15 SEPTEMBER 2000
AMSTERDAM, THE NETHERLANDS
Globalization and Agriculture
Liberalization in India has been discussed mainly in terms of changes in industry, information technology, and the urban middle class. Its consequences for agriculture and the rural population have received much less attention. For that reason, the Amsterdam Branch Office of the International Institute for Asian Studies (IIAS) and the University of Amsterdam invited experts to assess the present and expected impact of the liberalization process in India on its rural development and rural poor. The seminar 'Globalization and Agriculture in India' took place on 15 September at the University of Amsterdam and was attended by about thirty participants.
* By KRISTOFFEL LIETEN & MARIO RUTTEN
In India, famines are a part of the fabric of history. Yet, thanks to the so-called Green Revolution, aided by a policy of agrarian subsidies, support prices, food distribution systems, and external tariffs, production has seen a significant increase since independence. Even if the poorest people have not participated fully in the higher yields, rural poverty has witnessed a constant decline from around fifty-five per cent of the population in the mid 1970s to thirty-five per cent in the early 1990s.
Since around 1990, with the implementation of the structural adjustment policy and India's membership in the World Trade Organization, agrarian policies in India have undergone significant changes. Indian agriculture is becoming more integrated into the world commodity market and seems to have come more into line with the liberal policy regime advocated by the International Monetary Fund. Globalization has long been hailed as the solution to the problems of poverty and underdevelopment, but little is known of its effects on agriculture and the rural population alike.
The workshop commenced with an introduction by Professor Ashwani Saith of the Institute of Social Studies in The Hague. Saith argued that all further restructuring of Indian agriculture will mainly suit the interests of the richer sections in Indian society. Even if a change towards more neo-liberal policies were advisable in general, a failure on the domestic front could well be expected for various reasons. The major problem is that old economic and social structures continue to operate alongside the new set-up of market-driven dependency of production and consumption, fuelled by capital inputs and technology transfers. According to Saith, entitlement failures due to imbalances in productive assets, local structures of inequality and oppression, and regional imbalances, are among the main factors that explain why the poorer sections continue to be left out, even in those instances where agriculture seems to be fairing well. The combination of stockpiles of food in the hands of the Indian government and increasing rural poverty is an indication of the continuation of failing entitlements in Indian society.
The stockpiles of food in India, amounting to thirty million tonnes at present, were taken by Professor Utsa Patnaik of the Jawaharlal Nehru University in New Delhi, as the point of departure for a richly documented paper. Patnaik referred to the 1990s as the 'development disaster decade'. The general decline in poverty in the 1980s was reversed in the 1990s when an increase in the poverty ratio in rural India became the overall trend. She emphasised that this overall trend was applicable neither to West Bengal nor several southern states, where the existing decline in poverty of the 1980s had continued in the 1990s. Patnaik argues that this difference in poverty trends between states in India is caused by differences in entitlements. The continuous success in poverty reduction in states like West Bengal appears to be closely related to more direct government intervention in the economy, particularly through land reforms, food-for-work programmes, ration shops, and midday school meal programmes, for instance. In view of these conclusions, Utsa Patnaik lamented how as the result of the present policy of limiting the state and of economic modulation by global forces population growth in India has once again begun to outgrow agrarian growth, with all its negative consequences this entails.
The third introduction was delivered by Prof. Ratan Khasnabis of the Department of Business Administration at the University of Calcutta. Khasnabis provided the audience with detailed statistics on agrarian growth and public expenditure. He emphasized that public investment, national research efforts, support prices, fertilizer subsidies, and some measure of land reforms had in the past contributed to the growth in Indian agriculture and the reduction of rural poverty. He thinks that the main problem with the new regime's policy in the field of agriculture is its volatility. The free market, in his view, does not operate among equals. Unstable prices in the world market will have unsettling influences on the food security and agrarian production in India. Volatility will spell disaster under conditions of poverty and low productivity.
The debate that followed, chaired by Professor Jan Breman of the University of Amsterdam, reflected the quality and the frankness of the introductions. Most interventions agreed that earlier progress in Indian agriculture is currently tapering off and that poverty and polarization in recent years have increased in the countryside. There were differences of opinion on the structural nature and causes of this 'new' tendency. Is it not possible that Indian agriculture has entered a transitional phase with an occasional dip? Has polarization not always been a structural phenomenon of Indian (rural) society? To what extent are the recent problems in Indian agriculture caused by the effects of the structural adjustment policy pursued by the Indian government?
Recently, agriculture does not appear to have been a hot topic for research. The radical changes that are taking place in South Asia's rural economy may have a benevolent outcome, but they may also spell disaster. The lively meeting on 15 September in Amsterdam testified that the interest in this field should remain a constant concern for academics and policy makers alike.
Professor Kristoffel Lieten is a sociologist with a research interest
in rural development, local democratisation and child labour in South
Asia. He is a lecturer at the University of Amsterdam.
E-mail: lieten@pscw.uva.nl
Dr Mario Rutten is a sociologist with a research interest in rural entrepreneurs
in South and Southeast Asia and in the Indian diaspora. He is a lecturer
at the University of Amsterdam and co-ordinator of the IIAS Branch Office
Amsterdam.
E-mail: mrutten@pscw.uva.nl