Land Reforms and Agricultural Policies in India: A Comprehensive Overview

Posted on May 7, 2024 in Economy

LAND REFORMS IN INDIA

Abolition of the Zamindari System

The government passed legislation to abolish the zamindari system, aiming for complete eradication by the end of the first Five-Year Plan. However, implementation faced challenges such as:

  • Lack of proper land records
  • Legal challenges from zamindars
  • Exploitation of loopholes in legislation

Consequently, the zamindari system’s abolition remained largely on paper, with zamindars transforming into large landowners.

Tenancy Reforms

Tenancy reforms focused on three key areas:

  1. Rent regulation
  2. Security of tenure
  3. Conferment of ownership rights to tenants

The government fixed rent at 1/4th or 1/5th of the produce and provided security of tenure through provisions like:

  • Protection against arbitrary eviction
  • Land resumption only for personal cultivation
  • Minimum land allocation in case of resumption

CEILING ON LANDHOLDINGS

This reform aimed to ensure equitable land distribution. Key features of the Ceiling Act include:

  1. Ceiling based on a five-member family unit
  2. Varying ceiling limits based on land type and crop yield
  3. Exemptions for certain land categories (e.g., plantations, cooperative farms)
  4. Nominal compensation for surplus land acquisition
  5. Preference for Scheduled Tribes and Scheduled Castes in land redistribution

CO-OPERATIVE FARMING

Cooperative farming was encouraged to address land fragmentation. Farmers pool resources and land, reaping benefits like large-scale farming, mechanization, and increased output. Despite government incentives, practical challenges hindered its widespread adoption.

Limitations of Land Reforms

Land reforms faced several limitations:

  • Loopholes allowing landlords to evade regulations
  • Inefficient and corrupt administrative machinery
  • Lack of proper records hindering tenant rights
  • Litigation delaying surplus land distribution
  • Absence of support services (credit, marketing, inputs)
  • Population pressure and poverty enabling exploitation

AGRICULTURAL PRICE POLICY

The government has implemented measures to stabilize agricultural prices, including:

  • Creation of food zones and public distribution system
  • Establishment of the Commission for Agricultural Costs and Prices (CACP)
  • Buffer stock operations and warehousing facilities

The CACP announces three types of prices annually:

  1. Minimum Support Price (MSP): Assured price covering production costs and profit margin
  2. Procurement Price: Price at which the government buys from farmers
  3. Issue Price: Price at which the government sells foodgrains through PDS

SOURCES OF AGRICULTURAL FINANCE

Farmers access finance from both non-institutional (moneylenders, traders) and institutional sources. Institutional sources have gained prominence, reducing reliance on non-institutional lenders. Key institutional sources include:

  1. Commercial Banks: Increased agricultural lending after nationalization
  2. Cooperative Credit Societies: Three-tier structure providing short-term and long-term credit
  3. Regional Rural Banks (RRBs): Established to support small and marginal farmers
  4. National Bank for Agriculture and Rural Development (NABARD): Apex bank for rural credit and development

PROBLEMS OF AGRICULTURAL MARKETING

Challenges in agricultural marketing include:

  • Inadequate storage facilities leading to wastage
  • Lack of grading and standardization affecting fair pricing
  • Insufficient transport infrastructure
  • Exploitation by middlemen
  • Malpractices in unregulated markets
  • Lack of market information for farmers

Measures to Achieve the Objectives of National Agricultural Policy (NAP)

The NAP 2000 outlines measures to achieve its objectives, including:

  1. Sustainable Agriculture: Reducing population pressure, controlling land diversion, promoting wasteland cultivation and afforestation, and conserving soil fertility.
  2. Food and Nutritional Security: Increasing production and productivity, promoting horticulture and allied activities, and developing a National Livestock Breeding Strategy.
  3. Generation and Transfer of Technology: Developing location-specific seed varieties, region-based research, and strengthening extension services.

ROLE OF PUBLIC SECTOR IN INDIA

The public sector has played a crucial role in India’s economic development:

  • Capital Formation: Mobilizing savings and investing in industries
  • Infrastructural Development: Building irrigation, power, transport, communication, education, and health facilities
  • Industrial Base: Establishing basic and heavy industries
  • Regional Development: Promoting industries in backward regions
  • Foreign Exchange and Trade: Developing import-substituting and export-promoting units
  • Income Inequality Reduction: Utilizing profits for welfare programs and producing mass consumption goods

ROLE OF SMALL SCALE SECTOR (SSI)

The SSI sector contributes significantly to the Indian economy:

  • Employment Generation: Labor-intensive and suitable for diverse locations
  • Capital Formation: Contributing to income generation, savings, and investment
  • Equitable Distribution: Promoting income and wealth distribution through labor-intensive production
  • Resource Utilization: Exploiting latent resources and skills
  • Balanced Regional Development: Establishing industries in various regions
  • Reduced Industrial Disputes: Fewer strikes and lockouts
  • Low Cost and Efficiency: Utilizing capital and labor efficiently

PROBLEMS OF SMALL-SCALE INDUSTRIES

Despite their importance, SSIs face several challenges:

  • Inadequate Finance: Difficulty accessing credit at reasonable rates
  • Raw Material Shortages: Competition with large industries for supplies
  • Competition: Facing challenges from technologically advanced large-scale industries
  • Outdated Technology: Using old and inefficient production methods
  • Underutilization of Capacity: Operating below full potential due to resource constraints
  • Marketing Difficulties: Lack of standardization and market information
  • Industrial Sickness: High number of non-performing units
  • Data Gaps: Limited availability of reliable data on SSIs