Ministry of Agriculture
ANALYSIS OF TRENDS IN OPERATIONAL
The increasing number of holdings as well as growing marginalisation of land holdings have become a matter of concern to the policy makers. As per Agricultural Census reports, the number of operational holdings increased substantially from 70.49 million in 1970-71 to 97.73 million in 1985-86 which further increased to 105.29 million in 1990-91. A major shift has been in marginal and small farm holdings.
The growing increase in the number of holdings might be the result of the combined effect of institutional, technological and demographic factors. Among these factors, mention may be made of a) Implementation of land reforms legislations particularly land ceiling; b) In the wake of land ceiling legislations landowning joint families might have spilt at least for the sake or formality, into smaller holding units to evade land ceiling acts, and to take advantage of the poverty alleviation programmes undertaken by the Government of India without any operational consequence. Besides, sub-division of landholdings could have taken place consequent on the decay of joint family units resulting in small independent cultivating units; c) Regarding land tenure structure, the proportion of landless tenants might have gone up and added to the number of operational holdings; d) the land market might have undergone a change through sale and purchase of land; and e) With agriculture becoming more remunerative consequent on the application of technology, there might have been a growing tendency for (i) self-cultivation through renting in a small piece of land and (ii) sub-division of holdings. As a matter of consequence, the new agricultural technology with its high profitability might have prompted to the increase in the number of holdings.
Anyway, the answers to the following questions have become crucial in understanding the phenomenon of ever-increasing trend of the number of operational holdings: what are the causes of expansion of the number of operational holdings? What signal is being conveyed by this trend? What will happen in the next few decades? What modifications could be brought in our plans formulated for the agricultural sector which is going to be the sector of small and marginal farms?
It is against this background that the present study is taken up keeping the following objectives in mind.
Objectives of the Study
The study makes use of Agricultural Census data pertaining to the years 1970-71, 1976-77, 1980-81, 1985-86 and 1990-91. In the case of West Bengal, however, the 1990-91 Census data are available partly and thus the study uses data whatever available in published form. In the case of Bihar, data pertains to quinquennial years starting from 1970-71 and the latest being 1985-86. Considering the fact that the use of secondary data alone is not capable of providing sufficient ground for analysing the reasons for the growth of operational holdings, the study has gone into field-level enquiry, particularly, to study the aspects of family partitioning, land transfer and land reforms. Thus the study is based on both primary and secondary data in the states under study excepting for Orissa and Andhra Pradesh where the study makes use of secondary data only.
Sample, Design, Methodology and Coverage of the Study
The study has been conducted in the state of Haryana, Himachal Pradesh, Rajasthan in the Northern territorial region; Karnataka, Tamil Nadu, Andhra Pradesh in the Southern Region; West Bengal, Bihar, Orissa in the Eastern Region; Arunachal Pradesh in the North Eastern Region; Maharashtra and Gujarat in Western Region and Uttar Pradesh and Madhya Pradesh in the Central Region.
For the purpose of conducting field survey, two important agro-climatic regions within each of the selected states have been selected. One district each from the two important agro-climatic regions of the state as identified in the exercise conducted by Agro-Climatic Zonal Planning Team have been chosen considering the concentration of the number of operational holdings. In the second stage, one block/taluk in each selected district is chosen on the basis of same criterion. From the block/taluk, one representative mouza/village is selected. For the purpose of drawing sample, a complete list of operational holdings is prepared and such holders are grouped into five major size classes viz. below 1 hectare (marginal holdings), 1-2 hectares (small holdings), 2-4 hectares (semi-medium holdings), 4-10 hectares (medium holdings) and 10 hectares and above (large holdings). A total of 50 operational holders in each mouza/village from the list after stratifying it into five groups are chosen. Thus the total sample holdings consists of 100 each in the selected state spread over two selected districts belonging to two different agro-climatic zones of the state.
The study is largely based on simple tabular analysis. The agricultural census data pertaining to land holdings and other related aspects are analysed inter-temporarily on quinquennium basis starting from 1970-71. The analytical tables are framed according to five major size classes viz. marginal holdings (below 1 hectare), small holdings (1-2 hectares), semi-medium holdings (2-4 hectares), medium holdings (4-10 hectares) and large holdings (10 hectares and above). In the case of West Bengal and Bihar however, marginal category of holdings are sub-divided into sub-marginal (below 0.50 hectare) and marginal (0.50 - 1.00 hectare) holdings for analytical purposes. Inter-district/zonal level analysis has been done in states where dis-aggregated data are available in published form.
