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Institute of Economic Growth, Working Paper No. 305, January, New Delhi, Bina Agarwal (2010)

Drawing upon experiences of collective farming in a few transition countries and in India in contemporary times, the paper reconstructs the case for production collectivities in a situation of increasing marginalization and feminization of agriculture.

Organization of agricultural production has always been a crucial element in economic transition. In the current juncture, when agriculture is characterized by growing marginalization of holdings and feminization in many developing countries, the production structure of cultivation has assumed a central question. The declining size of holdings due to demographic processes causes resource-scarcity or creates a situation where high-yielding technology, indivisible in nature, is difficult to employ in farming. On the other hand, with migration out of agriculture, whether due to new opportunities or driven by distress, mostly male members move to other occupations while the female increasingly take care of the farms.

This feminization of agriculture in many developing nations, although well established by now, is not often explicitly recognized while formulating policies, thereby creating disconnect between policies and intended beneficiaries.

Agarwal, in this paper, reconstructs the case for producers’ collectivities in agriculture, from a bottom-up, human rights based perspective in order to address increasing marginalization and feminization of agriculture. This new approach to collective agricultural production is contrasted with the earlier experimentations of top-down agricultural collectives in erstwhile socialist economies, which ran into problems of sustainability and eventually got dismantled.

The agricultural collectives in the socialist era was characterized by coercive pooling of small peasant farms, compulsory requisitioning of output, massive sizes of production enterprises, farmers’ lack of voice of individual farmers in management decisions, and resultant socio-economic inequality, including gender inequality. The large size of collectives, formed through state decree, often ran into (dis)economies of scale. The lack of participative decision-making and ensuing inequalities created incentives for free-riding or exit from the collective.

In contrast to this, the ‘new’ bottom-up collectives are conceptualized on more participatory and democratic principles. While the constitution of these collectivities should be voluntary, the production, management and distribution decisions should be participatory and democratic in nature. Typically such collectivities should be small in size (of groups of 10-20 farmer households) with high socio-economic homogeneity among members. Additionally, there should be checks and penalties on free-riding.

Such bottom-up collectives can have a number of benefits. First, there is a scope for pooling of resources and undertaking lumpy investments like tube-wells/tractors, which otherwise is difficult for small farmers to make. By pooling land and other resources, the group can employ better technology, which has a certain extent of indivisibility. Secondly, land pooling by holders of contiguous farms increases the cultivable area by doing away with boundaries and bunds. Thirdly, it is easier for the landless to gain access to land primarily by leasing land as a group. At times, groups may pool resources to buy land for cultivation also.

Fourth, joint cultivation also allows labour-sharing arrangements among the members. This helps the collective to ensure adequate supply of labour during the peak season, without competing in the labour markets. Also, the pooling of farming skills and knowledge improves the overall productivity, compared to individual farms. Fifth, the formation of a collective empowers small farmers in terms of greater bargaining power vis-à-vis the market, state and other non-market institutions. Entering contract farming with companies at favourable terms and conditions is difficult for small, individual farmers, but is a distinct possibility for a collective. Similarly, in terms of accessing institutional credit or extension services from state and parastalal institutions is easier for groups. With male-bias usually affecting such institutions, the gains from forming a producers’ collective is even larger for women farmers.

Finally, a collective is more capable of dealing with market shocks like declining product prices or rising food prices than individual farmers. In fact, with sufficient expansion of scale and technology, farmers who are net buyers of food (as is common with smallholder agriculture), can transform into net sellers of food as a group. This reduces vulnerabilities of small and marginal farmers to food price spikes and can ensure more stable nutritional outcomes.

The paper looks at some recent studies on cooperative agriculture in transition countries where even after decollectivisation, many farms continued to function as collectives under modified regulations, due to the perceptible benefits of the latter.

These studies pertain to Kyrgyz Republic in Central Asia, Romania and East Germany in East Europe and Nicaragua in Latin America. In Romania, by 1993, 43 percent of decollectivised agricultural land returned to voluntary cooperatives while in Kyrgyz republic, 63.6 percent of all farm enterprises were family cooperatives in 1997. 22 percent of cultivated land was covered by family partnerships in East Germany by mid-nineties.

The study in Kyrgyz Republic reveals that farm cooperatives were typically small in size of 4-15 families with an average area of 16.2 hectares. The total annual income from crop production and total factor productivity was several times that of individual farms. In Romania, the cooperatives had 3-20 members, usually connected by kinship, and cultivated an average area of 41.2 hectares. Here, the yield of maize, wheat and sunflower was higher for the cooperatives. The labour productivity was higher for cooperatives throughout while land productivity of cooperatives was higher than the smaller individual farms only up to 6.5 hectares. In both these countries, farm cooperatives were managed through consensus among members.

The cooperatives in East Germany and Nicaragua were larger in size around 420-450 hectares. In East Germany during transition, the cooperatives had the highest technical efficiency, or maximum output per unit of all inputs taken together, compared to the individual farms or the large state farms. In Nicaragua, although income levels were not markedly different between cooperatives and private plots, the standard of living was better in the former. Here, the cooperatives were governed by an assembly and elected boards. Clearly, the various experiences show that the economic impact of collective agriculture in terms of higher productivity was significantly positive.

The other example of agricultural collectives studied in depth by the paper is the all-women farming groups in Andhra Pradesh, an initiative supported by the Deccan Development Society (DDS). This initiative has typically helped poor, low caste women to gain access to cultivable land. Under the group leasing programme, 144 women organized into groups (sangams) of 5-15 across 26 villages, cultvated 85 hectares by 2008. A quarter of the rent is paid by sangam members, and the rest is covered by interest free loans from DDS, repayable in installments. The lease periods are normally for 3-5 years after which new negotiations are made and sometimes the groups are reconstituted.

There has also been an innovation to practice group cultivation on purchased land. Supported by a state government scheme, which provides credit to dalit women to buy land, 25 women groups constituted of 436 members, were cultivating 224 hectares of purchased land in 21 villages. Half of the money provided for buying land came as a grant while the rest is repayable over 20 years. The access to land through leasing and ownership has significantly enhanced the social and economic status of these poor women. Also, a comparison between a lease-collective and single family ownership farm in Pastapur Village, Andhra Pradesh showed that the net farm profit per acre was 20 percent higher for the lease-collective. Higher productivity was definitely another gain made by the marginal women farmers.

Based on these examples of considerable economic and social gain that accrues to small and marginal farmers (more so for women) upon practicing collective agricultural production, the author strongly argues that collectivities can play a crucial role at the current stage of economic development in developing and transition nations. Women farmers’ cooperatives can have additional gains in the context of greater feminization of agriculture. The author also notes that supportive state policies are critical, if such gains are to be made from collective agriculture. Skepticism regarding collective farming in policy circles and neo-liberal policies that increasingly leave the agricultural sector to the vagaries of the market, though, can be a strong impediment to the formation and feasibility of agricultural collectives.