Indian Economy: Is Semi-Feudal Semi-Colonial still relevant? (part four) – Mudunuri Bharathi & R.Vijay

continued from Part 3

3.2.NCPH: Evidence from Andhra Pradesh
In this section some of the details are presented for the state of Andhra Pradesh. In addition to the NSS data and census data the results of a survey into the economic structure of agriculture are also presented.
The agrarian sector in A.P has been in the news for different reasons. The state has witnessed substantial number of suicides deaths of cotton farmers. A committee called the ‘Commission of Farmers Welfare’ was instituted to look into the crisis faced by the farming community. The state happened to be a scene of series of experimentation in changing the forms of agricultural production. The experiment on ‘contract farming’ with the help of Israel Company is one such experiment. The state is also a witness to a long drawn movement initially by the communist Parties and later by Communist Party of India (Maoist) seeking a change in the agrarian structure.
Next only to TN, AP witnessed highest shift in occupation from cultivators to non- cultivators. The number of non-cultivating households are 57 percent and the proportion of NCPH to total non-cultivating households is 50.8 percent. They own about 16.2 percent of the total value of land. The presence of agricultural labour is high and it is also a state which has a high incidence of pure tenants. There is a 4.2 percentage points increase in the proportion of cultivators between 1971 and 1981 but there is a 22.8 percentage points decline in their proportion of cultivators between 1981 and 2002. The census also has a similar story. Between 1991 and 2001 the number of cultivators has declined from an already low level of 27.74 percent to 25.47 percent (8).
Interestingly, what are considered to be the most developed districts with a history of 100 years of canal irrigation and a provision of double crops shows the lowest proportion of cultivating households. For example the East Godavari and West Godavari districts recorded 14.90 and 15.06 percent households as cultivators and this proportion has decreased to 12.92 and 14.20 percent respectively by 2001 (9). At the other extreme there are districts like Warangal and Adilabad, which in fact have witnessed an increase in the proportion cultivators. Given the extreme diversity, an attempt was made to study the agrarian structure by R.S.Rao and M.Bharathi (2003) (10).
The results of the survey are presented below. The surveyed villages represent different regions and the method of presentation chosen by the authors was a five-class analysis. Presenting agriculture in terms of class analysis was in vague during the late 1960’s and 1970’s. In a sense the report is a revisit to such framework and presents a different understanding compared to land based classification used in identifying structures. The methodology used in the survey and information on land and land related institutions are presented below. In this survey a complete enumeration of all households residing in the village was conducted. From these households, those households who were directly related to agricultural production were classified into five classes based on their interaction in the labour market.
They are as follows :-
Non-cultivating ‘peasant’ Households: At one end of the spectrum we have households who owned land but do not participate in production. They own land as a source of rental income as well as an asset that has the capacity to give higher rates of return on investment with minimum uncertainty. These households organize production by either leasing out land, employ farm servants to organize production or keep the land fallow. These households are identified as non-cultivating ‘peasant’ households. These non-cultivating ‘peasant’ households can be landlords in the conventional sense, can be a government servant, a school teacher, can also be from non cultivating caste groups or a household without able bodied persons. The major interest of these households in agriculture is to draw a rental income from land. They do not supply labor and have an indirect demand for labor.
Rich Peasantry: The distinguishing factor of this group is that they actively participate in the various agricultural operations on their farm. These households may or may not own land. If they do not own land they may lease in land and organize production. By its nature this group operates land not as a rent-yielding asset but as a productive asset. The households may employ permanent farm servants; casual labor and contract labor as the need arise to supplement the deficiencies in supply of labor. As the household draw on the labor from other households to meet its shortage, logically the household does not supply labor to the other household. These peasants participate in the production process and also employ wage labor with an objective to produce marketable surplus. In other words these households are demanders of labor and suppliers of produce in the output market. This segment facilitates in the formation of the labor market but is constrained by the existence and continued growth of output market.
Middle Peasants: The third category, the middle peasant group, distinguishes itself from rich peasant group by its exclusive dependence on family labor to the exclusion of any dependency on labor market for its own farm production. Further it also, like rich peasants do not contribute to the supply of labor to the labor market. Given the nature of agriculture operations and its timeliness, it does take labor from other families on the basis of exchange labor and at times may draw on the labor market also. By its nature the group has self-consumption as an objective of production and has least market orientation and market dependency. These are self-employmented cultivators with minimum demand on labor market and minimum supply in output market.
Poor Peasant: The fourth category is the Poor peasants group. These households are simultaneously cultivators and agricultural laborers. They are cultivators of insufficient land compared to their consumption needs and are also agricultural laborers to meet their subsistence. These are suppliers of labor in the labor market but also operate some land. The land that they operate could be owned or leased in land. The group may either own land or participate in the tenancy market, may opt for non-farm activities may contribute to out migration if the agriculture does not provide sufficient income. The strength of this group to sustain with in the village or reproduce themselves with in the village depends crucially on the strength and operation of its counterpart the ‘Rich Peasant Group’ and this is dependent on that group’s dynamism and activity.
Agricultural labor Households: The fifth category is a group of households, who are entirely dependent on sale of labor, called agriculture labor group. Devoid of any ownership of land, this groups derives its sustenance from selling labor either as permanent farm servant (sometimes as an inter generational bonded labor) or as a casual labor, or migrate out into agriculture works in neighboring villages or migrate to the urban areas as manual workers in the informal sector. Depending on the structure of the economy in which they operate, they become cultivators by leasing in land. But basically they are the suppliers of labor.
The structure of agriculture as revealed by the table 4, sends mixed signals. If one goes by classical peasant differentiation model, the rich peasantry should have a dominating influence on agriculture. However, that does not seem to be the case in A.P. They form only 4.45 percent of the total households with an area owned of nearly 17 percent of the total owned land. In contrast, the NCPH have a slightly higher percentage of households and also a higher share in the land owned. The predominance of poor peasantry and agricultural labour households is visible, with 71 percent of the households belonging to this category. In terms of land ownership also, it is the poor peasantry who have a dominant share of 32.20 percent of the total owned land. If one looks at the land operated, it is the poor peasantry and middle peasantry who have increased their share of land operated. Together, they operate nearly 70 percent of the operated land. The rich peasantry only marginally increased their share in the operated land. In other words, in the lease market also, the role of rich peasantry is not substantial while substantial extent of land is by poor peasants and middle peasants.
Table 4: Distribution of Households and Land Owned Across Class Groups

