Policy Windows and Livelihood Futures: Prospects for Poverty Reduction in Rural India

edited by John Farrington, Priya Deshingkar, Craig Johnson and Daniel Start; Oxford University Press, New Delhi, 2006; pp 512, Rs 675.

BEN ROGALY

T

his book explores patterns of economic and political change in contemporary rural India and, building on this, makes proposals for public action to reduce poverty in the countryside. The data at the heart of the volume are drawn from a large comparative study of two states, Andhra Pradesh (AP) and Madhya Pradesh (MP). However, the book operates on at least two other levels as well. First, while the editors account for a large proportion of the authorship of the chapters in the book, each chapter is arranged as a kind of anthology of work on a particular topic. So the reader encounters mid-chapter clips from other highcalibre contributors, including Sheila Bhalla, Mahendra Dev, Vijay Mahajan, Jos Mooij and N C Saxena. Second, the book carries a set of normative policy messages, which recur at various points. These suggest, among other things, that liberalisation in India has not gone far enough.

The book is necessarily selective about the themes it engages with. Much space is given to the analysis of trends in agriculture, to the diversification of rural livelihoods, including through temporary labour migration, to decentralisation, and to an approach to policy that has become known as “social protection”. The use of analysis at different scales is particularly effective. It makes the empirical study much more than a state-level contrast, engaging with divergent trends between regions of each state and between pairs of villages in each region.

Following a census of the whole populations of a total of 12 villages in the AP regions of Telangana, Rayalaseema and coastal Andhra and the MP regions of Malwa, Bundelkhand and Mahakoshal, 360 households were selected to participate in the more intensive research. Selection was on the basis of a random sample, stratified by landholding and caste. Anticipating the more detailed treatment of livelihood trajectories later in the book, Chapter 2 sketches out the broad patterns of occupational change. In conclusion, it suggests four archetypal pathways emerging from the study data. Put briefly, the richest don’t need to diversify, the poorest are unable to, the relatively well off choose to and the poorer are compelled to.

Trends in Agriculture

Chapter 3 is entitled ‘Agricultural Livelihoods in an Era of Economic Reform and Globalisation’. It reports the study data revealing that in the region of two-thirds of household income in the villages surveyed was directly dependent on agriculture. Interesting differences were found between the richest households in the two states, with 76 per cent of the total household income of this group being derived from agriculture in MP as against 59 per cent in AP. The analysis of agricultural labour markets suggests that they continued to be “interlocked and segmented...by class, caste and gender” (p 127), that gendered wage differentials persisted, and that there was an important relation between the relative tightness of the labour market and workers’ bargaining power over wages.

There are allusions throughout the chapter to the authors’ (Deshingkar, Start and Farrington) views on economic reforms. While it is acknowledged that “there may be some real cause for concern regarding the impacts of liberalisation on vulnerable groups” (p 84), a pitch is made for a reduction in subsidies to agriculture. The chapter ends with a call for “further deregulation of markets for inputs, land lease and outputs” (p 143). The “small number of large companies” that are “beginning to engage in rural markets” are among the “grounds for optimism” (loc cit). Caution is expressed about pressing for minimum wage payments and the potential negative impact on employment (p145). In sum, over-regulation is seen as the main problem

Livelihood Finance

Chapter 4 is concerned with the nonagricultural rural economy and temporary labour migration. It begins with a series of interesting and insightful clips. Sheila Bhalla reports the findings of an analysis of large-scale survey data, which shows that while agriculture makes up the largest proportion of rural income for most workers, the same sector has seen the slowest growth in incomes. The data also tell the story of the concentration of employment growth in the unorganised units. More than half of rural workers are in the unorganised manufacturing work in three sectors (food products, textiles and wood products). Bhalla predicts a change in the food sector with small traders, processors and producers threatened by the “penetration of supermarkets” (p 161). In spite of Bhalla’s warnings, large private companies are looked to by N C Saxena, in the next clip, “to invest in efficient marketing systems which override the networks of inspection, permits and bribery typical of the ‘control’ regime” (p 168). Once again, the familiar failings of the state are paraded in front of the reader, in this case with no scepticism at all about that weasel word deployed by large retail capital globally: efficiency.

The subsequent clips in the chapter focus on microfinance, the second of these being by Vijay Mahajan who correctly points out that poor people lack access to banks, that self-help groups are unevenly distributed across the country (75 per cent are in the four southern states according to Mahajan) and that microcredit is likely to be used to smooth consumption. However, Mahajan then proceeds to set out a normative case for what is referred to as “livelihood finance”, which involves raising money from capital markets. There is no discussion here either of the problems of private capital.

