Chapter 3 CHANGES IN AGRARIAN STRUCTURE IN . INDIA Introduction. Agriculture constituted the main occupation of people during the pre-British period. The Mughals had established a comprehensive system of land revenue administration wherein the Jagirdars or Zamindars were responsible for collection of land revenue from the cultivators_on behalf of the Moghul Emperor. The administration was generally sensitive to the state of the peasantry and would remit revenue iri a period of drought or distréss. Changes’ in Agrarian Structure during the British . Period The British brought about profound changes in the existing land revenue system in India. Starting with the Permanent Settlement introduced first in Bengal, the other two land settlements introduced later were the Ryotwari and the Mahalwari Settlements. Permanent Settlement During the Mughal Enipire, in Bengal as in the rest of India, the Zamindars were mere functionaries who held the right to collect revenue on behalf of the Mughal emperor and his representative or Diwan. The Diwan, in turn would supervise their activity closely and ensure that they were 120CHANGES IN AGRARIAN STRUCTURE IN INDIA 17 “neither lax nor overly stringent” in the collection of revenue. The revenue administration underwent a significant change after the East India Company was awarded the diwani (overlordship) of Bengal by the Mughal Emperor following -the Battle of Plassey in 1765. ‘The East India Company did not have any trained administrators, especially those familiar with local custom and Jaw. They instead depended on the corrupt and indolent British officials. Consequently, the landholders found themselves unsupervised and the extraction of revenue by the Company officers proceeded unchecked “by-any regard for future income or local welfare”. Following the devastating famine of 1770, the Company officials in Calcutta understood the consequences of oversight of revenue officials. Consequently, Warren Hastings, then governor-general, introduced a, system of * five-yearly inspections and temporary tax farmers. - Naturally, those appointed as tax farmers absconded with as much as they could in the time period in between inspections. The disastrous consequences of the system were noted in the British Parliament,.and in 1786 Cornwallis was sent to India to make necessary changes. Cornwallis introduced in 1793 what is known as Permanent Settlement, Under the zamindari or ‘permanent settlement’ system, feudal lords (zamindars, jagirdars etc) were declared proprietors of the land on condition of fixed * revenue payments to: the British regime. Landlords were. * required to pay 90.% of rent as revenue to the government in perpetuity and 10% was left with them as collection expenditure. Pedsants were transformed .into tenant farmers, and rents were collected by serried ranks’ of intermediaries below the levelsof zamindars. This system prevailed over most of North India, including, present-day Uttar Pradesh (except Avadh and Agra), Bihar, West Bengal, most of Orissa, and Rajasthan (except Jaipur and 12118 INDIAN AGRICULTURE SINCE INDEPENDENCE Jodhpur), and covered around 57 per cent of the total area cultivated. The Company hoped that the zamindar class would not only be a revenue-generating instrument but serve as intermediaries for the more political aspects of their rule, preserving local custom and protecting rural life from the possibly rapacious influences of its own representatives (Gokhlae as quoted by Gopalkrishna, 1959). However, this worked both ways; zamindars became a naturally conservative interest group and once British policy changed to one of reform and intervention in custom in the mid- nineteenth century, they were vocal. in their opposition. The British also believed that this newly created class of landlords would initiate modern farming practices and regenerate agriculture. In actual practice, the landlords (Bhadhar Purush) lived a luxurious life in towns and created a hierarchy of intermediates who were responsible for collection of rent from the peasant. This invariably meant * that the poor cultivator had to support a large.number of intermediaries resulting in excessive extraction of surplus and impoverishment of the actual cultivator. Because of numerous defaults on the part of tenants, the landlords or their intermediaries increasingly acquired title to land. Intermediary tenures became most prevalent, leasing and sub-leasing of land were commonly practised, and all the hereditary and traditional rights of the tenants were made completely defunct. The Court of Directors in the letter dated 15! January 1819 had admitted that the consequences most injurious to the rights of the cultivators have arisen from describing those with whom permanent settlement was concluded as the actual proprietors of land. The most important political consequence of . Permanent Settlement was that the political structure was altered forever; with the landlord class holding much 122CHANGES IN AGRARIAN STRUCTURE (N INDIA 19 greater power than they had under the Mughals, where they were subject to oversight by a trained bureaucracy with the power to attenuate their tenure. In India, not until the first efforts towards land reform in the 1950s — still incomplete everywhere—was the power of the landlord class over smallholders diluted. ; The British did not impose this type of settlement in the rest of India after it came under their rule. Instead, in these areas of British India, Captain Munro after the approval from the Directors introduced the second major system of land settlement called the Ryotwari system of land settlement over a period of time. The Ryotwari system was first introduced in Madras in 1792 and in Bombay in 4817-18. In this case, individual cultivators (ryots or