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PART IV
THE LAND REFORM PROGRAM AND ITS IMPLEMENTATION

INTRODUCTION: Emergence and Acceleration of the Contra-
diction, attempt for Distruction of Feudalism, and
Introduction of the Capitalist Relations of Production in
Agriculture

In peripheral social formation, there are different
class contradictions. In each period, one of these
contradictions becomes the main one. It is important to
recognize the main contradiction in each are of the
society under consideration. Because of the nature
of the state in Iran before the World War II, the basic
contradiction in the society was a contradiction between
the people and the ruling classes and their alliance (i.e.,
feudals, dependent bourgeois, and foreign investors). Other
contradictions were between feudals and bourgeois, foreign
capital and feudalism, and between foreign capitalists
over the issue of controlling Iran's economy.

After the War, as a result of the constant defeat of
the people and their suppression, the contradiction between
people and the ruling classes was reduced. On the other
hand, dependent bourgeoisie were expanding both qualitatively
and quantitatively; feudalism was declining because of a

series of historical events; and finally, United States

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investment gained ascendancy over British investment
in Iran. Consequently, the contradiction between the
dependent bourgeoisie and its ally (U.S. capitalism ) on
the one side, and feudalism and its old ally (British capita-
lsim), on the other side, became the basic contradiction of
the Post-War era.

it this stage the dependent bourgeoisie, because of its
nature, must sweep any obstacles to its expansion.
In the same way, because of the nature of the relation
between center and periphery, the foreign investors perceived
feudalism as the prime barrier for their further and still

deeper penetration into the Iranian economy. It is in

relation to these characteristics of the dependent bourgeoisie

 

and foreign capital that the action of the land reform as a
means to eradicate the feudal relations bf production must
'be analyzed.

If the aim of the dependent bourgeoisie and foreign
investors was to eXpand their activities in the agrarian
sector of the society, and if the means to achieve this aim
was the land reform, then, the principles of the program K
must be designed in harmony with expansion of the capitalist
relations of production and institutions in the countryside.

It is in relation to this notion that the Iranian land reforl
laws and regulations will be examined. In addition, the
implementation of the reform is crucial to our understandings
of the hidden objectives of the land reform. The results of

the distribution and establishment of the new institutions

264

 

 

 

will be taken into consideration in order to build up a

case for further steps toward analyzing the effects of the

reform on the rural social class structure.

 

 

 

 

 

 

 

CHAPTER ELEVEN
PUDH FOR LAND REFORM

11.i. Introduction

There are several explanations for the cause of land
reform in Iran (see chapter one). An attempt shall be made
here to construct a meaningful and objective explanation of
the land reform movement in Iran.

One thing certain here is that the conflict over the
political and economic nature of the government was intense
during the 1941-1961 period. It was in this period that
different efforts for the implementation of land reform were
suggested by different groups. The Shah was by no means the
first person to call for land reform in Iran. Land reform in

Iran has a long history dating back to the beginning of

 

present century. Different revolutionary and nationalist
groups have attempted to enforce land reform in one way or
another. On the other hand, different cabinets of the Pahlavi
regime have touched the issue in different times. Although
the 1962 land reform was carried out by the Shah, it was not
his genuine idea and will. On the contrary, it was a result
of the main contradiction which existed at that period of
time in Iran.

The aim of this chapter is chiefly to find the cause of

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the 1962 land reform through the main contradiction in
Iranian society. For this purpose, I have to give a back-
ground to different land reform attempts at different times.
As a result, land distribution ideas and activities in Iran
could be classified in three categories: (1) the early
"democratic” ideas and attempts on land distribution; (2)
distribution of Crown and Public domain lands; and (3)

the 1962 land reform.

11.2. The Early "Democratic" Ideas and Attempts

From the Constitutional Revolution of 1905-1911 to the
immediate post—Mussadiq years at least seven movements were
directed at the modification of the property relationship
between the landlord and the peasants, restructuring the
proprietary order in some parts of the country.

Land reform was recommended publicly as early as the
Constitutional Revolution. It was one of the principles of
the Mujahed Social Democrat society of Mashhad, established
in 1907. In their program, they mentioned the confiscation
of the king's and the big khans' lands on behalf of the
peasantry. In addition, they mentioned the limitation of
land property for all other landowners (Nik-Aein, 1980:47).

Land redistribution was one of the policies of the
Democratic Party, formed in 1909 by reform-minded deputies
of the Second Majlis. However, the members of the party were
only a minority within the Majlis; therefore, chances to

test their many ideas for reform were limited (Bahar, 1942:5).

267

 

 

 

 

 

 

The Democratic Party did not achieve its land reform goal
through the Majlis.

During World War I, some Iranians recently returned from
the Caucasus province of the Soviet Union, where they had
worked for several years in the Baku oil fields, formed the
Communist Party (Zabih, 1966). At the same time, some
Democrats organized a major guerrilla campaign against the
foreign occupation in the province of Gilan. The guerrilla
force became known as the Jangali movement.

The Communists, influenced by the revolutionary experi—
ences they had witnessed in Russia believed that one of their
tasks was the expropriation for distribution of all large
estates (i.e., state, religious, crown, and private lands)
in the country. They put this task in their party's program
(Nik-Aein, 1980:48). On the other hand, the Jangalis were
closely involved with the peasants, and they believed in
many reforms such as increasing the share-cropper's portion
of the harvest, lightening the labor services, abolishing
the dues in kind, and forcing the wealthy collaborators to
distribute some of their estates among the peasantry
(Kazemi, 1978:285).

The Communists joined the Jangalis and established the
Gilan Soviet Socialist Republic. In this coalitional
government, the Communitsts were determined to implement
radical land redistribution; while the founder of the Jagalis,
Mirza Kuchek Khan, supported reforms aimed at improving the

conditions of the peasants, and it seemed he had opposed any

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general concept of land redistribution (Ibid., P.286).

Internal contradictions soon broke the United front
apart. At the same time, the forces of the new central
government, WhiCh was at odds With the. movement, over the. issue
of their separatism, entered Gilan and suppressed the movement
and most of the rural reforms it had instituted were undone
(Hooglund, 1982:38-39).

In 1941, some of the Iranian Marxists organized a Marxist
party, the Tudeh (Masses). While successfully organizing the
urban workers, the party also tried to appeal to the rural
masses. Its official program called for the immediate
distribution of state and crown lands among the peasants;

the gradual buying of large private estates by the state and

 

their sale at low interest rates to the landless peasantry;
and the retention of a larger share of the harvest by the
sharecrOppers (Nik-Aein, 1980:49).

The party formed a Peasant Union and sent workers and
students into the countryside to organize the villagers. The
party's appeals to the peasants failed. The Tudeh was unable
to attract any significant following among the peasantry.
Since the party was never in a position to exercise real
political power, its professed dedication to the cause of
rural reform was never put to a test. In trying to explain
these failures, one party leader years later argued the ‘the
party had lacked cadres with rural backgrounds able to speak
the same languages and dialects as the peasants, to under-

stand their needs, to voice their demands, and, thereby,

269

 

 

 

 

 

accomplish the difficult task of mobilizing them, into viable
organizations (Kambakhsh, 1968:32). One may argue that this
was not the case, since there were some structual problems
with Iranian peasantry in comparison to Russian or Chinese
peasantry (Cf. Kazemi, 1978).

Another Marxist group, the Firqah-i Dimukrat-i Azarbayjan,
grasped control over Azarbayjan province and established an
autonomous regime in that province in November of 1945. In
April 1946, the provincial government prepared a land reform
law which allow for the distribution of state land to the
peasant. In relation to the landlords' estates, the leaders
of the revolutionary government compromised with the local
Azarbayjani landlords and confiscated only the estates which
belonged to non—native owners (Gharatchedaghi, 1967:37-38).
The Firqah-i Dimukrat, like the Jangali movement, was
suppressed in December 1946. Subsequently, their land reform
legislation was abrogated.

One clarification is needed here before I go further on
the issue of democratic land reform ideas and attempts.The
above-mentioned cases were ones in which land distribution -
was decided on by a revolutionary grouping then in power, and
they were not in the first instance results of the demands
of a peasant movement.

After the Second World War, some independent intellec-
tualls sympathetic to leftist ideology (i.e., Hassan Arsanjani)
were interested in the land reform issue. Their concerns

about rural reform did not originate solely from ideology but

270

 

 

also from a genuine dislike for the existing agrarian system.
They became convinced that a reformation of the land tenure
system was the necessary prerequisite for ending the poverty
and exploitation of the peasantry. Their main efforts were
in the form of suggestions to the government. However, since
they had neither an organizational base nor a voice in the
government, their suggestions were useless.

The National Front, a place for nationalistic-reformist
intellectualls, had emerged in 1949 under the leadership of
Dr. Mahammad Musaddiq. By March 1951 they had become a
politically strong enough force to appoint Musaddiq as a prime
minister. Two decrees were issued by him in October 1952.
The first stipulated that following division of the crop,
20 per cent of the landlord‘s share was to be returned to
the village; 10 per cent would be distributed among the
sharecroppers and 10 per cent would be reserved for village
development projects. The second decree abolished free labor
service and all the various dues which landlords customarily
levied upon their sharecroppers.1

In May 1955,,Musaddiq suspended the sale of the Crown
lands by the Shah and instituted action designed to transfer
title of these lands to the state (wiiber, 1965:182).
Musaddiq’s effort was insubstantial becuase it lacked a
redistribution of the large landowner's estates. Part or the

reasons for his failure lay in the very nature of his

government. _h August 1955, Musaddiq was deposed in a coup

d'etat through the financial support of interested foreign

271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

powers, particularly the United States.

Finally, 1 should mention here the last democratic
program put forward by a member of the leadership of the
second National Front, Khalil Maleki. He offered a proposal
for the democratization or popularisation (melli Kardan) of
land and water. Maleki's program was as follows: to transfer
the title of ownership from the landlords to the peasant
community as a whole, which would dispossess the landlords
at a stroke and without complicated legal and other wrangles;
avoid the colossal administrative task of defining every
single peasant-holding in every village; prevent the emergence
of scattered and small individual hoidings; and bypass the
immediate problem of dispossessing the landless community.2
The idea was too advanced and too radical for it to be under-
stood by any political force in the country. Nalek"s program
would work only as part of the construction of a broader and
genuinely democratic society; it was part of his vision of
Iranian socialism.

What is important to say here is that all these democra-
tic ideas and attempts were suppressed either in their embryo-
nic stages or at the middle of their implementation by the
central government which was a supporter of the landowning
class. The government by no means was a supporter of the

peasants in Iran.

272

 

 

 

11.5. Distribution of Crown and Public Domain Lands

from the beginning of the Pahlavi's era, a number of
ineffective efforts for redistribution of Public Domain
lands were put forward by the government. In addition to
this, since 1941 Mohammad Reza Shah attempted to sell the
crown lands several times in the name of the redistribution
of the crown lands to the peasants.

During the rule of Reza Shah, a few superficial attempts
were made to distribute the state lands, but theseaefforts
were ill-formed and did not bear any positive effect. These
efforts resulted simply in the usurpation of state lands by
the big and influential landowners. From 1927 to 1941, the
governmental attempts to redistribute Khaliseh land in
Sistan, Khuzestan, Luristan, Kirmanshah and Dasht-i Moghan,
were unsuccessful. As Lambton has indicated:

Where land has in fact been distributed,
it has either never got into the hands of
the peasant proprietors or, where it has,
they have been subjected to pressure of
various kinds and it due course have been
expropriated in many cases (1955:244).

In September, 1941, under the pressure of the national
opposition, Mohammed Reza Shah ceded the Crown Lands,
confiscated by his father, to the state. In 1942 a law was
passed providing for the return of a number of these estates
to their original owners (Rudulph, 1971:51). Some of the
lands were given back to the original owners. However, the
Shah soon noticed that the government was using the revenues
from the Crown land to meet its ordinary expenses. After

some deliberation, he decided to take back the lands and

273

 

 

 

to sell them. As a result, in July 1949, under the pressure
ofthe Shah, the Najlis passed a bill providing that all lands
that had not been successfully reclaimed were to revert to
the possession of the Shah.

In January 1951 the Shah issued a decree providing for
the sale of his 2,000 villages to the peasants. The sale
proceeded very gradually over a ten-year period, and fully
one-third of the royal lands were sold to various wealthy
favorites of the Shah, rather than to peasants (Hooglund,1982:
45).

As I mentioned before, during Dr. Musaddiq's premiership,
the Shah's effort to sell the crown lands was stopped for a
time by order of the government. But the sale resumed after
the fall of Musaddiq. Within the decade 1953-62, some 517
villages were sold (Mclachlan, 1968:692). During this period,
the Shah turned many of the remaining lands over to his
brothers and sisters. He kept a large proportion of the
remaining land for himself and his son. It was in this period
that the Pahlavi families started to become the big agri-
cultural capitalists of the country (Nik—Aein, 1980: 42).

After an abortive attempt at redistribution of the
Public Domains, further distribution of Public Domain took
place under the provisions of the 1955 law for the distribution
of Public Domains through the country (McLachlan, 1968:691).
The law was only implemented in 1958 and had a very limited
impact. This distribution of the Khales h villages eventually

was caught up in the land reform of 1962. During the 1962

274

 

 

 

 

land reform the entire khaleseh village were distributed.

To sum up this section, I should mention here that it
has been recorded that, during the state land distribution,
in.many cases by interfering with the distribution of water,
and by withholding water, the land of the peasants became
valueless. As a result, the peasants were thus forced to
sell out at a low price or merely abandoned the land,
which was then usurped (Cf. Lambton, 1955:252). On the other
hand, most of the Crown lands were sold to wealthy friends
of the Shah who later established large-scale mechanized

capitalist farming.

11.4. Causes of the 1962 Land Reform

In the first half of the present century, the major
foreign investment was confined to the Iranian oil industry.
But, as we know, in the period after 1950 a new form of
domination, known.as the New Dependency, characterized the
development of peripheral countries in general(Dos Santos,
1970). As is well known, this period corresponded to a new
phase in world capitalist expansion, whereby mutinational
corporations started to take over the economy of Third
World nations.

Since the Second World War the U.S. had increased its
influence in Iran through supporting the regime. During
the 1950's American policy in Iran was focused on creating
internal security and stability through military strength,
as well as economic growth. The first American act was the

1953 coup d'etat. (Cf. Nirumand, 1969:25).

275

 

 

 

 

 

After the coup, it was obvious to the Americans that
the Shah would be able to guarantee the internal stability
of the country along the lines of their policy only if
they accorded him massive financial and military support
from the very outside. The initial $45 million arrived in
Iran as early as September 15,1955, to be followed by
another $15.5 million a few months later; U.S. aid
totalled $127,3 million for the fiscal year 1954 (Nirumand,
1969:93). After these aids, Iran became a testing ground
for the deveIOpment of political and economic structures
aimed at keeping the Third World under the domination of
the capitalism of the center (Holfgott, 1976:22). Since
then, Iran's development, engineered in Washington, has
moved in the direction of greater political and economic
power in the hands of the Shah and the expanding dependent
bourgeoisie. The social order andsecurity, which were
maintained by the use of absolute force in this period,
were partially designed to attract both domestic and
foreign capital for investment. Following the coup of
1955, for the first time, the private sector was granted

an Opportunity to grow rapidly. As Ashraf indicated:

 

 

The most interesting and significant indus-

trial development of the 1950s was the

emergence of an private sector on a much

larger scale than anyone had expected (1971:255).

During this time, the Shah insisted that future public
enterprises be limited to a few branches of heavy industry

and that the government carry even these only as far as

276

 

 

 

 

 

the preparatory steps, when presumably private enterprise
might take them over (Clawson,1977:69).

At the same time, the Shah invited the foreign inves-
tors to invest in Iranian economy. As the Shah stated
during his 1958 visit to Washington, D.C.:

Iran is on the eve of its greatest development.
Its economic potentialities and the scope for
foreign capital investment is unlimited...Now
is the time for bold, imaginative measures on
the part of American private capital to come
into Iran and join the prodigious efforts we

are making. The present opportunity may not
present itself again (queted in Silsby,1980:56).

In addition, the enactment of the Law Concerning the Attrac-
tion and Protection of Foreign capital in Iran in 1955

opend up the Iranian economy to Western capitalism in
general and to the American corporations in particular
(Walton, 1980:275). As a result of this law, up to June
1958 some 1084 foreign compaines were established in

Iran in different sectors of the economy, but very few

in the agricultural sector (Ivanovgn.d.:195).

In relation to this new type of dependency, the feudal
system of production imposed a static type of relationship
in rural areas, and this was diametrically opposed to the
interests and modern design of the dependent bourgeoisie
and foreign capitalists who wanted to expand their
activities. Feudalism in Iran was acceptable to the hour-
geoisie of the center as long as the center/ periphery
relationship was confined to the extraction of raw materials,

the limited importation of consumer goods, and the

277

 

 

 

 

exportation of capital. Since the relation between Iran's
economy and the center entered a new phase, the bourgeoisie
of the center in collaboration with the Iranian dependent
bourgeoisie had to disslove precapitalist forms in the
economy and politics of Iran, molding traditional oppression
by the indigenous exploitative classes with the needs of
Capital to produce a new structure and process. As such,
"the destruction of the feudal mode of production was
placed on the agenda of the dependent bourgeoisie/ imperiah
list axis as the most urgent task of the day" (Forouzin,
1979:147).

The rise of dependent bourgeois activities had shown
the ruling families and landowners that the traditional
landowning enterprise was becoming outmoded and uneconomical
and thus, declining as compared with the flourishing
opportunities in business enterprises. Some of the land-

owners recognized this opportunity and shifted to bourgeois

 

activities.3 Among them the Shah himself sold the land
at his own prices, and put the funds into very good use
both inside and outside the country, ridding himself of
dangerous immovable property, and boasting to the whole
world that he was giving 'his own' lands back to the
peasants (Katouzian,1981:500). As Pesaran has indicated:
Almost all major industrialists in.the private
sector were hand-picked for their loyalty to the
‘Pahlavi regime and were backed by members of the
royal family and the court either directly or

indirectly through the machinery of the Pahlavi
Foundation (1982:510).

278

But, the majority of the landowning class resisted any
drastic change in village communities. 0n the other hand,
they did not show any interest in selling any piece of
their land because land was the source of their socio-
politico-economic power.

Despite the activities of the dependent bourgeoisie
in the agriculture of the Gorgan and Dasht regions, the
existence of the precapitalist agricultural system and the
type of ownership of land was an obstacle to further
development of dependent bourgeois activities in agriculture.
In addition to the dependent bourgeoisie, the foreign cor-
porations wanted to invest directly on a large scale in
the agricultural sector. A contradition arose here between
the interests of the dependent bourgeoisie and foreign
capital on one side, and feudal landlords on the other side.

To overcome the contradiction, American capitalism
perceive feudalism as the prime obstacle for its further
and still deeper penetration into the Iranian economy.
"Following the newly formulated policy of 'social reform'...
the United States exercised a massive pressure on the ruler
of Iran to innovate reform policies and implement a land
reform program" (Ashraf, 1971:132) with an almost missonary
zeal as a panacea to developmental problems in Iran. AS
an American adviser to the Plan Organization clearly pointed
out:

The attempt to extend land distribution beyond

the Shah's Crown Land program was mainly an
American objective (Baldwin,1967:93).

279

 

 

The Kennedy administration immediately set up a task force
for this purpose. The American ambassador to Tehran, Armin
Meyer, recently revealed: "That task force did nothing but
work on Iran. The idea was that Iran's demise was about to
take place... that it was about to go down the drain, and
we just had to take some dramatic and drastic steps"
(Kayhan International,1977).

In the beginning the Shah was hesitant and resisted
Kennedy's persuasians, which, as time went by, evolved into
open threats. The United States' Administration threatened
to withdraw a 55 million dollar loan from the already
recession-shocked economy (Halliday, 1979:44-5). A180,
miliary aid to the vulnerable shah became dependent on the
implementation of land reform. When in 1960, the attempted
coup of General Gharani was discovered, the Shah realized
the gravity of the situation. At this time, the American
support of the Shah was conditioned by appointing Ali
Amini, who was assumed to carry out the necessary process
of land reform, as prime minister of Iran.4 The Shah could
not afford to ignore American advice.

By selecting Amini to head his government, the Shah
hoped to demonstrate that his ideas and goals for Iran were
similar to those of Iran's principal foreign ally. In this
regard, the Shah had to alienate the feudal landlords in
order to pave the road for his new alliance the dependent
bourgeoisie. This was not an easy task for the Shah, because
he partially owed his Crown to the feudalists who persist

tently sabotaged the progressive measures of Dr. Musaddiq

280

 

 

 

 

 

and conspired to their utmost to mar his efforts, and who
constituted the main social basis of the 1955 coup d'etat.
The Shah was aware that his espousal of the land reform
program still involved a serious risk to his position: land-
lords and other conservative forces would not give up with-
out a struggle. However, the Shah accepted any risk to
strengthen his position since he thought the successful land
reform would change the economic and political power of the
landowning class vis-a—vis the rising bureaucracy and
bourgeoisie. As Ashraf has indicated,

A community of interest has been established

between the higher echelon of bureaucracy

and the economic elites. Without the coalition

with these elements, the wealthy bourgeoisie

would lose its power and probably its
prosperity (1970:351).

In fact, this shift was as a result of both the internal
and external pressures on the Iranian regime.

Some measures were taken before the initiation of the
land reform in order to safeguard its implementation. 0n
the one hand, Amini brought along Hassan Arsanjani as his
Minister of Agriculture and gave him responsibility for
developing a policy for land reform. This action was taken
to divert people's mind from the nature of the land reform,
since Arsanjani had a good reputation among the people for
having excellent ideas of land reform (Richards,1975:6-7).
0n the other hand, the Shah dissolved the Majlis and closed
the Senate in 1961. He dissolved both houses of parliament

because they were dominated mostly by the landlords'

281

 

 

 

 

interests and he did not want to see emasculation of this
last land reform law. After Parliament was dissolved, the
previous Land Reform Law was amended by a cabinet decree
approved by the Council of Ministers on January 9,1962.

To sum up, although in this period the landowners were
socially, politically, and economically powerful and shared
in state decisionpmaking, they began to ebb when dependent
bourgeoisie started to become economically and politically
strong in the society. The international situation between
peripheral and core countries created a situation in which
foreign supporters of the landowners could not continue
their support. Landowners were forced to concede their
prominent status to leaders of the dependent bourgeoisie
who had more flexibility in generating surplus. In fact,
the kind of reform carried out in Iran was a faithful
reflection of the interplay of alliances and conflicts
that have arisen between the dominant classes: the land-
owning nobility, the merchant bourgeoisie of the "bazar",
the imperial family and new dependent bourgeoisie, along
‘ with their British and American allies. It was a product

of the capitalist character of the Iranian state.

282

 

 

1.

3.

4.

11.5.Endnotes

For further information see Lambton's Persian Land Reform,
1969. pp. 57-38.

 

See his various articles in issues of Ilm va Zindigi

(monthly periodical) 1959-62, and Firdowsi (WeekIy
magazine) 1962.

 

A glimpose into the class composition of the emerging
bourgeoisie illustrates that the landowners constituted
50 per cent of farm.capitalists in the Gorgan region
(Ashraf,1971:181).

Amini had previously served as Iran's ambassador to
Wahington, and had special ties with the Kennedys
(Saikal, 1980:76).

283

 

 

 

 

CHAPTER TWELVE
THE 1962 LAND REFORM AND ITS IMPLEMENTATION

12.1. Introduction

What is known as Land Reform in Iran consisted of a
series of acts beginning with a bill dated 12/31/1961 which
was approved by the Cabinet in the absence of parliament.
The reform attempted to transfer the ownership of the
large holdings as well as some tenancy reform. With regard
to these two aims three distinct phases could be seen during
the decade in.which the transfer of land ownership and
re-organization of the relations of production took place.

Three major efforts were being made with respect to
re-organization of relations of production. In the phase
one, attempts were made to establish rural cooperative
societies. Membership in these societies was a prerequisite
for obtaining the distributed land. In phase two of the
reform, the landlord and the peasant were encouraged to
establish a joint-stock farming unit. Finally, in the phase
three, the government design.was to create large-scale
agriculture through either farm corporations or large agri-
businese enterprise.

The actual task of executing the laws of the land
reform was the responsiblility of the specially created Land

Reform Organization (later the Ministry of Cooperative and

284

 

 

 

 

 

 

Rural Affairs). This task was hard because the land owner-
ship in Iran was involved with political power. Its imple-
mentation became harsh since the Land Refom Organization
faced a severe reaction from the landowning class and
other reactionary groups. As a result, the land reform
program was affected by these reactions, and there was
some modification in its original plan. However, the land
reform reached its aims gradually.

The task of this chapter is to provide the content of
the different laws as well as the nature of them. In addition,
the statistical results of the distribution of the land will
appear here too. It is important to distinguish between
lands that were incorporated into the "reform" and "nonreform"
sectors in.the process of land reform. The reform sector is
compsed of lands appropriated from the former landlords and
sold out to the peasants. The nonpreform sector includes
the unexpropriated lands retained by their former owners,
the lands that were legally or illegally exempted from the
distribution. Because of the nature of the land reform, the
relations of production in both sectors were changed drastically.

It was these laws and the supplementary related measures
that changed the social structure in the rural areas of Iran.
Study of the effects of these laws and measures on the socio-
economic structure of the rural communities is the intention‘

of part V of this dissertation.

12.2. The Laws Governing the First Phase

This section consist of two parts: first the law

285

 

 

 

 

 

 

regarding the distribution of the lands; and second, the
regulation of the establishment and membership of the rural
cooperative societies.

The law governing the first phase of the land reform
was drawn up and approved by the Council of Ministers and
the Shah in the absence of the Majlis after its prorogation
in 1961 (McLachlan, 1968:692). The aim was the distribution
of large holdings belonging to absentee land-owners, and the
limitation of individual land-ownership.

The main elements of the law regarding the distribution
of the land in phase one were as follows:

1) limitation of the size of individual holdings to
six dangs (equal to one whole village); landlords
were required to sell their excess holdings to the
government. It was optional for them to choose which
village to retain; in addition, the landlords were
allowed to keep the equivalent of one whole village
scattered among a number of villages (McLachlan,
1968:693).

2) to arrange the price of land which was taken from
landlords and redistributed among the peasants.
Compensation was based on the landlord's average
tax payment in the most recent year multiplied by
a coefficient calculated separately for each region.
This coefficient was to vary between 102 and 180,
depending on a variety of factors: the recency of
the local land tax assessment, the local practice
of crop division between landlord and tenant, the
distance from market, etc. (Research Group, 1970:7).

3) to allocate holdings among the peasants without
changing the existing field layout of the village
(Azkia, 1980:52).

4) membership in a rural cooperative was necessary for
the peasants who were eligible to receive land
(Research Group,1970).

286

 

 

 

 

 

5) to redistribute the lands among those peasants‘
who were naggq-holder. In instances where the land
had been assigned to a ggggh, rather than to the
individual pasag-holder, the members would divide
the bupgh's field among themselves (Hooglund,1980:54).

The above mentioned regulations precluded any need for
a comprehensive survey on land ownership and nasaq-holders
and speeded up the redistribution. In each village it was
clear who was nasaqfholder and who did not have such a
right. Nevertheless, inevitable inequalities would result
as a consequence of the criteria of nasaqgholding.

The land reform law, instead of providing any particular
new arrangements for the division of the waters of qanats,
rivers or wells, indicated that this shall be done on the
basis of the traditional common law practice of the locality.
It was arranged that the ownership of the qanats should be
given over to the peasants jointly, the rights of each
being based on )the traditional rights attached to a parti-
cular piece of land. In the case of rivers, the respective

traditional water rights of each piece of land should be

transferred to the peasant (Research Group,1970:72).

 

Theoretically, supervision of the water resources of the
transferred lands, and the upkeep and repair of irrigation
channels were to be the responsibility of the relevant co-
operative society (Lambton, 1969:275). In practice, this
arrangement caused trouble in the first phase of the reform.
According to the laws of phase one, lands which were in
principle to be made exceptions to the reform, apart from

the six-dang of ownership,1 were defined as follows:

287

   

 

a) Fruit orchards, tea groves and nurseries, the land
and standing property (a'yan) of which belonged to
the landlord.

b) Mechanized agricultural lands, that is, estates
which at the date of promulgation of the land
reform law, were farmed by mechanized equipment
and without the labor of share-croppers
(Parham,1971:105)

c) Estates which were made into private endowments
(Vaqf-i khas) before 6/12/59.

d) All the ublic endowed lands (Vaqf amm) (Denman,
1978:265g. ‘—_' "_'
I will explain later how some of these exemptions became
barriers to the redistribution of lands among the peasants.

The second most important aspect of the initial phase
of the land reform was the development of the rural coopera-
tives. The rural cooperative societies in Iran date back to
1955 when rural fund societies were established. The land
reform law of 1962 gave greater impetus to the expansion of
cooperatives since those who drafted the law intended the
cooperative movement to be widespread, with these societies
taking the place of the landowner in the villages which
were transferred to peasants. In fact, they were the product
of state policies during late 19503 and early 19608. These
societies were expanded in rural areas, as an incorporated
part of the first phase of the reform.

Theoretically, a simple logic was to rule the distribu-
tion: no cooperative, no distributed land (Denman,1978:280).
The Note to Article 16 of the Land Reform Law stated that
land shall be given to peasants who have already joind the
co-operative society of their district, and the 18th session

of the Land Reform Council dated 6/3/62 placed a restriction

288

 

 

on membership by saying that only those who were to receive
land under the terms of the land reform were eligible to
join the co-operative society (Research Group,1970:71).

In fact membership in the rural cooperatives was made
mandatory for peasants receiving land; and was forbidden
for landless peasants.

The land reform organization assumed that cooperatives
would provide credit and also general supervision and
direction of agricultural affairs, i.e., to obtain and
distribute seeds, seedlings, and purebred livestock. Further-
more, the task was to facilitate agricultural marketing,
and to promote modern farming in the region. One should
expect the high speed of quantitative expansion of these
societies, while at the same time questioning the quality
of them. What was really important for the Land Reform
Organization was the numberical existence of these societies.
This affected the function of these societies; and as a
result they became a tool for putting the peasant proprietors
in a disastrous situation rather than filling the gap which

resulted from the absence of the landlords.

12.3. The Implementation and the Results of the First Phase
The land reform officals suggested a district-by-
district approach to implementation of the reform. The area
around the city of Maragheh in East Azarbayjan province was
selected as a pilot case for putting the reform into effect.
Thus, as early as March 1962, the first series of lands were

transfered to the peasants (Lambton,1969:90). After buying

289

 

 

the land, the government immediately resold it to the peasants
for the purchase price plus a maximum 10 per cent charge
for administrative costs. Payments were arranged into

fifteen equal installments due annually at harvest time. This

was, in theory, a uniform practice for the whole country.

As Denman has indicated, there was no rural land

market in Iran, and no market price of land or villages to

which compesation could be related (1978:267). For the whole

country, the average price of the purchased villages was

some 540,000 rials (approximately $ 7,000), which seems

somewhat lower than the real value of the villages. This

was attributed to the fact that the landholdings were valued

on the basis of taxes paid by the owners, and since most f
of the influential landlords had for years evaded payment (
of taxes on their land, they suffered losses (Research F
Group, 1964a: 145-6).

Although it seems from the above paragraph that the

landlords were mostly the losers, they managed in fact to

find numberous ways of getting around the laws. Many of them

were able to preserve some of their land, either by taking I f
various kinds of evasive measures, or by complying with the
stipulated exemption conditions. As a result, a great ;
number of landlords passed their lands off as mechanized. To fl
strengthen their case, they sometimes put a tractor on their u

farm and dug an artesian well. On other occasions they

 

would revoke the existing peasant-landlord relationship
and would employ the peasants as laborers, thereby giving

them the status of farm-workers. "At least 1180 villages

 

290

 

 

were exempted as mechanized villages“ (Halliday,1979:111).
The landlords were able to do that because there was no
clear definition of the term "mechanized estate" in the
original law.

