SESB Term Paper

Land Market in Rural Bangladesh

Prepared For: Professor Muzaffer Ahmad Course Instructor SESB (G 304) Prepared By: Tanvir B. Anwar Roll no. 2 BBA 11th Batch Date of Submission: January 23, 2006 Institute of Business Administration University of Dhaka

TABLE OF CONTENTS INTRODUCTION _________________________________________________________ 1 RURAL LAND: BANGLADESH SCENARIO _________________________________________ 1 DYNAMICS OF LAND MARKET _______________________________________________ 3 An analytical framework for the underformation of the land market _______ 3 Survival strategy and participation in the land market ___________________ 4 Modes of financing of land purchases _________________________________ 5 Motivations for land sales ___________________________________________ 6 SOURCES OF FINANCE FOR LAND PURCHASES AND MOTIVATIONS FOR LAND SALES IN HASANPUR AND PURBALACH ___________________________________________________________ 8 Motivations for land sales in Hasanpur and Purbalach ____________________ 8 Sources of finance for land purchases in Hasanpur and Purbalach ________ 12 LAND REFORM POLICY ___________________________________________________ 14 Where can reforms yield greatest dividends? __________________________ 14 Reforming land administration: Priority areas _________________________ 15 Big solutions and Small solutions _________________________________ 17 ACTIVITY ON LAND MARKET - A CAVEAT _______________________________________ 17 CONCLUSION _________________________________________________________ 18 REFERENCES _________________________________________________________ 19 APPENDIX ___________________________________________________________ 20

INTRODUCTION In agrarian societies land is not only the main means for generating a livelihood but often also to accumulate wealth and transfer it between generations. The way in which land rights are assigned therefore determines households’ ability to produce their subsistence and generate marketable surplus, their social and economic status (and in many cases their collective identity), their incentive to exert non-observable effort and make investments, and often also their ability to access financial markets or to arrange for smoothing of consumption and income.

RURAL LAND: BANGLADESH SCENARIO The ownership of agricultural land remained one of the most difficult problems in the Bangladesh countryside. During British rule, elite large landowners, many of them absentee landowners, owned most of the land in East Bengal. After 1947 new laws abolished large estates and set limits on the amount of land one person could own. Many big Hindu landlords moved to India, but the wealthy Muslims who bought up their holdings became a new landlord elite. Legal ceilings on landownership resulted in little extra land for distribution to the poor because landlords arranged ways to vest ownership in the names of relatives. As a result, in most villages a few families controlled enough land to live comfortably and market a surplus for cash, while a large percentage of families had either no land or not enough to support themselves. Studies have suggested that in the mid-1980s the richest 10 percent of the village population controlled between 25 and 50 percent of the land, while the bottom 60 percent of the population controlled less than 25 percent. The disparities between the richest and poorest villagers appeared to be widening over time. The large number of landless or nearly landless peasants reduced the average landholding to only less than one hectare, down more than a third since 1971. Because Islamic inheritance law as practiced in Bangladesh calls for equal division of assets among all the sons, the large population increases led to increased fragmentation of landholdings and further impoverishment. Inheritance, purchase, and sale left the land of many families subdivided into a number of separate plots located in different areas of the village.

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The ready availability of large numbers of poor laborers and the fragmented character of many landholdings has perpetuated a labor- intensive style of agriculture and unequal tenancy relations. At least a third of the households in most villages rent land. The renting households range from those without any land of their own to those middle-level peasants who try to supplement the produce grown on their own land with income from produce grown on additional land. Sharecropping is the most common form of tenancy agreement. Traditional sharecropping arrangements heavily favored the landlord over the sharecropper, with a fifty-fifty split of the produce and the tenant providing all inputs of labor and fertilizer. After decades of rural agitation, the 1984 Land Reforms Ordinance finally established the rule of three shares--one-third of the produce for the owner, one-third for the sharecropper, and one-third split according to the costs of cultivation. Poor peasants who could not obtain land as tenants had to work as agricultural laborers or find nonagricultural jobs. The 1984 Agricultural Labor Ordinance set the minimum daily wage for agricultural labor at 3.28 kilograms of rice or its cash equivalent. Employers who broke this rule could be brought to village courts and forced to pay compensation twice the amount of back wages. However, because village courts were dominated by landowners, there was still little official redress for the grievances of agricultural laborers. In fact, the structure of rural land control kept a great deal of power in the hands of relatively small groups of landlords. Today, Bangladesh rural society is characterized by inequalities in landownership within a very narrow range. Over the time, tremendous demographic pressure has also reduced the per capita land owned. The top most holding group in Bangladesh also experienced a decline in their average quantity of landholding. At the same time, there has been the emergence of a huge, mass of marginal and landless rural households. The net result is growing differentiation with no significant structural change whereby large farm agriculture emerges to reap the benefits of economies of scale and efficient management. The country remains predominantly agrarian with the preponderance of small holdings.

