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Land Reforms
07 May 2016 17:43

Land Tenure System

Pre-£ System

1. Land was owned by the tiller so long as he paid revenue. The zamindar was only a revenue collector and
had no police / judiciary powers.
2. Land was not tradable mainly because (a) Consent of village community was needed and it generally didn't
come for village outsiders. (b) Pressure on land was not so much. (c) Social
factors where association with land was considered a mark of respect.

When the Mughal power started declining, these military tax-collector officials, and anyone else with
influence (like nawabs and other powerful court officials), grabbed power where they could to become de-
facto hereditary landlords and petty chiefs in their local areas, and emerged as a new class of landlords with
something akin to property rights over the land. They increasingly came to control the administration of the
their lands. This concentration of power in the hands of the Tax collector was called gentrification
 
During these times (as also the Mughal ones), the burden of taxation was fairly high (sometimes up to 50%),
but there was also a history of remissions and rescheduling in times of distress.

In come the British

When the British were just settling in, they realized that the demand for British products in India wasn’t very
high, whereas Indian handicrafts and clothes were quite popular in Europe. To minimize outflow of British
currency to India (basic tenet of mercantilism), they decided that Indians should be made to pay themselves
for the imports they send to Britain. The colonial government also needed money to maintain the large
administrative machinery and army.
 
 

Permanent Settlement 57% - Pneumonic - 19 * 3

Ryotwari 38% 19 * 2

Mahalwari 5%.

 
 
Rationale
1. Welter of Rights Issue
a. Competing claims on Land
2. Peasant Rights showed large variation - could be individual or Village rights or Zamindar rights -
Need to standardise
3. By 1850, land revenue accounted for about 60% of total British Government revenue. Thus, land
revenue and its collection were the most important policy issues during the colonial period.
4. Existing local elites knew about the land better
5. Economic Theory says Marketing of A resource ( Land here), leads to a better efficiency
6. To weaken Military elite who were a threat to state power

 Issues
1. Disruption of traditional mechanism
1. landlord now had property rights over the lands in his jurisdiction, instead of tiller
2. Tillers became tenants who could be summarily dismissed
3. disrupted the traditional patron-client relationship between landlords and tillers, which used to
serve as an insurance against natural calamities

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2. Growth of ABSENTEE LANDLORDISM
1. moneylenders and traders
2. weren’t interested in disposseing the peasants of their lands-
a. they rather used land mortgages as measures of coercion,
b. to exercise substantial control over agricultural produce, charge usurious rents, and exercise
market control.
3. Many level of intermediaries were created
a. Which further increased the rents to be paid
4. Investments in agriculture drastically declined even further

3. Prevented growth of capitalist farming in India: -

1. Declining Productivity - Blyn - 0.72%
2. Food Imports dependencey - Made up 50% of all capital expenditures
3. Reasons
a. Absentee landlordism
b. small size of landholdings because large landowners leased out their holdings to many small
farmers;
c. Zamindar didn't invest because hi sland could be confiscated on non payment of rent
d. Tenant didn't invest because of frequest transfer of land and all benefits accruing to the land
owner

4. Cash Crops - Given high rents, many farmers moved from growing food crops to cash crops like cotton
and sugarcane, leading to famines - Data of BLYN - 0.57%

5. Issues in Agriculture
1. In 1954, 93% of all rural credit came from moneylenders
2. 97% of all farms utilized wooden ploughs
3. Rare use of improved seeds, artificial fertilizers etc.  

6. Landlessness
1. 45% owned no land, and worked as farm laborers

7. Compounded by , Deindustrialization led to large number of sharecroppers.

1. This gave more power to landlords to extract ever-greater rents.
8. ed to widespread famines, and ultimately, non-realization of expected revenue by the British.

