LIVELIHOOD PATTERN OF AGRICULTURAL LABOUR ...

Mahapatra: Livelihood Pattern of Agricultural Labour 79

LIVELIHOOD PATTERN OFAGRICULTURAL LABOURHOUSEHOLDS IN RURAL INDIA:EVIDENCE FROM ORISSASushanta MahapatraMADRAS INSTITUTE OF DEVELOPMENT STUDIES, CHENNAI, INDIA

ABSTRACT Using primarily different published secondary data, thearticle analyses employment generation, income of different cate-gories of labour and the extent of indebtedness and earningprevalent among rural landless labourers and agricultural house-holds in rural Orissa, with a view to understanding their livelihoodpatterns. In this state—where more than 85 per cent of the popu-lation is rural—a third of rural households constitute landless labourhouseholds which depend completely on wage employment. An-other 60 per cent of rural households is comprised of marginalfarmers and small farmers who do not generate sufficient incomefrom their land. Even small farmers with up to five acres supple-ment their agriculture with outside jobs or wage employment.The evidence relating to rural labour households and agriculturallabour households shows an explicit overall decline in employmentboth for male and female labour. There is also a decline in theaverage number of earning members per household. Clearly, therural labour households and agricultural labour households in thisstate are characterised by low earning, decline in income, low con-sumption and high debt, and remedies will have to be found togenerate more employment and income.

KEYWORDS: Agriculture, earnings, employment, income, indebtedness,labour markets, livelihood, Orissa, rural labour

Introduction and Literature Survey

In recent years, several theoretical and empirical studies on the functioning of rurallabour markets have appeared. An important trend in this literature has been toexplain patterns of income and employment generation, number of days of workavailable for different kinds of rural labour, and the extent of earning and indebtednessprevalent among these households. The nexus of landlessness, growth of agriculturallabourers and poverty has assumed major significance. The Indian rural workforceincreased at the rate of 1.9 per cent per annum between 1971 and 1981, but since thenet sown area has scarcely risen by 0.4 per cent over the whole decade, there would

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be a rise in the magnitude and proportion of wage labourers (Krishnamurty, 1984).The states of Andhra Pradesh, Bihar, Karnataka, Maharashtra, Orissa, Tamil Naduand West Bengal have relatively large proportions of agricultural labourers, whichtogether constitute 70 per cent of the total agricultural labour force in the country.Barring Maharashtra, the other states have a high percentage of rural populationbelow the poverty line (according to the 38th round of the NSS pertaining to theyear 1983).

In traditional agriculture, labour market references are made to the time-specificityof labour contracts. It is presumed that short-period labour contracts, such as dailylabour, are more frequent than long-period contracts. A contrast is seen betweenwage contract, sharecropping and fixed-rent contract. Daily wage rates are determinedin the daily labour market. Daily casual labour contracts are the major form of labourcontract in traditional agriculture or rural economics (Sajjad, 1989). The above state-ments were empirically observed during a review of contracted arrangements, employ-ment, and wages in rural labour markets conducted by Binswanger and Rosenzweig(1984). They claimed that daily (or casual) labour is the principal form of labourcontract in South and South East Asia, a claim supported by empirical results fromBardhan and Rudra (1980a, 1980b). The authors’ findings are based on a surveyof 110 randomly-selected villages in West Bengal, with data collected in 1979. It wasfound that 83.6 per cent of total ‘labour families’ in all sample villages are ‘casuallabour families’.

Ravallion (1982) studied wage adjustment in Bangladesh before and after the1974 famine, finding that the most important immediate cause of starvation dur-ing the 1974 famine was a sharp drop in the food-purchasing power of agriculturalearnings. The rate at which agricultural work exchanged for food fell dramatically inBangladesh during the 1974 famine (Sen, 1981), so that landless agricultural workersand part-time farmers became the famine’s main victims. Sen (1981) thus attributedthe famine to ‘trade entitlement failure’.

