AGRICULTURAL LAND CONVERSION AND FOOD SECURITY A THEMATIC ANALYSIS

International Research Journal of Agriculture and Rural Development
Journal homepage: www.irjard.nonolympictimes.org
ISSN: 2319-331X | Vol.3.No.1 | December’2014
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AGRICULTURAL LAND CONVERSION AND FOOD
SECURITY: A THEMATIC ANALYSIS
Govindaprasad.P.Ka
and K.Manikandanb
a
M.Phil. Research scholar, Department of Economics, Gandhi gram Rural Institute-DU, Gandhi
gram, Dindigul (Dt)-624-302, Tamil Nadu,India
b
Assistant Professor, Department of Economics, Gandhi gram Rural Institute-DU, Gandhi gram,
Dindigul (Dt)- 624-302, Tamil Nadu, India
ABSTRACT: Land is the basic resource for human society. The rapid pace of economic
development along with population growth, urbanization and industrialization exert pressure on
limited natural resources base of a country. This poses a serious challenge to researchers and
policy makers to strike a balance in the use of natural uses, keeping in mind the need for their
conservation for sustainable development and food and livelihood security. Land being one of the
basic natural resource has always been the subject matter of debate regarding its effective use. The
growing demand for non - agricultural uses and the non-availability of land for meeting these
demand gradually resulted in more and more agricultural land converted for nonagricultural uses.
This however is truer of the developed countries of west than of developing countries. Nevertheless,
with increasing pace of industrialization ,economic and population growth the developing countries
now are experiencing more or less similar problems as were faced by developed countries like
U.S.A, Canada, U.K, Russia and others. These problems of conversion of agricultural land to non-
agricultural uses attracted the economist in developing countries also. This paper provides a
thematic analysis on the causes of the agricultural land conversion and impacts of the conversion
on food security. The paper shows that the mismatch between demand for and supply of land has
led to conversion of agricultural land for non - agricultural purposes. And loss of agricultural land
or conversion is the major factor causing food insecurity by reducing food production and
employment opportunity at the same time price of food grain as well as vegetables will rise and
purchasing power will decline.
Keywords: Land conversion;Demand and Supply side of agricultural land conversion; food
insecurity;
INTRODUCTION
Land is the basic resource for human society. The rapid pace of economic development along with
population growth, urbanization and industrialization exert pressure on limited natural resources base
of a country. This poses a serious challenge to researchers and policy makers to strike a balance in
the use of natural uses, keeping in mind the need for their conservation for sustainable development
and food and livelihood security. Land being one of the basic natural resource has always been the

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subject matter of debate regarding its effective use (Bardhan, 2010). The growing demand for non -
agricultural uses and the non-availability of land for meeting these demand gradually resulted in
more and more agricultural land converted for nonagricultural uses. This however is truer of the
developed countries of west than of developing countries. Nevertheless, with increasing pace of
industrialization ,economic and population growth the developing countries now are experiencing
more or less similar problems as were faced by developed countries like U.S.A, Canada, U.K,
Russia and others. These problems of conversion of agricultural land to non-agricultural uses
attracted the economist in developing countries also. This paper provides a thematic analysis on the
causes of the agricultural land conversion and impacts of the conversion on food security. Here
makes an attempt to highlight that the mismatch between demand for and supply of land has led to
conversion of agricultural land for non - agricultural purposes. The farmers are the only suppliers of
agricultural land. The main non - agricultural demand for agricultural land comes from urban,
industrial, commercial, residential, recreational, educational and other uses. The competition
between agricultural and non - agricultural use of land leads to emergence of land market. The
adjustment of demand and supply of agricultural land results in conversion of agricultural land. And
this will reduce agricultural production. This chapter explains how the process of agricultural land
conversion to non - agricultural purposes takes place via demand and supply side factors by
reviewing the relevant literature. The review also links this issue with food security.
THEMATIC ANALYSIS
1.Demand and supply of agricultural
land
The demand for agricultural land can be for various uses, urban, residential, industrial,
commercial, recreational, educational, and other uses. Demand for agricultural land is mainly
dependent on the price of agricultural land. The demand will be more when the price of agricultural
land is low and demand will be less when the price of agricultural land is high. Thus there is an
inverse relationship between demand for and price of agricultural land (walters, 2013).
The supply of agricultural land is given and fixed. The farmers are the potential suppliers of
agricultural land in the context of conversion. At the same time farmer, himself, is a demandant of
his land. Because agricultural land provides utility apart from agricultural production and income
generated from it. It includes utility from agricultural land as an asset, insurance, status good, hedge
against disaster, collateral to access credit, as an inheritance for future generation and other uses.
And farmers are unsure of their ability to buyback land after they have sold it; without possibility of
buy back they are reluctant to sell (Chakravorty, 2013).The decision to supply a particular amount of
land will be based up on the price and opportunity cost of selling the land. A farmer supplies or
converts a particular agricultural land if the price offered for his land exceeds the reservation price or
opportunity cost (Chakravorty, 2013; Wadhva, 1983). So at a given price, farmer’s decision to sell or
convert a particular amount of agricultural land will depend upon the relative profitability of selling
versus keeping the land in agricultural use (Wadhva, 1983). Because cropping choices are viewed as

