Oct 2003 Edition

Problems of Indian Agriculture

Indian Agriculture in a Historical Context

An important aspect to note about Indian agricultural production (in most parts of the country) is its relationship (even dependency) on skilful and wise water-management practices. One of the unique features of the Indian Subcontinent is how almost its entire rainfall is concentrated in the few monsoon months. During the monsoons, the Indian Subcontinent is usually gifted with bountiful rains, although not infrequently, this bountiful monsoon can turn into a terror, causing uncontrollable floods in parts of the country. Conversely, every few years, the monsoon can be erratic and deficient, leading to drought and the possibility of famine.

Thus. all through history the development of Indian agriculture has been inextricably linked with effective water-management practices that have either been taken up by the state, or by local village communities. Water management has necessitated a certain degree of cooperation and collective spirit in the Indian countryside, and until the imposition of colonial rule, it precluded any widespread development of private property in India.

Regional rulers, or local representatives of the state were generally obliged to allocate a certain percentage of the agricultural taxes on building and managing water-storage, water-harvesting and/or water-diverting structures which facilitated a second crop, and provided water for drinking and other purposes in the long dry season.

Only a small percentage of Indian farmers have enjoyed the luxury of natural irrigation, although there are reports that in certain parts of the country, the soil used to retain enough moisture well beyond the monsoon months. However, it is equally true that the drying up of wells led to mass migrations, and sudden depopulation of old towns and villages.

In Assam, Bengal and Bihar - all flood-prone states, there is evidence of a massive network of canals that allowed both effective drainage to prevent flooding during the heavy monsoon months, and also provide for fishing, transportation and irrigation arteries in the dry seasons.

Intelligent water-management thus allowed for the growth of a healthy agricultural surplus, that in turn facilitated steady urbanization (albeit at a much slower pace than seen in the industrial era), and the development of a variety of pre-industrial manufacturing in areas such as textiles, jewelry, wood/metal-working etc.

Because of the immense importance of effective water-management, the entire revenue system of the state was structured so as to take into account both the necessity of water-management and the inherent dependency that existed between Indian agriculture and the availability of water. Most Indian states attempted to collect revenues in a manner that did not entirely destroy the village solidarity that was essential in proper sharing and management of common water-resources. At the same time, urban tax collectors had to deal with mediating entities from the villages, so that they did not tax at a rate that might lead to the destruction of water-management facilities so essential for life and sustainable agriculture.

By and large, taxes were imposed on villages collectively (not on individual farmers directly), and the village elites (whether Brahmins or others) were obliged to ensure that the burden of taxes did not destroy the complete viability of agriculture. Taxes were also adjusted keeping in mind whether the land was well-irrigated or not.

When ruling dynasties became utterly corrupt and decadent, and failed to tax within limits, or neglected the construction and maintenance of collective water-management facilities, they were confronted with revolts and rebellions, and even risked being overthrown.

There is evidence that whenever the tax collectors of a certain regime became too greedy (such as what happened in certain villages/districts during the reigns of some of Northern India's more rapacious invading conquerors), entire villages would be abandoned to escape the burden of heavy taxes. As long as India was not very densely populated and there was the potential of new lands to cultivate, (and the reach of the armed state was not absolute and all-encompassing), this was one of the means by which Indian villagers - both artisans and peasants were able to escape the burden of back-breaking taxes.

But as the population grew and states became more powerful, this escape route was gradually sealed off, and this then led to regional peasant rebellions - most significant of which were the Sikh and the Maratha revolts against the Mughals.

Thus, the British arrived in India at a time when peasant rebellions were beginning to eat away at the invincibility of the might of the Mughal empire. However, even as the decentralization that resulted from the break-up of the widely resented Mughal empire eased slightly the burden on the peasantry in most instances, it also provided an opportunity for the increasingly cunning and shrewd Britishers in India to seize the opportunity, and exploit the widening cleavages in Indian society for their own nefarious ends.

Colonial Aspects of Exploitation in the Indian Countryside

The imposition of Colonial Rule in India led to a drastic break with the past, in that not only did the scale and intensity of the exploitation of the village communities greatly increase, it also led to the introduction of new, and almost entirely parasitic intermediaries between the state and the tax paying masses - intermediaries who were typically induced (or pressurized) to abandon traditional restraint, and discard the old formulae that helped mediate the burden on the typical village peasant or artisan.

