Rise of 'New Landlords'

DISCUSSION

Rise of ‘New Landlords’

A Rejoinder

Bhim Reddy, Abhishek Shaw

ownership holdings (NSSO Reports 331, 407, 419, 492, 500).

Did Agricultural Conditions Affect Tenancy?

The year 2002-03 witnessed a decline in the total cropped area. Vijay uses this re-

Disagreeing with R Vijay’s “Structural Retrogression and Rise of ‘New Landlords’ in Indian Agriculture: An Empirical Exercise” (EPW, 4 February 2012), the authors argue that the explanation for declining tenancy may not hold and that the hypothesis on the emergence of “new landlords” and the importance of tenancy can be explained by the changing terms of tenancy in the country.

Bhim Reddy (bhim.hyd@gmail.com) is a PhD student at the department of anthropology, University of Hyderabad and Abhishek Shaw (abhishekshaw@gmail.com) has completed an MA in economics from University of Hyderabad.

n “Structural Retrogression and Rise of ‘New Landlords’ in Indian Agriculture: An Empirical Exercise” (EPW, 4 February 2012), R Vijay provides evidence of an increasing number of noncultivating landowners (termed noncultivating peasant households; NCPHs) in rural India, based on National Sample Survey Organisation (NSSO) reports. Such people, who own land but have left cultivation for non-agricultural sectors in the rural economy, are called “new landlords”. Their households earn income from non-agricultural sources, but continue to hold onto their land and earn rent from it. They provide land for the lease market. Vijay contends that the increasing importance of NCPHs necessitates a reorientation of ways to deal with the agrarian crisis, which takes into account the importance of tenancy as a method of cultivation.

The longitudinal evidence (the NSSO’s decennial rounds on assets and liabilities between 1981-82 and 2002-03), however, does not support his hypothesis, while the data presented in a crosssectional village study of 10 villages in Andhra Pradesh reveals the signiﬁ cance of tenancy in cultivation. Based on evidence from the village studies, he contends that the declining trend in tenancy suggested by NSSO’s data is counterfactual. He attributes this inconsistency to a decline in the land lease market due to inconducive agricultural conditions in the survey year (2002-03). We argue that his explanation for declining tenancy may not hold and that his hypothesis on the emergence of “new landlords” and the importance of tenancy can be explained by the changing terms of tenancy. The following discussion on tenancy is based on the NSSO’s decennial data on assets and liabilities and its reports on operational holdings and

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duction to account for a decline in the land lease market. But, ﬁrst, if one looks at the decline in tenant holdings in total operational holdings, it was higher in 1991-92 over 1981-82, at 4.2%, while it was only 1.1% in 2002-03 over 1991-92. Despite a higher decline of tenant holdings in the former decennial survey, the area under tenancy increased by 1.1% and fell by 1.8% in the latter one, due to an increase and a decrease respectively of large tenant holdings. This variation was caused by signiﬁ cant ﬂ uctuations in reverse tenancy. Further, we argue that the lease market may decline after a bad agricultural year but not in the same year. This is because lease contracts are made at the end of an agricultural year (tenancy for each year is decided after the previous year’s harvest), not after seeing if agro-climatic conditions are favourable or not. If 2001-02 is examined, the cropped area and the production were similar to that of the previous couple of years, which witnessed higher agricultural production compared with the decadal average production for 1991-2000.

Therefore, we do not see a possibility of decline in the survey year, but it could have affected the lease market the next year. If, for the sake of argument, the decline in cropped area indicates a decline in tenancy, then, stretching the same logic, one may infer a decline in cultivators as well. Owing to non-cultivation of land, a section of cultivator households should have declared that they were not operating any land. If this was so, the decline in cultivators and a relative increase in NCPHs based on the same survey are questionable. This would imply that the relative increase in NCPHs is not signiﬁ cant enough for Vijay’s argument to hold.