On the heels of Mahajan’s contribution come Orlanda Ruthven and Sushil Kumar’s discussion of the impact of the availability of non-agricultural work on the terms and conditions of agricultural employment. This is an impressive piece, based on the fieldwork in eastern UP, which documents changing labour markets over time to show that nearby jobs outside agriculture were indeed the key to higher agricultural wages.

Economic and Political Weekly November 18, 2006 However, Ruthven and Kumar are quite realistic about the prospects for workers in general: “increased reliance on migrant labour” is one of the factors leading to “a generally less favourable situation for labour in the future”. Whether a decent living can be made by the increasing numbers of migrant labourers will depend in part on “the resolve and determination of labourers to migrate” (p 189).

The next 70 pages of Chapter 4 contain some of the most interesting material in the volume. Here Priya Deshingkar and Daniel Start draw an analysis of their research project data to propose a range of drivers for diversification of economic activities made up of five categories, including opportunistic or “‘creaming’ diversifiers” and “low return ‘copers’ and work searchers” (pp 208-09). It is interesting to note that these authors do advocate subsidies to agriculture, selectively in the areas of low agricultural potential, in contrast to the criticism such subsidies come in for elsewhere in the book. The topic of migration is analysed in a considerable detail. Start and Deshingkar showed earlier in the chapter that in most of the 12 villages in AP and MP the seasonal migration for agricultural and nonagricultural labour was essential. The positive approach to policy for migrant workers builds on an understanding not only of the centrality of migration to many rural people’s livelihoods (it accounts for one-sixth of household income in the AP villages and one half in the MP villages), but also of the riskiness of the process of searching for work (p 204). As with the work on social protection later in the book, these authors advocate “supporting emergent labour market rights and improving the lot of the migrants involved in long distance work search” (p 223). Yet, here as elsewhere, growth and equity are seen as trade-offs and the degree to which labour markets should be regulated is kept as an open question.

The analysis of migrant livelihoods is detailed, and shows variation in the extent of migration by individuals and households. It suggests that important changes have taken place over time in migration routes, with a process of improvement in employment terms and conditions, such that several long-established routes have become “regular and accumulative paths to engaging in high return labour markets” (p 228). Some of these routes are described in detail, including migration for work in sugar cane cutting by workers from Medak district in AP, for which the ownership of bullocks and a bullock cart are essential. The authors provide regression analysis that suggests diversity in the causes of migration, with, for example, a significant negative relation between land owned in MP, as opposed to a positive, but not significant relation in AP. These differences warrant further study. The authors show clearly that the number of potential earners in a household is a strong determinant of whether anyone from that household migrates, though they make the rather too blunt summary point that “labourscarce households do not migrate” (p 238).

The fifth chapter is explicitly concerned with risk and vulnerability and the means available to rural people to avoid, or recover from, “poverty slides”. The key phrase here is social protection, and the chapter editors, John Farrington and Priya Deshingkar, helped by three other contributing authors, explore types of formal social protection, including targeted programmes of “social assistance”, and more rights-based “social insurance”. The authors also consider informal social protection, including credit, gifts and practical assistance provided by neighbours and relatives, noting that this can involve the perpetuation of inequality through extending patron-client ties. Indeed, the methods people take to insure against risks include “reliance on immediate or extended family, wider kinship, or caste networks, borrowing from moneylenders or relatives, the sale of assets or drawing down of savings, and whatever formal mechanisms may exist for accessing subsidised food, or credit, insurance or pensions. Reallocations of responsibility may also be made within the household”, including “withdrawing children from school” and “[i]n extreme cases, households may reduce their consumption of food” (pp 275-76).

The analysis of major poverty slides based on the research project data is revealing. It shows that the greatest single call on social expenditure by households is marriage, followed by major health costs, and then the costs associated with death and funerals. Each of these is considered in turn with detailed comparative analysis

Economic and Political Weekly November 18, 2006

across AP and MP, different caste groups and by sex. The downward mobility is found to be associated with family lifecycles, with their various financial impacts. The next section of the chapter elucidates the ways in which families cope with these impacts including through borrowing. Interestingly, the authors find that “the ability to take on and service debt…[is]…central to the success of most individual social protection strategies” (p 294). (What is not considered, but is worth further thought, is the degree to which individual protection strategies should be conceived of as social.) Unfortunately, the authors slip at times into a behavioural analysis of why poor people are poor, listing “personal traits” (p 288) and inventing a category of “sensible households” (p 321).

