Although land reforms are typically non-market interventions involving public action, an interesting feature of implementation of land reform in West Bengal is that it has triggered activity in the land merket and, in contrast to experience in rest of India, land markets have contributed to the redistribution of land – albeit in very small plots – to the poor. This study analyses the influence of agrarian reforms on land markets in two villages of West Bengal.

Until the 1970s, the agrarian structure of West Bengal was noted for an impoverished peasantry, the relativity small size operational holdings in the state, high inequality in the distribution of land and the widespread prevalence of forms of shrecropping tenancy arrangements. Land reform legislation was passed in the 1950s and amended several times after that. The decades of sixties and seventies were years of political struggle for the implementation of land reforms. The effective implementation of the legislation occurred after 1977, when a coalition of left-oriented parties, led by the Communist Party of India (Marxist), came to power.

There were three components of the land reforms implemented after 1977. First was a programme of tenancy reforms – popularly known as Operation Barga – under which about 1.4 million bargadars (sharecroppers) were registered. All recorded bargadars were legally recognised as tenants and given a permanent right to cultivate the leased land. The second component of the programme was the imposition of ceilings on household operational holdings. About 1,262,000 acres of land were identified as surplus and were acquired by the public authority. Of the acquired land, 1,025,000 acres were distributed to around 2.5 million households. The third component of the land reform was the distribution of non-agricultural land vested in the state. This was to be used for crop cultivation, for afforesatation and community development purposes and for use as homestead land. Homestead land was given in small plots, eachnot exceeding 0.8 acres, to 500,000 agricultural worker, artisan and fishing-worker households in the state. Along with land reforms, the government initiated another important change in rural areas by organising regular elections to institutions of local government – the panchayats – at the village, block and district levels.

The panchayats and rural mass organisations, mainly the Kisan Sabha (Peasants’ organisation), were active participants in the process of land reform. The achievements of agrarian movements in the late 1970s and early 1980s also included more effective enforcing of minimum wages in agriculture. Since 1978 panchayats have become key institutions of public action at the local level and have played an important role in planning and implementing the development programmes of the government.

Growth of agricultural production and productivity in West Bengal in the years following implementation of land reforms and reorganisations of institutions of local governance was remarkable; agricultural performance of West Bengal has been described as India’s agricultural "success story of the 1980s".

In this study I have attempted to analyse the effects of agrarian reform on land markets and on the pattern of transactions in the land market. The "land market" refers to transactions in which the ownership of land was transferred; land lease markets are not included in the analysis.

The study shows that the volume of land transactions in West Bengal between 1977 and 1995 was greater than the corresponding volumes in land markets studied at different points of time in Punjubm Maharashtra, Rajasthan and Uttar Pradesh.

The difference between the study villages and the other villages in respect of the pattern of land transactions are particularly noteworthy. The empirical studies of land markets indicate that the trend is towards the net sale of land by small holders and net purchase is relatively large landholders. This is consistent with the results of empirical studies of peasant differentiation: the trend is towards the loss of land by poorer sections of the peasantry and the acquisition of land by sections of the rich. Another result from the literature on differentiation is the general failure of agricultural workers to acquire, as a class, ownership holdings of land through purchase.

In West Bengal, by contrast, it was, in general, the poor and landless who acquired land through the market between 1977 and 1995. It must immediately be noted, however, that the extent of land purchased by each peasant or worker household was very small indeed. Nor did the transactions in the market brought about any radical redistribution in favour of the poor. Nevertheless, the overall pattern of land transfers is noteworthy, and calls for some explanation.

On the demand side, the poor acquired the purchasing power to but land as a consequence of developments after 1977. These include registration of bargadars, land redistribution, improvement in real wages in agriculture, increase in the days of employment and improvements in access to formal credit.