TEMPLE OWNED LANDS IN TAMIL NADU:

AN ECONOMIC ANALYSIS

Rajendran, T and K. Palanisami

Department of Agricultural Economics

Centre for Agricultural and Rural Development Studies
Tamil Nadu Agricultural University
Coimbatore - 641 003.
ACKNOWLEDGEMENT
 ACKNOWLEDGEMENT

“Great Achievements are earned with God’s grace”. My salutations at the feet of
the supreme power for his blessings. He kindly imbued me to overcome each and every
obstacles faced and finally to triumph in my present endeavor.

If with profound satisfaction I could present this piece of investigative work in its
present form, I owe a great deal to several of those who showered unstinted support
on me throughout. I owe in second though to place on record in resplendent letters
the over helming patronage granted to me by these noble souls, but for which I
would have been only groping in dark.

I reckon it with a privilege to work under the competent guidance of my

chairman, Dr. K. Palanisami, Director, Water Technology Centre. My diction of thanks
will be incommensurate for his dexterous, meticulous and altruistic guidance during the
advancement of my work. Inaffable is my gratitude for his keen interest, whole-hearted
co-operation and unflagging encouragement rendered during the progress of my
research work and in preparation of the thesis.

I am much oblicated to the members of advisory committee Dr.M.Chandra

sekaran, Professor & Head (Agrl.Econ.), Dr.C.R. Ranganathan, Professor (Maths.) and
Dr.P. Devasenapathy, Professor (Agronomy), for their helpful suggestions, keen interest
and kind encouragement.

Words are inadequate to express my sincere thanks to, my special Friend,

Ashok kumar.

I express my special thanks to Dr.K.R.Ashok, Associate Professor (Agrl.Econ.),

for his constant inspiration and laudable counseling during the course of study.

I am very much indebted to my dear Pal Prahadees, Ph.D, Scholar for helping me
in carrying out the statistical analysis.
 I have immense pleasure for their timely help and encouragement to my sister
Mrs.Chelvi indhi Rani, brother Saravana Kumar and beloved sisters Freethi, Saveeth
and my darling Vineeth, Pal mouse, dear friends Balakrishnan, Arumugasamy and junior
Pal Senthivel.

I am also greatful to all my classmates Mrs. Anjugam, Asst.Prof. (Agrl.Econ.),

Mrs. Thilagavathi, Asst.Prof. (Agrl.Econ.), Mr.Elenchezhian, and seniors, juniors for
their unwavering assistance throughout the period of work.

As “Dearest is the friends love who’s volunteered help at the time of need for
achieving my cherished goal paves me to offer loveable and debted thanks”.

On a personal note, I wish to express my affection and thanks to my parents

Mr.G.Thirumalai velu and Mrs. Thirumalai acche whose silent scarifices, this work
would have never been materialized and my brother Mr.T.Chelladurai and
Mr.T.Chandran whose constant motivations has been the driving force of my life, my
sister Mrs.V. Krishnammal for their support.

Words are inadequate to express my sincere thanks to friends, Ebhin, Pradheep,

Kala, Garpagam and Mahendran, for his timely help and advice.

I extend my thanks to all those who stood with me during the execution of work in
one-way or another.

(RAJENDRAN, T)
 CONTENTS

Chapter
Title Page No.
No.

I Introduction

II Concepts and Review

III Design of the Study

IV Description of The Study Area

V Results and Discussion

VI Summary and Conclusion

References

Addendum
 LIST OF TABLES

Table Page
Particulars
No. No.

1 Temple owned lands in Tamil Nadu

2 Number of sample farmers selected from each village

3 Demographic characters of the study area

4 Cropping pattern of the study area

5 Average Rainfall of the study area

6 Land use pattern of the study area

7 Operational holdings of the study area

8 Sources of irrigation of the study area

9 Temple with and without lands

10 Recorded Tenancy Rights of sample farmers

11 Average rent payable for land

12 Categories of tenants

13 Family size of the sample farmers

14 Age of the sample farmers

15 Farming experience of the sample farmers

16 Educational status of the sample farmers

17 Economic status of the sample farmers

18 Size distribution of sample farmers

19 Distribution of operational holdings-Lorenz curve Gini Co-efficient

of concentration: Temple tenants

20 Distribution of operational holdings-Lorenz curve Gini Co-efficient

of concentration: Owner farmers
Table Page
Particulars
No. No.

21 Cropping pattern of the sample farmers

22 Productivity of crops of the sample farmers

23 Total Investment by sample farmers

24 Asset pattern of the sample farmers

25 Estimating log-linear production function of Temple tenants

26 Estimating log-linear production function of Owner farmers

27 Problems in investment

28 Reasons for not making investment

29 Sample mean of output and input used by the farmers-non-

convergence

30 Resource use efficiency of Temple tenants

31 Resource use efficiency of Owner farmers

32 Sample mean of resources used by the farmers

33 Estimates of Stochastic Frontier Production Function for paddy I-

Temple tenants

34 Estimates of Stochastic Frontier Production Function: paddy II-

Owner farmers

35 Problems faced by the sample farmers

36 Farmers’ Suggestions to improve the productivity of Temple lands

 LIST OF FIGURES

Figure
Particulars Page No.
No.

1. Map of Tirunelveli district showing the study area

2. Size distribution of the operational holdings

3. Lorenz curve for operational holdings - Temple tenants

4. Lorenz curve for operational holdings - Owner farmers

5. Productivity of the sample farmers

6. Structure of the stochastic frontier model

ABSTRACT
 ABSTRACT
TEMPLE OWNED LANDS IN TAMIL NADU: AN ECONOMIC ANALYSIS

There are many temples in Tamil Nadu, which have cultivable land and also
urban lands to a limited extent, donated to them for earning income to meet their
maintenance expenses. These temple owned lands are given on lease to the cultivators
and the rent received from them is the major source of revenue to the temples. But the
purpose is not fulfilled because the rent collection is very poor. The reason stated by the
defaulting lessees is invariably low productivity of the temple lands that gives income not
sufficient even for their subsistence. Major objective was to study the efficiency of crop
production on temple tenants and owner farms in Tirunelveli district, Tamil Nadu and the
specific objectives were (i) to find extent of temple lands cultivated by temple tenants and
their size distribution; (ii) to make a comparative study of capital investment of temple
owned lands and owner operated lands; (iii) to study the efficiency of the crop production
of temple owned lands and owner operated lands; and (iv) to suggest the policy measures
to improve productivity of temple lands.

The present study is based mostly on the primary data collected from 90 temple
tenants and 50 owner farmers. The two taluks of Tirunelveli district viz., Shencottah and
Tenkasi were selected for the study. From the selected two taluks, nine villages were
selected randomly, (five from Shencottah and four from Tenkasi). Ten temple tenants
were selected randomly from each village, which constituted 90 temple tenants. In order
to compare the temple tenants with operated land efficiency, 50 owner farmers were
selected randomly from eight villages (each five) and last 10 from one village. The total
sample constituted 90 temple tenants and 50 owner farmers, thus making the total sample
to 140. The collected data were analyzed using stochastic frontier production function to
fulfill the objectives of the study.

Among the selected farmers in Tirunelveli district, none of the two taluks, there
was full percent Recorded Tenancy Rights (RTR) for temple tenants. The percentage of
registered RTR was 50.0 or above in Shencottah taluk and the highest percentage were
goes to (77.5 per cent) in Tenkasi taluk.

On an average size farm family has three persons. It could be of interest to note that the
size of family is not different between temple tenants and owner farmers. The results had
indicated that, a maximum number of farmers belonged to the age group of above 45 years
(46.4 per cent) followed by the age group of 35-45 years and below 35 years with 42.9 per cent
and 10.7 per cent respectively. About 60.7 per cent of the sample farmers had 10-25 years of
farming experience, 27.9 per cent of them had the farming experience more than 25 years and
only 11.4 per cent of them had an farming experience less than 10 years.

Maximum number of farmers (38.6 per cent) had secondary education followed
by primary education (32.1 per cent). 16.4 per cent of the sample farmers had collegiate
education and only 12.9 per cent of them are illiterates. Per farm income realized was the
maximum in owner farmers at Rs. 65440 followed by temple tenants at Rs. 50156. As
regards per capita income also, similar trend could be observed among the farmers and it
ranges from a minimum of Rs. 5483 in owner farmers to the maximum of Rs. 4180 in
temple tenants. On the other hand, per hectare income was the maximum in owner farms
at Rs. 32638 followed by temple tenants at Rs. 31075.

The Gini concentration ratio was worked the temple tenants to 0.16 and in owner
farmers to 0.14, indicates more equality with farm size. Paddy is the predominant crop in
the both groups of farms. It occupied 84.1 per cent of the Gross cropped area (GCA) of
temple tenants and 62.0 per cent in owner farmers.
In the case of temple tenants, overall average productivity of paddy I was 2285
kg/ha and it was 2295 kg/ha for paddy II, 284 kg/ha for tomato, 494 kg/ha for soybean
and 236 kg/ha for groundnut. In case of owner farmers, the average yield of paddy I,
paddy II, tomato, soybean and groundnut were 3576 kg/ha, 2846 kg/ha, 2348 kg/ha, 753
kg/ha and 423 kg/ha respectively. Investment on land was highest in owner farmers at Rs.
4209 (6.4 per cent), followed by temple tenants at Rs.1292 (12.3 per cent). The keenness of
temple tenants for investment was livestock.
 Farm size was important for both the temple tenants and owner farmers. While
income of the family had lower effect on investment. Among tenant farmers presence of
RTR had a positive effect on investment. The most vital reason stated by the temple
tenants was that they don’t want to invest on temple lands. Their inclination was for
investment in livestock. In case of owner farmers, lack of finance and poor ground water
supply were the reasons for their less than desired investment.

For the efficiency analysis with the stochastic frontier production function shows
that, Temple tenants, paddy I and paddy II, seed rate was found to influence the paddy
yield significantly at five per cent level. The variables namely nitrogen, phosphorous and
labour, (paddy II only) was found to negative impact as the paddy yield by 0.1123 and
0.8916, 0.1192 and 0.1908; 0.0683 and 0.0111 per cent respectively.

Temple tenants articulated that scarcity of the water as the foremost important
problem (96.7 per cent) followed by the low price of the produce, pests and diseases
(86.7 per cent and 82.2 per cent) respectively. Owner farmers indicated that water
scarcity as a serious problem (96.0 per cent), higher incidences of pests and diseases and
low price of the produce ranked second and third respectively.

The highest percentage of temple tenants (96.7 per cent) had suggested that, they
were needed co-operative cleaning work in tanks and ponds and
85.6 per cent of farmers were suggested for remittance of rents at the time of crop failure
and uncertainties. Further, 82.2 per cent of the farmers expressed that need for digging a
well to improve the productivity of temple owned lands.
 INTRODUCTION

CHAPTER I

INTRODUCTION

“The magic of private property turns sand into gold;

Give a man the possessions of bleak rock and he will turn in to garden;
Give him a nine years lease of garden; he converts it in to a desert.”
- Arthur Young

Tamil Nadu is a land of ancient, big temples and mutts. There are many temples

in the state, which have cultivable land and also urban lands to a limited extent, donated

to them for earning income to meet their maintenance expenses. These temple owned

lands are given on lease to the cultivators and the rent received from them is the major

source of revenue to the temples. But the purpose is not served because the rent

collection is poor. The Hindu Religions and Charitable Endowment (HR & CE)

Department is in overall charge of maintaining records and administering the temple

owned lands.

These institutions own nearly 191583 hectares of land (HR & CE, Policy Note:

2003-04). There are several cases where temples are not in a position to file cases against

the defaulters. Again in many cases the existing tenants were not the original lessees.

These are the administrative problems (Vaidhyanathan, 1994).

However, the reason stated by the defaulting lessees is invariably low productivity

of the temple lands that does not give income sufficient even for their subsistence. It is

reported that tenants are really pained for being unable to pay the rent due, because of either

crops failed totally or yielded very poorly in the last 20 years or more, even in Thanjavur
district – the rice bowl of Tamil Nadu (The Kalki Special Report, 1994). This plea has been

even admitted in a few cases filed in the court and the cases had been disposed of on

payment of rent that was less than one fourth of the demand.
Temple owned lands in Tamil Nadu which consist of wet, dry and rainfed lands. The
details are given in Table 1.

Table 1: Temple owned lands in Tamil Nadu (Ha)

S. Owned by
Type of land Owned by Mutts Total extent
No. Temples

1 Wet lands 73543 8512 82056

2 Dry lands 87407 13817 101224
3 Rain fed 8301 - 8301
Total 169252 22330 191583

Source: Policy Note, HR&CE, 2003-04.

The ownership rights of lands held by institutions like temples, and trusts play a

crucial role in the determination of productivity and production in agriculture on the one

hand and landlessness among the tillers of the soil on the other. It has been widely

argued that the exemptions given to the religious institutions from the purview of the Land

Ceiling Acts have been enabled many landlords in Tamil Nadu to escape on the onslaught of

the Land Ceiling Legislation. It has also been argued that this loophole of exemption has

presented landlordism and sub-infeudation in Tamil Nadu (Sivaprakasam, 2003).

Even though the Land Ceiling Act has exempted ‘Religious Institutions’ from the

‘ceiling limit’, their lands, as per the public Trust Act, 1961, should be divided and

distributed among their tenants with not more than 5 acres of land per head including the own

lands held by each tenant. Among the public institutions, in terms of concentration of land

ownership, temples, mutts, and trusts are highly significant. According to Tamil Nadu Land
Reforms (Fixation of Ceiling of land) Third Amendment Act of 1974 (which came into effect

from 15 February 1970), the temples may distribute to each of its tenants not more than 5

acres of land. In reality, temple tenants posses more lands than the legal limit.

The Public Trust Act permits the temples, mutts, and trusts to own up to

20 standard acres of land for pannai (self) cultivation. But Dharmapuram Adheenam has

about 3500 acres under self-cultivation, Avadayar Koil in Arantangi taluk, controlled by

the Tiruvaduthurai Adheenam, owns about 8000 acres in 45 villages. It is found that

almost all the temples and mutts hold under self-cultivation much more than what is
permitted under the Madras Public Trust Act of 1961 (Iyer, 1973). The exemption given to

the religious institutions has perpetuated the concentration of lands in a few hands. This is

a major area of concern of the agrarian situations in Tamil Nadu - at present. Some studies

have mentioned the role of public institutions like temples, mutts, and trusts as one of the

obstacles for the successful implementation of Land Ceiling Acts. But they have been not

gone into the role of such religions institutions in agrarian reform in any great depth.

Statement of the Problem

According to Tamil Nadu cultivating Tenants (Rights to purchase Land Owners’

Rights) Act, 1973, the religious institutions like temples, mutts and trust were allowed to

own 15 acres of land and the rest of the land should be allowed to be purchased by the

tenants who cultivated the temple lands. The listed temples (getting annual income above

Rs.10000 but below Rs.100000 per annum) in Tamil Nadu in the year 1962-63

collectively owned 200000 acres. Nearly one-third of the 9908 non-listed temples

(getting income above Rs.200 but below Rs.10000 per annum) collectively owned

210000 acres (Franklin, 1987).

Almost all the temples own more than 15 acres of land. If the 1973 Act had been

given assent by the president of India, it would have struck a major blow against temple-
based landlordism. The HR & CE opposed this Act and asked for exemption for the

entire temples. In August 1973, the president returned the Act without giving assent to it

because of the stiff opposition of the religious institutions.

The president’s rejection of this Act has resulted in the denial of opportunity

given to the temple tenants to purchase and own the land they cultivate. All the temple

lands are exempted from the purview of Ceiling Acts. These exemptions given to the

public institutions like temples, mutts, and trust have contributed to low surplus lands

under ceiling legislation. Till now, no law has been passed by the state government for

the conferment of ownership right of the land to the tiller.

If the productivity of temple lands is really low, that will lead to low income-low

investment – low yield-cycle. If the cycle is allowed to persist, it is a social waste of the

scarce land. If it is not really low, then the statement of lessee should be contested and

proved wrong. In either case, an economic analysis of temple owned land is the only way

to find a remedy. If the productivity is low it may be due to several reasons. The very

status (tenant) of land holding may be the cause, because tenants may have no interest to

make adequate investment to maintain the fertility of the soil that belonged to some one

else temple or other owners. He may not have the required investible fund and his
borrowing power may be small. A tenant may be a late adopter of technology because he

is too poor to experiment new innovations. Risk aversion may be a cause for the late

adoption of technology. Further, technology itself may not be appropriate to him because

it may be uneconomical for adoption on a small scale or his knowledge of the technology

may be poor because he might have been largely by passed by the extension programmes.