Rao (1988) examined the nexus between the rural labour market and the wageemployment structure of a village. Villages fragmented rural labour markets in Indiaand elsewhere; research analysed inter-village mobility barriers, inside-outside differ-entiation and the nature of the intra-village labour exchange. Unemployment reducesthe opportunity cost of labour to peasants to below an institutionally determinedwage, while lack of ‘familiarity’ raises the cost of recruiting and employing non-village labourers to village employers above that wage. Hence, patron-client relationsbetween village employers and employees benefit both, and will be the characteristicform of rural labour exchange. Under appropriate conditions, sharecropping mayalso emerge as a way of organising production and of sharing rents within villages.Sarap (1989, 1991a) analysed patterns of contractual arrangement among rural labourhouseholds in Orissa. In backward agriculture the nature of contract between rurallabourers and employers is generally stable and not varied, but Indian agriculture hasundergone changes and the agricultural sector has become diversified, with a portionof rural labour migrating to urban areas in search of jobs. Further, government legis-lation has intervened in marketing. As a result, labour contracts are also undergoing




changes, affecting the terms and conditions of contracts, which are becoming moreflexible depending upon the bargaining power of parties.

There is much literature on the concept of ‘livelihood’ and on ‘sustainable live-lihood’. Livelihood consists of the capabilities, assets (including both material andsocial resources) and activities required for a means of living. A livelihood is sustainablewhen it can cope with and recover from stresses and shocks to maintain or enhanceits capabilities and assets, while not undermining the natural resource base (Chambersand Conway, 1992). One can also define livelihood in terms of work and employmentwith poverty reduction, in the form of off-farm work, as part of a wage labour systemor as subsistence production. Sen (1973) observed that there are three aspects of em-ployment: income (a wage for the employed), production (employment providing aconsumable output) and recognition (where employment provides recognition forbeing engaged in something worthwhile). Lipton (1983, 1994) pointed out that 200days a year seem to be used extensively as the minimum requirement for the generationof a livelihood.

There is an overabundance of literature on interlinked land, labour and credittransactions. Most of this writing tries to explore the causes of interlinkage and outlinesits consequences for farm economy. It is argued that in a traditional setting landlordslease out land and by way of providing consumption loans extract surplus in theform of produce and free labour services. In their pioneering, extensive empiricalstudy, Bardhan and Rudra (1978) found mainly three types of linkages—credit-tenancy contracts, tenancy-labour links and labour-credit contracts. Since their samplehouseholds constituted only tenants and labourers (casual and permanent), theirstudy highlighted credit links with land and labour markets only and did not indicatethe crude links with input and output markets. The bargaining position of the weakerparty in the market is such that they lack not only the power to guide market forces,but also the ability to keep away from the market.

The need to secure a livelihood forces rural and agricultural labourers to enter theinterlocked market, and hence they are said to be ‘compulsively involved in the market’(Bharadwaj, 1974: 3). Not possessing sufficient land, many people are forced to selltheir labour, in the process subjecting themselves to the vagaries of the labour market.On the other hand, employment opportunities are so uncertain that people try tolease out land, again without being in a position to bargain for favourable terms andconditions. Various field studies (Bardhan and Rudra, 1978; Pleatteau et al., 1981;Sarap, 1991b) reveal extensive wage differences and price differentials in the interlinkedtransactions leading to exploitation of weaker parties, though some parties also foundinterest-free loans. Bardhan and Rudra (1978) pointed out that casual labourersworked at wages lower than market wages for their employer creditors. The under-pricing of labour services in credit-labour linkages was also observed by Sarap (1991b)and Pleatteau et al. (1981), though Bardhan and Rudra (1978) and Sarap (1991b)also observed interest-free arrangements to ensure a steady supply of labour, so thatthe payment of interest takes the form of wage cuts.




The Setting: Orissa Past and Present

The state of Orissa is located across the sea from Myanmar, the gateway to South-East Asia, one of the fastest-developing regions of the world. The state has a coastlineof 482 kms on the Bay of Bengal and lies wholly in the tropical zone. Its rich alluvialsoil is crossed by a large number of rivers and rivulets and provides an ideal naturalbase for developing prosperous agriculture. The state is well-endowed with almost allresources for higher levels of development like land, labour, water, forests, a coastalarea and mineral deposits. The land area of the state is about 155,707 square kms,comprising 4.74 per cent of India’s landmass. With 36.71 million people it accountsfor 3.57 per cent of India’s population.

