CHAPTER-II

REVIEW OF LITERATURE

Land is the foremost and mainstay of human endurance. It sustains life. Up

till now in this era of avant-garde, preponderance of individual existence on this planet is

exclusively inexorable by land. Just about 99% of human food supply comes from land

(M.S.Swaminathan, 1994) . Land is even now the adequate and indispensable condition

for agriculture. "Agriculture, essentially is concerned with the collection of solar energy

and its use in synthesizing a few simple inorganic materials principally water, C02 from

the air and Nitrogen into organic vegetable materials by means of the plant (P.D.Dumm,

1978) . Land is the medium through which this bioconversion process, on which all life

depends, takes place.

As the principal factor of production, Land has evoked the attention of economists

from the time of Francois Quesnay and De Gournay, the early physiocrats (Leo

Huberman, 1981)''. Moreover for the first time, the physiocrats who tinted the awe-

inspiring significance of land for apparent reasons. According to them, only agriculture

and land were truly productive of real wealth, thus promoting an early 'ecological'

(Fritjof Capral982) view. Land, they proposed is the only source of wealth, and only

labour on land is the only productive labour. Ricardo, also contemplated the imperative,

cultivate the poorer-marginal land, as population increased. That is, the scarcity of fertile

lands will drive the farmer to less fertile lands.

The doctrine of comparative advantage propounded by Ricardo, in the theory of

international trade, laid the basis of the much acclaimed conviction, that each country has

a comparative advantage in the production of certain goods, enabling it to specialize in

the goods it can produce cheaply. Though this can be of beneficial importance within a

country with a federal setup, at the international level, "It is now producing its own set of

social and environmental costs" (Henderson 1978)^. This model underlies much of

today's thinking on the global economy.

Spill man (1918) in his paper submitted to the American Economic Association

reported that land has become the most important limiting factor in the further

-41

development of agricultural resources. It is, therefore, time to take stock of resources in

land. During the same period, Henry C.Tay-lor (1940)^ and other economists earlier

studied the business management problems of farmers; and religious and other groups

initiated movements to enrich country life. In social science context, Further, Henry C.

Taylor and Benjamin H. Hibbard (1918)^ and Lewis C.Gray (1913)^ analysed the

problems of political economy, which arise out of change in the major forms of

utilization of land and the distribution of rights in land.

The thinking of early nationalists on the land problem is based on the

incompatibility of peasant agriculture with the demands of agricultural progress.

Thinking on the agrarian problem began to reflect a pro-peasant orientation. Among the

radical-nationalists contributing to the understanding of the Indian agrarian situation, the

most outstanding were Jawaharlal Neheu, Narcndra Dev, Ram Manohar and Jayaprakash

Narayan.

M.L.Darling (1928)'° and Harold H.Mann (1967)" contributed deep insights into

Indian agriculture and its institutional framework. Darling analysed the inter-relation of

the credit and the land system, and showed a remarkable perception of the inter

connections of social and economic life in Punjab. The intellectual task of re-orienting

the professionalisation of social sciences to the needs and requirements of the country

was undertaken by a number of scholars in the pre-independence period. Among them,

the most out standing were Radhakanmal Mukerjee, P.C.Mahalonibis, N.K.Boss,

D.N.Majumdar, D.R.Gadgil, D.P.Mukergee, V.KR.V.Rao, G.S.Ghurye etc.

In 1928, the Royal Commission on Agriculture stressed the need for promoting

agricultural economics as a subject of study in the Universities. Teaching of agricultural

economics gave a further stimulus to land economics in many universities. The Indian

Statistical Institute, Calcutta and the Gokhale Institute of Economics and Politics, Poona

was two such institutions of national importance which were associated with the names

of P.C.Mahalanobis and D.R.Gadgil respectively. P.C.Mahalanobis made an important

contribution to land economics by providing data on land holdings on the basis of the

National Sample Survey. His contributions were also significant in promoting

interdisciplinary collaboration in the Indian Statistical Institute and in giving impetus to

quantitative orientation in economics, sociology, anthropology, psychology etc. the

42

sociological studies by Ramkrishna Mukherjee(1957)'^ based on an application of the

quantitative methods were done in this favourable setting of the Indian Statistical

Institute. D.R.Gadgil contributed to the development of new techniques and methods of

village studies through initiation of field investigations. Some of the best work on the

Indian land problem combining qualitative approach with a quantitative orientation has

therefore come from Gokhale Institute. The Delhi School of Economics under the

leadership of V.K.R.V.Rao, also played a leading place in agro-economic research.

In 1959 he established the Institute of Economic Growth which continues to be an

important centre of studies in the field of land relations and agricultural development

In the development of agricultural economics in general and land economics, in

particular the contribution of the department of economics of the Bombay University is

highly significant. One of its major contributions has been the setting up of the Indian

Society of Agricultural Economics in 1939. The society and its journal 'The Indian

Journal of Agricultural Economies', have played a significant role in the development of

the discipline. The Bombay School is also to be mentioned for its attempt to draw upon

the discipline of sociology as an aid to agricultural economics in general and land

economics in particular.

The land question emerged as an important area of economic research after 1947.

The reasons for this new importance to the land question, according to Myrdal (1968)

has been due to the stimulating influence of politics on the development of economics.

Political factors favoring agrarian research was India's emergence as an independent

nation. The process of decolonization was also accompanied by an unprecedented anti-

feudal upsurge in the newly independent countries of Asia, Latin America and Africa

(E.H.Jocobyl961)'^

In the new epoch, however, land reforms came to be recognized as a fundamental

condition for economic development of the newly liberated countries (Chester Bowler,

1963)'^. A major indication of this was provided by the two U.N.Reports, one "Measures

For The Economic Development of Underdeveloped Countries" (1951) and the other on

"Defects in Agrarian Structure as Obstacles to Economic Development" (1951). In 1949,

the 'Congress Agrarian Reforms Committee' a higher-level body appointed by the

- 4 3 -

president of the Indian National Congress, released its report which presented an analysis

of the agrarian problem in India and also a programme of land reforms.