Thus resource constraint, lack of knowledge or difficulty in practicing the technology

may be the of low productivity. These constraints are to be identified and released to

break the vicious cycle of low productivity-low income and low investment. Inadequate
capital formation may cause dynamic deterioration in the farming efficiency – which is a

loss not only to the tenants and temples but also for the state economy because the scarce

land is wasted (State Planning Commission Report, 1995).

Hence, it is also important to conduct an economic analysis of temple owned

lands, which will help to improve the productivity of the temple owned lands through

appropriate policy interventions.

Objectives

Major objective of the study is to study the productivity of temple owned lands.

The specific objectives were:

i. to find the extent of temple lands cultivated by the temple tenants and their

size distribution;

ii. to make a comparative study of capital investment in temple owned lands and

owner operated lands;

iii. to study the efficiency of crop production of temple owned lands and owner

operated lands; and

iv. to suggest the policy measures to improve productivity of temple lands.

Hypotheses

i. productivity is higher on owner-cultivated lands than the temple tenant

cultivated lands; and

ii. tenants of temple lands make lesser investment than owner cultivators.

Limitations of the Study

The study is primarily based on the field level data collected through interviews

and discussion with the farmers. Hence, the usual limitations resulting from the recall

bias of the farmers apply to this study as well, further, this study was done in a specific
agro-climatic region covering specific time period and hence the results should be

carefully interpreted.

Organization of the Thesis

The Thesis has been organized in the following pattern.

Chapter I : Introduction: Problem focus, objectives, hypothesis, limitation of the

Studies are presented.

Chapter II : Concepts and Review: Concepts used in the study along with a brief

review of the earlier studies are presented.

Chapter III : Design of the Study: Survey design and analytical framework are

presented.

Chapter IV : Description about the study Area: Agro-climatic features of the area are

discussed.

Chapter V : Results and Discussion: Results of the study are presented and then

discussed.

Chapter VI : Summary and Conclusion: Salient findings are summarized and

conclusions are drawn. Policy implications are outlined.

 CONCEPTS AND REVIEW
CHAPTER II

CONCEPTS AND REVIEW

A thorough understanding of concepts used and the models employed in the

earlier studies would help the researcher in refining analytical tools for critical analysis of
the problem and would help to draw meaningful inferences. An attempt was made in this

chapter to review the past literature and presented under the sections viz.,

1. Review of concepts

2. Review of earlier studies

1. Review of Concepts

i. Production

ii. Productivity

iii. Investment
iv. Resource use efficiency

v. Technical efficiency

Production

According to Bhanage (1962) production in economics is any activity directed

towards the satisfaction of other peoples want through exchange.

Nerin (1971) defined production as the application of land, labour, capital, and

enterprise to the creation of new wealth.

 According to Hansen (1972) production covers the activities of changing the form

of a good at any stage from the raw material to the finished product, changing the

situation of a good, changing the position of a good in times and provision of some kind

of services such as retailing, banking and entertaining etc.,

Dewett and Chand (1975) defined production as the transformation of inputs into

outputs.

Donald and Malone (1981) described production as a process involving the

transformation of inputs into outputs.

According to Seth (1985) production is the result of blending various factors of

production viz., land, labour, capital, and organization.

According to Nallusamy (1994) production is considered as the conversion of

certain inputs of resources or factors of production into a usable form.

Productivity

Heady (1952) used the term productivity to denote physical productivity.

Bhattacharjee (1955) defined productivity as the output per unit of farm business.

Saxon (1965) defined productivity as the ratio of total output to all inputs

including intermediate producers.

Pandit (1965) defined productivity as the output per unit of input.

Singh (1977) observed productivity as yield per hectare of land.

Pandya (1977) considered agricultural productivity in terms of output per unit of

input. In other words, it was the output for every kilogram of improved seed sown, for
every litre of irrigation water used for every kilogram of fertilizer applied, for every liter

of herbicide and insecticide applied, or every unit of power employed for farm

operations.

Korgaonker (1977) defined productivity as the ratio of output to input.

Acharya and Nair (1978) defined productivity as the contribution of all the inputs,

they being combined in some composite farm position fashion.

Saini (1980) stated that the productivity was the output per unit of land. It could

be measured as output per unit of net area rather than gross cropped area because the

farmer would automatically takes care of the effect of intensity of cultivation of land

associated with different size classes of farms.

Singh (1995) defined that productivity is a concept measuring the ratio of total

output to a weighted average of inputs.

According to Kerr and Swarup (1997) productivity is the quantity of output per

unit of resource or input.

In this study, productivity is defined as output per unit of land.

Investment

The agricultural economists consider all expenditures on addition to and

improvement in farm assets as investment. But they differ in their opinion on items of

expenditures to be considered as investments.

According to the All India Rural Credit Survey (RBI, 1968) investment referred

to the total expenditure of funds in production/acquisition of capital goods by the farmers

during the period (usually a year) of reference. This definition would show investment as

addition to capital stock – a flow variable.

This was a macro definition of investment in agriculture including public sector

investment in extension-education. Investment for developing labour efficiency was

rarely found at micro (farm) level. If it was left out them farm investment would refer to

addition to and improvement durable productive assets only. Expenditure on variable

inputs such as seeds, fertilizers and energy etc., would not quality to be called investment
even though they were produced means of further production and hence came under the

category of ‘capital’ input. Expenditure on them would be earned back is one production

period and hence it was generally referred to as ‘current outlay’ and distinguished from

investment meaning addition to capital stock (∆ kt). Here, a distinction was made

between productive assets and capitals. The farmer included land and other natural

resources while the latter excluded them because they were natural resources and have be

called ‘land’ and not capital.

However, in this study the investment in (both fixed and working) capital, which

would mean that the concept of investment included both expenditure on durable

productive assets (as against narrow definition of productive capital) and also what was

called current outlay (expenditure as variable inputs).

In short, investment for the study would mean by expenditure on non-family

labour inputs.

Hence, the definition of investment used in this study and its components are

stated below:
 Investment refers to the total expenditure of the farmer during the year of

reference with the objective of carrying out of farm production, efficiently. It includes

three major categories of expenditure (components of investment).

1. Investment per se: a. Expenditure for creating/strengthening infrastructure and

addition to productive assets. Infrastructure included: wells, irrigation channels,

godowns, cattle sheds, and other such facilities. They would assist production

indirectly. b. Expenditure as productive assets (durable): land; land improvement,

soil conservation, plantations, livestock, tree crops, and plantations – three

increases productive capacity.

2. Expenditure on variable inputs such as seeds, fertilizers, chemicals, energy

require to utilize productive capacity and for improving production efficiency.

The size of this expenditure would depend upon the productive capacity and

infrastructure available on-farm.

3. Expenditure as hired labour, which would restrict expenditure on 2. In conditions

of scarcity of funds.

So capital formation in the present study is defined as the investment made on wells
irrigation structures such as installation of tube-wells, digging of bore wells, land reclamation,
livestock, and crop enterprise.

Resource use Efficiency

Khols (1956) defined efficiency as a ratio of ends to resource. The ends are

considered either in the broadest or narrowest sense depending upon on the particular

problem at hand.

Heady (1957) defined the efficiency as the capacity or ability of any person,

process, or thing to realize the special goal. Economic efficiency is used to be achieved
when the resource are used in a manner to maximize the particular objective or end

quantity which is relevant to the economic unit under consideration.

Farell (1957) first identified technical efficiency and allocative efficiency as two

components of economic efficiency. He defined technical efficiency as the measure of

firm’s success in producing maximum output from a given set of inputs.

Krishna (1964) compared the average yield per acre or average cost in different

size groups of farms to measure efficiency of various sizes of holdings.

Khusro (1964) used cost per unit of output to measure the efficiency of different

farm size holdings.

Lau and Yotopoulos (1971) described economic efficiency as composed of both

technical and allocative efficiency.

According to Yotopoulos and Lau (1973) a firm set to be more technically efficient
than other if it consistently produced larger quantities of output from the same quantities of
measurable inputs and a firm is said to be price efficient if it maximized its profit.

Timmer (1971), Shapiro, and Muller (1977) were concerned with focusing on

differences in productivity among farmers for measuring the technical efficiency.

According to Sampth (1979) the components of economic efficiency were price

or allocative efficiency and technical efficiency.

According to Forsund et al., (1980) the amount by which a firm would lie its

production and profit frontier and the amount by which it would lie above its cost frontier

were upgraded as measure of inefficiency.

 Pitt and Lee (1981) defined technical efficient production as the maximum

quantity of output attainable from given inputs.

Battese and Coelli (1988) defined technical efficiency of an individual firm in

terms of the ratio of the observed output to the corresponding frontier output conditional

as the level of inputs used by the firm.

Ekanyake and Jayasuriya (1989) opined that a production frontier could be

defined and identified, as an envelope of the entire range of relationship in a unique best

practice input-output correspondence.

Ali and Choudhry (1990) defined technical efficiency as the ability of a firm to

achieve maximum possible output with available resources and allocative efficiency as

the ability to contrive as optimal allocation of given resources. He defined economic

efficiency as a product to technical and allocative efficiencies.

According to Doll and Orazem, economic efficiency (1978) refers to the combination

of inputs that maximize individual or social objectives. They defined in terms of necessary

and sufficient conditions. The necessary conditions refer to physical relationship, while the

sufficient condition encompasses individual or social goals and values.

Mihir Shah (2002) indicated that not many people know that accounting to NSS

Data, nearly 80.0 percent agricultural labour households (those who earns more than

50.0 percent of their income from labour) is India are landed. The land they own has

such low productivity that is does not yield enough income to support their families.

Technical Efficiency

Khusro (1964) measured the farm efficiency in terms of output, per unit of a

single input, acreages or as output per unit cost of all inputs put together.
 Schmidt and Lovell (1979) explained technical inefficiency as the inability to

produce the maximum (i.e. frontier) output from given inputs and allocative inefficiency

as the inability to combine inputs in optimum proportions given the input price.

Brock et al. (1980) had indicated that the key question when defining the frontier

function concept is whether to allow actual observation to the above frontier or not.

The frontier is called deterministic if all the observations must be on or below the frontier

and stochastic if observations can be above the frontier due to random events.

According to Kalirajan (1990) economic efficiency enlists technical efficiency

whereby the greatest output could be obtained from any given set of inputs in a technical

production function and price efficiency yields equality between the marginal value

product and opportunity cost.

Ureta and Rieger (1990) said that the key feature of the stochastic production

frontier is that the disturbance term which is composed of two parts, a symmetric and a one

sided component. The symmetric component captures the random effects outside of the

control of the decision maker including the statistical noise contained in every empirical

relationship. The one sided components captures deviations from the frontier due to

inefficiency. They also said that the biggest advantages of the stochastic production frontier

model is the introduction of a disturbance term representing noise, measurement error and

exogenous stocks beyond the control of the production unit in addition to the efficiency

component. Hence technical efficiency measures obtained from stochastic frontier are

expected to be higher than those obtained from deterministic model.

Battese (1992) defined technical efficiency of the given farm as the factor by

which the level of production for the firm is less then the frontier output.

Jayaram et al. (1992) referred technical efficiency as the maximum possible yield

achievable with a given level of input use.

 Sunandini et al. (1992) studies the input use efficiency of rice farms in west

Godwari district of Andhra Pradesh using Cobb-Douglas production function. They

found that the ratio of marginal value product to factor cost was higher than unity or both

small and large farmers.

According to Shanmugham and Palanisami (1995) the measurement of economic

efficiency includes technical efficiency and price efficiency. Technical efficiency refers

to the proper choice of production function among all these activity in use by farms. Price

efficiency refers to the proper choice of input combinations. The issue of economic
efficiency in agriculture has now been broadened from the earlier emphasis on price

efficiency to consider technical efficiency also.

Kumbhakar (1994) defined the production frontier as the locus of maximum

possible outputs for each level of input use. A producer is said to be technically efficient

if the observed output was maximum, given the input of quantities and a failure on the

part of the farm to produce the frontier level of output, given the input quantities is

attributed to technical efficiency.

Kalirajan and Shand (1997) measured technical efficiency as the ratio of observed

output to potential output. Although there is no apriori theoretical reasoning is the

stochastic framework of measuring technical efficiency, the potential output is defined as

the natural shift from the observed output.

Belen and Manuel (1997) referred to technical efficiency as the achievement of

the maximum potential output from a given quantify of inputs, taking into account

physical production relationships.

Singh and Agarwal (1994) on the study of economic efficiency of rice production

in Punjab in three selected zones found out the per hectare yield of rice increased with an
increase in cost of cultivation which was observed in all the three agro climatic zones of

the states. However, this positive relationship between cost and productivity help up to a

point only. The economic optima of rice production reached at a cost level of Rs.6412 per

hectare with a corresponding yield level of 47.80 quintal during the year 1984-85.

Ghayathiry (2002) referred to stochastic frontier production function used to study

the technical efficiency among the small farmers and large farmers in talk command

areas and studied the technical efficiency of farmers in different paddy seasons in

Pondicherry region.

For the present study technical efficiency is defined as the degree to which the

actual output of the production unit approaches to the maximum. The overall technical

efficiency can be decomposed in to the pure technical efficiency and the scale efficiency.

2. Review of Past Studies

Measurement of Efficiency

Jayaram et al. (1992) analyzed the technical efficiency among the rice-growing

farmers in Mandya district of Karnataka using the frontier production function with the

sample of 100 farmers. The study revealed that existence of glaring over use of resources in

the production of rice. The input use was found to be highly inefficient. The measures of

technical efficiency indicated the degree of inefficiency in the use of selected factors in the

production of rice. The large farmers were found to be more efficient than the small farmers.

The highly inefficient use of resources particularly in the case of small farmers suggested in

proper pricing of resource such as, fertilizers and irrigation, leading to wastage.

Joydeb Sasmal (1993) used generalized stochastic formulation for production

function estimation. The production functions have been estimated empirically for HYV

Paddy by a field survey in 14 villages in Midnapore district of West Bengal. It has been

found that the marginal effects of inputs on mean output and variance of output are
independent. i.e. an input, which has positive marginal effect on mean production, does

not necessarily have similar effect on the risk of production. The inputs like fertilizers,

pesticides, and labour have significant impact on mean output of HYV Paddy both in the

rainy and dry seasons. Mean output is higher and variance of output is lower in the dry

season than in the rainy season are more appropriate for the cultivation of HYV Paddy.

Kutaula (1993) analyzed the farmers’ efficiency performances and its related

parameters while applying frontier technology to wheat crop grown on reclaimed soils.

On the sample farms, the factor, which affected was output. The mean technical efficiency
was 0.7636. It stated that the perfect technically efficient plant production of wheat,

farmers would be able to increase the output of wheat by 23.6 per cent. The farmers were

able to increase the present level of mean technical efficiency with the existing level of

inputs without any additional cost.

Shanmugham and Palanisami (1993) discuss the methodological approach

applying frontier production to measure the efficiency of rice farmers in Kamaraj district

of Tamil Nadu. Timmer’s probabilistic frontier function was used for estimating

efficiency measures, since it was free of effects due to outliers. The production function

was first estimated by OLS method, and then it was transferred in to a deterministic

frontier production function. The probabilistic function co-efficients used in estimating

efficiencies were obtained after deleting outliers’ observation until the estimated co-

efficients were established. The OLS estimates implied that fertilizer, irrigation, and

plant protection were significant factors of production in the rice farms. It might be due

to under use of resources by the average farms. The OLS portrayed the responses of the

average farmers while the frontier function reflected the response of the ‘best practice

farmers’. The study implied that the rice output of average farmer could be increased by

26.0 per cent by adopting the technology followed by best practice farmers.
 By optimum resource allocation, there existed a scope to raise output by 5.0 per cent.

The economic inefficiency revealed that the production could be raised by 29.7 per cent

if technology gaps between ‘average and best practice’ farmers were narrowed and also by

optimum resources allocation in all farms. Hence, this model is successful in measuring

both technical and allocative efficiency.

Bastine (1994) used stochastic frontier production to evaluate the comparative

economic efficiency of different categories of irrigated farms pertaining to coconut and

areca nut, which will highlight the comparative advantage of each for improving technical
as well as allocative efficiencies by adopting optimal resource allocation frontier by first

estimating Cobb-Douglas production functions and then correcting the constant term by a

correction factor worked out from the moments of residuals. The variables included in the

analysis were labour measured in man days, fertilizer cost in rupees per ha, manure cost in

rupees per ha, and irrigation measured in m3 per ha per annum.

Banik (1994) used stochastic frontier model with cross sectional data of 99 Paddy

farms in Bangladesh to estimate the technical efficiency of individual farms. The author

felt that various functional forms could be specified for the stochastic frontier production

function viz., Cobb-Douglas, constant elasticity substitution, Translog etc., However, the

author felt that the Cobb-Douglas functional form is generally preferred in most

published papers on technical efficiency measurement, because of its well known

advantages. Its purpose was to show what output of a given product would be achieved

by different combination of factors. Maximum Likelihood Estimates was used to

estimate the parameters. The variable included in the analysis were value of output per

acre as dependent variable and human labour as labour hours per acre, total expenditure

per acre attached with human labour etc., as independent variables. A very interesting

finding was that 10 out of 13 most efficient farms belonged to the category of small
farms. It was also observed that the average technical efficiency of owner-tenant farms

was higher than that owner farms.

