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An in-depth analysis of rural poverty, livelihoods, and coping strategies in semi-arid areas of India, specifically focusing on Anantapur and Udaipur. The report includes an introduction to the research objectives, components studies, and methodology. It also presents statistics on poverty and rural livelihoods in semi-arid areas, results from field studies, and conclusions regarding livelihood strategies in drought-prone areas.
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May 2001
Research objectives
The UK’s Department for International Development (DFID) supports research that promotes poverty reduction. The study reported here was commissioned by DFID’s Natural Resources Systems Programme (NRSP) - a research programme whose remit includes the development and promotion of “diverse coping strategies for poor rural households in semi-arid systems”.
This project, Understanding Household Coping Strategies in Semi-arid India, has the following purpose:
to gain a comprehensive and sound understanding of household livelihood and coping strategies in semi-arid India in general, and in two focus districts in particular
and specific objectives:
The investigation and analysis of household strategies includes consideration of:
allocation of family labour technical choices within crop, livestock or other enterprises choices between enterprises, including subsistence versus commercial production and off-farm work savings, investment and borrowing decisions management of natural resources, soil fertility in particular strategies to manage rainfall and other variable factors management of household consumption community activities and other social action
Although the household is the principal unit of analysis in this research, there is also consideration of intra-household and gender dimensions particularly in relation to division of labour, income and assets between family members.
Component studies, research partners, field sites and methodology
The research was led by the Natural Resources Institute and undertaken in collaboration with research partners in India (the Gujarat Institute of Development Research, GIDR, and the Society for the Promotion of Wastelands Development,
SPWD). NRI’s role was largely one of co-ordination of and synthesis from the four component studies:
(1) a review of national statistics, both at state and district-level, to identify key characteristics and trends affecting drought-prone areas, undertaken by GIDR (Iyengar, 2001)
(2) a review of the empirical literature on household coping strategies in semi- arid areas of India, also by GIDR (Rani and Dodia, 2001)
(3) field research in Udaipur district, Rajasthan, by SPWD (SPWD Udaipur Centre, 2001, and
(4) field research in Anantapur district, Andhra Pradesh, by SPWD (Rao, 2001).
Field research involved review of secondary data as well as participatory research in selected communities in each district
Reports on the component studies are provided at Annexes 2, 3, and 4.
Report layout
This report summarises the research results. It is intended as a stand-alone document However, readers with specific interest in certain detailed results are referred to the separate reports on each component study.
The remaining sections of this report are organised as follows:
section 2 describes trends in rural poverty in India; it introduces some of the concepts that are relevant to the debate on rural economic growth and poverty, and livelihood and coping strategies; and provides a very brief synopsis of the Indian literature on household coping strategies
section 3 presents selected statistics on poverty and rural livelihoods in semi-arid areas in India in general, and briefly reviews official data on the focus districts to set these in context
section 4 presents the results from the field studies; it describes and analyses the livelihood strategies observed in the focus districts
section 5 discusses these results in relation to general economic trends, providing a descriptive and analytical model of household livelihood strategies; it proposes areas of research that will contribute to an improvement in those strategies.
(2) government expenditure on agricultural research and extension has the largest impact on agricultural productivity growth and also has a significant impact on poverty.
They argue that agricultural growth is as important as poverty reduction, because it offers a means by which poverty reduction can be sustained.
What characterises India’s rural poor? In 1993, two states, Bihar and Uttar Pradesh, accounted for 36.5% of India’s rural poor. Together, Madhya Pradesh and Maharastra accounted for a further 17.8%. Nationally, the poorest 20% of the rural population derive their incomes 3 from cultivation (38% share of income), agricultural wage labour (16% of income) and non-farm sources (labouring, self-employment or regular employment) (32% of income) (Lanjouw and Shariff, 2000, using data from 1993/94). The corresponding shares for Bihar and Uttar Pradesh are 30%, 24%, 45% and 48%, 14%, 36% respectively. The landless, as well as the scheduled tribes and scheduled castes, feature prominently amongst the poor in India. Low education, social status and wealth restrict mobility and exacerbate attempts by India’s poor to improve their livelihoods.