In 1949, the Communist Party of India adopted a new 'political thesis' at its

second congress at Calcutta, which put forward a strategy of militant mobilization of the

peasants for an agrarian revolution. This basic thesis was further elaborated in a major

policy document called 'On the Agrarian Question in India' in the same year (Communist

Party of India, 1949)'^ Inl948, some of the followers of Mahatma Gandhi made a major

policy decision under the leadership of Bhave to launch the 'Sarvodaya' movement

which, a year later assumed the form of the well-known 'Bhoodan-Gramdan' movement.

Regarding the studies on the land reforms it is appropriate to mention,

V.M.Dandekar's (1964)'^ 'From Agrarian Reorganisation to Land Reforms',

M.L.Dantwala's (1961)'^ 'The Basic Approach to Land Reforms', P.C.Joshi's (1970)'*^

'Land Reforms in India and pakistan' A.M.Khusro's (1965)^° 'The Economics of land

Reforms and Farm Size in India', R.J. Krishna's (1961)^' 'Some Aspects of Land

Reforms and Economic Development in India', G.L.Nanda's (1958) 'progress of Land

Reforms' K.G.Sivaswamy's (1955)^^ 'Trends in Land Reforms' and United Nations

Progress of Land Reforms: Fifth Report (1970) '̂*.

The bulk of land economics studies in Kerala comes under category of land

reforms because, Kerala experienced tremendous pressures on land (K.M.Ayyatt, 1959;

U.R.Dillia, 1952; J.T.Jacob, 1970; M.K. Kurupl955; N.Gopinathan Nair, 1970; E.M.S.

Namboodiripad,1948; T.K. Oommen, 1971; V.R.Pillai, 1953; G.A. Rao, 1959; Shea,

1954; T.C. Varghese, 1970; K.V.K.Warrior, 1970; Doreen Warriner, 1971; Bureau of

Economics and Statistics, 1968.) "̂\ In the field of land pattern, however, there are only

few studies in Kerala. Most of them are biased either to the agrarian sector or to cropping

pattern changes. The study of P.P.Pillai (1982)^^ highlights the need for looking at the

pace and pattern of economic development at the state level in India, Kerala economy in

general and its agricultural sector in particular have several unique characteristics,

distinctly from those of the economy of other states in India.

One of the prime studies in Kerala relating to urban land use is that of Trivandrum

city (D.Reji. 1993)^^ Here the author analyses important determinants and consequences

of general changes in land use patterns. Further, it reviews important urban land

- 4 4 -

economic theories and by applying it to the sample city, it concluded that the existing

pattern of land use in Trivandrum city is not sustainable, and based on that some

important policy solutions are suggested.

A few studies have attempted to reflect on the impact of land reforms on the

agricultural sector of kerala. In fact, the question as to whether the different legislative

measures implemented under the land Reforms like the Abolition of Tenancy and

Conferment of Ownership on Land to Tenants has released the latent productive energies

of peasants is still debated. Divergent views on this question exist. Ommen, analysed the

economic diamensions of the question concludes that the impact of land Reforms in

Kerala has been marginal. According to him, the sections mainly benefited from land

reform were the erstwhile tenants who operated vast tracts of agricultural land. This

group which was released from the rent payment has been able to divert the resulted

surplus to productive investment in land and is emerging as a class of capitalist farmers.

Ronald . J. Herring(1980)^^ also subscribes to this view . But he is of the opinion that

capitalist agriculture has developed under tenant farming in Kerala even earlier. In

support of this view, he paraphrases Lenin and observes that tenants in the agrarian

system of Kerala do not necessarily fall under a single category. In addition, tenancy was

not indicative of any particular social organization of production; but rather a quasi

property from which was utilized in various configurations of production from feudal to

the distinctively capitalistic, with shades in between. Herring's observation is that Kerala

Land Reforms Act abolishing tenancy and land lordism have only resulted in the

redistribution of privileges in favour of the erstwhile tenants. According to him "the class

least benefited are those in need of benefits - the poor peasants and agricultural

labourers. The reform, while redistributing privileges failed to achieve land to the tiller".

The reason for this partial failure as per his version was due to the uniform treatment of

all tenant-land lord relations as feudal and a wrong approach to agricultural labourers.

Closely related to the above study, Joan.P.Mencher (1978)^^ speaks about the

conditions of labourers in the post-reform period and maintains that they have not shown

any signs of major improvement even after years of agitation and structural changes in

the agricultural sector. T.K.Oommen (1975)^" while viewing the post land reform

conditions in a sociological perspective argues that, having become owner cultivators, the

-45

chief beneficiaries of land reform have undergone an "embourgeoisement process"and

now keep themselves opposed or indifferent to the causes of agrarian poor.

Varghese (1970)^' traces the tenurial development in Travancore since 1850's and

examines the impact of the land tenure measures on agricultural development. He

attributes the expansion of cultivation in plains and high lands due to the government

policies. Varghese come to the conclusion that the rate of agricultural development was

highest in Travancore compared to other regions mainly due to favourable land tenures.

The study may be considered as a significant contribution in the agrarian history of

Kerala.

