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Why ending poverty in India means tackling rural poverty and power

January 29, 2015
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Vanita Suneja, Oxfam India’s Economic Justice Lead, argues that India can’t progress until it tackles rural poverty

More than 800 million of India’s 1.25 billion people live in the countryside. One quarter of rural India’s population is below the official poverty line – 216 VanitaSurejamillion people. A search for economic justice for a population of this magnitude is never going to be possible only by relying on migration to the cities.  Rural-urban migration and absorption of labour in the urban economy has been slow, and will likely remain so due to the slow growth of employment, especially in labour-intensive manufacturing.  The rural labour force will therefore have to find a way to improve their incomes back home in the countryside.

Agriculture is still the largest employer in rural areas. Of the total rural households (90.2 million), over half (57.8 percent) are involved in farming.  In any case, rural farm and non-farm incomes have a mutual sustaining relation in the rural economy and sustenance of a strong non-farm rural economy is possible only if the agricultural economy is doing well and vice versa.

So what works in boosting the rural economy? Concentrated policy interventions including spending and reforms in extension services from 2005-2014 has shown what is possible .Average agricultural growth jumped from 2.4% during the decade 19995 to 2004 to 4% for 2005 to 2014.

But it’s not just about money – this is an area which also needs innovation and scalable pilots where grassroots civil society needs to play a much larger role . The first step is to look closely into the salient features of this sector and its actors.  More than 85 % of farmers own less than 2 ha of land.   These small and marginal farmers are the backbone of India’s food security and can stimulate broad based inclusive growth in rural areas.

india-women-tilling-earth

Another feature of the farm economy is the feminization of agriculture.  Though there are still more men than women in agriculture, employment data shows more men are getting out while the absolute number of women farmers in India has increased by about 62 million from 2001-2011, and now accounts for 37% of the total agricultural population.

Many women smallholders are part time farmers, earning part of their incomes from employment in the non-farm sector (typically in day work such as construction).

Incomes are very low. The government estimates average monthly incomes per agricultural household across the whole of India from July 2012- June 2013 as just Rs.6426/- ($105), out of which farming accounted for 60 percent and nearly 32 percent came from wages.

Investments and policy reforms in agriculture need to give priority to these small and marginal farmers and specifically facilitate more entrepreneurship opportunities for women.  The major obstacle is often absence of land titles in their name, which hinders their access to technology, irrigation, credit and markets.  It is vital that technology outreach, agricultural schemes, and information on the Minimum Support Price (MSP) are not restricted to full time big farmers but reach to part time famers especially women.

But achieving inclusive growth and prosperity in rural India is not just about farming. Forest-based employment has been seriously neglected over the years. Forest-dependent communities are often in conflict with the government’s Forest Department, demanding rights over their forest resources. Around 1/4 of the rural population including 87 million tribals, are living in and around forest areas and depend on forest resources for their livelihoods.

Sixty per cent of India’s forest area is in tribal areas. So-called ‘scheduled tribes’ lag 20 years behind the general population, display the worst indicators of child malnutrition and mortality and are at risk of becoming locked out altogether of sharing prosperity.   The states of Jharkhand, Chhattisgarh and Odisha together account for 1/3rd of total tribals, ¼ of forest resources and 2/3 of minerals – conflicts around mining are commonplace.

Ending the exclusions of forest-dependent communities is hardly rocket science – they need secure access to their forests; support for building up value chains based on minor forest produce  (MFP), and  an end to the government forest bureaucracy’s  dual control on forest resources and their sale.  Though the Forest Rights Act (FRA) of 2006 recognized community rights over forest resources, its implementation has been systematically undermined by the Forest Department. It is important to expedite the implementation of FRA and bring further reforms under it – for example the FRA does not provide explicit rights over timber.

One progressive step has been the introduction of a government  scheme to provide a Minimum Support Price (MSP) to forest dwellers for some of their products, but again, its implementation leaves much to be desired, while many important products such as tendu leaves (used to make beedi cigars) and bamboo are nationalized and under the control of the forest department.

Two external forces further threaten rural livelihoods: – Firstly, dispossession by the state for mining, industry and infrastructure; secondly, the impact of climate change on both agriculture and forestry. Safeguards to minimize forced dispossession; informed consent, resettlement, rehabilitation and adequate compensation are some of the key elements needed to protect broad-based growth in rural areas.  State Action Plans on climate change and especially adaptation budgets need to be made effective and acted upon swiftly.