As I explained before, the definition of a landlord by
the Higher Council of the land reform was irrespective of
the age and status of the owner. Many of the landlords
responded to this situation by redistributing their villages
among their wives, children and relatives. This was the
easiest and chepest way for them to escape the redistribution
since they were able to backdate documents with the help
of private registrars; or rearrange the pages of the
official registration books (GOPF,1976:51).

Many landlords bribed reform officials and thus retained
some of their land that legally they were no longer entitled
to.2 Also, the fact that scattered plots from different
villages totalling to a whole-village could be retained by
the landlord made it possible for-the landlord to select
the best parcels, in terms of quality, from a number of

villages and at the same time maintain his influence

 

as the biggest free-holder in each village. ‘

All the above mentioned ways of escaping the redis-
tribution of the land limited the degree to which land has
been distributed, but at the same time they bring about these
developments in agriculture which the reform was designed
to encourage. They were contrary to an egalitarian
principle of land-to-the-tiller, but not to the development

of capitalism in the countryside.

291

   

 

 

 

IIIIIIIIIIIIIIIIII---::———————————————*

The weakening of government implementation continued
for serveral years during the competion of the first phase
of the land reform. By 1965, the number of purchased villages
had reached 12,920, of which only 9,888 had been given out
among 432,043 peasants (Sazaman-i islahat-i arzi, 1966:5).
Some of these results are summarized in Table 12.1. out of
432,043 families who acquired land in the first phase, a
relatively small number (perhaps about 50 to 40 per cent)
have acquired lands in acounts of between 1 and 2 hectares.
The rest have been given a negligible amount that could not
possible support them (GOPF, 1976:35). Some of these villages
had the least land, the least water, and were the least
fertile; they were, in short, the worst of their kind, since
the landlords had the choice to choose the best lands.

Execution of the first phase was not uniform in the
different provinces of the country, due to the different
systems of landownership and differences in the power of
local landlords. The fastest rate in the early months was
in the province of Fare (56% of 2,794 village had been trans—
ferred to the Government), and little happened at all in
Baluchestan (1%) and Yazd (0%) (Richards, 1975:7). Although
the first phase succeeded in redistributing land and breaking

the power of the major landlords, yet the number of villages

 

directly affected by the first phase constituted only a
small proportion of the total number of villages in the
country (about 20%). The overall impact of the reform was
by no means small, as the large land holdings of all major

landlords were liquidated, with profound socio-political

292

 

 

 

 

 

 

 

 

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293

 

 

 

 

implications for the entire country.

The implementation of the first phase created some
Opposition from within the government as well as from outside
of the government. By the end of the summer 1962, Opposition
was beginning to organize. The largest owners, many of whom
held high government positions, sought to erode the law by
questioning the depth of Arsanjani's hasty implementation.

On the other hand, Amini was seem as a man threatening the
unity of the Shah's absolute power from within. First Prime
Mininster Amini was forced to resign in July 1962. This
incident did not have an instant effect on the land program
since Arsanjani remained in his office in the new cabinet.
The new prime minister, Asadullah Alam, was a prominent
member of one of Iran‘s largest landowning families.

From outside the government, the land reform carried
on with some opposition from some landlords and clergy men.
In fact the landowning class in general were strongly opposed
to the reform on grounds of personal interest. Tribal
opposition to land reform began to appear in late 1962. On
November 12, 1962, Malek Abedi, chief of the Firuzabad Land
Reform Organization in Fars Province, was assassinated
(Tehran Journal, 1962) and the government put the region
under Martial Law. "Between November, 1962, and the following
March nearly one hundred soldiers and citizens were killed
in the struggle over distribution in Fare" (Baldvin,1967:105).
The backbone of the tribal resistance in Fars was broken

in early June 1963 when Abduallah Khan Zarghampour, chief

294

 

 

 

 

of the Boyer Ahmad tribe was killed in the Siyah Mountains
twelve miles from Dehdasht when he resisted while surrounded
by Government forces.

At the same time, some clergymen announced their opposi-
tion to the land reform program. This opposition was simul-
taneous with the progressive uprising of June 1963. I should
mention here that most of the Western scholars expert on
Iranian land reform believe that the main.issue of the June
uprising was the land reform. It is clear today that the
progressive clergy opposition was much deeper than an
simple opposition to land distribution.3

The state won the first round against those landowners
and clergyman who opposed the land reform. In this phase the-
government used mostly army forces. On.the other hand, the
Shah became convinced of the need for legislation to provide
security of ownership to landlords, while abolishing the
sharecropping relations. For this purpose, Arsanjani was no
longer suitable for the program. His mission was finished
here and in March 1963 he resigned at the request of the
Shah. His resignation gave encouragement to those both in
and out of government who desired a more leisurely rate of

land reform .

12.4. The Laws and Regulations of the Phase Two

In a situation of growing political opposition from
landlords and religious leaders, the Shah's attitude toward
the land reform changed, as illustrated by his choosing a

military officer, General Ismail Riahi, to succed Arsanjani

295

 

 

as Minister of Agriculture. The Shah had no interest on the
socio-economic conditions of the villages, and thus no
commitment to develop the kind of agricultural program which
would assure the long-term success of the peasants. This was
demonstrated by new governmental policy during the second
phase of the land reform. Riahi's appointment created a

slow pace of redistribution and priorities had changed.

The second phase of the land reform was formally
embodied in a series of Cabinet decrees which became known
as the "Annexed Articles" (Promulgated January 17,1963).

In 1963 parliamentary elections were held and the version
of the Annexed Articles were approved in July 1964 and became
known as the Additional Article (Richards,1975:8).

The aims of this phase were, on the one hand, to change
the agricultural production system in a way that would
abolish sharecropping practices, and on the other hand, to
prevent the radical expansion of independent peasantry in
favor of a new system of large landholding and agricultural
practice. It would be relevent to quote professor Lambton
(1969:215):

... those holding the reigns of power
began to realize that the emergence of an
independent peasantry might constitute a

new factor in the-political situation and
threaten their own power.

In short, the aim was apparently to do away with the remnants

of feudalism, but in fact it turned out to be a retreat from

the land reform and hence beneficial to the large-holders.
According to the second phase laws, all owners of the

exempted villages from the first phase have a choice of five

296

 

ways of settlement:

1) Landlords could lease their villages to the peasants,
i.e., those who were working on the cultivated and
cultivable lands of the village. This lease was a
cash rental on the basis of its weighted average
revenue calculated from revenues obtained during
the three previous years. The period of the lease
was up to 30 years, and the rental would be revised
every five years (Lambton,1969:194).

2

V

Sale to the peasants: Land could be sold to the
peasants on the basis of a mutual agreement about
the price between peasants and landlord. Before the
sale could be completed, land reform officials were
required to certify that the prospective purchasers
were actually nasaq holders, since the sale of plots
to other than nasaq holders was prohibited. (Ibid.).

 

3) Division of Land: Irrigated and dry farming lands
could be divided between the resident peasants and
the landlord according to the customary division of
the share-cropping, which as discussed earlier, was
on the basis of the five factors of land, water, seed,
labor and oxen. If this type of agreement was selected
by the landlord, then he was held responsible for
management and for using modern cultivation methods

Ibid. .

4) Formation of a share-holding a ricultural unit
(Jointestock agricultural unit .In this alternative
landlord and peasants should work jointly as share-
holders in a communal enterprise. Each member's
number of shares in the unit would be in proportion
to his share of the unit's assets, taking into
consideration land, livestock and tools. Profits
from the sale of crops would be distributed among
memebers according to each's share. Supervision of
each agricultural unit would be entrusted to a
managing committee composed of one representative
of the landowner (s), one representative of peasants,
and a third person chosen by mutual agreement
(Ibid, 204-206).

 

Sale of peasants' cultivation rights: Land-owners
whose cultivated land did not exceed a specified
maximum cguld purchase the rights of nasaq holding
peasants.

5

V

During the second Phase further attention was paid to
endowment lands. Villages which were vaqf-i amm (publicly

endowned) should be rented to the local peasant on the

297

 

   

 

 

 

basis of 99 year leases. Villages which were vaqf-i khas

 

(privately endowed) could be purchased by peasant or
could be rented for 30 years (Denman, 1978:272-3).

The nature of the laws of the second phase is consi-
derable, since on the surface they seem beneficial to the
peasant, but in reality they offered the landlord opportunities
to choose their own ways of dealing with the peasants.
Generally from the land-owners’ point of view the tenancy
agreement was the continuation of the status quo, particularly
when the leases were open to revision every five years. The
landlords did not lose anything and gained a Government-
enforced lease. From the perspective of peasants, the tenancy
agreements brought some disadvantages. For them, the
obligation to pay cash rents was the chief burden of tenancies.
This obligation forced the peasants toward the market-and
monetarization.

Under the second option (sale to the peasant), the new
peasant owners had to meet a price set by the landlords.

Under this condition, they were robbed by the landlord. In
alternative three (division of land) the peasants obtained a
small plot of the lands, due to the nature of the division of
crops.

Option four (formation of a joint-stock agricultural
unit) was a version of the old.landlord-peasant relationship
with a different name. Since most of the landlords were
resident in the cities and could not supervise the agricultural
unit, they entrusted their agricultural affairs to the

peasants which meant the continuation of the share-cropping

298

 

 

 

—i—

system.

The final option (sale of peasants' cultivation rights)
legitimized absentee landownership and harmed the peasants
since they gained nothing and lost their cultivation rights.

Like phase one, phase two included some exemptions.

The Land Reform Council ruled that cultivated lands, within
the boundaries of urban areas were not eligible for land
reform (Research Group,1970:59). Another exemption was the
mechanized farms. An owner could exempt 500 hectares from
the provision of the additional articles, as long as he

used a tractor to plow it and hired wage laborers to cultivate
it (Salmanzadeh,1980:65). But according to the fourth note
of the Additional Article, the land-owner was percitted to
develop his farm even above this size limit (Azkia,1980:53).
In fact, there was no limitation on the amount of mechanized
land that one owner could hold. Exemption of the mechanized
land was a direct effort to expand the capitalist relations

of production since it emphasized wage labor.

12.5. The Results of the Second Phase
The Additional Articles of 17 January 1963, unlike
the first phase of the land reform, were not put into

operation immediately. The implementation began in February,

 

1965 when it was approved by the Majlis and put into effect
immediately (Lambton,1969:194). Although the implementation
of the second phase continued until 1972, it soon became
clear that the first option (letting the land on a thirty

year lease) was the favorite. About 80% of the second stage

299

 

 

*—

transactions created tenancies. A total of 40,000 villages,
(including some 12,000 partially settled under the first
phase), and 21,912 farms were affected (Sazaman—i islahat—i
arzi, 1966:3). There were 227,490 landlords who rented their
land to 1,246,652 peasants (Ibid.).

By implementing the second alternative (the sale of
landlord's land to the peasants) 57,164 peasants bought land
from 3,275 landlords (Ibid.). As we can see, there were few
landlords who were demented enough to voluntarily sell their
land and water to the government so that the latter could
redistribute them to the peasants. This occurred only in
cases where there was not really any genuine land or water
and these were abstract names rather than anything else
(GOPF,1976:42).

About 156,279 peasants, received small plots of land
as a consequence of 22,646 landlords deciding to divide up
their lands according to option three (sazenam-i islahat-i
arzi,1966:3). There are no data to indicate the average
size of the farms which had been given to each peasant. One
organization's statistics indicated that the amount of land
received by each peasant was so small that it could not

possibly support a family. Their calculation is that some

 

of them acquired as little as 1/4 of a hectare of land
(GOPF,1976:44-45).

Based on establishment of the "joint-stock agricultural
unit", a total of 83,267 peasants received shares (sazeman-i

islahat-i arzi, 1966:3). Comparing the number of landlords

300

 

 

 

 

 

—:—

(41,774) who set up the joint units with the number of peasants
(83,267) show that two peasants, on average, shared the land
with each landlord. This indicates that this option was
favored by the small absentee landholders. As I mentioned
before, this option was in fact share-cropping under another
name, since the absentee landowners were notinvolved in
practicing agriculture.

Under option five, a small number of families, (17,157
of them) 'sold' their land to the landlords (Ibid.). Over
half of these were in an area controlled by the powerful
Alam family (Halliday, 1979:117). It seems likely that
peasants who submitted to this alternative were mostly forced
to do so.

Under the option of a ninety-nine year tenancy agreement
between the zaqf_administrators and nasaq-holding peasants,
another 172,103 peasants established tenancy contracts with

the vaqf administration (sazeman-i islahat-i arzi,1966:3).

 

The annual rent, at least during the initial five years, was
lower than value of shares of the harvest they owned prior to
the reform (Hooglund,1982:80). It is believed that some,

vaqf lands were sold to the peasants in a few cases where the

 

administrators of the vaqf felt it would be more beneficial

 

 

to sell the land and invest the money in other activities
(Ibid.,165).

In total 213,443 peasant share-croppers acquired land
under phase two of the land reform, as compared to 432,043
who had received it under phase one of land reform. The

statistics for redistribution under the second phase are

301

 

 

summarized in Table 12.2. These figures clearly show that the

aim of the second phase of the land reform was to halt the
distribution of land.

Table 12.2: Land‘Reform Options Under Phase Two

 

 

Owners
Villages Affected in Choosing Peasants
Option . Whole or in Part Option Affeczcd
99-year vaqf leases 12,052 ' 16,278 172,103
30-year tenancies 40,000 test.) - 227,490 1,246,652
Owner sale of land ‘ 3,275 57,164
Owner-peasant division of ‘ 22,646 156,279
land ' '
Owner-peasant joint stock 3,977 ' - 41,774 83,267
corporations
Owner purchase of 15,024 . 8,9§9 17,157

cultivation rights

 

 

a) Figures are not ayailable. .
(Source: Sazaman-i islahat-1 ar21,.1966.

Generally, peasants were not satisfied with the result
of the second phase because they did not receive ownership
of the land except in a minority of cases, and the terms
under which they received it were less favorable to them than
under the first phase. Thus, there was naturally widespread
peasant disappointment with the result of the second phase.
Peasants commonly expressed the view that the options were
not explained to them adequately. Therefore, peasants felt
that tenancy agreements had been illegally forced upon them
by their landlords. According to an investigation done by
Ajami, the peasant were made to sign a piece of paper which
later turned out to be related to one of the options more

beneficial to landlords than to peasants (Ajami,1970). In

302

 

 

 

 

short, the peasants got the impression that these objection-
able "choices" were being forced upon them by deceptive and
insensitive officials.

The second phase not only did not satisfy those peasants
who anticipated the opportunity to acquire land, it also
generated more anger among tenant peasants. The hostility
toward landlords, and violence against their property became
common in various districts. The peasants protested to the
land reform offices, saying that they did not know the nature
of the papers they had signed, but the officials paid no
attention to their complaints and took the side of the land-
lords. In fact, the state won the second round against the
peasant movement that was coming into being by either
ignoring the complaining peasants, or arresting "agitator"

peasants.

12.6. The Law and Supplementary Measures of the Phase Three.

This phase coincided with the government's policy of
modernization of farming. It contained three stages: the
creation of farm corporations; the amendment providing for
the sale of tenancies; and the encouragement of agri-businesses.
In fact this stage was set up to eradicate the remnants of
the feudal system of production.

In 1965, the Shah told the High Economic Council that
measures had to be devised to consolidate uneconomic forming
units,eXpand the area under irrigation, and increase
agricultural productivity. In the short run these goals could
only be acheived, the Shah asserted, through the creation of

what he called "farm corporations".5 Official visits were

303

 

 

 

made to Israel to study the Kibbutzim and the moshav. A year

 

later, the Shah again urged the formation of such economically
viable units, called for mechanization, and state a preference
to see the villages administered as farm Corporations
(Denman,1973:210).

The first stage of phase three (December,1965) outlined
a law setting forth the guidelines for the establishment of
farm corporations which were, in nature, an elaborate reformu-
lation of the concept of "joint-stock farm units" of the
Additional Articles (Katouzian,1974:228). On March 20, 1968,
the constitution of these companies was approved (Earham,
1977:112).

Theoretically, the principal objective of this law was
to speed up the "modernization" of agriculture through the
introduction of high rates of capital investment, mechanized
production, and the specialized cultivation of cash crops, all
of which was to be achieved by concentrating fragmented
individual holdings into vast corporate tracts. The law
relative to the creation of the farm corporation indicated

that "... it is hoped that the holding of each share-holder

 

will be no less than 50 acres of irrigated, or 100 acres of
nonpirrigated land" (Brun,1978:18).

Farm corporations were established in 1968 for a five-
year trial period. In practice, the establishment of farm
corporations, which would turn independent peasant property
into paper shares of the large corporations, led to the

concentration of ownership (through the sale of paper shares

304

   

 

 

 

 

 

by smallholders to big proprietors, thus creating absentee
capitalist farmers as well as peasant wage laborers) and
resulting in the state management of farm corporations by
officials sent from Tehran or the provincial capital. Yet,
the most damaging effect of this policy was to destroy the
historic boundaries of the Iranian village as an autonomous
unit of social life and labor. In short, this stage was
concerned with the consolidation of small units into big
ones.

The growing dissatisfaction with the results of the
second phase tenancy "reform" began to be divulged to Tehran
at a time when the government was involved in formulating
various agricultural deve10pment policies. Consequently, the
government began considering another action toward land
redistribution. On the other hand, the official policy formu-
lators believed that one obstacle to mechanization was the
fact that a majority of peasants were tenants, while their
lands ‘were owned largely by urbanites. They conclude that if
the tenants were to become owners, then this change in status
would provide a base for the establishment of farm corporation
and consequently the "mechanization" of agricultural methods
(Hooglund,1982:69). Therefore, the second stage was designed
to rectify the anomalies of the leasehold tenancies.

On July 13,1969, the law provided that in the following

cases:

(1) Lands rented according to option one of phase
two, whether or not the lease contract had been
drown up;

 

305

 

 

(ll) Lands included in "join-stock agricultural units";

(111) All lands which had remained in the hands of the
landlord after the first and second phases;

should be dealt with in either of the following ways:
(1) Sale to the peasant,or
(2) Division according to the ownership of agricultural
factors and apportioning the shares of landlord and
peasant (Earham,1971:106).
In fact, the five settlement options of phase two were reduced
to two.

The law did not apply to the land in villages constituting
I§q£_property (leased for ninety nine years), nor did it
affect any of the exemptions in force for mechanized land.
Finally, I should mention that the purchase price would be
equivalent to twelve years' rent, with payment arrangements
worked out by mutual agreement between owner and tenant
(Denman,1973). In this stage government did not intervene
in price setting.

The change of policy in favor of concentration and
'modernization' took yet another turn with the strategy of
establishing large agri-business complexes. This policy was

intended to create large-scale capitaistic farms, in the

 

style of the Latin American latifundia, in the areas where

the fertility of the soil and availability of water supplies

(officially described as 'the poles of land and water

resources') made it most attractive for land-extensive farming.
As H.Richards has mentioned, the fundations for the

Shah's foray into large-scale agri-business were laid during

the second Seven Year Plan (1955-62) when the head of the

306

   

 

 

’

Plan Organization, Ebtehaj, at a World Bank meeting in
Istanbul in September 1955 invited David E. Lilienthal,
former Chairman of the Tennessee Vally Authority (TVA) and
(the Atomic Energy Commission, to visit Iran in order to
examine the possibilities for a unified regional development
scheme similar to TVA (1975:12).

The 1968 law on "The Establishment of Compaines for
Utilization of Lands Downstream of Dams" says that the
government has a right to purchase necessary lands from
landlords and landowning peasants in order to release it to
agribusinesses created by state and/ or private domestic or
foreign investment (Salmanzadeh,1980:3). According to the
Agri-business Law the size of these farms should not be less
than 5,000 hectares (Azkia,1980:125).

This last stage of the Third phase was a direct attempt
to dispossess peasants in hundreds of villages in the most
fertile areas of the country, and use them as wage laborers
to work on corporate land. This policy was, put in Katouzian's
words, "a despotic pseudo-modernist strategy which deformed

Iranian agriculture" (1981:302).

 

 

12.7. The Outcomes of the Phase Three

Implementation of the 1969 Law took nearly two and a
half years, and was officially completed in 1972. Land Reform
Organization statistics indicate some 758,119 peasants had
purchased their tenancies by the end of 1972; in addition,
61,805 others acquired land as a result of owners choosing
to divide their land with peasants (Sazamanri islahat-i arzi,

 

307

 

—7—

The faithful performance of the distribution law of 1969
would have resulted in virtually all peasants gaining the
land they cultivated. However, in this phase, the government
played little role. As a result landlords sold their land
at their own convenience and at a higher price than that
which was legally permitted. In the option of the division of
land between landlords and tenants, many influential landlords
kept the better quality land and gave poor land for redis-
tribution. ‘

In relation to implementation of the law of establishment
of the farm corporation, the first corporation established
in Shiraz was near Persepolis in 1968. By the end of December
1977,93 Farm corporations had been established in different
regions of Iran (Azkia,1980:153). It was estimated that by
the end of the 1979, the number would reach 140. In fact this
did not happen, as a result of the failure of the program.

Finally, as a result of the Law of Agri-business, there
were about 15 large agri-businesses throughout the country
up to 1978, whose plantations ranged in size from 5,000 to
25,000 hectares. Eleven out of this total were established

in Khuzistan; their total extent came to 67,000 hectares

 

 

(Ministry of Agriculture and Rural Affairs,1976). Also, there
were 22 agri-business enterprises ranging in size from 1,000
to 5,000 hectares, which were mostly owned by Iranian
businessmen (Dumont,1976:25).

The success or failure of the farm corporations and
agri-businesses means the prosperity or unfulfillment of the

state in a fight against the independent peasantsfor

308

 

 

 

 

—i—

modernizing agriculture. This is part of my concern in part V

of this dissertation.

12.8. A Summary of 1962-1971 Land Redistribution

 

As the land reform moved from its first phase, it
became less and less effective as an instrument of land
redistribution. If the laws of the first stage had been put
into effect carefully, without any trickey by the.landlords
with the connivance of Government agents, the number of
villages given to the peasants (and consequently the number
of peasants families owning their lands), would have been
far greater.

Since the size of nasaq varied significantly among the

 

peasants within a single village, and also among the peasants
of different villages, the outcome of land reform was uneven.
By using the existing pre-capitalist structure of the villages
as the basis for their policy, one could conclude that the
officials deliberately designed the laws to distribute land
unequally, to benefit the richer farmers and to exclude at
least half of the rural population from its scope.

The more important point is the insufficiency of the

distributed land. According to an authoritative source the

 

amount of land the peasants received in many cases did not
make up a viable holding. The cultivated land held by nearly
40% of peasants did not exceed more than 2 hectares per
family (Khosrovi,1979:81), while the threshold of viability

outside the north part of Iran is 10 hectares per family.

509

 

 

 

 

 

The result of ten years of land reform are impressive.
In early 1962 before any redistribution had taken place there
were 3.2 million rural households, of which 2.4 million had
cultivation rights or were independent peasants (Bank Markazi
Iran,1972). As a result of the phase one and two reforms,
about 966,701 peasant households had received or bought land.
The law of phase three added about 799,924 peasant households
to this group. In total 1,766,625 households benefitted from
the land reform (see table 12.3). This figure of 1.7 million
households was 53% of the total number of rural households,

and 70% of the peasant share-croppers in the country.

‘

Table 12.3: Land Redistribution Summary

 

 

' Tatal peasants with haqqei nasaq, 1962 2,100,028
Peasants acquiring land
Under Phase 1 753,258
Under Phase 2
Owner sale to peasants 57,164
Owner division with peasants 156,279
Under Phase 3
Purchase of 30-year tenandies 738,119
Owner division with peasants 61,805
Tatal 1,766,625
Peasants holding 99-year vaqf leases 172,103
Toral beneficiaries of land rediStribution 1,938,728
Peasants not obtaining land 161,300
Percentage of nasaq holders obtaining land 92%

 

 

Sources: Sazaman-i islahat-i arzi, 1961-72.

Generally speaking, the government actually sought to
protect the interest of the small and medium-scale absentee
owners (through phases 2 and 3). As a consequence, tens of
thousands of absentee owners still remained after 1972,

although the great and powerful landlords had virtually

disappeared.
510

 

 

 

 

 

 

12.9.Endnotes

1. For the purpose of implementation of the law, a household

4.

5.

was regarded as one person. This definition was confirmed
by the thirty-sixth session of the Land Reform Council.
But the forty-third session of the L.R.C. (7/6/1963)
reversed this definition by declaring that women land-
owners in the same way as men, and irrespective of their
position in the household, are entitled to the upper
legal limit of land. Further, on 8/25/63, the forty-
seventh session of the L.R.C. issued a decree which also
entitled dependent children of the landlords to the

upper legal limit (Lambton, 1960:55).

This should not be generalized to all the land reform
officials. In fact the land reform organization was
among only a few governmental institutions whose staffs
were dedicated.

 

The June 1963 uprising under the leadership of Ayatollah
Khomini denounced the regime for living off corruption,
rigging elections, viola ing the constitutional laws,
stifling the press and political parties, destroying the
independence of the university, neglecting the economic
needs of merchants, workers and peasants, underming the
country's Islamic beliefs, encouraging Westernization,
granting capitulations to foreigners, selling oil to
Israel, and constantly expanding the size of the central
bureaucracies.

The maximum acount of land any owner could hold and still
be permitted to buy the cultivation rights of peasants
varied from 30 to 200 hectares depending on the location
and productivity of land (Homayon, 1963:18).

It is interesting enough to see that he did not asked the
"experts" to find a solution to the agricultural problem.
Instead, he claimed that farm corporations were the
solution.

 

311

 

 

 

 

PART V
RURAL SOCIETY AFTER THE LAND REFORM

INTRODUCTION: Emergence of the New Rural Socio-economic
Structure

The implementation of the land reform was a turning
point in the development of contemporary Iranian rural
areas. The land reform and its accompanying measures
swiftly changed the socio-economic conditions in rural
areas, enhanced the development of differentiated agri-
cultural enterprises and property systems, and thereby
modified the class structure of Iranian rural communities.
Characterized as a "reform from above," the land reform
program eradicated the pre-capitalist relations of
production, and superimposed new relations of production.
As a result of the land reform, the precapitalist estate
was transformed either into a transitory system of
production, or into a capitalist one, thus changing the
bais of the social relations of production. The former
category includes the independent peasant production and
the agricultural unit based mainly on tenant farming.

The latter category includes capitalist peasants, commer-
cial farmers, farm-corporations and agri-businesses.

Even though the transition to capitalism in rural

Iran is only a recent phendmenon and is by no means fully

312

 

 

completed, the social relations in agriculture are essenp
tially nonfeudal: land and labor are increasingly commo-
dified and their appropriation is more and more estab-
lished on a competitive basis. The majority of the product
is the result of either capitalist or petty commodity
production. The only difference between a capitalist
producer and a petty commodity producer is the capacity
to generate and expropriate a surplus via the use of
hired labor.

As we know, the transition to capitalism is not an
instantaneous process but a gradual one, over decades at
least, and one accompained by lags, apparent resistances
and a diversity of forms. In the case of Iran the land
reform program attempted to cultivate capitalist relations
of production in the countryside and had considerable
success in destroying the pre-capitalist system of social
relations. However, it could be argued that the reinfor-
cement of the independent peasant and tenancy sector
constitutes a brake of the full development of capitalist
relations of production in the countryside.

It is the intention of this part to explore the
emergence and structure of the new rural enterprises in
order to be able to draw a comprehensive picture of the
new rural class relations. By this, then, we can see the

effect of the land reform on Iranian rural class structure.

313

 

 

 

 

 

 

CHAPTER THIRTEEN
FORTIEICATION 0F TRANSITIONAL SYSTEMS 0E PRODUCTION

13.1. Introduction

The first intention of the present chapter is to
demonstrate that the elimination of the share-cropping
system (both muzara-eh and muqata-eh) did not result
automatically in the establishment of capitalist relations
of production in the countryside. Except for areas that
the government attempted to establish capitalist relations
of production, the predominant systems of production which
emerged after the reform were transitory systems of
production..This chapter will explain how muqasa-meh was
sharply expanded; and how the new tenancy farming (tulmbeh
EEEE) started to emerge as a transitory system of production.

The second aim in this chapter is to show how the
major pre-capitalist collective organization of production
(bgngh) was transformed and gradually dissolved by the
reform. Although it was believed by land reform officials
that rural cooperative societies could replace the bgngh
system and would fill up the gap which would result from
the destruction of the bunghs, in reality no village-level
institution ever has replaced their functions.

Finally, I will elucidate that one of the main results

314

 

 

 

 

of land reform was the emergence of the independent peasant
system of production. This new transitory system of
production was very beneficial to the capitalist system

of production since it was a good source of cheap labor

to produce cheap food. On the other hand, it was easy to
consoldiate the lands belonging to the independent

peasants in order to establish large-scale farming in the

 

areas which were suitable for capitalist activities. In
relation to the independent producer, I will also explore
the situation of non-farm petty commodity production, as it

is effected by land reform and its supplementary measures.

13.2. Elimination of share-cropping (muzara-eh and muqata-eh)

 

With redistribution of the land among the nasaq-holders

 

. and creation of the independent peasants; with exemption of

 

some of the lands from redistribution (i.e., mechanized land);
with the provision of establishment of tenancy farming; and
finally with the selling of the peasant cultivation right

(nasaq) to the landlord, the muzara-eh and muqata-eh social

 

 

relations have disappeared rapidly. After a decade of
implementing the land reform, share-cropping characterizes
perhaps only a small fraction of the total number of farms.
Some experts on Iranian rural change believe that even
before the land reform, muzara-eh disappeared in some parts
of the country as a result of the mechanization of agri-
culture (Khosrovi, 1976:78). As I have explained before

(chapter seven), the expansion of real mechanized farming

515

 

 

 

 

 

through the country before the land reform was limited to the
Gorgan region. Under particular circumstances, this mechani-
zation was established on the non-cultivating lands of the
region. Although this action stimulated the expansion of
mechanized land among some cultivating lands of the region, it
did not replace muzara-eh with other systems in the majority
of the feudal lands. In other parts of the country, muzara-eh

and muqata-eh remained intact until the land reform.

 

There is no doubt that, as a result of the Iranian land
reform, the forms of generating products and the mode of
surplus extraction were to a great, if still incomplete,
extent changed. Although land reform in Iran did not eliminate
large landownership in the rural areas, the new concentration
of land was not for the purpose of continuation of share—
cropping. Neither new landowners nor formerhnafaqfholders
were willing to continue with the share-cropping system.

From the new landowners' point of view, it was more profite-
able to pay wages to the peasants or to lease out his farm to
tenants for cash. In contrast to the landowners, the peasants
preferred to have their own plot and not to work for a share
of the crops.

To my knowledge, the incidence of muzare-eh and

 

muqata-eh relations of production was not very widespread at

 

the end of the land reform period.

316

 

 

 

 

 

15.3. Prevalence_of Tenancy Farming (nimeh kari and tulumbeh
E5211 "'

 

 

 

As I demonstrated in chapter seven, a particular type

of tenancy farming (muqasa-meh) existed prior to the land

 

reform. This system was modified and increased as an.unexpected

result of the land reform. It has been called nimeh kari mostly

 

after the land reform. Alongside nimeh kari, there is another

 

form of tenancy farming known as tulumbeh kari. This transi-

 

tory system of land exploitation was created after the
land reform.

Nimeh kari has prevailed since the land reform in Iran.

