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Land: An Asset or a Liability

Land: An Asset or a Liability

There is a craze in everyone in India as well as in other countries too, to have a piece of land other than a house plot in his/her name for agriculture or any other purpose. But the question is whether land is an asset or liability. This question is more relevant when land is used for agriculture production purposes. In the present situation land is an asset when it is used for non-agricultural purposes, but it a liability when it is used for agricultural purposes. Therefore those who cultivate the land are cultivating always at a loss. This booklet analyses the liability aspects of agriculture land.

Some years ago BBC in a news telecast while showing some farmers harvesting in North Dakota, USA, announced, "These farmers are harvesting their last crop in their life, They are moving out of their farms; because farming is no more paying," These are American farmers who have been cultivating large areas under substantial subsidy from the US government. It is reported in another news broadcast by Voice of America that several hundreds of farmers in the United States of America are leaving the farm sector every year in spite of the substantial support they get from the government.

Same is the case in most of the European countries; famers are leaving behind their age old occupation. Many farmers in India too, especially in Kerala, are leaving their paddy fields fallow or filling them up with soil from outside to be used for some non-agriculture purpose. Farmers who attend the yearly Kisan Mela at the Indian Agricultural Research Institute, New Delhi, ask the staff of the Programme to suggest some other cash crops for them to grow instead of the paddy and wheat; because they are realizing that food crops are no more profitable. People are beginning to realize that farming as livelihood is a losing proposition.

From time immemorial land has been the critical space for man's existence and operations in nature. Scripture says, "In toil you shall eat its yield all the days of your life." (Gen 3: 17). Though this is a religious saying it is scientifically true also. Every element in the human body has come from the earth and at the end of his life every element in his body goes back to the earth. Land is a portion of the earth on which he physically moves around and from which he derives all the nourishment for his life. Therefore there is an intimate relationship between man and the land. This intimacy with the land is expressed in his craze for the land.

All over the world from the beginning of the history man has been struggling for the land. Most of the wars in the world have been fought for the land either directly or indirectly. Even today people are fighting for land. About 75% of the cases in the Indian courts are land related. Some of them last so long that several generations go on fighting cases in the court.

"Land for the landless" is a very catchy jargon which people use to rally the landless around them. To the landless land is something which they are eagerly craving for and struggle for. Hundreds of NGOs and political activists are struggling for many years to get some land for the poor and landless. Similarly the landless people spend all their life to get a piece of land in their name. Finally they die in their fight and craze for the land.

There are millions and millions of people in this country who are struggling for agricultural land and many people think landlessness is a big problem for the poor. The poor also think that landlessness is the biggest problem in their life. The point here is that there is a craze in every one's mind for land and they live with it till they die. The craze is manifested in the way all the members in a family fight for their share of their parental land property. So many families have broken up and lifelong fights are going on.

The degree and the intensity of craving for land is directly proportional to the level of their illiteracy. First of all educated people generally seek and find other means of living. Secondly the educated people do not want to work on the land; they always want a "clean collar" job. Those who are highly educated will go for office jobs; those who are educated at the middle level become technicians and manufacturers. Therefore higher the illiteracy rate, greater the craving for agricultural land and vice versa.

From the point of view of the people who own the land there are mainly three categories: (1) people who own the land for their own cultivation and depend on it for the livelihood, (2) people who own the land but get it cultivated by others and (3) the people who own the land to use it for non-agricultural purposes. To the first category the land is a liability and to the second and third category the land is an asset. The second category of land use will be profitable to the owner but loss to the cultivator.

Even if the remuneration is equal or more from the farm sector, people still will generally opt for jobs in the non-farm sector. Because first of all the human energy needed for the farm operations is much more than the nonfarm operations. Secondly most of the farm operations are caste related and as people became more and more aware of the dehumanizing factors of the caste and caste related occupations somehow want to get out of the caste circle as early as possible. The best way of getting rid of the caste factor is to get out of the caste related occupations.

In a cash centred economy what is important is to have enough money to purchase whatever one needs. Therefore what is more important for every one is to acquire more and more money. When one has more money he goes for things other than what he really needs. He enters into a life style in which comfort is the major concern. If he still has money the next step is to enter into a life style of luxury, consumerism and greed. The plain truth is that the life of luxury and farm life do not go together unless farming is mechanized and the farmer has non-farm source of income. But in India farming is mostly done through manual work especially by the small and marginal farmers who constitute 85 per cent of the small and marginal farm holdings. Even highly mechanized farmers in USA and Europe, as already mentioned, are unable to cope up with the demands of the life style they would like to lead.