raiyats) were recognized as proprietors of theirland with rights to sub-let;-mortgage;and transfer their land by gift or sale. Under the Ryotwari system, the _ ryot was made the proprietor of land he tilled and the | jland became a transferable property. The settlement was ‘concluded for a short period ‘and the government reserved to itself the right to enhance the assessment for which no specific guidelines were laid down by law. This new system of settlement was a complete contradiction to the prevailing old system where the land revenue was permanently fixed by custom and the land was not a transferable property. This legal fiction brought into existence insecurity of possession and ownership of land—a phenomenon unknown before. The Ryolwari system held sway over most of South India, including present-day Maharashtra, Karnataka, Tamil Nadu, Kerala, Andhra Pradesh, and most of Madhya Pradesh and Assam. The princely states of Jaipur and Jodhpur in Rajasthan also fell under Ryolwari-type systems. Pockets of zamindari-type tenure existed within these ryotwari areas, particularly, where administered by local 12320 INDIAN AGRICULTURE SINCE INDEPENDENCE rajas or nawabs. Ryotwari system accounted for around 38 per cent of the total cultivated area. Finally, the third system of land settlement was the Mahalwari system, in which revenue settlement was made with entire villages as collective units as opposed to ryotwari method where each field was separately assessed. Peasant farmers contributed shares of the total revenue demand for the village (mahal) in proportion to their respective holdings. The whole body was jointly responsible for the payment of land revenue. The state was initially entitled to as much as 83 per cent of gross produce in revenue, although this was later lowered to 66 per cent. The Mahalwari system was introduced between 1820 and 1840 in Punjab (including both present-day Punjabs in Pakistan and India, and the state of Haryana), parts of what are now Madhya Pradesh and Orissa, and the princely states of Avadh and Agra in Uttar Pradesh. This type of tenure system was much less extensive, and , accounted for some 5 per cent of the cultivated area. Although there is some evidence to suggest that land markets had existed since at least the Moghul period, transfers of land were first institutionalized with the British land settlements. Legislation introduced in Ryotwari and Mahalwari areas during the 1850s enabled money-lenders to recover debts on loans secured on land holdings. Since revenue assessments were so high particularly in Ryotwari areas, indebtedness grew, and dispossession of land led to rapidly rising tenancy. According to Sharma “Initial assessments were so high that they often constituted the entire economic rent from land. Re-assessments made in 1860 in Bombay and 1855 in Madras (which continued until 1937) led to even higher land revenues, resulting in famine and prompling agrarian revolts” (Sharma 1992) As a result, rural society in Ryofwart and Mahalwari areas was polarized into landlor Bidhan Chantira oy aCHANGES IN AGRARIAN STRUCTURE IN INDIA a tenants and agricultural labourers, and the distribution of land became highly unequal. The Royal Commission on Agriculture, 1924-25, reported that in Bombay, 86 per cent of the cultivated area was held by 12 per cent of the cultivators. In Punjab by 1939, 2 per cent of land owners held 38 per cent of cultivated land. One of the major consequences of the Ryotwari and Mahalwari settlements was that the right to land as property was vested in the actual cultivator and land became transferable. This was no doubt an advance compared with the Permanent settlement. But it also led to large- scale alienation of land to non-agriculturist moneylenders because of excessive increase in revenue demand and increasing indebtedness. According to an enquiry by Thornburn into the conditions of Punjab peasants and their increasing indebtedness, the reduction in the size of holding and the obligation to pay land revenue every year were the two main reasons for increasing, indebtedness (as “quoted in the Famine Commission, 1880). The right of. property and: transferability of land did the peasant no good and the land gradually began to pass from the cultivators to the money lenders. In zamindari areas, rural society was even more hierarchically divided between landlords, tenants with hereditary rights (raiyats), sub-tenants, sharecroppers and agricultural Jaboufers, and land distribution was even,more unequal than int ryotwari areas. Early tenancy legislation (Bengal Rent Act, 1859; Bengal Tenancy Act, 1855) established occupancy rights for raiyats in zamindari areas; and attempted (with little success) to limit rents paid by sub-tenants and share croppers to 50 per cent of gross produce with written agreement and 25 per cent if not. In ryotwari areas, however, tenancy was not officially recognized or regulated by the colonial regime and no action was taken to stem the flow of distress sales, : 12622 INDIAN AGRICULTURE SINCE INDEPENDENCE dispossessions and evictions until the Bombay Tenancy Ac., 1939! The growing consciousness among the peasantry brought to fore the burning issue of security of the tenant. With the introduction of new legislation during the later period of British rule, the existing legislations on tenancy underwent important changes. A significant piece of legislation for the permanent settlement areas was the Bengal Tenancy Act of 1859, which gave permanent occupancy rights to all the occupancy tenants of over 12 years standing. Other legislation introduced during this period was designed to regulate the incidence of revenue and to provide security of tenure to the cultivators. In 1902, the British under the Revised Revenue Policy decided to