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Rise of 'New Landlords'

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.

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.

I
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

may 26, 2012

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

vol xlviI no 21

EPW
Economic & Political Weekly

DISCUSSION

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.

Economic & Political Weekly

EPW
may 26, 2012 vol xlviI no 21 127

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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