The analysis gives an overall picture about the changes that had taken place in

economy and society during the second half of 19th century. P.Radhakrishnan (1980)^^

who takes up the question of peasant struggle and reforms conclude that the process of

reform movement in Kerala is an on-going process, not yet anywhere near the stage of

completion and that the logical culmination would be an upsurge of the vast mad of

agricultural labourers who are really the tillers of the soil and most of whom remain

landless today even after the implementation If the land reform legislation.

While the above studies made after the implementation of Land Reforms Act are

unanimous in conclusion that the reforms have benefited at large only the upper strata of

the erstwhile. These do not give any clue to the economic impact of land reform policies

implemented in the State. The author attributed this inverse relationship to indivisibility

of certain factors of production like irrigation structures, farm building etc.

The larger capital flows on small and medium farms were due to the acquisition

of capital assets but capital inputs were the major inflow on marginal and large farms.

The per hectare analysis avowed that barring land, dead stock, mulch animals, the value

of other asses was greater on small farms. Overall, the value of total assets was greater on

large farms. When land value was excluded, the value of other assets per hectare was

greater on small farms.

The reason for this might be the availability of the bullocks and human labour in

excess on the uneconomic small size holdings having smaller area under the crop and

lack of off farm avenues of employment. The literatures of the subject of various

agricultural practices are fairly large. The study of this vast micro problem in applied

-46

research and the interest of the academics in it continuous unabated socio-economic

background of traditional versus modern practices in paddy cultivation has been probed

into by many studies.

In India, rice is grown under different land situations-rain upland, lowland and

irrigated medium land. There exist wide variations in the productivity of rice among the

three situations. Apart from all these situations, the High Yielding Varieties in India have

played a major role in the transformation of traditional agriculture. According to Chadha

(1979)^^ introduction of a new technology incorporating especially the use of non-

traditional bio-chemical inputs and to some extent mechanization of agricultural

operations started the process of transformation of traditional agriculture right from the

latter half of the 60's. It analyses in depth the Punjab experience regarding distribution of

production gains of new technology. But in his study farmers having very small and

marginal holdings were excluded from the analysis.

As Farmer (1977)"''̂ opines, "recent developments in agriculture have undoubtedly

increased economic differentiation among the peasantry." According to him, the study of

North Arcot shows that the major gain from HYVs cultivation have gone to the

cultivators. The agricultural labourers have also benefited from the increased

employment opportunities. But the gains of labourers were not as high as those of

cultivations.

According to Sipra Das Gupta (1970) modernizations has led to greater regional

inequality and inequality among different sections of rural population in each region.

According to her, the main reason for the first type of inequality has been the suitability

of new technology to environmental conditions of certain regions, whereas the nature of

new technology which is land augmenting has been responsible for the second type of

inequality.

Kartar Singh (1973)^^ in a study in Aligarh District of U.P. shows that the share

of the poorest 10 percent of the farm families was 0.42 percent in 1963-64 which

increased to 0.79 percent in 1968-69. The estimates of income inequality index indicate

an overall decline in the farm income inequality, district wise during the period. There

was an improvement in institutional set up. But the study does not reveal the true picture.

47-

because the districts were under complete governmental assistance. The methodology

adopted was regression analysis and interpretation of Lorenz Curve.

It is observed that the spread of modernization was followed by wider adoption of

labour saving technologies, i.e., tractors threshers and direct seeding Shand (1973) .

Thus even though modem practice adoption increases labour use per hectare by

increasing labour requirements for crop care and harvesting, if modernization induces

mechanization and direct seeding, the net effect may well be labour-saving, thereby

adversely affecting the well being of poor landless houdeholds. This idea was also

supported by Desai and Gandhi (1988)^1

A district-wise study was conducted by Bhalla and Alagh (1979)^^. According to

them, the growth of output in some low yield regions of Rajasthan or Madhya Pradesh

and also Kamatnke reached values of 4.5 percent and above, thereby helping to partly

offset the regional disparity in productivity. However, in other regions, the disparities

increased. As an example, they show that the gap widened between the high yield level

areas of Punjab and Haryana which experienced a high growth and other low yield

regions such as most of Central Maharashtra and adjacent western Andra Pradesh, which

showed only zero or negative growth.

Sipra Dasgulpta (1970)^^ points out that "wherever new technology was found to

be suitable to the environmental conditions it is reported to have been adopted by the

farmers irrespective of their size of farms and tenure status." But this same author has

said it is land augmenting. The author categories rural work force units (i)agricultural

labourers (ii)small cultivators and (iii) big cultivators and examines the impact of

technological change on them. The work clearly brings out the fact that inspite of a

relatively much smaller proportion of households belonging to the category of big

cultivators, their hold over the total land resources and agricultural surplus is so large that

their decision plays a major role with regard to technological change.

Biplap Dasgupta (1980)'*° in his book relating to the distribution or equity aspect

of the new technology says that the data seems to suggest that although the rate of

adoption tended to be usually higher among larger farms in the early years, the difference

between the large and small farms in respect of adoption rate seems to diminish overtime.

This is particularly true in the wheat growing areas. Though the small farms generally

48-

have tended to lag behind, they had shown a higher intensity of adoption. The author

holds that the distribution of land which is the most important factor influencing

agricultural income distribution has worsened because of the new technology. According

to Basu Ashok (1978)'*', a greater hindrance is the non-availability of new technological

inputs rather than the farmsize. The has gone one step further in exploring the

technological possibilities in Indian Agriculture. He postulates three broad types of

technology, output increasing, factor using and factor saving. The nervure of

technological change and its characteristics are elaborated. The author has focused

attention on two important types of technology i.e. Mechanical and biological.

