Nepal was long under a feudal system where a small number of landlords held most of the agricultural land (see Infighting among Aristocratic Factions , ch. 1). The state extended its control over the land by the administrative device of making land grants and assignments and raising revenues. Most of the landlords who were granted state lands were not directly involved in farming but contracted with tenant farmers on a customary, and hereditary, basis. The basic purpose of land reform was to protect the tenant farmers, take away excess holdings from landlords, and distribute property to farmers with small landholdings (holding one to three hectares) and landless agrarian households.

Efforts at land reform began with the enactment of the Land and Cultivation Record Compilation Act in 1956 and continued with the Lands Act in 1957 when the government began to compile tenants' records. Although these acts facilitated land reform, the lot of the small farmer did not improve, and further efforts were made. The Agricultural Reorganization Act, passed in 1963, and the Land Reform Act, passed in 1964, emphasized security for tenant farmers and put a ceiling on landholdings. There were several loopholes in the acts, however, which continued to allow large landholders to control most of the lands. There was some success in protecting the rights of tenant farmers, but not much was achieved in land redistribution. As of 1990, average landholdings remained small (see table 8, Appendix).

Data as of September 1991