1968 Agrarian Reform

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The 1968 agrarian reform was a government-initiated redistribution of agricultural land, leading to great changes in land ownership and an overall redirection of the agrarian system in Peru. After a military takeover led by General Juan Velasco Alavarado, the new military government made the reforms, targeting traditional elites in order to reduce the ability of the rich to manipulate the government.[1]

Contents

Background

Before reform the land ownership structure in Peru was very uneven. Overall in 1961, large estates were responsible for only 1.2% of the peruvian farms, but controlled more than 52% of the land. The peasant communities, on the other hand, were responsible for 84.6% of the farms and controlled less than 41% of the land. The percentages were even more lopsided when it came to the coastal segment of Peru. Plantations only represented 5.4% of the farms but were in possession of 86% of the land. Because of these numbers land ownership was unequal and greatly inefficient. The landlords had far too much land and not enough labor, while the peasants had too little land and too much labor.[2] According to political writer Eduardo Galeano, when the nationalist government came to power less than one-sixth of the land suitable for intense cultivation was being used, per capita income was fifteen times less than in the United States, and consumption of calories was among the world's lowest. The best lands along the the coast belonged to US enterprises or to rich landlords, and these wealthy enterprises paid hunger wages until the reform handed their lands over to the workers as cooperatives.[3]

Military Government and the Reform

"Peasant, the landlord will no longer eat from your poverty." - General Juan Velasco Alvarado

In 1968, the Armed Forces, led by General Juan Velasco Alvarado, staged a coup against President Fernando Belaunde Terry. The new left-leaning regime undertook radical reforms aimed at fostering development, and in 1969 gave the land back to the workers. As part of what has been called the "first phase" of the military government's nationalist program, Velasco undertook an extensive agrarian reform program and nationalized the fishmeal industry, some petroleum and mining companies, and several banks.[4] He expropriated farms and diversified the ownership of land in Peru, in order to break apart the elite and politically powerful landowners and facilitate a more governmentally cooperative society.[5] Seized lands were turned into worker-managed cooperatives.[6]

The military government also adopted a program of import substitution industrialization, which substituted imported goods for locally produced goods. The government expected productivity to rise but due to the overall inefficiency of the now small farms the agricultural sector could not keep up with the growth rate.[7]

At the same time guerrilla leaders were brought to trial, political activity was banned in the universities, indigenous banks were controlled, foreign banks nationalized, and diplomatic relations established with East European countries.[8]

Return to Democracy

Although the reform began with high hopes, it was quickly complicated by difficulties including corruption, rural and urban unrest, fights over land, and delays in modernization.[9] Velasco was replaced in 1975 by General Francisco Morales Bermudez. Morales Bermudez tempered the extremes of the Velasco administration and presided over the return to civilian government under a new constitution, and in the May 1980 elections President Fernando Belaunde Terry was returned to office.[10] After the country returned to civilian rule, the cooperatives faltered and members distributed the land among themselves.[11] The agrarian reform had limited private landowners to a maximum of 150 hectares of irrigated farmland, but this law was repealed during the 1990s. There are now dozens of neo-latifundios (new large estates) of more than 1,000 hectares, many of which consist of 10,000-20,000 hectares of irrigated land.[12]

Effects of the Agrarian Reform

Enrique Mayer, author of Ugly Stories of the Peruvian Agrarian Reform, noted that while agrarian reform caused enormous upheaval, controversy, and disappointment, it did succeed in breaking up the unjust and oppressive hacienda system. Mayer contends that the demise of that system is as important as the liberation of slaves in the Americas.[13] The agrarian reform had a positive effect on employment, though less than anticipated.[14]

Further agrarian reform occurred in Peru in 1988–1995, led by Peruvian economist Hernando de Soto and the Institute for Liberty and Democracy during the early years of the government of Alberto Fujimori, before the latter's auto-coup. In 2000 Hernando de Soto published The Mystery of Capital, arguing in support of such reforms. The poor, he argues, are often unable to secure formal property rights, such as land titles, to the land on which they live or farm because of poor governance, corruption and/or overly complex bureaucracies. Without land titles or other formal documentation of their land assets, they are less able to access formal credit. Political and legal reforms within countries, according to de Soto, help to include the poor in formal legal and economic systems, increase the poor’s ability to access credit and contribute to economic growth and poverty reduction.[15]

References

  1. Michael Albertus, 'Redistribution by Revolution from Above: Land Reform in Peru, 1968-1980' (2010) (Stanford University research paper)
  2. http://internationalbusiness.wikia.com/wiki/Agrarian_Reform_In_Peru
  3. Eduardo Galeano, Open Veins of Latin America (1973) (New York: Monthly Review Press), p.96.
  4. http://www.state.gov/r/pa/ei/bgn/35762.htm
  5. http://internationalbusiness.wikia.com/wiki/Agrarian_Reform_In_Peru
  6. Enrique Mayer, Ugly Stories of the Peruvian Agrarian Reform(2009) (USA: Duke University Press) http://www.dukeupress.edu/Catalog/ViewProduct.php?productid=18777
  7. http://internationalbusiness.wikia.com/wiki/Agrarian_Reform_In_Peru
  8. http://www.peru-explorer.com/land_reform.htm
  9. Enrique Mayer, Ugly Stories of the Peruvian Agrarian Reform(2009) (USA: Duke University Press) http://www.dukeupress.edu/Catalog/ViewProduct.php?productid=18777
  10. http://www.state.gov/r/pa/ei/bgn/35762.htm
  11. Enrique Mayer, Ugly Stories of the Peruvian Agrarian Reform(2009) (USA: Duke University Press) http://www.dukeupress.edu/Catalog/ViewProduct.php?productid=18777
  12. Fernando Eguren, President of CEPES (Centro Peruano de Estudios Sociales), '"Land Grab" the Peruvian way', 7 March 2011; http://www.commercialpressuresonland.org/opinion-pieces/land-grab-peruvian-way
  13. Enrique Mayer, Ugly Stories of the Peruvian Agrarian Reform(2009) (USA: Duke University Press) http://www.dukeupress.edu/Catalog/ViewProduct.php?productid=18777
  14. C. Kay, 'The agrarian reform in Peru: An assessment'; http://www.cabdirect.org/abstracts/19811875331.html;jsessionid=CAE5308E3991EFC795E3B1D109A44777
  15. Hernando De Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. (New York: Basic Books, 2000).
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