behind agrarian distress-by oct

8/6/2019 Behind Agrarian Distress-By oct

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CENTER FOR SCIENCE AND ENVIRONMENT41, Tughlakabad Institutional Area,New Delhi, India - 110062

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Behind Agrarian Distress:Interlinked Transactions as Exploitative Mechanisms

By Deepak K Mishra

Associate Professor in Economics, Centre for the Study of Regional Development,School of Social Sciences, Jawaharlal Nehru University, New Delhi-1100067E-mail: [email protected] , [email protected]

In recent years, there has been a growing concern regarding the impact of the neweconomic regime on the farming community. Newspaper reports on farmers suicideshave become the most frequently encountered and visible signs of agrarian distress. Anumber of micro-studies as well as the recently released Situational Assessment Survey of Farmers by the NSSO have conclusively established the grim realities in the Indiancountry-side. Agrarian distress, far from being a transitory phenomenon, has in fact its

own structural correlates. Without going in to the details of the nature, forms and degreeof distress, as captured by these empirical studies, it is important to note that creditmarket imperfections have played a significant role in these narratives of agrariandistress. Firstly , the farmers suicides, which, of course is not the only manifestation of distress, have been strongly linked with indebtedness in the credit market. More oftenthan not, the farmers, who have taken such extreme steps, had borrowed from informalsources at exorbitant rates. Thus, apart from the production failures and risks encounteredin the increasingly volatile output markets access to credit and terms of borrowing haveemerged as significant aspects of the agrarian crisis in India. Secondly , so far as theregional dimensions of the crisis are concerned, the conventional notion of agrariandistress being part of the broader landscape of underdeveloped agriculture and

backwardness, which has been shaping the thinking of economists and policy makers fordecades, no longer fits to the emerging evidences from rural India. At the risk of someoversimplification, it is important to emphasize that the manifestations of agrariandistress in contemporary India is not confined to the pockets of backwardness, largelycharacterized by low productivity, relatively lower levels of use of modern inputs andlow levels of commercialization of agriculture. It is significant that even the regionshaving a high degree of commercial agriculture, using relatively better technology andhaving a relatively diversified cropping pattern have also reported high indebtedness anddistress of various kinds. Thus, agrarian distress in rural India seems to have at least twoimportant dimensions, distress under backwardness and distress under commercialization . Although Orissa, in terms of its overall agricultural performance

represents an area under backward, low productive agriculture, within the state there aresigns of low productive as well as relatively advanced agricultural systems. By focusingupon particular aspects of the agrarian economy, this paper attempts to bring out theunderlying mechanisms, which contribute towards the making of the agrarian distress.


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More specifically, the paper reports the findings of a primary survey in there villages of Orissa on the extent, types and determinants of market interlinkages.

Market interlinkage has been observed under diverse production organisations, invarious forms, and has often led to different and conflicting interpretations. It has been

theorized on the one hand as a mutually beneficial voluntary contract among self-interest-maximising individuals faced with a variety of market imperfections, while on the other,it has been interpreted as an exploitative mechanism serving the interests of surplus-appropriating classes. Crucial to the debate on implications of market interlinkages is thedynamics of institutional arrangements that enable these linkages and sustain them underchanging conditions of production.

In the neo-classical framework, interlinkage is typically seen as a response tomarket imperfections or some other constraints faced by the economic agents. The thrustof the neo-classical and NIE argument is that since market interlinkages emerge only inthe presence of imperfections, asymmetry of information etc., interlinkage is motivated

by the desire for economic efficiency, not necessarily by the desire for furtherexploitation of the worker [Stiglitz 1986: 256]. Contrary to the neo-classical approach tointerlinkage as a voluntary contract among free economic agents, in the Marxianliterature it is analysed with explicit reference to the unequal relations of power, rooted inthe unequal access to productive resources. The core issue that separates the Marxian andthe neo-classical schools of thought in their approaches to interlinkage is the question of unfreedom and personalized dependence of labourers and tenants on the employers andlandlords.

IIThe Study Villages

The basic objective of the study is to find the factors influencing participation of labourand small holder households in informal credit and interlinked transactions of varioustypes under relatively advanced and backward agriculture. The three study villagesrepresent advanced, intermediate and backward production conditions in agriculture.Village: I in Sambalpur district represents the infrastructurally well-developed irrigatedvillages situated at the upper-end of the canal. Village: II located in Bargarh district is apartially irrigated village, where farmers depend upon the nearest relatively smalltownship of Barpali for selling their output or purchasing their inputs. The third village,selected from Nuapada district, which was part of Kalahandi, represents a typicalbackward, poverty-stricken village with poor infrastructural facilities and a lowproductive, dry land agriculture. After the selection of the villages all the householdswere interviewed on the basis of structured questionnaires in order to gather informationon various aspects of agricultural operations.

