A Most Important Finding

The official study group on agricultural commodities has finished its labours and has strongly recommended that all lands under crops that can earn foreign exchange should be exempted from the operation of land ceiling laws. The tiny size of land-holdings is, according to the verdict of the Study Group, a serious impediment to production. Against two to three-acre farms in India, they point out that the size of farms in other countries is as large as thousands of acres. “On the one hand”, they say, “we are quick to point to the higher yields in other countries, and on the other, we have passed laws which put a premium on antiquated modes of cultivation.” The group has published its opinion that the exemption of plantation-crops from ceiling laws is a step in the right direction, but that if we have to step up exports of agricultural commodities, at least all important foreign exchange earning crops should be exempted from ceiling laws.

The piece de resistance of pseudo-socialism was the land ceiling legislation. It has been now officially exposed as worthless and injurious to the health of the national economy. The export sector committee has endorsed the recommendation of the Study Group but has advised that the exemption should be operated in such a way that it does not affect the production of food grains.

This Study Group went into the question of increased production of export commodities. The principle emphasized in the Group’s verdict is, however, one of general application—wherever greater production is desired through improved methods and techniques of cultivation, whether the desired increase of production be of export-goods or of food grains. The size of the farm is an important element if mechanization and high-grade management are desired.

The ceiling laws have served to cause two bad results. One result is the transfer of land under rice and other food crops to sugarcane production, so as to qualify for exemption and escape the ceiling laws. This automatically reduced the area under food grains. The other result is benami transfers which soon mature, by reason of the laws of human nature, into real transfers leading to fragmentation, thereby preventing any recourse to new techniques of greater production. Both these consequences of the ceiling laws are deplored by those who desire adequate food-grain production. Ceiling laws issue out of what can be called the jealousy complex woven into socialism and the desire of the ruling party to obtain the votes of the smaller fry who are of course larger in number. The theory is that every one wants land, and their land hunger must be appeased not by suitable opportunities for cultivation but by breaking up the land into tiny bits of freehold. This policy is as erroneous as it is impracticable. That it is impracticable has been found by experience, and the ruling party has given up the slogan of land for everybody. It is erroneous because good cultivation, and especially increased production, through improved methods, calls for something more than mere labour, viz., capital and good management, as Dr. P.S. Lokanathan recently pointed out.

The producer on a small farm would like to keep his stock for himself and his dependents, and not sell it away. The principal suppliers to wholesale traders were the owners of the larger holdings and not either the small tenants or the small owners. The curtailment of the size of landholdings has set the clock back for effecting modern improvements. It has created a shortage of supply of food grains to the urban markets, causing prices to go up for industrial workers and other town-dwellers, thereby upsetting the entire economy. This result has been seen by the party in power, but dogmatism and pride prevent a confession.

The conclusions of the Study Group are not only welcome, but should be understood in their full import. The ceiling laws came at just the critical moment when landholders were turning to tractors and pumps and fertilizers. But for the ceilings would have been a great wave of improvement and agriculture. Agricultural machinery and modern would have raised Indian agricultural production to a level. Just at that juncture, however, came the pseudo-socialist measure of fragmentation to prevent India’s potential sufficiency from being realized. As a result we have increasing import of rice and wheat, and the vain call for increased export of other commodities to make up the foreign exchange deficit.

The unfortunate mess cannot be set right as long as pride and dogmatism rule the ruling party’s is not yet realized by the more honest congressmen, that a poor peasant can be as happy as he would like to be, if he works as a good tenant in a large farm properly protected by the State, and that he need not necessarily be made a ‘proprietor’ of the land. What he wants is security and fair terms as a tenant, and not status as owner. What he lacks is capital and talent for management, which some one else must supply. The credit that the State and its subordinate banking agencies supply fails to function satisfactorily in rural agricultural operations. All these and other relevant truths are ignored and a slogan-ridden atmosphere keeps our food shortage unrelieved. The report of this Study Group headed by Mr. V. Shankar ought to open the eyes of all right-thinking people, and bad laws should be expunged from our statute book without any compunction. There should be no ceiling on the size of farms. On the contrary, we should see that successive partitions do not lead to fragmentation.

Talking of ceilings, the ceiling that is wanted is a ceiling on taxation. The taxes demanded at present from honest and diligent industrialists are a monstrosity and, from the national point of view, suicidal. It is there that we want a reasonable ceiling, not on the size of farms. The problem of unemployment should be tackled by doing what will develop private industry on a wide scale and not by attempting the Impossible, viz., to cut up land into small bits and provide every one of our hundred million families with a tiny farm.

This finding of the Agricultural Commodities Study Group is comparable in importance to the contemporaneous unfoldment in Soviet Russia of the truth that profit-motive is necessary for hard work and diligent management, and the resulting policy of bigger bonuses proportionate to extra production to those engaged in nationalized concerns. This of course is the only thing that can be done in Russia to approach the profit-incentive, where everything has been taken over by the State, and there is no private enterprise left. Natural laws cannot be abolished either by totalitarian rulers or by their ineffective imitators in India. You may not listen to a swatantra partyman’s warnings, but you cannot shut your ears against the finding and the advice of your own Board of Trade committee All you can, possibly do is to keep silent over it, shelve it, and go on the old way, running the dear old country to bankruptcy.