NCPHs and New Forms of Tenancy

Independent of Vijay’s explanation of the decline in tenancy indicated by NSSO

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to the evolving ﬁxed-rent norms if he has we argue that these two forms are qualito lease in land. The feudal character that tatively different and the trends have to persisted in sharecropping may not be be seen separately. explicitly entwined in the new tenancy It should be noted that ﬁ xed-rent tenrelation, but it may continue to be exploit-ancy was a dominant form compared to ative. Even reverse tenancy has been sharecropping until the 1960s, a characknown to be reverse exploitative. Thus, teristic of absentee landlordism. In 1961,

Table 1: Percentage of Area Operated by Terms of Lease

State	Survey Years	Fixed Money	Fixed Produce	Share of Produce	Other*
		(% share)	(% share)	(% share)	(% share)
Andhra Pradesh	2002-03	31.6	37.9	24.0	6.5
	1991-92	25.9	26.8	28.9	18.4
	1981-82	13.0	11.1	8.8	67.1
Assam	2002-03	15.8	3.6	55.0	25.6
	1991-92	17.0	4.0	27.8	51.2
	1981-82	15.4	8.4	35.3	40.9
Bihar	2002-03	12.0	17.5	67.0	3.5
	1991-92	9.5	12.8	43.5	34.2
	1981-82	6.5	3.6	73.3	16.6
Gujarat	2002-03	10.7	46.3	37.9	5.1
	1991-92	39.9	1.6	23.7	34.8
	1981-82	5.1	0.5	9.7	84.7
Haryana	2002-03	71.2	9.8	15.8	3.2
	1991-92	61.4	5.2	19.9	13.5
	1981-82	24.2	10.8	41.2	23.8
Karnataka	2002-03	32.4	41.1	24.8	1.7
	1991-92	20.4	14.7	28.6	36.3
	1981-82	3.6	4.7	29.3	62.4
Kerala	2002-03	39.9	7.5	12.0	40.6
	1991-92	15.9	0	2.1	82
	1981-82	3.4	0	13.2	83.4
Madhya Pradesh	2002-03	18.3	32.5	39.0	10.2
	1991-92	15.3	21.4	24.9	38.4
	1981-82	1.7	1.1	27.8	69.4
Maharashtra	2002-03	26.2	9.0	37.5	27.3
	1991-92	36.2	6.5	20.9	36.4
	1981-82	11.0	2.3	48.5	38.2
Orissa	2002-03	11.1	7.8	73.0	8.1
	1991-92	19.7	4.7	50.9	24.7
	1981-82	5.1	8.1	42.0	44.8
Punjab	2002-03	79.2	1.5	15.3	4
	1991-92	49.2	18.2	11.3	21.3
	1981-82	42.1	4.6	39.9	13.4
Rajasthan	2002-03	35.0	17.7	39.3	8
	1991-92	15.2	19.4	23.4	42
	1981-82	3.5	1.4	21.6	73.5
Tamil Nadu	2002-03	32.0	30.0	22.9	15.1
	1991-92	32.4	20.5	16.1	31
	1981-82	19.2	19.9	36.5	24.4
Uttar Pradesh	2002-03	23.8	28.5	34.9	12.8
	1991-92	9.2	15.2	46.5	29.1
	1981-82	8.6	4.9	50.1	36.4
West Bengal	2002-03	23.7	28.5	34.9	12.9
	1991-92	8.6	11.7	46.5	33.2
	1981-82	2.8	11.9	55.6	29.7

data, his assertion that NCPHs are increasing in importance is convincing. This also reafﬁrms the importance of tenancy as a method of cultivation. This assertion, we argue, is convincing not when one looks at tenancy as a whole but at the emerging forms of tenancy along with the coming of NCPHs. One ﬁnds a decrease in tenancy as a whole but an increase in ﬁxed-rent tenancy forms. The decrease in tenancy is because of a signiﬁ cant decrease of sharecropping. But there is a substantial increase in ﬁ xed-rent tenancy. The move from sharecropping to ﬁ xed tenancy agreements is growing and seems to be linked to the emergence of “new landlords” who are moving out of cultivation due to alternative opportunities.

