Concept and Definition:
Here we discuss relationship between size of lands and the productivity of lands as to whether the small farms are more productive as compared with large farms. Normally, it is said that there exists an inverse relationship between size of lands and the productivity of lands. It means that per acre yield of small farms is greater than that of large farms. Therefore, certain experts justify the sub-division of farms into small units to boost agri. production. In this regard, we shall study A. K. Sen’s demographic argument theory, Bhagwati and Chakarwati distress argument and Khusro’s tenancy argument etc.
Afterwards we shall show in the light of farm management surveys that more labor are used on small farms for per acre yield as compared with large farms. It also suggests that the land reforms will not only lead to increase the output, but the employment opportunities will also go up. Finally we shall discuss if we abolish the assumption of single variable factor (land) and a production function is constructed where production is function of seeds, fertilizers, human labor and use of power, in addition to labor what will be the relationship between size of the farm and productivity of farm. It is concerned with Returns to Scale. Here, the productivity of land will be discussed under the effects of Green Revolution.
A. K. Sen’s, Bhagwati, Chakarwati and Khusro’s Arguments:
(1) Small Farms have better Quality Land Compared to Large Farms:
(i) Sen’s Demographic Argument: According to famous Indian Economist A. K. Sen, the quality of small farms is better than large farms due to demographic reasons. He says that if the basic distribution of land is given in a society the lards which are superior can provide food to more big families as compared with inferior lands, in such circumstances if the lands are subdivided into smaller units due to law of inheritance the small farmers and the tenants will be able to cultivate the lands in a better way. As a result, they could yield us better output.
(ii) Bhagwati and Chakarwati Distress Argument: According to this argument, the small pieces of lands with small farmers have improved quality. It is explained as : When there are crop failures, droughts, floods or repayments of old loans including interest they have to sell less important or inferior lands. These lands are purchased by landlords. In this way, the inferior lands are accumulated with them and the small farmers get rid of them. Thus, when the small farmers are having optimal lands in the form of small pieces of lands, they would cultivate them properly to get more output.
(iii) Khusro’s Argument: According to Prof. Khusro, majority of small farmers are concerned with those farms which are cultivated by tenants. These lands are sub-divided with the reason that small farmers would cultivate them in a better way to get good yield.
In the above three arguments, it is supposed that the quality of land is an exogenous factor and it is out of control of farmer. But, practically it is not so. The quality of land can be improved due to better agri. practices.
(2) Small Farms are More Labor Intensive than Large Farms:
This argument is concerned with the dualism existing in labor market. As the labor which is gotten through market commands a higher wage as compared with the labor gotten through family. In other words, the wages of family labor are low. It is due to the reason that if an agri. labor who cultivates some other’s land instead of his family land, he has to face Psychological Costs. Moreover, working at family land provides more protection.
Again, when an agri. worker works at domestic lands he does not have to go away in search of a job. It has been observed that the agri. laborers who work at small farms are concerned with family labor, while the labor who work at large forms have been taken from market. Their wages are higher while the family laborers get lower wages. Following the principle of profit maximization a firm ( or a farm) will employ more labor where the wages are lower. This is concerned with small farms. Accordingly, the small farmers are more labor intensive than the big farms. It is shown with Fig.
The wages at small farms are Ws and here the equilibrium is at A where employment is being provided to OL2. The wages on the big farms are WL where the equilibrium is at B where OL1 are given the jobs. It is clear that the small farms provide more jobs than large farms. In other words, the labor intensity on small farms is higher than that on the big farms. As a result, the per acre yield from small farms is higher than that from big farms. In case of Pakistan, India and Bangladesh where pro-labor intensive environment exists, multiple cropping is possible by employing more labor.
In other words, the cropping intensity is higher in these countries. Again, it is said that in case of small farms the ratio of family labor and employed labor is higher. Thus they can be manipulated in a better way and that they can yield higher production. If the state of technology is given, the small farmers are said to have used the lands properly, met the requirements of lands quickly and protected the lands efficiently. As a result, the productivity and production of small farms is comparatively higher. From the above discussion we come to the conclusion that small fanners have superior quality lands and they possess more of family labor. While the big farms do not have such qualitative and quantitative peculiarities. As a result; marginal productivity of large farms of land is low.