Calcutta Notebook
Shoummo

The Samar Sen Memorial Lecture organised by Anushtup was held in the sanitised environment of East Zone Cultural Centre (EZCC) in Salt Lake on 16 March 2013. It was delivered by economist Pranab Bardhan from University of California, Berkeley. The theme was ‘Paschim Banger Bhumi Samasya—kichu notun chintar proyojoniyota’ or ‘The Land problem in West Bengal—time to think afresh’. The speaker was introduced by Partha Chatterjee from Columbia University and the lecture was followed by a discussion between him and the speaker. The event ended with the speaker taking questions from the audience.

Pranab Bardhan began with his memories of Samar Sen. He said that in his youth, his impression of the poet and later journalist can be best described in today's parlance as a 'kewl kewl dude'. Later, on meeting Samar Sen, he was floored by Sen's pleasant and amicable personality. Samar Sen was the founder editor of this weekly and yet those associated currently with the weekly were conspicuous by their absence at the lecture. The speakers while remembering their association with Samar Sen and this weekly sounded as if this publication is a thing of the past. Just to underscore that Frontier is alive, if not exactly kicking, a recording of the lecture has been put up on the weekly's website. To listen to the audio bytes please log on to http://frontierweekly.com

The speaker started with land reforms in West Bengal and said that land reforms in West Bengal stand out only in comparison to land reform measures in other states of India where, except in Kerala, precious little has been done. In fact the extent is significantly less when compared to China or Vietnam or even countries of the 'free world' such as Taiwan and South Korea. Pranab Bardhan confirmed that productivity of land in West Bengal did increase in 1980s and during the first half of 1990s under the impact of land reforms. He said the process of giving patta(sj or ownership rights of plots to landless cultivators was a non-starter because of the sub-optimal size of the plots and also the poor quality of the fallow lands that were distributed. The speaker added that the main feature of the land reforms in West Bengal was the recording of bargadars or share croppers, thus ensuring a security of tenure which encouraged the bargadar to think about making improvements/investments to the cultivable holding simply because the tenure could not be terminated at the will of the land owner. This coupled with decentralisation of governance through local self government or Panchayati Raj Institutions (PRI) carried the benefits of land reforms to the poorest households. The local self government institutions were not only used to record bargadars but also to distribute agricultural inputs or 'mini kits' to farmers and that in many cases the impact on increased agricultural productivity was attributable to decentralisation of governance and distribution of inputs rather than the recording of bargadars. The speaker also noted that the productivity increase was across the board and also evident in case of holdings that were not cultivated by bargadars. This was attributable to investment in facilities such as shallow tubewells and these investments were enabled by the fact that security of tenure prodded the bargadar to think about long term productivity and consequently the benefit of investment in productive assets was shared by all the cultivators along with bargadars. An interesting point made by the speaker was that land reform measures were significantly pronounced in areas where there was a close political contest between the Left and Congress rather than in places where the political domination of the left was overwhelming.

Pranab Bardhan also referred to a 2008-09 survey by the World Bank in 200 villages of West Bengal. The survey is yet to be made public but as per the person who led the survey there is still plenty that can be done to further land reforms. The measures as suggested by the survey are that the ownership of plots is transferred to bargadars and this transfer be financed by banks. In South Africa the financing has been done by the World Bank. Also, bargadars be allowed to 'sub-lease' their land since the survey found that more than 2/3 rds of the bargadars wanted to cultivate more land and that the bargadars be entitled to institutional finance on the basis of barga rights which is not recognised as a security against which institutional finance is available. This suggestion may look innocuous on the face of it but it could be an enabling inlet to allow microfinance institutions to make deep forays into rural Bengal.

Another significant comment by Pranab Bardhan was that since land reforms in West Bengal in the late 70s and early 80s, contrary to expectations, the distribution of land holdings has become more inequitable and this has happened due to subdivision of holdings since holdings less than half an acre cannot be cultivated for a livelihood. Based on a sample survey of transfer of land holdings between 1967 and 2004 the speaker commented, that in 1964, l/3rd of the cultivators were landless and that this figure went up to 85% in 2004. Also, 1/4th of the cultivating households in the sample were immigrants and they were from neighbouring villages, neighbouring states & from Bangladesh and these households contributed numbers to the growing bulk of landless cultivators. The speaker did not see light at the end of the tunnel in the form of collectivisation and joint farming since these have been discarded in Russia and China and not found favour locally. Rather, the speaker emphasised on the co-operative ownership of agricultural inputs & equipments and also co-operative marketing of agricultural products. The former will ensure bargaining capacity to the cultivator while negotiating prices of inputs/implements as well as their optimum utilisation while the latter will ensure a fair price for the farmers' toil. Storage and other infrastructure facilities could be built by co-operatives thus ensuring pooling of scarce resources as well as their equitable use of facilities by the members and such initiatives have been successful in most Southern states. Thus, it was apparent to the audience that no solution was in sight to the problem of fragmentation and subdivision of land holdings in West Bengal.

