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Impact of Technology Development on Indian Agriculture in 5 10 Years by zgx10972


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									 WTO & Agriculture Labour Paper for JSK

                        INDIAN AGRICULTURE
        (A CED Documentation -compiled for Jan Sangati Kendra by Veena, Nalini, Ajith and John)

Table of contents

1. Development of Indian Agriculture

2. Indian Agricultural Policy & The WTO Regime

3. The Political Economy of Agricultural Modernisation & Liberalisation

4. Agriculture Labour - Situation in India

5. State of Organisation of Agricultural Labour in India

Post independence, population was growing at a much faster rate than food production. This is called for
drastic action to increase yield. The action came in the form of the Green Revolution involving expansion
of farming areas, double cropping existing farmland using irrigation and using High Yeilding Variety
(HYV) Seeds. (Why Green Revolution -by Saby Ganguly )(Enclosure 1)

The 'Green Revolution' of the 1960s was confined to the northern states of Punjab, Haryana and parts of
Uttar Pradesh, and to strategic crops, mainly wheat and rice. Over 70% of the country's farmland
remains rainfed, whilst a significant proportion of agricultural land (150 million hectares) is now
classified as 'wasteland'. (iuf)

The liberalisation of the Indian agricultural economy started in 1991. The major impact has been the shift
from "lower value" or subsistence food crops to higher value cash crops (like cotton or oilseeds) (iuf).
The percentage Share of Cropped area in wheat, condiments, fruits pulse went up while Jowar, coarse
cereals, sugarcane went down in 1997-98 compared to 1996-97 ( Table showing distribution of crops 96-
97, 97-98) (Enclosure 2) Even with a crop like Cotton, Dastakaar Andhra has shown that state policy is (1 van 15)8/15/2006 10:29:50 AM
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in fact giving higher subsidy to cotton required for the big industry, at the cost of type of cotton required
for handloom or weaver based textiles. Even with these trends, the IXth Five Year Plan essentially plans
for increasing cash crops compared to foodgrains and essential commodities. Over the next two plan ie in
the XI th Plan, the target of growth rate of the value of wheat output is likley to come down .22 %
whereas the target value of production of cash crops like Sugar cane is planned to go up. Similar is the
case of Fruits & vegetables, Tea and Coffee, Livestock, fishery. Table on Target Growth rate in Value of
Output of Agriculture). A good prospect for wheat has been attributed more to the projected decline in the
area under wheat cultivation in the United States. (More on Wheat in India) (Enclosure 3)

Also refer to Macro-economic overview of India: Agriculture (Enclosure 4)

Population & Agriculture development

"At given levels and distribution of income, population growth may act as the initial point of
departure for
(a) increased demand for agricultural products, and
(b) increased supply of agricultural labour.
This in its turn would lead to a series of changes in the agricultural scenario of the country" --
higher yield per unit if technology is land saving, whereas different relative rates of labour and
capital intensity under labour saving technologies night lead to higher labour productivity also.
Thus resulting in higher agriculutral output alongwith increased farm income.. Due to low
income elasticity of demand for foodgrains and lower value crops, rise in farm output and
income would induce demand increases at higher rates for non-grain higher value crop and non-
crop (eg dairy , meat) agricultural products.
(Sudhin Mukhopadhyay, Population Growth and Agricultural Development in India) (Enclosure 5)


The Indian seed industry is expected to grow very rapidly in the coming years. There are several grounds
for expecting that the seed industry will coalesce under the control of a few large companies with foreign
interests. Firstly hybrid seed is produced principally by large companies and its use is set to increase
following the decline of the public sector for various reasons. Secondly, smaller companies will find it
increasingly difficult to compete because the market is fickle.Moveover, the plant variety protection
regulations will scotch a market in second and subsequent generations. Thirdly, there will be increased
use of transgenic crops which are produced only by those companies which can meet the high
development costs. (Vandana Shiva & Tom Crompton, Monopoly and Monoculture : Trends in Indian
Seed Industry by Vandana Shiva. Economic and Political Weekly, September 26, 1998. ) (Enclosure 6)

In defending the Technology Protection System(TPS), seed companies underline that it costs them
between $30 and $ 100 million to develop a high-yielding genetically engineered seed variety. The
present system of seed saving, which is prevalent in most developing countries, makes it difficult for
them to gain sufficient returns on their investment. But a number of farming experts and organisations
reject this logic. Critics of terminator technology also argue that poor farmers in the tropics not only
produce 15 to 20 percent of the world's food supply , they also maintain crop varieties that are a source of
genetic diversity for the world's plant breeders and genetic engineers. (Dead-end seeds yield a harvest of (2 van 15)8/15/2006 10:29:50 AM
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revolt by Ethiranjan Anbarasan, UNESCO courier journalist) (Enclosure 7)

