Land Reform in Egypt

Social and Economic Consequences of the Agrarian Reform in Egypt 

by Ismael Hossein-zadeh

Paper presented at the Middle East Economic Association in Anaheim, California, January 5-7, 1993

CONTENTS

  1. Background: Why a Land Reform Was Necessary
  1. Legal Framework
  1. Implementation of the Land Reform and Differentiation of the Peasantry

 a. Impact on the Pattern of Landownership

 b. Impact on the Pattern of Agricultural Income

 – Changes in the Income of Wage Earners

– Changes in the Income of the Landless

Tenant Farmers

– Changes in the Income of Land Recipients

  1. “Cooperative Revolution” and Its Effects on Peasant Differentiation

a. Objectives

b. Administrative and Organizational Structure

c. Patterns of Corruption

d. Agricultural Policies–Breeding Grounds for Bureaucratic Blunders and Abuses

– Credit Policy

– Crop Consolidation Policy

– Pricing and Marketing Policy

– Investment Policy

  1. Summary and Conclusion 

 

1. Background: Why a Land Reform Was Necessary 

There is a consensus among economic historians that the establishment of private ownership of land in Egypt was brought about as a consequence of the penetration of the European capital into that country. The European capital was ushered in by the Bonaparte’s French invasion of Egypt (1798-1800) which led to the termination of the reign of the Ottoman Empire and the rise to power of the Egyptian modernizer, Mohammad Ali, in 1805. Prior to this period, The system of landownership and the social system that superimposed on it…were those of an ‘Oriental feudalism’ the basis of which, in contrast to European feudalism, were the absence of private property in land and the centralism of the state’s power in the domain of agriculture.1

During the reign of the Ottoman Empire, Egypt has been given to Mamelukes, the heads of the Egyptian government in Cairo, in fief, i.e., in return for an annual tribute to the emperor. Successive Cairo governments, in turn, gave different parts of the country to different provincial governments 2 in return for a higher tribute than they paid to the emperor so that they could keep the difference for their treasuries. Provincial governments also made similar deals with local governments, sheikhs, and village notables. This process continued all the way down the line until it reached the bottom: the direct producer, the peasant. This did not mean that each peasant was a tenant in his own right. Some of them, perhaps the majority, worked on large estates for large tenants; they were either attached to the domain or hired on a yearly basis. In this way there existed a whole hierarchy of tenureship and fiefdom on the same plot or estate of land between the absentee landlord, the Ottoman emperor, on the top and the direct producer at the bottom.

Bonaparte’s expedition and the accession of Mohammad Ali to power “struck grievous blows against ‘Oriental feudalism’. In fact, the law of September 16, 1798, inaugurated land prices, recognized the peasant’s right to inherit, and regulated the the recording of landownership…In 1811 he [Mohammad Ali] massacred the Mamelukes in the Citadel. Between 1813 and 1818 he established a registry of land titles and distributed the commune’s land among the peasants and certain categories of functionaries.3

There then began the process of cash-crop, especially cotton, cultivation on a capitalist basis. The interests of Western capital converged along this process with Mohammad Ali’s economic and political needs–to break from the past and establish an independent, modern dynasty, Mohammad Ali needed both political image of an enlightened, modernizing leader and the cash revenue from the sale of cotton to bolster this image.

Although the process of privatization of landed property and commercialization of agriculture began under Mohammad Ali, it remained for the increased British need for the Egyptian cotton to accelerate this process and make the establishment of private ownership in land complete. “The reign of Ismail (1863-79) brought introduction and intensification of the cultivation of cotton in order to supply the English mills cut off from their supplies of raw materials by the American Civil War. In 1871 a law allowed the conveyance of title of land against the lump-sum payment of six years’ taxes in advance. Then, after the British occupation in 1882, private ownership of tax-exempt land was legalized (1883)…And finally, tribute was abolished except when it was beneficial to all (1891).”4

The establishment of private ownership in land did not mean that all peasants received land. Nor did it mean all those who received land were peasants, or that the distribution of land was anywhere near equality and evenness. To give a picture of how uneven this distribution was, suffice it to say that it largely reflected the hierarchy of fiefdom and tenureship prevailed before the distribution of land. In other words, the basis for the distribution of land was the pre-distribution pattern of tenureship: tenureship titles became ownership titles. 5

But even this originally lopsided pattern of landownership became further aggravated as the modern, capitalist sector gradually became the dominant sector and created (alongside the traditional sector) its own institutions and methods of operation,which meant the involvement of commercial banks in agriculture, the establishment of credit and mortgage houses, the emergence of moneylenders, and the like (see Table 1).


TABIE l.  Pre-reform Pattern of Landownership in Egypt

_______________________________________________

small holdings*  medium holdings**      large holdings***

% of    % of                % of                  % of       % of % of

owners    land            owners                 land      owners                            land

__________________________________________________________________

1894        83.3           21.7                15.4                34.3        1.3               44

1914        91.3           26.7                  8.5                 30.4          .8               43.9

1930        93.1           31.6                  6.3                 29.7          .6               38.7

1952        94.3           35.4                  5.2                 30.4          .5               34.2

_______________________________________________________

Source and Notes: Anouar Abdel-Malek, Egypt :Military Society, New York, 1968, P. 57.

* Less than five feddans

** Five to fifty feddans

*** More than fifty feddans

 

It also meant the beginning of a new form of social differentiation: capitalist farmers and wage laborers, hence more and more absentee landlords; rich peasants (‘kulaks’) and poor peasants, hence further depeasantization and proletarianization of poor peasants; etc.Mahmoud Abdel-Fadil sums up this process in the following words:

 

Three main institutional factors contributed to aggravate the lopsidedness of the agrarian structure in Egypt. First, the monopoly power of big landlords over land and water resources resulted in payment of exorbitant rents by small peasants and insecurity of tenures. Rents between 1948 and 1952 varied between $46 and $138 per feddan according to region, and were so high as to absorb 75 percent of the net income per feddan, leaving hardly anything for the tenant or the share-cropper. It was thus more advantageous for the landlord to lease his land out than to cultivate it himself [see table 2]. Second, most of the medium and short-term credit had been monopolized by the large landowners, while small peasants…had virtually no access to the modern credit market. Small landowners and tenants were therefore compelled to turn to village moneylenders, merchants and brokers who extorted interest rates often exceeding 100 percent per annum…From time to time peasants were compelled to sell their land and join the ranks of landless peasants. Third, heavy speculation in the rural land market had resulted in tremendous inflation of land prices…Such high prices of land made it even more difficult for small tenant-cultivators to purchase more land, resulting therefore in a further aggravation of the lopsidedness of the agrarian structure. 6

 

TABLE 2. The Proportion of Rented Area in Some Large Estates in Egypt 1949-50 (Area in Feddans)

_______________________________________________________

Estate                                       Total                 Operated by                       Rented

owners or                    ____________

their agencies               Area            %

________________________________________________________________

1. Royal Estate

Kafr-El Sheikh                        16,035  6,863                     9,172             57.2

2. Estate of Sheikh Fadl

Agricultural Company

in Menia                                   6,600    600                       6,000             90.9

3. Large Estate at Neg

Hamadi, Quna                       14,075 2,680                    11,395             80.8

4. Government Dept. of

Public Domains                     150,832 12,000       138,832            92.0

_________________________________________________________________

Source: Mahmoud Abdel-Fadil, Development, Income Distribution and Social Change in Rural Egypt (1952-70), Cambridge University Press, 1975, p.7.

 

This process further added to the already large percentage of landless peasants (see Table 3), a process which was responsible for the underlying social tension and its eventual explosion: “A silent, exploited mass, surrounded by hunger, disease and death — but also, and especially after 1945, a mass stirred into life by the flow and ebb, often daily and always weekly or seasonal, of those among them who went off to the cities…New ideas came from the cities. A phrase, a slogan:  ‘Al-ard li man yafla huha!  (Land to those who work it!)’ . Land meant–who could tell–the end of the endless wait to die. The peasant were going to rise…” 7

 

TABLE 3. Pre-reform Landless Families in Rural Egypt

______________________________________________________________

Census             No. of rural                   No. of Landless                        % of landless to

year                  families             families             rural families

______________________________________________________________

1929                 1,904,000                        697,000                       37

1939                 2,100,000                      1,107,000                      53

1950                 2,466,000                      1,469,000                      60

______________________________________________________________

Sources Samir Radwan, Agrarian Reform and Rural Poverty,  Egypt

(1952-1975); International Labor Office, Geneva  1977, P. 7.

