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Growth and Distress in a South Indian Peasant Economy During the Era of Economic Liberalisation

2005; Taylor & Francis; Volume: 41; Issue: 6 Linguagem: Inglês

10.1080/00220380500155239

1743-9140

Vamsi Vakulabharanam,

Agricultural risk and resilience

Abstract This article analyses the impact of agricultural liberalisation on different farming classes in the region of Telangana in South India. The region has been witnessing significant growth in real agricultural output over the last 15 years. At the same time, as NSS (National Sample Survey) household survey data indicate, there have been significant welfare declines not only for marginal farmers and landless labour, but for other groups as well. There have also been more than a thousand farmer suicides between 1998 and 2002. I argue in this article that during the liberalisation period, that is, post 1990, agricultural growth and increased distress have become mutually intertwined. I use the terms, growth-inducing distress and distress-inducing growth to explain this apparent paradox. Notes Vamsi Vakulabharanam, Assistant Professor, Department of Economics, Queens College, The City University of New York, 65-30 Kissena Blvd, Flushing, New York. Address for correspondence: 575 Easton Avenue, Apt. 10N, Somerset, NJ 08873, USA. E-mail: vamsi@qc.edu. The author gratefully acknowledges the comments on an earlier draft by J. Mohan Rao, James K. Boyce, Mark Brenner, Rajagopal Vakulabharanam, Sripad Motiram, Thomas Masterson, Arjun Jayadev and Mathieu Dufour and three anonymous referees. The author also thanks Dr Angus Deaton for guidance on the NSS 55th round adjustments. Field research in Telangana was made possible by the junior research fellowship grant from the American Institute of Indian Studies. Liberalisation policies include trade liberalisation, internal deregulation and reduction of state support in the form of production and consumption subsidies. As value added (VA) in agriculture is not available at the regional level, I use gross agricultural output at constant prices. In per capita terms, Telangana has been growing at 3 per cent over the last 15 years compared to 1.9 per cent in the 15 years prior to that. This growth rate is also higher than the corresponding numbers at the all-India level. In the 1990s, the world agricultural growth has come down to around 1.1 per cent. While in the developing economies growth rate has been around 1.5 per cent, in the advanced economies it has been 0 per cent. According to Agricultural outlook, November (2002), most of the world's commodity prices have been lower in 2002 than 1994. World cotton prices have been about 30 per cent lower in 2002 compared to 1994. There is no record of suicides on any noticeable level until the agricultural year 1997–98 in Telangana. Manmohan Singh, the finance minister who worked out the details of India's liberalisation package, inaugurated the annual conference of Indian Agricultural Economics, where he laid out the basic principles of liberalisation in Indian agriculture. My categorisation of farmers is as follows. A farm with more than four hectares is large, a farm with landholdings between two and four hectares is medium, a farm with landholdings between one and two hectares is small, and a farm with less than one hectare with some land is considered to be marginal. Households without any land are considered to be landless. The category 'others' is a residual category. Sample to population multipliers are specified in the NSS surveys. In particular, the indigenous cigarette (Bidi) industry in which women used to participate in this region has been adversely affected over the last decade or so. There are nine districts in the Telangana region. The correlations have been done on the real wage growth rates in these nine districts and the output growth rates during the specified periods. As women's wages are usually about half of men's wages in this region, this result would hold for women as well. Caste data is limited to whether a household belongs to the scheduled caste community or a scheduled tribe community. All the others are put in a different category. The justification for such a categorisation is that it is widely accepted in India that the scheduled castes and tribes have been the most oppressed groups in the caste system over a long period. In Warangal district, which has been growing at over 6.5 per cent in the last 15 years, more than 500 cotton farmers have committed suicide. Chayanov, a Russian agronomist of the early twentieth century, conducted extensive research on the Russian peasantry. He became popular in the Western academy in the 1960s (see Chayanov [ Citation 1966 ]). The memory recall about the 1980s is reinforced by the observations made in the thematic resurveys of villages in this region that were first surveyed in the 1980s and surveyed again in 2000–2001 (Reddy, D.N. [ Citation 2003 ]). For the last four years in this series, I had to use input costs from my fieldwork surveys and Murthy [ Citation 2001 ], as the costs of cultivation scheme did not divulge information from 1997 onwards due to confidentiality restrictions. According to Agricultural Statisitics [2000], between 1990–91 and 1997–98, price of urea has increased from Rs.2,350/tonne to Rs.3,660/tonne. DAP price has increased from Rs.3,600 to around Rs.10,000. There was a massive mobilisation by peasants across the entire state against the increase in power tariffs in August, 2000 before it was brutally crushed [ Citation Vaartha, 2000 ]. In Hyderabad, peaceful demonstrations were fired at, signifying the implementation of liberalisation-as-policy with an 'iron will' without the necessity for popular democratic consent. Actually, one woman who had borrowed from micro-credit collectives committed suicide in one of the villages where I did my field research because she was going to default. Additional informationNotes on contributorsVamsi Vakulabharanam Vamsi Vakulabharanam, Assistant Professor, Department of Economics, Queens College, The City University of New York, 65-30 Kissena Blvd, Flushing, New York. Address for correspondence: 575 Easton Avenue, Apt. 10N, Somerset, NJ 08873, USA. E-mail: vamsi@qc.edu. The author gratefully acknowledges the comments on an earlier draft by J. Mohan Rao, James K. Boyce, Mark Brenner, Rajagopal Vakulabharanam, Sripad Motiram, Thomas Masterson, Arjun Jayadev and Mathieu Dufour and three anonymous referees. The author also thanks Dr Angus Deaton for guidance on the NSS 55th round adjustments. Field research in Telangana was made possible by the junior research fellowship grant from the American Institute of Indian Studies.