Economic growth and rural poverty
Lewis’ widely accepted model of economic growth ascribes a key role to agriculture as the engine that:
provides a surplus for investment in other sectors releases labour into non-agricultural employment provides a market for industrial outputs provides raw materials on which other industries are based assures a food supply to the industrial labour force.
Thus, as an economy grows, secondary (manufacturing) and tertiary (services) activities account for an increasing share of national income. A virtuous cycle of rural growth linkages is predicted whereby agricultural growth fuels the development of the non-farm economy, through forward and backward linkages (demand for agricultural inputs and downstream processing or handling activities), and consumption linkages (rural demand for consumption items that are unrelated to agriculture).
However, these processes need not be unremittingly positive in outcome, nor is it always the case that agriculture is the engine of growth. Some of the topics that have received particular attention are:
unchecked urban growth, associated with a rapidly developing economy, can have negative social and environmental consequences
(^3) in cash and in-kind
the benefits from this growth may not “trickle down” to the poor; indeed those policies that promote most growth are not necessarily those that are most effective in reducing poverty^4
even where benefits trickle down, there will be losers as well as winners
the products of urban (or overseas) industry may be so cheap that they displace or stifle rural industrial employment
agricultural output may not be able to keep pace with population growth, such that food prices rise, pushing up urban wages and choking off growth
the pressure on natural resources may result in short-sighted production strategies that erode long-term sustainability
mining, tourism, government expenditure or even remittances can provide alternative or competing engines of growth 5
Studies based on macro-level economic statistics give little hint of the processes taking place at household-level that make up (or are hidden within) the broad trends. Within the rural economy, the presence and relative importance of a number of processes help determine the extent, depth and location of poverty: out-migration and employment in local towns; income distribution processes and “elite capture”; the effect of trade on traditional rural activities; changes in agricultural productivity; and pressure on the resource base.
As economies develop, the non-farm economy becomes more important. Ideally, it will draw labour from agriculture, attracted by higher returns in non-farm activities. However, the role of the non-farm economy in very poor rural areas is a subject of considerable debate, sometimes characterised by two different processes where:
attractive wages pull farmers into the non-farm sector, or poor agricultural incomes (exacerbated by the failing natural resource base and declining farm size) push farmers into poorly paid low entry barrier non-farm activities.
In most situations, both processes are present and it is usually the more advantaged groups who are able to take-up the most remunerative non-farm activities (because of their contacts, social status and confidence, information, access to capital and education). In a more rapidly growing economy, “pull” factors are likely to be more prevalent, but where there is economic stagnation in the agriculture and non-farm economies “push” factors (and large numbers of people in low paid low status activities) will be present.
(^4) Section 3 illustrates this with some examples from India. E.g., Maharashtra has high per capita
incomes and a relatively high incidence of poverty. (^5) The effectiveness of these “engines” depends in part on the strength of the linkages they create. The
non-agricultural engines all work by boosting rural incomes and hence demand for goods and services. In parts of Udaipur mining is important – but whilst it generates consumption linkages (through the workforce) mining rarely leads to strong linkages with other parts of the local economy.
consumption outcomes (also entitlements, consumption bundles, well-being, utility, income) within a mediating environment. This is represented in Figure 2.1.
Figure 2.2 describes the framework adopted by DFID, which was also the reference framework used by the researchers in this study. A livelihood is sustainable when it can cope with and recover from stresses and shocks and maintain or enhance its capabilities and assets both now and in the future, while not undermining the natural resource base. DFID can promote sustainable livelihoods by (a) contributing to the robustness and increased number of opportunities available to the poor by building up their asset base, and (b) ensuring that the structures and processes that define people’s options are working in favour of the poor. (Carney, 1998).
DFID’s sustainable livelihoods (SL) framework places assets into the following five categories:
Human capital (H): the skills, knowledge, ability to labour and good health important to the ability to pursue different livelihood strategies Physical capital (P): the basic infrastructure (transport, shelter, water, energy and communications) and the production equipment and means that enable people to pursue livelihoods Social capital (S): the social resources (networks, membership of groups, relationships of trust, access to wider institutions of society) upon which people draw in pursuit of livelihoods Financial capital (F): the financial resources which are available to people (whether savings, supplies of credit or regular remittances or pensions) and which provide them with different livelihood options; and Natural capital (N): the natural resource stocks from which resource flows useful for livelihoods are derived (e.g. land, water, wildlife, biodiversity, environmental resources).