Mohandas and Thomas (1997) studied the economics of rice production based on

data collected from a sample of 80 farmers in the area of Kuttanad, Kerala. The ABC of

cost concept was used to estimate various income measures for various size classes.

The Cobb-Douglas production function was used to estimate the resource use efficiency.

The MVP factor cost ratios indicated that an investment of additional rupee in each input

would yield an additional return worth of Rs.5.25 from input machine labour, Rs.147

from human labour and Rs.2.33 in fertilizer. Marginal Value Product of machine labour

was highest in the large farmers to an extract of 5.55, followed by small and marginal

farmers. In case of human labour, the productivity was almost similar for all the size

groups but for all the size groups but for the fertilizer it was found maximum among large

farmers (2.44) followed by marginal and small farmers.

Rajasekaran and Krishnamoorthy (1998) measured the technical efficiency and

analyzed pesticide use in rice production in the Thrissur Kole lands of Kerala. The Technical

efficiency in production was estimating by using the stochastic production function.

The estimation of stochastic production function made it possible to find out whether the

deviation in technical efficiencies from the frontier output is due to firm specific factors

or due to external random factors. The Cobb-Douglas type was specified for this study.

The Maximum Likelihood Estimates of the frontier production function indicate the

sample farmers had 0.53 ha of land with 2.13 tonnes of production.

The variance ratio showed that the farm specific variability contributed more to

the variation in yield among farmers, which means that the total variations in output from

the frontier is attributed to technical efficiency. It means 88.0 per cent of the differences
between the observed and the maximum frontier outputs were due to differences in

farmers’ level of technical efficiency and not related random variability.

The individual technical efficiencies showed variations and it ranged from 0.49 to

0.92. Majority of the farmers operated relatively at higher level of technical efficiency.

Xiaosang and Jeffrey (1998) used stochastic production function and cost frontier

to derive technical, allocative, and economic efficiencies of Chinese conventional rice

and hybrid rice production. The results suggested that when hybrid rice production

increased the potential economics of scale for Chinese rice production, observed

productive efficiencies was lower than conventional rice production.

Singh and Kumar (1998) analyzed farmers’ efficiency performance in rice crops

in Punjab, using frontier production function. The levels of technical efficiencies

achieved by the individual farmers were worked out using Timmers indices. Technical

efficiency was very high in Ludhiana district and least in Hoshiarpur district. The results

showed that 20.0 per cent farms had technical efficiency below 60.0 per cent and 40.0 per

cent had 60.0 to 70.0 per cent efficiency and same proportion had 70.0 to 80.0 per cent

efficiency in Hoshiarpur. In Ludhiana 47 out of 50 farmers i.e. 94.0 per cent showed

technical efficiency of 90.0 to 100.0 per cent.

And there was a considerable diversity is technical efficiency within the groups of

small, medium, and large farmers. Average technical efficiency was high for medium

and large farmers i.e. 78.0 per cent of both and 73.0 per cent for small farms. The

analysis of technical efficiencies in rice cultivation had shown that there was a

considerable variation in efficiency across regions and size categories.

Hazarika and Subramanian (1999) analyzed the technical efficiency of the Tea

Industry in Assam using the stochastic frontier production function model. It was found
that 29.4 per cent of the total farms that operate large farm (estates) belonged to the most

efficiency category (96.0 to 99.0 per cent) and 8.8 per cent in the least efficient group

(64.0 to 70.0 per cent). It was also observed that farm specific technical efficiency varied

between 0.64 to 0.99 with mean technical efficiency of 0.88.

Mythili and Shanmugham (2000) estimated the technical inefficiency of

individual farmers using an unbalances panel data of 234 rice farmers in Tamil Nadu.

The maximum Likelihood Method is used to estimate the frontier function. It was found

that the technical efficiency varied widely (varying from 46.5 to 96.7 per cent) across the

sample farms and it was time invariant. The mean technical efficiency was computed as

82.0 per cent, which indicated that on an average, the realized output could be increased

by 18.0 per cent without additional resources.

Renuka (2001) estimated the level of technical efficiency using stochastic frontier

model. Her study focused on the role of input utilization in Paddy cultivation in the 80s

and the early 90s, for West Bengal and Orissa. The study revealed that input productivity

has indeed played an important role in the growth performance in the 1980’s and early

1990’s. While growth inputs and total factor productivity have contributed significantly

to the output growth in both the states, the performance of West Bengal has been better

than Orissa. The important in the productivity input in West Bengal has been brought

about both by efficiency and technology in the presence of variations across seasons and

seed varieties. Although the use of inputs and technical efficiency increased overtime, if

has been dramatic as the improvement in the state of production technology. Overtime,

the farmers in this study have not only moved closer to their frontier, but have also been

operating with respect to a higher frontier or production technology.

Borthakur and Krishnamoorthy (2002) analyzed the production efficiency of rice

farms on the basis of the probabilistic frontier production function in the state of Assam
dis-aggregated by agro-climatic zones. The analysis revealed that fairly high technical

efficiency in almost all the zones of the state, indicating 74.0 to 80.0 per cent realization

of the maximum possible income by the farmer from their given set of resources. The

OLS estimate implied that fertilizer and manure were not significant factors of production

in any zone. This implied that ‘average’ and ‘frontier’ farmers did not use any appreciable

quantity of these inputs or they use too much of these inputs resources, so that the input

elasticities became zero. The OLS estimate for human labour was the highest (0.3049) in

CBV zone and the lowest in LBV zone (0.1192). The coefficient of seed was the highest
is UBV zone and became progressively lower in other zones. In all the zones except NBP,

the constant term in the frontier function was higher than that estimated by the OLS method.

In the study area the farmers were not fully allocatively efficient in maximizing their profits

as the highest allocative inefficiencies of 37.0 per cent were observed in BV zone.

Fan (2000) developed a frontier shadow cost function approach to estimate

empirically the effects of technical change, technical and allocative efficiency improvement

in Chinese agriculture during the period 1980-93. The author concluded that the first phase

rural reforms (1979-84) focused on the decentralization of the production system have

had significant impact on technical efficiency but not allocative efficiency and during the

second phase of land reforms, which was supposed to focus on the liberalization of rural

markets, technical efficiency improved very little and allocative efficiency had increased

only slightly.

Himayathullah and Iqbal (2000) compared the technical efficiency of rainfed and

irrigated wheat farms are Peshawar Valley. An econometric model was used to test the

hypothesis that small, medium, large farmers and owner-operated, owner-cum-tenanted,

and tenanted farms are equally technically efficient. They concluded that medium and

owner operated farms were relatively technically more efficient than small, and large farms
and owner-cum tenanted farms respectively. In the rain fed farming system of Lakki

Marvat that the small, medium and large farms and owner operated and owner-cum-

tenanted and tenanted farms were equally technically efficient in the Peshawar Valley.

Jha et al. (2000) applied data envelopment analysis to estimate allocative and

technical inefficiency in the cultivation of wheat on 300 farms in the Indian Punjab for

the periods 1981-82 and 1982-83. They discovered that, on the whole, large farms are

technically and allocatively more efficient than small farms for both years. At the

disaggregated level a broadly similar results were obtained.

Lansink et al. (2000) measured time and firm specific – output technical efficiency.

The firm specific production frontier incorporates past prices as an argument encouraging

innovation and time trend to account for exogenous technical change. The result of the

Dutch pot plant firms indicated that increases in energy would induce the firms to adopt

energy services, machinery, and labour saving technologies and material and structure

using technologies.

Maietha (2000) used shadow prices approach to decompose the cost efficiency into
its technical and allocative components. He conducted that the inefficiency due to higher
cost was on the average 69.0 per cent and mainly as a result of technical inefficiency.

Wadud and White (2000) compared the estimates of technical efficiency obtained
from the stochastic frontier approach and the data envelopment analysis (DEA) approach
using farm level survey data for rice farmers in two villages in Bangladesh. In one village,
irrigation was operated by diesel pumps and in the other village by electricity. They
concluded that the result from both approaches indicated that the efficiency is significantly
increased by the factors measuring environmental degradation and irrigation infrastructure.

Fraser and Hone (2001) analyzed annual variation between estimates of farm-

level technical efficiency derived using data envelopment analysis and malmquist
estimate of total factor productivity. They found out that farms changed their relative

rank in terms of efficiency across years.

Gerber and Franks (2001) used data envelopment analysis to identify real farms

that are Cent percent relative efficient, which was used to comparison farms and

indicators of best practice. After efficient farms were identified, the inputs they used

were compared with the input used by less efficient farms to show which were over used

and how much.

Overfield and Fleming (2001) studied the impact of gender relations on the

technical efficiency of the Coffee small holders in Papua New Guinea. Likelihood ratio

tests revealed significant technical efficiencies in coffee production. The mean technical

efficiency for the whole period was 0.57. The gender factors like the proportion of male

labour, the commitment by male and female household heads to commercial production

of coffee and education of male household heads were significantly influencing the

technical efficiency.

Velavan (2001) studied the measurement of efficiency, equity and poverty among

the tank irrigated farmers in Tamil Nadu, he concluded that the technical efficiency of the

farmers had shown that the farmers in PWD tanks were more efficient than the farmers in

PU tanks and again the large farmers were more efficient than the small farmers wetland

area, participation is tank and water management activities had significantly affected the

efficiency of the farmers.

 DESIGN OF THE STUDY
CHAPTER III

DESIGN OF THE STUDY

This chapter provides a detailed outline of the methodology, selection of study

area, and sampling procedure followed for the selection of Temple Tenants (TT), Owner

Farmers (OF) and the econometric techniques employed.

Selection of the Study Area

In Tamil Nadu, two districts namely Thanjavur and Tirunelveli have more acreage

of temple lands when compared to other districts of the state. We purposively selected

Tirunelveli district as a study area because southern Tamil Nadu, the district has more

acreage under temple lands in order to get the sufficient number of respondents having

temple tenants. The researcher belongs to the same district and he is familiar with the
local dialect, geographical area and culture of the people which may provide additional

advantage to the researcher to collect the relevant informations. A total of 28364.28

hectares belongs to temple lands is Tirunelveli district. Of this, 17144.44 hectares are

wetlands, 9781.16 hectares are dry lands and 1452.68 hectares are rainfed lands.

Sampling Design

In the study area out of 11 taluks, two taluks viz., Tenkasi and Shencottah were

selected randomly for the study. The researcher, after consulting respected Hindu

Religious and Charitable Endowment (HR & CE), Executive officer of Tenkasi and
Shencottah, listed out the tenants who have owned and operated temple lands. From the

selected two taluks, nine villages were selected randomly from Shencottah (five) and

Tenkasi (four); 10 temple tenants were selected randomly from each village, which

constituted 90 temple tenants. In order to compare the temple tenants with owner

operated farms, 50 owner-operated farmers were selected randomly from eight villages

(each five) and last 10 from one village. The total sample constituted 90 temple tenant

farmers and 50 owner farmers, thus making the total sample to 140 (Table 2).

Table 2. Number of Sample Farms Selected in each Village

Temple Tenants Owner Farms

S. No. Taluk / Village
(TT) (OF)
I. Shencottah
1. Panpozhi 10 5
2. Vadagarai 10 5
3. Shencottah 10 5
4. Puzhiarai 10 5
5. Kudiruppu 10 5

II. Tenkasi
6. Nannagaram 10 5
7. Kumanthapuram 10 5
8. Krishnapuram 10 5
9. Kadayanallur 10 10
Total Sample 90 50

The field data from the sample farms were collected with the help of pre-tested

interview schedule through personal interview. The information regarding the age,

education, experience in farming, family details, size of the firm, asset position,

investment, problems in investment and suggestion by the farmers were obtained from

the sample respondents. The secondary data like location of the District, soil type, rainfall

pattern, cropping pattern, demography, land use pattern, irrigation pattern and

infrastructure facilities etc., were obtained from District statistical office.

Study Period

The study was conducted from August - 2004 to November - 2004. The data

pertaining to the year 2002-03 were gathered.

Tools of Analysis

The following tools were employed to analyze the data, interpret the results, and

draw conclusions relevant to the objectives of the study.

1. Percentage Analysis

Simple averages and percentages were worked out for both temple tenants and

owner farmers included in the study in order to identify their general characteristics,

cropping pattern, cultivation practices, problems in investment, suggestion by farmers etc.,

2. Determinants of Investment

To encourage investment by temple tenants and owner farmers, the factors

influencing the level of investment had to be identified first and their relative importance

should be evaluated. Farm size, income of the farm family and presence of Recorded

Tenancy Rights (RTR) were considered to be important. To understand their relative

influence on investment log-linear production function was specified. It was:

ln In = ln a0 + a1 ln A + a2 ln Y + a3 ln D + U

Where,

In = Investment (in Rs. ‘000)

A = Farm size (in ha)

Y = Annual income of the family (in Rs. ‘000)

D = 1 if tenant had RTR

= 0 otherwise

U = Random error term

ai = parameters to be estimated. (i = 1 to 3)
 The equation was estimated separately for the two groups of farmers with the

apriori expectations.

The dummy variable D was not relevant for the owner farmers who had made

investment in farm assets during the year ending 2002 – 03 constituted the sample for this

analysis. They were 90 and 50 among temple tenants and owner farmers respectively.

The Ordinary Least Square Method (OLS) with the classical assumptions was used for

the estimation. The estimated values were tested for the statistical significance at one per

cent, five per cent and 10 per cent levels.

3. Lorenz Curve

Palanisami et.al. (2002) and Rajanikanth (2000) mentioned that the Lorenz curve is

normally used to represent and analyze the size distribution of income and wealth. In this

study, the curve relates to the cumulative proportion of operational holding when the units

are arranged in ascending order of their size. The units may be individuals, size groups and

the like amongst which inequalities exist and sought to be measured.

The inequality measure itself is described by the Gini coefficient of concentration derived

from the Lorenz curve.

This was drawn to depict and analyze the size distribution of the firm. This curve

represented the cumulative proportion of firm size, when the units are arranged in the

ascending order of their firm size. If every member of the sample had been same firm

size, the Lorenz curve would coincide with the diagonal, which is also referred to as the

“Line of absolute equality” or “Egalitarian line” Thus the Lorenz curve is a curve of

actual distribution and the lines limiting the area below the diagonal is the area of

absolute inequality. The Lorenz curve was used to study the distribution of farm size of

the selected temple tenants and owner farms.

Gini Concentration Ratio

Using Gini concentration ratio, inequality was measured. Gini concentration ratio

is defined as the proportion of area under diagonal line which is known as Lorenz curve.

Its value ranges between 0 and 1 (Palanisami et.al, 2002).

The Gini concentration ratio of ‘0’ means that every individual had equality with

firm size. Ratio of ‘1’ would mean that it reflect inequality in firm size distribution

among the sample farmers. Gini concentration ratio was worked out by using the
following equation:

G = 1+ (1/n)-(2/n2 Z) Σ (n+1-i) Yi

Where,

G = Gini concentration ratio

N = the number of individuals (respondents)

Yi = farm size holding by the ith individual

Z = Σ (Yi/n)

4. Production Function Analysis

Different methods are used in studying the problem of economic efficiency in

agriculture of which the production function approach is one. The concept of production

function is an integral part of the concept of economic efficiency. Generally the

efficiency of input use of economic agents is evaluated by comparing the marginal

productivity of factors of production with their prevailing market prices. To achieve

optimum allocation of resources, therefore, it is necessary to know the marginal and not

the average product. Marginal productivity can be known only if full technical

relationship between output and input is known. Given the data and the nature of the

problem, production function of the Cobb-Douglas type was used in this study, keeping
in view the appropriateness of the function to a study of this nature and also the

experience of the past studies. The production function fitted to the data in this study was

of the form:

Y = b0 X1b1 X2b2 X3b3 X4b4 X5b5 Ui

Where, Y = Paddy output (kg/ha)

X1 = Quantity of seeds (kg/ha)

X2 = Quantity of urea (kg/ha)

X3 = Quantity of phosphorus (kg/ha)

X4 = Quantity of potassium (kg/ha)

X5 = Labour (man days / ha)

b0, b1, b2, b3, b4, and b5 = regression coefficients

Ui = Error term

Technical Efficiency

In the present study, an attempt was made to measure the efficiency of crop

production of temple lands and owner operated lands using stochastic frontier production

function.

Frontier Production Function

Aigner et al. (1977) developed a stochastic frontier model. This model was

employed to measure technical efficiency between the temple and owner operated lands.

