Ind. Jn. of Agri.Econ.

Vol.64, No.4, Oct.-Dec. 2009

Agrarian Crisis and Depeasantisation in Punjab:

Status of Small/Marginal Farmers Who Left Agriculture
Karam Singh, Sukhpal Singh and H.S. Kingra*

INTRODUCTION

Agriculture in Punjab had high growth for a long time up to early 1990s; it
slowed down thereafter due to the available potential of resources and technology
getting exploited closer to the possible limits, which led to increasing costs, shrinking
resource base, declining productivity, profitability and incomes (Kalkat et al., 2006;
Singh, 2009). The Punjab peasantry especially the small/marginal farmers
also had little alternative but to go for capital-intensive farming. The over-
exploitation of natural resources, especially groundwater, further dragged the farm
incomes towards digging deeper for submersible pumps installation (Singh, 2008).
During the era of high growth, the farmers attained high living standards, which also
led to their social and cultural obligations being more expensive. Little wonder, the
indebtedness of the farmers, more so to the non-institutional agencies and particularly
of the small/marginal farmers, whose economic base is poorer, increased faster than
their repaying capacity. As a result, their distress continued to mount.
The indebtedness of the peasantry had been a serious issue since long. It was the
Punjab province where Malcolm Darling brought out the classic work on rural
economy in the early 1920s and reported that about four-fifth of the Punjab peasantry
was under the debt to the tune of 5-6 times of their annual income. His overarching
conclusion was that, “Punjab peasant is born in debt, lives in debt and dies in debt”
(Darling, 1925). In 1950-52 the National Sample Survey Organization conducted a
survey on rural indebtedness, which revealed that 63 to 78 per cent farmers were
indebted (NSSO, 1956). The farmers’ indebtedness continued, with little reprieve for
some time. The institutional loans gave a good fillip during 1970s and 1980s but the
decade of 1990s showed a slowdown, not only in institutional credit but also in the
growth rate of agriculture (Singh, 2009). The agrarian distress reached a high climax
by early 2000, when the Government of India sponsored an all-India independent
NSSO study (2003), which reported that 40 per cent of the Indian farmers and 37 per

*Agricultural Economist, Punjab State Farmers Commission, Ludhiana – 141 004, Senior Economist and
Assistant Farm Economist, Punjab Agricultural University, Ludhiana – 141 004, respectively.
The study was sponsored by The Punjab State Farmers Commission, Mohali (PSFC) and conducted jointly with
Punjab Agricultural University, Ludhiana (PAU). The views are of the authors who are grateful to the anonymous
referee for his valuable comments.
586 INDIAN JOURNAL OF ARICULTURAL ECONOMICS

cent of the Punjab farmers have expressed their desire to leave farming, it being not a
profitable occupation (NSSO, 2005). A recent study by the Punjab State Farmers
Commission and Punjab Agricultural University puts the ‘bad climax’ in perspective;
it reported that on an average a farmer was indebted up to 64 per cent of his annual
income but the farmers up to 4 hectare (ha) were indebted up to about 90 per cent of
their annual income. Further, the stress level of indebtedness approaching
bankruptcy, which was defined as loan being equivalent more than two years’ family
income, included 12.8 per cent of the farm households. And this was inversely
associated with the farm size. About 19 per cent of the marginal and small farmers
were under acute burden of indebtedness (Singh et al., 2007).
The main consequence of agrarian distress has been that the marginal and small
farmers, who find it increasingly hard to sustain on farming, are getting pushed out
from agriculture. But due to lack of any skills, it is difficult to get absorbed in the
industrial sector (Gill, 1994). Thus, a large chunk of ‘reserve army of labour’ is
accumulating in the rural economy. According to unpublished official estimates about
35 lakh persons in 2006 were unemployed in the state; out of whom about 24 lakh
belong to rural areas.
There is a decline in the proportion of cultivators in the total workforce of the
State that have added to the unemployed or semi-employed force, which has built a
pressure on an already over crowded agricultural labour market. The proportion of
cultivators in the total workforce decreased from 35.4 per cent in 1981 to 31.7 per
cent in 1991 and further to about 23 per cent in 2001. The decline has been more
severe in the rural sector where the proportion of cultivators in the total workforce
declined from 46.1 per cent in 1980-81 to 31.7 per cent in 2000-01 (Government of
Punjab, 2007). The lower section of the peasantry is forced to sell or lease-out their
land and many of them join the labour market. According to the law of the increasing
division of the labour in society, small scale peasant agriculture must inevitably give
way to large scale capitalist agriculture (Thorner et al., 1966). Karl Marx said, the
peasant who produces with his own means of production will either gradually be
transformed into a small capitalist who also exploits the labour of others, or he will
suffer the loss of his means of production and be transformed into a wage worker
(Marx, 1963).
Punjab is an agriculturally developed but land scarce economy. The number of
operational holdings in the state decreased from 11.17 lakh in 1990-91 to 9.97 lakh in
2000-01. The maximum decline was observed in case of small/marginal farmers;
from about 5 lakh in 1991 to 3 lakh in 2001 (Government of Punjab, 2007). The
plight of about 2 lakh of the small/marginal farmers who left farming is not known.
This throws up a plethora of questions: Where have these farmers gone? What is their
plight and status? What happened to their land? Can something be done for them?
These and many other questions prompted this study. The objectives of the paper are:
(1) to examine the magnitude of shift from farming to non-farming activity in the
 AGRARIAN CRISIS AND DEPEASANTISATION IN PUNJAB 587

Punjab state, (2) to assess the plight and status of the shifting families in the state and
(3) to identify the factors affecting the phenomenon and suggest policy measures.
II

