Nature of Farm Holding
· Small scale Vs large scale farming.
· Problems of sub division and fragmentation of land holding.
· System of land management.
· Land tenure system.
· A key component of institutional change.
· Justification of land reform.
3. Farm size and productivity
The agriculture sector even today generates 38% of the total GDP and provides employment for more than 71% of the labor force of Nepal. There is a debate over what should be the appropriate size of farms, because the size of the operating units as in the case of manufacturing industries decisively affects the income from agriculture. There are economist and farmer who advocate large scale farming for efficient operations a satisfactory income to the farm family and food to the consumer at reasonable price. But on the other hand some social person strongly advocates small size farming on ground of social justice. Poverty in agriculture in most of the third countries is as much a problem of farm size as of any single factor. The great majority of farm families in these under developed countries with low incomes live on under sized and inadequate units. The amount of income is depending on the size of the farm, predominant of small and tiny holding is mainly responsible for peasantry in these countries. there are no cost advantage or disadvantages for farm of various sizes, large size farming would yield the best results to the farmers and small farm will have under usual price relationship, low incomes and saving than large farms, so the size of farm is vital element in determining the earning capacity of the farmers as well as the efficiency of farm unit.
3.1 Farm holding/ Agriculture holding
Agriculture is the major economic sector of Nepal, this sector take 38% of the GDP of Nepal. although this sector occupies one fifth of the total land are of a country Farm Holding is an economic unit of agricultural production under single management comprising all livestock and poultry kept and all land used wholly or partly for agricultural production purposes without regard to title, legal form or size.
Agricultural holdings are grouped into two categories:
1. Land holding, and
2. Holding with no land
1. Land holding- Land
2. Holding with no land- Holding with no land are those with two or more cattle (livestock and poultry birds) and operating less than 0.013 hectares of land for agricultural purposes...
3.2 Small scale vs. large scale farming
There is a vital question in farming system. Should farming be done on a larger or smaller scale? As in manufacturing industries, in agriculture, we have some advantages of large scale farming. Large sized farms are more economical in working and conducive to greater efficiency than the small sized farms. It is because all technical advantage open to small farms are also open to large farms but all advantages open to large sized farms are not open to small farms. It is claimed that large farms enjoys economies of production, managements, finance and marketing, which will help in reducing the cost of the farm product and increasing its efficiency. The large sized farm takes advantages from production economies as follows:
· Use of updated and most automatic machines.
· Division of labor and labor specialization.
· Better utilization of by products.
· Facilities of repair and maintenance.
· Benefit of research.
· Discount and rebates.
· Easily get credit.
As the farm size increases beyond a certain size, the difficulties of supervision and organization decrease the efficiency of large farm. The size will be so large relative to the managerial input or ability that cost per unit increases. Technical advantage of large scale production in manufacturing as well as in farming are pronounced where the work is done with expensive large machines and with a large staff of workers. Most operation in efficient farming as we know , require intimate care with living animals small farming is more intensive than large scale farming. In Nepalese context a majority of the agricultural households depends upon small farm size for cultivation. There are 45% of small farmer operating less than 0.5 ha of land and 8% large farmers operating 2 ha and more land. There is an uneven distribution of the agricultural land in the country. Small farmers operate only 13% of the total agricultural land while 31% of the total agricultural land is operated by large farmers.
3.2.2 Relationship between size and productivity
The productive will be reduced if the size of operating units is reduced. There is highly positive relationship between the size of farm and agricultural productivity. As the farm size expands gross output per unit declines. The opponents of land reforms argue that agricultural productivity will be reduced if the size of operating units is reduced through redistribution measures. This is based on the assumption of a highly positive relationship between the size of the farm operation and agricultural productivity, which is by no means an established fact. The assumption is based on the misinterpretation of the existence of economies of scale in the western agriculture especially American farm management studies.
A general explanation of the inverse relationship between farm size and productive was offered in terms of low opportunity cost of family labor in a labor surplus economy and the resultants variations in the input of human labor over different size classes of farms which range from essentially family labor based small farms to large farms employing relatively a greater proportion of wage labor.
