Impact of Institutional Change on Productivity in a Small-Farm Economy-Case of Rural West Bengal

a Small-Farm Economy Case of Rural West Bengal Badal Mukberji Swapna Mukhopadhyay 'West Bengal is the only state in India which has for the last neatly two decades been operating a system of democratically elected local self-government. If is also the one state which has successfully (anted out certain land reform measures. This paper attempts to estimate the impact of these institutional changes on total factor productivity in the production of rice in the state Introduction ONE of the major factors behind the persistence of rural poverty in developing countriesean be i raced to the low productivity of labour on small and marginal farms on aeeoum of a variety of reasons Lack ot access to complemcniai\ inputs, insecurity of tenancy and dependence on the rural rich in a situation of asymmetric power relations and interlinked factor markets, all militate against achieving a high level of productivity on small and marginal farms. Yet as the size- productivity debate in Indian agriculture has clearly established, productivity on small farms may fact be higher if one could net out the impact of factors of production other than labour.1 In other words, low land productivity on small farms is more a reflection of constraints other than just farm size. The state of West Bengal in India provider an interesting case study of what a small-farm rural economy can possibly achieve if some of these constraints could be even partially lifted This has happened through the institution of the Panchayati Raj