- Email: [email protected]
Tenancy and fallow land
World Development Perspectives 7–8 (2017) 28–31
Contents lists available at ScienceDirect
World Development Perspectives journal homepage: www.elsevier.com/locate/wdp
Research paper
Tenancy and fallow land ⁎
Thiagu Ranganathana, , Ghanshyam Pandeyb a b
Indian Institute of Management Nagpur (IIM Nagpur), Nagpur, India National Institute of Agricultural Economics and Policy Research, New Delhi, India
A R T I C L E I N F O
A B S T R A C T
Keywords: Fallow land Irrigation Tenancy India
This article explores the relationship between tenancy and fallow land in rural India. To do so, the article measures the average proportion of land left fallow among households in villages with different tenancy arrangements. The common tenancy arrangements in a village could be either sharecropping, fixed rent, both or none. A particular arrangement could be seen as an institutional form that evolves due to various historical, economic, and social factors. Our study explores the impact of these arrangements on land that is left fallow in two years (2004–05 and 2011–12) for the same set of households using the Indian Human Development Survey (IHDS) data. We find that the average proportion of owned land that is left fallow by the households is highest (18.3% in 2004–05 and 15.1% in 2011–12) in villages that had no tenancy arrangements and lowest (12.2% in 2004–05 and 6.2% in 2011–12) in villages that had fixed rent as the common tenancy arrangement. These findings are quite robust across farm households of different land class sizes and across farm households with and without irrigation. The results indicate that having tenancy markets could reduce the amount of land left fallow by farm households. In particular, the land left fallow is less among households in villages where the most common form of tenancy is fixed rent tenancy. This does provide a case for liberalising and legalising tenancy. But, care should be taken that such measures do not lead to land concentration among a few by increasing reverse tenancy.
1. Introduction Tenancy is an institution that has evolved in different ways given the historic and socio-economic conditions over years in various parts of India. Right after independence, India inherited a feudal agrarian structure and there was a need for land reforms in the country. Part of the land reforms implemented was related to land leasing which was either abolished or strictly regulated. These reforms were implemented in the 1960 s and 1970 s and tenancy is either legally banned or highly restricted in many states of the country1. Though such reforms have benefitted some farmers in the country, some of the results of these laws have been counterproductive (Hanstad and Haque, 2008). There have been three things that have happened due to these laws – there is a presence of concealed tenancy and the tenants do not get benefits related to formal credit and insurance; land is leased out for shorter time periods as laws in some states indicate that farmers who are tenants over a specified period have the right to be not evicted and/or purchase
⁎
land; land is left fallow instead of being leased out to other farmers if the farmer is not able to cultivate the land due to some reasons (NITI Aayog., 2016). This article explores this third aspect in detail using the Indian Human Development Survey (IHDS) data collected in 2004–05 and 2011–12. IHDS is a large-scale nationally representative survey conducted by National Council of Applied Economic Research (NCAER) in collaboration with the University of Maryland in 2004–05 and 2011–12. The survey was conducted in all the states and union territories of India except Andaman and Nicobar and Lakshadweep. The survey was conducted in all the states and union territories of India except Andaman and Nicobar and Lakshadweep. The survey was conducted over a sample of 42,152 households, including 27,579 households in around 1503 villages and 14,573 urban households in around 971 urban neighbourhoods. We use the data related to only the rural households in the analysis. The survey collected information on land owned, land leased-in and land leased-out by the households. The amount of owned
Corresponding author. E-mail address: [email protected] (T. Ranganathan). 1 In some of the states, such as Kerala, Jammu & Kashmir, and Manipur, leasing out agricultural land is banned without any exceptions while in some states like Bihar, Karnataka, Madhya Pradesh, etc., law allows only certain categories of landowners (widows, divorced women, members of armed force) to lease out land. There are other restrictive clauses related to tenancy duration, heritability of lease, conditions of termination of lease, etc., in different states of the country.
https://doi.org/10.1016/j.wdp.2017.11.002 Received 3 March 2017; Accepted 21 November 2017 2452-2929/ © 2017 Elsevier Ltd. All rights reserved.