_____________________________________________________

 

And they did indeed rise. Abdel-Malek relates that between 1949 and 1951 peasant uprisings on large estates multiplied. “The peasants attacked the private guards and even the police barracks…demanding the land that they worked. And this occured even on the royal estates. …The ‘peasant sectors’ of the Marxist organizations of the years 1944-48 were now fully entrenched, endowed with professional staff, with committees uniting local students, the nationalist schoolteachers, the fellah (farmer), the farm workers and poor peasants….” 8

The gravity of the situation sent shock waves to all sides and stirred all those concerned to seek solutions. The Association for National Renaissance proposed a twenty-five-year program of agrarian reform, which it justified on these grounds:

 

Social sickness is gradually spreading through the countryside…If this movement is neglected at all, it is full of dangers…In a time of revolution, agrarian reform is concentrated on the compulsory elimination of large estates and sometimes of their owners; in Egypt in the present circumstances it should be carried out by a wise and provident government that wishes to benefit from a period of relative calm to accomplish a comprehensive reform…political opinion is turning resolutely toward the left: a general desire fore renewal, for social progress, is becoming more and more strongly manifest…but its dominant direction has not yet clearly appeared. 9

 

On the left, there were calls for a land reform that would place a ceiling of fifty feddans on landownership: “In this fashion there will be a reserve of land that will be divided equally among the landless peasants and the farm workers, who include two million poor peasants…The poor workers have more right than anyone else to the land that they work with their hands.” 10

Labor organizations–most notably, Workers’ Committee of National Liberation, the Congress of Egyptian Trade Unions, and the Preparatory Committee for the Congress of Egyptian Trade Unions– were also demanding similar changes.

From overseas, opposing influences and conflicting signals poured in. While from the East the success of the Chinese revolution, in which the peasantry played a prominent role, offered the example of a radical land reform, from the West came suggestions of ‘preventive’ reforms. For example, in February 1952 the United States’ State Department published a brochure –‘Land Reform, a World Challenge’– in which it emphasized the importance of land reform in “the fight against hunger and communism”. 11

This was the social and political scene in Egypt in the immediate days before the coup–perhaps just ripe for it. The social atmosphere was in turmoil. Political parties, organizations, interest groups and even some of the most powerful governments in the world were discussing different solutions, drawing different plans, and issuing various reform proposals. But the action –preemptive action, to be sure– came from somewhere else: from a small knit of military officers, called Free Officers, whose immediate plan was to overthrow the monarchy. On 23 July 1952 they took the power and about six weeks later, September 9, announced a land reform program which in effect forestalled the the plans of both the right and the left.

Although the full meaning of the Free Officers’ forestalling a victory by the left will become more clear later in this study, let us just give an advance indication of what it means at this point. Abdel-Malek describes it in the following words:

 

It was altogether natural that the Free Officers’ coup d’ etat and the overthrow of the King Faruk should have inflamed hearts and exalted imaginations. In the rural areas there was already talk of agrarian reform. Revolutionary echoes came from the big workers’ centers. Political confusion was at its height, and some people went as far as to wish for a real popular revolution. At Kafr-el Dawar, the cite of the Anglo-Egyptian factories of the Beyda Dyer Company (most of the capital was English, and all of it was managed by Ahmed Abbud), the union decided to strike. Its leaders, Mustafa Khamis and Mohammed Hassan el-Bakary, addressed the crowed, in which the workers and peasants of the area were fraternizing. They spoke of a new era, of the end of injustice, of oppression. This was August 13 [three weeks after the coup]. On the same day the army surrounded the factory, dispersed the demonstrators and set up a military tribunal that tried the two labor leaders on the spot and sentenced them to death. They were hanged high the next day. 12

 

  1. Objectives, Legal Framework, and the Nature of the Land Reform

 

According to the original, September 1952, land reform legislation, 13

(1) The ceiling of landownership was fixed at 200 feddans per person. In practice the majority of these owners would have 300 feddans, since the law allowed a father of two or more children to retain an additional 100 feddans.

(2) Exemption from this limitation was granted to companies owning more than 200 feddans, on the ground that they were reclaiming fallow or waste land; to individuals in the same category; to industrial companies that needed more than 200 feddans of land for their production; to scientific agricultural companies and charitable organizations; and to owners burdened with debts, under special conditions defined by the law.

(3) Every owner affected by the law would be indemnified in negotiable government bonds for the land taken from him; the price per feddan was fixed at ten times its rental value, which itself was seven times the land tax; in addition the owner would be compensated for the value of the trees and buildings, whether permanent or other, on his land. The bonds given to these owners would bear an annual interest of 3 percent for thirty years; they could be used for the payment of taxes, the purchase of waste land, etc.

(4) The expropriated land would be distributed by the state to peasants within five years, although the owners could sell their land directly to the peasants insofar as the tracts did not fall within the law. The ceiling on sales to peasants was set at five feddans. Land alloted to the peasant by the state would be paid for by him over thirty years at 3 percent interest per year, plus an additional charge of 15 percent of the total value of the land under the pretext of payment of the costs of seizure and conveyance. Finally, every beneficiary of the reform must be an Egyptian of legal age who had never been convicted of any offense bearing on matters of honor; he must be a farmer, a tenant or a worker on the land distributed, or a resident of the village in question.

(5) At the same time the law undertook to establish the relations between the owners and tenants of land. The rental value of the feddan was seven times the land tax or else half of its crop, if the lease was made on the sharecropping system; gardens,flower plots, etc., exempted from the system. Finally, no one could rent land unless he was going to work it himself, and no lease could have a shorter term than three years.

(6) A committee especially appointed by the minister (three members representing landowners and tenants, three representatives of the farm workers, one high official as president) would be charged with fixing wages for farm workers in the various regions, from year to year.

(7) Agricultural cooperatives would be established for small holders (owning up to five feddans). Their function would be to arrange for farm loans, supplies or fertilizer, and to organize the rotation of crops and to market the harvests. These cooperatives would later have to be grouped in general cooperative associations and cooperative unions under the control of the Ministry of Labor and Social Affairs.

(8) Farm workers would be allowed to form unions for the protection of their common interests.

This is undoubtedly a comprehensive agrarian reform program. It goes far beyond a simple redistribution of land. It is a package of policy measures intended to change the pattern of landownership, the pattern of agricultural income distribution, the organization of production, the terms of land tenureship, and the terms of agricultural labor contracts and wages. This is because the agrarian reform program was designed within the context of broader objectives of national development.The Free Officers perceived that a speedy, smooth development of Egypt as a modern, industrial society required (a) transferring the nation’s riches and resources fixed in land to industry; (b) undermining the political power tied to the land –converting the ‘enlightened’ landlords into capitalist entrepreneurs and breaking the power of the obscurantist ones by other means; (c) designing a distribution plan that would not in any way smack of ideas like ‘free land’ or ‘land to those who work it’; and (d)creating the necessary legislations and institutions that would carry out these plans. The carefully formulated reform program had taken all these objectives into consideration.

Despite the comprehensive character, the reform program was essentially a moderate one. Respectful of private ownership of land, it had made the entire policy package self-financing. And in spite of the presence of the element of compulsion, the projected process of transition was virtually based on persuasion and inducement. Moreover, not only the ceiling placed on landownership (200 feddans officially, 300 in practice) was much higher than the pre-reform expectations, demands, and proposals, but also the compensation paid to the landlords for the loss of their above-the-ceiling land was very generous. According to the compensation provision (point 3 of the legal framework), the price fixed for the land above the ceiling was based upon the then prevalent rental value–ten times the rental value. But, as noted earlier, both the price of land and its rental value were inflated to extremely high levels in the years immediately preceding the agrarian reform. According to the official figures, the real inflation rate for both the price of land and the rental value was about 280%–the land price rose from $644 to $2024 per feddan and the rental value from $65 to $161.14  This means that the actual compensation price was almost three times the official one. Thus, Abdel-Malek, citing Doreen Warriner’s calculations, notes

 

The majority of the large proprietors had thus amortized the price of their land in fourteen years, and their indemnification under these conditions constitutes a real gesture of political appeasement of the powerful of the old system by the state and a solemn rejection of the very principle of revolutionary expropriation. 15

 

Abdel-Malek also provides a picture of the burden of the compensation costs (accompanied by a variety of other costs) that fell on the shoulders of the land recipients:

 

An investigating team from the newspaper Al-Missa, under the leadership of Ali el-shalakani, an economist, was able to ascertain after a long series of studies in the field that the peasant was obliged to pay almost $115 per year for each feddan received from the state, $34.5 to pay the annual installment on the loan, $27.6 to help pay irrigation facilities, etc., $23 for farm supplies, $23 to pay off earlier loans in most cases, and other minor charges…various disbursements incured by a peasant owning three feddans amounted to more than $287.5 per year, whereas his income was only  $264.5. 16

 

Yet, these sobering statistics are usually overshadowed by the peasant’s psychological thirst for a piece of land, and his mere entitlement to that piece of land makes him deeply appreciative. The Egyptian engineers of the land reform proved to be very well aware of this psychology . They even didn’t conceal their intention of taking advantage of it when they quoted with approval the ideas of the American Department of Agricultures: “A little piece of land and a few favorabIe circumstances have more influence than great armies on world peace. This is something that grows inside a man’s mind…something that it becomes difficult to uproot and destroy.” 17

Representatives of the industrial and banking capital had good reasons to express satisfaction with the land reform program. For example, The National Bank of Egypt welcomed the program with the following statement:

 

Egypt can congratulate herself on the fact that after so many deceptive promises and empty words, the matter has been carried out by a regular government that attacked it within the framework of the law, without leaving the initiative to the masses with the risk of violence and disorder. If the question is viewed from this angle, then any reform whatever, no matter how radical, is preferable to the anarchy of a mass movement. 18

 

