Colonial Context of Agriculture in India

 

Colonial Context of Agriculture in India

 Gaurang Sahay

 

The discourses on the pre-colonial Indian agrarian structure are quite homogenous in terms of the ideas and lessons that they provide. The main concepts which were developed and used to understand the pre-colonial Indian agrarian structure are: 1. Oriental Despotism, 2. Asiatic Mode of Production, and 3. Prebendal Patrimonialism. The conceps are more or less similar to each other in terms of their contents and meanings. They bring out following features of the pre-colonial Indian agrarian structure:

  Agrarian structure during the pre-colonial era

1. Absence of private property in land

2. Possession and use of land on communal basis

3. State or king as the absolute owner of land

4. Torrid climatic environment

5. State controlled irrigation or public hydraulic works

6. Division of agrarian society into self-sufficient, autonomous and isolated village communities or village as idyllic little republics

7. All kinds of relationships organized around the institution of caste or, to put in different words, caste system as the basis of self-sustaining and self-producing Indian village communities

8. Surplus labour as tribute to the despotic king

9. Absence of classes leading to servile social equality

10. Absence of hereditary nobility

11. General slavery or exploitation of the people directly by the despotic state or king without any relationship of dependence and exchange at the lower levels and juridical restraints

These structural features made Indian society, which was overwhelmingly agrarian, ever static and historyless. Marx writes, 'Indian society has no history at all, at least no known history. What we call its history is but the history of the successive invaders who founded empires on the passive basis of that unresisting and unchanging society.'

Colonial Ethnographers and British administrators-cum-sociologists such as Baden Powell, Henry Maine and Charles Metcalfe followed both in words and spirits such an orientalist understanding of Indian social formation and its agrarian structure. To quote Metcalfe, 'The village communities are little republics, having nearly everything they want within themselves, and almost independent of foreing relations. They seem to last where nothing else lasts. Dynasty after dynasty tumbles down, revolution succeeds revolution; Hindu, pathan, Mughal, Maharatta, Sikh, English are masters in turn; but the village communities remain the same.'

When Brtishers came to India to rule over country, they came with such an understanding of society or agrarian structure of India. Accordingly they introduced a number of policies to make agriculture profitable for them or to extract resources from agriculture in India.

The system of taxation

1. The burden of land revenue

To begin with, the Britishers introduced policies to appropriate agricultural produce and surplus through its system of taxation. The colonial state used the system of taxation to secure its basic colonial purposes such as maintenance of the colonial administrative and military structure, unilateral transfer of surplus from the colony to the metropolis, to mobilize funds for its investment in the purchase of Indian goods to sell abroad and to secure a sufficient export of food grains and raw materials in the second.

The land revenue always remained at a very high level, exceeded the rise in the prices of agriculture produce, and was an increasing and significant part of the peasants’ income. Even in the pre-Depression years land revenue was a very high proportion of the net income (it stood around 20 per cent). In the Depression years the land revenue was a crushing burden. During the Depression period the net income of farmers or peasants was negative and land revenue phenomenally added to the net loss. Even in the immediate post-Depression years as well land revenue constituted more than 50 per cent of the net income. It used to either consume almost all surplus or cut into consumption by being larger than surplus. A great number of the landowners were paying the land revenue not from any real net income but by cutting into their consumption, or by borrowing, or by selling out their assets, or by using income from other sources. The system proved extremely harsher and exploitative also because around 60 per cent peasants owned less than 5 acres land and, therefore, used to generate very small income and lived on the edge of subsistence. Land revenue that invariably represented a sizable per cent of the net agricultural income would inevitably cut into their subsistence and leave them dependent on credit for necessary expenditure. Even for those with medium sized holdings of 15 to 20 acres, the land tax would tend to destroy any possibility of savings and leave them dependent on credit for necessary expenditure on life cycle ceremonies like births, deaths and marriages. The system of taxation was extremely harsh that pushed the peasants into indebtedness, and necessitated the process of depeasantisation and commercialization of agriculture.

2. Problems with colonial method of assessment

The colonial method of agricultural production or income assessment for determining land revenue put tenants or self-cultivating peasants in an awfully disadvantageous position because the method ignored the whole issue of costs of cultivation including the minimum subsistence required for the reproduction of the peasant family labour, and took the actual rent paid by the tenant to the landowner as equal to real rent and, thereby, ignored the rack-rent character of the actual rent. Further, the method exaggerated the value of production by estimating it on the average prices of the whole year and not on the actual prices received by the cultivators. It also assumed a level of yield or productivity much higher than the level actually prevailing in the country.