This will be useful to compare the resource use efficiencies between the two groups of

farms. The concept of productions frontier is the same as that of production that describes

the greatest possible output from a given combination of inputs. (i.e.) it is a ‘production

frontier’. Therefore failure operate on the production function is technical inefficiency.

 The measurement of inefficiency is the main motivation of the study of frontiers.

Farell (1957) in his seminal paper elaborated the concept of technical efficiency.

It involves the firm’s ability to obtain the maximum output from a given set of input or

resources. If a firm uses the best practices/method and could achieve the maximum

output with a given inputs and technology. It is likely to be superior to another firm,

which does not get the same output with the similar bundle of inputs and technology.

The estimation of production frontier has proceeded along the two general paths.

Deterministic Frontier

Which forces all observations to be on or below the production frontier so that all

the deviations from the frontier are attributed to inefficiency and other representing the

usual random noise. The advantage of deterministic frontiers is that the farm-specific

efficiency and random error can be separated.

The key factor of the stochastic production frontier is that the disturbance term is

composed of two parts. One is symmetric and the other one sided. The symmetric

component captures the random effects outside the control of the decision maker

including the statistical noise contained in every empirical relationship (such as poor

input performance, bad weather, input supply breakdown etc.,) and the one sided

component that captures deviations from the frontier due to inefficiency.

Stochastic Frontier

The following equation denotes the production frontier in the matrix form.

∑i
Qi = Q (Xki, β )e i = 1,2 …. n k = 1, 2 …. k

Where,

Qi is the output of the ith farm

 Xi is the vector of K inputs of the ith farm,

β is the vector of parameters to be estimated and

∑i a farm specific error term.

The stochastic frontier is called a ‘composed model’ because the error term is

composed of two independent elements, namely

∑i = Vi – Ui i = 1,2….n

The term Vi is the symmetric component and permits random variations in output

due to factors like weather and plant diseases. It is assumed to be identically and

independently distributed as Vi ≈ N (0, δ 2V). A one sided component (Ui ≥ 0) reflects

technical efficiency relative to the stochastic frontier Qi = Q (Xki, β )evi. Thus Ui = 0 for

any farm lying on the frontier, while Ui >0 for any farm lying below the frontier. Hence,

expression Ui represents the amount by which the frontier exceeds realized output.

Assuming that Ui identically and independently of U is half-normal. This Ui takes the

value zero when the farm produces on its outer-bounded production function (realizing all

the technical efficiency potential) and is less than zero when the farm produces below its

outer-bounded production function (not realizing fully its technical efficiency potential).
This might happen due to number of factors, such as risk aversion, self-satisfaction,

information problems, which may prevent the farm achieving its fully potential.

Density functions can be written as,

1
 −1 
δ u(Ui) =  
1  2ui 2  if Ui ≥ 0
δu
2π

= 0, otherwise
 It follows that δ 2
= V (∑ δ 2)

= δ v2 + δ u2

Further defining λ = δ v /δ u (i.e.), ratio of assided error term to symmetric error term.

The Cobb-Douglas function form is generally preferred for assessing technical

efficiency because of its well-known advantages. Its purpose is to show what output of a

given product will be achieved by efficient combination of factors. As for as example, one

may need the difference in the amount of labour used per unit of land. In principle,

confining the analysis to this functional form can be sometime restrictive. However, it is

possible to estimate the stochastic frontier using Maximum Likelihood Estimation Method.

Aigner et al. (1977) suggested that Maximum Likelihood Estimates (MLE) of the

parameters of model could be obtained in terms of parameterization.

δ 2
= δ v2 + δ u2 and

λ = δ v /δ u

One advantage of estimating the frontier function is that it is possible to find out

whether the farmer deviation of yield from frontier yield is mainly because he did not use

best practice techniques or is due to external random factors. Thus one can say whether

the differences between actual yield obtained and frontier yield, if any occurred

accidentally or not.

δ 2
= δ v2 + δ u2 and

γ =δ v
2
/δ u
2

γ is an indicator of relative variability of Ui and Vi that differentiates that actual yield

from the frontier.

There are two interesting points above γ .

Where δ v2 is tending to zero, which implies that Ui is the pre-dominate error

than γ =1. This means that farmers yield difference from the increasing feasible yield is

mainly because he did not use best practice technique.

When δ u2 is tending to zero, which implies that the symmetric error term Vi is

the predominant error. γ will be tending to zero. This means that the farmers yield

differences from the frontier yield is mainly because of either statistical error or external

factors not under this control. Maximum Likelihood Method may obtain direct estimates
of stochastic production frontier model. In this study MLE Method is used for estimation (as

used by Olsen et al. (1980), Aigner et al. (1997), Kutaula (1993) and Arindam Banik,

(1994))

Assumptions Used in the Present Stochastic Frontier Model

In the present study, the following assumptions were made which underline the

specification of a stochastic frontier. The frontier is stochastic in nature due to factors

beyond human control and symmetrical distributed error term present in it is responsible

to capture the effects of outside random effects observation and measurement error on the

dependent variable and other statistical noise.

Variations in the technical efficiency of individual firms are due to factors

completely under the control of farmers.

 DESCRIPTION OF THE STUDY
AREA
CHAPTER IV

DESCRIPTION OF THE STUDY AREA

The analysis of any research cannot be fully appreciated, unless the background

information, such as physical, social, and economic condition of the region, is

interpreted. This will help in correlating the results with the actual field condition.

Hence information regarding the geographical location, rainfall distribution, source of

irrigation, land use pattern, cropping pattern, demography and general environmental

features of the study area given a bird eye view in this chapter.

Geographical Location

Tirunelveli district lies between 8o. 05′ and 9o. 30′northern latitude and between

77o.05′ and 78o.25′east longitude. It is bounded in north by Virudhunagar district, in east

by Tuticorin district, in south by Gulf of Manner, in southwest by Kanniyakumari district

and in west by Kerala state. The total geographical area of the district is 6823 sq.km and

it is divided in to three Revenue Divisions, 11 taluks, 61 Revenue Firkas and 628

Revenue villages for the Administrative purpose.

General Features

Tirunelveli district is under southern agro-climatic zone of Tamil Nadu. It is

having an altitude of 100-160 metres with coastal alluviam, Black, Red sandy, and deep
red type soils. It experiences an average annual rainfall of 777.7mm and annual potential

evapotraspiration (PET) of 1825 mm. Tanks are the major source of irrigation in the

district covering 40.2 per cent of irrigated area. The major crops grown in the district are

paddy, cotton, pearl millet, sorghum, chillies, and minor millets. The district details are

delineated briefly as follows. Figure 1 shows that the study area of taluks for Tirunelveli

district.

Population
The total population of the district was 27.24 lakhs as per 2001 census. It could

be seen from Table 3 that 52.0 per cent of the population was in rural areas. The female

population was higher (51.0 per cent) than males. The literate level was 68.4 per cent of

which male accounted for 54.3 per cent.

Table 3. Demographic Characters of the Study Area

S. No. Particulars No. of persons Male Female

1. Total population 2723988 1333939 1390049

(100.0) (49.0) (51.0)
2. Rural population 1415742 688797 726945
(100.0) (48.7) (51.3)
3. Urban population 1308246 645142 663104
(100.0) (49.3) (50.7)
4. Literate population 1917238 1041964 875274
(100.0) (54.3) (45.7)
5. Density of population 411 per sq. km

(Percentages to total are given in parentheses)

Source: Dist. statistical Hand Book 2002-03.

Soil Type
 The soil type plays a major role in agriculture. It mainly decides the cropping pattern
and other input requirements. Hence the information on various soil types their potential and
limiting factors are necessary for effective utilization of these natural resources in an optimum
level. Soil types of Tirunelveli district are predominant red loam and black soil.

Cropping Pattern

The cropping pattern plays a major role in deciding the input consumption of

agriculture. The detail of cropping pattern followed is the study area is furnished in Table 4.

From table 4 it can be inferred that the major crop was paddy in the district.

It was accounted for more than 40.0 per cent of the total cropped area followed by pulses

(11.0 per cent).

Table 4. Cropping Pattern of the Study Area (2002-03)

S.No. Crops Area in ha Percentage to total
1. Rice 66200 42.0
2. Millets and other cereals 10700 6.7
3. Pulses 17400 10.96
4. Sugarcane (Gur) 3500
5. Sugarcane (Cane) 3500 4.4
6. Groundnut 3700 2.3
7. Gingelly 1400 0.9
8. Cotton 3900 2.5
9. Total cultivated area 158680
10. Net Sown Area 136695
11. Area sown in more than once 21985
12. Average size of holdings 0.81

Source: Dist. Statistical Hand Book 2002 – 03.

Climate and Rainfall

 Tirunelveli district experiences a semi-arid tropical climate. Hot weather is

experienced during March, April, May and Cool weather from November to February.

Moisture regime of the district is ustic and soil temperature regime is isohypothermic.

About 57.2 per cent of the rainfall is received during period from October to December.

The rest of rainfall is distributed fairly in other seasons though the quantum of rainfall

was very low. The particulars of average rainfall in the study area are given in Table 5.

Table 5. Average Rainfall in the Study Area (2002 – 03) (mm)

Normal Actual
S. No. Particulars
Rainfall Rainfall
1. Winter (January – February) 68.7 71.9
2. Summer (March – May) 151.4 179.2
3. South – West Mansoon (June – September) 112.8 56.6
4. North – East Monsoon (October – December) 444.8 506.8

Source: Dist. Statistical Hand Book 2002 – 03

Land Use Pattern

Land use pattern in Tirunelveli district is presented in Table 6. It could be seen

from table that the geographical area of the district was 6.82 lakh hectares of which net

area sown was 20.0 per cent (1.37 lakh hectares) followed by forests area accounting for

17.7 per cent (1.20 lakh hectares).

Table 6. Land Use Pattern in the Study Area (2002-03) (Ha)

Percentage
S. No. Particulars Area
to total
1 Total geographical area 682308
2 Forest 120736 17.7
3 Land put to non-agricultural uses 99521 14.6
4 Cultivated waste (Barren and) 63370 9.3
5 Permanent pastures and other grazing land 5267 0.8
Land under miscellaneous tree crops and not
 6 included in net area sown
Current fallow 10681 1.6
7 Other fallow land 64112 9.4
8 Net area sown 150965 22.1
9 Area sown more than once 136695 20.0
10 Total cropped area 21985
11 158680

Source: Dist. Statistical Hand Book 2002 – 03.

Operational Holdings

There are about 3.06 lakh holdings in Tirunelveli district of which marginal

holdings accounting for 80.5 per cent of the total. It was observed that only 0.4 per cent

of the farmers were under the category of large but they owned 10.3 per cent of the area.

The area of operational holdings in the district was 2.37 lakh hectares of this 32.9 per

cent were under marginal holdings. Small and semi-medium accounted for about 40.0

per cent of the total area under operational holdings. Operational holding of the district

are given in Table 7.

Table 7. Operational Holdings in the Study Area (2002-03)

S. No. Size of Holdings Number Area (ha)

1 Marginal (less than 1 ha) 245946 78265
(80.5) (32.9)
2 Small (1 – 2 ha) 34291 48044
(11.2) (20.2)
3 Semi – medium (2 – 4 ha) 17443 47649
(5.7) (20.1)
4 Medium (4 – 10 ha) 6744 39256
(2.2) (16.5)
5 Large (morethan 10 ha) 1231 24396
(0.4) (10.3)
Total 305655 237620
(100.0) (100.0)
(Percentages to total are given in parentheses)

Source: Dist. Statistical Hand Book 2002 – 03.

Source of Irrigation

A major factor deciding consumption of fertilizers and pesticides is the availability

of irrigation facilities. Different sources of irrigation are presented in Table 8. It is found

that wells were the major source of irrigation accounting for 42.5 per cent followed by

tank irrigation (40.2 per cent). Irrigation by tube wells was negligible (0.9 per cent).

Table 8. Sources of Irrigation in the Study Area (2002 – 03)

S. No. Source Number Ayacut (ha)

1 Canals 197 15407
(16.4)
2 Tube wells 118 860
(0.9)
3 Wells (irrigation only) 87172 39934
(42.5)
4 Tanks 2170 37730
(40.2)
Total 93931
(100.0)

(Percentages to total are given in parentheses)

Source: Dist. Statistical Hand Book 2002 – 03.

Infrastructure Facilities

The infrastructure facilities like vehicles, roads, banks, hospitals and agricultural

pump sets are conducive for agricultural development of any region. Tirunelveli district

has more number of Registered Motor Commercial Vehicles (17912 nos.) and
Non-commercial (90883 nos.). In road development, the district has better position in

transport facilities. The district has more commercial bank branches with (230 nos.).

Tirunelveli has more number of electrified agricultural pump sets (67 449). They

are used to exploit the groundwater in the district. In the health facilities Tirunelveli

district has better position with 2196 beds and 370 doctors.

Paddy Cultivation Details

The total area under paddy cultivation was 90,000 ha with two cropping seasons,

viz., Khar, the first crop (June to September) in 28, 000 ha and Pisanum, the second crop

(October to February) in 62, 000 ha. The major verities cultivated are ASD 16, ASD 17,

ASD 18, ADT 36, ADT 42, and CO 45.

Temple Lands in Tamil Nadu

Particulars about the temples and mutts in Tamil Nadu with and without lands and

buildings are presented in Addendum.

 RESULTS AND DISCUSSION
CHAPTER V
RESULTS AND DISCUSSION

The results of the study are presented and discussed in this chapter through the

following sections.

i. Tenancy aspects of the sample farmers

ii. Basic characteristics of the sample farm households.

iii. The size distribution of land holding of temple tenants and owner farmers.

iv. Farm investment by temple tenants and owner farmers.

v. Efficiency of the crop production in temple tenants and owner farmers.

i. Tenancy Aspects of the Sample Farmers

Recorded Tenancy Right
Record of Tenancy Rights (RTR); as per the Tamil Nadu Agricultural Lands Act,
1969, any person cultivating land not owned by him, but taken on lease has to register his
tenancy right with the concerned taluk office. This is called Record of Tenancy Rights (RTR).

This registration entitles him the security of tenancy (against arbitrary evitiction),

fair rent and even a right to buy the land on priority, if the land is offered for scale.

However the very same benefits of the tenants encourage landowners to avoid the

registration. They would prefer oral lease or other forms of arrangements (such as
hypothecation for loans, advances from the owner to the tenant - either real or

imaginary). So it is not uncommon to see unregistered tenancy. Temple tenants take on

lease the lands belonging to the temple. It cannot be done without an official order from

HR & CE Department. But even among temple tenants there exists the unregistered

tenancy rights; because lease is inherited, transferred or even sold by the original lessee

to some one else without notice to the temple authorities. The current status of the

Recorded Tenancy Rights (RTR) is presented in Table 10.

Table 10. Recorded Tenancy Rights of Sample Farmers

Temple tenants (Nos.)

S. No. Taluk
Total with RTR %
1 Shencottah 50 27 54.0
2 Tenkasi 40 31 77.5
Total 90 58 64.4

It could be observed from table 10 that in none of the two taluks, there was

100.0 per cent RTR for temple tenants. The percentage of registered RTR was 54.0 in

Shencottah taluk and the highest percentage was 77.5 per cent in Tenkasi taluk. Overall

percentage was 64.4 showing that the Act had not been fully enforced. Not all these who
failed to register concealed the fact; simply they had not done it and they were well aware

of the Act and had no reservation for registration. Their activities were transparent.

Therefore, the extent of concealed tenancy would be smaller than the percentage of

unregistered (non RTR) tenants.

Terms of Tenancy

The period of lease, the rent and the mode of payment of rent are the factors that

define the terms of tenancy. When the rent is a fixed value payable in cash either before

raising the crop or after the harvest of the crop it is called fixed cash tenancy. If the rent is
payable in kind at specified rates so many number of bags of grain per hectare, it is fixed

kind tenancy. Alternatively the rent may be paid as a percentage of the produce harvested

which is called as share cropping.

The Public Trust Act 57/61 fixed fair rent at 40.0 per cent of grain harvested and

20.0 per cent of straw and the tenants retained 60.0 per cent of the main product (rice

grain) harvested. But non-payment of rent was not infrequent and sought relief, which

came through Act 21/72 where in the tenants who paid atleast a part of their arrears, were

given waiver for the balance of rent due from them. Further the Act 18/80 changed the

even proportion of the harvest payable as rent. The share of tenant and the owner in total

quantity harvested was fixed at 75.0 per cent and 25.0 per cent respectively and no share

in the straw was payable.

Thus, the tenants received substantial relief from their obligation to pay rent and

further relief came from the Act 38 of 1991. At the time of study, the rent payable by the

tenants of temple and also other lands was 25.0 per cent of the harvested product only.

Therefore, the rent paid per hectare of leased in land varied due to the variation in

productivity of the crop raised.

Average quantity of paddy grain payable by the sample tenants and its money

value, estimated at the average price (of Rs. 4/kg) received by the sample farmers are

presented in Table 11.

