1. Implications of India’s Land Policy: Poverty of Land or Land of Poverty - An Empirical Study Anjan Kumar Jena Suresh Kumar Sukumarapillai New Delhi, India

2. 1. Introduction Area under Agriculture (including Culturable Waste, Grazing land, Miscellaneous Tree Crops and Grooves) 62.8% Share of Agriculture in GDP1950-51 – 56.5% 2012-13 – 14.3% Share of Agricultural Workers to Total Work Force 1950-51 – 69.8% (97 Mn) 2012-13 – 54.6% (263 Mn) New Land Policy - Right to Fair Compensation, Transparency in Land Acquisition, Rehabilitation, and Resettlement (Amendment) Bill, 2015

3. 2. Macro Performance of Agriculture Table-1: Agriculture and Allied Sectors, GDP, and Employment (1952-53 to 2012-13) Period Triennium ending (TE) Agriculture and Allied Sectors, GDP at 2004-05 prices (Rs. Million) Workforce in Agriculture and allied sectors (Million) Share of Agriculture in GDP (%) Share of Agricultural Workers to Total Workers (%) TE 1952-531,621,120 9756.5 69.8 TE 1972-732,580,70012643.569.7 TE 1992-934,064,04018529.364.8 TE 2012-137,453,850 26314.3 54.6 Source:(1) Government of India, Central Statistics Office, National Annual Accounts for various years (2) Government of India, Registrar General of India, Census Data for various years

4. 2. Macro Performance of Agriculture (Contd..)

6. 3. Unemployment Situation in Agriculture Table-2:Percentage Distribution of Usual Status Workers of all Ages by Industry of Work Category of PersonsIndustry of Work AgricultureSecondaryTertiary Rural Male 59.4 22.018.7 Female 74.9 16.78.3 Person 64.1 20.415.5 Urban Male5.635.359.1 Female10.934.055.1 Person6.735.058.3 Rural + Urban Male43.625.930.5 Female 62.8 20.017.2 Person48.924.326.8 Source: Government of India (2013), National Sample Survey Office, Key indicators of Employment and Unemployment in India 2013.

7. 3. Unemployment Situation in Agriculture (Contd..) Table-3: Sectoral Distribution of Employment YearsAgricultureIndustryServicesConstruction 1999-0059.911.923.74.5 2004-0558.512.623.45.5 2009-1053.211.825.49.6 2011-1248.913.626.910.6 Source: Government of India, Reserve Bank of India

8. 3. Unemployment Situation in Agriculture (Contd..) Table-4: Sectoral Employment Elasticity SectorElasticity Agriculture0.04 Manufacturing0.09 Mining & Quarrying0.52 Construction1.13 Trade & Transport0.19 Finance / Real Estate0.66 Other Services0.08 All Sectors0.19 Source: Government of India, Reserve Bank of India Database

9. 4. Consumption and Expenditure Pattern Table-5: Income and Consumption Expenditure of Agricultural Households (in Rs.) Farm Size Class (Ha) 2002-03 Marginal Propensity to consumpti on 2012-13 Marginal Propensity to consumpti on IncomeConsumpt ion SurplusIncomeConsump tion Surplus <0.0113802297-917 1.66 45615108-547 1.12 0.01 – 0.4016332390-757 1.46 41525401-1249 1.30 0.41 – 1.0018092672-863 1.48 52476020-773 1.15 1.01 – 2.0024933148-6551.26734864578910.88 2.01 – 4.0035893685-961.0310730778629440.73 4.01–10.005681462610550.81196371010495330.51 10.00 +9667641832490.664138814447269410.35 All Sizes21152770-6551.31642662232030.97 Source:(1) Government of India (2005), National Sample Survey Office, ‘Income, Expenditure and Productive Assets of farmer Households’ (2)Government of India (2014), National Sample Survey Office, ‘Key indicators of Situation of Agricultural Households in India’

10. 4. Consumption and Expenditure Pattern (Contd..) Table-6: Percentage-wise Distribution of Income from Different Sources by Land- size Classes, 2012-13 Farm Size Class (Ha) Income fromTotal Income Wages/salaryCultivationFarming of animals Non-farming business <0.01 63.640.6625.909.80100.00 0.01 – 0.40 57.4516.5414.9511.05100.00 0.41 – 1.00 38.3340.8811.998.81100.00 1.01 – 2.00 23.5257.2811.138.07100.00 2.01 – 4.00 15.4468.5810.825.16100.00 4.01 – 10.00 10.3477.637.644.38100.00 10.00 + 3.1786.226.344.28100.00 All Sizes 32.2247.9411.877.97100.00 Source: Government of India (2014), National Sample Survey Office, ‘Key indicators of Situation of Agricultural Households in India’

11. 5. Operational Holdings and Area Operated Table-7:Estimates of Certain Key Characteristics of Operational Holdings in Rural India from Land Holding Surveys of NSS: 1960-61 to 2012-13 Item1960-61 (17 th ) 1970-71 (26 th ) 1980-81 (37 th ) 1991-92 (48 th ) 2002-03 (59 th ) 2012-13 (70 th ) 1.No. of operational holdings (Million) 50.7757.0771.0493.45101.27108.78 1.1.Percentage increase (%) 12.424.531.58.47.4 2.Area operated (Million ha.) 133.48125.68118.57125.10107.6594.48 3.Average area operated (ha.) 2.632.201.671.341.060.91 4.Percentage of joint holdings 4.220.600.620.080.403 5.number of parcels per holding 5.7n.a.4.02.72.32.0 Source: Government of India, National Sample Survey Organization, ‘Household Ownership and Operational Holdings in India’, various issues