 

This system emerged as a result of different actions. In
some cases, the land had been bought by a few rich peasants
from small peasants and then had been rented to the tenant
farmers (Ashraf, 1975:30). In other cases, the landlord had
bought the cultivation right (nassaq) of share-croppers and

converted the land to cash crops, with the help of tenant

 

 

farmers (Azkia, 1980:114). Finally, in many cases, the
landlords who exempted the most productive land from redis—

tribution turned their land to nimeh kari (Ajami, 1970:69).

 

One of the main characteristics of this system of
production is that the tenancy agreement between the landowner
and the tenant is based on a short-term contract, which
remains in force for one or two years. The tenancy agreement
is mainly for cultivation of vegetables and sayfi (Azkia,
1980:112).

The second characteristic of the system is that the

tenant farmers have extensive knowledge and experience in

317

 

agricultural affairs, especially about sayfi crOps. The
tenant farmers are usually well-to-do peasants and some of
them originally came from the central parts of the country.
They move around the country looking for land to rent at
bargain prices (Ibid., P.113).

The third characteristic is that these peasants live
on rented farms for the period of cultivation and are not
involved in social activities of the village. They are
considered by the residents of the villages as a marginal
group. They cultivate the land with the help of the agri—
cultural laborers who are brought from the tenant farmers'
villages as migratory laborers (Research Group, 1969:286).

The fourth peculiarity of the nimeh kari system is its

 

management. The management of the enterprise is based on
the decision making of the tenant himself. Whatever is the
decision of the tenant, the owners of the land expebt a fixed
rent from him regardless of success or failure of the crOps
(Ashraf, 1975:59).

The fifth distinction of the nimeh kari is that in

 

tenancy agreements the provision of land, water and half of
the fertilizer cost are the owner's duty, while providing
the other factors of production such as labor, seed, agri-
cultural implements and the remaining half of the fertilizer
is the tenant's responsibility (Azkia, 1980:115).

The sixth characteristic is that the tenant farmers

make another contract (in addition to the contract with

318

 

 

 

 

 

 

 

landowners) with various middlemen in the town markets in
order to sell their products (Ashraf, 1975:59).

Nimeh kari has been established mostly for producing

 

summer crops for market. They are usually located close to
the big cities and towns. Their production is labor intensive.

One of the reasons that nimeh kari has been expanded after

 

the land reform is its labor intensive character. They
are beneficial to capitalism since they produce labor
intensive croPs.For example, in a village near Marvdasht
in.Fars province, the capitalist owner of 500 hectares

of land of the village leased out 30 hectares to an
outsider tenant farmer to cultivate labor intensive crops

(i.e., watermelon and so on), while he cultivated sugar-

 

beets on rest of his land using mechanized equipment and
wage laborers (Ajami, 1970).

The value of the products sold by the nimeh karan is

 

 

high. In the above mentioned village, for 30 hectares
cultivation in 1966-67, 1,650,000 rials products were sold.
For that year, the pure income of each nimeh kar was 43,000

 

rials for seven.months work which in contrast to the income
of the independent peasant producers of that region was

really high (Ibid., pp. 61-62).

 

The development of the nimeh kari increases unemployment

 

in many villages of the country since nimeh karan bring

 

their own.laborers from outside the villages to work. This

 

is one of the reasons that nimeh karan are not welcome among

 

the residents of the villages.

319

 

 

 

Nimeh kari has a contradictory characteristic. On the

 

one hand, they are exploited in relation to both landowners
and middlemen and contractors of the market. On the other
hand, since they work with the help of agricultural laborers,
they exploit these laborers to some extent. Their positions
are quite risky since they are dependent on Lmarket price
fluctuations. It has been reported that some of them became
bankrupt. However, their situations in general are better
than independent peasants and they survive the development
of capitalism because of their ability to deliver food to
consumers at a lower price than the capitalist.

As I mentioned before, there is another form of tenancy

farming known as tulumbeh kari. This has a minor difference

 

with nimeh kari in terms of land—ownership. One of the main

 

reasons for the emergence of the tulumbeh kari after the

 

land reform was the problem of providing water for irrigation.
Tulumbeh karan rented the unirrigated land and by investing
in digging semi-deep wells, they have provided an adequate
water supply. This usually happens on the marginal lands of
the villages. Another reason for the emergence of tulumbeh
kari is insufficiency of the lands of poor peasants after

the land reform and a lack of credit’to invest in production.
Therefore, the poor peasant prefares to lease out his land to

tulumbeh kar and seeks job on others“ land or in towns.

 

In this system of production, a specialized peasant
has taken the risk of investment in farming activities. He
provides water, seeds, water pump, and all other cultivation

implements. The labor power comes either from family labor

320

 

 

 

 

 

or hiring some agricultural laborers. The agricultural

laborer in the case of tulumbeh kari, unlike nimeh kari, comes

 

from the village itself (Ashraf, 1975:69). In tulumbeh kari
the owner of the land does not intervene in decision-making .
The head of the family is the major manager of the enterprise.
As Ajami has indicated, these enterprises are more
inclined to increase their yield and introudce new methods
for cultivation. Therefore, in order to increase output per
hectare they have cultivated the land according to capitalist
farmers' norms. Intensive farming is often found in their
agricultural units. They have set aside less land as fallow,
by providing more water to cultivate a larger proportion of
their land. Their crops are usually labor intensive and for
their seasonal work they hire wage laborers. Most of these
enterprises are run by specialized, experienced, peasants.
Because of their profitability, cash and summer crops (sayfi)
are the main'products of these enterprises. These agri-
cultural units are mostly concentrated around the cities
(Ajami. 1970).

The ability of tulumbeh karan for investment in agri-

 

cultural machinery is not high, but in contrast, they have
a high ability to invest in digging the wells and installing
water pumps. In one village, for example, on average each

tulumbeh kar family invested 138,140 rials for supplying

 

the;water (Ashraf, 1975:76). This amount is very high by
comparison to the investments of the nimeh kari and

independent peasant families.

321

 

 

 

 

 

Each tulumbeh kar family invested an average 179,639

 

rial in all agricultural necessities during 1966-67. He
sold 335,743 rials products. Therefore on average, he earned
122,532 rials from selling his agricultural products.

Tulumbeh kar family usually has some livestock. It has been

 

estimated that he can earn 10,000 rials from selling livee
stock products. Consequently, the average net income of a

tulumbeh kar family in the year investigated was 132,532

 

rials (Ashraf, 1975:78). Comparing this with the pure income

of the nimeh kar in the same year shows that tulumbeh kar

 

 

income was three times higher than nimeh kar's. This is

because the yield per hectares in tulumbeh kar units was

 

higher than that of nimeh kar and even independent peasants

 

(or. Ajami, 1970).
'.According to some stuides there is evidence that the

tulumbeh karan, after renting the land :from the small

 

peasants for a few years, have bought the land andsexpanded

their farms (Azkia, 1980:116). At the same time, it has been
reported that these agricultural units have been threatened

by the uninstitutionalized arrangements for supplying

credits (Rural Research Group, 1968: 50). Tulumbeh karan

 

have obtained credit for investment in water supply from
various middlemen and urban merchants. Borrowing the credit
allowed the merchants to monopolize the buying and selling

of all products belonging to the tulumbeh kar. As a result,

 

the contractors usually buy the crops at a lower price than

the free market price. In addition, the merchants intervene

322

 

 

 

 

 

 

in the decision-making regarding the type of crops that
should be cultivated for each year (Ashraf, 1975:69-71).
Therefore, the degree of involvement of the merchants in
decision-making effects the amount of yield and the hectares
under cultivation.

A comprehensive survey of these agricultural units has
not been carried out yet. One thing is clear about this
system of production; it is spreading rapidly. At the
beginning, it was found mostly in Fars and Bandar Abbas
provinces. Gradually it is becoming widespread in the
country. As I mentioned above, there is a tendency for its
expansion and rapid transformation to either independent
peasant production or to the capitalist activities. But at
the same time there is a threat against it in relation to

market and middlemen.

13.4. Transformation and Gradual Disappearance of the buneh
system_

Iranian villages experienced significant socio—economic
changes after the land reform. These changes transformed the
organization of labor which had prevailed in village society.
The practical effect of redistribution was the break-down
of traditional units of agricutural production in some
regions, in which all agricultural activities were under-
taken collectively. Unfortunately, the governmental officials
who drafted the land reform law totally ignored the structure

and function of buneh. The land was distributed to the

323

 

 

 

 

individual nasaq—holders instead of buneh. The first effect

 

 

was the division of the bppeh organization.

The practical effects of the destruction of the tradi-
tional pppeh system were many. First, as we know, the
bppgh organization gave socio-economic security to its
members. Although the leading members had some social and
economic privilege over other members, even the weakest
members were sheltered against socio-economic difficulties.
After the disintegration of the bungh system, the lower
members, who were accustomed to working within the frame-
work of a bungh, could not COpe with the socio-economic
pressures.

Secondly, the destruction of ppp§h_caused a rapid
process of social and economic polarization and strati-
fication within the village population. The disintegration
opened the way for stronger elements among the peasantry to
concentrate more and more social and economic power in
their hands at the expense of others.

Since working together was a necessity to the Iranian
peasantry, redistribution of land among individual members
of the bupgh meant that some peasants could not do all the
specialized work such as irrigation which needed more
experience and cooperation.1 As a result, after the land
reform there existed a strong tendency among the peasants
to keep the ppneh intact for some years, especially in
regions which faced a scarcity of water (Saedloo,1978:80).
However, there were changes in the terms under which bunehs

operated; most importantly, the privileges, which had

324

 

 

 

resulted in an inequitable distribution of both labor and
the harvest,were eliminated (Safinezhad, 1974:178). There
is evidence which indicates that in certain villages bunehs
have survived quite well, albeit in greatly modified form
(Ibid.).

In spite of the peasants' ambitions and attempts to
preserve the traditional system of production, in the
course of time these bunehs could not meet the challenge
of the newly created socio-economic conditions and began
to break up. In additionato this, since lands were redis-
tributed unequally, those who received large amounts of
land thought cooperation with smaller holders was less
practical than hiring agricultural laborers (Hooglund,1981:
174). Therefore, economic considerations have reinforced a
trend toward 92232 dissolution.

Table 13.1 represents the course of disintegration of
the 92229 structure in the village of Table- Abad in the
period after the land reform. In this village, the peasants
who received land were organized in 15 four-household
bunehs. After nine years, all _of them had broken up except
for a few with very strong family ties (Safinezhad, 1974).
The 15 production teams in the year 1965-66 have increased to
47 production units in the year 1973-74. It is clear that
in spite of the peasants’ attempts, the continuation of the
92225 system of multi-household production teams have proved
impossible because of the new conditions.

Similar fragmentation and atomizing processes were

reported from many villages in different parts of the country.

325

 

 

 

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seems nasaaa> esn<-hnasa ea easaeaaam sheen mo coaasameaeamaa no mmaeoaa one ”a.ma manna

326

 

 

Bunehs' gradual but steady dissolution during the 1970s
has produced a similar pattern in many villages. First, in
a typical redistributed village, bunehs were re-established
in the same number and size as existed before the reform.
After a few years they expanded numberically by reducing
their size. Finally, as peasants decided to cultivate

their own land individually, the number of bunehs start
decreasing over time.

While bunehs have not disappeared completely from rural
Iran, overall their decline has been dramatic.By 1977 the
bunehs, as a village institution, had larely disappeared
and those which remained were completely transformed in
comparison to their roles before the reform. They no longer
serve the central roles in the villages and no village-level
institution has replaced their functions. As a result, this
transformation and dissolution had an effect on both

resources and agricultural production (Cf. Azkia, 1980).

13.5. Creation and Expansion of Rural Cooperative Societies
The rural cooperative societies were created as a part
of the land reform program, but they started to operate
before the 1962 land reform implementation. By 1960 there
were 636 cooperative societies with some 290,000 members
(Ajami,1976:200). These societies rapidly eXpanded after 1962
since a share-cropper was required to belong to a rural
cooperative if he was to obtain land. At this point these

societies were transformed into fully governmental organizations.

327

 

 

 

 

 

 

They touched the lives of more rural families than any
other organization.

It was believed by land reform Officials that rural
cooperatives could take over the duties of landlords and
bunehs. Theoretically, the functions of cooperative
societies were as follows: a) operations concerned with the
production, exchange,storage, transport, and sale of the
produce of members; b) provision of agricultural implements
and machinery, fertilizers and pesticide; c) provision of
consumption goods; d)extension of loans to members to tide
them over the .period until they sell their crops; to provide
what they need for cultivation of their crops, and where
necessary provide money for improving the means of production
(Lambton, 1969:293).

Rural cooperatives were initiated, designed,created,
super-impesed and stage—managed by a central bureaucratic
network. No efforts were initiated to make the cooperative
societies into genuine peasant partnerships. Rather, they
became agencies for exercising bureaucratic control of
rural affairs (Katouzian, 1974:233). The cooperative society
consisted of independent peasants. The daily administration
was in the hands of the board of directors (three members and
two reserve members) who were appointed by the general
assembly of all society members. They were elected for a
two-year priod. The individual cooperatives elected delegates
to the union. From each union a president and managing

director were elected, but in practice 80 per cent of the

328

 

 

 

 

 

 

managing directors were government officials (Ashraf,1977:34).
All unions were grouped together in the Central Organization
for Rural Cooperatives (CORC) with headquarters in Tehran.
Although many functions were mentioned for the rural
cooperatives, very soon the explicit functions of the
societies became distribution of credit and necessary
consumer goods. In order to understand the distribution of
credit to rural cooperative members, it is necessary to see
the operation of the sponsoring financial agency. The
financing procedure had three steps. First, at the regional
level the Agricultural cooperative Bank allocated a sum
negotiated annually to the Regional Union of Rural Cooperatives.2
Second, the Regional Union distributed this sum among the
COOperatives. Finally, the cooperatives in turn distributed
it to those members who requested loans (Ashraf,1977:38).
By 1961, 960 cooperatives with 351,973 members granted 449
millions of rials loans. At the end of 1975 the number of
cooperatives increased to 2,858 with 2,685,000 members and
24,723 millions of rials loans granted. The expansion of
the cooperatives between 1961 and 1975 has been summarized
in table 13.2.
The loans genrally did not exceed 21,000 rials ($300)
per year and were often well below this sum (the 1961
average was $40 per). In 1975 the average loan granted to
a peasant household was $220 (this was the highest from
1961 to 1975) which was uncomparable to the norms proposed by

the International Labor Organization ($1000 per agricultural

329

 

 

 

 

 

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330

 

 

household (Center for National Spatial Planning,1976:30).
Even this amount was not available for all the peasants
requesting loans in all villages. Over 15,000 villages
were still without cooperatives in 1975 (Richard .1975z10).

As I mentioned before, one of the functions of the
cooperatives was provision of water supply. The cooperative
societies that were charged with the responsibility of
supervising and maintaining the traditional qanat_irrigation
system of underground water channels did not fulfill their
obligations, and the gang: system was allowed to decay
(Ghorayshi, 1981:29).

In relation to technical assistance, the cooperative
members demanded help in the methods of using chemical
fertilizers, improved seeds, irrigation, pest control, and
agricultural machinery. Those in charge of the cooperatives
were unable to adequately assist the peasants. An examination
of technical guidance distributed within 142 cooperatives
illustrates this problem: only 38 of these societies received
help regarding chemical fertilizers, 36 had assistance in
using improved seeds, 10 had help with irrigation, 22 were
assisted with pest control, 26 in the use of agricultural
machinery and only one had assistance in the use of loans
(Institute for Social Studies and Research, 1970:133).

The technological assistance was introduced only to
men, while there was 7 per cent female members. For Iranian
rural women, who were active participants in agricultural

activities,especially in areas where rice was cultivated,

331

 

 

the introduction of technical assistance only to men had
several implications. First it changed the status of women
in relation to production. Secondly, in the course of
agricultural development (if there was any), men's labor
productivity tended to increase while women's remained more
or less static.

In the distribution of consumer goods, the cooperatives
played an important role even though, at face value, they
represented only a small part of the total consumption of
the rural population (this was about 2 per cent excluding
consumption of self produced goods) (center for National
Spatial Planning, 1977:24). In fact, these cooperatives with
their 4,4OO sales outlets and 2,685,000 memebers, created a
densely patterned commercial network across the country
(Ibid.). However, the expanSion of their activities on
consumption needs could not effectively carry out one of
their major roles (namely to cut the activites of the private
sector). Only in the supply of tea and sugar did the amount
obtained from cooperatives come close to the amount obtained
on the free market (see Table 13.3). In short, the stress
was put on co—operative buying, rather than co-operative
farming.

It was clear at the end of the 1970s that cooperatives
failed to mobilize peasant resources for better farming.
This helped to increase the role of the rural bourgeoisie
and merchants from the cities in providing necessary loans
for the peasants' survival. A 1968 survey of credit sources

for relatively prosperous peasant families in several

332

 

Table 13.3: Areas where cooperative members obtain
consumption needs

 

 

 

Items where items are obtained
Cooperatives free market
Sugar and tea 47% 53%
Clothes 3% 97%
Household items 14% 86%

Seeds,Fertilizers
and other farming
needs 36% 64%

Others 16% 86%
Sources: Plan and Budget Organization, 1973.

 

districts showed that moneylenders still accounted for 38. %
to 58.5% of the loans received (Denman,1973: 20-21). The
interest rate of the loans from uninstitutionalized sources
was very high. In relation to this issue, the cooperatives
not only did not take the place of the exploitive rural
middlemen, but it paved the way for the expansion of their
activities by lacking sufficient credit to offer to the
peasants.

A survey in seven areas of Iran showed that some
managers of the cooperatives had accepted "commissions”
from members and in return gave them more credits (Rural
Research Group, 1970). Different reports indicate that
credit through the cooperatives was primarily advanced to
well-to-do peasants since they were able to have influence
over the cooperatives (Khamsi, 1969; Ashraf,1977; Azkia,1980;
and Hooglund,1982).

In short, cooperatives were another branch of the state

bureaucracy rather than self-governing peasant societies.

333

 

They were under the control of the upper stratum of the
peasantry. Their ability to provide credit to the poor
peasant was low. One of their main functions was encouraging
consumption of the town-made goods. They did not encourage
cooperative farming and assistance at all. While the land
reform has effectively destroyed the pppgh as a cooperative

unit of production, the expansion of the cooperative

societies was by no means a substitute for bunehs.

13.6. Expansion of Independent Peasant Production

As I demonstrated before, one of the major effects of
the land reform was to eliminate share-cropping and increase
the number of peasant proprietors, and thus the size of the
latter class increased to one-second of the rural population.,
After the land reform, independent peasant production became
the most prevalent system of agricultural production in
Iranian communities.

It was found that until recently 40% of both irrigated
and unirrigated land sown in cereals, 85% in rice and 46% in
cotton was reported to be exploited by independent peasant
family farms. And this group of peasants produced between
40%-50% of gross agricultural value added in 1972 (Statistical
Center of Iran, 1974). As we can see from the above statistics
the role of the independent peasant farm is very important
in the overall agriculture of Iran.

Independent peasants, consisting of former peasant
proprietors as well as families that benefited from the land

reform, constituted 51%cfi'the rural families. Their

334

 

 

holdings are up to 50 hectares (Plan and Budget Or.,1974).
From the size of the landholding, this class of the peasantry
consisted of three strata: the first group owns less than 2
hectares land; the second one owns between 2 and less than 10
hectares; and the upper stratum owns between 10 and 50 hectare.
Table 13.4 shows the situation of these three strata of

independent peasants.

Table 13.4: Independent Producer Peasants After 1362 Land Reform.

w

 

Size Total Areas Percentage Total No.0: Penny Percentage Average eize
finecteree) Lhectaree) Area of. Country Peru Unite (h_ectaree)
Under 2 785.800 4 .5 1 9056,466 ‘3 I 0.?

2-)10 4,686,305 28.5 969,526 39 4.8
10950 7,500,741 45.5 428,086 11 $7.5
Total ' 12,972,846 “78.5 2,454,066 99 5.3

 

Source: bitumen-y of Agriculture, 1975.

Table 13.4 indicates that Iran has a high proportion
of small farms. At least one-third of Iran's present farms
are too small to provide the target income if they represent
its only source. Since 7 hectares were accepted by Iranian
agronomists and rural sociologists as the minimum average
amount of land required to support one village family of
five members at a basic subsistence level for one year

(Hooglund, 1981:93), it is obvious from the above table that

335

 

 

at least half of the independent peasants were below the line
of minimum subsistence. As we already know, at least 75 percent
of those who acquired land under the land reform received

less than 7 hectares.

The peasant family is the basic unit of production. The
field work is done mainly by the members of the family,although
in some cases (mostly upper stratum) agricultural laborers
are hired for harvest time. Juridically the head of the
family is the owner of the land which he received after the
reform. Agricultural activities are directed and controlled
by the head of the family; the father is normally the
director of the enterprise. All production decisions are made
”by him. Independent peasant households control and manage.

their means of production,thus allowing them a measure of

 

autonomy vis-a-vis other classes.

Independent peasant families are involved in various
agricultural activities including farming, livestock rearing,
orchard gardening and domestic industry. The production of
crops in the units based on family farming is determined by
the needs of family consumption. They usually cultivate
more than four crops. According to the Statistical Center of
Iran, in 1975 more than 7 % of peasants were reported as
cultivating more'than four crops (1974). Since there is a
difference in terms of various agricultural activities
which determine the main source of family income, we can

distinguish three main categories. In those independent peasant

336

 

 

 

communities in which the main activity is farming, only 55%
of their incomes comes from cultivation; 50% from livestock
rearing; 10% from gardening; and 5% from others (i.e., home
industry). In the community with predominantly gardening
activities, 60% of the independent peasant’s income comes
from gardening; 50% from farming; and 10% from other
activities. Finally, in a community with sayfi Ear} (summer
crops), almost 70% of the income comes from summer crops;
10% from farming; 10% from livestock rearing; % from
gardening, and the remaining 5% from other activities
(Khosrovi, 1979:100).

It was believed by Government Officials that land
distribution would encourage peasants to increase their
production but, as we have seen, during the land distribution
period, the most productive land was allocated to the land-
owners and mostly unirrigated and poor lands were redistri-
buted among the peasants. This had an effect on independent
peasants' income. Another factor which inhibited the efficient
use of land was the land parcelization created by the
land reform (Cf. Ghorayshi, 1981:29). This in turn affected
the income of the families. Although there is no comprehensive
information about the level of income of the independent
peasant families before and after the land reform, various
studies show a tentative level of their income after the
reform. According to the findings of the Rural Research center
of Tehran University, during the middle of the 1970s, the

range of the average income of independent peasant families

337

 

 

 

in Iran was from 6,967 rials in Birjand to 48,682 rials in
Kashmar (Ashraf, 1975:41). Table 13.5 illustrates the
average income and loan distribution for independent peasant
families across the country in 1975.

As we can see from Table 15.5, in many regions the
average peasant is chronically in debt because his subsistence
farming does not provide for any saving margin. The little
credit that the lower strata of independent producers could
obtain was spent mainly on their immediate consumption
need or to repay old debts and, therefore, did not go for
the purchase of agricultural inputs from industry (Ghorayshi,
1981:29). As the independent peasant family is unable to
really increase its level of living substantially with such
poor resources at its disposal, it continues to provide a
minimum subsistence income to its members. Since land has
begun to lose its importance as a main source of income, the
peasants are forced to seek complementary sources of income
elsewhere. The vast majority of thses independent peasants
worked either as part-time wage laborers in agricultural
production outside their own land or migrated as seasonal
laborers to cities. Capitalist producers in agriculture and
cities benefited from this semi-proletarianization by
paying a wage which is below the cost of maintenance and
reproduction of the labor force, since the function of the
independent peasant sector is to add the necessary complement.
In fact, the independent peasants are an inexpensive labor

force for the process of capitalist accumulation.

338

 

 

 

Table 13.5: Average income and loan of an
Independent producer Peasant in 1975

 

 

(Rirals).

Regions Income Loan allocated
Ilam 19,809 15,520
Bojnord 19,457 12,461
Tabas 15,522 11,546
Kashmar 48,683 5,372
Bandar

Abbas 30,568 18,558
Torbat

Hidarieh 26,554 10,657
Khalkhal 18,025 7,748
Birjand 6,967 4,672
Nishabor 10,525 14,941
Torbat 28,881 9,856
Dargaz 27,881 15,272
rohan 50,578 10,657
Mashhad ' 32 , 297 8, 506

 

Source: Ashraf, 1975:40.

The consumpticn pattern of the independent peasant
families in Iran is representative of a consumption pattern
in poor societies. Between 70% to 80% of their income goes
for food consumption while there is evidence of malnutrition
I among them (Statistical Center, 1972). According to one
survey 55% of the loans obtained by the poor independent
peasant families has beeen spent on food consumption
(Institute of Social Research and Studies quoted in Khosrovi,

1979:24). A large number of peasants actually had to sell

339

 

 

 

 

their land in order to clear their debts (0kazaki,1968:45).
Although the independent producer peasants consume most
of their products, they have to sell part of their produce
to procure those goods they do not produce themselves and
to pay back the usurers from whom they have been borrowing
(Halliday, 1981:51). Peasants not involved in the market
as sellers of their produce obviously find it difficult to
participate in the commodity markets as buyers of the
products of industry. On the other hand, many of these
peasants who do not sell any of their agricultural produce
own plbts of land that are too small to support their
families and, therefore, must take whatever employment
they can find. In short, the land reform encouraged the
growth of market relations and resulted in commodity
relations, although they are not ubiquitous.
Finally, I should indicate that since the independent
peasants are legally and socio-economically attached to
their small plots of land by means of ownership rights,
they have very little chance for expanding their activities
within the village framework and cannot easily leave the
village because of their relations to their means of production
(i.e.,land). The effect is that the independent peasant
household is forced to overexploit its own labor to a great
degree. But this has its own limitation. In short, the state
that created the many small independent peasants at the

same time created many barriers to their viable operation.

340

 

 

 

 

13.7. Changes in Non-farm Independent Production

The non-farm independent sector covers a wide range
of activities which supplement agriculture and animal
husbandry and are an integral part of the rural economy.
They include processing, manfufacturing and infrastructure
building. This sector of the rural economy has been under
pressure since the penetration.of capitalist activities in
Iran. But, after implementation of the land reform, the
non-farm independent sector started declining. This pattern
has been observed in other countries, too. As Dhamija
(1976:70) has indicated, "the neglect of the non-farm sector
occurs in most countries whose Agrarian Reform is introudced."

Information on employment in the rural non-farm sector
is generally unreliable and incomplete.3 According to the
Iran Handicraft Organization, 752,000 people were involved
in the crafts in the rural area by 1966 census. A majority
of them were employed in carpet weaving (71.2%), of which
70% of them were women (Ministry of Interior,1966).

The important factor which has to be taken into
consideration is the twofold process that is effecting the
Iranian idependent crafts workers. 0n the one hand, some
. crafts could not compete with modern industrial goods,
therefore they start to either disappear or to be diverted
to other skills. On the other hand, independent crafts workers
(like carpet weaver) who went under a heavy attack from
capitalist penetration in their field had to adapt to the

needs of the capitalist.

341

 

 

 

Since the traditional artisan could not compete with
modern industrial goods, the gap between the quality of
local products and mmdern industrial goods grew and the
earnings of the self-employed artisan shrank. They found
that the goods produced in urban centers or imported from
foreign countries coming into the rural market were taking
away their clientele. For instance, the development of the
plastic industry, which manufactures containers, storage jars,
sandals, etc., has put a lot of the pottern workers,metal
workers and traditional slipper making industry (givgh)
of smaller self-employed artisans out of work.Those who tried
to resist faced an increase in the cost of raw materials.

The only thing they could do was to cut back on their
own earnings. This led to a state of stagnation in most
of the sectors and "the younger generation were not
interested in entering into traditional crafts" (Dhamija

1976:26).

 

Part of the responsibility for stagnation in some
craft sectors was the destruction of the 22228 system. As I
discussed earlier, the rural blacksmith and carpenter were
directly linked to the activities of the bunehs. Getting free

from working within the frame of buneh, the new independent

 

peasants were not obliged to deal with the rural crafts
workers. They now could go anywhere to shop or fix their
instruments. In addition to destruction of the bunehs, the
establishment of the rural cooperative societies not only

did not save the operation of artisans like carpenter, but

342

 

 

 

in reality sped up their destruction. As we know, the
formal credit system of the rural cooperatives could not be
used since the credits were limited to indpendent peasants
only. On the other hand, the cooperatives increased a
massive flow of the goods from urban to rural communities.
These goods were more attractive to the peasants than

things prepared by village craftsworkers.

As a result of changes in using some means of production
(things like water-pump and in some cases tractor and so on),
and introduction of new transportation means (i.e.,bicycle
and motorcycle), many of the local artisans and some
manufacturers had to be diverted to other skills (Dhamija,
1976z5). Shops like garages and bicycle-shops Started to
emerge. This was due to the fact that there was a growing
local demand for these skills. These shops were totally
dependent on the urban market for their parts and material.
There was no relation between them and village blacksmiths
(if they survived).

There were areas in which the situation was totally
different. In the case of carpet weaving, the independent
producers became totally dependent and subsidized capitalist
activities. As we know, the carpet industry has two
separate but interrelated sectors. First is the sector which
provides and processes the raw materials and prepares them
for weaving. Second is the sector which involves weaving

itself. Processing of raw materials, which had an important

343

 

 

 

impact on the rural economy, went under heavy attack from
capitalist penetration. Wool was the most important of the
processing activities,a large proportion of the rural
population being greatly dependent on the wool produce.
After the land reform, wool producers became the target of
the traders. Producers took loans from the traders against
the sale of wool during the shearing seasons. For this loan
they were charged 40% to 60% interest. They returned the
loan in wool and the price paid by the trader was generally
10% to 20% lower than the price paid in the towns. They lost
nearly 50% of the value of the wool at this stage. Since
they were in constant debt to the trader, they had no choice
but to deal with the trader (Dhamija, 1976).

The traders now have a monopoly over the raw materials.
The independent carpet weaver has to buy the material from
them. The trader gives the raw materials on loan. When they
buy the spun and dyed wool from the traders, the processes
having been done by mills or small workshops, they often
pay a price 10% to 20% higher than the market price
(Dhamija, 1976:61). The trader or shop keeper also advances
the day to day needs of the independent family. They also
have control over some aspects of production like suggesting
a marketable design for the carpet. after the carpet is
ready, it is evaluated and the price is paid to the weaver
by the trader after deducting the credit given to the weaver.

There was a large complex of Iran carpet Company which

was financed by the government in order to help the independent

344

 

carpet weavers. The company had offices in all at the
provinces and also in the districts. The yarn was processed

at a central place and distributed throughout the country.
Finished goods were also collected and brought down to the
central office where they were washed before they were
marketed locally or exported. This company was not able to

cut the influence of the traders and middlemen since according
to official statistics only 4% of the actual production and
trade in carpets was handled by the company and the rest

was handled by private trade (quated in Dhamija, 1976:68).

With expansion of the capitalist carpet weaving looms
in the rural areas, the independent carpet weavers are
facing another threat. After the land reform, second and
third sons of peasants have been forced off the land and
are willing to become weaving apprentices (English,1966:81).
The capitalist owners of the carpet looms took advantage
of these cheap laborers in order to produce more and cheaper
carpets. As a result of this new trend, the independent
carpet weaver faces competition with capitalist products.

In short, the indpendent carpet weavers are more closely
linked with urban life than the agriculturalists. Market
prices of wool and dyes, current wages for carding, spinning,
and dyeing wool, and the international export trade in
Iranian carpets are of far greater concern to them than the
advent of the spring rains or the condition of this year's
crops. In fact, they face an unsafe read to their future,

like their counterpart in agriculture.

345

 

 

 

13.8.Endnotes

1. According to some case studies, many of the peasants had

[\3
e

\N
e

to hire more experienced peasants for specialized tasks
and it caused delay in agricultural activities (Cf. Azkia,
1971 .