do away with the frequent increase in the land revenue and decided that enhancement of révenue would only take place if prices were increased. Further, it decided to suspend the collection of rent in famine years. Some of the later legislation tried to give relief to the enant by way of restrictions on enhancement of rent and provision of security of tenure. This included the Central Provinces Act, 1920, Agra Tenancy Act, 1926, and The Bengal Act of 1928. An important set of legislation passed in Punjab, UP and Bombay were designed to restrict the “transfer of land to non-agriculturists mainly the moneylenders. : A number of legislation for tenancy reforms were + passed by the Congress government in 1937 when it came to power in many provinces with a view to redéem the pledge it had made in its election manifesto. The main legislation were: The Bihar Tenancy Act, 1936, The UP Tenancy Act, 1937, and The Bombay Tenancy Act, 1938. Most of these aimed at providing hereditary rights to the tenants, reducing the interest rates on loans to the tenants, abolition of Begar, and specification of grounds on which 126CHANGES IN AGRARIAN STRUCTURE IN INDIA 23 a tenant could be ejected and so on. Despite legislation, very little benefits of reduction of rent reached the actual cultivator. The state of the peasantry was quite dismal. In Punjab about 40 % of cultivators were tenants at will. In Madras 44 % of villagers were landless labourers. In Bengal between 1921 to 1931, there was an increase of 62% in the number of rent receivers. The plight of agriculturist became very dismal during the depression of the 1930’s and along with the self- cultivators; the tenants had also to bear the’ brunt of a fall in prices. This was specially so since the landlords seldom agreed to reduce the rent. ‘The Congress was in the forefront of fighting for peasants’ rights. But the Party had an ambiguous stand vis-a-vis the landlords. The Congress wanted the mass of peasantry to be a part of the freedom movement and had therefore to speak about their basic interests. Simultan- ieously, it wanted a united front in its fight for independence ‘against the British. Hence it did not want to accentuate the contradictions between the peasant and the landlord. Tt was a tight rope walking but the Congress leadership under Gandhi had mastered the art of doing so. According, to George Rosen (1966), “So long as the peasant interests were adversely and directly affected by (the British) government, the Congress. _..defended. peasant interests with vigour. But where peasant interests were circumscribed by (the indigenous) landlord interest, the Congress under Gandhi counselled mutual trust and understanding”. It was only after independence that the Congress governments took a clear-cut stand and took a decision to abolish the intermediaries. The nature of land reforms ‘undertaken after independence will by examined in a later section. 12724 ANDIAN AGRICULTURE SINCE INDEPENDENCE Technological Change The 'second development that took place during the British period relates to the technology of production in agriculture. Some of the technological up-gradation through irrigation came primarily as a result of a belated response to frequent famines during the late nineteenth and early twentieth centuries. The British undertook large investments in irrigation and by 1920’s had created a reasonable net work of canal irrigation in Punjab, Sind and the United Provinces and had successfully revived tank irrigation in the South. By 1924, nearly 18 per cent of net sown area of India came under irrigation, but most of . it was concentrated in the north west of India and in the south. The other aspect of technological development was the setting up of the Imperial Research Institute in Pusa in the State of Bihar in 1905 and the Royal Council of Agriculture Research in 1929. Some agricultural universities were instituted-and research was encouraged. ! Attempts were also made to develop a scientific system of * research and development by gradually evolving better quality seeds, by importing new species and so on. But, because of lack of adequate investment, achievements were mostly limited to commercial crops. This notwithstanding, it was during the British period that the foundations were laid for research and scientific development in agriculture. To sum up, two important adverse consequences of the land system introduced by the British during the 18" century were firstly the creation of a class of absentee landlords and secondly the institutionalisation of land transfers. ‘The British did give a major boost to irrigation and also undertook some measures for establishing a system of scientific research and development which made a visible impact in certain parts of India. But because of the 128CHANGES IN AGRARIAN STRUCTURE IN INDIA 25 perpetuation of outmoded and semi-feudal land relations, the growth performance of agriculture was rather dismal. At the social plane, in spite of the introduction of an elaborate legal system based on common law, the age-old communal and caste biases and social oppression continued unabated due to lack of dynamism in the rural economy. It was the national struggle for freedom that gradually imparted consciousness to the people for equality and human dignity. In this context, Gandhi's role and especially his work for the uplift of scheduled castes and tribes were of paramount importance. PostIndependence Period: Land Reforms and Changes in Production Relations The policy makers in India were committed to itnplement radical land reforms in India after independence. Most of the states in India passed land reform legislation during the mid-fifties with the objective of removing such - impediments to agricultural development that arose from