Monday, June 04, 2007

Securing Kerala

In recent weeks, Kerala Chief Minister Achuthanthan has caught the state by surprise by sending earthmovers and bulldozers to Munnar to remove illegal encroachments, including properties owned by politicians of all hues. In the process, his actions have won the hearts of some of his staunchest critics among the public. Around the same time that Achuthanthan decided to move against what has come to be known as the "land mafia", he also announced plans to reverse paddy reclamation projects throughout the state. As rice has fallen out of favour with Kerala farmers, paddy fields have given way to other crops and commercial enterprises. Expressing concern for the state's food security, Achuthanthan has proposed actions against real estate firms who buy paddy fields and convert them for alternative purposes. Unfortunately, what he does not realize that this latter plan is going to backfire and threaten his very efforts to curb illegal encroachments.

Illegal encroachments are consequences of an economy with increasing disposable income but comparatively few investment opportunties. And whether we're talking about non-resident Keralites sending home more and more remittances every year or real estate firms reacting to economic opportunities in Kerala, the reality is that Kerala has to proactively react to the demands of an increasingly wealthy population. And this is where it is falling behind today.

First, let us give Achuthanthan credit where he is due. Forest lands are government property for the very reason that free markets are imperfect. Forest lands have enormous positive externalities, because they are an important link in the biological cycle. Some of the Munnar forests contain the most pristine vegetation in Kerala. They are habitats to wild animals that form an important part of the food chain. They potentially harbor plants whose medicinal value are inadequately documented. Forests also act as carbon dioxide reservoirs, playing increasingly significant roles as the world searches for solutions to air pollution. They hold more benefits to society than can be accounted for, and thus do not compensate private holders as they should. In private hands, they would not be conserved as they mean more to society as a whole than to private individuals. Their viability are best left to a public authority appointed by society. However, forest departments and land revenue departments can be lax when there are not enough incentives in place to maintain healthy forests. Let us not forget that it is the political class which is responsible for many instances of illegal encroachments, so change should begin at the top. So, let us hope that our Chief Minister also turns his attention to the systemic flaws that lead to the misuse of public lands.

In contrast, the Chief Minister's plans for paddy fields, have very little to do with the reality of a growing Kerala and owes more to his fixation on food security. This unhealthy obssession is partly rooted in Kerala’s history. In particular, the political class in Kerala still suffers a hangover from the food crisis in 1964, when the existing Communist government was booted out and the state was placed under Central rule. The four states of Andhra Pradesh, Karnataka, Tamil Nadu and Kerala were then consolidated into a single food trading zone. Instead of letting food prices prevail at market rates and intervening for the most marginalized consumers, the Central government placed price ceilings on the stocks it purchased in the name of rationing. So while wealthier consumers in Kerala were able to pay the rates that Andhra suppliers demanded, ration ships ran out of stock as the State government refused to budge on prices. Kerala tided over the crisis temporarily with imports from countries including the U.S. and Pakistan and over time developed a more efficient distribution system. So, Achuthanthan's concern for rice’s dwindling prospects in Kerala almost seem justified. Almost.

It is difficult to justify a labor-intensive crop like rice in a state that has near 100% literacy and is better off by putting its human resources in more productive industries. Kerala's achievements in educating its people are precisely why paddy fields are dwindling from their peak in the 1970s. The mass spread of education, pre- and post-Independence, opened up alternative sources of employment for millions of Keralites within the short span of two or three generations. Workers from communities that historically depended on agriculture suddenly found more lucrative opportunities in retail, education, civil service, construction, tourism etc. It's the classic textbook case of economic diversification within an increasingly skilled workforce. Meanwhile, rice's viability as a crop has diminished significantly with rising labor costs.

But despite the diminishing contribution of rice to the local economy, Achuthanthan believes that Kerala should spend valuable taxpayers' money on increasing the cultivation of rice in the name of food security. If we define food security as a state where people are capable of feeding themselves, Kerala is not facing a food crisis by any measure. If anything, most Keralites are employed in those jobs where they are most productive and can earn enough to feed themselves. The only need for an intervention would be for those marginalized consumers, or "non-consumers", for whom the price of rice puts it effectively out of their reach. It is conceivable that these non-consumers have grown in number in recent times as food prices have risen. Yet, is forcing farmers and industrialists to switch to paddy the most effective way to feed these marginalized people?

