Less than 200,000 households across rural India owned more than 10 hectares of land in 2018-19, a recent report of the National Sample Survey (NSS) has estimated. These households constitute just about 0.1 percent of all rural households and 0.2 percent of all agricultural households. There were an estimated 172.4 million households in rural India, including about 93.1 million agricultural households.
The number of households owning at least 10 hectares has fallen 70 percent about 700,000 (0.5 percent of all rural households) estimated in 2002-03. In comparison, the number of rural households had increased by 16.6 percent over the same period.
The share of these households in the total land owned by rural households has also contracted over this period from 11.6 percent in 2002-03 to about 3.9 percent in 2018-19, according to the NSS report titled Situation Assessment of Agricultural Households and Land and Livestock Holdings of Households in Rural India, 2019.
Ownership of more than 10 hectares was categorised as large holding in the survey while holdings of 0.002-1 hectare were considered marginal. Owners of land measuring less than 0.002 hectares (or 20 sq. metres) were considered landless.
The contraction of landholdings and its fragmentation is not a recent development. It has been happening for decades due to division into smaller parcels among inheritors, acquisitions for industrial, housing and infrastructure development, creation of special economic zones (SEZs) and sale by owners for various reasons including financial difficulties.
In 1961-62, when India’s industrial development was in the early stages, an estimated 2.9 percent of rural households owned more than 10 hectares of land and their combined holding was about 28 percent of the rural household-owned land, previous reports of the NSS show.
That distribution changed further by 1991-92 when India began industrial liberalisation, to an estimated 0.9 percent of the rural households with a combined holding of 13.8 percent of rural household land. By 2012-13, when the previous round of the survey was held, the share of rural households with large holdings had declined to 0.2 percent and their share of land to 5.8 percent.
The current report has estimated that a majority of rural households owned small parcels of land – the average size of holding in 2018-19 was about half a hectare. The holdings of non-agricultural households were typically under one hectare.
The fragmentation of land led to a big increase in the proportion of households owning up to one hectare or marginal holding, a significant number of which were non-agricultural households. The proportion of such rural households jumped almost seven percentage points from 69.6 percent to 76.5 percent between 2002-03 and 2018-19.
The increase between 2012-13 and 2018-19 was only 1.1 percentage points. The share of land held by such households rose sharply, from 23 percent to 34.5 percent over the 16 years. About 70.4 percent of agricultural households and 83.6 percent of non-agricultural households held less than one hectare of land, the survey found.
Ownership of 4-10 hectares is categorised as medium-sized holdings. Significant changes were seen in this category also due to fragmentation of holding. The share of households with such holding declined from 3 percent to 1.4 percent over the 16 years. The share of land owned by these households fell sharply from 23.1 percent to 14.7 percent.
The size of land owned is important as it affects the economics of agriculture. Increased fragmentation of land makes farming inefficient and unviable as an income-generating activity, which is increasingly the case in India. It also leads to overuse of land, which will not allow it adequate time to rejuvenate between crops. Many small farmers, therefore, take on lease additional land from others to make their farming viable.
Average land ownership data for the states show a decline in holdings across states but the fall was the sharpest in Bihar, Jammu & Kashmir and Rajasthan among the bigger states. The size average holding of households, excluding those categorised as landless, contracted more than 43 percent between 2002-03 and 2018-19.
The contraction in the average size of land owned was about 39 percent in Gujarat and West Bengal. In other states such as Madhya Pradesh, Punjab, Tamil Nadu and Uttar Pradesh, the average size of landholding declined by about 35 percent. Kerala, where the average landholdings was anyway small, saw one of the smallest declines in the average size of land owned. Across the north-eastern states, the trend was mixed, with states such as Mizoram and Nagaland reporting a small rise in average landholdings.
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