All the states under study experienced increase in the number of operational holdings, although with varying degrees across the states. Moreover commensurate with the growth of holdings, there has been proliferation of marginal holdings. This is the case observed in every state covered by the study. Going through the changes across the states in the distribution of operational holdings, it comes out clearly that both the number and area of operated holdings increased in the case of sub-marginal, marginal and small size groups of holdings and a decrease of number and operated area of holdings in the medium and large size groups. Amongst smaller holdings, substantial gains accrued to sub-marginal holdings (operating land less than 0.50 hectare) in West Bengal and Bihar (AERC, Visva-Bharati, 1996). However, what happened in different categories of farms inter se can not simply be judged by macro data and for this, we need more information on the process of change taking place at the village level. This is provided by our micro-data collected through farm-level enquiry.
The combined use of macro and micro data reveal that the growing increase in the number of operational holdings is the result of the combined effect of institutional, technological and demographic factors. The reasons for the growth of operational holdings identified in the states under study may be summed up as follows: (i) Sub-division of holdings occurring from break-down of joint family units reported in West Bengal, Bihar (AERC, Visva-Bharati, 1996), Uttar Pradesh (AERC, Allahabad, 1997), Rajasthan (AERC, Vallabh Vidyanagar, 1997) and Himachal Pradesh (AERC, Shimla, 1996) (ii) Sub-division of holdings caused by notional transfer with a view to obtaining Government subsidy/ assistance reported in West Bengal (AERC, Visva-Bharati, 1996), Uttar Pradesh (AERC, Allahabad, 1997), Madhya Pradesh (AERC, Jabalpur, 1996), Gujarat (AERC, Vallabh Vidyanagar, 1997), Himachal Pradesh (AERC, Shimla, 1996) and Tamil Nadu (AERC, Chennai, 1996) (iii) Sub-division of holdings arising from parental transfer reported in Arunachal Pradesh (AERC, Jorhat, 1996) and Gujarat (AERC, Vallabh Vidyanagar, 1997) (iv) Sub-division of holdings occurring from family partitioning reported in Uttar Pradesh (AERC, Allahabad, 1997), Madhya Pradesh (AERC, Jabalpur, 1996), Haryana (AERC, Delhi, 1997), Tamil Nadu (AERC, Chennai, 1996) and Karnataka (ADRT, Bangalore, 1997) (v) Division of holdings among legal heirs after death of the head of the household reported in Rajasthan, Gujarat (AERC, Vallabh Vidyanagar, 1997) and Madhya Pradesh (AERC, Jabalpur, 1996), (vi) Split of family holdings for evading land ceiling laws reported in Uttar Pradesh (AERC, Allahabad, 1997) and Tamil Nadu (AERC, Chennai, 1996) (vii) Distribution of ceiling surplus land reported in West Bengal (AERC, Visva-Bharati, 1996) Haryana (AERC, Delhi, 1997), Himachal Pradesh (AERC, Shimla, 1996), Rajasthan (AERC, Vallabh Vidyanagar, 1997), Andhra Pradesh (AERC, Waltair, 1997), Orissa (AERC, Waltair, 1997) and Karnataka (ADRT, Bangalore, 1997) (viii) Distribution of Government waste land reported in Andhra Pradesh and Orissa (AERC, Waltair, 1997) (ix) Acquisition of land given by the government under various schemes reported in Madhya Pradesh (AERC, Jabalpur, 1996) and Tamil Nadu (AERC, Chennai, 1996) (x) Conferment of ownership right to tenants reported in Himachal Pradesh (AERC, Shimla, 1996), Haryana (AERC, Delhi, 1997), Maharashtra (AERC, Pune, 1996) and Karnataka (ADRT, Bangalore, 1997) (xi) Market pressure (the process of purchase and sale of land) reported in West Bengal and Bihar (AERC, Visva-Bharati, 1996), Rajasthan (AERC, Vallabh Vidyanagar, 1997), Arunachal Pradesh (AERC, Jorhat, 1996), Madhya Pradesh (AERC, Jabalpur, 1996) and Tamil Nadu (AERC, Chennai, 1996) (xii) Reclamation of culturable waste land and un-authorised occupation of Government forest land reported in Arunachal Pradesh (AERC, Jorhat, 1996) (xiii) Increase in profit due to technological development in agriculture reported in Rajasthan and Gujarat (AERC, Vallabh Vidyanagar, 1997) (xiv) Increase in irrigation potential reported in Maharashtra (AERC, Pune, 1996), Himachal Pradesh (AERC, Shimla, 1996) and Karnataka (ADRT, Bangalore, 1997) (xv) Commercialisation of Agriculture reported in Karnataka (ADRT, Bangalore, 1997) and (xvi) Growth of non-farm activities reported in Karnataka (ADRT, Bangalore, 1997).