the agrarian structure inherited from the past and éliminating éxploitation and social injustice within the agrarian system. This was to ensure equality. of tenurial status and opportunity o all. The broad guidelines of legislation were laid down by the Report of the Congress Agrarian Reforms Committee, 1948. The final aim was co-operativisation of land of small and marginal farmers and cooperative village management. The Working Commiitee of the Congress in its meeting in Nagpur in January 1959 gave a thrust to the programme of land reforms. According to the Nagpur resolution, the organisatior of the village was to be based on village Panchayats and village cooperatives. ‘The future agrarian pattern should be that of cooperative joint farming in which land will be pooled for joint cultivation, the farmers continuing, to retain their property rights and getting a 12926 INDIAN AGRICULTURE SINCE INDEPENDENCE share from the net produce in proportion to their land. Further those working on land would get a share in. proportion to the work put in by them. As a first step prior to the institution of joint farming, service cooperatives should be organised throughout the country. The Nagpur resolution gave the property owners notice that their excess land is to be expropriated. The fall out of this resolution was a consolidation of forces against Jand reforms both within and outside the Congress. The result was that the timetable for completing co-operative management was postponed from the end of 1959 to the end of the Third Five Year Plan. The left wing in the Congress was to wait for another bout of land reforms much later during the early 1970’s when Indira Gandhi made it a part of the 20-point programme. Land Reform Legislation The main objectives of the land reforms legislation enacted by the State governments during the mid-’fifties were five- fold, viz., (i) abolition of intermediary tenures; (ii) tenancy reforms comprising, regulation of rent, security of tenures and conferment of ownership rights on tenants; (iii) ceiling, on land holdings and distribution of surplus land; (iv) consolidation of holdings; and (v) compilation and updating of land records. After the initial, burst of enactment of land reform legislation during the mid fifties, some subsequent legislation on ceilings on land holdings were also passed by the states during the mid sixties as also during the emergency in 1975. : Abolition of Intermediaries During the mid-fifties, intermediary tenures like zamindaris, jagirs and inams, which covered more than 40% of the area of the country, were fully abolished except for a few minor {enures such as those held by religious 130CHANGES IN AGRARIAN STRUCTURE IN [NDIA 27 and charitable institutions and service inams. As a result as many as 20 million tenants were brought in direct contact with the State and Rs. 6700 million worth of compensation was to be paid to the ex-intermediaries of which nearly half had been paid by the beginning of the Fifth Five Year Plan. An additional advantage of the abolition of intermediary tenures was that considerable areas of cultivable waste land and private forests came under the management of the Government. However, in many parts of the country, landlords, with the connivance of the local bureaucracy, were able to resume land for self-cultivation by ejecting a large number of tenants. This became easy since several States which had intermediary tenures did not possess the requisite revenue administration. In States like Bihar, Orissa, Rajasthan, Madhya Pradesh and West Bengal, landlords managed to keep very large holdings because of their power and influence. In general, the level of success _ of Zamindari abolition depended on the strength of the peasant movement. A general view is that land reforms were fairly successful in achieving the objective of abolition of zamindari, jagirdari, inams etc in most parts of India. One important consequence of the abolition of intermediaries was that the extent of tenancy declined considerably and self-cultivation became the dominant mode of production in most parts of India (Table 3.1). According to some authors, the abolition of intermediaries during the 1950s was more comprehensively and easily achieved than subsequent reforms owing to political expediency: it brought substantial gains to many at relatively low political cost (Mearns, 1999). Some’authors argue that many of the beneficiaries of the abolition of intermediaries (former upper and middle caste tenants) are now among those ‘13128 INDIAN AGRICULTURE SINCE INDEPENDENCE politically visible, larger landowners who bitterly oppose ceilings on land holdings (Ray 1996). Another criticism leveled is that the cost of abolition of intermediaries was very high as heavy compensation was paid to former zamindars. Tenancy Reforms: Reduction of Rents The tenancy legislation enacted in most of the States had two main objectives namely providing, security of tenure to the tenants and regulating rates of rent payable by them. Earlier to the enactment of this legislation, the customary level of rents commonly paid by tenants-at-will, non- occupancy tenants and share-croppers over the greater part of the country was one-half of the produce or more. In addition, very frequently there were other payments which enhanced the burdens borne by tenants. The maximum rates of rent have been fixed at levels. not exceeding 1/4th to 1/5th of the gross produce in all " ; the States except in Andhra Pradesh, Haryana and Punjab. .In some of the States, as in Gujarat, Maharashtra and Rajasthan, the maximum rent now stands at one-sixth of the produce. In Assam, Kerala, Orissa and Union Territories, the rent payable is about one-fourth of the produce or less. In several States, the normal level of