The agrarian inheritance at Independence

Detail

A. Colonial legacy: who got the farm surplus

Settlement details (Permanent Settlement, ryotwari, mahalwari) are in colonial-economy-1947.

• Intermediaries took the farm surplus. Colonial revenue settlements placed a class of middlemen between the state and the actual farmer.
• Intermediary: a person who holds rights over land and collects rent from it, but does not farm it himself.
• The main types were zamindars (landlords who collected rent and paid land revenue to the state), jagirdars (holders of land grants, called jagirs, given for service) and inamdars (holders of rent-free gift lands, called inams).

• They collected rent from the real tillers but did nothing to improve the land (Class 11, Indian Economy on the Eve of Independence).

• Fixed revenue dates led to harsh rent collection.

• Revenue had to reach the state by fixed dates. If it did not, the zamindar lost his rights.
• So zamindars squeezed cultivators for rent "regardless of the economic condition of the cultivators". Bad harvests brought no relief.
• The result was misery and social tension in the villages.

B. The chain of exploitation

• Subinfeudation: layers of sub-lessees between the state and the tiller.
• The state leased to the zamindar, the zamindar leased to a sub-lessee, and the sub-lessee leased to another.

• Each layer took a cut. The tiller at the bottom paid for all of them.

• Rack-renting: charging an excessive rent that leaves the tiller almost nothing.

• Worked example (illustration): a tenant grows 10 quintals of rice and pays 6 quintals as rent. Only 4 quintals are left to feed the family, keep seed and buy inputs. Rent here is 6 ÷ 10 = 60% of the produce.

• Compare this with the post-Independence national guideline, which set fair rent at 20–25% of the produce [2].

• Absentee landlordism: land owned by people who neither live on it nor farm it, and who lease it out to tenants.

• Their only interest was rent, so nobody invested in the land.

• Insecure tenants and sharecroppers.

• Sharecropper: a tenant who pays rent as a share of the crop instead of a fixed cash amount.
• Both tenants and sharecroppers could be evicted at will.
• They had "neither resources and technology nor incentive to invest" (Class 11, Indian Economy on the Eve of Independence). A tenant who might lose the land next year will not dig a well on it.

C. Why the land stayed poor

• No investment in the land. Agriculture was "starved of investment in terracing, flood-control, drainage and desalinisation of soil".
• Terracing: cutting hill slopes into flat steps so that soil and water are not washed away.

• Desalinisation of soil: removing excess salt from soil so that crops can grow.

• Poor inputs. Technology was poor, irrigation was scarce and fertiliser use was negligible.

• Commercialisation of agriculture without prosperity.
• Commercialisation of agriculture: growing crops to sell in the market rather than to eat at home.
• Some farmers moved from food crops to cash crops (cotton, jute, indigo). These fed British industry.

• Cash-crop yields rose in some areas, but farmers did not become better off. Less land under food crops also reduced food security.

• Stagnation.

• Total output rose only because more land was brought under the plough (extensive cultivation, meaning more area). Output per hectare stayed low.
• In the first half of the 20th century, aggregate real output grew by less than 2% a year and per capita output by about 0.5% a year.
• Real output: output measured at constant prices, so that price rises are removed.
• Formula (approximate): growth of per capita output ≈ growth of total output − growth of population.

• Worked example (illustration only): if output grows 2% a year and population grows 1.5% a year, per capita output grows about 2 − 1.5 = 0.5% a year. So a small rise in total output was almost used up by the extra mouths to feed.

• The frame in Class 11, Indian Economy 1950–1990: under colonial rule there was "neither growth nor equity" in agriculture.

• No growth, because yields were stagnant.
• No equity, because the surplus went to intermediaries, not to tillers.

D. The position around 1950

• Dependence on agriculture.
• About 75% of the population depended on agriculture (Class 11, Indian Economy 1950–1990).

• The colonial-era chapter gives about 85% of people living in villages and 70–75% of the workforce in agriculture.

• Agricultural productivity: output per unit of land or per unit of labour.

• Formula: land productivity (yield) = total output ÷ area cropped. Labour productivity = total output ÷ number of workers.
• Worked example (illustration): a farm of 5 hectares produces 40 quintals of wheat. Yield = 40 ÷ 5 = 8 quintals per hectare. If 4 workers farm it, labour productivity = 40 ÷ 4 = 10 quintals per worker.

• Productivity was very low around 1950 for three reasons:

  • old technology;
  • missing infrastructure for most farmers;
  • dependence on the monsoon, with very few farmers having irrigation.

• Subsistence farming: farming mainly to feed the household, with little marketable surplus left to sell. It was typical of small holdings using traditional methods.

• Marketable surplus: the part of output left over after the farm family's own needs (food, seed, feed for animals, wages paid in grain). It is the amount that could be sold.
• Formula: marketable surplus = total output − (family consumption + seed + feed + payments in kind).
• Worked example (illustration): output 20 quintals; family eats 15, keeps 1 for seed, pays 2 in kind. Marketable surplus = 20 − 18 = 2 quintals.

• Trap: marketed surplus is what the farmer actually sells. It can be larger than marketable surplus when a debt-ridden farmer is forced to sell grain the family needs ("distress sale").

