Why Did a Slump Follow Land Reforms in Kerala?

Abstract

The land reforms in Kerala have deservedly attracted attention not only for the boldness of the policy formulation, but also for the perceived efficiency with which they have been administered as compared to elsewhere. However, the addi tional perception that the state today boasts of a strong agricultural economy undergirded by these very reforms is far from correct with paddy production, its erstwhile core, which by now is at a level below that in the year preceding their launching. As an explanation of this counter-intuitive outcome, it is proposed here that the slump is a case of the 'Dutch disease', with the difference that the boom has occurred offshore. Such an explanation alone, unlike earlier attempts, is able to account for the trajectory of the central variables, notably real wages and output. Kerala's experience bears some lessons for the study of agrarian transformations.