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investment decisions constrained by agronomic and personal economic factor (Blank, 2001). Thus as
the price of agricultural land increases and exceeds the reservation prices the supply of agricultural
land will also increase.
For understanding how the adjustment of demand and supply forces results in agricultural
land conversion, the factors operating on demand and supply side of agricultural land and their
influence to cause agricultural land conversion need to be known in detail. The review that follows is
done in line with this purpose.
1.1 Demand side factors of agricultural land
Conversion
1.1.1 Population
Population pressure is an important factor causing agricultural land conversion. High
population pressure and increasing number of nuclear families leading to distribution of human
habitation, it increases the demand for agricultural land mainly due to expansion of settlement which
results in increasing marginal land consumption, causing conversion of agricultural land for non-
agricultural uses (Vesterby, 1991, Samuel & George, 2004, Raju, Anil, 2006, Narayanan, 2006, Raj
&Azzez, 2011). For example, Ramaswamy et al. (2012) found that in India per capita availability of
agricultural land declined from 0.48 hectare in 1951 to 0.16 hectare in 1991 and is likely to decline
further to 0.08 hectare in 2035 and it is mostly on account of subdivision and fragmentation of land
holdings caused by rising population coupled with breakdown of joint family system. Further in
Allahabad it is reported that, with the concept of nuclear family gaining popularity in the rural areas
as well, large areas of agricultural land are being divided and sub-divided with the family head
opting for engaging in commercial activity instead of going in for agricultural use of the piece of
land (Banergy, 2009). The population pressure results not only in displacement of ranches by ranch
houses but also will largely influence price of agricultural land (Rutan, 1961).Thus the given the
supply of agricultural land the population growth results in increasing demand for agricultural land
as a result price of agricultural land increases. The increasing price of agricultural land again acts as
an incentive for converting agricultural land among the poor farmers.
1.1.2 Growth in income
Economic growth is an important factor causing agricultural land conversion. Increasing
economic activity and economic output could lead to increasing land for urban expansion. With
economic growth local governments attempt to expand their public finances for development
purposes, including generous investment in industrial parks, key infrastructure, urban regeneration,
universities and schools and so on. On the other hand local enterprises, tended to expand production
or invest on new commercial ventures. In this way economic growth stimulate demand for more
land, resulting in rapid expansion of built up land from the city proper to surrounding rural areas
(Yuanbin, Zhang, 2013). In this context, informal encroachment on agricultural land also occurs
because of scarcity of land in urban areas and cheapness of agricultural land (Kamel, 2005). In
Kerala conversion of wetland and paddy growing area in to built up area has become a practice since

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the late 1980s because of increased cash flow and economic development due to NRI remittance
(Raj, Azeez, 2009). Similarly a state level study in Tamil Nadu shows that land put to non -
agricultural uses seems to have a positive relationship with overall economic growth. At the same
time the Net Sown Area showed a negative growth rate (Raveendaranet. Al., 2013).Thus along with
economic growth the demand for non - agricultural uses of land increases causing increased demand
for agricultural land. Thus upward shift in demand for agricultural land due to economic growth
causes more amount of agricultural land converted for non - agriculture purposes.
1.1.3 Urban sprawl
Sprawl is the results of interaction of various diverse forces in the land market. And the
heterogeneous nature of fringe land market due to different in fertility, soil type, topography, size,
legal and tax status, and other factors. Firstly, the increase of soil fertility is associated with increase
of agricultural land conversion. Generally land with high productivity is high fertile and often close
to water sources. The development of industrial or commercial sites usually associated with natural
or human made advantages. Such advantages play an important role in determining the location for
housing and residential development. The construction cost on flat land always less than rough land.
Secondly, land with little slope are more attractive for housing and urban development. Farm close to
city and major highways are prone to be converted to urban uses. Thirdly, farm size is an important
variable; it is more feasible and profitable to choose large farm rather than small farm due to scale of
economy .Thus development of housing and industrial sites transform the urban fringe from prime
farm land to new residential and industrial areas (Azadi, 2010). Along with this the discontinuous
development patterns also a cause of urban sprawl. An example of discontinuous development is
commercial uses which are more productive than residential uses that follow the latter uses. The
commercial uses become productive only after substantial amount of residential inhabitation takes
place in that area. Thus in the development of an area, initially residential uses are coming up slowly.
After a few years, commercial uses become very remunerative because of substantial demand for
services and commodities (Wadhva, 1983). The urban expansion takes place with construction
activities. The construction sector includes both real estate and infrastructure (www.nsdcindia.org).
And these permanent constructions activities result in rapid loss of fertile agricultural land (Fazal,
2000). For example in China a lot of agricultural land has been lost to urban sprawl in the process of
China's rapid economic growth during the past three decades. There may be 4 million hectares of
arable land lost, since the industrialization and urbanization accelerated (Xiubin, 2011). In Tamil
Nadu (in Madurai District) it is reported that fast urbanization culminates unmindful quarrying,
fragmentation of land and real estate boom. Several unauthorized lay outs have come up on
agricultural land and farm lands being converted into residential colonies on the Madurai -
Alagarkoil Road, Madurai -Natham Road and Madurai - Melur Road. According to statistics
available with the district administration, the net area cultivated in the district which was 1.48 lakh
hectares in 2000-01 had come down to 1.36 lakh hectares in 2010-11 (Sundar, 2013). Thus urban