APPROACH OF THE STUDY

This study presents an empirical analysis of the status of farmers, particularly the
small/marginal ones, who have left farming in an agriculturally developed state of
Punjab during the last two and a half decades or so. There are 20 districts in the
Punjab state, which are administered through 141 Development Blocks; two Blocks
were randomly selected from each district. One village (cluster of villages in case the
selected village was small) from each selected block was randomly selected. Thus in
all, 40 villages/village clusters were randomly selected.
The preliminary census showed that the total number of families who left farming
was 920 in the selected villages. Some of these families are settled in the nearby
cities or other states or abroad, which made it difficult to get data from those
families.1 The data from all the available families (which were 589 out of 920) in the
selected villages were collected through personal interview method on specially
structured questionnaire. Out of these, 217 were marginal farmers (<1 ha), 192 were
small farmers (1-2 ha), 134 were medium farmers (2-4 ha) and 46 were large farmers
(> 4 ha). The main objective of this study was not to study the ‘farming-economics’
but ‘farmers-leaving-farming’, which suggests that the ‘farmers at the verge’ of
leaving even up to 4 ha were hardly different than the ones below 2 ha. The study,
therefore, concentrated more on these categories of farmers though the status of the
46 large farm households who left farming also included to some extent.2
III

PROCESS OF DEPEASANTISATION

The transformation of workforce from farming to non-farming sector is either

growth-led transformation or distress-induced one. The growth-led transformation is
related with the developmental factors like mechanisation of agriculture, increasing
employment and income, high education level, urbanisation, development of
secondary and tertiary sectors and even state intervention for generating employment
opportunities. These factors are known as ‘pull factors’, which contribute to ‘pull’ the
workforce from farming to more lucrative non-farm activities.
On the other hand, distress-induced transformation is based on the hardship or
crisis driven factors like falling productivity, increasing costs, decreasing returns and
crop failure; unemployment and underemployment; increasing indebtedness and even
suicides. These factors are known as ‘push factors’, which push the agriculture
workforce towards non-farm activities to eke out their livelihood. This study
examines the dynamics of shift of farmers towards non-farming activities, and how
far it is due to ‘growth-led’ pull factors or a ‘distress-induced’ one.
588 INDIAN JOURNAL OF ARICULTURAL ECONOMICS

(1) Magnitude of Farmers Families Who Left Farming

There were 7520 farmers in the 40 selected villages/village clusters doing

farming at the time of study. Another 920 farmers had left farming thus making a
total of 8440 farmers of whom 11 per cent had left farming. Out of 920 farmers who
had left farming, only 589 were still in the villages (Table 1). Based on the
distribution of 589 farm holdings, it was found that the highest proportion of the
small farmers operating 1–2 ha (15 per cent) followed by medium farmers operating
2–4 ha (11.3 per cent) and marginal farmers operating less than 1 ha (10.8 per cent)
left farming. This makes our presumption that the farmers up to 4 ha belong to the
same category as the ones operating less land particularly in so far as the issue of
leaving the farming is concerned. It also portrays that the distinct category of small
farmers (1-2 ha) decide a ‘bit early’ to leave farming and the marginal (< 1 ha) and
the medium (2 -4 ha) ones ‘keep hanging-on’ for more time; the former may be more
due to ‘lack of opportunities relevant to their skills and/or aspirations, whatever these
be’ and the latter may be due to still ‘somewhat better but eroding economic base’.
On the whole, 12.1 per cent farmers operating up to 4 ha left farming. In contrast only
4.9 per cent of the large farmers (> 4 ha), had left farming.

TABLE 1. NUMBER OF FAMILIES WHO LEFT FARMING IN PUNJAB, SAMPLE ESTIMATES

Farmers who left farming

Total number of Distribution
Category farmers Sample (per cent) Total Per cent
(1) (2) (3) (4) (5) (6)
Marginal (< 1ha) 3138 217 36.8 339 10.8
Small (1-2 ha) 1997 192 32.6 300 15.0
Medium (2-4 ha) 1846 134 22.8 209 11.3
Sub-total 6981 543 92.2 848 12.1
Large (> 4 ha) 1459 46 7.8 72 4.9
Total 8440 589 100.0 920 10.9

(i) Region-Wise Shifting From Farming

The shift from farming varied across different socio-cultural and agro-climatic
regions of Punjab (Table 2). It was the highest in Doaba region where 1/6th (16 per
cent) of the total families left farming and at a lower pace of 1/9th in the Malwa (11.8
per cent) and 1/19th in Majha (5.3 per cent) regions of the state. Settling abroad
became more prevalent earlier in Doaba region where majority of the farmers are
marginal and the highest proportion among them (25.5 per cent) left farming. A
major part of the sub-mountainous region also comes from the Doaba region, and
thus about 21 per cent of the farmers in this region left farming followed by South-
western region (11.2 per cent) and Central region (10.2 per cent). Thus it can be
concluded that 1/5th of families left farming in sub-mountainous region (where
 AGRARIAN CRISIS AND DEPEASANTISATION IN PUNJAB 589

agricultural productivity is also lower) as compared with about 1/10th in the other
two regions.
TABLE 2. REGION-WISE PERCENTAGE OF FAMILIES WHO LEFT FARMING, PUNJAB

Marginal Small Medium Large Total

Region Sample size (n=217) (n=192) (n=134) (n=46) (n=589)
(1) (2) (3) (4) (5) (6) (7)
Socio-cultural Region
Majha 72 3.2 7.9 9.6 7.4 5.3
Malwa 399 12.8 17.6 11.2 4.6 11.8
Doaba 118 25.5 12.7 13.5 6.3 16.0
Agro-climatic region
Sub-mountainous 35 29.8 12.9 17.0 - 20.5
Central 388 8.5 14.2 11.8 6.3 10.2
South-western 166 16.0 17.5 9.7 3.4 11.2

(ii) Period-Wise Magnitude of Families Who Left Farming

The agriculture crisis in Punjab had taken the roots since early 1990s and the
process of farming families leaving farming gathered momentum particularly after
2000 since when the proportion of farm families who left farming stands at 63.6 per
cent (Table 3). This is the period of declining productivity, increasing costs and
decreasing profitability in agriculture (Singh, 2009). The proportion of farm families
who left farming during 1990s and before 1990 worked out to 32 and 5 per cent
respectively. Almost a similar type of trend was observed in the case of marginal,
small and medium farm size category.
TABLE 3. PERIOD-WISE PROPORTION OF FARMERS UP TO 4 HA WHO LEFT FARMING, PUNJAB