Number of HH

Area owned

(In acres)

Agricultural Labourer (AGL) 490 (28.32) 44.13 (1.15)
Poor Peasants (PP) 746 (43.12) 1340.49 (35.20)
Middle Peasants (MP) 322 (18.61) 1028 (27.01)
Rich Peasants (RP) 77 (4.45) 646.50 (16.98)
Non-cultivating “peasant’ households (NCPH) 95 (5.49) 746.20 (19.60)
Total 1730(100) 3805.85 (100)
Note: Figures in brackets are proportion to totals
Source: survey data
Tenancy is important in the surveyed villages. The total leased in land is 675 acres (table 5), which is 16.66 percent of the total operated land. If one takes the lease out land, it is 429 acres forming 11.27 percent of the total owned land.
The difference between the extent of land leased in and leased out can be attributed to non-resident households owning land in the villages. These segments of non-resident households were not covered by the survey. The villages witnessing the highest extent of land under tenancy are the irrigated paddy growing districts of the delta region. The two villages in the delta region constituting nearly 45 percent of the leased in transactions and also the total leased in area. The distribution of leased in and leased out area is presented in table 5. While the NCPH are the only net suppliers of land in the lease market, the poor peasants and middle peasants are the net demanders of land in the lease market. While all classes participate in the leasing in and out, the predominance in the leasing in operation are the poor peasants with 50 percent of the land leased in. On the leasing outside, the predominance is of the NCPH with 78 percent of the land leased out.
Table 5: Distribution of Area Leased in and Leased out Across Classes.
Leasing in Leasing out Net lease in area*
No of


Area leased in

(in acres)

No of


Area leased

out (in acres)

