Economic Liberalization and Rural Land and Labour Markets in India: A Study

The paper examines the rural land and labour markets in the context of economic liberalization in India. Land and labour are the two fundamental resources available to the rural people for income generation. The access to land and to employment for labour become basic determinants of well-being for the rural households. Reforms are often seen as hostile to rural areas and the poor, although they should be beneficial not only for overall growth, but also rural growth and poverty alleviation. The study based on primary household data examines the land and labour markets in the reform period and the underlying linkages of these to different characteristics of the household. The study finds that over the reform period in India the land markets are leading to less landlessness rather than more, and growth in marginal and medium farm sizes rather than large. Lease markets are leading to operated land in more hands. Land purchase behaviour is related to less land, more education, greater crop diversification, and higher crop and livestock revenues. Leasing-in is also related to many of the same variables and is showing great diversity in lease agreements involving outputs, inputs and rent. Labour-employment is showing diversity of occupations but the primary dependence on agriculture is still about 80 percent. There has been some change in the occupational structure. Nonfarm employment is associated with higher overall employment. Own-farm employment is strongly related to crop diversification and livestock activity; other farm employment to number of male and female family members and irrigation; and non-farm employment to education. Broadly, liberalization does not show adverse consequences but rather some positive impact on rural land and labour markets.Reform, Land, Labour, Development, Poverty, Labor and Human Capital, Land Economics/Use,

A Conceptual Framework for Studying Institutions in Watershed Development

Improving productivity and incomes in rainfed areas is a major challenge in India, and a key to achieving this is improving the use of land and water which are the principal constraints in these areas. A major initiative through which this is pursued in India is Watershed Development (WSD) programs which have been taken up under different schemes funded by the Government of India and the state governments. Since poverty is particularly acute in the rainfed areas, large expenditures to the tune of about US$ 500 million per year are being made on WSD programs. A hierarchy of complex institutional arrangements of the government and other bodies undertakes the planning and implementation of WSD to the district and village levels. Institutional weaknesses are a significant challenge and often lead to poor implementation and results. The paper develops a conceptual framework for the study of institutional setups in the implementation of watershed development programmes. It uses the theoretical fundamentals of new institutional economics, and concepts of organizational design and governance from management sciences. It related these to observations from six in-depth case studies of watershed development projects in state of Andhra Pradesh, India which has the largest number of such projects. The framework that emerges may be useful for examining the institutional setups and performance of watershed development activities in various areas, as well as the better design of the institutional setups for watershed and other development programmes in India and elsewhere.

DEVELOPMENT AND POVERTY REDUCTION: DO INSTITUTIONS MATTER? A STUDY ON THE IMPACT OF LOCAL INSTITUTIONS IN RURAL INDIA

The paper examines the impact of local institutions on development and poverty in the rural areas of India. Recent research on the role of institutions on the path of economic development indicates the importance of both "macro" and "micro" institutions including local institutions. The study finds a large number of both formal and informal local institutions in the surveyed villages, and a substantial degree of interaction of the households with the institutions. These include both formal institutions such as service cooperatives and dairy cooperatives, as well as informal institutions such as savings groups, community associations and labour groups. The study finds that apart from the standard factors included such as land, capital and labour, the presence and membership in local institutions plays a significant role in explaining the variation in household incomes and gain in capital assets over time. Savings/ micro-credit groups, and dairy cooperatives are found to be particularly important. Further, membership in these institutions is not found to be related to high asset levels or high caste - it is often inversely so. This indicates a stronger developmental role. Recorded opinions of the households supports the findings on the impact and beneficial role of local institutions. The study confirms that institutions do matter, and that local institutions can and do make a significant contribution in helping development in the rural areas, especially so for the lower income groups.Institutions, development, poverty reduction, International Development,

Development and Poverty Reduction: Do Institutions Matter? A Study on the Impact of Local Institutions in Rural India

The paper examines the impact of local institutions on development and poverty in the rural areas of India. Recent research on the role of institutions on the path of economic development indicates the importance of both “macro” and “micro” institutions including local institutions. The study finds a large number of both formal and informal local institutions in the surveyed villages, and a substantial degree of interaction of the households with the institutions. These include both formal institutions such as service cooperatives and dairy cooperatives, as well as informal institutions such as savings groups, community associations and labour groups. The study finds that apart from the standard factors included such as land, capital and labour, the presence and membership in local institutions plays a significant role in explaining the variation in household incomes and gain in capital assets over time. Savings/ micro-credit groups, and dairy cooperatives are found to be particularly important. Further, membership in these institutions is not found to be related to high asset levels or high caste – it is often inversely so. This indicates a stronger developmental role. Recorded opinions of the households supports the findings on the impact and beneficial role of local institutions. The study confirms that institutions do matter, and that local institutions can and do make a significant contribution in helping development in the rural areas, especially so for the lower income groups.