A.K.Sen has presented this explanation with the help of the following diagram:
In the diagram, the curve MP represents the scheduled of net marginal product of labor applied to a given area of land. if cultivation is family based, and if the per area supply of labor in the family equal or exceeds OP, we can expect that OP amount of labor will be applied, provided labor has no outside opportunity of employment and there is no significant disutility of work in the relevant range of effort. if the wage rate is OW a wage based farm will restrict labor input to OC i.e. up to the point where marginal productivity becomes equal to the wages paid to labor. Hence, we find that labor land ratio is higher on small farms as compared to large farms. This greater intensity of labor use keep the productivity of small farms higher than the large farms.
3.2.3 Land distribution in Nepal
Most of the land holdings in Nepal
1. There are 45% of small farmers (operating less than 0.5 hectares of land)
2. There are 8% large farmers (operating 2 hectares and more land)
3. There are 47% middle level farmers (operating 0.5 hectares -2.0 hectares of land)
Similarly, there is an uneven distribution of the agriculture land in the country. The 45% small farmers operate only 13% of total agricultural land while 31% of the land is operated by 8% large farmers. There are more number of small farmers in the hills than in the mountains and the terai.
Land fragmentation problem is mounting due to family breaking as the alternative employment in non-agriculture sector is growing very slowly. The problem is generally found under 0.5 hectares and in between 0.5 ha to 2.0 hectares parcels of land. The number of parcels in total operated area by a household gives an indication of land fragmentation. There is an average of 3.1 parcels per agricultural land area operated.
- Fragmentation is more pronounced in western parts of the country.
- Amongst geographical regions, fragmentation is highest in the Mountains and lowest in the in the Terai region.
-In rural areas, fragmentation is lower in the east terai compared with other parts of the country.
3.2.5 Small Scale farming
It comprises small and middle level farmers, who hold less than 2 hectares of land to cultivate in an agricultural year. Large family size (agricultural household) and subsistence earning by small farm size always creates poverty, underemployment and disguised unemployment in small scale farming. Similarly, it is the root cause for the everlasting traditional farming in Nepalese agricultural sector.
Characteristics of small scale farming:
· Low level of output by applying higher level of inputs.
· Difficult for commercialization in agriculture.
· Difficult to apply modern methods of production specially advanced machineries, chemical fertilizers and pesticides in right proportion.
· It yields comparatively low crop production in comparison to higher cost of production.
Advantage of small scale farming
§ Environment friendly.
§ Self dependent and self respect
§ Low cost and affordable.
§ Low consumption of electricity.
§ Labor intensive oriented.
§ Small size.
§ Use of local resources, skill and technology.
Disadvantage of small scale farming.
§ Difficult to get discount.
§ Less employment generation.
§ Only for sustenance.
§ Lack of market channel.
§ Difficult to get farming credit.
3.2.6 Large scale farming
Those who cultivate more than 2 hectares of land in an agriculture year are included in the large scale farming categories. In Nepal
Characteristics of large scale farming:
· Large scale farming is suitable for commercial agriculture
· Comparatively low production cost and higher productivity
· Suitable for applying advanced agricultural machineries, chemical fertilizers and pesticides.
· It yields more output in comparison to lower level of input.
Advantages of large scale farming.
§ Employment creation.
§ Easy credit system.
§ Extensive relation.
§ Local manpower and resources use.
§ Tax fixation.
§ Large size in production.
§ Capital intensive.
§ Low production cost.
Dis advantage of large scale farming.
§ Environment hazard.
§ Profit oriented.
§ Labor exploitation.
§ Difficult to repair machine.
§ Difficult to run.
§ Long guestations period.
Difference between large scale farming and small scale farming.
| Large scale farming | Small scale farming |
| § Extensive farming § High cost and repairing. § Environment hazard. § Capital intensive § Discounts and rebates § Employment creation § Potentiality of high exploitation of labor. § High consumption. § Low production cost. | · Intensive farming. · Low cost and repairing. · Environmental friendly. · Labor intensive. · No discount and rebates. · Less employment creation. · Less exploitation. · High production cost. |
3.3 Problems of sub-division and fragmentation
The division process of land is called fragmentation. The meaning of sub division denotes the division of cropland into various parts. And the process of sub division of land is called fragmentation. According to Sadhu and Singh “fragmentation refers to the manner in which the land held by and an individual or undivided family is scattered through the village in plots separated by and in possession of others.” The small farmers too, dividing for their law full heir. Fragmentation takes place when every successor insists on a share in each portion of the ancestral land. The culture of dividing land property among heir is to give to each heir a proportionate share in all good or bad land. In the result the successive generation turns into common ancestor inherited. The smaller size of land also broken up into smaller and smaller plots and in the other hand the land hold by an individual or undivided family is scattered throughout the village in plots separated by land in possession of other. There are several causes of fragmentation of a land in Nepal
- The law of inheritance.
