Perspectives

Land Reforms and particularly through ‘benami’ transactions.

Though the Estates Acquisition Act of
1953 (implemented from April 14, 1955)

Agriculture had individual ceiling provisions, the total

area voluntarily surrendered by big land-
owners was was only around 3 lakh acres.
These lands were not fertile and some of
The West Bengal Experience them were disputed properties. The domi-
nant force in the rural area was the rentier
class, which was not interested in produc-
The spectacular growth in agricultural production in West Bengal tion. So the land that they kept clandes-
in the 1980s was preceded by a programme of land reforms tinely beyond the ceiling was not used by
launched by the state government. This redistributive operation them for production by direct means. These
created a favourable ambience that enabled agriculture to thrive. were all let out to tenants-at-will, the
Productivity growth in the 1990s decelerated after that initial sharecroppers who had no formal rights.
Some of them just kept lands fallow. Many
spurt. In order to reverse the decline, the state now needs to recorded tenants also had vast areas under
complete the process of agrarian reforms, and beef up its their possession. Though the intermediary
agricultural infrastructure. class lost its intermediary rights, its social
and political position still remained high.
D BANDYOPADHYAY other states. In fact, from the mid-to late- It was a part of the ruling establishment
1960s the state lived from ‘ship to mouth’ and its stranglehold on rural society con-

T
he old Bengal presidency and later
on West Bengal (since 1947) suf-
fered from agricultural stagnation
for about a century from 1881 to 1981.
In the pre-second world war days, cheap
rice used to be imported from Burma
(Myanmar) to meet the deficit. In 1943,
there was a terrible famine, during which
between three and four million people
died of starvation and hunger (Amartya
Sen: Poverty and Famine, OUP, 1999,
p 52). This horrendous event left an in-
delible mark on the individual, commu-
nity and administrative psyche regarding
food security in the state. Since 1944, the
state had some type of public distribution
system on the ground. Statutory rationing
was abolished in the 1950s, but a modified
rationing system continued all over the
state, including the Kolkata metropolitan
area. Though all political parties, particu-
larly the Left, had always been very sen-
sitive to the food issue, the entire attention
was on public distribution of foodgrains
(rice and wheat) rather than on production
of food. With the deteriorating food situ-
ation in the mid-1960s in eastern India,
statutory rationing was reintroduced in
Kolkata metropolitan area and in indus-
trial towns. In the popular mind, it was
always thought that it was the obligation
of the centre to arrange supply of foodgrains
for public distribution either by importing
food from abroad or by procurement from
under the PL 480 regime. Exasperated by
the frequent threat of disruption of supply
to the rationing system, chief minister
P C Sen took drastic measures for com-
pulsory levy and procurement of rice from
surplus farmers and rice mills. In 1966-67,
six lakh tonnes of rice was procured to
build up a fall back stock position for the
statutory rationing system. This measure
made Sen and the ruling Congress Party
very unpopular with the rural farming com-
munities, which voted the Congress out
of power in the 1967 general election. The
first non-Congress United Front (UF)
government of 1967, which had some
leftist parties in the coalition, took a soft
line on procurement and practically gave
it up to appease the middle and upper
peasantry.
The reason why no systematic effort
was made to raise production during these
years, except implementing some all-
India schemes of the central government,
had to be found in the antiquated produc-
tion relations in the agrarian sector.
Zamindari and all forms of intermediary
tenure were abolished in 1955. Those who
were recorded as settled or occupancy
tenants and their undertenants became
proprietors of land under the state. So far
so good. But the erstwhile landed aristo-
crats still continued to have control over
huge areas of agricultural land, which they
retained through various devious means,
tinued due to the absence of the emergence
of any other counterveiling social force.
Under the circumstances, interventions for
increasing production did not and could
not have any significant effect. That the
prevailing agrarian situation was an im-
pediment to the absorption of new techno-
logy on a large scale became evident from
the fact the impact of the green revolution
of the mid-late 1960s was felt in West
Bengal over a decade later only after
agrarian relations underwent a massive
change through two phases of land re-
form. Success has many claimants. I would
not assert that the upsurge in food pro-
duction in West Bengal from 1983-84
onwards was only due to land reforms. In
the analysis that follows, an attempt is
made to show that limited land reforms
in the state did create a favourable am-
bience in which such an event could
happen.
It is necessary to look at some quantities
at this stage. Table 1, regarding rice
production in West Bengal, tells its own
story.