Thus the process of growth of holdings at work can be best described in terms of repeasantisation of the landless holdings made possible by redistributive efforts of land reforms (AERC, Visva-Bharati, 1996; AERC, Delhi, 1997; AERC, Shimla, 1996; AERC, Vallabh Vidyanagar, 1997; AERC, Waltair; AERC, 1997; Jabalpur, 1996; ADRT, Bangalore, 1997 and AERC, Chennai, 1996) where surplus lands are distributed among as many families as possible so as to enable them to `walk on two legs'. Market forces also tended to operate enabling landless holdings to acquire land through purchases (AERC, Visva-Bharati, 1996; AERC, Vallabh Vidyanagar, 1997, AERC, Jorhat, 1996; AERC, Jabalpur, 1996 and AERC, Chennai, 1996). Again, land tenure structure has undergone a change with the conferment of ownership rights to tenants adding to the number of operational holdings (AERC, Shimla, 1996, AERC, Delhi, 1997 and AERC, Pune, 1996). The cases of resumption of leased out land for self-cultivation have been accompanied by `tenant switching' whereby landless tenants have gone up (AERC, Visva-Bharati, 1996). All these happened apart from sub-division of holdings caused by (i) break down of joint family units (AERC, Visva-Bharati, 1996, AERC, Allahabad, 1997, AERC, Vallabh Vidyanagar, 1997, AERC, Shimla, 1996) (ii) notional transfer with a view to obtaining government subsidy assistance (AERC, Visva-Bharati, 1996; AERC, Allahabad, 1997; AERC, Jabalpur, 1996; AERC, Vallabh Vidyanagar, 1997; AERC, Shimla, 1996; AERC, Chennai, 1996) (iii) sub-division of holdings arising from parental transfer (AERC, Jorhat, 1996; AERC, Vallabh Vidyanagar, 1997) (iv) sub-division of holdings occurring from family partitioning (AERC, Allahabad, 1997; AERC, Jabalpur, 1996; AERC, Delhi, 1997; AERC, Chennai, 1996; ADRT, Bangalore, 1997) (v) division of holdings among legal heirs after death of the head of the household (AERC, Vallabh Vidyanagar, 1997, AERC, Jabalpur, 1996). In the state of Bihar the phenomenon of landless workers acquiring land (either through the efforts of land reforms or through renting in plots of land) has not featured at all, rather, in the state, parcellisation of land holdings emanating from land partitioning among heirs of family members has prominently figured (AERC, Visva-Bharati, 1996). In such state, however, land market tended to work in favour of creating marginal holdings through land purchases by landless holdings, although, the occurrence of such phenomenon is not as much important as it is in the case of West Bengal (AERC, Visva-Bharati, 1996).
It is clear that out of the total influx into the marginal farm category, apart from sub-division of holdings, a sizeable number came from below, i.e., the phenomenon of landless holdings acquiring land assumed much significance during the period under study. In other words, the ladder process worked in upward direction creating additional holdings in the farm sector. Since holdings are mostly concentrated in the marginal group, the growth of such holdings can largely account for the total increase in the number of operational holdings and the explanations could sought in the reasons cited above.
