The latest survey by the National Bank for Agriculture and Rural Development (NABARD) reveals some significant trends regarding per capita land holdings among Indian farmers. According to the survey, the average landholding size has decreased from 1.08 hectares in 2016-17 to just 0.74 hectares in 2021-22, marking a reduction of about one-third (31%).
This decline in landholding size is accompanied by other notable findings:
Increased Income: The average monthly household income of farmers rose from ₹8,059 in 2016-17 to ₹12,698 in 2021-22, reflecting a 57.6% increase.
Rising Expenses: Monthly expenditures for rural families also increased significantly, from ₹6,646 to ₹11,262, a 69.4% rise.
Debt Burden: The percentage of rural families with outstanding debts grew from 47.4% to 52% over the same period.
These findings highlight the dual challenges of shrinking landholdings and rising financial pressures on Indian farmers.
MAIN REASONS OF REDUCTION IN PER CAPITA LAND HOLDINGS:
The reduction in per capita land holdings in India is influenced by several factors:
1) Population Growth: As the population increases, the same amount of land is divided among more people, leading to smaller individual holdings.
2) Inheritance Laws: Land is often divided among heirs, resulting in fragmentation over generations.
3) Urbanisation: Expansion of urban areas reduces the amount of agricultural land available.
4) Economic Pressures: Farmers may sell portions of their land to meet financial needs, further fragmenting holdings.
5) Lack of Land Consolidation Policies: Inadequate policies to encourage land consolidation contribute to the persistence of small and fragmented holdings.
IMPACT OF URBANISATION ON LAND HOLDINGS:
Urbanisation significantly impacts landholdings in several ways:
1) Land Conversion: Agricultural land is often converted into residential, commercial, or industrial areas to accommodate growing urban populations. This reduces the amount of land available for farming.
2) Increased Land Prices: As urban areas expand, the demand for land increases, driving up prices. Farmers may sell their land for higher profits, leading to further fragmentation.
3) Infrastructure Development: Construction of roads, highways, and other infrastructure projects often requires land acquisition, which can reduce agricultural landholdings.
4) Migration: Rural residents may move to urban areas in search of better employment opportunities, leading to abandoned or under-utilized agricultural land.
5) Policy and Planning: Urban planning policies may prioritize development over agricultural preservation, influencing land use patterns.
These factors collectively contribute to the shrinking size of agricultural landholdings, posing challenges for sustainable farming and rural livelihoods.
LOW LAND HOLDINGS AFFECT THE PRODUCTIVITY OF THE LAND: The decrease in landholdings can significantly impact agricultural productivity, particularly due to the challenges in adopting mechanized and modern agricultural practices. Here are some key points to consider:
1) Economies of Scale: Larger farms can benefit from economies of scale, where the cost per unit of production decreases as the scale of operation increases. Smaller landholdings make it difficult to achieve these efficiencies, leading to higher production costs.
2) Mechanisation: Modern agricultural machinery, such as tractors, harvesters, and irrigation systems, are often designed for larger plots of land. Small and fragmented landholdings make it challenging to use these machines effectively, reducing the potential for increased productivity.
3) Investment in Technology: Farmers with larger landholdings are more likely to invest in advanced technologies, such as precision farming tools, which can enhance productivity. Smaller farmers may lack the financial resources to make such investments.
4) Crop Diversification: Larger farms can diversify their crops, reducing the risk of total crop failure and improving soil health through crop rotation. Smaller farms may struggle to implement such practices due to limited space and resources.
5) Access to Credit and Markets: Farmers with larger landholdings often have better access to credit and markets, enabling them to invest in inputs like high-quality seeds, fertilizers, and pesticides. Smaller farmers may face difficulties in securing loans and accessing profitable markets.
6) Extension Services: Agricultural extension services, which provide training and support to farmers, are more efficiently delivered to larger farms. Smaller farms may not receive the same level of support, limiting their ability to adopt best practices.
7) Land Fragmentation: As land is divided among heirs, it becomes increasingly fragmented, making it difficult to manage and cultivate efficiently. This fragmentation can lead to underutilization of land and lower overall productivity.
STRATEGIES TO ADDRESS THE CHALLENGES:
Addressing these challenges requires innovative solutions, such as:
1) Cooperative Farming: Small farmers can form cooperatives to pool resources, share machinery, and access markets collectively.
2) Land Consolidation: Policies that encourage voluntary land consolidation can help create larger, more manageable plots.
3) Government Support: Subsidies and financial support for small farmers to invest in technology and infrastructure can enhance productivity.
4) Training and Education: Providing targeted training and extension services to small farmers can help them adopt modern agricultural practices.
These strategies can help mitigate the negative impacts of decreasing landholdings on agricultural productivity.