From the low of the decade of the 1970s
to the spurt of the 1980s is not only sig-
nificant but also amazing. In the 1990s
there was a deceleration. Yet the figure
of 5.03 per cent for 1980-95 was way
above the national average and also that
of high-performing states. Table 2 shows
exponential rate of growth of foodgrain

Economic and Political Weekly March 1, 2003 879

and rice production using a three-year
moving average in percentage.
West Bengal’s unqiue achievement in-
dicates what an appropriate mix of tech-
nology, proper changes in agrarian rela-
tions and institutional reforms can accom-
plish. “West Bengal, with a growth rate
of over 7 per cent per annum in agricultural
value added – more than two-and-a-half
times the national average – can be de-
scribed as the agricultural success story of
the 1980s” [Sen 1992]. It also shows that
there is no contradiction between some
measure of egalitarianism and efficiency.
Of course, there is a controversy regard-
ing the correct rate of growth. Some schol-
ars doubt government claims of over 6 per
cent rate of growth per annum. There is
also the issue of methodology of collection
of data by government of West Bengal
(GoWB). Till the early 1980s, the Bureau
of Applied Economics and Statistics
(BAES) used to conduct independent
sample surveys for average estimation and
crop cuts for yield estimation based on the
statistical methodology developed under
the direction of professor P C Mahalanobis.
The figures given by the directorate of
agriculture (DOA) used to be checked
against the data given by BAES. Gener-
ally, the latter figure used to be taken as
the correct estimate by official sources. In
the early 1980s, BAES gave up acreage
estimates and DoA’s figures were taken
as the official figures. Obviously, one
cannot rule out the possibility of institu-
tional bias in favour of a higher production
figure to give credit to itself (Rogaly, Ben,
et al: Sonar Bangla? Sage Publication,
1999, p 19). This point has to be borne
in mind while discussing the issue of rate
of growth.
According to Sen and Sengupta (1995)
foodgrain output grew at the rate of 6.9
per cent per annum in West Bengal be-
tween 1981-82 and 1991-92, against 3.3
per cent per annum in Bihar and 4.7 per
cent per annum in Orissa during the same
period. There was a statistically significant
break in the trend growth between the two
decades of the 1970s and 1980s. Some
scholars observed that even if the DoA’s
production figures were assumed to be
reliable, there was a serious problem re-
garding the choice of the base year. In
1981-82 and 1982-83 harvests in West
Bengal were low. Choosing the base year
as 1983-84 with the same production
figures the annual rate of growth would
be 4.3 per cent per annum [Rogaly
1999:18-19].
880
This is not the occasion to get into an
elaborate discussion on statistical method-
ology of data collection. Assuming for
arguments save the growth rate figure of
4.3 per cent per annum, the fact remains
that even this figure, though not as spec-
tacular, indicates that the performance had
been highly impressive, “far surpassing
prior growth rates in the state and com-
paring quite favourably with agricultural
growth elsewhere in India. The fact that
this growth occurred during a period of
modest but significant agrarian reform is
noteworthy, suggesting that greater equity
is compatible with efficiency and growth”
[ibid: 19].
There are many claimants for success.
Technocrats look at this episode as the
result of application of HYV seeds for the
main aman paddy crop, extensive cultiva-
tion of ‘boro’ (spring summer crop), use
of groundwater on a large scale and in-
creased use of chemical fertilisers. All
these factors undoubtedly contributed to
the acceleration of rate of growth of
foodgrain production in West Bengal. The
neighbouring states of Bihar and Orissa
also experienced moderate increase in the
rate of growth. John Harriss (1993) tried
to explain the story of agricultural take-
off by the availability of newer varieties
of rice, wider use of fertiliser and ground
water.
This explanation is generally true for the
entire eastern region of India but it leaves
unanswered a particularly better perfor-
mance sustained over a longer period in
West Bengal compared with its neighbours.
The Left parties in West Bengal tried to
explain this phenomenon in a very sim-
plistic manner through moderate land
reform measures undertaken in the state
in the late 1970s and early 1980s, particu-
larly, ‘Operation Barga’. There is some
merit in this line of argument. Without
repeating the well-known arguments for
land reform for higher growth, we may
briefly note the following points. Redis-
tributive land reform, which allows land
poor and landless households to access
land results in small family-holding agri-
culture which is generally more productive
than large-scale farming through hired
labour. There is ample evidence in India
and other countries about higher produc-
tivity per unit of land in small-scale family
farming. The efficiency and growth case
for tenancy reforms is also well known.
