Lecture 5 - Institutional and Technological reforms in Agriculture | Indian Economy - In Depth Analysis - Economics PDF Download

 Page 1


Institutional and Technological reforms in Agriculture 
 
 
 
 
 
 
 
 
 
 
 
 
Lesson: Institutional and Technological reforms in 
Agriculture 
Lesson Developers: Vaishali kapoor and Rakhi 
Arora 
College/University: University of Delhi 
 
 
Page 2


Institutional and Technological reforms in Agriculture 
 
 
 
 
 
 
 
 
 
 
 
 
Lesson: Institutional and Technological reforms in 
Agriculture 
Lesson Developers: Vaishali kapoor and Rakhi 
Arora 
College/University: University of Delhi 
 
 
Institutional and Technological reforms in Agriculture 
 
 
Table of Contents: 
1. Introduction 
2. Land Reforms 
2.1 Historical Background 
2.2 Case for Land Reform 
2.3 options for Land Reforms 
2.4 Components of Land Reform 
2.5 Evaluation of land Reforms 
3. New agricultural strategy 
3.1 Components of strategy adopted in India 
3.2 Evaluation of New agricultural strategy 
4. Green Revolution 
4.1 Benefits of Green Revolution 
4.2 Adverse impacts of Green Revolution 
4.3 Second Green Revolution 
 
5. Summary 
6. Exercises 
7. Glossary 
8. References 
 
Learning outcomes:- 
i) Define land reforms. 
ii) Describe components of land reforms. 
iii) List advantages and disadvantages of land reforms. 
iv) Evaluate government policies. 
v) Mention pros and cons of green revolution 
vi) Define green revolution. 
 
1. Introduction 
Amongst the three sectors viz. Primary, secondary and tertiary, it is the primary and 
especially agriculture sector in which land, its acreage under cultivation, land relations and 
lands’ usage are important.  On realizing this, government had taken various initiatives to 
confer rights associated with land, in best possible manner.  Though, it brought about 
desired results or not, needs to be questioned. 
Along with changes in the rights of ownership of land, role of technology was realized.  The 
new agriculture strategy is a technology-oriented strategy under which farmers are 
encouraged and supported the application of modern science and technology to agriculture.  
Page 3


Institutional and Technological reforms in Agriculture 
 
 
 
 
 
 
 
 
 
 
 
 
Lesson: Institutional and Technological reforms in 
Agriculture 
Lesson Developers: Vaishali kapoor and Rakhi 
Arora 
College/University: University of Delhi 
 
 
Institutional and Technological reforms in Agriculture 
 
 
Table of Contents: 
1. Introduction 
2. Land Reforms 
2.1 Historical Background 
2.2 Case for Land Reform 
2.3 options for Land Reforms 
2.4 Components of Land Reform 
2.5 Evaluation of land Reforms 
3. New agricultural strategy 
3.1 Components of strategy adopted in India 
3.2 Evaluation of New agricultural strategy 
4. Green Revolution 
4.1 Benefits of Green Revolution 
4.2 Adverse impacts of Green Revolution 
4.3 Second Green Revolution 
 
5. Summary 
6. Exercises 
7. Glossary 
8. References 
 
Learning outcomes:- 
i) Define land reforms. 
ii) Describe components of land reforms. 
iii) List advantages and disadvantages of land reforms. 
iv) Evaluate government policies. 
v) Mention pros and cons of green revolution 
vi) Define green revolution. 
 
