Attempts at Improvement in the Status of Tenants

Attempts at Improvement in the Status of Tenants*

K. V. RAO, M.A., M.Litt.

F. M. College, Balasore

The main object of this Paper is to examine the two aspects of Tenancy legislation in recent years, namely, the effectiveness of provisions for (i) security of tenure and (ii) improvement of tenurial status of tenants, which are proposed by the sponsors of this Conference; and I propose to deal with those aspects with particular reference to the recent legislation undertaken in the States of Orissa, Madras and Andhra.

I must, at the very outset, confess that the subject chosen by the sponsors, as it is worded, had intrigued me a bit. We want to examine the effectiveness of tenancy legislation–but ‘effectiveness’ from what point of view, if not from whose point of view? It should mean that what we desire to examine here is to what extent this legislation has given ‘permanency of tenure’ to the cultivating tenant, but this view can be examined only on a legal plane and at a conference of practising lawyers but not by, what we call ourselves, ‘agricultural economists.’ Or it could mean–and I take it that this is the meaning intended–that we try to examine the effectiveness as far as this legislation could assist the tenant in security of tenure and a share in the produce so as to act effectively as a producer.

This second meaning makes the subject less objectionable as a topic of discussion here. I deliberately say ‘less’ because in theoretically supporting tenancy legislation, we, the economists, as economists, are treading on slippery grounds and making the biggest assumption, no doubt supported by many authorities, that land tenure system has anything to do at all with production from land, or which is much worse, that security of tenure or owner-cultivation necessarily results in greater production from land and therefore is the best. This belief is much ingrained in us, so much that even the scientifically-minded sceptics among us do not pause and try to verify the veracity of the belief.

I once had the temerity to question it, and I compared the yields of lands in the Zamindari areas and ryotwari areas, and in owner-cultivated and lands held under a temporary tenure. And believe me–or anyone of you can conduct surveys now and verify–there is absolutely no truth in the statement that yields are better in the owner-cultivated lands. On the other hand, in some cases, at least, yields were larger in the case of lands held under a temporary tenure. It is not surprising; for, as economists we know that the yield from land depends upon so many factors which are common to both kinds of lands–the only difference comes in the entrepreneurial capacity and the incentive to cultivate on the part of the actual cultivator. It is a mistake to suppose that incentive on the part of the cultivator comes only if he owns the land; fear of losing tenure might be a greater incentive. But let us grant it. Even then it does not mean that every owner cultivator is a better entrepreneur than the so-called ‘absentee owner’. Other things remaining the same, we can say, that the production from land increases with the entrepreneurial capacity of the owner, be he the actual cultivator or the supervisor.

The acceptance of this rule has far reaching consequences; for, unless we can prove that incentive from ownership plays a far greater part than managerial or entrepreneurial capacity, we are treading on doubtful grounds, when we talk about the ‘effectiveness of the legislation’ from the economists’ point of view. On the other hand, if we admit, as we ought to, that incentive could as well be provided by fear of eviction, ¹ then we have also to admit that by changing hands in ownership and supervision, land has a possibility of coming from the hands of a good entrepreneur into those of a bad one. This possibility is all the great in the case of ‘the bhoodan lands’; ² because the donors of these lands are certainly people of proved entrepreneurial ability–otherwise they would not have acquired so much land as to be disposed to make a gift–while the beneficiaries are of almost proved inability–as otherwise, in this political system of equal opportunity and competition, they would not have remained so poor so long as to deserve a gift. And in this case land also happened to be of a bad quality so that in the case of ‘bhoodan lands’ at least we can say that we are placing sub-marginal lands in the hands of submarginal cultivators, and the results are also bound to be sub-marginal. ³

Dividing owners into efficient and inefficient, and also the cultivators into efficient and inefficient, we see that production from land is protected in three out of four cases, in the system of crop sharing, whereas in owner-cultivation, there is no protection at all in fifty per cent of cases where the owner-cultivator happens to be inefficient. ⁴ On the whole, it is undoubted that security of tenure need not necessarily mean an increase in production from land. ⁵

It does not mean that there need be no security of tenure. Far from it. But what I say is that it is not a question of economics, but only one of socio-politics, especially the second part of our problem, unless one goes to the extent of saying that by this transfer of a greater share of the produce from land, if we are sure of affecting it from the richer to the comparatively poorer sections of the community, and also that we are effecting greater economic activity.

Equity, in Dr. Dalton’s words, is an evasive mistress, and the economist is too old and worn out to be fascinated by her. Even supposing that we, as economists, are fit enough to dabble, in socio-economic problems, we have a duty to be sure of our ground–at least we must make sure that what we support as a just cause is really resulting in that accepted goal. But here again we do injustice to ourselves. In the first place, as the Planning Commission say, it is very difficult to define social justice accurately. Then, I ask, is it not intellectual dishonesty to prepare a whole scheme of reforms without even being sure of the goal? In the second place, accepting that the ends of justice would be met if land is redistributed among the landless and security of tenure is assured to the cultivator, are we, the economists, sure that such transfer is really taking place from the rich to the needy? In other words, have we, either the Planning Commission, or the Government, or the economists, conducted even a sample survey to find out how many people ‘gain’ and how many ‘lose’ as a result of this transfer, so as to calculate the maximum social advantage?

