On June 24, 1992, the Egyptian People’s Assembly reversed the agrarian relations law, a centerpiece of the 1952 revolution, under which some 1 million families enjoyed quasi-property rights — secure tenancy at fixed rents — over more than 1.5 million of Egypt’s 6 million feddans of agricultural land.  This reversal is part of the broader transformation of Egypt into a capitalist market economy. In the words of Ismailiyya governor and vocal liberalization advocate Ahmad al-Guwayli, “land is a factor of production which awaits liberalization.”  Capitalist agriculture requires that owners have the freedom to dispose of their property as they please and that the market determines rents. This reversal will give private investors confidence that property rights take precedence over all else.
Since the death of Gamal Abdel Nasser in 1970, the agrarian bourgeoisie has pushed to scrap his agrarian reforms. Sadat gutted the cooperatives and abolished agrarian relations dispute committees, which had favored tenants. Rents frozen since 1952 were raised in 1975. By 1985, land values had reached at least 20,000 Egyptian pounds per feddan, while rents remained fixed at less than 80 pounds per feddan a year. Landlords stood to gain several thousand pounds per feddan if they could evict tenants and sell land or rent on the open market, or raise livestock and horticultural crops themselves with hired labor. 
In 1985, the ruling National Democratic Party (NDP) agricultural committee, representing landlords, called for an increase in rents and for the right of owners to sell land under tenancy contracts. But a sympathetic government backed down on presenting the proposal to Parliament after security police riots in 1986 threw doubt on the reliability of a repressive apparatus conscripted in good part from the rural poor. For the rest of the 1980s, the government was caught between pressure from its landed constituency and fear of the political reaction among peasants, while jurisdictional rivalries obstructed a regime consensus on reform. 
In the 1990s, growing economic crisis increased Egypt’s vulnerability to the international economic pressures wielded by the International Monetary Fund. The collapse of socialism had discredited alternatives to capitalist development, and reform had proceeded in East Europe without popular backlash. The Mubarak regime acquired new confidence from the success of its risky role in the war against Iraq and from the consequent debt relief. Mubarak and his advisers became convinced that the time was right for a major push for agricultural liberalization.
Softening Up the Opposition
The government had begun a press campaign favoring liberalization in the 1980s. Pro-government journalists, notably al-Akhbar’s Galal al-Din al-Hammamsi, insisted, without any supporting data, that tenants were making exorbitant profits from rising agricultural prices and many owners were actually poor peasants themselves. Others claimed that inefficient small tenants had to make way for large agribusiness. by the 1990s, the terms of the public debate had been reframed from raising rents to abolishing the whole agrarian relations system which secured tenancies. The government seems to have forged a pro-“reform” coalition of rural sub-elites, including agronomists, agricultural economists and village headmen, whose opposition to reform in a 1986 survey had been turned around by 1992. One factor in winning over the village notability, and perhaps in neutralizing small peasant proprietors, was the accompanying end to compulsory state marketing at low fixed prices.
Tenants received little support from the opposition parties. The Wafd, a party of the agrarian bourgeoisie, advocated a 20-fold increase in rents and a phase-out of guaranteed tenancy. Ibrahim Shukri of the Socialist Labor Party agreed that tenants got excess profits, and should not be able to inherit tenancy contracts, although he advocated that expelled tenants be compensated with government-reclaimed land. The silence of the Muslim Brothers was generally seen as approving the change.
The National Progressive Unionist Party, or Tagammu‘, through its organ, al-Ahali, was almost alone in defending the principle of tenant rights. It charged that 90 percent of owners were wealthy and mostly absentees, and that restoration of their control over the agrarian surplus would only increase their consumption, not investment. But even the socialist Tagammu‘ acknowledged the property rights of owners and conceded rents should be raised, although only as evidence showed increases in actual tenant earnings.
There was no sign that tenants themselves were part of the debate. The Tagammu‘ lacked a peasant auxiliary that it could mobilize. Nor did tenants have any autonomous vehicles to express their interests. They had no voice in Parliament and were not represented on the NDP agricultural committee. Potential peasant interest groups, such as the Union of Agrarian Reform Cooperatives and the Higher Council of Agricultural Cooperative Societies, were purely technical in function, headed by NDP apparatchiks, and split between owners and tenants or controlled by rich peasants. 