If Achuthananthan's true goal is food security, he has two options:
1) procure food at market rates and subsidize them for the marginalized consumers or
2) grow food locally and provide it to the needy.

The latter is far more disruptive because it ignores the merits of a competitive market and creates a deadweight loss to the state. With option 1, he can obtain rice at the cheapest rates possible from other sources. With option 2, he forces farmers to grow rice in the place of more valuable and less-labor intensive crops and thus reduces their incomes. But, even if he were to subsidize those farmers and prevent any loss of income to them, Kerala would be paying for a relatively expensive crop, creating an even greater bill for taxpayers. So, one has to assume that Achuthanthan believes that there is some intangible benefit the balances the cost of encouraging paddy growth. Therein lies the unspoken, irrational fears that "food security" have come to represent.

Food security as an argument belies many of the irrational fears that politicians hold about free trade and farming constituencies. Achuthanthan’s paddy project is inherently about his staunch belief that Kerala should produce its own food and his insecurity with free markets. According to our leaders, we should support rice farmers even if we have to pay more for their rice and create fields when there is no need for more. This irrational argument ignores the very basic fact that Kerala consumers are not restricted to Kerala’s products and should be able to choose from the larger Indian and world markets. The hype around "food security" also ignores Kerala’s ability to focus on more productive sectors of the economy so that it can create more wealth and its people can eat more than a daily plate of gruel. In a nutshell, paddy reclamation is a wasteful exercise for a state with better things to do.

Yet, there is no dearth for meaningful reforms if Achuthanthan seriously wishes to pursue greater food security for Kerala. For example, he can begin by reforming one of the most antiquated laws in Kerala agriculture, the Kerala Land Utilisation Order of 1967. The 1967 legislation was passed with the express intention to lock up agricultural land in Kerala, including paddy fields, within agriculture. Passed in the hindsight of the ’64 crisis, the Order introduced tremendous restrictions in converting fallow paddy fields to commercial usage. However, as rice prices have fallen and labor costs risen since the Act was passed, huge swathes of paddy fields have been converted surreptiously or left barren in the absence of government permission. In the process, environmental activists have lost considerably in their fight to reforest paddy fields and restore pre-agriculture ecosystems as needed. Owners of smaller landholdings have been unable to take advantage of much needed capital investment and consolidation. And illegal encroachments have proliferated as scrupulous dealers have turned their eyes to less well protected public lands in the absence of commercially zoned real estate. The ’67 Order is increasingly endangering the delicate relationship between public and private lands. Ironically, it has even failed to play any substantial role in increasing food security. Because in a market like India, where people are free to trade across state borders, food security has little to do with local crops and more to do with economic security.

Kerala's food crisis in 1964 was only superficially the result of inadequate agricultural output. The 1964 crisis was in part driven by Kerala’s impoverishment and lack of economic diversification. A community’s dependence on agriculture leaves it exposed to a considerable amount of risk, for e.g. the risk that a bad drought will bring a poor harvest. Kerala's lack of value-added products and a largely unskilled workforce in the 1970s left a large section of society exposed to the highly variable price of a commoditized product. So in the past, local food insecurity has always fed economic insecurity and vice versa – i.e. a fall in food production often led to a loss in income for a large portion of Keralites, thus reducing the ability to buy food and so on. Today, the situation is very different with Kerala having diversified significantly into the services sector and a large proportion of skilled and unskilled workforce having migrated overseas. The debilitating link between food production and economic insecurity has weakened considerably. Most Keralites no longer rely on the comparatively cheaper and inferior rice from public distribution system as they are generally wealthier than their predecessors and can afford to buy better quality rice at prevailing rates. Ultimately, Achuthanthan's paddy reclamation initiative is not only a solution to a non-existant problem; it also does little to improve Kerala's economic security, which as history shown, is the best driver of food security.


Anonymous said...

