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The Agrarian Question amidst Populist Welfare

Interpreting Tamil Nadu’s Emerging Rural Economy

M Vijayabaskar ( is at the Madras Institute of Development Studies, Chennai.

Tamil Nadu’s emergence as a developmental model rests on its ability to combine economic growth with poverty reduction and high levels of human development. Scholars attribute such outcomes to a set of social policies implemented in response to a long history of “democratic action.” It is, however, not clear whether such intervention through social policies can also enable a more inclusive trajectory of economic development. This paper uses the analytical lens of the “agrarian question” to examine this aspect of the state’s development. In doing so, the paper argues that while social welfare nets are crucial to negotiate the vulnerabilities of a market-driven growth process and open up new political and economic spaces, they are inadequate in a context where the secondary sector has not been able to absorb labour to the extent anticipated.

The author wishes to thank J Jeyaranjan, Judith Heyer, and A Kalaiyarasan as well as participants in presentations of earlier versions of the paper made at the French Institute of Pondicherry, Azim Premji University in Bengaluru and the Madras Institute of Development Studies in Chennai.

Tamil Nadu has been recognised for its ability to sustain growth along with good human development outcomes (Drèze and Sen 2013; Kalaiyarasan 2014). Scholars attribute the emergence of this model to a set of social policies initiated in response to a history of collective action driven by social and political mobilisation among lower castes (Srinivasan 2010), resulting in a political regime described as “competitive populism” (Wyatt 2013a, 2013b; Noman 2010). While democratic action may explain the emergence of a more proactive welfare regime than most states in the country, it is still not clear whether populism can also influence the pattern of economic development so as to render it more inclusive and sustainable. If public action has accounted for the emergence of such a welfare regime, how does the welfare regime shape the domain of economic relations?

In recent years, it appears that the sutures that held the Tamil Nadu model together are being undone. Over 200 farmers have committed suicide in the state since the second half of 2016, reflecting a long-term crisis in the state’s agriculture and agroecology (Harriss and Jeyaranjan 2016; Janakarajan 2004). While the state’s welfare net is believed to have offset the negative fallout of agrarian distress to an extent, its limits are now evident. Affirmative action in employment policies have also become less effective due to reduced employment opportunities in the public sector in the post-reform period (Pandian 2011). Further, in a context of a nation-wide concern over jobless growth (Kannan and Raveendran 2009), it is not clear whether those exiting agriculture are able to access quality jobs, despite a relatively vibrant manufacturing sector and high levels of human development. This paper seeks to understand these developments in the state, particularly in relation to its welfare regime, through the analytical lens of the “agrarian question” (Bernstein 1996, 2006, 2016). To ensure a process of sustained accumulation and development in post-colonial economies, Marxist scholars consider the resolution of the “agrarian question” to be critical; it has been the subject of much debate in India (Lerche 2013; Thorner 1982; Patnaik 1986). Bernstein trisects the agrarian question into three domains (1996). The first draws attention to changes in control over productive assets in agriculture and the extent to which processes of differentiation and dispossession transform self-employed “traditional” cultivators into waged labourers on the one hand and capitalist farmers on the other. The emergence of such production relations is critical to the next problematique of the agrarian question, that is, capital accumulation. The agricultural sector should be in a phase of expanded reproduction that allows for surpluses to be generated and invested in the non-agricultural sector, the expansion of which can absorb those moving out of agriculture as waged labourers. The inability of the agricultural sector to generate surpluses and hence bring about structural transformation can therefore undermine the process of capitalist modernisation of the economy. Apart from the social justice imperative, land reform was therefore seen as crucial to this process as it generates greater incentives for surplus generation (Lerche 2013). Bernstein argues that under globalising conditions, ruling elites no longer look to the agricultural sector to source capital as they can overcome the capital constraint by access to global capital. More important, therefore, is the agrarian question of labour: the ability of “surplus” labour to move out of agriculture and that of the non-agricultural sectors to absorb the workforce productively. The final aspect of the agrarian question concerns politics around the first two aspects, that is, how different segments of the rural population respond to changes in distribution of productive assets and capital accumulation and, in turn, shape these domains.

