law. But since 19 72 there has also been considerableactivity in the northern sierra, initially focussing on a few very large estatesowned by stock-raising companies, sometimes associated with the coastal sugarenterprises.

For various reasons, it is impossible to say exactly what proportion ofland legally liable to reform has, in fact, been affected, chiefly because theliability to expropriation is not simply a function of size of holding, but alsoof efficiency, tenure system and other factors taken into account by the complexlegislation involved. The land liable to expropriation can only be establishedafter detailed investigation by agrarian reform officials. It is, however, possible to estimate the proportion of total exploited land so far affected by agrarian reform in each province, and this can be done using the data contained in theagricultural census of 1972.Recent estimates of the amount of agriculturalland in Peru vary very widely and are sometimes based on very weak foundations,but the 1972 census is probably the best set of figures available. Even so, someprovinces give anomalous results in that the amount of land expropriated and adjudicated is greater than the total of exploited land in agricultural units according to the 1972 census I It is certainly not impossible that this anomaly maybe due to deficiencies in the census, but it is also likely to be a result of thefact that data for land adjudicated is located by the province in which the headquarters of each reformed unit lies rather than by the provinces in which theland itself is located, and in some cases there is certainly considerable overlapof reformed agricultural units across provincial boundaries.

With this proviso, then,it is apparent that the regional incidence of landreform has been highly variable, as may be seen from Table 1.

Table 1Percentage of exploited land in agricultural units affected by land reform to

March, 19 74, by provincesNumber of Provinces 75% and 50-74% 25-49% 10-24% 0.1-10% Nil Total

overCoast 1 2 7 5 9 29Sierra 6 4 8 12 51 90Selva and montana - - 1 4 2025

Total 6 14 16 210 44

In only 4 3 provinces out a total of 144 has land reform affected more than 10percent of the exploited land in agricultural units, and 15 of these are in thecoastal zone. In 13 provinces over half of all agricultural land has been expropriated, and most of these are in the sierra. But no less than 80 provinces have

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been totally untouched by land reform. Of these 20 lie in the montana and theselva where the problems of agrarian reorganization are, in general, being tackledin other ways, particularly by the reversion of idle or abandoned land to thestate. And while only 9 out of 2 9 coastal provinces, mainly in the extreme northand south of the country, have been untouched so far, well over half of thesierra provinces (51 out of 90) have not yet been affected.

It is clear that a regional concentration of land reform has occurred,partly as a result of deliberate policy, particularly after 19 71, and partly asa result of the concentration on areas in the sierra where studies had previouslybeen made during the Belaunde regime, and partly because of a social and political commitment to the reform of coastal agriculture. There is, however, anunderlying logic in the distribution of land reform. In the sierra, land reformhas been carried out massively in precisely those areas which have undergone amoderate degree of economic and social change, with reasonably good accessibilityto urban markets on the coast and especially in Lima. The central sierra haslong been a focal area of change associated with mining and with the railway linking Huancayo and Cerro de Pasco to Lima. In southern Peru, the expansion andcommercialisation of the great estates in Puno were certainly accelerated by itsrailway links with Arequipa and the coast. These have both been major transversal axes of development in Peru, but other and later links, mainly by road, alsopaved the way to forward movement in the basin of Cajamarca and the Callejon deHuaylas, where land reform has also been active. The Cuzco area stands apart asa regional centre in its own right, and as a centre in which land reform was initiated as a counterweight to peasant unrest and disaffection. It is significantthat the areas of little or no reform activity to the middle of 1974 are, in general, those which are remote and isolated, whether in the extreme northern andsouthern areas of the coast, or in the areas of backwardness in the sierra, suchas the north-eastern sierra beyond the trough of the Marafion, or the sierra provinces of the south which are among the poorest in Peru in terms of material welfare, and are for the most part still difficult of access.

In terms of the hypothetical spatial economy adumbrated above, Peruvianland reform has certainly been carried out, for social and political reasons, inthe highly commercialised and efficient land-use systems of the coast (though notin the immediate hinterland of Lima itself). It has not affected the remotestand poorest areas to any significant degree, and in the sierra has been pushedfurthest in the zones of intermediate character where modernization and thecommercialization of farming have made some progress.

Regional Policy and Rural ReconstructionThe development of a regional policy towards expropriation, especially in

1971-72, has its counterpart in the elaboration of a regional approach to thecreation of a new, reformed rural landscape, though this regional policy appearsto have emerged partly as a result of the force of circumstances and as a byproduct of administrative processes and in part through the implications of cooperative organization, the basic stated tool of agrarian reorganization. But anessentially regional policy has, in fact, been intellectually structured in anordered and logical way. Whether it can be successful in the fact of demographicrealities, peasant opposition and the exigencies of place remains to be seen.

