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Neglect Of Agriculture Paves Way For Rise In Poverty In Odisha

Updated: May 26, 2012 3:54 pm

Odisha is at a crossroads and some say the changes are irreversible. But when one comes across a number of struggles explicitly linked with the displacement drive one feels quite hopeful about the change in the current scenario of defeatism.

This is due to the state makes large land acquisitions on behalf of the private corporate sector, using the colonial-era Land Acquisition Act (1894). Even where the state pays what it calls the market rate for such land as it acquires, private firms stand to benefit greatly: for the market rate is calculated on the basis of sale prices of land in the previous period. Not many land sales take place in the period leading up to acquisition, and such sales as take place may understate the price in order to avoid stamp duty.

On the other hand, this regime of the free market economic policies had made the agriculture ruinous resulting in falling annual agricultural growth rates (an all-time low of 0.6 per cent per year during 1994/95-2004/05), return of usurious money lending (the non-institutional credit increased from 31 to 42 per cent of rural borrowing between 1991 and 2003); an official RBI committee has now charted out methods whereby rural moneylenders can be provided funds by the banks, and “incentivised” to reach credit to the financially excluded. The rulers have also been trumpeting microcredit as the answer to financial exclusion and a series of highly publicised farmer suicides.

The government policies since the beginning are adversarial towards the agriculture (in terms of trade with the industry). It is considered that agriculture is not a skilled job. Therefore, the wages in the agriculture sector is comparatively low and depressed. Even the government documents indicate that 1.89 per cent of persons in a rural areas work to maintain a family, while it is the single person for the organised sector. It is also a fact that public investment in agriculture (measured as a percentage of agricultural GDP) has been more than halved since the mid-1980s (fell from 38.97 in 1985-86 to 28.7 in 1990-91 [1980-81 prices] from 20.5 in 2004-05 to 17.6 in 2008-09 [Economic Survey, 2009-10]. The price support ‘safety net’ has no meaning and relevance as the support prices are set too low and, more generally, no proper system of implementation is in place.

Within the uneven development of Indian agriculture, new class of capitalist farmers have emerged from the peasantry and they accumulate through exploiting other rural classes while, at the same time, their surplus may well be appropriated in turn by traders and moneylenders. It may well be that an increasing share of the agrarian profits is being appropriated else where it is, for example, argued that increasing food prices from 2006 onwards have benefited the middlemen and not the farmers.

But then, how was growth taking place in Indian economy especially in Odisha? It is the non-agricultural growth that is being sustained across more than two decades of neo-liberal economic reforms based on sectors catering to the urban middle classes and export markets, while direct economic links between agriculture and the rest of the economy have been weakening for a long time. Agriculture has declined in importance for the non-agricultural economy and non-agricultural capitalist classes: capital for investment in industrial production is now available from non-agricultural sources, including international financial capital. Moreover, cheap food and agricultural raw materials can now be provided, at least partly, by the world market, as opposed to solely through productivity gains within India’s own agriculture.

While speaking to this Correspondent, Bijoyabhai of Campaign for Eminent Domain in Tribal Areas, said: “The neo-liberal policy changes from 1991 onwards also made farming more problematic, as the Indian agriculture was also used to operate within a shielded home market. But during the 1990s external trade in agricultural produce and inputs was liberalised, exposing Indian farmers to outside competition at fluctuating world market prices that were falling from 1997 and that fell dramatically for products such as edible oil, cotton and some plantation crops. At the same time, the environmental stress of modern agriculture has been felt by way of land degradation and falling water tables, adding to the difficulties of many farmers. Government of India data shows that real per capita farm incomes did not grow from 1997 to 2002, and in some states they fell.”

He further added, “But that mining NSDP at constant prices went up during the same period by an average of more than 10 per cent annually suggests that mining may be adversely affecting agricultural productivity. In fact, this seems to be the finding of researchers who attempted to analyze agricultural productivity in a coal mining region in Odisha and found that mining reduces agricultural yield and total factor productivity” .

Researchers argue: “Any developmental effort without due consideration for agricultural improvement will be proved nullified.” In levels of both unskilled and skilled wages, the mining districts (Angul, Bargarh, Dhenkanal, Jajpur, Jharsuguda, Kendujhar, Koraput, Sundargarh) show lower annual increases than all except the KBK districts.

Percentage distribution of population by monthly per capita consumer expenditure (MPCE) classes in the 60th round NSS, reported in the 2006-07 Economic Survey of Odisha, also highlights the income inequality in Odisha from the urban-rural divide. Only 4.4 per cent of Odisha’s rural population has MPCE of Rs 775 and above, as against 15.4 per cent for India. But 56.2 per cent of Odisha’s urban population lie in this group compared to 52.4 per cent for the nation

Within the uneven development of Indian agriculture, new class of capitalist farmers has emerged from the peasantry and it accumulates through exploiting other rural classes while, at the same time, their surplus may well be appropriated in turn by traders and moneylenders. It may well be that an increasing share of the agrarian profits is being appropriated elsewhere. It is, for example, argued that increasing food prices from 2006 onwards have benefited the middlemen and not the farmers.

