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Hostile Economy


READING RURAL REALITIES


 

 

Prof. Jeemol
Unni-fnbworld  By Prof. Jeemol Unni


 

 

A village
woman-fnbworld

 

Of late, the contextual relevance of the term ‘rural’ has shifted from mere geographical space to epitomize the marginalized and the disenfranchised. While dissolving boundaries continues to stimulate greater interactivity between “urban” and “rural” what does it really do for rural labour? The sad reality is this: globalization and GDP growth notwithstanding rural labour has been reeling under a pretty hostile economic environment. What it also means is that the non-farm sector has been rising at the cost of agricultural activity. 


The Agrarian Crisis: A major source of sustainable livelihood and food security in most parts of rural India agriculture has been rendered unviable thanks to spiralling costs and uncertain output prices. While rising agricultural wages is often seen as the villain of the piece the picture is far larger pointing an accusing finger at declining public sector investments, to begin with. 

 

Farmer
ploughingg fields-fnbworlda


While public gross capital formation in agriculture and allied rose from 2 to 3.5 percent of GDP during the tenth plan in 2002 to 2007 on a yearly basis, it had declined during the Eleventh Plan to 2.7 percent in 2010-11. Subsidies to agriculture, which had touched their zenith at 16.6 percent of GDP in 2008-09, dipped to 11.8 percent in 2010-11. Fertilizer subsidies, which had burgeoned to cross 8 percent in 2008-09 deflated thereafter. While all other agricultural subsidies dropped (to 3.1 percent) food subsidy leapt to 5 percent of GDP during the Eleventh Plan by 2010-11. Declining subsidies may be seen in the light of efficiency but the truth is that declining public investment impacts negatively on agricultural sustainability. Besides, a sliding central and state budgetary share hasn’t illuminated the rural horizon either: total budgetary expenditure went from 12 percent in 1960-61 to 10.9 percent in the decade ending 1990, to 9.7 percent in the decade ending 2009-10. Add to this a significant breakthrough deficit relevant to agricultural productivity since the hoary days of the Green Revolution, not to mention briskly depleting groundwater resources.  Soil accustomed to high fertilizer input demands high volumes of water rendering crop production difficult, water tables having receded. Compounding this problem is a growing number of farmers taking to water-intensive crops, incentivized by procurement and minimum support price policies. 


Destruction of Rural Livelihoods: Industrialization, urbanization, and infrastructure-related projects continue to exert pressure on land: per capita availability of land declined from 0.89 hectare in 1951 to 0.27 hectare in 2011. The (over) mining of natural resources – showcased by  the Niyamgiri tribal communities’ foiling of Vedanta’s bid to source bauxite from their habitat – and shrinking of grazing land happen to be major culprits. 


About 48 percent of rural households resort to common property resources (CPR) for their livelihood. Not too long ago, large tracts of CPR in Gujarat were given away to a private company that wanted to develop a private port. This not only blocked grazing land but also creeks and water bodies where inland fishing was a major source of livelihood.Sadly, decimation of existing livelihood options continues to outpace their re-generation with no  immediate solution in sight. 

 

Shrinking rural incomes and employment: Growing urbanization has taken a toll of rural incomes and employment opportunities.  Incomes dwindled from 62 percent in 1970-71 to 48 percent in 2004-05 in the rural sector and employment from 79 percent in 1993-94 to 75 percent in 2004-05.


Employment has been growing at a slower pace in the rural sector compared to the urban: 2.67 percent versus 3.57 percent per annum of the boom period lasting from 1999-00 to 2004-05. Rural employment shrivelled to 0.43 percent per annum, between 2004-05 and 2009-10, as opposed to a sturdy 2.19 growth rate evinced by the urban sector. 


Thanks to a waning agricultural sector the non-farm sector has turned into a rural employment hub. According to an IRDR (2013) report, “Almost two-thirds of the increase in non-farm employment was in casual wage labour, whereas roughly one-fifth between 1993-94 and 2009-10 was in self-employment.” Sectors registering employment growth include manufacturing, construction, trade, hotels and restaurants, and transport. The list, rather significantly, doesn’t extend to modern dynamic businesses and finance. 


Marginal and small operational land holdings: The number of operational holdings in the rural sector has ballooned over the last four decades- from 70 million to 137 million. Which means they have shrunk in size: about 85 percent of all operational land holdings come under the marginal or small category with over two-thirds operating less than one hectare of land. The challenge, obviously, lies in finding ways of augmenting productivity in these small holdings. The National Sample Survey Organisation (NSSO) surveys on “Assets and Liabilities in India” clearly point to an ascent in the proportion of non-cultivating households. 