The Agricultural Cooperative Bank, under the superivision
of the Ministry of Cooperative and Rural Affairs, had
more than 200 branch offices distributed throught the
country grouped into 10 regional subdivisions (Ashraf,
1977:33).

For factors responsible for unreliablity of the data on
employment in the rural non—form sector see Dhamija,
1976: 32~33.

 

 

CHAPTER FOURTEEN
GERMINATION OF THE INDIVIDUAL CAPITALIST FARM ENTERPRISES

14.1. Introduction

During the period of land redistribution, precapitalist
muzara-eh and muoata-eh relations of production were
definitively liquidated in Iranian agriculture and the large
feudal landholdings were broken up. The independent peasant
share of total cultivated land increased. However, in
spite of this extensive redistribution of land to the
peasantry, large individual capitalist farm enterprises were
to emerge.

It was almost impossible to find a peasant capitalist
farming across the country before the 1962 land reform.
The peasant capitalist farm is in fact a new phenomenon
which emerged as a result of the land reform. Economically,
the land reform and other rural "development” programs were
designed to benefit only the upper classes in the rural
areas. 0n the other hand, the situation after the reform led
the privileged sector of the village to accumulate wealth and
expand their holdings. At the expense of the poor stratum of
the peasantry, a minority group of the rich villagers
constituted a class of capitalist peasants.

As I discussed before (chapter 7), the large-scale farming

347

 

 

 

based on the capitalist mode of production had developed on

a limited scale in a particular region, under very special
circumstances, before the land reform. What was unique

about the land reform was that it allowed some absentee land-
lords to keep some of their lands if they changed their
method of cultivation and consequently the relations of
production. The land reform benefited absentee landlords by
exempting their lands partially from redistribution, and by
helping them to establish the capitalist farms. The land
redistribution and its related measures has had a significant
effect in the development of these farms.

By the end of the land reform program (1972), a new
rural bourgeoisie and a new proletariat were created in the
rural society. In agricultural activities the bourgeoisie's
members include those members of the previously better-off
peasantry, gavbands, and village headmen (kadkhudas), who
have became owners too, and some of the old landowning
’families who have in one way or another retained land, or
former middlemen who usurped lands from the peasant-owners
through the credit activities. On the other side is the new
rural proletariat which is made up of the laborers of
pre-reform times, plus those families who might have acquired
land but were averted from doing so, or who obtained land
and then lost it as a result of a mistake in the distribution
policy. This structure was both initiated and sustained by
the state which not only created the new legal basis for

property rights, but also controlled the system economically

348

 

 

 

 

 

through its control of rural institutions.

14.2. Peasant Capitalist Farming

 

The development of peasant capitalist farming after
the land reform was mainly due to a variety of economic
factors. The first factor was the inequality in distribution
of land. This had two significant effects on the process of
the emergence of capitalist peasants. On the one hand, a
group of the peasants received more land than others, there—
fore, they were able to accumulate wealth in one way or the
other. On the other hand, the majority of the peasants
received insufficient land: this led to the low productivity
of the poor strata of independent peasants and consequently
some of them sold their land to rich peasants. This led
latter to expand their activities.

The second factor was the governmental policies which
were in favor of the rich peasants. The presence of cooperative
officials in the villages in alliance with the richer peasants
created credit policies which helped to consolidate the
new rural bourgeoisie. The richer peasants had more access
to the credits. In fact, it was the intention of the
government to help the richer peasants.

The third factor was the effect of the capitalist
entrepreneurs‘ activities in agriculture on the rich peasants.
In some regions (i.e., Gorgan and Moghan dashts), the
expansion of capitalist farming has affected the agricultural

structure of the regions. An important example has been the

349

 

 

 

adoption of mechanized farming by independent peasants.

The development of mechanization had an important role in
the alteration of farming methods. The other change was the
rapid increase in cultivation of cash crops (i.e., cotton
cultivation by peasants in the Gorgan region). Owing to

the effects demonstrated by the entrepreneurs' activities,
some of the independent peasants adopted the new methods
based on mechanization. The richer stratum started to grow
cash crops and introduced other new techniques such as
irrigation. This led to a change in their financial position,
and they could accumulate some wealth, enlarge their holdings,
use agricultural laborers and become capitalist peasants
(Azkia, 1980: 125-4). On the other hand, some of the middle
stratum of the independent peasants who invested in machinery
by borrowing credit from various middlemen did not succeed

in introducing farm machinery for various economic-technical
reasons (i.e., maintenance of the tractor, or paying back

the loan on time). Some others who had changed their crops
from grain to cash crops suffered from other difficulties
(i.e., they could not pay their loan installments ).
Consequently, many peasants who obtained land through land
reform had to sell their land to wealthier peasants in order
to pay their debts (Abedini, 1977:55). This was another

factor contributing to the expansion of the capitalist peasants
in Iran.

The Iranian capitalist peasants consist of former small

350

 

land-owners, some of the rural elites (i.e., kadkhuda),
former landlords' bailiffs, the heads of the production

teams (sarbuneh), providers of the oxen (gavbands), and

 

some well-to-do nasaq-holders, whose economic position
gave them a influential role in both land redistribution
and accumulation of land after the land reform.

This class of peasants possess large holdings, between
50—100 hectares, and are incumparably better supplied with
productive means than other peasant classes (Ministry of
Agriculture, 1975). They constitute a small proportion of
the proprietor families (0.6 per cent). The total number
is 16,269 families. Their total cultivated lands are 1,075,697
hectares (6.5% of the total in the country). The average size
of their farms is 70.5 hectares. They hold 5.4% of the
irrigated lands and 4.2% of the rain-fed ones (Ibid.).

Their farm sizes are generally smaller than commercial farms.

The capitalist peasant and his family members usually
do not perform any manual labor but merely manage and
supervise. The management is more direct, compared to
commericial farms. The capitalist peasants are dependent
regularly upon exploitation of the rural wage laborers. They
employ laborers on a daily wage basis. They are also
dependent upon the poor stratum of independent peasants as
a source of seasonal and part-time cheap labor. The subsistence
production of the semi—proletarian peasants reduces the
reproduction costs necessary for the maintenance of this
semi—proletarianized, peasant labor force. As Ghorayshi

has indicated, the restricted development of capitalism in

351

 

 

 

rural areas limited the employment of wage labor (1981:30).

The point to be mentioned here, in relation to
employment of wage labor, is that although peasant capitalist
farming has developed in Iran through the past two decades,
the social relationship of production still retains some
pre-capitalist elements. For example, as A kia has
demonestrated, the duration of the workday sometimes exceeds
10 hours; part of the wage may be paid in kind rather than
cash; laborers are not allowed to seek outside work in the
off-season on penalty of losing their employment; and the
majority of the peasant laborers who are hired on the
farms use the labor of their own family members in their
work (1980:125).

My intention here is to present some of the principal
characteristics of Iranian capitalist peasants. First of
all, they will tend to cultivate their lands themselves
rather than give them out on lease. The head of the family
is the manager of the enterprise. Secondly, they use hired
labor in a much greater proportion than family labor.

They usually prefer to employ semi-proletarian peasants
since their wages are lower. Thirdly, the fundamental aim
of buying the labor power is augmentation of their capital,
that is accumulation and reinvestment of surplus value

in order to generate more surplus. In short,they tend to so
organize their production as to yield a high rate of return
on their investments. Fourthly, they would tend to use farm

machinery. Since mechanization of farming in Iran is a

352

 

 

 

relatively post~reform phenomenon, the present situation in

the peasant capitalist farms is the use of machines side by
side with traditional implement (i.e., the capitalist preasants
use machines on part of the land while their hired semi~
proletarians use traditional implements) (Golabian, 1977:192).
Finally, the capitalist peasants are market-oriented. They
produce for the commercial market within a monetarized
economy. They would tend to market an important share of

their produce. They keep track of the price flunctuation

and the demand of the market.

The capitalist peasants dominated the water resources
and controlled the distribution of water in most villages.
This was either through the control of traditional resources
(i.e.,qanats), or through the establishment of new irrigation
resources (i.e., wells with water pumps). For this reason,

they controlled the economic life of the villages (Khosrovi,

 

1979:88). Since they had more access to water resources,
they could use twice as much fertilizer as independent
peasants (Aresvik, 1976). They used biochemical technology
because it is land-saving, increases yield, and reduces
unit cost for the individual producer.

The capitalist peasants usually received improved seed
from the governmentalinstitutions. As Aresvik has shown,
high quality certified wheat seed was Produced by the Seed
and Plant Improvement Institute and distributed under the

Wheat Impact Program to capitalist peasants (1976:151).

353

 

 

 

In relation to the use of the improved seed, the capitalist
peasants were the most frequent users of the technical
assistances.

The government sold tractors, combines, a-d farm
equipment on easy terms through the Farm Machinery
Development Department, Ministry of Agriculture, which had
sales offices in each province.1 In addition, agricultural
machinery was sold through private dealers (Aresvik, 1976:166).
Since capitalist peasants were the only group of peasantry
which had extra money, they were able to buy most of the
machinery offered to the peasants. In 1972 the total number
of agricultural four-wheel tractors was estimated at around
25,000 in the horsepower range from 55 to 75. Two-wheel
tractors were gaining popularity especially in Gilan and
Mazanderan provinces. In the same year, there were 16,789
two-wheel tractors in Iran (Ibid., PP. 162,164). In

addition, in 1972 there were about 2,000 self-propelled

 

 

combines and 15,000 motorized backpack sprayer-dusters
(Ibid, P. 168). On the average,each capitalist peasant
had one tractor in 1972. Some capitalist peasants whose
land was not large enough to fully employ their machinery
began to do custom work. This was another source of income
for the capitalist peasants (Okazaki, 1968:56).

As a result of using machinery, biochemical technology,
improved seeds, and water at a proper time, the production
't for capitalist peasants is relatively higher

than for independent peasants. Consequently, the capitalist

354

 

 

 

peasants' income from each hectare is higher than the
peasant using traditional methods of cultivation. These
factors, in addition to the factor of wage labor and the
size of the holding, led the capitalist peasants to produce
a significant surplus. Table 14.1 shows production of
different crops per hectare in peasant capitalist farms

for 1978. Depending upon the type of crop predominant in
each farm, and in relation to the size of the holding, the
capitalist peasant's income varied from region to region in
the country. For .instance, production of rice is more
profitable than suger-beets. Comparing two capitalist
peasants with equal farm size, the one who cultivates rice
could accumulate more wealth than the one who cultivates

cotton, while both crops are labor intensive.

Table 14.1: Gross Income From Some Agricultural Production
Per Hectares in 1978

 

 

Types of crops Average - Price per Gross Income
‘ Production Kilogram Per Hectare
Per Hectare (Rial) (Riral)
g(kg.)
Wheat 718 14 10,052
Rice 2770 75 207,750
Cotton 1700 29 49,500
Suger-beets 25000 _ 3.4 85,000

 

Source: Khosrovi, 1980:19.

Capitalist peasants, as I mentioned before, produce

their products as commodities. The fact that they produce

355

 

 

 

commodities does not differentiate them from independent
peasants, but rather the fact that being a commodity is
the dominant and determining characteristic of their
products. Although they hold only 6.5% of total cultivated
lands of Iran, they provided 45.2% (50215 million Rials)
of marketed agricultiral products in the country for
1975 (Khosrovi, 1979:109). This shows that their direct aim
and determining motive of production is the production of
surplus value.

One of the results of the land reform program has been
a change in the pattern of marketing agricultural produce.
Capitalist peasants are now taking no responsibility for
transport and sale of crOps, and their activities in this
direction have been facilitated by the urban wholesalers
who buy the capitalist peasants' products and sell them in
urban markets (Thompson, 1976:252). In this regard, there
are some disadvantages for capitalist peasants.

In summary, peasant capitalist farming is a post-

 

 

reform phenomenon in Iran. It is expanding as an economic
result of the land reform. This type of enterprise.is
replacing the old method of exploiting share-croppers and
landless villagers, by hiring the semi-proletariat and
proletariat of the villages. Since one of their aims to
accumulate more land, they are always covetous toward the
lands of the poor peasantry. Although they provide a high

proportion of the marketed supplies, they are not the main

indigenous source of urban food supplies. They produce

356

 

 

 

mostly cash crops like cotton and suger-beets. Before the
1979 Iranian revolution, they had political power over the
rural institutions. Although they have not been eliminated
from the rural power structure, their political dominancy

over the peasantry has been limited.

14.3. Commercial Farming (Capitalist Farming)

 

As I discussed before (chapter seven), prior to the
lane reform, except for Gorgan region, one does not find
any region in which commercial farming was practiced. The
development of capitalist farming after the land reform
mainly is due to a variety of economic factors. First,
during the land reform, a large proportion of agricultural
land was classified as mechanized land and was excepted
from the implementation of the land reform law. Some of
the former landlords who exempted their mechanized land
advanced more mechanization and heavy investment in
irrigation. Secondly, the agricultural development policies
seemed to be guided by an attraction toward the capitalist
model of agricultural development Which stressed widespread
mechanization and large financial investments. Thirdly,
the large landowners who survived, converted from grain
crops to cash crops because of better market conditions for
these latter crops. In addition, there was no longer an
obligation for land-owners to produce cereals which were
necessary as a food-stuff in the old share-cropping system.

Finally, the dissolution of the buneh and nasaq systems

357

 

 

 

 

led to the low productivity of independent peasant farming
and consequently the release of peasants from the land,
which meant cheap labor for the capitalist farmers. They
replaced share-croppers with the employment of a diminished
number of dailywpaid wage workers.

Commercial farms constitute the economic basis of
capitalist farmers which stemmed principally from the
former landed elite living in urban areas and from the
penetration of merchant capital,politicians' investments,
some rich agricultural engineers' investments, and retired
army generals' investments into the agricultural domain.
They wereall residents of the cities and towns, and they
had the full support of the governmental institutions.

The most obvious members of the capitalist farmers were the
court families. The Shah and his relatives who were among
the biggest feudal landowners of the country during two
decades before the land reform, turned to the largest
commercial farm owners after the reform.

The capitalist farm enterprises in Iran have their own
characteristics. First of all, these farms mostly belong
to one or two individuals who are urban residents
(Ashraf, 1975:16). Secondly, they have a relatively high
level of capital investment and the use of modern farm
machinery are key visages of these enterprises (Azkia, 1980:
117). Therefore, they are usually capitalnintensive. However,
labor—intensive crops tend to be grown on some of the

large-scale capitalistic farms employing a small highly skilled

358

 

 

 

 

 

 

and privileged group of wage laborers, and a large group

of unskilled, poorly paid, and unprivileged workers. The
former workers usually are brought from economically more
backward areas of the country (Sistan Province) or recruited
from the poor population of Afghanistan. Thirdly, the size
of these farms is over 100 hectares (Ministry of Agriculture,
1975). These farms represent 0.4% of the country‘s farms
(9,553 farms), and 15 per cent of the total agricultural
lands (2,452,906 hectares). The average size of the farms

is 258.7 hectares. They constitute 18.9 per cent of
irrigated lands and 7.6 per cent of rain-fed ones (Aresvik,
1976:102).

The fourth important characteristic of the commercial
farms is the sale of the labor power by the free laborers.
Both native and imported laborers have the mobility of
industrial workers (Ashraf, 1975:17). In short, they have
a free-floating and mobile labor force. The fifth charac-
teristic is that agricultural production is mainly for
national, and to some extent, international markets
(Azkia, 1980:117). Finally, the management of the farm is
the owner‘s duty; he has a representative who is responsible
for supervising the agricultural affairs; and he usually
has a foreman in the feild (Cf. Ajami, 1977:61). In these
enterprises the decision making about using farm implements,

investment in technology, supply of land and labor, cultivation

of different crops, and distribution of income is the

owner's responsibility.

359

 

 

 

Capitalist farming has been situated in rural Iran
in three different ways. First, in some villagesthe entire
village lands are under capitalistic cultivation. In such
villages the class structure is completely polarized: on
the one side, the owner and manager and supervisors; and,
on the other, a bulk of the agricultural proletariat.

Second, in other villages capitalist farms are established
side by side with independentpeasant farms or tenancy
farming. In these villages the independent peasants

remain structurally between capitalist and the proletarian.
The capitalist farmers can use the semi-proletariat of

the village as a cheap source of the labor. Finally, there
is capitalist farming which has developed outside the
village boundaries. This can be seen in regions like

Gorgan and Torkaman Sahra (Dasht) which started to developed
even before the land reform (see chapter 7). In these

farms the owners use mostly migratory laborers.

The capitalist farms are located mostly in the Mazandaran
and Gorgan, Isfahan, North Khorasan, West Azarbayjan,
Khuzistan, Fars,Markazi, Kerman, and Fermanshahan regions
of Iran, which are known for intensive farming. Even after
the land reform, the Gorgan and Dasht regions have the main
concentration of capitalist farming units. It is very
obvious that the development of capitalist farming in Iran
is uneven within each province and between different provinces.

T

n capitalist farming, there is an exclusive use of

 

 

 

machinery. In these farms, draft animals were replaced by
tractors; human labor in harvesting was reduced by combines
(Okazaki, 1968:38). The enormous impact of mechanization on
Iranian rural society is suggested by the following fact:
one tractor with one driver and his assistant replaced 45
peasants with 90 oxen (Golabian, 1977:191). This process of
mechanization had a deep effect on Iranian rural economy.
On the one hand, it not only tended to separated the
pea8“nts from the land but also required a division of labor
between those who had skills to work the machinery and those
who did not. On the other hand, it has of course made the
complete separation of livestock and crop farming possible.
Before mechanization, the need of producers to maintain
livestock for ploughing determined how far this separation
could proceed.

The capitalist farmers put a large sum of money into
farm machinery. While one tractor was needed for every 90
hectares of cotton land, more than one tractor in many
cases was introudced for each 90 hectares of cotton land.
Usually a tractor of 55 to 65 H.P. was used on the farms.
But, some farms have introudced bigger tractors of over 80
H.P. (Okazaki, 1968:22). Since public and private credits
were concentrated in the hands of the capitalist farmer, it
was easiest for them to buy farm machinery than for the
capitalist peasants. In 1972, nearly 50 per cent of all the
tractors used in agricultural production were owned by

capitalist farmers (Statistical Center of Iran,1972:299).

361-

 

 

 

Investment was advanced in irrigation facilities, as
well as in farm machinery. As one of the best schemes to
raise production was the acquirement of water at a proper
time,2 the capitalist farmers invested capital in irrigation
facilities. They invested in digging wells 20 to 130 meters
deep with pumping equipment. Some farmers adopted a
sprinkler irrigation system. Almost all of the capitalist
farms had these new irrigation facilities, which required a
large amount of capitals. Changes in the irrigation system
affected social and economic structure in the rural areas
profoundly and fundamentally. As Golabian has indicated
(1977:157), uncontrolled sinking of deep wells has damaged
the sensitive qanat systems in many areas, decreasing
their discharge or even destroying them. There are many
reports of villages whose main water sources have dried up
after one deep well had been sunk in their catchment zone.
Many villages have abandoned by the population just because
one rich capitalist farmer (usually a former landowner)
sunk a deep well to water his farm, destroying the qanat
system of the village and making the continuation of
agricultural production impossible.

Besides the development of new irrigation systems and
mechanization, the capitalist farmers have made extensive
use of seeds of good quality and fertilizers. Seeds are
obtained either from some factories, i.e., cotton ginning

and suger-beets factories, or from a private dealer who

362

 

 

 

usually imported them from Western countries. Since capitalist
farmers have the most sophisticated irrigation facilities

in the agriculture of the country, they use the highest
proportion of the chemical fertilizers. In addition, the
introduction of insecticides and herbicides have advanced

in these farms. They usually had connection with private

and public research institutes. Unfortunately, there is no
data available concerning the amount of chemical materials
which they have used annually.

The labor force in the capitalist farm is fully
proletarianized. Since these farms are mainly based upon
mechanization, they ”did not absorb a singnificant number
of workers” (Ghorishi, 1981230). They usually employed
agricultural experts, preferably persons trained at universities
or two years colleges, and in a number of instances actually
hired foreign technicicans to assume overall managerial
responsibility for their farms (Hooglund, 1982:83).

In the absence of a production credit system for agri-
culture, indicated Aresvik, most of the commercial banks'
lending to agriculture was in the form of credit to big
capitalist farmers (1976:171). He also showed that the
borrowers of the Agricultural DevelOpment Bank of Iran were
commerical farmers (Ibid.,p.172). The capitalist farmers.
were the only ones who could absorb the long-term credits.
is Hooglund has mentioned, the long-term credits were

reserved for those individuals with sufficiently large

363

 

 

 

 

annual incomes so as to be deemed "credit-worthy": the
large-scale absentee owners (1981:17).

Generally speaking, the capitalist farms usually
contain different crops. For example, in the capitalist
farms of the villages around Marvdasht in Ears Province,
farms with six different crops have been recognized

(Cf. Afami, 1977:65). Some capitalist farms produces food—

stuff. Some even produce marketable vegetables. For instance,

1.!

“n the province of Khuzistan, the urban elite took an
interest in marketable vegetable cultivation. In addition

to traditional vegetables like onions, leeks, parsley and
lettuse, they also grow melons, eggplant and cucumbers. A
significant innovation was the post land reform introduction
by agricultural engineers of a new variety of watermelon,

locally known as hendevaneh-i mohandesi (engineering water-

 

melons)-- the imported Charleston Grad varity (Salmanzadeh,
1980:189). However, in general, the commercial farms are
the principal producers of raw materials for industry
(i.e.,cotton).

In commercial farms, the investment in new techniqes
is high because the owners try to conserve labor and
fundamentally reduce the cost of production. Their primary
objective is to obtain consistently high yeilds and big
profits. Therefore, their investment per hectare is higher
than the capitalist peasant and independent peasant,

certainly. For example, in the village of "Sheshdani" near

364

 

 

 

’i—

Narvdasht in Far Province (which has a typical commercial

farm), a farmer cultivating 249 hectares of his land invested

2,473,608 rials which is 9640 rials per hectares. his net

income for 1966 was 1,773,575 rials (Ajami, 1977:67). This

is incomparable with what an independent peasant could get

from each hectare. Table 14.2 indicates the detail cost

and net income from each crops per unit, and total costs

and benefits for the farm under investigation. It has been

indicated that throughout the 1970's the capitalist

farms' operations were generally successful (Hooglund,1982:85).
All commercial farms produced primarily for the market,

and therefore were responsive to such normal market forces

as prices of products and inputs, availability of inputs,

and market outlets. They were also susceptible to the

overall investment climate, and the development of this

sector, therefore, was closely related to the national and

sectoral policies as they affected the private sector.

Capitalist farms, during 1970s, only made a small contribution

to the agricultural output of Iran (Aresvik, 1976:100).

Their total share of sales of products in the market for

 

1975 was 4,462 million rials (4.1%) (Khosrovi, 1979:109).
They actually played an important role in providing non-food

marketable agricultural products.

 

To sum up, the development of capitalism along the
commercial road transformed pre-capitalist estates into

large-scale capitalist enterprises. Its development

365

 

 

 

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led to the separation of the small producers from their
means of production. In the capitalist farm extra economic
relations did not exist, and the capitalist farmer derived
his power from his economic basis. This power was shared
with the nonagricultural bourgeoisie in controlling the
state. Generally, relations between capitalist farmers and
agricultural proletariat were characterized by mutual
suspiciousness and barely concealed hostility. As a result,
by the mid— 1971's, significant numbers of commercial farms
had begun to hire Afghan laborers because they were much
less troublesome than native agricutural proletarians.

On the other hand, during the 1979 revolution many of these
farms were expropriated by the popular action of the rural
proletariats and the poor stratum of the independent
peasants. As a matter of fact, many of these farms are

still in operation through the country.

14.4. Agricultural Proletariat Families

The number of rural landless after the land reform
increased rapidly because during the reform's implementation
there was a continuous reduction in the number of families
possessing land, and an increasing number were pushed into
the rank of rural proletariat. The rural workers existed
before the land reform, but the land reform caused a
sharp increase in them. The sharp increase of the rural

7,74

proletariat was due to several factors. first, the

367

 

 

1

mechanization of some farms prior to the reform, and also
during the first phase of land reform, enabled some landlords
to displace the share-croppers or turn them into casual
laborers who were paid in cash or kind. According to official
statistics there were about 161,500 households which had not
received land but were still working in agriculture (Sazaman-
i islahat-i arzi, 1972).

The second reason is that under the second phase, many
peasants were forced to sell their rights of cultivation to
the landlords and work on the land as a wage laborers. hearly
17,157 families had to sell their land to the landlords.
Over half of them were in the area controlled by the prime
minister Alam (Halliday, 1979:120). The third reason was
that in the transition between phases two and three another
192,000 families seem to have failed to convert their
tenancies into ownership (Ibid.). The fourth reason is
the size of the most plots which peasants received. It
should be noted that many peasants could not subsist from
their small plots of land. Therefore, many of them were
forced to leave the land. In relation to this factor, when
a poor peasant turns to a casual worker,all members of the

family over 10 years of age turn to rural laborers, because

 

under the muzara-eh system and within khanevar organization
of production all the members were working on the lcnd.

rinally, the establishment of the farm corporations and

ct

agri-busnesses contributed to he increase of the rural

proletariat by confiscating the land of some villages

368

 

 

 

 

(this will be discussed in next two chapters).

1.
.L

t‘b

n act agricultural laborers emerged as a distinct
class: a landless rural proletariat, whose common charac-
teristics are low income, economic insecurity and unemployment.
The great majority of them work no more than six months a
year (Azkia, 1980:73). Whereas the relation between the
pre-reform agricutural laborer and the feudal lord was
determined by custom and tradition and there was extra
economic relations, that between the post-reform agricultural
proletariat and the capitalist farmer is determined solely
by mutual agreement, allowing both much greater flexibility.
The rural agricultural proletariat in Iran are indeed free
insofar as they are not generally tied to particular

pieces of land; but, in the absence of real alternative job
opportunities, they are effectively tied to agriculture

as a main source of livelihood, even though this source

 

gave them only 200 days of employment in the whole year.

The rural proletarian.families have formed a reserve
labor pool from which independent peasants, capitalist
peasants, capitalist farmers and agribusinesses can draw
according to their day-to-day re_uirements. There were
500,000 rural proletarian families according to 1972 official
statistics (Plan and Budget Organization, 1976). According
to the same source, 209,000 individual proletarian were
full-time employed and 139,000 were part-time (for provincial

data on full-time and part-time rural workers see Table 14.3)

369

 

 

(Ibid., pp. 252/10). According to the Eational Census of
Population and Housing for 1976, among the population of

10 years of age and above 23,253 males and 1,567 females
were seeking work, and they were previously employed. At

the same time, 127,310 males and 10,127 females were seeking
work and they were previously unemployed (Plan and Budget
Organization, 1981:xL). The high amount of seasonally
unemployed males (415,445) and females (196,001) have been
reported from rural areas among the active population
(Ibid.).

Due to th; insufficient size of the independent peasant
landholdings, half of the rural proletariat tend to be
individuals that do not support families (i.e., sons of
small independent peasants). They are related and thus
fail to reveal the permanence of linkage to subsistence
agriculture. is a result, many wage workers who are members
of households partially supported by subsistence agricultural
production falsely appear as proletariats. Capitalist
producers benefit from this semiproletarianization by
paying a wage which is below the cost of maintenance and
reproduction of the labor force.

Prior to the reform, the agricultural workers were not
worse off than the nasaq-holders; but after the land reform
the situation of agricultural proletariat has become worse.
Their positions deteriorated vis-a-vis that of the villagers
who obtained land. Faced with so many problems in selling

their labor power, the mass of the rural proletariat had

370

 

 

 

 

 

to be satisfied with their marginal life. Consequently,
relations between the rural proletariat and independent
peasants (especially lower stratum) have been based upon
an economic competition characterized by tension and even
hostility (Lambton,1966:201). This tension emerged as a
result of two facts. First, the middle and upper strata
of the independent peasants can under take all the work
on their land, therefore they actually eliminated work
opportunities on as much as 25 per cent of the land upon
which agricultural workers acquired seasonal jobs before
the reform. Secondly; since the lower stratum of the
independent peasants cannot support their family, they seek
opportunities in the capitalist enterprises which as a
result keep wages down (Hooglund, 1982:97).

In order to survive and continue producing,the agri-
cultural proletariat received the minimum necessary for
their basic needs. According to official statistics, the
average daily income of a male proletariat in 1972 was
98 Rials for a female (Plan and Budget Organization, 1976:
252/11). Table 14.3 shows provincial wages for.male and
female separately. This table indicates that except for
Boir Ahmad province, the wage for males is twice that for
females in almost all other ones. As we know in some areas
like Gilan, the women's work in agricultural fields is
heavier than men's work. It is obvious that the annual
income for an agricultural proletarian family differs

from place to place, depending on the prevailing natural

371

 

 

 

 

 

 

 

 

 

I 4
Table 14.3: Distribution of Agricultural Proletariat and their Wages in Iran for 1972
Provinces Full-time Part-time Hen fla,es Women Wages
Workers Workers (Bialg) (Rials)_ ,_g

Central 11,000 21,000 130 61
Khorasan 23,000 9,000 ' 77 35
Isfahan 13,000 2,000 118 59
East Azer-

bayjan 15,000 9,000 104 51
Khozistan 5,000 2,000 87 52
Mazandaran 21,000 33,000 100 58

Fare 15,000 9,000 93 48
Gilan 34,000 6,000 112 62

West Azer-

bayjan 11,000 7,000 114 52
Kerman 8,000 12,000 76 38
Kermanshahan 7,000 4,000 115 60
Saheli 1,000 1,000 70 39
Sistan-Balo-

chistan 5,000 8,000 56 40
Kordestan 19,000 5,000 99 45
Hamedan 9,000 2,000 136 61
Lorestan 3,000 1,000 119 58
Zanjan 2,000 2,000 100 56

Yazd 3,000 .900 88 42
Boshehr .
Charmahal 3,000 2,000 105 71
Semnan 1,000 800 97 4O

Ilam 200 500 100 41
Boir-Ahmad 600 1,000 77 72
Country 209, 000 139 . 000 98 55

 

 

Source: Plan and Budgent Organization, 1976: 252/10-11

372

 

 

 

 

 

conditions, from type of work done, and from ent rpri to
enterprise. However, the average annual income was 26,800
Rials, which 18,000 Rials of that was earned from the work
of the head of the family, and 8,600 from other memebers
(Ajemi, 1977:122).

The situation of the migratory labo orers is worse.
ilt nough they may earn the same wage as the local proletariat,
the double cost of living (one in the host village for
themselves, and one in the donor village for th ir families)
reduced their living standard compared to the local proles
tariat. In fact, they have to migrate since their labor
supplies do not have any demands (SMDK, 1978:94).

Although the income of the agricultural proletariat
has increased compared to the period before the land reform,
this increase does not mean an increase in their real income.
From 1965 to 1973 the proletarian families' expenses have
been raised twice, while there was not an equal increase in

their incomes (see table 14.4 for the increase in the rural

a-

family's expenses). if we assume that ho h the head of
the proletarian family and his wife were working for 200

days a year, their average income for 1972 would be 55, 080
rials, while at the same time their average living expense

according to the official sources was 59,280 rials (calculated

H,

Irom table 14.3 and 14.4). This indicates that these families
were always in debt to he village sho op} ceeners.