World Development Perspectives 7–8 (2017) 28–31
T. Ranganathan, G. Pandey
Table 1 Tenancy, proportion of land leased out, and proportion of land left fallow. Most common tenancy arrangement
All None Share cropping Both Fixed rent F-Statistic (ANOVA with null hypothesis: mean total Fallow land across four types of villages is the same)
Average proportion of land owned that is left fallow
Average proportion of land owned that is leased out
2004–05
2011–12
Difference
2004–05
2011–12
Difference
13.7% 18.3% 13.6% 12.7% 12.2% 37.6***
9.0% 15.1% 9.6% 7.3% 6.2% 73.2***
−4.7%*** −3.2%*** −4.0%*** −5.4%*** −6.0%***
8.4% 2.5% 8.0% 9.6% 12.8% 48.7***
9.5% 4.1% 9.1% 10.8% 12.8% 35.5***
1.1%*** 1.6%** 1.1% 1.2%** 0.0%
Note: *, **, and *** in the difference columns indicate the p (observing the calculated difference if the null hypothesis of difference = 0) is less than 1%, 5%, and 10%. The same for the bottom ANOVA row indicates the p (observed F-statistic if the mean fallow land across four different types of villages is same) is less than 1%, 5%, and 10%.
land that was not cultivated or leased out was calculated as the land that was left fallow (land owned – land leased out – land cultivated)2. In the village level survey conducted in 2011-123, information was collected on the most common form of tenancy in the village. Accordingly, the village leaders/elders were asked about the most common form of tenancy in their village - fixed rent, share-cropping, both or none. The common form of tenancy in a village depended on the laws related to tenancy in a state. So, we might find that villages in a state to be similar in this aspect. Appendix A presents the state-wise distribution of villages across these four categories. We find that across all India, 13% villages have sharecropping, 16% have fixed rent, 56% percent have both, and 15% have none as the most common forms of tenancy. In this article, we calculate the average proportion of land left fallow among households in these four types of villages.
r ⩽ cr
Lr ⩾ 0
(3)
s ̃ ⩽ cs
Ls ⩾ 0
(4)
∂C Lc ⩾ 0 ∂Lc
(2)
(5)
The above equations suggest that farmers will cultivate that amount of land at which the risk-adjusted marginal income from cultivation is equal marginal costs of cultivation, they will rent out land at which the unit rent is equal to marginal costs of renting out, they will sharecrop land at which the risk adjusted output from sharecropping is equal to the cost of giving out unit land for sharecropping. For those who leave land fallow, the optimal land cultivated, rented out and sharecropped output together will be less than land owned by them. We have not considered the case of farmers leasing in land, but it can be shown that the conditions will remain the same even if it is considered. We have also assumed the consumption and labor supply decisions to be separable from land allocation decision in our framework which may not be always true.
Consider a farmer who owns land equal to L0, leases out Ls through sharecropping and Lr through fixed rent form of tenancy. Assuming that the farmer cultivates in Lc amount of land, a simplistic land use optimization problem of the farmer could be presented as follows:
3. Results
∼ Maximize θ f (Lc ,l,e )−C (Lc ,l,e ) + rLr + s L̃ s −cr Lr −cs Ls
The tables in this section present results pertaining to only those households which own agricultural land. Table 1 presents the average proportion of owned land left fallow and land leased out for households belonging to different types of villages. Table 1 shows that the average proportion of owned land left fallow by households is 4.7% higher in 2004–05 compared to 2011–12. The average proportion of land leased out in 2011–12 was 1.1% higher than that in 2004–05 indicating inverse relation between leasing out of land and fallow land. In both the survey years, the average proportion of owned land left fallow was the highest among households in villages with no tenancy (18.3% in 2004–05 and 15.1% in 2011–12). The average proportion of owned land left fallow was the lowest in both years among households in villages with fixed rent tenancy as the most common form of tenancy (12.2% in 2004–05 and 6.2% in 2011–12). Table 2 explores the proportion of land left fallow across villages with different tenancy arrangements for irrigated and unirrigated households. From Table 2, we observe that the findings in Table 1 related to tenancy and the proportion of land left fallow remain valid for both the irrigated and unirrigated households. In both the years, the average proportion of land left fallow among irrigated households is the highest in villages with no tenancy (17% in 2004–05 and 8.3% in 2011–12) and the same was lowest in villages with fixed rent tenancy (8% in 2004–05 and 3.9% in 2011–12). For the unirrigated households, the proportion of land left fallow was highest for households in villages with no tenancy (18.9% in 2004–05 and 18.1% in 2011–12) and lowest for households in villages with sharecropping in 2004–05(13.5%) and for