Period Marginal Small Medium Sub-total

(1) (2) (3) (4) (5)
Before 1990 4.6 4.2 6.7 5.0
During 1990s 31.8 29.7 35.8 32.0
Since 2000 63.6 66.1 57.5 63.0
Total 100 100 100 100

(2) Reasons of Leaving Farming

Farming may not be a lucrative business, but the farming and ownership of land
are associated with the socio-economic status of a person in the rural society in India
in general and in Punjab in particular. There are multiple reasons/responses such as
the declining productivity, higher input costs, low output prices, extensive farm
mechanisation, fragmentation of land holdings, low net income of the farmers, etc.,
which forced a section of Punjab peasantry to continuously look for opportunity for
leaving farming and joining even lower hierarchy of the society. Obviously these are
the economic reasons (Table 4).
590 INDIAN JOURNAL OF ARICULTURAL ECONOMICS

TABLE 4. PER CENT FARMERS STATING REASONS FOR LEAVING FARMING, PUNJAB

(multiple responses)
Marginal Small Medium Sub-total Large
Reasons (n=217) (n=192) (n=134) (n=543) (n=46)
(1) (2) (3) (4) (5) (6)
Low income from farming 71.4 59.9 58.2 64.1 45.7
Division of land 43.3 25.5 29.1 33.5 21.7
Debt repayment 35.5 29.7 31.3 32.4 21.7
Starting new occupation/service 25.3 22.4 25.4 24.3 15.2
High land rent making
costly/difficult to lease in 14.3 17.2 23.9 17.7 23.9
Land rent was equal to net returns 6.0 14.6 20.9 12.7 15.2
Money needed for social needs 12.9 8.3 11.9 11.0 8.7
Children settled in other occupation 6.0 8.9 10.4 8.1 4.3
To go abroad 6.9 8.3 8.2 7.7
10.9
Emigrated elsewhere 1.4 0.5 0.7 0.9
Others* 12.4 24.5 28.4 20.6 26.1
*Death of main earner, old age, crop failure, high land prices, intoxicants, etc.

Low income from farming was the predominant reason for leaving farming for
about 71, 60 and 58 per cent of the marginal, small and medium farmers respectively.
The sub-division of land, which further erodes the viability of holdings of below 4 ha
aggravated due to capital intensive highly mechanised agriculture, which was the
next major reason and reported by 43, 26 and 29 per cent marginal, small and
medium farmers respectively. It is also important to note that debt repayment was the
reason for leaving farming as was indicated by 36, 30 and 31 per cent marginal, small
and medium farmers respectively.
The high land rent, which made it costly for the smaller farmers to lease-in, or
also alternatively along with low income from farming that makes their earning from
land rent equal to or sometimes even more than the net returns from farming: these
were also the important factors that forced the tenant and tenant-cum-farmers to leave
farming. About 18 per cent and 13 per cent of the farmers operating up to 4 ha left
farming due to these reasons respectively.
To maintain social status in the society farmers have to spend considerable
amount of money on social functions. There were about 13, 8 and 12 per cent
marginal, small and medium farmers respectively, who stated this reason for leaving
farming. Small-scale agriculture being a non-profitable activity, the next generation
of the farmers does not want to continue this occupation and they settle down in some
other occupations. This reason of leaving farming was reported by 8 per cent of the
Punjab farmers operating up to 4 ha. Another about 8 per cent of these farmers left
farming to go abroad and/or emigrated to other parts of the country.
A few large farmers also left farming but the relative placing of the statements of
reasons varied.3 Thus almost all the important reasons except high land rent or land
rent being equal or more than the net returns were indicated by larger majority of
 AGRARIAN CRISIS AND DEPEASANTISATION IN PUNJAB 591

small and marginal farmers than the large farmers. The four main reasons of leaving
farming, viz., low income from farming, division of land, debt repayment and starting
new occupation, which was reported by 24 to 64 per cent farmers operating up to 4
ha, was given by only 15 to 45 per cent large farmers, i.e., these reasons were given
by 40 to 60 per cent more of the smaller farmers than the large farmers. In contrast 20
to 35 per cent more of large farmers gave the high land rent as the reason for leaving
farming than the smaller ones. This shows that the distress factor was more
prominent for leaving farming for the farmers operating up to 4 ha. This also means
the relative play of pull factors was more significant for the large farmers of whom
only a few left farming.
It may be concluded that low income from farming due to low productivity and
high input costs were the main reasons of leaving farming in the state. The
parcelisation and fragmentation of land holdings increased the cost of production,
squeezed the returns and hence brought the farmers under debt. The smaller farmers
(operating up to 4 ha) were the most severely affected by these problems. However,
the other main reasons like high land rent and low returns as compared to land rent
and money spent for social obligations were also responsible for pushing the smaller
farmers away from agriculture. Thus the ‘push factor’ has impacted strongly those
farmers operating up to 4 ha.

(3) New Occupations of Depeasantised Farmers

The main impetus to rural non-farm employment growth generally comes from
the dominant rural economic sector namely agriculture (Mellor, 1976). After leaving
agriculture in distress, the small and marginal farm families generally adopt lower
level of activities due to scarcity of capital and technical skills (Table 5).
About 22 per cent of the farmers operating up to 4 ha joined the labour market
after leaving the farming. This proportion was the highest (28 per cent) amongst the
marginal farmers followed by the small farmers (20.8 per cent) and medium ones
(12.7 per cent). Further, 4.6 per cent of these people started selling their labour in the
agriculture sector itself. This proportion was the highest in case of marginal farmers
(6.9 per cent) followed by the small (4.1 per cent) and the medium ones (1.4 per
cent). In contrast, none of the large farmers who left farming joined the labour class.
Due to inadequate industrial development in the state, only 3.3 per cent of the farmers
who left farming could join as factory labour.
The nature of labour work of a large chunk (13.1 per cent out of 21.7 per cent) of
these people alienated from agriculture as labourers is still unspecified; they work in
almost all types of activities wherever the work is available to them. This work force
can be called ‘on demand labour’ or ‘versatile labour’. Throughout the year, they are
ready to work, they work as and when, they are demanded on whatever jobs are
available and wherever available.
592 INDIAN JOURNAL OF ARICULTURAL ECONOMICS