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DYNAMICS OF LAND MARKET An analytical framework for the underformation of the land market The inertia in the land market cannot be understood in isolation from the nature of developments in other markets and the labor market in particular. Vast masses of peasantry involved in compulsive exchanges and lacking in alternative opportunities of livelihood in such countries get tied to tiny holdings resulting in the underformation of both labor and land market. Colonial intervention into the property rights structure of land gave rise to a multiplicity of tenurial rights and a hierarchy of sub-infeudation accompanied by a development of revenue farming. Land transfers took place after a prolonged process of distress. Poor peasants made frantic efforts to cling to land through various strategies like paying exorbitant rents, debt rolling and labor tying. Land market remained inert in the situation wherein the peasants persisted with their tiny holdings bidding high rents in the lease market but failing to accumulate enough money to enter into the land market to buy it as an asset. Contractual arrangements in the credit market very often are such that the peasants are allowed to continue as share croppers in the land which is mortgaged by the peasants for borrowing. The outcome is again both underformation of land and labor market. The risk of being a helpless landless laborer compels the petty owners to hold on to their land although the net income accruing to them is very little. On the contrary, the wage income as a casual labor could be higher for them, there is, thus, a tendency towards pauperization without necessarily culminating into proletarianisation. It is, therefore, not difficult to see why the participation in land market cannot be divorced from the totality of the activities of survival and hence its links with labor and credit market.

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Survival strategy and participation in the land market As rural households start losing land they become more and more survival conscious due to increased insecurity. As a result, they become desperate and cling to land. In these circumstances a household has two strategies: First, they may curtail consumption and hold on to the tiny patch of land. Second, they may seek off-farm employment to ward off the precarious condition of being landless. If, however, they sell land at the lower size of landownership, households sell land by smaller pieces. This is an indication of clinging to land as far as possible. On the other hand, the upper size group households may not find it unbearably painful to alienate a small proportion of their land. This could be for purposes like economic diversification, asset transformation or for sheer reasons of moving out from agriculture. The amount of land alienated may, therefore, be bigger than the amount of land sold by a small landowning household, for whom the loss of a small bit of land amounts to slipping out from the very foundation of their existence. This is why we witness so much of resilience on the part of small landowning households who would rather be pauperised than being proletarianised. The following table shows division wise owner, tenancy, landlessness and agricultural labor holding of rural zilas. Table 1: Land Holdings of Villages under different Districts Name of Division

Owner Holdings

Barisal Chittagong Dhaka Khulna Rajshahi Sylhet Bangladesh

897239 2180718 3331997 1469908 3174616 753069 11807547

Ownercumtenant holdings 331792 757325 1152699 537464 1235802 190995 4206077

Tenant holdings

Holdings with no own land

122985 236207 453939 166637 673348 161461 1814577

122986 236203 453939 166637 673346 161460 1814571

Source: The Bangladesh Census of Agriculture (rural), 1996, BBS.