 
 Ryotwari Issues ( Thomas Munroe, 1820)
• Ryotwari should, in principle, have eliminated the need for any intermediary between the state and the
peasantry, and initially this was the attempt.
• The results were mixed.
• Benefits
○ In western India, the erstwhile office holders did lose their strongholds
○ ; in southern India, many of them emerged as substantial cultivators themselves, while in other
areas it was a mix of both.
○ As Abhijit Banerjee shows, greater public investement occurred in these areas, since it was easier to
raise rents here
• Farmers had property rights over their lands. However, collection was strict, and rent was expected
even in harsh times of famines.
• In theory, the settlement was supposed to be direct, but a large number of intermediaries developed
anyway, bringing the system close to what was followed in permanent settlement areas. In essence, then,
the difference between Ryotwari and Zamindari areas was reduced to one of the possibility of
increments in tax (which was allowed in Ryotwari areas, but not in zamindari areas).
• Where ryotwari system took place properly, the resulting individualism caused a faster decline of
panchayati raj institutions and mode of governance much faster than in mahalwari settlements.
 
Mahalwari issues (parts of North India (North-West Provinces (1822), Punjab, Awadh, United Provinces)
• initially involving mostly the already existing taluqdars. However, even here (especially in Awadh), the
revenue assessment from these mahals was very high, and a lot of the land went into payment
overdues, and was subsequently auctioned.
• Thus, even in Awadh, there was a shift from the old landowning class of taluqdars to a new commercial
landowning class. As a result,
• Awadh came to have something very similar to the Permanent Settlement system, even though it started
out as a mahalwari area.
 

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Reasons for Different Land Revenue Systems in Different Areas:
 
1. Influence of individual administrators, and their ideologies (Munroe, Holt Mackenzie etc.). For example,
Permanent Settlement was initially introduced in Madras, but Thomas Munroe later convinced the
administration to use Ryotwari settlement
2. Political Events: In Awadh, initially the mahalwari system was introduced. After the 1857 mutiny, the
British felt that having big landlords on their side would help prevent such revolutions, and hence
zamindari was reinstated in 1858 (was called taluqdari, but was essentially the same thing)
3. Date of conquest: Areas that came under British control later were more likely to have Ryotwari system,
because of shifts in views of economists and others in Britain

 
Persisting Differences Till Today Due to Varying Land Tenure Systems:
 
Zamindari and Ryotwari areas differed in their subsequent development. Even during colonial times, given that
rents could not be raised in Permanent Settlement areas, most public investments in irrigation etc. flowed
towards Ryotwari areas (more productive agriculture in these areas would allow collection of more land
revenue).
 
Abhijeet Banerjee and Lakshmi Iyer show that post-independence, although there was a massive effort to
improve agricultural productivity, erstwhile zamindari areas were slower to adopt HYV seeds etc. Could be
because of:
 
1. Income inequality:
1. In areas with zamindari systems, landlord classes grew rich and peasants poor, so inequality
increased. In Ryotwari areas, everyone was exploited, so everyone was impoverished
2. Political environment:
1. Zamindari system created a political ethos of class-based resentment in those areas, which persists
even till today (Bihar, Maoists etc.). Peasants in non-zamindari areas were much more likely to work
harmoniously with local elites
3. Persisting effects of public investments:
a. It was easier to raise rents in Ryotwari areas, which gave the British some leeway to invest more in
canals, irrigation, railways etc. in Ryotwari areas

Land Reforms
Reforms

1. Zamindari abolition acts: ○ Haque - Area under tenacy decreased from

All states passed anti-zamindari acts in a
staggered way and in paper zamindari was
abolished. Even in Ryotwari and Mahalwari
areas, moneylender zamindars were
abolished.
about 50% in 1951 to 20% by 1960
○ heir biggest flaw was they could obtain land for
'personal cultivation' which was defined
loosely to include personal supervision by the
zamindar or any member of his Family

2. Tenancy regulation: a. Positive - Haque - Area under tenacy

1. Allowed tenants to buy the land at minimal
cost
2. To put a ceiling on rent payable,
3. to make sure evictions don't take place
except as per law
4. and in the event of eviction for personal
cultivation, at least a minimum land is left
with the tenant.
decreased from about 50% in 1951 to 20% by
1960
b. Negatives
1. By 1992, ownership right confered to
only 4% of cultivated area - PS APPU
2. only became underground.
1. Were renamed as farm servants or
sharecroppers
2. Voluntary surrender used as a
guise

