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Kaimur model of development offers hope for Bihar


 By T N Jha

Vegetable export: Kaimur

Vegetable export: Kaimur

Bihar, of late, has been the focal point of national debate, inflamed largely by the political heat generated by MNS led tirade against Bihari immigrants in Mumbai. This seems to be gaining and becoming pan-Indian, as, reportedly, in other parts of the country as well, the non-acceptance of Bihari workers is getting further momentum. This, on the flick side of it, has certainly aroused Bihari sentiments and sub- nationalism across all those living in or out of Bihar, which historically remained, more as a sequel to colonial legacies, deeply divided and fragmented on social lines. Perhaps, the rise of Bihari pride, unprecedented in the known history of the land of Budha and Mahavira implicitly augurs well, in as much as it perhaps demean willy-nilly the social divide and create a new super-structure for social integration and usher in a new era of economic resurgence in the state.

2. How far and how quick this becomes realizable, the history alone will unravel it. It must, however, be appreciated that behind such pan-Indian bitterness against Bihari immigrants lies the phenomenon of exodus of workers as well as non-workers, from Bihar to destinations offering better opportunities and conveniences for employment or otherwise. While migration, in any development literature, is advocated to be desirable to grease, induce and accelerate the process of development by correcting labour market, the exodus of labour, caused mainly by regional growth imbalances admittedly perpetuates cultural conflict across sub- nationalism and put pressure, mostly demographic beyond sustenance level on the local economy and infrastructure. For some, it even robs the local economy by distorting factor market, mainly labour. It must at the same time be recognized that such an exodus is essentially due to gross planning failure in as much as it ignored balanced regional development and failed to ensure efficient allocation of public and private investments across regions. Any policy intervention seeking to arrest the exodus of labour force has to concentrate, as the policy makers and academicians have often argued alike, on measures which absorb them in the local economy itself. It is argued in the present paper that the Kaimur model of development, as experienced in the preceding few decades in the west-southern parts of Bihar offers some ray of hope for Bihar in the given circumstances.

3. That Bihar along with its neighbouring Hindi heartland has remained almost stagnant while the other regions particularly those in the down south have flourished with massive doses of investments, including those by corporate and multinationals generating high growth rates, better infrastructure building and balanced sectoral development needs to be probed more deeply with honest admission of historical aberrations and lapses, may be due to individual or collective failures. If one gives a closer look at the status of current growth scenario of Bihar one is dismayed, even stunned to observe that amidst high demographic pressure, the highest in the world, the state continues to be heavily agriculture dependent unlike the other fast developing states where the service and industry sectors have taken off in true Rostovian sense with relatively high investment and generation of employment opportunities. But, agriculture, engaging more than four-fifth of the state population, if the districts of Kaimur range (Shahabad, Aurangabad, etc) are excluded, offers a dismal picture. For example, the factor productivity (land, labour and capital) is the lowest in the country. The farm and crop profitability is the least, even showing evidence of erosion, particularly since mid-nineties more among the small and marginal farmers.

4. Depressed commodity prices, coupled with rising input prices largely explain the erosion in farm profitability. Besides, the near absence of procurement mechanism deprives farmers to get appropriate share in the price spreads. As long as the informal channel of private commodity trading sustained on strong commodity demand mainly cereals from the neighbouring country of Bangladesh and Nepal continued, the prices in the state remained steady, benefiting the local farmers in income gains. But once it collapsed since the on-set of the current decade with sovereign intervention in commodity trading in the neighbouring country, the erosion in farm income almost killed the soul of agriculture of the state. In fact, there is evidence to suggest that there have been reverse commodity flows through private channels to destinations having better marketing infrastructure and offering differential price regime. The farmers of Bihar remained the ultimate losers in as much as they had to compromise on commodity prices which remained depressed anything upto 20-25 per cent. On the other hand, the rising input prices particularly due to overwhelming dependence on diesel mode of irrigation and ever increasing fertilizer prices increased the cost of cultivation. More important, cultivation of commercial crops like sugarcane, tobacco, spices, etc also received beating on continued lack of sustained off-take and unfavourable price regime, thus hurting the cash flow of the farmers.

5. Strikingly, as the statistics published by the government of Bihar in its latest economic survey 2006 and 2007 shows, even the net sown area is shrinking considerably due mainly to increasing current fallow and demographic pressure for non residential use, further abated by aberrations in factor market like land, labour and capital due to both price and non-price factors including unfavourable institutional and policy regime. The dominance of absentee cultivation and all pervasive lease cultivation have crippled the already rigid and inefficient land market, thus choking private investments including those supported by formal credit institutions; as such farmers could not offer any collateral to obtain credit support. The low level of technological adoption including improved farm management practices have further led to cripple growth in productivity and employment in agriculture. The inefficient irrigation as measured in terms of cost per unit, timeliness, inadequacies, ineffective irrigation command and low intensities has further restricted the adoption of new technology in the state, enhancing the cost of cultivation and further eroding farm productivity and profitability. Even the institutional credit market has not grown to supplement the developmental needs of the state. This is clearly visible in terms of per unit availability of credit and its timeliness. The relatively low wage rates and lesser availability of employment days for farm labour both on and off the farm, despite massive influx of government guaranteed employment schemes have abetted and intensified the incidence of unemployment and under employment and induced massive exodus of labour to seek better employment opportunities, mostly outside the state.

