The Effects Of 1340 Land Reforms On The Agricultural Sector Of Iran; A Counterfactual Argument On The Role Of Cooperatives In Land Reforms

Studying land reforms in Iran has proven to be a very hard task as there are only a few academic documents to address the issue properly. The rest of the documents are either biased (politically) towards the event or in some cases offer a very limited view of those policies depending on what point of view the author advocates.
Most of the writings that were published before the revolution were merely words of praise for the glorious achievements of the Shah of Iran in the face of difficulties or the U.S. interpretation of the reform schemes. On the other hand the post-revolution writings are filled with accounts of government corruption in Iran during the reign of the toppled King of Iran, and his dubious plans to annihilate religious beliefs in rural areas by means of modernization and industrialization and the great achievements Iran has had in its agriculture sector after the Islamic revolution. Consequently, making the decision whether a certain account of the claimed history is worth mentioning in the essay was a really difficult task as there is always a possibility of being misled by all the biased information given in the resources.
To gain a better understanding of the issue it was necessary to find the common claims provided in these different resources and bring them together in an attempt to get a better picture of the probable truth behind all those claims. An endeavor has been made to keep the current essay as objective as possible.
Defining Land Reform

Land reform has been defined in different manners, some definitions will be mentioned here:
1. Land Reform: a process in which land is given or sold at low prices to ordinary people, so that it is not owned only by a few rich people (McMillan n.d.).
2. Land Reform is a purposive change in the way in which agricultural land is held or owned, the methods of cultivation that are employed, or the relation of agriculture to the rest of economy. Reforms such as these may be proclaimed by a government, by interested groups, or by revolution (Britanica n.d.).
The similar point in these two definitions is that land reform refers to a change in the system of land ownership. This change was accompanied by many obstacles in Iran but was eventually implemented under a series of socio-political reforms under the name of the 'White Revolution' of Iran (and sometimes hailed as the 'revolution of the people and the king'). The impact these reforms have had on Iran's agriculture sector has been a matter of debate for years. Some claim that they in fact affected the lives of the Iranian farmers by encouraging them to invest on their own lands, but others believe that the peasant class didn't have any financial asset to invest on land and that by itself caused the reforms to be led in the wrong direction. In the following pages the question whether the reforms had a positive or a negative impact on the lives of farmers and the agriculture sector of Iran will be discussed together with a counterfactual argument over the role cooperatives could play in a better implementation of the reforms.
The 'White Revolution of Iran'