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sprawl leads to conversion of agricultural land. The urban expansion can better be explained with
real estate sector and infrastructure sector.
1.1.3.1Real estate and construction sector
The demand drivers of land for real estate sector are a) residential b) commercial and real
estate activities of Special Economic Zone (SEZ) (www.nsdcindia.org). Real estate market functions
in complex transitional areas that are greatly affected by the interface of urban influences and strong
agricultural tradition (Drozd, 2004). Real estate sector puts high demand for agricultural land.
Firstly, the rising demand for buildable land results in high price for agricultural land and selling up
of agricultural land to real estate ventures. This is mainly due to scarcity of area suitable for real
estate ventures. Thus the gap between the demand and supply of suitable area for residence and
commercial real estate projects leads to radical conversion of low lying wetland to buildable area
(Raj &Azeez, 2011). It is because in terms of direct income real estate is highly attractive to
agriculture and the low price of agricultural land. For example, in Kerala paddy land has become a
desired asset for the capital and cash rich real estate industry because of its lower price compared to
non-paddy land (Vasudevan, 2013). Similarly a recent study in Dindigul District of Tamil Nadu
revealed that the land area under real estate tripled between 2001(23 hectares) and 2011(70 hectares)
while 212 hectares of agricultural land has been left out of cultivation in 2011 as compared to 2001.
Due to the influence of real estate sector demand the market value of agricultural land has increased.
As a result most of the farmers are selling their land as real estate plots for generating income rather
than sticking on to non-viable agriculture (Suganthi&Manikandan, 2012). In the same district, a
study observes that in Sirumalai traditional agricultural land is converted to resorts (Oppili, 2013).
Thus real estate sector which is vibrant in the states where urbanization is higher, as such the real
estate sector growth leads to conversion of agricultural land.
The residential sector mainly influenced by urban pressure and migration. Here, urban
expansion is a cause and effect of expansion of residential sector. It is because urban expansion
resulting in low level of settlement density and continued population shift outwards from urban core,
leading to decline in cultivable acreage (Ronald, 1984). The conversion or decline in cultivable areas
is significantly greater in rural areas near to urban centers (Samuel & George, 2004). This shift of
urban growth from the city core to the peripheries is also due to emergence of environmental lobbies,
easy availability of land at low market price and lesser awareness and less care toward implementing
regulation in the rural settlement in the urban periphery (Rao, 2008). Therefore the shift of
population from urban core to urban fringe causes increasing demand for residential area. And this
unplanned increase in residential area is a major threat to agricultural land in urban fringes (Fazal,
2000). However the phenomenon is taking place not only in urban fringes but also in the little far
villages in the highly urbanized states. It is reported that pushed by unsettling agricultural conditions
and pulled by lucrative real estate deals farmers across the famed and fertile Cauvery delta in Tamil
Nadu are selling their lands to real estate developers. In AmmaChatram, Marudhanallur,
Tirunageswarm, Mathur, and in a host of other villages in Thanjavur and adjacent districts,