Indian farmers Women

Credit Rucha Chitnis, http://www.awomanslens.com/

Climate change cannot be seen as a standalone issue, disassociated from wider issues of resilience in rural India, which in turn depends on sustained incomes and control over natural resources such as agriculture, forestry and renewable energy – these are the essential components of a structural shift towards intra country equity and resilience to climate threats.

Last but not least is the role of social protection programs under the Food Security Act, 2013, such as the Public Distribution System (PDS), Integrated Child Development Services (ICDS), Mid-day meal scheme (MDMS) and the Maternity Benefit program in rural India. All act as safety nets, addressing malnutrition and hunger, and are a necessary condition for populations to strive for economic justice.

Demanding policies and investments for a resilient and prosperous rural India where people have dignified livelihoods still remains a transformative and necessary agenda, just as it was for Gandhi.

4 comments

  1. Thank you for a really detailed blog entry, but it leave me wanting to know how population growth fits into this? Presumably farm sizes and incomes get rapidly smaller when there are more children in each generation?

    Isn’t population growth having more impact on individual people (in rural India) than climate change? (NB this is a question – I don’t know the answer)

  2. A detailed note on the plight of small and marginal farmers

    1. It is generally seen that agricultural activity currently is unsustainable for small and medium land sized farmers. The problems they face, stem from fragmented lands with low potential for using technology, perpetual indebtedness of the farmer that is inhibiting him to provide the inputs, difficulty in securing sustained labor and managing them productively. Further, poor marketing strategy, poor storage facility, strings of middlemen, all take away the cream of the value of their produce. Bureaucratic ineptitude to tackle their problems, to mention a few.

    2. Government with all good intentions is pouring money into this sector year after year. However the effects of these efforts do not seem to resurrect farmers. Multitudes of agencies in the non-government sectors, like NGOs funded by foreign institutions are all engaged in this sector spending enormous money and time. Even these efforts do not seem to save farmers from penury.

    3. It is virtually impossible for individual farmers to tackle the problems cited above and emerge out to unshackle the dungeon they are trapped into. Farmer’s suicides are rampant due to the destitution of their profession and more than two lakh farmers have so far ended their lives. Added to these vows, the weather, water resources and availability of the farm labor, all collapse the farmer today in India. Disillusioned and ridden with extreme poverty and lands not lending them to make a decent living, the youngsters leave their older ones in the villages and migrate to larger towns, seeking employment. However as they have poor education they do not find a proper fit in cities and towns. This breeds discontentment and drive them to engage in disreputable activities. Even some farmers with large land holdings up to 10 acres of lands are finding agriculture unsustainable.

    4. Another daunting issue is how does one communicate with farmers? For example, if there is shortage of pluses, how will they communicate with farmers to grow more pulses? What mechanism will the Government adopt to engage with farmers? Is it possible for anyone to make them work towards this goal? It is just impossible. Even if it is possible in a small area by some skillful communications, what guarantee it provides that farmers will grow pulses dropping what they has been growing traditionally? What price will they secure? There is fear to taking risks in such new ventures. There is a lack of organizing skill that is yet to develop to tackle such eventualities. Hence Government has no other alternative but to import. So to calculate the food production in India, it is the collection of data at village level and pass on to the higher ups. With a generally poor administrative system one wonders if the statistical information provided by the Government is fully authentic. It is thus clear that the Management of the affairs of agriculture needs refurbishment to get around the issues eluding the existing situation.

    5. Many models have been tried in this area but they have failed to find a viable and sustainable solution. For instance, Pepsi’s contract farming in the Punjab State initially showed promise, failed for a variety of reasons. The plant was sold away to Hindustan Lever!. The experiment of growing wheat and conversion to flour in Horshangabad in Madhya Prades could scale up to 1000 acres only at the time they did this experiment. Lack of consistent quality produce, problems of scalability, competition from exiting channel, corruption with corporate dealers (corporate do not soil their hands in the venture directly) who administer the activities, to mention a few. If corporate needs to make money some passion needs to be shown at the heart of the operations. They must engage themselves into agricultural production using lands of farmers and by their domain skills make profits and share with all farmers. Seleting a few and getting their business going, like in the cases mentioned above will mean exploitation.

    6. I have seen that large farmers in our country with large tracts of lands, conduct profitable agri-business. They have large money resource and can organise local labor easily. This enables them to make abundant profits from agricultural operations. They also benefit from Government’s largess in terms of waiver of Income Tax, fertiliser / seed and implements’ subsidies, loans from Nationalized Bank [even thought they may strictly not need one and but they take it to expect “ loan waiver “ that happens many times]. One can appreciate the contrasting lives for two types of farmers in one country!
    7. A national shame is that enormous volume of decay that happens to food grains stored in the open by the Government. It is indeed appaling. Several mouths could be fed if waste could be avoided, export could be explored, imports could be avoided. As much as 30% of the food grains are wasted every year as there are insufficient storage with Government’s Food Corporation of India the agency to safe keep. Even when kept in godown, rodants devastates due to poor staking and inspection and taking measures that can be easily controlled. There is poor accountability on those who are in charge of management of this area.

