efficiency at farm level -...
TRANSCRIPT
263
CHAPTER - VIII
EFFICIENCY AT FARM LEVEL
In this chapter, we deal with two aspects of farm
efficiency: (i) land-use efficiency and (ii) production
efficiency of the farm. A few factors which, in our view
determine the efficiency of production at farm level are
discussed on the strength of our primary data. These are:
intensity of new technology, intensity of family-based
farming and general economic standard of the farming
household. A cronological review of the history of debate on
farm size and yield rate reflects that the economists do not
have a unanimous opinion in this matter. For example, Farm
Management Studiesl have mainly centred around questions of
production efficiency. The proposition which attracted
considerable notice and has continued to recur in discussion
is the alleged inverse relationship between yield per acre
and the size of holding. Sen•s2 finding adheres to the inverse
relationship between the size of holding and productivity;
and he gave three alternative lines of explanation for this
relationship as: (i) technique-based, (ii) labour- based and
(iii) fertility-based explanations.
Some doubts were expressed about the statistical
validity of the inverse relation between yield per acre and
the
1.
size of holding by Rao3
Government of India, Ministry of ? t u die_§_ .in .t I]_~_ ~£_Q__flQ_Il}i.~?. qf F.?. rrn tl_~dh_y~ p_r_~Q_~§.h .•. !.'t~J:i.r._a?... Pvnj~b .... 1954-55,1955-56 and 1956-57.
2. Sen, A.K. (1964). op. cit.
who, on the basis of
Food and M~Tl.~9.~.ITL~nt l,.J_. p__,_ ? . .Oc:!
Agriculture: f. Q r. 13. QfD_P~Y..,
~.~.?. t 1:! E? ng~l ,
3. Rao, A.P. (1967). •size of Holdings and Productivity'. ~~on_g_rn_j,_c;;_ ~nq e.QJ.i.t.i_~?.l W~.~J<!.Y, No. 11, pp. 1989-90.
264
disaggregated data relating to the FMS, presented some
figures which contradict the above result.
Rudra's4 analysis of individual holdings survey
completely in 20 villages, strengthened Rao's
conclusion. All these villages belong to the region which
falls under the green revolution belt namely, Punjab, Haryana
and parts of western U.P. The yield per acre in this study is
defined as the gross value of output divided by the gross
cultivated area, which is different than the definition
adopted in other studies. In any case, his main conclusion
was that yield per acre is invariant to farm size and he
claimed that in the process of aggregation, the Farm
Management Study data had come to reveal the spurious
dependence of yield per acre on farm size.
Commenting on Rudra's statement, Hanumantha Raos
pointed out that the divergence between Rudra's findings and
those of the FMS would persist, because Rudra's study was
based on yield per acre of gross cultivated area, whereas the
FMS estimate was yield per acre of net cultivated area. In
sum, Rudra's concept of 'yield per acre' was substantially
different from that of the FMS and was in fact biased towards
eliminating the inverese relationship between size of holding
and yield per acre, mainly because the intervening
variable-cropping intensity is universally accepted as
inversely related to farm size.
4. Rudra, A (1968). 'Farm Size and Yield Per Acre'. ~IJQ ~qJ.Jt. .. :i..c;.?.J Weekl_y, Special Number, July-Dec. Nos. 27-52.
Economi G. Vel. III,
5. Hanumantha Rao, C.H. (1968), 'Farm Size Acre: A Comment' . ~<:;.Q_QOITliG ?.nQ P9_l it.iG.~l. Number, July-Dec. Vol III, Nos. 27-52.
and Yield Per We~kly, Special
265
Rudra6, in reply, questioned the concept of size
of farm (net cultivated area) as a proper measure of land
input and also pointed out that the relation between size
of farm and intensity of cultivation was not
'invariably' inverse, as Rao supposed.
Saini7 in a later study, using disaggregated farm
management data and relating yield per acre to size of
holding (net cultivated area), reported that within the
framework of a traditional agriculture, the smaller farmers
with their relative abundance of family labour could attain a
relatively higher intensity of cultivation and also claim a
relatively higher productivity per unit of land through
increased input of human labour and other traditional
resources of farming. Even, in the initial stages of
emergence of a capital-intensive technology, the inverse
relationship between farm size and productivity still holds.
Again, an extensive study by Bhattacharya and
Sainie provided some further support for the hypothesis of
the inverse relation between the size of holding and yield
per acre.
6. Rudra, A (1968):'More on Agriculture: Economic anq Agriculture, Octo. 26.
Returns to Scale Pol i ~ical ~-~-~.kl.Y .•
in Indian Review of
7. Saini, G. R (1968): 'Resource Use Efficiency in Agriculture', Indj.an Jour~I. of B.gr_:l_c_\.! .. l!.lJ.r~l £_g_gngm_i~_s. Vol. 24, April-June, again in the book, G. R. Saini. ( 1979) : • Farm ;;;j z;_§...... 8.§~o~_r-~_ec_U§..~ ~ff.i.c:: .. i~DC::Y ?nd. _;[ncg_me Distributign:_ .lB. ~J:.Y..9.Y .i_IJ Ir:l9.~?1J. ~gr:_t.G.u.J.t.u.r.~ ~i t;.h §Q_ecial 8.§.f_~renc~ to ~_,_£_: ... ~p_q eJJDj.~Q.. New Delhi.
8. Bhattacharya, N. and Saini, G. R. (1972) : Productivity A Fresh Look, ~_g_gnq_mtg_ We~~. Vol. VII, June 24.
'Farm Size and ~.0.9 p_gl.~_.t.t~?J
Bharadwaj9
266
(1974), on the basis of the
published studies in the economics of Farm Management,
authenticated the existence of the inverse relation between
farm size and yield rate, and claimed that this inverse
relation may be attributed to the difference in intensity of
cultivation and in cropping patterns- the smaller holdings
generally cultivate land more intensively and producing crops
of greater value per acre.
Bhalla and Chadhato, on the basis of stratified
random sample survey covering all districts of Punjab,
concluded that the inverse relationship between farm size and
productivity had disappeared in the central Punjab which was
the real seedbed of the green revolution in the state. In
other parts, especially the lagging semi-hilly and
mountanious districts, the inverse relationship was still
operative.
In this chapter,we attempt to examine the farm size
and yield rate relationship in the context of Orissa. Our
analysis, unlike that of the previous contributors to the
debate is more detailed inasmuch as we wish to bring in the
additional dimensions emanating from different tenancy
status, and test the land-use efficiency of the farm by size
class and tenancy status.
9. Bha radwaj, K. ( 1974): 'P.r.Qggg_t .. L9.n ~.Q.nqj_.t_~ QQ?. j._r1 _I_I}qta,n
10.
B.9.r.J_g_l,J_t.t.~JL~.; .. 6 ~ . .t.~,J_9.Y b.?.?.~q 9JJ [?.fiT! tL~na,gell)~D...t ~l,J.CY~Y?. ; Cambridge University Press, London.
Bhalla, G. S. and Chadha, ~ 119. 1h~. §I'D..?.J-.1 1?.~ ?..?.~_n t :. A Bffi91J.9 P..~_Qj§l_Q CuJ.tt~_C!!.9.C.§, (1982): 'Green Revolution of Income Distribution in al}g p_gJJ .. t..;i~?l ~~~_b:}._y, May
G. K. ( 1983) : '§ r~~~..D. B~vqJ ld.t _ _i_g_n §t.~_qy q_f.. In~.Qm~ P. .. ;i.?JL;iJ:~.\:!.t;.j_g_n New Delhi, and Chadha, G.K. and the Small Peasant: A study
Punjab Agriculture' E;_~QD.Q.Il!iC 15-22.
267
An important indicator of land-use efficiency
especially from social point of view, is to consider cropping
intensity (gross cropped area divided by net operated area).
A higher value of average cropping intensity would imply a
greater degree of land-use efficiency of the available farm
land.
Further, we adopt the following procedure to
estimate the relationship between the size of farm and yield
rate:
(i) We define size of farm as net cultivated land (owned land minus leased-out land plus leased-in land) minus uncultivated land,
(ii) We estimate per acre yield by dividing the gross value of output (including value of by-products) by gross cropped area, as was done by Rudra,
(iii) We use log-linear functions to fit the relation between the size of farm and yield rate, taking yield rate as dependent variable and the size of farm as independent variable.
In Table-8.1, We estimate cropping intensity (a
measure for land use efficiency ) by size class and
tenancy status. A study through size classes shows that the
magnitude of cropping intensity, in general, is comparatively
higher for marginal farm and is the lowest for large farm.
The only deviation we notice is under share crop system,
where the value of cropping intensity is slightly higher for
small farm compared with that for marginal. farm. The moot
point, however, is that the value of cropping intensity for
large farm remains much below the level shown by other size
classes under any tenancy arrangement. Likewise, going
through agrarian categories for all size classes put
together, we observe that the average cropping intensity of
268
Table - 8.1 Avtrage Cropping Intensity by Size Clas1 and Agrarian Cat19ory
"arginal Fare Still Fare large Faraff All size-class Far•
Owner cultivation I 1.2134 1.1329 1.1181 1.1399 :
Fixed Rent Tenancy : t .4211 1.2216 1.118tl 1.2355
+ Shue Crop Ttnancy 1 1.1827 1.2192 ..... 1.1415
All Systeu 1.2718 1.1647 t .1777 t. 1596
------------------------------------------------llote : t =Pun owner cultivator and owner-cue-lessor.
tt :: large fare including aediua fara.
269
farms under fixed rent tenancy is the highest; and the farms
under share crop system and those under owner cultivation
system show the same level of cropping intensity.
By and large, taking the value of average
cropping intensity as a measure for land-use efficiency of
the farm, we conclude that, firstly, marginal farmers are
more efficient in land-use compared with small and large size
farmers; secondly, the farms under fixed rent tenancy display
a better efficiency in land-use compared with those under
owner cultivation and share crop tenancy; and lastly, the
marginal farms under fixed rent tenancy are relatively more
efficient in land-use.
In Table-8.2, we estimate log-linear relationship
between the size of farm and yield rate under various forms
of cultivation: owner cultivation, fixed rent and share
crop systems, separately for unirrigated and irrigated
villages. On an average, we observe that the yield per acre
is inversely related to the size of farm both in the
unirrigated and irrigated villages under either system of
cultivations. The only obvious deviation is that in some
cases, the relation is significant whereas in some other
cases, it is not significant. For example, in the unirrigated
villages, the relationship between the size of farm and the
yield rate is negative under any system of cultivation; but
in the case of owner cultivation system, it is significant
even at 0.01 level; _;1..
the value R ~~. intercept and slope
are significant in view of high values of F and t statistics
respectively. Similarly, in the irrigated villages, this
relation is negative under any system of cultivation. It is
hbl~ - 8.2 log-linear Relationship between yield Rate and Size of Fare
Unirrigated Villages Irrigated Villages
log-linear equation R-2 Degree
f-value of log-linear Equation R-2 Degree
f-value of freedot Fnedot
ff •• ff .. .. ff
log v. 3.213 - 8.1851 log r 1.1157 11.57 v, .. 1 log v. 3.434 - 8.16997 log r 1.2317 24.6489 v1•1 Owner Cultivation t 1((5.63181 (-3.39111 v2•8B 1186.1661 1-4.97281 v2•82
ff ff H ff
Log V • 3.411- 1.1131 log I 1.1434 1.589 vl•l log Y • 3.575 - 8.1626 log I 1.4318 24.2584 vl•l Fixad Rent Tenancy : 188.2351 1-1.26191 v2•35 1253.5531 1-4.92951 "2''32
ff .. f
log V • 3.111- 1.8489 log I 1.1414 8.9979 '~t"' log V • 3.291 - 1.1166 log I 1.1975 3.2411 v1•t Share Crop Ttnancy t 1182.313) (-1.9514) v2a21 1146.642) 1-1.7999) v2e31
-------------------------------------------------------------------------------------------------------------------------------------------Note : I I " +- valuts.
x ~ size of holding. y • yield per a[rt cropped.
• • significant at 1.85 level. ff • significant at t.tl level.
t\:)
" 0
271
ghly significant under owner cultivation and fixed rent
·stems, because the value of coefficient of adjusted
termination (~#~). intercept and slope are significant at
01 level. In the case of share crop system, the intercept
1d slope are significant at 0.01 and 0.05 level respectively, ~
1t the coefficient of adjusted determination (R~~) is not
gnificant.
