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4/16/2008 4:54:49 PM
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Views expressed here are author"s own and not of this website. Full disclaimer is
at the bottom.
(The author is a Professor in International Economics in Nagasaki University, Japan)
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The dispute of the farmers, against the oppressive governments in Singur, Nandigram, Orissa, Chhattisgarh, and Andhra Pradesh in India, is not a war between industry and agriculture or between progress and conservatism but between basic human rights and a government determined to create a pure capitalistic heaven by taking over poor people"s only possession of a little land and a home without paying proper compensation. The dispute is not restricted to West Bengal. The introduction of Special Economic Zones (SEZ) would put India into flames everywhere when the poor 80 percent of the population now understand that they have no choice but to fight in order to survive against the combined might of all political parties, whether CPI (M), Congress or the BJP, who are now acting as agents of the India"s true ruling class, the captains of Indian industry. In India the land Acquisition Act of 1894, a colonial act of the British Raj to take over lands for any purposes, is now being used to take away lands from poor farmers to give these to mega rich private companies for their real estate business, which does not serve public interests.
For industrializations land is needed, however, those who are losing their land must be compensated properly. A proper compensation implies at least compensations for lost home, lost assets, lost professions and lost regular income. Thus, those who have lost home and land must receive from the government a new home or apartment, value of the land taking into account the possible appreciations over the next decade and a new job or regular monthly payments to compensate for the loss of income. In Singur the government is paying a maximum of 1.3 times the value of the land, although the price of land is becoming double in every five years or less. There is no promise of a new job or regular monthly income or a new house. There are no provisions for lost education for the children of the farmers. Thus, the declared compensations are highly inadequate. That is the source of the dispute.
There is a second argument as well from the point of view of overall economic policy. Industrialization just for the sake of it is not justified. It is essential to look at the costs and benefits of setting up an industry. In Singur for example, about 14,000 families are being evicted from about 1000 acres of land, as given in most newspapers. Out of those 12239 persons are landowners; the rests are landless tillers. If we assume only one person per family was gainfully employed in farming, the number of job losses are 14,000 minus those who are not dependent on farming for living. However, only about 4000 people, mainly from outside West Bengal, will be employed in the proposed Tata Motor Company in Singur. Even if we assume that another 2000 may be employed in motor-parts industry and the service sectors to support the industrial activity in Singur, the total number of job-losses would be huge. Thus, there is a net welfare loss in terms of net job destructions in Singur, which the government has not yet addressed. From this point of view it was better for the government to tell Tata Motor Company to go elsewhere in West Bengal, when according to the government about 14 percent of the land in West Bengal are not under cultivation. However, that option is not available for any of the state governments in India, who are now competing against each other to invite industrialists to their states.
The same argument is much more valid for the Haldia Special Economic Zones in West Bengal, which demands more than 20,000 acres of land. Already 250,000 people were evicted in Narmada Valley, thousands if not millions will be evicted in Orissa, Jharkand and Chhattisgarh or Hariyana in India to make room for the Special Economic Zones creating millions of destitute on the streets, just like in China where possibly 150 million people are now unemployed destitute. Thus, it is essential to ask whether we really need this type of economic growth and industrializations where the people would not gain much.
Industrialization in the Developed Countries in the age of Empire:
Industrialization in the developed countries in Western Europe including UK did indeed destroyed a lot of fertile lands, but at the same time they had encouraged and financed their evicted farmers to go to foreign lands, in North and South America, Oceania, and Africa to kill the local people and take over their lands. Red Indians in North and South America, Africans, aborigines in Australia, Maoris in New Zealand were systematically killed over the last 250 years to make room for thousands of evicted farmers from every Western European country. Even Japan had sent away its evicted farmers to Manchuria, Korea, Taiwan, Brazil and Peru. It is not possible for the evicted farmers from India today to go to USA, Canada, Australia and New Zealand to kill the white farmers to take over their land. Thus, this absurd logic given by some that it is natural to expect evictions form fertile land if a country wants to built industries, has no meaning. Where would the evicted farmers of India go to have any alternative employment?
