Is the Stage Set for Mainstreaming Trade into National Development Strategy of India?

Pramod Dev MPolicy Analyst, Cuts International

Concept of Mainstreaming Trade into National Development Strategy

Process of integrating trade policies and priority areas of action withinthe overall national development plan or strategy A process of bargaining among key stakeholders and establishing acorrect balance between trade liberalisation and companion policies.

Approaches can take place at three levels- Policy, institutional andgovernment-donor relations.

Source: Taufiqur Rahman (2004), Concepts and Approaches to Mainstreaming Trade

Objective of the study

Go beyond impact analysis of trade and enquire about the prevailing conditions for mainstreaming trade into national development strategy.

To understand the benefit deficits in globalisation and liberalisation.

Why is there a pattern for winners and losers, especially in a participatory democracy?

How do the political and economic decision chains work? How inclusive and responsive the processes are?

Hence the analysis of demand for and supply of supportpolicies and programs forms the basic frame work for this study

Trade Policy Making in India

Marred in secrecy - limited or selective public consultation Decisions taken by small group of officials with out enough

prior political consultation Process is still top-down and not in a position to factor in

ground realities. Influence of vulnerable agricultural stakeholders limited due to

their capacities and lack of organisation. Though the consultation processes have been initiated,

inclusiveness is still an issue.

Methodology of the study

Rajasthan and West Bengal as indicated by the project proposal.

Agriculture sector was selected for its economic, political and social importance within the country.

Impact of globalisation and liberalisation are most noticeable in livelihoods and economic security in the agriculture sector.

Sectoral analysis deemed desirable as the mainstreaming process could vary across sectors.

Field Research

Field research was conducted in three phases among three broad stakeholder groups like:Peoples’ representatives and political functionaries at the local, state, and national levels and government officials on the supply sideThe households, and local community based organizations on the demand side

Separate questionnaires for government officials, peoples’

representatives, and households and gram panchayat.

Criteria for Selection of Districts

Analyse disaggregated HDI data to chose Best, Moderate and Worst performing districts in terms of development.

Percentage of Agricultural population, especially rural, in the total. Production of Agriculture- considerable contribution to the State’s

agricultural out put and variety of cultivation. Access to Public amenities like PHCs, education institutions, water &

sanitation etc. Allocation of government funds

Districts Selected

Rajasthan West Bengal

Best Hanumangarh Hughly

Moderate Bundi Jalpaiguri

Worst Banswara, Barmer Purulia, Malda

Criteria for the selection of Blocks from the Districts

Tentative list of blocks- final selection on the basis of inputsfrom the district level.

Select two blocks per district on the basis of following selection criteria-

Chose the best and worst blocks on the basis of development indicators and poverty.

High percentage of agricultural population (Agricultural labourers + cultivators) in each block.

Ensure that each block produce different crops; where ever possible.

To ensure heterogeneity not to select contiguous blocks; unless there is stark difference in terms of development or major crops cultivated.

Distribution of funds

Criteria for the selection of Panchayats from the Blocks

Select two panchayats from the selected block based on Ratio of agricultural population to total working population

in the villages. Concentration of agricultural activities. Based on the inputs from prior interviews and CBOs on

development and agricultural problems; choose the worst and best performing panchayat on development

Criteria for choice of Household from Selected Panchayat

Identify the prominent agricultural area using information from the interviews at the district, block and panchayat levels.

Establish a direct link with agricultural like a) agricultural labourers b) Cultivators c) Agricultural Land owners etc. If the person is earning/earned part/ full of his income from agriculture she/ he is eligible.

Try to maintain 50:50 sex ratio of the interviewees, as far as possible.

Choose respondents according to the share of each social, religious and occupational group in the total population of the village to ensure an accurate representation of the society and agricultural activity of the panchayat.

Why Focus on Pachayati Raj Institutions (PRIs)?

The three-tier PRI System was intended to provide the people a larger role in political decision making.

Expected to reduce the transaction costs and improve efficiency of services delivery.

First tier of signalling of needs and demands and last tier of service delivery.

Proximity to hot-spots of impact- testing the possibility of swift action.

Results of Field Survey

Participation of the female stakeholders in the survey was limited due to the prevailing socio-cultural aspects and their lower level of awareness

Elected female representatives operated in constraining environments that favored men as the only important actor

Functional literacy was poor among the farmers

Basic InformationRajasthan

West Bengal Total

Total Respondents 366 412 778

Female 30 65 95Male 336 347 683SC 63 135 198ST 92 74 166Muslim/ OBC 177 122 299General 31 78 109No Response 3 3 6Education: Illiterate 112 109 221

Education: 10th or lower 178 260 438

Education: Above 10th 56 38 94

Occupational Profile

The small- scale farmers constituted almost 45 per cent of the total households surveyed

Multiple role in West Bengal indicates high incidence of outward migration and seasonal agricultural employment.