This article identifies some fissures in a regime of accumulation that addresses concerns of equity primarily through interventions in the domain of welfare without articulating a strategy that is inclusive of labour. I argue that while social welfare nets are crucial to negotiate the vulnerabilities of a market-driven growth process and do open up new political and economic spaces, it is inadequate in a context where the secondary sector has not been able to absorb labour to the extent anticipated. The “agrarian question of labour” is therefore far from resolved and I point to the limits of such a resolution as conceived in classical understandings of the agrarian transition. The paper draws substantially from secondary sources in addition to material from a recently completed study on youth politics in Tamil Nadu. The study is based on a survey of 1,550 youths comprising students, workers, and unemployed youth in metropolitan and small-town Tamil Nadu, in addition to detailed qualitative interviews with select respondents together with focus group discussions in all locations.1

Land Relations in Tamil Nadu

Though Tamil Nadu has been criticised for its inability toimplement land reforms successfully (unlike in Kerala and West Bengal), data on current distribution of landholdings in the state suggests a limited potential for land redistribution (Table 1).

Table 1 shows that nearly 92% of landholdings in Tamil Nadu are in the small and marginal category and, in fact, between 2000 and 2010, the share of operational holdings held by this category has increased from 55.6% to 60.6%. Importantly, the share of land held by large landholders has declined during this period and in 2010–11 accounts for only 5.4% of the total land. Without denying the limits of such data on operational holdings (with no details on ownership, which could have resulted in under-reporting), the scope for redistribution of land to enable more viable and productive landholdings among marginal farmers appears to be limited. However, micro-level evidence in parts of Tamil Nadu suggests a pattern of transfer of land from the upper to the intermediate castes and, to a limited extent, to Dalits (Jeyaranjan 2016). In terms of differentiation, there has been a process of growing landlessness, as partly evident from the shift in workforce composition (Table 2).

Table 2 indicates a steady decline in both the share and the absolute number of cultivators since 1991, suggesting a movement out of land among this section of the workforce. Harriss and Jeyaranjan (2016) mobilise evidence from several village-level studies to point to increased landlessness. However, at least one of the studies they cite suggests either a status quo or an increase in landholding. Around 55.43% of the households in the state did not own land other than homestead land in 2003–04. While fragmentation and landlessness have been observed at one end, there is little secondary evidence to suggest increasing concentration of landholdings at the top; the share of land under semi-medium, medium, and large-holding categories have actually fallen (Table 1). Djurfeldt et al (2008) also concede an absence of polarisation at the micro-level, despite greater fragmentation at the bottom. In peri-urban locations, however, there is evidence of non-rural actors buying up rural land and consolidating landholdings (Vijayabaskar and Menon 2016; Heyer 2016). The gains of such consolidation are seldom realised within agriculture and are more often accompanied by a shift in land use from agriculture to real estate and speculation. Other aspects of agrarian relations that are seen as essential to a dynamic capitalist agrarian economy—such as activation of labour and land markets, decline of traditional interlocking of factor markets, and adoption of new technologies—have all been observed. The social welfare net has also contributed to underminingthe sources of coercive power wielded by landed castesover landless Dalit agricultural labourers and hence has opened up spaces for more democratic production relations. Rural caste hierarchies in the state are, therefore, less likely to be tied to economic exploitation than by opportunity hoarding. In the absence of consolidation of landholdings, other sources of economic differentiation have to be sought in the non-farm economy.

Crises in Accumulation and Welfare Policies

Though the share of agriculture in Tamil Nadu’s net state domestic product (NSDP) at less than 8% is the second lowest among major states and half that of the all-India average, yields for most of its major crops, including paddy, sugar cane, and horticultural produce, are one of the highest in the country.2 The statealso has one of the most commercialised agricultural sectors (Nagaraj 2006) and hence is input intensive. Given the fragmented nature of landholdings and capital-intensive production, the median annual income for a farmer in Tamil Nadu in 2012–13 was less than₹20,000 (net of cultivation costs) despite high productivity levels (GoI 2015). A key area of concern has been that of access to irrigation. While the gains from green revolution in the state were largely premised on extraction of groundwater, there is growing evidence of the limits to such extraction with nearly two-thirds of the groundwater blocks in the state being classified as “non-safe.” Depleting groundwater levels have led to considerable increase in costs of cultivation, with farmers often investing in tube wells running up to 1,000 feet and more, particularly in western Tamil Nadu. Further, as Harriss and Jeyaranjan (2016) point out, despite relatively higher yields in the state, these have stagnated for a longtime even as input costs have risen. This crisis in viability of farming is also partly evident from the decline of even the net-sown area from 62.32 lakh hectares in 1979–80 to 49.86 lakh hectares in 2011–12.