Lc + Lr + Ls ⩽ Lo
where l and e are the labor and external inputs with f(.) the production ∼ function and θ is the multiplicative error term, C(.) is the cost function, r is the rent per unit area of land, s ̃ is the risky unit output from land that is obtained from land that is given out for sharecropping, cr is the costs involved in giving out land for fixed rent – this will involve potential loss of land to tenant and other transaction costs involving search for tenants, etc., and cs is the cost of giving out land for share cropping – which will involve potential loss of land to tenant and other transaction costs involving search for tenants, and monitoring of efforts. It is important to note that the output from sharecropping is risky while rent is fixed and costs for sharecropping might be higher as it involves monitoring. The Lagrangian of the above maximization will be as follows:
∼ θ f (Lc ,l,e )−C (Lc ,l,e ) + rLr + s L̃ s −cr Lr −cs Ls + λ (Lo−Lc −Lr −Ls )
⩽
Lo−Lc −Lr −Ls ⩾ 0
2. Conceptual framework
Subject to
∼ ∂f θ ∂Lc
(1)
The first order conditions for the optimal solution is as follows: 2 In the 2011–12 round, data was collected on how much land was left under permanent fallow/pastures and how much was left as current fallow separately. This was not done in 2004–05. For comparability reasons, we use only total fallow land for both the years in our paper. 3 This question on the common form of tenancy was not asked in 2004–05 village survey. If that data has been there, we could have analyzed the changes in the common forms of tenancy in villages during this period.
29
World Development Perspectives 7–8 (2017) 28–31
T. Ranganathan, G. Pandey
Table 2 Tenancy, Irrigation, and Proportion of Land Left Fallow. Most common tenancy arrangement
Average proportion of land owned that is left fallow 2004–05 Irrigated
All None Share Cropping Both Fixed Rent F-Statistic (ANOVA with null hypothesis: Mean Total Fallow Land across four types of villages is the same)
11.7% 17.0% 13.6% 11.2% 8.0% 20.7***
2011–12 Unirrigated 15.5% 18.9% 13.5% 14.5% 17.0% 27.8***
Difference ***
3.8% 1.9% −0.1% 3.3%*** 9%***
Irrigated
Unirrigated
Difference
6.0% 8.3% 7.8% 5.5% 3.9% 45.3***
12.0% 18.1% 11.2% 9.6% 9.2% 21.4***
6%*** 9.7%*** 3.4%*** 4.1%*** 5.3%***
Note: *, **, and *** in the difference columns indicate the p (observing the calculated difference if the null hypothesis of difference = 0) is less than 1%, 5% and 10%. The same for the bottom ANOVA row indicates the p (observed F-statistic if the mean fallow land across four different types of villages is same) is less than 1%, 5%, and 10%. Table 3 Tenancy, Land Class, and Proportion of Land Left Fallow. Most common tenancy arrangement
Average proportion of land owned that is left fallow 2004–05
All None Share Cropping Both Fixed Rent ANOVA
2011–12
Marginal (< 1 ha)
Small (1–2 ha)
Medium (2–4 ha)
Larger (> 4 ha)
ANOVA
Marginal (< 1 ha)
Small (1–2 ha)
12.1% 15.9% 10.5% 11.0% 13.0% 31.3***
14.8% 24.4% 16.2% 13.2% 10.7% 26.1***
16.4% 22.8% 20.9% 14.8% 11.3% 14.02***
22.5% 37.3% 20.2% 23.9% 12.7% 8.52***
188.9*** 34.3*** 52.1*** 144.1*** 4.9***
8.2% 14.2% 8.0% 6.1% 6.2% 79.7***
9.8% 17.3% 12.4% 8.2% 6.7% 17.9***
Medium (2–4 ha)
11.5% 20.4% 13.5% 10.5% 6.4% 9.9***
Larger (> 4 ha)
11.8% 16.0% 14.2% 12.3% 4.7% 6.1***
ANOVA
125.3*** 12.7*** 28.4*** 133.0*** 3.6**
Note: *, **, and *** in the ANOVA columns indicates the p (observing the F-Statistic if the average proportion of land left fallow is same across four different land classes is same) is less than 1%, 5% and 10% levels. The same for the bottom ANOVA row indicates the p (observed F-statistic if the mean fallow land across four different types of villages is same) is less than 1%, 5%, and 10%.
