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Dejected Landowners. Of all the events, by far the most important was Peru's program for land reform. While crowds outside Lima's Presidential Palace shouted approval, Velasco, who took power in a coup last October, told Peruvians that "the land must belong to the peasant." His audience in the greenand-gold Ambassadors Hall consisted of military officers, government officials, businessmen and Juan Cardinal Lan-dazuri Ricketts, head of Peru's reform-minded church. All cheered—except the wealthy landowners present. Quoting Tupac Amaru, an Inca chief who led an abortive rebellion against Spanish colonial rule in the late 18th century, Velasco exclaimed: "Campesino, the owner will no longer eat off your property." Opposition to the decree would come from Peru's landed oligarchy, Velasco predicted, and he warned: "To this oligarchy, we say that we are ready to use all the energy that may be necessary to crush any sabotage of the law."
Land reform—a major plank of the Alliance for Progress—had been attempted by President Fernando Belaunde Terry, whom Velasco and the military ousted last year. However, pressures from wealthy landowners had consistently watered down Belaunde's proposals in Congress. The "earthquake generation," as Velasco's inner circle of radically nationalist advisers likes to call itself, has no such obstacles to overcome, of course: Congress was closed down when the military took over.
Under the new decree, proclaimed after a final 20-hour Cabinet session on the "Day of the Indian" (appropriately changed by Velasco to the "Day of the Campesino"), land holdings will be limited to a maximum of 540 acres in the coastal areas, about 150 acres in the highlands. The biggest benefits will most likely accrue to Peru's Indian eampe-sinos, 5,000,000 strong, who were dispossessed of their land when the Spanish colonizers arrived and have been living in grinding serfdom since then. The new small landowners will be encouraged to get together in cooperatives. Large estates will continue to operate as units, but estate workers will share ownership and control under a kind of stockholder arrangement.
Not Only Peru. Land owned by W.R. Grace & Co., a U.S. corporation whose Peruvian assets of some $65 million include two large, highly efficient plantations that produce 17% of Peru's sugar, is specifically covered by the decree. The company took the news philosophically. "We have been here for 150 years, and we have always obeyed the law of the land," said James Freeborn, who heads Grace operations in Peru. "If that's the new law of the land, then that's it." Grace's large Peruvian industrial complex, which produces alcohol, paper and plastics, will probably remain untouched.