Neoliberal Capitalist Globalisation has fundamentally altered Agrarian relations

An Essay on “Washington Consensus um thekkele narayanettante paadathe nellum” written last year.

The story of Thachanakkara, a not-so-fictitious land in central Kerala from the 1910s to 2058, is explained in the Malayalam Kendra, Kerala Sahithya Academy-winning novel, “Manushyanoru Amukham” (A Preface to Human), written by Subhash Chandran. The story is centered on the Ayyattumpilli, a higher caste, powerful Janmi family, and depicts a miniature of 20th-century Kerala through an intricate, vivid commentary.

Through the three-generation-long history of Ayyattumpilli, the author depicts the social and political events and the changes they caused in Thachanakkara and Kerala. The story begins with Nara Pilla, a feudal lord, and an arrogant being owning much of the land in the area. He is revered due to his money, caste, and powerful position he owns in society. His main source of revenue is agriculture, and he gives regular employment to at least a hundred people. His kids grow up with fewer benefits of power, money, and upper caste, and in their youth, witness the fragmentation of land due to inheritance as well as the Kerala Agrarian Relations Bill of 1957.

Agriculture no longer remains a lucrative business for the Ayyattumpilly family, and all the members diversify their income sources. Some of them turned to factory jobs, whereas the educated ones took up teaching. The women did not go to school, and all became homemakers, some rearing cows.

The third generation of Ayyattumpilly grows up with no taste of abundance and superior nature in money, land, caste, let alone power. But they see the use of electricity, radios, and later televisions. They grew up in contemporary Kerala, buying all the agricultural products that were once produced by their family two generations before. The village turned into a town, and its houses gave way to huge and tall buildings.

The story ends with Jithan, a highly educated youth who gets employed in a toy factory making monkeys playing symbols (quite metaphorically), and later leads his life mechanically in a ‘concrete jungle’ with his nuclear family, deprived of the natural beauty of the land he grew up in. His life ends with the unfulfilled quest for a purpose in life. “Man is the only creature that perishes before attaining full growth!” he remarks, showing the distressing life inflicts on the people of the 21st century.

In light of this story that traverses pre- and post-neoliberal capitalist globalization, let us define these basic terms.

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, a price system, private property, recognition of property rights, voluntary exchange, and wage labor. Neoliberal globalization is a term used to describe the worldwide spread of an economic model emphasizing “free markets” and “free trade.” Decreased governmental regulation, privatization of government-owned enterprises, reduced government spending, and the lowering of barriers to international trade and investment play central roles in the neoliberal approach. The stated goal of these policies is to maximize economic efficiency and economic growth.

The neoliberal theory claims that a largely unregulated capitalist system (a free market economy) not only embodies the ideal of free individual choice but also achieves optimum economic performance with respect to efficiency, economic growth, technical progress, and distributional justice. The state is assigned a very limited economic role: defining property rights, enforcing contracts, and regulating the money supply. State intervention to correct market failures is viewed with suspicion, on the grounds that such intervention is likely to create more problems than it solves (Kotz, 2002).

India, through its 1990 reforms, opened up its economy, and a new model of economic reform commonly known as the LPG or Liberalization, Privatization, and Globalization model came into being. It brought drastic changes in all economic spheres, including agriculture. India, being an agriculture-dominant, caste-based diverse society, provides a wider canvas for analysis. The main focus of this essay is to analyze the fundamental changes brought in by Neoliberal, Capitalist Globalization.

Agrarian relations refer to all activities related to agriculture ranging from production and marketing to consumption. It focuses on how and by whom the land is being cultivated, what kind of crops can be produced, and for what purposes. It deals with how food and agricultural incomes can be distributed, and in what way the agrarian sector is linked to the rest of the economy. As VK Ramunajan notes in his paper “The State of Agrarian Relations in India Today” (2011), the term ‘agrarian question’ in Marxism can be seen as having three broad aspects or component parts. The first concerns the nature, extent, and degree of the development of capitalism in the countryside. The second aspect or component part of the agrarian question concerns the nature of the classes that arise based on the development of capitalism in agriculture. This aspect addresses questions of the characteristics of landlordism, the forms of differentiation of the peasantry, the nature of moneylenders and merchant capitalists in the countryside, and the socio-economic characteristics of the rural labor force. The third aspect is concerned with class struggle: how and by means of what alliances are the classes that have been identified mobilized for a resolution of the agrarian question, that is, for a progressive transformation of production relations in agriculture and the socioeconomic conditions in the countryside.