3. The land revenue system and the small holder

The colonial system of land revenue disregarded size of landholding or differentiated character of peasants in India while imposing tax on land or land rent. Therefore, it was a regressive form of taxation because it was heavily weighted against the small-holding peasant. Obviously while a large landowner could afford to pay a large proportion of his income as tax, a small landholder, even assuming that a small-holder got the same income per acre from his land, could not for the reason that his total income used to be very small or could not result into surplus.

Small landholders were not able to obtain the benefits of high prices of agricultural commodities, for they often ended up being net buyers rather than sellers of food because their own production did not meet their consumption of needs. His petty agriculture income ruled out any question of building up reserves for lean years. The land revenue system placed the small-holders in a no-win situation. Generally the small-holders struggled to make their tiny plots yield the utmost. But it did not benefit them because higher yields meant higher rates of land revenue. Enhancements in revenue used to take place at one stroke causing massive problems for small holding peasants. Small-holders constituted a major proportion (around 70 per cent) of the landowners.

This ruinous situation for the peasants was further aggravated by the prevailing canal rate or water rate that was almost equal in amount to land rent, but more unjust. The water rate had no relation to the actual costs incurred in providing irrigation facilities. The water rate was even more inelastic than land revenue because the government was under no obligation to reduce it, no matter how low the prices of agriculture produce. Besides, water rate could be enhanced at any time, there being no fixed period of settlement as in the case of land revenue. The combined demand of land revenue and water rate was not something even the well-to-do peasants could pay with ease even in normal years. That is why there were many reports of peasants refusing to take canal water.

The system proved worse for the tenants who were quite sizable in numbers and used to cultivate nearly half of the total land. In addition to paying the half share of the crop to landowners, tenants also paid as rent to the landlords half the land revenue and water rate. Since the tenants’ income from the tented land was considerably lower than the owner’s income from self cultivated land, even paying half the land and water rent was a considerable burden.

The system was framed in such a way that did not help the peasants maintain his income level in periods of falling prices (Depression years) and, on the other hand denied him the marginal benefits of rising prices. One can say that the continued dependence on land and water revenues as a major source of government revenues as well as the incapability of the huge majority of the landowners and peasants including tenants to put up with the burden associated with rent were nothing but the consequences of the logic of colonial underdevelopment. The Land revenue committees under the chairmanship of Malcom Darling and others was formed from time to time to make a detailed inquiry and recommendations, financial considerations ruled out any radical reduction of agricultural taxation and political considerations ruled out any radical redistribution of the tax.

The Debt-ridden Peasants

Peasants’ inability to pay up the land revenue and water rent implied loss of land – the only factor of production for the vast majority of people in India. Indebtedness was, as a result, often the only way out. Indebtedness was alarmingly at a high stage throughout in the colonial India that led to the massive alienation of land from peasants to moneylenders both through mortgage and outright sale.

The moneylenders managed to marshall debt related policies to their own advantage and made money-lending the most lucrative and preferable practice by charging on debtors by a long way higher interests. The returns from rural money-lending were much higher than returns from instruments in other instruments. Generally the rate of interests varied from 24 to 100 per cent, and loans in grain and kind fetched interests that varied from 50 to 125 per cent per year. The size of the people involved in money-lending and the resources that they commanded was substantial. Village based moneylenders were a very substantial component the group of moneylenders. There was a continuous increase in the rate of agricultural debt. It was positively correlated with the falling down of the agricultural prices that the peasants faced most of the time.

Though the borrower’s position in the rural class hierarchy determined his credit-worthiness, and hence the greater amount of the absolute debt incurred by those higher in the hierarchy. However, this does not in any way mean that the burden of debt was greater on the upper sections of peasantry. Given the lower incomes of the smaller peasant proprietors and tenants, their smaller absolute amount of debt represented a much heavier burden than did the larger absolute amount of debt for the larger proprietors. The same logic would apply to the class of tenants.

Unlike the landlords or upper section of peasantry, the vast majority of other section of peasantry borrowed out of a wide range of needs such as loan for consumption, buying cattle, securing seeds, constructing wells, meeting land revenue and water rate payments, repayment of old rate, and for expenditure on birth, marriage and death. These needs were accentuated during the periods of crisis such as famine or drought and flood, epidemics, crop disease and sudden and sharp variations in prices. Thus, their indebtedness was a forced one, unlike the indebtedness of landlords.