Table 11. Average Rent Payable for Land

Temple tenants (Nos.)

S. No Taluk
Kind (kg/ha) Value (Rs.)

1 Shencottah 763 3052

 2 Tenkasi 774 3096

Total 769 3074

As could be seen in table 11 payment of rent in kind for rice crop was 769 kg/ha

for the temple tenants and average value of rent per ha was Rs.3074. In Shencottah taluk,

payment of rent in paddy was crop 763kg/ha and in Tenkasi taluk was 774 kg/ha with the

value of Rs. 3052 and Rs. 3096 respectively.

Thus, rent of the temple land was lesser than that of owner land. The relief and

concessions provided by the various Tenancy Act were so common to both temple

tenants and other tenants, but the lower average value of rent per hectare for temple lands

could be explained only by lower productivity of temple lands and the failure to revise

the cash rent adequately over the years.

Categories of Tenants

Temples allocated temple lands directly to the cultivating tenants long back and

the allocation was officially recorded as per the RTR Act 10/69. By this arrangement,

sub-tenant and all other cultivators of the temple lands were recognized as tenants of the

lands cultivated by them. It also allowed the temple tenants to pass on the land to their

legal heirs if they were cultivators. There was also a ceiling of five standard acres

(two standard hectares) for land allotted to any individual tenants. Tenants who had land

in area of exceeding five standards acres divided the same among their family members

to satisfy the law and to retain the land with them.

There were cases of transfer of the lease holding to some other cultivators in

return for cash payment either as advance, loan or outright sales price. While the records

in the temple would show someone as the lessee, the actual cultivating tenant would be

someone else. They were called indirect tenants of temple lands. The lands were the cash
crops like sugarcane and banana were raised, were leased out by open auction method,

normally for period of three years. In the next auction after three years the land might

change hand, if the highest bidder in the auction was some one other than one who was

cultivating land previously. But, at any one point of time there was no difficulty in

identifying the tenants and they were direct tenants of the temples.

Hence, the tenants could be classified into two categories as (i) direct tenants and

(ii) indirect tenants. The indirect tenants can be further classified by mode of acquisition

of tenancy. The distribution of tenants among these categories of farms presented in

Table 12.

Table 12. Categories of Tenants

(Numbers)
Direct Indirect tenants
S. No. Taluk Total
tenants Heirs Sub-lease
1 Tenkasi 7 15 18 40
2 Shencottah 9 12 29 50
Total 16 27 47 90
(%) 17.8 30.0 52.2 100.0

As could be perused from table 12 there were 16 direct tenants, accounting for

17.8 per cent of the total number of temple tenants. The indirect tenants were 74

(82.2 per cent). Among them, 30.0 per cent received land as heirs of the tenants who took

land on lease from the temple, originally. The share of sub-tenants in the total number

indirect tenants was 52.2 per cent.

There were direct and indirect tenants, the whole set of the indirect tenants

category and some in the direct tenants category had no RTR in spite of the law making it

obligatory. Most of the temple tenants had the security of tenancy, as even transfer to the
heirs was not difficult. Sub-leasing and even sale of tenancy right was observed while in

a smaller proportion only.

ii) Basic Characteristics of the Sample Farmers

Basic characteristics of the sample farm households’ would help in drawing

inferences in proper perspective and hence the same are described in this section. Mainly

size and type of family, age, educational status and experience in farming, economic

status of the sample farm households are described below.

Size of Family

The size of farm family in general would influence the types of labour employed

in agricultural operations and the number of wage earners would influence the farm

family income and the adoption of modern technologies in agriculture. Therefore, the

details on the size and composition of the sample farm households were analyzed and the

results are presented in Table 13.

Table 13. Family Size of the Sample Farmers

(Numbers)
Owner farms
S. No. Family size Temple tenants (TT) Over all
(OF)
1 <3 23 11 34
(25.6) (22.0) (24.3)
2 3–5 66 39 105
(73.3) (78.0) (75.0)
3 >5 1 0 1
(1.1) (0.7)
Total 90 50 140
(100.0) (100.0) (100.0)
Average size 3.2 3.16

(Percentages to total are given in parentheses)

 From table 13 it could be observed that on an average family size were about 3.

It could be of interest to note that the size of family is not different between temple

tenants and owner farms.

As tenants have to pay rent for the leased-in lands, they have a desire to increase

their income and hence a large family is advantages to them either to lease in more area

for cultivation or to earn wage income through off-farm employment.

Age of the Farmers

Age of the farmers in general influences the extent of adoption of modern

agricultural technologies to a great degree. Therefore, the details on the age of the sample

farmers are presented in Table 14.

Table 14. Age of the Sample Farmers

(Numbers)
Temple tenants Owner farms
S. No. Age in years Over all
(TT) (OF)
1 <35 10 5 15
(11.1) (10.0) (10.7)
2 35 – 45 41 19 60
(45.6) (38.0) (42.9)
3 >45 39 26 65
(43.3) (52.0) (46.4)
Total 90 50 140
(100.0) (100.0) (100.0)

(Percentages to total are given in parentheses)

It could be seen from table 14 the temple tenants in the age group of 35-45 years

constituted 45.6 per cent, followed by 43.3 per cent in the age group of more than 45

years and 11.1 per cent for the age group of less than 35 years.
 For the combined sample, the results had indicated that, a maximum number of
farmers belonged to the age group of above 45 years (46.4 per cent) followed by the age
group of 35-45 years and below 35 years with 42.9 per cent and 10.7 per cent respectively.

Experience of the Farmers

Experience in farming in general influences the resource-use efficiency in

farming; because of those farmers were having a lot of traditional and modern

technologies. Therefore, the details on the same were analyzed and the results are

furnished in Table 15.

Table 15. Farming Experience of the Sample Farmers

(Numbers)
Temple tenants Owner farms
S. No. Experience in years Over all
(TT) (OF)
1 <10 9 7 16
(10.0) (14.0) (11.4)
2 10 – 25 53 32 85
(58.9) (64.0) (60.7)
3 >25 28 11 39
(31.1) (22.0) (27.9)
Total 90 50 140
(100.0) (100.0) (100.0)

(Percentages to total are given in parentheses)

Perusal of table 15 indicates that 60.7 per cent of the sample farmers had 10-25

years of farming experience, 27.9 per cent of them had the farming experience more than

25 years and only 11.4 per cent of them had a farming experience of less than 10 years.

In case of temple tenants, tenants having experience 10-25 years constituted

58.9 per cent, while those having experience above 25 years constituted 31.1 per cent.

Only 10.0 per cent of the temple tenants were found to have experience below 10 years.
 Regarding owner farmers, 64.0 per cent had the farming experience between

10-25 years, 22.0 per cent of them had the farming experience above 25 years and only

14.0 per cent of them had a farming experience of below 10 years.

Educational Status of the Farmers

Educational status of the farmers in general influences the knowledge of the

farmers and hence the extent of adoption of modern technologies. The details on the same

were analyzed and the results are presented in Table 16.

Table 16. Educational Status of the Sample Farmers

(Numbers)
Temple tenants Owner farms
S. No. Educational status Over all
(TT) (OF)
1 Illiterate 11 7 18
(12.2) (14.0) (12.9)
2 Primary Schooling 29 16 45
(32.2) (32.0) (32.1)
3 Secondary Schooling 32 22 54
(35.6) (44.0) (38.6)
4 College 18 5 23
(20.0) (10.0) (16.4)
Total 90 50 140
(100.0) (100.0) (100.0)

(Percentages to total are given in parentheses)

It could be noted from table 16 that the study area maximum number of farmers

(38.6 per cent) had secondary education followed by primary education (32.1 per cent).

An interesting fact was that 16.4 per cent of the sample farmers had collegiate education

and only 12.9 per cent of them illiterates.

 In case of temple tenants, 35.6 per cent of them had completed secondary

education and it was 44.0 per cent in owner farmers where as, the share of illiterates was

12.2 per cent and 14.0 per cent in temple tenants and owner farmers, respectively.

It could be inferred that collegiate level of education was higher in temple tenants

(20.0 per cent) followed by owner farmers (10.0 per cent).

Income Status of the Farmers

Per capita annual income of a farm family was taken to be a measure of its

economic status. It was measured in current prices of 2002-03. Annual income included

all sources-crop and livestock production, wage income off-farms or non-farm and

income from assets such as hire charges for equipments hired or rental income for assets

leased out-net of all costs incurred in the process of earning the income. Therefore the

annual per capita income was calculated and is reported in Table 17.

Table 17. Income Status of the Sample Farmers

(Rs. / Yr.)
S. No. Category per farm per capita per ha
1 Temple tenant 50156 4180 31075
(TT)
2 Owner farms 65440 5483 32638
(OF)
Over All 57798 4832 31857

It could be seen from table17 that per farm income realized was the maximum in

owner farmers at Rs. 65440 followed by temple tenants at Rs. 50156. As regards per

capita income also, similar trend could be observed among the farmers and it ranged from

a minimum of Rs. 5483 in owner farmers to the maximum of Rs. 4180 in temple tenants.

On the other hand, per hectare income was the maximum in owner farmers at Rs. 32638

followed by temple tenants at Rs. 31075.

 The maximum per hectare income in owner farmers was due to the supplementary

income derived from the livestock and effective use of farm resources. Thus smaller the

family, better education and ownership of land were the main factor contributing to the better

economic status of owner farms as compared to temple tenants. Thus, the larger size of the

family and large experience had not helped temple tenants to their economic status.

iii) Size Distribution of Land Holdings

Temple own blocks of lands covered whole of one or more revenue villages

because donors-rulers, philanthropists have donated lands in areas of sufficient to earn

income for the maintenance of temples such as day - today expense and periodical repairs

and renovations. Even earlier legislations fixing ceiling on size of land holding exempted

temple owned lands. Temple leased out the lands in blocks in open auction. Persons, who

took the land on lease paid the rent to the temple, but cultivated the land by subleasing to

other tenants each with a small area. The sub-tenants had no security of the tenancy and

the rent fixation was very arbitrary, causing much hardship to them. The problem

assumed the proportion of social unrest, particularly in Tirunelveli district.

The need to protect the interests of the sub-tenants was strongly felt and the

government response came with the Public Trust Act 57 of 1961. A ceiling limit of 20

standard acres was fixed for areas under direct cultivation of the temple.

Distribution of Farmers by Size

The size of the farm was measured by the operational area i.e. area available for

either owned or leased in, irrespective of the fact whether it was actually cultivated or not

in the year of study. The land holding pattern of the sample farmers was analyzed and the

results are presented in Table 18.

Table 18. Size Distribution of Farms of Sample Farmers

(Numbers)
Temple tenants Owner
S. No. Size of land holding (Ha) Total
(TT) farmers (OF)
1 Below 1 27 7 34
(30.0) (14.0) (24.3)
2 1–2 47 26 73
(52.2) (52.0) (52.1)
3 Above 2 16 17 33
(17.8) (34.0) (23.6)
Total 90 50 140
(100.0) (100.0) (100.0)

(Percentage to total are given in parentheses)

As could be seen in table 18 majority of the farmers i.e. 52.1 per cent had

operational land of one to two hectares. 23.6 and 24.3 per cent had an operational area

above two hectares and less than one hectare respectively.

In case of temple tenants, 52.2 per cent had operational area of one to two

hectares 30.0 per cent of them had an operational area of less than one hectare and only

17.8 per cent of them had an operational area above two hectares.

Regarding owner farmers, 52.0 per cent had an operational area of one to two
hectares 34.0 per cent of the sample farmers were found to have an operational area

greater than two hectares. Only 14.0 per cent of them had an operational area of less than

one hectare. An interesting note that more than 50.0 per cent of the sample were in

having operational area one to two hectares.

The size distribution of farmers shows that small sized farmers. Nearly, 53.0 per

cent of temple tenants and owner farmers were in the category of marginal (<1 ha) farms.
Therefore medium and large sized farmers were few and the success of farming depends

upon the availability of technology appropriate for the small and tiny scale operations.

Figure 2. Shows that majority of the farmers i.e. 52.1 per cent had an operational

land of one to two hectares. 23.6 and 24.3 per cent had an operational area above two

hectares and less than one hectare respectively.

60

Figure 2. Size of Farm Holdings

50
Lorenz Curve

Distribution of operational holdings and the Gini co-efficient of concentration

ratio analysis for the temple tenants and owner farmers are furnished in Tables 19 and 20.

Table 19. Distribution of operational holdings-Lorenz curve Gini Co-efficient of

Concentration: Temple Tenants

No. of % % Cum hol Cum Cal. Area

Size (ha) Area
holding Holding Area % area% (ha)

0.5-1.0 23 18.4 25.6 16.2 25.6 16.2 413.3

1.1-1.5 35 42 38.9 36.9 64.4 53.1 3420.4

1.6-2.0 31 52.4 34.4 46.1 98.9 99.1 9802.0

2.1-2.5 1 1 1.11 0.9 100.0 100.0 10000.0

Total 90 113.8 100.0 100.0 23635.7

Gini
0.16
Ratio

Table 20. Lorenz curve Gini Co-efficient of Concentration: Owner Farmers

Cal.
Size No. of % Cum Cum
Area % Area Area
(ha) holding Holding hol % area%
(ha)
1.5-2.0 11 22 22 13.9 22.0 13.9 306.2
2.1-3.0 23 69 46 43.7 68.0 57.6 3916.5
3.1-4.0 13 52 26 32.9 94.0 90.5 8507.6
4.1-5.0 3 15 6 9.5 100.0 100.0 10000.0
Total 50 158 100 100.0 22730.3
Gini
0.14
Ratio
 From tables 19 and 20 it is seen that there is heavy equality in the distribution of
operational area towards temple tenants. While nearly, 53.0 per cent of temple tenants
accounted for only about 20.0 per cent area remaining 47.0 per cent accounted for about
80.0 per cent area, wherein the case of owner farmers were in 80.0 per cent accounted for
only about 30.0 per cent area remaining 20.0 per cent accounted for about 70.0 per cent area.

The distribution is even more equality at higher ends. The Lorenz curve is

plotted in figures 3 & 4. The Gini concentration ratio worked the temple tenants to 0.16

and in owner farmers to 0.14, indicates more equality with farm size.
 100
90
80
70 Egalitarian line

Cum. % area 60
50
Temple tenants
40
30
20
10
0
0 10 20 30 40 50 60 70 80 90 100
Cum. % holdings

Figure 3. Lorenz Curve for Farm Size Distribution of Temple Tenants

100
90
80
70 Egalitarian line
Cum. % area

60
50
Owner farmers
40
30
20
10
0
0 10 20 30 40 50 60 70 80 90 100
Cum. % holdings

Figure 4. Lorenz Curve for Farm Size Distribution of Owner Farmers

Cropping Pattern of the Sample Farmers

The cropping pattern, which influenced the productivity as well as the

profitability, in turn, depends on the production environment. Main sources of irrigation

in that study area were tanks as well as wells. The details of the cropping pattern

observed in the sample farms for the crop year 2002-03 are furnished in Table 21.

Table 21. Cropping Pattern of the Sample Farmers (Ha.)

Temple tenant
S. No. Crops Owner farms (OF)
(TT)

1 Paddy I (June-Sept) 57.2 36.0

(63.1) (42.5)
2 Paddy II (Oct-Dec) 19.0 16.5
(21.0) (19.5)
3 Tomato (June-Sept) 5.0 23.0
(5.5) (27.2)
4 Soybean (Oct-Dec) 7.4 7.6
(8.2) (9.0)
5 Ground nut (Oct-Dec) 2.0 1.6
(2.2) (1.9)

GCA 90.6 84.7

(Percentage to total are given in parentheses)

i All percentages refer to Gross Cropped Area (GCA)

ii Area figures are sample totals.

Paddy is the predominant crop in both the groups of farmers. It occupied 84.1 per cent

of the GCA in farms of temple tenants; 62.0 per cent in owner farmers. There were two

seasons that contributed for the concentration of paddy in the farmers. Where the first

season (June-Sept) crop accounted for 63.1 per cent and 42.5 per cent of the GCA of
temple tenants and owner farmers respectively, and the second season (Oct-Dec) paddy

accounted for 21.0 per cent and 19.5 per cent in GCA of temple tenants and owner

farmers respectively. Soybean shared 8.2 per cent and 9.0 per cent of GCA in farms of

temple tenants and owner farmers respectively. Tomato was cultivated in 27.2 per cent

and 5.5 per cent of GCA of owner farmers and temple tenants respectively. Groundnut

had very small share of 2.2 per cent and 1.9 per cent of GCA in temple tenants and owner

farmers respectively. Thus, Paddy is the most dominant crop in both group of farmers,

followed by soyabean, tomato and groundnut in temple tenant farmers; while the order
was tomato, soyabean, and groundnut in owner farmers.

