Tenancy and efficiency of farming in a developing economy

This work is essentially an exercise in the economics of agricultural development in a developing economy. The system of land tenure is a crucial factor in deter mining the allocation of resources in the agricultural sector and if these resources are not efficiently alloca ted, the growth potentials of the economy cannot be fully utilized.

Agricultural development essentially determines the overall rate of development of the economy since on it depends its structural transformation which changes fundamentally the structure of output and employ ment and it is a crucial determinant of the rate of industrial development. Agricultural development produces interaction effects in terms of production linkages, transfer of resources and the impact of demand for industrial products which serve as inputs for agriculture. Agriculture Development will contri bute to the increase of exports and thus enable the imports of essential capital goods, technology and raw materials for industry.

In the Indian economy, the phenomenal growth of agricultural output achieved in recent years is largely a result of the biological-chemical aspect of technolo gy, though in some regions of the country, there has been the use of highly improved agricultural imple ments also such as tractors, harvesters etc. But inspite of various attempts at land reforms through legislative measures in terms of the abolition of the intermediarics, in the fixation of ceiling on land ownership and provision of proprietory rights to tenants and share croppers, the organisational change has not been completed and there still exists the system of tenancy, share-cropping and rack-renting in various parts of the country either in an open or con cealed form and a number of studies have revealed that the system has been intensified in a number of states after the Green Revolution. Had the process of land reforms been completed, the dimensions of the Green Revolution would have been much wider scope as it would have covered a much larger part of the country and would have brought under its purview all types of farms and farmers.

The present study is an attempt to assess quantitative ly the use of resources by peasant proprietors and tenants and to analyse the comparative efficiency in the use of the farm resources by the two types of farmers. In doing so the study has attempted to relate the use of resources to the different size-groups of farmers in both the categories. Apart from measur ing factor productivity and cropping intensity on the various types of farms, the study has also measured the input-output ratios and marginal productivities of factors to evaluate the comparative efficiency in the use of farm resources under different tenurial systems. The estimates of marginal productivities and the tests of significance have revealed that except that of material capital, the marginal productivities are signi ficantly higher on the ownership farms. The study, therefore, suggests that to optimize the use of resour ces in the farm sector, it is necessary to complete the process of land reforms and to implement the land reform measures effectively. On completion of this process depends the structural transformation of the economy and its capacity to achieve a satisfactory rate of growth of farm output.