In the 63rd round NSS (July 2006-June 2007), the percentage of Odisha’s rural population having MPCE (monthly per capita expenditure) below Rs 365 was 43 per cent, the highest among the 17 states ( Economic Survey of Odisha 2008-09). Even for the urban population, where the benchmark is Rs 580, Odisha is the fourth worst. In 2004-05, the BPL percentage in Odisha had reached almost 40 per cent, and almost twice the national average. In Keonjhar, the most mined district in the state, 62 per cent of the population live below poverty line. In Koraput, the bauxite capital of India, 79 per cent live below the poverty line, says CSE report.

In fact, Odisha is one of the very few states that saw poverty as measured by the number of poor people increase in both its rural and urban areas between 1993-94 and 1999-2000. The state had the second highest rural and urban unemployment rate in 2004-05 (NSSO). Besides, the state is very poor in the Human Development Index (District Level Household and Facility Survey 3 in 2007-08). More recently, it stood on a par with countries like Nigeria and Kenya in the Global Hunger Index-2008.

The UNHDR-2009 not only put Odisha among the top five states in the country on the basis of large-scale migration of unskilled workers, but also pointed out that Ganjam district led the migration tally with a shocking 66 per cent migration rate, whereas the mining districts of Keonjhar and Mayurbhanj had 50 per cent migration from rural areas.

While poverty forced many tribal girls and women to leave Sundargarh district, during 2007 and 2008, almost 30,000 fishermen, who were earlier living in villages near the banks of the Chilika, migrated to neighbouring states in search of work, being victims of the massive prawn-culture in those area.

As far as employment-creation is concerned, as measured by number of workers per one crore (rupee) capital invested, it is, at 5.01, fourth lowest in the country. According to the NSS unemployment data (“current weekly” rate which is the best indicator of unemployment), indicates that, among the 15 major states, Odisha, which had the second highest rural unemployment rate and fourth highest urban unemployment rate in 1993-94, has the highest average annual change in both rural and urban unemployment rate during 1993-94 and 2004-05.

Interestingly, the number of agricultural labourers as a per cent of total workers (main+marginal) showed one of the highest increases in the mining districts. This is not because of an increase in the number of agricultural workers (cultivators+agricultural labourers), but because of a shrinking base of workforce. In fact, other research has shown that between 1991 and 2001, the number of agricultural workers (agricultural labourers+cultivators) showed the highest per cent decline in the mining districts. In contrast, the increase in workers in household industries as a percentage of total workers was not impressive for the mining districts. This was further corroborated by the change in the ratio of workers-in-household industry to the agricultural labourers, which we take as a measure of the relative importance of the household-industry vis-a-vis agriculture. This may even be implying that mining has not necessarily encouraged ancillarisation. The figure of 0.09 per cent for mining districts is quite low compared to the figures for all other categories, except the KBK districts, which showed a decrease, suggesting a possible shift from household industries to agriculture in these districts.

Odisha has one of the lowest wage rates in the country. It is interesting to note in this context that between1993-94 and 2003-04 unskilled wage (as measured by the rural daily wage of field labourers) increased by around 7.51 per cent per year, while the skilled wage (as measured by the rural daily wage of a carpenter) went up by 7.68 per cent.

However, Researchers have identified four areas in which the state has a vital role to play in farming: (a) irrigation; (b) soil and moisture conservation of rain-fed agriculture; (c) the development and spread of bio-chemical inputs; in particular, fertilizers; (d) State policy which affects agrarian institutions and prices .

The total cultivable land of the state is nearly 6.56 million hectares of which only 2.47 million hectares were irrigated by the end 1998-1999, which is 41.85 per cent of the total irrigable area of the state. Out of total proclaimed irrigated area, 1.14 million hectares of land are irrigated through major and medium irrigation projects, 0.44 million hectares, through minor (flow), 0.33 million hectares, through minor (lift), 0.55 million hectares through other sources, which include private tanks, ponds, dug wells, water harvesting structures and the like. Nearly 62 per cent of the cultivable land is rain fed. About 30 per cent of cultivable land is irrigated through major, medium, minor and lift irrigation.

The neglect of agriculture shows the absence of knowledge of history, which shows that, for a country not to be a dependent entity in the periphery; it has to put emphasis on agriculture. In fact, to be an independent entity in the centre, a country has to have a “sustained increase in the productivity of agriculture and hence also in the agricultural surplus”. This study also points out that it “is an illusion, perhaps widespread but reflecting ignorance of economic history, that industrialisation somehow lies at the heart of the process of economic development”. “On the contrary”, it adds, “It is the final act and the crowning achievement of economic development; and there is no direct route to its successful realisation”.


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