2004–05 and 2011–12. We find association between the most common form of tenancy in the village and the average proportion of land left fallow by rural households. When there is no tenancy generally practiced in villages, the households tend to leave more land fallow. The average proportion of owned land left fallow is highest for households living in villages with no form of tenancy. This finding is robust for both years across farmers belonging to different land classes and with or without irrigation. The findings also seem to suggest that fixed rent form of tenancy seems to reduce the proportion of land left fallow significantly. The average proportion of owned land left fallow is lowest for households living in villages with fixed tenancy arrangement. This finding holds true for irrigated households and households belonging to all land classes except marginal farming households. Our findings suggest that legalisation and liberalisation of tenancy could reduce the proportion of land that is left fallow. But while doing so, precaution should be taken that such liberalisation does not lead to small and marginal farmers losing land and land getting concentrated among few. The Model Agricultural Land Leasing Act, 2016 has brought about the debate for this balance into forefront4,5.
those with fixed rent in 2011–12 (9.2%). Table 3 explores the proportion of land left fallow across villages with different tenancy arrangements for farmers belonging to different land classes. From Table 3, we find that in both years there is a positive association between farm size and proportion of land left fallow. In both the study years across all four land classes, the average proportion of owned land left fallow is highest for households in villages where there is no form of tenancy. For all land classes except marginal, the average proportion of owned land that is left fallow is lowest for households in villages with fixed rent tenancy arrangement in both the study years. For marginal land class, the average proportion of owned land left fallow in 2004–05 is the lowest among households in villages with sharecropping and in 2011–12, it is the lowest for households in villages with both forms of tenancy. 4. Conclusions This paper explores the relationship between tenancy and fallow land using Indian Human Development Survey (IHDS) data collected in
4 5
http://niti.gov.in/writereaddata/files/document_publication/NITIBlog2_VC.pdf http://peoplesdemocracy.in/2016/0501_pd/model-land-leasing-act-turning-clock-backwards
30
World Development Perspectives 7–8 (2017) 28–31
T. Ranganathan, G. Pandey
Appendix A Most common tenancy arrangement in the village State
None
Share cropping
Both
Fixed rent
Total villages surveyed
Jammu & Kashmir Himachal Pradesh Punjab Uttaranchal Haryana Rajasthan Uttar Pradesh Bihar Sikkim Arunachal Pradesh Nagaland Manipur Mizoram Tripura Meghalaya Assam West Bengal Jharkhand Orissa Chhattisgarh Madhya Pradesh Gujarat Daman & Diu Dadra & Nagar Haveli Maharashtra Andhra Pradesh Karnataka Goa Kerala Tamil Nadu Pondicherry All India
67% 71% 0% 53% 7% 3% 0% 0% 100% 83% 50% 0% 33% 0% 0% 22% 10% 19% 25% 9% 3% 12% 100% 0% 12% 6% 25% 100% 16% 34% 67% 15%
11% 18% 0% 18% 0% 49% 9% 3% 0% 17% 25% 50% 33% 33% 0% 22% 17% 43% 27% 13% 15% 17% 0% 0% 10% 5% 6% 0% 16% 0% 0% 13%
22% 12% 33% 29% 45% 47% 90% 97% 0% 0% 25% 50% 0% 67% 0% 43% 49% 38% 38% 68% 75% 70% 0% 0% 75% 41% 55% 0% 16% 42% 0% 56%
0% 0% 67% 0% 49% 1% 1% 0% 0% 0% 0% 0% 33% 0% 100% 13% 24% 0% 10% 11% 7% 2% 0% 100% 4% 49% 14% 0% 53% 24% 33% 16%
18 51 57 17 76 86 134 60 1 6 4 2 3 3 6 23 59 21 79 47 121 66 3 2 113 86 122 5 19 50 3 1343
NITI Aayog. (2016). Report of the Expert Committee on Land Leasing. Government of India, New Delhi. Accessed 3.03.17).
References Hanstad, T., Haque, T., & Nielsen, R. (2008). Improving Land Access for India’s Rural Poor. Economic & Political Weekly, 43(10), 49–56.
