The land question: A search for answers

Yoginder K Alagh

THERE seems to be emerging a fair consensus across the political spectrum that it is not very prudent to tamper with a decade-old ongoing process of the reform of the land market.  The earlier “revenue laws” of registration of titles were a part of a century-old colonial law. The imperial government kept almost complete control of land title and land use with itself to dispense land as Inams to a dependent class and in a large measure the freedom movement was created around changing that. 

Benami transfer
In addition, there emerged the problem of benami transfer of land which became very widespread after the land reform, particularly the Land Ceiling legislation in the second half of the last century.  In this case, while land was shown in the name of the tenant, effective control remained with the landlord.  A new kind of problem emerged in the 1970s of the last century.  Small peasants started giving up their land to middle and large peasants as they found it easier and more productive to work as landless labourers rather than to live off their share on the income from their meagre land holding. 
This phenomenon was described as reverse tenancy and in many Northern and Western states up to a third to two- fifths of the land farmed by middle farmers was leased in from small farmers. Studies show that small farmers who are efficient cannot make enough money to make both ends meet and, therefore, in many cases leased out their land to the middle-level farmers in  benami transaction. The new kind of paradigms that are emerging are not well-known outside the rural setup and to those who are conversant with Indian agriculture.

Do Bigha Zameen
We still have the Do Bigha Zameen syndrome.  In fact, a large number of the Do Bigha Zameen kisans moved out of agriculture.  The main surprise of the recent Census was  the increase in landless labourers in the rural sector and in agricultural occupations.  Whether this is because of the pull factor for better earnings outside agriculture or the push factor on account of immiserisation of large numbers of the peasantry is being debated and the jury is still out. Maybe both are at work in different parts of the country. This is still possible since there is a fractured labour market. We have to be clear that where the  push factor operates, misery is  great, particularly in years of adverse weather.
The average peasant who cultivates land say above one hectare is very different person than the caricature our urbanites debate. He is generally educated and is quite aware of the trends around him.  Remember that Gajendra Singh was politically very aware and was there in the AAP rally and is reported to have been a Samajwadi Party supporter.  This farmer is invariably young and educated.  He is into growing high-value grain crops or commercial crops.  The case of high value durum wheat and parmal paddy is much too well known to repeat description. 
Monsanto may be unpopular with the activists but high yielder  and/or genetic seeds are not so with farmers.  Take maize.  A lot of it has now grown for feed in Gujarat where I work.  This is so in the Adivasi belt of the eastern part of the state.    It is also there in North Bihar. Genetically modified seeds were adopted when their yield was around two tonne per hectare. By now averages of 5 tonne per hectare are reported. These farmers were earlier using seeds which would yield them around two quintals per hectare. So this is the new world.  It is an enticing world of commercialisation and high income.  But along with this comes the market risks of unbridled globalisation and commercialisation.  These are the three horses of the Apocalypse: Uncertainty, high cost, failure to internalise technology. The farmer needs money.  These seeds are expensive.  The earlier seeds were either purchased from another farmer or from the local agricultural university.   Now he has to pay thousands of rupees for the seeds.   He also needs more inputs.  Water has to come at a particular time and if rain fails, he has to pump out water.  Energy may not be available and the water level may in any case have gone down.  He has to pay extensively for pesticides.  Genetically modified  variety of seeds attract   insects. For all this, the farmer needs more money.  The co-operative sector has been talked down. Banks and what is euphemistically called the kerb market both need collateral and charge high rates of interest.  When things are alright, it does not matter, he pays back.  In Gujarat, the farmers actually contract a part of the standing crop to the financier.  But when the crop has failed, he is left high and dry.
He has borrowed money and has to repay.   His cultural values demand that. Gajendra Singh’s crop had failed in Dausa and his father shunted him out from his home. The channels show that he was a progressive farmer and erratic rainfall destroyed his crops.
The average rate of suicide in the farm population in the country is not high.  But in some districts it is so, say in Western Maharashtra. Studies show that in some districts the rate is much higher and has also gone up in recent decades. A danger is that the problem may become epidemic in nature.  Remember that in rare documented cases girls in school have been prone to inexplicable hysteria on a mass scale. Societies have also been prone to hysteria. It is extremely important that this does not happen.
Rainfall failure is being watched. The 93 per cent figure emerges from a statistical and not a physical model of the kharif monsoon.  I am a trained  econometrician and my teacher Lawrence Klein was an earlier recipient of the  Nobel Prize. Statistical models are a way of looking at the future when other ways are not there.  But uncertainty is  there.  In this case, it is also measured. We know the  El Nino matterd in the past.  We really do not know why.  We know that the rainfall  from the Pacific — from the to the Asian landmass is a constant.  We really do not know why.  When China gets more rain, we get less and vice versa.
We have reached the stage of Nirvana where pursuit of knowledge is no longer of value.  It is suited experts who build the future. The kisan is the beneficiary of forward markets, which I have always supported as an objective.  If you say that, “Listen I was in a maize- purchasing area and the forwards do not matter to the Adivasis,” you are told that the market is thin.  After you say that if the market is thin, the first round of reform has to create a functioning market they look askance, as if you are relic from Neanderthal times to use an expression of  Jagdish Bhagawati.  
The land legislation brought in by the UPA Government retained the powers of the State in the eminent domain but only at the margin.  By and large, the legislation made a bold effort to create a land market and was an adjunct to the larger process of reform in the economy.  The powers of the State were curtailed. If they acquired land for public purpose like construction of roads, hospitals and other social and infrastructural facilities, they would have to purchase upto 70 per cent from the open market.  The State could however, use its powers of Eminent Domain to acquire the rest.  This was sensible, since it precluded that one or two people could stop the acquisition of land for social purpose and delay the construction of a highway or a hospital and so on. In particular public purpose like defence and security projects had priority. This has been done in Chandigarh, but that is an exception.