Biotechnology and genetic engineering in agriculture is evolving in a total regulatory vacuum. The FDA
doesnot look at the safety of Bt-crops since such crops are treated as a pesticide. The EPA which is
supposed to look at safety of pesticides treats genetically enginnered crops which produce pesticide as a
conventional crop. There is, therefore no agency guaranteeing the safety of genetically engineered crops.
It is to fill this policy vacuum for environmental safeguards that citizens worldwide are calling for a five-
year moratorium on genetic engineering in agriculture.
(Globalisation and Threat to Seed Security: Case of Transgenic Cotton Trails in India by Vandana Shiva,
Ashok Emani and Afsar H Jafri. Economic and Political Weekly, March 6-13, 1999.) (Enclosure 8)

There are pleas for rejecting biotechnology/Gm seeds on the grounds that after the first few years of good
crops, the soil would deteriorate beyond redemption and that the multinational corporations would have a
complete control over agriculture of Punjab. .. The Indian Legal Framework has to anticipate
consequences that may follow and take anticipatory steps to ensure that the small farmer and the
consumer have adequate of the law. ( Sanjiv Chopra, The Fears of Monsanto. Pioneer. 20/03/2001. [C.
K34b.20032001PIO] (Enclosure 9)


The promotion of high yielding varieties(HYV) that marked the green revolution has led to the large-
scale use of chemicals as pesticides. Increase in the use of chemicals as pesticides can result in various
health and environmental problems like pesticides poisoning of farmers and farm workers,
cardiopulmonary, neurological and skin disorders, foetal deformities, miscarriages, lowering the sperm
count of applicators, etc. (Pestcides and Health Risks by Dinabandhu Bag. Economic and Political
Weekly. September 16, 2000) [J.D73.0900EPW3381] (Enclosure 10)

The Indian pesticide industry is the fourth largest in the world. Of the total market, around 75 percent is
accounted for by insecticides. According to Mr.Pradeep Dave, President, PMFAI, and Chairman and
Managing director, Aimco Pesticides Ltd., "Pesticides consumption in India is low- less than 800gm per
acre against 16 kg per acre in the U.S. We want the government machinery to educate farmers about the
use of pesticides through scientific programmes. All over the world better crop protection is used and
here the government discourages the use of pesticides", said Mr. Dave. ( Low capacity use dogs pesticide
units by Ramnath Subbu. The Hindu. 29 July 2001. [C.:K34a.29072001H] (Enclosure 11)

Over the past decade, the high prices of HYV cotton crops encouraged tens of thousands of small and
marginals farmers in the region to shift from traditional food crops to cotton. By switching to the cotton
meant costly investments in seeds, fertilisers and pesticides which was possible for the small peasants of
Telengana only through loans typically secured with their land or the gold ornaments of their wives.
Now, in the thousands of homes, dreams lie shattered amidst the ruin of thousands of families. A pall of
despair and shocks lies over the region today, where at least 180 debt-ridden cotton farmers committed
suicide in a short spell of just 3 months, recently. ( Anita Kanekar, Pesticides kill peasants instead of
pests. TWN features. 18/05/1999.[C.K34a.180599TWN ) (Enclosure 12)

The food we eat today contains a concoction of banned and restricted chemicals like DDT, benzene (3 van 15)8/15/2006 10:29:50 AM
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hexachloride (BHC), aldrin, dieldrin, lindane and many others. And the food is their route to the human
body. Result : functional disorder and disease. It all began with the Green Revolution, which saw
indiscriminate use of chemical fertilisers and pesticides. It left behind enormous toxic loads of
contaminants in the environment, which eventually found their way into humans through the food chain.
(Rajesh Rangarajan, Tasting Toxic.New Indian Express. 25/02/2001. [C.K34a.25022001NIB]
(Enclosure 13)

India had adopted the environment-friendly integrated pest management (IPM) approach for combating
pests and diseases as a cardinal principle of its plant protection strategy way back in 1985. By adopting
the IPM technology on rice, they have not only saved on pesticides but also improved conditions for
restoring the ecological balance in this rich agricultural belt. However, in most cases, the farmers gave up
this practice and reverted to pesticide use soon after the projects under which they took to it were over.
Besides the lack of necessary follow-up action on the part of the promoters, there are other reasons as
well for the failure of interest in this technology to endure without official patronage (Going off
pesticides. Business Standard. 12/10/1999. [C.K34a.121099BS] (Enclosure 14)


Irrigation has been seen as a panacea for agricultural growth. Most projects however are notorious for not
fulfilling its planned target or cost beneficial level performance.