31
Contents lists available at ScienceDirect
World Development Perspectives journal homepage: www.elsevier.com/locate/wdp
Research paper
Tenancy and fallow land ⁎
Thiagu Ranganathana, , Ghanshyam Pandeyb a b
Indian Institute of Management Nagpur (IIM Nagpur), Nagpur, India National Institute of Agricultural Economics and Policy Research, New Delhi, India
A R T I C L E I N F O
A B S T R A C T
Keywords: Fallow land Irrigation Tenancy India
This article explores the relationship between tenancy and fallow land in rural India. To do so, the article measures the average proportion of land left fallow among households in villages with different tenancy arrangements. The common tenancy arrangements in a village could be either sharecropping, fixed rent, both or none. A particular arrangement could be seen as an institutional form that evolves due to various historical, economic, and social factors. Our study explores the impact of these arrangements on land that is left fallow in two years (2004–05 and 2011–12) for the same set of households using the Indian Human Development Survey (IHDS) data. We find that the average proportion of owned land that is left fallow by the households is highest (18.3% in 2004–05 and 15.1% in 2011–12) in villages that had no tenancy arrangements and lowest (12.2% in 2004–05 and 6.2% in 2011–12) in villages that had fixed rent as the common tenancy arrangement. These findings are quite robust across farm households of different land class sizes and across farm households with and without irrigation. The results indicate that having tenancy markets could reduce the amount of land left fallow by farm households. In particular, the land left fallow is less among households in villages where the most common form of tenancy is fixed rent tenancy. This does provide a case for liberalising and legalising tenancy. But, care should be taken that such measures do not lead to land concentration among a few by increasing reverse tenancy.
1. Introduction Tenancy is an institution that has evolved in different ways given the historic and socio-economic conditions over years in various parts of India. Right after independence, India inherited a feudal agrarian structure and there was a need for land reforms in the country. Part of the land reforms implemented was related to land leasing which was either abolished or strictly regulated. These reforms were implemented in the 1960 s and 1970 s and tenancy is either legally banned or highly restricted in many states of the country1. Though such reforms have benefitted some farmers in the country, some of the results of these laws have been counterproductive (Hanstad and Haque, 2008). There have been three things that have happened due to these laws – there is a presence of concealed tenancy and the tenants do not get benefits related to formal credit and insurance; land is leased out for shorter time periods as laws in some states indicate that farmers who are tenants over a specified period have the right to be not evicted and/or purchase
⁎
land; land is left fallow instead of being leased out to other farmers if the farmer is not able to cultivate the land due to some reasons (NITI Aayog., 2016). This article explores this third aspect in detail using the Indian Human Development Survey (IHDS) data collected in 2004–05 and 2011–12. IHDS is a large-scale nationally representative survey conducted by National Council of Applied Economic Research (NCAER) in collaboration with the University of Maryland in 2004–05 and 2011–12. The survey was conducted in all the states and union territories of India except Andaman and Nicobar and Lakshadweep. The survey was conducted in all the states and union territories of India except Andaman and Nicobar and Lakshadweep. The survey was conducted over a sample of 42,152 households, including 27,579 households in around 1503 villages and 14,573 urban households in around 971 urban neighbourhoods. We use the data related to only the rural households in the analysis. The survey collected information on land owned, land leased-in and land leased-out by the households. The amount of owned
Corresponding author. E-mail address: [email protected] (T. Ranganathan). 1 In some of the states, such as Kerala, Jammu & Kashmir, and Manipur, leasing out agricultural land is banned without any exceptions while in some states like Bihar, Karnataka, Madhya Pradesh, etc., law allows only certain categories of landowners (widows, divorced women, members of armed force) to lease out land. There are other restrictive clauses related to tenancy duration, heritability of lease, conditions of termination of lease, etc., in different states of the country.
https://doi.org/10.1016/j.wdp.2017.11.002 Received 3 March 2017; Accepted 21 November 2017 2452-2929/ © 2017 Elsevier Ltd. All rights reserved.
