200

rental and capital value to land as a factor of production.
If the rise in land values and rentals is not due to the rise
in prices, they cannot be taken as indices of agricultural
progress because in that case it will be due to scarcity
caused by a larger population subsisting on the land. Let
us now examine the causes of rise in land values and rent-
als.

RISE IN LAND VALUES

The marginal table makes the fact of a rise in land val-
ues evident. It is often said that such a rise in land values is

simply an unearned incre-
ment to the agriculturist.
In other words, it is be-
lieved that he acquires it
without labouring for it. Is
this rise in land values due
either to a rise in prices or
to the pressure of popu-
lation on land, or is it part-
ly due to the former and partly to the latter? This is
the crucial question to which we shall now attempt an
answer.

An enquiry into the sales of land during the last 26
years showed that, in some cases, the rise in land values
was certainly due to a rise in the price of farm produce.
For instance, in cases where grass land was turned into
fields for sugarcane, the value of land rose. Thus the
more valuable a crop is, the greater the value it imparts
to the land on which it is grown. The price of the produce
thus indirectly contributes to a rise in land values.

As we have already said, custom rules even to-day
many of the transactions of our rural folks. It is quite
natural that a rise in the value of one field—though this

1 In calculating these average prices, nominal sales made by sowkars
to their clients and vice versa are excluded. It may be added that
the prices of only two classes of soil are given because there is little
difference between the prices of bagayat and kyari land in this village.

Year
Average price 1 of rice-land per acre in Rs.
Average price 1 of dry-crop land per acre in Rs.

1910-14
116-9
30*6

1915-19
127*5
55

1920-24
159-6
52-6

1925-26
182*8
54-9