The Kosi canal irrigation system was under construction across village lands, and the increasing
availability of high yielding seeds offered possibilities for agricultural development. But in 1981,
we found the situation little changed. The Kosi canal system provided no irrigation water and
increased vulnerability to flood. Agricultural development was limited.
(Gerry Rodgers, A Passage to Bihar. The BIHAR TIMES ) (Enclosure 15)


The Person who discovers a gene is, in effect, conferred ownership of it a patent ! In patenting life is
owning life. The use of a biochemical is often the same as what is traditional to local communities
somewhere. If a company patents that traditional use as its own invention, is it not then plagiarism? Is the
patent office that has allowed it then not legalising robbery? (Patenting life is owning life by Dr.Tewolde
Egziabher) (Enclosure 16)

The introduction of plant variety protection imposed by Trade Related Intellectual Property Rights
(TRIPS) forces all states to conform with existing practices of granting breeders' rights ny allowing
registration of "essentially derived varieties" which could be previously commercialised by anyone. This
was earlier rejected by India. The rational were that food security is a basic need whose fulfillment should
not be governed by private commercial interests and that information in agricultural management had
always been shared freely among farmers and the farming community. The Indian Government indicated
that it wanted to devise its own legislation for the protection of plant varieties. The draft bill however
essentially maintains the same provisions on breeder rights. As far as farmers rights is concerned, the act
does no more than protect the farmers right to save, use, exchange, share or sell their farm produce of a
protected variety. It does not take into account that Indian farmers have traditionally been breeders of
new varieties from the existing traditional stock, most of whose genes are now in laboratories in the
west. Plant Variety Protection Act and TRIPS agreement by Philippe Cullet. Hindu. 5/04/2000 [C. (4 van 15)8/15/2006 10:29:50 AM
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K34b.05042000H] (Enclosure 17)

Gene Campaign has been lobbying against the government's draft of the sui generis legislation and
proposing recognition of farmers as breeders, recognition of bio-resouces as an economic resource and a
Community Gene Fund. It also calls for public ownership of a country's biological resources in order to
stop bio-piracy and establish the rights of of local communities. Gene Campaign is a national level
organisation in India . It opposes the privatisation of the world's genetic resources and is working to help
secure the rights of the custodians of these resources: tribal communities and farm men and women of the
developing countries. The biological wealth of developing nations is under attack from MNCs who are
demanding patent rights as an instrument of access and control for one of the most sought after raw
materials of the world. (Enclosure 18)


Today, about one fourth of the GDP in agriculture is accounted for by the allied sectors, in which dairy
accounts for the lion's share.


The indigenous approach to livestock is based on diversity. decentralisation, sustainability and equity.
Our cattle are not just milk machines or meat machines. They are sentient beings who serve human
communities through communities through their multidimensional role in agriculture.

On the other hand, extemally driven projects, programmes and policies emerging from industrial societies
treat cattle as one-dimensional machines which are maintained with capital intensive and environmentally
intensive inputs and which provide a single output - either milk or meat. Policies based on this approach
are characterised by monocultures, concentration and centralisation, non-sustainablity and inequality.

The new livestock policy has been framed in this paradigm of machines and monocultures. It is serious
attack on principles of diversity, decentralisation, sustainability and equity in the livestock sector. (The
new Livestock policy - A policy of ecocide of indigenous cattle breeds and A Policy of Genocide for
India's Small Farmers by Dr. Vandana Shiva.)
 (Enclosure 19)


Hitherto development of dairy has concentrated on Cooperatisation, a la AMUL, so that the milk is
produced in by small farmers, in remote areas and processed in cooperative owned plants. Factory style
operations as developed in EU countries and New Zealand, some heavily subsidised, literally squeeze the
milk out of their cows, and pose a threat as they could dump excess production at cheap rates.

The WTO provisions force liberalising trade and government policies to augment world import demand
for dairy products, commitments on market access, reduction of domestic support and subsidies on
exports for the removal of distortions in the domestic market. Consequently the pressure is on the small
farmer, particularly women. (5 van 15)8/15/2006 10:29:50 AM
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The cost of production of milk in India is close to the lowest in the world, but the prices of dairy products
are among the highest, indicating who has been licking the cream till now. To stem the international
onslaught, the industry has called for the support of financial institutions to finance intermediary
processing facilities like milking equipment, cooling equipment etc. (How the financial interventions can
reduce the impact of WTO on Indian dairy by Shiv Kumar Gupta. Financing Agriculture - April-June
2001) (Enclosure 20)


WTO has come to the rescue of the MNCs in India in the form of a triple booster dose, namely, lifting
import restrictions, reducing import tariff and imposition of Intellectual Property Rights (IPR). They can
freely import not only raw materials but also finished goods and they can prohibit their typically Indian
counterparts from reverse-engineering their new innovative products. They can now influence Indian
farmers more effectively with more products in their armory without fear of imitation.
Traditional Indian companies in this sub-sector of agricultural inputs have become a soft target for
MNCs. These homegrown companies may soon become amenable to agree to let the MNCs use their
marketing and distribution network which they painstakingly created and developed over decades.
MNCs, particularly the new entrants, will find low cost acquisition of these networks extremely useful in
facilitating their smooth entry in this vast and diverse market. ( WTO and its impact on Agri-Business
Sector by Dr.(Mrs.)Varsha Varde. Financing Agriculture - April-June 2001)
(Enclosure 21)