Dependence on wage labour has gone up owing to the agricultural sector’s growing ineptness at providing wage employment forcing rural households into non-agricultural activities. Rural households – deriving their incomes from wage labour – swelled from 30 percent in 1974-75 to 40 percent in 2009-10 while agricultural labour households remained stagnant at 25 percent. 


The era of the 70s and 80s had witnessed a billowing of labour households with a concomitant sagging of wage earners. This phenomenon was interpreted as labour households having diversified into agriculture (as well as non-agricultural activities) with reduced dependence on wage labour. Today, the dependence on wage labour has gone up- in agricultural labour households the number of wage earners rose from 1.4 in 1987-88 to 2 in 2009-10. What could this possibly mean for the small holdings? The answer is simple: these holdings have lost out on sustainable diversification to agricultural activities with a growing dependence on wage labour. 


A bulge in wage dependence hardly bodes well for rural households starved of livelihood options, not to mention adequate number of wage employment days. The number of unemployed days, showing a declining trend in the previous decades, has hiked since 1993-94 from 30 to 40 days on average for men in 2004-05 and 25 to 40 days for women annually. 


New rural livelihood dynamics vis-à-vis MGNREGA: Is there a silver lining among these dark clouds? The MGNREGA, collective organisations and panchayats provide a partial answer.


Overall real daily wage earnings have, no doubt, gone up since the introduction Mahatma Gandhi National Rural Employment Guarantee ACT, MGNREGA in 2006. This rise, evinced by both rural labour and agricultural labour households, has been muted, nonetheless, by other factors. The statute aimed at poverty-reduction through employment generation has failed to live up to its promise of ensuring livelihood security in rural areas. In 2009-10, 34.7 percent rural households had MGNREGA job cards, which is lower than the percentage of rural labour households (40 percent). The average number of days worked was 37 days, which is far lower than the guaranteed 100 days per household. The average number of days worked over a year for agricultural labour households was 32 while other labour households obtained an average of 43 days of work. 


According to NSSO, person-days in casual labour on public work constituted only 1 percent (male and female) of all casual labour person-days in 1999-00 and 2004-05 in the rural sector. Post MGNREGA this figure climbed to a meagre 2.7 percent for male and 5.2 percent for female casual workers in 2009-10. The actual contribution of MGNREGA in total casual labour employment is, thus, not very high.


MGNREGA was visualized as a programme for generating casual wage employment in order to create sustainable assets. Regrettably, not much thought has gone into skilling workers or upgrading their existing skills. Which is a pity because the programme could become a tool for employment generation utilizing skill training (or upgrades) in the context of assessed demand. 


The role of education and skill: As everybody is aware, skill training and education provide a way out of poverty, particularly in societies riddled with caste and social hierarchical structures. The educational level of casual workers has gone up, especially in the context of primary and middle-level schooling. But the picture remains grim: 44 percent casual workers and 65 percent female rural casual workers remain illiterate. Besides, traditional artisanal skills are on the decline dictated by the paucity of product demand.   

If rural labour were to shift from casual wage employment to more remunerative, salaried occupations with heightened livelihood options certain issues would have to be addressed on an urgent basis. This highly desired “shift” could be facilitated by organizations like collectives and Panchayats.


Collective representation: For rural products, including artisanal non-farm products, to become viable a collective form of representation is in order. Rural producers, being small and scattered, are inept at acquiring good returns for their products thanks to the evanescence of traditional supply chains layered with contractors and middle men. And this is where collectives can step in and help with the aggregation of products. The AMUL cooperative model stands out as an excellent example of such a collective structure. A form of collective organizations includes self help groups or SHGs. The SHG-Bank linkage programme launched by NABARD in 1992-93 facilitated the growth of a women-led SHG movement. Many of these SHGs have federated to derive benefits of economies of scale and acquire large funds from banks to facilitate lending to the poor.


The National Rural Livelihoods Mission (NLRM), in its bid to expand livelihood options for the poor, has been playing a crucial role in terms of bringing at least one member from each poor household into the SHG fold. It remains to be seen if the NRLM will actually succeed in transforming the marginalized in rural India. 


Panchayat: The Panchayat as an institution of (rural) representation is as old as the culture of India with references occurring in the Rig Veda. The 73rd Amendment to the Constitution mandated decentralisation, devolution of power to the panchayats and 33 percent reservation for women. Being empowered financially and administratively keeping women in the forefront has led to better outcomes in health, education, water and sanitation and forest management. The increasing share of rural labour households remains a concern and only generation of productive employment through development of rural institutions as seen above can save the day for rural labour.

 

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Prof. Jeemol Unni is Director, Institute of Rural Management Anand (Gujarat).






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