The processes following expropriation appear to have led to an ad hoc, improvised form of regional administration. Expropriated land is put into the handsof Special Committees of Administration, firmly controlled by the State, and withthe aims of maintaining the continuity of production and of preparing the way for

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adjudication. In the early stages of reform, in 1969 and 1970, Special Committeeswere set up for the administration of individual estates, but increasingly, theseCommittees have been charged with the administration of additional fuhdos in aspecific area. On the coast, Special Committees have come to control all of theexpropriated land in whole valleys. Thus, a Special Committee formed to administer four fundos in the valley of Canete in January, 1971, increased its orbit ofcontrol to 13 fundos by September, 19 72. In the sierra, too, a similar processhas occurred. The Special Committee of Lampa-Capachica in the Department of Puno,for example, was created in 19 7 0 to administer 31 fundos and was subsequently extended to cover others as they were expropriated in the whole region.

Although temporary, and intended to pave the way for the transition to cooperative forms of organization, the Special Committees began the process bywhich the identity of former fundos has been blurred, though usually not obliterated. In some cases, particularly on the coast, there is a close geographicalidentity between the orbit of responsibility of the Special Committees and thoseof the Proyectos Integrales de Asentamiento Rural which have subsequently beencreated. Whatever else, the Special Committees have been powerful instruments inthe extension of State control.

The building blocks of the new agrarian structure on a permanent basis,however, are the final units into which expropriated land is adjudicated afterthe temporary administration of the Special Committees. Almost all land adjudicated during the military regime has been to cooperative organizations, either toCooperativas Agrarias de Produccion (CAP) or to Sociedades Agrarias de InteresSocial (SAIS). The latter are composed essentially of the former tenants orlabourers on expropriated estates together with neighbouring comunidadescampesinas which have a common boundary at some point with the ex-fundos. Mostof these are located in the sierra, and they reflect some attempt to avoid tnecreation of a nouveau riche group among former tenants and labourers, and an attempt, however limited in scope, to spread some of the benefits of reform to thecomunidades.

One immediate implication is a substantial increase in the scale of agrarian units. SAIS Tupac Amaru, successor to the estates of the Cerro de Pasco Corporation, comprehends an area, almost entirely of natural pastures, of 216,500ha. It was adjudicated to the former workers together with 16 comunidades, theterritory of which amounts to an additional 176,000 ha. The new CAPs are frequently substantially larger than the fundos they replace. In Puno Departmentone CAP, appropriately known as El Gigante, is some hundred kilometres long andfifty kilometres wide, though most of it admittedly consists of bare puna suitable only for the grazing of llama and alpaca. Three other CAPs created in Punoin 1971 have an average size of 10,329 ha compared with an average size of theoriginal fundos of 6,203 ha. It is an open question whether economies of scaleare sufficient to outweigh the penalties which must arise from occasional, butsurely inevitable, mistaken decisions, or to outweigh the evident problems oforganising cooperative activity on a large scale.

These basic cooperative units are in turn being organised into larger-scaleregional entities with a wider scope which would ultimately integrate with theplanning of the agricultural sector on a national scale. These are the ProyectosIntegrales de Asentamiento Rural (PIAR), of which fifty had been established bythe end of 1973. They are intended to fulfil a number of functions: to takeadvantage of economies of scale through central cooperatives, and to permitlarger-scale agricultural planning within the orbit of the PIAR; they are also tomobilise savings for coordinated investment programmes, credit provision and

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agricultural extension. In short, they are intended to decrease dependence onthe State for credit, financial aid and commercialization. But the social function of the PIAR was also stated to be to create the means for internal compensation of incomes among component cooperatives, and to begin to tackle the problemof incorporating the small independent peasantry into the hierarchical cooperative structure - a much more complex, controversial and potentially explosivepolicy, and one which appears to have met substantial resistance.

Finally, proposals were made towards the middle of 19 7 2 for the creation ofProgamas Integrales de Desarrollo on a still broader regional scale, and theseare intended to be multi-sectoral, with investment programmes, in part financedby the State, which would involve social and physical infrastructure and labourintensive industries, including agricultural-processing industry, to provide local employment. The total hierarchy seems to bear the marks of an elegant blueprint conceived with the genuine aim of accelerating rural progress on a regionalbasis.

How far, then, is agrarian reform likely to generate a major impulse towardsregional growth in the areas in which it has been applied, and how far is it likely to reduce or eliminate the drain of rural income to the cities and achieve agreater equality of income distribution?