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farmlands are being converted to residential plots at a galloping rate (Srivathsan, 2011). In the
similar way in Erode district of Tamil Nadu in the country, turmeric (popular), sugarcane, oil seeds,
coconut, paddy, banana and various other food crops are grown on hundreds of hectares in the
district. But hundreds of hectares of arable lands in many parts of Erode district are now being
converted into housing plots at a fast pace (Ramesh, 2011). The development of special economic
zone (SEZ) also demands more agricultural land. The acquisition of agricultural land and misuse of
land for real estate development are the concerns raised by development experts with regards to SEZ
(Shah, 2009).
1.1.3.2Infrastructure
The government focuses on infrastructure development with active participation of the
private and public sector. This segment includes power, irrigation, road transportation and
communication (www.nsdc.india.org). The development of infrastructure is also necessitated by
urban expansion and economic growth. Rapid economic growth has significant impact on the
demand for commercial property to meet the need of business, by way of offices, warehouses, hotels,
expanded factories, retail and financial services (www.nsdcindia.org &Chakravorty, 2013). The
urbanization itself involves growth of infrastructure; buildings, road and communication facilities
and it demands considerable land to be diverted from its original use (Raj, 2011). For example, in
their study Azadiet.al., pointed out that road construction that support industrial development has
caused encroachment on fertile agricultural land (Azadi et.al., 2013). Likewise it is reported that in
Madurai Ring Road connecting Mattuthavani with Kappalur and the four-lining of Madurai -
Tiruchi, Madurai-Dindigul and Madurai - Virudhunagar along with new residential areas come up in
seven to 10 km stretches in various roads have added to loss of farm land (Sundar, 2013). There are
many examples where highways, airports, and new suburbs remove more than a million acres of
prime agricultural land each year.
High population growth, economic growth, and speculation, real estate, infrastructure
development are operating at a grater pace. The operations of these factors push up urban sprawl.
This phenomenon is significantly greater in urban fringe. Thus the expansion and growth of those
urban centers encroaches on productive agricultural land (Gorecka et.al., 1978). Therefore the land
located near to city has more demand and higher value than land in unincorporated township. This is
because the cities and secondary centers provide more public services such as police, water, and may
also have better school system, the value of which is capitalized in to the land values. Thus the
distance from the land parcel to an access point of an urban centre is expected to reduce land price
per acre (Hushak, 1975). Apart from this, urbanization presents many challenges for farmers on the
urban fringe, such as destruction of crops and damage to farm equipment and declining benefits such
as equipment sharing, land renting, custom work when neighboring farms are converted to
development (Jun Jiewu, 2013). Therefore urban sprawl directly and indirectly causes decrease in
area of arable lands as they are diverted to other uses.
1.1.4Speculation

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Land has become a prime speculative asset and its price has been escalated to astounding
level (Vasudevan, 2013). The speculation carried out by professional speculators, developers, and
even by farmer owner himself. In the case of professional speculators and developers, they buy the
land cheap and sell it dear. The speculator holds the land till increase in market value is higher than
the cost incurred by them (land price and cost of holding). The developers improve the land; level the
land, subdivide it, build residential, commercial or industrial building and then sell it off. But the
speculators make no improvement on land and only create artificial scarcity in land market to
increase land price over time (Wadhva, 1983). The principal motive for buying of farm land is the
anticipation of profit from future sale. And a significant variation in land value was attributed to
buyer – seller’s expectation regarding future nonfarm development. Moreover speculation is found in
local land market with lower land price (Hirchl, Nelson, 1994). For example it is reported that, in
Tamil Nadu at Semmozhi Nagar, a housing colony on the main road to Tiruvarur, the developers
have acquired and sold all the plots. Those who own are reselling them at a price of around Rs. 350
sq.ft. This makes the area, which was once a farmland, worth about Rs. 1.5 crore an acre. The land
prices escalate further as one approaches the town. In contrast, two - acre farm land is worth only
about Rs 2 lakhs. Even projects in small villages such as AmmaChatram, far away from
Kumbakonam, the price of residential plots are as high as Rs. 575 sq.ft. as against Rs 25 per sq.ft for
a farmland located a little farther away. Such conversions have resulted not because of the organic
growth of the place, but driven more by speculative investment. This is evidenced by the fact that
only a few houses are built in the many colonies and vacant plots are regularly resold (Srivathsan,
2011). Another speculative trend found in Tamil Nadu is that after short - lived attempts at raising
bio-fuel plantations and likely after receiving government subsidies for seedling procurement and
land preparation, the bio - fuel companies are in the process of selling lands into real estate for at
least double the purchase price per acre, according to government land records. Thus, instead of
minimizing threats to food security and enhancing rural welfare, growing bio-fuels on marginal lands
appears to be doing the exact opposite by dispossessing farmers of their agricultural land (Jennifer,
2011). This kind of trends of speculative demand seems to be major factors causing abnormal
increase in agricultural land price. Even in a much earlier study Ruttan found that speculation raises
the farm real estate price (Ruttan, 1961). ShahabFazal found that in Shaharanpur 12.2 per cent land
are lying vacant for future urban construction. And it is used neither for urban development nor for
agricultural purposes as land owner await increase in land values (Fazal, 2000). Similarly in Kerala
keeping a wetland fallow for a while as a prelude to diverting it for other uses, is a common practice
(Raj &Azeez, 2009). In the same way in Dindigul district of Tamil Nadu most of the agricultural
land are kept idle with the view to converting them into real estate, factories, mills and other non-
agricultural uses, because the increased market value of agricultural land as a result of opening up of
national highways (Suganthi&Manikandan, 2012; Yang, 2011). Thus speculative phenomenon is a
major factor causing abnormal rise in agricultural land price and conversion of agricultural land. In
most cases now days in India, conversion is in the form of keeping the agricultural land idle with or
without making division or plots only for speculative gains.