Have a look at The paddy fields are not just producing rice, it does act as a water reservoir. It does help kerala in keeping its water table(Storing it during monsoon and thus recharging the ground water). See, the area under paddy cultivation is just 12% of the total area under cultivation(Not that it is not 12% of total geographical area). Do we need the so called REAL ESTATE development killing the balance paddy fields? Cann't we use the non-paddy cultivated area and have development?


The message of your blog was'nt clear enough. Should we allow urbanisation at the costs of our farmers's lives ? There was recently a programme in Britain's Channel-4 about India's 'whirl wind' economy. The programme also detailed about 200,000 suicidal deaths of farmers all across the country in the past 2 years! It also interviewed Dr.M.S. Swaminathan, father of India's 'Green Revolution' Dr. Swaminathan expressed his worst fears about India's mind less urbanisation & it's consequences to the society in future.Agriculture has been India's back bone; even in it's early days of deprivation, which one should'nt forget.You may import better quality food from other countries, but it is always better to be self sufficient.Catastrophies , calamities , war & famine can stike you unaware, and then your friendly nations may not sell you food; it's only the grains in your granaries that will feed you then!
Instead of lamenting about the poor quality grains we produce; why can't we think of impoving quality of our agricultural produces through collective research.India's IT Megalomaniac dreams is just a bubble waiting to be burst at any time, emphasis should be on agriculture & for impoving farmer's lives & giving them the know how & technology.

abhishek said...


You have touched a number of points, many of which I can't adequately respond to within the space of a comment. I intend to write more articles on Kerala agriculture and where I think it should be headed in the future, where I will address all of your fair points.

Let me address a couple of your points though in the meantime. No, I don't condone urbanization at the expense of our farmers. However, do I think that India has too many farmers? Yes. India's agriculture is past the point of diminishing marginal returns. If we wish to provide more and better public facilities, including hospitals, schools, we have to encourage the development of alternative sources of employment in the manufacturing and service sectors so that our country's wealth increases and tax revenues increase. Till date though, neither Kerala nor India have actively pursued the rehabilitation of farmers into alternative sectors, which is why you see the haphazard rural-urban migration characteristic of cities like Delhi and Mumbai, which creates crowding and place additional pressures on the urban infrastructure. We should be developing infrastructure in rural areas and encourage local development, so that we can approach the problem systematically and rehabilitate farmers to their benefit.

I agree that India's urbanization is completely mindless right now. But, how should we define urbanization? Should we define it as the increase in populations of existing mega-cities? Or should we define it as the development of better products and services, including health and education, within rural areas? If the answer is the latter, India's development will more sustainable than if it pursues "mindless urbanization" as you put it, or "ruralization" as naive development activists would have it. And this is where India is falling behind today. Kerala while years ahead of the rest of the India in this respect, is increasingly feeling the pressure on public services from an overstretched government budget and stagnant tax revenues.

Now about your comment on better quality rice, I did not advocate India abandoning rice production. It is a fact though that Andhra Pradesh is a larger and more productive producer of rice than Kerala. Could Kerala benefit from imports from Andhra Pradesh? Potentially yes. Do the risks of catastrophes, calamities that you mention apply there? No. Because the larger the diversity of your choices, the better your chances of survival. If Kerala has the opportunity to import rice from various parts of India, it is better insulated against weather risk than it is on its own.

About rice development research - Kerala's technical abilities in this area are not up to the mark precisely because its public financial resources are limited. We are already running a huge budget deficit and spending in agricultural R&D usually takes second place to priorities like paying government salaries. The issue here is that Kerala has no meaningful industry to tax. Agriculture is off limits to taxation. So, how do we generate more funds for public spending without encouraging alternative industrial development?

Whistleblower, at some point, you have to draw the line between per capita agricultural income, agriculture and India's food security. They are three separate issues.
India's, or Kerala's, per capita agricultural income is stagnant precisely because there are too many farmers for too little land. Even if we mechanize, introduce higher-yielding seeds, and generally increase productivity, I do not forsee improving the conditions of the 60% of our population beyond a level of substinence. Agricultural societies everywhere are forcibly retraining their farmers to provide alternative, value-added goods and services. We could be doing the same, albeit humanely and purposefully, rather than haphazardly. We should be attracting manufacturers and service providers to the rural hinterlands with better infrastructure, and applying taxes on them to pay for public facilities in the rural areas themselves and retrain locals in the production of value-added goods and services.