TABLE 5. OCCUPATIONAL DISTRIBUTION OF FARMERS AFTER LEAVING FARMING, PUNJAB

(per cent)
Marginal Small Medium Sub-total Large
Activity (n=217) (n=192) (n=134) (n=543) (n=46)
(1) (2) (3) (4) (5) (6) (7)
Labour (i) Agriculture 6.9 4.1 1.4 4.6 -
(ii) Factory 3.7 4.2 1.5 3.3 -
(iii) Construction 1.4 0.5 - 0.7 -
(iv) Unspecified1 16.1 12.0 9.8 13.1 -
(n=118) Sub-Total 28.1 20.8 12.7 21.7 -
Milkmen (n=53) 10.1 8.8 10.4 9.8 6.6
Distress- (i) Capital interest 0.5 0.5 0.7 0.6 8.7
rentiers (ii) Land rent 1.8 13.0 15.7 9.2 28.3
(n=53) Sub-Total 2.3 13.5 16.4 9.8 37.0
Trader/dealer (i) Livestock 0.9 0.5 0.7 0.7
(ii) Vehicle - 0.5 1.5 0.6
(n=4) Sub-Total 0.9 1.0 2.2 1.3 6.6
Abroad (n=37) 6.9 6.8 6.7 6.8 8.7
Service Government 6.9 10.9 9.7 9.0 10.9
Private 16.1 11.5 15.7 14.4 2.2
(n=127) Sub-Total 23.0 22.4 25.4 23.4 13.0
Entrepreneur (i) Flour mill 2.3 2.6 1.5 2.2 -
(ii) Operator (truck, 6.9 7.3 3.0 6.1 2.2
taxi, auto, van)
(iii) Repair shop 5.1 4.2 1.5 3.9
(iv) Mason2 2.8 2.6 0.7 2.2
(v) Grocery shop 2.8 4.7 1.5 3.1 10.9
(vi) Miscellaneous3 7.4 5.2 17.2 9.0
(n=144) Sub-Total 27.2 26.6 25.4 26.5 13.1
Others4 (n=4) 1.4 - 0.7 0.7 4.4
TOTAL 100.0 100.0 100.0 100.0 100.0
Notes:1. Some of the farmers after leaving farming worked for some other farmers but without any payment
(sort of exchange labour) before becoming a regular labour class.
2. Mason includes construction work, carpenter, saw.
3. Miscellaneous include brick kiln, mini rice mill, poultry farm, printing press, cable operator, dhabha,
photographer, scrap-dealer (kawaria), etc.
4. Others include vegetable vendor, construction contractor, etc.

In fact, farmers, and particularly the smaller ones, are always looking for some
job, preferably in the public sector. About 23 per cent of the farmers operating up to 4
ha who left farming did so after they got a job in the public or private sector. This
proportion was almost the same for the three categories of farmers of up to 4 ha
which was 23.0, 25.4 and 22.4 per cent for the marginal, small and medium farmers,
respectively. The absorption of marginal farmers was the highest (16.1 per cent) in
the private sector followed by the medium farmers (15.7 per cent) and the small
farmers (11.5 per cent). About 7 per cent of the farmers who left farming migrated to
other places/countries. This proportion was the same for all the three above farm size
categories. There was a sizable number (21.1 per cent) of farmers who established
their own low-capital investment low-earning businesses like flour mill (2.2 per cent),
repair shop (3.9 per cent), construction work (2.2 per cent) and grocery shop (3.1 per
cent) among these farmers. Similarly, about 6 per cent of these people became truck,
 AGRARIAN CRISIS AND DEPEASANTISATION IN PUNJAB 593

taxi, auto or van operators/drivers. Some of these operators drive their own vehicles
and earn their livelihood. This proportion was about 7 per cent for marginal and small
farmers and only 3 per cent for the medium farmers. Similarly, 9 per cent of these
farmers set up other ventures like brick kiln, poultry farm, printing press, cable
operator, dhaba, vegetable vendors, property dealer, photographer, priest,
construction contractor and other activities. Another 10 per cent of the smaller
farmers became milk-vendors; some of them also kept 1-2 dairy animals of their own.
Some of the farmers operating up to 4 ha who could not earn farm incomes better
than the land rent, leased out their land (i.e., left farming) but could not find any
opportunity to supplement their incomes from labour-earnings. Some of them even
sold the little land they had in distress. Thus these people live on the meagre land rent
or on the interest from the deposits made by selling their tiny pieces of land. After
leaving farming, 9.2 per cent of these farmers were living on the land rent alone and
another 0.6 per cent sold off their land and lived mainly on the meager interest-
earnings. This section of the farming community performs no useful economic
activity and is vulnerable to indulge in bad habits and even start taking intoxicants.
This class can be categorised as ‘distress-rentier class’. There was a direct
relationship between the proportion of persons living as distress-rentiers and their
farm size. It was 2.3, 13.5 and 16.4 per cent for marginal, small and medium farmers
respectively.
Again, the large farmers leave farming to do different things. All the large
farmers, who left farming stating the land rent to be higher as the reason for leaving
farming became the rentier class (37 per cent). And unlike their smaller counterparts,
these were not the distress-rentiers. In fact 11 per cent of the large farmers who left
farming became commission agents, and another 6.6 per cent traders or dealers
compared with none of their smaller compatriots becoming commission agent and
only 1.3 per cent becoming petty traders/dealers. None of the large farmers joined the
labour class, whereas 22 per cent of the smaller ones had gone into this category.
Also more of the smaller farmers joined petty private service (14.4 per cent) whereas
only few large farmers (2.2 per cent) had gone there and that too on a better one.