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The factors that influence agricultural land on the demand side are population growth,
economic growth, urban sprawl and infrastructure development, real estate growth including
residential sector, commercial, construction and speculation. The increasing operations of these
factors result in increase in the demand for agricultural land for various non-agricultural purposes
due to its lower price and other characteristics suitable for non - agricultural uses. The increasing
demand with fixed supply of agricultural land will cause increase in the price of agricultural land.
Along with high price the other factors operating on the supply side push the farmers to sell or
convert the agricultural land. The following section reviews literature on supply side factors of
agricultural land conversion.
1.2 Factors in supply side of agricultural land conversion
The supply of agricultural land increases when the price offered for the land exceeds the
reservation price. The value of land and building per acre are expected to have positive effect on land
release from farming, since high land price encourages release of farm land into its higher nonfarm
uses (Gorecka et.al., 1978, Hirsch, 1994). For example, for farm land valued at Rupees 1000 a
farmer may receive Rs 10000 to Rs 25000 or more than that from non - agricultural uses. Apart from
price, other factors influencing the supply of agricultural land are low profitability and return from
agriculture, shortage of inputs and size of holdings. The literatures on these aspects are reviewed as
follows.
1.2.1 Low return and profitability
The maximum return is expected from any resource allocation, so is the case of land. Thus
the land has been re - allocated from agricultural to industrial and other urban uses in most of the
countries like United States, due to the net return earned by agriculture is lower and not growing as
fast as the return in industrial, commercial, or residential uses. As a result , every year a large number
of high potential productivity agricultural lands are being shifted to non - agricultural uses in all the
countries - diminishing each nation’s, and hence the world’s stock of productive farm land (Gorecka
et.al., 1978). And the profit depends upon revenue and cost. In agriculture the revenue is determined
by the price and yield. And the cost is mainly determined by the input prices. Thus changes in
commodity price and yield result change in profit. Along with profit, the behavior of farmer together
will determine the supply of agricultural land. For instance, the risk averse farmers and ranchers quit
producing less profitable commodities voluntarily than others. As a result when agricultural profit
margin is low relative to alternative investment farmers begin to shift out of agriculture (Blank,
2001). Apart from this, the “impermanence syndrome”* is also leads to a reduction in investment in
new technology or machinery, or idling of farm land (Jun Jie Wu, 2013). For example, Kannan
(1990) in his study found that instability in earning and low profitability have taken away the
incentive for cultivation in many areas of Kerala. The costs of production are determined by local
demand and supply of inputs. The costs are going up as competition for resource expands with
alternative uses (Blank, 2001). This increasing cost will reduce the profitability from agriculture. As
a result farmers move away from agriculture. For example, in Kerala farmers discard rice cultivation

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for years because of lack of justifiable economic return and profitability. The main reason for
declining profitability is high labor cost (Raj &Azeez, 2011). There are several studies which show
that, increasing cost especially labor cost that has reduced net return and thus incentives of farmers to
cultivate (Prabakar, 2011; Pandey, 2012; Herbert, 2013). In Tamil Nadu it is reported that more and
more small and marginal farmers are selling their land especially to big institution of higher
education and companies since agriculture become unprofitable venture and they are looking for
other works mainly under the Mahatma Gandhi National Rural Employment Guarantee Scheme
(MGNREGS). The other reasons for declining profitability are: uncertainty over water availability,
steep rise in input price, and inadequate procurement price for food grains (Ramakrishnan, 2013;
Narasimhan, Gireesh, 2012).
Another aspect is the lack of interest of younger generation in agriculture due to low returns.
As a result the number of old age people increase in the labor intensive agricultural activity
(Viswanathan, 2012). Many agricultural producers are either at or nearing retirement age. Therefore
obtaining the best price for their asset is typically a high priority. Thus the high land price being paid
by acreage buyers are appealing to many land owning farmers and use the proceeds for retirement or
nonfarm investment (Drozd, 2004). At the same time younger generation works for wages using
capital owned by older generation. And they live on the income from capital and proceeds from land
sale (Deaton, 2001). Thus the attitude of people in different age group also results in sale of
agricultural land.
Having said in different ways, the main reason for this seems to be the low profitability of
agricultural activity. Thus even a slight increase in cost of production or a decrease in gross value of
output makes agriculture economically nonviable. Due to this farmers sometimes act as speculators.
Here the farmers by recognizing the potential non - agricultural use of land refuses to sell it till the
price increases to higher level. Meanwhile he continues to cultivate less intensively by reducing
investment in agriculture till it is taken up for non-agricultural uses. And uncertainty of duration of
ripening period may result even in non use of land (Wadhva, 1983). As such the land is cultivated
less intensively or is kept idle for speculative gains. Thus the low return and profitability from
agriculture necessitates increasing supply of agricultural land for non - agricultural uses.
1.2.2 Shortage of inputs
Shortage of input is another factor causing conversion of agricultural land. The major inputs
apart from land helps agricultural production are, labor, power and water. Input shortage has two
impacts a) impact on cost b) impact on output. Because in the factor input market when there is high
demand for input and less supply of factor services, automatically the factor price will increase. On
the other hand lack of input will lower agricultural production. As observed by Balakrishnan the loss
of land and labor to non - agricultural sector have acted as a slowdown growth of Kerala’s
agriculture, starving it of resources (Balakrishnan, 1999). Dalwai in his study reveals that in India
the important problems of agricultural sector are; stressed natural resources, inadequate
infrastructure, lack of technology and run down delivery system in credit (Dalwai, 2012). For
instance it is reported that the Mahathma Gandhi National Rural Employment Guarantee Scheme