Now, coming to agriculture, no one advocates less agricultural output in India, but if we can retrain some farmers, the rest will have more agricultural resources between themselves. Per capita agricultural incomes can rise without any detrimental effects to India's food production.

Lastly, by pursuing occupational diversification, we improve India's food security, because we develop more than one source of income. Our society is no longer rendered vulnerable to a drought or other natural disaster that could affect our local food production. Meanwhile, we develop stronger terms of trade with the rest of the world. And unless the whole world plunges into war, India will always be able to trade with some other country and exploit its comparative advantage to the benefit of its people. And even if a catastrophe of global proportion occurs, India should have stocks of grain to tide over any temporary crisis, while it get its agricultural sector back in shape. Arguably, after converting paddy fields to commercial zones, it takes some time take them apart and reconvert to paddy fields. At most, I would think 2-3 years. So, India would have to store 2-3 years worth of food grains for a catastrophe of that nature. That is no impossible task for a trillion-dollar economy.

abhishek said...

Farmer suicides are largely the result of wilfull blindness of the Indian government to aiding their integration with a liberalized economy. I cannot describe all the reasons for the sudden spurt in farmer suicides, but I will touch on the most obvious ones.

First, as most farmers cannot sell their lands to commercial developers, the ones that can't sell their lands are trapped in a vicious debt cycle unable to extricate themselves using their only collateral. Of the few that are able to sell their land to commercial developers, they undervalue their real estate because they have imperfect information. It is a fact that when real estate developers meet with farmers, there is a significant inequality in their knowledge - real estate developers have a better sense of the market. Most Indian farmers are illiterate. So the negotiated prices generally undervalue the land. What is the solution? The solution for most politicians is to outright ban the transfer of agricultural land, reducing Indian farmers to nothing more than dependents of local money-lenders. Unfortunately, they do not think of better solutions to these problems, including educating farmers, improving the highly fragmented real estate market and in
general, addressing the assymetry of information flow within rural communities.

Another reason for farmer suicides is the assymetry between liberalizing imports but unliberalized exports. And this is particularly applicable to Kerala. Simply put, farmers in Kerala are unable to mechanize their agricultural practices to increase their yields due to opposition from local labor unions among other agents. As a result, their agricultural production are expensive in comparison to imported grains from countries with higher yields. In recent years, the opposition to agricultural mechanization has diminished but not to the confidence level required for investors to approach Kerala farmers with money in the belief that their investments will be sustainable. We are frequently told that rice is a labor-intensive crop. Why is that so? Wheat used to be a labor-intensive crop until tractors and threshers came along. And now it is a capital intensive crop for farmers in wheat-developing countries. How is that rice has not been mechanized in Kerala? Why do we still rely on expensive manual labor to grow rice? The longer we put off mechanization and the more people are locked up in agriculture, the smaller the pieces of the pie for everyone.

I hear very often that free markets are the root cause of farmers' suicides. My belief is that their problems derive not because Indian markets are liberalizing, but because Indian markets are not free enough. Let me explain. In a free market, information flows freely from one agent to another. However, farmers are denied the opportunity to access that information due to their relative lack of education and access points, so they are unable to communicate real estate values, development initiatives and have a general lack of control in determining their financial outcomes. They are denied access to credit without collateral from government institutions and instead rely on local monopolies, a.k.a, individual money-lenders. For some money-lenders, the usurpous rates they charge reflect the risk of their investment. There is a whole other field of finance that focuses on the issue of microcredit. Suffice to say though, that farmers lack access to competitive lenders of money. It is for these and more such reasons, that farmers find little recourse to alleviate their debt burdens. Don't blame free markets when there are no free markets.

Anonymous said...

The lessening number of comments and the foolishness(in analysis) of the posts point to the increasing irrelevance of this blog. The blatant(very subtle sometimes but the trend is very visible) ciriticism of any policy of anything remotely related to communist party is deplorable. May this blog blow up into oblivion!

abhishek said...

@Displaced mallu

Thank you for your very enlightening comment. As always, critics like you take things personally and do very little to add value to a discourse.