Considering the five stages of mechanization that is, (i) elementary stage of

mechanization (ii) animal traction (iii) initial motorisation (iv) motorisation and (v)

automation stage, it has been observed that except for Punjab and Haryana, India is still

mainly in the second stage of mechanization, using tools and equipments. But here the

author has, however, failed to discuss what possible combination of these two types of

technology (mechanical or biological) would be relevant for Indian Agriculture, which is

still a polemic question to be answered.

George and Chowkidar (1972)'*^ conducted a study of local and HYVs in the West

Godawari District of Andhra Pradesh. This study examines the production, marketing and

characteristics of the farms adopting HYVs of Paddy. The cultivation of HYVs was

confined to the delta area having adequate irrigation facilities. These variations cornered

about 25 percent of the area under paddy crop. IR-8 variety in spite of its cost of

cultivation was profitable. During the Karif season, the farmers were reverting to the

cultivation of local varieties as the HYVs mature in October when the rain causes serious

damage. The local varieties, on the other hand, mature late and are not thus damaged by

rain.

They state degree of adoption of HYVs was limited to the size of the holdings,

education and social status of the farmers. Age showed a negative relationship 83 percent

of the farmers were willing to adopt HYVs, and the rest were reluctant as they thought

the cultivation of HYVs were non profitable and risky. This was more true in the case of

small farmers. The lack of knowledge was one of the important characteristics of non-

-49

adopters. According to Ramaswamy (1982/^ the adoption of varieties, farm size, tenure

and literacy are not significant.

The handicaps of the imported varities from derived from their susceptibility of

diseases and insects, temperature sensitivity, non-photo period sensitivity and poor grain

quality." His study showed that the Phillipines and Taiwan varieties proved highly

sensitive to virus and bacterial diseases; even IR-8, although a better variety, requires

considerable expenditure on plant protection. Further, this variety suffered from delayed

grain maturity as a result of cool night temperatures. The non-photo period sensitivity of

both TN-1 and IR-8 gave rise to additional major problems. The new varieties when

raised during the Kharif season suffer in yield because of the paucity of simshine

resulting from the cloudy conditions of the monsoon period. Secondly, the early planting

of TN-1 andIR-8 results in early grain maturity and early harvest which, in the southern

rice growing states, has to; be undertaken during the rainy season. The farmer has to

spent large expenditure on plant protection and irrigation. He shows that in most cases

IR-8 fetches a lower price than local varieties, mainly because of low quality. Chowrasia

and Singh (1972)'"* contrast by saying that even though HYVs consumed fertilizers three

times more than local varieties, their yields were also three times higher. Therefore, they

often fetch higher profit to the farmers. But their study pertained to an area favouring

HYVs. Jane C.Moodie and Fredoun-z.Ahmadi-Esfahani (1992/^ focus that in Japan a

local variety grain called "Japonica" feteches higher prices and still has a higher demand.

Dharma Narain (1977)'*^ in his former approach has a clear pointer favouring

HYVs. His findings suggest that during the first decade of planning, the increase in land

productivity was largely due to crop shifts -in favour of those with greater yields and

locational shifts, the net growth rate in yields being close to one-third of the overall rate

of growth in land productivity. In the latter period, the overall productivity growth rate

was nearly one-third larger and that the net gain was nearly 67 percent ie, two third of the

overall productivity growth. Much of the net growth in yield could be attributed to food

grains as they benefited from "Green Revolution" directly and demonstrably.

Climatic factors like rainfall are an important factor behind yield variability. A

recent study suggests that agricultural output has become more sensitive to rainfall in the

post-green revolution period, with the elasticity of output with respect to rainfall

-50

increasing from most crops except wheat and some rabi (winter) crops in this period

(Rao, 1983)'* .̂ This because of the strong complementary relationship between use of

modem input and availability of moisture either through rainfall or irrigation, as also the

fact that growth has taken place under diverse envirormients and constraints Nadkami and

Deshpande (1982)''^. The extension of cultivation to marginal lands or riskier regions has

contributed to higher yield instability (Sen, 1967)''^.

Factors associated with the new agricultural technology, particularly widespread

use of HYVs chemical fertilizers and greater susceptibility of new crop varieties to pests

and diseases have accentuated instability (Hazell, 1982)̂ *̂ . The new agricultural

technology along with changed price policy environment has altered the production

opportimities facing farmers, which has effected changes in the traditional crop patterns

and systems. The shift from risk-spreading and risk-adjusting crop system and practices

like milti-cropping, crop diversification to monocropping and crop specialsation have

tended to increase risks in farming. New profit -making opportunities have encouraged

farmers to neglect some ecologically beneficial crop, further, the mutual compensating

mechanism of crops/regions whereby a bad crop in one region can be offset by a good

crop in another, has got affected due to shifts in the cropping pattern and systems, yield

correlations across crops and regions have increased following the green revolution

(Nadkami and Deshpande, 1982'83)'*^

Quite a few studies have been done in the concept of agrarian evolution from

traditional to modem practices. The spread of the new varieties would appear to be slow,

given the great claims made for them, and the comparatively high level of knowledge,

awareness and receptivity of farmers in Kerala. Ibrahim Kunju (1976)^'while tracing the

developments in administration during the 18th century, briefly describes the states of the

Travancore economy. The study gives a brief account of revenue administration, state

trading and irrigation works executed during the 18th century.

Samuel Mateer (1883) mainly examines the sociology of the people, he gives a

detailed account of the developments in major crops during the 19th century up to

1870's. One chapter of his book is exclusively devoted to the discussion of agriculture:

the major crops cultivated; methods of cultivation; yield; price and exports of

Travancore. He provides a detailed discussion on the various aspects of individual crops

-51

like paddy, coconut, areca nut etc .He also traces the history of tapioca, its introduction

into Travancore and the rapid expansion of the crop. The work in very significant for a

historical study of agriculture in Travancore.