1. Introduction 
Amongst the three sectors viz. Primary, secondary and tertiary, it is the primary and 
especially agriculture sector in which land, its acreage under cultivation, land relations and 
lands’ usage are important.  On realizing this, government had taken various initiatives to 
confer rights associated with land, in best possible manner.  Though, it brought about 
desired results or not, needs to be questioned. 
Along with changes in the rights of ownership of land, role of technology was realized.  The 
new agriculture strategy is a technology-oriented strategy under which farmers are 
encouraged and supported the application of modern science and technology to agriculture.  
Institutional and Technological reforms in Agriculture 
 
 
Green Revolution was one such agricultural strategy that aimed to increase production of 
food grains, with aid of science and technology.  Food grains production was targeted so as 
India could become self-dependent for its food requirements. 
This chapter broadly covers three topics namely, land reforms, green revolution and new 
agricultural strategy. First Section discusses land reforms and explains its components.  In 
the second section, new agricultural strategy, its relevance and strategy in practice are 
discussed.   In the last section, green revolution & its success are covered. 
2. Land Reforms 
Land reforms refer to the change in the ownership rights of land and /or improving the 
terms at which land is provided to the tillers.  Land reforms are undertaken with the 
purpose of making rational use of scarce land. Land reforms also aim at making farm size 
economical by imposing ceilings or floors on land holdings. It also favors the less privileged 
class when land’s redistribution takes place and ownership is transferred to landless labor 
from those having land in excess of ceiling limit.  Land reform is a measure that keeps a 
check on exploitation of tillers, who are at vagaries to be exploited by their landlords. 
 
2.1 Historical Background 
During colonialism, British entrepreneurs acquired land at low prices for mines, 
plantations, setting up companies etc.  The private property rights took over community 
ownership system of Indian society.  Moreover, Land tax was introduced and was 
popularized as “Zamindar System”. In this system, there were chains of intermediaries 
involved; those collected tax from tiller. 
 
As a result, at the independence of India ownership was highly skewed.  A small fraction 
of people were holding major fraction of Land.  This small group of landlords and 
intermediaries exploited their tenants by charging heavy rents either in cash or kind.  
Under such an arrangement, tenant had little incentive to develop farmland with 
increased production and neither was landlord concerned to improve the quality of land 
and henceforth, agricultural production and productivity suffered. In the first five years 
plan, land reform was sought to be indispensable pillar that could fight poverty by 
means of higher productivity in agriculture and equitable distribution of land.  
 
2.2 Case for land reform 
The distribution was not just or equitable; it was highly skewed, tenurial arrangements 
were exploitative which justify undertaking land reforms and also these were economic 
theoretical justifications that furthers the case for land reforms.  There are discussed 
one by one. 
 
a) Skewed pattern of distribution of land. 
 
Page 4


Institutional and Technological reforms in Agriculture 
 
 
 
 
 
 
 
 
 
 
 
 
Lesson: Institutional and Technological reforms in 
Agriculture 
Lesson Developers: Vaishali kapoor and Rakhi 
Arora 
College/University: University of Delhi 
 
 
Institutional and Technological reforms in Agriculture 
 
 
Table of Contents: 
1. Introduction 
2. Land Reforms 
2.1 Historical Background 
2.2 Case for Land Reform 
2.3 options for Land Reforms 
2.4 Components of Land Reform 
2.5 Evaluation of land Reforms 
3. New agricultural strategy 
3.1 Components of strategy adopted in India 
3.2 Evaluation of New agricultural strategy 
4. Green Revolution 
4.1 Benefits of Green Revolution 
4.2 Adverse impacts of Green Revolution 
4.3 Second Green Revolution 
 
5. Summary 
6. Exercises 
7. Glossary 
8. References 
 
Learning outcomes:- 
i) Define land reforms. 
ii) Describe components of land reforms. 
iii) List advantages and disadvantages of land reforms. 
iv) Evaluate government policies. 
v) Mention pros and cons of green revolution 
vi) Define green revolution. 
 