I suppose if we attract readers like you, we must not be so irrevelant.

MC said...

@ abhishek, whistleblower - ONLY if anyone really spent some time and read the entire article, would they make any sense of it.

while achuthanandan's initiative is welcome, there are many versions to the motive doing the rounds. but in the end if he can remove encroachments from the state WITHOUT bias, then its fine. but i dont see that happening, at least not now. because there are encroachments untouched despite full knowledge of it.

if someone told me the demolitions are going to help our farmers in any way, thats absurdity. its quite obvious the landscape in munnar is not where our average farmer is going to cultivate paddy. while i would fully like to believe that these demolitions are not a part of the vendetta with pinarayi (and vice versa) as some suggest, we need to see ultimately what the end result is. all i can see is rubble and statements of destruction in crores. but how is this land going to be used? do they have a plan of immediate action for that? is there a special task force for that? its easy to destroy and reclaim using brute force. but whats the end result?

i will not argue about the legalities and appropriateness of demolitions, since i am sure the court will do the needful. if there is illegality involved, there definitely needs to be eviction - not sure if demolition is the only answer.

two of the biggest victims of the demolition drive were none other than achuthanandan and pinarayi. ultimately they got expelled from their party as a result of this drive, the ego behind it and its "unknown" motive.

anyway the point is, how has the demolitions improved the farmer's life? or will it ever improve?

quoting m.s.swaminathan and ecostat is fine, and i fully agree that farmers need support in INDIA, not just kerala. but i dont think these demolitions have or will help the farmers. because that was not the motive of this drive. to put it in another way: is anything being done for the farmers apart from this demolitions? how are we improving the already existing farm lands?

@ displaced_mallu - to brand the demolition drive as something "related to the communist party" itself says a lot. is it only the act that you are interested in? please think of what the motive is, and what the end result will be.

this blog was quiet for a while due to some personal problems, and not because we are less interested or committed about Kerala.

"may this blog blow up into oblivion"
are you serious?? :)

abhishek said...

Thanks MC for your comments.

I think the message of my post may have been misconstrued slightly. My argument is that Achuthanthan's actions against paddy reclamation projects is going to be counter-productive and threaten his efforts to prevent illegal encroachments. As people, including rice farmers, look to alternative sources of industry to develop their land and generate income, Achuthananthan is going to stand in their way. In the process, we will see more such incidents as illegal encroachments as land pressures spill over to public lands, which are less well regulated than private lands.

PCM said...

Dear Abhishek,
A wonderful post and apt observations. Sending earthmovers and bulldozers to Munnar to remove illegal encroachments is creating ripples in the Politics of Kerala, especially the LDF allies including CPM. The public support is not as evident as the rift within LDF. The envy emanating from the GIANT STATURE Achuthanandan has achieved is gathering momentum. Let us hope that it will not become another Gonu.
This action was long due, but the UDF was fighting shy of addressing it. At least the present CM has shown the courage to do so. Now he has reached a stage where he cannot pull back, or reverse his decision. It sounds something like the boon given to Bhasmasura. The ripples are moving all around the State.
I am sorry only for the quantum of national waste involved in pulling down all the buildings. I am also worried about the message this might send to real estate investments.

The idea concerning paddy reclamation projects seems somewhat far-fetched. As you have mentioned, Kerala's achievements in educating its people are precisely why paddy fields are dwindling from their peak in the 1970s. In our hurry to glorify white collar jobs, we have diminished the glory of hard labour. The situation in the state is such that there are no people to do the work in the fields. Machines have to be used for each and everything with the approval and ‘ransom’ to the trade unions. And the cultivation of paddy has become a seriously doubtful investment. In Kuttanad, for example, growing fish is hundred times more fetching than farming. The State is already grown into one of the biggest consumer centres and it may have to use the money it produces to buy rice and other essential items from outside the State. In the present trend of globalizing everything, we will have to do with producing money through profitable crops and NRI means; spend it to buy paddy.
From that point of view, Achuthanandan’ s policies in either fronts seem to buckle – first by driving away investment in real estates and secondly by leaving vast areas of usable land arid and uncultivated.

abhishek said...