However, on the basis of the test of significance,
may say that in the irrigated villages, the inverse
~lation between the yield rate and the size of farm is
gnificant under any system of cultivation. On the other
in the unirrigated villages, this relationship is
.gnificant in the case of owner cultivation system, whereas
the case of share crop and fixed rent systems, it is not
.gnificant. Thus, the owner cultivation system confirms
.gnificantly this relationship both in the irrigated and
)irrigated villages.
The inverse relationship between the yield rate and
1e farm size could, inter alia, be due mainly to two factors:
1e variation in use of new inputs and in the use of family
ibour. By that, we mean that the small size farm uses
3latively higher new inputs and own family labour compared
Lth the large size farm, in which the small size farm
~perienced a higher rate of yield and in reverse, the large
ize farm experienced a lower rate of yield. In the
revious chapter, we observed that the marginal farms use
slatively higher level of both new inputs and family labour
nd in contrast, the large size farms use ~elatively lower
272
other words, on an average, the value of new inputs and
family labour used per acre cropped decline as we move from
small size farm to large one. So, it confirms the inverse
relationship between the farm size and the use of new inputs
and family labour.
between
labour.
In this section, we have to study the relationship
the
If
yield
we find
rate and the use of new inputs and family
a positive relationship between these
variables, then it would strengthen further the inverse
relationship between the size of farm and the yield rate.
Moreover, it would show the efficiency of the farm with
respect to the use of new inputs and the use of own family
labour. For this purpose, we estimate log-linear relationship
by taking yield per acre as dependent variable and the value
of new inputs and the implicit family labour cost per acre
cropped as
relationships
tenancy and
independent variables. We estimate such
under (i) fixed rent tenancy, (ii) share crop
(iii) fixed rent and share crop systems
combinedly. Before going
between these variables,
to estimate log-linear relations
we estimate the coefficient of
correlation between yield rate and new inputs, yield rate and
implicit cost, new inputs and implicit cost, and finally, the
coefficient of multiple correlation between yield rate, new
inputs and implicit cost.
In Table-8.3, we estimate correlation coefficients
and apply t-test to measure its significance. We see that
under fixed rent tenancy, the value of correlation
coefficient in each case: between yield rate and value of new
inputs, yield rate and implicit family labour cost, value
Table - 8.3 Cotfficient of Corrtlation btt .. en Yield Rate, Nlw Jnputa and Faaily labour
---------'yl 'yl rkl
------------------------------------------------------f
1.2533 Fixed Rtnt Tenancy t (2.17511
1.1938 Sfltln Crop Tenancy t (8.6799)
f f
Fixed Rent and 1.4554 Share Crop SystteS : (5.6961)
Oltftl!r f f
Cut tivati011: 1.2143 (2.87741
lote z 1 = significant at 8.15 level. t 1 = significant at 1.11 level ( I :: +- VUUI!5.
• 8.2892
f2.5M41
8.8781 Ul.57fl41
f
8.1741 (I. 419131
f f
1.1944 12.59911
I f It
1.3588 1.3316 (3.19311 (2.88851
1.1656 1.1133 11.2251 (1.82791
f f f f
1.2351 1.4617 <2. 77121 (6.51281
f f I f
8.2211 11.2619 12.97331 13.55981
ryt =Coefficient of correlation bet.een yield rate and ne• inputs. 'yl =Coefficient of corrtlation bet.a~n yield rate and iaplicit filily labour cost. rtl =Coefficient of correlation bet.,en ne• inputs and iaplicit faaily ldbour c~st.
r v kl =Coefficient of aultiple correlation between yield rate, nev input!. and iaplicit cost. ..
27~
of new inputs and implicit family labour cost, and between
yield rate, value of new inputs and implicit cost, is
positive and significant at 0.05 level. It is important
to notice that under share crop system, although we observe a
positive correlation in each case, yet in none of the
cases it is significant. Under combined systems (fixed rent
and share crop systems), the correlation between those
variables is positive and significant at 0.01 level. In the
case of owner cultivation system, the correlation between
those variables is positive and significant in either case at
0.01 level. From Table-8.3, we find that under any system of
cultivation, the degree of correlation between yield rate and
value of new inputs is relatively greater than that
between yield rate and implicit family labour cost. Further,
the correlation between yield rate, new inputs and implicit
family labour cost is higher for fixed rent tenants than that
for share crop tenants and owner cultivators. Again, that for
owner cultivators is higher than that for share crop tenants.
In Table-8.4, We estimate log-linear relations
between yield rate (dependent variable) and value of new
inputs and implicit family labour cost (explanatory
variables) and the output elasticity of new inputs and family
labour (implicit cost). We see that under any system of
cultivation, it indicates the positive relationship between
yield rate and new inputs and family labour; and intercept is
significant at 0.01 level under either system. But the
deviation is that under fixed rent system, the coefficient of
the variable-implicit family labour cost is significant and
-~ the coefficient of adjusted determination (R-~) is also
275
Table - 8.4 loq-lintar Relations bet•!fn yield Rate and Ne. l~puts - laplicit Cost
log-linear Equation Degree _2 A F-Value of
Freedoa
ff f
loq Y = 2.9449 + 1.13658 log t + 1.17296 log 1 fi1ed Rent Tenancy :
v1=2 1.18931 4.1721
+- value: (4.37531 H.51821 <2.6321
ff
log Y = 3.1764 + 1.112111 log k + 8.142846 log 1 v1=2 Share Crop Systea;: 1.1128 8.3379
+- value: (11.6231 <1.61941 (8.47191
ff ff
Filled Rent and Share Crop Systems:
log Y = 3.15613 + 1.19826 log t + 1.16423 log I •• 8.1994 15.3173
+- value: (9.54441 (5.51591 <1.88971
ff f t
Olcner Culti vahon:
logY= 2.87953 + 1.83229 log t + 1.113389 log l tt
1.1577 5.2351 +-value: <35.95551 <2.37971
Uote : t = significant of 8.15 level. ff = significant at 1.11 level. y = yield per acre cropped. k c value of new inputs per acre. 1 = iaplicit cost per acre.
(2.14321 ----------------------
276
significant at 0.05 level; whereas under share crop system,
neither the slope -2
nor R~~ is significant. But, it
is important to note that, when we look at both the
systems combinedly, we observe that the coefficient of new
inputs is significant even at 0.01 level and the
coefficient of adjusted determination (R-2) is also
significant at 0.01 level. Under owner cultivation system,
we see that both the coefficients of new inputs and implicit
family labour cost are significant at 0.05 level and the
-~ coefficient of adjusted determination (R*') is significant at
0.01 level.
By and large, it is obvious that the yield rate is
directly related to the use of new inputs and use of family
labour. Previously, we observed an inverse relationship
between the size of farm and the yield rate. Logically, it
can be now deduced that both the use of new inputs and
family labour are inversely related to the size of farm.
Moreover, it also strengthens conclusion of our previous
chapter (VII) namely that the size of leased-in Land and use
of new inputs are inversely related.
For a better theoretical understanding, we explain
the above relations in the following figure. We see that, at
the farm size ox1, the yield rate is oy1, and in order to
achieve this yield rate, the tenant cultivator has to use
amount of new inputs and family labour per acre
cropped. If the farm size increases to oxz, the yield rate
declines to oy2, resulting from a reduction in the use of new
inputs and family labour to OP2- Again, with the farm size as
large as OXJ, the yield rate is as low as oy3; aeca~~ ~
~I I
y p
Y=bo-b1 X (i) Y = 13 o+ 13 1 P ( i i )
Y2 --------
y 3 --------,
, I I , I I I , I I , ,
,
I I
k 1
/ I -------I __ _ , I
I I I
P= i\o- f.1x
L------:---L--· K' / I I I
I I
' 0 X1 X2 X3 p 1 P2 P3 0 Xl
--------------> <----------- ------------------> Size of Farm Amount of New Size of Farm
Note
because of
to op 3- We
of farm and
3rd-part, of
use of new
k lX 1 (=op1).
Inputs & Family Labour
y = yield per acre cropped
x = size of farm
p = Value of new inputs and family labour used per acre cropped
a fall in the use of new inputs and family labour
derive the inverse relationship between the size
the use of new inputs and family labour in
this figure. When the size of farm is ox 1, the
inputs and family labour per acre cropped is
If the farm size increases to ox 2, the use of new
inputs and family labour per acre cropped declines to k2 x2
(=op2 ), and so on. It is in the fitness of things to point
out that extending the application of new inputs plus family
labour from P1 to P2 and further to P::s is based on the
assumption that there is a proportional relationship between
the two. Earlier in our analysis, we have observed that the
per acre value of new inputs (variable Kt) is highly
278
correlated with the imputed cost of family labour (variable
L2). Our underlying assumption is, therefore, not without its
empirical justification.
So far so good. However, the efficiency of the farms
with respect to the use of new-inputs and family labour may
not be on similar footing under different tenancy forms. In
order to measure the efficiency of the farm in this
respect, we use output elasticity of new
labour. We see in Table-8.4 that output
inputs and family labour under fixed rent
and 0.173 respectivly, under share crop
0.043, and under both systems combined,
inputs and family
elasticity of new
tenancy is 0.037
tenancy 0.012 and
that is 0.080 and
0.064 respectively, and under owner cultivation system, it is
0.032 and 0.113 respectively. All this indicates that output
elasticity of family labour in each case is comparatively
larger than that of new inputs. Further, comparing fixed rent
with share crop tenancy and owner cultivation system, we see
that both output elasticity of new inputs as well as of
family labour are larger in the former than in the latter. It
implies that the farms under fixed rent tenancy are
relatively more efficient, compared with these under share
crop system and under owner cultivation system, in the use of
the new inputs and the family labour in the process of
cultivation. Again, comparing owner ultivation system with
share crop tenancy, we observe that output elasticity of new
inputs as well as of family labour are larger in the former
than in the latter. It implies that the farms under owner
cultivation system are relatively more efficient than those
under share crop tenancy.
279
Besides, there is another implicit factor which
influences the use of inputs in the production process. It is
the economic standard of the cultivators. Under semi-
feudal mode of production, in which the subsistence
cultivation is the main feature, the economic distress of the
farmers compels them to raise production to the maximum
possible extent inasmuch as they expect that an increase in
farm income would keep them out of the vicious circle of
poverty. In any case, the poor farmer<s earnest endeavour is
always to arrange a daily square meal for his family without
going to the door of the landlord or money lender. Of
course, many of the sample observants, especially those
belonging to the marginal and small size farms, were frank
enough to admit the above. If so, it is obvious that the
production of the marginal and small farms, many among whom
suffer from the subjugation of poverty, would be greater
compared with that of the relatively better-off cultivators.
In this section, we wish to test the relation between the
size of farm and the economic standard of the farming
household. For measuring the economic status of the
cultivating households, we use some selected indicators as
follows:
Firstly, we estimate the average net farm and non-
farm incomes of the cultivating households by size class and
tenancy status. Secondly, monthly per capita consumption
expenditure of the cultivating households in each size class
under various agrarian cagtegories are computed. Finally, the
average saving-income ratio of th~ cultivating households is
derived. While computing saving~income ratio, income is
defined as the sum of annual net farm income, net non-farm
income and all transfer payments(including rental income,
interest received on capital, dividend on shares etc.), and
net saving is defined as the difference between net household
income and total annual net expenditure. Total annual
expenditure is consciously split into three components, vlz.
consumption expenditure of routine nature (CE), expenditure
other than consumption (EO) like expenditure on marriage,
funeral, etc, and repayment of loan including interest (RL).
Investment expenditure is excluded from the expenditure side.
Net saving,in this case, comprises cash in hand, cash
deposits in bank, loans and advances to others and
investments in land development, business, etc. Net saving of
a household can be positive, negative or zero. The
saving-income ratio (SIR) could be defined as the amount of
net saving per unit of annual household income. All estimates
are annual figures pertaining to the reference year of the
survey.
indicator
household.
The saving-income ratio (SIR) is an appropriate
to
If
judge the economic
the saving-income
status of cultivating
ratio takes a higher
positive value, it implies that the household is economically
better-off; and in the case of higher negative value of the
SIR, it means that the household is highly deficit. If
the SIR of a household is zero, it means the household is
neither better-off nor worse-off in respect of economic
status. In any case, the degree of severity of economic
standard is directly linked to the numerical value of the
SIR.
