Abstract
This paper revisits the debate on the relationship between farm size and utilisation of agricultural land. Since the 1960s, a large number of studies have been examining this relationship and suggesting possible explanations supporting their thoughts. Three significant hypotheses exist in the literature forwarded by different scholars in this regard: an inverse relationship, a positive and a U-shaped one. Using the recent data from the Agriculture Census of India, this paper attempts to analyse the spatio-temporal trends of the relationship between farm size and land utilisation and examine the hypotheses and explanations already advanced, taking a state-level analysis in India. We found an inverse relationship where smaller farms are more fully and intensively used compared to the larger farms; however, the increasing share of unutilised land among the small and medium farms in the recent decade of 2005–2006 to 2015–2016 indicates a losing ground of small farmers because of ongoing agrarian distress.
Introduction
Agriculture has a very important contribution to the Indian economy and plays a significant role in the overall socio-economic condition of the country. Agriculture and allied activities contribute about 14% to the country’s gross domestic product (GDP; Federation of Indian Chambers of Commerce and Industry (FICCI), 2015) and support the livelihood of almost half of the total population, given that about 49% of the total workers are engaged in agriculture (NSSO, 2014). However, most of the farmers in India are small or marginal farm holders and practice subsistence farming. The share of small and marginal landholders was 83% in 2005–2006 (Chand et al., 2011), and the average size of landholding has declined from 2.3 ha in 1970–1971 to 1.33 ha in 2000–2001 (Mahendra Dev, 2012). India also witnesses a rapidly declining land–man ratio which requires efficient use of agricultural land utilisation.
A long time ago, Sau (1976) stated that land is not a timeless and static concept. In India, 141 million hectares of net cultivated land constituting 45.86% of the total operated area in 2010–2011 is as good as 423 million hectares if this land can be utilised three times a year. It is the degree of utilisation that gives a dimension of efficiency of utilisation of the vital resource, which is critical in a country like India, and one of the significant factors shaping the quality of land utilisation is the size of farms. This paper focuses on the relationship between farm size and land utilisation in the Indian context.
Since the 1960s, there has been a long debate over the relationship between farm size and utilisation of agricultural land in India. Several studies have analysed this relationship and suggested possible explanations supporting their thoughts (Chadha et al., 2004; Hossain, 1974; Khan, 1979; Mazumdar, 1963; Rudra, 1968; Sen, 1962). After a detailed scrutiny of the existing literature, it is found that there are three significant hypotheses forwarded by different renowned scholars in this regard: the first group advocates an inverse relationship between farm size and land utilisation, the second group believes in a positive relationship and a U-shaped relation is proposed by the third. The first group of researchers has established a negative relationship between farm size and land utilisation (Bardhan, 1973; Bhalla and Roy, 1988; Bharadwaj, 1974; Chadha et al., 2004; Hossain, 1974; Sen, 1962, 1964). It is argued that small farms are more productive and more fully utilised compared to medium- and large-size farms and the ‘productivity per acre decreases with the size of holding’ (Sen, 1962). Smaller farms are cultivated mainly by the family labours who provide more efforts than the hired labours, given the limited alternative opportunities for livelihood support other than farming. In contrast, large farms are dependent on hired labour, so they tend to restrict their labour to a certain level. Mazumdar (1963) also observes that higher productivity of land in smaller farms is a function of labour-intensive practice as ‘more inputs are applied in smaller farms because of the necessity to earn a minimum level of living for maintaining the biological needs of subsistence’. Similarly, Hossain (1974) states that ‘small farms are more productive because of better labour endowment and intensive labour use’.
The second school of thought, however, believes that a positive association exists between farm size and land productivity, where productivity increases with farm size. Khan (1979), in an extensive study of 732 irrigated farms of the Indus basin, found that the large farms are 9% more productive than that of small farms due to extensive use of ‘non-traditional’ inputs like fertiliser, hired labour and machinery, which are more efficient than the ‘traditional’ inputs. The last group, deviating from the other two, argues that the relationship between land productivity and farm size is rather ‘U-shaped’ as the productivity decreases with an increase in the size of farms and after reaching a minimum level, the land productivity again starts rising with the increase in farm size. Small farms have higher productivity due to ‘efficient and intensive use of labour and land’, while the higher productivity of large farms is attributed to the fact of ‘efficiency in the use of capital intensive methods’ (Iqbal, 1989). Mahmood and Nadeem-ul-haque (1981) also observed a similar pattern in Pakistan that ‘the smallest and largest farm sizes have the highest land productivities, while the middle farmers are relatively inefficient’.
