Agricultural Tenancy in India: Growth Promoting or Growth Retarding

Tenancy is gaining significance in Indian agriculture in recent times. It takes the form of fixed rent in the areas of assured irrigation and sharecropping in the areas of uncertain irrigation and low cropping intensity. With high use df purchased inputs like chemical fertilizers and pesticides, the importance of tenancy declined in rain-fed agriculture. There is no evidence of inter-linked transactions of land, labour and credit in the areas studied in Andhro Pradesh. On the other hand, tenancy leads to increase in labour use, cultivation of high valued crops, high participation of family labour and development of non-farm activities like dairying. Though tenancy agreements are oral and for short period, there is no frequent change of tenants. However, legalizing tenancy confers certain benefits to the tenants like access to the credit and insurance markets and removes imperfections in the land markets like choosing the tenant on the basis of caste.