Industrialization in the Developed Countries in the post Second World War Period:
However, we cannot ignore the industrialization process in the developed countries after the end of the colonial period. After the Second World War, it was no longer possible for the Western European countries or Japan to colonize foreign lands for their own people to move over. Thus, severe land use planning and regional planning were introduced in every developing country to preserve fertile lands and areas of natural beauty and induce industries to move to the areas of high unemployment and infertile areas, so that valuable lands can be preserved for agriculture. At the same time various forms of subsidies and price supports were introduced for the farmers along with total protection from foreign imports in every developing countries. Central planning for agricultural production became the norms in the European community, USA, Canada, Australia and Japan in which the government effectively protect the farmers by giving a stable price for their products, subsidize production and compensate for the loss or over production. These types of protections are now so important for the developed countries that the governments of these countries are prepared to even ruin the prospects of the World Trade Organization just to maintain the level and quality of protections for the farmers in all developed countries.
Thus, it is quite wrong to suggest that the developed countries have ignored agriculture in preference for industries. That was never the case. The declining number of people engaged in agriculture was due to a combination of factors. Industrialization process, emigrations to the former colonies, consolidation of land holding sometime in a very brutal way as observed in USA during the 1930"s depression years, and mechanization of agriculture have reduced the attractions of employment as farm laborers.
Harmony between Industry and agriculture:
However, agriculture is still very important for Europe, where it is a way of life for many people. The prosperity of agriculture in the developed countries since 1950s and the attractive landscapes are the results of effective agricultural land use and environmental planning. Companies are not allowed to set up industries where they like but they have to comply with the environmental regulations. Industries producing dangerous products or using hazardous process, chemical and nuclear industries are not allowed to be anywhere near major centers of population.
In the east European countries outside the former Soviet Union, who were mainly agricultural before 1950, industrialization took place in a planned way without causing any unemployment or evictions of the farmers. Collectivization and a planned economy allowed the Soviet Union to survive the barbaric war waged against it by the German Nazis. Between 1942 and 1944, 12 million hectares of newly cultivated land were sown in the eastern part of the country.
This progress properly reflected in the sustained rise in investment in agriculture. Agriculture"s share in the total investment increased from 6.5 per cent in 1924 to 18 percent in 1935. Thus, it is possible to sustain rapid industrialization along with prosperity in agriculture. There should not be any conflict between industry and agriculture in a planned economy. Both in planned economies of the Eastern Europe and mixed economies of Western Europe and Japan, agriculture and industry flourished simultaneously.
Globalization and Welfare:
Does Globalization increase welfare? The problem of the evicted farmers exists not only in West Bengal, but all over India. The cause is not the promotion of industry as opposed to agriculture but a false economic idea imported from the U.S., which disregard a planned and balanced economic development but promotes a capitalistic development of the reformed economy that automatically invites evictions and exploitations of the poor. China is the best example of the success story of Globalization, but what kind of welfare the Chine people are enjoying now!
The so-called experts say India needs to get rid of its prohibitive labour policies, which are designed to protect the weakest members of the society against unrestricted exploitations by the private-sector employers. Special Economic Zones where Indian labour laws and tax laws are not applicable is the answer, according to these proponents of "economic reforms".
There are many restrictions on foreign investors in China. They must have a Chinese partner company; they have to export a substantial part of their production; they cannot raise finance from China; they in many cases have to supply defense-technology to China in return for permission to invest in China. Still the foreign companies are going to China as they can exploit the Chinese workers as they please. Chinese workers have no trade union rights or any basic human rights. Workers who have tried to form independent unions or lead labor protests have been imprisoned for many years, and were severely punished or killed . Thus, China is a fascist capitalist country with its economy driven by the foreign capitalists with an insignificant (less than 2 percent) private sector of its own.
Exploitations of the workers are the basic elements of Chinese economic policy. As a result, increased foreign investments do not add to the social welfare of the people of China, but to the economic welfare of a small minority of people in China who are connected to the government, army and above all the Chinese Communist Party. China is using the state power to suck the blood of the workers to enhance its attractiveness for the foreign investors. Should the people of India emulate China to increase economic growth, which would not benefit the people at large, but a small elite of India? This is the fundamental question.
