– R V Ramana Murthy
The states of Telangana and Andhra Pradesh, existing as one state Andhra Pradesh during 1956-2014, in spite of its uneven nature, underwent considerable transformation in the six decades. There are several microlevel studies in the literature like Carole Upadhyay (1988), Krishna Rao (1984), Niranjan Rao and D Narasimha Reddy (2008), Ramachandran VK, Madhura Swaminathan and Vikas Rawal (2009) and Vidyasagar SR (2013) that have brought out evidence of changing agrarian conditions of production in the rural Andhra Pradesh. There is a growing consensus over the fact that relations of production in the state are evidently capitalist. Some studies are explicit in this conclusion and some implicit. Given the paucity of macro data on crucial aspects of agrarian conditions, there is however, a need for many more studies to confirm certain major trends and this study contributes in this direction. We have seen Basole and Basu (2011) have come up with some important observations over agrarian structure, tenancy, credit, capital formation, wage labour etc to examine the dominant mode of surplus accumulation. The authors concluded that compared to five decades ago, the dominant mode of surplus extraction is production for profit exploiting wage labour. The present study is undertaken examining the production conditions and relations, with an additional objective of understanding how rural households cope with the distress and level of income generation across size classes. The field work was undertaken in the year 2013, (the study is published in 2015), by interviewing 1087 households in seven villages in erstwhile combined Andhra Pradesh. Seven villages are drawn from three regions, namely, Telangana, Coastal Andhra, and Rayalaseema. Information is collected over size of holdings, production, costs, investments, returns, prices, non-farm activities, employment, and welfare benefits received. I shall summarize the major findings of the study in the following.
Regarding land ownership, the study finds that the number of households with some access to land is about 95 percent. If one considers sub-marginal households (owning less than 0.4 acres), the effective landless households is about 25 percent in the sample villages. Among 75 percent landed households, 46 % are marginal farmers, 20 % are small farmers, 19 % semi-medium farmers, 13 % are medium farmers and 2 % are large farmers, following the NSS classification. Among these effectively, 85 percent farmers are petty commodity producers (defined as those own relatively smaller parcel of land and depend on family labour for farming also hire out as wage labour for farm as well as non-farm activities). Thus even these appear as land owners, but in substantive terms they workers. The remaining 15 percent landed households, constituted by medium farmers owning 10-20 acres and large farmers owning more than 20 acres of land, are clearly capitalist farmers, who have the capacity to earn profits in farming by exploiting wage labour. Such classification expects a process of class differentiation as well. Thus as witnessed at national level, the micro data too suggests an expanded Kautskian predicament of large petty commodity producers looming large in agriculture.
Holdings in agriculture are becoming fragmented from above. Small holdings emerge from below and from above. Some previously landless labourers purchased land, as happened until two decades ago. Holdings from above are getting fragmented through property mutation. These two processes are making increasing number of marginal, small and semi-medium farmers. The share of medium farmers share declined moderately and that of large farmers declined drastically over time. Medium and large households are selling part of their holdings, and leasing out the rest or growing orchards.
Landlessness is generally higher in Coastal Andhra villages (particularly in canal irrigated ones), in Telangana and Rayalaseema villages it is less. All villages that have dry land or well irrigation, have lower share of landless labour, are increasingly depending on mechanisation.
An upcoming dominant feature in these villages is the phenomenon of rising tenancy, that began to be seen in different states of India in the past one decade. Tenancy is dominant in villages which have assured irrigation. Small, marginal and landless households are leasing in land in the tenancy market on fixed rent. Cash rents exist where cash crops are grown and kind rent is preferred in paddy growing villages. Non-cultivating households in villages are on the rise, who own land that they lease out, who diversify into other activities. Sharecropping is observed only in one village whose irrigation sources are fully rainfall dependent. In contrast to Basole-Basu study, which observes data only till 2003, this study notes a rising trend of tenancy. But I confirm their view, this tenancy is capitalist in nature.
It is observed that production is essentially for market. Except for small and marginal farmers who keep a third of the produce for home consumption while selling the rest in the market, all other categories of farmers sell 90 percent of their produce. Those who produce cash crops sell the entire crop. Thus, general commodity production, a necessary condition for capitalist relations of production, is the dominant feature. Even the petty producers who constitute 85 percent in number, command 65 percent of total production, contribute a surplus of 75 percent production to the market. This suggests that production has become predominantly general commodity production, a certain characteristic of capitalist transition.
