Declining Farm Size and Degradation of Natural Resources-Emerging Problems in Indian Agriculture.

Declining Farm Size and Degradation of Natural Resources-Emerging Problems in Indian Agriculture. (Reference: India’s Agricultural Development under the New Economic Regime: Policy Perspective and Strategy for the 12th Five Year Plan

Vijay Paul Sharma, W.P. No. 2011-11-01, IIM(A), November 2011.)

Small and fragmented land holding

Indian Agriculture is characterized by small and fragmented land holding. There are about 129 million operational holdings possessing about 158 million hectare land with average farm size of only 1.23 hectares, down from 2.3 hectares in 1970-71. The reduction in farm-size has been larger in the case of medium and large farmers than in the case of small and marginal farmers. Around 83 % of the farmers have land holdings less than 2 ha and they cultivate nearly 41% of the arable land. On the other hand, less than 1% of the farmers have operational land holdings above 10 hectares and account for 11.8% of the cultivated land.

Inverse relationship between farm-size and crop-productivity has been well established but participation of small producers in markets remains low due to a range of constraints such as low volumes, high transaction costs, lack of markets and information access. Improved market access can have large impact on small holder incomes but it requires both policy and institutional reforms. Small farm in India is superior in terms of production performance but weak in terms of generating adequate income and sustaining livelihoods. Therefore, another area for policy intervention is land market reforms.As holdings are becoming small, fragmented and uneconomical, marginal farmers may be better off by leasing out the land to other farmers and seek gainful employment outside the sector.

Degradation of Natural Resources

Land and water are two important resources for sustainable growth of agriculture. Health and strength of these scarce resources is degrading at an accelerated pace and productive resources are being diverted from agricultural to other sectors.

Overexploitation of Ground Water Resources.

With 59% of irrigated agriculture and 85% of drinking water supplies dependent on it, groundwater is a vital resource for rural areas in India. Through the construction of millions of private tube-wells and wells, there has been a phenomenal growth in the exploitation of groundwater in the last five decades. The ground-water irrigation was a prime driver of green revolution technology in Mid 1960’s and increasing cropping intensity in the country. However, this era of seemingly endless reliance on groundwater for both irrigation and drinking water purposes is now approaching its limit as an increasing number of wells reach  unsustainable levels of exploitation.

The over exploitation of ground-water is emerging as an increasingly serious problem in agriculturally important districts of the country. The problem is more pronounced in rice-wheat based cropping systems in the Indo-Gangetic plains, and some sugarcane growing regions in the western and southern parts of the country.

A number of policy and institutional factors have been responsible for over-exploitation of ground-water in India. Easy availability of credit from financial institutions for installing tube-wells and provision of highly subsidized or free electricity for pumping in many states has encouraged increased extraction.

Attempts to regulate ground-water extraction by imposing credit restrictions have not been successful because well-off farmers have accessed private resources. A well-defined system of property rights to water that limits individual and collective withdrawls has been absent. The electricity for agricultural sector is highly subsidized in many states and free of cost in some states but low predictability of power supply.

Depletion and degradation of Land resources.

Shifts in resource availability and resulting land-use changes are adversely affecting growth of agricultural sector and national food security. A high degree of degradation of existing land resources has aggravated the problem. The per-capita availability of cultivable land has declined from .27 hectare in 1982 to .18 ha in 2003. this, in turn, is adversely affecting the livelihoods of the farming community in general and small and marginal farmers in particular.

Land degradation due to desertification, soil erosion, excessive and unscientific use of agricultural inputs such as irrigation water, fertilizers, agrochemicals, etc and deforestation is accelerating at an unprecedented rate. Land degradation will remain an important issue because of its adverse impact on crop productivity, the environment, and its effect on food security.

The expansion of cultivable land and intensification of production achieved through the use of irrigation have contributed to substantial production increases world-wide. For developing countries, its contribution to the attainment of development objectives of food security, poverty alleviation, and improvement of quality of life of the rural-population has been significant. Salinity and water-logging, soil erosion and water-pollution are a few of the serious problems that have gone hand in hand with irrigation.