**Table 12: Impact of land consolidation on one holding, Sambalpur district**

|**Land**<br>**Category**|**Relative**<br>**Weighting**|**Approx**<br>**price**<br>**(Rs. Per**<br>**acre)**|**Be**|**fore Cons**|**olidation**|**A**|**fter Conso**|**lidation**|
|---|---|---|---|---|---|---|---|---|
||||**Area**<br>**(acres)**|**No. of**<br>**plots**|**Imputed**<br>**value of**<br>**holding (Rs.)**|**Area**<br>**(acres)**|**No. of**<br>**plots**|**Imputed**<br>**value of**<br>**holding (Rs.)**|
|_Bahal_|1.00|80,000|3.00|3|240,000|1.25|1|100,000|
|_Berna_|0.75|60,000|1.50|3|90,000|2.50|1|150,000|
|_Mal_|0.50|50,000|1.86|8|93,000|3.15|1|157,500|
|Total|||6.36|14|423,000|6.90|3|407,500|
|Weighted<br>total|||5.055|||4.70|||

Source: Field notes, Laderpally village.

- **_information asymmetries and transaction_** _costs:_ A possible reason for the infrequency of voluntary exchange of land parcels between farmers may be the lack of necessary information about the potential productivity of each other's land. However, this seems unlikely in villages where there can be few secrets. It seems more plausible that farmers may be unable to agree on the exchange value of fragments in the context of thin land markets. Uncertainty surrounding its legal status and the high cost of obtaining _pattas_ may also discourage potential transactors.

- **_need to hold land as a liquid asset:_** Land enters the sale market infrequently and in small fragments. Landowners will be unwilling to consolidate their land parcels as this might preclude the option of selling/mortgaging a small piece of land in order to meet future contingencies (e.g. marriage or funeral costs). The discussion in Section 4.1.4 established that most land sales are distress sales. Clearly, consolidation programs that seek to restrict resale also restrict the liquidity of land as an asset in the limited portfolio available to cultivators (Heston and Kumar, 1983).

Of these, soil heterogeneity seems to be the chief constraint on land consolidation in the north-western plateau of Orissa, and risk aversion in unirrigated regions. While high transaction costs in land markets also act as a disincentive to voluntary consolidation (i.e. the voluntary exchange of plots), the importance of holding land as a liquid asset, in the absence of other durable assets or steady income-streams, is a critical factor in explaining the widespread resistance to land consolidation in practice.

# _4.2.6 Policy issues_

Land consolidation, where it may successfully be implemented, is more likely to contribute positively to agricultural productivity than to improving access to land for the poor. In theory, consolidation ought not change net land distribution, and so should not leave the poor worse off. Our findings in Orissa suggest that land consolidation, like land survey and settlement operations, actually tends to worsen land distribution at the bottom end, to the extent that it has brought about any real change on the ground. While land consolidation may contribute positively to agricultural productivity under certain conditions, it will not help increase access to land for the rural poor unless attention is also paid to other aspects of a land reform agenda. For instance, insecure tenants and share-croppers whose names do not appear in land records may lose their rights in land, if consolidation is pushed through without first securing their rights.

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