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Industrialization: an examination of land usage in Kerala

An article examining land usage in Kerala and the question of industrialization.


A paddy field in Kozhikode. Paddy production has declined by more than half since the 1980’s in Kerala. (Credits: Ajeeb Komachi)

I had written an article on how the Kerala Model is non-existent and how the state is entirely dependent on Remittances. Many of those responses I have received were about how the state has no land for massive industrialization.  Is this so?

Firstly, Let’s look at the density of the state: Kerala has 819 persons per square kilometer,  and is the third most densely populated state after Bihar (at  881 persons) and West Bengal (at 903 persons). If one is to argue that Kerala cannot be industrialized due to the high density, then this argument should hold for West Bengal as well. This is of course, just a singular line of thought. there are many other factors that should be considered.

One such source for information is the information regarding land use pattern in the state:


Source: Kerala Economic Review, 2015-16

As one can see, the majority of the land in the state is utilized as agricultural or fallow land.  A better visualization of the land use is below:


Source: Kerala Economic Review, 2015-16

You can clearly see that the land use in the state is primarily agricultural. What crops is being sown in this area?  As one would expect, 7,90,220 Hectares of land is Coconut, while Rubber comes second with 5,50,000 Hectares.

The question of using land for industry or agriculture is a a question that is too complex to be entered into at this point.  The question however is not similar to the problem of food security, but productive land use. When I say “productive land use” I do not mean it in agricultural terms, but rather in economical terms. What is more productive for the state? The use of agricultural land for cash crops and other such crops, or using it for the purpose of industry? Kerala does not produce most of the grains, pulses or other food crops that it consumes, and thus the question of “self -sufficiency” is an absent one. For example, Kerala’s Rice production was 10,67,000 tonnes in 1961, which has almost halved in 2015 to 5,50,000 tonnes, while the population doubled from 169 Lakh to 348 lakh. In such a context, the question between Industrial Production versus Food Production does not prop up, rather the question would be narrowed down to the economics of cash crop production as against industrialization. There is another factor that we have not considered: the question of cropping intensity, or the use of the same land for different crops. Kerala is at the lower end of such utilization at 130%, with Punjab, Himachal Pradesh and West Bengal (all above 170%) leading in the country. Thus the conflict between the two could be an imagined one.  Regardless,  the productivity question would be hard to answer without a field study and primary data.

However, one can answer this question to a limited extent by utilizing some logic, one can easily conclude that industrialization is far superior to cash crop production. After all, the Miracle on the Han river did not happen because the Koreans cultivated rubber.

All this being said, I do concede to the limited point that Kerala cannot have mass-industrialization to an extent that Karnataka or Tamil Nadu has. But there is no doubt that there is scope for increasing industrial output: the state’s industrial sector accounts for barely 10% of Gross State Domestic Product.

The problem clearly is not the lack of land,  but rather a series of issues that drive private investment in the industrial sector:

Firstly, the lack of labour. While the state leads in unemployment in the country, the state has still witnessed a massive influx of migrants from North and East India, numbering about 24 lakh (2013). Why? because the people resident in the state are unwilling to work “menial” jobs that are “below them”. This is a phenomenon I had noted before, with many a malayali youth preferring employment with the Government.

Secondly, the ease of doing business. The state ranked last in the recently released NITI Aayog Ease of doing business ranking, the state was ranked last, and not without reason. The state has a notoriously complicated legal regime for industries, and the time that is taken by the various governmental agencies to give sanction would truly astound anyone.

Thirdly, the issue of Politics. Even if one are to assume that an industrial unit somehow gets all the required sanctions and finds the labour required, the ugly head of Trade Union politics will surely raise its head. The problem that confounds the Kerala State Road Transport Corporation is primarily the Trade Unions, who refuse to accede to any reforms – and there have been more than one instance where industries had to close down due to the whim and fancy of Trade Union leaders. The problem can be best explained with the help of the example of nokku kooli where Trade Union leaders force people to pay workers for the “work that is lost” when goods are unloaded by machines or by other workers.

In conclusion, there are reforms that can be initiated in an effort to provide impetus for the growth of the industrial sector in the state. So far, one can only look at this portal at the Kerala Website and sigh.

#Analysis #Kerala #Agriculture #Industry #Economy #KeralaModel #Krishna #Economics

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