The other side of the situation is that in the future all the agriculture operations will be carried out by computers and automatic machines. Automation is an ongoing process which is an integral part of the modem management not only because it saves human energy but also because the work is done better and faster. In the agricultural sector at present land is involved actively in the production process. Normally the quantity of land in terms of area is directly related to the quantity of production. For a given type of land, less the area cultivated less will be the production and vice a versa. The production also depends on the quality of land used. We get more production from a good land compared to another which is poor in quality.

The quality of the land depends on the physical and chemical characteristics of the soil. The physical characteristics of the soil are soil texture, soil structure, soil density, soil porosity, soil air, soil temperature, soil water etc. Other physical properties are the depth of the soil, thickness of the top soil, slope of the land, the state of erosion, permeability of the sub-soil, drainage ability of the soil, available soil moisture, soil behaviour in relation to wetness, frequency of flooding and overflow, the intensity of drought, inherent fertility of the soil, soil-stone ratio, the type of crops or plants grown earlier, the type of use of the land use earlier etc.

The production potential of the land depends on the organic matter in the soil, the composition of organic matter, carbon-nitrogen ratio, cation-anion exchange capacity, soil reaction, buffering capacity of the soil, nutrient transformation and fixation in soil etc. Production also depends on the climatological factors especially the sunshine hours, rainfall, composition of air, moisture availability and the temperature. Due to high temperature, longer sunshine hours and higher moisture availability the photosynthetic activity and consequently the total biomass production and the crop yield is more in the tropical areas. In such areas maximum number of crops can be grown and hence the productivity per unit area will be higher.

The production also depends on the external factors such as seed, fertilizers and manures used, incidence of pests and diseases etc. The production capacity varies with varieties. High yielding seeds are far superior in yields compared to the local varieties. Proper use of fertilizers and manures according to the soil test values will result in better yield compared to improper use of fertilizers and manures without any soil test.

The crops are susceptible to pests and diseases at any stage of their growth. Sometimes farmers have to abandon the whole crop due to attack of pests and diseases. The incidences of pests also vary a lot. Some years it comes like an epidemic and in some years no pests at all. The crops are infested with all kinds of weeds. Sometimes the intensity of weed growth is such that the farmer has to abandon the field. Sometimes he has to use very powerful and harmful weedicides. Natural calamities like cyclone, hailstorms, frost, snowfall, heavy rain, strong wind, fire, earthquakes, volcanoes etc. affect the crop adversely. In some areas wild animals play havoc to the crops destroying completely the whole crop. In some areas thieves and other anti-social elements create a lot of problem to the crops and the poor farmer is deprived of the fruit of his labour.

In the production system the main human factor is labour or the human energy needed to cultivate the land and raise the crops or animals. The energy required for carrying things long distances, up and down on the slopes, digging the soil, digging a pit for planting a sapling, for puddling, weeding, harvesting and threshing etc. under the sun, rain, cold and heat is much more than any other work except logging, quarrying and fishing when done manually. A man doing such operations burn out as much as 4000 to 5000 Kcal of energy per day. Very often people in the farming occupation work more than eight hours. If soil and climatic conditions are more adverse than the normal the energy requirement will be even more.

The return from such labour is proportionately very low in the agricultural operations as compared to any other occupation. For example a man working in an office will spend hardly 1000 Kcal of energy or another working on a lathe machine may be spending about 2000 Kcal of energy per day. But in cultivation a man spend 4000 to 5000 Kcal of energy per man day. The investment in human energy and time can never be really accounted. The point is that if a person were to spend the same energy and time on any other enterprise he will be able to earn much more than what he will get from the farming. Also the risk factor is more for any farm related occupation.

Land for agriculture is a liability because the products of the land are not priced according to the cost of inputs including the labour of the cultivator. The prices of the inputs are going up while the price of the farm products hardly increases or at times even goes down. The prices of all the non-agricultural products are decided by the producer whereas those of the farm products are decided by the middle men. Under such situation land for agricultural purposes will always be a liability. This can be reversed only if farming is taken up as a national essential service activity and the cost is either borne by the consumers or by the government or by both.

Farmers never keep records of their expenditure and income and they are unaware of the exact loss they incur crop after crop and year after year. Next write up shall on the farm accounting so that farmers can estimate the actual amount of loss they incur and why farming is a losing occupation.

(The writer is retired Professor, Agri Economics from XIM Bhubaneswar. Email: )

(Published on 26th December 2017, Volume XXIX, Issue 52)