There has been a significant crop diversification in the past two decades. There has been a shift in the area from food crops to non-foodgrain crops. The traditional crops have disappeared totally. I have observed that peasants aim for self-sufficiency with respect to family needs, and also strive to produce for the market to earn cash revenues.
Substantial investments in pump sets, tractors, rotovators, sprayers, sprinklers, and borewells are made by almost all classes of farmers. Tractors and harvesters are available on lease in all villages. Thus operations are getting mechanised, except weeding, especially in non-food-grain crops. Knowledge systems of agricultural production remain informal and unprofessional among petty producers, while medium and big farmers are much more professional. Capital formation on average ranged up to about Rs.1.5 lakhs per acre. Farmers have regular access to commercial banks with an average crop loan of Rs.15000 per season and they also raise loans from private money lenders for production as well as consumption purposes. The credit share of banks of farmers in general is about 52 percent. Institutional credit has a size bias. However, petty producers are now provided 25 percent of their credit through women SHGs. The tenant farmers are not covered by the institutional credit, and are forced to rely on private lenders. While instrumental rationality of farming class even in the lower order appear to be well attained, but reproduction of social relations has become more expensive.
Canal irrigated areas enjoy subsidised irrigation. Dry land farmers had to put a greater share of private investment, while state has provided rural electrification. The average use of fertilizers is about 256 kilos per acre. All inputs, including seeds are purchased from market. It is about two or more decades since relations of production turned dominantly capitalist.
There is a considerable capital investment on pumpsets, tractors, rotovators, weeders, sprayers, pesiticides, fertilisers, sprinklers, micro-irrigation. Harvesters, tractors and other mechanical tools are available in lease market for every size class farmer, which are widely used. The rational response to cost escalation is visible in adoption of mechanization.
The field observations revealed that medium and big farmers enjoy higher yields, lower costs and greater profitability. This is found to be the case for most crops such as paddy, maize, cotton, turmeric, and sugarcane.
The study found that average profitability for 9 crops is positive only over simple paid-out costs (without considering rent on own land, interest on fixed cost and family labour) of owner-cultivators. But once family labour and rent paid is accounted profitability became marginal or zero for most crops except for turmeric, which is a high value commodity. When rent on own land, interest on fixed capital and 10 percent margin profit is considered, the gross profit would became negative. However, profitability is marginally better for medium and large farmers. The average annual return per acre for paddy is found to be Rs.12000 per annum, Rs.10000 for cotton, Rs,9000 for maize over paid out cost+family labour. The profitability tends to be below the market rent, which makes leasing, if available, a rational option. Thus the present conditions appear to give extremely poor returns to the farmers. Farming has lost the ability to sustain the farmers. Petty producers, who supplement their incomes with wage income and use family labour to a considerable extent, appear to carry the agricultural sector. The study found that agriculture supports only 45-55 percent of household income in villages. The rest of the income is earned from non-farm activities. However, this static picture apart, occasional windfall profits also sustain the optimism of the peasants, which wears off gradually. Intense competition among the farmers does not appear to allow any long term gains, market prices tend to eliminate any profitability, keeping the peasantry earning a bare subsistence.
The returns of sugarcane over paid out costs as well as full costs are positive for small farmers and large, while negative for marginal, semi-medium and medium farmers. The sugarcane cultivation gives about Rs.25,000 average return over full cost with an average 20 tonne yield.
Tobacco, with a yield about 5-9 quintals, returns about Rs.22,500 net per acre for a medium and semi-medium farmer; 3,500-7,500 for marginal and small farmer over paid out costs. Returns fall to Rs.6,000-9,000 per acre over full cost. Turmeric, cultivated in selected pockets, brings handsome returns of Rs.54,000-68,000 per acre. Thus regional and class differences exists in accumulation.