Despite its vast deserts and inadequate rain that makes water a scarcity; Iran is a land that has traditionally been a major agricultural haven. The four essential elements related to agriculture (Soil, Water, Wind and sun light) have been frequently mentioned in Iran's historical literature which indicates the importance of agriculture to the Iranian public.
With the evolution of the farming technology in the world, new horizons have been opened towards the production of agricultural products in the face of an ever rising population that is in need of new food resources (Hejrati Winter 2011, 123), but there still remained a very important obstacle on Iran's way to developing its agriculture sector; namely, the ownership of land (Hejrati Winter 2011, 123). For centuries Iran's agriculture sector was dominated by land lords who would either rent their land to farmers or employ low wage workers who were paid on a daily basis to farm on their behalf, even though the contribution of these wage farmers was not much, they still could manage to live their lives on trading their extra products for cash (Sirous 2010, No. 124, 15). Some villages are still run in this manner, but after the implementation of land reforms most farmers now work on their own land.
Land reforms were first mentioned during the reign of Reza Shah Pahlavi but were never fully implemented. A couple of villages were distributed between the farmers in Systan province but the process didn't last long. Prime Minister Muhammad Mosaddegh (an Iranian Patriotic Politician) issued an order that obliged the landlords to give up on 10 percent of their land in favor of their farmers during his term in office. Ten percent of the property released would be given to the farmers while another ten percent would be spent on development projects (Hejrati Winter 2011, 129). His aim was to increase the earnings of the farmers who worked on the land by dedicating a portion of the landlords profits to them but due to the coup that was staged against him, his reforms were only partially implemented (Sirous 2010, No. 124, 15). It wasn't until the 60's that the then Iranian king (Muhammad Reza Pahlavi) led a social revolution in Iran aiming at a series of fundamental reforms especially in the agriculture sector of Iran. The reforms were applied under the name of 'the White Revolution of Iran' or 'the Revolution of the People and the King' as some scholars used to call it at that time. Years earlier the advisors to the King had started planning for what they believed to be a total modernization and industrialization of Iran. They had based their plans on the assumption that Iran is not in fact an agriculture friendly country (Sirous 2010, No. 124, 16) because of its geographic situation and its easy access to raw materials needed for industrialization. Nevertheless, the 'law on land reforms' seems to have been adopted contrary to these contentions.
The preface to the 'law on land reforms' has stated the objective behind the adoption and implementation of land reforms in Iran as 'in accordance with the widespread and eventual social and industrial evolutions it is necessary for the establishment of economic foundations and the wellbeing of the citizens of this country to have a great evolution in agriculture as well. To this extreme, the bill on land reforms is submitted to the National Council with two objectives in mind: first, to increase production and second, to provide for justice. The implementation of the land reforms will lead to the distribution of agricultural land, a more efficient use of the country's water and soil resources, the usage of more modern methods in agriculture, an increase in the percentage of agricultural productivity in agricultural lands, and a fundamental reform in the relations between the land lords and farmers.' (Khoyi n.d., 60-61)
Reviewing the history of Iran at that stage of time makes one realize that there was more to the reforms than a mere economic agenda. The reforms in the ownership regime of lands were implemented with different political, economic and social aspirations. It's unfortunate that most studies made on land reforms seem to be biased in favor of the past regime or the present. This has made a neutral examination of the case at hand, a very difficult task. Nevertheless, scholars have generally counted three aspirations in this regard: 'a) removing undue social and political power from the landlord class, b) improving the social and economic status of the peasant class, and c) achieving increased agricultural production by encouraging increased farm level capital and labor inputs.' (A.I.D Second Edition, 1)
The first political ambition was served by annihilating the excessive ownership of land by the great land lords who had capitalized power in the country. The power of this group was not a new phenomenon in Iran. Historically, they had always constituted a major center of power in the Persian Empire. Their power was seen as an expansion of the powers of the king all around the country, yet their existence constituted an obstacle on the way to modernization, as their investments were traditionally made in the establishment of villages and traditional agricultural activities. The rise of Prime Minister Mohammad Mosaddegh as an appraised nationalist figure who had secured himself a strong support among the people and the coup implemented by the supporters of the Shah and the American government had already shown that the traditional dependency of the Royal family was inefficient in securing proper amount of support for the royal family, therefore it was of utmost importance for the Shah to find himself new allies. A simple calculation led to the Shah's decision to give up on the support of the Great Land Lords by annihilating the feudal system through land reforms, and gain the support of more than ten million farmers in return (Khoyi n.d., 62). Had the king implemented the land reforms efficiently, there would be a great chance for him to neutralize any kind of uprisings against him in the future. Whether the farmers played the role of revolutionary forces or the protectors of the regime depended, highly, on how the government managed to deal with their economic needs. What seems to have been important to the villagers at that time had been their ownership of land, the situation of renteerships, the creation of jobs, the clearance of taxes and the management of prices (Khoyi n.d., 62).
The second motivation mentioned above seems to have been, mainly, of a rhetorical nature. The implementation of land reforms did not necessarily lead to the betterment of the lives of villagers in Iran. In fact, in most cases, due to the inadequacy of resources in the hand of the new petit land owners, they were forced to move to big cities, thus not only did the land reforms not improve the quality of the lives of the farmers, but also it changed the shape of Iranian villages while crippling the agriculture sector of Iran. One of the most important shifts after the implementation of land reforms was the increasing dependence of villages on big cities. Villages that lacked access to services like edible water and electricity had now been granted these services. A set of reforms were done in terms of the village's access to schools, medical centers, telecommunication centers, and cooperatives. These centers were built close to the entrances to these villages and next to the newly built roads. This had caused new constructions to be made next to these newly built centers instead of the traditional location of construction in villages, namely, the water sources (Hojjat Summer 2007, 80).
The third motivation was never fulfilled. Having realized the incompetitiveness of agriculture, most foreign and domestic investors preferred to invest in the emerging government supported industries.