The pattern of money spending for the agricultural

proletariat in Iran is similar to the poverty pattern, since

373

 

 

 

.wem "whmr .:0H98na:8muo prpzm new soda "chasm

 

 

 

 

 

 

v.msom n.0vmv «.mmma o.meav o.smmn m.m00v m.mmnv m.mmmn m.mm>m mmmnmaxm Hopes
w.eavm s.mosp m.mmsa a.mmma m.mmma m.e~vF v.mmo. F.8mma 8.0mma mamaoaxm
mfiig .850

m.omwm o.wnmm n.mmam m.omsm F.Fnom m.ommm V.VN>N v.mmmm m.mamm memeuaxm
ooomnoa use poem

mama mama Fem. osma mama mama pom? mama mama momcmaxm no mass

 

Am_u_aa mam—-msm_ .msee on roe s__5sm _mr=m a as umcmaxm a=_>_n mamru>< "¢.¢P apnea

374-

 

 

they spend a high proportion of their income for food.

There is actually nothing to be used for educational or

health expenses. Buying luxury goods does not have any meaning

for them. ihe only time they take a trip is when they look
for jobs outside their villages. Members of the family

may not see a town unless they are forced to migrate to
the big cities. In these cases they usually become residents
of a shanty town. Although they are on the edge of a big
city, their life conditions become worse than in their
village. They usually have no choice of returning to their
home village.

To sum up, the rural proletariat expanded in Iran
drastically after the land reform. Some of them were
_former share—croppers. Losing all the means of production
needed to sustain themselves, these peasants came to
depend on their labor power as their sole source of live-
lihood. The new situations in the rural areas did not
absorb them completely, as result of the land reform and
other agricultural policies of the government. Consequently,
they formed a pool of surplus laborers with low job
opportunities. They were in conflict with both new indepen-
dent peasants and the owners of the new capitalist enter—
prises. This class of the peasantry were the most hungry

group for obtaining land‘during the 1970s. Although they

H;

did not constitute a art 0

D‘

effectiv

(D
'd

the 1979 revolution,

they have been sole to confiscate some of the capitalists'

375

 

 

 

land during 1979-1980. Unfortunately, some of them had to
return the lands to their owners as a.result of the change in
the attitudes of some of the new rulers in Iran towards

land ownership.

 

 

 

14.5.Endnotes

These tractors- were assembled in Tabrize by a govern-
ment-sponsered tractor manufacturing plant of Rumanian
Universal tractors and in Arak by the American John
Deer tractor plant since 1967 and 1970 respectively.

The following difference in yield is observed between
i rri ga ated and unirrigated cotton landzirrigated cotton,
2,329 k ., unirrigated cotton, 965 kg. per hectare in

Gorgan Okazaki, 1968:22).

An artesian w-ell needed on an average 250, 000— 3000 00
Rials (US 33 ,300— 4 ,000) (Ibid., p. 25).

377

 

 

 

 

CHAPTER EIETEEN
THE DEVELOPMENT OF THE EARN CORPORATION

15.1. Introduction

National economic planners had repeatedly questioned
the economic validity of independent peasant farming since
the mid-1960s. Their argument was based on the point that
irrigated farming land was very limited (20 million hectares--
12 per cent of the total 165 million hectares) and thus
measures to increase agricultural productivity were
essential to national development. In addition, they
.believed that farms were divided into uneconomic units as
a result of the land reform.

The planners suggested that the difficulty could be
overcome by the creation of farm corporations. This suggestion
was stimulated by the Shah's model for pseudo-modernization
of the farming system. In fact, the farm corporation was a
third way employed to develop the capitalist system in
Iranian agriculture. The farm corporations were fundamentally
semi—governmental joint—stock companies. They were apparently
modelled on the western types of joint—stock compai_es,
except that there were severe limitations on the transfer
or sale of shares.

The intention of this chapter is first to explain the

 

 

 

objectives of the farm corporations from the statements
of the officials. Then I try to make evident the hidden
or unstated ends of the corporations. The process of the
establishment of farm corporations should follow the
statement of the objectives since it responded to the real
aims of the officials. Secondly, I will explore the state
of change in the modes of agricultural production in the
villages which were covered by the farm corporations.
Finally, as a result of this change in the production
process, I will investigate the effects of these new
enterprises on the Iranian rural reality. This will bare
for us the new class structure in those villages which

went under the farm corporations' operation.

15.2 Objectives of Farm Corporations and the Process of

 

Thgir Establishment

The objectives of the farm corporation first appeared
in the Fourth Five-Year Plan of the country in 1968. It
was elaborated later by the Ministry of Cooperation and
Rural Affairs (MCRA) as Article One of the Law for the
Formation of Term Corporations. The farm corporation had
proclaimed the following objectives: (1) to increase the
per capita income of the peasants; (2) to increase output
by the wideSpread provision of facilities for farm
mechanization; (3) to create all possible opportunities for

the use of farming machinery and to make the fullest efforts

cf

0 establish the most modern methods of operation; (4) to

utilize the maximum manpower in the villages; (5) to prevent

379

 

 

IIIIIIIIIIIIIIIIll---::——————————————v

the division of the land into small and uneconomic portions;
(6) to increase production through expanding the area of
land under cultivation in the region of operations, by
making use of infertile, uncultivated and waste land; and
(7) to increase the standard of living of the members of
farm corporations (NORA, 1971: 20 and 1974).

The NORA indicated that the farm corportions' goals
would be reached through the following ways: (a) the
exclusive and permanent use of land belonging to share-

holders; (b) the intensive use of agricultural machinery,

 

treated seeds, fertilizer, pesticides and so on; (c) the
planning of labor resources between agriculture and industry
by establishing handicrafts and cottage industries in the
rural areas which will be able to absorb the surplus labor
released as a result of mechanization of agriculture;
(d) the eXpansion and improvement of livestock breeding
by the construction of hygienic stables, the provision of
fodder, and animal disease control which would increase the
production of red meat; and (e) finally, the use of the
experts availabe which leads to more efficient management
of production and marketing (MoRA, 1971,1974).

These were the objectives and the ways to reach them

which were stated by the Government officials. In order to

 

set up a guide to evaluate'the farm corporations, I propose
some hidden objectives of the farm corporations' establishment:
first, it was the intention of the government to speed up

the process of expansion of the capitalist relations of

productions in the rural areas. Tor this purpose the state

380

 

 

 

injected huge sums of capital in villages covered by corpo-
rations. Second, the establishment of farm corporations was
the safest way to convince the independent peasant to buy
agricultural machinery and other modern agricultural
implements (the products of the dependent bourgeoisie).
Third, it was proposed to enable the state to gain economic
and social control over Iran's rural areas. Finally, the
expansion of bourgeois activities in the big cities
needed cheap casual labor. The emphasis of the farm
corporation on mechanization is obvious proof of this
disastrous objective of displacement of the labor force
from rural areas which was foreseen from the start.

This indicates that the areas for establishing the
farm corporations were selective. The initial step for the
establishment of farm corporations had to be taken by the

TCRA. The Ministry looked for a few criteria such as the

>-——:

potentialities of an area for increasing both water supplies
and land under cultivation, the adjacency of the villages

to the center of the province, climatic conditions, and

the fertility of its soil (NORA, 1968). This indicates

that how the areas for establishing the farm corporations
were selective.

. Theoretically, for the formation of corporations the
votes of 51% of eligible members was required. The government's
calculation of percentages to ascertain the extent of the
majority was not done village by village but over the entire
region involved. An uneven distribution of votes meant the

sweeping into a corporation of a village with a majority

381

 

 

 

IIIIIIllllllllllll---:::————————————a

opposed to the policy (Denman,1975:215). In practice, the
establishment of the corporation was compulsory. They were
situated v3herever the government felt was suitable for them.
By the end of 1976, there were 89 farm corporations
in the different regions of the country. These corporations
covered 850 vil lla ages with a total 53, 662 members. The total'
land under their control was 401,000 hectares of which
590,000 hectares of that were cultivable and only 150,000
hectares were actually under cultivation (ECRA, 1976:151e157).
Table 15.1 shows the provincial distribution of these farm
corporations with the number of villages covered in each
province and the number of share-holders. as table 15.1
indicates, most of the farm corporations were concentrated
in the western half of the country which has the most
fertile lands and most plentiful water (see chapter Four).
The peasants in these areas could have continued farming
successfully without introducing farm corporations. ln
contrast the eastern half of the country which is the

backward area, desert oases, and arid region (all of which

 

badly needed investment and the development of irrigation
cili ties) were disregarded by the government. This shows
that the policy was on behalf of uneven development. It

was the governments' intention to develop capitalist activities

 

in those agricutural areas which were profitable, not to

develop the poor underdeveloped regions of the country.

382

 

 

Table 15.1: The Provincial Distribution of Farm Corporation in

 

 

 

 

_ 1972

Province No. of Farm No. of No. of

Corportions villages Share-holders

Markazi 6 70 2,800
Kermanshahan 9 131 3,381
Khuzistan 8 86 2,935
Kerman 6 127 3,806
Luristan 5 26 1,502
East Azar-

bayjan 11 65 3,966
West izar-

bayjan 6' 54 1,972
Pars 15 116 4,172
Khurasan 5 29 1,666
Charmahal 7 59 2,642
Kurdistan 2 13 704
Hamadan 3 15 931
Sistan 2 20 1,222
Gilan 2 7 577
‘Mazandaran 1 5 359
Isfahan 1 2 135
Zanjan 1 2 308
Ilam 1 23 604
Total country 89 830 33,662

 

 

Source: Ministry of Cooperation and Rural Affairs, 1976:

151-157. ’

383

 

 

The area of a farm corporation could exced 1,000
hectares and could include from two to 20 villages and farms
(Salmanzadeh, 1980:226). ihe farm corporationYS agricultural
land average was 3500 hectares, not all of which was
cultivated (P ahn, 1978: 4). This shows that for the first
time in Iranian history the boundary of the village as a
complete and integrated socio-economic unit was broken.
Table 15.2 gives detailed information about all farm
corporations in the Ears province. AS we can see from the
table, the two areas of concetrationx(8hiraz and Firuzabad)
are the most fertile lands of the province. secondly, it
shows how the villages boundaries were borken. For example,
the Karzin corporation included 21 villages. Thirdly, it
indicates how small proportion of the villagers were the
members of the corporations.

Financial assistance (read governmental capital) had
a very steady role in establishing the farm corporations.

or 89

H)

According to official reports the value of loans
corporation up to 1977 were more than, 1 ,722, 744 Mthousand
Rials, and the total gr nts-in— —aid were 8,422 thousand
Rials. The loans were for periods of between five and
fifteen years, and bore 4% interest per annum. 1% interest,
together with the original amount of the loan was repe aid
to the government, while the remaining 3m was spent ov

T flfl

loan on ”develop ment” projects in the farm corportions

/a-f~(—\

 

\nvii,1978). is is obvious, while obtaining credit for rural

384

 

mac“: ”oohnom

 

mmH+HmH Momma «msflmmm< Henna can :oflpmsomoou mo zap

 

 

Ill IIIIIIIIIIIIIII

—m\N\mN . . .

.. ..
_m\~\n~ coo.am..~_ mm~.~_ one 8r... mg.N oqm._ aoo.o ooo.a a. m.oo~ u.a-=g.u at d gu_a
em\~\m. ooo.~o..~ Nov.“ can o-.~ NM...m. moo.— .Nn.m mac.m a on uaaauagvd «can a. a an

mm\Np\wN. OOo.¢S.O~ 30;: ”h §.P GOO.N. 68¢ cmN.N 68.” 2. pp OaAONP-vu “L...— hnMQ

mm\~.\v~ coo._mm.mp .mm.m_ — «so._ «on p as... mmm.. Nuo.m m an ugmauo>ng “Lad any“ a

om\~_\a— coo._~m.m .Nm.m onN mum _ omm._ om«.— nom.~ an~.o a ~m ugmouo>r~z ug.a =~..ou=u~a

~m\__\~— coo.noa.~ flea.“ sn— ooh. omm.p ace. om... oom.. n n u.4¢~=..d ar.m u.na~=r.a

~m\__\m. ooo.-m.m -m.m new mmo . can“. «so «a~.. nm~.~ h a eaaa~=r.m mr.d =_gn.~>qx

~m\__\._ ooo..~o.~ _~o.~ ..m. mam. m_m._ mom mo~.. onm.~ a ma "snag“ “Lam Loo“
~35 8o.§.~.8_.2 W: 3... 8a.. m3“. S»... «a... a 8 5:3 cc 53m.
~m\m\¢ ooc.oa¢.~. ca..~_ ~MM can.P ooa.— co.._ oNo._ Nan.m m we , -g.=m “rad =.~uoroa
~mxnxm ooo.~mo.o— smo.op p- smm._ cpv.~ pun p onm.— sue.» a —o Nagvgw “Lam acumen:

¢mp — cm¢ — cam mmm.p m-.n e an Nagasm. mung usuav>uaz
maxmxmn coo..c¢.m .ov.o we. .~m . .Na.. No... -a.. m.m.n m we Nansen . “rad .-gmuwunu
. .
353 as g ... ~84 3 .9 n8 ...8 as; on... N 3 5...... ca 29:3
a: a: a:

saucuaau Am_a_¢v soap» co scans snow

:0; who 0 van) flea

...... .....n ...... h.“ an“ ha.“ ha an. an “a 3:... ......a...
we mung 50 oz oosagm —uuop nun“ ”fine" so saga mo .02 coca sham we use:

pane» .um.a

oocw>osa mama cw :owumsomsoo spam mo canyonsum paw :ofiqupom one ”m.mH oases

 

'3535

 

 

’i—

cooperatives was difficult, there was no problem for farm
corporations since they were in favour of the government.
is a result of this governmental investment, the farm
corporations were established very fast (see last column

of table 15.2).

15.3. Mode of Agricultural Production in Farm Corporations

Through the establishment of a farm corporation in,a
village, all the production enterprises were transformed
into a large-scale capitalist enterprise hiring wage
laborers. Membership was essentially confined to villagers
who were fitted to the following categories: (1) peasants
who received land from land reform, or the pre-reform

independent peasants; (2) barzegaran who did not receive

 

land through the land reform; (3) farmers and landowners
who for some reasaon (i.e., mechanization) were not affected
by the land reform; and (4) tenants who acquired land under

99 year lease of vaqf lands (Rural Research Group, 1970;

 

Richards, 1975:10). Other villagers (i.e., non-agricultural

laborers) were not allowed to join the corporation.

 

At the initial stage, the peasants and other landowners
transferred their lands to corporations for complete and
permanent use; and received in return a share "equivalent"
in value to the property contributed. The peasants retained
nominal ownership of the land; it was the ”use rights"
which, in effect, were deeded in perpetuity to the state,

although the government officials did not admit that farm

386

 

 

 

 

corporations were really a species of "state farm”. Here,

it seems that ”land reform gave the peasants title to

lend only to take it away from them again” (Richards, 1975:11).
The lands of those peasants who refused to join farm
corporations were forcibly expropriated.

Evaluation of a peasant's means of production (i.e., land
machinery, oxen and equipment) was made by a three-member
Committee. Corporation Law established no valuation formula,
but the general principal was ten times the annual income
from land considered the value of land; and there was more
flexibility concerning the transfer of machniery or oxen
belonging to the peasants. If they were needed for the
corporation they would be acquired, but if the equipment
was not fundamental for the corporation then they would be
referred to as loan to the corporation (Azkia, 1980:150).
in average share represented (in 1972) 1,000 Rials (310.31)
of the land’s appraised value (Richards, 1975:11).

There were three fundamental problems with the process
of evaluation of the lands: first, there was no appropriate
knowledge about the size of the holding; consequently
different shares were given to equal-size lands. Secondly,
lands with different qualities were given equal values,
therefore,some peasant later complained about this. Finally,
the manner of pricing the lands was disputable for peasants.
They claimed the land was not priced on its market price

(Pourafzal, 1972: 155-158). is a result of this mis—evaluation,

>9

the e‘isting share-holding inequality became sharper.

387

 

 

 

—7——

Since the corporation did not limit the number of
shares which each member could hold, there was high
diversity in the means of production, notably in the
amount of land, among the members of each corporation. For
example, in oasri-shirin Corporation 140 peasants, each
holding less than 15 shares, had 1,242 shares, compared
with 32 rich peasants who had 2,764 shares (Keshavarz,
19712141). In other words only 9% of all shares belonged
to 42% of peasants while 70% of the shares were allocated
to 12% of the shareholders. Or, in the case of Dargazin
corporation, 5,000 shares out of a total of 17,000 belonged
to 28 former rich landowning families (6%of the total
shareholders) while 70% of the remaining shares belonged
to 94% of peasants. The smallest individual share-holding
was 1.6 and the largest was 1,118 shares (Azkia, 1980:155).

in fact, this new institution perpetuated the old
economic and political structure in the village in a new

manner. The former landowners, village headmen, and gavbands

 

who possessed more shares held more power in the corporations.
Their share- holdings were usually above 80 shares. The

poor stratum of the independent peasants (holding less than

 

30 shares) and the landless members of the corporation, who
were economically poor, played no role in the power struture
of the corporations. Finally, the former nasaq-holders,

who were in between in the *pre-reform system, remained in

between in new system. Put in Jazani‘s words, ”it was the

388

 

 

if

number of shares owned by a person that will determine
his possession and not his work" (1973:61).

The unequal structure of share-holding affected all
the aspects of the share-holders' life. Despite the
increase in cnrporation-sponsored lending, there were
some restrictions on borrowing for some of the small share
holders. This meant that small share holders continued
to be dependent upon traditional sources of credits which
offered short-term credits with high interest rates
(more than 40%), in order to support part of their consump-
tion needs. However, the medium and large share holders
had no difficulty obtaining credits from the corporations,
since there was a large amount of money provided annually

as loans and grants to the corporations (for example, there

 

 

were 6,184,511 Rial credit for 33,662 members of farm
corporations in 1976 (MCRA,1976)).

The value of credits granted to the farm corporations
was 20 times greater than in the sector dependent on rural
c00peratives (Katouzian, 1981:309). This astronomic
difference, which was completely due to the highly discrimi-

natory policy of the government in distributing credit and

 

grants between the two sectors, was for the purpose of

mechanizing the corporations‘ farming.1is a result, the .
corporations invested heavily in machinery without attention
to the real need for such machinery.2 The use of tractors
in farm corporations rose from 20 per cent of cultivated

areas, before the commencement of their operations, to 100

389

 

*7

percent in the annual cultivation year of 1974-75 (NORA,
1977:63). Consequently, draught animals were replaced by
tractors. During the same period the utilization of combines
increased from 5 per cent to 95 per cent of the cultivated
areas (Ibid.). Human labor in harvesting was entirely
displaced by combines. A total number of 652 tractors
and 95 combines and over L600 other agricultural tools were
distributed among these corporations (Ashraf, 1977:22).
Besides heavy investment in agricultural machinery,
contract agreement with foreign countries made possible a
number of big projects within farm corporations: livestock
breeding and related industries with the help of the
Yugoslavian Agro-Industrial Institution; chicken production

and food factories with the help of the Bulgarian Techno-

 

 

Export Institution;a computer services project with 24
mini-computers and a terminal in Tehran with American

help; a water supply and irrigation network development
project with the help of American companies; and finally a
management improvement project with the help of FAC experts

(noni,1975).

 

All the above—mentioned heavy investment indicates

 

that the establishment of farm corporations meant the
eXpansion of markets for foreign goods in the rural areas

of Iran. Each farm corporation was a wo million dials
annual market for industrial goods and products (SEEK, 1978:

269 . Beside the purchase of foreign goods, every ‘ear the

390

 

 

7"

MCRA had to pay for the services that foreign eXperts had
to supply to the farm corporations. In addition, the
international ”experts" on the issue of farm corporations
were paid in order to do research on the corporations'
"development”. These were other unnecessary expenses which
had to be paid by the corporations or the hCRA to the
foreigners.

The drastic change in landownership and level of the
productive forces accompanied with the bureaucratic nature

of the farm corporation Organization created a new division

’—

1‘ b

o labor in the rural areas when these enterprises were

established. The organization of the corporation consisted
of a General Assembly of shareholders, a Board of Directors,

F‘"

Inspectors and a Managing Director.9 Theoretically,

 

 

policy-making and other geneal business was entrusted to

the General Assembly. However, in many corporations peasants
claimed that they had no influence in policy-making

(Cf. Azkia, 1980: 157-158). The Board of Directors was
responsible for the constitution of the General Assembly.
Its main duties were to define the problems of the
corporation; to prepare the financial report; to supervise
the activities of the Managing Director; and finally to
decide about the corporation's contract with other agencies
(hCiA, 1974). The rich peasants and the village headmen

usually occupied these offices (Rural Research Group,1970).

One of the shareholders was elected as an Inspector who,

391

 

 

————"

‘0‘

along with an agriculturalist designated by the NORA, was
responsible for checking the accounts and helping the
implementation of the provisions of the corporation statuses
(rcal,1974). Theoretically, a Hanaging Director should be
elected by the Board of Directors, but in practice he

was appointed by the NORA (Tlan and Budget 0ranization,1968:
114). He had complete power over the farm corporation and
was directly responsible to the farm corporation central

supervisory unit of ECRA in Tehranr(8almanzadeh, 1980:227).

determination of the socio-economic structure of the villages
under their control. Some of them had more power than
pre—reform village owners.

_n farm corporations, labor was supplied by the share-

 

 

holders and barzegaran who worked for wages. Theoretically,
as a result of the farm corporation all the members should
become wage laborers. Tn practice since cultivation became
greatly mechanized, the majority of the farm corporations
could not hire all their members. The Managing Directors

were in favor of hiring non-shareholding laborers, since

 

they were ready to work for lower wages (SMDK, 1978: 274).
is a result, a few of the share-holders were hired in non-
farm activities of the corporations, and the bulk of them
remained merely shareholders, with nothing to do except
waiting for their annual income from their shares.

The source of the income in a farm corporation was
either from dividends on the shares, or from wages received

7

as labor services. Net profit of the farm corporation was

392

 

 

 

explained as total earnings after the deduction of expendi-
ture and depreciation.a minimun of 15% of net profit was
regarded as retained profit and was put in the reserve
fund of the corporation for contingencies. After all
deductions were made, the balance was distributed among
the shareholders on the basis of their shareholdings
(Frevialds, 1972:187). The profit was in the interests
of those who owned relatively large plots of land, not
the peasants who cultivated their own small plots of land.
With reference to wages, wage rates varied by the
levels of responsibility, type of work and productivity of
workers as determined by the Manager and the Board of
Directors (Richards, 1975:11). There was a tendency in
corporations to pay less wages to the laborers for the same
jobs in comparison to other regions of the country (Azkia,
1980: 233—4). This happened because, as we know, one
of the indexes for the ”prosperity" of a corporation was
net profitability. In this regard, since the large share-
holders did not perform wage labor in the corporation, they
imposed low wages on the dependent .peasants who needed jobs
to achieve subsistence levels. In order to keep the wage
low and reduce the cost of reproduction of the labor force,
the wage labor shareholders were given personal user-rights
over garden plots up to one thousand square metres adjoining
their respective house.

According to the reported balance sheets of 53 corporations

393

 

 

f

1“!)

in 1974, the average annual profit 0 18,605 shar holders
was about 5801 and the average annual wage of these
shareholders who gained employement in corporations was

abo~t 5 426 (Ashraf, 1977:22). We should bear in mind

r

that the majority of shareholders in each corporation held
below.the average shares. Also, not all shareholders were
offered jobs in the corporation. In order to show the

actual distribution of annual profit in the corporations,
I will give two examples here. In the case of the Tivan
nar farm corporation near Garmsar, total expenditure for
1969 was 5,457,408 Rials and total income was 5,508,896
Rials. The net profit before deduction was 51,491 Rials
which after a deduction of 15 per cent (7,723 Rials) as a

reserve fund, the balance was 43,768 Rials. Since this

corporation had 4,855 shares, the annual profit per share

:1)

was only 9 ials. With regard to the average number of shares
which each shareholder had in that corporation (30 shares),
the average annual profit was 270 Rials (SMDK, 19782273).

This was the case of a desperate corporation. In the case

 

of the Shamsabad corporation (which was regarded as the
most successful corporation) in Fhuzistan, the dividend paid
per share was 410 Rials (Salmanzadeh, 1980:232). If we

assume that the average shareholder held 30 shares in this

Q

cor oration, the avera.e annual profit per shareholder was

0

1

12,300 “ials. Even this amount was low compared to the

average income of a non-croporate independent peasant. These

394

 

 

”—

data from case studies indicate the groundlessness of the

governmental claim about t

small shareholders of the

1 a

before, his

landowners who held a larg

1 .4. The

Structure

5 Effects of Farm

 

The establishment of
whole socio-economic struc

under their operation. In

production of wheat in corporations was 4

independent peasant family

he increase in income of the

corporation. As I mentioned

system was only beneficiary to the former

e amount of shares.

Corporations on Rural Sochgl

farm corporations changed the

ture of the rural societies

the sphe e of production, the

"3

fig/
I /0

a.

higher than the

farms. In the case of rice,

cotton and barely yield per hectare was 3%, 13% and 9%

higher in the corporations

for wheat,the variation of

increased production, but t

development of new water re

from this

{D

corpo

 

corporations and independent

very significant. It is true

times greater than for a peasant household in
then the higher production per

as one might have anticipated.

(Azkia, 1980:214)._Thus, except
yield per hectare between the
peasant family farms was not
that many corporations
be

.LL

his was mainly through t

sources. If we bear in mind that

the average farm corporation investment per household was 100

n

a cooperative,

hectar does not seem as marked

Ecwever, someone must ha

ve

heavy investment.

ration's activities

 

 

 

 

 

 

o the absentee shareholders who had 0 her occupations in

enerated wide difference in

ct
C)
(D
O
In:
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(D
U)
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i :3
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09

income dis ribution among the peasants and socio—economic

1

differentiation among the regions. In fact the central
government was able to take advantage of the class structure
existing in the countryside, by reinforcing the position

of the well to—do peasants (sar-bunéhs), lessors of

 

productive means ( gavbands), and remainders of the former
landowning class. is a result of widening economic
differentiation, the nature of the conflict between different
peasants changed.Dispute over shareholding caused tension among

peasants. Conflict over discrimination in employment and

I 1

low dividends caused tension between peasants and the
administration. Generally speaking, a conflicting relat n

emerged between small shareholders worlu g for wages and
non-shareholder wage laborers, on the one side, and the
large shareholders and mangerial-technical staff, on the
other side. In fact, with the emergence of the corporations,
the peasants had to endure new explo Mt tion by the state
apparatus.

The establishment of farm corporations was very
unpopular among the majority of affected peasants. In many
cases a confrontation with Government agents concerning the

.1.

transfer of their exclusive right of cultivation of land to

4 . .
the corpor ion emerged. In almost all the cases, after a

considerabl

(D

amount of wrangling peasants realized that

 

 

 

IIIIIIIIIIIIIIII-IllllI--———______l

demands and complaints would get them nowhere. "To silence
their objections, peasants are told the Shah wants the
corporation” (Flatt, 1970:80). The insistent peasants
were jailed in order to serve as an example for others.
One of the consequences of the farm corporation
operation was that the peasant was forced to migrate. This
was a result of the nature of the corporation. The
inequality of holding the shares in the corporation forced
the small shareholders to leave the village. Also, the

4.1

disproportionate use of machinery in bfle corporations
rendered nearly all the villagers, be they independent
peasants or agricultural proletariat, unemployed. For

example, in Dargazin Corporation it was estimated that

 

 

with full mechanization the labor force would be reduced
by 80% (Behpour,1971:10). Despite the promises of the
corporation to establish the rural industry and handicraft
centers, the farm corporations did not provide adequate

alternative employment for those peasants who were either

 

self-employed or full-time family helpers. Consequetly,
many peasants migrated to the cities looking for jobs.

In the case of the Garmsar Corporation, 210 out of a total

P!)

o 703 shareholders have left the village since the creation
of the corporation (Azkia, 1980:156). This consequence was
a response to the aim of releasing workers for casual

in the cities.

\

work

Some corporations started to introduce particular

cash crops (i.e., opium) which needed specialist peasants.

p.397

 

 

 

 

q

Therefore the corporations had to employ agricultural workers
from other regions. This created seasonal migration which had

a negative eiiect on the ,rosperity of the native workers.

In tde case 0: the Garmsar corporations more than 2,000
migrato;y peasants from different part of Khuiasan regularly

Research Group, 1969). It was the same in all the corporations
which shifted to the new cash crops.
One cf the main effects of the corporation programs
w s the extension of governmental control over the rural
areas through urban bureaucrats. Since the emergence of the

corporations, tne peasants were unable to control their
ile

(1.
L5
(D

91:

got rid of the former landlords,
they came under the control of a new master, namely the
state and its bureaucrats. The power was concentrated in the
hands of urban bureaucrats in order to prevent a potential
peasant movement.

One of the most important problems which was created

as a result of -arm corporations was the waste of agri—

cultural capitai through lack of supporting service and

‘)

while awaiting the de

l
spare part” (Salmanzadeh, 1980:256). It was very obvious that

- ..

Cl
C)
(D
F6
0)
w
*3.
O
O
H
‘Lj
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398

 

 

 

 

system that could expand through the country in isolation.
In fact, the aim of the cor po- ti on (higher income for
\easants) and the means to reach this aim (mechanization
through the introduction of farm machinery) were confused.
In Short, the farm corporation program was a state
deception to preserve the interests of the former landowners
and to expand the influence of the bourgeoisie in tie

rural areas. The expansion of capitalist activities by the
farm corporation's program not onlyf aile d to solve the

agricultural problems of the country, but created a

JD
I

dependency o- agricultural and non—agricultural activities

upon foreign countries which provided agricultural machinery
and implements, computerized offices, and experts. In
machinery, the corporations purchased a lot of im orted
tractors and combines without having the capacit v to
maintain them. Furthermore, the establishment of a center
pivot irrigation system was an inappropriate. irrigation
system for the Iranian countryside for the same reasons as
the use of machinery; In relation to the use of the computer
in office, there was no thought given to the problem of how
to operate a computer in rural Iran. in atdition they did

not consider how they would find computer programmers to

work in rural Iran. Finalli, in relation to experts,many

TiC and other international exerts were hired or invited
to work in "developmental” planing in order to suppor the
government‘s agricultural policies re ted to the farm

.1.

corporations.

399

 

 

 

if farm corporation programs were continued, we might
have disastrous rural areas at the end of the 19803. They

would have created anarchy both in the sphere of production

and consumption. fortunately, the 1979 Iranian revolution
stopped their opertions and emancipated a sector of the
peasantry while it offended rich and large shareholders.
In this regard, the power base of the urban bureaucrats
he villages was eliminated, while the caitalist peasants
and farmers started to run their enterprises again. Of
course, the independent peasants enterprises began to
exploit their family labor as before the establishment of

the farm corporation.

400

 

|\)

 

 

15.5.Endnotes
78% of the financial help given to farm corpor rations was
in the form of grants (3tem Jogqedam, 1978).

0')

For example :ar msar Corporatin had 1 bulldozer,5 jeep
21 tractors, 4 com mbines, 5 furrowers, 4 ditchers, 1
border marker, 6 fertilizer distributors, 20 motorized

sprayers, 15* rail are, 2 balers, 1 threshing machine,
1 rake, 4 weldi11ng machines and 21 lorries (Rural
Pesearch Group, 1969).

*4
N
OJ
:1-
[.1
9
O
y-
(I
L‘i’
(D

For detail description
corporation see Tahn, 1

\00
—45
(n
own
I
~45

See the f
between C
issue of _
1976; Eajaii, 1

ng works for cases involrins confrontation

and the covernvent official over t;
mation of CUltiVG tion rights: GOES
'; 313K,1978; Azkia, 1980.

—\1 [3'
O):

401

 

 

 

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m

16.1. Introduction

 

Word "agribusiness” coincides with the switch to
vertical organization on the part of certain giant
compaines able to control the whole food chain from field
to table. These corporations have what they like to call
the ”total market concept" and they are applying it
both in the center and in the peripheral countries. In
two words, as George says (1977:133), the agribusinesses
see themselves as the world's salvation. They think they
alone are capable of solving the problem of world hunger.

