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Monday, December 7, 2009

Agricultural Growth in India: Role of technology, incentives, and institutions

"Given wide variations in climate, soil characteristics, and in the extent and quality of irrigation facilities available, 'area' is a rather poor indicator of the productivity of land. We know that, other things being the same, regions with higher rainfall tend to have higher productivity. There is evidence that soil quality as well access to irrigation varies, with smaller holdings in general having better quality land and a higher proportion of their area under irrigation. Why should there be a systematic inverse relation between land quality and holding size is an interesting and as yet an unresolved question."

"The incidence of tenancy – measured both by the proportion of households which lease in land and that of operated area which is leased in – is very low. Tenancy clearly is not playing much of a role in correcting the mismatch between the distribution of land and that of labour power across households. Because of this, and the high proportion of those who do not operate any land on their own, wage labour plays a significant role in agriculture. According to the 2001 Census, nearly 40 per cent of workers engaged in agriculture were wage labourers."

"Dependence on wage labour is widespread: there are few purely wage labour-dependent farmers or wholly family labour-dependent farms. Large landowners depend more on wage labour; but even small cultivators use some wage labour even as they contribute a sizeable part of the wage labour supply for agriculture. The relative importance of the two sources of labour is a function of holding size, the caste composition of the population and of landowners; incidence of wage labour tends to be higher in regions with relatively high proportion of scheduled castes which have traditionally been excluded from land ownership."

"These features of Indian agrarian organisation stand in sharp contrast to those of other heavily populated, land-scarce countries of East Asia such as China and Japan. Pre-war Japan and pre-revolutionary China had low land-man ratios and unequal distribution of land ownership…"

(A. Vaidyanathan in 'Agricultural Growth in India: Role of technology, incentives, and institutions,' p. 140 OUP)

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