Reversing land reforms

Print edition : February 27, 2004

The gains made by Kerala through the land reform measures of the 1950s may be undone if the attempts at changing the limit on landholding and introducing contract farming by multinational companies are allowed to succeed.

in Thiruvananthapuram

KERALA often boasts of the most radical land reforms law in the country. The legislative process to introduce it, which began under the first Communist Ministry, immediately after the State's formation in 1957, sought to provide security of tenure to tenants and ownership rights to occupants of homestead land (kudikidappu). It also sought, not so successfully though, to impose limits on land ownership and distribute surplus land to the landless.

In a pineapple farm in Ernakulam district.-PICTURES: K.K. MUSTAFAH

By the time the reform process lost steam in the 1970s, it had brought down to a great extent the economic, class and caste inequality in Kerala society, ended statutory landlordism and the janmi system, and limited the ownership of landholdings. It offered protection to tenants from eviction, provided sites for the construction of houses to thousands of families and was instrumental in raising rural wages and in the introduction of social security schemes for agricultural workers.

But land reform in Kerala did not really end capitalist landlordism or transfer agrarian power to agricultural labourers and poor peasants. As E.M.S. Namboodiripad, under whose leadership the reform process was launched in the late 1950s, famously remarked, the old janmi system was replaced by "landlordism of another type", of landlords who get their lands cultivated through wage labour and those who live by lending money and dominated rural trade.

Significantly, land reform did not increase agricultural production or rural employment in the State. In fact, one of the most visible results of the land reform legislation was the extreme fragmentation of land, the oft-cited reason for making agriculture a low-profit venture in the State. Many new landlords realised that they could not make a living out of agriculture and turned to less labour-intensive crops or were forced to seek avenues that could generate additional income. Increasingly, they displayed a tendency to leave their lands fallow. The result was a drastic fall in employment in the agricultural sector also and a rise in farm wages disproportionate to the yield. Workers began to migrate to non-agricultural sectors, especially to satisfy the demand caused by large-scale construction activity. At one point, the Gulf boom pushed up land prices so high that selling agricultural land for real estate development became an enticing option.

The crisis in Kerala's agricultural sector, which has a large part dominated by cash crops, was complete with the introduction of the liberalisation policies in the 1990s. The price of coconut, a major crop, fell sharply with the reduction of import tariffs on edible oil. The market for rubber, another important crop, was depressed following large-scale import of natural rubber. All plantation crops in which Kerala had a substantial stake, namely, tea, coffee, rubber and cardamom, had also to compete with low-cost imports. The farm workers' agitation of July-August 1997, which led to the destruction of crops and other income-generating ventures on vast tracts of reclaimed paddy fields, was the first visible sign of distress on Kerala's agricultural scene (Frontline, September 19, 1997).

The most discernible trend in the past few decades, indeed, has been the marked shift in the cropping pattern towards less labour-intensive crops. In food-deficit Kerala, the area under paddy fell drastically by over five lakh hectares (from eight lakh hectares) in the past two decades. Although over 60 per cent of the land that went out of paddy cultivation continued to be used for agriculture, the preference was to grow coconut, rubber, arecanut or crops such as banana, tapioca and vegetables. Now, farmers are turning increasingly to quick-profit cultivation of exotic varieties such as vanilla, horticulture and medicinal plants, which have markets outside India.

But, despite the fall in agricultural production and agricultural employment as a result of land reforms, until recently there had been no attempt to undermine the reform measures. For over two decades after the 1970s, farmers and farm workers were, however, living with a new set of problems, of low profits from the fragmented land and lack of employment despite guaranteed minimum wages.

Two initiatives, with the underlying rationale of taking on the challenge of the current farm crisis, are causing widespread concern in the State and are seen as a movement aimed perhaps at the reversal of Kerala's land reform process itself. One is a Bill, already before the State Assembly, with the objective of removing the limits on land ownership. Another is a draft piece of legislation, yet to be presented before the Assembly but modelled on the requirements of the new agricultural policy of the Central government, which, among other interventions, would require substantive reforms in land policy. It is also aimed at promoting contract farming and reintroducing the leasing of agricultural land.

Land ceiling was imposed on household landholdings. The ceiling varied with the size of the household and did not exceed 25 standard acres (10 ha), the maximum that the largest family could own. However, the Kerala Land Reforms Act, 1963, exempted certain kinds of land from the ceiling limit, including plantations and private forests. Thus, those cultivating plantation crops such as rubber, tea, coffee, cocoa, cardamom, cinnamon and so on were not bound by the limit. (This exemption was also available for cashew plantations initially, but it was withdrawn in January 1970, a major grouse of cashew planters since then, who have been arguing for the restoration of the "benefit".)