Social reforms faced two obstacles in Iran, on the one hand the grand feudal class was the greatest opposition to the shift of social structures in Iran due to the fact that their interest lied in the protection of the status quo and on the other hand the high dependence of Iran's economy on oil exports had weakened its position against its foreign counterparts while leading to the bankruptcy of national industries. Foreign investment had increased together with domestic investment after the coup but the traditional position of the feudal class, the low purchasing power of the people and the limited domestic market had limited the scope of investments (Khoyi n.d., 64).
It is also necessary to realize that the implementation of these reforms took place after the election of John F. Kennedy as the United States president. The shift of policies in the US that happened after this election had a huge impact on Shahs decision to implement a series of socio-political reforms in Iran, including the land reform. In fact it is even suggested that if it weren't because of the pressures imposed on the Shah by the US president he wouldn't take on such a risky (due to the power of the feudal class at the time) task (Ezzatpour Fall 2011, 167).
By the time the implementation of the reforms was finished 58 percent of Iranian farmers had acquired land for themselves which could be considered a major success for the government if unexpected problems like the impossibility of using agricultural machinery on the divided land (due to the size of these divided lands) had not emerged.
Contrary to those who have hailed land reforms as an effort to establish the foundations of a more modern and more efficient agriculture sector, a group of scholars have suggested that the land reform was aiming at the very heart of the agriculture sector of Iran. They claim that a blind ambition for modernization and industrialization made the government to take such measures, while it was completely aware of the catastrophic consequences that these policies could have for the agriculture sector. The result was that a huge number of people who were living in rural areas immigrated to big cities in hope for a better life (as their farming couldn't cover their expenses any more), thus the country faced a catastrophic imbalance between the population of the rural producers of agricultural products and the urban consumers (Sirous 2010, No. 124, 16). The reason behind this population movement was that the former landlords who had invested a considerable amount of money on the agriculture sector didn't feel obliged to invest in that sector anymore and moved their assets to the cities and the newly established factories, as a result those farmers who now had the luxury to own their own land had no financial asset to rely on (Sirous 2010, No. 124, 16). There is also a claim that even in the absence of investments by landlords, the creation of farmer peasant cooperatives, supplying enough credits for the farmers, and extending enough genetic stocks and technologies would keep the balance and help improve the lives of the farmers (A.I.D Second Edition, 1) which is indeed the subject of this term paper.
This new urban population had lived in rural areas all their lives and had no skills but farming on land, therefore they couldn't possibly find jobs in modern factories, except in low skill jobs where they would have to work for an excessively low wage. Considering the fact that Iran's modern industries were indeed in their infancy period, the number of jobs provided by these industries could not suffice the emerging population of the unemployed in the country. The impoverished population had no other choice but live in the slums emerging outside the cities. Their basic human rights were neglected and they were seen as third class citizens, burdens on the shoulder of the government and the working urban population.
The reforms were claimed to be a major development in the agriculture sector of Iran but the fact that the attached lands on which farmers used to farm were now divided into many small lands on which the usage of farming machinery was almost impossible proved to be troublesome (Hejrati Winter 2011, 123). A group of MPs believed that 'land reform' doesn't necessarily mean that all farmers have to own their own lands. They proposed a system of huge cooperative institutions to manage the land for which farmers could work and earn a fixed salary, this proposal was put into effect in 1346 (Iranian Calendar) (Zahed Third Year, No. 11, 111). The problem with implementing this policy was that most farmers considered it as a threat to their ownership rights and believed that it could eventually lead to an increasing number of unemployed populations in their villages (Hejrati Winter 2011, 123), therefore the proposed system was never implemented completely.
The situation has, more or less, remained the same. Farmers use the same old techniques on their farms without feeling the urge to use modern machinery (even though in some areas the situation has changed due to the establishment of cooperative agricultural companies). The confusions caused by the implementation of land reforms has led the agriculture sector in Iran to decline from its position as a major source of exports in the 50's to a miniscule industry that endeavors for its own survival.