There are many beneficial offshoots of
land reform which are not generally
stressed. If poor peasants were allowed to
Economic and Political Weekly
cultivate their own parcel of land they
would not compete with full time landless
agricultural workers in the rural labour
market. That would help in raising rural
wages. Moreover, owning a piece of land
would enable the family to have a home
of their own, thereby releasing the house-
hold from various restrictive practices
imposed by the landowner. It would in-
crease its creditworthiness and bargaining
power. It would provide freedom of choice
to operate in the market [Ghimire 2001].
Resource reform relates primarily to
changing relationships. First, it aims at
changing access and tenure relationships.
Second, it seeks to change the current of
exclusion so that the poor gain access to
credit, technology, markets and other
productive sources. Third, it aims for the
poor to be active participants in the devel-
opment of government policies and
programmes affecting their communities
and livelihoods [Moore 2001]. Thus it is
the combination of three factors, namely,
redistributive and tenurial reforms, access
to non-farm inputs and services necessary
for farming, and institutional reforms
enabling peasantry to exercise some de-
gree of governmental functions and influ-
ence policies, which are essential for
successful resource reform to enhance poor
peasants’ capacity to increase production
and reduce poverty.
Against this background let us examine
briefly West Bengal’s land reform
programme. Land reforms in the state took
place in two phases. Each phase had dis-
tinct characteristics of its own. The first
phase was in 1967-70 under the two UF
governments.
When the first UF government came to
power in February 1967, the countryside
in West Bengal was seething with agrarian
discontent. The first arrow of the militant
Naxalbari movement was shot in that
village soon after the new government
assumed power. Hare Krishna Konar, the
charismatic peasant leader who became
revenue minister, tried to dissuade the
breakaway group of the CPI(M) from taking
Table 1: Rice Production in West Bengal
Period Compound Annual
Rate of Growth
1950-60 1.01
1960-70 2.28
1970-80 1.22
1980-90 6.41
1980-95 5.03
Source: Madhura Swaminathan: EPW, October 3,
1998.
March 1, 2003
to violence. He failed. To contain the
movement politically in addition to the
administrative and police actions being
undertaken, he said that he would act on
Mao Zedong’s famous thesis of ‘fish in
water’. Militants (fish) could roam about
freely in the ‘water’ of peasants’ discon-
tent. If the restlessness of the poor peas-
antry could be reduced, the fish would
vanish. Though ceiling provisions were
introduced in 1955, by 1967 only 300,000
acres (appr) of land had vested. This was
all surrendered land of big landlords. It
was common knowledge that the landed
gentry still controlled huge chunks of
agricultural land, way beyond the ceiling
through various devious means. They had
well crafted documents to show that nomi-
nally they did not possess any land above
the ceiling. These documents could be
disproved only by overwhelming oral
evidence of direct witnesses like share-
croppers, agricultural workers and other
categories of rural workers who directly
worked under the real owners and not
under the nominal title holders. A massive
quasi-judicial campaign was launched to
unearth the clandestinely held land strictly
according to law and established proce-
dures. By 1970 (in less than three years),
about a million acres of good agricultural
land vested in the state.
It had some important side effects which
should be mentioned. The poor peasantry
participated in the quasi-judicial proceed-
ings in large numbers as witnesses. They
found that it yielded results. Violence had
created terror but produced no land for
redistribution. They reposed faith in peace-
ful collective action, eschewing the path
of militancy. The Naxal movement in rural
areas faded away. There was some spurt
in urban violence but that also eventually
Social ostracism and even physical
punishment was meted out to many.
Operation Barga
Thus, when the Left Front(LF) govern-
ment came to power in 1977 they had to
urgently give attention to the plight of
sharecroppers who had suffered badly
during the previous regime. Benoy
Choudhury, another famous peasant leader,
became land reforms minister. On advice
he agreed to accept Paulo Ireiri’s process
of conscientisation followed by action. In
one such conscientisation camp, Sambu
Tudu, a tribal sharecropper activist who
suffered imprisonment of four- and-a- half
years without trial, gave the ingredients of
the methodology of ‘Operation Barga’. He
stated that sharecropping did not involve
any point of law. It was a verifiable fact.
