After eight months of political bickering, Peru last week had its first
major land-reform program. The sensible new law is a patient compromise
of three different bills introduced by President Fernando Belaunde Terry
and two major opposition parties.Rather than give the government unlimited expropriation powers, the
legislation scrupulously exempts the large, highly mechanized coastal
sugar holdings and efficiently run highland livestock ranches that are
vital to Peru's economy. Instead, it aims mainly at haciendas of 3,000
acres and up that do not pay their way, are either uncultivated or
marginally productive under present ownership. The landholders—whether
private citizens, companies or the Roman Catholic Church—will be paid
fair market value for their expropriated land in cash and 18-to
22-year bonds bearing 4% to 6% tax-free interest; livestock, buildings
and equipment will be paid for in cash.By utilizing state-owned land along with the expropriated acres,
President Belaunde hopes to eventually settle 1,000,000 landless
peasants on their own farms, giving up to 32 acres to a family in rich
coastal areas, up to 75 acres in the highlands. If the program is
carried out successfully, the change will be dramatic. Most of the
country's arable land has been concentrated in the hands of a few
wealthy hacienda owners ever since colonial days; the peasants either
worked as sharecroppers or scratched a bare living out of their own
tiny plots, often no larger than a single furrow. Today a peasant's
life expectancy is only 32 years, and his income is about $110
annually. To get maximum effect from the new law, which goes into
effect next month, the government set up separate agencies offering
credit and technical assistance to the new landowners.
