Changing Modes of Production in Indian Agriculture

The Marketization of Land and the New Landowning Class

Sociology Optional Notes {PDF}

Complete Notes Package (Paper I & II) | 1000+ Pages | Instant Download

Discounted Price | Buy Now @ ₹600 →

• The introduction of new technology in agriculture has transformed the very mode of agricultural production, giving resources other than land — tractors, mechanised ploughs, pump sets, power threshers — a new centrality that they never held under the traditional system.
• Earlier, landownership passed almost entirely through inheritance, because the land market itself was underdeveloped; today, land can be purchased in the market, so a person no longer needs to inherit land through traditional channels to join the class of landowners.
• Land reform and the Green Revolution together restructured the agrarian system, opening space for a genuinely new class of farmers with different skills and backgrounds — people retired from civil and military service, for instance, who invest their savings into agricultural land rather than inheriting it. This is the sociological story behind the emergence of the Gentleman Farmer.
• This new farming class also attracts educated individuals who choose agriculture as a vocation specifically because of its increased profitability, running their holdings like modern business firms rather than as traditional family farms — marking a substantial break from the older agricultural system.

The Emergence of Capitalist Farmers

• The emergence of capitalist farmers is one of the most significant developments in independent India’s agrarian structure, though how far capitalism has actually penetrated Indian agriculture remains a live sociological debate.
• A capitalist form of wage-labour agrarian organisation has replaced the traditional system of customary land relations, marking a clear transition from peasant family farms to commercial capitalist farms oriented toward marketable surplus.
• A powerful class of rich peasants existed even earlier, but could not properly be called capitalist farmers, because agriculture had not yet experienced genuine capitalist penetration; in the more recent period, new technology and the wider apparatus of agricultural development schemes have allowed a small section of this rich peasantry to emerge as fully commercial, capitalist farmers.
• These farmers have made full use of high-yielding seed varieties, fertilizer, improved implements, assured irrigation, credit facilities, and improved transport and communication — resources typically well beyond the reach of small and marginal cultivators.
• The capitalist farmer hires wage labourers to do the actual work of tilling the soil, remaining involved in agriculture primarily to appropriate the profit it generates rather than to labour on the land personally, and the resulting surplus is directed toward the market rather than domestic consumption alone.
• The size of this capitalist-farmer class remains small in absolute terms, but its emergence has measurably increased agricultural efficiency and productivity, and has helped drive industrial growth more broadly — even as it has simultaneously widened the gap, and accentuated inequality, between the top and bottom layers of the agrarian class structure, contributing to rural unrest.

Debating the Capitalist Character of Indian Agriculture

• Ashok Rudra sees only a partial capitalism in Indian agriculture: a genuine capitalist would always respond fully to market demand, but Indian agriculture remains structurally locked into the wheat-rice system, producing for the market but without full market rationalisation.
  • He points out that while the percentage of land devoted to cash crops is comparatively high, the percentage of family income actually derived from those crops remains low — evidence of an absent input-output rationality of the kind genuine capitalism would demand.
  • Profits from agriculture, in his account, are frequently not reinvested back into agricultural production at all, but diverted instead into ritual spending and status-consolidation expenditure — hence “partial,” not full, capitalism.
• Utsa Patnaik goes further, arguing Indian agriculture remains in a genuinely pre-capitalist phase — a preparatory phase that precedes capitalism proper rather than an early form of it.
  • She notes that although modern technology is available, it frequently goes unused, and family labour continues to substitute for skilled hired labour in one form or another.
  • Farming communities, on her reading, function only as pressure groups rather than as a class that actually controls economic and political power — so while pockets of pre-capitalism, and even a few genuinely capitalist enclaves, do exist, it would be a mistake to generalise and call the Indian agrarian economy as a whole “capitalist.”

Contemporary Shifts in Agricultural Production

• The structural shift away from agriculture, visible in this changing mode of production, shows up starkly in national labour data: agriculture’s share of India’s workforce has fallen from about 66% in 1987–88 to roughly 43% in 2023–24, even as its share of GDP has fallen further still, to around 16–18% — meaning agriculture today employs proportionally far more people than it contributes to national output, the classic sign of a sector still absorbing surplus labour rather than one being modernised out of the workforce.
• Within this overall decline, employment patterns have themselves become more gendered: women’s share within agricultural employment rose from 57% (2017–18) to 64.4% (2023–24), even as men’s participation in agriculture fell — a “feminisation” of the agricultural workforce running alongside the sector’s broader relative decline.
• Contract farming and corporate-linked agri-business, once a marginal presence, have expanded considerably, with agri-tech firms and processing companies now entering direct production agreements with farmers for specific crops — continuing the trend toward commercialised, market-oriented cultivation that Rudra and Patnaik were already debating.
• The government’s Farmer Producer Organisation (FPO) scheme, targeting 10,000 FPOs, reported the onboarding of its full target by February 2025, linking around 30 lakh farmers (nearly 40% of them women) into collectives with a cumulative turnover exceeding ₹5,000 crore by mid-2025 — an attempt to give small and marginal farmers some of the aggregation, bargaining power, and market access that individually they lack, without requiring them to give up land ownership the way corporate consolidation would.
• Together, these trends suggest Indian agriculture is best read neither as fully capitalist nor as simply traditional, but as a structurally mixed and still-transitioning system — exactly the kind of “partial” or “pre-capitalist” characterisation Rudra and Patnaik described, now further complicated by state-sponsored collectivisation through FPOs and the steady, if incomplete, entry of corporate contract farming.