Land For Various Other Non Agricultural Uses Economics Essay

Land continues to be a vital source of livelihood for a significant proportion of population in rural India. Land continues to be the basis for the well being of a large section of the rural poor. The highly skewed and fragmented distribution of land holdings makes it even more vital as an asset in the Indian countryside. Agriculture and other primary sector activities that are based on land continue to be the prime source of livelihood for a majority of the population. The pressure exerted by India’s growing economy on land has intensified in the post liberalization phase in the face of increasing demand for the conversion of agricultural land to non-agricultural uses. Large volumes of land are being acquired for various non agricultural purposes like setting up of industrial parks and projects, mining, SEZs etc. The last two decades have recorded a continuous change in the land use pattern. Such a pattern of land use shift has largely to do with the acquisition of agricultural and other fertile lands for industrial and other projects. Indian land economy is on a transition path that has involved an expansion in the area under non agricultural uses and a decline in the cultivated area. Another trend that has been observed is the changing cropping pattern.

This dissertation aims to look at the changing land use pattern in India since early nineties, both at the national and state levels. The objective is to look at the trends in terms of the shifts in land use between alternate uses. Also, the land use trends with in agriculture, in terms of land being put to cultivation of various crops is discussed at the national and state levels. The objective of this exercise is to see the extent of shifts taking place from cultivation of food grains to non food crops, and the impact it is having on the per capita production levels of food grains. Due to non availability of data for continuous years, all the national level figures for India in this exercise have been computed by excluding the Union Territories. The exercise relies on secondary data on land use and cropping pattern made available by the Ministry of Agriculture, Government of India. Such an exercise assumes importance in the light of the fact that the last two decades have seen a rapid rise in the land and land related disputes. Land acquisition for various industrial and other non agricultural uses has been on the rise. The quantification of the shifts in the land use between agriculture and non agricultural usage at the state level can help us understand better the seriousness of the problem as it unfolds in India today. Large scale land acquisitions, especially of prime agricultural land, can have serious consequences in terms of both threatening rural livelihoods of small and marginal farmers and food security. Already we have been seeing a shift from food grains to non food crop cultivation in many regions of the country. This can threaten food security in the long run, in the face of stagnating yields and declining total area under cultivation.

The contemporary debate on land use changes in India can be located in the broader context of the large scale land acquisitions that have been going on at the world level. It ought to be mentioned that the world land economy too has been undergoing some serious changes in the last few years, especially since the global economic crisis and the food crisis preceding that. Land has come to be seen as an asset which can be used for speculative gains, in addition to serving various other purposes like cultivation of commercial and non food crops, biofuels cultivation etc. It has been estimated that global investors have acquired 111 million hectares of agricultural lands over the last four years, seventy five percent of which were in Africa. As per the Land Matrix project of the International Land Coalition, till November 2011, 2042 land deals had been reported. Between 2000 and 2011, 203 million hectares of land has been acquired through these deals worldwide. Out of these 2042 reported deals, 1217 have been cross referenced and amounted to 83.2 million hectares of land. This is equivalent to 1.7% of the world’s agricultural area. Africa happens to be the main target of this land rush. Amongst the total deals that have been reported publicly, 948 are located in Africa and amount to 134 million hectares. The corresponding figure for Asia is forty three million hectares, and nineteen million hectares for Latin America. For Africa, the reported large-scale land acquisitions cover around five percent of Africa’s total agricultural area, as compared to 1.1 percent for Asia and 1.2 percent for Latin America. Eleven nations in Africa alone account for seventy percent of the total area that has been covered by these deals. Many of the deals are concentrated in Sudan, Ethiopia, Mozambique, Zambia, DR Congo and Tanzania. Asia is the second most targeted continent. South-East Asian countries such as the Philippines (74 deals on 6.6 million hectares), Indonesia (24 deals on 3.36 million hectares) and Laos (40 deals on 1.1 million hectares) have been the focus of many of these land deals in the region. In Latin America, Brazil (32 reported deals on 3.7 million hectares) and Argentina (27 reported deals on 2.7 million hectares) have been the most targeted ones.

