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.