Some agribusinesses involve the setting up of a large-
scale (usually over 1,000 hectares) mechanized and capital
intensive farming operation. A wide range of commodities are
covered by agribusinesses, including grains, industrial
crops, fruits and vegetables, red meat, and dairy and
poultry products. Other agribusinesses involve both pro—'
ducing and processing (in this case, it is referred to
as agro—industry). For the purpose of this chapter, I use
the term ”agribusiness" to refer to both horizontally
integrated farm activities and vertically integrated

farming and processing activities.

402

 

 

 

 

——i——

The fourth type of capitalist mode of cultivation in
Iran was the introduction of agribusiness in rural areas.
The development of agribusiness activity in Iran was due
to the enormous initiative of the state. The strategy was
heavy state investment in infrastructure to create a
climate conducive to private investment. It is the intention
of this chapter to show how the government facilitated the
expansion of agribusinesses in the countr . is a result,
the basic aspects which will be analyzed are: the control

of the means of production by a sector of the dominant class

 

(in alliance with foreign capital) which had access to
large amounts of cash; the transformation of the social

’5

relations of production; and the development or new

 

production techniques which were based on the widespread
use of machinery. Finally, the agribusiness activities
will be evaluated in order to see their successes or

failures.

 

 

16.2. Reasons Behind the Agribusinesses and Process of

 

Their Emergence

 

The emergence of agribusinesses in Iran must be

related to the internationalization of capital in the

H

sphere of agriculture. According to the logic of inte

p.
H)

te

*‘S

|.__l

national capital, the United States is best su 0

grain production, and the Third World should therefore
produce cheap cotton, tomatoes, strawberries, beef, and

poultry, etc., for the united States or Western Europe.

403

 

*7

This displaces Third World staple foods and thus further
creates a market for American grain (Burbach and Flynn,
1980).

igribusinesses have several incentives for moving into
the Third World. Throughout the world, agribusiness is
"zeroing in,” as Bankamerica President Lundborg suggested
years ago, on the best land and the cheapest labor in the
under-developed countries. Speaking of his company‘s new
thrust towards overseas production (in Guatemala, Iran,
Indonesia, etc.) Murray Stewart, President of C.Brewer
and Co. says, ”we’ve been in this business longer than
almost anybody else, so we're interested in anything that

can be grown profitably” (George, 1977:151). Agribusinesses

 

 

have incentive other than cheap labor and high margins

for moving into the Third World. Their overall taxes are
often substantially reduced for operations in host countries.
The agribusinesses are the ones that use a "host" country's
land and labor for producing food—-rarely to satisfy

local needs, almost always for export to the developed

 

countries‘ markets that will pay the most for their produce.
Foreigners have always been important to Iranian

"development” projects. There was liberal policy toward

the importation of capital and intermediate products, as

these were regarded as essential to the successful.

q—v‘

implementation of the import—substituting strategy (resaran,

1 Iranian government decided to

82

509). is a result the

\I.)

bring foreigners deeper into the fabric of the society

404

 

 

—’7

(FirtzGerald, 1974:78). To attract the flow of foreign
capital to the agricultural sphere of the country, the
government had to Cl ea te the necessary conditions for that

1

to occur. In order to discover such conditions, the

government of Iran formally entrusted the task of a com-

prehensive survey to the Dew lork—based Develpment and
Resoruce Corporation (D & P), headed by David 3. Lilienthal
and Gordon Clapp (United States, Tehran Embassy, 1957).

7

These two architects of the Tennessee ally authority

(TI/4 ) established the hnuzistan Development Service (lDS).

The KDS set forth studies, plans and recommenda ons

d‘

The most importan recommendation was that 14 dams should
eventually be constructed in Khuzistan. Ither recommendations
concerned irrigation, land preparation and crop and soil
research (Bagley, 1976:28). The IDS was awarded executive
authority in the contracting of foreign compaines for the
construction of dams and other projects which were considered

crit al to agricultural develpment of the province. EDS

was to work with the Khuzistan Water and Power Authority

 

(ETTA) to spearhead the necessary techn al fOUI Qdations

 

for large-scale, capitalist ventures in the area. Since most
of contracts went to American companies, it is not
surprising that by 1957 the IDS was understood to exist
primarily as a ”tool for American interests" (United States,

Tehran Embassy, 1957).

i-$
511
F]

In 1958 the Shah described the panacea for agricultw

C1

deve1onment in Zhuzis 'an as

   

 

 

—:—

The project covers a series of dams and flood
control works, and the program is based on the
coordinated exploitation of all the resources of
the region, by principles of cooperation between
public and private groups and agencies on the
lines of the Tennessee Vally. This symbolized the
threshold of a new era and a unique expansion

of industrial development in the middle East
(Silsby, 1980238).

;y 1959 the Shah ordere‘ work began at once (Richards, 1975:
13). we should bear in mind that it was after this project
that Iran embarked on the land reform.

The first dam was Dez Dam. Since the dam was huge and

its construction was above the Iranian government’s

‘4)

“ancial capacity, the D & R asked the World Bank for

A I)

iinancial help ior

l-I

ran. One of the conditions which the
World Bank laid down in 1959 for financing the Dez Dam was
that a portion of the project be devoted to_a pilot irriga-
tion project to demonstrate the benefits of modern farming
techniques (Ibid.,p.13). As a result of the state investment
and the World Bank financial aid, the ”public works” and
the large—scale irrigation projects for Dezful and other
areas were systematically advanced primarily to assi

in la arge scale agriculture ventures. as Silsby (1980:49),
has indicated, it was not the purpose of the government,

the agriculture ministers, or the hu’Pii officers to build

the De: Dam for indigenous smallholders' needs. From the

 

very begining, la rge- -scale irrigation was conceived as
mrely a necessary foundation for future large-scale agri—

cultural ventures. In fact, by 1959 when the construction

of the Dez Dam began, it was clearly understood that the

406

 

 

 

 

rri

14

ation system was prepared, in the

filter the

09

Ct

creation

\_/
(1)
O
5
d‘
:..J
(D

Fourth Elan (1968-7 , here was an emphasi

5
of large farming and “nimal husbandry units to be operated

ned in

O

menti

HI

by advanced techniques (Field, 1972:68).

chapter 12, in 1968 the government passed the agribusiness
ict as a supplementary measx re to the land refo_l. Br
iassing the Aoribusiness not, the national planners showed
their desire to introduce modern, large- scale fa; ming systems
t

into the agricultural sector. The Dez Irrigation Projec

l
....D b

area was selected exclusively for establishment oi the
agr ibusinesses. However, in other areas of the country,
the sound of preparing the land and irrigation canals for

he policy of agri-

ct

agribusiness was heard. Accordin o

09
d'

business development, agricultural poles were designated
and land expropria ted for the injection of capital and
sophisticated foregin agricultural enterprises.

To mak way for agribusiness the nv?; was permited to

”buy” the land of independent peasants from 58 villases
within the project area, usually against the desire of the
peasants to part with it (Richard, +975z14

fore, f07ced the villa ers involved on 17th July 196; to

({Q

contact the nfl?l oifice in Dezfu

IQ
d
O
m
m
I4
H
(“i
D
m
I.)
H
D‘
O
|._J
Q
’J
S

bQ
U)

to the government.2 Between July .969 and June 1973, the

. *_ _ ‘ ‘l_ _ '1 Am “ ' _ m I. .J...‘ a o ‘ f‘

EOvefnmecb "re-purchased” 40,Ub0 heCtares in one LeSlgflGted
n r ' ' - 4... .9 4.1 A 4.. .3- /'(-~ .Am ~. _|_ _

areas. ihe remaining parJ ii the total oo,Coo hectares

‘ v - .-,- __
CU‘_DQSS€S Was 30 re-purc"ase d C7 garCh

*J.

1 ‘ A
I“\ «A --r~-4 r7-
alLCCEUCQ iv; cfir

 

 

 

 

 

'u

 

 

1974 (igro—industry and Settlement Department, 1973).
The peasants were compelled to sell their land a
administrative prices which were netted ior their debts

_"
1

to the state and the cost oi housing accomodations built
for their resettlement (Latouzian, 1978:561). ..‘¢_cc01 ding n

to the International Bank for Reconstruction and

CJ

elc ment, for t he initial 22, 000 hectare Dez Project
area, 121,000 people in fifty-eig ht villages were expulséd
(quoted in Silsby, 1980: 51). _n ey were members of almost
58,000 peasant famililes who just acquired the land as a
result of the and reform implementation.

1 structural change took place when the ownerships of
large number of independent peasants began to fall into

prepare for the

.3
o
H
Q.
(D
"5
rt
0
o“
a)

the hands of the state i-
‘g class and their foreign alliance whose backgrounds

were often commercial who, for that reason, controlled

:3

large monetary as sets. nese new agarian bourgeoisie

considered their properties an inte egr al part of their overall

L; _.

. 1

investments an d triev to maize them as productive and pro—
fitable as possible. One can conclude here that the deve-
lopment of a de pen ndent agricul' tural bourgeoisie partly
resulted as the Iranian agricultural economic sector became
dependent on foreign-oriented production.

The government agencies (i.e., the Cenjer for the
-ttraction and Protection of Foreign Investments in Iran)
started to advertise in order to attract the foreign

.9

.. Richards, 1975:11). it the same time, the

408

 

 

 

 

government was ready to help both foreign and domestic

01’]

O)

ablish their enterprises. is Claw

d‘

investors to es

indicated, in ran,

Government-sponsored . financial institutions
have played the major role in introducing
Q

privatel -owned, enterpr neurial capitalism
(1977:69J

The government encouraged foreign capitalist involvement
through the system of credit. The foreigners were awarded
tariff protection, a ”five year tax holiday” and the
:reedom to import whatever they desired. By the Fourth
Development Plan in 1968 a new Agricultural Development
Tund was created to invest heavily in ag_ibusiness. It
received an initial fund of thirteen million dollars with
the authority to borrow up to 3 200 million (Silsby, 1980:
51-52). Consequently,-agricultural fields for investment
were opened up. Agri—ousinesses flowed into Iran because
the rise of catitalist production relations in the country-

, l

:3
(D
U
"S
(D
O
O
{:5
{1;
[..J
Ll‘
...;
U
53
H)
O
‘5
03
L3
(D
H
'_.l
O
Q:
Q
I.)
H
Q)
U

c 1 - I _I_ “
id capital

I
f

0 V
‘
.

I‘

W

l

*1
I.)

accumulation; that is, the profit rate in the n Iorld

f

is higher than at home. During 1970s, the governmen

leased hundreds of thousands of hectares of productive

H

and to mutinational agribusiness. is FitzGerald reported,'

it was easier for the government to rent land to foreigners
than to help out its own small farrers (197fi:78).
Private companies from Jhe United States and Great

'9 4"? - ‘ f‘-/-v- ' ‘v- '5‘ V I-\ --L- a 3- J'-
oi use world’s largeSt banks, iarm equiamene manuiacturers,

409

 

 

 

 

 

 

 

‘l

were ready to spend the

hanized

n

s and for intensive mec

:he owners of some of these corporation earnestly

they could repeat th-eir California successes,

enough water for irrigation, enough power

plants aid enough insecticides and

the petrochemical plants nee; l3r, success

alnost guaranteed here....Anyone who annot make it

n

Ihuzistan has no busi we a being a farmer” (Iaraqi quoted

Salmanzadeh, 1980:241).

A comprehensive cont act was si,m ed between the

government and the investors which spelled out the respon—

 

sibilities ties. Under

of both par
government undertook to provide a
to the investor (usually) Several
to ific

"ailable according a spec

at the same time). The government

construct the secondary canals for the delivery of

.

to each 100 hectare plOt
each 1,000 hectare tract.
electric Power (at the consumer's
the investor from tax on any form
other side,
ce it was

8111

were not authorized,

and access

In addition, it also provi

the ventures backed solely by for reign invest

the contract, the
certain amount of
large tracts made
time—table and not all
also guaranteed to
water
and service roads to
'ded
expense) and exempted
machinery he used. On the
to

government policy

encoura,ge joint Iranian—f0 oreign ventures. The investor
had to agree to invest 80,000 Rials (3 1,145 per hectare
during the first iive years of operation, and therefore

410

 

 

he was expected to keep the annual gross product value at
about 60,000 Rials (3857) per hectare. The minimum area
of a tract of land made available to an investor was 1,000
hectares and all land levelling was deemed to be the
investor's responsibility, together with the construction
of tar iary irrigation ca ls s, ditches, drainage and field
roads. Fur thermore, the investor had to agree to employ one
man for every ten hectares of land leased and after bfle
iirst five years to reduce the number of his foreign staif
to three per cent of his total personnel. In addition, he
had to offer one apprenticeship for every 500 hectares
leased (igro-industry and Settlement Department, 1973:7—9).
Agribusiness units, both public and private, would be
tablished on 500, 000 hectares of land (Aresvik, 1976:56).
To assist in the capitalist trans-formation, the state
provided renewable th rty-year leases to foreign and
domes tic agribusiness compaines. The state was by far the

bi gest investor in the agribusinesses. The initial conse-

g
quence was such that agribusinesses gained the li on's
share of the most _ertile land in the country.

According to the official statistics, there were 213
e.gr ribusinesses operating in 256,000 hectares land. Cut of
these numbers, 7 units with 154,000 hectares were governe-
nental; 202 units private with 40,000 hectares; and finally

‘ts governme ental ~nrivate I 'rms with 62, 000 h.ectares

 

H)
__|

(lnosrovi, 1980:64). The greatest amount 0 concentrated

 

 

 

in the hands of as C,ribusiness was located in Ehuzistan
province.

As a result of the D h R recommendation, a sugar cane
plantation near Eaft Eappeh, north of Ahwaz in Lhuzistan,
ned, and a subcontract made with the Brewer
Companv o: iawaii to ma1 age it (Pichards,1975 :13). This
agri—business included 10,800 hectares land within the
boundary of the DI? (Ashraf, 1975:25). Another governmental
agri—business in the Ehuzistan province was lhwaz Sugar
Beet Factory with 9,127 hectares land located near
nhwaz (Ibid.). In addition, the government had shares in
the majority of foreign firms.

In fact Khuzistan became the land of the giant agri-
businesses, but they were operating in other provinces as
well. Tirst Hashem haraqi Agro-Industry of Iran and America
{of ten called the Iran-America lgribusniness) began operating

in 1969 on 20,267 hectares, and its ori al major .share

m

holder was an emigrant Iranian, Hashem Naraqi, a naturalized
American and one of the biggest almond gro Jere in California
dis share was 51%.Other shareholders

t Eational City Bank, hew Torn with 50%; lranians’
Bank, Tehran with 10%; and three individual stocld dolders
with 9% shares (Richards, 1975:14).

rie second gi ant agribusiness, Iran-California Agri-

business Company, was founded in June 1970, as a partners chi

betvnn the inerican- d cans-W0 ld Agricultural Develoo-
meno with 302 share,9 and the agricultural Developm rent Fund

 

 

 

of Iran (433:) with 15% shares. The other shareholders

D

were: 273;, 5%; I I. laleghani and Partners, 10%; Bank
rinancial Corn. 20%; John Deere

Crop., 10%; and Dow Chemical Corp. with 10% shares (Tichaids

S
1975:14).This agribusiness had access to 10,536 hectares
land (Salmanzadeh, 19802228). This agribusiness was
initiallgr managed by 78 year old. George Wilson, who from
1951 to 1955 had headed the Ca ifornia Farm Bureau :edera tion

(lbid., p. 240).

The third agribusiness, Shell-Cotts Agribusiness of
Iran, was established upon the recommendation of Lord
Rothschild, a friend of the Shah and a member of the Shell
board. The company brought in an international transport
and commodity brokerage firm Hit chell Cotts Ltd. 4 to
manage the new agribusiness ( 0f. ?_ichard, 1975:16). Ehell—

Cotts Agribusiness of Iran, established on 18th Jcnuarv

1971, was initially a tria mlar oartner ship between lranian
1nvestorc (aD_i, 15u' aoo Bank Cmran 10 M, ihe ?oyal
Dctch/ Thell group (70%) and the British 0 o n compaiy

held 14,736 hectares of land.

inalli, I should mention the International Agribusiness

k J
O
:3
Q
93
{3
k:
0
H).
l i
‘1
Q)
[j

vhich emerged on June 1975. 60 perc nt of
the investment was of foreign origin and 40 per cent of
domestic origi ‘. One of the foreign investors was the

nawaiian hgronomic Company (with 15% shares) which acted as

413

 

—’f

a major participant in establishing the Heft Tappeh sugar
cane plan ation in the late fifties and early sixties. The
Japanese Hitsui held 15 per cent of the shares. The other
foreign investors were: Chase Manhattan Bank, 15%; and
Diamond 3 Cattle (Roswell, few Mexico) 15%. The lrsnian
p rtners were as follows: Bank Kelli (
5% Ahwaz Sugar Beet Factory, 15%; lDrl, 15% and KWPA, 15%
(3a almanzadeh, 1980:240; Richards, 1975:14). This agribusiness
was allotted 16,680 hectares of land.

is we can see, the Iranian government invested in all
the above mentioned agribusinesses ex ept the Iran-American

.1.

one. The investment of the overnment was not limited to

(79

h
I..J

Q)

g"busninesses of th Khuzistan. Wherever the government

(3'

uilt a dam, ;rt invested in partnership with foreign

O

1

investors. In Azarbayjan province, the Iranian Ministry of

 

Agriculture and the Hawaiian :4.gronomics, Dunlop Ltd., and

a Japanese firm were jointly creating th as country' s largest
agribusiness unit in the Meghan steppe below the lras Dam.
in area of 50,585 hectares was prepared for cultivation

and meat industries (Bagley, 1976:34). is oil revenues rose,
the government became more involved in large-scale farming
investment. During the 1970s the government became heavily
involved in a number of joint ventures with foreign firms.
The Minis stry of agricul ture in conjun notion with two British
consu ant firms, drew up a 20-year national development

plan in 1975 designed to promoted large-scale iarming mostly

r)

A
I

based on agribusiness (Salmanzadeh,

intention of the government to establish the dairy and meat

414

   

 

complexes in the major tribal livestock breeding areas--

ars, Kurdistan, Luristan, and Azerbayjan (Aresvik,1976:114).

hj

Projects like these are another indicator of the uneven
development of capitalism in Iranian agriculture after the

land reform.

16.3. Agribusinesses in Operation

 

The agribusinesses tried to shape the Iranian agri—
cultural system to meet the needs of the export sector
rather than those of the internal market. Between 1969
and 1973 the government leased hundreds of thousands of
hectares of productive land to mutinational agribusinesses
across the country. During this time 62,219 hectares of
the most fertile land of the Khuzistan was allotted to
four giant agribusinesses. Table 16.1 indicates detailed
information on these large-scale California—style componies.

In this section I focus on these four agribusinesses
since there is not much information available about other

ones in the country. 0f the total 20,267 hectares allotted

_\

to the Iran-America Agribusiness, 4,567 hectares were

actually handed over, of which a quarter was levelled
originally. However, by utilizing unlevelled land in the
1973-74 cropping year, the company had nearly 5,700 hectares
under winter crops and 2,600 hectares under summer crops.

_‘

The company also established several large citrus orchards

 

covering a total area of 550 hectares. It was claimed hat

by being the first agr business to be established in the

[.1

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416

 

 

 

area, Ir n- -America Agribusiness acquired the best land,
suitable for alfalfa and vegetables, particularly asparagous,'
primarily for export purposes (Salmanzadeh, 1980:240).

This company had the second highest investment among

the agribusinesses of the region. It had the desire to use

D‘

r5
..A
w

igh proportion of machinery. As Rechards has indicated
(1975:16), when all his fancy farm machinery arrived at
the Persian Gulf port of Khorramshahr, haraqi paraded it to

Dez in order to dramatize the takeover of agr ic culture y

I”)

large— —scale enter p ise. Earaqi’s aim was to rea. pro its
through the export of asparagous and other produce sought
abroad. As one reporter noted:
From here yearly asparagus will be flown to
“orthern Eurpoe before an asparagus tip breaks
ground elsewhere; here tomatoes, sugar cane,
alfalfa (for Japan) (United States, Department
of Agriculture, 1978).
The company began exporting asparagus by air to Europe in
1971 (Bagley, 1976:35). In addition, fresh fruit and vegetables
were shiped to oil rich Kuwait, Bahrayn, Abu Dhabi and
Dubai (Freivalds, 1972:190).

The total number of laborers employed by the company
was nearly 1,000 of which only one fifth were permanent
staff. This company relied heavily upon seasonal cheap
laborers. It was a real example of capital-intensive
fa; ming, since on an average it had one worker per 10
hectares of cultivation.

The total land allotted to the Iran-California Agri-

business was 10,5561 qec tares, of which nearly half had been

417

 

 

 

leased by January 1974 and approx1 ma ly 3, 800 hect ares
were levelled by harsh 1974. The company had nearly 3,700
hectares under winter crops and 840 hectares under summer
crops. The company was growing a wide variety of crops. An

interesting feature of land use by this company was the

C

.1.
L:

sub-lease of 100 hectares of its land to Isfahani migrar
peasant workers. Part of this company's labor requirement
was drawn from the previous nasaq—holding local peasants
who were paid hourly. The total number of laborers employed
by the company was nearly 400, of which nearly half were
seaonal laborers. By sub—leasing land to his laborers,the
company reduced the cost of the reproduction of labor force.
Iran—California planned to grow wheat, maize, fodder

crops, sugar beet, vegetables and cotton, to breed livestock,

and to build a vegetable processing and packin ng plant a

\.

cold storage plant and a cotton ginnery (Bagley,1979:33).
The company was able to produce most of the products it
planned to gr ow, but it did not build any processing plants

.1.

e farming level. C—enerally speaking, the

c+

q
A
.-

a

5.1.

and remaine

b

—

company was not as success as the iran-America Company in
exporting material to other countries. its main produce was

for domestic markets.

14,736 hectares. 3y harch 1974, about 4,
leased and 3,800 hectares levelled. In the 1973-74 cropping
year, the company had 1,565 hect res under winter crops and

»i hectares under summer crops. The com anv invested

418

 

 

 

 

mainly in oil- seed cultivation and stockbreeding. Cf 2,891
hectares of summer crops, 1,940 hectares were cotton
(Bagley, 1976:34).

The Shell-Cotts had opted for a capita l-intens ”v
approach (Richards,1975:17). However, in prOportion

a

to amount of land released to it, Shellécotts employed
a higher ratio of permanent laborers than any of the
compaines. It was expected the compani would employ 1,500
iranian and would reduced the proportion of foreign
‘emploxees to one per cent by 1976 (Eagley, 1976:34).
Out of its total land allocation of 16,680 hectares,
nternational Agribusiness of Iran had received 4,240
hectares by January 1974, of which 1,250 hectares were
levelled. The company experimented with the introduction
of sturdy beef cattle breeds for intensive meat production.
As we can see from the table 16.1, the company had the
highest amount of capital compared to the other three
companies. It was a very capital-intensive company. The

1

company had the desire to import a massive number of the

o
C

I._J
H,

rom the United States. It was ,part of the govern-

.g

ments' plan to ask the company for a comprehensive deve lop-
ment of meat production.

Concurrent with the establishment of the agribusi me see,
plans were drawn up to replace illa ages involvec i; the
agribusiness scheme with new resettlement centers or
shahraks ('small-town'). The number of villages incruded in

.D

4.7 ,q n_- ._ . . _.;
these iour agriouSihesses 18 g_ vs

{'5
‘ J
{.3
Cl-
Cu
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.

 

 

 

of 13 shahraks were planned to replace the 100 villages

involved in hhuzistan (3al_anza

53

the ethnic c

Q)
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resettlement centers of has Irri
province. As we can see, some of these centers even
included four ethnic groups (i.e., Zhusrou shahrak .

The typical residential area of each shahrak contained

eries of rows of four-housing units, with a maximum

h
fa
w

0‘)

capacity of 500 units. Each of these units was designed for

occupation by one household and consisted of two'main’

rooms (6XA and 2X3 square metres) and a 'lot of approximately

I"
I

.J

700 square metres of land. Eacl snahrak had a population

as a town. 0n the other htnd, no faim land was attached

to any of these centres so they could nOt be corSidered as
villages. Furthermore, no admiristrative prov;s;oi was made
for the administration of shahraks,and no ediustments were

a I v 1

made Since they came into existence in 1;72. This led t

 

‘9" h . 1r- fl - - . ‘. 1, J—‘ . A 3,}- ‘ . 1" ‘ fl 7“,“

CI. 1.513;. CI 883‘! 1065 , fl OT 3135 bflere c2. -‘.€oal\;’l‘d La or UZGQTOI' . Thus ,
.«1 ~-'1 '. .-- .:.. 1 .0 ‘.I_ .2. :3: G .L. ,- - - .\

eacn agricuSiness aoponted a member oi le stall asotemporar,

- “-0 - ~ n“. * A , - _' y'fl- - no . 2“"
’unoriiCiai‘ snahrak supervisor (ca mansaten, 15o0:243).

420

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Table 16.2: Ethnic Background of Villages included in the
New Resettlement Center of DIP

 

 

Mane of VLLlages' Included Ethnic Bad<gmxd Evacuated Date of
sank m Raetdemmt R19 66 Hififi “85¢th
RAMS Farr-ash Milli/Arab 278 48 9.®.72
Bale-{jam Arab/Datum 196 20 25.11.73
lbsseixm
Balenjom Arab/M11111 87 45 2643.74
Deylane 0113 Arab 315 60 8.01.74
Band”! 103381 Arab 1.27 24 5.(3.74
Kutiai Dezflslli 772 135 25.04.72
Naijafabad Dedulli 6a 115 24.04.72
Total: 7 Vinaga - 265 447 -
KHEUJ W (5251;) Dr Sagva'xd 194 34 15.01.73
to 15.03.73
Biatian Arsbid Bakhtiai/Arab Ass 112 30.04.73
Qalleh Am Dezfulli/U-fl‘
. Sagvand 213 40 14.04.73
amen Tilda ‘ Dezflmi 12) 20 3.05.3
Bcnd'l Malian Arab 104 19 $53 .72
Bat-h Seyd
Taber Arab 9]. 16 8.10.72
Bmeh Gary Arab 117 17 12.09.72
mane-bad Baldidara/Arab 599 96 6.11.72
tn 4.01.74
Chleh Abde 92h Ar‘ab/Daszlli 790 1:5 17.12.73
Azizabad Lur W 119 22 7.CB.R
Total 10 villages - 2333 ‘ 512 -
SASAN Deylana Sofla Arab/037111111 537 109 2.CB.7‘2
Satan Lur Sagva'd/
Deszlli 517 9'7 2.03.72
to 10.(2.73
Baeh Alva‘x Ara: 338 SB 12.d3.72
Bcneh Yams Ara 91 15 20.03.72
3013‘! Rdflnah Arab & 62 23.01.74
Salarabad Dr Sagvafi/Arab 528 1(5 13.%.72
tn 2343.72
Sardarabad Lur Sagvmd/
Dezflalli 333 61 23.CB.72
Caleb-lbw Dr Sagvand/
Sam Dezfulli 24) 44 10.%.72
Total 8 Villages - 2905 546 -
GRAN) 25 Villages
“IUI'AL Resettled - 853 1505 -
Source: Salmanzadeh, 19802247
421

 

 

 

 

 

The agribusinesses eliminated employment for many of
the former peasants and created wage laborers among others
who were 'resettled' in shanty-town style shahrak near the
huge farms. Three main groups of workers in the agribusinesses
were distinguishable: unskilled farm laborers, skilled
operators and white-collar workers. The permanent employment
available in the agricultural field was limited, and
wages ranged from 95 Rials ($1.40) per day for women and
teenagers to 120 Rials ($1.80) for men. With luck this
meant a maximum annual income of perhaps 50,000 Rials, or.
roughly $440 per year. Many received less. Wage rates for
seasonal unskilled labor were still much lower than for
permanent labor ( Richards, 1975:15). Hourly rates payment
was completely alien and incomprehensible—to peasant field
workers who were accustomed to organizing their work time-
table to coincide with sunrise and sunset. The extremely
low average wage of the farm laborers was linked with the
queStion of the emplOyment of children, who were paid
considerably lower daily wages than adults.

In contrast, heavy equipment operators at the agri-
business received about 10,000 Rials per month and were
employed year round, yielding an annual income of roghly
$ 1800 (Richard, 1975:15). This was comparable with the
wage of industrial workers in the cities. However, their
numbers in each agribusiness did not exceed ten. Finally,
an Iranian white-collar supervisor in agribusinesses was

earning 130,000-150,000 Rials ($ 1,910-3 2,260) or roughly

422

 

 

 

 

 

five times the income of an unskilled laborer. Ascending
the occupational ladder, one could find a head of the
accounting office earning 915,000 Rials or about $ 13,450
annually; and managing directors (either Iranian or
foreign) earning roughly twice this amount (Richards, 1975:
15—16). In short, the establishment of the agribusinesses
did nothing to improve the situation of the rural
population under their employment.

Since agribusinesses were first of all profit-oriented,
there was no assurance that they would participate in or
stimulate the development of the social and physical
infrastructure in the surrounding villages. These agri-
businesses were capital—intensive. As Brun has indicated
(1978:19), "both the Iranian agencies and foreign companies
often seem to give the highest priority to giant projects
calling for coasiderable purcnases of foreign materials.“
They were deSirous of capital-intensive projects because
"... even foreign labor can grow restive" (George. 1977:149).
0n the other hand, as we know, agribusinesses are basically
antagonistic to national control over local food production
and marketing; thus the Iranian government had full
knowledge that what was raised would be largely exported.

As a result, more and more land was devoted to greater and
greater quantities of luxury food products for export and
only a small residue remained for the consumption of

Iranian upper class families.

 

 

 

 

16.4. The Results of the Agribusinesses in Iran

Like all pseudo-modernistic strategies in Iran and
elsewhere, agribusinesses brought no progress, because any
progress is by definition rooted in the existing history
of the relevant entity. Progress is a natural extension of
what there is already; it is not, and cannot be, the
arbitrary superimposition of irrelevant blueprints. The
agribusinesses were (at different levels) purely noninsti-
tutional and ahistorical inventions, transplanted into a
given social formation from the air. They destroyed the
technical characteristics and social relations of production
of Iranian agriculture, and replaced them with completely
alien and ill-adapted technological and institutional forms.
This process brought to pass two consequences: 1) the
failure of the agribusinesses' operations in Iran; and 2),
rural poverty in their region of activities. The rest of

this chapter is devoted to these two issues.

16.4.1. The Failure of Agribusinesses in Iran
.Agribusinesses in Iran, in general, and in Khuzistan
in particular, were not the success which was anticipated.
Within less than a decade of their establishment, the
initial enthusiasm of many of the foreign investors gave
way to disappointment. By the late71970s, only ten years
after the adoption of the agribusinesses as a principal
vehicle for agricultural "modernization", agricultural

production in the reclaimed areas was somewhat less than

424

 

 

 

had been the case before the project began. A micro-economic
study of relative performance of farms of different sizes
and modes of production has demonstrated, as clearly and
rigorously as possible, that the agribusiness farms have
been performing worse than all other production types and
categories in almost every respect (Cf. Etemad Maghaddam,
1978). Etemad Moghaddam forcefully demonstrated that
nearly all the indexes of performance--e.g., labor
productivity, land productivity, total productivity, etc.--
are higher in the case of peasant farming than farm
corporations, which in turn have performed better than
agribusiness companies.

The distorted agricultural policies caused: delivering
the most fertile land, with ample resources of water,
to inefficient agribusiness companies, channelling a
huge amount of financial capital and technical in put to
them. However, with the exception of the cane plantation
at Haft Tappeh, increases in yields were not as specta-
cular as the government and the companies so confidently
predicted. One of the major serious causes of the
unsatisfactory results of the companies, however, was
that some of the companies had secondary interests. They
manifested an apparent interest in establishing agri-
husiness in order to smooth their way to bigger and better
investments. Something of their motives can be gained
from the background of the creation of Shell-Gotta.