(4) Level of Satisfaction from the New Occupation

In an agrarian society like that of Punjab, farming is tagged with some social
status. Thus, it is very difficult for the farmers to leave this occupation and join
lower paid jobs or lower social status jobs or other activities in the economy. Thus
some people who found jobs in public sector or joined other better paid activities
were satisfied from their new professions while others were less satisfied from these
occupations, even if some of them were earning better than when they were in
farming (Table 6).
594 INDIAN JOURNAL OF ARICULTURAL ECONOMICS

TABLE 6. LEVEL OF SATISFACTION FROM NEW OCCUPATION AFTER LEAVING FARMING, PUNJAB

(per cent)
Farm Level of satisfaction Want to go to
category Fully Medium Less Dissatisfied No response Want to expand new profession
(1) (2) (3) (4) (5) (6) (7) (8)
Marginal 21.7 31.8 16.1 30.4 - 45.2 30.0
Small 24.5 32.3 22.4 17.7 3.1 50.0 21.4
Medium 33.6 31.3 16.4 17.2 1.5 48.5 17.2
Sub-total 25.6 31.9 18.4 22.7 1.4 47.7 23.8
Large 69.6 15.2 4.3 4.3 6.5 58.7 4.3

There were about 22, 25, 34 and 70 per cent of the marginal, small, medium and
large farmers respectively who were fully satisfied with their new occupation. Thus
better the resource base, better the level of satisfaction from the new occupation,
which was too distinctive for the large farmers. However, in terms of willingness to
expand the business, it was about the same (45 to 50 per cent) among farmers
operating up to 4 ha and somewhat higher at 59 per cent for large farmers.
There were 46.5, 40.1 and 33.6 per cent farmers among marginal, small and
medium ones who left farming and they were only somewhat satisfied or dissatisfied
with the new profession. In contrast, only 8.6 per cent of the large farmers were in
this category. Still all were not envisaging change to a new profession, though the
proportion was of the same order being 30, 21.4, 17.2 and 4.3 per cent respectively.
This is symptomatic of the lack of opportunities available to such distress farmers
among the smaller ones.

(5) Status of Land Holding After Leaving Farming

Land ownership is a social prestige issue as well as an economic base for

livelihood of rural families. Thus, the smaller farmers of up to 4 ha leaving farming in
distress (or for that matter any farmer leaving farming) would still like to keep their
land ownership intact but this could be done in toto by 51.7 per cent farmers and
partially by another 11.4 per cent families. As many as 36.2 per cent such distress
farmers had totally sold their land (Table 7).

TABLE 7. PER CENT FARMERS WHO SOLD/LEASED OUT LAND AFTER LEAVING FARMING, PUNJAB

Status of land Marginal Small Medium Sub-total Large

holding (n=217) (n=192) (n=134) (n=543) (n=46)
(1) (2) (3) (4) (5) (6)
Total land sold 45.2 29.2 31.3 36.2 8.7

Partially sold 4.6 14.6 17.9 11.4 21.7

No land sale 48.4 56.3 50.8 51.7 69.6

Pure tenants 1.8 0 0 0.7 0

Total 100.0 100.0 100.0 100.0 100.0

 AGRARIAN CRISIS AND DEPEASANTISATION IN PUNJAB 595

The proportion of farmers who sold total land was the highest in case of marginal
farmers (45.2 per cent), followed by small and medium ones (29 to 31 per cent) and
the lowest by the large ones (8.7 per cent). There were another 4.6 per cent marginal
farm families who sold their land partially, whereas the percentage of small and
medium farm families who partially sold their land, worked out to be 14.6 and 17.9
per cent respectively. There were few marginal families (0.7 per cent) who were
found as purely tenants and did not have any land to sell.
Region-wise the retention of land (no sale) was maximum in Doaba (73 per cent),
followed by Majha (66 per cent) and Malwa (43 per cent). The relatively poorer
conditions of these farmers in Malwa led to the largest majority selling total land (42
per cent) as compared with 23 per cent in Doaba and 22 per cent in Majha. Again
majority of the farmers who left farming in the sub-mountainous region did not sell
their land (68 per cent) as compared with the Central (54 per cent) and the South-
western (45 per cent) regions. The South-western region was more affected by cotton
failure in the late 1990s, leading to acute agrarian crisis of indebtedness and farmer
suicides (Kumar et al., 2006). In this region, 41 per cent small and marginal farmers
leaving farming had to sell their total land. In the Central and Sub-mountainous
regions, 34 per cent and 27 per cent farmers who left farming sold their total land
(Table 8).

TABLE 8. STATUS OF LAND HOLDING AFTER LEAVING FARMING, REGION-WISE, PUNJAB

(per cent farmers operating up to 4 ha reporting)

Region Sample size Total sale Partial sale No sale

(1) (2) (3) (4) (5)
Socio- cultural region
Majha 72 21.5 12.3 66.2
Malwa 399 41.8 14.8 43.4
Doaba 118 22.7 4.6 72.7
Agro- ecological region
Sub-mountainous 35 26.5 5.9 67.6
Central 388 33.7 12.8 53.5
South-western 166 41.4 13.2 45.4

(6) Change in Income After Leaving Farming

Income plays a vital role in the transformation of work force in the society. The
comparison of income from the previous and new occupations would show the plight
of the farmers who left farming. The farmers respondents could respond correctly to
the present level of income (after leaving farming) but it was rather difficult to collect
this information precisely and directly for the previous income when they were still
doing farming. Therefore, it was based on the farmers’ perception of whether they
have become better off now than when they were doing farming/or alternatively
would they have been better off had they continued doing farming. While obtaining
this information the farmers were broadly told or reminded about the prices of
important agricultural commodities (wheat and rice) then and now. This segregated
596 INDIAN JOURNAL OF ARICULTURAL ECONOMICS

the group of farmers who stated about the negative change in income after leaving
farming. Among those who felt that they were better off now, further categorisation
was asked for whether now more than double the (comparable) income than before
and segregated another category. And the remaining ones were asked for to place
themselves in the other three categories. Also, for this information we followed the
principle of ‘whenever in doubt, leave it out’. Thus this information was available for
only 322 families out of the total sample of 543 families operating up to 4 ha and for
23 large farmers. It was found that the change in income showed variations from
negative to an increase of more than hundred per cent. Among the marginal, small
and medium farm families about 10, 30 and 33 per cent families respectively, were
worse off than their previous economic level. Even 26 per cent large farmers
responding were worse off now than before (Table 9).