• Partition made the food problem worse. West Punjab went to Pakistan, and with it the irrigated canal colonies (the surplus wheat and cotton lands).

E. Food imports and "ship-to-mouth"

• PL-480. Low productivity "forced India to import food from the USA".
• PL-480 was the US law of 1954 (Public Law 480) for sending surplus US farm produce to other countries on easy terms. India's agreement was signed in 1956.
• India moved away from the goal of food self-sufficiency and relied on subsidised PL-480 wheat imports from the USA. These grains were available continuously in this period [3].

• Import disincentive: cheap imported wheat kept grain prices low. That reduced Indian farmers' reason to grow more. A Foodgrain Policy Committee (1967) raised this concern and favoured self-reliance [3].

• Drought and "ship-to-mouth".

• In the drought years 1965–66, grain went almost straight from ship to consumer. This was the so-called "ship-to-mouth" existence.

• Two years of severe drought (1965 and 1966) convinced India's leaders that they could not rely on foreign imports for food security (every person having steady access to enough food) [4].

• The turn to new technology.

• In 1966, M.S. Swaminathan persuaded the government to procure 18,000 tons of high-yielding Mexican wheat seeds [5][6].
• These seeds changed wheat farming, mainly in Punjab and Haryana [5].
• India's wheat production rose from 12 million tons (1964) to 20 million tons (1970) [5].

F. The two-pronged policy answer

Goal	Instrument	Logic
Equity	Land reforms	Change who owns and operates land
Growth	HYV technology (the Green Revolution)	Raise output per hectare

• Land reforms: changes in who owns land and on what terms it is held, so that the tiller gains rights and the surplus.
• After Independence, land reform had four components [2]:
  1. abolition of intermediaries;
  2. tenancy reforms (security of tenure and fair rent);
  3. land ceilings (a legal upper limit on how much land one family can own);
  4. consolidation of holdings (joining scattered small plots into one compact plot).
• Land is a State subject under the Constitution. Only State legislatures can make and carry out land-reform laws [2]. This is why results varied so much from state to state.

• Mixed results:

  • By 1960, laws abolishing intermediaries had been passed everywhere. This was the most successful part [2].
  • Tenancy laws (passed mainly 1960–1972) gave ownership or owner-like rights over only about 4% of the operated area [2].
  • Surplus land distributed under ceiling laws was less than 2% of the total net operated area, and it was concentrated in only six states [2].

• HYV (high-yielding variety) seeds: improved seeds that give much more grain per hectare. They need assured water, fertiliser and pesticides.

• The rest of this note is about the tension between these two goals. HYV technology raises growth, but it rewards farmers who already have land, water and money. That can widen inequality unless land reform comes first.

Prelims Hooks

• Class 11 NCERT describes colonial agriculture as "neither growth nor equity".
• Rack-renting means an excessive rent that leaves the tiller almost nothing. Subinfeudation means layers of sub-lessees between the state and the tiller.
• Marketable surplus = output − (family consumption + seed + feed + payments in kind). Marketed surplus is what is actually sold, and it can be larger in distress sales.
• First half of the 20th century: aggregate agricultural output grew < 2% a year and per capita output ≈ 0.5% a year.
• PL-480 is a US law of 1954. India signed its agreement in 1956. "Ship-to-mouth" refers to the drought years 1965–66.
• In 1966, India procured 18,000 tons of Mexican HYV wheat seed. Wheat output rose from 12 Mt (1964) to 20 Mt (1970) [5].
• The four components of land reform are abolition of intermediaries, tenancy reform, ceilings and consolidation. Abolition of intermediaries was the most successful and was legally completed by 1960 [2].
• Land is a State subject, so land-reform laws are made by State legislatures, not Parliament [2].
• Trap: Partition moved the irrigated canal colonies of West Punjab to Pakistan. This worsened India's food deficit.

Mains Points

• Institutions before technology. Colonial agriculture stagnated because of who held the land: absentee landlords, insecure tenants and rack-renting killed any reason to invest. It was not only a lack of seeds. This is why the post-1950 strategy put equity (land reform) beside growth (HYV). It also explains why weak tenancy reform, covering only about 4% of operated area [2], limited the spread of later gains.
• Food aid versus food sovereignty. PL-480 imports kept people fed in the 1950s–60s. But the grain was cheap and subsidised, so it held down prices for Indian farmers. The 1967 Foodgrain Policy Committee flagged this and favoured self-reliance [3]. The 1965–66 droughts turned this into a strategic lesson [4]. It links to today's case for MSP (minimum support price), procurement and buffer stocks, and to India's stand on public stockholding at the WTO.
• Growth-equity tension (GS-III). HYV technology needs water, fertiliser and credit. It therefore favoured irrigated regions (Punjab, Haryana) and larger farmers. Without effective ceilings (under 2% of net operated area redistributed [2]), growth came with regional and class inequality. The input subsidies of later decades partly tried to make up for this.
• Federal angle (GS-II). Land is a State subject, so reform depended on each State's political will and land records [2]. This is why results differed so much across states. The same logic applies to today's debates on land-leasing laws and digitising land records.