The global land grab has been an outcome of the liberalization of the land markets that formed a part of the neoliberal strategy being introduced in many developing countries over the last two decades. This paradigm views land and other natural resources as just another commodity, and argues in favor of moving from common or community based land rights to individual rights and promotion of free land markets. The main argument put forth by the proponents of this view is that this would lead to an increase in efficiency of land use and encourage investments. There is no place for livelihood concerns for those who stand out to lose their lands as a consequence of such a strategy. Inherent in this development paradigm is the notion that subsistence farmers are necessarily poor, and would benefit from jobs created by these investments. This view gives little importance to issues like intact habitats, common lands, and the security of landholding. Moreover, the employment generation claims have hardly materialized: for instance, in case of oil plantations it has been observed that an established plantation uses only one worker per four to ten hectares of land, depending on the efficiency production. The liberalization of land markets has been accompanied by the entry of new players which has led to new types of land controls being developed. International development and financial institutions have been aiding this process of privatizing land relations.

A major consequence of the structural adjustment policies implemented in many developing countries since the eighties has been the increasing neglect of the agrarian economy. The state institutions that were put up in place for supporting agricultural development got dismantled, and the support which was being provided to farmers was removed. Prices have come to be market determined in many developing nations and the period has also seen a drying up of public investments in agriculture. Some agricultural producers managed to survive in this new environment; but many could not, and in a period of falling agricultural prices, private investors showed very little interest in this sector. As a result of all this, what has happened in the last more than two decades is that rural poverty still persists on a large scale and a wide segment of the farming population has been relegated to subsistence agriculture.

The new rush towards farmland acquisition for cultivation of non food crops and promoting commercial agriculture has made it more difficult for the small scale farmers to sustain themselves. The agrifood companies in their attempt to ensure a better supply, and governments and private commodity buyers in response to the global food price crisis, have been increasingly seeking large tracts of farm land around the world, particularly in Africa and other developing countries. The targets of the recent rush in farmland are mostly poor, agriculture-based countries, many of which are in Sub-Saharan Africa which require increasing their own food production to improve local food security.

The current spate of land deals around the globe has been looked at in different ways. Three different perspectives can be broadly identified through which the wave of farmland investments has been examined. One approach weighs the benefits from small scale farming against those from the highly capitalized and large scale farms. The second approach has been to look at the ability or otherwise of the host nations to successfully regulate and manage the large volumes of investments so as to make sure that they can help reduce poverty and contribute to rural development. The basic issue that this approach focuses on is that even in situations where large scale farm investments may appear to be desirable, problems of governance in the host nation may lead to situations where all the stakeholders may not end up benefitting from these investments. The third approach raises a more fundamental question and looks at the issue of whether or not the transformations brought about by increased investment in agriculture are desirable or not. Large volumes of investments in farmland can lead to the development of a more export led agriculture and a market for land rights, both of which can lead to serious problems as far as rural development and poverty alleviation are concerned. The approach that focuses on just the issue of host countries’ capability to manage large inflows of farm investments pays little attention to the risks which are associated with increased commodification of land and a greater dependence of developing economies on the international markets to meet the food security objective. The opportunity costs should be the primary criteria evaluating these investments rather than just the issues like the volume of such investments and how to regulate those.

Of the total number of people considered food insecure in the world today, almost half are engaged in subsistence agriculture. These families are often unable to feed themselves because the plot of land they cultivate is too small, and because they are confined to regions without well developed irrigation facilities. These households are mainly net buyers of food. Due to the lack of any effective support mechanism, they have been increasingly finding it unviable to continue farming and often end up working as wage laborers on large plantations or migrate to the cities. These are the groups that are direct victims of the increasing pressures on land. The phenomenon is compounded by the loss of farmland due to the development of large infrastructure projects and expansion of urban areas. The increasing pressure on land resources has been putting the indigenous people and forest dwellers in a precarious position as well. Once these points are taken into consideration, it becomes evident that the approach that focuses primarily on the issue of how to regulate the large scale investments in farmland suffers from serious limitations as it ignores the costs that large scale acquisition and commercialization of agriculture might impose on an agrarian set up which is characterized by highly unequal land distribution and a prevalence of small scale holdings. The main issue ought not to be how to regulate land acquisitions for commercial agriculture as if it were inevitable, but to put forth some alternate programs for agricultural investment and development. Any such land investments leading to changes being made to rights over land ought to be a last resort, where no other investment model can be better conducive of human rights, in particular the right to adequate food.

The next chapter presents a brief comment on the global land acquisition drive and the factors responsible for that, followed by a discussion on the global land use pattern since 1990. Chapter 3 discusses the land use trends in India, both at the national and state levels, since early nineties. Chapter 4 is a discussion on the cropping pattern trends in India and the respective states since early nineties. It also presents a discussion on the per capita food grain production for the individual states and also at the national level. The question of land acquisition in India, the various issues related to it and the legal framework guiding land acquisition are discussed in Chapter 5, followed by the concluding remarks in Chapter 6.