But the landed aristocracy did not appreciate the ‘preventive’ reforms initiated by the Free Officers. They were not accustomed to have a ceiling of two or three hundred feddans on their landownership; for them the sky had been the limit. Moreover, they were mot ready to loose, or even to share, their political authority; they were used to complete control. Thus, instead of using the opportunity that the moderate character of the reform program provided for their smoothly becoming industrial capitalists, as the Free Officers had hoped, they chose to abuse it. They took advantage of the many loopholes and leeways of the reform laws and, as President Nasser admitted, “Some landowners through fictitious bequests and sales continued to own up to 3,000 feddans”. 19

They showed no willingness to invest in industrial development projects the huge sums of compensation funds they had received for their ‘above-the-ceiling’ lands.  “In 1955, for instance, of $103.5 million taken out of land, only $13.8 million was invested in industry. And the rest? The mushroom growth of luxury apartment houses…almost all of them concentrated in Cairo and Alexandria…In 1956, investment in this sector reached 47.3 percent of the total of all investments, and 75.8 percent of all private investments.” 20

The opposition of big landlords, who held sway over the main balk of the nation’s wealth and capital, went beyond passive resistance to the government’s industrialization drive. After a brief period of confusion following the Free Officers’ swift overthrow of the king and the promulgation of the agrarian reform legislation, they rebounded and embarked on a challenging course: “Sayed Marei spoke of sabotage at several dozen irrigation pumps and of some landowners’ refusal to supply their peasants with fertilizer, seed and cash advances for their working expenses; many proprietors appealed to the Council of State to nullify the law as a violation of the constitution.” 21

The whole sociopolitical scenario in Egypt offered another classic example of the conflict between representatives of the traditional landed aristocracy and those of modern capitalist bourgeoisie. It also provided another case of Bonapartist maneuvering on the part of the nationalist leader between the contending social strata. By now, the Egyptian Bonapart, Nasser, was standing on a firm sociopolitical ground. He had overthrown the Monarchy, established the Egyptian Republic, eliminated all existing political parties and organizations (especially the leftist ones), and established his own political parties and institutions. furthermore, he benefited from the support of the Soviet Union and the (tactically) conciliatory attitude of the United States –as noted, the United states was trying to replace the departing England.

Therefore, no more concessions to the land-based political power, especially now that further concessions meant the undermining of the Bonapart’s reform mission, hence his legitimacy, and hence his rule. It was time to fight back: “A son of the prominent Lamlum family [who had] resorted to force in order to prevent the execution of the law…was arrested, tried with much display and sentenced to hard labor.” 22

There then followed a series of modifications to the original laws. In 1958, a new law extended the time over which the new owners were supposed to pay for the land they had received from thirty to forty years, and reduced the interest rate from 3 to 1.5 percent. In 1961, the ceiling on private ownership was reduced to 100 feddans; this included waste and fallow land, and no longer only land actually under cultivation. Furthermore, members of the landlord families were not allowed to manage an area of more than fifty feddans under the guise of lease, tenure in perpetuity, etc. A law of 1963 expropriated foreign proprietors, and one of 1969 reduced the limit of landownership further down to 50 feddans

Modifications made to the original reform laws represent only improving measures of these laws in order to accelerate the realization of their objectives: the acceleration of the process of (primitive) capital accumulation and national development. They do not represent any change in the nature of the original legal frameworks: respect for property rights and vigilance against nationalizations in agriculture. One of the clearly stated objectives of these laws was to reject the nationalization of land in favor of providing a “strong vital economy for the small landholdings.”23  President Nasser confirmed this tenet when he told the editor of Pravda that “the socialist solution for the problem of agriculture in the United Arab Republic (Egypt) was based on two measures: first, increasing the number of owners of arable land, and second, consolidating land ownership by co-operation and transforming the economy of small holdings into a strong one through continuous expansion of co-operation.”24

 

  1. Implementation of the Land Reform and Differentiation of the Peasantry

As the legal framework of the reform program shows, the major tasks of the Ministry of Agrarian Reform were (l)change in the distribution of land; (2) change in the distribution of agricultural income –not only through land redistribution but also through improvements in rent and wage provisions in favor of landless tenants and wage workers; and (3) supervision of the organization of production. This last task meant the establishment of peasant cooperatives which, while preserving the private ownership of its members, would both supply their input needs and market their surplus output.

 

a. Impact on the Pattern of Landownership

As Table 4 shows, the implementation of various reform laws, enacted between 1952 and 1970, resulted in the distribution of 817,000 feddans, 12.5 percent of the total land under cultivation at the end of the program (l970), among 341982 families which amounted to 1.7 million persons, or 9 percent of the rural population in 1970. Column 2 of this table, land requisitioned but not yet distributed, shows the degree of government’s involvement in the reform program; it went far beyond a simple supervision of the distribution process. “The Agrarian Reform Authority administers land pending distribution. It has substituted for the ‘daira’ of the old landlord its own bureaucratic machinery, leases plots and collects rent, and in some places engages in direct cultivation. Public organizations have an inherent tendency to perpetuate themselves and some delays in distribution may well be due to a reluctance of the Authority to relinquish its functions.”25


TABLE 4.  Land Redistribution 1953-70

_____________________________________________________________

Year                 Land requisitioned (cumulative)  land distributed (cumulative)

_____________________________________________________________

1953                             211,000                                     16,000

1954                             294,000                                     81,000

1955                             374,000                                     148,000

1956                             434,000                                     184,000

1958                             544,000                                     269,000

1966                             875,000                                     696,000

1970                               n.a.                                                     817,000

____________________________________________________________

Source: Robert Mabro, The Egyptian Economy 1952-72 , Oxford University Press, 1974, P. 68.

 

Government’s temporary possession of the land pending redistribution served several purposes. First, it forestalled the temptations and initiatives of peasants to take over the land subject to distribution. Second, it provided the government with the status of a landlord willing to voluntarily distribute his land among peasants, and hence provided it with the peasants’ sense of indebtedness, appreciation, and political support. Third, it helped to establish the government’s control over the agricultural sector and rural population. Fourth, and this is a general proposition, it added a new material basis to the traditionally pure administrative basis of the role of government functionaries.

Changes in the structure of landownership resulted from the reform program are shown in table 5. Most notable of these changes are those taken place at the two extremes of the spectrum of landownership. While at top end of the spectrum we witness the disappearance of the above-the-200 feddan ownerships, at the bottom end we witness a considerable rise in the land held by small, below five feddan, owners–from 35.4 percent in 1952 to 57.1 percent in 1961. Since the relative number of the latter group of owners remained almost constant, 94.3 percent in 1952 and 94.5 per cent in 1965, the added land to their share is then reflected in a rise in the average size of their holdings–from 0.8 feddan in 1952 to 1.2 in 1965. The constancy of the relative number of small holders is due to the fact that the majority of landless peasants, tenants and agricultural workers were excluded from beneficiaries of land distribution by the ‘eligibility’ criteria (see clause 4 of the legal framework above). “The Egyptian reform did not aim to satisfy the land hunger of all tenants and landless workers…It sought limited improvements in the distribution of wealth, and benefited the upper section of low-income group…Distribution to former tenants and permanent workers is justified on efficiency grounds, but benefits could have been extended to large numbers if the ceiling on ownership had been lowered to 25 feddans.”26

Despite the 1961 legislation which lowered the ceiling of ownership from the 200 feddans of 1952 to 100 feddans, the number of owners in this bracket, i.e., the100-200 feddan bracket, has not decreased; indeed, it has increased from 3000 in 1952 to 4000 in 1965! This shows that although the imposition of 200 feddan ceiling pushed those above this ceiling below it, most of them resisted going further down below the new, 100 feddan, ceiling .

Changes in the pattern of intermediate ownerships, above 5 and below 100 feddans, are moderate enough to warrant the conclusion that the pattern remained almost constant between 1952 and 1965. Among the various ownership groups that fall into this interval, the 20-50 feddan group deserves special attention. There is an increase in both the number of owners in this group and in their share of land. This is because as the large estates above this ownership bracket became subject to reform, and thereby this bracket became the new top end of the ownership spectrum, the owners of those large estates joined this new top ownership bracket. As capitalist production became more and more the dominant form of production in agriculture, this group (largely as capitalist farmers) occupied the same soicoeconomic status in the Egyptian agriculture as the pre-reform semi-capitalist, semi-fuedalist group of large landlords. In fact, as we shall shortly see, the large scale of production achieved by this group as a result of its ability to apply intensive capitalist methods of production, more than compensated the loss of the pre-reform scale of extensive production. In other words, the reduction in the degree of ownership differentials as a result of the reform program did not mean a reduction in the production differentials, and hence in the class differentials.

 

TABLE III.5: Change in the Structure of Landownership in Egypt (1952-65)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patterns of landownership presented in Table 5 can be translated into a graphic illustration by means of Lorenz curves–depicting cumulative percentages of the number of owners against the corresponding cumulative percentages of land ownership (Figure l). In this way we can see in a glance the shift in the position of the Lorenz curve as a result of reform measures, and hence, in the degree of ownership concentration, or, conversely, in its degree of dispersion. The Central Bank of Egypt calculated this degree in terms of Gini coefficients and obtained the figure 0.611 for the period before 1952 and the figure 0.383 for after 1965–meaning that as a result of the reform program the degree of concentration of ownership dropped from 0.611 to 0.383 in 1965.27

 

Figure l: Lorenz comparison for distribution of landownership 1952-1965.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: This figure is based on Abdel-Fadil’s figure 1.1,  p. 13,  of  Development. Income Distribution and Social Change in Rural Egypt 1952-70,  Cambridge University, Press,1975.