In section 4, the description of livelihood portfolios in Anantapur and Udaipur provides numerous examples of how rural people combine their use of these different assets to pursue different livelihoods. Roads and transport, for instance, clearly influence access to markets (enabling trade of a perishable rural product, such as milk, for instance) and facilitate daily or longer-term travel/migration to other employment.
The transforming structures and processes are the mediating influences external to the household. They include factors that are influenced by the state, such as government policies and programmes, and laws and regulations. Social and cultural institutions and norms also shape or limit the use of assets and the types of activities available. Transforming structures and processes can usefully be classified as operating at different levels, such as macro (e.g. national government policy), meso (e.g. state policies and programmes) and micro (e.g. local land-use plans). Markets also exert a major influence on livelihoods through changes in relative prices and terms of trade. Economic reforms may interact with market forces to reduce distortions and barriers.
Figure 2.1 A Generic Livelihoods Framework :
Outcomes enhance, or erode, assets
Strategies result in Outcomes
Assets are transformed by
ASSETS: NRs, political, human, social, cultural- spiritual, physical, financial, political capital
Comprising activities – RNR-based, RNFS, urban etc.
Food Security, Well- being, Income etc
modifying and contextual factors
modifying and contextual factors
agency and the objectives of local people. Also, outcomes may have both positive and negative aspects, and these need to be clearly separated.
People’s objectives are likely to vary, depending on their livelihood strategies and circumstances. However, there has been surprisingly little research in India into what people’s objectives, or desired outcomes, actually are. In a review of the literature about five relevant studies were identified (Chambers et al, 1989). The reviewers postulated that for many people there is a hierarchy of three objectives or priorities, all of which can overlap and co-exist but, as the lower ones are more and more met, so the higher ones become more significant. They are:
Survival , based on stable subsistence Security , based on assets and rights Self-respect , based on independence and choice.
Changes in the external environment can affect assets, activities or outcomes. The resultant changes in behaviour are known as coping strategies (if the event has a negative effect on entitlement) or accumulation strategies (if entitlement improves). If coping behaviour is constantly necessary, then the livelihood strategy becomes a survival strategy, leading to erosion of assets and destitution (ODI, 2000).
Poor households in risky environments adopt coping strategies to protect their livelihoods. Coping strategies include:
(1) intensification of existing income activities (2) diversification into new activities, including migration (3) drawing on common property resources (4) drawing upon social relationships and informal credit networks (5) drawing on formal safety nets (e.g., through the state) (6) drawing upon assets (stores or, in extremis , productive assets) (7) adjusting consumption patterns (changing or reducing consumption).
The literature on coping strategies in semi-arid India^7
Rani and Dodia’s (2001) literature review considered the evidence on coping strategies in semi-arid rural India. It shows that one of the most favoured mechanisms is that of diversifying into non-farm activities and seasonally migrating to other areas. In the semi-arid areas diversification into non-farm activities is of a temporary and permanent nature depending upon the severity of the situation. The literature also very clearly shows that the households that are badly hit in the semi-arid areas are those of small, marginal farmers and landless households and those belonging to lower castes, who also diversify first. This phenomenon is not specific to any particular region but is observed in the semi-arid areas across the different countries.
Apart from diversifying into other income generating activities and seasonally migrating out, the households in the semi-arid areas also view common property resources as integral to their livelihoods. These resources act as a very important source of subsistence for poor households whose depend on CPR for fodder, fuel and grazing of livestock. This point comes across strongly in the literature. However, the studies also reveal that over the years there has been a decline in CPR, due to illegal encroachment, privatisation, government allocation of CPRs under various poverty schemes and auctioning of parts of CPRs.