The first, and perhaps the most insuperable problem to be faced is thatthere is simply not enough land to go round. An overall estimate was made in19 70, relating to earlier reform legislation, that on the coast there was onlyenough land to provide 3 5 percent of the qualified rural population with a minimum viable family farm, and that in the sierra there was only enough land to provide farms of 9 percent to the qualified rural population. These are, of necessity, approximations, but they illustrate the scale of the problem in the countryas a whole. According to the agricultural census of 1972, 1,026,240 holdings outof a total of 1,322,610, or 73 percent, were less than 5 ha., and 440,040 wereless than one hectare. To be compared with these figures is the fact that thetotal number of families benefitting by the end of July, 1974, was only 131,712 -a considerable achievement, but still only 12.8 percent of all holdings of lessthan 5 ha.

Direct comparisons are obviously impossible between the number of agricultural units in 1972 and numbers of families benefitting, especially since thecensus itself reflects in part the results of land reform to that date. Percentages of families benefitting in comparison with the total number of holdings cangive no more than a rough indication of the scale at which the problem has beentackled, bi? it is evident that even in the regions strongly affected by land reform, these percentages are depressingly low: in Puno Department, 11 percent; inCuzco Department, 8 percent; and even in the central sierra department of Junin,only 9.5 percent. In the sierra, the problems posed by the pressure of populationon land cannot, it would seem, be solved by land reform alone. In the coastalarea, however, land reform has made a much greater impact: in Lima the corresponding percentage is 16.5; further south in the Department of lea it rises to 30 percent, and in the northern coastal sugar zone the figure rises to 6 9 percent.

In the sierra, there is certainly nothing like enough land to create viableholdings for its rural population, but in many regions, this difficulty is compounded by the fact that the spatial organization of holdings does not easily permit of a redistribution which will substantially benefit the minifundistas. Thereare fairly large areas in which small farmers are concentrated in compact blocks,spatially separated from the blocks of hacienda land. Time and distance cut themoff from the benefits of land reform without considerable disruption. Provisions

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exist in the law for the consolidation of minifundios into viable family farms orinto cooperatives, but they have so far not been seriously applied. In areas ofcompact small-scale peasant farming, consolidation could only be achieved at thecost of evictions and relocation, and there is often no prospect of reformed landbecoming available within reasonable distance for those displaced. Few would bewilling to abandon traditional holdings, however small, for the doubtful benefitsof cooperative membership. On existing cooperatives, former tenants and labourers have proved extremely unwilling to relinquish their traditional plots or personal flocks in the interests of economic efficiency. For them, and for the proprietors of the minifundios, their plots and stock are their security for survival .

Secondly, in the light of the pressure of rural population on the land,particularly in the sierra, one of the major economic justifications for land reform must lie in the extent to which it would encourage more intensive use ofland and in particular the conversion of extensively used natural pastures, wheresoil and climate permit, into more intensive uses such as cultivated, irrigatedor controlled pastures or as arable land, creating employment possibilities whichwould assist directly in the relief of pressure on the land. Yet there is reasonto suppose that in some cooperatives at least, agricultural planning has continued to stress the concentration on cattle or quality wool-bearing sheep whichcharacterised the progressive haciendas, and which had been accompanied over theprevious thirty years by the eviction of hacienda labourers and tenants. Acontinuation of extensive land-use on former haciendas may still, in fact, be themost profitable policy for the membership of the cooperatives, even though it maynot be socially desirable or in the best social and economic interests of theregions in which they lie.

Thirdly, how far is the Peruvian reform likely to bring about a more equitable distrihition of income as between country and town? In terms of the introductory comments made above, it is obvious that land reform per se does notaffect the terms of trade between agricultural and industrial prices at the farmgate, but it is worth stressing that the level of agricultural prices is a keyelement, and perhaps the most important, in determining rural prosperity. It isby no means obvious that the conflicting interest between rural producers forhigh agricultural prices and urban consumers for cheap food will be resolved bythe state in the interests of rural producers. So far in Peru, it has been acheap food policy for urban consumers that has prevailed. The cooperatives mayultimately succeed in reducing the burden of marketing and distribution costs,but there has been little evidence of this so far, either; the effect of land reform on migrations has yet to be analysed, though it is likely to be complex.The transfer of rents and profits by landowners to the towns has been eliminatedin the reformed sector, and it is certainly true that the families directlybenefitting from land reform have enjoyed substantially higher incomes than theyhad as labourers and tenants on the large estates.

