In this study, evolution of land mortgage as a means to secure credit and its consequences particularly on land transfer and landlessness have been discussed using historical data and also purposively collected field data from a sample of 383 farm households. It has been shown that marginal land holders loose land and become landless while large land holders accumulate this land primarily through land mortgage. It has been concluded that reduction of the rate of growth in landlessness will require, among other things, special regulations banning land mortgage to obtain credit and availability of credit for freeing mortgaged land.


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