Nearly 85 per cent of Orissa’s population lives in rural areas, depending mostly onagriculture for its livelihood. The total cultivable land of the state is nearly 65.59lakh hectares; at the end of 2002–03 only 26.02 lakh hectares were irrigated. Despitevariations in land, soil and climatic conditions, the bulk of land is devoted to cultivationof food grains, especially rice. Nearly 63.75 per cent of the state’s population is engageddirectly or indirectly in agricultural activities. About a third of rural households con-stitute landless labour households that depend completely on wage employment.Another 60 per cent of rural households are marginal farmers and small farmers whoseland-size is very small; income generated from this land is so low that these house-holds also depend on wage employment. Lastly, even small farmers with land holdingsof up to five acres supplement their income with outside jobs or wage employment.Given this situation, studies of wage and employment of rural households areimportant.

The rest of the world knows Orissa for its past glories, scenic locations, art andarchitecture, rich culture and its peace-loving people. The lesser-known aspects ofthe state are its backwardness in social and economic development during the post-economic planning period. Historical reviews show that Orissa, then the Kalinga,was one of the most advanced regions in the country with prosperous trade and agri-culture. Unfortunately, the state lost its earlier pre-eminent position. Its impover-ishment began during the post-planning era and economic development in the statehas become a national concern. The state now enjoys the dubious distinction oflagging behind most other states in human development. Its adult literacy rate isonly 46 per cent and it has the lowest per capita rural income in the country, atRs. 3,028. There are a host of factors responsible for the present state of developmentin Orissa.

Demographic and Economic Indicators

The demographic profile obviously has an important bearing on the developmentprocess and labour markets. The following are some of the facts revealed in the 1991Census: the decennial population growth rate of Orissa during 1991–2001 was 15.94per cent, as against 20.06 per cent in the previous decade. The number of femalesper 1000 males increased slightly, from 927 in 1991 to 933 in 2001. The density ofpopulation, 203 persons per square km in 1991, increased to 236 in 2001. The




urban population of 13.38 per cent in 1991 increased to 14.97 per cent in 2001, butthe process of urbanisation has been slow in the state compared to the national average.On the literacy front, achievements have been noticeable but below the nationalaverage, as the literacy rate increased from 49.09 per cent in 1991 to 63.61 per centin 2001—as against 52.10 per cent to 65.38 per cent at the national level. The maleand female literacy rates, 63.1 per cent and 34.7 per cent respectively in 1991, increasedto 75.95 per cent and 50.97 per cent respectively by 2001. The state has a higherconcentration (38.41 per cent) of backward populations, comprising Scheduled Castes(16.20 per cent) and Scheduled Tribes (22.21 per cent), as against 25 per cent forIndia as a whole. The Scheduled Areas cover nearly 45 per cent of the total geographicalarea. The SC/ST literacy rate was 36.78 per cent and 22.31 per cent, respectively.

Orissa being one of the poorest states in the country, the rural picture is character-ised by low per capita income. The state is now more frequently subjected to naturalcalamities of flood and drought due to ecological imbalances caused by large-scaledevastation of forests and vegetative cover wrought in recent times. In 1999, a cyclonein the coastal belt badly affected the state’s economy (Government of Orissa, 2001).Scarcity of rainfall (989 mm) in the crop season of 2002 resulted in crop failure anddrought conditions in large parts of the state, leading to large-scale outmigration ofpeople from villages in this state (Action AID, 2002). The extensive drought situationhas become an issue of debate in the state legislature as well as in Delhi. Drought hasa long history in this region, first recorded by Arthur Cotton in 1841–42. Historicalrecords show that Orissa suffered from terrible droughts and famines in the fifteenthand sixteenth centuries (Gazetteer of India, 1992). Severe famine conditions havealso been recorded in 1770, 1774–75, 1792–93 and 1865–66 (Government of India,1878: 39).1