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Holdings reporting cottage industry 54525 77874 139837 57454 112858 21678 464226

Agriculture labor households 469130 916481 1687659 850025 2090006 388129 6401430

Modes of financing of land purchases A study of buying and selling of land with respect to sources of finance for the purchases and motivations for selling brings to surface the impetus that activates the land market. Moreover, it helps us to understand the dynamics of changing land ownership patterns in rural areas. We are also able to grasp how the internal conditions of a rural economy (e.g. the extent of surplus accruing to rural households from agricultural activities) interact with external conditions (income earning opportunities in urban and other rural areas) in shaping the structure of a village economy as it stands today. Five major modes of finances are identified for purchase of land in the two villages. These are: Agricultural income Agricultural income refers to income earned through marketable surplus above the subsistence requirement of the household and productive consumption requirement of agricultural production. Part of this income could also be in the form of rent for leasing out agricultural land (in cash or in kind). At the same time, wage labor activities in agriculture could also be a part of agricultural income. Non-agricultural income Non-agricultural income source of finance refers to the mode of finance when the income used to purchase land has been obtained from profit of trading, savings made out of the salary earnings from different types of services, remittances received from urban sector or from foreign countries. When such non-agricultural income is used by the household for financing land purchase, it is perhaps true that the household is deriving its source of subsistence from owned or operated land. In many instances success of land accumulation through such mode presupposes a minimum cushioning effect of land based earning. However, if the non-agricultural earning is sizeable enough it may be possible to buy land with non-agricultural income alone. Borrowing Borrowing refers to as a source of finance by the respondents if the required cash for the purchase of land are mobilized by them through borrowing from money-lenders at usurious rates of interest, borrowing from friends and relatives

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with no interest, borrowing through mortgaging out land and borrowing from institutional sources like Krishi Bank (Agricultural Bank) or other financial institutions. Interim sales and purchases Interim land sales refer to a sale of land by the respondents if one or more plots of land is sold to finance purchase of another plot(s) of land. Interim land sales usually do not lead to significant changes in land owned by the households, because, the households dispose off one piece of land to buy another piece of land. Rural households resort to this practice to acquire proximate plots in exchange for distantly located ones. Considerations relating to land quality and access to irrigation facilities may also motivate such transactions. Mixed sources of finance A purchase of land could also be financed by mixed sources which is a combination of the above sources. In fact, it is very difficult to isolate sources of finance. So long households have diversified sources of income it is difficult to say which source of income has gone into the financing of a specific land purchase. In this sense most of the purchases may be deemed to have been financed from mixed sources.

Motivations for land sales In the absence or near absence of alternative income earning sources which are stable and also reliable, rural households tend to cling to land. Under this circumstance the land market remains inert and land alienation observed among the rural households is to be viewed from the perspective of survival strategy of the households. So far, three motivations for land sales are identified: 1. Distress sales 2. Asset transformation and interim land sales. 3. Diversification of economic activities. Distress sales Distress sales are triggered off when the immediate survival of the households is threatened. There may arise occasions when rural households face severe imbalance between income and expenditure. Under such circumstances they are left with no alternative but to sell land. Poor peasant households may, however,

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adopt a strategy of consumption curtailment for consecutive years, thereby postpone the process of land alienation. But in times of acute imbalance between income and expenditure (caused by major crop losses, shocks from natural disaster, physical illness leading to loss of work days, expenditure on marriages and rituals, debt obligations and litigations, etc.) compulsive sale of land occurs and this is termed as distress sale. The immediate purpose of such sales is to bridge the acute gap between income and expenditure. Asset transformation Land is sometimes sold by the rural households with the objective of attaining command over other forms of assets like housing and residence, transport vehicles, irrigation pump sets, rice hullers, bullock and plough sets etc. Land may also be sold for buying another plot of land or for the purpose of moving out to the urban areas. Non-productive use (or non-income generating) like acquisition of jewellery, financing matrimonial functions, house-building, etc., could also motivate land sales in rural areas. Land purchases through asset transformation do not change the basic wealth position of the households. What it really indicates is that households make a readjustment in their wealth holding by substituting less secure and less value appreciating wealth with more secure and more value appreciating wealth like land. Of course, this observation is quite specific to a backward agrarian economy like Bangladesh where opportunities for portfolio diversification are very limited. In Bangladesh rural areas, we do observe phenomenon like selling a small piece of land to purchase a pair of bullocks and a plough set which enable the farmer to cultivate his land more intensively and to utilize family labor resources in a more effective way through leasing land or selling bullock-labor. However, at a meager level of asset holding land gains through asset transformation do not indicate a major qualitative change in the wealth position of the household. Diversification of economic activities Land may be sold with the objective of diversification of economic activities of the members of the households, like getting job in the urban areas, going abroad, investing in trade and commerce, etc. The net outcome of such diversification depends on their success. Sometimes attempts for diversification may turn into failure which may lead to bankruptcy of the household.