Pranab Bardhan also commented that although the majority of the working population of West Bengal is engaged in agriculture, the segment contributes only 18% to the state gdp. The only way out, he felt, was a shift to manufacture. He criticised the idea favoured by many that the focus should be on small industries due to their labour intensive character to say that although this may at times be true, large industries can often generate employment in large numbers. He said that small industries that are ancillaries to big industries manage to 'stand on their feet' and should be preferred but there is nothing to hope from small industries which are sick primarily because they are not productive and also because they employ poor people who have nothing better to do. The speaker cited the example of garment industry which is labour intensive and which has been successful in China, neighbouring Bangladesh, Cambodia, Vietnam and Indonesia. He said that the case of the garment industry in these countries could be cited as an example of large scale but labour intensive industry. He also highlighted that social benefits have accrued to the women work force in the Bangladesh garment industry and cited the example of the marriageable age of women that has gone up from the earlier 15-16 years to 22-23 years and that this has eased the population growth rates. However, in spite of the recent fire and other accidents in some garment factories in Bangladesh the speaker did not draw attention to the abysmal safety conditions in these sweat shops. He also did not elaborate that Bangladesh does not grow raw cotton or produce man-made fibres and manages to produce low quality yarn only. In other words, bulk of the raw materials for the industry is imported and the value addition is done by labour that is relatively cheaper and the finished product is exported abroad. It must also be pointed out that the export of a manufactured product, always and more so under the present global recessionary conditions, is actually an export of unemployment. The question that refuses to go away is that West Bengal adds 13 lacs every year to the list of job seekers and if solutions are not found within agriculture, since no industry is in a position to generate such employment numbers in West Bengal, the state's future is bleak.

Coming to the requisites for propelling industrial growth, the speaker listed infra-structure like roads, power, a distribution network, credit facilities and land. He said that in a state as densely inhabited as West Bengal some agricultural land will have to be given up and 'some people will face eviction'. Pranab Bardhan asserted very strongly that Government must intervene in the land acquisition process because in Singur, the 'Tatas could in no way have negotiated with 13,000 farmers’ and that if the state does not intervene then the land will slowly pass into the hands of the land mafia who will buy scattered holdings and sell the consolidated plot to industrialists. Moreover, a small farmer will not be able to stand up to the bargaining capacity of a big industrialist, said the speaker, and the rights of those without any land holdings like landless labourers/share croppers will only be ensured if the government steps in. Further, Pranab Bardhan strongly underlined that all infrastructure enablers for industrialisation be built by the government rather than by private entrepreneurs and for this land must be acquired by the state. For land acquisition, the speaker suggested the setting up of regulatory commissions with apolitical/impartial members that would specifically look at every case of land acquisition and sort matters out by holding hearings at the local level with the assistance/association of PRI.

On compensation for land acquisition, Pranab Bardhan was of the opinion that the basis for fixing compensation should be decentralised to state governments and not dictated by rules fixed by the Central government. However, it was not clear as to why the speaker rued the sudden upswing in land prices over the last 4-5 years since this appreciation will accrue to farmers who have normally been short changed when 'temples of modern India' were being built. The speaker made his position very clear in the very next moment when he said that high land prices will reduce the prospective rate of profits for capital investors and they may shy away from setting up new ventures.

The speaker entered into uncharted waters while speaking about the mode of payment of compensation. He suggested the compensation package be split into two parts, one immediate and the other prospective. The immediate compensation can be in the form of cash while the prospective component could be in the form of a pension entitlement from a pension fund which is invested in shares. A few quick points will be in order to emphasise the dangerous territory into which the speaker was treading. Land is an asset that appreciates continuously at rates that beat the rate of inflation and is perhaps only comparable with gold. The speaker’s suggestion is to compensate for a part of the acquired inflation proof asset with cash which suffers inflation because it is paper currency and this surely is an unfair exchange. The suggestion to compensate for the balance of the acquired land through periodical disbursals from a pension fund that is invested in shares that are listed in the volatile stock market will make life even more difficult than it normally is for agriculturists. Capital market is not the safest of places and had it been so then industrialists would not have bothered to invest their funds to set up production units. Rather, they would have invested in the capital market and sat back to relax and see their investments grow. That is simply not to be and now with the integration of the local capital market with the global, the local market reacts first and fast to any global economic changes or re-adjustments. Foreign Institutional Investors (FIIs) bring their money in and take their money out at a profit, at internet speeds. Only punters and speculators can ride the crest of the capital market and survive the trough. The mantra is to buy a piece of paper and sell it at a profit and not be the last person in the chain, the sucker, who is holding the paper with no one to sell to. There is no way that a participant in the agrarian economy can be suddenly forced to gate crash into this casino.

Pranab Bardhan ended his speech by emphasising that whatever be the politics, a new thinking with respect to West Bengal is essential at this critical juncture. The huge unemployment numbers in the state and the annual additions to the unemployed pool, if not absorbed into gainful employment immediately will result in social chaos and increased criminalisation of youth. This has happened in the past and none can deny that this is happening right now across the state.
27 April 2013

Frontier
Vol. 45, No. 45, May 19-25, 2013

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