Landholding, Agricultural Modernization, and Local Institutions in India

Abstract

India's experience with the green revolution offers fertile ground for examining current paradigms for understanding social change in the developing world. The changes produced during the decade 1960-70 were dramatic but unsettling. Even in those areas where agricultural production and income rose most rapidly in response to the new varieties of wheat and rice, such as Punjab State, it appeared that India could not reverse the trend toward greater poverty. Many have argued that, in fact, the data indicate that the rapid agricultural change associated with the green revolution increased inequalities in Punjab. I shall explore this argument and the evidence supporting it below, but the analysis presented here suggests that the sources of growing rural inequality in Punjab are quite independent of the newly introduced technology. The case against the green revolution on equity grounds does not appear to be substantiated by the data. One of the difficulties in establishing a causal model of events in Punjab during the sixties is the role of rural institutions--cooperatives, credit banks, agricultural departments, and so on-in the development process. The control of essentially nonmarket institutions over major inputs into production (credit, water, fertilizer, seed) makes standard economic analysis difficult and questionable. Many key decisions are made by administrators and village-level political elites according to criteria which appear to produce results quite at variance from those one might expect from farmer choices in a market situation. Conversely, attempts by political scientists to explain the distribution of benefits from these same rural institutions produce analyses which do not seem to be consistent with the actual distribution of the benefits of the green revolution technology. Although the better-off farmers appear to control the cooperatives, this has not necessarily meant that access to their benefits is restricted to the rich in Punjab, nor can varying access to the cooperatives explain the differences in