The exit policy, the right of the employers to retrench at will, is the so-called "flexible labour market policy", because of which multinational companies are investing in the special economic zones of China and other emerging market economies. This is the corner stone of Globalization The flexible labour market includes some other characteristics as well: temporary job contracts instead of permanent job, outsourcing of most of the activities, contract labourers, hiring of home based workers and so on. The idea is to save money by not paying pensions, medical benefits, leave entitlements, and complete freedom of the employers not to take any responsibility for the workers. Employers also do not need to have office facilities or factory premises if they can contract out most of the activities. As the employees do not know each other and suffer from the chronic fear of being unemployment, organized trade union activities cannot take place. The employers are at the mercy of the employers and the market forces. China, since it has started her economic reform to transform itself into a pure capitalistic economy, has a flexible labour market with flexibility organized and implemented by her ruthless state machine. India wants to emulate that in the special economic zones in its drive towards Globalization.
Foreign investments are neither necessary nor sufficient for economic development. Both
Japan and the Soviet Union have achieved spectacular economic development with very little or no foreign investment. Indonesia and Thailand have received massive amounts of foreign investment but they are still very poor.
Privatization and downsizing may not lead to economic revival but the result can be just the opposite. China by exploiting the workers and driving out peasants from their home have gathered massive amounts of foreign currency to be used by a minority while the majority of the people are still very poor. In China, high economic growth has not touched the majority of the people who are losing whatever economic security they earlier had.
In India situation will be the same with the recent drive for more economic reforms through the creation of Special Economic Zones (SEZ) by evicting farmers, when the majority has not benefited from the "economic reforms" during the last fifteen years. This policy will create mass unemployment in a country where employment opportunities are scarce. A country cannot be considered a great economic power if the people are unemployed and destitute and children are without education.
In India, after independence there was no land reforms except in recent years in West Bengal, Kerala and Tripura. However, these land reforms are flawed as it has created thousands of very poor marginal peasants who are now unable to maintain their land holdings due to their debt obligations. The number of landless agricultural labourers are rising in India on a massive scale. About 70 percent of the population of India are poor, by the accetable international criteria, of having less than $2 a day. Most of the poor in India are in the rural economy or they live as destitutes in the urban areas.
The only way to solve their problem is not to create small private land holdings but collectivization of agriculture through the creation of co-operative farming with state supporting every aspects of the life of the people in the rural areas. Rural poverty was abolished in the Soviet Union within two decades by 1940 because of the socialization of agriculture. Rural agro-industries and other small scale industries can be developed, employing significant number of rural population within these collective cooperative agricultural enterprises turning villages into self-sufficient economic units. In this way industrialisation can proceed without causing any hardships for the farmers.
Co-operative farms do not imply confiscation of lands by the government. It may allow the farmers, without any loss of entitlement, to have equities on the collective farms, in return for their ownership, which they can sell in the stock market at any future dates. Rich farms should pay trunover taxes to subsidise the poorer farms so as to have a more equitable standard of living for the farmers and to provide a very valuable source of revenue for the government by having agricultural income tax in an indirect way to finance rural development.
For large-scale industries, both private and public, very strict environmental and land-use planning regimes are needed so that fertile land cannot be destroyed or hazardrous industries cannot pollute the environment, atmosphere, land and water system. The government should set up a land-use planning agency to identify areas unsuitable for agriculture, pay proper compensation and arrange rehabilitation for the existing farmers before industries would be allowed there. At the same time the government should try to expand the areas of land suitable for farming by extending irrigation system and by creating embankments for all major rivers to stop erosion of agricultural land.
Due to the lack of proper environmental and land-use control, Indian landscape looks very unattractive compare to the landscape in Europe, North America, Japan and Australia. Esthetic and economic considerations go hand in hand. Destruction of environment and agriculture bring ruinification of both natural beauty and environmental quality leading to very unattractive and infertile land. Indian policy makers should take into account of the quality of life in their calculations of economic benefit to create an overall gross domestic happiness rather than having just higher gross domestic product in a scorched land with disposed farmers and destitute labourers as is the case in most parts of China.
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