Hence, instead of a sharecropper, who did
not have scrap of paper, going to the revenue
tribunal, why did not the revenue tribunal
go to the field and verify facts in the
presence of all sharecroppers and land-
owners? He suggested the reversal of the
process followed for about 100 years. This
procedure was followed with appropriate
modification during ‘Operation Barga;
1978-81, with startling results of the re-
cording of 1.2 million sharecroppers in
three years.
Taking advantage of a law passed during
the internal emergency (1975-77), which
allowed free title to homestead plots up
to five cents for a homeless family, 500,000
such cases were also recorded in tandem
with ‘Operation Barga’, giving title to such
actual occupiers.
In quantitative terms over 1.6 million
sharecroppers were recorded giving them
hereditary right of cultivation, and a fair
sharecropping which could be used as a
document to establish one’s identity and
also for securing crop loans from institu-
tions. About a million acres of vested land
were distributed among 2.5 million ben-
eficiaries who were landless or land-poor
peasants. Half a million households were
given title to homestead plots. Land reform
thus directly benefited a little over four
million rural households – a significant
proportion of the rural population.
There is a controversy regarding the
percentage of arable land covered by land
reforms. About a million acres of land
redistributed would constitute 7-8 per cent
of the total cultivable land. Scholar com-
puting from NSSO figures suggest that the
percentage of area under ‘operation barga’
would be around 7 per cent [Gazdar and
Sengupta 1995]. Whatever the source this
figure of 7 per cent seems to be wrong (a
gross underestimation). An authoritative
estimate of area under barga cultivation is
to be found in the report of the Land
Revenue Commission, Bengal, 1940. It
estimated that about a fifth of the land in
Bengal was under barga cultivation (para
142, p 67). There was no reason to infer
that the incidence of barga cultivation had
gone down in the western part of Bengal
(West Bengal), with the top 20 per cent
of landowners owning 71.60 per cent of
Table 3: Increase in Net Area Irrigated
by Different Sources of Irrigation
West Bengal and India (1976-77 to 1985-86)
Source of Percentage Increase
Irrigation West Bengal All-India
Canals 12.9 14.4
Tubewells 575.4 59.7
Tanks/ponds 44.0 (-) 22.0
Wells (-) 34.0 13.7
Other sources 201.0 13.6
All sources 74 19.7

died a natural death. The second important deal in crop sharing with a certificate of Source: CMIE quoted from EPW, October 3, 1998.
effect was the atrophy of the class of rentier,
landed gentry. It broke the backbone of Table 2: Exponential Rate of Growth of Foodgrain and Rice
this parasitic class, who lost their social, Production Using a Three Year Moving Average
(Per cent)
economic and political dominance over
rural Bengal. The space they vacated was Foodgrain Rice
gradually occupied by middle and upper Rate of Growth t-stat Adj-R2 Rate of Growth t-stat Adj-R2
peasantry who were productive agents. 1951-52 to 1960-61 (0.15) 0.24 -0.12 (0.52) 0.88 -0.03
This shift of power equation had a ben- 1960-61 to 1970-71 3.44 7.90 0.86 2.93 4.68 0.67
1970-71 to 1980-81 1.38 3.88 0.58 1.28 5.35 0.73
eficial impact later on.
1951-52 to 1980-81 2.65 18.4 0.92 2.29 17.60 0.91
During the Congress regime of 1972-77, 1980-81 to 1990-91 5.15 8.01 0.86 5.75 8.78 0.88
some efforts were made to get back the 1990-91 to 1999-2000 2.39 21.16 0.98 2.36 17.87 0.97
land lost by the landed aristocracy. But 1980-81 to 1999-2000 4.02 16.20 0.93 4.45 16.15 0.93
1951-52 to 1999-2000 2.65 30.88 0.95 2.66 27.51 0.94
they failed as proper legal procedures were
followed while vesting. But they took their Note: All estimates other than for 1951-52 to 1960-61 were significant at the 1 per cent level; the estimate
revenge on sharecroppers and agricultural for 1951-52 to 1960-61 was not significant (even at the 10 per cent level) and the Adj-R2 was
very low.
workers who tendered evidence against Source: Rawal, Vikas, Madhura Swaminathan and V K Ramchandran, (2002): ‘Agriculture in West Bengal:
them. Many sharecroppers were evicted. Current Trends and Directions for Future Growth’, a printed paper not yet published.