1. Introduction 
Amongst the three sectors viz. Primary, secondary and tertiary, it is the primary and 
especially agriculture sector in which land, its acreage under cultivation, land relations and 
lands’ usage are important.  On realizing this, government had taken various initiatives to 
confer rights associated with land, in best possible manner.  Though, it brought about 
desired results or not, needs to be questioned. 
Along with changes in the rights of ownership of land, role of technology was realized.  The 
new agriculture strategy is a technology-oriented strategy under which farmers are 
encouraged and supported the application of modern science and technology to agriculture.  
Institutional and Technological reforms in Agriculture 
 
 
Green Revolution was one such agricultural strategy that aimed to increase production of 
food grains, with aid of science and technology.  Food grains production was targeted so as 
India could become self-dependent for its food requirements. 
This chapter broadly covers three topics namely, land reforms, green revolution and new 
agricultural strategy. First Section discusses land reforms and explains its components.  In 
the second section, new agricultural strategy, its relevance and strategy in practice are 
discussed.   In the last section, green revolution & its success are covered. 
2. Land Reforms 
Land reforms refer to the change in the ownership rights of land and /or improving the 
terms at which land is provided to the tillers.  Land reforms are undertaken with the 
purpose of making rational use of scarce land. Land reforms also aim at making farm size 
economical by imposing ceilings or floors on land holdings. It also favors the less privileged 
class when land’s redistribution takes place and ownership is transferred to landless labor 
from those having land in excess of ceiling limit.  Land reform is a measure that keeps a 
check on exploitation of tillers, who are at vagaries to be exploited by their landlords. 
 
2.1 Historical Background 
During colonialism, British entrepreneurs acquired land at low prices for mines, 
plantations, setting up companies etc.  The private property rights took over community 
ownership system of Indian society.  Moreover, Land tax was introduced and was 
popularized as “Zamindar System”. In this system, there were chains of intermediaries 
involved; those collected tax from tiller. 
 
As a result, at the independence of India ownership was highly skewed.  A small fraction 
of people were holding major fraction of Land.  This small group of landlords and 
intermediaries exploited their tenants by charging heavy rents either in cash or kind.  
Under such an arrangement, tenant had little incentive to develop farmland with 
increased production and neither was landlord concerned to improve the quality of land 
and henceforth, agricultural production and productivity suffered. In the first five years 
plan, land reform was sought to be indispensable pillar that could fight poverty by 
means of higher productivity in agriculture and equitable distribution of land.  
 
2.2 Case for land reform 
The distribution was not just or equitable; it was highly skewed, tenurial arrangements 
were exploitative which justify undertaking land reforms and also these were economic 
theoretical justifications that furthers the case for land reforms.  There are discussed 
one by one. 
 
a) Skewed pattern of distribution of land. 
 
Institutional and Technological reforms in Agriculture 
 
 
If one look at the data of ownership pattern of land as given in Table 1, one finds 
one that one-fifth of the rural population held majority (62%) of the total area under 
cultivation.  The farms with this rich minority were of size in excess of 10 acres and 
those held by at the bottom end were ranging from less than 1 acre to 5 acres in 
size. 
 
 
Table 1 : skewed distribution of land 
 
Percentage of rural 
household 
Percentage of total area 
under cultivation by 
households 
Size of the farm 
63 % 19 % Less than 1 acre to 5 
acres 
18 % 62 % Greater than 10 acres 
Source: NSSO, 1960-1 
But skewed distribution of land alone is not sufficient to justify a policy.  This 
distribution is not just and it has economic counterpart which makes it clear that it is 
not efficient.  (see next points of discussions) 
b) Price of land and rents 
 
Since land is fixed in supply, there is an upward pressure exerted on price of land 
when demand increases.  Large landowners reap benefits by leasing land than 
cultivating and these absentee landlord charge exorbitant rates of rent.  Though the 
price of land can be regulated by legislation say by putting a cap on price of land but 
this would be futile if there are tenurial agreements made.  So the alternative is to 
ration the land i.e. fixing a ceiling limit beyond which one cannot hold/ acquire land. 
 
c) Inverse relationship between farm size and productivity 
Empirical studies have shown that there exists negative relationship between size of 
the farm and output per hectare.  Productivity measured by output per hectare 
decreases as the size of the farm increases.  The reasons diagnosed are that ‘soil 
fertility of small farms tends to be high’ and also, ‘small farms tend to use labour 
more intensively’.  So, policy of land redistribution seems important from productive 
efficiency point of view.  
d) Others 
Land is a status-quo, so it enhances individual’s status in the society.  Also, land 
provides security and can act as collateral if a poor farmer needs credit to improvise 
on production techniques. 
 