Now what signal is being conveyed by this trend? As is evident, the structure of land holdings in the states under study typically presents the picture of small and marginal farmers' economy characterised by small farmers as well as small farms. That is, not only are the holdings small in size, but also the farmers are without sufficient endowments of capital that could make the holdings economically viable. It is evident from field-level data that in West Bengal and Bihar, the marginal landholders even do not possess draft animals (in about 43.48 per cent of cases in West Bengal and 11.76 per cent of cases in Bihar). In Uttar Pradesh, small and marginal farmers are found to own only one bullock per farm (AERC, Allahabad, 1997). This is reported in the sample villages belonging to Ballia and Saharanpur districts of Uttar Pradesh. In Haryana, marginal farmers (holding less than 1.00 hectare land) owning no bullocks is reported in Sanwat village, Karnal district while in the other village called Dullat in Hissar district, number of bullock per farm works out to 0.40 which implies that some marginal holdings own no bullocks at all (AERC, Delhi 1997). Obviously, they are to depend on hiring market for draft animals. In such cases, hiring of draft animals against offering themselves as wage labourer in the labour market can not be ruled out.
Small and marginal holdings enjoy greater advantage in regard to higher cropping intensity and irrigation levels (AERC, Visva-Bharati, 1996; AERC, Waltair, 1997; AERC, Jorhat, 1996; AERC, Vallabh Vidyanagar, 1997). The Agricultural Census Data furnishes observations on cropping intensity and cropped area irrigated by size classes of operational holdings which brings out the fact that the characteristics observed in 1970-71 persisted in 1985-86 (AERC, Visva-Bharati, 1996) and also in 1990-91 (AERC, Waltair, 1997) namely the percentage of cropped area irrigated and cropping intensity declined with the increase in the size of holding. The net result has been the continuance of the inverse relationship between farm size and output per acre. In the initial stages of technological change, size-productivity debate centred around the concept that large farmers are as efficient as and even more efficient than small farmers. For large farms, the higher output per acre obtained not through higher cropping intensities but by raising yield per acre through intensification of input use like fertilizers etc. However, in so far as cropping intensity on large farms continued to be lower than on small farms, the efficiency of resource use persisted in small and marginal farmers' economy. The alleged inverse relationship between yield per acre and the size of holding was taken more or less as well-established by most economists (among others see Mazumdar, 1963; Khusro, 1964; Saini, 1971; Bhattacharya and Saini, 1972; Bharadwaj, 1974; Rao, 1994). The inverse relation between farm size and productivity persists even now owing to the existence of higher levels of irrigation and cropping intensities on small and marginal farms as evidenced by Agricultural Census Data.
The efficiency of resource use on small and marginal farms does not imply that such farms are economically viable units. Given the narrow base of the production activities indicated by the low size of the farm and low farm returns on this base as indicated by the preponderance of food crops in the farm sector in general and in the small farm sector in particular, small and marginal farms can not be viable. There is ample evidence to suggest that small and marginal farms are mostly economically non-viable units (among others Bharadwaj, 1974; Vyas, 1976; AERC, Visva-Bharati, 1992). The returns on such farms are so meagre that income earned from such farms are inadequate to meet the subsistence needs of the farm family. Even in agriculturally prosperous state viz. Haryana, net income per hectare of gross cropped area for marginal farms (holding less than 1.00 hectare) works out at Rs.9721 in a sample village of Hissar district (AERC, Delhi, 1997). In the other sample village of Karnal district, the corresponding figure stood at Rs.6920 per hectare of cropped area in case of such farms. With this income, they are to support the size of family numbering 5 or more. In Maharashtra, gross value of produce of marginal category of farmers (0-1 hectare) appears to be Rs.5114.29 per hectare as against Rs.8202.23 for small farmers recorded in the sample village in Beed district. The other sample village in Kolhapur district however exhibited higher value of gross produce per hectare. In Himachal Pradesh where orchards occupies significant position in the cropping pattern, value of produce for marginal categories (below 1 hectare) of farmers is estimated at Rs.6611.88 per hectare in Mandi district. In the other sample district (Shimla), however, the estimated gross value of produce works out at Rs.29918.27 per hectare. Any way, with their meagre income small and marginal holdings are to support the family members consisting of five or more. Small and marginal farm holdings supporting a proportionately larger size of family is also reported (AERC, Visva-Bharati, 1992).