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SOURCES OF FINANCE FOR LAND PURCHASES AND MOTIVATIONS FOR LAND SALES IN HASANPUR AND PURBALACH The survey data of two villages, namely Hasanpur and Purbalach, is used here to understand selling and purchasing land behavior of households.Hasanpur is located in the Anandapur union of Fulgazi thana in the Feni district. Purbalach is located in the Raipur union of Raipur thana in the Laksmipur district. Census data from 1972 to 1987 on land ownership pattern, sources of finance of land purchases and reason for land sales were combined with sample information on livelihood strategies, product and factor markets of these two villages were used in the study. The survey was conducted over 210 households in Hasanpur and 209 households in Purbalach. To measure the dynamic changes in landownership position of a household, the households are classified into three categories: a) ‘stable’ b) ‘declining’ c) ‘growing’. Stable household faced zero or very little change in landownership over 1972 to 1987, similarly, growing household acquired more lands over survey period and declining group lost land. Following table shows the distribution of households of the two villages. Table 2:Distribution of Households by change in Land Ownership Village

Hasanpur Purbalach

Growing household 47 66

Stable household 93 94

Declining household 64 45

Number of Land Sales Never owned land Total 6 4

210 209

For the detailed land ownership change among households in relation to the size groups please consult Table A.1, A.2 and A.3 in the Appendix section.

Motivations for land sales in Hasanpur and Purbalach The tables 3 and 4 record the incidence of land sales in Hasanpur and Purbalach. It is evident that the total number of households involved are almost equal in the two villages (210 for Hasanpur and 209 for Purbalach). The reference period for Hasanpur is January 1973 to December 1986 while that for Purbalach is January 1973 to December 1987. A longer period of coverage should have resulted in more sales for Purbalach. Since that has not occurred, it may be unequivocally asserted that land sales are less frequent in Purbalach compared to Hasanpur.

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Evidently the distress sales is the most dominant reason for land sale in Hasanpur. But in Purbalach this factor is also important but not as dominant as in Hasanpur. Here, if we club together reasons that broadly fall under nondistress categories the non-distress sales outnumber distress sales. In Hasanpur land sales are triggered off by uncertainties of crop production caused by intermittent crop failures. In Purbalach, however, the uncertainties have been attenuated under the impact of a successful irrigation and drainage project during the period under review. Table 3: Reasons for Land Sales of different households in Hasanpur from 1972 to 1986 Reasons for Land Sale

Distress Sales Crop Failure Serious Illness Death of the Principal earning member Expenditure on Marriage and rituals Debt Obligation Litigation Diversifying economic activities Invest in trading Secure employment abroad Secure employment in Bangladesh Asset Transformation Interim Land sales Buying urban land House building in native village House building in urban areas Set up homestead at a different site Buy bullock power Buy other types of assets Migration Pilgrimage Column Totals

Growing household 9 5 1 1 1 1

18 9 5

4

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Number of Land Sales Stable Declining Total household household 21 106 136 8 89 102 1 1 3 1 3 4 3 5 9 8 4 13 4 5 1 9 10 1 1 8 8 1 1 4 9 31 9 2 2 4 1 1 7 1 1 1 1 5 5 4 3 3 1 1 27 127 181

Forty seven 'growing' households of Hasanpur made 27 land sales during the reference period. Only one third of these sales are distress sales. It indicates that some of the 'growing' households did not experience continuous upswing in their economic condition. Crop failure appears to be an important cause of distress land sale. Two thirds of the land sales by these 'growing' households have been however, motivated by asset transformation and asset swapping activities as expected.