With population increase and consequent additions to the labour force, laboursupply continues to outstrip demand, resulting in accentuated problems of unemploy-ment and under-employment. The occupational classification from the 2001 censusdata reveals that the total workers in the state number 142.73 lakh, constituting38.89 per cent of the total state population. Out of the total number of workers, themain categories were cultivators (29.69 per cent), agricultural labourers (35.04 percent), household workers (4.83 per cent) and other workers (30.44 per cent). Theproportion of male workers to male population and female workers to female popula-tion in 2001 was 52.75 per cent and 24.62 per cent, respectively. The work par-ticipation rate in rural and urban areas in Orissa was 29.67 per cent and 38.47 percent, respectively. As alternative sources of livelihood in the rural areas are limited,the population pressure on land is high. The female work participation rate increasedfrom 19.8 per cent in 1981 to 20.8 per cent in 1991.

Unemployment poses a major problem for the state, with estimates that the totalbacklog of unemployment at the beginning of 2003–04 could be of the order of10.04 lakh persons. To tackle the problem of unemployment, during the Tenth Planall the wage employment and self-employment programmes of the Ninth Plancontinued with special emphases on the generation of employment opportunities inthe secondary sector, and on the setting up of new industries in the private sector.The Live Register maintained by the employment exchanges reveals that at the end




of 2002, the number of educated unemployed in the state was 6.16 lakh, 80.84 percent of the total 7.62 lakh applicants. While the number of vacancies has not showna corresponding rise, the number of applicants in the Live Register continues toincrease. The total number of registrations in the employment exchanges during2002 was 1,41,234 and vacancies notified were 2,239. Out of the notified vacancies,placement was only made with respect to 2,601 persons, including the backlog of theprevious year (Government of Orissa, 2005).

The poverty situation in the state is alarming. Although the proportion of thepopulation below the poverty line has declined, it remains higher than the nationallevel in rural and urban areas. During 1987–88, about 48 per cent of the total popu-lation and 24 per cent of the urban population were below the poverty line as comparedto 34.4 per cent and 20.1 per cent, respectively, at the all-India level. Scarcity of cultiv-able land and even declining land-man-ratio in the state has made operational holdingssmaller and uneconomical. The worker population ratio in rural Orissa registered anincrease from 31 per cent in 1971 to 39 per cent in 1991. Per capita net state domesticproduct (NSDP) in the state was Rs. 4,726 and Rs. 1,578 during 1993–94 at currentand constant prices respectively, against Rs. 7,060 and Rs. 2,292 at national averages.

Objective and Data Sources

The main objective of the study is to analyse the pattern of employment and incomeamong the rural labour and agricultural households in rural Orissa to understandtheir livelihood pattern. The present study was undertaken with three specific ob-jectives: (i) to study the pattern of employment generation, i.e. number of days ofwork available for different kinds of rural labour; (ii) to examine the patterns ofincome of different categories of labour; and (iii) to document the extent of earningand indebtedness prevalent among these households. The analysis of rural agriculturallabour households is important as these households comprise a vulnerable segmentof the rural population, the percentage of which has increased significantly in almostall the states in India. The article primarily uses different published secondary reports,such as Rural Labour in India—A Compendium of Basic Facts (Government of India,1983). It also uses the Labour Bureau’s Indian Labour Year Book 1990–91, and RuralLabour Enquiry (RLE) Reports like Report on Employment and Un-employment 1987–88, on wages and earnings of rural labour households as well as on indebtednessamong rural labour households for 1983 and1987–88, respectively. In addition, thearticle uses particularly the 38th Round (1983) and the 43rd Round (1987–88) ofthe National Sample Survey Organization (NSSO), ‘Sarvekshana’.

Pattern of Employment, Income and Indebtedness among theRural and Agricultural Labour Households in Orissa

This section discusses the pattern of employment available to rural labour householdsin Orissa in recent years. We have survey data for the years 1983 and 1987–88. We




shall compare changes in the employment available from the first to the second period.The income of the labour household will depend upon the number of days of em-ployment and the wage rate at which employment is obtained. In a household, manyworkers may get employment; the workers may be male, female or children. A house-hold may try to maximise its income by employing all its labour force over differentparts of the year. It may also like to work in different activities. In view of this one hasto consider the total employment within a household.