Economic and Political Weekly March 1, 2003 881

land in 1981-82 (NSS 37th round). Chances
were that it would be higher because of
wider prevelance of absentee landlordism
due to proximity of the metropolis of
Kolkata. Without casting any aspersion on
the NSS, it is well known that in matters
of property relations there is a wider margin
error in such figures because of the inher-
ent apprehension of respondents to tell the
truth in this regard to any government
agency. Therefore, I would argue that the
Land Revenue Commission’s estimate
would be nearer to the actual ground situ-
ation than that of the NSS.
Thus around 25-28 per cent of the arable
land in West Bengal went in favour of the
direct beneficiaries of land reforms. This
is a sizeable area. One can reasonably
presume that these lands, which were either
indifferently cultivated or kept fallow,
started being cultivated at least at the sub-
optimal level to the extent labour can
substitute capital. The impact of it on total
production must have been significant.
Independent studies indicate that ‘Op-
eration Barga did have a beneficial effect
on production and productivity of land
under cultivation by registered sharecrop-
pers. Banerjee and Ghatak (1996, 1999)
conducted field surveys in the mid-1990s
and found that there was 17-18 per cent
increase in productivity in the fields op-
erated by registered sharecroppers. This
finding validates the hypothesis that with
security of tenure and fair crop sharing
sharecroppers would have incentive to
increase production. They might be using
more labour per unit of land than necessary
but such efforts would certainly enhance
production.
After several decades of violence and
turmoil during each harvesting season,
Operation Barga brought peace to the
countryside. This tranquillity in the rural
areas induced and encouraged private
investment in agriculture for long-term
benefit. Those who had the capacity could
now think on a long-term basis and make
investment decisions for increasing pro-
duction on their own land.
It was pointed out earlier that the first
phase of land reform successfully broke
the stranglehold of the landed aristocracy
on the society and politics of rural West
Bengal. How significant this factor was
became evident in the first election to
three-tier panchayats in 1978. For impor-
tant political reasons, the LF government
decided to revive the panchayats, which
had been lying dormant for almost two
decades without a single election being
882
held. This institutional revitalisation had
a far-reaching and enduring effect on the
rural society and economy.
In 1978, elections were held for the
three-tier panchayat system in West Bengal.
The CPI(M) the major constituent of the
LF, had at that time a total membership
of around 30,000 in West Bengal concen-
trated in the Kolkata metropolis and a few
other industrial centres. This party along
with its minor partners, had to put up
around 80,000 candidates. Where would
they get so many candidates when they had
hardly any base in the rural areas? The
middle and upper peasantry, now free from
the social and economic yoke of the landed
gentry, seized the opportunity. En masse
they moved in to offer themselves as
candidates of the LF. They came in not for
any ideological consideration but to pro-
tect their own interests. So long as CPI(M)
was against the zamindars and aristocracy,
they had nothing to fear. In fact, they
supported the party’s moves. Now that that
class had gone, no one knew what the
Leftists would do. So better join them as
long as the going was good. The party also
welcomed them because they formed the
much needed rural base which it did not
have. It was a win-win situation for both
sides.
Rural Investment
The class that came to power in the
panchayats were productive agents and so
were interested in production. They were
tasting power for the first time in genera-
tions after the political demise of the rentier
landed gentry. From 1980 onwards in the
Sixth Five-Year Plan, a massive transfer
of Plan funds started for rural development
and poverty alleviation schemes. The
middle peasantry, now in the power in the
panchayats, started using public funds
(particularly wage employment funds) for
creating public works in support of agri-
cultural production. Money for wage
employment was extensively used for these
purposes. Small and temporary bunds or
weirs for impounding water for irrigation,
and rain water harvesting structures, were
created to support agriculture. How mas-
sive had been these efforts were would
evident from Table 3.
While public investment in irrigation (as
reflected in canals) was not significant
either in West Bengal or in the all-India
context, the state surpassed strikingly the
all-India figures of ‘Tubewells’ and ‘Other
sources’. These other sources were created
Economic and Political Weekly
by panchayats under the control of the
ascendant middle peasantry. Tubewells
were sunk mainly through private sources.
Panchayats also in some places played a
role. Investment of wage employment funds
(such as NRER, RLEGP) by panchayats
for ‘other sources’ acted as a catalyst for
mobilising private funds for shallow/small
power tubewells. The rise of the middle
peasantry was the direct result of the success
of the first phase of land reform for vesting
of ceiling surplus land. This ascendant
productive class spearheaded the agricul-
tural surge in the state.