World Development Perspectives 7–8 (2017) 28–31
T. Ranganathan, G. Pandey
Table 1 Tenancy, proportion of land leased out, and proportion of land left fallow. Most common tenancy arrangement
All None Share cropping Both Fixed rent F-Statistic (ANOVA with null hypothesis: mean total Fallow land across four types of villages is the same)
Average proportion of land owned that is left fallow
Average proportion of land owned that is leased out
2004–05
2011–12
Difference
2004–05
2011–12
Difference
13.7% 18.3% 13.6% 12.7% 12.2% 37.6***
9.0% 15.1% 9.6% 7.3% 6.2% 73.2***
−4.7%*** −3.2%*** −4.0%*** −5.4%*** −6.0%***
8.4% 2.5% 8.0% 9.6% 12.8% 48.7***
9.5% 4.1% 9.1% 10.8% 12.8% 35.5***
1.1%*** 1.6%** 1.1% 1.2%** 0.0%
Note: *, **, and *** in the difference columns indicate the p (observing the calculated difference if the null hypothesis of difference = 0) is less than 1%, 5%, and 10%. The same for the bottom ANOVA row indicates the p (observed F-statistic if the mean fallow land across four different types of villages is same) is less than 1%, 5%, and 10%.
land that was not cultivated or leased out was calculated as the land that was left fallow (land owned – land leased out – land cultivated)2. In the village level survey conducted in 2011-123, information was collected on the most common form of tenancy in the village. Accordingly, the village leaders/elders were asked about the most common form of tenancy in their village - fixed rent, share-cropping, both or none. The common form of tenancy in a village depended on the laws related to tenancy in a state. So, we might find that villages in a state to be similar in this aspect. Appendix A presents the state-wise distribution of villages across these four categories. We find that across all India, 13% villages have sharecropping, 16% have fixed rent, 56% percent have both, and 15% have none as the most common forms of tenancy. In this article, we calculate the average proportion of land left fallow among households in these four types of villages.
r ⩽ cr
Lr ⩾ 0
(3)
s ̃ ⩽ cs
Ls ⩾ 0
(4)
∂C Lc ⩾ 0 ∂Lc
(2)
(5)
The above equations suggest that farmers will cultivate that amount of land at which the risk-adjusted marginal income from cultivation is equal marginal costs of cultivation, they will rent out land at which the unit rent is equal to marginal costs of renting out, they will sharecrop land at which the risk adjusted output from sharecropping is equal to the cost of giving out unit land for sharecropping. For those who leave land fallow, the optimal land cultivated, rented out and sharecropped output together will be less than land owned by them. We have not considered the case of farmers leasing in land, but it can be shown that the conditions will remain the same even if it is considered. We have also assumed the consumption and labor supply decisions to be separable from land allocation decision in our framework which may not be always true.
Consider a farmer who owns land equal to L0, leases out Ls through sharecropping and Lr through fixed rent form of tenancy. Assuming that the farmer cultivates in Lc amount of land, a simplistic land use optimization problem of the farmer could be presented as follows:
3. Results
∼ Maximize θ f (Lc ,l,e )−C (Lc ,l,e ) + rLr + s L̃ s −cr Lr −cs Ls
The tables in this section present results pertaining to only those households which own agricultural land. Table 1 presents the average proportion of owned land left fallow and land leased out for households belonging to different types of villages. Table 1 shows that the average proportion of owned land left fallow by households is 4.7% higher in 2004–05 compared to 2011–12. The average proportion of land leased out in 2011–12 was 1.1% higher than that in 2004–05 indicating inverse relation between leasing out of land and fallow land. In both the survey years, the average proportion of owned land left fallow was the highest among households in villages with no tenancy (18.3% in 2004–05 and 15.1% in 2011–12). The average proportion of owned land left fallow was the lowest in both years among households in villages with fixed rent tenancy as the most common form of tenancy (12.2% in 2004–05 and 6.2% in 2011–12). Table 2 explores the proportion of land left fallow across villages with different tenancy arrangements for irrigated and unirrigated households. From Table 2, we observe that the findings in Table 1 related to tenancy and the proportion of land left fallow remain valid for both the irrigated and unirrigated households. In both the years, the average proportion of land left fallow among irrigated households is the highest in villages with no tenancy (17% in 2004–05 and 8.3% in 2011–12) and the same was lowest in villages with fixed rent tenancy (8% in 2004–05 and 3.9% in 2011–12). For the unirrigated households, the proportion of land left fallow was highest for households in villages with no tenancy (18.9% in 2004–05 and 18.1% in 2011–12) and lowest for households in villages with sharecropping in 2004–05(13.5%) and for