 

However, due to several reasons this improvement in the degree of inequality of ownership is overstated. First, since due to multiple ownerships the number of owners is less than the number of ownerships, and since the official data is based on the number of ownerships and not of owners, i.e., on the number of the pieces of properties and not on the number of proprietors, therefore, the improvement in the degree of concentration of landownership based upon the official data embodies an element of overstatement.28 Second, a serious defect in the data is due to the aggregation of the less-than-five-feddan ownerships, which included some 95% of all owners in one bracket. Evidence suggests that the distribution of ownership within this very large bracket might have become very unequal…After the 1952 reform, the less-than-five-feddan owners amounted to 2,642,000, of whom 2,018,000 or 76 percent owned less than one feddan. A survey of ten villages in 1968 suggested that this ratio has risen to 89 percent.29 Third, many big landowners avoided having their land expropriated by registering land in the names of different members of their families, while still themselves retaining effective control and the ultimate possessory claims to land.30

The improvement in the degree of inequality of ownership will be further reduced when we include in the picture the number of landless peasants (Table 6).

 

TABIE 6.  An estimate of landless families  1952-72 (OOOs)

___________________________________________________________

1950  1961        1965        1970           1972

_____________________________________________

1. Rural population                    13,700  16,120     17,604      19,280      19,928

2. Population engaged in

non-agricultural activities           1,370  2,418         2,641         2,892        2,989

3. Agricultural population           12,330  13,702      14,963       16,388     16,939

4. Agricultural families     2,466    2,750         2,993         3,278       3,388

5. Landed families                       1,003    1,642         1,785         1,853       1,857

6. Landless families                     1,463    1,098         1,208         1,425       1,531

7. Landless families as a %

of agricultural families                  59                     40                40               43            45

_________________________________________________________________

Source: Samir Radwan, Agrarian Reform and Rural Poverty, Egypt(1952-75), International Labor Office, Geneva, 1977, p. 23.

 

As this table shows, 45 percent of the agricultural families remained landless by the end of the reform program. The inclusion of landless families in the calculation of the degree of ownership inequality–assigning O feddans to them–will result in much higher Gini coefficients (table 7). While before the inclusion of the landless, the degree of inequality for the year 1961 was 43 percent, now, as this table shows, it is 80 percent (i.e., Gini coefficient is 0.800). Despite some improvement from 1950 to 1961 (as reflected in the Gini coefficient’s reduction from 0.889 to 0.800),the fact remains that by the end of 1961 while half of the population possessed only 1 percent of land, the top 10 percent possessed almost 65 percent of the land. Yet, evidence shows that this is the best picture that can be given of the impact of the reform program on landownership. For, as Table 6 shows, the situation started to deteriorate from the mid 1960s onward–the number of landless families rose from 1,098,000 in 1961 to 1,208,000 in 1965, to 1,425,000 in 1970, and to 1,531,000 in 1972, or, to cancel out the effects of population growth, from 40 percent of agricultural population in 1961 to 45 percent in 1972.

 

TABLE 7.  Decile distribution of landholdings, 1950 & 1961

___________________________________________________

% share in landholding

_____________________

Deciles                                                 1950                             1961

___________________________________________________________

1                                                          0.0                                0.0

2                                                          0.0                                0.0

3                                                          0.0                                0.0

4                                                          0.0                                0.0

5                                                          0.0                                1.0

6                                                          0.0                                2.54

7                                                          2.3                                6.21

8                                                          16.05                            9.62

9                                                          12.03                           15.67

10                                                         69.61                           64.69

___________________________________________________________

Gini coefficient (average)                       0.889                           0.800

___________________________________________________________

Source: Samir Radwan,  Agrarian Reform and Rural Poverty, Egypt (1952-75), ILO, Geneva, 1977, p. 25.

 

The evolution of the pool of landless peasants–the decline in the number of the landless until mid 1960s and the reversal of this trend thereafter–is of special importance to our analysis. In a sense, it captures the character of the entire reform program and its socio-economic effects.

The significant drop in the number of landless families, from 59 to 40 percent, in the late 1950s and early 1960s is indicative of the revolutionary character of the period. It was during this period that the government had to crack down on the “remaining pockets of feudalism” and impose a lower, 100-feddan, limit on landownership in order to, on the one hand, have responded to expectations of and pressures from the mass of the landless, and, on the other hand, to the menace posed to its rule by the challenges of the big landlords. Thus, the relative improvement in the degree of ownership inequality in this period came about more as a result of governmental

decrees and “Liberation Rallies” than as a result of a process of socio-economic development. This is to be expected in the early stages of revolutionary social changes. In the case of Egypt, however, these changes proved to be of an ephemeral character, i.e., they did not turn into permanent structural changes.

After the mid 1960s, we witness a reversal of the previous trend and a steady increase in the number of landless peasants–from 40 percent in 1965 to 43 percent in 1970 and 45 percent in 1972. This is the result of a new, post-reform process of peasant differentiation which, in turn, was the result of the post-reform transformation in the agricultural relations of production from ‘semifeudalist-semicapitalist’ into capitalist ones. As noted earlier, this transformation was one of the major goals of the reform program. After more than a decade of the Free Officers’ revolutionary rhetoric, and hence of the big landowners’ puzzlement, then began the period of ‘stability’ and a new surge of capitalist development in the Egyptian agriculture. Table 8 reflects this new structure. This is clearly the picture of a capitalist agriculture, in every aspect and on all accounts: the use of machinery, the employment of wage labor, the diversification of crops, etc.


TABLE 8 Indicators of the degree of capitalist development and peasant differentiation in Egyptian agriculture (1961)

__________________________________________________________________

size of holding              % of total     % share of     % of hired    % share    % share    % share

(feddans)                      holdings      total ag.          wage labor    of tractors  of fixed     of total

labor force      to total            in use         tools of     fruit

labor force                        irrigation  area

__________________________________________________________________

Less than 5 (poor

and small peasants)        84             73                   10                 7              17             17

 

From 5 to 20

(middle peasantry)           14             20                  22                  19              36             17

 

20 and above                       2              7                     63                   74             47              66

__________________________________________________________________

Source: Mahmoud Abdel-Fadil, Development, Income distribution and social Change in Rural Egypt 1952-70,  Cambridge University Press, 1975, p. 50.

 

This explains the post-reform process of ‘depeasantization’–a process of poor peasants’ being once again, just as they were before the revolution, forced to sell their small plots of land to rich peasants and capitalist farmers and join the pool of the landless. How ironical! The Free Officers embarked on the reform program to halt foreclosures, dispossessions, and ‘depeasantization’. Barely a decade later, it started all over again.

 

b. Impact on the Pattern of Agricultural Income

 It might be argued that in a capitalist agriculture the pattern of income distribution need not correspond with the pattern of land distribution. For example, it is possible that due to varying degrees of capital (or labor) intensity of production process, the scale of production be considerably different from the scale of landownership. It is also possible that due to favorable employment opportunities and respectable wage levels, agricultural wage laborers (and poor peasants who partially depend on their wage income) earn incomes comparable to those of small or even middle peasants. Indeed, as reflected in its legal framework, the Egyptian land reform program did not make the distribution of agricultural income entirely dependent on the distribution of land; it was designed to improve the living conditions not only of the land recipients, but also of the mass of the landless ‘ineligible’ to receive land. This was to be achieved through changes in the rent and wage provisions in favor of landless tenant peasants and agricultural wage laborers.

Unfortunately, evidence shows that the Egyptian reform program has not generated a pattern of income distribution different than that of land distribution. As table 9, shows, the share of the mass of the agricultural poor–wage earners and poor peasants–remained virtually unchanged as a result of the agrarian reform laws. This means that exactly in the same way that the effects of land distribution largely bypassed these two groups of the agricultural population, so did the effects of income distribution.

 

TABLE 9.  Distribution of agricultural income in 1950 & 1960

____________________________________________________________________

% share in total

1950   1960

 

Wages of the landless                                                5.4                   5.0

 

Below 2 feddans

(poor peasants)                                                          6.5                   7.0

 

2-50 feddans                                                              43.7                52.0

 

Over 50 feddans                                                        31.2                29.0

 

Rental payments                                                       13.1                  7.0

____________________________________________________________________

Total                                                                           100.0              100.0

____________________________________________________________________

 

Source:  Donald Mead, Growth and Structural Change in the Egyptian Economy, Illinois, 1967, p. 78.

 

True, the picture that Mead gives us in this table does not cover the entire reform period. But for two major reasons this picture can still serve as a firm basis for our analysis. First, Mead’s picture is consistent with the picture given by Mabro for the later years of the reform program (Table 10). Second, as was pointed out earlier, as well as demonstrated by Table ll below, the improvements in the wage rate and income share of agricultural wage earners in the early and mid 1960s were temporary, and took a reverse course thereafter. This means that the picture presented by Mead and Mabro, tables 9 and 10, respectively, provides the most favorable representation of the income effects of the reform program on the landless and poor peasants, and is therefore unobjectionable.