TABLE 9. CHANGE IN INCOME AFTER LEAVING FARMING, PUNJAB

(per cent)

Change in income Marginal Small Medium Sub-total Large

(1) (n=132) (n=114) (n=78) (n=132) (n=23)
(2) (3) (4) (5) (6)
Declined 10.0 29.8 33.4 22.7 26.1
Up to 25 per cent 3.1 16.7 11.5 9.9
26.1
25-50 per cent 7.7 10.5 11.5 9.6
50 -100 per cent 10.0 15.8 17.9 14.0 21.7
> 100 per cent 69.2 27.2 25.6 43.8 26.1

It is also significant to note that 77 per cent of the farm households operating up
to 4 ha were better off after leaving farming. Interestingly, due to meager income
from tiny holdings, 69 per cent of the marginal farmers after leaving farming had
their income increased by more than 100 per cent. In contrast only 26 - 27 per cent
small, medium and large farmers were earning comparatively more than double the
(comparable) income from their new professions. However, it may also be noted that
the absolute increase in income of the small, medium and large farmers, on an
average, is positively associated with the farm size, which was the predominant base
of their previous incomes.
The change in income after leaving farming depends upon the type of occupation
and the situation in which the farmer lands in like selling land to start some new
venture/enterprise or to stave off the previous distress (e.g. payment of old debt), etc.
These correlates are studied hereafter.4

(i) Occupation and Change in Income After Leaving Farming

The change in income after leaving farming depends upon the type of occupation
adopted by the families. Those families whose income level has gone down after
leaving farming mainly belonged to the distress-rentier, labour and trader/dealer
 AGRARIAN CRISIS AND DEPEASANTISATION IN PUNJAB 597

(Table 10). The distress-rentiers were doing nothing else and 64 per cent of them
lived on lower incomes now. Their probability of getting drug-addict was higher. In
contrast, 63 per cent of those who joined the labour-class had better income than
before. Basically, those people who joined labour market generally came from
marginal farm families. The previous income level of these families was also very
low. Further, only those families who joined the organised sector as factory workers
could double their income from their previous income level. Even the traders/dealers,
which were very menial and small scale enterprises for these farmers operating up to
4 ha came next with 29 per cent facing a decline in income although another 43 per
cent had income increase of up to 50 per cent and 28 per cent having even more than
double the income than before.

TABLE 10. CHANGE IN INCOME AND PROPORTION OF FAMILIES IN NEW OCCUPATION, PUNJAB

(per cent farmers operating up to 4 ha)

Activity Negative Up to 50 per cent 50-100 per cent > 100 per cent Sample size
(1) (2) (3) (4) (5) (6)
Labour 36.67 36.67 26.66 - 30
Milkmen 10.0 17.5 20.0 52.5 40
Distress-rentier 63.6 18.2 - 18.2 33
Trader/Dealer 28.6 42.9 - 28.6 7
Abroad - 7.4 7.4 85.2 27
Service 13.3 14.7 16.0 56.0 75
Entrepreneur 19.6 18.7 19.6 42.1 107
Others - 66.7 - 33.3 3
Total 22.4 19.3 13.8 44.5 322
Notes: 1. Entrepreneurs include: Bhatta, mini rice mill, poultry farm, printing press, cable operator, dhabha,
operator (truck, taxi, auto, van), vegetable vendor, property dealer, photographer, scrap-dealer
(kawaria), construction contractor.
2. Labour includes; agriculture labour, construction labour, factory labour.

Contrary to the general perception that service class is always a privileged section
of the society, in the present study about 13 per cent of this class also experienced
negative income. Basically, these persons are placed at lower posts like driver of
private vehicles and menial jobs in the private sector, etc. However, the fact still
remains sound, as 56 per cent had their income increase by more than double the
previous income and overall, 87 per cent had higher income than before.
Being milkmen raised the income of more than 52 per cent families to more than
double the previous income and another 38 per cent also had higher income up to 100
per cent. Having a little base of their own (like 1-2 dairy animals), they do relatively
better than the other (small) entrepreneurial categories to which the small/marginal
farmers shift; of these only 42 per cent had more than double the previous income
and about 20 per cent of them even had lower income than before. There is need to
promote the self-occupation.
598 INDIAN JOURNAL OF ARICULTURAL ECONOMICS

(ii) Status of Land Holding After Leaving Farming and the Change in Income

About 36 per cent of the farmers operating up to 4 ha sold their total land and left
farming. Therefore, it is important to examine the relationship between land
ownership and change in level of income. Table 11 reveals that majority (54.6 per
cent) of the marginal farmers who sold off all their land had recorded more than
double the increase in their income. This shows that if they are not better off even
after leaving the farming, it is better to sell off their tiny piece of land, particularly in
the case of marginal farmers even though it deprives them of whatever little
asset/security they had, and that too the land, which enjoys a prestige in the rural
sector. However, in the case of medium farmers of 2–4 ha, selling total land and
leaving farming, for a majority (68.4 per cent) it turned out to be bad proposition as
their income declined. Even in the case of 46.9 per cent small farmers, owning 1–2
ha, leaving farming led to a more distress situation. This is symptomatic of their lack
entrepreneurial skills to do better or they might have been in more distress to sell
their total land for other reasons (such as to repay their old debts, etc.) and hence
become more poor. On the whole, 34 per cent of the smaller farmers operating up to
4 ha who sold their total land and left farming had lower income than before.
TABLE 11. CHANGE IN INCOME LEVEL OF THE FARMERS WHO SOLD TOTAL LAND, PUNJAB
(per cent farmers operating up to 4 ha)
Change in income
Farm category Negative Up to 50 per cent 50-100 per cent > 100 per cent Sample size
(1) (2) (3) (4) (5) (6)
Marginal 14.5 14.5 16.4 54.6 55
Small 46.9 28.1 6.2 18.8 32
Medium 68.4 21.1 10.5 - 19
Sub-total 34.0 19.8 12.2 34.0 106