rent is still about a third of the produce. In actual practice the reduced levels of rents—and indeed other conditions of tenancy—provided for by legislation were far from adequately enforced, and to a large extent customary rates of rent continued to prevail. This is because the social and economic position of tenants in the village is weak and it becomes difficult for them to seek the protection of law. Moreover, resort to legal processes is costly and generally beyond the means of ienants. Thus, despite the legislation, the scales are weighted in favour of the continuance of existing terms 132CHANGES IN AGRARIAN STRUCTURE IN INDIA 29 and conilitions. Where arrangements for leasing land are arrived at between individual parties, variations from the norms set by legislation can occur for a variety of reasons, for instance, if the owner undertakes to provide seed or bullocks or pay for irrigation. In view of considerable ignorance on the part of tenants of the rights granted by legislation, effective implementation of tenancy legislation, has become quite difficult (Third Five Year Plan). Security of Tenure and Resumption of Land for Self- cultivation Legislation for security of tenure has three essential aims— firstly, that ejectments do not take place except in accordance with the provisions of the law; secondly, that land may be resumed by an owner, if at all, for ‘personal cultivation’ only: and thirdly, that in the event of resump- tion, the tenant is assured of a prescribed minimum area. But despite strict laws on resumption, in actual practice the landlords were able to make use of their clout to evict thé poor tenants, or enforced their rotation among landlords’ plots to prevent them acquiring occupancy rights. The result was a general worsening of their tenure security. Again, market forces rather than the dictat of law mainly determined the terms of tenancy. In actual practice, tenants hardly enjoy any security. Since the legislation was aimed at providing security of tenure and deprive the landlords of their land rights, the landlords resorted to large-scale eviction of tenants. : Further, the provision to ban tenancy (leasing) outright in some states had perverse effects on the tenant. ‘The experience of the operation of the Act in the states of Uttar Pradesh, Orissa and Madhya Pradesh brings out that the Act has led to concealed tenancy arrangeménts. These were in general even more informal, for shorter duration and less secure than they had been prior to reform. In 133“Y INDIAN AGRICULTURE SINCF INDEPENDENG F some other states like Bihar and Rajasthan, tenancy is not prohibited. However, no legal provision exists to record informal tenancies. It is only in West Bengal after Operation Bargadar that informal tenancies were registered and protected. The other states where some measures were taken to protect tenaney were Tamil Nadu and the Vidharbha area of Maharashtra. According to one estimate (1996), there was a net loss of access by the rural poor to around 30 per cent of the total operated area as a result of tenancy reforms, and by 1992, ownership rights had been conferred and tenancies protected on no more than 4 per cent of the total operated area (chiefly in Assam, Gujarat, Himachal Pradesh, Karnataka, Kerala, Maharashtra, and West Bengal). No wonder the implementation of tenancy reforms has been described as generally weak, non-existent or counterproductive (Mearns, 1999). The legislation regarding conferment of ownership rights on the cultivators was also not implemented properly. For example, in regard to the. conferment of ownership rights on cultivating tenants, the existing legislation in the States of Andhra Pradesh, Bihar, Tamil Nadu, Haryana and Punjab still falls short of the accepted national policy. In ‘West Bengal, while all under-raiyats were brought directly in relationship with the State, this did not include Bargadars (share-croppers) though they were protected against eviction at will. The experience of West Bengal brings out that the success of tenancy reforms is contingent upon political strength of the parties committed to their cause. In the West Bengal case, the most notable aspect of the reform process was not legislative change — many of the central provisions had been on the statute books since the'1950s - but political change at the state level, reinforced by effective institutions at loéal level. With popular support from 134CHANGES IN AGRARIAN STRUCTURE IN INDIA 31 Panchayati Raj institutions and local political representative bodies, well-publicized land settlement camps moved from village to village, updating Jand records and offering tenants the right to register their tenancies at the same time. This concerted effort between government and citizens’ representative bodies helped to bring about a significant shift in the bargaining power of tenants in relation to landlords which was ultimately the key to success of operation Bargadar. Tenancy reforms of 1977 in West Bengal helped to create the necessary incentive structure for improvement of land by the tenants and along with investments in irrigation and new technology were Table 3.1 Percentage of operated area leased States 1953-54 1971-72 . 1981-82 1992-93 2002-03" Andra Pradesh 202 79.0 6.2 9.6 9.0 Assam : 43.0 167 ° 64 89 53 _ Bihar 24 M5 103 39° 89 i Gujarat 94 39 2.0 33 Sa + Haryana 398 «2330182 FAA Himachal Pradesh NA 159 32 48 NA Jarnmu & Kashmir 221 © Bl 25 37 NA Karnataka 25 | 159 6.0 74 3.6 Kerala 20.2 8.6 241 29 40 Madhya Pradesh 98 75 Bee Ge 3.6 Maharashtra 1976.2 5.2 55 47 Orissa 1226, 135 9.9 95 13.0 Punjab 308 280 161 188 168 Rajasthan 20 53 43 52 28 Tamil Nadu. 270 131 109 109 6.0 Uttar Pradesh 4 130 «= 10.2 105 95 West Bengal 254 188 134 104 93 All India 20.6 10.6 72. BB. 65 « Data for 2002-03 pertain to the Kharif season. Source: National Sample Survey on Land Holding , NSS 8" round, No. 36 1954.55 : NSS 17" round No. 144 1961-62; NSS 26" round No. 215 1971- 72, NSS 37* round, Nos.330 and 331 1982, 48" round No.388, 1992 and 59th round, No. 492, 2006. 