 

TABLE 10.  Distribution of agricultural income in 1950 & 1960

____________________________________________________________________

% share in total

1950               1960

 

Landless families                                                      9.0                   8.0

 

Holders of less than 5 feddans                             17.5                34.0

 

Holders of 5-100 feddans                           48.5                54.0

 

Holders of over 100 feddans                                 25.0                  4.0

____________________________________________________________________

Source:  Robert Mabro, The Egyptian Economy 1952-72, Oxford University Press, 1974, p. 221.

 

 

Change in the Income of Wage Earners.  As noted earlier, the only thing that fell to the lot of the 45 percent of the agricultural population ‘ineligible’ to receive land was an official, legislative minimum wage. As their share of the reform program, this was supposed to improve their income level, and hence their living conditions. Thus, the minimum wage legislation fixed a minimum wage rate for an eight-hour day 18 piasters(PT) for men and 10 piasters for women and children (compared with 10-15 piasters for men and 6-7 piasters for women and children per day before the agrarian reform).31

But as Table ll shows, the minimum wage criterion can best be characterized as a political gesture of sympathy. Nor could it be otherwise in the face of, on the one hand, a lack of employment opportunities and independent labor organizations, and, on the other hand, the existence of an army of reserve labor in terms of millions. The minimum wage level fixed by the 1952 legislation was reached 14 years later, and for a brief period only–this was the period of active campaign against the “remnants of feudalism” and for “socialist transformation”. Soon after this period, the wage rate, once again, began to decline, a decline which “has continued uninterruptedly until the present day”.32

 

TABLE 11.  Movement in real wages in rural Egypt, 1952-74

(1952 = 100)*

____________________________________________________________________

1952                           100                             1965                             89

1953                             99                              1966                           113

1955                             58                              1967                           107

1956                             63                              1968                           103

1959                             82                              1969                           100

1960                             81                              1970                             91

1961                             75                              1971                             93

1962                             81                              1972                             95

1963                             84                              1973                             93

1964                             91                              1974                             87

____________________________________________________________________

Sources & Notes:  Samir Radwan, Agrarian Reform and Rural Poverty in Egypt, 1952-75, International Labor Office, Geneva, 1977, p. 31.

* In the original, Samir Radwan’s, table the base-year is 1938. The choice of the year 1952 as the base-year here, and hence calculations of the real wage indices on this bases for the following years, is my own.

 

Of course, a judgement of the size of the aggregate wage income based on the level of the wages alone can be erroneous; the level of employment is equally important in the determination of the aggregate wage income–especially in less developed, agricultural economies where large numbers of women and children work, and where official wage rates mean very little. But, as tables 9, 10, and ll show, in the case of Egypt the decline in the agricultural wage level has been accompanied by a decline in the aggregate wage share of the agricultural income, meaning that there have not been counteracting employment opportunities to compensate for the declining level of wages.

 

Changes in the Income of Landless Tenant Farmers.  The agrarian reform program also sought to improve the tenant cultivators’ share of the agricultural income by improving the tenancy terms in their favor. Thus the 1952 legislation fixed the cash rent per feddan at seven times its tax ($6.9, on the average) which amounted to about $48.3. According to Abdel-Fadil, this is on the average $23 less than the pre-reform rate.34 The Egyptian Ministry of Agriculture estimated that as a result l, 100,000. tenant-cultivators benefited a sum of about $92 million annually. Abdel-Fadil’s estimate is about half of this amount, which is still quite significant. 35 Hanson and Marzouk have estimated the decline in the rental income of absentee landlords to almost half of its pre-reform level–this is consistent with Mead’s account cited earlier, Table 9, last row– which, according to their calculations, should have raised the income of beneficiaries by one-third.35

These writers, however, warn against taking these estimates for actual changes, and against taking temporary changes for lasting effects:

 

It would be misleading to see this shift as a permanent structural change in the distribution of agricultural income, as recent investigations have shown that the margin between the ‘statutory’ and ‘ market’ rates of rent tended to widen on the account of a rise in the latter. A common practice to evade rent ceiling, as noted by Saab, is to sign a lease calling for the legal statutory rent, but at the same time to compel the tenant to sign separate bills of exchange for extra amount. Thus to an unknown extent, much of the initial income gain to the tenant, which accrued in the form of reduced rents, had gradually been lost back to the landowners through ‘black market’ rents and through various forms of evasion, e.g., through shifting the burden of land tax and certain costs to the tenants.37

 

Changes in the Income of Land Recipients. Various attempts at the assessment of the income effects of the reform program on land recipients have produced extremely diverse results. Accounts based on official data show a respectable steady rise in the income of land recipients in the period between 1952 and 1965. One of these accounts is provided by Eshag and Kamal which shows a more-than-double increase in the net money income of land recipients (see Table 12). Eshag and Kamal’s account is confirmed by those of both Doreen Warriner38 and Gabriel Saab.39

 

TABLE 12.  Net money income per feddan of land recipients, 1952-65

____________________________________________________________________

Year($s) 1952-327 1954-533 1956-739 1958-939 1960-150 1962-355 1964-564

____________________________________________________________________

Source:  Eshag, E. & Kamal, A. M.  “Agrarian Reform in the UAR (Egypt)”, Bulletin of the Oxford Institute of Economics and Statistics, 30, 1968,  p. 97.

 

Independent accounts and field studies, however, show no improvement in the income of land recipients. For example, Mohsen Abdel-Khalek, as a result of his “Field Study of the Agrarian Reform in Two Typical Areas During the Period 1953-63”, concludes, “Against all expectations, the net income per recipient in the two sample estates was not only below that of a tenant farmer in the same estates during 1950-52, but also below the national average income per tenant during 1956-63.”40 Abdel-Khalek’s findings are confirmed by the results of a field study carried out by Ali el-Shalakani and his investigating team from the prestigious newspaper Al-Missa , according to which “various disbursements incurred by a peasant owning three feddans amounted to more than $287.5 per year, whereas his income was $264.5.”41

Diverse as these findings are, they are not inconclusive. The point here is not to accept the findings of one group of the researchers and reject those of the other–especially since both groups are well respected for their rigorous research works. The task is instead to try to find out what accounts for the discrepancies between the two findings. There are two major reasons for these discrepancies. More specifically, the first set of findings, those based on official data, seem to be flawed for two major reasons.

First, as Table 12 shows, this set of findings are based on money terms and, therefore, as Samir Radwan points out,

 

The increase in the beneficiaries’ income measured in real  terms must have been much less than [these] figures suggest. If allowance is made for the rise in the cost of living in rural areas, which amounted to some 65 percent during this period, the real increase in the beneficiaries’ income per feddan will be reduced to about 44 percent. It is our judgment, however, that this gain must have been totally wiped out during subsequent years . . . through the effects of rapid inflation and increase in cultivation and cooperative expenses.42

 

Second, there is the general problem of judging the parts on the basis of the whole, or the average. Both the increase shown in the land recipients’ net money income per feddan (Table 12) and in their aggregate income (Table 10, second row) suffer from this problem. For example, a judgment on the basis of the aggregates presented in the latter table would lead us to conclude that the land recipients’ share of the agricultural income rose from 17.5 percent in 1950 to 34 percent in 1965, whereas a breakdown of this (less-than-five-feddan) ownership bracket into two smaller brackets of 3-5 and less-than-three feddans shows almost no increase in the income of those who owned less than three feddans (Table 9, second row), This means that the increase accrued to the owners of 3-5 feddans only. But evidence shows that about 95 percent of land recipients owned less than three feddans–this is despite the fact that the officially recognized size of a subsistence farm for a family of average size was three feddans, and despite the fact that the limit of ownership for land recipients was officially set at five feddans– which means that only about 5 percent of all land recipients benefitted from the income effects of the reform program.43

*****

So far we have been studying the distributive effects of the Free Officers agrarian reform program. But these effects came about largely through the administrative apparatus and agricultural policie–credit policy, investment policy, crop consolidation policy, pricing policy, marketing policy, and the like–of the agrarian cooperative system. Thus, an examination of this system, the system of “cooperative revolution,” as President Nasser called it, will enhance our understanding of the effects of the reform program.

