In an earlier blog, I had tried to examine the claim that productivity of small farmers is higher than large farmers (the so-called “inverse relationship”). I had presented some studies which seemed to support this claim at an aggregate level but did not account for different crop choices of small and large farmers.
I recently finished reading Nilotpal Kumar’s book “Unravelling Farmer Suicides in India” where he starts by describing in detail the farming practices in the study village, located in Anantapur district of Andhra Pradesh.
His study shows that on unirrigated land, productivity of groundnut cultivation follows a simple relationship: small farmers have lower productivity than large farmers. He surmises that this is due to multiple factors (none of which are surprising):
- “The large and middle farmers are likely to own superior quality dryland plots, draft power and ready capital”
- No double-cropping in drylands
- “These advantages afford them greater flexibility in responding to precipitate moisture-related fluctuations, pest-related vulnerabilities, and labour scarcities, as compared to small farmers”
- Disadvantages of scale in costs of production
In irrigated lands, the relationship is more complex, see table below:
Even for irrigated lands, while there is a significant inverse relationship between medium and small farmers, the productivity of larger farmers is much higher than both of these categories.
As Nilotpal Kumar points out himself: “My cost and budget analysis for dry-land groundnut has shown that yields – the value of output per acre – on large farms in NRP are superior to those on small ones. This finding … casts doubts about the possibility of an ‘inverse relationship between yield per acre and size of holding’ in dry lands. The ‘inverse relationship’ argument has been key to the neo-populist claim that small farms are technically superior to large farms and they are, therefore, amenable to capitalistic growth with the help of a developmental state (like in the case of South Korea/ Taiwan) — something that the Marxists have long disputed.”
Placing this study in the context of other literature, some of which I cited in the previous post leads to a nuanced conclusion: While in aggregate, productivity (Rs./hectare) of small producers appears to be higher, it is probably largely due to different crop choices, double-cropping and intensive farming practices on irrigated lands. On drylands, the farmers’ advantages of larger scale, quality of land and greater capital lead to an expected relationship: namely greater productivity of large holdings.