A medicinal plant nursery.-

But, ever since the State Law Reforms Committee, headed by the Revenue and Law Minister K.M. Mani (leader of the Kerala Congress-Mani, a party representing the interests of farmers of the hilly areas), recommended amendments to the laws to give more freedom to farmers to choose their own crops, there have been demands that cashew, medicinal plants and vanilla - money-spinner crops with increasing worldwide demand - be exempted from land ceiling limits.

The proposed amendment to the Act argues for granting exemption to these crops, stating that the crisis in the plantation sector in the State, caused by the fall in prices since the introduction of liberalisation policies, has made landholders reluctant to cultivate crops such as rubber, tea, coffee and cardamom. The proposed law argues that such landowners cannot switch to other crops because "they will not get exemption from ceiling limits if the land is used for non-plantation purposes". The Bill further states that considering the potential of cashew as an important source of foreign exchange, and the demand for medicinal plants and vanilla, it is "considered necessary to grant exemption to lands planted with cashew, medicinal plants and vanilla from the ceiling provision".

The proposed amendment has met with criticism for it offers the worrying possibility of allowing landowners to escape from the ceiling provisions imposed by the land reform legislation, merely by changing the crop profile.

According to Communist Party of India (CPI) leader and former Minister E. Chandrasekharan Nair, who was a member of the State Assembly that formulated the land reforms law, the exemption from ceiling limits was originally granted to plantation crops based on the fact that plantations needed to be run as "industries", with plantation workers being eligible for benefits that were unavailable to agricultural workers. The exemption was largely based on the interests of the plantation workers and also on the fact that the running of plantations required additional capital investment and technological inputs to increase production and productivity. "But the proposed amendment allows a landowner to plant medicinal plants, vanilla or cashew as an inter-crop even in coconut plantattions and avoid the ceiling provisions. In short, the very idea of limits on land ownership is proposed to be removed from the land reform legislation. It is a counter-revolution in the agricultural sector, which will once again lead to the concentration of land in the hands of a few," he said.

Dr. K.P. Kannan, Director of the Centre for Development Studies (CDS), Thiruvananthapuram, told Frontline: "There is no need to grant exemption from the ceiling limit on land growing cashew, vanilla and medicinal plants because the production of these crops do not depend on the size of the landholding. They grow equally well in small holdings. Such exemptions would only lead to excess land concentration and to more people moving away from agriculture. Or people with money and no interest in agriculture would buy land to keep it merely as a real estate investment." He said that the land reforms, as implemented in Kerala, had important drawbacks and one of them was the exemption on ceiling limits granted to plantations. The impact of land reforms was, therefore, felt on paddy and coconut lands alone. The proposed law will only reinforce such drawbacks, according to him.

IN December 2003, the Agriculture Department of the Government of India (GoI) organised a workshop in Thiruvananthapuram to explain the additional changes in land policy being suggested for implementation, importantly, among them, the introduction of contract farming and liberalisation of land leasing, as a solution to the agrarian crisis. The State government has since formulated a draft law based on a "model Act" named Agriculture Produce Marketing (Development and Regulation) Act, which, among other provisions, proposes to introduce contract farming in the State.

Explaining the proposed reforms at the workshop, Dr. T. Haque, Chairman of the Commission for Agriculture Costs and Prices, GoI, said contract farming was a system in which agro-processing or trading companies entered into a contract with farmers to purchase a specified quantity of any agricultural commodity at an agreed price. "By entering into a contract, the company reduces the risk of non-availability of quality raw materials or commodity and the farmer reduces the risk of fluctuating market demand and price of his produce. In other words, it provides an assured market and price for an agricultural commodity. Small farmers who are capital-starved and cannot make major investments in technological inputs would find this a big help. Contract farming agreements would provide them with quality inputs, technical guidance, credit and management skills," he said.

