Finding an alarming picture on the farm front with over 2/3 of landholdings of households in the country are of one or less than that hectare extent and the government credit not penetrating to them and bearing a high level of indebtedness with little access to good farming practices, according to Assocham study.
The study released on "Farm Structure Reform: Structural Changes on Farm Size Needed for further successes in Rural Front" says that there was a strong case for them to be collectively farmed either through corporate type or cooperative pooling of land. With this kind of farm holdings it is unrealistic to expect the next big stride in agriculture, the chamber cautioned policy makers.
The study based on data of the NSSO 70th round of survey and the chamber's own half a dozen studies on various aspects of the rural scene earlier, found that out of around 9 crores households, over 23 lakh households were holding on to tiny 0.01 ha or less of land holdings, 2.87 crores to 0.01 to 0.4 ha of plots and 3.14 crores to 0.41 to 1.0 ha extent of mostly farming land plots. Even out of those with the tiny plots of 0.01 ha or less, 16% depended on cultivation as the principal source of livelihood. One hectare or less farm plots cannot be cultivated economically, the chamber pointed out.
The study revealed that for small landholdings households the source of farm credit was still the traditional moneylender, these debts carry high interest rates in many cases as much as 25% or more and that the debt burden is far higher than what their asset value could hold. Indebtedness among cultivators was in inverse proportion to the extent of land they held, the smaller ones carrying larger debt burdens in all states across the country.
Comparing the agriculture land as proportion of the total land and the level of prosperity the study revealed that only four states namely Gujarat, Kerala, Punjab and Haryana in that ascending order have average asset value far higher than the national average of that value. Kerala with 27.3% of land used for agriculture was ahead of all other states with many of them over 60% of their land in agriculture, pointed out the recent study.
The average asset value of households in urban areas was Rs 22.85 lakhs while that in rural areas was Rs 10.07 lakhs, almost double for the urban area land holder. Among others in the study is the clear dominance of OBCs as a group among the bulk of land holding social groups in all the 10 categories of rural households ranked according to their monthly personal consumption expenditure (MPCE). The indebtedness position is also in inverse relation to the income levels the first three deciles of rural groups classified by their level of MPCE, having the maximum burden of debt.
"The picture this brings out strongly emphasizes particularly when compared with income distribution among urban population groups is one of tremendous inequality that could only be rectified through massive capital inflow and modern management of the bulk of the farmlands after they are brought under more economic sizes," added the study.