13532 INDIAN AGRICULTURE SINCE INDEPENDENCE, instrumental in ensuring rapid growth in agricultural productivity since the early 1980s (Banerjee et al, 1996, Lieten 1996; Hariss, 1998) Extent and Terms of Tenancy The available data shows that the extent of tenancy has perceptibly declined in all the states since 1953-54. For India as a whole the operated area leased-in declined from 20.6 % in 1953-54 to only 6.5 % by 2002-03. But the incidence of tenancy continues to be relatively higher in the agriculturally advanced state of Punjab and Haryana. Mode of Payment of Rent Important changes have taken place in the mode of Table 3.2 ‘Trends in percentage distribution of leased-in area by terms of lease All India (Rural)- 2002-03 Percentage of area by ternis of lease State Fixed Fixed Share of Others All money produce produce inc. Rel. _ terms Andhra Pradesh 316 379 24.0 64 100.0 Assam 15.8 3.6 55.0 25.6 100.0 Bihar zi 12.0 175 67.0 35+ 100.0 Gujarat 10.7 46.3 37.9 51 100.0 Haryana n2 98 15.8 32 100.0 Karnataka 324 9 411 24.8 17 100.0 Kerala 39.9 75 12.0 408 100.0 Madhya Pradesh 26.2 325 39.0 10.2 100.0 Maharashtra ni 9.0 37.5 273 100.0 Orissa 79.2 78 73.0 82 100.0 Punjab 35.0 15 153 40 100.0 Rajasthan 32.0 177 #3 8.0 100.0 Tamil Nadu 23.8 30.0 22.9 Lt 100.6 Uttar Pradesh 23.8 129 526) 104 106.0 West Bengal 23.7 285 34.9 129 100.0 India 29.5 20.3 40.3 9.9 100.0 Source: NSS 59" Round 16, Report No. 492, 136CHANGES IN AGRARIAN STRUCTURE IN INDIA 3 payment, of rent over a period of time with fixed money and fixed produce emerging as the most important together accounting for 49.8 % of area under lease. The share of produce continues to be important as it accounted for as much as 40.3 % of area under lease during 2002-03. The mode of payment of rent also differs from one state to the other. In agriculturally advanced states like Punjab and Haryana, fixed money constituted by far the most common method of payment accounting for 79.2 % and 71.2 % of area in terms of lease during 2002-03. On the other hand, share of produce accounted for 67 % of area in terms of lease in Bihar, 73 % in Orissa, 55 % in Assam and 52.9 % in’ Uttar Pradesh (Table 3.2). It would be desirable, as a matter of policy, to hasten the transition from rents in kind to cash payments. Imposition of Ceilings Imposition of ceilings and distribution of surplus land * among landless labourers was the third and the most ‘important objective of land reform legislation in India. Unfortunately, this was also the legislation that met with little success in its implementation. The failure was caused due to loopholes in law and large-scale connivance of the surplus farmers with the revenue administration, lack of will power of policy makers and the relative weakness of the peasant movement. < For example, various exemptions and loopholes left by individual states allowed landlords to retain control over land holdings, mostly through benami transactions namely transactions that transferred holdings in the names of deceased or fictitious persons registeréd with the connivance of the village patwari. The lack of accurate, updated records of rights in land was noted to be a major constraint on the effective implementation of larid ceilings as also tenancy reforms. Furthermore, ceilings were 137"8002 ‘26¥ PUP 6p “oupunos WES PUY Z661 “98E'OU PUNOF wBF ZAEI LEE PUL OEE'SOU ‘PUNOL wiE SSN 'ZL-TLET SIZ ‘OU PUNO 497 SSN ‘29-1961 BHT ‘OU PUNE wT SSN SE-Pg61 9°0U ‘PUNO yg SEN SUIPIOE pur] Uo daamg sydueg peuoNeN, : zines 00°00T O0'00T OO'OOT OO;OOT DO'ODT ODOT 00°00T 00'0OT Q0'00L 00°00T 00°00t O0'00T Iv SSIL €8'ET ZO'SL 6% He'ez eT'9e 09° 880 EFT We sot 19 (saoqy = gz) a2 BOT 409% FEET FLOE ere zeZ oe SF SV9 EBL 286 LT'6(66°F2-0'0T) RIDA, 2 g Zz 2 SOIL 852 BEET LIZ HO GEST 009 C6 SLOT 96IT gett 6FZT (6'6-00's) paunEeG 5 BE0% 6S8L 6F9T LOFT OFZI GOUT OS'OL. HEL OLBI 6ST LO'SE GReTL (66S 7IeuS = SO'EZ E691 Zt 926 682 wg 09°69. 9°09 less 46% 68h ST'BE (6%'2-T0') ere < 00°0 00°0 00°0 00'0 00°0 00°0 QOL SZIL CIT 596 SoIl 60°€7 (10°00) ssaqpueq x £00 2661 “€8-Z8EL ZZ-IZ6I Z9-196T HS-Eg61 E00T 2661 €8-Z86L ZZ-LZ61 Z9-196L HS-ES6T Zz poumg way aSoquzoieg sSurpjory diysioume aBoqusoseg (52190) SUD 235 UpUY ITY - Suppjoy dpyszaumo yo vonnqinsiq-ezis (2) [emg 34 138CHANGES IN AGRARIAN STRUCTURE IN INDIA 35 frequently set too high in relation to the average size of household operational holdings to have much impact on the agrarian structure in most states. That the legislation regarding imposition of ceiling on land holdings failed seriously is brought out by the fact that over a period of 35 years since ceilings have been enforced, land redistributed is estimated to constitute less than 2 per cent of the total operated area (Ray,1996). Some states have achieved much greater progress than others in implementing, ceiling reforms: Jammu and Kashmir has redistributed 17 per cent of its operated area, West Bengal 6 per cent, and Assam 5S per cent. It is however worth noting that the threat of ceilings does seem to have prevented the further expansion of large holdings. Furthermore, the redistribution of even very small plots of homestead land has brought substantial benefits to the poor. , One of the serious consequences of the failure of land “ceiling, legislation is that the pattern of land distribution has remained extremely skewed. In this respect India lags far behind the East Asian countries and China who were successful in implementing thorough land reforms and therefore in bringing about a near egalitarian society