It is therefore understood that there are different views among scholars about farm size and agricultural land utilisation; however, it should be noted that the grouping of farm size would tend to impact the findings of these studies. Different researchers have classified farm size in different ways; for instance, Khan (1979) has grouped farm size into two broad categories, small farms (i.e. up to 25 acres) and large farms (i.e. more than 25 acres), while Mahmood and Nadeem-ul-haque (1981), criticising Khan’s (1979) view of positive relation due to over-aggregation of farm size categories, have used three farm size categories, that is, small farms up to 12.5 acres, moderate farms between 12.5 and 25 acres, and large farms above 25 acres, and concluded with a U-shaped relationship between farm size and land productivity. Hence, it is very difficult to generalise the productivity of land vis-a-vis the farm size. Considering the long debate on farm size and agricultural land utilisation starting from the 1960s, this paper attempts to analyse the spatio-temporal trends of the relationship between farm size and land utilisation and examine the hypotheses and explanations already advanced, taking a state-level analysis in India.
Database and Methodology
Data related to farm size, area of operational holdings and utilisation of agricultural land have been drawn from the Agriculture Census of India, 1995–1996 to 2015–2016. This census provides a wide range of information regarding land use for all the states under the heads of net sown area, area under current fallows, other uncultivated land excluding fallow land, fallow land other than current fallow, culturable waste land and land not available for cultivation. The first two categories were treated as net cultivated area and the fallow land other than current fallow, other uncultivated land excluding fallow land, and culturable waste land were considered as uncultivated land in this paper. This paper used the five standard farm size categories defined by the Agricultural Census. These are marginal (0–1.0 ha), small (1.0–2.0 ha), semi-medium (2.0–4.0 ha), medium (4.0–10.0 ha) and large land (more than 10.0 ha). For a comparative analysis of the relationship between farm size and land utilisation across the states from 1995–1996 to 2015–2016, the newly formed states (i.e. Jharkhand, Uttarakhand and Chhattisgarh) were merged with their parent states. It is found that the survey was not conducted in Maharashtra in 2005–2006; therefore, the data of 2000–2001 were used for the state.
Results and Discussion
Structure of Landholdings in India
Most of the Indian farmers are small landholders. It is observed that out of 146.45 million total landholdings in India in 2015–2016, around 126.06 million holdings are under marginal and small size categories. As seen in Table 1, most of the agricultural land in India is smaller in size. The combined share of marginal and small land holdings is as high as 80.31% of the total operational land in 1995–1996, but the area operated under these two farm size categories accounted for only 36.02% of the total area. On the contrary, just 1.22% of large landholders own almost 15% of the operated area. This asymmetric distribution of landholding and area reflects huge inequality between the small and large farmers in the country where some handful of large farmers hold a massive amount of land. However, there is a clear trend of increasing number of marginal and small landholders as well as the area under such categories from 1995 to 1996 onwards. The area under these small holders increased to 41.14% in 2005–2006 and 46.94% in 2015–2016. This changing pattern indicates a decreasing trend of inequality in the distribution of land among small and large farmers as captured by the reduction in Gini coefficient from 0.56 in 1995–1996 to 0.52 in 2015–2016. However, the change in Gini ratio being very less, only 4 percentage points, over a long period of two decades implies the dominance of large landholders, as about 9.07% of the total operated land area in 2015–2016 is concentrated with only 0.57% large landholders. Moreover, the ratio of area coverage and landholding for the large farms has gone up to 15.84 from 12.17, while the ratio for marginal holders increased marginally to 0.35 from 0.28 in the study period. A close observation of the average size of landholding shows that the small holding character of Indian agriculture is much more prominent even today. The average size of landholding in this country was 2.3 ha in 1970–1971, which drastically reduced to 1.41 ha in 1995–1996 and even further to 1.08 in 2015–2016 (Figure 1). More than 68% of land is marginal landholding with less than 1 ha of land.