According to one senior Shell executive,

425

 

 

 

 

The original idea of going in was that in 1970,

the Shah said the companies tended to take money

out of Iran and not put it back in. In 1970,

that was long before the oil price increases,

of course, and Iran was not a particularly

wealthy country, so we said, ok, we will make a

gesture which will be appreciated and help

the shah in his farming policy, and we searched

around to find something and this we thought

would (Richards, 1975:17).
Examples of this type of investment were Shell, Dow Chemical
and John Deere. For them entry into agribusiness in Iran
functioned as an avenue either for protecting other
interests already presented (oil) or for entrance to new,
more lucrative investments than agribusiness.5

Since these compaines were not really expert in

agribusiness operations, "many cropping decisions were
commercially unsound or unrealistic" (Weinbaum, 1977:439).
The reason for this was that the initial of crops was made
on the basis of studies performed at the research station
(i.e., Safiabad Research Center) on micro-plots--where all
variables (fertilizer, water, pests, etc.) can be tightly
controlled--which could not give an accurate picture of
what true yields or various crops would be when planted
over thousands of hectares. Ignoring this discrepancy, the
companies went ahead with a few "suitable" crops recommended
by the research centers and sowed vast hectarages. Most
of the crops did not do very well, and after several years

.0

Cl trial and error compaines shifted their cultivations
(Richards,1975:16). This was late, since it created a lots
of debits for the compaines.

The agribusiness gamble was a dismal failure for both

426

 

 
 

 

 

 

 

the government and private sectors. The management of.the
companies was simply unsuited to the task, the labor force
reluctant and the productive unit irrelevant to the
ecological conditions. As a result, a majority of the
companies came under heavy debits. Table 16.3 shows the
financial situation and the losses of the four agri-
businesses in the DIP area in 1977—78. As we can see, their
debts to the Agricultural Development Bank of Iran and
other agencies and banks were very high. As Salmanzadeh
has indicated, in many cases, rent and water charges
running into several million Rials were not paid (1980:241).
In many cases, the agribusiness officials blamed the
governmental credit policy for their failures. For
instance, a senior Shell executive complained that "by and
large Shell-Cotts was not getting enough assistance from
the government" (Richards, 1975:17).

When it became clear that most production targets
could not be realized, the foreign investors of the agri-
businesses slowly withdrew their support, leaving the
finance of agribusinesses more and more in the hands of the
Iranian Agricultural Development Bank and other Iranian
private partners. By 1976, with few exceptions, the
agribusinesses were effectively, if not officially, declared
bankrupt. At this time, the government, already a sub-
stantial financial partner, stepped in to salvage the
predects (Weinbaum, 1977:4410). One year latter, the Agri-

cultural Ministry proposed to sell 26 government—owned

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428

 

 

 

farms, feedlots, processing outlets, and other facilities
but there was no longer any private-sector interest
(Silsby, 1980:62). In the case of the agribusinesses with
secondary interests, some believed that the reason for
the compaines' withdrawal was that they (i.e., John Deere
and Dow Chemical) got what they wanted, so they got out.
Their primary investments in Iran were both larger and
potentially more lucrative than their relatively small
interests in agribusiness.

DeSpite these negative results, the Shah had plans
to expand the areas open to agribusiness in Iran. The
reason for this was that his family, which became part of
the agrarian bourgeoisie, had interest in the continuation
of this sector of agriculture. It was this family and
their partners who were the most successful agribusiness
owners. They used their powers to dispose of governmental
funds and facilities to run their agribusiness. The
Shah's family not only had their own agribusiness, but
they had join ventures with most domestic and foreign
investors (Nik-Aein, 1980:45). In short, although agri-
business was the most disastrous gamble in the Shah's
agricultural policy, it was advantageous for the court

families and their alliances.

16.4.2. Rural Poverty and the Agribusinesses
As agrcultural policy shifted to support California-

style farming schemes, resources were increasingly

429

 

 

 

 

 

 

 

concentrated in foreign and indigenous enterprises. A

minority of capitalists clearly became the beneficiaries

of land, large-scale irrigation, credit and marketing

facilities. Part of the agricultural economy and social

structure was subordinated to an externally-geared,

export-oriented market economy. The natural consequence

of this approach was massive rural impoverishment. The

establishment of the agribusinesses denied the growing

rural population access to land and contributed to the

spread of the wage—earning class. As a result of the

agribusinesses, fifty-five thousand peasant households

in Khuzistan lost their lands, their homes, their cultural

and sociological entities, etc., by one stroke (Katouzian,

1978:361).6 Although the Khuzistan case was the harshest one,

the story was close to this wherever a giant agribusiness

was established. The peasants were turned into landless

wage laborers enabled to scratch a living by providing

part-time seasonal wage labor for the companies. As Clawson

has indicated, there was large reserve army of the unemployed,

willing to be proletarianized even at rock-bottom wages

(1977:68). Mechanization“ severely limited employment creation

in agribusinesses. Some 5% of the rural labor force was

. employed by agribusinesses in DIP (Silsby, 1980:55).
Agribusinesses did not need to cover the annual salaries

of all the workers, since they only needed them for part

of the year. Although salaried work existed, it had been

limited to administrative employees and a few skilled

450

 

 

 

 

 

   

 

workers. The majority of the labor force received its
salary in cash, based on seasonal labor. But, many had
migrated to the cities in search of work. As Silsby has
shown, migrant rural labor provided a pool of unskilled
cheap and near-slave labor in the shanty-towns (1980:54:55).
The life in the new resettlement centres was
segregated as a result of mixing different ethnic groups
and putting them in one shahrak. With the exception of
family and kinship, there were few group activities.
Patricia Rosenfield who visited these shahraks in 1975 and
1974 stated:
Traditional, established village relationships
have been broken; persons from the same village,
even from the same family are sent to different
shahraks (1975:82).
Some members of shahraks, who had no alternative to
evacuating their villages, showed resentment by constantly
neglecting shahrak regulations (Salmanzadeh, 1980:248).
The shahraks bore little resemblance to small towns.
They were without pipedwater, modern plumbing, or waste
treatment facilities. Communal taps served as the source
of drinking water, and for every two units (20 persons)
there was an outdoor lavatory (Richard, 1975:14). On the
other'hand, they were unlike the traditional villages.
The living quarters were smaller, and the brick and metal
materials used produced houses which were not particularly
pleasant in the summer months with an inside temperature

requently above 40°C (Salmanzadeh, 1980:245).

431

 

 

With low income, the families of the agribusiness workers
faced malnutrition. The basic food for these families was
wheat, which was normally consumed in the form of flat
loaves. Rice was a food for feast days. Meat was rarely
eaten. The indispensible stimulant was tea, taken with
plenty of sugar. The food was occasionally supplemented
with plain yoghurt (Bergmann,1975:77). Table 16.4 indicates
the food consumption of the members of a worker family
at an agribusiness. 0

Table 16.4. Average Consumption of Selected Foodstuffs

of the Members of a Worker Family at an Agribusiness
(in Kilogram per capital and Year)

 

 

Foodstuff Minimum Maximum Average
Wheat 81.0 152.0 123.42
Barley 27.0 38.0 34.36
Rice 5.0 25.0 12.12
Meat 2.1 4.0 3.47
Sugar 6.0 10.0 7.62
Tea 1.47 3.1 1.978

 

Source: Bergmann, 1975:78

As table 16.4 shows, the food item most consumed by workers
was wheat. The meat and rice consumption was very low,

and they were kind of fancy foods for them. From this
table one can calculate the amount of protein or calories

which each person could get out of his/her food annually.

432

 

 

 

 

—i—

As a result of the above mentioned conditions, the
workers were antagonistic toward the agribusiness owners
and managers. However, under the coercive conditions, the
workers presented their antagonism through an attitude
of indifference. The agricultural proletariat of the
agribusinesses, who lost their newly-acquired land rights
to the agribusinesses established on their farm land,
lost their hope for the future and, as Salmanzadeh
observed, it was not surprising that this bitterness and
resentment was expressed in a reluctance to give whole-
hearted support to their new employer (1980:241). It
must be related to this feeling that the agribusiness
managers started to employ outsiders with no vested
interest in the land.

In summary, under the agribusiness measures, the

regime confiscated the lands of newly-emerged indpendent

 

 

peasants and gave them to foreign capitalists and their
Iranian collaborators for anti-national agribusiness
projects. But, with the collapse of the old regime and
weakening of the coercive apparatus of the state in the
countryside, the peasantry re-occupied the large agri-

businesses.

 

16.5.Endnotes

The Dez Project area included Dezful town on its northern
boundary and extended for 60 kilometres south to the
ancient town of Susa (Shush) and included the Haft Tappeh
sugar Cane plantation in the extreme south.

Theoretically, the law passed in 1968 was to establish
agribusiness on newly irrigable state-owned lands. In
practice, the peasants' lands were expropriated for
this purpose.

Trans-World Agricultural Development Corporation was
founded in 1965 by 15 American Agrarian capitalists
emgaged in irrigated agriculture in.the California
Imerial Vally to make investment in other nations
(Bagley, 1976:33).

Mitchell Cotts operate in more than 20 countries and has
heavy investments.

Shell Chemical 00. Iran, set up with private Iranian
participation a 2,000 ton/Yr. pesticide plant at Qazvin,
100 miles north of Tehran (Field, 1972:72).

The total number of peasant households dispossed from
the land as a result of agribusinesses in.the whole
country is not known since the government did not
published any information in this regard.

434

 

 

 

THE POST-LAND REFORM A

PRCDUCTICN AND RJR'

17.1. Introduction

 

As I have demonstrated in chapter ten, the Iranian
village societies were highly stratified, with a complex
hierarchy of power and influence. The land reform succeeded
in restructuring rural social classes. This restructuration
was as a result of a change in articulation of the modes of
production. It is the intention of this chapter to show the
new articulation of modes of‘production within a specific
historical social formation in order to be able to present
the dynamic of social classes within modes of production.

To analyze the new articulation of modes of production,
I illustrated empirically a typology of farm enterprises
based on the concepts of modes of production (see chapters,
13,14,15, and 16). This typology was a base for exploring
the process of social differentiation among rural producers.
The differentiated class structure in various types of
village communities is determined in the post-land reform
period through the combined forces of the develOpment of
capitalism and public reform.

The Iranian peasantry, affected by the land reform,
has become much more stratified than it used to be. The

class structure of different communities became different

435

 

 

 

 

from each other after the reform. However, it is possible
to characterize the agrarian social classes that have been
identified by using the information on farm enterprises. As
a result of the operation of new enterprises, the peasantry's
class character had torn apart. This process differentiated
them into distinct classes that lost their unity in the
context of the new economic system. The rural classes in
general, and the peasantry in particular, entered into a
stage of flux. Its different classes became a target of
-internal differentiation also. Although internal differentia-
tion was inevitable, complete polarization did not seem to
appear.

In the post-land reform years, apart from obvious changes
involved in the departure of the arbabs and raiyats, the
other major alteration was the emergence of rural capitalists
and petty commodity producers. This chapter will summarize
the position of these two classes. In addition, the situation
of the rural proletariat will be reviewed in relation to

these two new classes in the countryside.

17.2. The Post-Reform Articulation of the Modes of Production
I have argued that there is a form of economic deve-
lopment specific to Third World formations in which the
development of capitalism is restricted to particular
sectors of the economy. Also, I have discussed that the
capitalist mode of production impinges on non-capitalist
modes at different stages of development of Third World

societies in different ways. The articulation existed before

436

 

 

 

 

 

land reform was a basis for restricted development of capi-
talism in the Iranian social formation. This form of deve-
lopment was structured both by the development of capita-
list activities in urban areas, and by the remaining pre-
capitalist activities in the countryside under the hegemony
of the capitalist mode of production.

This determinate structure has changed during the new
penetration of foreign capitalists into the Third World. In
the case of Iran, the feudal mode of production came under
the direct attack of dependent capitalism via the land
reform. Although capitalism was the dominant mode of produc-
tion and the operation of feudalism was under its control,
capitalist production in agriculture was actually limitted.
During the period of massive land redistribution under the
land reform, pre-capitalist relations of production were
definitively liquidated in Iranian agriculture and the
large feudalistic estates were broken up. The most important
change was the disappearence of the feudal lord, the pre—
capitalist as a class, and by the same process, the
dematerialization of the share-croppers equally as a class.

During the 1960s, with the dissolution of feudalism,
land reform and its related measures created a petty

commodity mode of production and established capitalist

 

relations of production in the countryside. The new structure,

therefore, must be understood in terms of articulation
between the capitalist mode of production and the petty

commodity mode of production, in which the former is the

437

 

 

dominant mode and the latter is subordinated under the
mechanism of the market. The form and content of the arti-
culation between the capitalist mode and the petty commodity
mode is based upon the production of certain material by
the petty producer which is not profitable to the capitalist
producer (e.g., cheap food) and the providence of cheap
labor (semi-proletariat) to the capitalist enterprises.
The capitalist mode obliges the petty commodity producer to
adapt to the needs and logic of its own functioning system.
In the years following the land reform, capitalism in
Iranian agriculture has developed at a rapid pace,fostered
in large part by the investment of the state in agricultural
production through a variety of programs. As I have’
demonstrated, there were four roads to capitalistic develop-
ment in Iranian agriculture. On the first road, a proportion
of some feudal estates were converted into a large capitalist
enterprise, and the feudal landlord became a capitalist
enterpreneur. The second road of capitalist development in
agriculture was a result of an unequal redistribution of
land and the emergence of capitalist peasants through
accumulation of land by the former rich peasants and agents
of the landlords. The development of capitalism along this
road required the elimination of the feudal landlords and
thier estates. The third road along which capitalism was
developed in Iranian agriculture resulted from the appropria—
tion of the independent peasants‘ land with the heavy

investme-t of the government. This road changed the

I

438

 

 

 

 

   

 

independent peasants into both shareholders and wage-laborers,
while the rich peasants and absentee landholders became

mere shareholders with big stakes. Finally, the last road

of capitalist development in Iranian agriculture was that

of the lease arrangements in which multinational agribusiness
firms established contracts with the government over the

land expropriated from the newly-emerged independent peasants.
As we can see, the emergence of capitalist relations of
production was partially intentional (i.e. farm corporation
and agribusiness), and partially unintentional (i.e. capitalist
peasant farm enterprises).

The expansion of capitalist relations of production
through the above-mentioned ways was a manifestation of the
inclinations of the domestic as well as foreign investors
for investing in agriculture.1 This could become materialized
only through the state's attempt to distribute land, and
at the same time, by developing the essential economic
infrastructures--dams, irrigation canals, roads,and a
financial structure to facilitate the provision of credit
to agrarian capitalist enterprises--in agriculture. Therefore,
the state attempted to extend capitalist relations of
production in the agricultural sector by land reform and
direct investment. The expansion of the large capitalist
farms in Iranian agriculture was attributable in part to

the state policies that were initiated to stimulate imports

O

f capital and intermediate goods. In short, the development

0

f capitalism in Iranian agriculture, which was established

439

 

 

 

during the 19508 in the Gorgan region, accelerated rapidly

in the 1960s and 1970s through large-scale state intervention
in agricultural investment.

I have demonestrated that these capitalist enterprises
have coexisted with petty commodity production and
constituted a new articulation. In this new articulation,
capitalism has neither eliminated nor completely transformed

petty commodity producers. Rather it seems to coexist with

them, while at the same time perpetuating their misery.

"U

etty commodity production performs a number of important
functions within the Iranian agricultural sector. Hence the
rural petty commodity sector, which includes independent
peasants, tenant peasants, artisan and tradesmen, is concerned
with the provision of goods and services considered unpro—
fitable by foreign or large~scale capital.

In describing the nature of their relationship to the
capitalist mode of production, petty ccmmdity production
is identified as a transitional mode between the feudal
and the capitalist mode of production (Moser,1978:1057). The
unfavorable conditions under which the petty commodity
sector is articulated with the capitalist mode of production
leads to their exploitation and impoverishment. Petty
commodity producers, by being incorporated into a
capitalist market system, become from the point of view of
this larger system converted into enterprise that is subject
to the laws of unequal exchange. Surplus value produced

by them is transfered from the rural to urban sector through

 

 

 

 

 

an appropriation of the surplus labor obtained as a result

of the low market price paid by the bourgeoisie,for their
products. That is to say, since the petty commodity producers
must often sell their products for a price below their value,
part of the labor expended in the production of these products
is not renumerated and is thus appropriated by the industrial
or commercial consumers who buy these products (raw materials
and basic food products).2 According to Barta, the unfavor-
able terms of exchange suffered by petty commodity producers
are a consequence of the structural articulation between the
petty commodity mode of production and the dominant capitalist
mode of production, a structural relationship which results
in the exploitation of the petty commodity producers by the
urban bourgeoisie, who are the primary consumers of the
products which the petty commodity producers.sell on the
market (Barta quoted by Harris, 1978:15). In short, the
petty commodity producers are subsumed to capital through
the market. This means that an existing labor and produc-
tion process ends up under the control of capital, but the
process is not otherwise changed.

The petty commodity producers are not only subsumed to
capital through the market. The precise articulation of
petty commodity producers with capitalist mode of production
insures that an abundant supply of cheap labor is constantly
released by this sector to the rural and urban capitalist
enterprise. As we have seen, almost half of the independent

peasants in Iran after the land reform have less than

441

 

 

 

 

subsistence-sized holdings.The agrarian capitalist producers
prefer to use these semi-proletariat since they are not
totally dependent on a wage and use the wages earned as a
supplement to their own products. In other words, their

cost of reproduction is low for capitalist enterprises.

I indicated that it is easier for capitalism to turn
the land of petty commodity producer peasants to the
capitalist Operation than the feudal estates. We saw how
within less than ten years more than 850 villages were
turned to the capitalist relations of production under the
operation of the farm corporations. Furthermore, during
the 19708 the government leased 236,000 hectares of land
of the petty commodity producer peasants to 215 agribusinesses.
Other forms of capitalist enterprises were expanded
rapidly since the expropriation of the land of the indepen-
dent producers did not create any organized reaction. As
a result, a structural change took place when the ownership

arge number of petty commodity peasants’ land began to

'_J

f a

O

H)

all

’4.

nto the hands of the capitalist producers. This process
was part of the larger gradual process of peasant differen-
tiation.

The nature of the relations that each social group
maintains with the means of production is an important factor
in locating social classes and following the processes
of differentiation. As de Janvry has indicated, ”...there
is a process of social differentiation through which some
groups gain increasing control of the means of production

while others lose it and become increasingly proletarianized..3

442

 

 

 

 

(1981:117). The long-term effect of the land reform was
(and still is) an increase in class differentiation and
class conflict in the villages between a small group of
influential rural capitalists, a large group of petty
commodity producers and a group of landless proletariat.
The process of class differentiation can now be interpreted
in terms of the categories of social classes. This will
permit us to visualize the possible trajectories followed
by each social class or fraction of a class as capitalism
develops.

The new articulation of the modes of production and
the unequal development of capitalism in agriculture after
the land reform provided a material basis for a rural class
structure specific to the Iranian countryside. In what
follows, I will outline the major classes and class
fractions contained in this new structure, indicating
how they were founded as a result of the new articulation

and the nature of thier dynamics.

17.3. Rural PettyfiCommodity Producer and its Differentiation
As I mentioned before, rural petty commodity producers
consists of independent peasants, tenant peasants, craftes—
men, and tradesmen. They dominated the rural economy, while
they themselves are under the domination of the capitalist
economy. They also comprise the majority of the rural
population in Iran. Petty commodity producers are at the
kernel of the class structure in the villages in which the

independent peasant is the predominant enterprise(51% of the

443

 

 

rural population). However,this class of peasantry does not
constitute a homogenized peasant class as a result of the
land reform itself.

The inequality in the distribution of land was crucial.
By making the size of the new allotments dependent on the
size of the old customary holdings, the government arti-
ficially created three strata of petty commodity producer
peasants: the lower stratum which owns less than 2 hectares
contains 43% of the independent producers; the middle
stratum comprises 59% which own between 2 hectares and less
than 10 hectares; finally, the upper stratum owns between
10 and less than 50 hectares and includes only 1 % of the
independent peasants. These groups produce to varying degree
both for subsistence and for market; some crops are
almost totally commercialized while others are mainly for
home consumption.

The upper stratum (sometimes called rich peasants)
possesses large holdings and are incomparably better supplied
with productive equipment than the other strata. They
engage in agricultural activities themselves, but partially
rely upon the exploitation of poor or landless peasants.
The land lost by the poor independent peasants is
accumulated by the rich peasants. This process of accumu-
lation sometimes "leads to the transformation of the
rich peasant into bourgeoisie enterpreniurs" (Stavenhagen,
1978:49). As Eahdavi has demonstrated ,in some villages

in Iran the rich peasants own the village shops, act as

444

 

 

 

 

 

 

general money-lenders and traders and can afford to acquire
more land and livestock (quoted in Keddie, 1968:78). In
these cases to draw a line between rich peasants and petty
traders is difficult. As a result of their strong economic
position in the village, they play an influential role in
the political life of villages. As we saw in the case of
farm corporation, the administrative jobs were mostly
concentrated in the hands of better-off peasants.

The middle stratum of independent peasants derive most
of their income from agricultural activities. Their farm
production exceeds the subsistence requirements of their
households and thus a surplus is available for disposal on
the market, but this surplus is not large enough to be

accumulated. They do not employ hired labor and they rely

 

 

exclusively on family labor. It may be mentioned here
that it is the middle—category peasants who have suffered
most in terms of loss of family labor, due to large scale

3

migration to urban areas. In spite of state policies
ignoring the position of the middle and lower strata of

the petty commodity producer peasants, the middle stratum
play a significant role in the overall agriculture of Iran.
They remain in control of their means of production and
continue to be petty commodity producers. In the case of
villages with farm corporations, the middle stratum of
independent peasants tended to stay in the village and
work for the corporations. A considerable proportion of

them found occupation in the corporations.

The lower stratum of the independent peasants (sometimes

445

 

 

called poor peasants) have insufficient land to satisfy
the minimum needs of a family or to allow the utilization
of their work throughout the year. Their farms cannot
insure the needs for maintenance and reproduction of the
whole family. And neither can wage levels permit full
proletarianization. As a result, peasant households on these
farms must rely on both farm production and external sources
of income, a dependence that gives them the status of
semiproletariat. These subsistence peasants constitute
the reserve of cheap labor for both rich independent peasants
and the capitalist enterprises.

The lower strata of independent peasants is not only
exploited by the capitalist enterprises but also by
various middlemen. Since they have to borrow loans and are
able to pay back only a fraction of the debt, their
indebtedness accumulates over time, ant the interest charge
on accumulated debt becomes bigger and bigger until the poor
peasant is hopeleSsly ruined. In most cases this ends up

vith confiscation of their land by shopkeepers and money-

g“

lenders. It is only a small proportion of the most

comfortable section of the small holders that will be able
to preserve their shaky position. The large mass of small
holders incapable of surviving on their small plot of land

a.

migrated to urban areas. higration among them occurred not

H)

only for the memebers of households but for the heads 0
the households as well. According to one survey, about 90%

of the peasants who migrated to ruban areas between 1975

446

 

 

 

 

and 1979 belong to the small peasant stratum (Askari,1978:17).
All the above-mentioned strata of independent peasants,
as petty commodity producers, are basically producing for
exchange. although they appear to have control over the
means of production in formal terms, in real terms their
labors are firmly subordinated to capital via the mechanisms
of unequal exchange. They petty commodity producers were
enmeshed in the capitalist market via money-lenders,
merchants and whole sale dealers, usually resident in the

cities. Since the average amount of credit paid to petty

 

commodity producers was lower than that received by the
capitalist farmers and farm corporations,4 the petty commodity
producers were forced to borrow from middlemen with high
interest rates. Therefore, through the various forms of
credit, capital gains direct control over the production
process. As Hooglund has observed:

From the peasants' point of view, the credit

policies were the most exploitative. There

was no redress from the imposition of extor-

tionate interest rate (1982:20).
One way of gaining control of production is the intervention
of the wholesale dealer in the production process. Credits
are provided by wholesale dealer, for certain products, to

petty commodity producers in which producers are put under

 

obligation to deliver or to sell the harrest to the
contractual partner. This is happening mostly in the case
of tulumbeh karan who obtain credit for investment in

1

water supply from wholesale dealers and as a result, the

447

 

 

 

contractors usually buy the crops at a lower price than

cl—

he free market price. In addition, the merchants intervene
in the decision-making process regarding the type of crops
that should be cultivated for each year.

An important fraction of petty commodity producers
in rural areas of thezcountry contains itinerant peddlers and
village shopkeepers. Representatives of all these types
of petty commodity producers might be found in the largest
villages (above 2,500 population), whereas in the case of

small villages and hamlets, wandering peddlers(pilehvars)

 

sell or bartered their wares (Hooglund, 1982218). The
products for sale include commodities such as tea, sugar,
rice, cotton clothes, etc; none of which are produced

locally.

 

One important effect of the land reform was the rapid
expansion of these petty commodity producers. The majority
of these petty commodity producers succeeded in consolidating
their economic position after land reform because they
become the indirect beneficiaries of the share of the
harvest which formerly belonged to the landlord. They
engaged in salaf-khari, the practice of purchasing the crops
of the poorer peasants before the harvest at discount
prices.This practice seems to have increased significantly
since land reform (Khosrovi, 1972). By the mid-1970s most
shopkeepers were able to increase their business with
peasants by 25-50 per cent as compared with a decade

Q

earlier (Hooglund, 1982:95). The peasants' _imited involvement

448

 

 

in town markets provided tradesmen the Opportunity to gain
an important degree of control over village economic
transactions. In short, the tradesmen were in the stage of
eXpansion after the land reform.

The eXpansion of market exchange into rural areas
changed the character of rural handicrafts. I have shown
that craftsmen have been under pressure since the penetration
of capitalist activities in Iran. In fact, the deteriorating
status of craftsmen was not a direct result of land reform
but mostly a consequence of the greater availability of
cheap manufactured goods which tended to undersell the hand-
made counterparts traditionally produced by village crafts-
men. What land reform did was to open the rural doors to
modern industrial goods. Therefore, all the necessary
items such as shoes, clothing, copper utensils, wooden
furniture and agricultural tools are now made and distributed
through local bazaars at low prices and craftsmen cannot
compete with factory-made products (hooglund, 1975:229),
and they have therefore found it difficult to earn a liveli-
hood.

The activities of those households involved in rural
handicrafts became less popular among the villagers, except
carpet weaving, since cheap urban products became available.
The economic significance of these occupations is minimal
and surplus income is low. some of them (i.e., shoemakers
and coppersmiths) find it increasingly difficult to

u.
t

modern industrial goods, therefore they start

competg Wlbfl n

 

 

 

to disappear.Some of these craftsmen, especially those who

are young with families to support, migrate to the towns.

:th rs join the rank of the rural proletariat. 0n the

(D

(

th

0

(D

r hand,those handicrafts which do not compete with

industrial products and are needed by the capitalist market

/'\

i.e., carpet), were allowed to be produced by craftsmen,
but at the same time they became subsidized to capitalist
activities. These petty commodity producers became piece
workers for urban carpet merchants. This new process
gives them the status of semiproletariat.

All the above-mentioned groups of petty commodity
producers are highly unstable and quickly differentiatable.
As we saw, like urban petty commodity producers, the rural
petty commodity producers are under capitalistic pressures.
In the case of the independent peasant, the transition to
semi-prletarianization was the major feature, and a movement
in the opposite direction, the transition towards the
capitalist mode of production, was the minor feature. The
former are those who are pushed into the sale of part of
their labor power, and thus articulate to some extent with
the capitalist mode of production. The latter are arti-
culated in another way, directing their production toward

I ‘I

the capitalist market and buying labor power. If they
commit themselves entirely to that market and limit
themselves personally to an organizing role then they are
making the transition to becoming capitalist peasants.

The position of nimeh karan and tulumbeh karan are

 

450

 

 

 

quite risky, since they are dependent on market price fluc-
tuation. They are under the exploitation of the market
through middlemen and contractors (wholesale dealers). It
has been reported that some of them became bankrupt. However,
they survive the development of capitalism because of
their ability to deliver food to the consumer at a lower
price than the capitalist. As I have indicated before,

some tulumbeh karan after renting the land from the small
peasants for a few years, have bought the land, eXpanded
their farms and become middle indpendent peasants with
stable positions.

In the case of tradesmen, they have benefited from land
reform primarily because an overwhelming majority of
peasants received insufficient land for profitable farming
and thus continued to depend upon credit advances to finance
both basic consumption needs and agricultural expenses.

Some of these tradesmen have invested in agricultural
activities. Generally speaking, the position of tradesmen
were stable and towards expansion of their activities.

The craftsmen's activities are restricted by commodities
produced under more advanced capitalist conditions. The
growth of the system of capitalism imposed increasingly
heavy pressure on the independent craftsmen. The end
point of this process was a differentiation toward either
proletanianization or semiproletarianization. Under the
process of semiproletarianization, a segment of the crafts-
men will survive who produce profitable commodities for

capitalist merchants.

451

 

 

 

As a result of the land reform implementation and the
start of contacts with the market, the Iranian rural petty
commodity producers undergo a process of soico-economi

differentiation.

17.4. Rural Capitalism and its Expansion

The government tended to argue that abolition of the
feudal relation of production meant that the exploiter of
the peasant in the countryside had been successfully beaten.
However, for the peasants themselves the gppgp still existed
through the private and state owned large and medium
capitalist enterprises. In fact, the main change was the
disappearance of the feudalistic ownership of land, but at
the same time its partial replacement by the capitalistic
ownership of land. We learned in the previous chapters that
power in the villages was transferred to a new ruling class.
While the landlords' power in the villages was broken by
the intervention of the State, they themselves were reinte-A
grated into a new ruling class as capitalist farmers, state
employers, merchants or shareholders in Industry.5

As a result of the land reform and its supplymentary
measures, a relatively satisfied class with a greater
stake has been created. The power and resources of this
new landed class enable them to keep effective control over
the rural economy. In agricultural activities the capitalist
members who emerged include those members of the previously
better-off peasantry, some of the old landowning families,

urban merchants and bureaucrats, and state and foreign

452

 

 

 

investors. This new dominant class in agriculture was
eXpanded rapidly since one of the capitalist producers' aims
was to accumulate more land. Therefore, they were always
covetous toward the lands of the poor peasantry. They were
able to expand because they could use the credit facilities
provided by the Agricultural Bank. This bank only lent to
those farmers who invested on a large scale in agriculture.
Also, they were best able to benefit from cheap chemical
fertilizers and.pesticides, and from the latest seed varieties
provided by government agencies.

In the case of capitalist peasants, we saw that the
situation after the reform led the privileged sector of the
village to accumulate wealth and expand their holdings. They
continued to eXpand by capturing lands from the poor stratum
of the independent peasants or by buying the land from former
absentee landlords. Although the number of peasant capi-
talist families constitute a small proportion of proprietor
families (0.6%), this fraction of the capitalist class,
relative to the village standard, possess a considerable
amount of arable land. Their total cultivated lands were
more than the total amount owned by small indepnedent
peasants (1,073,697 hectares). The capitalist peasant was

in a position to manipulate the situation and monOpolize

the key positions in all rural organizations. They dominated

rural affairs under their own leadership. Their economic
strength undermined the situation of the rural petty

commodity producers.

453

 

«L!