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(MGNREGS) has led to severe labour shortage in the agricultural sector. It aggravated the
conversion of agricultural land for commercial or residential uses (www.thehindu.com, 2012). Due
to labor shortage, farmers especially small and marginal farmers stop cultivation and migrate to
urban and semi urban areas leaving their land fallow. So that land under non - agricultural use
increase (Sonika Gupta). A study in Sooranguty and KongaranKottai in Tamil Nadu showed that
farmers abandon their land due to labor shortage, high labor cost; because the landless agricultural
laborers migrating out of the area for non - agricultural jobs. On the other the younger generations
have become reluctant to take up and more willing to sell the agricultural land, have opted to migrate
to Middle East for work (Jennifer, 2011). It is reported that Tamil Nadu shows a negative growth in
percentage of agricultural labor and farmers to total work force. This is because the share of
agricultural labor and farmers indicate a net out -migration from rural to urban areas at a faster rate in
the more recent period which is primarily due to the industrial boom in the recent times
(Raveendaran et.al., 2011). Thus as far as labor input is concerned a vicious cycle operates. Similar
to labor, electricity is one of the major inputs to agriculture. The shortage in the availability of
electricity will adversely affect agricultural production and income of the farmers. In Erode district
of Tamil Nadu it is reported that many rural areas experience power cuts ranging from 10 to 12 hours
a day, crippling the agricultural operations. The agricultural productivity of the district is going to
witness a drastic fall due to the long hours of power outage and shortage of water (The Hindu, Sept,
2012).
Water is an essential production factor in agriculture, both for crops and livestock (copa -
cogeca.eu, 2013). Water for agriculture is critical for future global food security. However, continued
increase in demand for water by non - agricultural uses, such as urban and industrial uses along with
climate change increase water scarcity. Climate change affect the agriculture and food security by
altering the spatial and temporal distribution of rain fall, and the availability of water, land capital,
biodiversity and terrestrial resources. The increased competition for water within and between
sectors, leads to water out of agriculture and leaving less water for food. The challenge of water
scarcity are; increasing cost of developing new water sources, land degradation, ground water
depletion, water pollution, and ecosystem degradation. For example about 8.5 million ha of rain fed
land and1.5 million ha of irrigated land are lost to Stalinization every year. Global productivity loss
from irrigated, rain fed, and range land due to land degradation over three decades has been
estimated at 0.4 per cent per annum. An estimated 15 per cent of the system’s productivity was lost
due to land degradation alone for the Thungabhadra irrigation project in southwest India (Hanjra,
2010). Thus it is clear that water scarcity leads the agriculture as an unviable activity. This will push
the farmers to convert the land for non-agricultural purposes. In India the soaring population, rapid
urbanization, and a thirsty farm belt are all putting strain on India’s anemic water infrastructure. The
resulting water shortage could severely impact country’s agricultural sector and food security (CSIS,
2007). In Tamil Nadu it is reported that water scarcity is the major problem and it has adversely
affected the agricultural sector (Srinivasan, 2007). This is because out of a net sown area of 56 lakh
hectares, about 30 lakh hectares (54 per cent) of arable land are irrigated. Since irrigation may take