The potential for surplus diversification from agriculture into other sectors has therefore become limited for most cultivators in the state, unlike in the early phases of the green revolution. It has been observed that the transfers of agrarian surplus to the urban economies have been undermined in recent decades with the urban economy being relatively disembedded from the rural hinterlands in terms of capital (Harriss-White 2016). Rather, rural lands in parts of the state have emerged as sources of speculative accumulation for non-rural elites and, to a limited extent, locals (Vijayabaskar and Menon 2016). Declining net sown area and returns from cultivation, accompanied by relatively higher levels of mechanisation, also imply a fall in employment for agricultural labour. This also means that the bulk of the cultivators and agricultural labourers are unlikely to be in a position to reproduce themselves solely through work on one’s own land or as wage workers in agriculture. State interventions in the domain of social welfare have been crucial to address this problem.

Despite such agrarian distress, poverty levels have fallen dramatically in the state since the early 1990s (Kalaiyarasan 2014). It is worth remembering that the average poverty levels were higher than the all-India average till the 1980s, and it is only since the 1990s that we witness a steady decline in poverty, including that of rural poverty. This poverty reduction has been made possible through a strengthening of its social security net, the public distribution system (PDS) in particular. According to Dreze and Khera (2013), universal PDS in the state has accounted for a reduction in the headcount ratio of the poor by 44.4% in rural Tamil Nadu, which would appear even steeper if one were to use the consumer price index for agricultural labourers (cited in Balagopal 2015). The PDS, along with a slew of other welfare programmes, may not compensate for livelihood diversification through productive employment, but it does make possible spaces for diversification especially in conjunction with affirmative policies in education. Though surplus diversification seems quite unlikely, there is enough evidence of livelihood diversification out of agriculture.

Diversification of Labour and Economic Differentiation

According to the Socio-economic and Caste Census 2011 (SECC), only 18.22% rural households report income from cultivation as the main source of income in the state, as against the all-India figure of 30.1%. What is the nature of this diversification? As per the SECC, 65.77% of rural households in the state list manual casual labour as their major income source, implying that the bulk of non-farm employment is insecure and precarious. In Table 3 the nature of employment between 2000 and 2011–12 further confirms this shift to more casual employment.

While the share of the self-employed has increased during this period at both the all-India level and among other major states, Tamil Nadu is the only state that has seen a fall in the share, along with that of regular salaried work; these have been compensated by a rise in casual employment. This is likely to be due to a sharper decline in the number of cultivators, the growing role of construction in the state’s economy, and a relative decline in the ability of the manufacturing sector to increase its share in the state’s employment. The state has the largest share of workforce employed in the construction sector after Kerala (Vijayabaskar 2015). Though the state continues to account for the largest number of factories in the organised sector and also the highest number of workers employed in factories in the entire country, its share of employment in all-India manufacturing has increased by only 1% from 2000–01 to 2010–11. However, the share in the number of factories has increased by close to 2% (Vijayabaskar 2015). This is suggestive of a decline in employment absorption in the manufacturing sector, a phenomenon well in line with global trends. Except for a small segment in the automobile sector, most jobs are temporary and low-skilled. The emergence of large contractor firms like UDS in the state (Rajshekhar 2016) is tied to the demand for such temporary labour. Fieldwork among youth revealed that they are often between jobs, looking for a new one. Diploma holders recruited as apprentices and trainees are almost never absorbed by the firm. Within services, trade, transport, repair, and real estate have emerged as major sources of employment. But, once again, they remain largely low paying with little security of employment. Amidst such an uncertain urban present, the rural continues to be a source of security. Diversification does not always translate into a complete abandoning of the rural; agriculture continues to offer income support to the majority of farming and labouring households in the state (Harriss and Jeyaranjan 2016). Micro-level studies indicate a combination of farm and non-farm livelihood strategies (Jeyaranjan 2012). This is suggestive of a growing diversification of household income, but an inability of those households to make the urban transition completely. The social welfare net also sustains this “in-betweenness”—between the rural and the urban, between self-employed, waged work and being unemployed—buffering them from uncertainties in the job market and in agriculture. Social welfare policies may, however, have contributed to the increase in reservation wages enabling a tightening of the labour market for less-skilled jobs, as reflected in a rise in real wages for agricultural workers (Harriss and Jeyaranjan 2016); gender differences in wage rates, however, persist.