 

4. “COOPERATIVE REVOLUTION” AND ITS EFFECTS ON PEASANT DIFFERENTIATION

 

a. Objectives 

Agrarian Reform cooperatives were set up immediately after the promulgation of the reform program in order to carry out “the socialist solution” to the agrarian problem in Egypt, a President Nasser put it. “The socialist solution,” according to Nasser, meant “consolidating landownership by cooperation and transforming the economy of small holdings into a strong one through continuous expansion af cooperation.”44  Complementary objectives of the cooperatives were defined by the Charter of National Action in the following words:

 

Agricultural cooperation is much more than mere simple credit, to which it was confined till recently. It starts by the process of pooling agricultural exploitation, which proved to be very successful. It goes parallel with the financial process which protects the farmer and liberates him from usurers and middlemen who take the largest part of the fruit of his labor. Cooperation also enables the farmer to use the most modern machinery and scientific means to raise production. It helps the farmer in marketing, which enables him to obtain the highest returns to his continuous labor and toil.”45

 

The idea is very interesting. It is intended to combine the advantages of the economies of scale with those of the incentives of private ownership of individual farmers. To this end, “each cooperative manages a land reform area as a single unit. Farmers retain both ownership and the responsibility for cultivating their own plots, but they are required to follow a number of practices: crop consolidation, triennial rotation, and cooperation in certain activities such as fumigation of crops and pest control.”46

The model certainly has the potential to revolutionize the organization of production and bring about a form of communal land system. But the neatly formulated tasks and objectives of the cooperatives turned out to be in practice fraught with all kinds of loopholes and leeways for scandalous abuses by both the agrarian reform officials and the influential big landowners. The attitude of the influential landowners

 

Toward the cooperative movement has been not so much one of opposition but one of subverting the services offered by the cooperative to their own exclusive use. With their social and economic influence, they have succeeded in dominating the administration of the cooperatives and taking full advantage of them. An intensive study of one village in Beheira province stressed the success of the umdeh [literally: important; commonly: traditional mayor] in preserving his traditional power a full seven years after the revolution. He ran the village cooperative society virtually as a private business, the preserve of friends and relatives. Press reports suggest that these observations do point to a general trend. . . Studies of corruption in the cooperatives make it clear that the centrally-appointed personnel have been directly and fully implicated.47

 

A brief look at the administrative and organizational structure of the cooperative system will help to better understand these abuses.

 

b. Administrative and Organizational Structure 

Membership of the Agrarian Reform cooperatives was compulsory for both the land recipients and tenants on land reform estates. Although nominally managed by a board of directors elected by the members, a supervisor appointed by the Agrarian Reform Authority (and directly responsible to it) held effective power. Nationwide, a pyramidal structure placed all the Agrarian Reform cooperatives under the control of the Agrarian Reform Authority in Cairo.

At the time of the initiation of the agrarian reform program (1952), and hence of the Agrarian Reform cooperatives, there already existed some 1,727 voluntary agricultural cooperatives with a membership of 500,000 and a capital of $1,520,000. In contrast to Agrarian Reform cooperatives, the voluntary cooperatives had not been involved with the organization of production; they had been concerned primarily with bulk purchase and marketing.

Voluntary cooperatives continued to exist side by side with the Agrarian Reform cooperatives until 1960. Thereafter, invoking the ‘success’ of the Agrarian Reform cooperatives, the government decided to transform the voluntary cooperatives into the Agrarian Reform type ones. This decision was gradually carried out through a combination of compulsion and inducement. An attractive inducement was the very cheap agricultural credit; for the period of 1961-62, it was absolutely interest free. Therefor, in the words of one observer, “by the end of 1962, when the regime did finally compel those remaining outside the cooperatives to join, the coercion could be smoothly implemented.”48 The evolution of the agricultural cooperatives during the Nasser years (1952-70) is shown in Table 13.

 

TABLE 13.  Development of agricultural cooperatives, 1952-70

____________________________________________________________________

Year                            No. of cooperatives              Members (millions)

____________________________________________________________________

1952                                       1,727                                                  0.5

1965                                       4,839                                                  2.4

1966                                       4,879                                                  2.5

1967                                       4,921                                                  2.7

1968                                       4,955                                                  3.0

1969                                       4,998                                                  2.9

1970                                       5,013                                                  3.1

____________________________________________________________________

Source:  Central Agency for Public Mobilization and Statistics (Cairo), 1971,  p. 51.

 

Carefully guarded against any degree of peasant initiatives, the Free Officers’ approach to the reform issues was from the very beginning a purely administrative and/or engineering one. True to this attitude,

 

they relied on centrally-appointed experts rather than the elected boards of directors to run agricultural cooperatives…The first cooperative educational center was established by the Cooperative Federation in Cairo, with a course of study of one year. In 1956 the Agricultural Cooperative Institute was established, and the curriculum of universities throughout the United Arab Republic (Egypt) included advanced studies for the graduation of cooperative leaders. The very limited quantitative and qualitative results of these early efforts was indicated by a conference called by the Socialist Union for Farmers at the University of Cairo in 1967. Ignoring the efforts of the previous ten years, the conference issued a declaration calling for the ‘spread of technical cooperative education throughout the country and the preparation of trained experts for the future’–much as if that goal had just been discovered!49

 

And what were the practical results? What was the relationship between the classroom education and the requirements of field work experience? Was there a translation of these experts’ formal education into an understanding of and cooperation with the Peasants?

An American specialist who did a field study of the Egyptian agricultural cooperatives offers some answers to these questions:

 

A director at one of the agricultural training centers told me of his difficulties with Egyptian teachers and government workers who were supposed to be undergoing training for rural construction work. To begin with, his students resist even the idea of visiting nearby villages during their training period. They prefer to listen to lectures on rural problems rather than observing them in the raw. Once they are ‘forced’ into the villages, they insist on maintaining their ‘dignity’–which means they refuse to wear work clothes, open-necked shirts and overalls or khaki trousers. Instead, they must wear their business or office suits and sport a necktie and jacket so as to maintain the proper distance from the peasants. ‘They are afraid,’ he said, ‘to get their hands down into their native soil…They are ashamed of dirt and disease and of the peasants among whom they will work in future.’50

 

A study group from the newspaper Al-Jumhuriyyah  also observed that the state supervisors kept their distances from the peasants while living amicably with the village gentry and authorities: “In Taha Al-Bish the agricultural supervisor holds his meetings daily in the house of the umdeh (the traditional head/chief of the village). In many other villages the supervisor hardly knows or does business with anyone except the secretary or president of the association.”51

 

c. Patterns of Corruption 

The brief sketch of the cooperatives’ organizational and administrative structure presented above makes it clear why the Free Officers’ army of bureau-technocrats responsible for directing the cooperative system was, on the one hand, alien to the mass of small and poor peasants, and , on the other, susceptible to the big landowners’ influence and to complicity with them. It also shows the continued domination of the rural sociopolitical life by the big landowners, and the widespread patterns of corruption in the cooperative system. Drawing on materials discovered by the Committee for the Liquidation of Feudalism, Ali Sabry, Nasser’s most influential cabinet member, pointed out how certain landed proprietors belonging to the category of national capitalism (that is, owning more than 25 feddans) managed to establish links with the administrative, technical, and cultural organizations in the village with the aim of exploiting them uniquely for personal aims.

 

A specific example of these networks of the more prosperous elements combining to secure their own interests to the detriment of the smaller farmers is provided by Michel Kemal, an editor of Al-Tali’ah. Writing in D’emocratie Nouvelle  of February 1968, he described a family in one village whose members held the following posts: in the administration–the mayor, his alternate, and his four assistants, the chief of police and his assistants; in the Arab Socialist Union–the secretary of the committee, the vice-secretary, and eighteen out of a total of twenty members; in the village council–the chairman, the secretary, and ten members; in the village cooperative– the president, the secretary, and another member of the board of directors. Commenting on such domination of the villages by influential families, Sabry comments that ‘these links resemble in more than one way those which previously linked the feudalists and the public administration entirely subservient to their authority.’ This statement makes clear Sabry’s view that much of the touted change and reform in the countryside has been imaginary.52

 

Simultaneous with these revelations, Al-Ahram Al-Iqtisadi  (May 15, 1968) also published the startling results of a comprehensive survey of the problems of the cooperatives. Following are some of these results.

– In 1968 approximately three hundred boards of directors were dissolved by the Ministry of Agriculture for “causes ranging from issues of influence and embezzlement to dealings on black market.”

– The cooperative society of Mit Khalaf village was turned into a family affair. One of its officials appointed five members of his immediate family to positions in the cooperative: three as watchmen, one as a mechanic, and a fifth as a cooperative treasurer.

– In the cooperative society of Mit Mas’us one of the members of the board of directors had taken $1,570 from the cooperative fund without appropriate justification–he used the fund for investment in trade. When asked to return it, he is reported to have delayed doing so for months.

– Members of the board of directors at the office of the largest town in Al-Manufiyyah Province misappropriated about $11,500 for use in trade, the purchase of live stock, and other forms of business.

– Members of the board of directors of some cooperatives in this province sold insecticides on the black market, divided the profits, and then sprayed the peasants’ fields with diluted insecticides.53

To counter these pervasive patterns of corruption, the Agrarian Reform Authority, in addition to some punitive measures against a number of big landowners and a series of reshufflings of the cooperatives’ bureaucracy, decided to turn to poor and small peasants, the owners of less than five feddans. It was thought that the abuses of the cooperative system could be brought under control if the membership of this group of peasants–the “natural allies of socialism,” as they were occasionally called–in the boards of directors of cooperatives was raised to the level of their proportion in the overall landowner population, i.e., to four-fifths. But for a variety of reasons, this half-hearted solution (like many others before it) did not succeed.

For one thing, the one-fifth proportion of the big owners’ membership in the boards of directors often proved to be more than adequate for effective domination of the boards.

 

A field study of ten Egyptian villages by the research department of Al-Jumhuriyyah  (reported in the editions of June 13 and 20, 1968) Provided persuasive documentation of this ascendancy of the more affluent members of the boards. In their representative sample of villages the Al-Jumhuriyyah  researchers found that invariably it was not the board of directors that controlled or led the cooperative association, but ‘usually one or two individuals, with the supervisor or the secretary a rich peasant’. The board of directors was most often found to be a mere rubber stamp.54

 

Secondly, where the one-fifth proportion was insufficient to control the board of directors, the big owners legally broke up their holdings into plots of smaller than five feddans, then transferred these plots to the members of their families and relatives, thereby gained a higher membership proportion in the board, and hence its control. The May 15, 1968 survey of Al-Ahram Al-Iqtisadi  reported that “a certain class has infiltrated the boards of directors and ruined the situation. They are large landowners who have changed their holdings to less than five feddans.”