Thank you very much for your comments. You have voiced my concerns exactly. It is not that I am against paddy conversions in any way. Its just I am concerned for the farmers who would like to grow alternative crops and increase our state's wealth rather than grow something as expensive to produce as paddy.

In the end, these concerns about us not growing our own rice is all about xenophobia. Can anyone point me to people growing rice in their own backyards anymore? No, most people have to go to the market to buy rice, but no one complains because we all cannot be rice farmers. We earn our livelihoods according to our skills and leave rice farming to those that are best at it. As to Kerala trying to produce it owns rice in favour of importing rice from its neighbouring state, politicians have to decide whether we are Keralites first, or Indians first. I believe we are Indians first and should enjoy the privilege of the Indian market. If it comes to supporting the Andhra rice farmer who can produce rice cheaper than the Keralite farmer, I'll go with the former.

In the end, we are all increasingly dependent on each other. One can view this as an attack on independece and self-sufficiency as nationalists and in this particular matter, "state-ists", would proclaim. But that is a smaller risk for an increasingly integrated market that fosters prosperity and reduces economic risk. This is especially important for the marginalized section of Kerala society - laborers - who rely on the state for public health and education services.

Anonymous said...

hey where is that blog about guruvayur, i had got it on my feeds...anyway please dont publish it, its a little derogatory...

PCM said...

Kerala is still one of the cheapest States to live in, but the mindset of farmers,labourers and workers makes it prohibitive to do any sort of cultivation. The cost of production is too high and the price demanded by the paddy cultivators is exorbitant. Even when price of rubber went up above 100 Rupees and went down a little, there was a hue and cry about falling prices.
Demanding very high prices for products simply because they are produced in Kerala doesn't seem a welcome feature.

MC said...

the "motive" has been exposed now with achuthanandan saying that party offices should be exempted from evictions even if they are on encroached land. how sillier can things get? its a shame to the state and its really sad that crores worth of construction was brought down just as a fancy. its now quite evident that these people have no RULE or policy, but are just out there to satisfy egos. the people of Kerala continue to be the biggest donkeys.

abhishek said...

From the Daily Pioneer -

'Justice S Sirijagan, hearing a private petition against the skewed operations, commented: “We tend to doubt the intentions of the Government in Munnar. We are ashamed that we supported the government in its apparent efforts to take back government land from land mafia and encroachers”.

The observation is not part of a judgement but a stinging observation in the course of the hearing, expressing the court’s dismay at the government reneging on what has been billed an unprecedented step to protect the State’s interests.'

Anonymous said...

we have to take class to achumamamma that we are in 21 st centuary not in shilayugam> so we have to be SMART,SMART CITIZENS,SMART CITIES> so thinkabout of our next generation> make gods own country more beutifull rather than< dogs own country>

Anonymous said...


Anonymous said...

I know this is really beside the point but can you guys please answer these questions:

1.) Is it possible to get by (at least in the beginning) without Malayalam in Kochi/Trivandrum/other cities in Kerala? How hard is it survive in Kerala initially without knowing Malayalam? I will learn it eventually of course.

2.) Do Malayalis in Kerala (once they know English/Hindi) force you to speak Malayalam at all costs? I have never been to Kerala so please don't make fun of my ignorance.

3.) Is Malayalam compulsory in schools in Kerala (SSC/ICSE/CBSE) et al? If so, until when?

4.) How widely understood (ie at the mass level) is Hindi/English in Kerala?

Bobby said...

There has always been a terrible itch to react to things that I see in kerala.But, is it worth spending time on analysis?

1.People dont need helmets!
2. Elephants always offer photographers and TV channels with those 'close to death' shots for their cover pages and 'Flash News' and the 'malayalees' relish these moments like one of their favorite 'jagathy' scenes.
3. Politicians are gods, gods are in politics and we have one man fighting againt everything- Suresh Gopi!!
4.Just walk into one of those well lit jewelleries and watch the pepole who are there, you cannot miss seeing that poor man spending all his savings for buying gold ( misery). That makes his daughters life secure- the more the better ( somebody told him that!)

No no...i dint write this becoz i want things to change...chumma, for the jolly effect!

MohanJjoseph said...

Bring back Kayal Muricken!!

Terms of Use and Disclaimer