Shrimp cultivation is sweeping India like one of the cyclones that occasionally pummels communities
along the country's 4,030 kilometer coastline. Reminiscent of the "Green Revolution," the fertilizer- and
pesticide-intensive commercial agriculture that has transformed the Indian countryside in the past 30
years, proponents have dubbed India's explosion of export-oriented shrimp farming as the "Blue
Revolution". Aquaculture Floods Indian Villages- by Gary Cohen
(Enclosure 22)

Liberalisation of the economy, high profitability and a strong international market have all contributed to
the country's aquaculture boom. In 1994 and 1995, shrimps constituted about 70% of the seafood exports
to the United States, a trade worth US$1 billion. This development has dangerous consequences for the
environment, farming communities, and users.
(Environmental impact of shrimp culture by A Rajagopal) (Enclosure 23)

The National Fishworkers Forum has been protesting the proliferation of such farms and also heavy
trawling activity which is threatening the livelihoods of coastal peoples. ( Support Protests against
Industrial Aquaculture in India). (Enclosure 24). "The temporary ban by Supreme Court's order on
shrimp farm construction offers hope that their traditional livelihoods will be spared amid India's rush to
transform its economy into one dominated by exports and transnational corporations. For anti-
aquaculture activists, the ban buys time to strengthen the opposition movement, organize an international
consumer boycott and prepare a legal case against further conversion of farmland into shrimp farms".
Protests over aquaculture in India -by Martin Khor. (Enclosure 25) (6 van 15)8/15/2006 10:29:50 AM
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Bangalore Declaration of the Via Campesina "denounce the policies of the World Bank, the IMF and the
other international institutions which fraudulently implement so-called `rural development policies' that
are really designed to rob us of our common heritage - land, water and genetic resources. We are not
fooled by the program to privatize land and water as a way of getting investment and development. Our
experiences teach us that the privatisation of land is leading to more debt, more hunger and more injustice
for peasant families. We call for genuine and just agrarian reform.

The patenting of life forms, which gives private ownership and control over genetic resources and even
human genes, is absolutely unacceptable. We will not cede the ownership of our common heritage and
the basis of all of our lives to the transnational corporate sector. The privatisation of natural resources is
concentrating these common goods in the hands of the wealthy who use them for luxuries while basic
needs are not met." Bangalore Declaration of the Via Campesina
(Enclosure 26)


The World Trade Agreement of 1994 brought agriculture for the first time in world trade history within
its policy framework. The principles and policies of the WTO are based on Ricardo's concept of
comparative advantage. The four major elements of the World Trade Agreement in the field of agriculture

     q       Market access
     q       Domestic support
     q       Export subsidies
     q       Trade-Related Intellectual Property Rights

For India TRADE LIBERALISATION is likely to open opportunities for exports, but poses threat of

     q       stiffer competition
     q       greater uncertainties under new world order
     q       price fluctuations..

Under WTO:

     q       relaxation of quantitative restrictions
     q       non-tariff/phyto/sanitary by importing countries

will expose Indian farmers to world market prices.

 This view feels that the Indian farmer will be jolted out of their "reverie" under the shadow of the
protective cocoon
 of Government Support.

The Challenge is to (7 van 15)8/15/2006 10:29:50 AM
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     q       adjust the internal economy to external stipulations
     q       adapt according to external threats and opportunities
     q       balance the interest of farming community, consumers and effective use of untapped resources

The reforms have opened up trade in agriculture and given a boost to exports which have been growing at
20% per year
since 1991. At the same time, they have resulted in hardships for many small farmers and the urban poor.

The gainers include farmers with the capital to buy new technology and inputs and those with the ability
to switch to the
production of cash crops that enjoyed higher prices over food crops, whose production has declined. The
losers include
the small farmers and landless labourers whose incomes declined as a result of mechanization.

Reference: Review of Agricultural Progress : Trends, Developments and Outlook for Future by
Bhaskar Barua. Financing Agriculture - Inhouse Journal of Agricultural Finance Corporation Ltd. July-
Sept. 2001 & Oct.-Dec. 1999

           WTO & Globalisation : Frequently Asked Questions. Financing Agriculture - Inhouse
Journal of Agricultural Finance Corporation Ltd. April-June 2001. ( see for basic features of the WTO
Agreement on Agriculture (AoA), and explanations of concepts like Quantitative Restrictions, Sanitary
and Phytosanitary measures, Blue Box, Blue Box, Cairns Group, Dumping, Tariff, Quota etc.)

