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Social Policy and Development Programme Paper 15: Global Capitalism, Deflation and Agrarian Crisis in Developing Countries

5 Dec 2003

  • Author(s): Utsa Patnaik


The issue of land rights and that of gender equality are strongly affected by the prevalent economic and social policy regimes, at both national and global levels. The dominant policy regimes decide to what extent movements for securing land rights or gender equality encounter favourable conditions and have some hope of securing positive gains.

The paper is divided into five sections. The first deals with the deflationary impact of global finance capital on the large number of developing countries that have implemented loan-conditional structural adjustment and trade liberalization policies promoted by the Bretton Woods institutions. Section 2 outlines the broad contours of land reform in India. In section 3, the author discusses recent developments in the agrarian sphere, especially the crisis induced by the prolonged fall in primary product prices. In section 4, she deals with the impact of liberalization and adjustment on rural livelihoods, land use and food security. The fifth section explores possible strategies for protecting rural livelihoods. It focuses particularly on the West Bengal experience with respect to tenancy reform and addressing gender inequality in land control.

The author finds that unregulated capitalist exploitation of bio-resources by big landlords, rich farmers and town contractors has produced a crisis for the majority of India’s rural inhabitants by way of deforestation, lack of firewood, falling sub-soil water tables and acute scarcity of drinkable water. Such factors, combined with falling non-farm work, income-deflating policies and export thrust, have had devastating effects on the livelihoods of the poor.

Yet in many Indian villages, the people affected have launched successful joint community efforts to invest and diversify activities within a voluntary co-operative framework. These are helping to preserve livelihoods and generate enough income and flexibility for hitherto poor households, so they can remain in villages rather than migrate seasonally to cities, and can send their children to school rather than to work.

This, the author argues, is the way forward in other developing countries. It is not easy in places where local government institutions have not been democratized and where state support is lacking; and it often encounters resistance by local landed employers. She concludes that where there is at least a minimal level of state support and activism against deflationary globalization, however, it can lead to a relatively successful stabilization of livelihoods.

Utsa Patnaik is professor of economics at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, in New Delhi. She has written extensively on the political economy of development and on the agrarian question.

Order PPSPD 15 from UNRISD ($12 for readers in industrialized countries and $6 for readers in developing and transitional countries and for students).