In the Gang Canal region of Rajasthan, the cropping pattern changed from a labour intensive crop, cotton, to a mechanized crop, cluster beans. The shift in cropping pattern not only displaced workers from farm wage work but also brought changes in labour hiring contracts with large scale conversion of daily wage rate contracts to piece-rate contracts. Drawing on a primary survey in a village from Gang Canal region, the paper examines the change in the agrarian relations in rural Rajasthan by analysing the emerging development in the rural labour relations. For piece-rate work in farm wage work in some parts of Rajasthan, the wage rate is unilaterally decided by the landlords and large capitalist farmers and is denoted as the ‘village rate’. The manual workers have negligible bargaining power vis-à-vis the village rate. The conversion of daily wage rate contracts to piece-rate contracts has enhanced the duration of working day that involves a rise in the rate of surplus value. Access and availability of low wage labour facilitates the accumulation of capital. With the limited availability of employment in the non-farm sector (in both public and private sectors), workers are compelled to sell their labour power at wages that do not exceed the level of subsistence. The paper concludes with a brief examination of continuum of coercion and varied degree of unfreedom among worker in the village.