Table - 8.5 Fara and Non-Fara lntaat al tht Cultivating Hausthold by Sizt Class and Agrarian tat~gary
fin rupees)
-------------------------------------------------------------------------------------------------------------------------------------------Pure ovner-andOwner -tua-lessor
Average Average Fara Non-Fara lntoae lntoaet
I 2
Untrrigated Villag.s 1
"argtnal 1 1599.11 2357.81 S.all 1 3513.11 3931.11 large : 5899.11 4751.18 All Site Cluus 1 2714.18 316~.11
Aver age Per Capt h Fuily lntoae lntoae
3 4
3956.18 689.11 7443.11 9~ ... 18649.11 1173.88 5879.18 848.18
Pure tenant-andowner -tUa-t en ant
AveriiJI! Fara lntoae ~
Average Non-Fara lncoaet
6
2713.tt 1468.18 3988.81 1664.18 7432.81 1689.11 3884.81 1548.88
All Agrarian Categori.s
Avenge Fuily JnCOII8
Per Capita Average Averagt lncoaa Fara Non-Fan
lncou lncol&f 1 8 9 II
4181.11 767.88 2117.18 2124.te 5652.11 783.18 3732.11 2884.88 91141.81 992.11 6499.88 3521.11 5352.18 819.11 3151.18 2248.11
Average Faitily Jncoae
11
Per Capita lncoee
12
4141.18 717.81 6616.H 863.18 11121. tt 1143.88 5398.81 797.11
-------------------------------------------------------------------------------------------------------------------------------------------Irr.igated Vilhgu ' "arginal 1 3542.11 6792.11 11244.88 1754.11 3349.81 3618.18 6967.11 1214.11 3399.81 ~144.tt 8~43.81 1476.11 Seal I 1 8248.M 13569.11 21817.11 24~6.11 ~321.11 3328.18 8649.81 1231.18 7311.11 18292.81 17613.11 2166.11 large 1 11717.11 17782.81 28499.11 2737.81 18957.11 8581.80 194~7.81 2114.81 11763.11 16114.11 26777.81 2628.11 All Siu ClanK I 5893.81 11391.81 16283.81 2286.11 4149.18 3879.11 7928.18 1279.81 5182.81 752~ ... 12617.11 1838.11
lli Saapll! Vii hges 1
~rginal I 2481.11 4469.18 69~8.11 1288.81 3188.81 2882.18 5911.88 1049.81 2765.11 3714.11 6479.81 1133.18 Stall 1 5631.11 8242.88 13873.81 1647.18 4398.11 2176.18 6574.11 921.88 5131.81 5778.11 18918.18 1364.81 large 1 8541.81 11896.81 21437.11 2185.11 8~17.11 3729.08 12246.11 1338.11 8534.11 9483.11 18817.81 1822.11 All She Cluus 1 4249.et 6653.11 18912.11 1525.11 3932.81 2769.11 6781.18 1154.11 4116.18 922.11 9138.18 1341.81
-------------------------------------------------------------------------------------------------------------------------------------------1 Transfer payaents, negligible in quantu• although, art included in non-fare incoae.
I),J ()) ......
282
In Table 8.5, we estimate net farm and net non
farm income of the cultivating household by different size
class for
separately,
together.
unirrigated
and finally,
In each case,
for
we
and irrigated villages
all sample villages taken
classify the cultivating
households into two broad groups: (i) owner cultivators which
comprise pure owner cultivators and lessor-cum-owner
cultivators, and (ii) tenant cultivator group, similarly,
comprising owner-cum-tenant cultivators and pure tenant
cultivators. Moreover, for this part of the analysis, the
large size class of farm includes the medium size farm as
well. Such rearrangement is necessitated by lack of adequate
number of observations.
Starting with the category of owner cultivator, we
see in Table-8.5 that the average farm income and average
non-farm income of the cultivating household are
invariably increasing with increase in farm sizes. The
average per capita income of this group is also increasing
as we pass from the lower size class to the higher size class
of farms. For example, for the category of owner cultivators
in the unirrigated villages, the average per capita
income is Rs. 689.00 for the marginal farm, Rs 925.00 for the
small farm and Rs. 1073.00 for the large farm; in the
irrigated villages, it is Rs. 1754.00 for the marginal farm,
Rs. 2456.00 for the small farm and Rs. 2737.00 for the large
farm; and in all sample villages, it is Rs.l200.00 for the
marginal farm, Rs. 1647.00 for the·small farm and Rs. 2005.00
for the large farm.
J
283
We observe similar results in the case of tenant
cultivators in each set of sample villages. That means that as
the farm size of tenant cultvator increases the
corresponding farm income, non-farm income and aver3ge per
capita income of the cultivating household increase. For
example, in the unirrigated villages, the average farm income
is Rs. 2713.00 for the marginal tenant, Rs. 3988.00 for the
small tenant and Rs. 7432.00 for the large tenant. The
average non-farm income of the marginal, small ano large
tenants is Rs. 1468.00, Rs. 1664.00 and Rs 1609 respectively.
The average per capita income of the marginal, small and
large tenants is Rs. 767.00, Rs.783.00 and Rs.992,00
respectively. Similarly, in the irrigated villages, the
average farm income for the marginal, small and large tenants
is Rs. 3349.00, Rs. 5321.00 and Rs. 10,957.00 respectively,
whereas the average non-farm income for those tenants is Rs.
3618.00, Rs.3328.00 and Rs. 8500.00 respectively. Further,
their average per capita income is Rs.1214.00 for marginal
tenant, Rs. 1230.00 for the small tenant and Rs. 2104.00 for
the large tenant.
Moreover, a comparison between tenant cultivator and
owner cultivator in the unirrigated villages shows,
irrespective of size classes, the average farm income of the
tenant cultivator is greater than that of the owner
cultivator,whereas the average non-farm income of the former
is lower than that of the latter. But, in the irrigated
villages, both the average farm income and the average
non-farm income of the tenant cultivator are lower than that
of the owner cultivator.
284
The pattern of distribution of farm and non-farm
income among the cultivating households in Table-8.5 indicates
clearly the intensity of dependency of households on farm
income and the •trade-off' between on-farm and off-farm
employment. A study on inter-size class distribution of farm
and non-farm incomes either in irrigated or in
unirrigated villages shows that the proportion of farm income
to non-farm income increases sharply, as we move from lower
size farm to higher ones. The households having large size
holdings depend much more on their farm income, whereas those
with smaller size holdings rely relatively more on non-farm
sources of employment and income. Since for the small size
cultivators, the land resource is very limited compared with
the quantum of the available family labour, the surplus of
working members is pushed out from their own cultivation
towards non-farm activities; in other words, the smaller size
operating households put relatively more labour days on out
side activities than on their own cultivation. On the other
hand, the households having large size farms are not under
any acute pressure and do not face the contigency of engaging
themselves in non-farm activities, because their land
resources are much more to provide employment to their family
members; even during off-seasons, they rather prefer leisure
to work since the farm income would be sufficient enough to
feed their families in a fairly satisfactory manner.
Nevertheless, a permit of great significance is that in some
cases, the households having larger size farms do earn very
high level of non-farm income compared with their farm
income. This is so because of much better resource positional
contacts, or, better educational background or more trained
285
hands, the family members working outside agriculture were
engaged either in private/government jobs drawing attractive
salaries or carrying on large size business on their own .
For example, in Dolasahi village, among the medium and large
size owner cultivators and owner-cum-lessors, two were
school teachers and one was a business man. Such
sporadic cases notwithstanding, the general pattern of
inter-size class distribution of farm and non-farm income
clearly shows that the intensity of dependency of the
cultivating households on farm income increases as the farm
size expands.
Further, in table 8.5, the pattern of income
distribution between unirrigated and irrigated villages
reveals a clear •trade-off' between on-farm and off-farm
employments. In other words, as one cultivating household
moves from the unirrigated conditions of cultivation to the
irrigated conditions, it avails itself of proportionately
higher off-farm employment facilities. For example, for all
agrarian categories, the proportion of non-farm income to
' farm ~ncome 'in the unirrigated villages is 1.01, 0.77 · and
0.54 for the marginal, small and large farms respectively,
whereas in the irrigated villages, it is 1.51, 1.27 and 1.45
for the three categories respectively; for all size classes,
it is 0.72 in the unirrigated villages and 1.28 in the
irrigated villages. Thus off-farm employment opportunities in
the irrigated villages are greater than those in the
unirrigated villages. It may be due to the fact that
agricultural development itself triggers off a lot of non-farm
activities in the local village economy itself. During our
286
own survey, we observed that in the irrigated villages most
of the cultivationg households were engaged in a number of
ancilary activities besides their own cultivation such as
food processing, business, transportation, etc. In constrast,
in the unirrigated villages, most of the cultivating
household remained unemployed during the off-season.
The irrigated and unirrigated villages taken
together, we observe that the average farm income of the
marginal tenant cultivator is greater than the average farm
income of the marginal owner cultivator, whereas the average
non-farm income of the former is much lower than that of the
latter. But, in the case of the small and large farms, both
the average farm income and the average non-farm income of
the owner cultivators are greater than those of the tenant
cultivator. It implies that the marginal tenants families
spend proportionately higher labour hours for their
own-cultivation than other activities. Similarly, an
examination of per capita income of the cultivating
households shows that the average per capita income of the
tenant cultivator is lower than that of the owner cultivator.
We take the annual consumption expenditure and the
per capita consumption expenditure
households as another indicator to
of the
identify
cultivating
the economic
standard. In Tables 8.6 and 8.7, we estimate the average
annual consumption expenditure and the average annual per
capita consumption expenditure of the cultivating households
by size class and the two broad agrarian categories. A
study
the
through size class, for either category,
average annual family expenditure of
reveals that
the marginal
Table - 8.6 Average Annual Met lncaae, Net Expenditure, Net Saving and Saving - lnco•e Ratio of the Cultivating Household
lin rupee~)
-------------------------------------------------------------------------------------------------·----------------------------------------------------Site of Far a
Pure Owner-andOvner-cua-lessor
Pure Tenant-and-Dwner cull-'t.enant
------------------------------------------------------------------------------------------------------------------------------------------------------RCE PCRE EO RL NE Ill SIR RCE PCRE EO RL N£ HI SIR
------------------------------------------------------------------------------------------------------------------------------------------------------"arginal 4838.11 783.81 496.88 -- 4534.88 3956.88 -8.146 4689.88 845.81 375.11 48.et 5832.&8 4181.11 -8.284
Unirrigated Saall 5534.11 688.88 429.88 38.10 6981.88 7443.~8 8.196 5682.1!1! 787.18 395.H - 6177.88 5652.88 -1.175 Villag&s
Large 7927.81 798.88 518. til 28b.8B 8718.H 10649.88 6.182 8871.1B 974.11 218.81 278.1111 9349.1!1 9841.11 -1.833
------------------------------------------------------------------------------------------------------------------------------------------------------"arginal 7296.111 1249.1111 8211.8t 88.88 8214.81 1~244.et 1.199 6069.88 1157.8t 418.18 229.88 b716.1t b967.11t 1.1137
trri gated Saall 121111.11! 1352.1!1 3647.11 288.88 l5945.ttl 21817.611 1.2b9 11392.18 825.81 625.H8 16.111 7133.11 8649.11 1.187 Vi II age!i
Large 13941.81 2257.81 1235.11 823.1!8 15999.111 28499.01 1.439 14788.88 1589.88 - 3425.81 18125.11 19457.18 1.168
------------------------------------------------------------------------------------------------------------------------------------------------------"arginal 5589.18 965.H 651.18 42.18 6281.81 6958.118 1.896 5515.18 979.81 395.11 161.11 6178.11 59lt.lll -8.822
All Suple Saall 8431.11 111!2.18 1869.11 151.88 18451.1!8 13873.11 8.247 5981.89 799.81 46b.et 5.111 637l.tl 6574.81 8.13l Vi llagas
Large 11222.tl 14211.18 913.81 581.18 12715.1!8 21437.18 8.378 lll6b5.81 l165.tB 139.11 1246.1!1 12158.18 12246.11 1.116
------------------------------------------------------------------------------------------------------------------------------------------------------Mote 1 RCE = Routine Consuaption R¥penditurt.