- Decline of joint family system.
- High population growth rate.
- Lack of industrial development in rural areas.
- Attraction of landed property.
The major problems of sub-division and fragmentation of land are:
· Low productivity
· Problems of mechanization
· Social Problems (due to unemployment and underemployment)
· Mounting pressure on forest resource
· Problem of migration and uncontrolled urbanization
· Rising level of poverty
· Lack of raw materials for agro-based industries
· Underutilization of factors of production
· Difficulties in commercialization in agriculture.
· Agriculture resists UN limited supply of labor which causes disguised unemployment.
3.4 Land management system
The term land management comprises of two words land and management. A land basically includes all the land on which some agriculture operations are performed and use of other purpose by a person. Management on the other hand means the act or art of managing. In the land management the farm management is a vital thing. The management of farm can be defined as a process of managing the farming activities for accomplishment of the given objective of the farmers.
Land is widely accepted as the primary means of increasing productivity and a major asset in our social and economic set up. The task of land utilization and management has to be taken ahead in a sustainable manner to ensure multifaceted and dynamic development based on the physical nature of soil and other factors like texture, capacity and quality steps need to be initiated to ensure the efficient management of the new land ceilings that have been announced while there is an equal degree of urgency to make available the remaining land to the marginalized section of the society with the view to alleviate poverty.
3.5 Importance of land management system
The land management system has greater importance as an institutional base of agricultural development. The government is trying to find out better solution regarding the problems of land management. For this purpose the following activities are being practiced.
- Preparing topographic maps
- Availability of information & statistics
- Development of land utilization policy
- Land management services
- Arranging for the proper rehabilitation of the freed bonded labors & landless peasants
- Protection of land ownership and increasing the Acers of the real agricultural laborers to farmland
- Control of land fragmentation
- Management for land pooling etc.
Such effort from the side of government and other related institutions would make the investment in agriculture very effective and thereby increase productivity and contribute to sustainable economic growth.
3.6 Measurement system of land in Nepal
There are different land measurement systems in the different parts of the country. It differs from place to place. Though the government has determined the certain measurement system in topographic surveys, many traditional pattern of measurement are still used in practical life.
Some of the major land measurement systems in Nepal
1. Bigaha System
In the terai region of the country, the Bigaha system of land measurement is in practice.
According to this system,
16 Kanwa = 1 Dhur (182.25 sq. ft.)
20 Dhur = 1 Kattha (3645 sq. ft.)
20 Kattha = 1 Bigaha (72,900 sq. ft.)
2. Ropani System
In the mountain region and in Kathmandu valley, the Ropani system of land measurement is in practice.
According to this system,
4 Daam = 1 Paisa
4 Paisa = 1 Aana
16 Aana = 1 Ropani (5,185 sq. ft.)
3. Muri system
This is an ancient system of measurement. It was used in the country prior to the Bigaha and Ropani systems were come into practice.
According to this system,
10 Chimti = 1 Muthi
10 Muthi = 1 Mana
8 Mana = 1 Pathi
20 Pathi = 1 Muri
4. Khet System
According to this system,
1 Muri Soil = 1369 sq. ft. (37 ft.X 37 ft.)
4 Muri Soil = 1 Ropani land
25 Ropani land = 1 Khet
5. Hale System
According to this system, land area ploughed by an ox in a day is categorized as 1 Hale area. It is used in the remote villages where the modern measurement technique is still unavailable.
6. Bijan System
Land area is categorized in the basis of amount of seeds (bijan) needed for the production of major crops.
7. Land measurement in the basis of its quality
Land is also categorized in the basis of quality and productivity. In the practical life, people differentiate lands by analyzing their input- output ratio, fertility of soil, availability of irrigation etc.
