There have been a number of researches on land size and productivity in the Indian agriculture sector. The point of debate is whether the scale of land has any significant influence on agricultural productivity. Adam Smith had envisaged the concept of economies of scale in the 18th century. The theory was made popular by Alfred Marshall in the 19th century. The idea of economies of scale in agriculture had been a matter of political debate in Germany, Russia, France, and many other developed countries. Even in countries like India and China, distribution of land among the cultivators became a matter of serious economic and political discourse. Peasant revolts against the landed aristocracy in various countries have been an interesting topic in history.
Agriculture is scale neutral
A great deal of research has shown that Indian agriculture is scale neutral. It means, if other things remain the same, one small plot of land gives the same proportion of output as a large land holding. Therefore, productivity depends on quality of land, its geographical position, the quality and quantity of inputs, water supply, use of labour, different financial subsidies, quality of seeds, method of cultivation, mode of ownership of land and other such factors. Agricultural production does not depend on the scale of land used for cultivation. It is a misleading concept that if productivity of land is to be increased, India has to cultivate on bigger scales. A section of pro-green revolution policy makers and observers thinks that it is necessary to cultivate in a large scale if productivity is to be increased significantly. This has been experienced in Punjab and some other states in the 1960s.
There has been an opposite view on the land size and productivity debate in India. In the 1960s, it was observed that in many cases, the productivity of land was higher in small scale agricultural production.
Economists like Amartya Sen observed that in small scale cultivation, the owners use intensive labour and pay intensive attention in their land to get maximum returns from a small holding. This was not possible in large scale cultivation. In this regard, Sudipta Bhattacharyay, Professor of Economics at Viswa Bharati University and a specialist in agricultural economics, has stated that the higher productivity in small scale agriculture as compared to large scale agriculture is due to poverty of the small land holders. It is mostly unviable for small scale farmers to employ additional labour. They have to toil in an inhuman way. Out of desperation, they have to work hard for livelihood. Therefore, there is no management magic in small scale cultivation in India.
Current land holding picture of India
The recent census of operational holding in the country shows that there has been a marginal increase in the number of small and marginal operational holdings (below two acres) in 2015-16 as compared to 2010-11. Interestingly, operational holdings of women also increased from 12.79% in 2010-11 to 13.87% in 2015-16. The marginal, small and medium land holdings constitute the lion’s share of operated areas. At the same time, large land holdings account for only 9% of the total operational area. The average size of operational holdings is highest in Nagaland (five hectares) and lowest in Kerala (0.18 hectares).
Need of the hour
It is clear that the scale of cultivation is not a cause of productivity. Then why can’t the small and marginal farmers ensure their well-being through cultivation? It is their poverty which is responsible. Additionally, government help and subsidy is important and that subsidy should be targeted and well-planned. For example, subsidy in fertilizer and electricity among others has been serving the rich farmers in a big way. At the same time, this has reduced the quality of top-soil due to the overuse of fertilizers. Excessive irrigation in places has led to the depletion of ground water levels.
Even developed economies subsidise their agricultural sector. In India, government intervention has been found inadequate. The improper pricing of agro-products is another problem. The present minimum support price policy is not working. A lot of products are being sold much below the required rate. The government needs to invest more in this sector as it accounts for more than 50% of the country’s employment, provides food to all, and stabilises the price level in the economy.