IIIAgrarian Relations and Informal Credit


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The historical transformation of production relations in the study region,throughout the colonial period, resulted in the differentiation of the peasantry and gradualexpansion of the landless labour class (Padhi, 1999). An important aspect of thistransformation was land alienation from the tribal peasantry to the upper and middlecastes (Nath, 1998). The development of canal irrigation in Sambalpur district,

particularly after the construction of the Hirakud dam, has resulted in significant changesin labour relations.

The study of agrarian structure in the three villages revealed that the landless,marginal and small landowners account for around 86 per cent of all surveyedhouseholds. The extent of landlessness was found to be higher in the irrigated beltthan in the unirrigated region. It was found that the top 6 per cent of landowners control32.35 per cent of the cultivated area (Table: 1). The decomposition of landowninghouseholds, according to the different caste groups, reveals a neat correspondencebetween land-ownership status and caste-status the scheduled caste and scheduled tribehouseholds have relatively higher share among the landless and marginal farmers while

in the larger size-classes the OBC and general categories have a higher presence1

. Thedistribution of operational holdings according to various size classes shows thepreponderance of small and marginal cultivators, particularly in the dry village (Table: 2).In both the irrigated villages, the small as well as the large farmers were found to beleasing-in land, but in the unirrigated village, land-lease market was found to bedominated by small and marginal farmers (Table: 3). While in the developed and well-communicated irrigated village, fixed produce tenancy was found to be the mostimportant form of tenancy, followed by fixed-cash tenancy, in the intermediate i rrigatedvillage, share tenancy, followed by fixed produce and fixed cash tenancy was found to bethe predominant form of tenancy. As a whole, while in the irrigated villages, fixedproduce tenancy emerged as the major form of land-lease contract, in the dry, backwardvillage, sharecropping is the main form of leasing-in. An important aspect of the land-lease market in the unirrigated village is the relatively higher importance of usufructuarymortgage (Table: 4).

Our filed-survey revealed that contractual relations in labour market in the twoirrigated villages broadly follow a similar pattern, but are more complex and fragmentedthan those in the unirrigated, dry village 2. In the rainfed agricultural belt, represented bythe third village, Amlapali, the agricultural labour contracts are broadly of two types:casual and permanent. Within the permanent labour contracts, two kinds of arrangementswere noticed: (i) Firstly, the halia or guti systems, which is basically an attached labour

1 In total, among the landless 41.80 per cent are ST, 32.8 are SC, 22.22 per cent are OBC and the rest3.17 per cent belong to the general category. Among the marginal farmers, 57.36 per cent are OBC,26.36 per cent are ST and 16.38 per cent are SC. On the other hand in the semi-medium and largecategories, OBCs followed by the general group have a relatively higher share. Taking all thehouseholds together, the 4.50 per cent of general households own 10.32 per cent of total area, 44 percent of OBCs control 44 per cent of area, 23 per cent of SC own 14 per cent of land and 29 per centof ST household own 13 per cent of the area.

2 In a study on Sambalpur district, Nath finds that labour relations in the irrigated area are notqualitatively different from those in the dry region (Nath, 1998), while Sarap(1991a) reportssubstantial changes in the region following intensification and commercialization of agriculture.


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contract for male adult labourers, the duration of which is usually one year: (ii) Secondly,the attach labour contracts for young boys, called kuthia , who are employed mainly fortaking care of the cattle. Both these contracts involve an initial payment of paddy, calledbaha bandha (literally meaning mortgaging your arms), and followed by paymentseither in installments or in lump-sum after the harvest, along with some gifts during the

festivals. It is important to note that the incidence of permanent labour contracts hasdeclined substantially in the study village, not for any other reason, but for the sheerunviability of agriculture in this drought prone region. In the casual labour category,gender differences in terms of wages as well as task-specific preference for male orfemale labour were also noticed. Another important feature of the casual labour marketwas that, though contractually independent, some casual labourers work for the sameemployers quite often, a type of contract that we have termed as repetitive casual labourcontract. The labour relations in the dry region has to be understood in the backdrop of relative stagnation in agricultural production, substantial degradation of forests and otherCPRs, frequent droughts and food insecurity, particularly for the poor and themarginalized groups (Nayak and Mahajan, 1991; Mishra and Rao, 1992; Rao, 1995;

Mishra, 1996; Mishra, 2001; Sarap and Mahamalik, 2003). In recent years migration tourban areas of Orissa and neighbouring states, particularly for short-duration, seasonalmigration, has also been affecting labour contracts in the study village.