Above 70% of the total respondents depended on agriculture for more than half of their income- susceptibility to the changes in the international and domestic arena.

Rajasthan

West Bengal Total

Agricultural Labour 30 64 94

Small-scale farmer 194 163 357

Medium scale farmer 53 32 85

Large scale farmer 56 33 89

Multiple Role 26 118 144

Is agricultural income sufficient for survival?

Rajasthan

West Bengal Total

Yes 105 113 218

No 207 222 429

Family Members Work 43 53 96

Others 2 5 7

Different responses according to scale of activity:

Large and Medium farmers receive sufficient income.

Sufficiency for small farmers’ depend on rain, local prices, affordability and availability of credit.

Coping measures- migration, animal husbandry in Rajasthan (walking cash reserves!)

Knowledge on International Trade

Awareness on international trade in agricultural trade and globalization is abysmally low, even in the export zones.

Lack of awareness amongst government officials and people’s representatives on trade and globalization

Domestic trade is misunderstood as international trade

Inability to trace the value chain beyond the point of sale.

Higher procurement price and stopping imports as desired government action against cheaper imports.

Raj-asthan

West Bengal Total

Have Knowledge 37 38 75

Don't know 240 316 556

Sell to exporters 6 2 8

Don't Know if it goes abroad 8 10 18

Know Someone else 3 6 9

Better price for exported items 16 4 20

Reasons for Cultivating Current Crops

Propensity to try new crops low due to availability of water, concerns on subsistence.Increased vulnerabilities due to dependence on traditional varieties.Demonstration effect important in cultivation of better varieties of traditional crops.Timely incentives(especially input) induce shift to cash crops and vegetablesMarket demand, government incentives alone not enough

Rajasthan

West Bengal Total

Traditional 254 324 578

Governmentsubsidies andincentives 0 2 2

RecentMarketDemand 16 14 30

ContractFarming 1 2 3

Others 18 2 20

Most Important Point of Sale

Raja-sthan

WestBengal Total

Governmentprocurement 1 0 1

Local PrivateAgents 136 67 203

Directly at Mandis 114 208 322

Multiple Points 46 28 74

SelfConsumption 59 45 104

•Lack of marketing facilities for agricultural goods as the important cause of underdevelopment•Most small-scale farmers sell produce close to the farm due to high transportation costs, lack of awareness about regulated markets(Rajasthan) and storage facilities(West Bengal).•Result: low prices, wastage and exploitation.•Low awareness about government procurement.

Knowledge about Govt. Support Programmes/ Subsidy for Agriculture

Raja-sthan

West Bengal Total

KnowAboutGovt.programs 227 260 487

Don'tKnow 133 127 260

•Low: despite the ‘yes’ as most of them could not single out specific support for agriculture or its size.

•Government support for housing was held as agricultural support

•Knowledge limited to ‘minikits’ and subsidy for drip irrigation .

•Delivery of support inefficient- untimely, insufficient; and corruption

Access to Agricultural Credit

Raja-sthan

West Bengal Total

Requested 169 118 287

Not Requested 182 229 411

Difficult to get funds 124 100 224

Not difficult to get funds. 58 79 137

•Difficult to access government funds•Unwillingness to pledge land•Local money lenders, traders bettersource as corruption and delay make the bank funds costly. •Sivana, Rajasthan medium and large farmers have easy access to credit: middlemen- bank officials nexus. Indebted beyond their means in anticipation of waiver.

Primary Contact on Government Support

Rajas-than

West Bengal Total

Approach Dept Directly 124 78 202

Go through Political Leader 37 40 77

Panchayat Members 155 172 327

Others 36 59 95

•GP members best informants and primary access points.•Capacity of the GP members as facilitators limited due to lack of information and dependence on govt. officials.•Outreach programmes of the agricultural departments ineffective•Difference of opinion between officials and political functionaries on the best access points.

Who could deliver support at the time of need?

•Farming has become speculative- Increased Vulnerability•Uncertainties in the form of price shocks and crop loss•More than profit margins, resources and time needed to recover after a loss determine the impact of shock in the era of globalisation.•Important to assess stakeholder confidence in the available mechanisms

RajasthanWestBengal Total

Local Panchayat 61 33 94

Agri Dept./ State Govt. 121 20 141

Neighbours 39 136 175

None/self 27 109 136

Others 14 56 70

Wide variation in responses •Rajasthan- Government, as neighbours will also be affected. •West Bengal- Sceptical about government support- community and self help.

