PROBLEMS IN LAND REFORM

          The priority shift
The land reform controversy
The distribution issue
The implementation problems

REFERENCES

APPENDIX

 

 

PROBLEMS IN LAND REFORM

 

          After two decades, the land reform programme in Thailand has yet to reach the point where it can make a substantial contribution to the growth and development of the economy as a whole.  Obstacles to land reform are, to a large extent, those which inhibit agricultural and rural development.  Problems facing land reform can be grouped under several headings which will be presented and discussed in detail below.

The priority shift

          In spite of the fact that land tenurial problems were identified and constituted a major thrust behind the promulgation of the land reform law, shift in terms of priorities could be witnessed over time.  When land reform was first introduced and became law in 1975, much of the problems confronting the agricultural sector was drawn from high tenancy rates and landlessness in the Central Plains of Thailand.  Emphasis was therefore heavily placed on reform of the private land domain.  A few years later, the government at that time realised that the encroachment problems were also looming in the public lands and covered a much wider area across the country than the traditional tenancy issue.  The ALRO then adjusted its programme to accommodate a new role as a land settlement agency around 1978.  While the shift to public lands continued, the ALRO was on the other hand faced with an increasingly difficult task of purchasing land from private landowners for distribution to tenants and the landless.  The reversal in priority setting is further exemplified in the national policy speech delivered to the Parliament in October 1992 and the 1993 government workplan which aims at allocating 4.0 million rais of deteriorated forest land to farmers.  Judging from the 8-year Land Reform Plan (1992-1999), the ALRO seems to be very well set for expansion of the reform of the public lands (almost entirely national forest land), with a token effort in buying land for distribution among the lessee.  An immediate observation is that the tenancy problems are left unsolved and, in the light of stronger growth in the non-farm sector, may even intensify.  The one million-strong tenant farm families, as a force, can be explosive to the rest of the economy.

The land reform controversy

          On May 4, 1993, the cabinet passed a resolution, which is the backbone of the government's land policy on forest encroachment, that deteriorated forest land would be distributed at the rate of 4 million rais a year to the squatters through land reform implementation only.  This of course was based on the broadly-accepted belief that land reform would bring about greater social equity and justice to the economy.  Under the land reform law, maximum ceilings on land holdings are explicit, and legally apply to all those land parcels under the land reform areas.  Thus after land reform implementation, the squatters would be legalised but could cultivate land of the size up to the maximum ceilings allowable under the land reform law.  The conflict arose when the cabinet also decided in the same resolution to provide outright land title deeds to those squatters whose land had been cultivated before the time of gazettement of forest reserves.   Under the land reform law, only conditional land titles can be issued to the land reform beneficiaries, with a constraint on limited transfer- ability.   With the cabinet resolution, those squatters who could prove that they or their predecessors had been cultivating the land before the time of gazettement of forest reserves would be exempt from the land reform law and would be issued with full land title deeds.  The constraint on transferability under the land reform law would not apply.   Such conflict has grown into a national land controversy by means of multi-media in November 1994 and, forced the agriculture minister and one of his duties to resign.

          The controversy was largely propelled by the fact that the cabinet resolution was supportive to land speculation and beneficial to large investors who could accumulate attractive, potential prime land before land reform implementation and, with proof that they or their predecessors had been cultivating it before the gazettement of national forest reserves, could request for issuance of full title deeds, at a later date.  These titles, quite different from the ALO 4-01 and land titles under the land reform law, can be transferred readily and thus can fetch high prices.  A more serious implication is that the land reform beneficiaries were no longer farmers only, but extended to cover all squatters, i.e. those who simply cultivated the land.  The latter category would then include part-time farmers, non-farmers and land speculators.  (Many argued correctly that these groups were not 'farmers' by the land reform law and thus should be disqualified.)   Thus under these circumstances there is every reason to believe that farmland under the land reform programme will soon be diverted to other uses which may be detrimental to sustainable development.  Already it was found that much of the land under land reform in the island province of Phuket, a world famous tourist attraction, was held by rich families who are more involved with businesses like property develompment, hotels etc. than farming.  Yet they were recipients of the ALRO 4-01, by the virtue that they were occupying and farming the land at the time when the land was proclaimed as Land Reform Area.  Similar incidences took place in other provinces, creating public outcry that land reform has actually benefited the rich, and not the poor as it supposed to.