Productivity of the Crops

One of the hypotheses set for this study is that the productivity of crops grown by

the tenant farmers is comparatively lower than that in the owner farmers. Several past

studies had shown that this low yield of temple tenants by the “Low Investment –Low

Productivity – Low Income Cycles support this fact. For further verification of this fact,

the data on yield of crops collected from the sample farmers were analyzed and the

results are presented in Table 22.

Table 22. Productivity of Crops of Sample Farmers

(Kg/Ha)
Temple tenant Owner farms (OF)
S. No. Crops
(TT) (n=90) (n=50)

1 Paddy I (June-Sept) 2285 3576

2 Paddy II (Oct-Dec) 2295 2846
3 Tomato (June-Sept) 284 2348
4 Soybean (Oct-Dec) 494 753
5 Ground nut (Oct-Dec) 236 423
 It could be seen from table 22 that the average productivity of crops varied among

the farms due to differences in the soil fertility and cultivation practices. Overall average

productivity of paddy I in temple tenant was 2285 kg/ha and it was 2295 kg/ha for paddy II,

in temple tenant the productivity of the other crops were 284 kg/ha for tomato, 494 kg/ha

for soyabean and 236kg/ha for groundnut. In case of owner farmers, the average yield of

paddy I, paddy II, tomato, soyabean and groundnut were 3576 kg/ha, 2846kg/ha,

2348kg/ha, 753 kg/ha and 423 kg/ha respectively. Highest productivity was seen in

owner farmers.

Figure 5. Shows that the productivity of the temple owned lands was lesser than

the owner operated lands. In case of temple owned lands the average productivity of

tomato was 284 kg/ha and groundnut was 236kg/ha because scarcity of the water as well

as low price of the produce and severe incidences of pests and diseases.
 4000
Figure 5. Productivity of the Sample Farmers

3500
iv.) Farm Investment

Investment of capital is beneficial and inevitable for farm production and more so

with the modern technology appropriately ‘Capital intensive’. When farmers attempt to

avail the opportunities opened up by the technological progress in agricultural, farming

becomes technology intensive and also capital intensive. Whether it is owner operated or

tenanted operated, application of technology demands additional investment for in

acquiring durable productive assets that can improve productive capacity on –farm and

for purchase and use of critical inputs that help effective utilization of the capacity.

The first one includes fixed inputs such as productive assets in land, wells,

channels, pump sets, tractor, sprayers, dusters and other equipments, while the second

one including variable inputs of quality seeds, manures, bio-fertilizers, chemical

fertilizers, weedicides, pesticides and energy resources for operating the tractor and other

machineries. In making the required investment, tenant farmers have two limitations that

are not very serious with owner-operated farmers. First, problems relate to the attitude of

the tenants. Since the land does not belong to him and tenancy may change hand,

investment in durable assets is risky; a tenant is less enthusiastic than owner farmers, to

make such investments. The security of tenancy for a reasonably long period of say more

than five years may solve this problem, but such a security is not readily available to

many tenants. Second limitation comes from the ability of the tenant to borrow. For

investment in durable assets, financial institutions give loans and even subsidies are

available, but security of immovable assets is insisted. Tenant farmers do not have any

such asset, because even the lands tilled by them are not theirs.

For the crop loans there was no need for such security still the tenants may not be

enthusiastic because they have to share the additional gains with the owner of the land

with practically no share for the owners in the burden of debt and cost of production.
This had a social dimension also for the non-temple tenants. However the limitations of

the tenant cultivators would not be serious if the return to the investment were large

enough to motivate them if that was true, low investment seen in tenant farms could be

explained, at least partly due to low return for the investment. Then low return would be

the cause of low investment and vice-versa. A cycle of low-level equilibrium might

persist, causes of which should be identified and removed not only in the tenant but also

of economic efficiency of the land use.

Total Investment

Details of investment were collected for the period of three years ending 2002-03,

because many of the investments took more than a year of completion as in the case of

wells, land improvement and livestock. Therefore data for only one year (2002-03) would

estimate the level of investment. Not all the farmers had made investment during the

period. Therefore, actual number of farmers who made investment in one form or other,

total values of the investment (valued at 2002-03 prices) are presented in Table 23.

Table 23. Total Investment by Sample Farmers (2002-03) (Rs /Ha.)

Temple Owner
No. of No. of
S. No. Type of Investment tenant farms
farms farms
(TT) (OF)
1 Land 45 1292 48 4209
(12.3) (6.4)
2 Livestock 65 51122 50 57100
(91.4) (87.0)
3 Sprayer 82 2611 50 2958
(4.7) (4.5)
4 Field channel 77 897 44 1387
(1.6) (2.1)
Total 55922 65654
(100.0) (100.0)
(Percentages to total are given in parentheses)
 Perusal of table 23 revealed that the investment on land was maximum in owner
farmers at Rs. 4209 (6.4 per cent), followed by temple tenants at Rs.1292 (12.3 per cent). The
preference of temple tenants for investment was livestock, because it supplemented farm
income. Dairy animals provided employment to the women in the family, while bullocks
helped men to go for off-farm employment for ploughing operations carting manures and
transport of seedlings occasionally. It was 91.4 per cent (Rs.51122) for temple tenants while
in owner farmers the investment on livestock was 87.0 per cent (Rs. 57100).

Many of the farmers wanted to improve drainage and irrigation facilities.

They desired to invest in wells; irrigation channels, threshing floors and other farm

structures such as cattle shed or storage. However, majority of the temple tenants had

reservation on this investment because the land did not belong to them. Thus, the need for

strengthening infrastructure was felt by the tenants. If temple authorities encouraged it

and with a guarantee of lease for the next 15 years and a share in the investment cost,

temple tenants would take up the investment which would improve the annual rates of

investments, because failure to do so would weaken the productive base of the farmers.

Pattern of Asset Holding

The asset position in the farmers reflects the extent of capital formation in

agricultural and the judicious combination of enterprises in farming. Therefore, the

particulars on the same for the sample farmers were collected and analyzed. The results

are presented in Table 24.

Table 24. Asset Pattern of the Sample Farmers

(Rs. / Ha)

S. No. Temple tenant (TT) Owner farms (OF)

Type of Asset Value % Value %

1 Cattle shed 25025 32.4 26096 29.1

2 Livestock 26493 34.3 21531 24.0

3 Tractor/Pump set 25489 33.0 41163 45.9

4 Sprayer 274 0.3 938 1.0

Total 77281 100.0 89728 100.0

From table 24 it could be observed that the value of total asset was Rs.77281 for

temple tenants and in Rs. 89728 for owner farmers. In case of temple tenants livestock

and tractor ranked first and second by their shares in total asset value; cattle shed ranked

a distant third, while the share of sprayer was very small.

In contrast, owner farmers had the largest share of the value of tractor (45.9 per cent)

and next in cattle shed followed the livestock. The value of sprayer was very small. Owner

farmers required investment in livestock and tractor to enable their intensive farming. Thus

the pattern of asset holding in the farm groups was consistent with their needs.

Determinates of Investment on Temple tenants

The log-linear production function estimated for the temple tenants who had made

investment during the three years ending 2002-03 is presented in Table 25.
Table 25. Estimating Log-linear Production Function of Temple Tenants

S. No. Variable Co-efficient Standard error

1. Constant 7.3038* 0.6498

2. Farm size -0.0122 0.0163
3. Income 0.0469*** 0.0632
4. Dummy of RTR -0.00002 0.0009

R2 = 0.0120 F = 0.35

*** Statistically significant at 10% level

The value of R2 was very low, the equation could not explain about maximum per
cent of variation in Y, because some of the variables not included in the equation. (Such
as attitude and perception of the farmers for the investment and high risk bearing ability)
because of the problems of measurement.

Among the variables specified only income had very low value (0.0469).
However it’s co-efficient was statistically significant, implying that income had some
effect on investment. The effect of income would however be felt indirectly in the
influence of amount borrowed.

The elasticity of investment with respect to size of the farm was negative and
statistically not significant. It implied that size of the farm would not affect the level of
investment. Therefore bringing the temple tenants together for collective action would
help farm investment.

The reason might be tenants thought that the full profit goes to someone else-like
a perception; they are not willing to invest any investment on tenants’ lands when
compared to owner operated lands.
 Finally, the coefficient of the dummy variable (D) was -0.00002 and statistically
non-significant, meaning that the temple tenants with RTR invested significantly larger
funds in assets than those without RTR. Then a very strict enforcement of RTR was
needed for, not only for implementing the legislation but also for its beneficial effect on
investment. The coefficient of income (0.0469) and farm size (-0.0122) indicated the
level of their influence on investment. A very strict enforcement of RTR will be needed
for, as the most important determinant of investment by temple tenants, followed by
income and farm size.

Determinates of Investment on Owner Farms

The log-linear production function estimated for the owner farms is presented in

Table 26. The estimated equation showed a good fit with expected sign for the entire

statistically significant coefficient and a value (0.3228) for R2. The coefficient of constant

had the expected positive sign with statistically significant. The farm size ranked first

with the largest elasticity. However, the relatively low value of R2 revealed that there

were factors, other than those specified in the equation, with significant effect on

investment. Cost of the assets, market situation for them such as after-sales service,

warranty and period required for delivery might be the reasons.

Table 26. Estimated Log-linear Production Function of Owner Farmers

S. No. Variable Co-efficient Standard error

1. Constant 6.0368* 4.5581
2. Farm size 1.3780 0.2997
3. Income 0.2543*** 0.4104

R2 = 0.3228 F = 10.72

*** Statistically significant at 10% level

 Thus availability of credit, interest rate and farm size holding were the general

determinants of investment in any farm. While income of the family had lower effect on

investment. Among tenant farms presence of RTR had a positive effect on investment.

Problems in Farm Investment

The reasons stated by the farmers for not making any investment were discussed

with the investors and evaluated for their validity. The list is presented in Table 27.

Table 27. Problems in Farm Investment (Numbers)

Temple tenants Owner farms

S. No. Particulars
(TT) (n=90) (OF) (n=50)
1 Benefit will go to the owner 80 0
(89.0)
2 Small income 68 28
(75.6) (56.0)
3 High risk 66 26
(73.3) (52.0)
4 Security is not available 65 21
(72.2) (42.0)
5 Can be done in later 48 0
(53.3)
6 Credit is not available 48 0
(53.3)
7 Owners does not agree to support 42 0
borrowing (46.7)
8 Interest rate is higher 37 0
(41.0)

(Percentages to total are given in parentheses)

 As could be discussed from table 27 maximum (89.0 per cent) percentage of

temple tenants were indicated that the benefit would go to the owner. The most important

constraint was low income (75.6 per cent). Higher risk involved was also expressed by

73.3 per cent of the temple tenants. Further, 72.2 per cent of the temple tenants felt that

lack of security as a reason for not making investment. Then, 53.3 per cent of temple

tenants did not felt any urgency to make investment, which they desired to make later.

Credit constraint was reported by 53.3 per cent. Owners disagreed for borrowing and the

highest interest rate were the reasons i.e. 46.7 per cent and 41.0 per cent respectively.

Moreover, owner farmers expressed similar problems as well, majority of them

indicated (56.0 per cent) the income of the family was smaller and higher risks associated

with it were the other reasons (52.0 per cent). A few owner farmers (42.0 per cent)

reported the lack of security as a reason for not making investment. Thus, the results

showed that the owner farmers did not find much difficulty in making investment if they

desired to make it.

In sum, regarding farm income, reduction in risk and security of tenancy would

motivate the temple tenants to make adequate investment. But the motivator would be

translated into action only if adequate credit was supplied to them. In credit, supply was
more important than interest rate, if institutional credit at the prevailing rates of interest

were available. Temple tenants required the help of the owners (temple or others) to

enable their borrowing and investment. This had to be arranged through some policy

measures. Investment would increase income, which in turn would improve the credit

worthiness of farmers and would put the farmers on a cumulative growth path.

Reasons for Not Investing

Reasons for not making investments reported by the respondents are shown in

Table 28.
Table 28. Reasons for not making Investment (Numbers)

Temple tenants Owner farms

S. No. Reasons
(TT) (n=90) (OF) (n=50)
1 Not interested to invest on leased 75 0
land (83.3)
2 Lack of finance 69 31
(76.7) (62.0)
3 Supply of ground water is poor 57 28
(63.3) (56.0)
4 Higher cost involved 43 15
(47.8) (30.0)

From table 28 it could be observed that the most important reason stated by the

temple tenants was that they don’t want to invest on temple lands. Their preference was

for investment in livestock. In owner farms, lack of finance and poor ground water supply

were the reasons for their less than desired investment. Hence, Temple tenants come

forward to make investments, if the temple came forward to share the cost and offer a

security of tenure to allow the right to use the benefit without any uncertainty; of course

with a reasonable payment by the tenants of share in the additional income to the temples.

A ground level planning for each of the temple would identify both scope and pay-off of

such investments.

EFFICIENCY MEASUREMENT

Given the level of investment by the different categories of farmers in the study

region, it is important to study how the characterization of the type of farms (viz., tenant

and owner farms) would affect the productivity of crops. Since paddy is the major crop

grown in the study region, resource use efficiency in paddy cultivation is attempted in the

following sections.
The efficiency measures estimated includes:

A. Resource use efficiency using OLS method

B. Technical efficiency – Stochastic Frontier Production Function using

MLE Method

A. RESOURCE USE EFFICIENCY

The mean resources used by the farmers are presented in the Table 29.

Table 29. Sample Mean of Resources Used by the Farmers

Temple Owner farms

S. No. Particulars
tenants (TT) (OF)
1 Seeds (kg/ha) 39 41
2 Urea (kg/ha) 192 260
3 Phosphorous (kg/ha) 50 93
4 Potassium (kg/ha) 80 118
5 Labour (mandays/ha) 37 75

The results of the production function analysis of factors influencing the yield of

paddy I & II are given in Table 30.

The coefficient of multiple determination R2 was 0.13 which indicates that

13.0 per cent of the variation in the dependent variable is accounted by the independent

variable selected for the study. The coefficient of multiple determination (R2) for the

paddy II was 0.10 indicating that 10.0 per cent variation in the dependent variable had

been accounted by the selected independent variable. The reason might be the lack of

finance, scarcity of water as well as low price of the produce and higher incidences of

pest and diseases.

 For the paddy I and paddy II, seed rate was found to influence the paddy yield

significantly at five per cent level. The variables namely urea, phosphorous and labour,

(paddy II only) was found to have negative impact as the rice yield by 0.1123 and 0.8916,

0.1192 and 0.1908; 0.0683 and 0.0111 per cent respectively. The results indicates that

one per cent increase in the seed rate ‘ceteris paribus’ would reduce the rice yield by

0.1123 per cent and 0.8916 per cent for paddy I and paddy II respectively.

Table 30. Resource Use Efficiency of Temple tenants

Paddy I Paddy II
Explanatory
S. No. Estimated Standard Estimated Standard
variable
co-efficient error co-efficient error
1. Constant 8.5734** 0.984 8.6554** 0.5436
2. Seed (kg/ha) − 0.1123* 0.4872 −0.8916* 0.1464
3. Urea (kg/ha) − 0.1192 0.1657 −0.1908 0.7382
4. Phosphorous −0.0683 0.0360 −0.0111 0.0165
(kg/ha)
5. Potassium 0.1053 0.0165
0.0372* 0.0649*
(kg/ha)
6. 0.0665 0.0484 −0.0368 0.0667
Labour
(mandays/ha) 0.1260 0.0966
R2 90 90
Sample

** Significant at 1% level

* Significant at 5% cent level

One per cent increases in the use of potassium fertilizer ‘ceteris paribus’ would

increase the yield by 0.037 per cent and 0.064 per cent for paddy I and paddy II

respectively. Also one per cent increases in the use of labour ‘ceteris paribus’ would

increase the yield 0.066 per cent for paddy I only.

II Owner Farms

The results of the production function analysis for the owner farms are given in

Table 31.

Table 31. Resource Use Efficiency of Owner Farmers

Paddy I Paddy II
Explanatory Estimated
S. No. Estimated Standard Standard
variable co-
co-efficient error error
efficient
1 Constant 7.8671** 1.4601 8.3767** 2.3592
2 Seed (kg/ha) 0.0432* 0.0756 0.0633* 0.0341
3 Urea (kg/ha) 0.0186* 0.1889 0.2650* 0.2955
4 Phosphorous -0.0551 0.0941 -0.0643 0.2483
(kg/ha)
5 Potassium (g/ha) 0.0051 0.0229 -0.1372 0.3103
6 Labour 0.0413 0.2542 -0.2287 0.2954
(mandays/ha)
0.0174 0.0914
R2
50 50
N

** Significant at 1% level

* Significant at 5% level

The coefficient of multiple determination for paddy I and paddy II (R2 of 0.02 and

0.012) indicated that only 2.0 per cent of variation in the dependent variable was

explained by the explanatory variables included for the analysis in both of the crops in

paddy I and paddy II. The reason might be higher incidences of pests and diseases and

low price of the produce.