PCRE = per capita routine consuaption expenditure. EO c expenditure other than con1ueption !excluding investDent expenditure) RL • repayaent of loan including interest.
TAE = total annual tlptnditurt ICE+EO+ftll. HI : net incoae.
SIR • 1avinq - incoat ratio.
N 00 ....;J
288
Table - 8.7 ~Rragt Annual Elpenditure, let lntoae and Saving - lntoee Ratio of
Faraing Household for All Agrarian Cattgorie'
Hn rupees!
Unirrigated Villages
Site of hn
lbrginal
Saall
large
RCE
4252.81
5612.88
82'13.11
PCRE EO
754.H 451.18
731.H 413.11
863.U 383.111
f
RL NE Ill
18.11 4721.11 4841.6 -1.168
21.11 683~ ... 6616.H 1.188
283.88 8'15'1 .• tH2t.M 8. lib
---------------------------------------------------------------------------------------------------flarginal 665'1.11 1151.11 686.11 16t.M 7426.11 8543.11 I. t3t
Irrigated Saall 11212.11 1lfl.U 2681.11 281.11 13193.H 17683.M 8.256 Yilll!jl'S
Large 14886.18 2893.11 1110.88 13t'I.H 16485.6 26777.11 8.387
---------------------------------------------------------------------------------------------------ftarginal 5556.81 972.81 534.tl '15.11 6185.tl 647'1.18 8.145
All Saaple Saall 7483.H 925.11 1299.18 '11.11 87'13.81 11918.81 1.1'14 Yillil}t&
Large l1t57.11 1341.11 677.18 777.81 12511.H 181117.tt 1.316 -------------------------------------------------Mote : RCE = Routine Consuaption expenditure.
PCRE = per tapita routine tonsuaption expenditure. EO = expenditure other than tonluaption (extluding investaent ezpenditure) RL = repayaent of loan intluding interest. N£ = Net expenditQre (CE+EO+RLI 11 =Saving- lntoae Ratio III = Net lntoae.
289
cultivator is less than that of the small cultivator, and
further, the average family expenditure of the small
cultivator is less than that of large cultivator under any
S'=t of sample villages.
We observe certain deviations in the case of per
capita consumption expenditure of the cultivating
households. For example, in the unirrigated villages, the
average per capita consumption expenditure of the marginal
cultivator is greater than that of the small cultivators both
under owner cultivation and tenant cultivation systems. But,
in the irrigated villages, the average per capita consumption
expenditure of the marginal cultivators is less than that of
the other size class of farms under owner cultivation system,
whereas under tenant cultivation system, the per capita
consumption expenditure of the marginal cultivator is greater
than that of the small cultivator.
However, irrespective of such deviations,we note
.that both the marginal and small cultivators in each set of
sample village incur lower average per capita expenditure
than the large size cultivators.
Finally, an examination of the indicator of the
saving-income ratio (SIR) shows that in the unirrigated
villages, the average saving-income ratio is negative for the
marginal cultivating households and is positive for the small
and large size of cultivating households (Table-8.7). For
example,
marginal
the average saving-income ratio is -0.168 for the
cultivators, as low as 0.088 for the small
cultivators and only 0.106 for the large cultivators. In
290
sharp contrast, in the case of irrigated villages, the
average saving-income ratio is positive for all size classes
of cultivators.In particular, it is extremely redeeming to
see the big improvement from -0.168 in unirrigated villages
to +0.131 in irrigated villages in the case of margnial
farmers.For such petty farmers the blessings of tecnological
improvements (proxied by irrigation) reflecting themselves in
tremendous increase in farm income (from Rs 2017.00
3399.00, Table 8.5, col. 9) as well as non-farm income
Rs. 2024.00 toRs. 5744.00, Table 8.5. col. 10) need
to Rs
(from
to be
underlined in particular. For small and large farmers also
the improvements are quite impressive.
Moreover, a careful scrutining of Table-8.6
further shows that between different size classes under each
agrarian category, a more or less similar same pattern in the
value of average SIR holds as we observed above. It's
implication is obvious that, in many cases, the marginal
cultivators incur negative savings (net borrowing) as
proportion to net income and indicates their week economic
standrad; whereas in other extreme, the large cultivators in
many instances secure a greater positive net saving as
proportion to net income, which implies their better economic
standard.
Besides, a comparison between owner cultivator and
tenant cultivator in each set of sample villages points out
that the average saving-income ratio of the owner
cultivator is greater than that of the tenant cultivator
corresponding to each size class. For example, in all sample
villages, whereas the average SIR for tenant cultivator is
291
-0.022, 0.031 and 0.016 corresponding to marginal, small and
large cultivators respectively, for the owner cultivator, it
is 0.096,0.247 and 0.378 corresponding marginal, small and
large size class respectively. It is interesting to note that
in the unirrigated villages, the average saving-income ratio
for each size class of tenant cultivator is negative, and it
declines as the size of farm increases. Thus it implies
that the tenant cultivators are economically worse off
compared with the owner cultivators.
Looking across the agrarian classes, we find that
the marginal tenant cultivators are in real economic
distress. Still more, such cultivators in the unirrigated
villages are in far deeper water.
On the basis of the results based on the above three
indicators: average family income, average family consumption
expenditure and average saving-income ratio, we conclude that
the marginal cultivators figure at the
economic ladder in general and
cultivators remain at the worst
lowest rung of the
the marginal tenant
economic position in
particular.
(especially
The economic distress of the marginal cultivators
the tenant cultivators) in the subsistence
agriculture partly acts as a compelling factor for them to
stimulate initiatives for raising their farm income by
adopting new technology_ and using land and family labour as
much effectively as they can within the parameters of the
given socio-economic and technological environment
column 5 against column 1 in Table 8.5).
(see
Further, in order to authenticate the above
results, we estimate in Tabl&-8.8 the incidence of poverty
292
Tabltt 8.8 lncidance of Poverty1 aaong CUltivating Households.
Irrigated villaqt!t-
flirginil Firat
Sial I Fin:
large Fin:
All size classe~:
Unirrigated villages:-
ftarginil Fua:
S.all Fin:
large Fire:
All size classe~:
flirginal Fin:
Stall Fan:
All size tlasse~:
Pure O.ner-andO~mtr -cua-1 euor
42 ••
11.76
17.65
38.95
81.82
57.14
35.71
68.89
62.86
38.84
25.81
58.57
Pure ttnant-andO~~ner-cu.-tenant
59.26
51.H
1.18
54.55
84.85
77.78
33.33
75.ee
68.97
23.18
64.29
tlote: • lntidence of poverty is defined as tbe percentage of cultivating households bela. the pDYtrty line.
(a) Poverty line= per capita annual consueption etpenditure (rurall at 1987-88 price level is Rs. 1175.1.
All agrarian tabgories
51.96
24.H
14.29
41.33
82.95
66.67
34.78
71.33
65.~
58.11
25.11
56.33
293
among the cultivating households (percentage of cultivating
households below the poverty line). We define the poverty
line in terms of per capita annual consumption expenditure
(for rural Orissa) at 1987-88 (survey year) price livel 11 and
derive the poverty estimates for various agrarian categories
as well as in various size classes. Overall, in the irrigated
villages, around 41.33 per cent of cultivating households
remain below the poverty line, whereas in the unirrigated
villages, as many as 71.33 per cent of such households are
below the poverty line; in all sample villages taken
together, it is as much as 56.33 per cent.
A scrutiny through size classes (for all agrarian
categories) shows that the incidence of poverty is much
greater for the marginal cultivators compared with small
and large cultivators.For example, the incidence of
poverty for marginal, small and large farming households in
the irrigated villages is 50.96 per cent, 24.00 per cent and
14.29 per cent respectively, and in the unirrigated villages,
it is 82.95 per cent, 66.67 per cent and 34.78 per cent
respectively. In all sample villages taken togeter, it is
65.63 per cent for marginal cultivators, 50.00 per cent for
small cultivators and 25.00 per cent for large cultivators.
11. Poverty line in terms of per capita annual consumption expenditure for rural Orissa at 1960-61 price level was Rs. 167.00 (see V.M. Dandekar and N. Rath, Poverty in India', Indian School of policical Economy, 1971, P-9). In Orissa, the consumer price index for agricultural labourer in 1987-88 (1960-61=100) was 703.5. We expressed the above poverty line at 1987-88 prices as follows:
703.5 Poverty line (at 1987-88 prices)= Rs. 167.0 x
100
= Rs. 1175.00.
294
Comparing pure owner plus owner-cum-lessor
cultivators with the pure tenant plus owner-cum-tenant (for
all size classes), we observe that the incidence of poverty
is much higher in the latter group than in the former
group. For example, in the irrigated villages, about 30.95 per
cent of pure owner plus owner-cum-lessors and as many as 54.55
per cent of pure-tenant plus owner-cum-tenant remain below the
poverty line. Similarly, in the unirrigated villages, 68.89
per cent of pure owner plus owner-cum-lessor and as large as
75.00 oer cent of pure tenant plus owner-cum-tenant report
below the poverty line. In all sample villages taken
together, about 50.57 per cent of pure owner plus owner
cum-lessor and 64.29 per cent of pure tenant plus owner-cum
tenant are below the poverty line.
Looking at the position, both agrarian categorywise
and size classwise, we discover that the incidence of
poverty is much higher for the pure tenant plus owner-cum-
tenant belonging to the marginal size class. In other
words, most of the marginal tenant operators, a
majority of whom were found to be petty land owners or
landless, were living below the poverty line. It implies that
the incidence of poverty of the cultivating household is
inversely related to the size of operational holding, and
secondly, if somehow the tenant operators acquire the
ownership status, the incidence of poverty gets reduced.
The main findings eruanating from the. preceding
analysis in this chapter are as follows:
295
The cropping intensity is higher for the
marginal cultivators and is relatively low for the small and
large cultivators. The fixed rent tenants display a better
performance in respect of the cropping intensity compared
with the share crop tenants and owner cultivators.
Particularly, the marginal cultivators under the fixed rent
tenancy show relatively higher efficiency in cultivating land
more intensively.
We observe an inverse relationship between yield
rate and size of farm both in irrigated and unirrigated
villages. In the irrigated villages, the inverse relationship
between yield rate and size of farm is significant both under
fixed-rent and share crop tenancies. On the other hand, in
the unirrigated villages, this is significant in the case of
the owner cultivation, whereas both in the share crop and
fixed rent systems, it is not significant.
The inverse relationship between yield rate and
farm size is due mainly to two factors:variation in the use
of new inputs and in the use of family labour. We find that
both under fixed rent and share crop tenancies, the
degree of correlation between yield rate and new inputs is
relatively greater than that between yield rate and family
labour. Moreover, the degree of correlation between yield
rate, new inputs and family labour is higher for the fixed
rent tenants than the share crop tenants.
We observe the positive relationship between yield
rate and new inputs and family labour either under the fixed
rent or under the share crop system. When w~ look at both
296
systems combinedly,we see that the coefficient of new
inputs is significant even at 0.01 level, whereas the
coefficient of family labour is not significant. That
indicates that the variation in yield rate is contributed
significantly by the new inputs than that by the family
labour. Since the yield rate is inversely related to the size
of farm and again, the yield rate is positively related to
the use of new inputs and family labour, it implies that the
use of new inputs and family labour is inversely related to
the size of farm. In other words, the small size tenants use
the new inputs and family labour at a higher rate than that
by the large size tenants. The farms under fixed rent tenancy
are relatively more efficient compared with their
counterparts under share crop tenancy, in the use of new
inputs and family labour in the production process.
There is an implicit factor which influences the
effective use of the new inputs and the family labour in the
process of production. It is the economic standard of the
cultivator. We measure the economic standard of the
cultivating households by using per capita income, per capita
consumption expenditure and saving-income ratio of the
cultivating households.
In the unirrigated villages, the average farm
income of the tenant cultivator is greater than that of the
owner cultivator, whereas the average non-farm income of the
former is lower than that of the latter. In the irrigated
villages, both the average farm income and the average
non-farm income of the tenant cultivator are lower than that
of the owner cultivator. The irrigated and unirrigated
~7
villages taken together, we see that the average farm income
of the marginal tenant cultivator is greater than that of the
marginal owner cultivator, whereas the average non-farm
income of the former category is much lower than that of the
latter. Similarly, on an average, the per capita income (farm
income and non-farm income) of the tenant cultivator is lower
than that of the owner cultivator.