Some features of the labour market in the irrigated belt are similar to that in thedry region. The payments to permanent labour, however, unlike in the dry villages, moreoften than not, are made in cash, mostly in monthly installments. The extent of permanentlabour was noticed to be higher in the relatively less developed irrigated village than inthe irrigated developed village. Among the casual labourers two types of arrangementswere noticed time-rate and piece-rate. Some of the time-rated casual workers were alsofound to be under repetitive casual labour contract. The casual labour market was alsofound to be segmented in terms of gender, particularly in the second irrigated village. Themigrant labour from the neighbouring districts of Balangir, Kalahandi and the borderingstate of Chhatishgarh generally work under piece-rate contract. Women and children inthe age group 12-15 form a significant part of the migrant labour groups. Acomparatively recent phenomenon is the formation of labour groups by the local labour,particularly the youths, who also work under piece-rate contracts. The contractualarrangements with the migrant labour were also found to be of three types, viz. thosenegotiated by the employer himself, who sometimes travels to the villages of the migrantlabourers before the peak season; those negotiated through an agent, who more often thannot, acts as the group leader and thirdly, supplementary contracts with a group of labourers who have already finished their work. Usually small and marginal farmers inthe irrigated area enter into the third type of contract with the migrant labourers, afterthey finish the work in the field of large farmers, partly as an attempt to reduce thetransaction costs. All these different forms of labour contracts have certain implicationsfor interlinked transactions, particularly because often the contracts are cemented throughprovision of credit at low or zero rate of interest. While the in-migration of labourersfrom neighbouring drought prone area and the resultant competition among the residentand migrant labourers have strengthened the bargaining position of the cultivators,the high labour demand in the irrigated belt, particularly during the peak season, has


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forced them to design a variety of labour arrangements including incentive payments,provision for house-sites and tiny pieces of land for farm servants and permanentlabourers, recruitment of group leaders, among the migrants, as monitoring agents,besides providing cheap credit.

An investigation into the structure of credit market revealed that participationlevel in the credit market is very high in the study region (Table: 5). So far as the sourcesof borrowing are concerned, it was found that an overwhelming majority of theborrowing households resort to borrowing from informal sources. The data shows arelatively higher participation of the poor and the marginalised sections of peasantry inthe informal credit market. It is important to mention here that a sizeable percentage of large farmers also borrow from the informal sources, particularly in the irrigated villages.In terms of distribution of volume of credits, it is found that access to formal credit istypically low for the landless labourers and small farmers. So far as the purpose of creditis concerned, it is found that the landless labourers and the marginal farmers borrowedmainly for consumption purposes while large size classes of farmers borrow mainly for

production purposes3

.It was observed that for the landless labourers and the marginal farmers,

moneylenders and shopkeepers are the two most important sources of borrowing, whilefor the small and semi-medium farmers, traders and moneylenders are the most importantsources. For large and medium farmers, traders are the most important source of informalcredit. The structure of informal credit market in the rainfed village was found to besomewhat different from that of the irrigated villages in the sense that traders play a farless important role in the former (Table: 6). An important dimension of the informalcredit market is that the average size of borrowing from different sources follows aparticular pattern: shopkeepers have generally advanced lower size of credit, even withinthe same farm-size category. On the other hand, there seems to be some flexibility in theaverage size of loan advanced by moneylenders. This points out towards a fragmentationof the informal credit market with different class of lenders advancing loans forparticular needs and particular group of farmers 4.

IVInterlinked Transactions: Efficient Institutional Arrangements or Interlocked

Modes of Surplus Extraction?

So far as the relative importance of different types of interlinked transactions isconcerned, it is found that, on the whole, labour-credit interlinkage is the most importantform of interlinkage followed by output and input-output credit interlinkages. Both in theirrigated and unirrigated villages, labour-credit interlinkage is found to be the mostimportant form, but in the irrigated region, output-credit and output-input-credit are the

3 While the percentage of consumption credit to total credit was as high as 90.44 per cent for thelandless, 78.57 for marginal farmers, the share of production loan in total volume of credit taken was71.13, 99.75 and 92.04 for semi-medium, medium and large categories of farmers respectively.

4 The average size of credit advanced by moneylenders, traders and shopkeepers were found to be Rs2940, Rs 4722 and Rs 653 respectively.


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next two important forms, while in the dry village, those positions are occupied by land-labour-credit and output-credit interlinkages, respectively. Thus, land-labour-creditinterlinkage comes out as a feature of backward agriculture while in the developed,irrigated belt; output market has come to play an important role in the interlinkedtransactions. In both categories of areas, labour-credit interlinkage has a substantial

presence. The farm size-wise participation in different types of interlinkages revealed thatwhile semi-medium, medium and large categories of households participate mainly in theinput-output-credit and output-credit interlinkages, marginal and small farmers enterinto all types of interlinkages.