In diversifying into non-farm activities, households simultaneously draw upon social relationships and informal credit networks. The social relationships and the traditional support system along caste lines continue to serve as a means of support in various ways, though these networks are weakening. Interest rates rise during droughts, making it very difficult for the poor households to borrow, though these networks continue to be effective during normal years.
The consumption needs of farmers during poor years are partially met by drawing upon the reserve assets, which they build up during peak seasons. These may take the form of savings in cash or in-kind (e.g., stored grains), productive assets (such as livestock or land), and non-productive assets (such as jewellery).
In drought years, households also reduce their food intake and expenditure on social and religious commitments. The reduction in food intake is more prominent among the women, and smaller farmers. Finally, the interventions made by the Government in the form of scarcity relief works play a crucial role in averting large-scale starvation and provide employment. However, in recent years there have been doubts about the effectiveness of these relief programmes and whether they reach the needy.
The existing literature provides important insights into coping strategies in different regions of India. The empirical evidence is based principally on village studies, and although the strategies can be categorised (for instance in relation to the seven groups identified in the previous sub-section) the activities that comprise those strategies differ between regions, reflecting heterogeneous opportunities and resources.
Notwithstanding this, some insights can be gained from national-level statistics and these are reviewed in the following section.
(^7) This overview comes from Rani and Dodia (2001).
In sum, these points suggest that a robust interpretation of the state-level data is difficult because of the noise created by factors that are not fully explored in the analysis: the influence of the mega-cities (whose early growth can be attributed to strategic location and trading opportunities, rather than poor agricultural potential, and whose subsequent growth has built, at least in part, on the critical mass and comparative advantage previously established); the mitigating (and growth- promoting) effect of irrigation in some of the drought-prone states; the rather arbitrary classification of states (into drought-prone or not) based on the percentage of districts affected; and the manner in which state-level aggregates conceal the variation occurring at district-level, which is particularly problematic in the case of large states. Whilst the state-level findings provide pointers on some interesting issues, consideration of district-level data is likely to be more productive.
Drought-prone states and demography, economy and employment
Consideration of population growth shows no clear trends in the differences between DP and NDP states (Table 3.2). Although there was slower population growth in NDP states between 1961 and 1981, prior to this and after this there was relatively higher population growth than in the DP states, so that over the period 1951- population growth was identical in both groups, at around 2.12% per annum.
Table 3.2: population growth rates in DP and NDP states 1951-61 1961-71 1971-81 1981- DP states 1.87% 2.28% 2.24% 2.09% NDP states 2.01% 2.16% 2.19% 2.12%
There is some economic rationale to the argument that relative to non drought-prone states, drought-prone states may be: less populous; less densely populated; and more urbanised. Each of these could follow from relatively poor land productivity. Population per se is a fairly weak test of this argument because it takes no account of the size of each state. Consideration of population density and urbanisation is, however, very interesting. Drought-prone states are markedly more urbanised but overall less densely populated (see Table 3.3). Moreover, in the drought-prone states a smaller percentage of the population is employed in the primary sector (principally agriculture). Notwithstanding higher levels of urbanisation and non-primary sector employment, a priori those states with a less productive agricultural base might be expected to be poorer. Curiously, the data on per capita net state domestic product (NSDP) do not support this hypothesis. On the contrary, they show significantly, and sustained over time, higher incomes in the drought-prone group. Of the four states with the highest per capita NSDP in 1993-94 (Maharashtra, Punjab, Haryana and Gujarat), three are drought-prone. Moreover, of those states in which more than 30% of the population fall below the poverty line, only three are DP whilst six are NDP.
Table 3.3: Demography, employment and NSDP and drought-proneness Drought-prone states Non drought-prone states 1981 1991 1981 1991 Population per km 2 218 267 333 402 Population urbanised 28% 29% 17% 19% Primary sector workers 65% 71% Per capita NSDP in Rs 1731 2340 1332 1732
In addition, the drought-prone states accounted for 42% of the total population in 1991 (of the sixteen principal states identified above), but only 37% of the rural poor^10. Consideration of the incidence of poverty in rural and urban areas also reveals some interesting patterns. In drought-prone states as a whole, a lower percentage of the rural population is poor (24% falling below the poverty line compared with 44% in the non drought-prone states), and a higher percentage of the urban population is poor (35% compared with 28% 11 ). This could suggest the following scenarios:
in areas of higher agricultural potential, the poor stay in rural areas because there are livelihood opportunities; in the drought-prone areas they are more likely to live in or move to towns the economic opportunities in agriculturally higher potential areas lead to concentrations of wealth and power, whilst trapping significant numbers in poverty^12 possibly stronger adherence to some of the more inequitable and regressive traditional institutions in areas where more of the population remains rural.