Paddy, being the most important crop in Kerala got much attention from academic

scholars as well as official agencies. The scholars who made notable studies in paddy

crop are Panicker (1981), Unni Jeemol (1981)" and Harikumar (1991)^^ They examine

the trend in the area production and yield rate of rice in Kerala between 1960-61 and

1978-79,the reasons for its decline and the implications thereof The causes attributed to

the decline are: fall in the price of paddy since 1974-75, rise in the cost of cultivation

particularly due to increase in wages and improvement in the supply position of rice due

to imports. In another study, Panickar (1981)^^ presents the finding of a survey conducted

in Palght and Kuttanad areas to examine the socio-economic factors under lying the

adoption of HYVs. A major finding of the survey is that the yield rates of HYVs are far

less than the expected yield rate. The low yield is attributed to low response of yield to

fertilizer, the physiological properties of the new seed varieties prone to more incidence

of pests and diseases, high and rising prices of fertilizer and plant protection materials

leading to a high cost of production. The study concludes that the rice economy in the

study region is caught in a paradox of modernization without commensurate

improvement in net returns.

Unni Jeemol (1981)" has made a modest attempt to examine the shift in cropping

pattern of Kerala from 1960-61 to 1978-79, she classified the growth in the gross area

under three phases viz. (1) between 1960-61 and 1968-69 when the area under rice

increases (2) between 1969-70 and 1974-75 when the area under rice tended to stagnate

and (3) between 1975-76 and 1978-79, when the area under rice fell sharply. The main

finding of the study is that there has been a shift in cropping pattern in favour of coconut

crop at the expense of the paddy crop.

According to Harikumar (1991) '̂*, increasing cost of cultivation declining

profitability of paddy cultivation and land management problem has forced farmers of

Kuttanad to enter into new land relations. He says, "Paddy cultivation in Kuttanad shows

signs of stagnation in terms of production, productivity and area under cultivation. A

comparison of prices of inputs and outputs shows that the terms of trade have been

- 5 2 -

unfavorable to the farmers, especially to paddy farmers, particularly after the mid

seventies."

The agriculture revolution in England in the 18th and 19th centuries brought to

light innumerable innovations that made possible revolutionary changes in production

(Chambers and Mingay, 1966; Riches, 1972; and Russell, 1966)^^. There innovations did

not 'spring fiiU-blovm from the head of a Coke or coimty gentleman' but were products

of significant changes in property rights and economic linkages in rural England during

the 17th and 18th centuries (Riches, 1972)". However, the men farmers in Britain did

play a significant role in promoting agricultural innovations and indulged in

improvements and experimentation. Prospects of higher rents, security of tenancy,

competitive prices, and increasing urban demand for food were important incentives for

landlords and tenant farmers in seeking technological improvements in agriculture during

the 19th century. Though suggestions for conducting experiments in farmers, fields were

made much earlier, it was only in 1843, after the use of manure and manufacturing of

fertilizers started, that the first experiment station was founded. This, the Rothamsted

Experiment station was founded by John Lawes, a country gentleman, and was run by the

profits he made from the manufacture of super-phosphate fertilizer (Russell, 1966)^ .̂

Similar individual attempts to improve agricultural production and the enquiry for

further improvements through organized research were started in several parts of Europe.

The rapid growth in basic science research since the late 18th century spurred the growth

of agricultural research. Agricultural research in these European nations was pioneered

by individuals or private institutions; but the State soon stepped in, providing ftjnds and

administration of research, especially in France and Germany. The first agricultural

experiment in France (1834) was established by Jean Boussingauot in his estate in

Bechelbrom (Dennison, 1840; Russell, 1966)^^ In Germany the first experiment station

established at Mockem, Saxony, though publicly supported was set up in 1852 in

response to an initiative by the Saxon farmers, whose draft charter for the station was

legalized by the Saxon government (Russell, 1966;Ruttanl982)^^. Schools and

experiment stations in agricultural chemistry, established with Government support were

institutional innovations emanating from Germany. Leibig's success in chemistry and its

increasing use in agriculture led to fiarther investment in research. Using financial grants.

53-

the Royal Agricultural Society of England (1840) encouraged both practicing scientists

and farmers to contribute inventions and discoveries for raising agricultural output.

Scotland's Edinburgh Laboratory (founded in 1842) was supported by the Agricultural CO

Chemistry Association of Scotland, a voluntary agricultural society, (Russell, 1966) . In

Japan, following reports of these European attempts, agricultural research was initiated

by the Meiji Government in 1871 (Hayami and Yamada, 1975)^°. Yet, in the rest of the

world, agricultural research continued to be largely an individual effort and rarely if ever,

an organised private endeavor.

Nasim Ansari examined (1968)^', both from a theoretical and an empirical point

of view, some questions regarding costs and benefits and developmental impact of canal

irrigation projects. His case studies included the Bhakra Project in Punjab and the Sarda

and the Betwa canals in U.P. To study the problems he conducted a field survey in the

regions served by these canals. Since most of the areas studied were those which were

newly irrigated, he was able to focus attention on problems of irrigation development,

rather than on benefits of irrigation, an aspect which received greater attention in

previous studies. Nasim Ansari analysed both secondary data and the primary data he

collected through field survey. He examined the structure of irrigation rates prevalent in

the two states. Various theoretical issues involved in irrigation pricing were also

discussed in this study in detail. He examined the arguments for and against the case of

betterment levy and its possible effects on the redistribution of land. The study

highlighted the net benefit criterion as the most appropriate and presented the case for

volumetric charging.

