The Hindu Business Line : Focus on agriculture

THE LATEST World Employment Report (WER) brought out by the International Labour Office in Geneva has a chapter "Why Agriculture Matters", where it is argued that without growth in agriculture in developing countries there can be no meaningful reduction in poverty in these regions.

To quote the report: "If poverty is largely rural and rural employment is mainly in agriculture, then it seems likely that parts of the growth process that are linked to rural areas, specially those related to agriculture, may have more direct and immediate effects on poverty reduction than would growth outside rural areas".

The first response to this is that this is not a new development perspective. If it was, there would not be much place for the "trickle down" theory of growth in economic literature.

But the fact of the matter is that this latter theory of development has been around for a long time, being essentially promoted as an alternative to the theory which says that, for growth, there should be a direct attack on poverty in rural and urban areas entailing substantial investment in anti-poverty programmes.

In other words, employment should be generated by these anti-poverty programmes themselves and not be the result of "development effects" filtering into the rural and urban poor areas of growth measures taken in other spheres of the economy.

The ILO report argues that the rural population in developing countries — where poverty lies embedded — comprises nearly 60 per cent of the total population (2000) in these economies, the figure perhaps going down marginally to 56.8 per cent by 2005.

The proportion of total population living in rural areas in the least developed countries (LDCs) is even higher. The WER says: "Despite ongoing structural transformation in many of the (LDCs), around 75 per cent of the poor continue to live in rural areas."

In fact, perhaps the best example of any government focusing on agriculture for a sufficiently lengthy period of time, and getting satisfactory results in terms of the general wellbeing of the rural population, has been that of the Left Front set-up in West Bengal.

Indeed, in the past, the State Chief Minister, Mr Buddhadeb Bhattacharjee, has had occasion to point to the experience of the erstwhile TDP Government of Mr Chandrababu Naidu — which had become a showpiece of IT development focused almost exclusively on Hyderabad — his point being that the development model in West Bengal was different in that the focus was on rural development based on land reforms, etc.

His conclusion was that the dissatisfaction of the rural people in AP was the basic reason behind the shock defeat of the Chandrababu Naidu Government while in West Bengal the Left Front need have no such fears because of the solid support which the Front enjoys in the rural areas mainly because of the land reforms introduced by the Front Government in the 1980s.

Clearly, and logically, the WER development perspective makes a lot of sense if sheer number is given the pride of place in any growth matrix.

However, the more important issue is whether there should be flexibility in the implementation of such a policy for the simple reason that the "benefits-elasticity" of all rural development programmes framed and implemented in developing countries need not be identical.

It is in fact not inconceivable that, in some regions, the "trickle-down" approach may produce better results than pouring loads of money down the drain in the rural areas for a variety of reasons specific (or otherwise) to these regions.

Ranabir Ray Choudhury

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