Lc + Lr + Ls ⩽ Lo
where l and e are the labor and external inputs with f(.) the production ∼ function and θ is the multiplicative error term, C(.) is the cost function, r is the rent per unit area of land, s ̃ is the risky unit output from land that is obtained from land that is given out for sharecropping, cr is the costs involved in giving out land for fixed rent – this will involve potential loss of land to tenant and other transaction costs involving search for tenants, etc., and cs is the cost of giving out land for share cropping – which will involve potential loss of land to tenant and other transaction costs involving search for tenants, and monitoring of efforts. It is important to note that the output from sharecropping is risky while rent is fixed and costs for sharecropping might be higher as it involves monitoring. The Lagrangian of the above maximization will be as follows:
∼ θ f (Lc ,l,e )−C (Lc ,l,e ) + rLr + s L̃ s −cr Lr −cs Ls + λ (Lo−Lc −Lr −Ls )
⩽
Lo−Lc −Lr −Ls ⩾ 0
2. Conceptual framework
Subject to
∼ ∂f θ ∂Lc
(1)
The first order conditions for the optimal solution is as follows: 2 In the 2011–12 round, data was collected on how much land was left under permanent fallow/pastures and how much was left as current fallow separately. This was not done in 2004–05. For comparability reasons, we use only total fallow land for both the years in our paper. 3 This question on the common form of tenancy was not asked in 2004–05 village survey. If that data has been there, we could have analyzed the changes in the common forms of tenancy in villages during this period.
29
World Development Perspectives 7–8 (2017) 28–31
T. Ranganathan, G. Pandey
Table 2 Tenancy, Irrigation, and Proportion of Land Left Fallow. Most common tenancy arrangement
Average proportion of land owned that is left fallow 2004–05 Irrigated
All None Share Cropping Both Fixed Rent F-Statistic (ANOVA with null hypothesis: Mean Total Fallow Land across four types of villages is the same)
11.7% 17.0% 13.6% 11.2% 8.0% 20.7***
2011–12 Unirrigated 15.5% 18.9% 13.5% 14.5% 17.0% 27.8***
Difference ***
3.8% 1.9% −0.1% 3.3%*** 9%***
Irrigated
Unirrigated
Difference
6.0% 8.3% 7.8% 5.5% 3.9% 45.3***
12.0% 18.1% 11.2% 9.6% 9.2% 21.4***
6%*** 9.7%*** 3.4%*** 4.1%*** 5.3%***
Note: *, **, and *** in the difference columns indicate the p (observing the calculated difference if the null hypothesis of difference = 0) is less than 1%, 5% and 10%. The same for the bottom ANOVA row indicates the p (observed F-statistic if the mean fallow land across four different types of villages is same) is less than 1%, 5%, and 10%. Table 3 Tenancy, Land Class, and Proportion of Land Left Fallow. Most common tenancy arrangement
Average proportion of land owned that is left fallow 2004–05
All None Share Cropping Both Fixed Rent ANOVA
2011–12
Marginal (< 1 ha)
Small (1–2 ha)
Medium (2–4 ha)
Larger (> 4 ha)
ANOVA
Marginal (< 1 ha)
Small (1–2 ha)
12.1% 15.9% 10.5% 11.0% 13.0% 31.3***
14.8% 24.4% 16.2% 13.2% 10.7% 26.1***
16.4% 22.8% 20.9% 14.8% 11.3% 14.02***
22.5% 37.3% 20.2% 23.9% 12.7% 8.52***
188.9*** 34.3*** 52.1*** 144.1*** 4.9***
8.2% 14.2% 8.0% 6.1% 6.2% 79.7***
9.8% 17.3% 12.4% 8.2% 6.7% 17.9***
Medium (2–4 ha)
11.5% 20.4% 13.5% 10.5% 6.4% 9.9***
Larger (> 4 ha)
11.8% 16.0% 14.2% 12.3% 4.7% 6.1***
ANOVA
125.3*** 12.7*** 28.4*** 133.0*** 3.6**
Note: *, **, and *** in the ANOVA columns indicates the p (observing the F-Statistic if the average proportion of land left fallow is same across four different land classes is same) is less than 1%, 5% and 10% levels. The same for the bottom ANOVA row indicates the p (observed F-statistic if the mean fallow land across four different types of villages is same) is less than 1%, 5%, and 10%.