Ansari (1968)^' pointed out that the two major principles of pricing of irrigation

benefits are the marginal cost pricing principle and the benefits principle. The former

when applied to a decreasing cost industry like irrigation would not cover the entire cost.

In the case of the latter also, since only direct benefits are taken into account in pricing,

the prices fixed could very well lie below the costs. Even though pricing at less than

costs may be necessary or expedient in particular circumstances, prices must cover costs

in the long run. A large part of the cost is accounted for by interest charges; therefore,

much depends on these rates. Since the construction cost has gone up considerably in

recent decades and the water-rates have risen only slowly, the gap between cost and

-54

receipts has been widening progressively to such an extent that the two cannot be brought

to equality even if interest rates are reduced to very low levels. This fact points to the

need for upward revision of rates. The study also showed that demand for irrigation

depends more on the development of agriculture than on the level of water-rates.

The National Council for Applied Economic Research (1959)^^ conducted a two -

fold study of the Sarda Canal; a cost-benefit analysis and an investigation into the criteria

for the fixation of water-rates. The study suggested that water-rates may be fixed on the

basis of net additional benefits and not in terms of adequacy of returns from or

amortisation of investment within a given period.

Benefit-cost analysis and choice of criteria for irrigation rates and investment

constituted the central theme of the study for the Research Programmes Committee of the

Planning Commission carried out by Baljit Singh and Shridhar Misra (1960)^^. It

explored the possibilities of tracing even the tertiary benefits of the projects and spelt out

certain limitations of the Benefit-Cost analysis. Regarding fixation of rates, it

emphasized the aspect of cost more than benefits. "Full capacity is to be the objective of

any rating system and this can be achieved when rates equal marginal costs, i.e., the

additional variable cost for irrigating an additional area of cultivated area". It is also

recognized the need for ploughing back a part of the benefit for the growth of the

economy. Ploughing back was possible through a compulsory levy for all farmers in the

irrigable areas of the project, whether they use the irrigation facilities or not. This study

recommended a two-part tariff; Irrigation rates proper and general irrigation charges or

levy.

The study by Brahmbhatt (1974) '̂* on the impact of irrigation on Naurangdeshar

village in Rajasthan compared ex-ante position (1961-62) with the ex-post (1968-69)

position. It examined the effect of irrigation on growth of agricultural labour, subsidiary

non-agricultural occupations, different size-groups, intensity of cropping, cropping

pattern, farm inputs, farm yields and net income from cultivation. The agricultural labour

increased from 5.8 percent in 1961-62 to 21.7 per cent. The casual male labourer

received employment for 203 days as against only 93 days employment. This is not

entirely due to irrigation. There could have been other contributory factors as well in

existence for the expansion of employment opportunities. Nevertheless, the lion's share

-55

of it was due to irrigation. The cropping intensity increased from 2.6 per cent to 13.0 per

cent. As for cropping pattern, the proportion of area under food crops to gross cropped

area gad declined from 90 per cent to 77 per cent.

With regard to crop-yields, the yield per hectare of all irrigated crops were

strikingly higher than those for the same crops without irrigation facility in 1968-69. The

yield levels increased with the number of watering. In the case of HYV Bajra and

Mexican wheat, the farms which have received six watering had double the yield per

hectare than those which had received only one watering. In addition, the costs of seed

and farmyard manure were found to be inversely related to farm size.

The gross income from cultivation in 1968-69 was 3 times what it was in 1961-

62. The corresponding increase in net income was 2.5 times that of 1961-62. Another

remarkable finding of the study is that, irrigation had assisted only marginally to increase

the inequality in income distribution. Because, the per farm net income from cultivation

which had been 7 times higher for large farms as compared to small farms in 1961-62,

was 8 times higher in 1968-69.

The study made by Tarafder Rabiul Islam (1977)^^ aimed at identifying the socio­

economic and institutional factors that determine the efficiency of low lift pump

irrigation in Bangladesh. Here the efficiency is defined in terms of irrigable area which is

technically and economically feasible. It revealed the least cost point of irrigation to be

at 61 acres. It is not certain whether this represents the optimum level, due to under

utilization of the pumping capacities. On the average, a pump irrigated only 39 acres in

1069-70, which was much lower than what it could do. The factors accounting for such

under utilization were: (1) absence of adequate and timely supply of credit (irrigated

crops needed more investment)(2) the belief that longer hours of work will enhance the

number of break-downs of the pump, (3) the indifference on the part of the group

manager, who gains nothing by expanding the area, and (4) lack of sufficient profit from

irrigated cultivation.

M.D. Fazlul Haque (1975)^^ made a study on shallow tube wells, Deep Tube

wells and Low Lift pump in order to carry out a comparative analysis of those small-scale

irrigation systems in Bangladesh. The data for the analysis were collected by the survey

method. Taking the unirrigated areas side by side, (control) as a bench mark for

56-

comparison of the irrigated areas, he had analysed the effect of irrigation on cropping

intensity, yield, fertilizer consumption and labour-use. The study is realistic to the extent

that irrigated condition was compared to the unirrigated conditions. However, the survey

method (rather than the Cost Accounting method) used to collect data on costs and

returns of cropping limits its utility. The intensity of cropping was 23.6 per cent more for

irrigated crops on the average. As between different sources, it was the highest for

shallow Tube well (28.8 per cent) and the lowest for low lift pumps (15.7 per cent). The

study revealed that yield of rice and jute was not dependent upon the availability of

irrigation, while other crops responded significantly to irrigation.