 Seed rate was found to influence the paddy yield significantly at five per cent

level. The variables namely urea, labour were found to influence the yield significantly at

five per cent level. The result indicates that one per cent increase in seed rate ‘ceteris

paribus’ would increase the yield by only 0.043 per cent.

In paddy II, the co-efficient of multiple determination R2 was 0.09 which

indicated that 9.0 per cent of the variation in the dependent variable was not explained by

the explanatory variable included in the analysis. The variables namely seed rate and urea

were found to influence the yield significantly at five per cent level.

The result indicated that one per cent increase in the seed rate and urea ‘ceteris

paribus’ would increase the paddy yield by 0.06 and 0.26 per cent respectively from the

mean level.

B. TECHNICAL EFFICIENCY – STOCHASTIC FRONTIER PRODUCTION

FUNCTION

Efficiency is a very important concept in production economics, where resources

are meager and opportunities for developing and adopting better technologies are

competitive. Efficiency of a firm refers to its performance in the utilization of resources

at its disposal. It is also important to know-how well the resources are being utilized and

what possibilities exist for improving the operational efficiency in the phase of overall

resource scarcity.

Efficiency study could show that it is still possible of raise productivity by

improving the level of efficiency without actually increasing the resource base. Estimates

on the extent of inefficiency could also help to decide whether to improve efficiency or to

develop new technologies to raise agricultural productivity.

 In the present study to understand the technical efficiency among the temple

tenants and owner farms, the stochastic frontier production function of Cobb- Douglas

form was estimated using MLE method. The stochastic frontier production function

analysis attempted in this study had the paddy output in kg as dependent variable

included the following seeds in kg/ha, urea in kg/ha, phosphorous in kg/ha. potassium in

kg/ha and labour in mandays/ha.

Among the stochastic frontier productions function attempted under the different

crop establishments, Temple tenants as well as Owner farms in paddy I and paddy II, the

MLE estimates could not be obtained for the Tirunelveli district due to skewness. Hence

the estimates of stochastic frontier production function for paddy I and entire study alone

are presented and discussed.

REASONS FOR NON-CONVERGENCE AND CONVERGENCE OF FRONTIER

PRODUCTION FUNCTION

Among the stochastic frontier production functions attempted under the different

crop establishments, the MLE estimates could not be obtained for the Temple tenants of

paddy II and paddy II for Owner arms which was due to skew ness. Hence the MLE

estimates of total farmers are the study area alone (paddy I for both Temple tenants and
Owner farms) are discussed.

To find out the reasons for non-convergence and convergence of frontier

production function, the details of number of sample temple tenants with paddy yields

closer to the sample mean yield, above the sample mean yield and below the sample

mean yield worked out under different situations.

On perusal of the non-converged function, the number of farmers with paddy

yields above the sample mean yield and below the sample mean yield was almost equal

in sample tenants of paddy II. Though the numbers of farmers alone and below the
sample mean are not very close, however the different is very narrow. Besides, sizeable

numbers of farmers closer to the sample mean yield are also seen. This pattern of

distribution of yield among the sample farmers implied that most of the sample farmers

are already closer to the sample mean yield with the existing level of inputs. Hence the

function did not converge to frontier. So the farmers are already technically efficient.

But by observing the convergence function, the numbers of farmers yield closer to

the sample mean are almost nil in most of the study area except a few. Besides the

difference between the number of farmers with the yield above and below the mean yield

are also comparatively vast unlike in non – converged function. So this type of distribution

of yield among the sample farmers implied that most of the sample farmers’ yields are

below the frontier yield. Hence the function converged to show that most of the farmers

existing yield are below the maximum possible yield (frontier level) with the present level

of input, which indicates that most of the farmers are technically inefficient. (Sham, 1998)

The mean inputs used by the temple tenants of paddy II and Owner farmers of

paddy II are presented in Table 32.

Table 32. Sample Mean of Resources Used by the Farmers

Temple tenants Owner farm (OF)

S. No. Particulars
(TT) paddy II paddy II
1 Seeds (kg/ha) 34.9 41.0
2 Urea (kg/ha) 192.3 261.1
3 Phosphorous (kg/ha) 42.4 92.2
4 Potassium (kg/ha) 72.2 111.6
5 Labour (mandays/ha) 48 72
A. MLE ESTIMATES OF TEMPLE TENANTS: PADDY I

The results of the Maximum Likelihood Estimates are presented in Table 33.

Table 33. Estimates of Stochastic Frontier Production Function - Paddy I

S. No. Explanatory variables Parameter values Standard Error

1 Constant 8.5843** 1.0171
2 Seeds (kg/ha) -0.1122* 0.5143
3 Urea (kg/ha) -0.1191 0.1652
4 Phosphorous (kg/ha) -0.0683 0.0387
5 Potassium (kg/ha) 0.03686 0.1083
6 Labour (mandays/ha) 0.6669 0.0510
7 δ 2
u 0.00017
8 δ 2
v 0.00139
9 λ = δ u/δ v 0.3497
10 θ = δ 2u/(δ 2u+δ 2v) 1.0014
11 MTE = 1- δ u (2/π )1/2 0.9674

** Significant at 1% level

* Significant at 5% level

It could be seen from table 33 that the variance of one sided error term (δ 2u) and

symmetric error term (δ 2v) were 0.0017 and 0.00139 respectively which implied that

symmetric error term was dominant which measured the short fall of output from the

maximum possible output. The ratio of one sided error term to symmetric error term (λ )

worked out at 0.3497, which implied that the standard error term of one sided error term

was greater than the standard error of symmetric error term.

The estimate of discrepancy parameter (θ ) indicated that maximum per cent of

the difference between the actual output and the maximum possible output were due to

the different in technical efficiency of farmers. The Mean Technical Efficiency (MTE) of
0.9674 indicated that the yield of Paddy was 3.26 per cent less than the maximum

possible output, thus showing scope for further increasing the productivity of temple

tenant in paddy I with the existing level of input use in the study area.

B. MLE ESTIMATES OF OWNER FARMS: PADDY I

The results of frontier regression are presented in Table 34.

Table 34. Estimates of Stochastic Frontier Production Function - Paddy I

S. No. Explanatory variables Parameter values Standard error

1 Constant 7.7872** 2.0617
2 Seeds (kg/ha) 0.0565 0.1096
3 Urea (kg/ha) -0.1246 0.3126
4 Phosphorous (kg/ha) 0.0983*** 0.1443
5 Potassium (kg/ha) 0.0247 0.0089
6 Labour (mandays/ha) 0.0736 0.3190
7 δ 2
u 0.00815
8 δ 2
v 0.00001
9 λ = δ u/δ v 0.0902
10 θ = δ 2u/(δ 2u+δ 2v) 1.0000
11 MTE = 1- δ u (2/π )1/2 0.9926

** Significant at 1% level

*** Significant at 10% level

It could be seen from table 34 that the estimates of error variances δ 2u and δ 2v

are 0.00815 and 0.00001 respectively. Therefore, it can be easily seen that the variance of
2
one sided error term (δ u) is larger than the variance of symmetric error (δ 2V), this

implies that the one-sided error term was more dominant which measured short falls of

output from the maximum possible yield. The ratio of one sided error term to symmetric

error term (λ ) worked out to 0.0902, which implied that the standard error of one-sided

error term was greater than the standard error of symmetric error term.
 The estimates of the discrepancy parameters obtained θ were 1.000 and this

noticed that maximum per cent of the differences between the observed output and

frontier output is due to technical efficiency of farmers. The Mean Technical Efficiency

(MTE) was 0.9926, which implied that the yield of paddy I was 0.74 per cent less than

the maximum possible output. Thus the analysis of technical efficiency revealed the

scope for increasing the productivity of paddy I at the existing level of input use for the

farmers in the study area.

Mean Technical Efficiency

The average technical efficiency, (i.e.) the mean of the distribution of the Ui could

be easily calculated. In half-normal case (Ui distributed as the absolute value of N

(0, δ u2) variables. The mean technical inefficiency is δ u2 (√2/π ) and technical

efficiency is 1-δ u2 (√2/π ). The technical efficiency can be evaluated one’s estimate of

δ u as in Aigner et al., (1997) or Schmidt and Lovell (1979). On an average technical

inefficiency could be estimated by the average of the Ei as in Jondrow et al., (1982).

Fig.6. The Basic Structure of Stochastic Frontier Model

 Here the productive activities of two firms, represented by I and j, are considered

(Figure 6.). Firm I uses inputs with values given by (the vector) x i and obtains the output,

yi, but the frontier output, yi*, exceeds the value on the deterministic production function,

f (xi;β ), because its productive activity is associated with ‘favorable’ conditions for

which the random error, vi, is positive. However, firm j uses inputs with values given by

(the vector) xj and obtains the output, yj, which is less than the value on the deterministic

production function f (xj;β ), because its productive activity is associated with

‘unfavorable’ conditions for which the random error, vj, is negative. In both cases the
observed production values are less than the corresponding frontier values, but the

(unobservable) frontier production values would lie around the deterministic production

function associated with the firms involved.

Problem Faced by the Sample Farmers

In order to understand the problems faced by the farmers they were asked to state the

possible problems. The answers reflected their perception of what were the constraints and

they suggested also few remedies. The farmers’ opinions are presented in Table 35.

Table 35. Problems Faced by the Sample Farmers (Numbers)

Temple
Owner Farms
S. No. Particulars Tenants(TT)
(OF) (n=50)
(n=90)
1 Scarcity of water 87 48
(96.7) (96.0)
2 Price of the produce is very low 78 42
(86.7) (84.0)
Incidence of pest and diseases 74 43
3
(82.2) (86.0)
4 Lack of finance 55 26
(61.1) (52.0)
Quality of the soil is poor 49 20
5
(54.4) (40.0)
 It could be seen from table 35 that temple tenants of Tirunelveli district expressed that
scarcity of the water as the foremost important problem (96.7 per cent) followed by low price
of the produce and pests and diseases (86.7 per cent and 82.2 per cent respectively. They also
identified inadequate investible funds to buy these critical inputs as one of the constraint (61.1
per cent).

Owner farmers were complained only water scarcity as a serious problem

(96.0 per cent), higher incidences of pests and diseases and low price of the produce

ranked second and third respectively. More specially lack of finance was not a serious

problem with owner farmers.

Suggestion by the Farmers

The suggestions for improving the temple lands productivity as offered by the Farmers

are presented in Table 36.

Table 36. Farmers’ Suggestions to Improve the Productivity of Temple Lands

(Numbers)
Temple Tenants
S. No. Particulars
(TT) (n=90)
Need for cleaning the tanks and ponds 87
1
(96.7)
When crop failure rents should remit 77
2
(85.6)
3 Need for digging a well 74
(82.2)
4 Give the tenants to right to buy the lands 70
(77.8)
5 Have a co-operative society to supply inputs and 52
procure the produce (57.8)
6 Remove the intermediate tenants 49
(54.4)
7 Allowing liberal subsidies on the inputs 34
(37.8)
8 Reduce the rents on lands 28
(31.1)
As could be perused from table 36 that the maximum percentages of temple tenants
(96.7 per cent) had suggested that, they needed co-operative clean work in tanks and ponds and
85.6 per cent of farmers suggested for remittance of rents at the time of crop failure and
uncertainties. Further, 82.2 per cent of the farmers expressed that need for digging a well and
77.8 per cent of the farmers expressed that giving to the tenants right to buy the land. Finally,
they suggested for having a own co-operative society to supply inputs as well as procure the
products, remove the intermediaries of tenants involved in the teneural process, allowing liberal
subsidies on the inputs and reduce rent (57.8 per cent, 54.4 per cent, 37.8 per cent and 31.1 per
cent respectively).
SUMMARY AND CONCLUSION
 CHAPTER VI

SUMMARY AND CONCLUSION

A brief summary of findings, conclusion drawn and the policy implications of the

study are presented in this chapter.

Summary

There are many temples in Tamil Nadu, which have cultivable land and also

urban lands to a limited extent, donated to them for earning income to meet their

maintenance expenses. These temple owned lands are given on lease to the cultivators

and the rent received from them is the major source of revenue to the temples. But the

purpose is not fulfilled because the rent collection is very poor. The reason stated by the

defaulting lessees is invariably low productivity of the temple lands that gives income not

sufficient even for their subsistence.

If the productivity of the temple lands is really low, that will lead to low income-

low investment-low yield cycle. I f the cycle is allowed to persist, it is a social waste of the

scarce land. If it is not really low, then the statement of lessee should be contested and

proved wrong. In either case, a study on efficiency of land is the only way to find a remedy.

Major objective was to study the efficiency of crop production on temple tenants

and owner farms in Tirunelveli district, Tamil Nadu and the specific objectives were:

i. to find the extent of temple lands cultivated by temple tenants and their size

distribution;

ii. to make a comparative study of capital investment in temple owned lands and

owner operated lands;

iii. to study the efficiency of crop production of temple owned lands and owner

operated lands; and

iv. to suggest the policy measures to improve productivity of temple lands.

 The present study is based mostly on the primary data collected from 90 temple

tenants and 50 owner farms. The two taluks of Tirunelveli district viz, Shencottah and

Tenkasi were selected for the study. From the selected two taluks nine villages were

selected randomly from Shencottah (five) and Tenkasi (four); 10 temple tenants were

selected randomly from each village, which constituted 90 temple tenants. In order to

compare the temple tenants with operated land efficiency, 50 owner farmers were

selected randomly from eight villages (each five) and last 10 from one village. The total

sample constituted 90 temple tenants and 50 owner farmers, thus making the total sample
to 140. The collected data were analyzed using stochastic frontier production function to

fulfill the objectives of the study.

Tenancy aspects of the sample farmers

Among the selected farmers in Tirunelveli district, none of the two taluks, there

was full percent Recorded tenancy rights (RTR) for temple tenants. The percentage of

registered RTR was 50.0 or above in Shencottah taluk and the highest percentage were

goes to (77.5 per cent) in Tenkasi taluk.

Payment of rent in kind for paddy crop was 769 kg/ha for the temple tenants and

average value of rent per ha was Rs.3074. In Shencottah taluk, payment of rent in paddy
crop was 763kg/ha and in Tenkasi taluk was 774 kg/ha with the value of Rs. 3052 and

Rs. 3096 respectively.

There were accounting for 17.8 per cent (direct tenants) of the total number of

temple tenants. The indirect tenants were 82.2 per cent. Among them, 30.0 per cent

received land as heirs of the tenants who took land on lease from the temple, originally.

The share of sub-tenants in the total number indirect tenants was 52.2 per cent.
Basic characteristics of the sample farmers

On an average size farm family has three persons. It could be of interest to note

that the size of family is not different between temple tenants and owner farmers.

The temple tenant in the age group of 35-45 years constituted 45.6 per cent,

followed by 43.3 per cent in the age group of more than 45 years and 11.1 per cent for the

age group of less than 35 years. For the combined sample, the results had indicated that, a

maximum number of farmers belonged to the age group of above 45 years (46.4 per cent)

followed by the age group of 35-45 years and below 35 years with 42.9 per cent and

10.7 per cent respectively.

About 60.7 per cent of the sample farmers had 10-25 years farming experience,

27.9 per cent of them had the farming experience more than 25 years and only 11.4 per cent

of them had a farming experience less than 10 years. In case of temple tenants having

experience 10-25 years constituted 58.9 per cent, while those having experience above

25 years constituted 31.1 per cent. Only 10.0 per cent of the temple tenants were found to

have experience below 10 years. In case of owner farmers, 64.0 per cent had the farming

experience between 10-25 years, 22.0 per cent of them had the farming experience in

above 25 years and only 14.0 per cent of them had a farming experience below 10 years.

Maximum number of farmers (38.6 per cent) had secondary education followed

by primary education (32.1 per cent). 16.4 per cent of the sample farmers had collegiate

education and only 12.9 per cent of them are illiterates. In case of temple tenants, 35.6

per cent of them had completed secondary education and it was 44.0 per cent in owner

farmers where as, the share of illiterates was 12.2 per cent and 14.0 per cent in temple

tenants and owner farmers, respectively. It could be inferred that collegiate level of

education was higher in temple tenants (20.0 per cent) followed by owner farmers (10.0

per cent).
Economic status of the farmers

Per farm income realized was the maximum in owner farmers at Rs. 65440

followed by temple tenants at Rs. 50156. As regards per capita income also, similar trend

could be observed among the farmers and it ranged from a minimum of Rs. 5483 in

owner farmers to the maximum of Rs. 4180 in temple tenants. On the other hand, per

hectare income was the maximum in owner farmers at Rs. 32638 followed by temple

tenants at Rs. 31075.