Institutional Innovations and Models in the Development of Agro-Food Industries in India: Strengths, Weaknesses and Lessons

Agro-industries are given high priority in India particularly because of their great potential for contributing to development. The emphasis on village-based agro-industries was introduced almost a century ago in India by Mahatma Gandhi as an important ideology and corner-stone of the independence movement. The approach has undergone substantial transformation since then, but major challenges to its success in development remain: how to organize sustained production and procurement from large numbers of small farmers, how to ensure adoption of the right technology and practices to generate quantity and quality output at a reasonable cost, how to obtain capital for ensuring good processing technology and meeting the high working capital requirements in a fluctuating business, how to deliver strong marketing efforts to compete and open nascent markets, and how to ensure effective ownership, management and control to ensure performance for its main stakeholders of producers, consumers and investors. To address these challenges, effective institutional frameworks are a must, and a number of innovations and institutional models have emerged in India. These include the HPMC model, the AMUL model, the Pepsi model, the E-choupal model, the Nestle model, the Heritage model, the Suguna model, the Reliance model and more. The paper uses available literature and data to examine the performance of several of these models with respect to the above mentioned challenges. Many findings and lessons emerge which would be useful for business and for guiding supportive policies and practices in developing countries.

Wheat Marketing and its Efficiency in India

The study examines the marketing of wheat in India, focusing on the private marketing system, the marketing efficiency and quality. Wheat is now a major food staple in India, crucial to India’s food economy and security. With production reaching 70 to 75 million tons and a large demand, India’s wheat economy is the second largest in the world. The efficiency of marketing is crucial to farmer incomes, consumer welfare, as well as government budgets and the economy. Substantial changes are taking place in the marketing of wheat. The study finds that the farmers now almost invariably sell in the nearby primary markets rather than to village traders. The farmer choice of varieties is now becoming market oriented with quality and market acceptance becoming as important as yield. The typically market intermediary provides hardly any special, value adding or developmental services in return for the commissions and margins. The farmers see considerable scope for improvement in the marketing system. The consumer demand for wheat varies considerably across the country. But wheat has made inroads into food consumption in the east and the south. The retailers are increasingly conscious of consumer demand and quality, and keep a varietiy of wheat and wheat products. Direct buying of wheat grain, storing, and own recourse to processing are common in the north and the west, whereas direct purchase of wheat products such as flour is the norm in the east and the south. The trend is towards direct purchase of processed wheat products, and within this from loose to packaged branded wheat products. The estimated average total marketing cost of wheat is found to be of the order of Rs. 266 per quintal, and in this transport has the largest share of 40 percent, commission and taxes make up 25 percent, and wastage another 15 percent. When compared to the consumer-farmer price spread, the marketing costs account for 74 percent of the spread, leaving 26 percent for margins – this is fairly efficient but there is significant scope for improvement. On an average, the farmers receive 66 percent of what the consumer pays. The government channel marketing cost is reported to be Rs. 309 per quintal, but this does not cover the whole chain and is not strictly comparable. Examination of the question of market integration for wheat is difficult due to data and quality difference problems. Co-integration analysis using monthly price data for eight markets for the period April 1997 to June 2004 indicates that nationally the markets are integrated but the LOP (Law of One Price) does not hold, and the presence of six common stochastic trends implies the absence of full pair-wise co-integration.

The subarcsecond mid-infrared view of local active galactic nuclei: III. Polar dust emission

Recent mid-infrared (MIR) interferometric observations showed in few active galactic nuclei (AGN) that the bulk of the infrared emission originates from the polar region above the putative torus, where only little dust should be present. Here, we investigate whether such strong polar dust emission is common in AGN. Out of 149 Seyferts in the MIR atlas of local AGN (Asmus et al.), 21 show extended MIR emission on single dish images. In 18 objects, the extended MIR emission aligns with the system axis position angle, established by [OIII], radio, polarisation and maser based position angle measurements. The relative amount of resolved MIR emission is at least 40 per cent and scales with the [OIV] fluxes implying a strong connection between the extended continuum and [OIV] emitters. These results together with the radio-quiet nature of the Seyferts support the scenario that the bulk of MIR emission is emitted by dust in the polar region and not by the torus, which would demand a new paradigm for the infrared emission structure in AGN. The current low detection rate of polar dust in the AGN of the MIR atlas is explained by the lack of sufficient high quality MIR data and the requirement for the orientation, NLR strength and distance of the AGN. The James-Webb Space Telescope will enable much deeper nuclear MIR studies with comparable angular resolution, allowing us to resolve the polar emission and surroundings in most of the nearby AGN.Comment: Accepted for publication in ApJ on Mar 08 (submitted Dec 22

Marketing of Fruits and Vegetables in India: A Study Covering the Ahmedabad, Chennai and Kolkata Markets

