ficiaries of the land distribution programs carried out in the region up to 1969.

It is true, of course, that land redistribution per se, while important, is not the only measure of advance in rural institutional reform, and the following positive trends have been recorded in the region over the past decade:

(1) A systematic beginning has been made in classifying and registering land property. A number of countries have initiated comprehensive cadastral surveys and modern systems of land classification, measures which are fundamental to strengthening land taxation policies and more rational land-use planning, and helpful in resolving tenure insecurities and assisting in future tenure reforms.

(2) The most evident abuses of semi-feudal land holding systems and indentured worker arrangements are being eliminated. This is not only the consequence of greater peasant mobility and gradual marketorientation of farming, but also the result of deliberate reform policies. In the Andean countries, and particularly in Peru and Ecuador, a substantial proportion of tenant-workers-buasipungueros, yanaconas and arrimados-who have been tied to estates by unpaid labor obligations have been transformed into small holders, and the inquilino system in Chile is rapidly disappearing.

(3) Peasants are becoming better organized and occasionally acquire greater power in rational decision making. Even in countries where rural labor unions do not exist, opportunities for various forms of peasant associations, cooperatives and empresas campesinas have greatly expanded during the past decade. The more active of these groups have been instrumental in stimulating land reforms in a number of countries.

(4) Development programs are increasingly oriented toward improving the lot of smaller farm operators. These include not only beneficiaries of land tenure reforms, but also independent peasant-cultivators and members of traditional peasant communities with established land rights. Programs of community development, rural credit, education and cooperative services are reaching out to this new clientele, which formerly had been virtually unaffected by such assistance. While campesino-oriented programs are still relatively small, progress in these areas has clearly accelerated during the past decade.

HIGHLIGHTS OF RECENT REFORMS

Agrarian reforms have continued to be key policies in Mexico, Bolivia and Venezuela where land distribution and campesino programs are advancing at an encouraging pace. However, the emphasis of these programs is shifting from primary concern with land distribution to development efforts and the production of marketable surpluses on reform settlements,

to make reform pay off in terms of rural employment and income. In Venezuela, investments in physical infrastructure, agricultural credit and farm installations on the asentamientos are absorbing an increasing share of public resources. Under a new integrated program of rural development, about US$ 181 million will be invested during the next four years in farm roads, drainage and irrigation, research and extension, agricultural credit, silos, machinery and beef and dairy cattle, to benefit some 13,000 families in about 110 reform settlements. The Government of Bolivia has also been concerned in recent years with strengthening the economic viability of the new peasant landholders who have obtained land since the revolution. These efforts have involved, first, the granting of legal titles to landholders, to settle conflicting claims and make the campesinos eligible for agricultural credit programs. Small irrigation, pasture and livestock development is also being stressed on highland ex-haciendas.

Mexico is unique among the countries of Latin America in the mag nitude and consistency of its agrarian reform. According to the President's latest Annual Message to the Mexican Congress, 3.7 million hectares were distributed to 63,300 campesino families in 1968-1969. This brings the total for the last six years to 16 million hectares, distributed to over 300,000 small holders.

"The pace of land distribution in Mexico is likely to continue to benefit from 50,000 to 60,000 families a year, based on the large number of land claims pending resolution, reserves of public lands available for distribution to ejidos and the long-term commitment of the Government to land development, especially in irrigation and drainage projects. Settlement in newly irrigated areas and the development of water resources in areas already held by ejidos have become the main economic bases for the Mexican reform effort.

Large-scale irrigation systems have been instrumental in enabling Mexico's agricultural sector to produce record harvests. The major reservoirs have been able to maintain 93 per cent of their water supply despite one of the worst droughts in its history. In 1969, of 69 new irrigation works in progress, 19 were completed. About half of all the irrigated areas are intended for ejidos, with individual holdings of ten hectares for ejido members, and half for intensive small commercial farms of 30 to 50 hectares each.

Under a special program of the Secretariat of Hydraulic Resources, small irrigation and drainage projects have been developed on 145,000 hectares of dry land, mostly occupied by very low-income campesinos, and 182 small irrigation projects completed under this program in 1969 benefited 9,500 campesinos.

The large demand for agricultural credit among ejido farmers and the limited ability of the Banco Nacional de Crédito Ejidal to meet the demand was one of the factors underlying creation of the new National Agricultural Bank in 1965. The Bank has pioneered with a decentralized organization tailoring lending to local conditions.

Among the other countries, Colombia was one of the first to enact agrarian legislation after the Charter of Punta del Este.

Although land redistribution so far has played a relatively small part in that country's agrarian reform, between 1962 and mid-1969 the tenure rights of 74,500 families were confirmed, and new land was given to some 7,500 campesinos in established agricultural areas. During the same period, approximately 7,400 families were settled on virgin lands under tropical colonization programs of the Colombian Agrarian Reform Institute (INCORA). INCORA has developed into a well-staffed, technically competent agency with a comprehensive program that includes improving land tenure conditions, tropical land development, irrigation, land reclamation and agricultural credit for reform beneficiaries. INCORA's efforts to organize peasant cooperatives are of particular interest. By the end of 1968, reform-cooperatives had over 17,000 members and were especially active in marketing. During 1969, considerable, progress was made in setting up second-level central cooperative purchasing and marketing agencies to serve all reform areas.