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For the stable households, Land sales due to crop failure is only a small proportion of sales due to distress factors. Reasons like serious illness, death of the principal earning member and expenditure on marriage ceremonies which is a drain on the liquidity position of the households caused land alienation. Debt obligation sales are high in absolute terms among the 'stable' households. The number of land sales among the 'declining' households of Hasanpur has been found to be 127. Out of these sales 83.46 per cent (106 sales) were caused by distress conditions of which crop failure appears to be the largest component. Nine cases of land sales (7.09 per cent of all sales) have been motivated by attempts to acquire other forms of assets like urban land, building houses and buying bullock power. Table 4: Reasons for Land Sales of different households in Purbalach from 1972 to 1987 Reasons for Land Sale Growing household 5 3

Distress Sales Food deficit Ceremonial Expenses Illness Debt Obligation Litigation Family expenditure Diversifying economic activities Invest in Business Get job abroad Asset Transformation Buying urban land House Construction Buy other forms of assets Interim land sale Buy another piece of land Recover mortgaged land Column Totals

2 1 1 2 1 1 14 14 22

Number of Land Sales Stable Declining Total household household 5 36 46 2 14 19 1 9 10 2 2 3 3 1 3 1 7 8 2 14 17 1 2 2 13 15 8 10 2 2 4 5 2 3 9 8 31 9 7 30 1 1 16 66 104

'Growing' households of Purbalach which outnumber the 'growing' households of Hasanpur to a large extent made a total of 22 land sales. The number of distress sale is 22.73per cent of all sale transactions. A large number of land sales performed by the 'growing' households of Purbalach (63.64per cent) are interim

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land sales. Some of these sales are meant for exchanging unsuitable plots of land for suitable plots of land. 'Stable' households of Purbalach are equally inactive in land sales as expected. They made only 16 land sales during the reference period. Out of these sales nine land sales are motivated by purchase of another piece of land or interim land sales. 'Declining' households of Purbalach made a total of 66 land sales during the reference period out of which 54.55 per cent accounts for distress sales. Other sales are motivated by diversification of economic activities, asset transformation and interim sales. These sales together account for 45.45 per cent of the total number of sales. Such land sales may cause decline in the landownership of the households in the short run, but the long run dynamics of diversified economic activity or income accruing from assets acquired may reverse the process. The 'stable' households of Hasanpur are less involved in land purchases, only 14 land were purchased. 35.71 percent of the purchases made by them are financed by non-agricultural income. Agricultural income accounts for only 7.14 percent of the total land purchases. Five out of the 14 purchases of land (35.71 per cent) are also made through asset transformation.

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Sources of finance for land purchases in Hasanpur and Purbalach

Table 5: Mode of finance for Land Purchases of different households in Hasanpur from 1972 to 1986 Mode of Finance

Agricultural Income Non-Agricultural income Interim Land Sales Asset Transformation Asset Transformation and Non-Agricultural income Borrowing Borrowing and Asset Transformation Interim Land Sales Labor income and Borrowing Non Agricultural Income and Borrowing Agricultural Income and non-agricultural income Agricultural income and asset transformation Interim Land Sales, agricultural and nonagricultural income Column Total

Number of Land Purchase Growing Stable household household 22 1 108 5

Declining household 2 5

Total 25 118

5

5

2 1

12 1

10

2 1

1 1 1 2

8 9

13 2 4 2 8 9

3 6

3 6

3

174

14

15

203

In Hasanpur, On the whole 12.64 per cent of the number of land purchases by the 'growing' households have been made out of agricultural income. Borrowing is the third major source of finance for land purchases. Given the total number of transactions, borrowing financed land purchases account for 5.75 per cent of all purchase transactions. Borrowing for financing of land purchase may or may not have immediate restraining effect on current consumption. Another possibility could be access of these households to institutional credit sources which they use for buying land in some instances rather than using them for productive purposes for which the loan is given. The 'stable' households of Hasanpur are less involved in land purchases, only 14 land were purchased. 35.71 percent of the purchases made by them are financed by non-agricultural income. Agricultural income accounts for only 7.14

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percent of the total land purchases. Five out of the 14 purchases of land (35.71 per cent) are also made through asset transformation. The 'declining' households of Hasanpur made only 15 land purchases. Only two purchases were reported to be financed by agricultural income. What is interesting with respect to the finance of land purchases by the 'declining' households of Hasanpur is that a larger number of finances were provided through asset transformation, borrowing and interim land sales. Therefore, the nature of finance for land purchase by the 'declining' households differ to a great deal from the 'stable' and 'growing' households. Table 6: Mode of finance for Land Purchases of different households in Purbalach from 1972 to 1987 Mode of Finance

