Last Update: Jan 2025 (Land (Agricultural Inputs))
Table of Contents
Land (Agricultural Inputs)
This article deals with ‘Land (Agricultural Inputs).’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Introduction
- India has 18% of the world population but 2.5% of the world’s land. Hence, land is a scarce resource in India.
- Net sown area in India is 141 million hectares out of India’s total geographical area of 368 million hectares.
- Due to the tradition of equal division of land among heirs each passing generation, the issue of small-sized farms and land fragmentation has come to the forefront.
- The average size of farm holdings has declined from 2.3 hectares in 1970-71 to 1.08 hectares in 2015-16.
- The distribution of land is not a consolidated one, but its nature is fragmented. Different tracts have different levels of fertility, and it is distributed accordingly. If there are four tracts to be distributed between two sons, both sons will get smaller plots from all four tracts. Hence, landholdings have become fragmented.
- According to Situation Assessment Survey, 2021 (SAS, 2021), 86% of agricultural household ownerships are small and marginal while just 0.1% are large.
- Furthermore, increase in fragmentation of ownership has been observed and average size of household ownership has decreased to 0.512 hectare in 2019 (SAS, 2021)
Side Topic: Types of Holdings
Agricultural holdings are classified into three categories:
| Economic Holding | Holding which ensures a minimum satisfactory standard of living in a family. |
| Family Holding | Holding which gives work to an average size family having one plough. |
| Optimum Holding | Maximum size of the holding which must be possessed and owned by a family |
Problems due to Small Landholdings
- Small landholdings lead to the major limitation to reap the benefits of economies of scale in agriculture operations.
- Small and marginal farmers have low bargaining power since they have a minimal marketable surplus. Hence, they are the price takers (not price makers) in a market.
- The income of small and marginal farmers is very low, forcing them to live below the poverty line.
- The small and marginal farmers can’t adopt new technology as it requires capital investment.
- It also exacerbates the problem of disguised unemployment in the economy.
Wayout
- Land Consolidation: Reallocation of holdings to create farms comprising only one or a few parcels instead of many patches. However, all states have passed such legislation, but it has been implemented only in Punjab, Haryana and some parts of UP.
- Land Leasing: Union has circulated the Model Land Leasing Act providing security to the owner of land against illegal occupation by a tenant farmer. Provisions of the Model Land Leasing Act will encourage owners of land who have moved to some other sector for employment to lease their land to tenant farmers for cultivation.