This does not explain why the rural poor in the poorer (but NDP) states stay in rural areas – unless it is because they are locked into rural livelihoods by a mixture of carrot and stick measures. (For instance, share-cropping arrangements are, at least somewhat forgiving in a poor year, whilst indebtedness may lock households into literally interminable debt repayment schedules, including labour obligations). An additional point is that the NDP areas have more forest cover, which provides an additional source of income (e.g., from NTFP collection) to poor rural populations^13. Perhaps urban labouring and migration opportunities do not appear very attractive but in DP areas the rural population sees this as the only alternative to very poor agricultural livelihoods – and once migration becomes commonplace within such communities, it makes it easier for other members of the community to do the same.
Land-use and agriculture in DP and NDP states
Data from 1970/71, 1980/81 and 1993/94 show some consistent, though not necessarily large, differences in land-utilisation between DP and NDP states^14. The most notable is a much higher percentage of area devoted to forest and tree crops in the NDP areas (27% compared with 15% in 1993/94). For all other land-use categories (not available for cultivation, pastures and grazing land, cultivatable waste,
(^10) The poverty data are drawn from Fan et al ., 1999 , and are for 1993. Data for 1991 are not available. (^11) The urban differences are less significant: the mean difference is smaller and there is greater
variation around the mean. (^12) Gini coefficients give some indication of wealth concentrations. Analysis of gini coefficients for
land-holdings indicates a trend towards more unequal distribution of land in 4 of the 9 NDP states and no clear trend in the other five. Similarly, five of the DP states show a regressive trend, with unclear results in the other two. (Iyengar, 2001, p65). However, the relationship between NSDP, wealth concentrations and poverty is difficult to untangle. India’s wealthiest state (in terms of per capita NSDP) is Maharashtra. It is drought-prone, and within the DP group it has the highest incidence of poverty. The next wealthiest state is Punjab, which is NDP and has markedly lower poverty than any other state in India. (^13) This is the case in NDP Orissa, Bihar and Madhya Pradesh, for instance (pers. com, C Conroy) (^14) All of the agricultural statistics should be treated cautiously, particularly where apparent differences
are quite small, because of the well-known problems in regularly collecting and reliably reporting on crop areas, livestock numbers etc.
higher rates of urbanisation in the NDP districts. DP districts tend to show lower rates of literacy.
Forest cover is not consistently higher or lower in the DP districts relative to NDP districts. In most states, a higher share of area is sown in DP districts than in NDP districts. The irrigated share of cultivated area tends to be lower in DP districts. In all states, land holdings in DP districts are larger than in NDP districts. In most states, the DP districts use less chemical fertiliser/ha than the NDP districts. The exceptions are Bihar, Karnataka, Madhya Pradesh and Orissa. The amount of bank credit loaned to agriculture is generally less in the DP districts than in the NDP districts. The value of agricultural output per unit area tends to be lower in the DP districts.
The urbanisation findings are interesting and a little difficult to interpret. DP states are more urbanised than NDP states, but DP districts are less urbanised than NDP districts – implying migration to NDP districts from DP districts, and stronger development and urbanisation trends in the NDP districts. The trend towards urbanisation (principally urban areas in NDP districts) is apparently greater in DP states, presumably partly because of the exodus from DP districts 15.
