By Nageshwar Patnaik in Bhubaneswar, October 31, 2016 : In less than five years of renaming of Orissa to Odisha, the resource rich state is still groping in darkness to ensure faster economic progress. Though the economy of the state has been far from stagnant in recent years, it has a lot of ground to cover before the living conditions of its population get upgraded to a reasonable level and before it catches up with the more developed Indian states.

In terms of per capita Net State Domestic Product [NSDP], Odisha has the rank of 24 among 27 major states in the country in 2013-14 [advance estimate] at Factor cost at 2004-05 prices. The state is just ahead of Assam Uttar Pradesh and Bihar according to Odisha Economic Survey, 2014-15.

Still worse is the fact that Odisha finds itself on the bottom four in Human Development Index [HDI]. At 32.59 per cent, the head-count index of poverty in Odisha in 2011-12 was much higher than the corresponding All India figure of 21.92%.

The liberalisation process that began in India in the early 1990s catapulted Odisha as the most attractive destination for large capital-intensive projects by private-sector firms – typically mineral-based ones. Some of these projects, however, faced opposition from the people threatened with displacement. At the same time, the state could do little with its longstanding woes – poverty and unemployment.

There had been serious decline in the Orissa’s agricultural sector, which is still the only significant determinant of per capita income in the state – while the mining sector, be it in production or exports, has flourished.

Ever since the liberalization, privatization and globalization [LPG]-led industrialization took off in the early 1990s, the government’s emphasis was more on industry and mining than agriculture, which becomes obvious from the low agricultural productivity in the state.

One cannot deny the fact that the problem of economic development has as much to do with politics as with economics. The failure of the Naveen Patnaik government to find out a reasonable solution to the displacement issue has stymied many mega projects including Posco and ArcelorMittal’s 12 million ton steel plants in the state. Various political groups also exploited the discontent and distrust of people to ensure that these projects are not grounded.

The government’s overdrive for fast industrialization virtually initiated a process of pauperisation of agriculture through, among other things, under utilisation or non-utilisation of land and agricultural labour, degradation and diversion of cultivable land, and stagnant crop and resource productivity. No wonder that one witnesses an increasing rate of farmer suicides in the state.

This neglect of agriculture shows an absence of knowledge of history. A country prospers if it puts emphasis on agriculture. The government appeared rigid on importing the industrial revolution without laying the necessary agricultural foundation.

For nearly three decades [1980-2010], agriculture in Odisha has been reeling under the subsistence nature of operation, relatively small size of landholdings, high incidence of indebtedness, inadequate and poor irrigation infrastructure, limited access to credit and other crucial agricultural inputs, weak market linkages, recurrence of flood and drought, concentration of tribal population.

In fact, agriculture has shrunk from 54.6 per cent in 1980-81 to only 17.3 per cent in 2009-10 of the total state gross domestic product. The state witnessed the falling share of agriculture to overall GSDP as well as fluctuating trend of growth rates for the last few years. The share of agriculture to GSDP further came down to 15 per cent in 2014-15 according to OES, 2015-16.

Rural workforce in the state is predominantly employed in agriculture sector with more than 60 per cent of the rural households directly or indirectly engaged in this sector. There also has been rapid rise in small holdings [less than one hectare of holding] in the state. Scarcity of land and declining land-man ratio has made operation holdings smaller and uneconomic.

The prevalence of tenancy in the state is high in comparison with the national level. Most of the tenant cultivators have no clear property right on land the contracts are short term and oral in nature. Besides, tenants have no access to formal credit market as it is given based on collateral, mainly ownership of land. Majuscule section of tenants is marginal and small tenants. They have to depend on the landlord of moneylenders to arrange for working capital requirements.

The Naveen Patnaik government appears to be in the process of changing its land-lease laws and it is expected to complete the process of amending the decades-old land lease laws by the end of this financial year in the backdrop of nearly 90 per cent farmer suicide cases reported by tenants.

As many as 1,358 farmers, including 155 women, have committed suicide in the State during eight years from 2007 to 2014. This was informed by agriculture minister Pradeep Maharathy recently in the state Assembly.

Though the state government has been consistently maintaining that farmer suicides are not related to crop loss or debt burden, it is very clear that farmer suicides in the state are an outcome of agrarian distress. Ironically, there is no provision of compensation to the family of the deceased.

But in Odisha’s case all the hundred suicides reported so far are of paddy cultivators and 90 per cent of them are tenant farmers. In the absence of any tenancy law or rules, the verbal agreement and beliefs run the entire tenancy show putting the real peasant in jeopardy. Neither does the tenant get any compensation for the crop loss nor any relief. He is not assured of the Minimum Support Price (MSP) without the Farmer’s Identity card and he remains at the mercy of the middle man.

Development of irrigation is key to agrarian growth. Even to-day, the nature of irrigation in the state is of protective type and it is mainly utilized to protect the khariff crops due to delayed and erratic rainfall. Only 28.9 per cent of the total crop produced in the State comes from irrigated land, Maharathy recently told the state Assembly.

As per OES-2015-16, 33.2 per cent of paddy, 3 per cent of pulses and 16 per cent of oilseeds are only produced in irrigated areas. There is uneven distribution of development of irrigation and inefficient use of the created potential. About half of irrigation potential created in the case of flow and 37 per cent of groundwater has not been utilized in the state and the efficiency of water use is also low in case of canal irrigation, experts said.

“The incidence of unemployment and underemployment in rural Odisha, and particularly among the youths is quite high. The agricultural labourers in unirrigated and tribal districts in the state are in a more disadvantaged position as these households suffer from higher incidence of underemployment / underemployment with lower wage rates due to labour and agricultural productivity”, says economist Prof Raj Kishore Panda.

There is a need for a major policy intervention to boost up the agricultural productivity through infrastructure development, cropping intensity, diversion towards high value but labour intensive crops like fruits and vegetables, and use of productivity-raising appropriate technology, remarks Prof Panda, who was director of the city-based Nabakrushna Choudhury Centre for Development Studies.

No one can deny that the state – once known as a sluggish, ultra-poor and highly debt stressed state – has transformed itself from a lagging state to a state in transition spurred by investment in metal industries largely. And yet, the state has to pay a heavy price due to neglect of agriculture and farmers which is evident from the world-wide media coverage of infant deaths due to malnutrition in Nagada in Jajpur district, the gut-wrenching image of Dana Majhi carrying the body of his wife Amangdei, wracked by tuberculosis bacteria, with a sobbing daughter walking alongside et al.

All this again brought the deprivation and utter hopelessness of lives of poor in rural Odisha into focus. The challenge before Naveen Patnaik government to make inclusive development a reality, agriculture and farmers should get utmost priority, failing which history will keep repeating itself bringing shame to Odias living across the globe in this new millennium.