Following the adoption of neoliberal “reforms” during the 1990s, the Indian government undertook “massive programs of privatization and structural adjustment” (Chandrasekhar and Ghosh 2002; U. Patnaik 2012: 234; Walker 2008: 559). The “license-permit raj” characterizing the post-independence regulatory framework was replaced by a policy package combining deregulation, trade liberalization, financial sector reforms, and devaluation (Sanyal 2007: 242–5; Shah 2008: 80). Under this neoliberal policy regime, there were systematic cuts in public expenditure that led to reductions in redistributive welfare benefits and social services, affecting the most vulnerable sections of the population, including the unemployed and the dispossessed (Basu and Das 2009: 159; Baviskar and Sundar 2008: 87–9; Bhaduri 2008: 12–13; P. Patnaik 2012; Shah 2008: 80; Walker 2008: 562).

Such policies of the Indian central government were aimed at opening up the domestic economy and gaining the confidence of investors and financial institutions regulating global capital flows to attract foreign direct investment (FDI) and prevent capital flight (Bhaduri 2008: 11–12; P. Patnaik 2008: 109). The lifting of restrictions on private corporate investment triggered a “race to the bottom” among the regional state governments of the Indian Union, which vied with each other to offer concessionary terms to finance capital for large-scale construction and development projects. Even traditionally left-wing governments in the states of West Bengal and Kerala joined the competition, reflecting a “virtual consensus among all major political parties about the priorities of rapid economic growth led by private investment” (Bhaduri 2008: 10; Chatterjee 2008: 57; Levien 2012: 944–6; P. Patnaik 2011: 3). As a consequence of the new trade regime, Indian agriculture has been exposed, in a new and unprecedented way, to volatility in the international prices of food and non-food crops and, in the case of several commodities, prolonged periods of steep declines in prices (see, for instance, Ghosh 2005).

Let us examine how neoliberal globalization, fueled by capitalism, altered the following in India:

i) Production and area of cultivation: In the earlier years of economic planning, food availability was a serious problem in India. The total food grain production was hardly 51 million tonnes in 1950-51, which increased to 198 million tonnes in 2004-05. Food grain production increased but at a much lower rate from 2004 to 2009-10 as compared to the rate of growth before liberalization. A change in cropping pattern indicates a shift in the area under the cultivation of major crops. For a long time, the area under food grain crop cultivation has been declining, also indicating that the cultivation of non-food grain crops has been increasing. This shift in cropping patterns was taking place due to remunerative prices being offered to commercial crops and better market access given to growers (Singh, Navjoth 2020).

ii) Land: Since the mid-2000s, the dispossession of land has become unprecedentedly central to India’s political economy. While tens of millions of people were dispossessed of their land in the period of state-led development (Fernandes 2008), the scale of land dispossession has accelerated since liberalization. Its causes, moreover, have profoundly shifted as privatized forms of industry, infrastructure, real estate, and extraction have eclipsed public sector projects as causes for forcibly taking land from farmers. By the latter half of the 2000s, the Indian state had to confront the fact that the land requirements of its neoliberal growth model were difficult to fulfill under conditions of electoral democracy. India’s vast rural population, the second largest in the world, controls the land that is desired in ever greater quantities for the private investment that is central to the country’s neoliberal phase of capitalist expansion. The upshot is that farmers are making themselves the most significant obstacle to capitalist growth in India. While the peasantry has long been seen as an obstacle to progress, this specific roadblock is as unexpected for modernization theory and classical Marxism as it is for “India Inc.” (Michael Levien, the land question in India 2017)

iii) Labour: Violent forms of exploitation and unfreedom in labour relations, defined as neobondage, have emerged all over India in the informal sector. These cases of labourers being tied to an employer or a labour contractor through advances or loans have been observed in many parts of India in modern agrarian production (Lerche 1993, Breman 1996). Globalization and subsequent restructuring of the Indian economy after economic reforms have created a conducive environment for more internal migration across sub-regions (Bhattacharjee, Mala. (2020).

