A Sensible Land-Reform Law

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.

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