In a situation where farm income is not even at the bare margin of subsistence, the scope for agricultural improvement on such farms can not be expected, rather, meagre income would force them either to adopt supplementary enterprises or to take recourse to the informal credit market for their sheer survival. Obviously, all these reflect the distress conditions of small and marginal farm units under which production is carried out and market involvement assumes a compulsive character for them. At this stage, once we rule out the alternative of big-push industrialisation, it becomes pertinent that the entire agricultural sector have to generate surpluses, that could offer the scope for gainful employment to the surplus labour on small and marginal holdings. At present, only a small proportion of the farms are in a position to generate surpluses. Such farms are by and large bigger farms. Obviously, the activity of surplus creation will have to be much more broad based where not only large and medium sized peasantry but also small peasants have to be brought into the surplus creating stream. Hence, what is needed is the creation of an economically viable small farm sector. This calls for setting a floor to the size of farm, making small peasant farms self-sufficient which is as much important as the fixation of ceiling on land holdings.
The relevant question is: is it possible to create a viable small farm sector? When the scope for recovering excess land above the ceiling is limited and the land hunger remained immense, land-redistributive efforts in no way would be able to transform sizeable number of small and marginal farmers into viable units. Now, if it is not possible, small and marginal farm units have no other way but to rely on the informal credit market for their survival. Obviously, the growing tendency of the agrarian economy towards small and marginal has tended to reopen lucrative field for usurers who can exploit the farmers by perpetuating the existence of small holdings. The usurers, in the face of land ceiling legislations, of course will not have the tendency to grab the land of defaulting debtors to cultivate it themselves, rather, when the debtors would go bankrupt, they would seize their land only to lease the same to similarly impoverished peasants, preferably landless peasantry. In this way, they would seek to perpetuate the dependence of the farmers on usury and under the situation, the farm economy would get chronically impoverished. Usury which is based on small and marginal farmers' economy would tend to perpetuate the said economy. In fact, that is why, the small farm economy although getting increasingly impoverished has not withered away but has persisted over years.
We may now make an attempt to identify the mode of production which is gradually going to be dominated in Indian agriculture with reference to the states under study. The principal question in determining the mode of production is: how are the landless population involved in production? Do they work as agricultural labourers or do they lease in land and work as cultivating tenants?
The Agricultural Census Data reveals that in the period under consideration, landless tenants have gone up (AERC, Visva-Bharati, 1996). The occurrence of such phenomenon is much more prominent in the case of sub-marginal holdings. The instance of landless households reporting leasing-in is evidenced by the field-level data in West Bengal (AERC, Visva-Bharati, 1996). At the same time, there are also instances of landless households gaining access to land through purchases (AERC, Visva-Bharati, 1996; AERC, Vallabh Vidyanagar, 1997; AERC, Jorhat, 1996; AERC, Jabalpur, 1996; AERC, Chennai, 1996) and running as small independent producers. Government policy of land reforms are also towards repeasantisation of landless holdings (AERC, Visva-Bharati, 1996; AERC, Delhi, 1997; AERC, Shimla, 1996; AERC, Vallabh Vidyanagar, 1997, AERC, Waltair, 1997, AERC, Pune 1996; ADRT, Bangalore, 1997; AERC, Chennai 1996). It is, therefore, evident that owners of labour power are becoming independent producers and for such transformation, market induced changes are being supplemented by the efforts of land reforms. Under the circumstances, the number of households selling labour power is going to be limited displaying the characteristics of pre-capitalist relations, rather than showing the sign of capitalist relations. Because as capitalist relations develop, more households come to sell their labour power.
On the other hand, demographic pressure necessitating division of family holdings is leading to a change in the status independent producers. Sub-division of family holdings is tending to create peasants with tiny holdings (AERC, Delhi, 1997; AERC, Waltair, 1997; AERC, Visva-Bharati, 1996; AERC, Allahabad, 1997; AERC, Jabalpur, 1996; AERC, Vallabh Vidyanagar, 1997; AERC, Jorhat, 1996, ADRT, Bangalore, 1997; AERC, Chennai 1996) that are not capable of generating sufficient income from cultivation and hence forcing them to fall in debt-trap. The landless holdings becoming marginal operators of land through market forces, leasing-in and above all through the efforts of land reforms also can not avoid involving themselves in the debt-mechanism. In fact, the growing increase in the number of holdings has tended to provide lucrative ground for usurers who can exploit the peasants limiting their functionaries not only in one market but also in a number of agrarian markets in an inter-locked manner. In a word, with the increase in the number of operational holdings, a situation is being created in which credit market involvement of peasants assume compulsive character leading them to fall in the grip of pre-capitalist form of exploitation through usury. The overall implication has been that the agrarian economies of the states under study, although at present represent small peasant economy, would gradually be dominated by pre-capitalist mode of production rather than developing capitalist form of production organisation in agriculture.