    I have been studying these issues for the past over five years and have met many farming communities, associations and find that these observations stand validated.

    Institutionalisation of the farming vocation, appear to be a possible alternative. This could be in the form of creating a corporate enterprise between the farmers and an investor, who can be an individual or a corporate body that is interested in sustained development of rural interiors and aim at a for-profit venture. To be clear the model is not any charity or philanthropy to mention the least. It is to resurrect the small and marginal farmers from penury. This will support a sustained development and will truly benefit the constituents forming such a corporate body. This process will unleash the farmer from fire-fighting for his daily bread and cooperate with the entity in charge of agriculture. The way it is designed to work is:

    1. Create and enterprise as a producer company or a Limited Liability Partnership form of enterprise.
    2. While the investor brings in cash converted to equity shares, the farmer’s land is valued at the Government recognised rate and equity shares are used to the farmer on conversion to cash value.
    3. The company so formed shall engage professionals in Managing the business of agriculture.
    4. The share-holder farmers are provided with employment as labor and wages paid in accordance with the NREGA rules for guaranteed all year around.
    5. The company can also induct farmers with special skills as part of advisors in the operation and pay wages.
    6. People without land can also be employed as labor. Other non-farm activities can also be started to ensure full employment to all employable in the villages. This way employable men and women will get work and earn wages.
    7. The company can also initiate non-farm activity to generate greater employment to those nearby. Many activities, like workshops for tractor repair, making implements for farming and the like.
    8. The company can embrace the cows of farmers and create dairy farming activity and make value added products for sale to nearby centers of consumption. The dung can be used to create supplemental energy like Gobar Gas and also used as organic manure for the agricultural activity for organic manner of production.

    The above activities can generate profits and will be mutually beneficial. This activity can be called a true CSR initiative even though it is on a for-profit model.

    Two operating examples will add strength to this argument. What is also brings to bear is that such activities will erase the notion of suicides of farmers and peace and tranquility will descend in villages.

    In recent times, the Tamilnadu Agricultural University in Coimbatore has successfully experimented Precision Farming technique and applied this technology in the lands of 200 farmers of Dharmapuri district in Tamilnadu. At the initiative of this University, farmers in Dharmapuri formed Precision Farmers Agro Services Private Limited, three years ago with 200 farmers each forking out Rs 10,000.00 as share capital. They grow essentially vegetables and fruits. Collectively, the farmers produce 23 varieties of vegetables and in the last two years, they have reported a 60% increase in yield. This is a first example of a form of corporatizing the activity of farming. However here the farmers themselves are doing the farming on their land and pool the produce and market them collectively and not individually. It is learnt that they refused to supply to the corporate that have set retail chains in cities and preferred to sell on the NH going through their villages. While this practice is a minor deviation from what is suggested, yet the benefits are immense and have turned the lives of these farmers into a bright future. Scalability impeeds growth of such initiatives.

    The second example is partnering between Spice Board of India and villagers in Tikka-Karbi. It has contributed Capital with farmers in the North-East of Assam to form a company, Coinonya Farm Producer Company Limited, in Tikka-Karbi village to produce spice and market them through the Spice Board. These two towering examples demonstrate that Institutionalization is a better answer to the bugging problems of agriculture. Both these are thriving examples working very satisfactorily benefiting farmers and the corporate.

    There are other benefits of this type of initiatives that I foresee.

    1. Once the corporate gets into a rural environment, it can be energized into taking up rural uplift in a numerable manner. It can create health centers, schools, vocational training for youngsters in related activity, overtime create food processing centers and market value added products.
    2. For example training able bodied men to create a cadre for tackling Security Issues that today has become a social menace. They can be sent to cities for employment and supplement income of the parents in villages.
    3. Promote animal husbandry by embracing all the cows of the villages around; provide milk to young children and build their health.
    4. Encourage sports activities to build future sportsmen; build them for partaking in Olympics!
    5. Once the farmers have money with them through the activities of corporate farming, peace will descend in villages, Naxalites’ movements will wither away and prosperity will transcend. This will make the rural area prosperous.
    6. Many replications of such models can generate greater momentum that will get kindled all over India, to make the country in unassailable position.

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