During the second half of the decade Chile achieved considerable progress in reforming its land tenure system. The Chilean reform program, which has been reviewed in greater detail in the last two Social Progress Trust Fund reports, is unusual in that it attempts to combine economic and social objectives simultaneously within a single well planned program. Up to the end of October 1969, CORA, the reform agency, had expropriated 1,047 fundos, or large states, covering 2.7 million hectares, of which 238,000 was irrigated land. By the end of 1969, 515 asentamientos or reform settlements had been established, with 16,500 farm families. Another 22 settlements with 600 families were in the process of being created. CORA's efforts are supplemented by substantial credit and cooperative organization programs of INDAP, directed toward minifundistas and landless peasants.

An immediate result of legislation in Peru and Ecuador in 1964 and 1965 was the elimination of onerous tenancy arrangements, whereby land use rights were predicated on unremunerated campesino labor. In the 1964-1968 period 75,000 Peruvian campesinos gained possession of small holdings ranging from two to ten hectares each. In Ecuador, 19,000 families gained security of tenure on. small plots they had previously worked under semi-feudal conditions. Although the amount of land the beneficiaries obtained was often insufficient, these programs contributed to greater security and higher family incomes and

made land recipients eligible for institutional farm credit programs, such as the Plan Costa in Peru.

Reform in Ecuador has had a spotty record. After vigorous activity during 1965-1967, funds of the Ecuadorian Institute of Agrarian Reform and Colonization (IERAC) have dropped rather sharply. Up to 1967 the various programs of IERAC had benefited 31,000 families, at a rate of about 10,000 reform units a year. The pace of programs slowed considerably in 1968, when the yearly rate declined to about 2,000 families benefited. A recent attempt at "indirect reform" involves facilitating private land subdivision by purchases and deferred payments through the National Development Bank.

Land invasions in Peru in 1963 and 1964 resulted in the acquisition of over 400,000 hectares in haciendas in the Sierra region, of which the largest was a 300,000-hectare sheep ranch. An agrarian reform law enacted in 1964 made it possible to begin systematic expropriation of 2.7 million hectares in several departments of the Sierra and the Costa. As a result, by the end of 1968 some 11,200 campesino families had received possession of 353,000 hectares of land, but legal, administrative and financial constraints prevented the larger structural changes envisaged in government plans under the 1964 law.

The latest reform decree, enacted in June 1969, swept aside most constraints that stood in the way of more drastic reform and greatly simplified administrative and legal proceedings. Under the new law, the valuation of expropriated land is based solely on the value declared by the owner for tax purposes during previous years, and extensive litigation over expropriation can no longer delay the reform process. Another reversal of previous policy under the new legislation is that cash compensation for farm inventories and installations no longer is required. A new comprehensive water code was also adopted which facilitates the application of policies based on public interest principles to water development, especially in the arid Costa region.

New agrarian courts were established in each of the twelve agricul tural regions of the country and five new agrarian reform zones were added to the existing three. This procedure brought the whole Sierra region under the jurisdiction of the reform. About a million hectares will be subject to immediate expropriation, of which 400,000 hectares are irrigated lands.

Under the new legislation the Government of Peru has promulgated plans to provide land to 100,000 campesinos in 1970-1971. It is interesting to note that the initial thrust of the reform is on the intensive coastal plantations, rather than the more traditional highland areas. Dur ing 1969, nine large sugar cane estates in the Costa region were expro

priated and titles were granted to 4,200 families in agrarian reform zones. Farms expropriated in the Costa region are being reorganized, with the intention of eventually placing them under cooperative management in order to preserve the advantages of existing economies of scale and permit profit-sharing by the workers.

All these country experiences during the 1960's are valuable for future planning and for designing more comprehensive reform policies. Most elements for rural development policies integrated with overall development policies are already at hand, but one very important residual problem, while often referred to, does not seem to have been faced squarely as yet. Well-planned agrarian reforms could considerably increase the ability of the rural economy to use labor productively. Under present circumstances, it does not appear probable that the demand for displaced agricultural labor will increase much faster than the present net rate of increase of rural population-around 1.5 per cent annually for the region as a whole-or that the demand will include the full potential of presently underemployed seasonal workers. The redistribution of income associated with agrarian reform would stimulate a rising demand for inexpensive consumer goods, and thus promote the growth of industries that can be relatively small-scale, close to rural markets, and use a higher labor component than industries oriented toward upper-income urban demands.

2. Agricultural Credit

ADVANCES IN FARM CREDIT PROGRAMS

With greater attention to agricultural production and farm modernization during the 1960's, the need for farm capital has substantially increased. Attention to agrarian reform and the desire to incorporate smaller cultivation into the market process has spurred efforts to find new forms of financing for smaller farmers, who generally have no access to production credit at reasonable terms. This has meant, first of all, an increase in official institutional farm credit and efforts to increase the capacity of the national farm credit agencies to serve a broader clientele. It has also meant a search for new methods to integrate banking and financial services with technical assistance, agricultural extension and educational aid.

Without exception, all the member countries have made positive efforts to increase the flow of capital to the rural sector. Such efforts have included strengthening credit institutions; providing necessary technical assistance and special fiscal and monetary incentives for private investment in agriculture, and an increase in the flow of public funds to the sector.