Agricultural Income Non-Agricultural income Interim Land Sales Asset Transformation Agricultural Income and asset transformation Asset Transformation and Non-Agricultural income Labor Income Borrowing Agricultural Income and Borrowing Agricultural Income and non-agricultural income Interim Land Sales, agricultural and nonagricultural income Column Total

Growing household 17 54 10 9 4 2 15 2 15

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Number of Land Purchase Stable Declining Total household household 2 6 25 2 2 58 8 7 25 1 10 4 2 15 1 3 1 1 15 7 6 /13 20

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171

The broad composition of finance for land purchase in Purbalach by the 'growing' households is similar to that of the 'growing' households of Hasanpur. The single most important source of finance is non-agricultural income. Agricultural income happens to be the second most important source of finance accounting for 13.28 per cent of the transactions. Agricultural income as a source of finance would assume added importance if mixed sources of finance like 'agricultural income and non-agricultural income' and 'agricultural income and asset transformation' are also taken into consideration. Interim land sales and asset transformation together accounts for 14.84 per cent of the transactions.

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'Stable' households of Purbalach made 20 land purchases during the reference period of the study. The most dominant source of finance for land purchase among these households were interim land sales. It is difficult to talk about the importance of other sources of finances as there were very few transactions in relation to the sources. Just like the 'stable' households of Hasanpur, Purbalach 'stable' households also do not make their presence felt in the land market although they are the largest category of households in the village. 'Declining' households of Purbalach made a few land purchases during the reference period. Agricultural income dominates as a source of finance for land purchases if we consider mixed sources of finance like 'agricultural income and borrowing' and 'agricultural income and interim land sales'. The second most important source of finance for land purchases is interim land sale. Nonagricultural income does not figure to be an important source of finance for land purchases.

LAND REFORM POLICY Land reform is a well-discussed issue in Bangladesh, yet a solution to the problem has proved elusive. Over the last few hundred years the toiling masses have repeatedly tried to build movements to overthrow the landowners, which for lack of political ideology and organisation have ended mostly in defeat. The rare instances of success have led merely to a reconstitution of the rural tyranny.

Where can reforms yield greatest dividends? Generalized slogans on land reform with little operational grounding have been the bane of efforts to construct effective and meaningful agenda in this area. One of the key insights gained over the last decade has been the realisation that the absence of an up-to-date, systematic and universally accepted source of information on land resource availability and land rights lie at the root of much of the problems associated with land as well as with the inability to implement reform programmes. The key area to focus reform energy today is thus on reform of land administration.

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There are five specific dividends expected from a reform programme on land administration: 1. By streamlining and strengthening the information basis of land transactions, help to develop a dependable land market 2. Reduce corruption associated with the process of land acquisition 3. Reduce public suffering which arise from the archaic and dysfunctional land administration process 4. Cut out much of criminal and civil cases in the courts most of which originate in land disputes fostered by tempered or outdated land records 5. Improve the efficiency of reform programmes in khas land distribution, water rights, forest rights and land-use policy.

Reforming land administration: Priority areas There are three core components to the land administration process which are relevant to a reform programme: 1. The physical form of the ownership record 2. The institutional and physical method of record-keeping and 3. The method of Up-da1ing ownership information including updating the mouza maps and changes in use and plot size. The key reform already under discussion is the proposed Certificate of Land Ownership (CLO) which should replace existing from of owner-based land record. While there have been some technical progress in this direction, the actual reform is yet to be undertaken. Initial ideas of creating a new record for all landownership by an individual, the so-called consolidation of holdings approach, have now been found to be not the best way forward. Instead, a plot-based CLO with boundary map of plot and photograph of owner(s) included is considered the best option. However, the real challenge lies in actual implementation of the programme and creating a system of immediate and continuous updating of the CLO with every change in ownership. For this to start, provision of a legal cover for CLO is the essential first step. The CLO, to succeed, must be provided with the force of legal finality as distinct from