There has been concern in recent years regarding the efficiency of marketing of fruits and vegetables, and that this is leading to high and fluctuating consumer prices and only a small share of the consumer rupee reaching the farmers. Marketing of horticultural crops is complex especially because of perishability, seasonality and bulkiness. The study seeks to examine different aspects of their marketing, focusing particularly, on the wholesale markets for fruits and vegetables which have been established to overcome deficiencies and improve the marketing efficiency. Results indicate that in Ahmedabad the direct contact between commission agents and farmers is very low. For vegetables this is 50 percent and for fruits only 31 percent. Further, in the system of transaction, secret bidding and simple transaction dominate and open auction is relatively rare. In KFWVM, Chennai, the wholesalers act as commission agents and receive consignments directly from producing centers through agents or producers. By and large the system of transaction remains traditional and open auction is rarely seen. This is one major reason for poor efficiency. However, in the small AUS market in Chennai, the farmers sell directly to consumers. The share of farmers in the consumer rupee in Ahmedabad was 41.1 to 69.3 percent for vegetables and 25.5 to 53.2 percent for fruits. In Chennai KFWVM, the farmers share was 40.4 to 61.4 percent for vegetables and, 40.7 to 67.6 percent for fruits. In the small AUS market in Chennai, where the farmers sell directly to the consumers, the share of farmers was as high as 85 to 95.4 percent for vegetables. This indicates that if there are few or no middlemen, the farmers’ share could be much higher. In the Kolkata market the share of farmers ranged from 45.9 to 60.94 percent for vegetables and 55.8 to 82.3 percent for fruits. Thus, the shares are frequently very low, but somewhat better in Chennai, lower in Kolkata and even lower in Ahmedabad. The margin as a percentage of farmer-consumer price difference (an efficiency measure) shows that in Ahmedabad, the margins are very high and range from 69 to 94 percent. In Chennai they range from 15 to 69 percent, and in Kolkata they range from 46 to 73 percent. The high percentage of margin to farmer-consumer price difference is indicative of large inefficiencies and relatively poor marketing efficiency. There is great need to improve the marketing of fruits and vegetables. One important measure would be to bring more markets under regulation and supervision of a well-represented market committee. Another measure would be the promotion and perhaps enforcement of open auctions in the markets. Yet another measure could be efforts to bring more buyers and sellers into the markets, bringing them closer to perfect markets. The direct participation of farmers should be increased. Market infrastructure should be improved through storage (go-down) facilities, cold storages, loading and weighing facilities. Improvement in the road network, and cold-chain facilities are also of substantial importance. Greater transparency of the operations through supervision and systems can also help substantially. The market integration and efficiency can also be improved by making up-to-date market information available to all participants through various means, including a good market information systems, internet and good telecommunications facilities at the markets.

Fruit and Vegetable Marketing and its Efficiency in India: A Study of Wholesale Markets in the Ahmedabad

There has been great concern in recent years regarding the efficiency of marketing of fruits and vegetables in India. It is believed that poor efficiency in the marketing channels and poor marketing infrastructure leading to high and fluctuating consumer prices and only a small portion of the consumer rupee reaching the producer farmers. This paper examines these aspects in regulated wholesale markets for fruits and vegetables in Ahmedabad City area. These regulated markets were established to improve the marketing efficiency. The system of sale followed in these markets indicated that open auction as a system of sale is yet to take roots in these markets and the marketing system was dominated by open auction or secret bidding resulting to significant erosion of marketing efficiency. Analysis of marketing costs indicated that on an average they hover around 8 percent of the consumer price for vegetables 11 to 15 percent for fruits. On an average the share of farmers in consumer rupee was hardly 48 percent for vegetables and 37 percent for fruits. The study suggests that regulated wholesale markets can help in improving the marketing efficiency by promoting direct contact with the farmers, increasing the number of buyers and sellers in the market, promoting open auction system of marketing and strengthening or introducing facilities and services such as go-down, cold storage, transparency and access to internal and external market environment.

Groundwater Irrigation in India: Gains, Costs and Risks

Groundwater has rapidly emerged to occupy a dominant place in India.'s agriculture and food security in the recent years. It has become the main source of growth in irrigated area over the past 3 decades, and it now accounts for over 60 percent of the irrigated area in the country. It is estimated that now over 70 percent of India.'s food grain production comes from irrigated agriculture, in which groundwater plays a major role. Since the development of groundwater irrigation has not largely been government or policy driven . has happened gradually through highly decentralized private activity, this revolution has often gone largely unrecognized. However, despite this huge significance, groundwater irrigation is heading for a crisis in India and needs urgent understanding and attention. The number of irrigation blocks considered overexploited is increasing at an alarming rate of 5.5 percent per year. The number of blocks in which, officially, the creation of wells must completely stop is scaling new heights every year. Yet, the sinking of wells continues rapidly at enormous private, public and environmental cost. The way India will manage its groundwater resource in the future will clearly have very serious implications for the future growth and development of the agriculture sector in India, as well as the alleviation of poverty in India.