limits, not because we are persuaded that all published figures are suspect but because there are no figures for a start. Traditionally, leases have been of an oral nature and even now, although there is provision for recording tenancy in village accounts, entries are seldom made in the relevant columns.'*' Oral lease is the most common form of lease in the Coastal districts of Andhra Pradesh. 2 Both power relations in the village and anomalies in tenancy
legislation render the determination of the magnitude of tenancy, by type of lease, extremely difficult. 3 For purposes of a working assumption one has to
take as a starting point the findings of some semi-official and private studies on the subject# These studies point to the ubiquitous nature of sub
letting and crop-sharing in the coastal districts of Andhra Pradesh. From a study of several villages in the West Godavary district Ladejinsky concluded that 50 per cent or more of cultivators were pure tenants and they accounted for 50 per cent of the cultivated area rather than 25 per cent which official estimates claimed they did.^ Without putting a figure to the magnitude of share-cropping, Rao refers to its prevalence in the rice growing tracts of West Godavary.5
1 Parthasarathy, op.cit., p 13* Even records of rights do not contain information about oral leases, Ladejinsky, op.cit.. p 20.
2 Government of India, Planning Commission, Implementation of Land Reforms - A Review by the Land Reforms Implementation Committee of the National Development Council, New Delhi, Aug. 1966, p 2.
3 By power relations we mean here the relative bargaining positions of the tenant and the landlord. Although landlords themselves suffer from a kind of insecurity engendered by impending legislation the stronger economic position they enjoy enables them to browbeat the tenant. One of the anomalies in tenancy laws is that the rights of mortgages of land are regulated by the Transfer of Property Act rather than Tenancy Laws.
4 Ladejinsky, op.cit., p 23.
5 Rao,C.H.H. 'Uncertainty, Entrepreneurship and Share-Cropping in India,' Journal of Political Economy. LXXIX, 3,May/june 1971 > PP 578-595*
4.7
Given the high concentration of land ownership, surplus labour1
on the land and the absence of non-farm employment opportunities, tenancy situations are most likely to arise. 2 The object of leasing in land by farmers who have insufficient land is to supplement their meagre holdings.
The category of mixed tenancy comprises such farmers. 3 Farmers with
uneconomical holdings are likely to lease their holdings to other cultivators.^"
Those possessing no land are likely to offer their services as agricultural labour to farmers who require such services. Farmers who own substantial holdings may lease out land to obtain a size consistent with other existing factor endowments. The search on the part of both types of owners of land is to arrive at operational holdings that are economically viable.
The act of transferring land through leasing arrangements would lead one to expect the distribution of operational holdings to differ from that of ownership holdings. But this is not so as indicated by Table 1*7*
Raj was the first to point out the similarity between the two distributions.
1 In Andhra Pradesh, 43 pen cent of the total number of cultivating households cultivated less than an acre of land and accounted for a negligible part of the total owned area in the state. At the other end of the scale, about 2 per cent of the total number of households with individual holdings exceeding 50 acres accounted for 29 per cent of the total area, The National Sample Survey. Seventeenth Round, op.cit., p 118.
2 Dantwala,M.L. 'Small Farmers, not Small Farms,' in Khusro,A.M. Readings in Agricultural Economics. Allied Publishers, London, 1968, pp 418-420.
5 Sharma, op.cit., p 45*
4 Witness the leasing out of land by small farmers according to the NSS, see Table I.7 below.
5 In Andhra Pradesh, 6.84 per cent of the total number of households owned no land, NSS. 17th Round, op.cit., p 126.
6 Raj,K.N, 'Ownership and Distribution of Land,' Indian Economic Review.
Y, (N.S.) 1, April 1970, pp 1-42. Raj studied the Report on Landholding Rural Sector (NSS, 8th Round), No.74; the data relate to the period
1954-35-4.8
The persistence of high concentration of operational holdings is ascribed by him to the fact that the ability of lease in land is conditioned by the amount of land already held by the prospective lessee and the perception of risk by the lesser.1
1 Using marginal analysis, Raj developed a succession of models which examine the factors that determine the direction and extent of transfer of land. He develops the argument that the options open to owners of large holdings of land are either to lease out land or to cultivate the land themselves by hiring labour. Both options are fraught with risk. If land is leased out to farmers with small holdings and therefore low income, the risk is default of rent. If land is leased out to farmers who have large holdings, then the risk is reduction in average rent. If the reduction of average rent necessary to eliminate the risk of rent default is high, land-owners will cultivate the land themselves by hiring labour, but the risk here is that labour may not be available at crucial stages in cultivation. The amount of land leased out will therefore be determined by the owners' attitude towards different kinds of risk* Ra>) goes on to show how these decisions are
affected by different kinds of leasing arrangements. According to him crop-sharing will be preferred by land-owners to fixed rent,the greatei1 "their aversion of the landowners to bearing the risks of production..." Contrast this with Rao's argument that the
existence of crop-sharing arrangements is due to the very absence of entrepreneurial functions as in the case of rice cultivators in West Godavary, see Rao, op.cit., pp Haj found from the empirical verifidation of his model that there was no clear indication whether share-cropping was prevalent in areas where production risks were high and therefore scope for entre
preneurial functions was greater or whether its prevalence was in areas where there was less scope for enterprise, Raj, op.cit., p 31. Por a study of the concentration ratio based on data for High-Yielding Varieties of rice and wheat for the period 1967-68
to 1969-70 see Mukherjee,P.K. 'Concentration Ratio of Operational Holdings - Its Pattern and Variation,' EPW, V, 59? Sept.i* 26, 1970?
