Colonialism had a devastating effect on Indian agriculture. This when Indian agriculture, like in any other pre-industrial society, accounted for the preponderant share of the country’s total output.
Colonialism shattered the basis of traditional Indian agriculture without bringing in any dynamic new forces. Commercialization of agriculture and differentiation within the peasantry occurred on an unprecedented scale. However, unlike independent societies undergoing transition from pre-industrial and pre-capitalist to capitalist mode of production, in India commercialization and differentiation did not mark the shift towards capitalist commodity production and the rise of the rich peasant/capitalist farmer.
Commercialization of agriculture in colonial India facilitated the extraction of surplus from the peasantry (through land revenue demand in cash) and the transfer of this surplus from India to Britain by bringing agricultural produce to the export market. The ‘unrequited’ export surplus being the size of the surplus extraction or ‘drain’ from India.
Similarly, differentiation of the peasantry in India by and large did not lead to the rise of the rich peasant/capitalist farmer but to the creation of a rentier landlord class. Thus, while Indian agriculture was transformed, it was done in a ‘colonial’ manner which had a long-term enervating effect on it.
The typical features that emerged in Indian agriculture under colonialism put an unbearable burden on the bulk of the Indian peasantry. First, the colonial state made a very high tax demand on agriculture. In the early colonial period the state made permanent settlements with zamindars (the zamindari or Permanent Settlement) fixing the land revenue rates at a very high level. The zamindar was the intermediary between the state and the direct cultivator. He committed to pay fixed land revenue to the state while he collected rent from the actual producers. However, since land revenue was fixed, the colonial state discovered that it was not able to mop up the rise in agricultural income caused by the rise in agricultural prices that occurred over time. The surplus or the increase in income was being largely appropriated by the intermediaries.
Consequently, all subsequent land tax or revenue settlements made by the colonial rulers were temporary settlements made directly with the peasant, or ‘ryot’ (e.g., the ryotwari settlements). In ryotwari areas and other areas under very similar tenurial system comprising over 40 per cent of British territories, the land revenue rates were periodically enhanced pushing them up to the maximum limit the economy or polity could bear. Contrary to British claims the actual land revenue collections under the British were generally much higher than those under the traditional indigenous rulers. Being rigid and inflexible in crisis years of low production or low income due to crash in prices, such as during the Great Depression of the 1930s, the land revenue collections could equal 75 per cent of the whole of the net produce of the peasant! Till the turn of the twentieth century land revenue constituted more than half of the total revenue raised by the colonial state.
Second, under colonialism Indian agriculture experienced the growth of landlordism and rack renting on a very wide scale. In the zamindari areas absentee landlordism and subinfeudation was rampant. So high were the rents and other exactions from the peasant that the gap between what was collected from the peasant and the land revenue paid to the state was in some areas able to sustain scores of layers of intermediaries between the state and the direct cultivator!
In the ryotwari areas, too, despite the direct settlements between the state and the peasant producer, landlordism and tenancy became widespread over time. By one estimate the landlord holdings in ryotwari areas covered 40 to 50 per cent of the total land. On the eve of independence roughly 60 to 70 per cent of the total cultivable land in British India (including zamindari areas) was owned by landlords.