Distribution of landholding and area by farm size categories in India.
Source: Calculated from Agriculture Census, 1995–1996 to 2015–2016.
Average size of landholding in India.
Distribution of Uncultivated Land in India
Figure 2 presents the spatial distribution of uncultivated land across the states in India from 1995 to 1996 to 2015–2016. Uncultivated land is the cultivable land which is not currently cultivated and could be under culturable waste land, fallow land or other uncultivated land including pastures and grazing land. Around 7.7 million hectares comprising 4.73% of the total agricultural land remained uncultivated in India in 1995–1996. This figure has slightly reduced to 3.46% in 2005–2006 and then again unexpectedly increased to 3.79% in 2015–2016 as per the recent Agriculture Census.
Spatial distribution of uncultivated land across the states in India.
There are considerable variations in the distribution of uncultivated agricultural land across the states in India because of regional specificities and inequalities in different agricultural systems. As observed in Figure 2, the agriculturally developed states, such as Punjab, Haryana, Uttar Pradesh and, to some extent, Gujarat, have a very low percentage of uncultivated land, less than 1% of the total operational land because of the availability of high irrigation facility. These states have the highest irrigated land in the country, therefore, the farmers cultivate most of the agricultural land. Similarly, the states of West Bengal and Odisha also report a lower share of unutilised land which could be attributed to a humid agro-climatic condition and high density of population. On the contrary, the proportion of unutilised land tends to be higher (more than 5%) in the mountainous regions and areas with inadequate irrigation facilities, such as Jammu and Kashmir, Nagaland, Himachal Pradesh, Arunachal Pradesh, Rajasthan, and Maharashtra. Nagaland shows that almost half of the operational land remained uncultivated (42.06%) followed by Himachal Pradesh (35.54) and Arunachal Pradesh (29.74) as per the survey in 2015–2016. In the southern and eastern coastal regions of the country, the share of uncultivated land is somewhat moderate, ranging from 1.0% to 3.0%.
Farm Size and Land Utilisation: Scenario at National Level
The nature of land utilisation varies considerably across the farm size categories. At the all India level, the relationship between farm size and land utilisation, as observed from Figure 3, seems to show a clear negative trend. Smaller farms are more intensively used compared to larger farms. The smaller farmers, with limited access to land, tend to make it up with their labour, as the farm size productivity debate suggests. In 1995–1996, low proportions of land were left uncultivated under the marginal and small farms, while the corresponding figures are much higher for medium and large farms. In other words, the large farmers are not utilising their lands as optimally as the small farmers do. This inverse relationship deepens over the decade at the national level. In 2005–2006, the share of uncultivated land under smaller farms further declined, while the corresponding figures for the large farms almost remained stagnant. Thus, the historical trend that the earlier studies observed has continued and sharpened over time (Chadha and Sharma, 2001). However, the trend in the recent decade from 2005–2006 to 2015–2016 shows a contrasting picture. Surprisingly, the share of unutilised land among the small and medium farms appears to have gone up, while the large farms witness a declining trend.
Uncultivated land by farm size categories in India, 1995–1996 to 2015–2016.
The reason behind more efficient utilisation by smaller farmers is stated to have been driven by utilising higher availability of family labour per unit of land (Sen, 1962, 1964); the small farmers are primarily dependent on a small amount of land for their livelihood, therefore they cannot afford to keep their land left uncultivated. Other than a more intensive use of the family labour per unit of land, another possible explanation cited for the inverse relationship between farm size and land-use intensity is related to fertility of soil, aptly seen in the context of agricultural space. In fertile regions, land is more densely populated, farm sizes tend to be smaller and the agricultural practices are more labour-intensive. Contrastingly, farm sizes are typically larger in regions that were historically less fertile (Newell et al., 1997). Notably, many of these regions, like the north-west part of India, have become among the country’s most productive regions due to large-scale investments in agricultural infrastructure, in particular, irrigation. It would be fairly acceptable to argue that the marginal effect of a comparable quantum or even proportion of underutilised land is lower on the large farmer than those who cultivate smaller holdings. Moreover, due to access to higher financial and human capital, the families of large farmers often do not entirely depend on agriculture and have other means of livelihood support (Chadha et al., 2004). Sau (1976), albeit a few decades back, noted that they earn by lending money to small farmers and agricultural labourers at a high interest rate, engage in trading of agricultural products and food grains, and also participate in the business of industrial goods from town to village markets.