In order to find out the determinants of household participation in the interlinkedtransactions, four different logit regressions were estimated 5. The binary logit regressionmodel for all farm households revealed that the size of operational holdings, percentageof non-agricultural income in total income and years of schooling of the head of thehousehold, are negatively associated with the possibility of the farm household enteringinto an interlinked contract, while per capita debt at the beginning of the year, debt-assetratio, percentage of irrigated land in total operational holding and scheduled caste or

scheduled tribe status of the household, increases their probability of entering intointerlinked contracts.

In the case of small farm households, it was found that the size of operationalholdings, per capita debt in the beginning of the year, debt-asset ratio, SC/ST status andpercentage of irrigated area in operational holdings, are all positively associated with theprobability of a small farm entering into the linked contracts, while educational level of the household head, per capita farm output, proportion of non-agricultural income in totalincome, are negatively associated with the interlinkage process.

For labour households the possibility of entering into an interlinked transactionincreases with debt asset ratio, SC/ST status and decreases with access to non-agricultural wage income. When we consider all the sample households, it is found thatyears of schooling of the head of the household, value of non-agricultural incomegenerating assets, percentage of non-farm earning in total income, and per capita farmoutput are all negatively associated with the probability of the household entering intoany interlinked contract, while per capita debt at the beginning of the year, debt-assetratio and SC/ST status increase the probability of interlinkage. Thus, by and large, theregression results suggest that households having lower levels of asset and incomediversification, lower levels of schooling, higher levels of debt burden and lower socio-economic status have higher probability of entering into such interlinked contracts.

To understand the implications of interlinked contracts, we have analysed thedifferences in the mean rate of interest, the average price at which output was sold andthe mean male wage rate among the linked as contrast to the non-linked households. Itwas found that the mean rate of interest in interlinked transactions is higher than that inthe non-linked transactions, within the informal credit market. The gap between ratesof interest in the linked and the non-linked contracts is the highest in the dry, unirrigatedvillage followed by the irrigated, intermediate village. However, the importance of

5 For details see Mishra (2006).


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local specificities in determining the implications of interlinkages becomes clear in thecase of irrigated, developed village where the mean rates of interest in the linkedtransactions were found to be lower than that in the non-linked transactions. This mightbe so because of the labour-shortage and relatively easy access of labour households tonon-farm employment, on the one hand, which enables them to get cheap credit from

their employers and the competition among traders in the output market to advance creditto relatively larger farmers, on the other. Another important finding is that among allfarm sizes, the marginal farmers have paid the highest average rate of interest within thelinked transactions. An analysis of the distribution of linked and non-linked creditcontracts, across different ranges of interest rates, points out that even within the non-institutional credit market, interlinked credit transactions carry higher interestrates.

Another important finding of the study is that not only the SC and SThouseholds participate, to a relatively higher extent, in the interlinked transactions, butalso that when they have done so, the scheduled caste households followed by the

scheduled tribe households pay a relatively higher rate of interest, even within theinterlinked transactions.

It was also found that, on an average, the linked borrowers have to sell theiroutput at a lower price than do their non-linked counterparts. The price difference,however, is highest in the dry village and lowest in the developed, irrigated village.Even within the linked contracts, marginal, small and semi-medium categories of farmershave received lower price for their output than medium and large farmers. Similarly, itwas found that in all the villages, agricultural labourers entering into interlinkedtransactions, on an average, receive lower wages than those who have not done so.

These findings clearly bring out an important limitation of many oft-repeatedarguments on interlinkage. Whether interlinked contracts are exploitative or not is aquestion that has been widely discussed in general terms. However, our study revealsthat, to a great extent, the specific socio-economic position of the household, along withthe functioning of markets, opportunities for alternative sources of earnings and levels of productivity determine the outcome. Interlinkage, as an institutional arrangement, farfrom being static and a feature of backward agriculture alone, was found to be morewidely prevalent in the high-risk, high-productivity irrigated belt. With thetransformation of production conditions, the forms of interlinkage have also changed.While the role of land lease in interlinked credit transactions has declined, the outputmarket has increasingly come to play a prominent role in interlinked transactions.

VLooking Ahead: What is to be done?