in the countryside. The Indian rural scene is characterized by extreme inequality in land and asset distribution. data on ownership holdings and that on operational holdings has now become available up to 2002-03 (Table 3.2 (b)). Three important conclusions can be drawn from the changes in both ownership holdings and operational holdings over time. First, the share of small and marginal farmers both in ownership holdings and in total area owned is increasing rapidly over time. For example, during 1953-54, at the all India level, the small and marginal farmers owning less.than 2 hecta (5 acres) of land 13936 INDIAN AGRICULTURE SINCE INDEPENDENCE constituted 51.64 % of the total holdings but accounted for only 16.31 % of total owned area. By 2003, their share in the number of ownership holdings had increased to 80.4 % and their share of area had increased to 43.43 %. The large preponderance of small and marginal farmers and landless labour in the emerging agrarian structure in India has very serious and significant implications. Secondly, the proportionate share of large farmers both in total holdings and-land owned is declining rapidly over time. Thirdly, It is the semi-medium and medium farmers Table 3.2 (b) Changes in percentage distribution of operated area by category of operational holdings ~ India (Rural) Percentage distribution Percentaged distribution of operated holdings of operated area 60-61 81-82 91-92 62-03"| 60-61 81-82 91-92 02-03" (17th) (26th) (37th) (48th) | (17th) (20th) (37th) (59tH) Marginal 39.1 458 56.0 628 69 : 11S 5a | ore, Small 226 224 193 178 12.3 166 187 209 Semi- medium 198 17.7 142 120 | 207 236 24.1 225 Medium 140° 111 86 61 | 312 301 264 222 , large 45 31 19 13 | 290 182 152 118 allsizes 100.0 100.0 100.0 100.0 | 100.0 100.0 100.0 100.0 * Refers to kharif season. Source: same as in Table 3.2 (a). who are the main gainers in terms of share of owned area although their share in total ownership holdings has declined perceptibly. It is this group which has also emerged politically the most powerful group in the Indian countryside. A similar pattern of land distribution is discerned in the matter of operational holdings also. By 2002-03, marginal and small farmers accounted for 86.0 % of holdings compared with 80.6 % during 1991-92. During ; 140CHANGES IN AGRARIAN STRUCTURE fN INDIA 7 the time their share in operated area had increased from 34.3 % to 43.5 % (Table 3.2 (b)). Concentration of Holdings Another notable feature is increasing concentration of both ownership and operational holdings. The concentration in ownership is much higher than in operational holdings because of higher leasing - in by the lower categories of farmers (Table 3.3). Whereas there is a declining trend in concentration of ownership holdings, the opposite is the case regarding operational holdings. Table 3.3 Concentration Ratio Type of Concentration Ratio Holding 1953-54 1960-61 1971-72 1981-82 1991-92 2002-03 Ownership Holding 0.751 0.717 0.706 0.708 O71 0.74 Operational Holding - 0.621 0.583 0.588 0.624 0.641 0.624 Source: National Sample Survey on Land Holding, 8th, 17th , 26th , 37th, 48th and 59th rounds, Report 491 & 492. Consolidation of Holdings A. fourth element of land reforms is the consolidation of holdings. Although consolidation does not lead to any land distribution, bringing together of fragmented holdings over long distancés can confer numerous advantages to the cultivators. Land consolidation covers all categories of farmers although the benefits are more for large land holdings than small ones. But the benefits to small farmers are also substantial. For example, it was noted that in Uttar Pradesh, land consolidation programmes have reportedly led to.reduced dependency for many farmers, and have increased the economic viability of many farms (Oldenburg 1990). ' 14138 INDIAN AGRICULTURE SINCE INDEPENDENCE Several states have undertaken land consolidation measures. Overall, around a third of the total operated area in India was reported to have been consolidated by the mid-1980s, almost all of which was in Punjab, Haryana, Uttar Pradesh, Maharashtra and Madhya Pradesh. In these states, land consolidation was achieved through state programmes. Besides agro-ecological conditions, the legacy of mahalwari tenure systems may have made the task of land consolidation easier in Punjab and Haryana. In other states (Tamil Nadu, Kerala) no legislative provision exists for land consolidation, yet farmers themselves have achieved some consolidation through spontaneous exchanges in the land market. Critical Appraisal of Land Reforms in India—The Present Agrarian Structure An evaluation of the implementation of land reforms brings out that land reforms in India achieved only a partial success. Whereas the legislation succeeded in the matter of abolition of intermediaries, other objectives of land reforms namely tenancy reform and ceilings on landholdings were only partially realised. According to one scholar, the partial success of land reforms is attributable to the fact that the reform measures were generally promulgated by ruling elites composed of or electorally dependent on the upper echelons of agrarian society (Herring -1983). It can be argued that the suécess of the land reforms depended on the strength of the peasant movement. The implementation of land reforms legislation was more complete in regions where the peasant movement was strong and the other way round in areas where it was.weak. The examples of relatively more successful land reforms are Telengana region in Andhra Pradesh, Tamil Nadu, Maharshtra, PEPSU in Punjab, United Provinces and West Bengal. 