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the current situation wherein there is no specific finality except in the uncertain and very lengthy process of court judgements. Any success in the introduction of the CLO will simultaneously serve to current a number of current maladies. It will modernise the physical form of the record, confer finality on the document, and, ensure a smooth process of up-dating, and considerably ease land transactions. A supplementary area of reform is in the area of record-keeping. The policy options to consider here are: § Is privatisation an option? § Should record-keeping be in hard copy or also be in electronic format? § Should electronic preservation of existing records be undertaken as a

priority project? As Land Reform is a very big subject it includes variety of issues which should be addressed. 1. To addressed the other issues relevant to land reform a special commission may be formed to analise the issues and find its proper solutions are: 2. Gender issue in land rights: changes in laws to empower women to inherit land. 3. Customary rights of indigenous people should be clearly spelt in land laws. 4. Rights to fisheries and waste bodies: Current system of lease to highest bidder should be discontinued and lease granted to those who depend on the ‘mahals’ for their livelihoods. 5. Involvement of NGOs and local governments in the identification of khas land for redistribution to the landless. 6. Local Grievance Redressal Committees (GRCs) to be set up with local government, NGO and land ministry participation to hear land disputes at local level in the fmalization of CLOs. The GRCs can follow JMBA's EFAP procedures for suitable hearing in deciding cases. 7. Merger of land registration and land management under one ministry so that simultaneous updating of records taken place whenever a transaction

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is made by way of simultaneous updating of records take place whenever a tanscation is made by way of sale/gift etc. 8. Special court to resolve land litigation quickly. 9. Ensure access to land related information by introducing GIS in upazila level. 10. Empower local government to resolve land related disputes locality .

Big solutions and Small solutions A realistic agenda on land administration has to focus on both 'big solution's and 'small solutions'. The CLO is an example of the 'big solution'. However, there is also a critical need to address 'small solutions', solutions which can get started right away with much less of a challenge in policy innovation. An effective example of the latter has been the recent change in the Stamp Act, a small administrative innovation which has proved to have brought about multiple areas of benefit. By one stroke, the amendment has led to cost-savings for the government, removed some of the institutional sources of corruption around the printing, distribution and forgery of stamp papers and on corruption on submission of chalans, saved on storage space by decreeing a maximum of Taka 1200 worth of stamp papers, reduced the bureaucratic load on the sub-registry offices, and reduced the hassle for the buyers and sellers of land. It can be concluded in way that to ensure food for all citizens of Bangladesh and to eradicate poverty from the society land reform is the pre-condition in other way we could say without proper land reform sustainable development is not possible.

ACTIVITY ON LAND MARKET - A CAVEAT The level of activity on the land market and its characteristics are to be explained not only by emerging economic opportunities and the nexus of rural urban linkage, but also by host of other factors such as ecological condition, demographic pressure, kinship and lineage structure, migratory movements and externalities in cultivation created by state investment in agricultural infrastructure. We may, however, add that government policy interventions in

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the form of price support, input subsidy and rural works program may also influence the process. The way kinship and lineage structure affect the development of land market needs some elaboration here. Land market in rural Bangladesh is highly segmented and land transactions by and large remain confined within kinship and lineage structure. The pattern is reinforced by the law of pre-emption which discourages a seller from selling land to buyers outside the kin group if a prospective buyer is available within the group. The seller is obliged to sell land even at a lower price to the member of the kin group. We have observed that in both the villages land purchases are overwhelmingly financed by cash flows from non-agricultural sources, but the level and nature of land transaction activity differ between the villages probably due to factors mentioned above.

CONCLUSION What has emanated from the discussion on sales and purchases of land in the two villages is that in order to understand the dynamics of landownership one needs to go beyond land itself for countries like Bangladesh characterized by low land-men ratio. Under such circumstances land plays an important role but not a decisive role in shaping the dynamics. The data used for this study is about 20 years old, as no current survey data was found on the exchange behavior of land. The contemporary picture might be different from the study. But it is evident that, what appears now to be important is not land ownership alone, but the overall income profile of the households which is a mix of both agricultural and non-agricultural income.