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3. In UP and W Bengal sharecroppers were
not even considered to be tenants.
4. Decline in tenancy led to eviction of
tenants and rise in landless labor
5. Land accounts missing
1. Same land rotated between many
Bargadars
2. Informal contracts
6. Legal barriers
1. Over 5 lakh cases related to land
reforms in AP alone
2. Led to Sankari Prasad Case and
3. 1st amendment to the
constitution
7. No motivation of tenants to buy land
and get involved in disputes
8. Some zamindars were just bigger than
the peasants. Taking their land away,
impoverished them
c. By 2000, Ownership rights - 2 main states
WBengal 12%

Kerala 23%

3. Land ceiling: There were 2 rounds 0of reforms a. Zamindars to exploit the loopholes and evade
legislations - one in 50s and other in early 70s. the laws.
i. They made benami transfers, transfered
land in the names of other members of a
households,
ii. fired their tenants (the acts had a
provision that land will belong to the
person ultivating it for x years).
b. Also, Land ceilings were fixed very high
c. Subjective relaxations for plantations
d. By 2000 ( APPU) only 2 mha land which is < 2%
was declared as surplus and distributed
among 4.76 mm peasants.
e. West Bengal’s share of total surplus land
distributed was almost 20% of the all-India.
i. Operation Barga
1. Launched in 1977 and was time
bound
2. Aim
a. Registration of share
croppers
b. Permanent occupancy and
heritable rights
c. 25% to Zamindar
3. Success
a. Before Operation Barga,
registration only of 15%.
b. After, registration touched
60%
c. Took place in just 10 years
d. Voice to rural poor,
neutralised lower level
officials
e. Bengal- 20% share in surplus
land distribution after land
1.
ceiling, 12% share in tenants
conferred rights

4. Loan Waivers: All principal / interest dues to a. Large debt overdue

moneylenders were waived i. All India average of 45% in 70s
ii. In Bihar - 80%

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iii. With rise of peasantry led political
parties in 80s and 90s this only led to
policies like debt waivers resulting in a
vicious circle

5. Consolidating scattered land holdings into
Cooperatives
1. On the national scale only 1/3rd of the
consolidable area has been consolidated -
Haque
a. Punjab and Haryana have been able to
complete the task. Some states have not
even begun.
b. State led cooperatives- poor quality of
land, inefficiency, over bureaucratised
c. Leadership of cooperatives by dominant
individuals who often siphoned off the
govt support like credit, machinery for
private use

PS Appu also complains of Lack of Political will and Bureaucratic Apathy

Indirect Effects of Land Reforms

1. Positives
a. Reduction of absentee ownership: There are enough studies to indicate that the quantum of
absentee ownership in 70s was much less serious than in 50s. Absentee ownership had reduced
much more in unirrigated areas than in irrigated areas. The transfer of land under the forewarning
impact of tenancy and ceiling legislation to the resident cultivators was on a much larger scale in
dry areas
b. Besley and Burgess -
a. Reduced Poverty
b. Increased Rural Wages
c. Change in givt mentality from rent seeker to agri facilitator
i. Now rent less than 1%
d. Helps in availing of Bank Credit
e. Empowers people
f. Collapse of feudal structure
g. Inclusive Growth

2. Negativs
a. It led to increase in landless labor as former tenants were driven out.
○ The eve of reform ~50% of the area was under tenancy which has come down to 20% (Haque) now
as tenancies have gone underground. This means a loss of access to 30% to the tenants
○ Sine only 4% transfer of ownership and 2% effect of land ceiling
○ Rich peasants preferred to avoid wage related disputes with the new labor and thus preferred
more mechanization.
• Casulasiastion of labour - 25% to 40%
b. Ghatak and Besley and Burgess
c. Hurt Capitalist Farming
d. And write all the cons of Pro Tenant laws - Haque

21st Century Land Reforms - PC

1. Female empowerment.
2. Pro owner tenancy laws.

Ghatak (2007) Conclusions

• Overall, land reforms seem to have had a negative effect on agricultural productivity. However there is
considerable variation across types of land reforms and across states.
• Decomposing by type of land reform, the main driver for this negative effect seems to be land ceiling
legislation.
• In contrast, the effect of tenancy reform, averaged across all states, turns out to be insignificant.
• However, in West Bengal, one of the few states where tenancy laws were implemented rigorously, the
negative relationship between land reform and productivity is absent.
○ Hence, effects could have been positive had it been done properly
• Finally, tenancy reform seems to have increased the inequality of operational holdings in India if we
exclude West Bengal, which suggests that in anticipation of the new tenancy legislation, landlords could

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be engaging in eviction of tenants in states, other than West Bengal, where tenancy reform had been
poorly implemented.