The most vital factor forcing the households to enter into exploitative interlinkedtransactions is the non-availability or inadequate availability of institutional credit. Withthe increasing integration of agriculture to the global dynamics of commodity production,and the spread of new technologies to new areas, the credit need of the farm sector has


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grown manifold. However, with the current emphasis on the commercial viability of thebanking sector and reduction in subsidies of various kinds, farm households are left withlittle option but to rely on the informal sources of credit. Credit from informal sources, asour data clearly show, is not only costlier, in many cases such credit transactions areaccompanied by undervaluation of the collateral offered, which acts as an additional

mechanism of exploitation. The most reliable measure to reduce the dependence on suchexploitative interlinked transactions is to enlarge the accessibility of formal credit in ruralareas. This calls for a targeted and sector-specific expansion of formal credit, mainlythrough strengthening the rural banking system, but also through innovative group-lending schemes. While micro-credit may solve, to some extent, the problems of thelandless labour households, given the size of the loan required by farm households, evento meet the seasonal credit needs, enhancement of institutional credit allocations to ruralareas in general and to the agricultural sector in particular, has to be given due emphasis.

Another dimension that needs urgent attention is the expansion of the resourcebase of the poor and the marginalised groups. Two distinct but interrelated strands of

policy initiatives emerge from the study: firstly, the strengthening of the human resource-base at the household level, particularly through expanding access to education, will helpin reducing the vulnerability of the households, in a context where access to informationis increasingly becoming costly and crucial; secondly, the expansion of rural non-farmeconomy will go a long way in reducing dependency on interlinked transactions, throughdiversification of assets and earnings of the households. The spread of formal education,apart from its well-known positive externalities, will help in reducing the exploitativeforms of interlinkage, primarily because, information asymmetry as well as inadequateavailability of reliable and relevant information limit the range of feasible options beforethe households, which in turn, forces them to opt for such linked contracts. In alllikelihood, access to education will reduce the transaction costs in the formal creditmarket as well. A long-term impact of increasing access to education will be theexpansion of alternative sources of earnings and employment for the rural households,which also will help in reducing their reliance on interlinked transactions.

So far as the expansion of the rural non-farm economy is concerned, two broadpatterns of interventions can be envisaged. One set of policy measures are theemployment generation programmes, which not only help in reducing vulnerability of thelabour households by providing an important source of additional income, particularlyduring the lean season, but also raise wage in the agricultural labour market. Another wayto generate alternative sources of earnings, not only among the farm households, but alsoamong the landless labour households, is the promotion of self-employment

opportunities. A range of such activities, including some in the non-farm sector, can beidentified depending on local specificities. To the extent that such income diversificationstrategies provide a dependable and durable source of earning, it will help the ruralhouseholds in reducing their dependency on exploitative credit transactions, but anequally important outcome will be their better bargaining strength in the informal creditmarket, primarily because of their enhanced credit worthiness.


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The importance of raising farm income through increasing the levels of productivity in agriculture can hardly be overstressed. Agricultural growth, through itsvarious linkage effects plays a leading role in transforming the rural economy. However,given the higher credit requirements in agriculturally advanced regions, there is a need toprovide a range of complementary financial services to make agricultural growth more

diversified and participatory. Finally, the role of rural infrastructure in ensuring fairproduct prices needs to be emphasized. It is the availability of irrigation, which is the keyto the transformation of agriculture in developed irrigated area, but the differencesbetween the two study villages within the irrigated belt are almost entirely because of differences in levels of connectivity. Any policy-intervention that increases the portfolioof income and assets of the rural households, particularly of those belonging to the poorand the marginalized sections, and expands the range of feasible choices in input andoutput markets, will act as a deterrent to interlinked transactions.

Although lack of access to cheap, not just in terms of interest rates but also interms of transaction and other costs of getting credit, dependable and timely credit has

acted as a major catalyst of the current agrarian crisis faced by an overwhelmingly largesection of the farmers in India, it is important to note that the factors which has generatedand sustained distress of such magnitude are, at least partly, structural and it requiresmore than cosmetic and one-time miracle packages to address these issues. Consider,for example the following data from the NSSO survey: At the all India level, the mostimportant source of information regarding modern agricultural technology is otherprogressive farmers followed by the input dealer. In Andhra Pradesh, where 66 percentof indebted farmers have borrowed either from a moneylender or a trader, as high as 30per cent of farmers depend on the input-dealer for such information. The inherentinformation asymmetry that characterizes such a situation plays a role in forcing thefarmers to enter into exploitative interlinked transactions. The collapse of extensionservices in agriculture will have long-term negative consequences for productivity growthin Indian agriculture. Interventions to address the agrarian distress, in the minimum, needto be based on a two-prong strategy: one, a fire-fighting approach to stop the situationfrom deteriorating further; and a long-term strategy to find durable and equitablesolutions to the fundamental problems facing the Indian farmer in the context of globalization.


