Articles
Kerala’s Locked Fields: A Ban that Binds Growth in Chains
Kerala’s agriculture faces a paradox of abundant fallow land (57.4k hectares in 2023–24) alongside negative sector growth (-0.7%), driven by restrictive land laws like the Kerala Land Reforms Act (1963) and Paddy Land Act (2008) that ban formal leasing and fragment holdings. The article critiques these as now hindering scale, mechanisation, and tenant security, while advocating legalised leasing for productivity gains.
Kerala’s agricultural landscape presents an evident paradox: large tracts of cultivable land remain unused even as agricultural production continues to decline. In 2023–24 alone, 57.4 thousand hectares of land were reported as fallow (Department of Economics and Statistics, Government of Kerala), while the agriculture and allied sectors recorded a negative growth of 0.7 per cent (MOSPI,2024). This coexistence of land abundance and production distress challenges conventional explanations centred on agro-climatic constraints and pest infestations, which dominate official narratives. Instead, it points towards deeper structural issues that shape farmers’ incentives and capacities to cultivate land.
Figure:1
Source: Department of Economics and Statistics, Government of Kerala
The sustained negative growth in agricultural production of major crops over the last decade, as illustrated in Figure 1, reinforces the systemic nature of Kerala’s agrarian slowdown. With production growth remaining negative across most years, the decline cannot be dismissed as episodic or climate-induced. Rather, the persistence of contraction suggests institutional and policy-driven rigidities that discourage cultivation, limit efficient land use, and increase production risks for farmers.
One of the least examined yet crucial contributors to this vulnerability lies in Kerala’s restrictive land regime. The Kerala Land Reforms Act (KLR), 1963, by constraining formal land leasing, and the Kerala Paddy Land and Wetland Conservation Act, 2008, which permits only panchayats or Padashekara Samithis to lease land informally, have narrowed cultivational freedom. These arrangements often introduce discrimination and favouritism, compelling landowners to lease land to panchayat-recommended farmers and thereby limiting choice for both parties. The resulting fragmentation of landholdings and insecurity of tenure have also contributed to Kerala’s exceptionally high cultivation cost – ₹76,400 per hectare (Ministry of Agriculture and Farmers’ Welfare, 2021–22). These structural constraints have also fuelled a deep dependence on imports, with nearly 85 per cent of paddy consumption met through inflows from other states (Review of Agrarian Studies), reinforcing the paradox of fallow land amid food insecurity.
Legalising Land Leasing: Addressing the Vulnerable Tenant Farmers
The Kerala Government’s pending bill, tabled in August 2025 to legalise lease farming in the state, flickers like a distant dawn for vulnerable tenant farmers. Although leasing is formally banned in Kerala, informal narratives indicate that nearly 35 per cent of horticulture and vegetable production is undertaken on leased land. The Department of Agriculture, Government of Kerala, explains that such farming is typically carried out through informal 11-month contracts. While this leasing system is widely practised in agriculture, the institutional failure to legally recognise such tenancy increases the risks associated with farming, depriving tenant farmers of legal protection and access to formal credit.
Although the case for legalising lease farming appears promising, especially when viewed alongside parallel experiences such as Andhra Pradesh’s Crop Cultivators Rights Act, 2019, the proposal continues to face strong opposition in the Kerala legislature. The resistance is largely rooted in the legacy of the Kerala Land Reforms (KLR) Act, 1963. The KLR Act was revolutionary in dismantling the exploitative jenmi–kudiyan (traditional caste-based feudal land tenure system between the landlord and landless labourers) system that had long dominated Kerala’s agrarian structure. To protect tenants from landlord coercion, the Act imposed a complete ban on future tenancy under Section 74 and introduced ceilings on landholdings under Section 82.
For its time, these provisions of the KLR Act were transformative. However, six decades later, they have generated significant unintended consequences. Landholdings have been progressively fragmented through inheritance, leading to extreme atomisation of agricultural land. Today, 96.7 per cent of Kerala’s 7.3 million operational holdings are marginal (less than one hectare), and the average holding size has declined sharply. What once empowered cultivators has now become a structural constraint, preventing land consolidation, mechanisation, and commercial viability in agriculture. (A Compendium of Agricultural Statistics: Kerala 2023)
Economic data reinforces this diagnosis. According to the Kerala Economic Review 2024, agriculture’s share in Gross State Value Added (GSVA) declined from 11.92 per cent in 2014–15 to 8.30 per cent in 2023–24. Paddy cultivation area has halved since the early 2000s, yields have stagnated, and mechanisation levels remain among the lowest in India. Even the basic tractor density stands at just 4 per 1,000 hectares, compared to the national average of 33. Research from Kerala’s agricultural universities further indicates that gross cropped area is a key driver of agricultural output in the state. Yet fragmented landholdings and restrictive leasing laws continue to suppress the expansion of cropped area and prevent the realisation of scale economies.
Reclaiming Reform for a New Agrarian Reality
Kerala’s land reforms liberated farmers from feudal bondage, but the continued ban on land leasing now binds them to uneconomic scales and bureaucratic control. What was once a shield has gradually become a shackle. A liberalised, transparent, and farmer-driven land-leasing framework is therefore essential. Leasing must move away from informal mediation toward secure, market-based tenurial arrangements, supported by digitised land records and clearly defined exit clauses. Such a framework offers a genuine win–win outcome: landowners gain stable rental income, while farmers acquire scale, flexibility, and higher productivity. As the National Institution for Transforming India (NITI) Aayog rightly observes, land leasing is an economic necessity, not a feudal relic.
Sreelakshmi Harilal & Shobha Vasan are Research Associates at Centre for Public Policy Research.
Views expressed by the authors are personal and need not reflect or represent the views of the Centre for Public Policy Research.
Sreelakshmi holds an MSc in International Development from the University of Birmingham and BA Honors Economics from Lady Shri Ram College for Women, University of Delhi. She has worked as Academic Coordinator at a Cambridge International School.
Shobha Vasan is an economics researcher with a strong academic foundation and hands-on experience in agricultural and development economics. She holds a Master’s degree in Economics from the University of Hyderabad and a Bachelor’s degree from St. Thomas College, Thrissur.
Shobha actively contributes to academic and policy discourse through publications and volunteer initiatives. Her areas of interest include agricultural economics, development economics, labour economics, political economy, and public finance.