Page 5


Institutional and Technological reforms in Agriculture 
 
 
 
 
 
 
 
 
 
 
 
 
Lesson: Institutional and Technological reforms in 
Agriculture 
Lesson Developers: Vaishali kapoor and Rakhi 
Arora 
College/University: University of Delhi 
 
 
Institutional and Technological reforms in Agriculture 
 
 
Table of Contents: 
1. Introduction 
2. Land Reforms 
2.1 Historical Background 
2.2 Case for Land Reform 
2.3 options for Land Reforms 
2.4 Components of Land Reform 
2.5 Evaluation of land Reforms 
3. New agricultural strategy 
3.1 Components of strategy adopted in India 
3.2 Evaluation of New agricultural strategy 
4. Green Revolution 
4.1 Benefits of Green Revolution 
4.2 Adverse impacts of Green Revolution 
4.3 Second Green Revolution 
 
5. Summary 
6. Exercises 
7. Glossary 
8. References 
 
Learning outcomes:- 
i) Define land reforms. 
ii) Describe components of land reforms. 
iii) List advantages and disadvantages of land reforms. 
iv) Evaluate government policies. 
v) Mention pros and cons of green revolution 
vi) Define green revolution. 
 
1. Introduction 
Amongst the three sectors viz. Primary, secondary and tertiary, it is the primary and 
especially agriculture sector in which land, its acreage under cultivation, land relations and 
lands’ usage are important.  On realizing this, government had taken various initiatives to 
confer rights associated with land, in best possible manner.  Though, it brought about 
desired results or not, needs to be questioned. 
Along with changes in the rights of ownership of land, role of technology was realized.  The 
new agriculture strategy is a technology-oriented strategy under which farmers are 
encouraged and supported the application of modern science and technology to agriculture.  
Institutional and Technological reforms in Agriculture 
 
 
Green Revolution was one such agricultural strategy that aimed to increase production of 
food grains, with aid of science and technology.  Food grains production was targeted so as 
India could become self-dependent for its food requirements. 
This chapter broadly covers three topics namely, land reforms, green revolution and new 
agricultural strategy. First Section discusses land reforms and explains its components.  In 
the second section, new agricultural strategy, its relevance and strategy in practice are 
discussed.   In the last section, green revolution & its success are covered. 
2. Land Reforms 
Land reforms refer to the change in the ownership rights of land and /or improving the 
terms at which land is provided to the tillers.  Land reforms are undertaken with the 
purpose of making rational use of scarce land. Land reforms also aim at making farm size 
economical by imposing ceilings or floors on land holdings. It also favors the less privileged 
class when land’s redistribution takes place and ownership is transferred to landless labor 
from those having land in excess of ceiling limit.  Land reform is a measure that keeps a 
check on exploitation of tillers, who are at vagaries to be exploited by their landlords. 
 
2.1 Historical Background 
During colonialism, British entrepreneurs acquired land at low prices for mines, 
plantations, setting up companies etc.  The private property rights took over community 
ownership system of Indian society.  Moreover, Land tax was introduced and was 
popularized as “Zamindar System”. In this system, there were chains of intermediaries 
involved; those collected tax from tiller. 
 
As a result, at the independence of India ownership was highly skewed.  A small fraction 
of people were holding major fraction of Land.  This small group of landlords and 
intermediaries exploited their tenants by charging heavy rents either in cash or kind.  
Under such an arrangement, tenant had little incentive to develop farmland with 
increased production and neither was landlord concerned to improve the quality of land 
and henceforth, agricultural production and productivity suffered. In the first five years 
plan, land reform was sought to be indispensable pillar that could fight poverty by 
means of higher productivity in agriculture and equitable distribution of land.  
 