Agriculturist Moneylenders

Indebtedness and the consequent transfer of land to moneylenders became too big an issue to be ignored by the government. The government tried to restrict this process by setting up cooperative and credit societies and by dividing the people into ‘agriculturist’ and ‘non-agriculturist’ tribes, and prohibited the sale of land to ‘non-agriculturists’ or sahukar by the ‘agriculturists’. Agriculturists were defined as those who were members of particular agricultural castes and tribes. They were clearly not just landlords or well-to-do peasants; they were also members of an agricultural caste or tribe who had made good outside the village in government services, in professions, in the army and abroad.

Nonetheless, the policy resulted into further marginalization and exploitation of small peasants and tenants. This policy decision resulted into the phenomenal growth of agriculturist moneylenders, and made them more exacting because there was no limit to their exactions. The sahukars were limited in their exactions to the extent that they did not want the peasants to stop producing because otherwise they could not recover their loans. Unlike sahukars, the agriculturist moneylenders wanted the indebted peasants to be reduced to a state where they would be forced to give up their land. Almost nothing was done to curb the power of the agriculturist moneylenders in their role as a mortgagee.

The cooperative and credit societies which were promoted to alleviate the situation of indebted peasants, in actual fact, were appropriated by the upper section of the peasantry to strengthen their position, but completely failed to alleviate the situation of indebted peasants and tenants.

Commercialization of Agriculture

Commercialization of agricultural in colonial India was principally caused by peasant indebtedness due to exorbitant land and water rent and facilitated by the expansion of railways. Commercialization of agriculture means agricultural production for the market. It standardized and stabilized agricultural prices, which were hitherto characterized by sharp fluctuations from year to year and by wide differences from place to place. The major effect was the steady rise in agricultural prices.

The impact of commercialization of agricultural in colonial India was differential in nature. At one extreme, there were the subsistence and marginal peasants including tenants who were at the receiving end by being forced into the market by various economic pressures such as: land revenue or water rate payments, debt, interest and rent payments, scarcity, famine or low prices. Such economic pressures necessitated sale of produce in the market that led to deficit for consumption and resulted in further indebtedness, interest payments and again sale of produce. Since they were often net buyers rather than sellers of food, high food price were not at all to their advantage. Actually, they often ended up buying back their own food items at higher off-season prices.

Even for the better-off peasants, commercialization of agricultural hardly proved advantageous. Much of their benefits due to an increase in the prices of agricultural produce were outshined by a steep increase in costs of production. At another extreme, there were the landlords and moneylenders who immensely benefited because they did not bear the rising costs of cultivation but only reaped the profits of increasing prices of agricultural produce.

The lure of high profits in the period of high prices often led to a high level of exports of agricultural produce even when the stocks were low due to bad harvests. This led to wiping out of stocks and rise in prices, both of which were highly detrimental to those who had to buy their food in the market, that is, poor peasants and ryots.

The market pressures exerted by the necessity to grow high paying or cash crops also resulted in changes in the cropping pattern. There was a shift from cultivation of low profit but food crops such as jowar and bajara. This caused the diversion of land to cash crops that resulted in a steep rise in the prices of the low cost food grains.

The commercialization also tied peasants or tenants to specific traders or merchant moneylenders through advances made on the condition that they produce specified crops, the price of which was fixed beforehand. It was known as dadan system in Bengal.

The impact was differential in another way as well. Backward regions were drawn into the process of commercialization at a greater disadvantage or lesser advantage because either they were deficit regions or produced smaller surpluses. High prices of agricultural produce benefited them less or at most of the times militated against them when they were the buyers. Small peasants and tenants constituted a much larger section of the peasantry in these regions compared to the more fertile and secure regions, and they because of their revenue and other payment problems entered the market in a forced way and became its victims.

The negative impact of commercialization of agriculture was obviously devastating during the Depression years. The Depression brought about a sudden and heavy fall in prices of agricultural produce that impacted peasants negatively in a massive way. Due to non-reduction in the land revenue and water rate the cost of production did not decline to the same extent and the peasants’ expenditure remained much closer to the old levels. Consequently, the decline in their net income was much sharper than the fall in prices.

The decline in the income of landlords was not as much as in the case of owner-cultivators and tenants because they bore little or none of the expenses of cultivation. The Depression revealed the enormous and unfettered dependence of agriculture on the world economy and its consequent vulnerability of agriculture during colonialism. Apart from big landlords, all other sections of peasantry found their position seriously eroded, their savings wiped out, their capital reduced and their subsistence threatened.

The impact of commercialization of agriculture in India was highly differential in nature. It varied with one’s position in the class structure, from region to region, with the cropping pattern, and at different points of time. For the vast majority of the cultivators, the commercialization assumed a ‘forced’ character, and was negative in impact.