On average in poor agricultural households, men work from 21 to 10 days on their own farms, depending on size class. Women work about 42 to 19 days per annum on their own farms. Aggregate employment (on own farm and hiring themselves out) decreases over size class. Petty producers also hire in labour during the peak operations. Finally, they hire themselves out as wage labour. Average wage employment 73 days for men and 103 days for women. Aggregate (own farm + hired out) employment on average is less than 100 days for men and 150 days for women. Attached labour (on an annual contract) is very expensive and seldom exists. This indicates two things, first increased feminisation of agricultural employment and second, low employment availability, as suggested by several studies. Mahatma Gandhi National Rural Employment Guarantee Scheme in the study villages reportedly provided 45-80 days of employment. MGNREGA employment is sought by small peasants as well as landless labour. The crisis of unemployment is always round the corner.
The average wage rate for a male in agriculture in normal times is Rs.220-250; Rs.175-225 for female labour. Peak wage is in a range of Rs.300-350 for male and Rs.200-300 for female. We see a trend of rising wage rate on one hand and declining employment availability on the other, probably the latter is a response to the former through mechanization.
The average rural family business income ranges between from Rs.1,07,222 for marginal –semi medium farm households and Rs.3,00,000 for medium-large farm households. Thus is a definite process of class differentiation is also in place. More importantly, there is a considerable diversification of income from farm to non-farm activities among rural households. Roughly, 45 percent of income is derived from non-farm activities. While, the family income of marginal-small farm household income appears to be higher than the official poverty line given by the Planning Commission, 75 percent are still poor under the international norm of $ 2 per day.
Interestingly, most rural households receive welfare transfers from the state. At least six to seven schemes directly transfer welfare benefits in kind and cash to 90 percent of rural households in the state: e.g., the public distribution system, employment guarantee, pensions, scholarships, mid-day meal, and health insurance. The average transfer to a rural household by a conservative measure is about Rs.19000 per annum, and the poorest receive about Rs.23000 per annum.
Kalyan Sanyal (2007) and Chatterjee (2009) have argued that the Indian state executes a Polanyian ‘double movement’, mitigation measures against the poverty of rural households, the liberal democracy over period has compelled to design efficient welfare transfers. In our observations we have noted several welfare measures, like public distribution, pensions, MGNREGA employment, mid-day meals, health insurance, microfinance loans, etc., are implemented with reasonable effectiveness in the State. Small differences that may exist between the two states of Telangana and Andhra Pradesh in welfare measures are more due to differences in administrative efficacy. There is no resistance to these from big landlords. The changing agrarian structure and social change has something to do with this. The relations of production are organised entirely through market mechanisms, the nature of these production relations is more obvious than ever before.
Conclusion
The generalised commodity production, wage labour, dominating production for market, crop diversification in attempt to earn cash revenues, gradually growing mechanization, capitalist tenancy markets found by this study, as done by others strongly suggest a definite capitalist transformation. When it comes to question of increasing small holdings managed by petty commodity producers, low and falling returns, significant indebtedness, occupation diversification by farmers in general and wage income by petty producers suggests trends Kautsky has elaborated in his work. While 19th century capitalism itself did not eliminate the small peasantry in advanced capitalist countries, as Kalyan Sanyal, Bernstein, Akram Lodhi-Kay suggested, it is impossible to do so in the case of post-colonial 20th century capitalism. The growing capitalist nature of production makes more and more surplus labour in agriculture, with people who exist or undertake temporary migration to urban spaces. This is the condition of capitalism in periphery. The bourgeoisie in India are possibly too aware of this condition, and make welfare transfers to mitigate the survival crisis for the petty producers and the proletariat. This study brings evidence to this effect. Particularly, after the introduction of neoliberal reforms, the farm sector appears to be exposed to naked market forces without an effective safety net intervention for most crops. This is making big and middle level farmers to quit and lease their lands while small and marginal farmers to hang on rather than to join the reserve army. The locus of surplus appropriation has moved out of farming, subjecting it to indirect exploitation of the sectors’ labour belonging to petty producers. In my opinion, the existence of small holdings, growing tenancy and agrarian distress are not a sign of crisis imposed by‘semi-feudalism’, rather this crisis created by developing capitalist relations, where a rentier class that exists in the form of landlords, commission agents, traders, fertilizer and pesticide suppliers, money lenders, manages to squeeze the surplus from the exchange process, driving their subjects to precarity.