Muhammad Ali had attempted to take Egypt directly from a subsistence agricultural economy to a complex industrial one. He failed because of internal weaknesses and European pressures. Ironically, Muhammad Ali, whose goal was to make Egypt economically and politically independent of Europe, set the country on the path to economic dependence and foreign domination.

In the industrial sector, Muhammad Ali's factories did not last past his death. In the agricultural sector, Egypt's longstaple cotton became increasingly attractive to British textile manufacturers. Between 1840 and 1860, the export of cotton increased 300 percent. During the American Civil War, the area devoted to cotton cultivation in Egypt increased almost fourfold and cotton prices rose along with cotton production.

The transformation of the rural economy from subsistence to cash-crop agriculture caused dramatic changes, including the privatization of land in fewer hands and the dispossession of peasants. The privatization of land began during the reign of Muhammad Ali, who in the 1840s distributed half the agricultural land to royal family members, Turco-Circassian officials, and Egyptian notables or village headmen. Although many land grants were rescinded during the reign of Abbas, consolidation of landholdings proceeded during the reigns of Said and Ismail at the expense of small and middle-sized peasant proprietors. By the 1870s, the royal family owned one-fifth of all the cultivated land in the country. The largest royal estates could be as large as 10,000 feddans (a feddan is slightly more than an acre--see Glossary). By the 1890s, 42.5 percent of all registered land was held in tracts of more than fifty feddans. The largest landowners included members of the royal family, and the Turco-Circassian elite of officers and officials. Their estates were worked by sharecroppers or agricultural laborers. By the time of Ismail, these landowners had developed into a landed aristocracy. Another group of landholding elite originated with Muhammad Ali's appointment of Egyptians as village headmen (umada; sing., umdah), the state's agents in the countryside. This was Muhammad Ali's attempt to reduce the power of the Turco-Circassians. With the privatization of land, the Egyptian notables became substantial landowners with considerable political influence.

Historian Judith Tucker has described the nineteenth century as a time when the peasants were transformed from independent producers with rights to use the land to landless peasants forced to work as wage-laborers or to migrate to the cities where they became part of the urban dispossessed. The development of capitalist agriculture and a monetized rural economy spelled disaster for many peasants. Despite land laws like those of Said in 1855 and 1858, which gave peasants legal ownership of their plots, peasant land loss occurred at an unprecedented rate, chiefly because of indebtedness. Forced to borrow at high rates of interest to get the seed and animals necessary for sowing and to pay monthly installments on their taxes, the peasants had to repay these loans at harvest time when the prices were lowest.

The American Civil War put a premium on Egyptian cotton, and the price increased. When the war ended, the inflated prices suddenly dropped. For the first time in Egypt, a serious problem of peasant indebtedness appeared with its inevitable consequences: mortgages, foreclosures, and usurious loans. The village headmen and the owners of great estates profited from the crisis by purchasing abandoned land. The headmen also profited as moneylenders.

Peasants also lost land because taxes on peasant land were higher than on estate land. Large landholders sometimes paid as little as one-fourth of the taxes paid by the peasantry. In addition, peasants fled the countryside to escape corvée (forced labor) on the state's public works projects and military conscription.

At the turn of the century, the population of Egypt was about 10 million. Of this total, between 10 and 20 percent were landless peasants. In 1906 less than 20 percent of the privately held and waqf (religiously endowed) land was held by 80 percent of the population while 1 percent owned more than 40 percent. Most landowners owned between one and five feddans, with three feddans being necessary for subsistence.

Data as of December 1990