Indian Agriculture Policy Follows WTO

The 1991 Economic reforms have begun a process of change. Although the pace and impact has not been
as significant, compared to the industrial sector, there are signs of progress. Liberalizing export controls
and commodity prices has further reduced the urban bias against agriculture. The export sector has
grown rapidly as a result of these reforms. Production has shifted away from food crops to cash crops
such as fruits and vegetables which offer higher returns. Imports are being allowed in, but they have not
flooded the market because domestic prices remain lower.

 However, not everyone has benefited. Liberalization has increased the price of inputs such as fertilizers
significantly. Wages have not increased and consumption levels have fallen as a result of growing
inefficiencies in the public distribution system. Small farmers continue to be marginalized. ( Trade and
Development Centre : India Case Study - Agricultureby Sidhhartha Prakash, WTO Consultant)
(Enclosure 27)

Given the objectives of removal of the incidence of poverty and unemployment and of ensuring food and
nutritional security, attaining a high growth reate in agriculture in the Ninth Plan, the value of agricultural
output is targeted to increase at annual rate of 4.5% in the Ninth Plan. The targeted annual growth rates
in the value of agricultural output for the Tenth and Eleventh Plans are 5.3% and 5.1% respectively.
These targets have been determined keeping in mind the commodity-wise level of expected demand -
both domestic and external - and the domestic supply possibilities.

Target Growth rate in Value of Output of Agriculture During the Ninth Plan and over the Perspective (8 van 15)8/15/2006 10:29:50 AM
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Period (in Percentage)

Commodity                         IX Plan   X Plan    XI Plan
1) Agricultural Crop               3.82       4.54      4.27
a) Foodgrain                       3.05       3.57      2.73
i) Rice                            2.75       3.08      2.73
ii) Wheat                          3.75       4.31      3.64
iii) Coarse Cereal                 2.20       2.40      2.43
iv) Pulses                         3.50       4.93      5.66
b) Oilseeds                        5.25       8.85      5.16
c) Sugar Cane                      4.00       6.16      6.07
d) Fruits & Vegetables             7.00       8.01      7.89
e) Other Agricultural Products     2.64       3.08      3.04
   of which
i) Tea                             5.00       6.16      6.07
ii) Coffee                         5.00       6.16      6.07
2) Livestock                       6.59       7.68      7.36
a) Milk Group                      7.04       8.32      7.89
b) Meat & Poultry Group            7.50       8.63      8.50
c) Other Livestock Products        2.00       1.85      1.82
3) Fishery                         6.50       7.00      7.00
4) Total Agriculture               4.50       5.30      5.10

Taken "Food Requirement and Agricultural Growth" Extract from the Ninth Plan. (Enclosure 28)

Prof. M.S. Swaminathan characterised the World Trade Agreement of 1994 as "an unequal and unjust
trade bargain" for Indian agriculture. Discussing the grave implications especially for millions of small
and marginal farmers in India, he came up with the innovative and important suggestion that India should
press for a "Livelihood Box."

Several exemptions from the calculation of domestic support were provided. The two major categories
are "Green" and "Blue" Boxes. Article 6.1 of the Agreement on Agriculture lists eligible items for
inclusion under Green Box subsidies. These include policies which provide services or benefits to
agriculture or the rural community, stockholding for food security, domestic food aid, investment
subsidies and agricultural input subsidies for low income and resource poor families, which permits us to
impose quantitative restrictions on the import of agricultural commodities, where dispassionate analysis
indicates that such imports will kill livelihood opportunities for small and marginal farmers and landless
agricultural labour, as well as for those involved in small-scale agro-processing and agri-business
M S Swaminathan, For a Livelihood Box, Frontline, Volume 18 - Issue 03, Feb. 03 - 16, 2001.
(Enclosure 29) (9 van 15)8/15/2006 10:29:50 AM
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Five years after the World Trade Organisation (WTO) came into existence, the anticipated gains for
India from the trade liberalisation process in agriculture are practically zero. And yet, undaunted by the
negative fallout from the implementation of the WTO's Agreement on Agriculture, the Ministry of
Agriculture is aggressively pushing for the second phase of reforms... The entire effort of the free trade
initiative is to destroy the foundations of food self-sufficiency so assiduously built over the years. After
all, with food production increasing in the US and in the European Union, the focus is only on how to
find bigger and reliable markets for exports. In the US, for instance, food production is slated to multiply
in the years to come. And incidentally, agricultural exports are the second biggest export earner for

The Government's focus remains very clear. It has already constituted a task force, under the
chairmanship of a known votary of the free trade paradigm, Sharad Joshi, to submit a report on the
implications of WTO's Agreement on Agriculture on Indian agriculture by February next. India's march
to complete dependency on food imports, therefore, is no longer a hidden agenda.
(WTO and Indian Agriculture: The End Result is Zero by Devinder Sharma) (Enclosure 30)

Historically, Modernisation of Agriculture was to lead to changes in relations of production from a feudal
system to capitalist mode. In India, factors such as caste, colonial influence and uneven development
meant that complex relations developed. During the mode of production debate in the 60s and 70s (Get
articles) indicated the relations were characterised variously semi-feudal, semi colonial, early capitalist, to
semi colonial systems.