In the unirrigated villages, the average per
capita consumption expenditure of the marginal cultivators is
greater than that of the small cultivators both under owner
cultivation and tenant cultivation systems. But, 1n the
irrigated villages, the average per capita consumption
expenditure of the marginal cultivators is less than that of
the other size class of farms under owner cultivation system,
whereas under the tenant cultivation system, that for the
marginal cultivator is greater than that for the small
cultivators. In all the villages taken together, the average
per capita consumption expenditure of the marginal and small
cultivators is lower than that of the large cultivators.
In the unirrigated villages, on an average, the
saving-income ratio is negative for the marginal
cultivating households and is positive for the small and
large size of cultivating households. Similarly, in the
irrigated villages, although the saving-income ratio is
positive for all size class of cultivators, yet it is
extremely low for the marginal cultivators and so much at
higher for the large size cultivators. Moreover, a comparison
between the owner cultivator and tenant cultivator in each
set of sample villages, shows that, on an average, the
'
298
saving-income ratio of the owner cultivator is greater than
that of tenant cultivator corresponding to each size class. '
Most of the marginal tenant operators, a
majority of whom were found to be petty land owners and
landless, were living below the poverty line. Firstly, the
incidence of poverty of the cultivating households is
inversely related to the size of operational holding, and
secondly, if the tenant operators acquire the ownership
status, the incidence of poverty gets reduced.
We conclude that, by and large, the marginal
cultivators make up the lowest economic stratum in general;
among them, the marginal tenant cultivators reflect the worst
economic condition in particular. It is quite obvious that
the economic distress of the marginal cultivators
(especially, the marginal tenant culticators) compels them to
raise production in an absolute sense for in that lies their
very survival. Since agriculture is the main source of
income, the marginal tenant cultivators try their best to
increase agricultural production, which would help them to
escape from the vicious circle of poverty or better still,
from the clutches of starvation. Thus they make an earnest
effort to use land for more than one crop and to use new
inputs and family labour extensively and intensively within
the parameters of the given socio-economic and technological
environment.
299
CHAPTE1~- IX
SUMMARY ANl-::> CONCLUS.IONS
The semi-feudal production relations in Orissa
agriculture is
policy decisions
not a new phenomenon. Consequent to the
taken by the British Government, especially
in terms of the 1897 settlement on ownership status to be
assigned to
be designated
the tenant cultivators, Orissa agriculture could
as a pure-feudalistic. Since the early days of
the present century, the severity of serf-lord relationships
in agriculture started to be lessened through the
enlightenment of national movement for Independence. Even,
since the abolition of Zamindari system, the pre-existing
agrarian relations took different directions. The erstwhile
zamindars and other intermediaries such as choudhuries,
kanungoes, makadams and jagirdars retained a major percentage
of their owned land under the guise of self-cultivation and
avoided the land ceiling by distributing and assigning
ownership to own family members, and consequently, they became
big landlords. They kept som~ pieces of owned land for self
cultivation by hiring basically tenant labour and leased~out
a larger size to different proletarian cultivating classes,
generally under fairly stringent terms and conditions. In
essence, they continued with their privilege and proprietary
positions as before. As a result, such an abused pattern of
agrarian relations led to a multi-faceted inter-locking
arrangements between the lessor and the lessee in the land
lease markets, and consequently, most of the timid tenant
cultivators were subjected to exploitation in various ways by
their landlords.
300
A look at agriculture in Orissa on the eve of
Independence, proves clearly that the historical causes are
rather more prominent
backwardness. In the
than
face
immediate ones for its
of continuing pressure of
population, the law of inheritance was causing the lane
holdings to get sub-divided. The British Government also
encouraged the policy to sub-divide the holdings, because the
process of rack-renting and rent collection would than be
easier. The process of sub-division continued unabated till
Independence. The continuing process of sub-division of
holdings might have drastically reduced the average size of
holding. Similar to the pattern observed for many other
states, the land distribution structure in Orissa was fairly
acutely skewed when the British rule ended in 1947. The
productivity of land showed a consistently declining trend
till the dawn of Independence. The cropping pattern was very
heavily dominated by food crops, especially rice.
The incidence of rent and various awabs (cesses)
with penalty
peasantry. The
compelled some
taxes was much heavier on the lower strata of
over-burden of such awabs and penalty taxes
tenants to desert their land and migrate to
other places. This was seen to be continuing even till the
abolition of zamindari system in Orissa. The wages to the
labourers and artisans were in the form of cash or in kind.
The wage in cash was increasing, but real wage was declining
due to relatively higher increase in the prices of essential
goods that occurred continuously between 1900 and 1947.
The irrigation base in Orissa was very poor on the
eve of Independence. Moreover, it was concentrated only in a
301
few regions. The canal irrigation system was started towards
the end of the nineteenth century. Moreover, the Zamindars
were less inclined to allow the tenants to use canal water
because they were expecting that the revenue assessment of
such land would then be higher resulting in net loss to them.
On the eve of Independence, Oriya peasants were largely using
traditional technology, based on labour-intensive methods of
production. The village mahajans, moneylenders, traders,
contractors and super-ior cultivators were the main source of
credit in rural Orissa.
The available evidence shows that on the eve of
Indepencence, the small and marginal farmers were producing
relatively more on per acre basis than the big farmers. They
could derive the benefit of higher output per acre primarily
because the production technology was highly labour-intensive,
and these were the farmers who had sufficiently higher quantum
of family labour for every acre of land operated. Common with
the situation in many other states, the small and marginal
farmers were forced to sell their produce just at the time of
harvest, when the price was relatively lower, because of their
obligation to defray their debt soon after the harvest. c
left without much stok of food for ~
Consequently, they were
survival in times of frequent scarcity. The village money
lenders, mahajans and big-farmers thus extracted extra gains
out of the poor farmers primarily because of the distress
under which the latter had to operate.
In sum, on the eve of Independence. there were
numerous structural, technological, institutional and economic
constraints, which were faced by the lower strata of the
302
peasantry in Orissa. These categories of farmers were
generally exploited through high •-ates of rent with extra-rent
cesses (awab) by a number of intermediaries and the feeling ot
insecurity of tenure affected them much more grievously than
higher farm operators. Since Independence, like many other
states, Orissa Government too has been implementing a number
of programmes for improving state agriculture. However, in
many aspects, their performance lagged much behind the All
India level. For example, the lower level of irrigation along
with the traditional sources became major impediments for a
mass technological switchover and consequently, lower yield
rates of the dominant crops as well as a lower overall
productivity of land followed. The weaker infrastructure and
institutions also contributed largely to agricultural
backwardness. Besides, in respect of influence of tenancy, the
share cropping dominated over other forms of tenancy. Since
the share crop tenancy is generally believed to be more
exploitative than the fixed rent tenancy, relatively a higher
incidence of the former would be, inter. ~lia, responsible for
overall technological backwardness as well as lower
productivity of land in Orissa agriculture.
In order to understand the nature of tenancy
relations in Orissa agriculture in a more scientific and
authentic manner, the need for micro-level field data can be
emphasized. The present study fulfills this requirement by
analysing detailed household-level data on various aspects of
tenancy. The main objectives of our study are: (i) to examine
the structure of land lease markets, conditions for lease and
mode of exploitation of tenant cultivators, (ii) to estimate
303
relationship between land under different tenancy systems and
use of new agricultural technology, and (iii) to test the
production efficiency of farms under various tenancy systems.
The primary data were collected both through purposive and
random sampling. The ultimate sampling unit is a farm
household. The final sampling units (farm households) are
chosen randomly without replacement, strictly adhering to the
principles of simple random sampling. The field data came from
villages in two districts, Balasore and kalahandi.
The selection of sample districts took two major
considerations into account: The general level of agricultural
development and the incidence of tenancy in the district. For
the former criterion, we chose five major indicators, namely
land utilisation, irrigation base, cropped area under HYVS,
use of the most crucial modern input, namely fertilisers and
yield rate for the most dominant crop: rice. On the basis of
the districtwise values of those five indicators, we ranked
all the thirteen districts of Orissa, and again, taking final
rank values into consideration, we classified these districts
into three broad groups: Group-! comprised those districts
which secured lower final rank values, Group-III comprised
those distric~s which secured relatively higher final rank
values and intermediate Group-II consisted of the remaining
districts. Accordingly, districts Cuttack, Puri, Sambalpur,
Ganjam and Balasore occupy the first five ranks and qualify to
go to
block
Group-I representing the agriculturally progressive
of districts. The next four ranks are occupied by
districts Bolangir, Mayurbhanja, Dhenkanal and Phulabani and
they constitute Group-II. This group implies an intermediate
304
level of agricultural development. Lastly, the remaining four
districts Koraput, Keonjhar, Kalahandi and Sundargarh take the
last four ranks in that order. Accordingly, Group-III
comprises these four districts representing backward
agricultural condition.
We selected Balasore district from Group-I which
represents agriculturally progressive districts and commands
higher incidence of tenancy. We chose Kalahandi district from
Group-III which represents agriculturally backward districts
and also bears higher incidence of tenancy.
The selection of blocks and villages is based on the
same criteria as in the choice of districts. For agricultural
development at the block as well as the village level, we took
only the percentage of irrigated net sown area into account.
- a However, in Balasore district, we chose Baulagadia and Dolas~i
villages; the former is agriculturally backward and the latter
is agriculturally advanced. Similarly, in Kalahandi district,
we selected Gopalpur and Tahnsir villages, the former being
agriculturally backward and the latter being agriculturally
advanced at their respective district standards. In all
choices, the higher incidence of tenancy has been kept as the
overriding criterion.
In each of the selected villages, we chose 75
households on the basis of stratified random sampling; in
total, the size of sample was 300. We carried on the village
survey at two stages: at the first stage, we conducted census
relating to certain selected questions such as household No.,
size of ownership holding, leased-out land, leased-in land,
305
net operated area and prepared a list for all households. At
the second stage, we dropped those households which did not
operate land; and stratified the land operating households
into four agrarian categories: (i) pure owner cultivator,
(ii) owner-cum-lessor, (iii) owner-cum-tenant and (iv) pure
tenant. Then, we classified each of the above agrarian
categories into four size classes on the basis of the size of
operational land: (i) marginal farm (operating upto 2.50
acres), (ii) small farm (operating between 2.51 acres and 5.00
acres), (iii)
10.00 acres)
medium farm (operating between 5.01 acres and
and (iv) large farm (operating above 10.00
this process of classification, we got 16 sub-acres). In
classes. We determined the size of sample in each sub-class by
adopting uniform sampling fraction. From each sub-class, we
chose households randomly.
Based on a detailed field survey, the present study
has generated a very large number of findings and insights. It
is not advisable to reproduce all our findings in this final
chapter. Accordingly, only some important results are set out
here.
is
The common agrarian feature in all sample villages
that more than one-third of cultivators are tenant
operators. Among the tenants, the marginal and small tenants
make up a big majority. For example, the percentage of tenant
households to the total is as large as 37.93, 50.33, 39.51 and
39.13 in Gopalpur, Tahnsir, Baulagadia and Dolasahi villages
respectively. Among the tenant households, the percentage
share of marginal and small tenant households is 87.27, 87.18,
85.94 and 100.00 per cent in Gopalpur, Tahnsir, Baulagadia and
306
Dolasahi villages respectively. In each of the above sample
villages, the agrarian category • 1 ' ~ owner-cum- essor oprates a ~
disproportionately larger average aereage of land with a fewer
number of parcels per acre, whereas the category •pure tenant'
operate a lower average size of land with an extremely larger
(average) number of parcels per acre.
The contractual relations between lessors and
lessees, which are exploitative in nature, correspond very
closely to semi-feudal mode of production. The supply and
demand analysis of land lease authenticates the existence of
semi-feudal mode of production in Orissa agriculture.