          Having bowed to the public pressure, the government requested the Council of State (or the Juridical Council) to clarify these matters with respect to the land reform law, particularly the qualifications of the 'land reform beneficiaries'.  The results were made known at the end of March, 1995 according to the land reform law, 'land reform beneficiaries' must essentially be either landless or marginal farmers, i.e. those having farmland insufficient to make a living.  By virtue of this clarification, the rich would not be qualified.  The implications, both political and practical, are vast because provincial authorities in many cases did not adhere to the strict definition of 'land reform beneficiaries' but instead sought to speed up the process of issuing land reform titles (ALRO 4-01) in response to the government policy.  It appears that many of the odd land reform beneficiaries would be disqualified to their land and would have their land reform titles revoked.  Some would resist this and others might seek a legal battle against the government for financial damages.  In May 1995, the government at that time faced a nonconfidence motion in the parliament.  After a few days of grueling debate, a government coalition partner (Palang Dharma Party) decided not to vote for the government and this forced the government to dissolve the parliament and call for a national election.  In July 1995, a new government was formed.  One of its main tasks was to undo the land reform crisis.  Non-farmers would be disqualified to receive land from the ALRO.  Their rights including the ALRO 4-01 land documents would be revoked Forest land not suitable for agriculture or land reform would be readily returned to the Royal Forestry Department.

          After the 1993-1994 overexpansion of the land reform programme in the forest land, the ALRO had to slow down its land distribution programme because of the political entanglement in 1995.  Towards the end of 1995 and in the early part of 1996, much time and efforts were made to weed out rich farmers and non-farmers so as to ensure that land reform beneficiaries would be real farmers.  By February, 1998, altogether 786 land reform recipients were disqualified from the land reform programme, and had their ALRO 4-01 revoked.

The distribution issue

          In the private lands, land is transferred from the landowners to the tenants and other small or marginal farmers.  In this case, land distribution does occur.  However, in the public land domain is only legally passed on from the government to the farmers but in practice it is merely an act of legalisation of landholders in the encroached forests.  For most farmers, they continue to cultivate the same parcels of land they have long held.  Sub-division of land plots is allowed among family members, should they be larger than the maximum limits set by law.  But decision making on farming activities is still made by the heads of households, rendering parcelling of large landholdings meaningless.  Thus it can be concluded that land distribution - the most important element in any land reform programme - hardly takes place in the case of public lands.

          In also follows that land reform beneficiaries are usually tenants in the private land domain and squatters in the public land domain i.e. encroached forests.  Other target groups have not benefited much from the land reform programme.  They include the landless and the rural poor.  Even when the government in 1991 launched the Land Fund programme to financially assist the landless in getting farmland, only a small fraction was able to secure such assistance three years later.

The implementation problems

          Land valuation    In any land reform programme, there is always a recurring problem of land valuation and compensation payment.  For Thailand, the valuation roll published by the Department of Lands which is used as a basis for land appraisal is rather crude and makes no distinction on different land uses.  Further, it inevitably contains speculative elements in it as well.  The government is constantly faced with the task of offering a sufficiently high price of land to the owners and, at the same time, ensuring that the land reform beneficiaries have the proven ability to repay.  This is increasingly self-defeating.  consideration instead should be made on the possibility of reducing speculative elements to a minimum so that the value of the land does reflect mostly agricultural uses.  Apart from fiscal measures like imposition of higher land taxes, zoning etc. government subsidy toward the price of land at which the land reform beneficiaries have to pay might also be considered.  In addition, land acquisition can be facilitated at a faster rate, if the government has made it clear that it would be ready to seek expropriation of land from the absentee owners as the last resort.  In order to protect landowners as well as farmers from possible abuses or injustice, a legal court to settle land disputes should be established.   This so far does not exist.

          Land transfer    Another problem associated with land valuation arises when land transfer between farmers is necessary or when the land reform beneficiaries return their land to the ALRO, after they have become owners of the land.  The price of the land should not and cannot remain at the level which it was purchased.  The time lapse, inflation, price speculation, attractiveness of alternative land uses etc. are some of the reasons whey this is true.  The new price need to be set at somewhat below the going market rate, but not too low.  On the other hand, if the price is higher than the market rate, the pressure is on the land reform beneficiaries to release their land as quickly as possible.  The problem is more serious when it is realised that the price of the land in many LRA's has increased several hundred-fold over some fifteen-year period since 1977.  To cope with this, there is need for ALRO to develop its own valuation procedure along with an appropriate land transfer process which does not penalise those who have no other alternative than to transfer their land and at the same time which does not encourage others to part with the land for handsome profit.

          The same situation also occurs in the case of public lands.  Farmer-beneficiaries are likely to pay only a minimal amount of money for their land, even if the land reform law makes a distinction among farmers with differences in land tenure.  For political reason, such distinction will not have much impact with regards to the land price, which is in any case low.