The new seed-fertilizer technology especially those arising from the Green Revolution has resulted in the
increase in land rents and lower labour wages( in real terms). Only the Big farmers, mainly those who are
producing for the market, could make use of Government Support. The marginal farmers have in fact
been further marginalised under the new regime of modern agriculture and green revolution. In fact most
farmer suicides ( refer to article on suicides which connect to credit. Humanscape article) have been
connected to pauperisation and indebtedness which so called government support in form of part
subsidies for seeds, credit, fertilizers have brought in.

The case for liberalisation of Agricultural Trade rests on two premises which have been contested.
a) Increased Trade means increased economic growth
b) Economic Growth promotes social well-being or vibrant civilisation.
To them, all the real politic of trade issues are challenges to be overcome by what is being called the
Emerging and Transitional Economies. Some even see it as a "comparative advantage" where opportunity
costs of production are
low. This basically means labour costs. This is because costs of inputs like seeds, fertilisers, pesticides,
transport etc, are getting globalised and thereby competitive. And Land? We are already seeing land
alienation and displacement of local populations on an unprecented scale for development projects (as in
Narmada for both power and irrigation), or for captive plantation for Industry ( as in Birla Rayon,
Karnataka), or mines contracting as in ( Samantha). All signs are that as globalisation of the agricultural (10 van 15)8/15/2006 10:29:50 AM
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sector progresses, land besides becoming alienated from local populations will be tradable. And once
alienated, valued only in exchange rather than use terms! Thus the true meaning of Emerging and
Transitional Economies is the transformation of a a by and large self-sufficient, labour intensive
agriculture to one which is dependent on its trade value in the market!

Given population changes, and pressure on land, demand for and supply of labour shifts simultaneously.
In many LDCs the shift in supply of labour has outpaced shift in demand caused by (slow) technological
progress. What is needed is for demand for labour (caused by more intense modern agriculture) to exceed
growth in labour supply. Therefore the importance of rapid diffusion of appropriate technology to offset
the effect of growing population and labour force, and ultimately for non-agricultural sectors to develop
in tandem.

Hayami & Ruttan, Does Productivity Growth in Agriculture Make the Rich Richer and the Poor poorer?
Chapter 11: Impacts of Increasing Agricultural Productivity on Equity: The Case of the Green
(Enclosure 31)

In India an unexpected supporter of reforms, came from Shetkari Sangathana, led by Shard Joshi. The
view was put forward by Gail Omvedt, that liberalisation would free the farmers of internal (government
& vested interest) controls, under which they have been suffering and not getting fair returns. She argues
that the new social movements like the environmental movement, the women's movement and dalit and
civil society organisations are voicing a new critque of the State and articulating new models of
development. These movements are not organised around class but around overlapping communities.
Despite robust critique of Omvedt's position (SAPs, Dust, and Hot Air: Gail Omvedt and Liberalization
by Balmurli Natrajan, Ciarán ó Faoláin, and Kavita Philip), (Enclosure 32) her plea for abandoning the
traditional owner-worker contradiction based politics, and moving to the urban-rural contradiction, needs
to be taken into account.

As the mainstream economy is firmly entrenched, and is consolidating globally, it is making deep inroads
into the periphery, and acting as a predator on the periphery. Tribals and farmers are being displaced
from their lands to development and infrastructure projects, fishermen are loosing their livelihood,
artisans are being marginalised. Most civil society organisations especially NGOs has in response
retreated to promoting the traditional and going back to earlier system. Omvedt's plea seem to ask for
modernisation within the decentralised production and consumption paradigm. Such a modernisation has
been denied to the periphery as the State in the name of subsidies has paid for development of
infrastructure, technology and production support. The New liberalised regime, hopefully will give a
level playing field to the periphery to develop.

The continued use of export subsidies and other forms of domestic support for big agribusiness in the US
and the EU allows massive dumping of underpriced agri-food products in developing countries. At the
same time access to markets in the South is secured through the Structural Adjustment Programs (SAPs)
imposed by the IMF and World Bank which have forced small farmers and peasants away from food self-
sufficiency and sustainable agriculture.

