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Revival of Agriculture Sector and Increasing Tenancy in India
The revival of the agrarian economy from the mid-2000s coincides with a significant revival of the foodgrain economy and to a lesser extent, by the non-foodgrain economy. There is a corresponding increase in the share of land under tenancy, specifically pure tenants. While there is a need to move on to high-value crops, the “land hunger” of agricultural labour through the tenancy market is constraining the shift to high value and highly uncertain horticultural crops.
India’s agricultural sector has witnessed several phases of growth since independence. However, the most discussed phase since the green revolution is the post-reform period (1995–2005) known as the deceleration period for the sector, whereas the later phase (2005–present) is considered a recovery period. The post-reform period experienced a drastic decline in average agricultural growth rates and farm incomes, which revived in the later period (Chand et al 2015). In the existing literature, these changes have been attributed to several factors, but two important ones are policy interventions and terms of trade. Policy failure in the post-reform period was a major explanation for the agrarian sector’s setback (Narayanamoorthy 2007). There was a decline in both private and public investment, credit supply shrank and the state-supported extension service system was inefficient and broken. On the other hand, the terms of trade deteriorated from the mid-1990s to 2005–06 contrary to the expectations from the reforms, and led to a decline in private investment in agriculture (Chand and Parappurathu 2012). Prices in the global market and the minimum support price for paddy and wheat declined in the late 1990s and early 2000s which hampered the average annual growth rate of the sector.
Another significant change, during the above phases, pertains to the tenancy market, which has rarely been focused on in related literature. Tenancy is an important institutional arrangement to organise production in Indian agriculture. The share of leased-in areas and households in rural India witnessed phases that ran parallel to the agricultural growth rate. When the sector performed well during the green revolution period, there was an increase in the share of leased-in areas and households. However, the same declined during the post-reform period and revived in the mid-2000s. Interestingly, the share of pure tenants also increased in the revival period. Given this, the article would like to raise two questions. Is the deceleration or revival of the agricultural sector specific to food crops or any broad crop groups? Second, does this have any implications on tenancy and if so, are the changes in the tenancy market similar across all Indian states?
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