The average annual number of days of wage-paid employment of agriculturallabourers belonging to each, agricultural labour and rural labour households, in agri-cultural and non-agricultural employment is given in Tables 1 and 2, respectively.Table 1 shows that in Orissa, a male worker got 230 days of full-day employmentduring the year 1983, and this decreased to 221 days by 1987–88. For female workers,the number of days of employment declined sharply from 174 days during 1983 to128 days in 1987–88. However, in the case of child workers, the number of days ofemployment has increased slightly, from 232 days during 1983 to 238 days during1987–88. Thus in the case of child labour, it was notably more or less the same.From this, it is difficult to judge the income level of a household in relation to differentcategories of workers. Table 1 also discusses the availability of non-agricultural employ-ment among the agricultural labour households belonging to agricultural labour.Here also the non-agricultural employment available to these workers (male, femaleand children) is negligible, as such agricultural employment constitutes the majordays of employment.

Thus it can be deducted from Table 1 that the availability of agriculturalemployment to all categories of labour (male, female and children) is negligiblethroughout the 1980s, both in 1983 and 1987–88. Table 2 shows the total days ofemployment available to males, females and children among the rural labourhouseholds belonging to agricultural labour. Clearly in the case of both rural labourand agricultural labour households, there was some decline in employment between1983 and 1987–88.

Table 3 indicates that in Orissa the proportion of agricultural labour householdsto the total rural households during 1987–88 was 35.2 per cent. Of the total house-holds in self-employment, agricultural activities constituted 32.4 per cent and non-agricultural activities constituted 14.1 per cent.

The earning of rural labour households as well as agricultural labour householdsin Table 4 shows that the total earning of the household will depend upon the averagesize of the family and the average number of earning members in the household andthe wage rate paid to the earning members. Average household size and average numberof earning members per household in the case of rural labour and agricultural labourare shown in Table 4. For this, we have information for three years—1977–78, 1983and 1987–88 (Government of India, 1977–78, 1983 and 1987–88, Rural LabourEnquiry) The average family size of rural labour households was 4.62 persons duringthe year 1977–78. It decreased to 4.57 persons during 1983 and further decreased to4.40 persons during 1987–88. Thus the average size of the family among the rurallabour households has declined between 1977 and 1988.




Tabl

e 1

Wag

e pa

id e

mpl

oym

ent

of a

gric

ultu

ral l

abou

rers

bel

ongi

ng t

o ag

ricu

ltur

al la

bour

hou

seho

lds

in a

gric

ultu

ral a

nd n

on-a

gric

ultu

ral e

mpl

oym

ent

(Num

ber

of f

ull d

ays

in a

yea

r)

Agr

icul

tura

l E

mpl

oym

ent

Non

-Agr

icul

tura

l E

mpl

oym

ent

Tota

l

198

319

87–8

819

8319

87–8

819

8319

87–8

8

Stat

e/In

dia

MF

CM

FC

MF

CM

FC

MF

CM

FC

Ori

ssa

219

165

232

207

115

236

117

014

132

230

174

232

221

128

238

All

Indi

a22

719

023

023

115

722

911

87

127

1123

819

823

724

316

424

0

Sour

ce: R

ural

Lab

our

Inqu

iry

Repo

rt o

n Em

ploy

men

t an

d U

n-em

ploy

men

t 19

87–8

8, 1

16, 1

19 a

nd 1

22.

