Land Reforms in Nepal
Jeetendra P. Aryal and Stein T. Holden
Department of Economics and Resource Management
Norwegian University of Life Sciences (UMB)
P. O. Box 5003, N-1432 Ås, Norway
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Introduction: Land Reform Act of 1964
First, comprehensive land reform programme in
Nepal
The Land Reform Act of 1964 has been amended
a number of times.
Objectives of Land Reform 1964:
– Ensure a fair share of the production to the
cultivators by putting an end to exploitation
– Encourage labor and capital to shift from
agriculture to other sectors
www.umb.no 2
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Main Features of Land Reform 1964
Abolition of intermediaries collecting taxes (called
”Zamindari System” in Nepal)
Imposition of ceilings on land ownership:
– 17 ha in the Terai
– 4.1 ha in the hills and
– 2.67 ha in Kathmandu valley
Imposition of ceiling of tenancy holdings
– 2.67 ha in the Terai
– 1.51 ha in the hills and
– 1.02 ha in Kathmandu valley
www.umb.no 3
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Main Features of Land Reform 1964 (contd.)
Redistribution of the surplus land (land acquired
after the imposition of the ceilings) to
land-poor/landless farmers
Security of tenancy rights
– Cannot evict tenant without proper reasons
– Later on, interpreted as: registered tenants can
claim ownership rights on 25% of rented land
(land-to-the-tiller)
Fixing of rent no more than 50% of production
Abolition of sub-tenancies
A compulsory saving program to provide an
alternative source of credit
www.umb.no 4
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Implementation of Land Reform 1964
Longer time to implement programme
– Cadastral survey
– Identification of tenants
– Distribution of provisional certificates of tenancy
Land ceilings imposed in 3 phases
– 1st phase: 16 districts in 1964
– 2nd phase: 25 districts in 1965
– 3rd phase: 34 districts in 1966
www.umb.no 5
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Achievements of Land Reform 1964
Successful in abolishing intermediaries collecting
taxes
Granted tenancy certificates to 300,000 tillers
Acquire nearly 31000 ha surplus land (land
obtained by imposing ceiling on land holding)-
nearly 2% of total agricultural land.
www.umb.no 6
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Weaknesses of Land Reform 1964
Due to weak implementation,
– large land owners got time to sell (or redistribute
among close relatives) their land above ceiling
– Many landlords evicted tenants
Dual ownership of rented land: As tenants can claim
ownership rights to 25% of the rented land, it
created dual ownership of rented land by landlord
and tenant.
– Increased conflicts between landlords and formal
tenants
– Increased informal short-term tenancy as landlords
fear to rent out land using written contract
www.umb.no 7
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Table 1 Proportion of Tenants and Area under Tenancy (in percentage)
Description Year
1961 1971 1981 1991 2001
Tenant households 40.4 19.0 9.5 15.9 12.2
Area under tenancy 25.5 15.9 6.2 8.5 8.7
Source: Ministry of Land Reform and Management (2006)
www.umb.no 8
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Consequences of Land Reform 1964
Weaker property rights of landlord on rented out
land
More focus on benefit of tenants through
expropriation of land in tenancy and access in
ownership rather than on rental regulations to
facilitate land rental markets and enhance
productivity.
Tenants may not return rented lands even after
the expiration of contracts but claim the
ownership rights to the land.
Increased conflicts between landlords and tenants
www.umb.no 9
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Consequences of Land Reform 1964
Distorted land rental markets
Create a loss-loss situation for tenants (Bhandari,
2006)
– Do not get enough land from redistribution
(because only 2 % land was acquired by imposing
ceiling and that was distributed among land-poor
tenants)
– Reduced access to land through land rental
market due to insecurity for landlords.
www.umb.no 10
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Amendment to the Land Act of 1964 in 1996
Main objectives:
Abolish traditional tenancy by partitioning
tenanted land.
Abolish dual ownership of rented land
Main features:
Equally divide land under tenancy between
landlord and tenant (Provision that tenant can
claim ownership rights to 50% of tenanted land).
Receive 50% ownership rights if the tenant tills
the land for 3 consecutive years.
www.umb.no 11
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Amendment to the Land Act of 1964 in 1996
Lower ceiling of ownership holding of land
– 3 ha in the Terai
– 2 ha in the Hills
– 4 ha in the Mountains
– 1 ha in the Kathmandu valley and all other urban
areas
– 0.5 ha in urban areas of Kathmandu valley
Compensation to land owners whose land is above
the new ceilings
www.umb.no 12
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Weaknesses
Not implemented yet
Aggravated the problem by increasing the share
of the rented land that the tenants can claim.
Increasing tenure insecurity for landlords
Distorted land rental markets
www.umb.no 13
NORWEGIAN UNIVERSITY OF LIFE SCIENCES
Land Reforms in Nepal
Land Reform in Nepal: the Present Context
After the Maoist war: Land reform “a scientific
land reform” a top agenda for all political parties
in Nepal
Not clear on what constitutes ” a scientific land
reform”
Maoist favors land-to-the-tiller policy again by
capturing land from landlords without any
compensation; other parties oppose it.
www.umb.no 14