(It is notable that whereas ancient texts such as the Manusmriti put a cap on agricultural taxes at one-sixth of the produce, and taxes during Mughal rule had risen to something between a third and almost half the produce, during British rule, the peasant was often left with barely a third of the crop.)

Not only were these intermediaries under no pressure to build or maintain traditional water-management structures, the manner in which they were chosen by the British to collect the taxes actually discouraged any diversion of the taxes towards any capital upkeep. Over time, this not only led to the destruction of century-old water management structures, but also to the virtual destruction of the knowledge systems and cultural traditions that had helped build and preserve these water-management techniques over the centuries in states such as Bihar, Bengal, Karnataka, Tamil Nadu and others . (Note that this has been highlighted not only by Rajni-Palme Dutt in India Today, but also by several other authors such as Margaret Bourke-White in the 'Famine in South India' chapter in her book: "Halfway to Freedom").

In addition, the British obliged these intermediaries to collect the taxes not in kind, but in cash. Since the peasant had little experience or understanding of a cash economy (or any control on the price of grain and agro-inputs), this put a further burden on the peasant, who now also had to face the thuggery of unscrupulous grain traders and usurious money-lenders - who took full advantage of the highly diminished status of the Indian peasant in the colonial dispensation.

(Note that the existence of money-lenders and traders is documented from at least Ashokan times, but the traditional Indian state typically insisted on a cap on interest payments and profits. Moreover, money-lenders and traders were traditionally active mostly in towns, not in villages. The encroachment of the cash economy and the growth of usury in the countryside began to adversely affect the peasants during the later Mughal period, but the problem grew very dramatically during colonial rule.)

As a result, not only was the typical Indian peasant reduced to a state of utter degradation, social relations within the village also became highly distorted. The traditional solidarity that had existed between villagers was now subject to the divisive and ruinous tactics of the parasitic intermediaries who had the protection and support of the colonial state.

As colonial rule progressed, the typical Indian peasant (and village artisan) faced a dual burden. Not only did the traditional feudal form of exploitation greatly intensify (in comparison to traditional Indian practices), the typical Indian villager was now also subject to the merciless forces of mercantile capitalism, who attempted to extract every ounce of savings or assets that any villager might still possess. Eventually, the typical Indian villager was stripped of all savings, and driven to mortgaging a considerable portion of any assets - whether personal jewelry, land and livestock, or tools and equipment.

But even as the Indian money-lenders and grain traders fleeced the village artisans and peasants, their accumulated wealth was not especially significant in comparison to the British mercantile capitalists of the East Indian Company who kept a lion's share of the loot.

It is especially important to note that whereas a share of the village surplus went to a few Indian intermediaries (who served as a buffer between the British colonial over-lords and the Indian masses, and generally acted to quash the class struggle), it was the British who expropriated the bulk of the peasant's assets and annual agro-produce, and transferred most of this looted wealth to the British homeland where it was turned into industrial capital and urban development.

This point is of special significance in understanding the unique nature of class contradictions in the Indian countryside (as compared to elsewhere in the non-colonized world.) For instance, almost throughout Europe, the peasantry was also subject to exploitation by the feudal landlords, but the expropriated surplus from the countryside eventually found its way into the urban banking system, and ultimately facilitated in the growth of industrial capitalism. Sections of the impoverished peasantry then had the chance to gradually move into industrial occupations.

But India was subject to an especially tragic plight. Its masses were thoroughly impoverished, but their immediate exploiters were able to keep only a very small share of what had been extracted from the peasantry. This meant that even when a transformation into industrial capitalism became possible (after freedom from British colonial rule) - there was simply not enough accumulated savings to fund the rapid expansion of industry that could eventually transform the countryside.

When the British left, they left India with extremely limited material means to industrialize, but a sizeable class of parasitic intermediaries who would serve as a constant drag on future development. Unlike India's pre-colonial mercantile classes and the more nationalist sections of India's traditional feudal nobles and intermediaries (who were mostly neutralized or exterminated in 1857) this new colonial era mercantile class was extremely backward in cultural terms and was generally lacking in nationalist spirit.