In this context, one cannot ignore the
pioneering role played by a segment of the
remnants of the old aristocracy left behind
in the rural areas after the vesting operation
was over. Most of them were absentee
landlords. But someone or other in the
family used to be there in the rural ‘manor’
house to look after the property, particu-
larly to manage the ‘benami’ lands. With
that gone, many from among the leftovers
migrated to towns. But those few among
the ex-zamindars and big tenure holders
who still remained in the rural areas played
a crucial role in initiating capitalist farm-
ing in the state. The trauma of vesting of
‘benami’ land was fresh. They could no
longer trust their own bargadars who had
‘betrayed’ them, severing their generational
loyalty. So some of them started self
cultivation through wage labour. They had
money. They had some education. They
could absorb the new technology. They
could take risk. From the mid-1970s, they
started experimenting with capitalist farm-
ing with HYV wheat. The wheat boom of
Birbhum and early ‘boro’ cultivation were
largely their contribution. This aspect has
not been well researched. A serious study
is required to find out their real contribu-
tion towards introduction of new agricul-
tural practices from the mid-1970s. Hav-
ing watched with interest their success, the
middle peasantry adopted them on a large
scale from the late 1970s and early 1980s.
A lesser known impact of redistributive
land reforms was to make a segment of
the rentier class into entrepreneurial pro-
ductive agents in agriculture.
Thus these segments of rural society
separately and not in concert played a role
in causing this agricultural upturn. The
direct beneficiaries of land reform, con-
trolling 25-28 per cent of land, started
operating sub-optimally. The ascendant
middle peasantry, always eager to increase
production, took to modern cultivation on
a large scale which was initiated rather
March 1, 2003
hesitantly by the rural rump of the old
landed aristocracy. Change in the social
order coupled with the new technology
brought about this amazing surge in the
hitherto moribund agriculture sector.
Those who try to explain this striking
growth in agriculture only in technological
terms tend to ignore the other social,
economic and political factors that con-
tributed to it. After all, use of HYV and
other biochemical inputs with irrigation
had been in vogue from the mid-1960s in
Punjab and Haryana. Groundwater had
been there forever. How would one ex-
plain the non-congruence of these factors
before the early 1980s in West Bengal?
While hardware agricultural technology is
undoubtedly important, software social
engineering in agrarian and social relation-
ships is no less valuable. To explain the
West Bengal phenomenon correctly one
has to look into both the socio-political
and technological factors together. The
middle peasantry consolidated its position
in panchayats between 1978 and 1983.
The Sixth Five-Year Plan, with a dominant
slant on rural development, started in 1980.
By 1982-83, all the contributory factors
started getting together to create the swell
in production and productivity in agricul-
ture in the state. This surge continued till
the early 1990s, when it started deceler-
ating.
The rate of growth of foodgrains in West
Bengal slackened in the 1990s to 2.39 per
cent from 5.15 per cent in 1980-90. Rice
is the most important foodgrain in the
state. There was a decline in the annual
growth rate of rice production, from 6.28
per cent in the 1980s to 2.19 per cent in
the 1990s. The average yield of rice in
West Bengal in 1999-2000, of 2,259 kg
per hectare, was higher than the national
average of 1,928 kg per hectare, but lower
than the better performing states of Tamil
Nadu (3,278 kg/hec) and Punjab (3,346
kg/hec). The decline in growth of total
rice production was primarily due to a
decline in the growth of yield. “Indeed
one might expect, in the absence of further
innovations, agricultural growth in West
Bengal is heading where other successful
states like Punjab and Haryana have
ended up – in a plateau of close to zero
growth” [Banerjee 2002]. Not a very bright
prospect!
There could be various factors for this
slowdown. A major technological break-
through in seeds with higher yields and
low water and energy intensity might bring
about a higher growth rate given the other
Economic and Political Weekly March 1, 2003
attending circumstances. That might be a
possibility in future, but there is nothing
of the sort on the board now.
In this context, three issues that might
arrest the decline and, perhaps, reverse it
may be pointed out. In the first place,
around 20 per cent of arable land now
under barga cultivation has reached a
plateau in production and productivity.
These lands are being cultivated sub-
optimally, or even less than sub-optimally,
because of the inability of registered share-
croppers to access other necessary non-
land inputs. One of the major reasons for
this is their lack of title to land. If they were
given title to the land they cultivate and
made raiyats directly under the state, their
creditworthiness would immediately im-
prove and they might be able to access
other non-land inputs important to raise
production from the stage of sub-optimality
to optimality. Therefore, I would urge
making the 1.6 million or so recorded
bargadars full owners of the land they
cultivate. Erstwhile owners may be paid
compensation by the sharecroppers through
bank finance to be arranged by state in-
tervention without budgetary support. The
change of status from secure leaseholder
to owner would open up various possibili-
ties for enhancing production. Will the LF
government, which failed to take such a
step in spite of earlier commitments during
the past two decades or so, agree to do
it now?