Besley Burgess (2000) Conclusions

Reform Effect on productivity Effect on Poverty

Tenacy - + (reduced poverty)

Consolidation + 0

Ceiling 0 0

Abolition of intermediaries 0 +(reduced poverty)

Overall Land reforms have had positive impact on agriculture wages.

Stiglitz - Tiger economies quickly reinvested surplus in LAND reform, education, infra which enabled them to
grow faster and maintain inclusive development

Are tenant cultivators as efficient as owner cultivators?

a) No
1. Investment Argument
• : A sharecropper tenant would be unlikely to invest in the land because
○ he would have to share the benefits with the landlord.
○ his tenancy tenure is not fixed and he may be evicted in the next year itself
• Similarly landlords are also unwilling to invest because
○ the tenant will free ride in this case.
• . Reason (a) can be overcome if there is an agreement on joint sharing of costs as well. But reason (b)
remains. And this is made even worse due to Indian laws which favor tenant and hence makes landlord
unwilling to sign long term lease agreements. Thus there is an urgent need to reform tenancy laws.
Yes
1. Pooling Argument: In tenancy lands, the skills and knowledge of both the landlord and the tenant are
applied and hence production better. Where cost sharing is agreed to, the capital available is higher - at least
working capital for sure and fixed capital to some extent.
2. Agricultural Technology Argument: One way out is equipment being owned by landlord and cost shared or
rented to tenant. Another way out is the existence of large rent market for agriculture equipment. This way
fixed capital can be paid for like working capital.

Institutional Reforms

(a) Tenancy Reforms

1. Current tenancy laws impede modernization of agriculture. The number of economically unviable
landholdings is increasing. But the marginal farmers have to stick to it and can't lease it out because of pro-
tenant legislations.
Also casusing mechanisation -> casualisation
2. Similarly corporate houses need to get into agriculture, but they can't because of archaic legislations on
tenancy.
3. Female empowerment.

(c) Institutional Credit Reforms

1. Agricultural credit needs to be given in the name of the tiller, not the land owner.

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CASE STUDY
• 0 landless scheme - Kunnur, Kerala
○ Each landless household has got a minimum of 3 cents of land
○ Though, people still complaining that land is infertile
• Landlessness " 42% and rising (38% in 93)
• Sada Baimana
i. Scheme in Telangana
ii. Registration of farm land at 0 cost
iii. 3 lakh aspirants
• Jharkhand- No registration charges for land under the name of Women

Draft Land Reforms Policy, 2013

1. For women
i. All new land distribution among landless will be in women's name
ii. 50% of land holding to fores communities for women
iii. Identify uncultivated arable land with govt and distribute it to women's groups
iv. STEP Taken
i. JHARKHAND - No regostry tax for land under Women's Name
2. Downward revision of land ceiling limits
3. Computerisation of land records

Land Leasing as planned by NITI Aayog

What’s there in the proposed model law?
• Leasing
○ Farmers and farmer groups be allowed to lease out land. The definition of ‘farm land’ is proposed
to be broadened to include food processing.
○ Automatic resumption after lease period is over.
○ Adverse possession law by state govt be removed - Says tenant cultivating beyond a certain no of
years be granted the ownership
• Tenants
○ One of the key objectives of the model law is to facilitate insurance, disaster relief, and bank credit
to the tenant without mortgaging of the leased land. Since the draft model law moots clear
ownership of land with the lessor, it disallows using the asset for mortgage purposes.
• Right now only land owners can claim insurance, disaster relief
○ In case land is sold before the tenure of the lease is complete, the rights of the tenants will be
secure. No changes will be made in the land records.
• Other details
○ Attestation of the lease is proposed to be done at the level of the sarpanch, local bank official or
notary.
○ The Model Act proposes quicker litigation process in case of disputes via special tribunal

Benefits
Land Leasing  ( Haque)
• Agricultural productivity
○ Tenants have short duration to escape fro Adverse Possession Law . This deters investment in
land.
○ Landowners keep their land fallow in the fear of losing land. This not only leads to underutilisation
of land but also access of poor to land is restricted.
○ They dont have access to credit and other government schemes. Hence productivity suffers.
○ Would promote Land Consolidation
• Equity
○ The informal tenancy leads to exploitation - Eviction, rotation, don't prefer putting land under
Tenancy due to Adverse Possession Law
• Occupational diversification
○ Land owners will lease out their land and invest in non farm enterprise.
○ Small and marginal farmers can lease out their land and supplement non farm income with rental
income.
○ Due to reduction in pressure on land, small farmers will be able to augment size of their operational
holding.