Udaipur, Rajasthan
Udaipur is one of seventeen drought-prone districts (out of a total of 23 districts) in Rajasthan. Average rainfall is 625 mm, and although very variable, there is a 75% probability that rainfall will be at least 500mm. It receives slightly more rainfall than the state average. Udaipur is less urbanised (17% in 1993) than Rajasthan state as a
(^15) In addition Iyengar (2001, pp31-34) presents some rather interesting comparisons of districts by
dividing them into different rainfall categories (< 375mm, 375-750 mm, 750-1125 mm, and > 1125 mm). Some very strong patterns emerge:
population growth rates decline with higher rainfall population density increases with higher rainfall urbanisation is inversely related to rainfall (partly explaining the higher population growth rates in the lowest rainfall areas) employment share of agriculture increases with higher rainfall the area share of forest and irrigation increases with higher rainfall average land holding size decreases with higher rainfall value of agricultural output per unit area increases with higher rainfall
Of these results, the most curious are the higher rates of population growth and urbanisation in those districts with the lowest rainfall. This could suggest that sharper trends towards urbanisation in low rainfall districts attract populations from the higher rainfall districts, or populations in low rainfall districts have higher population growth rates associated with higher rates of poverty. (District-level data on poverty are not available). However, this sits uncomfortably alongside the comparison of DP and NDP districts that shows higher rates of urbanisation in the NDP districts – a finding that is consistent with expectations based on agricultural productivity, rural incomes and consequent trends towards industrialisation and urbanisation. This apparently contradictory evidence merits further investigation. Pending clarification, the district and state data are probably more reliable than these data based on a new rainfall categorisation.
For all the districts, across all rainfall groups, population growth is slowing (1993 compared to 1985), and population density and urbanisation are increasing. Other variables were also considered (e.g., banking services, non-farm employment, Iyengar, 2001, pp 32-34) but no clear patterns emerged.
whole (21% or higher), but apparently more densely populated 16. Forest area share is significantly higher than for the state as a whole, net sown area share less and irrigated area share higher. Land holdings are smaller than the state average, and value of agricultural output per unit area significantly higher 17. The percentage of people employed in agriculture is slightly higher than the state average. These data tend to imply that the district is agriculturally relatively advantaged vis a vis a large part of the state- particularly if population density is higher or similar to the state average. Although this is consistent with higher rainfall experienced in Udaipur relative to the state average, some of the differences are quite large and may reflect data errors too 18.
Iyengar’s data suggest that agriculture has become markedly more intensive in the period 1985-1993, although the net sown area has also increased. For instance:
holding size declined from 2.1 to 1.8 has irrigated percentage of gross cropped area increased from 21% to 27% use of fertiliser per unit area increased by 350% (volume) net sown area as a percentage of all area increased from 21% to 38% large increases in the use of HYVs for wheat, maize and sorghum significant increase in the value of bank loans and bank deposits
The rural share of Udaipur’s population has gradually declined from 89% in 1961 to 83% in 1991. Scheduled castes and scheduled tribes represent 42% of the district population of 2.9 million (1993) Poverty data are not available for the district. At state-level, although poverty has declined (i.e., as a percentage of the total population), the decline has been very modest. Only Bihar and Assam (poverty actually increased in the latter) fared worse over the period 1951-1993 (Fan et al ., 1999).
Anantapur, Andhra Pradesh
With average rainfall of 544 mm., Anantapur is one of eight drought-prone districts (out of a total of 23 districts) in Andhra Pradesh. In common with the national-level findings, it has slightly lower rates of urbanisation and lower population density than the state as a whole. However, the population share employed in agriculture is apparently higher than for the state as a whole. Forest and irrigated area shares are less, and net sown area share more than the state average. Other district indicators of agricultural intensification (e.g., use of fertiliser, value of output per unit area, use of agricultural credit, per capita production of food grains) are all consistent with the expectation of a relatively less productive agricultural sector.
Notwithstanding its position relative to the rest of Andhra Pradesh, official data indicate that Ananatapur’s agricultural sector has become significantly more intensive
(^16) Iyengar, 2001, reports higher population density for Udaipur than for the rest of the state. However,
comparison with other sources suggest that Iyengar’s population density for all Rajasthan is too low. No comparative data were available for Udaipur district. (^17) This presumably reflects a degree of intensification associated with the smaller holding size, and the
fact that in there is more reliance on livestock in the more arid parts of the state. (^18) SPWD note some changes to the district boundaries that may have caused some data aggregation
problems.