Separating the emerging forms of tenancy from the older forms in agriculturally developed states that are witnessing a higher rate of increase in NCPHs is imperative because these forms are qualitatively different. In sharecropping, the landowner partly shared the burden of uncertainties in agricultural production arising from climatic and market conditions. If he undertook any capital investment, he was at risk of low returns and

losses. It also required monitoring cultivation to ensure maximum returns. Tenants, on the other hand, had feudal obligations to the landowner. Sharecropping was in many cases found to be similar to systems that entailed attached labour (Bardhan 1976); to maximise indirect exploitation of tenants’ family labour (Bharadwaj and Das 1975). In the new form of ﬁxed-rent tenancy, the landowner is ensured a ﬁxed rent, mostly in advance if it is in the form of money, without any of the burden that was involved in sharecropping. The “new landlords” who are engaged in other economic activities may not want to supervise agricultural production and may prefer being paid a ﬁxed rent in money. If they are involved in agricultural processing and trading, with interlocked markets, they may prefer a ﬁxed rent in kind (Vakulabharanam et al 2011). A tenant in

the new ﬁxed-rent form, especially in India 2002-03 29.5 20.3 40.3 9.9the case of reverse tenancy, may refuse to 1991-92 19.9 14.5 34.4 31.2

1981-82 10.9 6.3 41.9 40.9

conform to the obligations involved in the

* Other includes (i) under service contract; (ii) for share of produce together with other terms; (iii) under usufructuary

old form and prefer acting independently.

mortgage; (iv) from relatives under no specific terms. Or, a poor tenant may be forced to adhere Source: Data compiled from NSSO reports 407, 492.

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DISCUSSION

the area under ﬁxed-rent tenancy and	tenancy continued to rise. One possible
sharecropping was 38.5% and 38.2% re	explanation for this is the high incidence
spectively. Because of land reforms, the	of reverse tenancy in these two states. Of
ﬁxed-rent form decreased drastically	the total area leased-in, tenant holdings
and sharecropping emerged as the main	operating ﬁve hectares and more are
form in India. The new form of ﬁ xed	55% in Punjab and 43% in Haryana,
rent tenancy corresponds to the emer	whereas they constitute only 21% of the
gence of “new landlords”. We do not	total leased-in area at the all-India level.
suggest a replacement of tenancy con-	Reverse tenancy in the ﬁ xed-rent form
tracts involving sharecropping with the	has been growing in agriculturally
new forms. Those that are involved in	developed regions (Singh 1989). The
the new forms may be different in their	area under ﬁxed-money rent increased
class character from those involved in	from 24% in 1981-82 to 71% in 2002-03 in
sharecropping. Statistics reveal that	Haryana and from 42% to 79% in Punjab
sharecropping is mainly among margin	during the same period. Besides, there
al tenant holdings, while ﬁ xed forms	has been a shift towards ﬁ xed-rent
are mostly among larger holdings. This	tenancy in Andhra Pradesh, Tamil Nadu
suggests that marginal tenants are un	and West Bengal, which have a higher
able, due to lack of capital, to enter into	number of non-cultivating households, a
ﬁ xed-rent tenancy.	growing share of NCPHs and an increas
	ing concentration of land in their hands.
Rise in Fixed-Rent Tenancy	The area under ﬁxed rent (money and
As mentioned, we see a correlation	produce) has increased from 24% to
between the emergence of the “new	70% in Andhra Pradesh, from 39% to
landlords” and the appearance of new	62% in Tamil Nadu and from 14% to 52%
forms of tenancy in India. Vijay shows	in West Bengal. It is important to note
that households in the farm sector	that even West Bengal, a state known for
declined between 1981-82 and 2002-03	sharecropping and strict tenancy laws,
at the all-India level. Simultaneously,	conforms to the trend. Karnataka is no
there was an increase in NCPHs. We	exception, with an increase in ﬁ xed-rent
point out that terms of lease were chang	tenancy from 8% to 74%. Uttar Pradesh,
ing at the all-India level during the same	Madhya Pradesh and Rajasthan also show
period and they had to do with the	clear shifts towards ﬁ xed-rent tenancy.
various tenancy forms – ﬁ xed money,	On the other hand, while there was a
ﬁxed produce, share of produce (share	7% fall in sharecropping between 1981
cropping) and others (Table 1, p 127).	and 1991, it increased by 6% between
There was a growth of 9% in the area	1991 and 2002. This increase was be
operated under ﬁxed-money tenancy in	cause of trends in Odisha, Bihar, Maha
both decennials (1981-91, 1991-2002) and	rashtra, Gujarat and Assam. However, in
a growth of around 8% and 6% in ﬁ xed-	Bihar, ﬁxed-rent tenancy also rose dur
produce tenancy respectively. So there	ing this period. Gujarat had a rise in
was a clear rise of ﬁ xed-rent tenancy	sharecropping and ﬁ xed-produce tenancy,
(money and produce) in the states	but a fall in ﬁxed-money tenancy. While
known to be agriculturally developed.	Odisha showed a clear trend of growing
A closer look shows that states where	sharecropping and a decrease in other
the farm sector declined between 1981	forms, Maharashtra and Assam ﬂ uctua ted
and 1991 such as Punjab, Tamil Nadu	between ﬁxed tenancy and sharecropping.
and Kerala had a growth in ﬁ xed-money	The speciﬁcs of each region must be
and ﬁxed-produce tenancy. Kerala is a	looked at to ﬁnd reasons for these
special case, with tenancy moving to kin	trends. In most states, the area under
groups without speciﬁc terms of lease.	sharecropping as well as under other
This could be due to the strict tenancy	forms of tenancy has fallen. But there
regulations in the state. In Punjab and	has been a clear rise in ﬁ xed-money and
Haryana, there was a decline in non	ﬁxed-produce tenancy in states where
cultivating households between 1991 and	there has been a rise in NCPHs. This
2002, unlike other states. Yet, ﬁ xed-money	reafﬁrms the growing signiﬁ cance of
128	may 26, 2012