Not

e: M

—M

ale,

F—

Fem

ale,

C—

Chi

ldre

n




Tabl

e 2

Wag

e pa

id e

mpl

oym

ent

of a

gric

ultu

ral l

abou

rers

bel

ongi

ng t

o ru

ral l

abou

r ho

useh

olds

in

agri

cult

ure

and

non-

agri

cult

ural

em

ploy

men

t

(Num

ber

of f

ull d

ays

in a

yea

r)

Agr

icul

tura

l E

mpl

oym

ent

Non

-Agr

icul

tura

l E

mpl

oym

ent

Tota

l

1983

198

7–88

1983

1987

–88

1983

1987

–88

Stat

e/In

dia

MF

CM

FC

MF

CM

FC

MF

CM

FC

Ori

ssa

218

166

232

206

114

232

128

—14

122

230

174

232

220

126

234

All

Indi

a22

718

922

923

015

722

912

87

137

1113

919

723

624

316

424

0

Sour

ce: R

ural

Lab

our

Inqu

iry

Repo

rt o

n Em

ploy

men

t an

d U

n-em

ploy

men

t 19

87–8

8, 1

25, 1

28 a

nd 1

31.

Not

e: M

—M

ale,

F—

Fem

ale,

C—

Chi

ldre

n




Tabl

e 3

Perc

enta

ge d

istr

ibut

ion

of r

ural

labo

ur h

ouse

hold

s an

d po

pula

tion

by

hous

ehol

d ty

pe in

Ori

ssa

and

all I

ndia

Peri

od o

f Su

rvey

: Jul

y 19

87–J

une

1988

Rur

al H

ouse

hold

sR

ural

Pop

ulat

ions

Self-

Em

ploy

men

tSe

lf-E

mpl

oym

ent

Agr

icul

tura

lO

ther

Agr

icul

tura

lO

ther

Lab

our

Lab

our

Oth

erL

abou

rL

abou

rO

ther

Stat

e/In

dia

Agr

iN

on-A

gri

Hou

seho

ldH

ouse

hold

Hou

seho

ldA

gri

Non

-Agr

iH

ouse

hold

Hou

seho

ldH

ouse

hold

Ori

ssa

32.4

14.1

35.2

7.5

10.5

3814

.532

6.5

8.9

All

Indi

a37

.712

.330

.79

10.1

42.8

12.8

288.

48.

1

Sour

ce: N

SSO

Sar

veks

hana

NSS

43r

d R

ound

198

7–88

, 23–

4.




Tabl

e 4

Ave

rage

siz

e of

hou

seho

lds

and

earn

ing

stre

ngth

Agr

icul

tura

l La

bour

Hou

seho

ldR

ural

Lab

our

Hou

seho

lds

Ave

rage

siz

e of

the

fam

ilyA

vera

ge e

arni

ng s

tren

gth

Ave

rage

siz

e of

the

fam

ilyA

vera

ge e

arni

ng s

tren

gth

Stat

e/In

dia

1977

–78

1983

198

7–88

1977

–78

198

319

87–8

819

77–7

819

8319

87–8

819

77–7

819

8319

87–8

8

Ori

ssa

4.60

4.58

4.44

2.00

2.01

1.88

4.62

4.57

4.40

1.99

1.99

1.87

All

Indi

a4.

674.

634.

602.

132.

072.

004.

724.

644.

632.

082.

021.

98

Sour

ce: R

LE R

epor

t on

Wag

es a

nd E

arni

ng o

f Rur

al L

abou

r H

ouse

hold

s for

198

3 &

198

7–88

, 67,

70,

73

and

76.

Not

e: E

arni

ng st

reng

th is

def

ined

as t

he n

umbe

r of

per

sons

repo

rtin

g ag

ricu

ltura

l lab

our,

non-

agri

cultu

ral l

abou

r an

d/or

oth

er o

ccup

atio

n as

thei

r us

ual o

ccup

atio

n.




Given the declining family size, one can expect that fewer family members areavailable to do paid work, as shown in Table 4. The average earning strength was1.99 in 1977–78 and 1983. It declined to 1.87 during 1987–88. Regarding the aver-age size of the household and earning strength of agricultural labour householdsduring the same period, Table 4 shows the average size of the family was 4.6 personsduring 1977–78. It decreased to 4.58 by 1983 and further to 4.44 by 1987–88, indi-cating constant decline in the average size of the family during the entire period.

