Assam's economy is fundamentally based on agriculture. Over 70 percent of the state's population relies on agriculture as farmers, as agricultural laborers, or both for their livelihood. A majority of state's population, almost 90 percent of an estimated 22.4 million in 1991, live in rural areas where the mainstay of business is production agriculture. In terms of the state domestic product (SDP), the agriculture sector contributed over 38 percent of the state income in 1990-91. Agricultural Census data (Economic Survey of Assam, 1989-90) shows that total land under cultivation was 2.59 million hectares in 1985-86, or almost 33 percent of total geographical land area of the state (compared to almost 50 percent for India). The average size of land holding (including non-cultivable land) per household was only 1.30 hectares during the same time period compared to an average size of 1.47 hectares in 1970-71. Such fragmentation occurred due to two principal factors:(i) inheritance-related, i.e., breaking down land parcels to distribute among heirs, and (ii) government land reform measures which set the ceiling for land holding per family (50 bigha s at present) thereby promoting and facilitating land fragmentation (1). Numerous studies have shown that small and fragmented land holdings are one of the principal causes of low productivity because such land holdings do not facilitate economic and efficient use of modern technology (e.g., agricultural machinery, chemicals, and hybrid seed). Assam is far behind in the use of modern agricultural technology to improve its agricultural productivity compared to the rest of the country. For example, the agricultural productivity index for Assam was 156 in 1989-90 compared to 183 for India. Another problem of land fragmentation is the hidden unemployment or underemployment which understates the true unemployment level in the state. Assam produces both food and cash crops. The principal food crops produced in the state are rice (paddy), maize (corn), pulses, potato, wheat, etc., while the principal cash crops are tea, jute, oilseeds, sugarcane, cotton, and tobacco. Although rice is the most important and staple crop of Assam, its productivity over the years has not increased while other crops have seen a slight rise in both productivity and land acreage. For example, while rice yield per hectare in 1970-71 was 1,022 kgs compared to 1,261 kgs in 1990-91, wheat yield jumped almost three-fold from 583 kgs per hectare in 1970-71 to 1,455 kgs in 1990-91. A similar increase was observed in jute, sugarcane, potato, and rape and mustard. Tea is the most important cash crop in Assam and the state is well known world-wide for its tea. The total land area under tea cultivation (gardens) was estimated at over 229,000 hectares in 1989, employing an average of over half-a-million people per day. In addition, a considerable number of Assam's population depends on secondary and tertiary sectors-related to the tea industry. However, the exploitation of both precious land and laborers (employees) by the tea companies, most of which are either foreign-owned (non-Indian) or owned by Indian conglomerates (e.g., Tata), is well-documented. Bagchi (1997) reported that although such exploitations are going on for decades and even well-documented in the state government's own inquiry reports, the government (under both AGP and Cong-I periods) has failed to take any appropriate action to end such exploitations. Continuing to rely on the seasonal monsoon for the necessary water for cultivation is another characteristic of farming in Assam. As a result, potential exists for severe crop failure and consequent economic disaster. To avert such possible catastrophe, it will be necessary to equip the state with irrigation facilities, perhaps in selected areas first, due to the cost factor. Thanks............!!!