However, the recent trend of an increasing share of unutilised land among small and medium farms and the declining trend among large farms sharply contrast the findings of the earlier studies. It could be argued that the small farmers who had advantages in terms of family labour are losing their grounds given the ongoing agrarian distress, the land scarcity and the limits it sets to total production have deepened in relation to the larger farmers. Abraham (2016) noted that due to the agrarian crisis that appeared in the mid-2000s, there have been shifts of occupation from farm to non-farm sectors in India. It is fair to articulate given the stagnation in agriculture and the increasing input costs that small farmers find the cultivation unprofitable and tend to use family labour in non-farm jobs to support their families. The findings from the National Sample Survey 61st and 68th round employment and unemployment survey are testimony to this. It is observed that the shift from the farm to non-farm sector is much more prominent among small farmers than the large ones (Table 2). The share of male workers in the non-farm sector among marginal landholders has increased from 54.59% in 2004–2005 to 60.63% in 2011–2012. Similarly, the corresponding figure for female workers increased by 10%–40.13% over the same period. Using the Census of India occupation data, similar occupational changes have been witnessed (Table 3). There are sharp declines in the share of cultivators for both main and marginal workers and the rise of other workers who are engaged in the non-farm sectors.
Changes in work participation by farm size in India, 2004-05 to 2011-12.
Source: Calculated from NSSO 61st and 68th Rounds.
Changes in occupation diversification in India.
Source: Calculated from Census of India, 2001 and 2011.
Farm Size and Land Utilisation Across the States
The relationship between farm size and utilisation of agricultural land is likely to vary across the states in India, depending on the existing regional inequalities among different agricultural systems. The inequalities of resource distribution play a significant role to determine the differences in unutilised land across farm size categories. Chadha et al. (2004) theorised that the usual variation in unutilised land across the farm size categories would reduce in the agricultural regions characterised by high inequalities between farmers, defined in terms of access to resources; given that the region is productive, the large farmers are able to effectively make up for the labour by capital relative to the capabilities of the small farmers. They also argued that inequalities would be more marked in irrigated areas compared with unirrigated areas. Moreover, within irrigated areas, the inequality of resource distribution across farm size categories would be greater in tubewell-irrigated regions than in regions under canal irrigation. This is because the construction of tubewell irrigation requires appreciable private investment, and in regions with a developed water market, the cost of irrigation is higher for smaller farmers who are mostly water buyers, whereas the large farmers are water sellers/tubewell owners. In contrast, the canal irrigation facilities are mainly constructed with public funds and the cost of irrigation is also lower than tubewell irrigation. Based on the work of Chadha et al. (2004), this paper attempts to further explore the trends and changes in the utilisation of land across the states in India using recent data from the Agriculture Census. For this analysis, some states have been selected based on the criterion of proportion of net irrigated area to net sown area and the sources of irrigation facilities. The most important source of irrigation, whether canal or tubewell, is considered an important factor, and the states where the difference between these two sources is more than 10% have been selected (Table 4).
Irrigation facilities across states of India, 1995–1996.
Source: Computed from Agriculture Census 1995–1996, based on Chadha et al. (2004).
NIA: net irrigated area; NSA: net sown area.
Figure 4 presents a comparative picture of proportion of uncultivated land across farm size categories in different states of India over the decades of 1995–2006 to 2015–2016. The inverse relationship between farm size and land utilisation is also evident in almost all the states. The pattern of utilisation of agricultural land remains the same as established by earlier studies, that is, the proportion of uncultivated land increases with farm size. Almost all the states are testimony to this positive relationship between farm size and unutilised land, which has been sustained over the decades of 1995–1996 to 2005–2006. However, the recent trends during 2005–2006 to 2015–2016 reveal that the share of uncultivated land has unexpectedly increased slightly for small farms even when large farms witnessed a decline. This trend is more apparent in states like Uttar Pradesh, Andhra Pradesh, Karnataka, Maharashtra, Himachal Pradesh and Sikkim.
