Page 146 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Indian Economic Policy

Notes of profit maximisation, the owner-farmers reaped a profit of 180 per cent on irrigated lands in
the case of wheat and 183 per cent in the case of rice. Against this, the tenant cultivators on a 50
per cent basis reaped a profit of only 65 per cent in wheat and 67 per cent in rice. The return was
further reduced to a level of 42 per cent in the case of share-cropping on a 40 per cent basis.
Profit maximisation criterion clearly indicates that larger dosages of fertilisers will be absorbed
by owner farmers than by tenants. Thus, the conclusion is inescapable that tenancy cultivation
poses itself as a big obstruction in the way of fertilizer use.
(4) Widening disparities in income : Technological changes in agriculture have had adverse effects
on the distribution of income in rural areas. From his study of technological changes and
distribution of gains in Indian agriculture, C.H. Hanumantha Rao concluded : “Technological
changes have contributed to widening the disparities in income between different regions,
between small and large farms and between landowners on the one hand and landless labourers
and tenants on the other. In absolute terms, however, the gains from technological change have
been shared by all sections. This is indicated by the rise in real wages and employment and in
incomes of small farmers in regions experiencing technological change”.
(5) New Strategy and Socio-economic relations in rural areas : Francine Franknel, USAID expert,
undertook a study of the impact of the new strategy on the socio-economic relations of the
peasantry. The main conclusions of this study are :
(a) Overwhelming majority of the cultivators having uneconomic holdings of 2-3 acres have
managed to increase per acre yield from the application of small doses of fertilisers, but
aggregate gains in output have been insufficient to create surplus capital for investment
in land development.
(b) Often small and marginal farmers are forced to take some land on lease; in some cases,
they are pure tenants. Rising rentals in recent years (in response to the sharp spurt in land
values), and/or the tendency of landowner to resume land for personal cultivation (with
the introduction of more profitable techniques), has actually led to an absolute deterioration
in the economic condition of the small owner-cum-tenant cultivator class.
(c) Only the small minority of cultivators with holdings of ten acres or more have been in a
position to mobilize surplus capital for investment in land development, especially minor
irrigation, as an essential precondition for the efficient utilisation of modern inputs.
Moreover, this class has prided its gains by using increased profits to buy more land,
improve land already under cultivation, and purchase modern equipment.
(d) Farmers with twenty acres or more have made the greatest gains, partly by mechanising
farm operations to take up double or multiple cropping, and partly by diversifying their
cropping pattern to include more profitable commercial crops.
(6) Problems of labour displacement : Very few studies are available to assess the impact of the
mechanisation introduced under the garb of green revolution in terms of displacement of labour.
Uma K. Srivastava, Robert W. Crown and Earl O. Heady have examined the effects of two
types of technological innovations introduced under the Green Revolution — (i) biological and
(ii) mechanical.
The term ‘biological innovations’ refers to the changes in inputs that increase productivity of
land. The introduction of high yielding seed varieties and use of fertilisers, fall in this category.
In this sense, green revolution is described as transformation of seed-fertiliser technology. The
mechanical innovations refer to the introduction of new appliances which displace human or
bullock labour. Thus, whereas biological innovations are labour-absorbing, mechanical
innovations are labour-saving. It is therefore appropriate to describe the green revolution as a
biological-mechanical revolution. It is the net effect of the labour-absorbing and labour-saving
innovations which will determine the extent to which mechanisation need be introduced to
check further displacement of labour. The study concludes : “Since mechanisation may dampen
the increase in labour demand, resulting from the expanding factor of seed-fertilisers, the policies
that encourage premature mechanisation in surplus labour economies, such as India’s, do not
seem conducive to solving the problem of growing unemployment.”

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