In comparison, the mercantile classes in Europe of the late 18th and 19th centuries were not only wealthier, but also more urbane, and displayed a much higher level of cultural, scientific and technological openness and curiosity. This was also generally true of Japan, and to a somewhat lesser degree, of mercantile classes in other parts of Asia that escaped direct European colonial rule (such as in Korea, Thailand and even China).

It should also be noted that whereas the mercantile classes in Europe, Japan, Korea and China were moving in a broadly secular direction, the Indian mercantile classes were excessively weighed down by sentiments favoring religious revivalism or extreme sectarianism (a trend that was especially strong amongst Muslims, but also posed a serious problem amongst Sikhs and Hindus).

It is thus important to understand that not only was the Indian countryside weighed down by a new and more intensified feudal oppression in the colonial era (such as through the Zamindari or Mahalwari systems), it was also oppressed by a highly reactionary and socially conservative intermediary class of petty mercantile capitalists who would pose as the biggest obstacle to any radical or revolutionary developments in the Indian countryside.

Finally, it should be noted that colonial rule exacerbated the problems of the Indian countryside in yet another way. Prior to colonization, India was steadily becoming more urbanized, with some estimates suggesting that as much as a third of the Indian population may have been living in large or small towns. In addition, even in the villages, a considerable proportion of the population comprised of skilled artisans - weavers, potters, carpenters, metal-workers, painters etc. The proportion of the population that was exclusively engaged in agricultural production was steadily decreasing.

But in the colonial regime, several laws were passed that led to a catastrophic de-urbanization and de-industrialization of India. Trade tariffs and excise duties were set so as to destroy Indian industries, and squeeze domestic trade. In states like Bihar and Bengal, severe restrictions were placed on the use of inland water-ways - causing fishing and inland shipping and transportation to suffer. This led to even greater pressures on agriculture since large categories of highly skilled artisans and non-agricultural workers were thrown out of work.

Effects of Partition

The problem for India was compounded further by the demands for partition, and the insistence of the Muslim League in splitting the country on communal lines. It is important to note that prior to partition, the best naturally irrigated and most productive lands in Northern India were in North Western Punjab (now Pakistan). Fed by a network of all-weather rivers, no other part of the Indian sub-continent was capable of producing more grain with relatively little capital investment. Similarly, Bangladesh was a much better irrigated land than West Bengal (although it faced far greater risks of flooding than Pakistan Punjab).

But in any case, it is worth pointing out that the bulk of pre-partition India's wheat, cotton and jute were grown in what are now Pakistan and Bangladesh. Not only did partition provide India with a smaller share of the land (relative to the ratios of the Hindu, Sikh and Muslim populations), it also left India without the means to feed itself, and without some of the essential raw materials for industry.

(Although India did inherit bulk of the cotton and jute mills, India was unable to take full advantage of this until it had increased its own production of jute and cotton to supply these mills, whereas the raw material producers in West and East Pakistan could at least export their raw materials)

It should also be noted that partition disrupted what had been a somewhat natural distribution of labor between what became Pakistan and India. Since West Punjab and Sindh were better suited to agriculture, the relatively arid states of Rajasthan and Gujarat specialized in all manner of cottage industries and manufacturing that needed the raw materials and markets of West Punjab and Sindh to flourish.

In the same way, there was considerable co-dependencies not only between Western and Eastern Bengal, but also between undivided Bengal and its neighboring states such as Assam, Orissa and Bihar. The artificial vivisection of Bengal virtually destroyed the potential of regenerating the traditional trade linkages that had been so vital to the prosperity of the Eastern half of India. Geographically, it should be evident that the management of water and other natural resources cannot be efficiently undertaken without the effective coordination and active involvement of all the states in the Ganga-Brahmaputra region.

But the vitiated atmosphere under which partition took place meant that the possibilities of mutually beneficial cooperation in matters of resource-sharing, trade, transportation and agriculture were practically foreclosed. (To this day, communal forces in Bangladesh have resisted attempts by India to expand cooperation since they would rather see India suffer more rather than see both India and Bangladesh make more rapid progress.)

Thus, when the British left, India had become a much more village-based agricultural economy than it had been earlier - it is likely that the British had pushed India back by several centuries in this respect. Yet, its prospects for rapid industrialization were also quite bleak.