Uncultivated land by farm size categories across the states, 2005–2006 to 2015–2016.
However, the land utilisation vis-à-vis farm size is found to be different in some states, like Punjab and Haryana. The differences in uncultivated land between the small and large farmers are very low in these two states. The large farmers also use the land intensively as the small farmers do, sometimes even better than them. The better position of large farmers in these states could be attributed to the fact of agricultural development since the Green Revolution. Due to higher uses of new farm technology, mechanisation of farming, irrigation facility, and capital intensive cultivation practice, the large farmers have relative advantages that appear to have overtaken the labour advantages of the small farmers in terms of land-use efficiency. Other than the changes related to agricultural practices, in some states like Punjab in particular, the policies and institutions have worked in favour of large farmers, like electricity subsidy (Mahajan et al., 2009; Singh, 2012). There is also wide discrimination in the apportionment of electricity subsidy to different farm size categories. In Punjab, Singh (2012) noted that ‘a marginal farmer, on an average, got an electricity subsidy of Rs.2824 only during 2010-11 as compared with a large farmer getting as much as Rs.115,163, i.e., 40 times of what a marginal farmer gets’ (p. 627). Similarly, utilisation of modern agricultural machinery, such as tractors, laser levellers, rotavators, turbo happy seeders and zero tillers, among others, which reduce labour costs and also increase efficiency in farming practices, cannot be used in small and marginal farms. This gives a distinct edge to the large farmers of the more mechanised states over the small farmers, particularly in the north-western part of India.
Table 5 depicts the mean and coefficient of variation (CV) in under-utilisation of agricultural lands across farm size categories over the period of time. A distinct pattern is observed among the states with respect to mean and CV: low mean-high variation and high mean-low variation. The states with a low -level of uncultivated land have high variation across the farm size categories and the states with high uncultivated land report low CV across size classes. The highly irrigated states like Punjab, Haryana, Uttar Pradesh and West Bengal come under the first group. Although these states report a high CV ratio, the differences in the share of unutilised land among the small and large farm sizes are not much. On the contrary, the states with low irrigation facilities such as Rajasthan, Bihar, Sikkim, Maharashtra, Jammu and Kashmir, and Himachal Pradesh come under the combination of high uncultivated land and low CV. These results are consistent with the findings of the study by Chadha et al. (2004). They also argued that higher inequalities in the proportion of uncultivated area would indicate that small farmers are significantly better-off compared to larger ones. If these inequalities decline over a period of time, it would indicate that the smaller farmers are losing their relative advantage with regards to higher utilisation of their land resources for agricultural purposes (p. 219).
Variation in unutilised agricultural land across farm size categories.
Source: Calculated from Agriculture Census, 1995–1996 to 2015–2016.
A comparative analysis of variation in unutilised land reports that there was an increase in CV ratio in the predominantly tubewell-irrigated regions (i.e. West Bengal, Haryana, Uttar Pradesh, and Gujarat) over the decade from 1995–1996 to 2005–2006, barring Punjab where a slight decline was noticed. Although the increasing trend remains intact in the first two states in the next decade (2005–2006 to 2015–2016), Uttar Pradesh and Gujarat report a huge decline in the CV ratio, implying that the smaller farmers are losing their grounds. A mixed pattern is observed in the canal-irrigated regions: some states (Madhya Pradesh and Odisha) report a decreasing trend in the first decade and then a slight increase, while some (Andhra Pradesh, Karnataka, Tamil Nadu) show an increase in the first half followed by a declining trend in the recent decade. A consistent decreasing trend is observed in Maharashtra. These results are in sharp contrast with the findings of Chadha et al. (2004). In their studies, they found a decreasing trend of variations in the first group of states (Uttar Pradesh and West Bengal) and a rising trend in the latter (Odisha and Maharashtra). Amid these mixed trends, the findings of the present study reflect that the smaller farmers are losing their relative advantages in terms of higher utilisation of agricultural land in most of the states – be it tubewell-irrigated or canal-irrigated states.