2004–05 and 2011–12. We find association between the most common form of tenancy in the village and the average proportion of land left fallow by rural households. When there is no tenancy generally practiced in villages, the households tend to leave more land fallow. The average proportion of owned land left fallow is highest for households living in villages with no form of tenancy. This finding is robust for both years across farmers belonging to different land classes and with or without irrigation. The findings also seem to suggest that fixed rent form of tenancy seems to reduce the proportion of land left fallow significantly. The average proportion of owned land left fallow is lowest for households living in villages with fixed tenancy arrangement. This finding holds true for irrigated households and households belonging to all land classes except marginal farming households. Our findings suggest that legalisation and liberalisation of tenancy could reduce the proportion of land that is left fallow. But while doing so, precaution should be taken that such liberalisation does not lead to small and marginal farmers losing land and land getting concentrated among few. The Model Agricultural Land Leasing Act, 2016 has brought about the debate for this balance into forefront4,5.
those with fixed rent in 2011–12 (9.2%). Table 3 explores the proportion of land left fallow across villages with different tenancy arrangements for farmers belonging to different land classes. From Table 3, we find that in both years there is a positive association between farm size and proportion of land left fallow. In both the study years across all four land classes, the average proportion of owned land left fallow is highest for households in villages where there is no form of tenancy. For all land classes except marginal, the average proportion of owned land that is left fallow is lowest for households in villages with fixed rent tenancy arrangement in both the study years. For marginal land class, the average proportion of owned land left fallow in 2004–05 is the lowest among households in villages with sharecropping and in 2011–12, it is the lowest for households in villages with both forms of tenancy. 4. Conclusions This paper explores the relationship between tenancy and fallow land using Indian Human Development Survey (IHDS) data collected in
4 5
http://niti.gov.in/writereaddata/files/document_publication/NITIBlog2_VC.pdf http://peoplesdemocracy.in/2016/0501_pd/model-land-leasing-act-turning-clock-backwards
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World Development Perspectives 7–8 (2017) 28–31
T. Ranganathan, G. Pandey
Appendix A Most common tenancy arrangement in the village State
None
Share cropping
Both
Fixed rent
Total villages surveyed
Jammu & Kashmir Himachal Pradesh Punjab Uttaranchal Haryana Rajasthan Uttar Pradesh Bihar Sikkim Arunachal Pradesh Nagaland Manipur Mizoram Tripura Meghalaya Assam West Bengal Jharkhand Orissa Chhattisgarh Madhya Pradesh Gujarat Daman & Diu Dadra & Nagar Haveli Maharashtra Andhra Pradesh Karnataka Goa Kerala Tamil Nadu Pondicherry All India
67% 71% 0% 53% 7% 3% 0% 0% 100% 83% 50% 0% 33% 0% 0% 22% 10% 19% 25% 9% 3% 12% 100% 0% 12% 6% 25% 100% 16% 34% 67% 15%
11% 18% 0% 18% 0% 49% 9% 3% 0% 17% 25% 50% 33% 33% 0% 22% 17% 43% 27% 13% 15% 17% 0% 0% 10% 5% 6% 0% 16% 0% 0% 13%
22% 12% 33% 29% 45% 47% 90% 97% 0% 0% 25% 50% 0% 67% 0% 43% 49% 38% 38% 68% 75% 70% 0% 0% 75% 41% 55% 0% 16% 42% 0% 56%
0% 0% 67% 0% 49% 1% 1% 0% 0% 0% 0% 0% 33% 0% 100% 13% 24% 0% 10% 11% 7% 2% 0% 100% 4% 49% 14% 0% 53% 24% 33% 16%
18 51 57 17 76 86 134 60 1 6 4 2 3 3 6 23 59 21 79 47 121 66 3 2 113 86 122 5 19 50 3 1343
NITI Aayog. (2016). Report of the Expert Committee on Land Leasing. Government of India, New Delhi.
References Hanstad, T., Haque, T., & Nielsen, R. (2008). Improving Land Access for India’s Rural Poor. Economic & Political Weekly, 43(10), 49–56.
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