Thirdly, the inability of the poor peasants to challenge the dominant role of large owners. The above-mentioned research team from Al-Jumhuriyyah  interviewed the poor peasant members of the boards of directors to find out the reasons for this inability. The following are some of the reasons the interviewers reported.

– Most of the peasant members were not ‘invited’ regularly to attend board meetings, called by the dominant figures. Instead, they were called on once a month or once every several months in order to sign or stamp some of the council reports.

– As a result of their poverty, most of the peasants are thoroughly preoccupied with subsistence. For them there is no incentive to go to the Association except at times when fertilizer or insecticides are to be distributed.

– A control function is still more untenable for the poor peasant board members inasmuch as most of them either rent from or work for some of the rich peasants and medium landowners and therefore are inclined to their interests.55

These grounds for the poor peasants’ powerlessness vis-avis the rich peasants and capitalist farmers did not seem convincing (or understandable) to President Nasser. Complaining about the poor peasants’ ‘apathy’ and ‘despondency,’ he further relied on (and extended) the bureaucratic-administrative apparatus of the cooperatives to curb the corruption! Much as if this apparatus had not been the accomplice of the corrupt landlords, as well as the source of the corruption. And so, the corruption continued while the mass of poor and small peasants stood by helplessly observing the big landowners’ usurpation of their rights.

But a brief look at the agricultural policies–credit policy, investment policy, crop consolidation policy, pricing and marketing policies, etc.– which were either designed or signed by President Nasser and his colleagues will reveal that his blaming the peasants’ ‘apathy’ for the failure of the ‘cooperative revolution’ is much similar to blaming the victim for the misdeed of the perpetrator. For, as we shall see in the next few pages, it was because of these policies that the rich peasants and capitalist farmers were able to preempt the services of the cooperative system and subvert the whole system to their own use.

 

d. Agricultural Policies: Breeding Grounds for Bureaucratic Blunders and Abuses 

 

Credit Policy.  According to the Charter of National Action , the agricultural credit policy was designed to “protect the farmer and liberate him from the usurers and middlemen who take the largest part of the fruit of his labor” (1962, p. 55). To this end, the Agricultural Bank Credit was authorized to borrow money from the Central Bank, as well as to issue its own bonds, in order to finance the operations of the agricultural cooperatives. Until 1962, this was largely limited to the agrarian reform estates, and hence to the Agrarian Reform cooperatives. As all farmers had to become members of the cooperatives from 1962 onward,the government automatically became the sole supplier of the entire rural credit.

The government’s extremely cheap, and at times absolutely interest-free, agricultural credit policy was devoid of both economic and social logics. Economically, interest-free loans lead to an inefficient allocation of resources, e.g., encouraging the purchase of consumer goods at the expense of purchasing agricultural inputs. As Robert Mabro put it, “Fiscal instrument rather than the price of credit should be used to improve the distribution of income (e.g., a reduction in land taxes to benefit small landowners). The fiscal instrument is available, since land taxes are levied on Egyptian agriculture.”56

Socially, these loans “are difficult to justify on distributional grounds when they are extended to medium and big landowners. There is…evidence suggesting that these groups receive a disproportionate share of total credit.57  Table 14 shows the extent of this disproportionality. It shows that, for example, while the average loan per owner for the group of less-than-five-feddan owners is $29.9, it is $110.5 for the group of 5-25 feddan owners and $598.0 for the group of more-than-twenty-five-feddan owners.

 

TABLE 14.  Accumulated agricultural debts (as of Dec. 1966)

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Size of                        Debt                                        Debters                      Average

holding          (million           %                        (000s)          %                     debt/person

(feddans)            $s)                                                                              ($s)

____________________________________________________________________

Less

than 5             43.0      45                  1,470                80                    29.9

 

5-25                            38.4      41                     351    19                  110.5

 

More

than 25                      13.2      14                       22       1                  598.0

 

Total                           94.6    100                 1,843              100                   50.6

____________________________________________________________________

Source:  Sami Abu el-Ezz and Ahmed Abu el-Ghar, Cooperative Financing, Cairo, 1971, pp. 340-41

 

The evidence presented in this table was confirmed by the official accounts. A 1967 article by Ali Sabry treated in detail those abuses of the credit system. Stressing the idealism of President Nasser in formulating the interest-free credit program as a means of stimulating production in the agricultural field, Sabry painted a rather dismal portrait of the results of the experiment Sabry contended that the majority of outstanding loans are due from the major landowners, whose delinquency record he contrasted with the general tendency of the small proprietors to pay back their debt on time. Of the large landowners Sabry reported:

 

Their greed rose to such a point that certain of them instead of paying back the money, invested it in commercial enterprises. Instead of honoring their previous commitments . . . they then requested further funds. Due to the weakness of certain elements or to their own powerful personal influence, they were able to obtain them.58

 

The majority of the peasants received no credit at all. As a result of this monopolization of credit by the large landowners, the poorer peasants were forced to resort to that traditional exploiter, the village money lender. An earlier study (in 1963) conducted by the weekly Rose Al-Yusuf  uncovered examples of the peasants paying as much as 10 percent a week interest on such loans.59

In addition to credit, the cooperatives also had the monopoly of providing other agricultural inputs–fertilizer, seeds, technical advice and equipment, pesticides, etc. Some of the regulations governing the provision of these inputs, as well as the eligibility criteria to receive them, explicitly favored medium and large owners. For example, in the 1960s, only those owning at least five work animals could participate in government and animal insurance schemes, and therefore qualify for 150 Kg of forage at state-subsidized prices. Only those with more than fifteen feddans could acquire selected seeds, while farmers with less than five feddans were prohibited from planting highly profitable fruit trees unless they could get enough of their small neighbors to cooperate with them in a joint venture.60

 

Crop Consolidation Policy.  An interesting example of the bureaucratic miscalculations is related to the policy of land consolidation and uniform crop rotation. Although in principle, this is a very sound policy, especially from the viewpoint of the benefits of the economies of scale, the circumstances under which it was applied in Egypt made the project beneficial only to rich peasants and capitalist farmers. For the consolidation of crop and its uniform triennial rotation meant that the plots of poor and small peasants would inevitably fall within a single block and they would be obliged to grow a single crop [each year] . For example, if, according to the crop rotation, their plot falls in the cotton block, they will have to buy their need of wheat and corn and clover for their animals on the open market. Here, the large owners have an advantageous position: their holdings are large enough to enable them to diversify their production and have a surplus to sell. A study of ten villages has shown that this situation has resulted in the creation of an active black market, especially in cereals, rice and fodder, where large landowners sold their surplus to small farmers at exorbitant prices. Moreover, the practice of small farmers hiring land for specific seasons to grow a specific crop at rents much higher than the official rate became widespread. It is not therefore surprising that the system was strongly resisted by small farmers.61

 

Marketing and Pricing Policy.  After 1961. the government effectively controlled both the marketing of major agricultural outputs and the supplying of all its inputs. In this way the government was able to extract the agricultural surplus in the form of disguised taxation. For while it purchased peasants’ surplus output at relatively lower prices, it sold the their input needs at relatively higher prices. For example, while in the early 1960s the government imported the fertilizers at the price of $34.5-36.8 per ton, it charged the farmers $57.,5 per ton. Or while in 1970 the government purchased the cotton from the farmers at $33.4 per kantar, it exported it at $48.o per kantar.62

Since the policy of “compulsory prices” was a selective one, i.e., it did not apply to all agricultural crops, it resulted in a significant shift away from the production of crops subject to “compulsory pricing”–primarily wheat, cotton, rice, onions, and the like–to crops exempted from it–vegetables, fruits, full-season clover, milk and meat produces. But, as noted earlier, according to the cooperative laws, only the owners of more than five work animals were eligible to participate in animal insurance schemes and therefore receive forage for their animals at state-subsidized prices, or plant highly profitable fruit trees and orchards. Thus, the burden of the “compulsory pricing” policy fell on the shoulders of the owners of less than five feddans, since the large owners soon changed the pattern of their production and thereby evaded the “compulsory pricing”.

In an attempt to close this loophole, the government assigned the farmers quotas of the crops subject to “compulsory pricing”. But this was not a serious barrier to the big owners’ switching their holdings to more profitable crops. They were able to easily fulfil their quotas by either earmarking a fraction of their holdings to the cultivation of the required quotas, or buy their quota requirements on the market and allot their entire holdings to more profitable crops. A comparison between the net returns of the two groups of crops–the group subject to price control and the control-free group–explains why the large owners frequently adopted the latter option. Based on a World Bank study, these two sets of returns are shown in Table 15.

 

TABLE 15.  Net return per feddan (comparable time periods & units of measurement)

____________________________________________________________________

(1)  Crops subject to “compulsory pricing” (2)  Control-free crops
Cotton54.5 Wheat29.3 Rice25.4 Grapes200.0 Tomatoes175.0 Watermelon100.0

____________________________________________________________________

Source:  IBRD, Egyptian Agricultural Development:  Problems, Constraints and Alternatives, 1976, pp. 32-3.