iv) Caste-based inequalities: Capitalist modernity across the world was expected to diminish the salience of older forms of identity-based relations. In India, differences based on caste and tribe were to disappear. But, despite economic growth, the conditions of India’s Adivasis and Dalits have flouted these rosy expectations. [Alpa Shah and Jens Lerche, Ground down by Growth]. In contrast to the evidence suggesting that the caste hierarchy has been evolving and reconfiguring, but continues to prevail as a factor of socio-economic inequalities (Basile and Harris-White 2000, Kumar 2002, Deshpande 2010. Vaid & Heath 2010, Mosse 2018, some scholars argue that the “stickiness of caste” has weakened over time, and the tilt towards a modern economy creates new opportunities for social mobility (Béteille 1992, Panini 1996, Sharma 2013)

v) National System of Research and Extension: The net result of the unwise cut-back of public investment and in RDE has been a slowing of the rate of output growth – both food grain and non-food grain growth rates almost halved in the nineties compared to the pre-reform eighties, and both have fallen below the population growth rate even though this too is slowing down. The Agricultural Universities had earlier played a major role in developing and helping to disseminate new crop varieties, and the cut in funding for research in these Universities by affecting the search for better rain-fed crop varieties has also contributed to the deceleration in the growth of yields. [ Utsa Patnaik,2006]

vi) Public and Private Investments in Agriculture: When the state withdraws from investment in public works, infrastructure, and programs of mass employment, it robs the countryside of the foundations for growth and the means of poverty alleviation. In India, the decline in public investment in agriculture started in the 1980s and accelerated in the 1990s. By the end of the 1990s, public investment in agriculture and allied activities was only about 1.6 percent of agricultural GDP and about 6.6 percent of total gross capital formation in the public sector. Public investment in agriculture increased, however, after 2002. In particular, data on public-sector gross capital formation in agriculture at 2004-05 prices show a 42 percent increase between 2004-05 and 2006-07. Of course, this came after a sustained period of decline and took the form of partial recovery rather than real investment enhancement [VK Ramanujan 2011]

vii) Corporate farming, Contract farming, and food security: A similar conjuncture of agrarian crisis has become visible in recent years, as had been seen in the prelude to the inter-War Depression, owing to the income–deflation inherent in current macroeconomic policies driven by the dominant global neo-liberal agenda. [Utsa Patnaik 2003]. As soon as the trade was liberalized in 1991, within a few years, 8 million hectares of food-growing land was converted to exportable crops leading to a fall in per head food grain output, but farmers did not benefit since their exposure to steeply falling global primary prices from mid-decade plunged them into spiraling farm debt and insolvency.[ Utsa Patnaik 2006]

viii) Gender composition of the labor force: The changing dynamics of the labor force, especially in agriculture, reflect gender disparities. Men tend to benefit more from opportunities in non-agricultural labor, relegating women to the often strenuous and repetitive tasks in agriculture. This feminization of the agricultural labor force is evident in three ways: first, the absolute number of female agricultural workers surpasses that of male agricultural workers; second, the share of agricultural labor dominates over non-agricultural labor in women’s work profiles; and third, the majority of labor days worked by manual workers in agriculture are contributed by women. This trend is consistent with data from villages studied in Andhra Pradesh, specifically the Rayalaseema village and the north Telangana village (VKR 2011).

The instances you’ve highlighted align with the observations made by Cavanagh and Mander in Alternatives to Economic Globalization (2002). Economic globalization, touted as a solution to various issues, has fallen short of its promises. Instead, it has widened disparities in income and wealth both between rich and poor nations and within nations. The consequences extend to inhibiting democracy, hindering social justice, disrupting local communities, and displacing farmers from their traditional lands. Moreover, it has contributed to the most significant environmental breakdown in history. The primary beneficiaries of globalization, according to Cavanagh and Mander, are the world’s largest corporations and their top officials, as well as the global bureaucracies they helped create. The expectations from developing countries to grant more privileges to foreign investors, align their government procurement policies with WTO disciplines, prioritize facilitation of imports over domestic policy goals, and adopt ‘uniform’ competition policies have not resulted in the promised benefits.

All these take us back to re-examine the basic principles of neoliberal globalisation and Karl Marx’s speech to the Democratic Association of Brussels( 1948) “ What is free trade, what is free trade under the present condition of society? it is merely the freedom of capital. When you’ve overthrown the few national barriers which still restrict the progress of capital, you will merely have given it complete freedom of action”. Economic alternatives rooted for moving toward more sustainable, humanistic models of economic prosperity with an emphasis on citizen democracies, local self-sufficiency, and ecological health can only help human civilization be a more equitable, inclusive, and sustainable one.

• I remember struggling to write this essay in the PhD Bay of our campus, almost nearing the essay submission deadline. Many thanks to Dr. Yaseen Habib for helping me connect the topic of the essay to the book(Manushyanoru Aamukham) I was then reading, essentially removing the writer’s block and shaping the essay in its current form and an A grade.