But the reformed sector must pay for its land, installations and the stockinherited from the haciendas, and the sums involved are very substantial. Thecooperative member carries a heavy debt burden amounting, for example, in severalcooperatives in the Puno area to the equivalent of approximately ten times theaverage income per head in the department in 1961. In the SAIS Tupac Amaru, theaverage annual repayment, after the initial period of grace, amounts to some $66per family (1972 prices). In one sense, this represents a repayment to the State,which in turn must ultimately repay the expropriated landowners; in another sense,it represents a continuing mobilization of capital from agriculture and the rural

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FIGURE 1

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PERU -LAND REFORMLAND ADJUDICATED BY JULY 1974 BY PROVINCES

FIGURE 2

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sector to finance public investment, including industry. It remains to be seenwhether inflation will substantially reduce this particular burden. Furthermore,cooperatives are intended to be self-financing in terms of their own improvement;the PIARes are intended to reduce dependence on the State for agricultural extension, credit and the provision of social and physical infrastructure. The returnmovement of public funds from the centre to the periphery is to be kept to aminimum. It is by no means self-evident, in short, that land reform has substantially stemmed the traditional drain of rural income to the towns. Finally, theeffect of land reform on the distribution of income needs careful analysis. Themembers of cooperatives certainly appear to be better off than they were underthe ancien Regime, but in place of the hacendado they must support a substantialbureaucracy of well-paid professional men and administrators.

Agrarian reform in Peru may not achieve the great things that many hopedfor from it. Much of the country was still untouched by reform by mid-19 74, andin areas where it has made an impact, the intractable ecological problems of manand land prevent the transformation of the blueprint into reality on the ground.What is needed is a careful appraisal of the problems and of the opportunitiescreated by land reform, and constructive research on a regional basis.

References1. Based on a paper given at a conference on Current Research in Peru held at

the Centre for Latin-American Studies in the University of Liverpool,February, 1974. An extended version of the paper is to be published withthe title, Agrarian Reform and Regional Development in Peru, in Economicand Social Change in Modern Peru, Edited R. M. Miller, C. T. Smith, andJ. Fisher, Monograph Series No. 6, Centre for Latin-American Studies,University of Liverpool, 1976.

2. C. T. Smith, 'Agrarian Reform and Regional Development,' in Case Studiesin Agrarian Reform in Latin America, Ed. C. T. Smith and M. H. J. Finch,Monograph Series, No. 5, Centre for Latin-American Studies, University ofLiverpool, 1975, pp. 1-21.

3. See, for example, Peter Dorner, Land Reform and Economic Development, PenguinBooks, 1972, 167 p. On disparities of income in Peru, See J. P. Cole andP. M. Mather, Peru Province Level Factor Analysis, Revista Geografica,No. 77, Die. 19 72, Instituto Panamericana de Geografia e Historia, pp. 7-37.

4. K. Griffin, Underdevelopment in Spanish America, London, 1969, p. 64.5. Of the substantial literature on this theme, the following are of relevance

to the Peruvian situation: A. Garcia, Dominacidn y Reforma Agraria enAmerica Latina, America-Problema No.3, Instituto de Estudios Peruanos,Lima, 1970, 266 p; Helio Jaguaribe, Celso Furtado and others, La Dominaci6nde America Latina, America-Problema, No.l, Instituto de Estudios Peruanos,Lima, 1968, 221 p; Julio Cotler, 'The Mechanics of Internal Domination andSocial Change in Peru,' in Masses in Latin America, ed. I. L. Horowitz,Oxford University Press, 1970. 608 p.

6. C. T. Smith, 1975, op_. cit. p. 4-5.7. ibid., p. 6-7.8. Legislacion sobre Reforma Agraria, Publicaciones EMI, S.A., 1965, Lima, 416p.9. C. T. Smith, in R. M. Miller, C. T. Smith and J. Fisher, 0?. cit. , (forthcom

ing)

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10. For example, see the Peruvian Times, June 27, 1969; El Peruano, November 20,1969 .11. Ed. S. Martinez G., Legislacidn de Reforma Agraria, Lima, 1971, 250p.12. Acumulado de las expropriaciones y adjudicaciones, Lima, 27 June, 1972.13. Cuadro de Adjudicaciones, Gaceta Verde, Min.de Agricultura, No.6, July,1974.14. H. van de Wetering, The Current State of Land Reform in Peru, L.T.C.

Newsletter, No. 40, April-June, 19 73, Land Tenure Center, Wisconsin,pp. 55-59.

15. Resultados por Muestreo, II Censo Nacional Agropecuario, 1972, Lima, 1973,56 p.

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