In the light of the above, the following are the major policy implications emerging from the study.
1. The policy of allotment of tiny pieces of land has further swelled the rank of marginal farmers. Hence instead individual allotment, group allotment of surplus land should be enforced (AERC, Allahabad, 1997; AERC, Visva-Bharati, 1996).
2. A limit should be imposed on fragmentation of land beyond a functionally useful unit by enactment of agricultural laws (AERC, Allahabad, 1997; AERC, Visva-Bharati, 1996). This calls for setting a floor to the size of farm which is as much important as the fixation of ceilings on land holdings (AERC, Visva-Bharati, 1996).
3. In view of the growing sub-division and fragmentation of holdings implementation of one important land reform measure namely, consolidation of holdings is of extreme importance (AERC, Shimla, 1996; AERC, Visva-Bharati, 1996).
4. The implementation of radical land ceiling laws needs to be accompanied by an action on institutional fronts such as promoting co-operatives among the farmers having extremely small and non-viable holdings (AERC, Shimla, 1996; AERC, Visva-Bharati, 1996).
5. The sharp increase in number of marginal, small and semi-medium holdings, mainly due to sub-division, implies increasing pressure of population on land and non-availability of better employment opportunities. Vigorous efforts to create non-farm employment opportunities in rural areas would be necessary to reduce population pressure on land (AERC, Delhi, 1997; AERC, Shimla, 1996).
6. Diversification of activities related with land, such as beekeeping, sericulture, poultry, piggeries, dairy, fisheries, forestry, etc. should be encouraged so that ample employment and income opportunities may be generated. This in turn will prevent division of land and break the nexus between disintegration of joint families and fragmentation of family holdings (AERC, Allahabad, 1997; AERC, Pune, 1996; AERC, Shimla, 1996).
7. There is need for making land lease market more competitive by removing whatever government regulations exist against leasing. This would lead to increase in the extent of leasing and change in avocation by uneconomic land owners without fearing to lose their right in land due to leasing out (AERC, Delhi, 1997). This however may go against several state governments' land reform programmes viz. Operation Barga in West Bengal (AERC, Visva-Bharati).
8. The priority in allotting ceiling surplus and government lands to scheduled castes should continue in view of their miserably low share in number and area of operational holdings (AERC, Delhi, 1997). But the Co-ordinating Centre proposes that the policy of land-redistributive efforts should be directed towards strengthening the land base of the land-poor holding units irrespective of caste, creed and religion and ultimately converting them into viable farm units (AERC, Visva-Bharati).
9. The implementation of land reforms laws need to be accompanied by the actions like ensuring cheap and subsidised inputs including credit (AERC, Visva-Bharati, 1996; AERC, Shimla, 1996). The easy financial assistance in the form of loan, after making sure of the credit worthiness, should be extensively made available to activate the agricultural sector (AERC, Pune, 1996; AERC, Visva-Bharati, 1996). Timely and adequate availability of credit would also made small farms viable (AERC, Vallabh Vidyanagar, 1997; AERC, Shimla, 1996).
10. To make the marginal and small farms economically viable, area-specific crop diversification towards fruits, vegetables, flowers and other cash crops cultivation be given due emphasis ( AERC, Shimla, 1996).
11. Area-specific factors have to be tackled separately while implementing the policy of land reforms (AERC, Vallabh Vidyanagar, 1997). In Arunachal Pradesh, legalised individual ownership of land under permanent and semi-permanent cultivation, terraced land and abadi area at one side and community ownership on Jhum land and village forests on the other side may be conferred without much conflict. In the state, land holding pattern is to be assessed through conducting cadastral survey (AERC, Jorhat, 1996).
12. As a long term policy measure, what is vital is (1) the adoption of appropriate population policy (AERC, Visva-Bharati, 1996) and (2) setting up a Land Management Board at the apex level to effect agricultural management on desired lines (AERC, Allahabad, 1997).