Preferred form of Support

Raja-sthan

WestBengal Total

Money 55 244 299

Food Grains 80 30 110

Subsidy- Input 58 29 87

Work 66 39 105

Other 13 13 26

•West Bengal preference for monetary support•In Rajasthan, the stakeholders preferred food grains as the best form of support in Banswara; input subsidies in Barmer and work in Bundi.

NREGS as a Support Measure

Teething problems: Less than legal wages and workHigher awareness, unforeseen transparency

Positives•Just five percent of the willing respondents did not receive any work.•General satisfaction with wages; not with work.•Rural wage rate has gone up; and out-migration has come down •Employment for women in the vicinity of their homes and equal wages.•Creation of rural infrastructure

Points to Ponder•The scheme needs to be reinvented to sustain- should not be too successful •Should only supplement rural employment and not replace•Incorporate labour mobility.•Ward- off ensuing nexus and misuse with more transparency and audits.

Perceptions on NREGS

Experience with NREGS( 596 respondents)

Rajasthan West Bengal Total

Applied/ has Job Card 146 317 463

Did not seek work 22 22 44

Doesn't Know about NREGS 4 22 26

Less Than 100 Days Work Received 106 234 340

No Work Received 3 47 50

Less than Stipulated Wage 107 7 114

Satisfied With Work Received 67 32 99

Not Satisfied with Work Received 44 112 156

Satisfied With Wage Received 61 36 97

Not Satisfied With Wage Received 46 23 69

Gram Sabha in Mainstreaming Development

•High participation and information on Gram sabha; barring few exceptions •Scepticism about its utility•Functions of gram sabha are not well understood by polity- Requests largely relate to personal needs.•Idea as a tool to aggregate articulate demands has not caught up in the villages.•Policy makers do not pay enough attention to the action plans of gram sabha.• Predetermined thrust areas affect Grama sabha’s effectiveness in responding to local needs• Burueacratic- responsibility to draw plans and financial authority, limited authority to people’s representatives.•Misuse of gram sabha in West Bengal due to competitive politics.•Process of elimination of requests problematic and snaps the signalling process.

Perceptions on Gram Sabha

RajasthanWest Bengal Total

AttendedGramsabha 197 262 459Not attended 142 61 203Not Interested 22 20 42Don't Know aboutGramsabha 30 48 78Proposed Activities 162 182 344Recommendations ofGram Sabha areImplemented 85 119 204Recommendations ofGram Sabha are notImplemented 131 116 247

Funds Available to GP

Raja-sthan

WestBengal Total

Sufficient 80 68 148

NotSufficient 116 131 247

Don'tKnow 155 168 323

•Considerable lack of knowledge and secrecy about funds available at the GP level

•Available funds are insufficient.

•Mostly, funds are underutilised due to untimely allocation and improper planning

•More funds may not translate into more development

People as Policy Makers

Are common people capable of participating in governance?

•More than 60 per cent respondents had suggestions to offer.

•Most suggestions were on personal needs

Need to strengthen existing avenues of consultation and introducing fool-proof methods to ensure effective stakeholder participation in political decision making.

Impediments to Mainstreaming Development

•The Missing Opinion: Women in Decision Making.•War & peace between government officials & peoples’ representatives at the GP level.•Convenient Coalitions: Peoples representatives from Weaker Sections•Lack of reach and responsiveness of government support mechanisms.•Irrelevant eligibility criterion- misuse of BPL Cards•Inefficient use of government funds•Ignorance about issues related to globalisation and its impact• Asymmetric information and adverse selection by stakeholders on markets and prices.

•Lack of stakeholder participation in political decision making•Gram panchayat cannot respond to contingencies•Complex signalling process to gather information on demands from the•ground with multiple actor involvement.•Multiple layers of decision making often result in inefficient implementation of support schemes. • Absence of an inclusive mechanism that could reflect the ground realities in the formulation of national development strategy.

The need is to mainstream development in the national development strategy- democratisation of the process.

Development, when inclusive, is the best strategy to mainstream trade.

In retrospect…

• Strengthening the capacity of central government and its officials in effective assimilation of poverty and livelihood concerns.

• Wider stakeholder consultation at the state and district levels.• Strengthening State Governments’ capacities on trade issues.• Raising awareness and ensuring transparency on old and new

development and support schemes at the GP level• Contingency funds for GPs to act swiftly in the time of need.• Enhancing the authority of people’s representatives at GP• Enhancing the capacities of local civil society and media on trade

and globalisation.

Way Forward?

Thank You