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Table: 2 Size Class Wise Distribution of Operational Holdings

Village:I Village:II Village:III AllSize-class of Operationalholdings (inacres)

H A H A H A H A

HH notOperating anyland

102(61.08)

0(0)

57(44.53)

0(0)

32(18.60)

0(0)

191(40.90)

0(0)

(0.01-2.0)Marginal

17(10.18)

16.57(3.72)

14(10.94)

17.7(4.99)

96(55.82)

125.38(40.25)

127(27.20)

159.65(14.36)

(2.01-5.0)Small

15(8.98)

58.6(13.15)

29(22.66)

108.65(30.63)

37(21.52)

118.1(37.92)

81(17.34)

285.35(25.66)

(5.01-8.0)Semi-Medium

11(6.59)

73.7(16.54)

18(14.06)

111.67(31.48)

3(1.74)

18(5.78)

32(6.85)

203.37(18.29)

(8.01-12.0)Medium

11(6.59)

106.3(23.85)

7(5.47)

66(18.61)

2(1.16)

18(5.78)

20(4.28)

190.3(17.11)

(12.01&above)Large

11(6.59)

190.5(42.74)

3(2.34)

50.7(14.29)

2(1.16)

32(10.27)

16(3.43)

273.2(24.58)

All sizes 167(100)

445.67(100)

128(100)

354.72(100)

172(100)

311.48(100)

467(100)

1111.87(100)

Source: Field SurveyNote: (i) H = Households, A = Area owned in acres;

(ii) Figures within brackets refer to percentage to respective village totals.


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Table: 3 Size Class Wise Distribution of Households Leasing in and Area Leased-in

Village:I Village:II Village:III AllSize-class of Operationalholdings (inacres)

H A H A H A H A

(0.01-2.0)Marginal

8(25.0)

[47.06]

7.20(6.46)

[43.45]

1(5.0)[7.14]

0.50(1.19)[2.82]

4(26.67)[4.17]

3.00(21.43)[2.39]

13(19.40)[10.24]

10.70(6.40)[6.70]

(20.1-5.0)Small

6(18.75)[40.00]

9.70(8.71)

[16.55]

11(55.0)

[37.93]

18.90(45.11)[17.39]

8(53.33)[21.62]

5.00(35.71)[4.23]

25(37.31)[30.86]

33.60(20.08)[11.77]

(5.01-8.0)Semi-Med.

4(12.5)

[26.67]

13.50(12.12)[18.32]

3(15.0)

[16.67]

6.00(14.32)[5.37]

2(13.33)[66.67]

4.00(28.57)[22.22]

9(13.43)[28.12]

23.50(14.05)[11.55]

(8.01-12.0)Medium

7(21.87)[63.64]

29.00(26.03)[27.28]

3(15.0)

[42.86]

6.50(15.51)[9.85]

0(0.0)[0.00]

0.00(0.0)[0.00]

10(14.93)[62.5]

64.00(38.25)[23.43]

(12.01& above)Large

7(21.87)[63.64]

52.00(46.68)[27.30]

2(10.0)

[66.67]

10.00(23.87)[19.72]

1(6.67)

[50.00]

2.00(14.29)[6.25]

10(14.93)[62.5]

64.00(38.25)[23.43]

All sizes 32(100)

[49.23]

111.40(100)

[25.00]

20(100)

[28.17]

41.90(100)

[11.81]

15(100)

[10.71]

14.00(100)[4.49]

67(100)

[24.27]

167.30(100)

[15.05]

Source: Field Survey


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Note: (i) H = Households, A = Area operated in acres;(ii) Figures within brackets refer to percentage to respective village totals(iii) Figures within square brackets refer to percentage of households leasing-in to total farm

households, exc luding the non-operating households.

Table: 4 Forms of Tenancy in the Study Villages

Percentage of households and area leased-in underShare

CroppingFixed Produce Fixed Cash Usufructuary

MortgageOther terms

Villages

H A H A H A H A H AVillage: I 6.25 11.67 78.12 68.58 15.63 19.75 0 0 0 0Village: II 55.00 47.73 30.0 44.15 10.0 6.92 0 0 5.0 1.19Village: III 66.67 78.57 13.33 7.14 0 0 20.0 14.29 0 0AllVillages

34.33 26.30 49.25 57.32 10.48 14.85 4.48 1.19 1.49 0.30

Source: Field Survey

Table 5: Participation in the Credit Market by Source of Credit

Percentage of BorrowerHouseholds borrowing from

Percentage of Loanraised from

Category of Holdings

Percentage of HouseholdsBorrowing Formal

SourcesInformalSources

FormalSources

InformalSources

Village: ILandless 42.20 2.44

(0.98)97.56

(39.22)10.75 89.25

Marginal 47.06 0(0)

100(47.06)

0.0 100.00

Small 53.33 37.5(20.0)

62.5(33.33)

22.21 77.79

Semi-Med 36.36 25.0(9.09) 75.0(27.27) 29.38 70.62

Medium 36.36 50.0(18.18)

50.0(18.18)

49.15 50.85

Large 72.73 50.00(36.36)