According to this system, there are 4 types of land:
1. Abbal land- Highest quality of land which has higher productivity
2. Doyam land – Comparatively lower quality of land which has lower productivity
3. Sim land – Land covered with water in all seasons and yield low level of production
4. Chahar land – This kind of land is not appropriate for production i.e. barren land.
3.5 Land tenure system
Land tenure system in Nepal has long rooted history. The pattern of land tenure that crystallized by pre-unification and post unification is based on traditional ideas. It is being practiced without any change since ancient time. The existing land tenure system in Nepal
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Land Tenure System in Nepal
Raikar
-Peasants cultivated the land owned by state in their capacity and made directly payments to the state.
Birta/Guthi
-State granted Raikar lands to individuals or to the temples and monasteries.
Birta- beneficiaries are individuals
Guthi- beneficiaries are temples/monasteries/ or their holy persons.
There are 3 types of Guthi:
i) Raj Guthi ii)Darta Guthi iii) Duniya Guthi
Sera
Sera
-Raikar lands which are appropriated by the crown or meeting the food grains requirements of the royal palace.
Kipat
-Land owned by a number of indigenous ethnic groups (eastern and western hilly region) on a communal basis without any legal title.
Jagir
-Land assigned to the members of nobility as well as civil and military employees for services rendered to state.
Thus, the whole fiscal burden rested on non-privileged classes such as peasants, workers, craftsmen and small traders.
3.6 Land Reform
The concept of Land reforms has been used with different meanings and is open to a large number of interpretations. In view of the diversities existing in different countries of the world as between agrarian structures, political and social aspects, historical conditions and economic objectives and national priorities, it is difficult to adopt a universally acceptable definition of the term land reform so as to cover the common elements of the diverse phenomena. Some have defined it very broadly to include all policies relating to transformation of the agrarian economy. UN in its third report on the progress of land reform has talked of land reforms as “an integrated program of measures designed to eliminate obstacle to economic and social development arising out of defects in the agrarian structure.” In these way land reforms is equalwith a total program of agrarian development including modification in rural credit, land division, land taxation, marketing facilities, cooperative organization, agricultural education and advisory services. In the traditional sense of terms it has been used in a restricted sense signifying acquisition and redistribution of land and change in the pattern of land ownership. In the narrow sense land reform means the redistribution of property or rights in land for the benefit of small farmers and agriculture laborers. In Nepalese context the scope of land reform can listed in the following points;
· Tenants reforms which include: regulation of rent, security of tenure for tenants, and conferment of ownership on them.
· Ceiling on land holding.
· Organization of cooperative farms.
· Abolition of intermediaries.
· Agrarian reorganization including consolidation of holdings and prevention of sub division and fragmentation.
· Adoption of modern techniques/skills
· Integration of agricultural programs
· Justice, equity and ownership right in land holding etc.
3.7 Practice of land reform in Nepal
1. Investigation Commission 2009 B.S.
2. Tenancy Right Acquisition Act 1952
3. Land Reform Commission 1952
4. Royal Announcement of 1955
5. Land Act 1957
6. Birta Abolition Act 1959
7. Royal Land
8. Agricultural Re-organisation Act 1963
9. Land Act 1964
10. Agriculture Prospective Plan (APP) 1995
11. Kamaiya Abolition Declaration 2000
12. Fourth Ammendment of Land Act 2053 B.S.
3.8 Challenges of land reform:
Without a far-reaching reform of the laws relating to the land ownership and tenancy rights, the actual tillers of the soil cannot be made to feel that they have a personal stake in the management and improvement of the land. Unless they acquire that kind of feeling, they will not make the best use of their labor to raise the productivity of their land. As Gunnar Myrdal has pointed out “what is broadly referred to as the problem of land reform or agrarian reform tenancy reform included, has been attacked in order to create a situation where the labor force has the opportunities and feels the incentives, to exert itself very much more”. (Asian Drama) Land and tenancy reforms are the most important prerequisite for the growth of agricultural production. The land reform including the ceiling of land-holding introduced in Nepal
Despite several commitments made and measures taken, agriculture in Nepal remains poorly rewarding. The reasons around are: not much of cultivated lands, unequal distribution and primitive farming techniques applied by most farmers. A dire need is felt to revolutionize farming so as to boost country’s economy.
3.9 Social and economic implications of Land Reform Act 1964
The land reform Act 1964 and its amendments so far constitute the current land reform program in Nepal. The land Act 1964 and its amendments are based on considerations of basic institutional requirements for accelerating the pace of economic development in the country. Major objectives of current land reform program are:
-To shift inactive capital and population from land to other economic sectors.