On supply side of land lease, we observe that in
Baulagadia and Tahnsir villages, a larger percentage of
lessors are marginal/small size owners, whereas in Oolasahi
and Gopalpur villages, a larger percentage of lessors belong
to medium and layge size ownership classes (Table 6.1). In ~
agriculturally advanced villages (Oolasahi and Tahnsir
villages), the larger class lessors compared with smaller
class lessors leased-out smaller size parcels and retained big
size parcels for self-cultivation, whereas in agriculturally
backward villages, the lessors in smaller size. class compared
with big lessors leased-out small size parcels and retained
big size parcels for self-cultivation. A majority of the big
lessors leased-out land because of the manpower in their
families was not sufficient to carry on self-cultivation and
some of their plots were far away from their residences, in
which case self-cultivation would entail higher costs. Almost
all the marginal class lessors in each sample village leased-
out some portion of their owned land due to their acute
307
financial difficulties. Moreover, in all sample villages, we
did not get any evidence of recorded lease even for a single
lease transaction; the lease was totally oral.
Although rent is fixed by the lessor through
stringent contracts and bargains, yet we subscribe to the
possibility that the offer of a little higher rent, above the
contractual rent, provides incentive to the lessor to supply
more land. In other words, the lessor leases-out higher area
of land at higher rent and vice-versa for smaller area of
land. Further, the supply of lease is more sensitive to
acceptable rent. That means, the rent elasticity of supply of
lease in the case of 'acceptable rent' is greater than that in
the case of 'actual rent received'. We also discover that both
in 'actual rent received' and •acceptable rent', the rent
elasticity of supply of lease is relatively higher in the
unirrigated villages than that in the irrigated villages. In
other words, in the unirrigated villages compared with the
irrigated villages, if the rate of rent is increased by a
small per cent, it will induce the prospective lessors to
release a
markets.
relatively
This is
larger proportion of land on the lease
quite understandable inasmuch as the
incentive of a slightly higher rent would not be a sufficient
compensation for self-production foregone under irrigated
conditions.
Besides rent, there are a couple of other variables
which also influence the supply of lease independently such as
family size of the tenant household, financial and tenancy
status of the lessee and in terms of lessor's perception,
honesty, regularity and efficiency of the tenant cultivator.
308
In all sample villages, a fairly big percentage of lessors
prefer those tenants who are landless or marginal cultivators
having large number of working members in the family (Table
6.3), presumably under the hope of forging land-labour
interlocked contracts. As we see later·, this type of
interlocking is quite common.
On the demand side of lease, we observe that the
incidence of tenancy is relatively higher in the irrigated
villages and is relatively lower in the unirrigated villages
(Table 6.4). Between size classes of tenant operators, the
incidence of tenancy is much higher in the marginal and small
size classes compared with the medium and large size classes.
The average number of parcels per acre leased-in are
relatively greater for the marginal tenant cultivators and
those are relatively lower in number for the medium and large
tenant operators. As elsewhere, there are two major systems of
tenancy which are prevalent in Orissa agriculture too: fixed
rent and share crop tenancy. The. incidence of share crop
tenancy is higher in Balasore district and the incidence of
fixed rent tenancy is higher in kalahandi district (Table
6.5). A higher percentage of leased-in land of the marginal
tenants is under fixed rent system, whereas those of the large
tenants is under share crop system. It implies that tenant
cultivators in marginal size class mostly prefer fixed rent
system, whereas the tenants in larger size classes mostly
prefer share crop system to fixed rent system.
The stringent contracts between the lessor and the
lessee with respect to land lease frequently weakens the
bargaining power of the tenant in which he is forced to enter
309
into inter-locking land lease arrangements and ultimately, it
leads to exploitation of tenants in many different ways. Since
the land leases are unrecorded, there is every possibility of
eviction of tenant from the land at any moment that the lessor
decides. The term of lease in the case of fixed rent tenancy,
in most cases, is one year. In the case of share crop tenancy,
the term of lease, through verbal understanding, is for more
than one year, but with the condition that the tenant should
satisfy the contracts that are pre-decided practically by the
lessor's side only; otherwise, the tenant would be evicted
from the lease after one year. In any system of tenancy, the
lessors donot share the cost of production; but for the costs
involved in land development, the lessors share 50.0 per cent
of the cost. Under the fixed rent tenancy, the decision with
respect to the use of inputs and supervision of leased-in
land are taken by the tenant himself and the lessor does not
interfere in these matters. But, in the case of share crop
tenancy, many decisions are taken jointly and often, even the
supervision of the work goes under joint arrangements.
On the basis of contracts between the lessor an·d the
lessee for particular piece of lease, we classify land lease
markets into four market forms: (i) land-labour inter-locked
markets, (ii) land-credit inter-locked markets, (iii) land-
labour-credit inter-locked markets and (iv) lease market free
of any inter-locking.
In the case of incidence of inter-locking lease
markets, we observe (Table 6.7) that the incidence of overall
inter-locked markets are relatively higher in the irrigated
villages than those in the unirrigated villages. Most of the
310
tenant cultivators affected by the inter-locking lease
arrangements are the marginal tenant cultivators. Comparing
the incidence of different forms of inter-locked markets, we
observe that the incidence of the land-labour inter-locked
markets is higher than the other forms of inter-locked lease
markets. Between irrigated and unirrigated villages, the
incidence of the land-labour inter-locked and the land-labour
credit inter-locked markets are higher in the former villages
than in the latter villages, whereas the incidence of land
credit inter-locked markets is higher in the latter villages
than in the former villages.
We observe certain differences between the developed
and backward regions with respect to some important features
of lease transactions both under inter-locking and non-inter
locking lease arrangements (Table 6.8, 6.11, 6.17, and 6.20).
For measuring such differences, we chose parameters such as
average net operated area, average leased-in land, average
rent paid per acre leased-in, average number of working
members of the tenant family, average value of output per acre
cropp~d and so on. We estimated the differences of these
parameters between the advanced region and the backward region
both in the irrigated and the unirrigated villages separately.
On the basis of the test of significance of these differences,
we conclude that the inter-locked lease markets possess a
higher degree of heterogeneity compared with the free lease
market. Again, a comparison between land-labour interlocking
and land-labour-credit inter-locking shows that the degree of
heterogeneity between developed and backward regions is much
higher in the former than in the latter. Furthermore, both
311
under the conditons of inter-lockings, the degree of
heterogeneity between developed and backward regions is
relatively much higher in the irrigated villages than in the
unirrigated villages.
The decision of a cultivating household to lease-in
a piece of land is governed by a multiplicity of factors, some
based on his own resource endowment structure and some faced
by him exogenously. In order to explain some important ones
out of those factors, we use ·switchover analysis' which is
exclusively based on the binary dependent variable models.
Even after a cultivator chooses to become a tenant, his
constraints take him to the allied market conditions, and
accordingly, he has to decide whether he should or should not
enter into inter-locked market arrangements. Such inter-locked
market mechanisms have their own implications towards the
tenant operators' employment and income on the one hand and
the degree of exploitation to which he is subjected to, on the
other. Again, we use •switchover analysis' to explain a set of
forces lead the tenant operators to enter into inter-locked
market mechanisms.
In the case of tenant-to-owner switchover, we
consider all the 300 sample households which comprise all the
four agrarian categories: pure-owner cultivators, owner-cum
lessors. owner-cum-tenants and pure tenants. From the point of
view of lease market operations, the first two categories are
taken together primarily because all farm operators are owner
operators whether some of them are leasing-out or not.
Similarly, the third and the four categories are clubbed to
form a group of tenant operators, out of whom, some are owning
312
a small piece of land or are entirely landless. Again, in the
case of inter-locked lease conditons, we classify tenant
households (owner-cum-tenants and pure tenants) into two
categories: one category consisting of those who are involved
in the inter-locking lease arrangements and the other group
comprising those who are quite free from the influence of any
inter-locking.
In the case of tenant-to-owner switchover, we
discover that the probability expectation of a cultivator
being a tenant is related inversely to the size of owned land
per working member of his family, proportion of non-farm
income to total income of the household and per capita income
of the household (Table 6.6). Whenever a household has a lower
size of owned land per working member or a lower proportion of
non-farm income or a lower per capita income or a combination
of all the three, there is greater possibility for him to be
converted in=to tenant operator and vice versa. If the average
standard of the tenant households in the respect of the above
variables are improved upto the average conditions of the
owner cultivators, then a larger number of tenant operators
could be converted into owner cultivators. From practical
point of view, it would be less possible to liquidate tenancy
completel¢y because the conditions affixed in the alternative
policy interventions in our •tenant-to-owner switchover' model
could be rarely fulfilled. Still, it would be quite feasible
that a larger number of tenant cultivators could be converted ~
into owner cultivators through direct policy interventions of
one kind or the other.
313
Further, there are some other factors besides those
observed in the 'tenant-to-owner swithover' analysis, which
compel a certain group of tenant households to enter into the
inter-locking lease arrangements. Here too, we use
'switchover' analysis in order to explain those factors in an
authentic manner. In this case, we analyse the switchover of a
tenant operator from the inter-locking lease arrangements to
the lease conditions
(Table 6.9) that the
free of any interlocking. We observe
probability expectation of a tenant
entering into land-lease inter-lockings is r~lated inversely
both to the size of operational land per working member of the
tenant family and the support for the tenant family availing
itself of institutional credit facilities (or chance for the
tenant family being debt free), and positively both to the
expenditure-income gap of the tenant family and per capita
income of the tenant household. Whenever a tenant household
has a lower proportion
working members of his
of the size of operational land to
family or a bleak chance for him to
avail of the institutional credit facilities (or being debt
free) or ~ greater expenditure-income gap coupled with lower
per capita income or combination of all the four, there is
greater possibility for him to get involved in=to the inter
locked lease conditions.
specific
(Tables
Coming to the results emanated from the study on a
inter-locked lease market relations, we observe
6.12 and 6.18) that in the case of land-labour inter-
locked arrangements, the probability expectation of a tenant
household entering into the land-labour inter-locked markets
is related inversely to the size of operational land per
314
working member and per capita income of the tenant household
and positively to expenditure-income gap of the tenant family
and absolute number of days worked by the lessee's family for
its lessor. Likewise, in the case of land-labour-credit inter
locked arrangements, the probability expectation of a tenant
household entering into this type of inter-locked lease
arrangements 1s related inversely to the size of operational
holding per working member, rate of rent paid per acre leased
in and positively to expenditure-income gap, absolute number
of days worked by tile lessee for his lessor and amount of loan
borrowed by the lessee from his lessor.
From the above analysis, we observe certain common
factors which are responsible for a cultivator being
transformed into a tenant operator in general and a tenant
cultivator being forced to operate under inter-locking lease
arrangements in particular. Those are: (i) the size of owned I
operated land per working member of the families, (ii) the
crucial balance between on-and off-farm employment of the
cultivating households, (iii) expenditure-income gap and (iv)
labour-days of employment and amount of consumption loan by
the lessor to the lessee. In order to let the tenant
cultivators escape from inter-locking lease arrangements and
protect them from exploitative hold of the lessors, government
policy measures should be viewed in the light of above issues.
We observe a varying degree of exploitation of
tenants under the inter-locking lease arrangements. There are
three modes of exploitation of tenants in the land lease
markets. Those are: ( i ) 'rental exploitation', (ii)
'remuneration exploitation' and (iii)'usury exploitation'. The
general trend
agriculturally
of modes
backward
315
of exploitations shows that in the
areas, the rates of 'rental
exploitation' and 'usury exploitation' are relatively much
higher compared with those in the agriculturally advanced
areas, whereas in the agriculturally advanced areas, the rate
of 'remuneration exploitation' is much higher than that in the
agriculturally backward areas, under any type of inter-locking
lease condition (Tables 6.13, 6.15 and 6.19). Comparing rates
of exploitation of tenants among different forms of lease
markets, we observe that the magnitude of exploitation is the
highest in the land-labour-credit inter-locked markets and the
lowest in the lease market free of any inter-locking.
It is indeed interesting to see that the inter
locking lease arrangements do not adversely affect the tenants
production performances (Table 6.23). Although the tenants
supply labour to their lessors under the land-labour
agreements, yet they difnot neglect their own cultivation. In
spite of a slightly greater degree of exploitations of the
marginal farmers in the inter-locked lease arrangements, they
do not let their production suffer, in any relative sense.