High-opportunity costs
This process was also legislated for the land requirements of manufacturing enterprises.  Some experts were critical of this and I was one of them.  It is true that land costs are rising and procurement of land for an industrial project is a difficult problem. This however, reflects the basic scarcity of the resource endowments of the country.  India is short of water, energy and prime agricultural land. In addition, manufacturing enterprises want to locate around metropolisis, even if the land there has high-opportunity costs in terms of agricultural or rural needs. They would not like to go to barren land elsewhere. To be fair, we don't do land use planning by building infrastructure for such alternative locations on a sufficient scale.
The manufacturing sector has to learn to live with the real scarcities of the economy.  In a sense, it is being argued that Indian industry has the benefit of labour costs and certain kind of technological expertise, but not that of scarce land near the metropolis.  A long-lasting reform would require that the policy makers are able to look into the real problems rather than revert back to the colonial mindset that the State knows better who to endow land to.
It is interesting that no one has raised the issue that the Land Ordinance and now the Bill are inconsistent with economic-reform strategies. Reform means that different economic agents pay the market price or opportunity costs of the resources they need, rather than rely on the State’s allocative powers.
It is strange that when it has come to an opportunity for the farming community to make money from scarcity rentals, the State which swears by reform goes out of the way to deny them the economic benefit of garnering such scarcities. It can be argued that non- market methods are needed to handle scarcities. But that is not there in policies for other commodities. So why discriminate against the farmer when at long last he has a chance to make money? Land-use planning may not be possible since planning has been abolished. But the authorities could ask their Niti Ayog to examine the problem, rather than follow the Ordinance route. The hundred smart cities should build smart agricultural marketing infrastructure.
The writer, an eminent economist, is Chancellor,
Central University of Gujarat, Vice-Chairman, Sardar Patel Institute of Economics & Social Research & Former Union Minister of Power, Planning, Science & Technology

No help for us, we are farmers
There is a very little of policy which helps the farmer.  The farmers are growing crops where the government is not there.   My book on the future of Indian agriculture showed that there were four million kisans who we ignored, They were  going to the market with  their produce to meet the demand  which came from high-income growth in the economy. These markets are largely in our villages, which we calls  Census Towns.   These markets only mean that kisans go there, because we do not provide communication or any other infrastructure. The APMCs have no relationship with these markets. There is no crop insurance and there is no social security. Policies are in a rarefied domain where the policy maker does not know or takes no action. On the top of all this, if the farmers right to land is taken away, he or she feels doubly deprived.