As the issue reached a denouement in mid-1992, tenants became aware of the threat. Once the government prepared a draft reform bill, it began consulting with Parliament. This was covered in the press and occasionally on television. One journalist reported that fear and resentment swept the villages.  Tenants were surprised to hear MPs assert in a televised debate that they had gotten rich at the expense of landowners. They vehemently opposed termination of contracts, whatever the compensation. The owners, they argued, would use the land for building or for cattle or chicken raising. Tenants did the work and bore the losses and risks. They had farmed the land for decades, producing strategic crops for the state at low fixed prices, while the owners lived in the cities or got rich in Saudi Arabia. Tenants pointed out that costs had soared as input subsidies declined and wages increased, radically shaving their profit margins. They would accept rent increases only if the prices of crops such as cotton also increased.  According to Midhat Mustafa, an agronomist at Minoufiyya University, agricultural banks were now charging interest rates of 22 percent. It was sympathetic journalists and agronomists who made this tenant opinion known; tenants themselves remained passive, perhaps isolated by the alliance between the government and the village notability.
The agricultural committee of Parliament reported out a radical draft “reform” in June 1992 which would raise rent and quickly phase out all tenant protections.  The Tagammu‘ and the Nasserites led the opposition, asserting that mass expulsions would result. The Tagammu‘ advocated that the government guarantee tenants the right of first refusal to buy the land if owners wished to sell, provide tenants who wished to purchase their holdings the credit to buy, and mandate compensation for tenants who lost their contracts at 25 percent of the selling price. The government’s original draft incorporated the 25 percent compensation plan and would have phased out protections over a longer period, but the regime seemed to change position in the course of the debate. NDP secretary-general Kamal al-Shazli led the attack for the radical draft law. The sheikh of al-Azhar was enlisted to decree that since contracts must have a limited duration under the shari‘a, the old agrarian relations law violated Islamic law. Nasserite deputy Diya’ al-Din Da’ud countered that the shari‘a protected tenants from injustice, and that the new law transgressed it. His assertion that the sheikh of al-Azhar’s ruling was merely a personal view brought charges of sacrilege.
In the end, all compromise was brushed aside. Behind the scenes, Minister of Justice Farouq Sayf al-Nasr reportedly expressed confidence that society would accept it, since the left had been destroyed as a credible opposition. The assembly approved the law after a 19-hour debate over three days. Only ten votes were cast against it, all by Nasserite and Tagammu‘ deputies. 
Under the new law, rent is increased from seven to 22 times the land tax (averaging 25 pounds) per feddan. Alternatively, a sharecropping contract is permitted, splitting the output 50-50 and allowing the owner to share in increased profits. Secondly, all contracts will be terminated by 1997-1998 and thereafter owner-client relations will be governed by the free market. But the owner can sell the land at any time before that. The tenant has first refusal and is entitled to compensation if he does not buy the land. The original draft set this at 200 times the land tax regardless of years remaining in the contract, but a last-minute amendment made it equal to 40 times the tax for each remaining year of the contract, thus reducing the amount of compensation by as much as four fifths. Depending on the number of years left in the contract, peasants would receive on average 1,000-5,000 pounds per feddan. Since land prices have continued to boom, this probably amounts to no more than 2 to 10 percent of the value of the land, compared to the 50 percent customary when the tenant’s consent was necessary to sell. The interests of the owners triumphed, those of the tenants were practically ignored, and most of the burden of aiding them was put on the state. The government was made responsible for securing new housing for tenants who had built houses on their land, and expelled tenants are to have priority access to reclaimed desert land.
State, Class, Capitalism
The abolition of the tenancy law may be a first step in the replacement of small peasant production by larger-scale capitalist agriculture, but it is by no means certain this will be economically rational. There is likely to be some disruption in the transfer of management, and some owners have little interest or skill in agriculture. Food self-sufficiency may suffer, since the law is likely to accelerate the movement away from baladi food crops such as grain and legumes and toward meat, horticulture and export crops.
Critics raise the specter of class warfare in the countryside, with tenants battling police seeking to evict them. Where other villagers are the only potential candidates to buy or rent land, social pressures may prevent owners from changing tenants at will, and thus buffer the operations of the market. Owners reluctant to rent their land under the old law may now make more land available for tenants, but rich peasants would be best positioned to take advantage of this. The law certainly has the potential to inflict great hardship on the thousands of tenants who for decades enjoyed a modicum of security. One elderly tenant expressed his plight this way:
If I’m lucky enough to get out before the five-year interval, I might get…6,000 or 12,000 pounds, but that would be spent in less than two years. Now there’s talk of daily laborers getting ten pounds per day. But at my age who has the strength to work as a hand one day here, one day there? Where do I go, to the desert to reclaim lands? I’d die the next day. I’ve lived here all my life, I have nothing else…. When I’m gone, what will my wife do? 
