Agricultural Production Performance on Small Farm Holdings: Some Empirical Evidences from Bihar, India

Abstract

Immediately after the green revolution period, there was an intense debate on the observed inverse relationship between farm size and per hectare agricultural productivity in India. It was subsequently argued that the higher productivity of small holdings would disappear with the adoption of superior technology, modernisation and growth in general. Recently, National Sample Survey data show that small holdings in Indian agriculture still exhibit a higher productivity than large holdings. This article contributes to the limited literature on farm size and productivity in small land holder's agriculture in Bihar, India. Plot wise panel data of VDSA project are used to reach at precise conclusion. The results provide evidence for a positive relationship between farm size and productivity in case of small land holders’ agriculture and hence, an inverse relationship does not seem to apply within small landholders’ agriculture. A strong positive relationship between farm size and output per hectare is a result of higher use of fertilizer, modern seeds and irrigation sources on comparatively larger land holders than small land holders in Bihar, India. It is mainly due to more uneconomic land holdings of sub-marginal and marginal farmers to have limited access to water resources, quality input and credit. Access to resources and technology must be considered together for any agricultural development programmes for small land holder's agriculture. It is therefore needed to look for ways of improving their access to resources for farming through increased opportunities for earning off farms and off season income or through improved credit market. Hence, small size and land fragmentation are key bottlenecks for the growth of agriculture in Bihar, India. The crop productivity of tiny landholders can be increased through improving their access to institutional financing system, agricultural extension network and farm technology centres. However, promotion of non-farm rural employment seems to be the most appropriate option for increasing crop productivity and improving livelihoods of small landholders in Bihar.