50.00(36.36)

54.89 45.11

All Households 43.71 15.07(6.59)

84.93(37.13)

38.72 61.28

Village: II


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Landless 71.93 2.44(1.75)

97.56(70.18)

1.27 98.73

Marginal 92.86 15.39(14.29)

84.61(78.57)

45.84 54.16

Small 96.55 10.71(10.34)

89.29(86.21)

31.13 68.87

Semi-Med 100.0 22.22(22.22)

77.78(77.78)

44.44 55.55

Medium 100.00 71.43(71.43)

28.57(28.57)

87.91 12.09

Large 100.00 66.67(66.67)

33.33(33.33)

80.47 19.53

All Households 85.94 15.45(13.28)

84.55(72.66)

45.69 54.31

Village: IIILandless 37.5 0

(0)100.0(37.5)

0 100.00

Marginal 52.08 4.0(2.08)

96.0(50.0)

2.11 97.89

Small 43.24 6.25(2.70)

93.75(40.54)

4.12 95.88

Semi-Med 33.33 0(0)

100.00(33.33)

0 100.00

Medium 50.0 0(0)

100.0(50.0)

0 100

Large 0 0(0)

0(0)

0 0


96.25(44.77)

2.26 97.74

All VillagesLandless 49.22 2.13

(1.05)97.87

(48.17)4.89 95.11

Marginal 55.91 5.63(3.15)

94.37(52.76)

12.56 87.44

Small 64.20 13.46(8.64)

86.54(55.56)

23.41 76.59

Semi-Med 71.87 21.74(15.63)

78.26(56.25)

38.78 61.22

Medium 60.00 58.33(35.0)

41.67(25.0)

64.41 35.59

Large 68.75 54.55(37.50) 45.45(31.25) 57.50 42.50


88.21(49.68)

36.87 63.13

Source: Field SurveyNote: Figures within brackets refer to percentage to total households in the respective farm sizes


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(56.25) (6.25) (31.25) (0) (93.75)Semi-Med 100

(100)0

(0)0

(0)0

(0)100

(100)Medium 0

(0)0

(0)0

(0)100

(100)100

(100)Large 0

(0)

0

(0)

0

(0)

0

(0)

0

(0)AllHouseholds

62.34(60.00)

9.09(8.75)

24.67(23.75)

3.90(3.75)

100(96.25)

All VillagesLandless 61.96

(60.64)0

(0)34.78

(34.04)3.26

(3.19)100

(97.87)Marginal 59.7

(56.34)19.4

(18.31)20.9

(19.72)0

(0)100

(94.37)Small 33.33

(28.85)48.89

(42.31)17.78

(15.38)0

(0)100

(86.54)Semi-Med 27.78

(21.74)66.67

(52.17)0

(0)5.56

(4.35)100

(78.26)Medium 0

(0)

80.00

(33.33)

0

(0)

20.00

(8.33)

100

(41.67)Large 40.00(18.18)

60.00(27.27)

0(0)

0(0)

100(45.45)

AllHouseholds

51.29(45.25)

23.28(20.53)

23.28(20.53)

2.16(1.90)

100(88.21)

Source: Field SurveyNotes:

(i) Moneylenders include landlords and employers providing credit to tenants andlabourers respectively.

(ii) Traders include grain market traders, commission agents purchasing paddy and inputsuppliers.

(iii) Shopkeepers refer mainly to village grocery shop owners providing items for dailyconsumption.

(iv) Figures within brackets refer to percentages to total borrowers in the respective size-classes.

Table 7: Size Class wise Participation in Interlinked Transactions

Percentage of Households involved in Interlinked TransactionsFarm SizeVillage:I Village:II Village:III Irrigated

VillagesAll Villages

Landless 19.81(50.0)

50.88(72.5)

21.88(58.33)

30.82(61.25)

29.32(60.87)

Marginal 29.41(62.5)

71.43(90.91)

33.33(66.66)

48.39(78.95)

37.01(70.15)

Small 26.66(80.0)

65.52(76.0)

24.32(60.0)

52.27(76.67)

39.51(71.11)

Semi-Med 36.36(66.66)

55.55(71.43)

33.33(100.0)

41.38(70.59)

40.63(72.22)


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Medium 18.18(100)

28.57(40.0)

0(0)

22.22(100)

20.00(80.00)

Large 18.18(50)

33.33(50.0)

0(0)

21.43(26.66)

18.75(60.00)

AllHouseholds 20.96(56.45)

55.47(76.34)

28.49(63.64)

35.93(68.39)

33.19(66.82)

Source: Field SurveyNote: Figures in brackets refer to percentage of informal borrowers who have entered into interlinked transactions.

Table 8: Caste Group Wise Participation of Households in Interlinked Transactions:All Villages

Sl.No.