 

 

.2

i—l

As I discussed before, prior to the land reform, except

 

for the Gorgan and Dasht regions, one could not find any
region in which commercial farming was practiced. What was
unique about the land reform was that it allowed some
absentee landlords to keep some of their lands if they
changed their method of cultivation and consequently the
relations of production. After the reform they expanded
rapidly. Although these farms represented only 0.4% of

the country's farms (9,553 farms), they contained a consi-
derable amount of the agricultural land (2,452,906 hectares),
which is almost twice as much as the small independent
peasants' land. Also they controlled a high percentage of
the irrigated land of the country (18.9% .

The capitalist farmers increased their investments in
both the agriculture and non-agricultural sectors. Their
operational area is not confined to villages: they extended
their alliances to the national economic and political
frame. They were (and some still are) urban residents.
Their managerial representatives were at the peak of the
class structure and either as governing elite or as ruling
class exercised their tight control over economic, political
and organizational life of the community and extended their
control over all operating rural organizations in the areas
of their activities.

The rapid establishment of the farm corporations was
another indicator of the rapid expansion of capitalist

relations of production in the countryside. Within less than

454

 

 

ten years more than 89 farm corporation replaced the indepen-
dent peasant production with capitalist relations of
production in almost 830 villages with 55,662 members. We
learned that economic power in the villages covered by farm
corporations was transferred to the new group (rural capi-
talists) under the leadership of the managing personal,
with the backing of the central government. In effect they
were able to monopolize all the executive and administrative
positions in village institutions. It has been shown that
the benefits of a corporation‘s activities went dispro-
portionately to capitalist peasants and in many cases, to
the absentee shareholders who had other occupations in the
cities. The parasitic large shareholders expanded their
investment constantly in the corporations as a result of
exploiting the small and poor shareholders. Through farm
corporations, the government representatives at the village
level increased, and their activities widened the encompass
many aspects of village affairs. These managers' function
was quite different from the former landlords. They

were mostly concerned with the technical and business side
of agricultural production.

I.have demonstrated that the areas under the operation
of the agri-businesses expanded very rapidly, while at the
same time very selectively. Under the agribusiness activities,
the land associated with the entire village was cultivated
on capitalist norms, and there was only one mode of cultivation.

As a result, the rural structure became completely polarized:

455

 

 

 

on the one pole the representatives of the agribusinesses'
owners (managers and administrative staff); and on the other
pole the bulk of the rural proletariat. The emergence of
agribusinesses created a managerial group in the countyside
who were strangers to the village population and usually
lived out side the village compound.

In short, the situation after the land reform led the
privileged sectors of both villages and urban areas to
invest more in agriculture based on capitalist relations
of production at the expense of the poor stratum of the
peasantry. Also, government policies were to accelerate
their rapid growth through credits and exemptions from
taxes. In a short period of time they appeared all over like
weeds. Their economic stregth led them to dominate rural
affairs under their own and/or managerial leadership and to
Consequently undermine the situation of the rural petty
commodity producers. This dominant class was the most
stable class in the agricultural sphere prior to the 1979

Iranian revolution.

17.5. Rural Proletariat and its Migration

 

One of the principal effects of the land reform has
been to increase enormously the number of landless
peasants. They emerged as a distinct class: a landless;
rural proletariat, whose common caracteristics are low income,
economic insecurity and unemployment. After the reform,

this class comprised 44.5 per cent of the rural population.

456

 

 

 

 

Their positions deteriorated vis-a-vis that of the villagers
who obtain land.

We saw how small independent peasants were dispossed
by richer peasants as a result of the insufficiency of the
size of their holdings. Also, while Iranian farming
techniques were relatively labor-intensive after the land
reform, nevertheless, the use of machinery for major tasks
such as ploughing and harvesting had become common on
holdings over 10 hectares. The net result of these two
processes was to greatly increase unemployment in rural
areas. In Iran the percentage employed in agriculture has
been falling: From 56 per cent in 1956 to 33 per cent in
1976 (Halliday, 1979:130). Statistics compiled by the
Iranian government for 1971 indicate a rural unemployment
rate of 13.9 per cent for the economically active population
(Plan and Budget Organization, 1978:322). The agricultural
laborers found themselves in a situation of growing destitu-
tion. Unemployment or underemployment became even more of
a common feature in their lives.6 Official statistics on
the increase in agricultural employment between 1956 and
1966 point to an annual rate of only about one per cent
(UNILO, 1973:32). As the International Labor Office report
notes, "there are indications of complete stagnation since
1966" (Ibid.). 5

As a result of the existence of surplus labor in
rural areas in general, and in the agricultural sector in

particular, full employment in villages became unlikely.

457

 

 

 

 

The capitalist enterprises were likely to hire part-time
seasonal laborers and in most cases to use the semiprole-
tarian, since a large part of the cost of reproduction of
the labor force comes not from wages but from subsistence
activities of the work force itself. As Salmanzadeh has
observed, "one of the most drastic changes in the rural
area has been the employment of women as cheap wage-earners
in the capitalist enterprises" (1980:209). This process
had a discriminatory effect on the rural proletariat. A
small group of skilled laborers emerged in the villages
through the establishment of new capitalist enterprises
with a stable occupational position. On the other hand,
a conflict emerged between proletariat and semiproletariat
over the low opportunities which existed. In fact the
average length of employment for wage laborers in agri-
culture declined. The rural proletariat became deprived
than ever. After the land reform, they have always been
the poorest, most insecure, and dispossessed group among
the peasantry. Under these circumstances, the rural
proletariat were virtually compelled to migrate away from
their villages in search of work to support their families.
After the completion of the land reform, their migration was
primarily toward the urban areas.

The movement of human pOpulations has been throughout
history an intrinsic component of the major process of
structural change. The penetration of capitalism into the

agricultural sector and the persistence of backward forms

458

 

 

 

 

 

 

 

of production in the countryside of the peripheral countries
led to a slow process of semiproletarianization of peasants
and to rapid displacement of labor by machinery—-proletariani-
zation of the peasantry. This process of structural change
contributes to the growing decline of the rural areas

and to the gradual destruction of agriculture. As a result,
"the masses of the marginalized agricultural proletariat
are forced off the land and move to the urban center where
capital is concentrated" (Kazemi, 1980:8). As Gimenez has
indicated, it is capital accumulation which determines
migration processes within social formation” (1977z9).

It has been mentioned that during the previous regime,
priority was given by the planners to growth in the manu-
facturing and service sectors of the economy, and to the
concentration of these sector in urban areas; limited
attention was given to the agricultural-rural sector
(Abrahemian, 1980:22). The increase in the force of migration
from rural to urban was the result of the limited growth
of capitalist elements in the countryside, together with
the rapid expansion in the activities of secondary and
tertiary sectors, particularly the construction sector
which has in turn stimulated an enormous demand for
unskilled manpower from the rural areas. The majority of
rural young migrants ages 14—27 constituted unskilled

construction workers in towns.
Julian Bharier's careful estimate of migration in

Iran confirms the view that extensive city ward migration

459

 

 

is of recent origin. She finds that on the basis of the

"annual rates of growth of urban and total population...

there was no significant net rural/ urban migration before

about 1934" (Bharier, 1972:56). Between 1900 and 1956,

Bharier's calculations point to a total of 685,000 rural

to urban migrants. For 1956-66 the net rural to urban

migration was 1,680,000--a sharp increase over the previous

decades. Bharier notes that this figure is equivalent to

90 per cent of the total internal population.movements

(1971:30). The high rate of migration from rural to urban

areas continued. The urban population grew at 4.9 per cent

per annum, compared with 1.9 per cent annual growth for

the rural population (Aresvik, 1976:53): despite the fact

that the difference between birth and death rates is

higher in rural areas. The paCe of rural to urban migration

did not slacken for 1966-76 period. During this decade,

2,111,000 individuals migrated from the rural areas to the

cities (Kazemi, 1980:28). The number of migrants, which

had totaled 3,791,000 between 1956 and 1976, jumped to

over 380,000 annually after 1971 (Abrahamian, 1980:22).
This view is substantiated by the result of the

1976 nationwide census that indicates an annual increase

of 6 per cent in urban population as opposed to only 1.1

per cent in rural population for the ten-year period

1966 to 1976. In 1959 only 31% of the population was urban;

by 1976 this had risen to 48% (Plan and Badget Organization,

1976). The population of Tehran, for example, grew from

460

 

 

 

2,680,000 in 1966, to 4,460,000 in 1974, largely as a
result of rural-urban migration (Katouzian, 1974:231).

Because of the nature of the dependent economy of
Iran, the cities were unable to absorb these migrant popula-
tions and provide them employment. There was only one,
temporary, source of employment: construction. The arriving
peasant was on the periphery of cities' economy. He had
no industrial skills and he found it difficult to obtain
employment. "The shortage of employment opportunity is
due to the strategy of urban investment which reinforces
- the consequences of the pattern of consumption. Modern
service are capital intensive and they use a large proportion
of skilled labor" (Katouzian, 1978:351).

Those peasants who were unable to obtain employment in
the cities gradually created in the urban complex a new
phenomena, the under~proletariat. This highly-accumulated
force, lacking any skills, facing continuous unemployment
and horrific deprivation.may be very closely articulated
with the working class prOper. "This reserve army of
unemployed has, due to a terrific drop in their standard of
living, to live in far worse conditions than the workers.
This is what qualifies it as a sub-proletariat" (Jazani,

1973:146). This deprived section took shape in the form of

 

shanty towns on the edge of the big cities. The shanty tOwn
dwellers, as peddlers and temporary laborers, are the main
manifestations of the sub-proletariat.7

During economic and social crises, this section of the

461

 

 

urban population is pushed into a state of explosion culmina-
ting in spontanious and bloody riots. This section of the
proletariat can be dominated by elements from very different
revolutionary ideologies. In the case of Iran,
These young men see religion in very activist
terms...As late as August 1979, the overwhelming

majority gave Ayatollah Khomini unquestioned
support and loyalty as their imam (Hooglund, 1980:5).

Although their departure from rural areas was a "safty valve",
their arrival to the cities created a strong force for the
1979 Iranian revolution. It is true that the 1979 revolution
was primarily an urban revolution, but participation of the
rural elements was crucial to its success.

In short, the rural proletariat underwent great pressure
from land reform and from capitalist penetration into the
countryside. These forces differentiated them into rural
dwellers with miserable living conditions, and led those
who migrated to exchange a miserable rural past for an

even more miserable urban future.

462

 

4.

17.6. Endnotes

We saw how foreign compaines (i.e., the New York-based
Development and Resource Corporation) recommended the
establishment of infrastructure for deveIOping large-
scale mechanized agriculture. The expansion of capitalist
farming in the Gorgan region by domestic investors was
alsp discussed. Both of these happened years before the
implementation of the land reform program.

I should mention here that the transfer of surplus value
takes place as a result of the parasitic relationship
imposed on the peasants by the commercial intermediaries
with whom they must deal in order to sell their products.
In Iran, as in other peripheral countries, the group of
merchants, money lenders and intermediaries that form
the network of relations between the urban and rural

sectors reaches massive proportions.

As Azkia has illustrated, the dependence of the heads of
households of middle peasants on the land is stronger
than those of small peasants, and consequently the rate
of migration of the heads of households to urban areas
is less marked than among poor peasants. (Cf. Azkia,

1980: 70-71).

The average amount of credit paid to capitalist farmers
was 400 times, and in the case of farm corporations 41
times, more than the average paid to independent peasants.

According to one estimate, 20% of the total value realized
through compensation in stage one of the land reform was
used to buy shares in Government-promoted industries

(Halliday, 1979:133).

Accoring to Halliday, under-employment in the countryside
was running at around 40 per cent (1979:130).

463

 

7. There is a fundamental difference between this section and
the lumpen-proletariat, which comprises depraved class-
less elements (i.e., petty smugglers thieves, professional
hooli ans and louts, and prostitutesS (Cf. Jazani, 1973:

146‘7 o

464

 

SUMMARY AND CONCLUSION

This dissertation was concerned with tracing the
change in Iranian rural class structure as it relates to
the 1962 Iranian "land reform from above". The most
general objective was to study the nature of class relations
before and after the land reform in Iranfs rural areas for
the period between World War II and 1979. The specific
aim was to analyze the process of annihilation of some
rural classes and the emergence and expansion of others
after the reform.

The analysis of the effects of the 1962 land reform
on Iranian rural class structure took into account the
interplay of major internal, as well as external, struc-
tural forces. This was an important step towards applying
the theory of the articulation of modes of production to
the analysis of social change in Iranian rural society. In
order to analyze the rural class structure before the land
reform within the frame of modes of production, I surveyed
four interrelated levels: 1) pattern of landownership;

‘2) forms of production and division of products; 3)the pre-
dominant division of labor; and 4) level of the development
of the productive forces.

This research demonstrated that the most important

feature of landownership in Iran before the land reform was

465

 

 

 

 

the large-scale proprietorship of whole villages. This
included state-owned, crown-owned, religious endowment and
private-owned villages. There was another form of land-

ownership known as khurdeh maliki, an ownership of a small

 

share of the land in a village. This type of private owner-
ship contained dehqani (independent peasants) and absentee
small ownership. The dehqani proprietorship was not an
important form of land-holding in Iran. On.the other hand,
the absentee small-holding was seldom the only type of
holding in any given area but tended to be mixed with peasant
proprietors.

Relations between the peasants and the landowners were
for the most part, based on a muzara-eh (share-cropping)
contract. This was the basic form of feudalistic exploi-
tation of the peasants. Along with share-cropping, fixed
rents were likely common in the rural areas. Fixed rent was
paid in kind or in cash, or both, in place of a share of
the crop. Payment in kind was prevalent. We have seen that
the dehqani system of production played little, if no, part
in the reproduction of the agrarian structure of Iran in
the period before land reform. Finally, the capitalist farm
enterprises fallowed the rule of uneven development. Before
the 1962 land reform, the only regions in which capitalist
farming was developed were the Gorgan and Dasht regions.

In the pre-land reform period, the labor force of every
Iranian village was organized within a framework of pre-
capitalist institutions. The social division of labor in

the village has developed under the influence of two main

466

 

 

 

 

 

 

 

 

 

traditional institutions: khanevar (peasant household unit),
and the buneh (cooperative unit of production). The khanevar
was, in practice, the smallest unit of working organization.
In.most villages it was the khanevar unit that was recog-
nized as a working unit, not the individual member. All
members of the khanevar, from small children to retired
elders were members of this unit. The peasant household,
with whatever means available,was able to manage the
production process in spite of facing many difficulties.
They divided the tasks among the members of the household.
Until the period of land reform, production activities in
some Iranian villages were organized in a hierarchically
ordered structure, the puneh,a unit composed of several

households. In the areas which buneh was common, the peasant

 

did not work an assigned plot of land alone. Rather, it was
typical for the arable land of a village to be organized
into units farmed cooperatively by teams of share-crappers.
The whole population of the village was divided into bugghg.
Nearly all the labor power in a village was trained and
channelled toward production inside the traditional insti-
tutions. I
This research illustrated that the nature of each
productive factor played a very important role in the pre-
land reform relations of production. Also, it was demonstrated
that fluctuation of the relations of production in the
countryside has promoted some aspects of the productive
forces, while at the same time it has stagnated the others.

Almost all the equipment used prior to the land reform was

467

 

 

 

 

 

primitive. The predominant motor power used in agriculture
to put agricultural equipment into motion.was provided by
animals. The use of agricultural machinery was very limited.
The irrigation system was highly complex and this has made
possible the complexity of relations of production in the
rural areas. Prior to the reform, significant work had been
carried out by the farmers, local people, or the government
concerning seed improvement. The government efforts were
concentrated mainly upon the importation of good quality
seeds from abroad. Manure was considered the main source of
plant nutrients in Iran, but most of the peasants were so
poor that they could not supply their land with enough
manure. Application of chemical fertilizer was practically
insignificant. In.many parts of rural Iran, the process

of labor productivity was subjected to the sway of natural
changes. The most obvious effect was that the distribution
of the labor factor on the time axis of an agricultural
year was not at all homogenous, but on the contrary was
very rough and uneven. Finally, the arrangements of
cultivation in Iran were rudimentary. Among many reasons,
there were main ones: first, rotation of crops and
diversification were made impractical by the narrowness of
the market; second, the introduction of any crop whose
requirements were unlike those of the staple crOps tended
to disrupt the routine organization of cultivation, and
thus to undermine the unity of the village itself; third,
the great limiting factor in Iran's agriculture was water.

Consideration of the above-mentioned four levels of

468

 

 

 

 

 

 

analysis clarified for us that a characteristic peculiarity
of Iranian feudalism was the combination of feudal relations
of production and independent peasant production. Also,
penetration of capitalist relations of production in agri-
culture was limited. However, the pre-capitalist relations
of production in the countryside were subordinated to the
capitalist system of production. In.this social formation,
world capitalist-economy generated a form of distorted
capitalist development in accordance with the specific
function of which the Iranian economy fulfills within the
international division of labor. Since the beginning of
the present century, the rural sector was increasingly
drawn, through a system of commercial relations, into the

wider regional and national markets, and ultimately, into

 

 

the international economy. Foreign.demand for certain crops

 

turned part of Iran into areas of specialized raw material
production, dependent on the foreign market. Almost all
the landlords transferred their surplus physically to urban
areas where it entered commercial exchange. I
Iran's uneven.and restricted capitalist development
was a necessary function of the historical collusion of
the "traditional" Iranian society with Western capitalist
interests. Iran's integration into the global system of
capitalist production and exchange, and its role in.the
international division of labor, necessitated the preser-
vation of pre-capitalist forms for the maximum extraction
of surplus value. As such, it was necessary for the repro-

duction of Iranian capital and for the reproduction of the
469

 

 

 

international capitalist system as a whole. In short, the
relationship of the feudalist mode to the capitalist one
was not one of mere co-existence, in which each develops
independently of the other. Capitalism had different needs
of feudalism in different stages of development._As a
result of this process, we saw an alliance between feudals
and foreign capitalists. This alliance helped to preserve
feudalism in Iran.for awhile.

The class structure in Iran‘s rural areas before the
land reform derived from the historical form in which the
capitalist mode of production.articulated with those of the
pre-capitalist ones. Prior to the land reform, the village
in Iran was more than a simple assemblage of peasant house-
holds. Rather, the village was a socio-economic complex.
The villages had clearly defined social classes and a
hierarchy based on prevailing social relations of production.
The entire agrarian structure of Iran included a number of
social classes. They had definite positions in relations
to the means of production. There was also a relatively
high degree of economic differentiation within.the rural
classes. These classes consisted, in a broad sense, of a
dominant class and the subordinate classes. The dominant
class consisted of three sub-categories: 1) the absentee
landlord; 2) the landlord's agents; and 3) the oxen-owners...
The subordinate classes contained: 1) share-croppers and

tenants; 2) independent peasants and artisans; and 3) rural

laborers and servicemen.

470

 

 

 

 

A common.characteristic of the Iranian landowning
class was that they were usually absentee. The membership
of this class was an agglomeration of different components
that had been assembled over the previous century. An
alliance was established between the government and the
landlords. This alliance was dependent upon colonial powers.
The colonial powers maintained the alliance and exploited
it for their own benefits. This class was also connected
with the traditional bazaar. The absentee landlord had two
village level agents to safe-guard his interests. These
were his bailiff and village headmen. Neither of these
positions were clear cut. In the absence of landlord, a
gavband obtained a right to provide some means of production.

The pre-land reform Iranian villages contained an
assemblage of subordinated classes. The overwhelming
majority of the villagers consisted of raiyats (in relation

to muzara-eh and muqasa-meh systems of production). All

 

 

raiyats were victims of extortion and Oppression against
which they had little, if any, protection. The conflict
between the landlords and the raiyats in the pre-land
reform period was the main contradiction in the rural areas.
The dehqans constituted a small insignificant group of
peasantry in comparison with the huge mass of the raiyats.
The dehqan who owned a small plot of land was definitely
better off than his counterpart who lived as a tenant or
sharecropper. The second group of independent producers in
the rural areas was craftsmen. They manufactured virtually

all the nonfood products utilized by the villagers. Iranian

471

 

%

 

 

 

rural craftsmen (except carpet weavers) suffered the pene-
tration.of urban.made goods into the countryside, but
until the land reform they were still able to manage their
businesses somehow. Finally, the village laborers, before
the land reform, were those who neither owned any means

of production, nor enjoyed the right of cultivation.

There were village laborers involved in three sectors of
the village activities: a high proportion of them were

agricultural laborers (barzagaran); a few of them were

 

public servicemen; and the remainder worked in handicraft
workshOps for wages. The economic situation of the village
laborers was not better than raiyats or independent
producers, but it allowed them to survive each year.

This dissertation.demonstrated that, in relation to
the stage of New Dependency, whereby multinational corporations
started to take over the economy of Third World nations,
the existence of the precapitalist agricultural system and
the type of ownership of land was an obstacle to the
deve10pment of dependent bourgeois and foreign capitalist
activities in agriculture. Therefore, the foreign supporters
of the landowners stopped supporting their old alliance
(feudal landlord) both politically and economically; and
forced their new alliance (dependent bourgeoisie) in power
to move and eliminate feudalistic relations of production
in order to pave the road for capitalist agriculture. The
means to overcome this obstacle was the land reform. Therefore,
the intended aim of the land reform was the expansion of

capitalist relations of production in agriculture. This

472

 

 

 

 

 

task was carried out through: first, the unequal distri-
bution.of land; second, the exemption of some land from
redistribution; third, helping rich peasants to accumulate
surplus; and fourth, the introduction of farm corporations
and agribusinesses. In.this regard, the government had
considerable success in destroying the pro-capitalist
system of social relations in the countryside and introducing
capitalist relations unequally in some regions. However,
we know that capitalist relations of production cannot be
established within one night. It must meet some prerequisites.
Since the Iranian government was not ready, at that time,
for preparing the infrastructure enough for all the villages,
the policy was also to creating simultaneously the indepen-
dent peasant production. At the same time, the dynamics,of
dependent capitaliSm required the creation of the independent
peasant economy.

As a result of the implementation of phase one, many
of the landlords were able to preserve some of their land,
but they had to convert their old relations of production.
On the other hand, this phase created a mass of indpendent
peasants. The second phase not only did not satisfy those
peasants who anticipated the opportunity to acquire land,
it also generated more anger among tenant peasants. The
third phase coincided with the government's policy of
modernization of farming. Tenancies were sold and farm cor-
porations and agribusinesses were established.

The implementation of the land reform was a turning

point in the development of contemporary Iranian rural areas.

473

 

 

 

 

The pre-capitalist production institutions began to collapse
and new relations began to advance. This process of struc-
tural transformation has had very profound effects. It
enhanced the development of differentiated agricultural
enterprises and property systems, and thereby modified the
class structure of Iranian rural communities. As a result

of the land reform, the pre-capitalist relations was trans-
formed either into a transitory system of production, or

into a capitalist one, thus changing the basis of the

social relations of production.

Nimeh kari has prevailed as an unexpected result of

 

the land reform. It has been established mostly for

producing summer crops for the market. Nimeh kari has a

 

contradictory characteristic; On the one hand, nimgh karan
are exploited in relation to both landowners and middlemen
and contractors of the market. On the other hand, since
they work with the help of the agricultural laborers,
they exploit these laborers to some extent.

There is another form of tenancy farming known as

'tulumbeh kari. In this transitory system of production, a

 

 

specialized peasant has taken the risk of investment in
farming activities. He provides water, seeds, the water
pump, and all other cultivation implements. The labor
power comes either from family labor or from hiring some
agricultural laborers. Their productions are exclusively
for market.

After the land reform, independent peasant production

became the most prevalent system of agricultural production

 

474

 

 

in the rural communities. The peasant family is the basic
unit of production. Although the independent producer
peasants consume most of their products, they have to sell
part of their produce to procure those goods they do not
produce themselves.

As a result of the land reform and its supplementary
measures, different agricultural capitalist enterprises
emerged. The peasant capitalist enterprise is in fact
a new phenomenon which emerged as a result of accumulation
of wealth by the privileged sector of the peasantry. This
type of enterprise hires both the semi-proletariat and
proletariat of the village. Because of using machinery,
biochemical technology, improved seeds, and water at a
proper time, the production per unit for capitalist peasants
is relatively higher than for independent peasants.

‘ The land reform benefited absentee landlords by
I exempting their land partially from redistribution, and
by helping them to establish the capitalist farms. The
capitalist farmers put a large sum of money into farm
machinery. Investment was advanced in irrigation facilities.
They have made extensive use of seeds of good quality and
fertilizers. In these farms, the investment in new
techniques is high becuase the owners try to conServe
labor and fundamentally reduce the cost of production.

By establishment of farm corporations, the government
speeded up the process of expansion of the capitalist
relations of production in the rural areas. This was possible

since the state injected huge sums of capital in villages

 

 

 

 

covered by the corporations. Although from the production
point of view, the corporations were not successful, they
were able to convert the independent peasant enterprises
into capitalist activities.

Finally, the fourth type of capitalist mode of cultiva-
tion in Iran was the introduction of agribusiness in rural
areas. The development of agribusiness activity in Iran
was due to the internationalization of capital in the
sphere of agriculture and the enormous initiative of the
state. The strategy was heavy state investment in infras-
tructure to create a climate conductive to private investment.
As a result, private companies from the United States and
Great Britain spend the necessary funds to develop the land
for intensive mechanized farming. The partners for the
foreign investors were both the government and the private
Iranian investors. Although the agribusinesses in Iran
were not the success which was anticipated, they destroyed
the technical characteristics and social relations of
production of Iranian agriculture, and replaced them with
highly mechanized capitalist agriculture.

Even though the transition to capitalism in the country—
side is only a recent phenomenon and is by no means fully
completed, the social relations in agriculture are essen-
tially nonfeudal: land and labor are increasingly commodi-
fied and their appropriation is more and more established
on a competitive basis. The majority of the product is
the result of either capitalist or petty commodity production.

During the period of massive land redistribution under the

 

land reform, pre-capitalist relations of production were
definitively liquidated in Iranian agriculture:and the
'large feudalistic estates were broken up. In fact, the
new structure is an articulation between the capitalist
mode of production and petty commodity production.

In this new articulation, capitalism not only is a
dominant mode, but increasing its influence in agriculture.
Far from being displaced by capitalism, petty commodity
production is essential to capitalist production. The
unfavorable conditions under which the petty commodity
production is articulated with the capitalist mode of
production leads to its exploitation and impoverishment.
Petty commodity producers, by being incroporated into a
capitalist market, become from the point of view of this
larger system converted into an enterprise that is subject
to the laws of unequal exchange. The petty commodity
producer has to sell his products on the market at below
the cost of their value (and often at below the cost of
their own reproduction). Increasingly, unequal exchange
pushes the poor stratum of petty commodity producers off
the land, at least during certain times of the year,to
supplement their income with wage labor. This process
insures that an abundant supply of cheap labor is constantly
released by this sector to the capitalist enterprises.

The new articulation of the modes of production and
the unequal development of capitalism in agriculture after
the land reform provided a material basis for a new rural

class structure specific to the Iranian countryside. In fact,

477

 

the 1962 Iranian land reform annihilated some classes of
the peasantry; expanded the others; and finally created

new ones. As a consequence of this rearrangement, the whole
class structure of rural Iran was changed, and it re-emerged
with a new appearance.

In this new structure, the petty commodity producers
form the majority of the rural population. They comprise
independent peasants, tenant peasants, craftsmen and
tradesmen. They dominate the rural economy, while they
themselves are under the domination of the capitalist economy.
Although they appear to have control over their means of
production in formal terms, in real terms their labors are
firmly subordinated to capital via the mechanism of unequal
exchange. This group is highly unstable and quickly differen-
tiatable. They are under the process of semiproletarianiza—
tion. However, the upper fraction of them can accumulate,

under specific circumstances, and become rural bourgeoisie.

 

As a result of the land reform and its supplementary
measures, a relatively satisfied class with a greater
stake has been created. The power and resources of this new
agrarian class enable them to keep effective control over
the rural economy. This new dominant class in agriculture
was expanded rapidly since one of the capitalist producer's
aims was to accumulate more land, therefore they were
always covetous toward the lands of the poor peasantry. The
situation after the land reform led the privileged sector
of both villages and urban areas to invest more in agriculture

based on capitalist relations of production at the expense

 

478

 

 

of the poor stratum of the peasantry. Also, the governmental
policies accelerated their rapid growth.

One of the cardinal effects of the land reform was an
enormous increase in the number of landless peasants. They
emerged as a distinct class; a landless rural proletariat,
whose common characteristics are low income, economic
insecurity and unemployment. After the land reform, the
rural proletariat became more deprived than ever. Under
these circumstances, the rural proletariat were virtually
compelled to migrate away from their villages in search of
work to support their families. The rate of migration from
rural to urban areas was very high after the reform. The
migrants who were unable to find employment in the cities,

gradually created in the urban complex a new phenomena,

 

 

the under-proletariat.

 

By using the articulation of modes of production
approach, this study demonstrated how the pre-capitalist
mode of production in Iran co—existed with the capitalist
mode even after the domination of the capitalist mode in
the Iranian.social formation. Although the feudal mode of
production in Iran retained its basic forms of exploitation,
these forms were mediated by their relations to the
capitalist mode. In the period before the land reform,
capitalism drew on aspects of the feudal mode for its
reproduction. Capitalism in Iran organized'
the feudal mode to its requirements, but it did not immediately
transform it into a capitalist form. In fact, here capitalism

contributed indirectly to the persistence of the

479

 

 

 

pre-capitalist mode of production.

Secondly, and still significantly, the nature of the
pre-land reform articulation was determined by the internal
structure of the pre-capitalist modes as well as the
external factors (such as the stage of development of
capitalism), In relation to the structure of the pre-capitalist
system of production, the relationship between the peasants
and the landowners was for the most part, based on a
share-cropping contract. The surplus extracted by the land-
lords was transfered to the urban.market which, in the
final analysis contributed to the reproduction of capitalism
in Iran. In relation to external factors, the early post-
war phase of Iran's development was import-substituting
industrialization a strategy which did not, for the most
part, generate an imperative for capitalist development in .
agriculture. Due to the nature of the share-cropping contract
and the expansion of dependent capitalism in Iran, the
capitalist mode of production preserved the pre-capitalist
mode.

In the above-mentioned articulation of modes of production,
while the feudal mode of production was contributing to the
accumulation of capital in the center, it simultaneously
created a tension with the growing Iranian dependent
bourgeoisie as a result of the new phase in capitalist
development. Since the ultimate tendency of the dominant
capitalist mode of production is the dissolution of pre-

capitalist modes, the dependent capitalism in Iran in the

480

 

phase of the consolidation of the multinational corporations
moved to dissolve the feudal mode of production. In this
relation, the state as a major investor in economy became

an effective agent for removing the feudal relation of
production and its dependent institutions.

The current dynamics of dependent capitalism in Iran
required the creation of an independent peasant economy.
In the phase of increasing subordination of Iran's economies
to multinational corporations, the independent mode of
production was much more practical for contributing to
capital accumulation in the capitalist mode of production.
Far from being displaced by capitaism,
independent peasant production (as a petty commodity production)
was essential to capitalist production in Iran. Independent
peasant agricultural production continues to exist in Iran
because it is profitable to certain interests in the
capitalist system as a whole.

The present study indicates that to the
extent that in the peripheral countries the capitalist system
has been imposed upon pre-existing social structures, rather
than arising out of them, and has co-existed for a while
with modes of pre-capitalist production, the nature of
articulation itself is transitional, complex, variegated,
and in a state of flux. By using a dialectical-historical
method, this study provided an understanding of the
connection between various stages of the historical develop-

ment of the Iranian transitional social formation. In other

481

 

 

 

 

 

words, this study promoted the understanding

of the historical process of social change in Iran's
agrarian society. Changes occurred through a process of
"synchronic" (co-existing, simultaneous) as opposed to
"generic" (one giving birth to another in a priori linear
fashion). This understanding was possible only by utilizing

the "articulation of modes of production" approach.

482

 

 

 

 

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