Land Reforms and Cooperatives
Before discussing the role of cooperatives in the planning and implementation of land reforms, it would be helpful to give a definition of cooperatives. In 1995, the International Cooperative Alliance (ICA) proposed the following definition for a cooperative:
'A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically controlled enterprise.' (Cooperative Development Institute n.d.)
The given definition is obviously in contrast with the mandatory nature of membership in Italian agricultural cooperatives the account of which shall be discussed comprehensively in the following pages (though the mandatory nature of membership has become annulled under the Italian law as well and voluntary membership has replaced the old regime).
As is obvious from the given definition, cooperatives have the advantage of managing the limited assets and experiences of farmers collectively. For the purposes of this term paper, a study of the role cooperatives played in the implementation of land reforms in Italy shall be made, and the same logic will be applied to the land reforms in Iran to recognize the possible consequences of the same policies on Iranian farmers and their villages.
Traditional Agriculture in Europe
As a general rule, agriculture in Europe had been dominated by family led agricultural workshops. Such agricultural systems suffer many different malfunctions, especially in terms of their capacity to compete with more modern market centered systems of agriculture (Mohammady Year Nine, No, 28, 49). The evolution of the agricultural industry and the use of machinery in the production of agricultural products have led to a major shift in this trend in the past couple of decades. The establishment of industrial plants related to the processing of agricultural products close to villages has led to major shifts in the systems of agriculture in European countries. The majority of these agriculture related industries and the farms planted in these areas are managed by cooperatives as they provide for a more efficient use of sources. This trend can especially be seen in Denmark and the Netherlands (Mohammady Year Nine, No, 28, 50). Among the many different systems through which this process of adding value to agricultural products can be made, the cooperative system seems to be of higher efficiency.

Land Reforms in Italy
There seem to have been many similarities between the implementation of land reforms in Italy and Iran. Just like Iran, Italy's land reforms of the 1950s were aimed at the annihilation of the feudal style ownership of land. The implemented reforms annihilated the ownership of an approximate amount of seventy five thousand hectares of land (Mohammady Year Nine, No, 28, 50). The acquired land had lacked access to necessary farming sources due to which agriculture was done in a primitive manner in these lands (Mohammady Year Nine, No, 28, 50). Similar to Iranian farmers, the Italian farmers lived, mainly, in blatant country sides and had to work as daily or seasonal workers for the great land lords (feudal). Due to the proper implementation of land reforms, these farmers gained their own share of land while a third of the newly acquired land was dedicated to the establishment of proper assets in villages (roads, schools, churches, farming water facilities, etc.). The new structure of land and the mechanization of agriculture through the adoption of laws making it mandatory for farmers to function under cooperatives led to a total shift in the quality of the life villagers enjoyed in Italy as it made the agricultural industry (sector) profitable and export oriented.
As mentioned above, the implementation of land reforms in Italy were subject to the condition that all farmers (and for that matter villagers) who had acquired land due to the reforms be, mandatorily, made members of related cooperatives through which all agricultural (and agriculture related) activities would be managed. Such imposition was due to the fact that the farmers who had acquired land through land reforms had no experience in managing agricultural assets and were most probably not capable of using agricultural sources properly (Mohammady Year Nine, No, 28, 51). Another reason for such an obligation could lie in the fact that it was only through such institutions that mechanized agriculture could be implemented as the cooperatives brought together the collective financial power of the farmers (as well as the facilities legally assigned to cooperatives).
Lessons from the successful implementation of land reforms in Italy through the establishment of cooperatives could help Iran with its own experience of land reforms. Cooperatives have evolved considerably in the last couple of decades.