Peasants as Classes

Colonial impact on agrarian structure in India resulted in concentration of land ownership, parcellization of small-holding and the growth of uneconomic holdings, landlordism and tenancy on sharecropping basis at a very rapid rate. The pattern of leasing out and leasing in land in colonial India was typical of agrarian underdevelopment. Mainly large landowners were indulged in leasing out land and they found this practice more profitable than resorting to direct cultivation through hired labour. Small peasants and landless leased in land primarily for optimizing the use of their family labour. Landlords always commanded the situation and forced tenants to shift to kind rent and extra-economic services. A continuous increase in the competition for land on rent deteriorated the terms on which it was available to those who needed it.

Although agricultural labourers constituted a large percentage of agricultural population, the demand of labour was mostly seasonal, being concentrated at the times when agricultural operations reached a high intensity, as at the time of harvesting. Employment of fulltime labourers round the year was only indulged in by very large peasants with very large holdings. Overall agricultural wage labour was integrated into a system of petty commodity production at the traditional low levels of technology and productivity based on the family farm in which family labour remained predominant form of labour.

In colonial India leasing out land was clearly preferred to direct cultivation through wage labour because of the deterioration of the terms of tenancy resulting into greater returns from leased out land relative to direct cultivation with wage labour. That is why even the process of commercialization did not turn share-croppers into agricultural labourers.

The overwhelming majority of cultivators operated holdings that were below the minimum needed for producing a surplus over consumption and essential goods. Unlike leasing out of land and appropriation of surplus through rent, direct cultivation was a relatively minor source of accumulation of capital even for the upper layers of the peasantry.

The other main source of capital accumulation or appropriation of surplus was usury and mortgage debt. That is why there was a continuous and remarkable increase in the usurer and mortgage debt.

In conclusion we may reiterate that while high rents and the consequent low returns for the tenants ruled out any accumulation on the basis of even large scale leasing in of land. Accumulation were possible for big landlords who rented out virtually all their land, for those peasants who had more land than they could cultivate with primary family labour, for those who had extra sources of income and who could then invest their income in usury or mortgage debt or in the purchase of land. Direct cultivation of self owned land was comparatively a minor source of accumulation.

Regardless of the source and nature of capital accumulation, we find that none of the accumulating classes invested in a fashion that would lead to a transformation of agriculture along capitalist lines. In other words, no class or section emerged as the agent for capitalist transformation of agriculture in colonial India. This observation is also corroborated by the data on changes in agricultural productivity. Agricultural productivity remained more or less stagnant with some increases in the non-food crops category particularly in cotton.

Conclusion

The available evidence – on concentration of landownership, increasing tenancy cultivation on deteriorating terms, a comparison of the data for land owned and land operated, an examination of the amount of land operated in surplus producing holdings, the data on areas in which accumulations were being invested, the forms of surplus appropriation or accumulation, and the levels of productivity and capitalist investment – points to the absence of any sustained tendency towards the development of capitalism in agriculture. The vast majority of cultivators were unable – because of their insufficient holdings, the pressure of state taxes, rents and debt, the nature of commercialization, lack of credit, low productivity levels and the like – to generate a surplus for investment. And those who did have the surplus, and did accumulate capital, found that the opportunities for investment were far more attractive in other spheres – trade, money lending, mortgage, land purchase and leasing out. The inability of the majority and the disinclination of the minority to invest in agricultural development were inextricably linked together by the wider structure of colonial underdevelopment, of which they formed an integral part.

Contrary to the supposedly commonsensical understanding, India demonstrated features which could not be easily identified with capitalist development or as its structural initial conditions. In terms of surplus appropriation and production relations, society in India was increasingly throwing up forms which are usually identified as ‘semi-feudal’. In spite of wide variations in tenurial structure, crop patterns, legislative enactments and the like, we find a general tendency towards growth of jotedar-mahajans or agriculturist-moneylender- mortgagees in India. Further there was a strong coincidence between the increasing share of these groups in rural credit and the extension of barga and batai system. The second broad feature that emerges is that there was a common tendency towards stagnation of the productive forces. The classes emerging in these regions were either unwilling or unable to participate in the process of transformation of the productive forces in agriculture. Therefore, extended reproduction which is central to the capitalist system was not happening anywhere in Indian agriculture under colonialism.

Lastly we can say that it is because of the agrarian policies of the British government in India, agriculture in the colonial started exhibiting features typical of colonial underdevelopment such as stagnation of productive forces, emergence of parasite big landlords, intensification of semi-feudal relations, rack-rented and indebted tenants and small peasants, forced commercialization, and lack of capital investment in agriculture.