12. 5. Operational Holdings and Area Operated (Contd..) Table-8: Changes in the Percentage Distribution of Operational Holdings by Category of Holdings India – Rural Category of holdings Percentage distribution of operational holdings 1960-61 (17 th ) 1970-71 (26 th ) 1980-81 (37 th ) 1991-92 (48 th ) 2002-03 (59 th ) 2012-13 (70 th ) Landless 0.03 Marginal39.1045.8056.0062.8069.90 73.17 Small22.6022.4019.3017.8016.05 15.30 Semi- medium 19.8017.7014.2012.008.958.10 Medium14.0011.108.606.104.33.04 Large4.503.101.901.300.80.37 All Sizes100.00 Source: (1) Government of India (2006), National Sample Survey Office, ‘Some aspects of Operational Land Holdings in India, 2002-03’ (2) Government of India (2015), National Sample Survey Office, ‘Household Ownership and Operational Holdings in India’

13. 5. Operational Holdings and Area Operated (Contd..) Table-9: Changes in Percentage Distribution of Operated Area by Category of Operational Holdings India-Rural Category of holdings 1960-61 (17 th ) 1970-71 (26 th ) 1980-81 (37 th ) 1991-92 (48 th ) 2002-03 (59 th ) 2012-13 (70 th ) Marginal6.909.2011.5015.6022.20 27.71 Small12.3014.8016.6018.7020.60 23.44 Semi- medium 20.7022.6023.6024.1022.4023.50 Medium31.1030.5030.2026.4022.6519.33 Large29.0023.0018.2015.2012.156.02 All Sizes100.00 Source: (1) Government of India (2006), National Sample Survey Office, ‘Some aspects of Operational Land Holdings in India, 2002-03’ (2) Government of India (2015), National Sample Survey Office, ‘Household Ownership and Operational Holdings in India’

14. 5. Operational Holdings and Area Operated (Contd..)

15. Migration 55 th Round Survey of NSSO on ‘Migration in India, 1999-2000’ estimates – 245 million people as migrants (27 %) – Rural-rural migration - 61.8 % – Rural-urban migration - 18.8 % (Recurring migration stream). 64 th Round 2007-08 estimates – Rural-Urban - 19.5 % – Rural-Rural – No major change Between 1999-2000 and 2007-08 – Male Migrants - 34.4 % to 39.0 % – Female migrants - 14.4 % to 14.8 %

16. 6. Debt Burden Table-10: Estimated Number of Indebted Farmer Households NSSO Survey Rounds Percentage of farmer households indebted Average amount of outstanding loan (Rs.) 59 th Round (2003)48.612,585 70 th Round (2013)51.947,000 Source: Government of India, ‘Key Indicators of Situation of Agricultural Households in India’ (NSSO 70 th Round) & ‘Indebtedness of Farmer Households’, (NSSO 59 th Round).

17. 6. Debt Burden (Contd..) Credit to farmers - A critical concern for productivity-raising investment Institutional and non-institutional credit expanded over years – But not reaching Marginal and Small farmers. A series of shocks – both natural and market-induced – affect the small-holders’ agriculture. Minimum Support Prices (MSP) not forthcoming in time. No Storage Facilities – leading to distress sales Farmers produce food for consumption for humans and animals AND – raw materials / inputs for industrial production, – interest incomes for money lenders, – input dealers in fertilizers, seed, pesticides, etc., – unregulated lending business in rural India and more so for banks. – rental income in cash and/or in kind by virtue of ownership title in land.

18. 7. Towards Land Policy (a) Food Security Per capita net availability of food grains remained more or less stable at 186 kgs per year (since 1991) Food grains stock in the Central pool increased from 19.13 mn tonnes in 1991 to 66.69 mn tonnes in 2013. – Mssive leakages in the Public Distribution System (PDS)- 40% or more food grains released by Central pool fail to reach actual beneficiaries. Food Security Act, 2013 - Promises provision of rice, wheat, millets, etc., at highly subsidised prices to 75% of rural and 50% of urban population. – Protein intake missing in the Food Security Act, 2013.

19. 7. Towards Land Policy (Contd..) Solution to the problem Further expand wheat revolution, livestock production, especially in rural India, boost purchasing power of people. Direct cash transfers Use MNREGA to create public assets. – The scheme to be dovetailed to building houses and toilets for the rural poor.

20. 7. Towards Land Policy (Contd..) (b) Land Markets Inefficient land markets - a major obstacle to economic growth. Landed class has monopolised the rural land market. – Major impediment to higher productivity and capital mobilization Solution to the problem Liberalize land lease markets – Will facilitate both the lesser and lessee to freely negotiate on terms of lease contract – Will lead to productivity-enhancing investments in land Right to Fair Competition and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015 likely to address some of the concern areas of 2013 Act enacted in Indian Parliament.

21. 8. Conclusion Land acquisition must be regulated through legal/ policy intervention so that production and productivity is not compromised and without sacrifice of self- sufficiency in production and biodiversity. Land acquisition for industrialization and urbanization in view of employment potential growth is a sine-qua- non for giving a go ahead to equitable development process. India’s new Land Bill aims, among many other things, at creating an enabling framework to deal fairly with the displaced and dispossessed in the process of land acquisition.

22. 8. Conclusion (Contd..) Irrespective of any Land Policy, the incidence of marginalization of land holdings and farmers is on the rise, resulting from gradually diminishing income from farm activity. Enactment of Land Policy is of urgent necessity to address following 2 issues: – Marginalization of farming in falling average land size and increasing numbers of farmers being marginalized, – The challenge of employment generation for surplus population in agriculture.

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