2.2 Case for land reform 
The distribution was not just or equitable; it was highly skewed, tenurial arrangements 
were exploitative which justify undertaking land reforms and also these were economic 
theoretical justifications that furthers the case for land reforms.  There are discussed 
one by one. 
 
a) Skewed pattern of distribution of land. 
 
Institutional and Technological reforms in Agriculture 
 
 
If one look at the data of ownership pattern of land as given in Table 1, one finds 
one that one-fifth of the rural population held majority (62%) of the total area under 
cultivation.  The farms with this rich minority were of size in excess of 10 acres and 
those held by at the bottom end were ranging from less than 1 acre to 5 acres in 
size. 
 
 
Table 1 : skewed distribution of land 
 
Percentage of rural 
household 
Percentage of total area 
under cultivation by 
households 
Size of the farm 
63 % 19 % Less than 1 acre to 5 
acres 
18 % 62 % Greater than 10 acres 
Source: NSSO, 1960-1 
But skewed distribution of land alone is not sufficient to justify a policy.  This 
distribution is not just and it has economic counterpart which makes it clear that it is 
not efficient.  (see next points of discussions) 
b) Price of land and rents 
 
Since land is fixed in supply, there is an upward pressure exerted on price of land 
when demand increases.  Large landowners reap benefits by leasing land than 
cultivating and these absentee landlord charge exorbitant rates of rent.  Though the 
price of land can be regulated by legislation say by putting a cap on price of land but 
this would be futile if there are tenurial agreements made.  So the alternative is to 
ration the land i.e. fixing a ceiling limit beyond which one cannot hold/ acquire land. 
 
c) Inverse relationship between farm size and productivity 
Empirical studies have shown that there exists negative relationship between size of 
the farm and output per hectare.  Productivity measured by output per hectare 
decreases as the size of the farm increases.  The reasons diagnosed are that ‘soil 
fertility of small farms tends to be high’ and also, ‘small farms tend to use labour 
more intensively’.  So, policy of land redistribution seems important from productive 
efficiency point of view.  
d) Others 
Land is a status-quo, so it enhances individual’s status in the society.  Also, land 
provides security and can act as collateral if a poor farmer needs credit to improvise 
on production techniques. 
 
Institutional and Technological reforms in Agriculture 
 
 
2.3 Options for land reforms 
Though generally held belief is that land reforms can be initiated by state but there are 
scholars who argue that market can lead to efficient distribution of land. 
 
 
 
 
 
a) State- led land reforms 
 
In State-led land reforms, authority to any suitable government institution is 
assigned.  This authority then dispossesses land from large landowners, identify 
beneficiaries for providing this surplus land and redistribute land to these selected 
beneficiaries. But there are vested interests of large landowners and their powerful 
connection with political system which have meant that land reforms are not 
implemented meaningfully and desired outcome has not been achieved.   
 
 
b) Market-Assisted Land reforms 
Market- assisted land reforms refers to public & private sector providing loans & 
grants to the beneficiaries which they use to purchase land from ‘willing sellers’ at 
the ‘market price’ and set up their farms.  Sellers are willing and are not forced 
which is in contrast to state-led reforms, one need not fight landlord’s resistance and 
no illegal transactions or confiscatory payments would pop-up.  But this type of land 
reforms is not successful in transferring land to the resource poor rather rich farmers 
are net buyers of land. 
2.4 Components of land reforms 
Land reforms rests on four major pillars viz abolition of intermediaries, redistribution of 
land (guided by optimum farm size theory), improving conditions of tenants so that they 
are not at mercy of their landlord and computerization of land holdings for greater 
transparency and easy implementation of reforms.   These components are discussed in 
length as follows:- 
 
a) Abolition of Intermediaries 
 
After the independence of India from British rule, it was realized that there existed 
exploitative agrarian relations between tenants on one hand being exploited by 
absentee landlord and/or intermediaries on the other hand. Such agrarian 
relations impedes growth in agricultural production and productivity and hence, 
abolition of zamindari system and intermediaries became top most priority soon 
after independence.