Agrarian Crisis and Distress in Rural India

Jun 10th 2003, Utsa Patnaik.

Rural India is in acute distress. Though the bulk of the population in rural India has always experienced pitiable living conditions yet, their conditions are much worse at this moment than perhaps at any other time since the mid-sixties as there is not enough work, not enough food to eat and not enough water to drink for the rural population.

Those commentators who at all bother to notice the state of affairs, and they are few and far between, attribute this distress to the prevailing conditions of drought, which gives the impression, that it is a transitory phenomenon, and that it is a curse of nature. In reality however, the drought compounds the distress of the rural population as the increasing distress of the past several years has left them without any cushion.

The magnitude of distress can be gauged from the two Tables given below (both taken from Utsa Patnaik, ‘Foodstocks and Hunger’ mimeo.). The 1990s have not only seen a steady decline in the level of per capita food availability in the country as a whole (taking both rural and urban India together); the absolute amount of per capita food availability in the year 2002–03 was even lower than during the years of the Second World War-years that saw the terrible Bengal famine. Since urban India, on average, has not seen any drastic decline in food availability, the actual situation in rural India, it follows, must be even worse than what these figures suggest. And this situation, it must be emphasized, does not take into account the onset of the current drought. The drought has only accentuated a state of distress in rural India that has been growing ever since the 1990s, that is, ever since the country has embarked on the programme of neo-liberal economic reforms.
Table 1 >> Table 2 >>

Apologists for the neo-liberal policies put forward a curious argument to explain the decline in per capita food availability. This decline, they contend, is because of a change in the dietary habits of the people: they have diversified their consumption pattern from foodgrains towards all kinds of less-elemental and more sophisticated commodities. Therefore, according to them, far from its being a symptom of growing distress, the decline in food availability is actually indicative of an improvement in the conditions of the people, including the rural poor. Some have even gone to the extent of suggesting that with the changes occurring in Indian agriculture in terms of the cropping pattern and use of machinery, peasants and workers do not need to put in hard manual labour. Correspondingly, the need for consuming huge amounts of foodgrains no longer arises. Therefore, the rural population now is no longer bound to follow the old consumption pattern; it can afford to sample more up-market goods, including food items, which it is doing with a vengeance.

The dishonesty of this argument is quite appalling. All over the world, and all through history, as people have become better off they have consumed more foodgrains per capita, not less. True, this increase in foodgrain consumption per capita with increasing per capita incomes does not take the form of larger direct consumption of foodgrains; it takes the form of larger indirect consumption, so that taking direct and indirect consumption together the per capita consumption of foodgrains increases with rising incomes. In other words, people do not consume more corn or more cereals per se. They consume, more poultry products, meat and processed foods but the animals in turn consume more foodgrains, so that people, directly and indirectly, consume more foodgrains per capita. Thus in the former Soviet Union the annual per capita consumption of foodgrains, both directly and indirectly, was as much as 1 ton. This does not mean that a Soviet citizen actually consumed 1 ton of foodgrains per year; he or she consumed only a fraction of it directly and the rest via larger animal products and processed foods. Likewise in the US today the annual per capita consumption of foodgrains, both direct and indirect, comes to about 850 kilograms, which is six times the Indian figure of availability (the availability figure for India today is likely to be larger than the consumption figure since the former includes consumption plus additions to private stocks and such additions must be occurring at a time when public foodgrain stocks are burgeoning).

Within India too when we look at cross-section data across states, it is clear that states with higher per capita incomes have higher per capita consumption of foodgrains, that is, foodgrain consumption rises with income. What is true, and is invariably dragged into the argument by neo-liberal apologists, is that, according to NSS data, per capita consumption of foodgrains is declining over time for all income groups, which is supposed to support the ‘changing tastes’ hypothesis. But, in the case of the higher income groups, this finding loses its relevance because indirect consumption of foodgrains via processed foods etc. is systematically underestimated by the NSS. When we bear in mind the additional fact that the per capita calorie intake has gone down drastically for the entire rural population (see Table 3), and hence is likely to have gone down even more drastically for the rural poor, the fact of growing rural distress stands out in bold relief.
Table 3 >>

This growing distress has occurred precisely during the very years when the country has accumulated enormous foodstocks; indeed these two phenomena are the two sides of the same coin. The fact that accumulation of such enormous foodstocks has occurred despite a stagnation (or even a marginal decline) in per capita foodgrain output in the country during the 1990s (see Table 1), suggests that the cause of this accumulation is the absence of adequate purchasing power of the rural population. In other words, the period of neo-liberal reforms has seen a significant curtailment of purchasing power in the hands of the working people, especially in rural India, which has caused growing distress on the one hand and an accumulation of unwanted foodstocks in the hands of the government on the other. The fundamental cause of the growing rural distress is income deflation in rural India.

The most obvious and basic cause of this income deflation is the cut in government expenditure in rural areas. Table 4 gives figures of rural development expenditure as percentage of GDP.
Table 4>>

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