More than anything else this reveals the logic of agricultural restructuring under the WTO. The
systematic destruction of local capacity for food self-sufficiency and sustainable agriculture through the (11 van 15)8/15/2006 10:29:50 AM
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consolidation of the power of agri-food TNCs. The conversion of land use to non-traditional agri-exports
creates a paradoxical situation of increased dependency on TNCs for access to markets and distribution,
and inputs - including seed - while importing heavily subsidised agricultural products that are the same as
the traditional crops originally displaced. ( The WTO, the World Food System, and the Politics of
Harmonised Destruction by Gerard Greenfield, Education Programme Organiser (Indonesia), IUF-A/P)
(Enclosure 33)


Agricultural labour households (ALH) are defined according to Rural Labour Enquiries as those that
derive over 50 percent of their total household income from wage paid manual labour in agricultural
activities. Overall, there was a significant increase in the proportion of such households over the two
decades "73-74 to '93-94 in the 11 major states.

Less than half the rural labour households have land, and of those who do, only 13 percent own above
one hectare. In states like punjab and Haryana where the green revolution has taken place and the areas
most likely to go global, the proportion of rural labour owning land is as low as 6 and 12 percent
respectively, as compared to so called backwards states of Madhya Pradesh, Orissa, Rajasthan and UP,
where over 50% own land.( Sowmya Sivakumar, Proportion of agricultural labour households on the rise.
Economic Times. 8/9/01 [C.H10.08092001ET] (Enclosure 34). This clearly shows that modernisation
has resulted in alienation of land from the marginal rural labour households.

Consider the experience of West Bengal: The state's remarkable rise in agricultural production is a
common knowledge: total foodgrains production has increased steadily since the beginning of the eighties
and has continued to do so in the nineties as well. But despite such bountiful agricultural production, the
agricultural labourers in the state are fighting a grim battle for survival where wages are concerned. The
Left Front claims this achievement in agriculture as the result of successful implementation of the land
reform policy. Land reform might have acted as the catalyst for higher agricultural production, but it has
not succeeded in changing the distribution pattern of such gains in favour of the rural poor. There has
surely been improvement in economic conditions of those who were fortunate enough to share the vested
land distributed in the countryside and also those who were registered as bargadars. But then not every
one was equally fortunate -- there were many more who did not share the benefits of land reforms
directly. There economic conditions have, in fact, worsened further or stagnated at best, with ever rising
cereal prices. Tushar Mahanti, Agricultural prosperity doesn't really reflect on labourers' life.
Economic Times. 19/6/2000. [C.H10.19062000ET]
(Enclosure 35)

The average daily real wage for the State has increased by a marginal 6.5 % from Rs 13.78 in 1986-87 to
14.67 in 1991-92 - an increase of 89 paise over five years, not proportional to increased agricultural
prosperity. Non Agricultural rural employment increase by 63 per cent from 22.42 lakhs in 1980 to 36.47
lakh in 1991. Share of agricultural labourers in the total main workers in the State has declined from 25.2
percent in 1981 to 24.5 percent in 1991. Tushar Mahanti, Bengal farm labour gains little. Economic
Times. 29/07/2001 [C.H10.29072001ET] (Enclosure 36) (12 van 15)8/15/2006 10:29:50 AM
 WTO & Agriculture Labour Paper for JSK


The unorganized sector is made up of jobs in fields in which the Minimum Wage Act is either not
enforced at all or only marginally. There are no unions in the unorganized sector and therefore no
collective bargaining.

1973                                 217.48
1978                                 249.46
1983                                 278.69
1988                                 296.29
1991                                 315.17
1994                                 344.72
Source: MANPOWER PROFILES /IAMRI (Enclosure 37)

Ajith K. Ghosh's point to the slow growth of employment opportunities for the rural workforce (NSS
survey). Further the transfer of surplus labourers from the agricultural sector is so small that agriculture
remained the principal reservoir of surplus labour. (for Legislation, Policy, Schemes and Status of
Agricultural Labour, New Agriculture Policy favouring exports coming in and its effect on Labour and
employment see: M V Srinivasan, Neglect of the Agricultural Workforce)
(Enclosure 38)

Today, to what extent do labour legislation protect the Indian agricultural labourers? Despite as
many as 12 legislation and 14 welfare schemes operating in the country (see box 1), the plight
of agricultural labourers is pitiful. The legislation, unless strongly backed by workers
organisations on issue basis, is never enforced. In fact, Union Ministry of Labour while
analysing the effectiveness of existing Acts and welfare schemes in its Annual Report for the
year 1999-2000 pointed out that the existing Acts and welfare schemes have not adequately
protected the interest of agricultural workers. The ministry has envisaged alternative strategies
such as creating ?Welfare Fund' by enacting yet another ?comprehensive' legislation for
agricultural workers. Sadly, the preparation is continuing but it is never tabled in Parliament. An
Agricultural Workers Bill was prepared in 1997 but kept in the files. The workers went on dharna
in 1998 to pressurise the government to table the Bill. The then Cabinet Committee just passed
the bill and nothing has happened since then. In 1999 another modified version of the bill was
prepared and the story of negligence continues.