6. In such a scenario, the Leader Centric Price led Agro-Processing based Kaimur model of development which have been silently underway in the south-western parts of the state, offers sufficient rays of hope to enhance farm and non-farm income and absorb the growing labour force into local economy itself, thus avoiding cultural conflict and economic destabilization at both ends, and at the same time bringing peace and stability to the nations prosperity index. It may be remembered that Kaimur was created as a separate district in 1992 out of old Shahabad in the southwestern parts of the state with a geographical area of 3352 sq. km and population of around 13 lakh persons. The region, till late eighties remained completely undeveloped with high incidence of underemployment and unemployment. In fact, the area remained the breeding ground of intense socio-economic conflicts. It even used to be the nerve center of criminal and terrorist elements.

7. The same district, in a span of less than two decades, has turned into a development hub, even becoming investment destination, absorbing, in addition to local labour force, a large number of migrant workers mostly from north Bihar. The development has essentially been triggered by the rapid growth of rice-wheat crop system with assured marketing and high price gains as offered by public procurement mechanism built in the region in recent years. It is further supplemented by the emergence of rice processing activities as also the flourishing rice husk market, seed industry, dairy enterprises mostly khoa and paneer, and vegetable cultivation. The rapid rise of education, both public and private has also induced the growth impetus in the district.

8. Let me elaborate the point with facts and figures as obtained through field visit and personal interaction with the select local people. The district with large and efficient irrigation system (80%), mostly canal and lift irrigation from Sone, Durgavati and Karmnasa rivers coupled with high level of farm mechanization (tractor density at 40-45 per village) and high fertilizer consumption (above 125 kg/ha) gives crop yields exceeding 65-70 quintals per ha for rice and 40-45 quintals for wheat which by all standard is comparable to the best of districts in the country. The district thus produces around 8 lakh quintals of rice and 4 lakh quintals of wheat. The emergence of sound marketing infrastructure, public as well as private has facilitated farmers to generate high marketable surplus (6 lakh tones for rice and 2 lakh tones for wheat) at relatively high prices. As much as 1.5 lakh tones of rice and 1 lakh tones of wheat were procured by FCI in the last year. The rest was procured by rice mills and private traders, offering better commodity prices. More than 50 rakes of rice and 20 rakes of wheat were exported to different domestic destinations from the district. All these have meant fairly high income gains to the local farmers.

9. The rise of agro-processing units (nearly 200 small and medium size rice mills) with average hauling capacity of around 40 thousand quintals further accelerated the growth impetus in the district offering assured market and fair prices to farmers. The investments in agro-processing units have been attracted mostly by young entrepreneurs, even from other parts of the state mainly due to more favourable returns. This has generated around 30 thousand regular jobs absorbing mostly migrated workers from north Bihar. Given the high level of farm mechanization and vibrant transport network, the machinery repair works as well absorbs large labour force in the region. In fact, the growth of rice-wheat crop system, coupled with rice processing units has reversed the flow of lobour force into the local economy mostly from north Bihar. Again, the Paddy husk, which once used to be sold at throw away prices to traders from Punjab and Uttar Pradesh now has become a precious raw material in the local market due to its alternate use for generation of gasoline used essentially for domestic purposes. According to rough estimate the total annual turnover of husk business exceeds Rs 40 crores in the district, offering income and employment opportunities to thousands local work force.

10. The district has also turned into a dairy hub with production of milk touching 1.0 lakh liters per day, of which as much as 60% is marketable surplus. Notably, around one-fifth is used as liquid milk and the remaining four-fifth is processed into khoa and paneer, supplied to nearby cities like Varanasi. The opening of milk chilling plant (capacity at 25 thousand liters per day) at Mohania with well defined milk routes and necessary institutional support has also induced and accelerated the development process in the district. Significantly, more than 50% of dairy cattle are cross-bred thus giving higher milk yield and longer lactation cycle. Besides, there has been phenomenal awakening, perhaps driven by job oriented market, among the local people towards the need for universal and quality education, equally for the girl child. This has led to rapid increase in the enrollment of students in the district, more among the girls at all levels of education. The rise of school and college educational institutions, including private ones speaks volume about the expansion of education in the district. The upcoming of computer education, mostly through private institutions has been equally impressive. As a result, the district remained one of the first five fastest growing center in literacy attainment in the state, crossing 75% level by now. Significantly, the district has 7 best educated blocks out of 20 declared in the state.

Mechanization: Kaimur

Mechanization: Kaimur

11. One cannot fail to notice hundreds of truckloads of green vegetables being exported to different far off destinations from deep inside villages of the district, attributable mainly to fair price gains which the vibrant market offers, further facilitated by excellent road and rail connectivity visible all across the district. The next agenda for the local entrepreneurs seems to explore possibilities for adopting vegetable processing as future investment gooals. Finding the vibrancy of the local economy as a more lucrative and risk free business opportunity, the local banks have offered liberal credit support for development initiatives in the district, which is reflected in high C: D ratio and high repayment ethics as against the grim picture in the rest of the state.

12 The fast pace of development of Kaimur district in the recent past is attributable to a variety of factors. However, the single most significant contribution seems to have emanated from the rise of responsive and participative leadership, which the region collectively produced. The politics of the region by and large remained development oriented. How such leaderships have emerged is a question, which needs to be understood and analyzed separately. Let us hope for the moment that the rest of Bihar draws lessons from the experiences of Kaimur and commit to replicate the model for accelerating the process of development of the state and resurrecting true Bihar pride, thereby reversing the flow of labour force from outside to inside the state.


Note: DR T N Jha is Chairman, Indo-Nepal Friendship Trust, Patna


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