The scenario is more clearly captured in Figure 5. The pattern of land utilisation across farm size categories in the states of Uttar Pradesh, Punjab, Andhra Pradesh and Karnataka further strengthens this. The large farmers in Uttar Pradesh reduced the uncultivated land by utilising their land more intensively than that of the smaller farmers, and the share of unutilised land in 2015–2016 became even lower than the smaller farms. Similar findings were observed in Punjab. The case of Karnataka is slightly different. During 1995–1996 to 2005–2006, the proportion of uncultivated land reduced significantly for marginal and small farms, while large farms witnessed a rising trend; however, the trend became the opposite in the next decade reporting an increasing trend for small farms and a decreasing one for large farms. The trends in Andhra Pradesh show that although small farms were more intensively used compared to large farms, they lost their positive advantage with regards to land utilisation since 2005–2006.
Uncultivated land across farm size categories in different states.
Concluding Remarks
This paper has revisited the long debate on the relationship between farm size and utilisation of agricultural land using recent data from the Agriculture Census and examined the existing hypotheses and their explanations forwarded by different scholars. It is observed that most of the farmers in India are small landholders and the average size of landholding has been decreasing over the years. Although the inequality levels in distribution of land between the small and large farmers have declined slightly over the study period, the dominance of large land holders remains intact as a handful of large farmers holds a larger share of agricultural land.
The findings of this study confirm the hypothesis that there is an inverse relationship between farm size and utilisation of agricultural land in India, which is consistent with other previous studies (Bardhan, 1973; Bhalla and Roy, 1988; Chadha et al., 2004; Sen, 1962, 1964). Smaller farms are more fully and intensively used compared to larger farms. The higher utilisation of smaller farms is attributed to the greater availability of family labour and dependence on a small amount of land for their livelihood. Contrastingly, large farmers do not entirely depend on agriculture and have other means of livelihood support excluding cultivation, such as money lending, trading and business of agricultural and industrial goods (Chadha et al., 2004; Sau, 1976). However, the recent trend of an increasing share of unutilised land among small and medium farms and a declining trend among large farms over the recent decades of 2005–2006 to 2015–2016 are sharply contrasting to the findings of the earlier studies. It indicates that small farmers who had advantages in terms of family labour are losing their grounds given the ongoing agrarian distress, land scarcity and the limits it sets to the total production have deepened in relation to the larger farmers. A study by Abraham (2016) noted that due to the agrarian crisis that appeared in the mid-2000s, there have been shifts of occupation from the farm to non-farm sectors in India. Using NSSO employment and unemployment surveys, the present study found that the shift from the farm to non-farm sector is much more prominent among small farmers than the large ones during 2004–2005 to 2011–2012.
However, there are regional variations in this relationship between farm size and land utilisation across the states in India, depending on the existing regional inequalities in different agricultural systems. The proportion of unutilised land is very low in the regions with high irrigation facilities, while the share is higher in unirrigated areas and hilly mountainous regions. The predominantly tubewell-irrigated states of India have witnessed a clear increasing trend in the variation of under-utilisation of agricultural land over the decades of 1995–1996 to 2005–2006; however, Uttar Pradesh and Gujarat report a huge decline from 2005–2006 to 2015–2016. A mixed pattern is reported in canal-irrigated regions. These results are in sharp contrast with the findings of Chadha et al. (2004). The findings of the present study reflect that the smaller farmers are losing their relative advantages in terms of higher utilisation of agricultural lands in most of the states in India – be it tubewell-irrigated or canal-irrigated states.
It is therefore noted that the availability of irrigation facilities and source of irrigation have significant impact on the utilisation of agricultural land, as argued by Chadha et al. (2004), which is further strengthened by the findings of the present study. However, there are also other factors, including agrarian distress, non-farm employment opportunities, educational levels and urbanisation, that could potentially affect the utilisation of agricultural land across farm size categories which need to be studied further.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Ethical Approval
This study is based on the secondary information which is available in the public domain. Therefore, no separate ethical approval is required for this study.
Funding
The author(s) received no financial support for the research, authorship and/or publication of this article.