-To justly distribute cultivable land
-To make agricultural information and equipment easily available to improve the conditions of land dependent peasants.
-To stimulate substantial increase in agricultural production.
3.10 Main features of Land Reform Act 1964:
- Celling on land holding.
- Redistribution of land.
- Compulsory saving schems.
- Tenancy right.regulation of agriculture debt and abolish feudalism trend.
- Jimindari abolition.
1. Ceiling on holding- The current land reform program prescribes on holdings per individual or family at 25 bighas in terai, 50 ropanies in Kathmandu valley and 80 ropanies in the hills. In case of tenancy, this ceiling is 4 bighas in terai, 10 ropanies in Kathmandu valley and 20 ropanies in hills.
–Some additional land was also attributed for residential purpose in all those areas..
2. Rent ceiling :-The 1964 Act reinforced fifty percent ceiling on rent. Land owners are not entitled to appropriate more than 50 percent annual production from tenants.
3. Tenancy security:- Current land reform program confers tenure security on all tenants cultivating land on the date of commencement of the program. Secure tenants who obtain cannot be evicted on arbitrary grounds. Those so-called tenants who obtain land from land owners and engage others in actual cultivation cannot claim tenancy rights.
4. Redistribution of land:-Surplus land thus acquired is redistributed on accordance with prioritization. Tenants of land concerned are accorded top priority. Neighboring farmers are given second priority on other farmers and the area given third priority.
5. Compulsory saving:-Compulsory were collected from landowners tenants at fixed rates in case of cash crops and in kind for food crops. Compulsory savings thus collected were repayable after five years with interest at the rate of 5 percent per annum. But, this scheme had to be abandoned subsequently because of administrative difficulties.
6. Jimindari abolition:-Jimindari system has been abolished and jimidari holdings have been registered as taxable land under individual ownership. Land revenue collecting functions of jimidari have been entrusted to concerned government authorities.
Importance of land reform
- For agriculture development.
- Socio-economic change.
- Motivation of the people.
- Increase in income.
- Equal access of land distribution.
- Extra employment opportunity.
- Sentiment feeling.
- End of discrimination.
- Re-construction of rural social imbalance.
3.11 Justification of land reform for agricultural productivity and social leveling
It is agreed in a country when there is unequal distribution of land but where land is again the major source of wealth and income and the principal symbol of power, agrarian reform can be the indispensable strategy of equitable development. According to Phillip M. Raup, “Land reform is the modification of land tenure, supported by complementary policies designed to achieve three objectives of:
-Social justice
-Political health and
-Agricultural productivity”
Though some writers define land reform in the specific sense meaning the redistribution of property in land for the benefit of small farmers and agricultural workers; agricultural reform for many others has many far-reaching significance. Egalitarian aspect of land reform is more emphasized by Keith Griffin who says, “Land reform is an indispensable part of institutional reform generally to bring about a more egalitarian development of agriculture. Unless equitable distribution of land takes place, there is no way in which political situation will alter so as to bring about an egalitarian change.”
Critical Area
The following major issues plague Nepalese land reform program. These are the problems that paralyze the social leveling.
1. Despite the hege political slogans only 32 thousand hectares of land (about 1.2 percent of the total agricultural land) was available from the holding exceeding the legal limit.
2. Land owners through legal loopholes and other measures evicted the tenants.
Statistical Summary
| | Agricultural Census | ||
| 1961 | 1971 | 1981 | |
| Percentage of tenants | 40.37 | 18.94 | 8.15 |
| Land under tenancy | 25.48 | 15.76 | 4.46 |
The above statistical summary reveals that percentage of tenants and land under tenancy has been falling down sharply in every agricultural census. But, the reality is different, informal tenants are in substantial numbers. They are 21 percent in hill and 39 percent in the terai (IDS, 1986).
3. About one hectare of land is needed for a family of 6 members to maintain a tolerable living (IDS, 1986). But, it is not an attractive option and is likely to distribute mainly the poverty. In Nepalese context, one way among other alternatives for the distribution of the access to the resource for poor is better than the redistribution of agricultural land. For example, providing forest potential areas in leasehold for forest development because Nepal
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