Discussing the earning strength of agricultural labour households during the sameperiod in Table 4, we also see decline during this period. The average earning strengthin Orissa was 2.00 during 1977–78; it increased slightly to 2.01 during 1983, buthad declined again to 1.88 by 1987–88. A similar pattern is found in rural labourhouseholds in Table 4.

The total earning of the household will be influenced by the composition of theearning members, as female workers may get lower wages compared to males. Childrenwould earn even less, but are not covered separately in Table 5, where we have infor-mation relating to the average number of wage earners among the rural labour andagricultural labour households for the year 1987–88. In rural labour households theaverage number of wage earners was 1.32, 1.09 for male workers and 0.23 for females.The average number of wage earners for agricultural labour households in the statewas 1.35 during the same period, 1.12 for male workers and 0.23 for females. Thusthere was not much difference in terms of the average number of workers among therural labour and agricultural labour households.

Table 5 Average number of wage earners per household by sex during 1987–88

Agricultural Labour Households Rural Labour Households

State/India Male Female Total Male Female Total

Orissa 1.12 0.23 1.35 1.09 0.23 1.32All India 1.05 0.32 1.37 1.01 0.3 1.31

Source: RLE Report on Wages and Earnings of Rural Labour Households 1987–88, 79 and 82.

The average daily earnings of men, women and children belonging to agriculturallabour households in agricultural occupations during 1987–88 are listed in Table 6.It was Rs. 7.92 for male workers, Rs. 6.06 for females and Rs. 4.66 per child workers.Thus, women workers received lower wages than males, and children lower wagesthan females. We also have information relating to the average real earnings of malesbelonging to an agricultural labour household. The average daily wage earning ofmales in the state in terms of money earning was Rs. 3.81 in 1983, which increasedto Rs. 7.92 in 1987–88. However, in terms of real earning there was an increase fromRs. 3.81 to only Rs. 6.98 during the same period. Thus, the increase of real earningis significantly lower in comparison with that of money earning.




Table 6 Average daily earnings of males, females and children belonging to agricultural labourhouseholds in agricultural occupations during 1987–88

Male Female Children

State/India Cash Kind Total Cash Kind Total Cash Kind Total

Orissa 6.19 1.73 7.92 3.94 2.12 6.06 2.83 1.83 4.66All India 7.25 2.17 9.42 5.19 1.81 7 4.48 1.53 6.01

Source: RLE Report on Wages and Earnings of Rural Labour Households 1987–88, 109–11.

As Table 7 demonstrates, the average daily earning of a male worker during1987–88 was Rs. 7.92 in agricultural labour households and Rs. 7.79 for rural labourhouseholds. This table shows that the state-wise average daily earnings of men in1987–88 are even lower than the minimum wages fixed by the Government of Orissaunder the Minimum Wages Act, 1948 as on 31 December 1983.

Table 7 Average daily earnings of males in agricultural operations vis-à-vis the minimumagricultural wages fixed under the Minimum Wages Act, 1948

Average daily earnings during 1987–88for men belonging to

State/India Agr. labour households Rural labour households

Orissa Rs 7.92 Rs 7.79 10.00All India Rs 9.42 Rs 9.46 8.50–12.75

Source: Rural Labour Enquiry Report on Wages and Earnings, Rural Labour Households (43rd Roundof NSS), 236.

The evidence provided in Table 8 shows that agricultural operations constitute themajor activity both for rural labour households and agricultural labour householdsas far as wage earning is concerned. The average earnings of both categories of labourwere low, both in terms of money wage as well as in real wage terms. Table 8 showsthat the average daily earning of men belonging to all rural labour households engagedin agricultural operations was Rs. 3.66 during 1983, and increased to Rs. 7.89 in1987–88.

The actual earnings of the household may not be fully utilised for consumptionpurposes if the household has to part with a portion of earnings for loan repayment.Thus it is important to know about the past loan indebtedness of these households.The indebtedness of agricultural labour households is indicated in Table 9. Thepercentage of indebted rural labour households in Orissa was 40.08 in 1983 and35.40 in 1987. In the case of agricultural labour households it was 40.75 per cent

The prevailing minimumrates of wages (per day)

under the MinimumWages Act, 1948, as on

31 Dec. 1983 (Rs.)




Tabl

e 8

Ave

rage

dai

ly e

arni

ngs

in a

gric

ultu

ral o

ccup

atio

ns v

is-à

-vis

tho

se in

oth

er s

ecto

rs o

f th

e ec

onom

y (R

s.)