Politics and Poverty

The sixth chapter edited by Craig Johnson with contributions from four others, is the most coherent chapter. It begins with a theoretical and conceptual review of literature on decentralisation, and then goes onto explain the differences between how decentralisation operated in MP (under the Congress(I)), “often portrayed as a pioneer in the field of decentralisation” (p 368),

India: Historical Beginnings and the Concept of the Aryan by Romila Thapar, Jonathan Mark Kenoyer, Madhav M, Deshpande, Shereen Ratnagar; National Book Trust, 2006; ppx+201, Rs 65.

Dhadhi Darbar: Religion, Violence, and the Performance of Sikh History by Michael Nijhawan; Oxford University Press, New Delhi, 2006; pp xiii + 272, Rs 545.

War and Society in Colonial India edited by Kaushik Roy; OUP, 2006; vi + 375, Rs 595.

Explaining Growth in South Asia, Kirit S Parikh (ed); Oxford University Press, New Delhi, 2006; pp xix + 495, Rs 675.

Managing Water Resources: Policies, Institutions, and Technologies by V Ratna Reddy, S Mahendra Dev; Oxford University Press, New Delhi, 2006; pp xxi + 331, Rs 595.

Power Matters: Essays on Institutions, Politics, and Society in India by John Harriss; Oxford

and AP (under the Telugu Desam Party), which took a more “centralised and populist approach” (p 363). The authors skilfully show how the operation, rationales and outcomes of anti-poverty schemes were tied into the different polities of the two states. Evidence is marshalled to critique the view that “local elections and pluralist pressures” necessarily lead to accountability. It shows there are alternative routes and highlights the role of “macro-level competition among political parties” in the AP case, in “creat[ing] micro-level benefits for the rural poor” (p 394).

As a report on a major study of the dynamics of rural poverty, schemes set up to reduce it, and the interaction of these two with political decentralisation in two Indian states, the book contains much interesting material. The analysis is often nuanced, and the comparative framework leads to the findings of considerable importance, not least with regard to the role of political parties and governance structures in the operation and impacts of antipoverty schemes. However, in this reader’s view, the emphasis in the policy stance taken in the book does not always draw on the evidence from the study. So for example, in summary sections, and section titles, labour migration is portrayed much more positively as a livelihood “option”,

Books Received

Debating Gandhi: A Reader edited by

Globalisation and After edited by Samir Dasgupta, Ray Kiely; Sage Publications, 2006; pp 443, Rs 550.

Sikhs, Swamis, Students, and Spies: The India Lobby in the United States, 1900-1946 by Harold A Gould; Sage Publications, 2006; pp 460, Rs 750.

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than some of the evidence of precarious journeys, living conditions and employment suggests. Large-scale capital is too often seen as the answer to over-regulation by the state, without consideration of the new forms of regulation this entails. There is a headline message, that subsidies in the agriculture restrict growth, while the text contains warnings about the effects of continuing subsidies on agriculture in the European Union and the US.

The arrangement of the book in multiauthored chapters is innovative and there is much worth reading within it, including many of the clips. However, readers are recommended to dip into the book for material of interest to them rather than attempting to read the volume straight through. The book often lacks coherence, including in the introductory chapter, which suffers from a lack of linking passages between its seemingly unconnected subsections, for example the ones on the “specific vulnerability of scheduled tribes” and “centre-state fiscal relations” (pp 26-27). There are far too many lists and bullet points throughout. Nevertheless, in spite of these flaws, the book makes a valuable contribution to the literature on changing rural livelihoods in India.

EPW

Email: b.rogaly@sussex.ac.uk

World Economic and Social Survey 2006: Diverging Growth and Development, Academic Foundation, 2006; pp xxvi + 185, Rs 895.

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Impact of Bank Interest Rates on SHG Members: A Study in Grama Vikas Project Area edited byD Rajasekhar, N Krishne Gowda, R Manjula; Concept Publishing Company, 2006; pp 84, Rs 150.

Tracking the Macroeconomy: Selections from Macroscan, 2001-2005 (Vol I – India) edited by C P Chandrasekhar, Jayati Ghosh;

Tracking the Macroeconomy: Selections from Macroscan, 2001-2005 (Vol II – The World Economy) edited by C P Chandrasekhar, Jayati Ghosh; ICFAI University Press, 2006; pp 269, US$ 25.

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Economic and Political Weekly November 18, 2006