Farm Size and Productivity: Understanding the Strengths of Smallholders and Improving Their Livelihoods

During the 1960s and 1970s there was an intense debate on the observed inverse relationship between farm size and per hectare agricultural productivity in India. It was subsequently argued that the higher productivity of smallholdings would disappear with the adoption of superior technology, modernisation and growth in general. However, close to half a century later, National Sample Survey data from the initial years of the 21st century show that smallholdings in Indian agriculture still exhibit a higher productivity than large holdings. These smallholdings however show lower per capita productivity and the incidence of poverty is widespread. Strategies for Indian agriculture and smallholding households should include reducing the inequality in land distribution and promoting off-farm work in the rural areas itself. The strategy of improving the crop land-man ratio by facilitating migration from rural India has not worked and will not work. The lives of smallholding families can be improved only by building on their higher per acre agricultural productivity and by promoting off-farm rural employment. T he relationship between farm size and productivity has been intensely debated in India. A large number of stud­ ies during the 1960s and 1970s provided convincing evi­ dence that crop productivity per unit of land declined with an increase in farm size 1972) which provided strong support for land reforms, land ceil­ ing and various other policies to support smallholders on ground of efficiency and growth. Subsequently, various analysts started explo ring reasons or factors for higher productivity of small­ dra et al 2000) and some of them even questioned the inverse relationship betwee n farm size and productivity. Bhalla and Roy (1988) observe d that the inverse relation be­ tween farm size and productivity weakened and disappeared when soil quality variable was included in their study. Chadha (1978) analysing farm level data for three agro­climatic regions in Punjab for 1969­70, reported that the inverse relationship had ceased to hold in more dynamic zones. Ghose (1979) argued that an essential precondition for the existence of the inverse relation­ ship phenomenon is technical backwardness implying that with the advances in technology the inverse relationship will vanish. Similar to this, Deolalikar (1981) observed that the inverse size­ productivity relationship cannot be rejected at low levels of agri­ cultural technology in India, but can be rejected at higher levels. Rudra (1968) concluded that " there is no scope for propounding a general law regarding farm size and …