India had inherited one of the most depressing scenarios in Asia - a fairly densely populated nation with a pitiful urban base, a rural infrastructure in wrecks, a huge mass of population forced to survive exclusively on agricultural production - yet cynically oppressed by petty mercantile capitalists and feudal intermediaries. Moreover, it had also been left artificially divided on communal lines that meant that important historical linkages might never be revived (or revived only with great difficulty).

No civilized nation could have faced a worse set of circumstances.

The Indian Political Situation Post-1947

The Indian National Congress conducted a dual (and somewhat contradictory) policy relative to Indian agriculture. On the one hand, it attempted to ameliorate the problems of the Indian countryside by investing in irrigation, agro-research, agro-modernization and mechanization, but on the other hand, it was only half-hearted (at best) in implementing its own platform of land reforms because it was reluctant to hurt the interests of the feudal and mercantile intermediaries that oppressed most peasants.

Where the struggle for 'land to the tiller' became very intense, it was obliged to make concessions to the impoverished peasants, and move against the parasitic forces, but wherever the demands for land reform were not backed up by strong and effective people's movements, it chose to drag its feet.

It is only in the sixties, when India's Naxal movement began to spread and acquire a certain degree of political depth did the Indira Congress feel the threat and necessity of clipping the wings of the Zamindars, taking away the privy purses of the Maharajas, and assisting farmers more actively. Even as the Naxal movement was harshly repressed, banks were nationalized and were required to set up more branches in rural areas so that loans for seeds and farm equipment (and inputs such as fertilizers and pesticides) could be purchased through loans at more reasonable interest rates. The state also actively intervened in the buying and selling of grain.

Although these measures did not help all sections of the peasantry, it did allow a section of the country's farmers to gradually liberate themselves from the clutches of the old parasitic intermediaries, and move towards mechanized farming. Over time, peasants struggles put further pressure on the government leading to periodic waiving of loans, and easing of credit norms so that even middle farmers could get loans from government banks and rural credit unions. Subsidies were also provided for electricity and water use, as well as on the sale price of fertilizers and pesticides.

Thus, a combination of people's pressure and the gradual expansion of industrial capitalism has brought about significant changes in the Indian countryside. Whereas a section of Indian farmers (at least in some states) have become rich capitalist farmers, a large middle layer of farmers has also developed which is able to survive (even eke out a small surplus) in the good agricultural years (when the monsoon and market conditions happen to be favorable). These middle-income farmers also hire seasonal labor - and this further distinguishes them from the poorest farmers who can't even survive in the good years.

Thus today, there is a growing differentiation in the Indian countryside, and this is not too different from what has been seen in many other relatively mature capitalist countries. However, the increasing sub-division of land, and the rising costs of agricultural inputs is a constant source of problems and tensions in the countryside.

Comparisons with Europe

In many respects, developments in Indian agriculture have paralleled developments in the Germany and Italy in an earlier century. In both Germany and Italy, the transformation towards a modern industrial society took place slowly, and through a series of evolutionary steps - as is occurring in India today.

The main differences between India and Germany and Italy are simply that not only did Germany and Italy escape the horrors of colonization, they indirectly benefited from the colonial loot. This meant that as their urban industrial economies expanded, these nations were able to absorb their landless populations in their rapidly expanding industrial and services sectors.

When industrial expansion wasn't fast enough, Europe's landless had another escape route - external migration. For more than a century, Europe's unemployed and poor escaped to the US, Canada, South America, South Africa, Australia and New Zealand - where the indigenous populations were killed (or displaced from the best agricultural lands).

Whereas Europe had the distinct advantage of being able to export away its rural poor to land it grabbed from indigenous communities (who were not well-armed or skilled in modern warfare), India cannot simply wish away its excess rural population.

Solutions to the Problems of Indian Agriculture

The subdivision of already small farms in an agricultural model whose profitability is greatly linked to economies of scale makes the survival of the small farmer very difficult. Although the introduction of tractors and other industrial implements, of chemical fertilizers and pesticides, greatly increased the productivity of land and labor, it has not come without considerable burdens for the small farmer who is finding it very hard to compete with large and medium farmers. In most industrial nations, the introduction of such practices in the countryside has been accompanied by a gradual reduction in the rural population so that those who remain on the land can enjoy so