Land Reforms, Economy Traditional

Table of Contents
1. Reform Measures Initiated
2. Tenancy Reforms
3. Ceilings on Land Holdings
4. Consolidation of Holdings
5. Reforms in the Ninth Plan
6. Suggestions to Make Land Reforms Effective
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Reform Measures Initiated

Since Independence, India adopted a set of land reform measures to improve equity in rural land ownership, increase agricultural productivity and reduce rural poverty. These measures sought to remove intermediary layers between the State and cultivators, protect tenants and sharecroppers, restrict large holdings, and improve the structure and records of landholding.

1. Abolition of intermediaries (for example zamindars and other revenue-collecting intermediaries) so that tenants and actual cultivators deal directly with the State.
2. Tenancy reforms such as regulation of rent, provision of security of tenure to tenants and sharecroppers, and conferment of ownership rights on occupants where appropriate.
3. Ceiling on land holdings and redistribution of surplus land to the landless and marginal cultivators.
4. Consolidation of holdings to reduce fragmentation and improve operational efficiency of farms.
5. Cooperative farming to enable small and uneconomic holdings to obtain economies of scale by pooling land, labour and inputs while retaining ownership.
6. Updation and maintenance of land records to secure rights, prevent fraudulent transfers and enable targeted agricultural and rural development measures.

• Intermediaries were largely abolished by the end of the First Five Year Plan, except in a few isolated pockets where intermediary tenures continued to exist.
• By abolition of intermediaries, around 173 million acres of land was taken away from intermediary owners and roughly 2 crore tenants were brought into direct contact with the State (i.e., became directly recognised cultivators or claimants before government authorities).

Tenancy Reforms

Tenancy reforms aimed to protect tenants and sharecroppers from exploitation, stabilise occupancy arrangements, and wherever feasible transfer ownership to actual cultivators to implement the principle of "land to the tiller". Laws varied across States but shared common objectives.

• Many States enacted legislation to confer ownership rights on tenants on payment of a reasonable compensation to landlords.
• Where ownership conferment was not made universal, States introduced provisions for security of tenure for tenants and limits on rents.

The guidelines followed in Five-Year Plans with respect to tenancy reforms included:

1. Rent should be limited - conventionally suggested rent levels were between 1/5 and 1/4 of the gross produce.
2. Tenants should be accorded permanent (continuing) rights in the land they cultivate, subject to a limited right of resumption for owners in specified circumstances.
3. For lands where resumption is not permitted, the landlord-tenant relationship should be ended by conferring ownership rights on the tenants.

The effectiveness of security of tenure and tenancy laws depends on several legal and administrative factors:

1. How tenancy is legally defined (scope and exclusions);
2. Conditions under which landowners may resume tenanted land for personal cultivation;
3. How personal cultivation is interpreted in law (narrow or broad definitions affect resumption rights);
4. Legal provisions regulating voluntary surrender of tenancy; and
5. Accuracy and accessibility of land records that establish rights and occupancy.

• In practice, maximum-rent legislations were frequently flouted and tenancy-protection laws often failed to protect sharecroppers (who are distinct from fixed-rent tenants) because of difficult enforcement and weak record-keeping.
• Broad rights of resumption, combined with imprecise definitions (for example of personal cultivation), made many tenancies insecure.
• The Fourth Plan therefore recommended declaring most tenancies non-resumable and permanent (except in limited cases such as landholders serving in the armed forces or those with specified disabilities), and imposing penalties for wrongful evictions.
• As a result of legislations that conferred ownership rights on tenants, approximately 11.213 million tenants acquired ownership over about 15.3 million acres.

Ceilings on Land Holdings

Ceiling laws limit the maximum amount of agricultural land that a person or family may hold. Land in excess of the ceiling is declared surplus and is to be acquired by the State and redistributed to the landless and marginal cultivators. The device of land ceiling sought a more equitable distribution of land.

• Several States enacted ceiling laws through the 1950s and 1960s. Initially, ceilings and exemptions varied widely across States; many ceilings were set rather high and exemptions were numerous.
• To harmonise policies, the Union and States agreed national guidelines on land ceiling at a conference of Chief Ministers in 1972.

Special features of the 1972 national guidelines included:

1. Lowering ceiling limits to roughly 10-18 acres for wet (irrigated) land and up to 54 acres for dry unirrigated land, subject to variations according to local conditions;
2. Taking the family (not the individual) as the unit for determining holdings, with ceilings computed for a standard family size (for example a family of five);
3. Reducing the number of exemptions from the ceiling;
4. Retrospective application of law to declare benami transactions (transfers made in the name of another to avoid ceilings) void;
5. Placing such laws beyond routine civil-court challenge in many cases, by including them in the Ninth Schedule so as to restrict legal challenges based on fundamental-rights grounds.

• Ceiling legislation has been enacted by all States except a few Union Territories and regions such as Andaman and Nicobar Islands, Goa, Daman and Diu, Lakshadweep and much of the North-East (where special land laws or customary rights operate).
• So far, the total area declared surplus under ceiling laws has been around 7.49 million hectares, of which roughly 5.2 million hectares have been distributed to beneficiaries. A substantial part of the remaining surplus area has been held up by litigation and administrative delays.
• The agricultural census reveals the fragmentation and smallness of Indian holdings: the average size of holdings was only about 1.57 hectares in 1990-91. Holdings below two hectares rose from 66.6 million in 1980-81 to 82.1 million in 1990-91.
• Holdings below two hectares constituted about 78% of all holdings in 1990-91 but operated only 32.2% of the total cultivated area.
• By contrast, holdings above ten hectares declined in number (from 2.15 million in 1980-81 to 1.67 million in 1990-91), and made up about 1.6% of holdings but operated about 17.4% of the cultivated area. These figures show that ceiling legislation, as implemented, did not substantially alter the unequal distribution of land.