CONSOLIDATED FARMING IS THE ONLY SOLUTION FOR INCREASING DEMAND OF AMPLE SUGAR CANE FOR PRODUCTION OF ETHANOL/SAVING FOREIGN EXCHANGE/RURAL ECONOMY DEVELOPMENT: Consolidated farming at the village level can indeed be a strategic solution to meet the increasing demand for ethanol and domestic sugar consumption. Here’s a detailed exploration of how this approach, supported by nationwide policy formation, can benefit the agricultural sector and the broader economy:
Benefits of Consolidated Farming
1) Increased Productivity:
Economies of Scale: Larger, consolidated farms can achieve economies of scale, reducing per-unit costs and increasing overall productivity.
Mechanisation: Consolidated farms can more effectively utilize modern agricultural machinery, improving efficiency and yield.
Enhanced Resource Management:
1) Water and Soil Conservation: Larger plots allow for better management of water resources and soil conservation practices, leading to sustainable farming.
2) Integrated Pest Management: Coordinated efforts in pest control can reduce crop losses and reliance on chemical pesticides.
3) Improved Access to Technology and Inputs:
Advanced Farming Techniques: Consolidated farms can invest in precision farming technologies, high-quality seeds, and fertilizers, boosting crop yields.
4) Training and Extension Services: Larger farms can more easily access agricultural extension services, benefiting from expert advice and training.
5) Market Access and Financial Support:
Better Market Linkages: Consolidated farms can negotiate better prices and access larger markets, including export opportunities.
Credit and Insurance: Larger farms have better access to credit and insurance products, reducing financial risks.
Policy Support from the Union Government
1) Land Consolidation Policies: Incentives for Voluntary Consolidation: Providing financial incentives and support for farmers willing to consolidate their landholdings.
Legal Framework: Establishing a clear legal framework to facilitate land consolidation and resolve disputes.
Infrastructure Development:Irrigation and Storage Facilities: Investing in irrigation infrastructure and storage facilities to support large-scale farming.
Transportation Networks: Improving rural transportation networks to facilitate the movement of goods to markets.
Financial Support and Subsidies:Subsidies for Modern Equipment: Offering subsidies for the purchase of modern agricultural machinery and technology.
Credit Facilities: Providing low-interest loans and credit facilities to support large-scale farming operations.
Research and Development:Crop Varieties: Investing in research to develop high-yield, disease-resistant sugarcane varieties.
Sustainable Practices: Promoting research into sustainable farming practices that can be adopted at scale.
Economic and Environmental Benefits
Boosting Rural Economy:
1) Job Creation: Large-scale farming can create employment opportunities in rural areas, reducing migration to urban centers.
2)Income Stability: Improved productivity and market access can lead to higher and more stable incomes for farmers.
Foreign Exchange Savings:
1) Ethanol Production: Increasing ethanol production can reduce the need for crude oil imports, saving foreign exchange.
2)Export Opportunities: Surplus sugar production can be exported, generating additional foreign exchange earnings.
Environmental Sustainability:
1) Reduced Carbon Footprint: Ethanol as a biofuel can help reduce the carbon footprint of the transportation sector.
2)Sustainable Farming: Consolidated farming can promote sustainable agricultural practices, preserving natural resources.
Implementation Challenges
1) Farmer Resistance: Some farmers may be resistant to land consolidation due to cultural and emotional attachments to their land.
2) Coordination and Management: Effective coordination and management of consolidated farms require robust organizational structures.
3) Initial Investment: Significant initial investment is needed for infrastructure development and technology adoption.
Nationwide policy formation to support consolidated farming at the village level can play a crucial role in meeting the growing demand for ethanol and sugar, improving rural economies, and saving foreign exchange. By addressing the challenges and leveraging the benefits, India can create a more sustainable and prosperous agricultural sector.
In conclusion, the decreasing per capita landholdings among Indian farmers present significant challenges to agricultural productivity and sustainability. This issue is compounded by the increasing demand for sugarcane to support the ethanol blending program and rising domestic sugar consumption. To address these challenges, a comprehensive approach involving consolidated farming at the village level is essential. Such consolidation can enhance productivity through economies of scale, better mechanization, and efficient resource management.
Nationwide policy support from the Union Government is crucial to facilitate this transition. Policies should focus on incentivizing land consolidation, developing necessary infrastructure, providing financial support, and promoting research and development in sustainable farming practices. By doing so, India can not only meet the growing demand for ethanol and sugar but also boost the rural economy, create employment opportunities, and save foreign exchange by reducing crude oil imports.
Ultimately, a well-coordinated effort to consolidate landholdings and modernize agriculture will pave the way for a more resilient and prosperous agricultural sector, ensuring food security and economic stability for the nation.
P.G. Medhe is the former Managing Director of Shri Chhatrapati Rajaram Sahakari Sakhar Karkhana Ltd and sugar industry analyst. He can be contacted at +91 9822329898.