While such diversification suggests a sectoral and spatial mobility without economic mobility for a large share of rural households, this is not to deny the presence of quality jobs, however limited they are. The state is home to one of the most vibrant software, automobile, textiles, and leather sector enterprises in the country and together do generate a small share of high-end jobs. Importantly, the state is also home toa vibrant international remittance economy. According to a recent study based on a survey of 20,000 households (Rajan et al 2016), there are 2.2 million emigrants in the state (only slightly lower than that of Kerala), remitting around 14% of the state’s domestic product. One out of 10 households had at least one emigrant from the state. In terms of education, while around 50% had educational levels equal to or less than higher secondary, another half had tertiary and technical qualifications. In fact, working as an “engineer” was thedominant occupation, followed by construction-related work, indicating a kind of a dualistic labour market in terms of skills and income. The fact that emigration to the United Statesaccounts for the third highest share of emigrants indicates the skill intensity of one end of the migration stream. It would therefore appear that this set of emigrant opportunities opens up incentives for investments in education even as it creates new sources of economic differentiation. It is also important to note that, on an average, an emigrant incurs an expenditure of over₹1 lakh to emigrate. This is likely to pose barriers for lower socio-economic groups, though the report does not provide caste-wise data on emigration.

The question of who lands what jobs and what drives this segmentation is, however, not clear. (Djurfeldt et al 2008), based on a study of two villages, point out that the lowest and the uppermost segments take better advantage of non-farm employment opportunities than the middle segments. Given the predominantly marginal and small size of landholdings, and the increase in landlessness in the rural, access to landas a source of differentiation in the non-formal is inadequate to explain. Access to education may not be sufficient either.According to the report of the 2014–15 All-India Survey on Higher Education, 45.2% of Tamil Nadu’s youth in the age group of 18–23 years are engaged in some form of higher education or the other (Table 4).

As the table indicates, the gross enrolment ratio for Tamil Nadu is not only much higher than the all-India average (24.3%), it is the highest among all major states, outstripping the second best performing state by a considerable margin. Importantly, the ratio, though lower than that of the overall category is also relatively higher for Scheduled Caste youth suggesting a more broad-based increase in investments in education across castes. Given the limited generation of quality jobs, it is clear that mere access to higher education does not translate into better diversification options. As Table 5 indicates, the extent of unemployment among the educated, particularly among those from rural areas, is quite high.

“NEET” refers to the difference between total population in that age group and those who are in education, training or employment in that age group. The fact that nearly 30% of male graduates from rural areas fall under this category suggests that education does not translate into quality employment. Rather than mere access to higher education, it is therefore plausible that the quality of education accessed is the source of differentiation. In the course of both the youth survey and focus group discussions, many felt that the medium of education was a critical source of differentiation. Lack of access to English is seen as a critical barrier to better employmentopportunities in the context of a globalising economy, given that the bulk of quality employment gets generated in theservice sector. Privatisation of education at multiple levels, and consequent segmentation, is likely to generate new entry barriers in the labour market. Demand for such education,especially at the higher levels, has increased as indicated by the fact that the state accounted for more than one-fifth of all educational loans availed in the country through public sector banks during 2013–14 to 2015–16 and was the highest forall states (Figure 1).