With the facilities of irrigation, there was increased application of both manure

and fertilizers; the increase in traditional manure-use was found to be larger with deep-

tube wells than what it was in small-scale irrigation systems. On the other hand, the

increase in fertilizer consumption was smaller with large-scale irrigation while it was 4

times and 5 times with small type of irrigation. Also, the labour-use is more under

irrigation; it was very high with low-lift pump and shallow tube wells compared to deep

tube wells. The net profit of irrigated crop was as high as 23 times that of un-irrigated

crops.

The People's Republic of China, it is widely acknowledged now, depended

mostly on its local resources, men and material, for development of irrigation. In China,

"the small works form the back bone (of irrigation and water conservancy) while the

large works are merely to supplement the small works. And there the basic concept of a

small work is one "which can be completed with local materials and manpower. As the

experience of the local people grows, the size of dams also grows and dams as high as 30

meters are being completed by the masses. The Indian delegation testified to the fact that

even as early as 1959, China had made good progress in expanding Minor Irrigation

utilizing chiefly the local resources. To conclude. Minor Irrigation, in its construction

phase is more labour absorbing than Major Irrigation and is therefore more appropriate

for developing, labour-surplus economies.

The conclusion arrived at was that Indian farmers respond favourably to price

changes. Majumdar and Jakade (1964)^^ in a study analyzed the impact of the price of a

food crop on the area under a cash crop. They found that the area planted under a cash

57

crop, Jute is influenced by the relative prices of Jute and Rice. The allocation of land for

the cultivation of Paddy and Sugarcane in Deoria district was examined by Gupta and

Majid (1965) , on the basis of data collected from a large sample for the year 1961-62.

The study revealed that net monetary returns per acre from sugarcane cultivation is four

times high as that for paddy and this has provided an explanation for the continuous

increase in sugar cane acreage relative to that of paddy.

A study of inter-crop price parities undertaken by the Ministry of Food and

Agriculture, Government of India (1964) shows how price variations exert an influence

on reallocation of land among different crops. The study also shows how fixed

procurement price of wheat and rice and other government controls have induced farmers

to shift to cash crops like sugar cane.

M.V.George (1979)^^ in his study on Kerala, shows that the acreage response to

price changes has been positive in the case of most crops. P.P.Pillai (1982)'°

demonstrated that the area productivity and production of paddy in Kerala were fairly

elastic with respect to both its current and deflated prices. The allocation of net area

sown (NAS) among different crops in Kerala, especially the change in area under paddy

to tapioca and coconut has been explained by Kannan and Pushpangadan using three

econometric models. Change in area under paddy is explained by change in paddy

relative to that of coconut. The first model is based on the assumption of perfect

foresight. That is, the allocation decision is based on expected prices which are related to

current observed prices only assuming perfect foresight.

Many Less Developed Countries (LDC) in recent years, concerned with keeping

food prices low, especially in urban areas. This was intended both at ensuring political

stability and keeping money wages and other prices in the urban economy stable (Anne

Booth and R.M. Sundrum, 1984)^'. The above concern has given birth to a large

literature on the general subject of Government intervention in agricultural product

markets and the resultant changes in factor utilization, most of it severely critical. This

literature assumes that by depressing producer price (especially food grain prices, since

they form the main component of the wage basket) and thus distorting producer

incentives, LDC Goverments. Have prevented agriculture from growing as rapidly as

would be technically possible. Lipton (1977)'^ and Schultz (1978)'^ discuss an array of

-58

policy measures, including agricultural taxes, urban subsidies and domestic disposal of

foreign food stuffs acquired on concessional terms, which keep the ratio of domestic

agricultural (especially food) prices to non-agricultural prices much lower than would

prevail in a free-market economy completely open to international trade. For want of

profitable incentives farmers are, thus, not making the necessary investments.

In conditions where existing stocks of labour and technology in the agricultural

sector are not fully utilized as is the case in many LDCs, it is likely that production and

factor employment depend much more on the magnitude of effective demand for

agricultural products than on price movements.

A large volume of literature exists which identifies the determinants of factor

allocation among different crops with various sources of demand for agricultural products

in the LDCs. Three sources of demand are commonly distinguished-foreign demand, the

demand from urban non-agricultural sectors and the demand from within the rural

agricultural sector itself Let us here have a brief look at the literature on foreign

demand.

In course of their experience of a period of rapid growth, many LDCs became

highly specialized in primary production as their growth was largely based on the

expansion of their exports of primary products. Myint (1973) '̂* classifies the agricultural

exports of LDCs into those produced of small-scale farms in the peasant sector, and (ii)

those produced of large scale plantations. The expansion of exports, in both cases, was

due to the strength of foreign demand, especially from the developed countries. In the

peasant sector the growth of exports was largely met by using surplus resources of land

and labour. Myint explains that, in responding to demand, peasant producers' took full

advantage of the market opportunities available to them. "The economic growth that

accompanied the expansion of peasant exports was in some cases quite spectacular, such

as rice in the deltaic regions of Burma, but it was mainly a case of horizontal expansion

in which labour was absorbed to the extent that the land area could be extended. This

type of expansion came to an end, country after country as the extension of cultivation

pressed against the limit of cultivable area. On the other hand, the expansion of exports of

plantation crops was largely modem and large-scale, requiring substantial amounts of

capital which were mostly invested by foreign, usually colonial entrepreneurs.

59

A number of studies with respect to India have also asserted the positive response

of farmers to price changes. J.P. Bhatacharjee (1980)^^ in a study analyzing the changes

in cropping pattern in India since 1990, notes that at the beginning of the present century

more than 83% of cultivated land was under food crops and about 17% under non-food

crops. By 1947-48, area under food-crops had shrunk to 70% and area under non-food

crops increased to around 30%. He attributes this shift in crops from foodgrains to the

higher price of non-foodgrains, commonly known as cash crops.