142CHANGES IN AGRARIAN STRUCTURE IN INDIA 39 More generally, three critical ingredients of success in implementing reforms in land administration stand out: the importance of collective action at local level, the public nature of proceedings, and state power exercised on behalf of the socially excluded. This is.as true of land consolidation in Uttar Pradesh as it is of tenancy reforms in West Bengal, and offers valuable lessons from which to learn in broader efforts to improve land settlement, adjudication and registration (Mearns, 1999). The distribution of land has remained much skewed despite the enactment of legislations for land reforms. In this respect India lags far behind the East Asian countries and China who were successful in implementing thorough land reforms and therefore in bringing about a near egalitarian society in the countryside. The Indian rural scene is characterized by extreme inequality in land and asset distribution. The latest data for 2003 brings out that the concentration ratios for both the ownership and the operational holdings continue to be very high. Some other adverse socio-political consequences have also followed because of partial implementation of land reforms. According to Joshi, “While the ideology of land reforms was in the interests of the peasantry as a whole, it served primarily the richer peasants rather than the rural poor” (Joshi, 1975). One such consequence is the emergence of a well to do peasantry as a powerful economic. and political force in the rural areas. Two factors interacted with each other in bringing about inequality in asset distribution and in the emergence of powerful rural elite. The first was that the land was unequally distributed and the establishment of village cooperatives did not follow the abolition of zamindari as envisaged by Nehru. The second reason was that in irrigated regions of India, the self-cultivating semi medium and middle peasantry was able to derive optimum benefits from new seed-fertilizer 14340 INDIAN AGRICULTURE SINCE INDEPENDENCE technology. The political fallout of this development was that the well-to-do peasantry also became politically very powerful over time, compelling political parties to seek their support. But according to Gopal, “Nehru’s efforts at revolution by participation and consent were being converted by influential sections of Indian society into a revolution by revisionist methods, thereby reducing it to no revolution at all.” (Gopal, 1975). Accordingly, this development strengthened some extremely retrogressive factors like caste, linguistic considerations, and narrow provincialism. Summing up To sum up, With the emergence of self:cultivation as the dominant mode of production, one of the most important institutional constraints has been removed in large parts of India. However, the failure of tenancy legislation has resulted in large scale prevalence of hidden or open tenancy with limited rights for the tenants. In addition, the failure of land ceiling legislation has resulted in extreme inter- personal inequality in the countryside and an overwhelming preponderance of small and marginal farmers with very low production base. The inequality in land ownership has been further exacerbated as a result of differential income gains of high yielding new seed- fertiliser technology. The persistence of extreme inequality in the countryside and the preponderance of small and marginal farmers with limited resources pose the most important institutional challenge in India. The challenge becomes all the more important in the context of globalisation. How would: the small farmers be able to benefit from crop diversification or export possibilities? Would they be able lo diversify and remain competitive in capital intensive production of high value crops? What are the needed 144CHANGES IN AGRARIAN STRUCTURE IN INDIA 4. interventions? Or are these farmers to be left to the mercy of the market? These are some of the questions that remain unanswered Further Readings Appu, PS., 1996, Land Reforms in India: A Survey of Policy Legislation and Implementation, Vikas, New Delhi. Appu, PS., “Tenancy Reforms in India”, Economic and Political Weekly, Special Number, August 1975, pp- 1339-75. Banerjee, Abhijit V. and Maitreesh Ghatak, 1996, Empowerment and Efficiency: The Economics of Tenancy Reform, Mimeo, MIT and Harvard University. GOL, Survey on Land Holdings in India, Various Rounds, NSSO. GOI, Five Year Plans, Various Plans, Planning Commission Gopal, S., 1975, Jawaharlal Nelru—A Biography, (Vols. 1-3), Oxford University Press, New Delhi. Gopalakrishna, P-K.,1999, Developrtent of Economic Ideas in India, Peoples’ Publishing House, New Delhi. Guha, Ranjit, 1962, Rule of Property forBengal, An Essay on the idea of Permanent Settlement, Mouton, Paris; Indian Edition, Orient Longman, New Delhi, 1982. ; i Harriss, John, “What is Happening in Rural West Bengal? Agrarian “Reform, Growth and Distribution”, Economic and Political Weekly, 42 June 1993, pp. 1237-47. Herring, Ronald J., 1983, Land to the Tiller: The Political Economy of Agrarian Reform in South Asia, Yale University Press, New Haven. Joshi, P.C.,1975, Land Reforms in India, Allied Publishers, New Delbii Lieten, G.K., 1997, Development, Devolution and Democracy: Village Discourse in West Bengal, Sage, New Delhi. Myrdal, Gunnar, Asian Drama, Vol. Hop. cit, Chapter 26, pp. 1301-46. Mearns, Robin, 1999, Access fo Land in Rural India: Policy Issues and Options, World Bank. i Oldenburg, Philip, 1990, Land Consolidation as Land Reform in India, World Development 18(2) i Ray, SK., 1996, “Land System and its Reforms in India”, Indian Journal of ‘Agricultural Economics, $1 (182), pp. 220-237 Rosen, George, 1966, Democracy aind Economic Change in India, Vora & Co., Bombay. sharma, H.R. 1992, “Agratian Relations in India Since Independence”, Journal of Indian School of Political Economy, 4(2), PP- 201-262. 145