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MP has enacted a law for thus. Other states like gujarat too following up

• Digitisation of land records

a. Marking with GIS. Creation of a unique Land Identification number, GIS augmentation, linking with
banks, insurance
b. Provide better access to credit, insurance
c. Assures ownership to land owners - dbt can be targeted now
d. Tenacy is also recorded and they too get the benefit

• According to McKinsey, 90% of land records are unclear

○ Costs 1.3% of GDP every year
○ Pnemonic - Almost costs - Cost due to Judicial Delays, Benefir due to GDP are about 1% of GDP

Cooperative farming refers to an organisation in which:

    each member-farmer remains the owner of his land individually.

    But farming is done jointly.
    Profit is distributed among the member-farmers in the ratio of land owned by them.
    Wages distributed among the member-farmers according to number of days they worked.

This kind has been tried before but was mismanaged by bureaucracy, bogus landowners etc. leading to
disinterestedness, lack of competition. Lack of expertise also hinders.

Corporate farming is a term that is used to describe an agricultural operation that involves the production of
food and food-related products on an exceptionally large scale - Extensive Farming
corporate marketing is not just about agriculture itself, but also all the other components that are found under
the broad umbrella of agricultural production, marketing, and distribution. 

Cons: Loss of markets for small farms, possibility of exploitation by overuse of chemicals, changing soil
character, monopolisation etc.

Contract farming involves agricultural production being carried out on the basis of an agreement between the
buyer and farm producers (EG PEPSI and farmers) . Sometimes it involves the buyer specifying the quality
required and the price, with the farmer agreeing to deliver at a future date.

cons: similar to corporate farming but contract can be modified to allow farmer to farm by himself and provide
a promised amount of crop to the investor later, needs regulation

From <https://groups.google.com/forum/#!msg/econsiasprep/eZ0dAkGIVak/j6U30FaVCAAJ;context-
place=forum/econsiasprep>

Bhoodan
• Acharya Vinoba Bhave, JP
• Sarvodaya Samaj
• Padyatra
• Persuaded to part with at least 1/6th of land
• Result
○ Quantity
• 4 million acres transferred (7%)
• Out of targeted 60 million
• Fizzed out later
○ Quality
• Most lands transfered were
• Either infertile or
• Disputed
○ Redistribution
• Bihar - Less than 50% of Bhoodan land distributed even after 40 years and govt had to shut
down

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Gramdan
• Basically a collectivisation program
• Voluntary
• Successful in Orissa where caste, class boundaries had not yet developed

Milk Cooperatives
• Beginning
○ Kaira district famers approached Sardar Patel for check against middlemen exploitation
○ Set up a cooperative - Kaira disrict Union - Helped by Tribhuvandas Patel
○ Verghese Kurien - CEO
○ 24 hours veterinary service, machineey to make butter milk poweder, computer tech for better
logistics
○ Elections held in democratic spirit
• Operation Flood
○ Shastri expanded it all over India through Operation Flood on Anand Pattern
○ 22% of all maketed milk from Operation Flood
○ Room very high for improvement
○ 3 phase
1. metro target
2. Focus on vaccination
3. Focus on AI, R&D
• Benefits
○ Milk growth
• Earlier 0.7%
• After Operation flood, 4% per annum
• India largest producer
○ Dairy equipment capital industry
• Indigenous development
• 93% endogenous
○ 60% - Landless, small and medium farmers
○ Benefit also to SC, ST, Muslim
○ Women cooperatives
• With the help of SEWA
• 6000 women milk cooperatives set up
○ Idea used to set up cooperatives in other industries
• Dhara in Vegetable Oil
• Lijjat Papad

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