Secondly, acute fragmentation of hold-
ing, has become a major constraint to
intensive use of electro-mechanical appli-
ances, and even biochemical technology
in some cases. Without consolidation of
landholding, a major breakthrough in
production can hardly be made. Somehow,
Left parties in the state are averse, nay
allergic, to this concept. Their apprehen-
sion is that by this process of consolidation
of landholding small and marginal farmers
would lose out to medium and big farmers.
There is a point in this fear. To obviate
it, the current land reform law in the state
provides for consolidation of landhold-
ings of owners upto 1 hectare. If properly
implemented, the interests of small and
marginal farmers could be largely pro-
tected. It was Sardar Pratap Singh Kairon
(the then chief minister of Punjab) who
laid the foundation of the green revolution
in that state by consolidating landholdings
prior to the introduction of the miracle
Mexican wheat in the mid-1960s. Will the
LF government in West Bengal take cour-
age in both hands and do it?
Thirdly, insufficiency of institutional
credit in rural areas is seriously impeding
growth of agriculture in the state. “The
present rural credit needs of the state have
been estimated at Rs 10,000 crore. The
actual credit disbursement in 2001-02 was,
by contrast, only Rs 863 crore (Rs 549
crore from cooperative banks and Rs 414
crore from commercial banks).” (This
statement is ascribed to Asim Das Gupta,
finance minister of West Bengal in the
paper by Rawal et al, 2002 pp 47-48).
Compared with the requirement, credit from
the institutional sources is too insignifi-
cant. Here one notices a colossal failure
of the LF government in organising a
cooperative credit supply system in the
past two decades. Apart from traditional
sources, this void is filled up by two new
categories of lenders. First, there are sup-
pliers and vendors of agricultural appli-
ances, machinery and agricultural inputs
like seeds, fertilisers and pesticides. They
extend credit to push their sales. They
supply commodities at marked-up prices
and often buy produce at a price which
might not be remunerative to farmers. They
also act as extension agencies as the state’s
own extension system has collapsed. To
sell their products they sometimes give
improper advice, to the detriment of farm-
ers’ interest. The second category of lend-
ers are salaried persons who lend out of
accumulated money (or even borrow from
banks to re-lend to cultivators). The com-
mon rate of interest on such loans is 5 per
Rs 100 per month, or 60 per cent per
annum. In some cases it goes up to Rs 7
per month or 84 per cent per annum. A
new breed of unlicenced ‘shahukars’ has
come into being, whose proximity to rul-
ing parties through employees’ unions or
associations give them the protection they
require. With vested interests controlling
the informal credit market having ties with
various tiers of the ruling establishment,
will the LF government take the initiative
in organising a cooperative credit system
to supply a significant proportion of rural
credit at proper rates of interest? This doubt
arises because of the casual manner in
which this issue has been dealt with in the
state’s draft agriculture policy statement.
The policy statement has not yet been
finalised. So it may change. But the draft
as it stands makes a bland statement. “In
this context, cooperatives, cooperative
banks and cooperative credit societies will
play a key role in financing growth in
agriculture, horticulture, food-processing,
animal resource development, social
883
forestry, fisheries and irrigation” (p 12).
Such a general statement does not indicate
any serious commitment on the part of the
government to go ahead with vigour.
There are various other factors like proper
use of irrigation potential, appropriate
cropping pattern, pricing of agricultural
produce, marketing facilities, and the like.
These are all important factors taken jointly
or severally. But we are not entering into
these issues here.
Since the agricultural policy of GoWB
has not yet been finalised, it may not be
proper to comment on the draft paper in
circulation. The paper had undergone a
few revisions. In one of the latest versions,
one finds that the basic thrust of the policy
is to release a significant proportion of
cropped area under rice “for diversifica-
tion of crop production and, in particular,
the production of oilseeds, pulses, fruits,
vegetables, flowers and other non-food
crops”. One can anticipate that this em-
phasis on crop diversification from rice to
other food and non-food crops for the
purpose of value addition is not going to
change, since it seems to be in consonance
with the policy prescriptions of dominant
multilateral agencies.