The study went into technology-tenancy relationships
among the sample households (Chapter-VII). A broad analysis of
production efficiency at farm level was also undertaken
(Chapter-VIII). For both these analyses, certain adjustment
with respect to size classes and agrarian categories had to be
effected. For example, the owner-cum-lessor group was merged
with the group of pure owner cultivators primarily because of
these farm operators were owner operators whether some of
them were leasing-out or not. the mixed group was designated
316
as 'owner cultivators'. The group large size farms was merged
with medium size farms because of fewer cases available for
the former, which we denoted 'large farms' (operating land
above 5.0 acres). Again, among the tenant households (owner-
cum-tenants and pure tenants), some of them were operating
under fixed rent system and some others were sharecroppers, we
called the former 'fixed rent tenants' and the latter 'share
crop tenants'.
With respect to the structure of cost of production, we
observe (Table 7.1) that the va:ue of new inputs used by the
tenant cultivator per acre cropped is generally higher than
that for the owner cultivator. Again, a comparison among farms
of different sizes shows that, on an average, the value of new
inputs used by the marginal cultivators per acre cropped 1s
greater than that by the large cultivators in both types of
agrarian categories. It implies an inverse relation between
the use of new inputs per acre and size of farm. Further, as
we move up on the farm size ladder, we see a decline in the
average amount of implicit family labour cost, but a rising
average paid out cost per acre cropped. That clearly indicates
an inverse relationship between the size of farm and implicit
family labJr cost, ~
and a positive relationship between the
size of farm and paid-out costs. In other words, the large
size farms are heavily dependent on hired labour, while their
small brethren operate mainly with family farm labour. Again,
the average paid-out cost per acre cropped is higher for owner
cultivators and lower for tenant cultivators, and the implicit
family labour cost per acre cropped is greater for tenant
cultivators than owner cultivators. This confirms the view
317
that the tenant farrns are relatively much more family-based
than the owner farms.
By ranking the cultivators with respect to the
introduction of new technology in agriculture, the fixed rent
tenant would stand first, thA owner cultivator second and the
sharecropper would be the last to come (Table 7.2 and 7.3).
Secondly, ranking among s1ze classes under either agrarian
variant shows that in the use of new inputs, the marginal farm
would command the highest rank and the large farm the lowest
(Table 7.4). Thirdly, a comparison between owner cultivator
and tenant cultivator shows that the intensity of family-based
farming 1s lower in the former and higher in the latter.
Further, comparing fixed rent tenancy with share crop t(le~ncy, ~
the intensity of family based farming is greater under the
former system than the latter (Table 7.4). Lastly looking ~
across farms of different sizes, we discover that the
intensity of family-based farming declines as we move from
smaller size farm to larger size farm.
In sum, the marginal tenant farmer under fixed rent
tenancy display a better performance in the adoption of new
technology compared with small as well as large tenant farms.
There is a positive relationship between the intensity of
family-based farming and the use of new inputs. Moreover, this
relationship is much stronger under fixed rent tenancy and
much weaker under share crop tenancy.
We discover that the size of leased-in land is
related inversely to the use of inputs (both new and
traditional inputs) and the use of family labour (Table 7.5
318
and 7.6). Under the fixed rent tenancy, the size of land lease
plays a vital role in determining the amount of new inputs and
mandays of family labour are to be used. That indicates a
significant negative correlation between size of leased-in
land and use of new technology; and also between size of
leased-in land and use of family labour. Likewise, under the
share crop system,the relation between size of leased-in land
and use of new inputs is negative, but it is not significant;
however, the relation between leased- in land and implicit
family labour cost per acre cropped is negative and
significant.
The average yield per acre of the tenant farm stands
higher than that of the owner farm in almost all sample
villages (Table 7.7). A glance through size class of farms
shows that both under owner cultivation and tenant
cultivation, again both in the irrigated and unirrigated
villages, the marginal farm stays ahead of the small and large
size farms, in respect of average yield per acre. If a
comparison is carried out between small and large farms, it
appears that in the case of owner cultivation system, the
small farm displays a better performance than the large one
with respect to yield rate. Unlike that, in the case of tenant
cultivation, the performance of the large farm is as good as
that of the small farm in thiE aspect; but when the estimation
is carried out both for owner cultivation and tenant
cutivation systems together, it shows that the average yield
rate by large farm is slightly lower than that by small farm.
In respect of yield rate gains, first, gaps between
the fixed rent and share crop tenants, and then ~etween the
319
owner cultivators and share crop tenants get widened whenever
we switch over from production conditions in the unirrigated
villages to those in the irrigated villages (Table 7.8).
Second, as a result of effecting improvements in production
technology, the owner cultivators register relatively higher
production gain compared with other agrarian categories.
The relationship between the use of new inputs and
output is positive and significant in the case of fixed rent
tenants; in the case of share crop tenants, it is positive but
statistically non-significant (Table 7.10). The marginal
product of new inputs is much greater and significant under
fixed rent tenancy compared with that under share crop
tenancy both in the irrigated and unirrigated villages. Again,
the average output elasticity of new inputs is comparatively
higher for the fixed rent tenants and is lower for the share
crop tenants, both in the irrigated and unirrigated villages.
On an average, the output elasticity of new inputs under
either system of cultivation is much greater in the irrigated
villages than that in the unirrigated villages.
Thus, in respect of the performance of the tenant
cultivators in the use of new inputs, we find that the fixed
rent tenants are more efficient in the use of new inputs than
the share crop tenants both in the irrigated and unirrigated
villages; between irrigated and unirrigated villages, in the
use of new inputs, the tenant operators in the irrigated
villages are relatively more efficient than those in the
unirrigated villages.
We attempt to examine the farm size and yield rate
relationship in the context of Orissa. Our analysis is more
320
detailed inasmuch as we wish to bring in the additional
dimensions emanating from different tenancy status, and test
two important aspects of efficiency of the farm: (i) land-use
efficiency and (ii) production efficiency of the farm. An
important indicator of land-use efficiency especially from
social point of view, 1s the level of cropping intensity
(gross cropped area divided by net operated area). A higher
value of average cropp1ng intensity would imply a greater
degree of land-use efficiency of the available farm land. For
measuring production efficiency of the farm, we consider the
magnitude of the output elasticity of a few crucial factors of
production as the new farm inputs and the use of family
labour.
Starting with land-use efficiency of the
cultivators, we observe (Table 8.1) that in general the
marginal cultivators display a better performance than the
small and large cultivators. Talking of agrarian classes, the
marginal tenant operators under fixed rent tenancy display a
performance better than all others. The farmers under the
fixed rent tenancy are much more efficient in land-use
compared with those under owner cultivation and share crop
tenancy.
From the examination of the inverse relationship
between the yield rate and the size of farm among owner
cultivation, share crop and fixed rent systems, we observe
(Table 8.2) that in the (riga ted villages, the inverse
relation between the yield rate and the size of farm is
significant under any of the above three systems of
cultivations. Unlike that, in the unirrigated villages, such a
than that of new inputs (Table 8.4). Comparing fixed rent with
share crop and owner cultivation systems separately, we
observe that both output elasticities of new inputs as well &s
of family labour are larger in the former than the other two.
Again, comparing owner cultivation system with share crop
system, we observe that output elasticity of new inputs as
well as of family labour are larger in the former than in the
latter. Thus it shows that in the use of new inputs and family
labour, the farms under fixed rent tenancy are relatively more
efficient compared with those under owner cultivation and
under share crop systems, and farms under owner cultivation
system are relatively more efficient than those under share
crop system.
The economic standard of the cultivators is an
implicit factor which influences the use of new inputs and
family labour in the process of production. The foregoing
discussion shows that the marginal farmers obtain relatively
higher yield rates and are efficient users of land resources,
new inputs and family labour, in general and the marginal
tenant cultivators under the fixed rent tenancy are the
forerunners of all others in all these aspects, in particular.
This happens owing to the economic distress of the marginal
farmers. The economic distress of the marginal farmers compels
them to raise production to the maximum possible extent
inasmuch as they expect that an increase in farm income would
keep them out of the vicious circle of poverty. In order to
authenticate the above statement, we examine the economic
conditions of the farmers among the different size classes as
well as among different agrarian categories. For this, we use
321
relation is significant under the owner cultivation system,
whereas in the case of share crop and fixed rent systems, it
is not at all significant. The owner cultivation system thus
confirms significantly the inverse relation between the yield
rate and the size of farm both 1n the irrigated and
unirrigated villages.
The inverse relationship between the yield rate and
the far·m size could, i.Dt~r. ~lj_a, be due mainly to two tactors:
the variations in the use of new inputs and in the use of
family labour. Under any system of cultivation, the degree of
correlation between yield rate and value of new inputs is
relatively greater than that between yield rate and implicit
family labour cost. The correlation between yield rate, new
inputs and implicit family labour cost is much higher for the
fixed rent tenants than that for share crop tenants and owner
again, the one for owner cultivators is higher cultivators;
than that for the share crop tenants (Table 8.3). The yield
rate is positively related to the use of new inputs and use of
family labour. Such relation is significant both under the
fixed rent and owner cultivation systems, whereas under share
crop system, it is not significant (Table 8.4). Previously, we
observed that the size of farm and the yield rate are
inversely related. Incorporating the above relations, we find
that both the use of new inputs and family labour are
inversely related to the size of farm.
Further, under each type of agrarian system
(ownership cultivation, fixed rent and share crop tenancy),
the output elasticity of family labour is relatively greater
323
a few selected indicators such as per capita income, saving
income ratio and incidence of poverty.
Both 1n the cases of owner cultivators and tenant
cultivators, the average net farm income, average non-farm
income and per capita household income (farm plus non-farm
income) of the households invariably increase with an increase
1n their farm s1ze (Tables 8.5 and 8.6). A comparison between
tenant cultivator and owner cultivator in the unirrigated
villages, irrespective of size classes, shows that the average
farm income of the tenant cultivator is greater than that of
the owner cultivator, whereas the average non-farm income of
the former is lower than that of the latter. But, in the
irrigated villages, both the average farm income and the
average non-farm income of the tenant cultivator are lower
than those of the owner cultivator. Further, the average per
capita income of the tenant household is lower than that of
the owner cultivator both in the irrigated and unirrigated
villages.
The pattern of distribution of farm and non-farm
income among the cultivating households reflects the intensity
of dependency of households on farm income and the •trade-off'
between on-farm and off-farm employment. Our analysis of
inter-size class distribution of farm and non-farm income,
both in the irrigated and unirrigated villages, shows that the
proportion of farm income to non-farm income increases
sharply, as we move from lower size farm to higher ones. The
households having large size holdings depend much more on
their farm income, whereas those with smaller size holdings
rely relatively more on non-farm sources of employment and
~4
income. Further, as one cultivating household moves from the
unirrigated
conditions,
conditions of cultivation to the irrigated
it avails itself of proportionately higher off-
farm employment facilities.
An examination of the saving-income ratio (SIR)
shows (Table 8.6 and 8.7) that in the unirrigated villages, it
is negative for the marginal cultivating households and is
positive for the small and large s1ze of cultivating
households. In sharp contrast, in the irrigated villages, the
average saving-income ratio is positive for all size classes
of cultivators. A comparison between owner cultivator and
tenant cultivator points out that the avet·age saving-income
ratio of the owner cultivator is greater than that of the
tenant cultivator corresponding to each size class. It is
interesting to note that in the unirrigated villages, the
average saving-income ratio for each size class of tenant
cultivator is negative, and it declines as the size of farm
increases. Thus it implies that the tenant cultivators are
economically worse off compared with the owner cultivators.
Moreover, the marginal tenant cultivators are in real economic
distress. Stillmore, such cultivators in the unirrigated
villages are in deeper water.
A study of the incidence of poverty both size
classwise and agrarian categorywise (Table 8.8) shows that
overall, in the irrigated villages, around 41.33 per cent of
cultivating households live below the poverty line, whereas in
the unirrigated villages, as many as 71.33 per cent of them
are below the poverty line; in all sample villages taken
together, it is as much as 56.33 per cent. It implies that the
325
production under ir-rigated conditions provides the cultivating
households with more productive avenues of employments
compared with t~se available under unirrigated conditions. 1\
A scrutiny through size classes (for all agrar1an
categories) shows that the incidence of poverty for marginal,
small and large cultivating households in the irrigated
villages is 50.96 per cent, 24.00 per cent and 14.29 per cent
respectively, and in the unirrigated villages, it is 82.95 per
cent, 66.67 per cent and 34.78 per cent respectively.,
Comparing the group of pure owner plus owner-cum-lessor with
pure tenant plus owner-cum-tenant cultivators (for all size
classes), we observe that the incidence of poverty is much
higher in the latter .than in the former. For example, in the
irrigated villages, about 30.95 per cent of the former and as
many as 54.55 per cent of the latter are below the poverty
line. Similarly in the unirrigated villages, 68.69 per cent of
the pure owner plus owner-cum-lessors and as many as 75.00 per
cent of pure tenant plus owner-cum-tenants live below the
poverty line.