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place more than once, the gross irrigated area is of the order of 36 lakh hectares or an irrigation
intensity of 120 per cent. Canals account for about 29.2 per cent, tanks for 21.3 per cent and wells for
48.9 per cent of net irrigated area. In 1998-99 the food grain output reached a peak of 94 lakhs tones
due to the availability of irrigation. But in recent times, surface irrigation potential has largely been
exhausted. Area under canal irrigation has remained almost stagnant since the sixties at about 8.5
lakh hectares. The area under tank irrigation has fallen by a third from 9 lakh hectares in sixties to
6.3 lakh hectares in 1999-2000. The average net area irrigated by a tank has decreased from 19.2 ha
in 1981-82 to 15.1 ha in 1999-2000. The proportion of area irrigated by tanks has fallen from 36.8
per cent in the sixties to only 21.3 per cent in 1999-2000 (Angappapillai, 2012). Another reason for
reduction in irrigated area is water used for non-agricultural purposes. For example in Tamil Nadu
due to the pollution from tannery industries ground water become polluted. It caused water scarcity
for agriculture a well as for domestic purposes. As a result agriculture in that area is stopped and
villagers sold the land to tannery industry and evacuated the area (Kankaria, 2011). Thus it is clear
from the above discussion that the scarcity of good quality water results in decline in irrigated area
and cultivated area and it will reduce agricultural output.
It may be concluded that due to the shortage of inputs such as labor, power and water
agriculture activity become uneconomic and unviable activity. So the farmers convert these lands for
non - agricultural purposes which ultimately lead decline in agricultural output.
1.2.3 Size holding of land
As land holding size increases, the more likely that land is subject to declining marginal
product on additional unit (Hushak, 1975). At the same time the cost would increase with increasing
size of farm. It is true that, there will be some economies of scale due to use of excess capacity of
some indivisible item like tractor, pump set and sometimes even on labor. However the cost will
increase sharply once the critical size is crossed. That is, the net return would increase in increasing
proportion as proceed from a very small sized farm to large sizes. The increased average and
marginal profitability might be due to better utilization of land and other inputs. Beyond a critical
size, however the diseconomies in the form of management problems, sudden increase in cost might
set in (Wadhva, 1983). As mentioned above in case of marginal holdings, net return would be less
and farmers would opt out of cultivation. As Dalwai points out the increasing marginal holdings
along with poor return from cultivation (Dalwai, 2012) leads to conversion of agricultural land.
Because many small farmers and their families think that the best roadmap for development is to
move out of farming due to low return from agriculture. For example in Tamil Nadu it is reported
that average size of land holding had come down from 0.83 hectares in 2005-06 to 0.80 hectares in
2010-11. And more small and marginal farmers are selling their land holdings due to no profit from
agriculture and they become agricultural workers. Between, 2001-2011 there was a fall of about 8.7
lakh in the number of cultivators and a rise of nearly 9.7 lakhs in farm workers (Ramakrishnan,
2013). But interesting fact is, large land holders have more incentive for selling or converting
agricultural land for more profitable non - agricultural uses than medium, small, and marginal
farmers. For example in Himachal Pradesh Sonika Gupta found that the size of holding decreased

12 | P a g e
due to agriculture is not proving to be remunerative venture. This is resulted in subdivision of land in
Himachal Pradesh and diversion of cultivated land holdings to non - agricultural uses (Sonika Gupta,
2010). Thus land size is an important factor causing increasing the supply of agricultural land. It may
be briefly stated that on the supply side the low return and profitability, shortage of inputs and land
size act as important factors causing agricultural land conversion to non - agricultural uses.
To conclude, factors operating in demand and supply side leads to agricultural land
conversion. And these results in the shortage in the cultivated land and culminate in declining
agricultural output.
2. AGRICULTURAL LAND CONVERSION AND FOOD SECURITY NEXUS
In the previous sections, the review of literature showed how the demand and supply side
factors exert impact on agricultural land conversion. This has a serious implication on food security
especially in countries like India. This section makes an attempt to throw light on this.
Fig 1: Thematic presentation of agricultural land conversion and food security