In contrast, almost all the categories of farmers who kept land, and rather leased
out the whole of it to take up a new occupation in addition, became better off (Table
12). The income level of 85 per cent of the farmers improved due to keeping land and
shifting to a new occupation. Basically by leasing out land, these people earn some
income as a rent, which was more than their labour-income from farming; thus the
income from their new occupation was an additionality element. It shows that these
poor farming class, while leaving farming, should not sell their land, if they can
afford to; but rather lease out to keep supplementary earning from the be-little land
they have.
TABLE 12. CHANGE IN INCOME LEVEL OF THE FARMERS WHO LEASED OUT THEIR LAND, PUNJAB
(per cent farmers operating up to 4 ha)
Change in income
Farm category Negative Up to 50 per cent 50-100 per cent > 100 per cent Sample size
(1) (2) (3) (4) (5) (6)
Marginal 3.8 7.6 10.1 78.5 77
Small 21.7 25.3 20.5 32.5 78
Medium 19.7 23.0 23.0 34.3 61
Sub-total 14.8 18.4 17.5 49.3 216
 AGRARIAN CRISIS AND DEPEASANTISATION IN PUNJAB 599

(iii) Time of Leaving Farming and Change in Income

Why do farmers keep on doing farming even when in distress is brought out in
the relationship between time period of leaving farming and change in income level
(Table 13). Majority of the smaller farmers operating up to 4 ha (84 per cent) who left
farming after 2000, recorded increase in their income. This figure decreased as the
period of leaving was more in the past. Thus as many as 53 per cent of these farmers
who left farming before 1995, now have incomes lower than when they were
farming; this figure was 28 and 16 per cent for farmers who left during 1995-2000
and after 2000. This is a very precarious situation for these farmers. They leave
farming in distress and more of them face declines in incomes and thus again get
entrapped in distress. This suggests that there should be a long-term strategy for such
strata of ‘agrarian-class-in-distress’ which would sustain their income-improvements
in the long run. There were 33, 43 and 47 per cent farmers whose income more than
doubled as they left farming before 1995, during 1995 to 2000 and after 2000,
respectively. This shows that the distress farmers continue as long as they can, in the
wake of uncertainties of the few alternatives they can think of/or are available, which
might turn out to be better afterwards.

TABLE 13. TIME PERIOD AND INCOME OF THE FARMERS AFTER LEAVING FARMING, PUNJAB

(per cent farmers operating up to 4 ha)

Change in income
Period Negative Up to 50 per cent 50 – 100 per cent > 100 per cent Sample size
(1) (2) (3) (4) (5) (6)
Before 1995 53.4 10.0 3.3 33.3 30
1995-2000 27.9 21.3 8.2 42.6 61
Since 2000 16.3 18.8 18.4 46.5 231
Total 21.7 18.5 15.2 44.6 322

Thus 77 per cent of the farmers operating up to 4 ha had increase in income after
leaving farming; and about 45 per cent had even more than 100 per cent increase.
Among the distress-rentiers, who do nothing after leaving farming and live on meager
land rent, 64 per cent had a fall in income. In contrast 63 per cent of those who joined
labour class had increase in their incomes. About 90 per cent of those who adopted
dairy/milkmen had increase in income with 53 per cent having even more than 100
per cent increase. Likewise, 80 per cent self-employed and 85 per cent of those who
did not sell any land also had increase in income. The income of about 53, 28 and 16
per cent farmers who left farming before 1995, during 1995-2000 and after 2000 had
lower income than before thus being the ones who left in distress and again over time
got entrapped in distress thereby warranting a long term strategy for such ‘agrarian-
class-in-distress’.
600 INDIAN JOURNAL OF ARICULTURAL ECONOMICS

(7) Self-Occupation After Leaving Farming: Problems and Perceptions

Under the pressure of agrarian crisis, the marginal farmers in particular and the
farmers up to 4 ha in general have been finding very hard to live on farming income
alone. Obviously, they have been forced to be pushed out of agriculture. Some of
these people settled in their own small businesses but during the establishment and
functioning of self- employment enterprises they faced a number of problems; many
others too wanted to start their own self employment. Therefore all the respondents
earlier operating up to 4 ha were asked about the problems they faced for settling in
the new professions (Table 14) and their perceptions regarding the support from the
government for better settling in their new occupations (Table 15).

TABLE 14. PROBLEMS FACED IN SETTLING IN SELF-EMPLOYED VENTURES

AFTER LEAVING FARMING, PUNJAB

(per cent multiple response of farmers operating up to 4 ha)

Marginal Small Medium Sub-total
Problems (n=217) (n=192) (n=134) (n=543)
(1) (2) (3) (4) (5)
Capital/funds 30.9 28.6 26.9 29.1
Corruption 22.1 19.3 18.7 20.2
Power 16.6 15.6 17.2 16.4
Competition from large units 13.8 13.5 13.4 13.6
Labour problem 17.8 7.3 13.4 9.0
Others* 7.8 2.1 3.7 4.8
*Technical skill, repayment of credit, medical facilities for animal, high cost of inputs, etc.