The basic framework of wage policy, developed in India, can be described as follows. The government
sought to set a floor to the price of labour in the entire economy by statutorily fixing minimum wages for
workers in the unorganized sectors. Subject to this floor, wage determination in unorganized sectors was
left to market forces.

Statutory minimum wages have been largely ineffective in influencing wages in unorganized sectors.
Irregular revisions, lack of proper indexation and weak enforcement rendered statutory minimum wages (13 van 15)8/15/2006 10:29:50 AM
 WTO & Agriculture Labour Paper for JSK

virtually irrelevant in practice. Besides, there was no well-defined basis for fixing minimum wages.
Objectives such as prevention of exploitation are much too vague to be useful. It is not surprising that
minimum wages varied widely across occupations in a state and across states for a given occupation.
When norms vary so much, they cease to be norms. From Report of South Asia Multidisplinary Advisory
Team (SAAT) of ILO, NEW DELHI (Enclosure 39)


There are only a few rural/agricultural worker's unions. Where they do exist, their party political priorities
either limit their capacity to organise democratically at the grassroots level or reduce their will to
cooperate beyond their own immediate area or national trade union centre. Due to the poor quality of
organisation, national legislation for agricultural workers is weak or non-existent, minimum wages exist
but are not enforced. ( South Asian Research & Development Initiative (SARDI) Report-June 2001)
(Enclosure 37)

One of the Land and Freedom Report by IUF says that the traditional forms of trade union organisation
developed in the formal sector simply do not work amongst workers who have no stable relationship with
an employer. Thus, national      legislation for agricultural workers is weak or non-existent, minimum
wages exist but are not enforced, and wages remain well below the secondary or tertiary sectors. Land
and Freedom Report - IUF(Enclosure 40)

Implication on the labour Movement :
firstly, that petty producers (non-wage earners) account for nearly 40% of the productive population;
secondly, of all wage workers the industrial proletariat accounts for less than 11%. This in effect implies
that capitalist development is yet to displace precapitalist forms of production and that socialization of
production that forms the basis for socialist revolution is still a distant goal.

The significance of the numerical preponderance of the non-industrial proletariat needs to be seriously
considered. It is
obvious that there is a great responsibility on the workers of the more concentrated sectors to organise
themselves and
provide leadership to the large majority of unorganized workers. They also have the responsibility of
taking up the causes
of the marginal farmers and tribal people and winning them over to the cause of socialist transformation.
It also indicates
the low degree of socialization of production whose implications for the political programme of the
working class need
special consideration. Labour Movement in India as Reflected in the Indian Labour Year Book 1997 by
C.N. Subramanian (Enclosure 41)

Farmers are being encouraged to produce paddy and maize to cater to the needs of the growing middle
class, at the expense of basic food crops. As a result, the production of staple crops has declined and
prices have gone up. While incomes have declined, costs have risen for agricultural labourers.

Another consequence of liberalization, is that the margins of profits are going to markets, instead of the
farmers, who are being marginalized. Those who want to compete are being forced to use more fertilizers (14 van 15)8/15/2006 10:29:50 AM
 WTO & Agriculture Labour Paper for JSK

to boost production, but this is causing soil erosion and salinization. ( Agricultural workers
representative : ?We continue to be marginalized?
Mr. Chennaiya, Secretary, Andhra Pradesh Agricultural Labourers Federation (Enclosure 42)

The proposed Agricultural Workers Bill :

The half hearted effort, initiated by the Union Labour Ministry, and possibly out of electoral
compulsions, presses for the creation os a Rs. 10,000 crore welfare fund for agricultural workers, to be
financed through levies on agricultural products and processing of agro-food. The Bill also provides for
fixing of working hours, rest period, overtime harvesting wages, and mechanisms for resolving disputes
and registration of workers. Women workers are to be barred from working after sunset. The welfare
fund is expected to be used as contingency fund, to provide minimal assistance in cases of death or injury,
medical aid, old age pension, maternity benefits, aid for housing and education, and premium payment for
group insurance. But plantations are expected to be excluded from its purview.

Land owners will continue to have virtually no obligations to workers. States of Kerala and Tripura have
enacted laws for protecting agricultural workers long ago, in the form of the Agricultural Workers Act
1974 and Agricultural Workers Act 1986 respectively. ( Long Overdue Legislation by Anuradha Dutt.
The Pioneer, New Delhi, 29/01/2000. [C.H10.29102000PIO]) (Enclosure 43)

Communities everywhere have developed knowledge and found ways for deriving livelihoods from the
bounties of nature's diversity. This diversity provides us with the thousands of plants and animals needed
for food, medicine and shelter. ( Seed - The Symbol of Farmers' Rights by Navdanya.[R.K34b.605]

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