13 | P a g e
Agricultural land conversion to non - agricultural uses leads to food insecurity directly by
creating food shortage and food price increase.This aspect is presented in the figure (1). There are
too many suffer from lack of food in the world. Current global food production comes from 1.5
billion ha of cultivated land, representing 12 per cent of the total land area. About 1.1 billion ha are
rain fed with no irrigation systems. Thus rain fed agriculture is practiced on about 80 per cent of
world’s physical agricultural area and generates about 60 per cent of the world’s staple food.
Irrigated agriculture covers only 279 million ha or 19 per cent of cropland but contributes 40 per cent
of agricultural output. In the last 50 years, cropland has been reduced by 13 per cent and pasture by
4 per cent. According to the Food and Agriculture Organization (FAO), world agricultural
production growth is expected to fall by 1.5 per cent per year to 2030 and then a further reduction by
0.9 per cent to 2050, compared with 2.3 per cent growth per year since 1961. In fact, the growth by
2009 has fallen relative to the growth in 2000. A deceleration in agricultural growth will affect world
food security. The key drivers which have recently impacted and will impact on food production and
supply include: (a) water and land crisis; (b) climate change crisis; (c) energy prices and (d) credit
crisis (Hanjra, 2010). Since land is the major input for agricultural activity, the shrinkage of
agricultural land put a greater challenge to food security. Even though there is technical
improvement and development in the discoveries of new varieties of seed and fertilizers, agricultural
production cannot take place without cultivable land. Thus shrinking of agricultural land due to
conversion it into non - agricultural purposes, is a major threat to food security.
For instance in India, the cultivable land showing a declining trend. The data shows that as
many as 20 states reported decrease in cultivable land to the extent of 790,000 hectares between
2007-08 and 2010-11.The decrease is mainly attributed to diversion of cultivated land for non-
agricultural purposes, including construction, industries and other development activities, in the long
term it will affect the food security with the country needing more and more food grains to support
its growing population (Vishwamohan, 2013). According to the Global Hunger Report (2010), India
is among 29 countries with highest levels of hungers, stunned children and poorly fed women. And
report of UN World Food Programme suggests that despite significant economic progress in the past
decade, India is home to about 25 per cent of the world's hungry poor. Although the country grows
enough food for its people, pockets of hunger remain. Around 43 per cent children under the age of
five years are malnourished and more than half of pregnant women aged between 15 and 49 years
suffer from anemia (Sing, 2013). Another example is, in Tamil Nadu near to Tiruchi in
Mannachanallur as a consequence of farm land conversion agricultural production has significantly
dropped. As a result cultivation of local variety of rice phenomenally declined (Srivathsan,2011).
Similarly in the case of China another fastest growing economy in the world, facing severe food
insecurity. The main reason for this is agricultural land conversion for non - agricultural purposes.
Cultivated land conversion has emerged as a critical political and security issue, largely because of
food and environmental concerns. Despite the stringent policies designed to protect cultivated land
the area of good farmland fell by 12.31 million hectares between 1997-2008, while population level
continuous to rise at about average 7.5 rate. The first threat to food security of China is the

14 | P a g e
difficulties resulting from China’s limited land resources and large population. Second is the loss of
cultivated land due to the China’s rapid urbanization (Shunji Cui, 2011). Thus loss of agricultural
land or conversion is the major factor causing food insecurity. Because it will reduce food production
and employment opportunity at the same time price of food grain as well as vegetables will rise and
purchasing power will decline.
3. CONCLUSIONS AND POLICY IMPLICATIONS
This paper has made a thematic analysis on the causes of the agricultural land conversion
and impacts of the conversion on food security. It shows that agricultural land conversion is the
major problem of developed, developing and less developed countries in the world. And now a day
the developing countries are experiencing the highest average of agricultural land conversion
compared to developed and less developed countries. The review of literature has shown that the
major causes of agricultural land conversion are population growth, economic growth, and urban
sprawl including real estate and infrastructure development and finally speculative activity on
agricultural land on the demand side of agricultural land conversion. On the supply side the low
return and profitability, shortage of inputs and variation in land size push farmers to sell or convert
the agricultural land for non-agricultural purposes. This conversion causes shrinkage of agricultural
land as well as agricultural output. In the long run all these pose threat to food security. This is the
need of the hour; since supply of land is fixed use of land for one purpose will be at the expense of
other and when huge investments are made on land for one purpose it cannot be reverted back for
other uses. Hence, agricultural land which has greater implication on food security needs to be
protected against indiscriminate conversion. Planning of the cultivation may be done at the village
level. Cooperative farming involving women’s self-help groups (which are becoming stronger and
stronger social and economic organization at the village level) may be encouraged. Location specific
agricultural development programme may be implemented by the government and other agencies.
Rural credit delivery could also be made location specific based on the needs and conditions of the
villages. Computerisation of land records must be done at once. Proper integration of this must be
made across the line departments and organizations such as land registration office, village
administration office, village panchayat, block development office, department of agriculture and
public works department. Regular updation of information is all the more necessary. Control
informal money lenders in the villages. Reinforce the law stringently. Awareness on judicious
spending practices may be given. Direct and indirect government intervention through regulation of
land use - preventing the diversion of fertile lands from agricultural to non-agricultural purposes, and
retaining farmers in farming activity. Direct and indirect government intervention through regulation
of land use - preventing the diversion of fertile lands from agricultural to non-agricultural purposes,
and retaining farmers in farming activity. Speculative activities in land market should be curtailed by
reinforcing the laws stringently. Control fluctuation in price and ensure fair price to the farmers. The
above measures would help in controlling agricultural land conversion into non – agricultural

15 | P a g e
purposes and increase agricultural output and make agriculture as economically viable and a
profitable activity.
ACKNOWLEDGMENTS
Our thanks to the experts who have contributed towards the completion of this paper and
Gandhigram Rural Institute (DU).
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*****

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