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REFERENCES 1. Mahbub Ullah (1996) ‘Land, Livelihood and Change in Rural Bangladesh’ 2. Muhiuddin Khan Alamgir (1981) ‘Land Reform in Bangladesh’ 3. CPD TASK FORCE REPORT (2001) Policy Brief on “Land Administration” 4. Kamal Siddiqui, Imam Hossain (1988) ‘Land Reform and Land Management in Bangladesh and West Bengal’ 5. Klaus Deininger and Gershon Feder (1999) ‘Land Institutions and Land Markets’ World Bank Policy Research Working Paper No. 2014

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APPENDIX Table A.1: Changes in Land Owned per Household among the Growing Households in Relation to the Base Period (1972) Size Groups for Hasanpur & Purbalach Base period size groups (acres)

Number of Purchases per Household

0.0-0.10 .11-0.20 0.21-0.60 0.61-1.60 1.61-2.60 2.61-4.00 4.01 +

2.00 2.00 3.07 3.86 6.25 3.67 3.5

0.0-0.10 0.11-0.20 0.21-0.60 0.61-1.60 1.61-2.60 2.61-4.00 4.01 +

1.65 1.6 2.13 1.42 2.63 3.00 3.00

Average size of Plots purchased (acres)

Number of Sales per household

Hasanpur (1986) .395 0.0 .11 0.0 0.1735 0.076 .225 .636 .302 2.00 .278 1.00 .636 0.50 Purbalach (1987) .146 .117 .231 .40 .249 .33 .748 .67 .498 .125 1.113 .33 .615 1.00

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Average size of plots sold (acres)

Net Change per household (acres)

0.05 .11 .137 .226 .90

+.79 +0.22 +0.53 +.801 +1.612 +.793 +1.975

0.039 .157 .123 .337 .15 .45 .31

+0.236 +.307 +0.4903 +.835 +1.291 +3.19 +1.535

Table A.2: Changes in Land Owned among the Stable Households in Relation to the Base Period (1972) by Size Groups for Hasanpur and Purbalach Base period Number of size groups Purchases (acres) per Household 0.0-0.10 .11-0.20 0.21-0.60 0.61-1.60 1.61-2.60 2.61-4.00 4.01 +

0.522 0.076 2.00 -

0.0-0.10 .11-0.20 0.21-0.60 0.61-1.60 1.61-2.60 2.61-4.00 4.01 +

0.095 0.407 0.20 0.182

Average size of Number of Plots purchased Sales per (acres) household Hasanpur (1986) . 0.10 0.478 0.33 0.461 0.22 2.33 0.875 Purbalach (1987) 0.155 0.095 0.117 0.222 0.985 0.30 0.143 0.975 0.454

Average size Net Change of plots sold per household (acres) (acres)

0.125 0.108 0.29 0.34

-0.007 -0.024 -0.236 -0.297

0.155 0.186 0.653 0.20 0.298

0.0 +0.006 +0.001 -0.028 +0.04

Table A.3: Changes in Land Owned among the Declining Households in Relation to the Base Period (1972) by Size Groups for Hasanpur and Purbalach Base period Number of size groups Purchases (acres) per Household 0.0-0.10 .11-0.20 0.21-0.60 0.61-1.60 1.61-2.60 2.61-4.00 4.01 +

0.095 0.375 0.40 -

0.0-0.10 .11-0.20 0.21-0.60 0.61-1.60 1.61-2.60 2.61-4.00 4.01 +

0.176 0.50 0.50 0.75 4.00

Average size of Number of Plots purchased Sales per (acres) household Hasanpur (1986) 100 1.0 0.01 1.95 0.08 2.00 0.185 2.50 1.8 Purbalach (1987) 1.00 1.00 0.146 1.53 0.197 1.28 0.35 1.83 0.41 2.5 0.297 4.0

21

Average size Net Change of plots sold per household (acres) (acres)

.02 0.11 0.169 0.212 0.246 0.337 -

-.002 -0.11 -0.329 -0.394 -0.541 -0.606 -

0.065 0.13 .148 0.297 0.554 0.458 0.572

-0.065 -0.13 -0.198 -0.282 -0.838 -0.838 -1.10