Given the predominance of casual work, such debt-backed investments in education are not compensated by quality jobs for many households. Outside waged work, the non-farm rural economy is also being propelled by new sources of accumulation by political elites that are largely rentier in nature. Real estate and construction, oligopolistic liquor production and trade, sand and granite mining, educational institutions, contracts from the public sector, and corruption have emerged as new avenues of accumulation, fostering new provincial propertied classes in rural areas and small towns. This also contributes to the undermining of local agroecologies and, hence, agriculture (Harriss and Wyatt 2016; Manikandan and Wyatt 2014). This is tied to the rise of the political entrepreneur who sees investment in political careers as a source of accumulation, though this is not to deny the presence of surplus diversification from agriculture in certain regions of the state, western Tamil Nadu in particular.

Implications for Politics

Declining returns from agriculture and reduced quantum of employment in it have meant fewer incentives for collective action over land or improved agricultural wages in a context of extensive livelihood diversification. Struggles on both these counts have virtually ceased to exist, though J Samraj contends that there are caste–cultural factors also at work with regard to the lack of sufficient claim-making over land by Dalits (Samraj 2010). Caste-based mobilisations that privilege a move away from caste-ascribed occupations and feminisation ofagricultural labour also shape collective action around these distributional issues. Welfare interventions driven by competitive populism have, however, opened up democratic spaces of assertion for segments of the labouring classes, undermining traditional means of labour control in agriculture and also enabling an increase in reservation wages. Further, broad-basing of education through affirmative action has ensured a more democratic access to the labour market. However, this has not translated into adequate productive employment in terms of both quantity and quality, with the state’s poor record in agro-economy and job creation clearly being the weaknesses in its development regime.  Excessive attention to welfarist interventions may have paved the way for a regime of rural dispossession that may have appeared to be without costuntil recently.  

In a context of poor returns to both agriculture and investments in higher education for a large number of rural households, it is necessary to re-examine the nature of overlaps between class and caste hierarchies in rural Tamil Nadu. In particular, it is difficult to imagine a homogeneous class location of the entire spectrum of intermediate castes in the state. While segments have taken advantage of state policies tobecome members of a new affluent middle class, considerable sections have been excluded from the growth process leading to intra-caste differentiation. Differences are likely to emerge not only within specific backward castes but also between different backward castes, as hinted by Jayaraj (2004) but which requires greater attention. As mentioned earlier, caste hierarchies are more likely to be reinforced through opportunity hoarding, sources of which require further inquiry. This differentiation may partly explain the rise of caste-based political mobilisation that is able to make simultaneous appeals to multiple economic locations occupied by members of the same caste, of which very few may actually constitute clear signs of economic mobility.

While capital constraint may not be an issue for accumulation, the fact that the labour transition looks almost impossible warrants a reassessment of the agrarian question. Urban futures for most of the Third World appear bleak (du Toit Andries and D Neves 2014; Li 2009) despite the rural becoming “post-agrarian” or the transition being “truncated,” calling for scholars to reorient the demand for social protection away from the domain of work and employment and broad base it around institutions of citizenship and social justice (Ferguson 2015). At the all-India level, the agitations launched by Jats, Patels, and Marathas may well indicate this process of “truncated agrarian transition.” While this is not to deny the possibility of creating additional jobs in the state, the chances of a productive sector absorbing the entire transitioning workforce seem to be quite unlikely. The agrarian question of labour therefore persists. It appears that the question cannot be resolved entirely within the non-agricultural sector, but may possibly require a combination of the two in conjunction with a strengthened social security net. Importantly, this calls for a reinvigoration of the agrarian economy and its ecological sustenance, even if its share in the state’s income is declining. It is also important to pay attention to rural–urban differences in education and healthcare that tend to reinforce or enhance economic differentiation across these spaces. The role of remittances as witnessed in the case of Tamil Nadu and Kerala also suggests that the labour question cannot probably be resolved within subnational or even national scales of accumulation.


1 The study titled “Young People in India: Social Change, Development and Politics” was supported by Institute of South Asian Studies,National University of Singapore and involved a comparison of three states: Bihar, New Delhi, and Tamil Nadu. While the overall study was coordinated by John Harriss, Simon Fraser University and S Narayan, National University Singapore, I was responsible for the Tamil Nadu component of the comparative study.

2 See National Horticulture Board (2015).


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Updated On : 17th Nov, 2017


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