A counterfactual argument on the role of cooperatives in the progression of land reforms in Iran
Agricultural regimes in Iran can be distinguished in three different categories (Safari Shali 167-168, 213):
1. Peasant led (traditional) regime of exploitation including the exploitation of land by petit land owners.
2. Cooperative regime, including different types of cooperatives involved in the different stages of agriculture.
3. Commercial exploitation regime, including huge farming corporations, etc.
Most agricultural activities are still adopted by the first and the third category mentioned above while it is contended in this paper that the implementation of agricultural activities through cooperatives would indeed increase the efficiency of agricultural production in Iran.
For the purposes of this argument it is necessary to shift the course of land reforms in Iran from one aimed, merely, at granting ownership of land to peasants without providing them with the necessary assets (through cooperatives I assume) to one complemented by strong cooperative institutions. The following advantages are presumed for the activities of cooperatives in the agriculture sector of Iran (Safari Shali 167-168, 217-218):
1. Increasing efficiency in the production of agricultural products and consequently an increase in exports not related to the oil industry.
2. The direct participation of farmers in the implementation of plans aimed at the further development of agriculture in Iran.
3. The collective management of agricultural activities through cooperatives that employ experts.
4. The integration of land and the possibility of farming on expanded pieces of land.
5. Collective use of agricultural technology and the development of mechanized farming.
6. The efficient use of water resources.
7. Decreasing the costs of production, hence increasing the income of the producers and the members of the cooperative.
8. The possibility of providing farmers with proper education on modern mechanized agriculture.
9. The possibility of acquiring low-return bank loans by the cooperative.
Having studied the model of Italy (as a model depicting a transformation from a system quite similar to that of Iran to a modern cooperative based system) and the assumed advantages of cooperatives, one could conclude that had the Iranian government implemented land reforms in a different manner through the establishment of cooperatives supported by the government the following changes would seem possible:
1. Similar to Italian cooperatives, cooperatives could provide for, at least, some of the development projects (roads, agriculture dependent industries, etc.) in villages together with the government, hence increase the quality of village life in Iran.
2. The cooperatives could provide the farmers with necessary financial assets to acquire modern machinery and manage the collective use of this machinery.
3. Government loans would be managed through cooperatives in line with the development programs composed by the government regarding the establishment of mechanized and profitable agriculture.
4. Agriculture related industries would be developed and managed by cooperatives, instead of poor peasants who couldn't possibly afford the establishment of such industrial plants.
5. The government could rely on the information given to it through cooperatives in regards of the proper methods to be used due to its familiarity with the typography of the region.
6. In terms of political consequences, the improvement of the quality of life of the villagers and farmers would lead to their contentness with the government, hence lessen the possibility of the participation of the villagers in a revolution against the Shah, which would lead to a constant development of the country in accordance with the proposed development plans by the Shah of Iran (hence, no revolution, no war and no political turmoil in the country).
7. The government could more securely focus its investment plans on agriculture related industries where the country had experience and proper sources (together with petrochemical industries), while carrying on step by step plans in establishing other modern industries. In this case, a portion of the revenues from the export of agricultural products could provide the necessary financial assets for the establishment of new industries, instead of over-reliance on oil exports.

The land reform that was implemented in Iran during the reign of Muhammad Reza Pahlavi (The last king of Iran) changed the distribution of wealth in the Iranian society drastically. Even though Iranian farmers had never enjoyed a luxurious life they still could cope with their expenses by selling their extra production as well as providing themselves and their families with the food they needed, but after the implementation of these reforms and due to the lack of a comprehensive development program many of them were forced to leave their villages and immigrate to big cities in search for a better life. This better life was indeed just a mirage as they didn't have enough skill to be employed in the emerging industrial factories nor did they have sufficient financial assets to venture on establishing a business for themselves.
Whatever the reason behind these reforms may have been, the fact that the reforms were implemented prematurely, without preparing proper financial and technical assets, made the efforts taken by the respective governments void. The establishment of cooperative agricultural institutions was never fully implemented, former landlords were not keen to invest on the agriculture sector as the newly formed industries seemed more profitable, the government had not prepared enough financial assets to support the new land owners in adopting modern machinery in their farming activities. Land was torn into small pieces in which the only possible method of farming was the old fashioned labor intensive method and even that was not a cost effective approach as the earnings from land were not sufficient for the farmers to hire more labor. All this resulted in a confusing situation that still remains the same in many parts of the country even though efforts have been made in the past few years to amend the situation by establishing government controlled cooperative companies to help farmers with acquiring the skills and the machinery they need.

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