Day 72 – Q 2. There is a huge economic disparity between big farmers, and small and marginal farmers. Is it a result of bad implementation of land reforms in India? How do you think this gap can be reduced?
2. There is a huge economic disparity between big farmers, and small and marginal farmers. Is it a result of bad implementation of land reforms in India? How do you think this gap can be reduced?
Agriculture forms the mainstay for about 49% of total workforce in India. Small and marginal farmers (owning less than 2 hectares of land) constitute about 85% of farming households.
According to the Committee on Doubling of Farmers’ Income headed by Ashok Dalwai, the average annual earning of large farmers (landholding above 10 Ha) was seven-and-a-half times and that of a medium and semi-medium farmer’s was two-and-a-half times more than a small and marginal farmer’s household. It means 85 per cent of farmer households earn 9 per cent of total income while the rest earn 91 per cent. This shows the grave economic disparity existing among agricultural households.
The purpose of land reforms was to distribute land to the landless and provide title of ownership to the cultivators. However, it could not fructify in real sense of the term. The most notable and successful land reforms happened in states of Kerala and West Bengal (Operation Barga). There are multitudes of reasons for the existing economic disparity along bad implementation of land reforms among one of them.
Bad implementation of land reforms:
- Purposeful delay in the implementation land reform policy in many states, giving gap for transactions to escape the tooth of land reform laws.
- Zamindars – political nexus to get around the laws.
- Delay and loopholes in land ceiling laws caused large farmers to retain larger landholding through steps such as benami properties.
- Distribution of non-productive lands to the landless.
- Corruption in the process of land consolidation.
Other reasons for economic disparity:
- Inverse relationship between land size and efficiency because small farm size makes mechanization impossible leading to low productivity and low returns.
- Small and marginal farmers falling in debt trap of moneylenders because of lack of formal or institutionalized sources of credit.
- Poor targeting of policies with benefits mostly accruing to large farmers. Most populists schemes such farm loan waivers have also benefitted only large farmers.
- Distress sale by small farmers due to inadequate storage infrastructure leads to low remunerative prices for their produce.
Measures to reduce the gap:
- Digitization of land records for targeted benefits to small and marginal farmers.
- Effective implementation of e-NAM (National Agricultural Market) for better price discovery for farmers leading to high returns for farmers.
- Creation of non-farm jobs through schemes such as Prime Ministers’ Employment Generation Programme to reduce disguise unemployment in agriculture.
- Increasing access to formal sources of credit for small and marginal farmers.
- Promotion of Farmer Producer Organizations and Cooperative farming to give small farmers better negotiating power.
- Providing lab-to-farm connect through creating awareness about more scientific methods of cultivation for better yields and hence more returns.
- Taxing agricultural income for large farmers as suggested by NITI Aayog.
The challenge of making farming lucrative just got tougher with rising economic disparity. It is not just among various landholding groups, there is a distinct variation in income level across states depending on level of agricultural growth. The recent government intervention in interim budget of 2019-2020 to provide direct benefit transfer of 6000 rupees per annum for small and marginal farming households though PM KISAN (Pradhan Mantri Kisan Samman Nidhi) scheme is a step in the right direction for the benefit of small farmers.
Best answer: Mushfique