          Furthermore, since land transfer in public lands occurs even without ALRO intervention, it can be expected that it will take place as normal, whether land ownership is in the hands of the farmer-beneficiaries or not.  If this is allowed, the ALRO will be left with almost no instrument to deal with illegal land transfers.  Hence there is need to devise a system in which the ALRO acts as an intermediary on land transfers among land reform recipients.  Such system should cater for their needs, but unfortunately it still does not exist.

          Agricultural development    As land reform or agrarian reform is three-pronged, reform of the production structure and reform of the supporting services do not take precedence over reform of the tenurial structure, but they are equally important.   Providing land to the landless and the tenants does not automatically ensure that success is forthcoming.  Land reform beneficiaries need economically efficient production mix with accessible supporting services.  It is precisely this which inhibits successful land reform implementation.  More often than not, the land reform farmers are ill-advised in production planning and lack of supporting services to carry it out.  The ALRO is principally responsible for provision of land to the farmers.   Coordination and cooperation with other government agencies have proven to be difficult.  Advanced planning in this respect is needed but usually vague.  It is vagueness that is unacceptable for budget allocations (most of the time, detail is demanded), and thus the budget for such efforts is absent.  Agricultural development (A more comprehensive coverage of the financing issue in land reform is given in Sein Lin (28) is then quite a separate venture from reform of the land tenurial structure.  It is slow and worth special attention from the government, not just the ALRO.  In early 1996, the government, having realised this, encouraged provincial authorities to formulate agricultural development projects in LRA's to be undertaken by various departments at the provincial level.  It remains to be seen whether such efforts will pay off.   Looking beyond the administrative problems facing agricultural development, we are faced with a more serious development issue whether land reform can contribute substantially to renewable natural resources replenishment, since millions of rais of forest land are continually being transferred to the squatter families under the land reform programme.  Such environment degradation may be averted, if the ALRO and the Department of Forestry cooperate in protecting existing tree-covered forests and in fostering deliberate development efforts along the buffer zones, demarcating between conservation areas and agricultural land.  Projects such as agro-forestry, social or community forestry, mixed cropping with trees, fruit orchard or even straightforward tree plantation should be designed and implemented.  They potentially are environmentally-oriented in nature.  Such venture, however, encounters a number of challenges to the ALRO proper project designs, selection and restriction of project activities, selection of tree species, institutional innovation needed in social forestry etc.  These complexities must be dealt with, if land reform can, as it should, be directed toward the country's reafforestation mainstream.  (Professor John D. Montgomery offers a deeper insight in his paper on "Trees to the Tiller" (25).   So far, they have not yet been tackled to any appreciable degree.

          Large landholdings    In the private land domain, attempts have been made in the preparation of expropriating land from large landlords, but to no avail.   The main reason was that the political climate was not favourable.  This explains why land has never been acquired through expropriation.  It was purchased by the ALRO on voluntary basis only.  So large landlords have not been affected by the land reform programme.

          In the public land domain, the ALRO is faced with a more serious, uphill task.  Large landholdings were allowed to sub-divide into smaller holdings so as to accommodate other members of the landholding clan, on the ground that they must be farmers and work on farm.   But it was found later that certain landholdings were too large to sub-divide among family members who themselves might be ineligible to land allocation any way.  A new system was designed and approved by the NLRC in 1992 to deal with large landholdings.   In simple terms, they could utilise their land for a limited period of time and after that must return it to the ALRO.  Alternatively, they can accept compensation payment instead.  Compensation must be fair and sufficient, taking into account the actual uses of land.  The last resort for the ALRO is to exercise its powers over these large landholders on the asis that they do not conform with the land reform law and that land still belongs to the government.  Under these circumstances, legal action will be taken.  However, so far this still remains on the paper, and some groundwork is needed for effective implementation.

          In conclusion, land reform in Thailand is infested with numerous problems, mostly in its implementation.  Little has been made to effectively overcome these bottlenecks.   Political will has not been consistent, nor steady.  The past efforts by the government during 1992-1995 in distributing annually at least 4 million rais of land to the farmers in deteriorated forests. Though timely and long overdue, have in fact harmed the basic understanding of land reform concept (Following Sein Lin (28p. 29).  This is viewed as a land settlement programme which is supplementary to land reform.  In the Thai context, it will hardly alter the existing landholding structure.) vis-avis its implementation policy.  The 1993-1995 land reform crisis has deterred land reform decision-makers from providing land ownership titles to the farmers.  It will take a long while to get back to the land reform road again.

 

REFERENCES

 

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APPENDIX  :  FORMAL INTERNAL STRUCTURE OF ALRO

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