the “new landlords” in the land lease market, as emphasised by Vijay.

New Landlords?

One must bear in mind that the increase in landed non-cultivating households could indicate agrarian distress. For instance, a section of small and marginal landowning households may move to non-farm wage employment in a rural area. This may have been the case in some semi-arid regions that show an increase in fallow land. It would be more meaningful to examine the phenomenon of increasing non-cultivating landowners by region and class. Given the variation within and between states, using only the criterion of “value of land” to identify NCPHs as “new landlords” may be an overgeneralisation. While the category of “new landlords” exists in most agriculturally developing states, there is, interestingly, no explanation about the peculiar character of NCPHs in Punjab and Haryana. Both states have a high number of NCPHs, but a relatively low concentration of land in their hands and an increasing number of cultivators. Why is this so in the most agriculturally developed states in India? Could it be due to widespread reverse tenancy? Can the NCPHs in Punjab and Haryana be termed “new landlords” because they seem to be the marginal landowners catering to tenancy of the reverse kind?

References

Bardhan, P (1976): “Variation in Extent and Forms of Agricultural Tenancy – II, Analysis of Indian Data across Regions and Over Time”, Economic & Political Weekly, 18 September, pp 1541-46.

Bharadwaj, K and P K Das (1975): “Tenurial Conditions and Mode of Exploitation – Study of Some Villages in Orissa: Further Notes”, Economic & Political Weekly, June, pp A49-A55.

National Sample Survey Organisation (1996): “Operational Holding in India 1991-92: Salient Features”, 48th round, Report 407.

– (1998): “Households Assets and Liabilities in India” (as on 30 June 1991), 48th round, Report No 419.

– (2005): “Households Assets and Liabilities in India” (as on 30 June 2002), 59th round, Report No 500.

– (2006): “Some Aspects of Operational Land Holdings in India, 2002-03”, NSS 59th round, Report No 492.

Singh, I (1989): “Reverse Tenancy in Punjab Agriculture: Impact of Technological Change”, Economic & Political Weekly, Vol 24, No 25, pp A86-A92.

Vakulabharanam, V et al (2011): “Understanding the Andhra Crop Holiday Movement”, Econo mic & Political Weekly, Vol 46, No 50, pp 13-16.

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