AGL 6 (2.18) 11.5 (1.70) 7 (5.73) 6.5 (1.51) +5.5
PP 163 (59.27) 339.15 (50.23) 31(25.40) 36.74 (8.56) +302.75
MP 82 (29.81) 191.50 (28.35) 7 (5.73) 29.70 (6.92) +161.8
RP 21 (7.63) 99.5 (14.73) 5 (4.09) 23.00 (5.36) +76.5
NCPH 3 (1.09) 33.5 (4.96) 72 (59.01) 332.90 (77.62) -299.4
Total 275 (100) 675.1(100) 122 (100) 428.84 (100) +246.26
Note: 1. *Net leased in area is defined as (Area leased in – area leased out)
2. Figures in brackets are proportion to totals; Source: survey data
There is another feature worth mentioning (table 6). The survey recorded 605 families that do not own any land, who normally should have recorded as agricultural labour households. However, 115 of 605 households i.e., 19 percent of the households lease in land and operate as pure tenant cultivators. 77.39 percent of pure tenant households are poor peasant households. Another 16.52 percent of the pure tenants are middle peasants while 1.73 percent are rich peasants. The amount of land operated under pure tenancy by poor peasant works out to nearly 70 percent. In the two delta villages, 52.68 percent of the households do not own any land. Among the non land owning households, 38.85 percent of the households operate as pure tenant cultivators and most of them are poor peasants. The non-land owning potential agricultural labour households join the production structure as pure tenants, a path the households choose to hedge against uncertainties in income.
Table 6: Distribution of Area Leased in by Pure and Mixed Tenants Across Classes
Pure tenants
No Area (in acres)
AGL 5 (4.34) 10.50(3.98)
PP 89 (77.39) 183.65(69.69)
MP 19 (16.52) 61.80(23.45)
RP 2 (1.73) 7.50(2.84)
NCPH 0.0(0.0)
Total 115 (100) 263.50(100)
Note: Figures in brackets are proportion to totals ; Source: survey data
Thus the agricultural structure of A.P presents the two segments outside the production structure but playing a dominant role in the production structure. The NCPH with their command over land and the landless labour households with command over labour, through the operation of lease market, play an important role with in the production structure. If one sees the dynamics of the system, given that the rich peasants do not have a leading role, the NCPH possibly assumes the lead role. The survey has fragmentary data on the land market for a period of five years. The data is presented in table 7. Assuming that the data is reasonably representative, the area sold is more than the area purchased. While 175 acres are sold, the purchases are only 106 acres. It may not be far fetched if one presumes that the difference between the sales and purchase is accounted by non-resident households. If one takes the net purchases, all classes record a negative net purchase, while NCPH records a positive net purchase i.e., during the five-year period, it is the NCPH, which are accumulating additional land while other classes have land alienation.
If one looks at the dynamic aspects, NCPH are increasing their importance in the rural economy with their interaction in the land market. In the surveyed villages, area of land sold is greater than the area purchased11. Excluding agricultural labour household in all classes, one is witnessing sale transactions with the middle peasants being the main seller of land followed by NCPH.
The major purchases of land continue to be NCPH and they have purchased nearly 50 percent of the land transacted in the market (table 7). The NCPH are the net purchases of land while all the rest of the classes are net seller of the land.
In other words, the market as a process, is facilitating land transfer to the NCPH from the cultivating households.
Table 7: Distribution of Land Transacted in Land Market Across Classes
Sale Purchase
Net purchase

(area purchased – area sold)

No of



(in acres)

No of



(in acres)

PP 41(37.27)


24 (38.70)


MP 44(40.00)


24 (38.70)


RP 14 (12.72)


3 (4.83) 6.4 (6.03) -17.08
NCPH 11 (11.00)




Total 110 (100) 174.95 (100) 62 (100) 105.99 (100) -68.96
Note: 1. Net purchase = Area purchased – area sold
  1. Figures in brackets are proportion to totals; Source: survey data