PP A97-A100. Hukherjee found that the paddy villages in Andhra Pradesh had the highest average concentration ratio.
4-9
Table 1.7* Percentage Distribution of Estimated Households (H) and Area (a) owned by Size-Class of Ownership Holdings;
Percentage Distribution of Operational Holdings (H) and Area (a) operated by Size-Class of Operational Holdings;
Percentage of Area Leased out and Area Leased in to Total Area owned by Size-Class of Ownership Holdings.
Andhra Pradesh. 1961-62
5*00-7*49 7.09 9.91 12.73 10.38 9.77 7.00
7.50-9.99 3.51 7.06 6.37 7*45 4.84 5.00
10.00-12.49 2,92 7.54 4*93 7*30 6.38 - 4.00
12.50-14.99 1.54 5.00 2,87 5.37 3.21 10.00
15.00-19.99 2.27 9.07 4.23 9.55 2.47 8.00
20.00-24.99 1.88 9.68 2.77 8. 38 6.92 - 10.00
25.00-29.99 0.81 5.28 1.18 4.41 11.87 - 12.00
50.00-49.99 1.28 11.47 2.72 15.68 1.85 14.00
Above 50*00 0.92 17.15 1.72 17.41 2.66 - 1.00
100.00 100.00 100.00 100.00 5.33
Sources NSS, N0.I44, Tables with Notes on some Aspects of Land Holdings in Rural Areas (state and. All-India Estimates)> op.cit*. Table (5*1)7 p 118; Table (-9.1)» P 162; Table (5.l),P 128; Table (7*0), P 153*
Notes (a) This refers to the difference between operational area and owned area expressed as a percentage of owned area. It is calculated from actual figures unlike Column 6 which shows the calculation made by the NSS.
50
The purpose of the above survey of tenurial conditions and the size distribution of landholdings was to identify the size-class of farms characteristic of different types of interest in land* On the basis of the NSS data, no definite conclusions can be arrived at except that all sizes in the category of ownership holdings leased out land. This data does not tell us anything about the size class of fgtrms that leased in land. Logically, the difference between the area owned and area operated should indicate the magnitude of area leased in. Surprisingly, with the exception of size-classes
5.00 - 7 .49, 7.50 - 7.99, 12.50 - 14.99, 15*00 - 19*99 and 50*00 - 49*99, the actual area operated fell short of the total area owned. 1 Does this mean
that the difference signifies the area leased out? We do not know. Where the NSS data is particularly deficient is that it does not tell us anything about inter-farm transfers of land, i.e. the direction of land transfers between classes. Therefore, judgement of the size distribution of tenant farms cannot be based on these figures. To determine whether tenancy is peculiar to any particular size of farm, one has to turn to other sources.
The Census of 1961 revealed that pure tenancy holdings are, by and large, holdings upto 5 acres in size, Field studies indicate that in all districts in Andhra Pradesh, tenant households are concentrated in households that cultivate less than one family holding.
1 See Table 1®7* Column 7* If we construe this difference as area leased-out, we notice that they bear no resemblance to Column 7, which shows the percentage of area leased-out. However, one must not forget the caveat, that, answers to the tenancy problem cannot be found in the '’arithmetic'1 of tenancy figures. The impact of
tenurial conditions on productions is examined in Chapter V,
Definition of Small Farms •> 1 The determination of the numerical strength of different size-groups of farms presupposes a precise definition of farm size* In our case this is particularly important as we wish to show how small farms constitute a substantial of rural households and how their unequal access to the new inputs has implications for rice production in the economy as a whole. Apart from the problem of increasing production, we need a firm idea regarding farm size for determining the relative merits of policies concerning land reforms and distribution of wealth,^
Farm size can be defined either in terms of a single input, say acreage, or in terms of output. 2 In the literature on the economic analysis of Indian Agriculture, the former definition has been customarily employed.
The advantages claimed for this definition are that land is easily measured, is spatially fixed and is not subject to annual fluctuations. Its use as
1 How serious the problem of small farmers is can be gathered from the special reference made to this category of farmers in the Fourth Plan
(pp150-152), the creation of the Small Farmers Development Agency, special Reserve Bank of India directives to cooperatives societies to provide credit to such farmers and finally the institution of special programmes for the weaker sections of the population. Planning Commission, Small Farmers Development Agency - Outline of a Programme of Action, text of an address by Venkatappiah,B. to the Twenty-ninth conference of the Indian Society of Agricultural Economics held in Waltair dn Dec. 50, 19&9*
Anon, fSmall Farmers and the Reserve Bank of India,' ASI. XXVT, 4 July 1971 >
p 202. Anon, 'Agricultural Credit Reorganised,* ASI. XXVI, 11 Feb. 1972, p 797* Estimates Committee, 56th Report, Ministry of Agriculture,
Special Programmes for Weaker Sections and Unemployment. New Delhi, April 1973s Anon, 'Plan Programmes to benefit Small Farmers,1 ASI. XXV, 2 May 1970, pp 172-173*
2 Khusro,A.M. 'Returns to Scale in Indian Agriculture,' Readings in Agri
cultural Development. Edited by Khusro,A.M. Allied Publishers, London, 1968, pp 123-159*
3 Ibid.. see also, Vyas,V.S., Tyabi,D.S. & Misra,V.N. 'New Agricultural Strategy and Small Farms,' EFW, IV, 15, March 29, 19^9» PP A49-A53*
52
a measure of size is justified when we are dealing with a homogenous region.
Furthermore, land accounts for 70 per cent to 90 per cent of the value of fixed farm capital and more than 80 per cent of net earnings is attributed to land. 2 Also in a situation of transition to intensive agriculture the
3