Size Distribution of Land Holding of Farmers

Majority of the farmers i.e. 52.1 per cent had operational one to two hectares. 23.6

and 24.3 per cent had an operational area above two hectares and less than one hectare

respectively. In temple tenants, 52.2 per cent had operational area one to two hectares

30.0 per cent of them had an operational area of less than one hectare and only 17.8 per cent

of them had an operational area above two hectares. In case of owner farmers, 52.0 per cent

had an operational area one to two hectares 34.0 per cent of the sample farmers were

found to have an operational area greater than two hectares. Only 14.0 per cent of them

had an operational area of less than one hectare. An interesting note that more than

50.0 per cent of the sample were in having operational area one to two hectares. The size

distribution of farmers shows small sized farmers. Nearly, each

53.0 per cent of temple tenants and owner farmers were in the category of marginal

(<1 ha) farmers. Therefore medium and large sized farms were few and the success of

farming depends upon the availability of technology appropriate for the small and tiny

scale operations.

The Gini concentration ratio was worked the temple tenants to 0.16 and in owner

farmers to 0.14, indicates a more equality with firm size.

Cropping Pattern of the Sample Farmers

Paddy is the predominant crop in the both groups of farmers. It occupied 84.1 per cent

of the Gross cropped area (GCA) of temple tenants; 62.0 per cent in owner farmers.

There were two seasons for paddy. The first season (June-Sept) crop accounted for

63.1 per cent and 42.5 per cent of the GCA of temple tenants and owner farmers

respectively. Area under second season (Oct-Dec) crop of paddy accounted for 21.0 per cent

and 19.5 per cent in GCA of temple tenants and owner farmers respectively. Soybean

shared 8.2 per cent and 9.0 per cent of GCA of temple tenants and owner farmers
respectively. Tomato was cultivated in 27.2 per cent and 5.5 per cent of GCA of owner

farmers and temple tenants respectively. Groundnut had very small share of 2.2 per cent

and 1.9 per cent of GCA in temple tenants and owner farmers respectively.

Productivity of the crops

That the average efficiency of crops varied among the farmers due to differences

in the soil fertility and cultivation practices. Overall average productivity of paddy I was

in temple tenants 2285 kg/ha and it was 2295 kg/ha for paddy II, 284 kg/ha for tomato,

494 kg/ha for soybean and 236 kg/ha for groundnut. In case of owner farmers, the

average yield of paddy I, paddy II, tomato, soybean and groundnut were 3576 kg/ha,

2846 kg/ha, 2348 kg/ha, 753 kg/ha and 423 kg/ha respectively.

Farm Investment by Farmers

Regarding investment on land was highest in owner farmers at Rs. 4209 (6.4 per cent),

followed by temple tenants farmers at Rs.1292 (12.3 per cent). The keenness of temple

tenants for investment was livestock, because it supplemented farm income. Dairy

animals provided employment to the women in the family, while bullocks helped men go

to off-farm employment for ploughing operations carting manures and transport of

seedlings occasionally. It was 91.4 per cent (Rs.51122) for temple tenants while in owner

farmer was investment on livestock 87.0 per cent (Rs. 57100).

Pattern of Asset Holding

The value of total asset was Rs.77281 for temple tenants and in Rs. 89728 for

owner farmers. In case of temple tenants livestock and tractor ranked first and second by

their shares in total asset value; cattle shed ranked a distant third, while the share of

sprayer was very small. In contrast, owner farmers had the largest share of the value of

tractor (45.9 per cent) and next in cattle shed. The livestock value third. The value of

sprayer was very small.

Factors influencing Investment by Farmers

Among the factors influencing the investment of the temple tenants, variables

specified only income had very low value. However it’s co-efficient was statistically

significant, implying that income had some effect on investment. The value of farm size

had a negative effect on investment. Finally, the coefficient of the dummy variable (D)

was -0.00002 and statistically non-significant, meaning that the temple tenants with RTR

invested significantly larger funds in assets than those without RTR.

The income of the farms ranked second with the largest elasticity, followed by

farm size, significant and positive value for the coefficient of farm size would show that

investment would contribute to further investment in owner farmers. While income of the
family had lower effect on investment. Among tenant farmers presence of RTR had a

positive effect on investment.

Problems in Farm Investment

The highest (89.0 per cent) percentage of temple tenants was indicated that the benefit

would go to the owner. The most important constraint was small income (75.6 per cent). It was

also expressed by 73.3 per cent of the temple tenants that the higher risk involved.

Further, 72.2 per cent of the temple tenants felt that lack of security as a reason for not

making investment. Then, 53.3 per cent of temple tenants did not felt any urgency to
make investment, which they desired to make later. Credit was not available reported as a

reason for 53.3 per cent. Owners doesn’t agree to support borrowing and interest rate

higher in returns to the investment were the reasons i.e. 46.7 per cent and 41.0 per cent

respectively. Moreover, owner farmers expressed similar problems as well, majority of

them indicated (56.0 per cent) the income of the family was smaller and higher risks

associated with it were the other reasons (52.0 per cent). A few owner farmers (42.0 per

cent) reported the lack of safety measures as a reason for not making investment.

Reasons for Not Investing

The most vital reason stated by the temple tenants was that they don’t want to

invest on temple lands. Their inclination was for investment in livestocks. In case of

owner farmers, lack of finance and poor ground water supply were the reasons for their

less than desired investment.

Resource Use Efficiency of the Farmers

For the Temple tenants, paddy I and paddy II, seed rate was found to influence the

paddy yield significantly at 5 per cent level. The variables namely urea, phosphorous and

labour, (paddy II only) was found to negative impact as the paddy yield by 0.1123 and

0.8916, 0.1192 and 0.1908; 0.0683 and 0.0111 per cent respectively. The results indicate
that one per cent increase in the seed rate ‘ceteris paribus’ would reduce the paddy yield

by 0.1123 per cent and 0.8916 per cent for paddy I and paddy II respectively. Similarly

one per cent increases in the use of potassium fertilizer ‘ceteris paribus’ would increase

the yield by 0.037 per cent and 0.064 per cent for paddy I and paddy II respectively. Also

one per cent increases in use of labour ‘ceteris paribus’ would increase the yield 0.066

per cent for paddy I only.

In case of Owner farmers, seed rate was found to influence the paddy yield

significantly at five per cent level. The variables namely urea fertilizer, labour were
found to influence the yield significantly at five per cent level. The result indicates that

one per cent increase in seed rate ‘ceteris paribus’ would increase the yield by only 0.043 per

cent. The variables namely seed rate and urea fertilizers were found to influence the yield

significantly at five per cent level. The result indicated that one per cent increase in the

seed rate and urea fertilizer ‘ceteris paribus’ would increase the yield by 0.06 and 0.26

per cent respectively.

Problem faced by the Sample Farmers

Temple tenants of Tirunelveli district articulated that scarcity of the water as the

foremost important problem (96.7 per cent) followed by the low price of the produce,

pests and diseases (86.7 per cent and 82.2 per cent respectively. They also identified not

enough investible funds to buy these critical inputs (61.1 per cent). Owner farmers were

grumbled only water scarcity as a serious problem (96.0 per cent), higher incidences of pests

and diseases and low price of the produce ranked second and third respectively. More

especially lack of finance was not a serious problem with owner farmers.

Suggestion by the Farmers

The highest percentage of Temple tenants (96.7 per cent) had suggested that, they

were needed co-operative cleaning work in tanks and ponds and

85.6 per cent of farmers were suggested for remittance of rents at the time of crop failure

and uncertainties. Further, 82.2 per cent of the farmers expressed that need for digging a

well and 77.8 per cent of the farmers expressed that given to the tenants right to buy the

land. Finally, they are also suggested for having a own co-operative society to supply inputs

as well as procure the products, remove the intermediaries of tenants involved in the

teneural process, allowing liberal subsidies on the inputs and low rent were in 57.8 per

cent, 54.4 per cent, 37.8 per cent and 31.1 per cent respectively.
Conclusion

♣ The temple tenants had Recorded Tenancy Rights (RTR) overall percentage

was 64.4 showing that the Act had not been fully enforced. Not all these who

failed to register concealed the fact; simply they had not done it and they were

well aware of the Act and had no reservation for registration. Their activities

were transparent.

♣ The tenancy of temple land was lesser costly than that of owner land.

The relief and concessions provided by the various Tenancy Act were so

common to temple tenants, but the lower average value of rent per hectare for

temple lands could be explained only by lower productivity of temple lands and

the failure to revise the cash rent tolerably over the years.

♣ There were direct and indirect tenants, the whole set of the indirect tenants

category and some in the direct tenants category had no RTR in spite of the law

making it obligatory. Most of the temple tenants had the security of tenancy, as

even transfer to the heirs was not difficult.

♣ The size distribution of farmers shows towards small sized farmers. Nearly,

each 53.0 per cent of temple tenants and owner farmers were in the category of

marginal (<1 ha) farmers. Therefore medium and large sized farms were few

and the success of farming depends upon the availability of technology

appropriate for the small and tiny scale operations.

♣ The Gini concentration ratio was worked the temple tenants to 0.16 and in

owner farmers to 0.14, indicates more equality with farm size.

♣ Many of the farmers wanted to improve drainage and irrigation facilities. They

desired to invest in wells; irrigation channels, threshing floors and other farm

structures such as cattle shed or storage. However, majority of the temple

tenants had reservation on this investment because the land did not belong to

them. Thus, the need for strengthening infrastructure was felt by the tenants. If

temple authorities encouraged it and with a guarantee of lease for the next

15 years and a share in the investment cost, temple tenants would take up the

investment and it would improve the annual rates of investments, because

failure to do so would weaken the productive base of the farmers.

♣ Resource use efficiency analysis implied that there was an ample scope to

increase the productivity of the temple tenants and owner farmers by adopting

proper technology as well as optimum allocation of the available resources.

♣ Efficiency of the farmers could be supported by technical efficiency, the results

of which had indicated that owner farmers were efficient than the temple

tenants. This reveals that there is wider scope for further improvement in the

technical efficiency of the temple owned lands.

Policy Implications

♦ The study shows that many of the temple tenants do not have Record

Tenancy Rights (RTR), hence the enforcement of the Act might be strengthened

while tenants without RTR might loose their tenancy; further the land may be re-

allotted by the public auction system.

♦ A system of fixed cash tenancy must replace the present system of

share cropping i.e. 25.0 per cent of the harvested grain is payable as rent by the

tenants to the temple. Because of the present system gives room for declaring

lower yield or even total crop failure even in years of good crops. Temple staffs

are not able to know the actual yield of the crops.

♦ Temple can agree to help the tenants for making necessary and

beneficial investments either from its own funds or by helping tenants borrow for

the purpose of to be making an irrigation facility. Tenants must agree to pay the

rent and amount of loan payable regularly. Failure to pay in full the rent, loan or

both for more than three years must be made a sufficient cause to cancel the

tenancy rights; the land will return to the temple.

♦ Tenant farmers may be educated, motivated and assisted for collective

action in the market. The institution of co-operative tenant farming may be

revived because tenant farmers have very little bargaining power and so they find

unfavorable prices. Their collective action to help themselves will be the best

remedy.
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 ADDENDUM
Tamil Nadu Agricultural University,
Department of Agricultural Economics, CARDS,
Coimbatore - 3.
Temple Owned Lands in Tirunelveli District, Tamil Nadu-An Economic Analysis

I General: Code:

i. Name of the Farmer :

ii. Father's Name :

iii. Address :

iv. Age : Years v. Education upto:

vi. Experience in farming: Years:

vii. Is he the head of the family? Yes / No

viii. Size of the family:

Adults: Male: Female:
Children: Male: Female:

ix. No. of workers in the family and nature of work:

S. Name of the worker Age Sex Nature of Annual

No. work income
1.
2.
3.
4.
5.

x. Is he willing to respond to the enquiry? Fully / Reluctantly / Not willing

II. Structure of the Farm:

i. Area cultivated : acres

ii. Area owned :

iii. Area leased in /out :

iv. Area of temple land :

v. Area irrigated :
vi. Is the temple land taken on lease? Yes / No
If on lease give the following details

i. Land belongs to the temple :

Situated at :

ii. Land was received for cultivation

a) Directly from the temple by the cultivator himself

b) Someone else received it from the temple and transferred it to him in (Year)

* Name of the person :

* Relationship to the farmer :
* Conditions to the transfer :
* Is it registered : formal / informal

iii. What are the obligations to the temple tenant?

a) regarding right to cultivate?

b) regarding type of crops to be raised?

c) regarding payment of rent?

d) regarding any investment on land?

e) any other obligation ( specify )

III. Land Holding Pattern:

S. Details Area in acres

No. Wet Garden Dry Total
1. Area owned
2. Area leased out
3. Area leased in i. T
ii. NT
4. Area operated
5. Rent/ac (Rs.) i. Received
ii. paid
6. Land Revenue (Rs/ac)
7. Water charges (Rs/ac)
 Note: T- Temple NT- Non-Temple
IV. Cropping Pattern and Yield (for actual area)

S. Season/Crop/Variety I/ 2001-02 2002-03 2003-04*

No. D A
A Y A Y

A I Season ( )
1.
2.
3.
4.

B II Season ( )
1.
2.
3.
4.

C III Season ( )
1.
2.
3.
4.
D Net sown area
E Gross cropped area

Note: A- Area in acres Y- Yield in Kg

I- Irrigated D- Dry (rainfed)
* Proposed area
V. Productivity Deficit and Prices Expected/Realized 2002-03:

S. Crop / Variety Yield (Kg / ha) 2002-03 Reasons

No. I/D for
(1) (2) Max. possible Actual difference
MP BP MP BP in MP*
(3) (4) (5) (6) (7)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Contd…

S. Price per unit (Rs.) Income

N o. Actual 02-03 Expected 02-03 Expected 03-04 realised (Rs.)
(1) MP BP MP BP MP BP (14)
(8) (9) (10) (11) (12) (13)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

* Use code LR: low rainfall DM: Delayed monsoon

UTR: Untimely rain PD: Pests & Diseases
LI: Less input (specify) O: Others (specify)
Note: MP = Main Product BP = By Product
Col. (14) = Col. (5) x Col. (8) + Col. (6) x Col. (9)
VI. Assets Holdings:

S. Types of assets Years in use Present value Expected life

No. as on 02-03 (Rs.) (Yrs)
A. Buildings
1. Farm house
2. Implement shed
3. Cattle shed
4. Godown
5. Threshing floor
6. Irrigation structure
7. Pump shed
8. Others (specify)
B. Machines
9. Tractor
10. Pumps
11. Electric motor
12. Oil engine
13. Sprayers
14. Dusters
15. Others (specify)

C. Tools
16. Wood plough
17. Iron plough
18. Bund farmer
19. Puddler
20 Cultivator
21. Others (specify)
D. Others
22. Bullock carts
23. Others (specify)
E. Livestock
24. Bullocks
25. Cows
26. Buffaloes
27. Heifers/Calves
28. Others (specify)
Total Assets
VIII. Adoption of Technology:

1. Actual yields of crops are much less than the possible maximum? Why?
(tick the appropriate)

a) Poor soil
b) Water scarcity
c) In sufficient application of fertilizers
d) Pests and Diseases
e) Other reasons

2. Above causes of low yield can be removed by investing in the following.

Do you agree?
a) Land reclamation
b) Digging wells
c) Deepening wells
d) Installing pumpsets
e) Spending more on fertilizers
f) Spending more on Pesticides
Agreed
fully / partially / not
fully / partially / not
fully / partially / not
fully / partially / not
fully / partially / not
fully / partially / not

3. If you agree only partially or not at all for (a) through (f) in 2. Say why?
a)
b)
c)
d)
e)

4. If you fully agree for some or all of (a) through (f) then state the reasons or
not making those investments
a)
b)
c)
d)
e)

5. What type of assistance would you like to have for monitoring returns
from your land
a) Remove intermediate tenants
b) Remit rents when crop fails
c) Have a co-operative society to supply inputs / procure products
d) Liberal credit supply
e) Reduce rent
f) Give the tenants the right to buy the land
g) Allow liberal subsides on inputs
 h) Others (specify)
6. If all the temple lands are taken by the government and cultivated as
government firms are you

a) ready to work on it as wage earner

b) or as tenant paying rent to the government directly
c) or wish to form a society of all cultivators to take the lands on long-
lease and to pay the rent regularly

7. Had you been in default in paying rent to the temple? Yes / No.
If yes give detail for the past 4 years

Year Rent fixed Rent paid Difference Reasons

1999-00
2000-01
2001-02
2002-03

8. Do you know the penalty for default? If yes, describe it

9. Have you ever asked for waiver? And was it granted? If so fully / partly

10. Do you consider that the rent must be raised because of rising land value
and also income from land Yes / No

If yes, by how much? Rs. Per ac.

Grain Kgs. Per ac.
Or Per cent.
11. Do you need any help from government? Yes / No
If yes, describe it.

12. Give your suggestions to improving the temple lands productivity

i.

ii.

iii.

iv.