Diversion of agricultural land to non-agricultural uses is an issue of public debate in every agrarian economy experiencing rapid urbanization and industrial development. However, the issue has become more complex and politicised in India due to widely varied perceptions about the extent of diversion of agricultural land and the causes and socio-economic consequences of loss of agricultural land. It is generally perceived that large-scale conversion of agricultural land to non-agricultural uses has occurred and the issue of acquisition of large tracts of fertile land by corporates and displacement of farmers, agricultural workers, and other rural communities has become a major political rather than socio-economic issue. We try to determine whether the perceptions are consistent with empirical evidence on land use competition and identify main drivers that contribute to loss of agricultural land.
The evidence shows that agricultural land conversion has become a serious issue in the country but the extent and intensity varies across different states. Between triennium ending (TE) 1991-92 and TE2011-12, net sown area in the country declined by about 1.8 million ha but it increased in some states, e.g. about 20 lakh ha in Rajasthan and 9.5 lakh ha in Gujarat. In contrast, Odisha lost over 17 lakh ha net sown area, Bihar (including Jharkhand) 12.4 lakh ha, Maharashtra (7.6 lakh ha), Tamil Nadu (7.1 lakh ha), Karnataka (3.1 lakh ha), Andhra Pradesh (2.7 lakh ha) and West Bengal (2.6 lakh ha). Contrary to general perception, Gujarat is the only state which has been able to add about 3 lakh ha to its total agricultural land during last two decades. Area under non-agricultural uses increased from 21.3 million ha in TE1991-92 to 26.3 million ha in TE2011-12 and almost all states witnessed an increase in area under non-agricultural uses. The empirical results revealed that urbanization, road infrastructure expansion and industrial development were the most important factors affecting agricultural land. Therefore, proper planning and management of land resources and appropriate policy framework are required to check conversion of agricultural land. Managing urbanization process and industrial as well as infrastructure expansion in a desired way that protects productive agricultural land and uses barren and unculturable wastelands (about 17.2 million ha) is very critical to country's prosperity and sustainability. Hence, restriction on conversion of agricultural land for non-agricultural uses (mainly for industrial estates) and proper planning and implementation of land use policies are needed. The recent and current trends in agriculture and non-agriculture land use should not be a cause for either panic or complacency. However, strategic planning that avoids land use conflict by identifying areas, mainly barren and unculturable wastelands, for non-agricultural activities such as urban and industrial expansion and protecting productive farm lands is necessary to address land use conflicts and co-existence of agriculture and other non-agricultural activities. The problem of small and fragmented farms underlines the need for revisiting tenancy laws so as to increase the effective farm size.