Characteristics General OBC SC ST All

1 Percentage of Total Households involved inInterlinked Transactions

0.65 35.48 30.97 32.90 100

2 Interlinked Households as percentage of Total Households in the group borrowingfrom Informal Sources

33.33 64.71 72.73 65.38 66.81

3 Interlinked Households as percentage of Total Borrower Households in the group

10.0 52.38 70.59 63.75 58.94

4 Interlinked Households as percentage of Total Households in the group

4.76 27.23 44.04 37.78 33.19

5 Informal borrowers as percentage of TotalBorrowers in the group

30.0 80.95 97.06 97.5 88.21

6 Informal borrowers as percentage of TotalHouseholds in the group

14.29 42.08 60.55 57.78 49.68

7 Caste wise distribution of all Households 4.50 43.25 23.34 28.91 100Source: Field Survey


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Table 9: Types of Interlinked ContractsTypes of Interlinked ContractsSize Class

of OperationalHolding

Land-Labour-Credit

Labour-Credit

Output-Credit

Input-Credit

Input-Output-Credit

All

Village: ILandless

0(0) 20(100) 0(0) 0(0) 0(0) 20(100)Marginal 3

(27.27)2

(18.18)1

(9.09)3

(27.27)2

(18.18)11

(100)Small 1

(20.0)0

(0)2

(40.0)1

(20.0)1

(20.0)5

(100)Semi-Med 0

(0)0

(0)0

(0)0

(0)2

(100)2

(100)Medium 0

(0)0

(0)0

(0)1

(33.33)2

(66.67)3

(100)Large

0(0) 0(0) 1(50.0) 0(0) 1(50.0) 2(100)All Households 4

(9.30)22

(51.16)4

(9.30)5

(11.63)8

(18.61)43

(100)Village: IILandless 0

(0)28

(100)0

(0)0

(0)0

(0)28

(100)Marginal 1

(7.69)4

(30.77)3

(23.08)0

(0)5

(38.46)13

(100)Small 2

(8.33)

0

(0)

9

(37.5)

3

(12.5)

10

(41.67)

24

(100)Semi-Med 0

(0)0

(0)8

(72.73)0

(0)3

(27.27)11

(100)Medium 0

(0)[0]

0(0)[0]

2(100)[8.70]

0(0)[0]

0(0)[0]

2(100)[2.52]

Large 0 0 1 0 0 1


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(0) (0) (100) (0) (0) (100)All Households 3

(3.80)32

(40.51)23

(29.11)3

(3.80)18

(22.78)79

(100)Village: IIILandless 0

(0)7

(100)0

(0)0

(0)0

(0)7

(100)Marginal 9

(28.12)18

(56.25)5

(15.62)0

(0)0

(0)32

(100)Small 5

(55.55)2

(22.22)1

(11.11)1

(11.11)0

(0)9

(100)Semi-Med 0

(0)0

(0)1

(100)0

(0)0

(0)1

(100)Medium 0

(0)0

(0)0

(0)0

(0)0

(0)0

(0)

Large 0(0)

0(0)

0(0)

0(0)

0(0)

0(0)

All Households 14(28.57)

27(55.10)

7(14.29)

1(2.04)

0(0)

49(100)

All VillagesLandless 0

(0)55

(100)0

(0)0

(0)0

(0)55

(100)Marginal 13

(23.21)24

(42.86)9

(16.07)3

(5.36)7

(12.5)56

(100)Small 8

(21.05)2

(5.26)12

(31.58)5

(13.16)11

(28.95)38

(100)Semi-Med 0

(0)0

(0)9

(64.29)0

(0)5

(35.71)14

(100)Medium 0

(0)0

(0)2

(40)1

(20)2

(40)5

(100)Large 0

(0)0

(0)2

(66.67)0

(0)1

(33.33)3

(100)All Households 21

(12.28)81

(47.37)34

(19.88)9

(5.26)26

(15.20)17

(100)Source: Field Survey

Note:(i) This table refers to the different types of interlinked contracts . Since some

households have entered into more than one interlinked contracts, the totalnumber of interlinked contracts is higher than the total number of linkedhouseholds presented in Tables 7 and 8.

(ii) Figures within parenthesis refer to percentages to row totals.


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Notes:

[The author is deeply grateful to Profs. G.K. Chadha. G.S.Bhalla, Ravi S. Srivastav,P.M.Kulkarni, R.S.Rao and H.S. Shergill for their comments on earlier drafts of the

paper. Thanks are also due to Partha Pratim Sahu and Niranjan Sarangi for their generous help. An earlier version of the article was presented in a seminar on AgrarianTransformation in Orissa at Sambalpur University. The usual disclaimers apply.]

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