 

In an article of the June 1966 issue of Al-Taliaa , Abbas Kesiba described the impact of the government’s marketing and pricing policies on various layers of the peasantry in the following words.

 

These policies are more favorable to rich farmers than to the poor. The last point seems to be confirmed also by the resistance of small peasants to cooperative marketing in general and the compulsory deliveries system in particular…After delivering their quotas to the cooperatives, small farmers usually have very little left of their crops, and thus they have to buy their needs of grain and fodder for their animals on the open market where larger farmers dispose of their surplus at black market prices.63

 

From the viewpoint of the government’s overall national development plan, the agrarian pricing policy represents one more example of the Free Officers’ haphazard, contradictory, self-defeating development policies. Mindful of the old Egyptian saying that “if agriculture flags, Egypt fall,” they soon after the taking of the power embarked on the land reform program and allocated a significant portion of the national resources to the development of the agricultural sector. But their pricing and marketing policies turned the industry-agriculture terms of trade against the agricultural sector, and thus adversely affected their development objectives. Alan Richards describes these contradictory policies in the following terms:

 

These price policies and the resulting crop allocations have had a significantly detrimental effect on the national economy. Insofar as cotton, the principal export crop, has been reduced, Egypt has lost scarce foreign exchange. The reduction in wheat production and the necessity to keep wheat consumption more or less stable, since it is the principal cereal of the urban classes, contributed to the increasing burden of wheat imports. Some economists have estimated the losses of contradictory system of controlling some but not all crops to be roughly the equivalent of the balance of payment deficit in the 1960s. These problems have intensified under Sadat.64

 

Investment Policies. The Free Officers’ agricultural investment policies also suffered from bureaucratic miscalculations and blunders. A comprehensive study of these policies is, of course, beyond the scope of this work. Here we only cite two instances of these policies, which, according to all existing evidence, were indicative of a general pattern. The two instances in point were (a) the emphasis on land reclamation, and (b) the relative neglect of drainage. In his study of investment policies regarding these two alternative projects, Alan Richards points out that although costs per reclaimed feddan have been estimated at $1,104-2,300 (official government estimates are about $380.0) in contrast to the per feddan cost of tile drainage of roughly $106-115, the government gave priority to the reclaimed project at the expense of the drainage project. To this end, Richards continues:

 

Heavy investments (some $355.0 million out of a total agricultural sector investment of $479.0 million in the 1960-65 five-year plan) were allocated to reclamation schemes such as Tahrir  province on the western edge of the Delta. The results have been disappointing…Returns have been limited by low crop yields, in return, the result of neglect of drainage and poor soil structure. Unlike the arid US Southwest or the Negev, ‘when you talk about deserts in Egypt, you are talking about blowing sand’. The total area actually reclaimed is disputed, but by 1972 ‘only 518,000 feddans were being cultivated,’ of which only 345,000 feddans were ‘marginally productive’. This should be contrasted with the estimate of between 20,000 and 40,000 feddans of high quality lands which are lost every year to urban encroachment, roads, military bases and the like.65

 

Richards then asks, “why such egregious blunders were made?” His answer is quite instructive:

 

At one level, the explanation is simple: miscalculation. For instance, it was thought that the Aswan Dam would cause the water table to fall; it was believed that the new land would be as fertile as the old, etc. But these are only part of the story…Such failures were at least in part the result of the nature of the regime, its social base, and its bureaucratic/military mentality…Villagers in the old lands are divided by class, clan and family antagonisms. They would have to be induced to cooperate with one another to install drainage, rationalize water use, and improve public sanitation. This regime was highly unlikely to confront willingly such complex and intractable social problems of production on the old lands. Nor was it likely to provide decentralized incentive mechanisms to induce farmers to install their own field drains. The engineers of the bureaucracy naturally tended to think of the fundamentally social problems of Egyptian agriculture as essentially technical ones. In a centralized government structure, highly centralized responses were most attractive. New land could be planned from the top down; the labor was to be imported; one did not have to deal with a pr-existing and complex balance of local power. In the face of serious social and technical constraints, there was a great temptation to deny the existence of such constraints. This ‘sky is the limit’ approach was reinforced by the symbolism of the High Dam, which came to represent Egyptian nationalism and resistance to foreign domination.66

 

5. SUMMARY AND CONCLUSION 

Perhaps the most noticeable effect of the Free Officers’ agrarian reform  was the elimination of the thin top layer of large landowners, owners of more than 50 feddans who, while constituting only 0.4 percent of landowners, possessed some 35.2 percent of all the cultivable land. Although this reduced the land-based social and political power in the countryside, it did not eliminate that power; it was a modification, not elimination. For in place of this traditional top layer of landed aristocracy soon emerged a new, modern top layer of rich peasants and capitalist farmers who enjoyed the same class privileges and sociopolitical influence as did the pre-reform big landlords. This new top group, owners of 20-50 feddans, together with the group of the middle-and upper-middle peasantry, the so-called kulaks, “control most of the productive assets in Egyptian agriculture (60% of the farm area and about 80-90 percent of the stock of farm machinery), and they tend to submerge their objective differences and make common cause against the interests of the rural poor”.67

As a result of the reform program, some 12.5 percent (817,000 feddans) of all land under cultivation was distributed among 9 percent (341,982 families) of the rural population in parcels of less than 5 feddans. Although this slightly reduced the degree of inequality of landownership, the fact remains that by the end of the reform program 45 percent of the agricultural population remained landless, that 89.8 percent of all landowners owned less than the officially defined subsistence farm area of three feddans, that 95 percent of the 341,982 families who received land fell into the category of below the subsistence level farmers, and that only 5 percent (17,100 families) of land recipients received plots of 3-5 feddans. This is why from the mid-1960s onward, a new, post-reform process of ‘depeasantization’/’proletarianization’ began in Egypt as the poor peasants felt the painful necessity to untie themselves from their below-the-subsistence parcels of land in pursuit of other sources of survival, and began to sell, to lease out, or even to abandon those tiny parcels. And this is why the number of the landless peasants, which had declined in the first decade of the land reform, once again began to rise.

Despite the official, legislative improvements in the terms of wages and rents in favor of wage earners and landless peasants, and the promise or hope that this would lead to a pattern of income distribution different than that of land distribution, the income effects of the reform program essentially mirrored the ownership effects of the program. This meant (a) a significant drop or a significant transformation in the income of the top 0.4 percent of the landowners, owners of more than fifty feddans, as their landownership became limited to fifty feddans; (b) a significant improvement in the income of the owners of 5-50 feddans, who constituted 5.2 percent of all landowners and included medium, rich, and capitalist farmers; (c) a slight or no improvement in the income of the owners of 3-5 feddans, small peasants, who constituted 4.7 percent of all owners; (d) no improvement in the income of the owners of less than three feddans, poor peasants, who constituted 89.8 percent of all owners; and (e) a temporary improvement in the income of the landless, wage earners and tenant peasants, about 45 percent of the agricultural population, and the reversal of this improving trend from the mid-1960s onward.

In short, the effects of the reform program–ownership effects, income effects, and consumption effects– on the rural poor were negligible. “The distribution of consumption expenditure among rural households was more unequal in 1974/ 75 than during the 1950s. Real wages, the main source of income for the landless, shows almost no trend over the period 1938/ 75, and have actually deteriorated in the early 1970s…By the mid 1970s, 44 percent of the rural household population (5.8 million people) were below the poverty line.”68

After 1967, President Nasser began to realize and admit the disappointing results of the reform program for the overwhelming majority of the rural population. But he never realized or acknowledged the crucial reasons for this failure. He put the entire blame on factors external to the agrarian reform program and agrarian policies: “remnants of feudalism,” “greedy capitalist farmers,” “corrupt officials,” “counter-revolutionary plots,” and the like.  He also blamed the mass of small and poor peasants–perhaps out of frustration and disappointment, for their “apathy” and “unenthusiasm” toward his reform policies.

But our survey of the agrarian reform program and the policies that were implemented through this program revealed that the decisive reasons for the disappointing results of the land reform for the mass of the poor and landless peasants were internal to this program and these policies. It showed how the government’s credit, pricing, marketing, crop consolidation, and investment policies favored the rich peasants and capitalist farmers more than they did the poor and small peasants, and how in the majority of the cases, these policies adversely affected the poor peasants. The survey also indicated that where these policies did not directly favor the large owners, they were able to manipulate these policies and subvert them to their benefit. Indeed, it shows that the large owners were able to subvert the entire system of the agrarian cooperatives to their use.

the study further revealed that this was possible due to (a) the large owners’ socio-economic power; (b) the government’s reliance on an army of bureau-technocrats who were either willingly inclined to the interests of the large owners, or susceptible to their neutralizing and cooptive schemes; and thus, (c) the disappointment and disillusionment of the mass of the poor and small peasants who after more than 15 years of rallying behind the Free Officers’ various mobilization campaigns–“Liberation Rallies,” “National Unity” rallies, “Arab Socialist Union” rallies, etc.–and ending up with broken promises, ran out of steam and stood by hopelessly while witnessing the plunder of their rights by the large owners.