In a predominantly subsistence agrarian
system, with the overwhelming majority
of farmers being small and marginal, “re-
leasing a significant proportion of cropped
area” from paddy might adversely affect
them. Subsistence paddy cultivation en-
sures full or partial household food secu-
rity to farming families. Moving to non-
food crops would expose such farmers to
the vagaries of harsh market forces which
would increase their vulnerability. This
aspect has to be kept in mind in consid-
ering this policy shift.
While value addition is welcome for
enhancing income, in a highly competitive
market economy only corporate bodies
whether national or transnational could be
effective players. Thus corporate entities
would enter into the agrarian sector.
Everyone who is anyone is now singing
praises of the penetration of corporations
in the agrarian sector and commercialisation
of agriculture, including the controversial
‘contract farming’ – which had a dubious
history in eastern India including West
Bengal. One felt a bit disturbed by the
strident advocacy of contract farming by
nine well known non-resident Bengali
economists in a recent article in EPW
(already referred to).
Their argument is that “consumers in
rich countries are increasingly reluctant to
884
eat anything that is not guaranteed ‘safe’
meaning that their production has taken
place in a highly monitored environment.
Lobbyists and spokespersons from import
competing industries in these countries are
always happy to push for even tighter
regulations of imports of edible substances
for obvious cynical reasons. This makes
the multinationals a vital intermediary in
these industries. They are the ones that can
deal with the regulatory machinery and
have the requisite credibility with consum-
ers for being quality and safety
conscious...This we think is the main reason
to take the recent proposals for contract
farming seriously” [Banerjee 2002:4214].
In levity one might argue that wildlife
would be best protected if poachers were
made gamekeepers. To allay the apprehen-
sions of those who fear ruthless exploita-
tion of farmers through contract farming
by TNCs, they observe, “The discussion
of contract farming has brought up the
spectre of the ‘neelkuthis’ reborn in some
quarters. It is worth recalling that the
‘neelkuthis’ became what they became with
the active connivance of the colonial state”
[ibid: 4215]. The authors feel that the
“avowedly pro-people governments”
would not allow this to happen. Their hope
is likely to be belied because state govern-
ments are competing with one another in
soliciting TNCs to invest in their respec-
tive states. In such a situation, it is not only
difficult, but almost impossible for “avow-
edly pro-people” governments to place any
severe restrictions on the operations of
TNCs in this regard. TNCs would go to
the state which would allow them freedom
of operation. Moreover compared with the
money power of TNCs, near-bankrupt state
governments would hardly have any bar-
gaining power. The plight of ‘campesinos’
and the peculiar operations of these enti-
ties in the ‘banana republics’ do not evoke
confidence on their standards of fair play
and ethics.
Back Volumes
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Economic and Political Weekly
West Bengal had chalked out a unique
path of its own in causing a resurgence in
agricultural production in the 1980s and
1990s. Now there are clear signs of de-
celeration. To check it, let the state com-
plete the process of agrarian reforms, which
were halted mid-way. Let it develop the
necessary infrastructure by getting loans
from multilateral agencies. The awakened
peasantry of the state which had had a taste
of good life would carry forward the second
surge with their inherent resilience. EPW
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References
Banerjee, Abhijit et al (2002): ‘Strategy for
Economic Reform in West Bengal’, EPW,
October 12, p 4213.
Banerjee, Abhijit and Maitreesh Ghatak (1996):
‘Empowerment and Efficiency: The Economics
of Tenancy Reform’ working paper, MIT
Department of Economics.
Banerjee, Gertler and Ghatak (1999):
‘Empowerment and Efficiency: The Economy
of Agrarian Reform’, working paper, MIT,
Department of Economics.
Gazdar and Sengupta in Rogaly, Ben (1995):
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Ghimire, K B (2001): ‘Regional Perspective on
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UNIRSD – The Popular Coalition: Rome,
pp 18-19.
Harriss, J (1993): ‘What is Happening in Rural
Bengal? Agrarian Reform Growth and
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Moore, B H (2001): ‘Introduction’, Whose Land?
p 7.
Rawal, Vikas, Madhra Swaminathan and V K
Ramchandran: (2002): ‘Agriculture in West
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published.
Sen, Abhijit (1992): ‘Economic Liberalisation and
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Sen, Abhijit and Ranja Sengupta (1995): ‘The
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Sen and Gazdar’s paper in Ben Rogaly’s Sonar
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March 1, 2003