From the foregoing discussion, it follows that
firstl~ irrigation is the most crucial agricultural input
which could help the cultivating households to register
improved levels of productivity leading to higher earnings
which ultimately help them to cross the poverty line.
Secondly, the incidence of poverty of the cultivating
households is inversely related to the size of operational
holding. Lastly, if somehow the tenant operators acqu1re the
ownership status, the incidence of poverty gets reduced.
326
As regards per capita income, saving-income ratio
and incidence of poverty, our study shows that the marginal
cultivators figure at lower rungs of economic ladder in
general and the marginal tenant operators occupy the lowest
economic position in rarticular. The economic distress of the
marginal cultivators (especially tenant cultivators among
them) under conditions of subsistence agriculture such as
those encapsuled in our study by unirrigated villages 1n
general and those in District Kalahandi in particular, partly
acts as a compelling factor for them to stimulate initiatives
for raising their farm income by adopting new technology and
using land and family labour as much effectively as they can
within the parameters of the given socio-economic and
technological environment. The high incidence of poverty
nevertheless
cultivators.
ma/nifests itself among marginal tenant
In spite of their earnest effort to raise farm-
incomes, those still fall far too short to meet their routine
consumption expenditures. It happens solely due to the
considerably lower proportion of land resources of these
families on the one hand and the limited outside employment
opportunities for them on the other.
The main issues emanating from our study are:
(i) The acute financial problem does not permit some of the
petty and marginal land owners to carry on self
cultivation; under such condition, many among them lease
out their land.
(ii) On an average, the size of a typical parcel is much
smaller for the lower size class farmers and is
relatively bigger for the large size cultivators.
327
Consequently the small cultivators face the problem of
operation of agricultural implements in the1r fields.
(iii) Since the land leases are totally oral, there is every
possibility of eviction of tenant from the land at any
moment that the lessor decides; it thus creates greater
insecurity for them. The insecurity felt by relatively
petty tenant. cultivatot-s needs to be appreciated in
particular.
(iv) The incidence of tenancy is much higher in the smaller
size class of operators compared with that in the larger
counterparts; the extremely low land: man ratio on the
one hand and the general lack of alternative employment
opportunities on the other, constitute the most
formidable explanation for them to enter lease market as
lessees.
(v) Under specific conditions, the tenant households are
compelled to operate land under inter-locking lease
arrangements, and consequently, they face a greater rate
of exploitation in different ways.
(vi) The share cropping is the worst form of cultivation
system compared with fixed rent and owner cultivation
systems inasmuch as the net farm income earned under the
share crop system is the lowest.
(vii) A greater degree of
agriculturally advanced
diversity operates
and agriculturally
between
backward
regions in the respect of the use of new technology,
application of
t·ates.
family labour and consequently, y1eld
(viii) A relatively higher incidence of poverty is discernible
among the marginal and small farmers in general and much
328
higher among the mar·gi nal tenant cultivators 1n
particular.
(ix) The lack of adequate irrigation is the major constraint
for the cultivating households to gel rid of poverty.
Because, our study shows that as a cultivating household
moves from the unirrigated to irrigated conditions, it
avails itself of fairly high levels of on- and off-farm
employment and incomes.
The large number of insights emerging from our field
data throw up many policy issues. In what follows, we venture
to suggest a few policy measures which, in our opinion,
dese r·ve special at tent ion by pol icy admi nis tra tors and other
public authorities.
(1) We have a small proportion of households which do own
land but do not cultivate the same at all; they are pure
lessors. Moreover·, most of these pure lessors are marginal
lessors (marginal landowners) only; they were the people who
could not cultivate land themselves because of their economic
distress, and after leasing-out their tiny/marginal land, they
opt to become agricultural labourers. Similarly, some of the
owner-cum-lessors in our sample villages were marginal and
small landowners. Although they had no fewer working members
in their families, yet they could not keep the entire owned
land for self-cultivation because their limited farm
implements and acute financial scarcity would not permit them
to cultivate their total owned-land. Thus they kept some
portions of their owned land for self-cultivation and leased
out the rest.
329
The solution for the above problem is to stop the
practice of leasing-out by the marginal and small landowners.
From our perceptions, if they could avail themselves of the
facilities of finance and agricultural implements according to
their minimum requirements, they would then keep total owned
land for self-cultivation rather than leasing it out. The
policy decisions should be formulated in such a way that these
groups of landowners will get easily agricultural loans and
agricultural implements at lower rate of interest without any
security. The government has thus a direct responsibility for
toning up public institutions supplying production needs of
petty farm operators.
(2) Our sample data show that in the case of a majority of
marginal farmers in general and marginal tenant farmers in
particular, the average size of a typical parcel of land is
much smaller compared with the one in the case of big and rich
farmers. The main reason for this is that the marginal and
small farmers being poor could not invest much to convert the
smaller size parcels into bigger ones. So, they face many
problems at the time of ploughing, irrigation and operation of
other agricultural implements in the smaller size parcels. Of
course, in paper, at the district level, there is land
mortgage bank which is responsible for providing long-term
loans for· the purpose of land development. In actual effect,
such loans are not advanced without collateral. With the
marginal/small farmers, however, sufficient land collateral
does not exist by difinition and more often, such loans are
not so freely accessible to them.
The government should take this issue into
consideration, and provision of easy loan (without collateral)
be made for those marginal/small farmers who are interested to
convert their smaller parcels into bigger ones.
(3) In our study area most ot the tenancy contracts are oral
and unrecorded. The tenants, therefore, suffer from constant
fear of ejection and there is no legal provision to help such
oral tenants. It is a serious problem not only in our study
area but is reported for other areas as well. In order to save
the tenants from constant fear of eviction from land by their
lessors, the provision of recorded lease, with effective
government intervention, should be made. The programme of
•operation Barga' launched by the left front Government in the
neighbouring state of West Bengal may be drawn upon as a
guide-post. The Programme of Operation Barga (08) is an
organised campaign to record the names of the sharecroppers so
as to confer upon them legal protection against rent
enhancement and eviction by the lessors. The sharecroppers
were also to be made available with the benefits of
institutional finance. The ultimate objective of the whole
struggle was clearly to free the sharecroppers through
collective effort from the exploitation of lessors and money-
lenders. These recorded tenants are now more successful in
West Bengal
correct the
to exercise
age-old
their tenancy rights better and to
exploitative character of tenancy
relationships mainly on the basis of their organisationb:
strength. For a successful implementation of such a programme
in Orissa, it needs a vigorous mobilisation and organisation
of the mass of poor tenants in collaboration with other weaker-
331
sections at the grass-root level. It is a big challange for
the leftists in the state.
(4) For lessening the incidence of tenancy cultivators as well
as the inter-locking of lease arrangements, specific emphasis
is to be given on the basic factors which are responsible for
tenancy cultivation to grow and lease inter-locking to emerge.
In terms of our analysis, the important factors are: (i)
considerably lower size of owned/operated land per working
member of the cultivating household, (ii) less opportunity of
non-farm employment tor them, (iii) higher expenditure-kncome
gap of the cultivating household, (iv) lower per capita ~ncome
of the families and (v) less accessibility of the
institutional credit agencies to small and petty cultivating
households, especially the petty farm households.
The average size of operated land of the petty and
marginal cultivators should be increased and the landless
tenant households be conferred ownership status. This could be
done by enforcing the existing ceiling laws and distribution
of surplus land among the eligible petty and marginal
cultivators.
The two most important areas where the government
could assign priorities are expansion of irrigation network
and supply of institutional finance. Our study clearly shows
that the mere title of ownership in the absence of the most
crucial agricultural input-irrigation can not improve the
economic conditions of petty farm operators. Thus, the
conferment of ownership status on the pettty and marginal
tenant cultivators should be, j._n.t_~_r._ ~j-~. coupled with strong
332
irrigation base and the provision of institutional finance.
Together, they could bring about dramatic improvement in the
economic conditions of the petty/margianl farmers.
As a long-run strategy, the growth of rural
population be drastically checked through intensive family
planning and mass education of the rural people; but for
immediate solutions, those surplus working force which depends
mainly on land-resources be motivated towards non-agricaltural
activities,
cultivation
.toJ:.~_c.
be equipped
Infrastructural base for
the remaining labour force in
with advanced technology.
agricultural development be
strengthened. For creation of non-agricultural activities on a
massive scale, a multi-dimensional rural development
programmes ought to be extensively launched.
For effective implementation of the above suggested
measures, village level planning with respect to distribution
and allocation of land, irrigation, employment, credit,
agricultural inputs, etc. among the marginal and small
cultivators, is necessary. The organisational spirit of the
bulk of petty/marginal producers be channelised to achieve
some degree of co-operativisation so as to reap the economies
of scale for them. It is in this context the leadership in
panchayats could play an important role by encouraging the
petty/small producers towards forming co-operatives for
jointly undertaking overhead operations and investment if not
immediately going for joint cultivation.
(5) With respect to the issue of lessening the incidence of
share crop tenancy operation, we suggest as follows:
In Chapter-VII (Techno-Tenancy Relations), we
concluded that the sharecroppers generally use considerably
lower amount of new inputs per acre cropped compared with
those of
condition,
fixed rent and owner cultivators. Under any
the lessors d9not share the cost of production. If
the lessee would adopt new inputs in his leased-in land, the
entire cost of those would be borne by the lessee himself; on
the other hand, the gain from the new inputs would be shared
by his lessor. A general trend among the tenants operating
under share crop system is that even if the lessors persuade
the lessee to use new inputs, the tenants are less inclined to
do the same. On the basis of the observed behaviour of
tenants, if they could be motivated, through certain measures,
towards the use of new inputs on a large scale, along with
other development programmes, they would prefer to operate
under the fixed rent compared with share crop tenancy. Now,
the question that needs to be answered is how those tenants
who operate under share crop tenancy would be motivated to use
new inputs on a large scale. It requires first, higher
purchasing power of the tenant; second, easy availability of
new inputs at concessional rates; third, strong infrastructure
for agriculture such as irrigation, marketing, credit
facilities, etc, which would initiate a tenant to bear the
risk of use of new technology; fourth, training and education
for them in respect of the use of new technology; and fifth,
demonstration of substantial gains from the new technology. Of
course, the last three measures are more important to motivate
any cultivator towards the use of new technology.
334
Generally speaking, the above said measures are more
essential for the cultivators in Kalahandi district where they
are socio-economically and culturally much more backward
compared with those in Balasore district.
(6) In order to reduce a greater degree of diversity between
backward and advanced regions, expansion of irrigation at
relatively higher rate in the backward areas is essential.
Besides, other agricultural infrastructure needs to be
strengthened. For this purpose, a higher proportion of plan as
well as non-plan outlay be diverted towards the backward
regions.
(7) With respect to the reduction in incidence of poverty,
we suggest first and foremost attention should be paid to
agricultural development. From our study, it emerges that
firstly, as a cultivating household moves from the unirrigated
to irrigated conditions, it avails itself of fairly high
levels of on~nd off-farm employment and income£; secondly, if
the tenant cultivators acquire ownership status, the incidence
of poverty gets still further reduced. Incorporating these two
important results, we conclude that if the petty/marginal
tenant operators along with adequate irrigation facilities for
them, be conferred ownership status, it is quite feasible that
their income levels would be higher enough to let them cross
the poverty line. This is especially so for the category of
petty/marginal tenant operators. For overall reduction of
incidence of poverty among all other categories of
cultivators, agricultural development be accelerated on
priority basis through mass expansion of irrigation and
agricultural infrastructure.
335
The policy measures which emerged from our study are
centering around the question of irrigation and development of
agriculture. Reformation of existing tenancy structure with
stronger irrigation base and infrastructure could generate
higher on~nd off-farm employments and incomes for the rural
poor. Consequently, it would reduce the incidence of tenancy
as well as inter-locked lease markets on the one hand and the
incidence of rural poverty on the other.