A vanilla crop in Idukki district.-

Kerala has since then been debating the numerous problems contract farming has created the world over, especially in Punjab and Andhra Pradesh, where large-scale farming by multinationals has become a reality. At a national seminar on `The agrarian situation in India and alternative policies' organised jointly by the All India Kisan Sabha and the All India Agricultural Workers Union in Thiruvananthapuram, leaders of both the organisations were categorical that such imperialist globalisation policies would be extremely harmful in a State where comprehensive land reforms have been implemented. They said that the A.K. Antony government was turning away from its primary responsibility of encouraging the cultivation of food crops and trying to promote crops that suit the business interests of a few big corporations. This will play havoc with the diverse cropping pattern in the State. Only those who are unaware of the history of the struggles for land reform in Kerala would try to implement policies that will roll back the process, according to Kisan Sabha president S. Ramachandran Pillai, Member of Parliament A. Vijayaraghavan and convener of the Opposition Left Democratic Front Paloli Muhammed Kutty.

At the seminar, economist Jayati Ghosh's reading of the situation in the United States as well as in Punjab and Andhra Pradesh, where corporate penetration of agriculture is becoming widespread, was an appropriate warning to the Antony government. Presenting a paper titled "Corporate agriculture: The implications for Indian farmers", she said that contract farming held numerous problems for agriculture in developing countries like India. "It tends to displace labour quite substantially; marginalises the direct cultivators who lose control over the production processes and often even over their land; encourages more capital-intensive and less sustainable patterns of cultivation; result in greater insecurity and lower incomes for farmers because of the use of quality measures to lower the effective output price being paid by contractors; deny higher prices to farmers; propagate monoculture, which reduces food security and the possibility of livelihood diversification through livestock; relies excessively on lower paid women workers and child labour; and accelerates the process of casualisation of labour," the paper said.

At another seminar, "Land reforms in Kerala", organised by the C. Achutha Menon Study Centre, Chandrasekharan Nair was highly critical of the argument that it is not possible any longer to save agriculture in the State with its highly fragmented land ownership pattern, without entrusting it to the big corporations. "One need only look at the sad state of affairs in the tea and coffee plantations in the State run by plantation companies and big farmers to understand that such companies are almost entirely profit-driven and cannot be trusted to look after Kerala's agriculture. Kerala's agriculture development should have its focus on the small holders. An agricultural development policy that would push Kerala's 52 lakh smallholder farmers into poverty is bound to be a failure," he said.

Kannan told Frontline that contract farming would have a much more debilitating effect on Kerala because it will bring back tenancy, and more importantly, `reverse tenancy', in which big farmers lease land from small and marginal farmers. It will help big companies, driven only by short-term profit motives, come into agriculture in a big way. The small farmers will either become labourers in their own land or will be alienated from agriculture itself. "Why are these companies coming into agriculture at all? Is Kerala planning to achieve economic growth in this globalised era through agriculture? Or should it be through investment in the knowledge industry and similar growth areas? Studies in Punjab have shown that contract farming has made farmers jobless. They live on rent alone and the unearned income and a lot of spare time are cause for much social tension in rural Punjab today," Kannan said.

According to Ramachandran Pillai, the attempts to take away the ceiling limit on land and introduce contract farming are part of a plan to create a land market that will affect the majority of farmers and agricultural workers in the State. "It will lead to the alienation of land from the farmers and its concentration in the hands of the rich. Farming will become a loss-making proposition for the poor. Wages will go down and it could lead to the imposition of adverse working conditions. The gains that Kerala made through land reform laws will be destroyed," he said in a leader-page article in the Communist Party of India (Marxist) newspaper Deshabhimani.

State Agriculture Minister K.R. Gowri, who, as Revenue Minister in the Namboodiripad Ministry piloted the land reforms legislation, said while inaugurating the workshop organised by the Central government that the State government "will not do anything which is detrimental to the gains Kerala made through land reform". She said that the proposed amendments to the law would be introduced only after wide-ranging discussions on their implications, especially to the State's farmers and agricultural workers. But she also said that the government was not against introducing reforms in its land policy and was not averse to the idea of contract farming or leased land farming, provided they had sufficient safeguards to protect the interests of the State and its farmers.

State Agriculture Director K. R. Jyothilal told Frontline that few a companies, including Tropicana, a subsidiary of Pepsico, and a Kuwait-based company, had already evinced interest in contract farming in the State, mainly for pineapple and banana cultivation respectively. Pepsico plans to process contract-sourced pineapple to be exported as frozen concentrate under the Tropicana brand. The company has evinced interest in pineapple-growing areas in central Kerala and may want the State's farmers to grow high-yielding imported varieties to suit its requirements, initially about 25 acres. The Kuwait company's proposal is for banana cultivation on about 1,000 acres of leased land.

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