Dr. Raj Krishna (1963)^^, in his famous study on the farm supply response in the

Punjab region, compared the estimates of elasticity of acreage of nine crops grown in

Punjab region with that of the US region. He found that while the elasticity acreage

response of wheat to price movements was lower than that of the U.S., the elasticities of

cotton and Jute were much higher. Dharam Narian (1965)^^ has thoroughly examined the

role of basic economic principle of profit motive in the decision making process of Indian

farmers. He compared the year to year variations in acreage under six crops- Cotton, Jute,

Groundnut, Sugarcane, Rice and Wheat with their prices and proceeds per acre.

Based on data from these surveys, the Directorate of Economics and Statistics

(DES) has published a study on the trends in area and productivity of paddy at Taluk

level between 1975-76 and 1986-87. The Study Report has found that for the period

1975-76 to 1986-87, area under paddy in autumn and summer seasons decreased by 24%

and area under winter paddy decreased by 22%. The decline in area under paddy has

been attributed to changes in cropping pattern, conversion of paddy land for non-

agricultural purposes, and land being kept fallow for various seasons.

The findings of the study may be summarized as follows:

(i) Large-scale conversion of paddy land into garden lands and for non -

agricultural purposes.

(ii) Higher rate yield in all seasons.

(iii) HYV seeds and assumed supply of water helps higher productivity of paddy.

(iv) Higher rate of consumption of the fertilizers.

The necessity for reassessing the fiiture status of rice cultivation in the state was

emphasized by P. Suseelan (1988)''^. He advocated the reassessment of the future status

of rice in Kerala in the context of rising wage bills and tough competition from other

60-

more remunerative crops, with respect to the state's need for internal production of rice,

its labour absorbing capacity, its complementarity with the mixed farming system in

vogue in the state and its 'suitability and adaptability to the traditional rice areas of the

state'

The intensity of labour use in rice cultivation has been observed as declining in

areas in which wage rates are relatively high. Since the high cost of labour is commonly

cited as one of the factors leading to low profitability in paddy cultivation, the

substitution of human and bullock labour by machine labour has far reaching

implications. However, this substitution is governed by several considerations such as

soil, topography, average size of the operational plots and labour resistance, besides the

level of wages. An important finding which has serious implications relating to

institutional arrangements for increasing rural employment opportunities is the observed

"inverse relationship between size of holding and intensity of labour utilization" in rice

farming. 70

Umadevi's (1984) work on Plantation's Economy of Kerala dealt with the

historical evolution and development of rubber plantations in the cropping pattern of

Kerala. It also examined some important land economics concepts like land ownership,

land developments, and land reforms in Travancore, Cochin and Malabar regions. Paddy

field conversion is not a phenomenon starting only since the mid 70s as is commonly

believed. As Umadevi has pointed out, it has been a gradual phenomenon that has been

taking place right from the 1840's. She is of the opinion that it was the policies of the

East India Company favouring cash crops that led to the decline of paddy cultivation.

(Adam Smith as early as 1776, has indirectly pointed out to the English East India

Company's policy of transforming the production conditions in agriculture in the

colonies to their exclusive benefit, 1927). The erstwhile state of Travancore became for

the first time a net importer of paddy in 1861. Umadevi attributes this to the removal of

duty on paddy by the colonial Government in 1861. This resulted in a fall in prices,

discouraged paddy cultivation and initiated a gradual change in the cropping pattern in

favour of coconut. The Travancore Government took policies encouraging cash crops

which proved detrimental to the interests of paddy cultivators.

- 6 1 -

A number of working papers from the Centre for Development Studies have dealt

with the problems of paddy cultivation in the state. Pannikar (w.p-116, 1980)̂ ^ attributes

the decline in area under paddy to the following reasons viz., fall in price of paddy since

1974-75rise in cost of cultivation particularly due to increase in wages and improvement

in supply position of rice due to imports.

He has also observed that inter-regional and inter-seasonal variations exist in

paddy production in the state due to the differences in environmental factors. Another

paper summarises the findings of a survey in Palghat and Kuttanad areas, regarding the

adoption of HYVs. The major findings of the survey were that the yield rate of HYVs

was far less that the expected yield rates. The low yield was attributed to: low response

of yield to fertilizer, physiological properties of new seed varieties prone to more

incidents of pests and diseases, and high and rising prices of fertilizer and plant

protection materials leading to high cost of production.

Majority of the available studies on rice in Kerala are based on data aggregated

over seasons and over space. Aggregations of this nature might conceal some of the

inherent trends in the disaggregated data by mutual adjustments of the positive and

negative trends. The observed stability, in particular, of rice production in the state may

not be spread uniformly over the three seasons and over the different natural divisions of

the state. With a view to overcome this shortcoming, a disaggregated analysis of the rice

economy of the state was carried out by George and Mukherjee (1986)*'̂ . The Study

analysed the changes in area, yield and production of paddy during the three seasons of

Virippu (Autumn), Mundakan (Winter) and Punja (Summer) and for the combined

seasons as well. The Study found that growth rate of area, yield and production indicated

considerable variations across the districts, over seasons and over time. The reductions in

area and variability indicated that paddy land was wither converted to perennial crops or

there was a tendency to keep land fallow for longer periods. It was also observed that

both paddy and coconut prices has influenced the adjustments in paddy area. In the short

run, increased wage rate and disproportionate increase in prices of paddy influenced the

farmers decision to keep the land fallow. But in the long run the aforesaid tendency

together with increased relative price of coconut influenced farmers to switch over from

-62

paddy to coconut cultivation. However, the proportion of irrigated area was found to be a

non-significant variable in explaining paddy yield.

END NOTE

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