TABLE 15. PERCEPTIONS OF RESPONDENTS REGARDING SUPPORT FROM THE

GOVERNMENT, PUNJAB

(per cent multiple response of farmers operating up to 4 ha)

Marginal Small Medium Sub-total
Support (n=217) (n=192) (n=134) (n=543)
(1) (2) (3) (4) (5)
Loan at low rate of interest 39.2 39.6 30.6 37.2
Subsidy on inputs 29.5 27.6 26.9 28.2
Control on corruption 22.6 24.3 25.4 23.1
Power supply 18.9 21.3 24.6 21.2
Technical knowledge/training 18.4 16.1 12.7 16.2
Input supply 13.8 13.5 13.4 13.6
Assured marketing 12.4 10.9 13.4 12.2
Others* 6.5 4.2 2.2 4.6
*Others include job opportunities, health insurance without premium, non-collateral loans.

The capital requirement was the most important problem reported by 29 per cent
of such farmers. The next significant problem was the corruption in government
offices at various stages of establishing and functioning of enterprises, which was
reported by 20 per cent of the respondents. There were problems of power supply
(16.4 per cent) and the competition from the large units (13.6 per cent). However, the
 AGRARIAN CRISIS AND DEPEASANTISATION IN PUNJAB 601

labour problem emerged the highest among marginal farmers (17.8 per cent) on
account of very small business that too with little capital and the ‘labour-to-be-
engaged’ being skeptical about getting their wages, rather than the small (7.3 per
cent) and medium farmers (13.4 per cent). There were some other problems like
technical skill, recovery of credit, medical facilities, which were also reported by
about 5 per cent respondents.
The perceptions of the respondents regarding support from the government for
better settling in their new occupations varied from institutional and infrastructural
support and better management efficiency of the concerned government departments.
From the overall point of view, 37.2 per cent families demanded loans on low rate of
interest with easy repayment facilities to expand their profession. Another 28 per cent
respondents demanded subsidies on inputs. The ‘government should take effective
steps to control corruption’ was reported by 23 per cent respondents. Regular power
supply was the next requirement reported by 21 per cent respondents.
Similarly, about 16 per cent respondents expressed their desire to make
themselves technically sound. They asked for some special training course from any
public institution, free of cost, in their respective fields. Better input supply was
suggested by 14 per cent respondents and 12 per cent respondents asked for some sort
of assured marketing of their output in the new profession.

IV

SUMMING UP

The process of depeasantisation in Punjab began since early 1990s and gathered
momentum since 2000. More than 2 lakh small/marginal farmers have left farming
due to economic distress. This study explores all the issues relevant to the process of
depeasantisation. This field survey covered 40 villages, 2 from each district of the
State where the census showed that 920 farmers (11 per cent) left the farming, of
whom 589 were still in the villages and all of them were included in the sample. The
study further showed that among the farmers earlier operating up to 4 ha, 22 per cent
joined the labour market, 23 per cent joined the low paid private/government jobs and
27 per cent started some low-skill self-employed venture. And 23 per cent of those
who left farming were not satisfied. There are no strategies to assist them. Those who
sold land in distress to repay old debts were not better-off. 10 per cent were living on
meager land rent as ‘distress-rentiers’ and are more prone to drug addiction. Majority
of those distress farmers who left since long have again become worse-off.
Some of the large farmers also left farming but for different reasons and to
different things because of their better existing economic base. They are the ones who
get pulled out from farming in contrast to the small and marginal farmers who are
pushed out. Only 8.7 per cent large farmers sold land in contrast to 36 per cent of
their smaller counterparts. In terms of increase in income, large farmers even having
a higher base income before leaving farming, did almost relatively as better as the
602 INDIAN JOURNAL OF ARICULTURAL ECONOMICS

small and marginal farmers; the absolute gain of the large farmers can be well
imagined.
As many as 70 per cent of the large farmers who left farming were fully satisfied,
only 4 per cent were dissatisfied. In contrast, amongst the small/marginal farmers
who left farming, only 26 per cent were fully satisfied and another 23 per cent were
dissatisfied. As many as 24 per cent of the small/marginal farmers who left farming
were still unsettled and wanted to change to a new profession/occupation. In contrast
only 4 per cent large farmers were in this situation.
The small and marginal farmers leave farming in distress, and the longer they
have left farming, more of them face decline in income and thus again get entrapped
in distress. This suggests that there should be a long-term strategy for such strata of
‘agrarian-class-in-distress’ which would sustain their income-improvements in the
long run.
The small/marginal farmers after leaving farming in distress join mostly the
labour class or low-investment, low-earning, self-employment ventures for which
their technical training is almost nil or rather very inadequate. The government
should arrange for the training of small and marginal farmers who have (want) to
leave farming either as a better alternative option or even in distress, to acquire some
technical skills for the new professions, which they want to adopt and/or for the
employment in industry in collaboration with industry. The training should be
subsidised as they can hardly afford to pay for it.
There should be institutional support for their self-employed ventures including
the institutional credit at subsidised rate of interest. The assistance, technical and
monetary, for input supply and marketing of the produce is also important. Finally,
there should be some priority for power connection/supply for the small units
established by the small and marginal farmers. In a nutshell, the government should
earnestly address the farm viability of small/marginal farmers as well as encourage
and assist the non-viable ones to settle in non-farming ventures.

Received September 2008. Revision accepted December 2009.

NOTES

1. We tried to get the information about the present status of these families from the village people,
which, however, was too scanty and for too few of them and thus devoid of any worth to report.
2. Although 2-4 ha is normally considered as medium farmers (as per National Classification), but
the economic living and status of these farmers is also very precarious. Considering this, the Punjab
State Farmer Commission, the sponsors of the study, “Status of farmers who left farming in Punjab”,
included in the terms of reference to study in detail the farmers leaving farming operating up to 4 ha
(Singh et al., 2007). However, the large farmers were also studied for comparison. At places in the text,
for comparison purposes the two categories are large (> 4 ha) and smaller (< 4 ha) farmers, the latter
including the average/sub-total of marginal, small and medium farmers.
3. For the reason that fewer large farmers left farming, for different reasons and, as will be seen
later, to do different things after leaving farming, the overall average has not been the focus, nor
attempted.
 AGRARIAN CRISIS AND DEPEASANTISATION IN PUNJAB 603

4. The sample size for the large farmers was too small for this post-stratification, and hence
excluded from this section.

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