3.3 How can we explain this change?

In the emerging rural structure, there are three aspects that deserve attention while discussing agrarian crisis. The first and foremost is the relatively fast decline in the proportion of cultivators. The second aspect is the more or less stable proportion of agricultural labour households. The third aspect of the changing agrarian structure is the increase in the non-cultivating peasant households.
There can be three possible ways in explaining the decreasing importance of cultivators.
The first is based on classical peasant differentiation. During periods of transition from feudalism to capitalism, the rising capitalist economy, both in industry and agriculture in sufficiently long run, generates rich peasant/ capitalist farmers who is accumulating land. A consequence of this is the reduction in the number of production units i.e., cultivators. The growth in the capitalist economy draws the agricultural labour into industry as industrial work force. This process constantly increases the level of urbanization and a decline in the rural population. Much of the debate on the modes of production in agriculture carried out in the late 1960’s and early 1970’s was directed to analyse the generation and stability of capitalist farmer/capitalism in agriculture. The debate became inconclusive and an opinion emerged that the classical differentiation model is inoperative in the Indian context and the peasant differentiation is a frozen phenomena. The constancy in the agricultural labour population is not accompanied with a concentration of land with rich peasants. The enormous literature on the dominance of small farmers in the production structure also makes the peasant differentiation argument invalid.
The second explanation can be termed an absolute distress hypothesis. The frequently quoted suicide deaths of farmers across the country and distress migration from places like Kalahandi, Mahaboobnagar are seen as evidence for this hypothesis. Absolute distress can be due to secular decline in the profitability of agriculture, otherwise interpreted as a crisis in expanded reproduction or due to the sector facing problems of losses or a crisis in simple production. The process generating distress condition can be uncontrolled natural uncertainties, as it happened in Andhra Pradesh with five to six years of successive droughts or due to uncontrolled uncertainties generated by market interactions. These are the twin factors causing an absolute crisis for the cultivators leading to migration out of agriculture. This explanation is also untenable as the decline is sharpest in the cultivators and not in agricultural labour households, who are also dependent on agriculture.
A third explanation is a relative distress hypothesis. This explanation rests on a suggestion of the existence of certain non-farm sectors in the economy, which provide higher rates of return for investment, higher compared to agricultural sector. Such sectors are a result of already achieved high growth in agriculture or sectors that get generated with increased levels of urbanization/industrialization. The possibility of investment other than agriculture can lead to a possible occupational shift to cultivators.
The presence and increasing importance of non-cultivating peasant households with substantial interest on land indicates such a possibility and also indicates a contradiction. The contradiction is that the cultivator chooses non-farm activities while retaining interest on land. This can be explained by the higher levels of uncertainties in returns to the investment in the non- farm sector. Higher returns with a higher uncertainty in the non-farm sector investment compared to lower level of returns and lower uncertainty in the agriculture influences the portfolio choice of the cultivator.
The cultivators diversify but continue to own land. This possibly is the source of generating the non-cultivating peasant households who chooses a mix of higher returns in the non-farm sector and a lower risk in the farm sector. The certain income of NCPH in the farm activity is made possible by the demand for land existing within agricultural sector particularly from the agricultural labour households.
The land hunger of these households and the need to hedge against the uncertainties of living makes the land lease market a very active market. In all possibility, since the demand for land is reasonably high from this segment, the rent is also likely to be high making sure that the income of NCPH from agriculture is not unreasonable. This explains the decline in cultivators and the concomitant increase in NCPH and stable proportion of agricultural labour households. The relative distress hypothesis, if reasonably true, calls for a different approach for solving the agrarian crisis. The viability question is to be addressed as a viability of owner operated/rich peasant. On the other hand, tenant operated system seems to be viable and the structure is moving towards a tenant operated system. This restructuring of agriculture needs greater research for a purposeful policy orientation to solve the agrarian crisis.
From the above discussion, very briefly, the following conclusions seem to emerge.

1) Indian Economy, a developing economy, can be better comprehended if classified as a semi-feudal semi-colonial system.

2) In such a context, anti-feudal struggles are the only permanent solution for social transformation. In some special instances anti-imperialist struggles become the focus for a short period but they offer a temporary reprieve.
3) Non-cultivating peasant households with corresponding tenancy relations with agricultural labour and poor peasants are the main stumbling block for transformation of the Indian society.

4) Developmental path must be chosen in such a way that it focuses on the perspective of “surplus” people.
Recently in February 2011, as one of the mediators between Orissa government and Naxalites regarding the release of the kidnapped Collector Vineel Krishna and deputy engineer Pabitra Majhi, Rao communicated with Naveen Patnaik, the Chief Minister of Orissa, his views about development, i.e., social transformation, in the following manner- “In order to develop the state of Orissa, it would be important to locate the tribal people of Orissa at the centre stage and formulate developmental strategies in such a way that they develop, which in turn will develop Orissa”.
References of this part 
8) Directorate of Economics and Statistics (2006): “Statistical Abstract of Andhra Pradesh – 2006”
9 ) Directorate of Economics and Statistics (2006): “Statistical Abstract of Andhra Pradesh – 2006”
10) Rao R S and M. Bharathi (2003): Comprehensive Study on Land and Poverty in Andhra Pradesh: a preliminary report, a report submitted to SERP, Hyderabad.
11) The explanation given for the difference between the extent of leasing out and leasing in land is also applicable here.

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