Here again, I had the temerity to attempt a sample survey. I admit that my sample is a drop in the ocean and cannot satisfy the needs of a scientist. But it indicates the need for such surveys throughout the country before any legislation of this sort is resorted to. My survey shows that a large percentage of the so-called absentee landlords are no better in economic status than those that will gain by this transfer of land to the actual tiller. If a sort of a means test is adopted, what we may find is that a larger proportion of the absentee owners than what the Planning Commission suppose today, probably wil1 have to be allowed exemption and a right to reserve cultivation at will.

All the criticism made above applies well to the legislation undertaken in Madras, Andhra and Orissa. In all the three States, it is promised to be a temporary and transitory measure to be followed by more permanent ‘reforms’. The most important point in these measures is that the actual cultivator has been given a more secure tenure on the land, and the share of the owner has been defined, To that extent it is an undoubted improvement in the status of the tenant and might induce him to take a more lasting interest in his land; but I cannot call it a one-sided advantage to the tenant. It has some inherent draws which act as double-edged weapons likely to cut both ways; and the very law itself might help the eviction of the tenant more easily than before.

The first point is that while fixing the share of the owner as a definite proportion of the crop (at about 2/5 of the gross), the law definitely provides for the ejectment of the tenant for default in payment. Now, the proportion fixed is not definitely in favour of the tenant because the tenant now loses the advantages he was getting from the owner in terms of capital investment, supervision and advice, so that it would now be doubtful if the tenant could really bear that proportion. Secondly, in the case of a vast majority of cases–here again a sample survey is indicated–the really absentee landlord has not been getting his lion’s share of the produce from the tenant as is commonly supposed. The relations between the tenant and the owner have been so elastic in practice that a fifty per cent share was the maximum that could be taken by a lucky owner in exceptionally favourable years. But now the law helps the owners to be sure of their share; and, while in the old system the burden of collection was on the owner, now the onus of payment is on the tenant on penalty of ejectment, and there is no more any question of bargaining. It looks as though Shylock has been ensured of his pound of flesh! As far as I can see, as Indian agriculture is still a gamble with the monsoon, there will be more defaulters under the new conditions, and consequently more easy it would be for ejectment.

The second point is about the definition of owner-cultivator, or the actual cultivator. While it is a very difficult task to define it so exactly as to achieve the objective, and the attempt made by the Planning Commission has not been very helpful, in their anxiety to eliminate the sinning landlord completely, the three Acts have cut the cloth the other way so as to eliminate the efficient tenant as well as to defeat the other broader objectives of social justice. Take, for instance, the Madras Act. The object of the Cultivating Tenants’ Protection Act enacted recently is, in the words of the Revenue Minister of Madras, that the cultivator “should take to the job fully and must be able to turn a sod of earth or pour a bucket of water, etc.” The Act actually achieves this by requiring that the owner-cultivator or the tenant should have no other job that might make them liable to pay sales tax or profession tax. While the actual definition is so vague that it will help the cunning owners to deceive the law by simply ‘turning a sod of earth and pouring a bucket of water,’ in practice it will deprive the actual tiller of another source which might supplement his income. And here comes the real ambiguity in our aims!

For instance, is it not the aim of our Plans, both immediately and ultimately, that the small cultivator should be helped to earn extra income in his spare time? And why should we place an upper-limit, which after all can be altered by a small Panchayat? If we can permit a small tenant to make use of his spare time to get an extra income, why can we not look at it from the other side and enable the small income-holder to utilise his spare time in cultivating his or somebody else’s land?

Secondly, why are we making a fetish of owner-cultivation and depriving the means of livelihood from a great number of families, in the transitory period, when the ultimate objective, according to the Planning Commission, is either village management or co-operative farming, where the actual cultivator would cease to be the owner? This is a serious point that requires very careful thought–the wisdom of conferring permanent rights on some small tenants now when we want to deprive them of the rights later–especially in the light of what I will say at the end of this essay.

Even supposing that co-operative farming is a far off cry, are we doing justice to the owner-cultivator in the long run? By fixing a ceiling at about 6 acres, and insisting on owner-cultivation, are we not creating a class of people who will be ‘poor cultivators’? The net income from six acres might represent a fairly big sum at the present per capita income rates of India, but with the progress of the Plans and the rapid rise in National Income, will not agriculture become a still worse economic occupation than now? Naturally what follows is the organisation of small-scale industry and subsidiary occupations on a permanent basis, and as they can never compete with mills subsidies will also become a permanent basis of our economy.

And France gives us an example and a warning as to the possibilities of such action now; and in France which has small peasant proprietors on a large scale, both small scale industry and agriculture are subsidised!

Worse than that. As in France, we will be creating a new class of peasant-proprietors who will organise themselves as a political force and who will always insist upon a small-scale economy and subsidies. When this new pressure group is formed, will it be possible to dislodge them from ownership to create our ultimate Co-operatives? Already in the industrial sector the Leviathan of Labour is calling the tune, and we are creating another Leviathan in the agricultural section!

* Paper read at the Agricultural Economic Conference, December 1956.
¹ We have to admit it because, after all, this is the only incentive on which the Planning Commission depends to ensure that the new-owner class would not neglect their land. \
² I am not criticising the movement at all. I am merely pointing out one aspect of the problem without going into its merits.
³ Here again it is not criticism, but pointing out one aspect of the problem that deserves attention.
⁴ The various possibilities are: (a) In tenure system: i. Owner and, tenant both good. ii. Owner and tenant both bad. iii. Owner good, tenant bad. iv. Owner bad, tenant good. (b) In owner- cultivation: i. he is good; or ii. he is bad.
⁵ It is implied that once security of tenure is given the owner has no more entrepreneurial functions.