The law comes at a time when the village economy is particularly vulnerable to disruption. As a result of the oil boom and emigration, local self-sufficiency and dependence on agricultural income had declined in the 1970s and 1980s. Handicrafts were hurt by competition from manufactured and imported goods: Ready-made imported clothes replaced village-made em>galabiyya. Expectations in the villages rose dramatically. Now, off-farm earnings are declining and many peasants working abroad have returned destitute and unemployed.  Fathallah Rif‘at, the head of the Agricultural Bank, warns that small farmers will not be able to pay market interest rates and will become dependent on moneylenders.  Strong cooperatives are needed to provide credit and organize marketing for small holders, but village notables control what is left of the cooperatives and there is no social force likely to take the lead in organizing small peasants. 
Land reconcentration is therefore likely to take place at the expense of small owners as well as tenants, in the long run transforming Egypt’s peasantry into agrarian workers and a growing urban lumpenproletariat. This was precisely the tendency which the 1952 revolution cut short, and parallels a general liberalization of the agricultural market in which the state, by ending compulsory marketing, is relinquishing its remaining control over the agrarian surplus to the private sector.
In 1986 Robert Springborg argued that the inability of the agrarian bourgeoisie to pressure the government into changing the agrarian relations law indicated state autonomy vis-a-vis the dominant class. The recent change cannot be attributed to a capture of the state by the bourgeoisie. Rather, state elites have come to identify their interests with the relaunching of capitalist development. This new calculation is inseparable from the state’s declining fear of mass reaction to liberalization as the opposition parties, divided and lacking credibility and mass support, have withered away and the Islamist movement abstains from addressing economic liberalization.
The outcome of this struggle, nevertheless, far from reflecting state detachment from dominant social forces, manifests its linkages to them. The outcome ultimately rests with the domination of capital over labor, both internationally, where the IMF uses financial leverage to force liberalization, and at home, where the regime must grant propertied classes control over labor to elicit investment. The state reflects the international, regional and local balance of class forces and has constructed a coalition in which capital has increasingly displaced labor.
The class balance is both reflected in and affected by the corresponding alterations in Egypt’s political institutions. Under Nasser, a state “above classes” obstructed the translation of wealth into power, buttressing its autonomy by organizing small holders and tenants to curb the rural notability. The limited liberalization of the political system under Sadat gave the bourgeoisie privileged access through Parliament to the bureaucratic-based elite. By simultaneously enervating institutions which might give access to the wider public — through limitations on opposition parties, bureaucratic control of associations speaking for the lower strata, and gutting the cooperatives — the regime deters the mobilization of counter-forces by the small or non-propertied classes. In the village, the regime’s clientage ties to its rural base of landowners allows those allies an increasingly free hand in return for containing rural discontent. In this way, the state actively shapes as well as registers the balance of class power in Egypt.
 As of 1980. The distribution of land to peasants under the agrarian reform law has so far not been reversed.
 Al-Ahram Weekly, June 4-10, 1992.
 Robert Springborg, “State-Society Relations in Egypt: The Debate Over Owner-Tenant Relations,” Middle East Journal 45/2 (Spring 1991).
 Ibid., p. 247.
 Ibid., pp. 246-247.
 ‘Aziza Sami, “Debating a Law That Will Affect Millions,” al-Ahram Weekly, June 4-10, 1992.
 One peasant cotton grower interviewed in the press claimed he paid 27 pounds for plowing, 30 for land leveling, 115 for fertilizer, 40 for seeds, 50 for irrigation, 60 for pesticides, 150 for harvest and 200 for post-harvest leveling; the costs, when deducted from the price of 1,200 pounds received for the crop, left only a little more than 400 pounds, not enough to feed a family. Similarly, the June 24, 1975 issue of Ruz al-Yusuf responded to claims of high tenant profits by showing that the costs of production had increased parallel to farm prices and that tenants were therefore not enjoying excessive profits.
 People’s Assembly, “Report of the Joint Committee on Agriculture and Irrigation with the Committee on Constitutional and Legal Affairs on the Draft Alteration of Law 178 of 1952 on Agrarian Reform,” June 1, 1992. [Arabic]  Al-Ahram Weekly, June 25-July 1, 1992 and July 2-8, 1992.
 &lquo;Aziza Sami, “Eid Abdel-Rahman,” al-Ahram Weekly, July 23-29, 1992.
 Financial Times, June 7, 1992; al-Ahram Weekly, June 11-17, 1992.
 Al-Ahram Weekly, June 25-July 1, 1992.
 Malak Rouchdy, “Structural Change and the Adaptive Strategies of Small Peasant Households,” paper delivered at the annual meeting of the Middle East Studies Association, Portland, Oregon, November 1992.