The shortfall between potential surplus land (as indicated by surveys) and the area actually declared surplus under ceiling laws arose for several reasons:

1. Permitting families with more than five members to hold up to twice the ordinary ceiling limit;
2. Separate ceiling limits for major sons in a family, which increased effective holdings;
3. Treating each shareholder of a joint family as a separate unit for ceiling purposes under applicable personal laws;
4. Exemptions for plantations such as tea, coffee, cardamom, rubber and cocoa, and for land held by religious and charitable institutions beyond normal ceilings;
5. Benami and farzi (sham) transfers designed to conceal real ownership;
6. Misclassification or misuse of exemptions and incorrect classification of land;
7. Non-application of appropriate ceilings to lands irrigated by public investment.

Consolidation of Holdings

Consolidation is the process of rearranging fragmented plots of a holding so that the cultivator holds contiguous plots or plots closer to one another. Consolidation reduces the costs and time lost in moving between scattered plots and improves the feasibility of mechanisation.

• Progress on consolidation has been slow. To date, about 60.2 million hectares - roughly one-third of the total cropped area - have been covered under consolidation schemes.
• Most consolidation has taken place in States such as Punjab, Haryana, Maharashtra, Uttar Pradesh, Bihar, Jharkhand and Orissa.
• Only about 15 States have formal consolidation laws; States such as Andhra Pradesh, Tamil Nadu, Kerala, Pondicherry and many North-Eastern States lack such laws.

Cooperative Farming

Cooperative farming was promoted as a means to overcome the disadvantages of small and uneconomic holdings without forcing surrender of ownership. Under cooperative farming, holdings and resources are pooled for joint cultivation while owners retain title to their land.

1. Farmers join voluntarily.
2. Members retain individual ownership of land (they do not surrender title to the State or to a cooperative).
3. Members pool land, labour, livestock, implements and other inputs.
4. The pooled land is managed as a single unit to gain scale economies.
5. Management is typically elected by members or designated under agreed rules.
6. Produce and benefits are shared among members in proportion to land contributed and labour provided.

• Approximately 78% of holdings in India are below two hectares, and small farms operate about 32.2% of the cultivated area, which underlines the potential role cooperative approaches can play.

Tribal Land and Protection from Alienation

• Most States with significant tribal populations have enacted laws to prevent alienation (sale or transfer) of tribal land and to restore land alienated in contravention of these protections.
• Indebtedness is both a cause and consequence of land alienation; the absence of viable institutional credit for poor tribals pushed many into exploitative money-lender arrangements, leading to loss of land.
• Extension of affordable consumption and production credit to tribal households and stronger enforcement of protective laws are necessary to check further alienation.

Reforms in the Ninth Plan

The Ninth Plan emphasised that land access is critical to anti-poverty strategy because rural poverty is concentrated among the landless and marginal farmers. It proposed a programme of action to strengthen land reform measures and target the vulnerable.

The programme of action included:

1. Detection and redistribution of ceiling-surplus land.
2. Regular updating and computerisation of land records.
3. Tenancy reforms to record and protect the rights of tenants and sharecroppers.
4. Consolidation of holdings to reduce fragmentation.
5. Preventing alienation of tribal lands and ensuring restoration where alienation has occurred.
6. Providing access to the poor on wastelands and common property resources.
7. Permitting leasing in and leasing out of land within statutory ceilings to improve land-use efficiency.
8. Giving preference to women in distribution of ceiling-surplus land and protecting women's land rights.

Suggestions to Make Land Reforms Effective

Implementation and complementary measures are essential to make land reforms meaningful for poverty reduction and agricultural development. Suggested measures include:

1. Whole-hearted and speedy implementation of land reform laws at the State level; effective enforcement is essential.
2. Minimising legal and administrative loopholes in tenancy legislation so that laws protect vulnerable cultivators rather than becoming instruments of evasion.
3. Plugging malafide transfers, benami transactions and farzi arrangements that defeat the purpose of land ceilings and redistribution.
4. Supporting beneficiaries of land redistribution (many of whom are poor) through complementary rural development schemes - for example, livelihood programmes, watershed development, irrigation, credit and extension services - so they can make effective use of the land (schemes referred to in earlier plans include IRDP, DPAP, NREP and similar interventions).
5. Strictly following the policy objective of land to the tiller where feasible, so that cultivation rights and ownership vest with those who till the land.
6. Regular updating and computerisation of land records to ensure clarity of title, reduce disputes, enable faster detection of surplus land, and improve transparency.
7. Encouraging and organising strong tenant organisations and farmer cooperatives to safeguard rights, improve bargaining power and facilitate access to inputs and markets.
8. Ensuring small farmers and new beneficiaries obtain timely and affordable credit from co-operatives and banks to improve their economic position and investment capacity.

Conclusion: Land reforms remain central to rural poverty alleviation and agricultural development. Legal reform must be matched by effective administration, clear and up-to-date records, access to credit and support services, protection of vulnerable groups (tenants, sharecroppers, tribals and women), and institutional arrangements (cooperatives, producer groups) that enable smallholders to achieve economies of scale and improve productivity.