Ave

rage

dai

ly e

arni

ngs

ofm

en b

elon

ging

to

all r

ural

Ave

rage

ear

ning

s in

agr

icul

tura

l ope

rati

ons

labo

ur h

ouse

hold

s en

gage

d in

Ave

rage

dai

ly e

arni

ng d

urin

g 19

83 in

as r

atio

s of

ave

rage

ear

ning

s in

Stat

e/ag

ricu

ltur

al o

pera

tion

s (R

LE)

Fact

orie

sC

oal

Min

esPl

anta

tion

sFa

ctor

ies

Coa

l M

ines

Plan

tati

ons

Indi

a19

83 1

987–

8819

88A

pril

1988

1988

–89

Col

-3/

Col

-4C

ol-3

/ C

ol-5

Col

-3/

Col

-6

12

34

56

78

9O

riss

a3.

667.

8928

.23

75.4

—0.

280.

1—

All

Indi

a4.

639.

4636

.32

74.7

8—

0.26

0.13

—

Sour

ce: I

ndia

n La

bour

Yea

r B

ook

(199

0–91

)




Tabl

e 9

Ext

ent

of i

ndeb

tedn

ess

amon

g ag

ricu

ltur

al l

abou

r ho

useh

olds

/rur

al l

abou

r ho

useh

olds

Agr

icul

tura

l la

bour

hou

seho

lds

Rur

al l

abou

r ho

useh

olds

Perc

enta

gePe

rcen

tage

of i

ndeb

ted

Ave

rage

deb

tA

vera

ge d

ebt

per

of i

ndeb

ted

Ave

rage

deb

tA

vera

ge d

ebt

per

hous

ehol

ds (

%)

per

hous

ehol

din

debt

ed h

ouse

hold

hous

ehol

dspe

r ho

useh

old

inde

bted

hou

seho

ld

Stat

es/I

ndia

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

12

34

5 6

7 8

910

1112

13O

riss

a40

.75

36.1

341

516

886

1435

40.0

835

.432

450

380

814

19A

ll In

dia

51.0

539

.477

476

915

1619

5250

.42

39.1

806

787

1598

2014

Sour

ce: R

ural

Lab

our

Enqu

iry,

1987

–88,

Rep

ort

on I

ndeb

tedn

ess A

mon

g R

ural

Lab

our

Hou

seho

lds.




during 1983 and 36.10 per cent during 1987–88. Thus, roughly 40 per cent of therural labour households were indebted during 1983 compared to about 35 per centin 1987–88.

Table 9 also shows that the average amount of debt in the case of rural labourhouseholds was Rs. 324 in 1983, increasing to Rs. 503 for the period 1987–88. Theaverage debt per indebted household was Rs. 808 in 1983, and increased to Rs. 1419in 1987–88. In agricultural labour households the average amount of debt per house-hold during 1983 was Rs. 341, which rose to Rs. 518 by 1987–88. The average amountof debt per indebted household was Rs. 888 in 1983, and Rs. 1435 during 1987–88by contrast (Table 9). Thus there was an increase of average amount of debt perhousehold and per indebted household during the period 1983–87 for both agri-cultural labour households and rural labour households. In this situation, the actualnet earnings of all these households will be lower.

Table 10 indicates that the incidence of indebtedness among the Scheduled Casterural labour households was 40.70 per cent during 1983, declining slightly to 38.70per cent during 1987–88. Similarly for Scheduled Tribes, it was 29.50 per cent in1983, declining to 24.10 per cent in 1987–88.

Table 10 Extent of indebtedness among rural labour households by caste

Percentage of Indebted Households

Schedule Caste Scheduled Tribe All Classes

States/India 1983 1987–88 1983 1987–88 1983 1987–88

Orissa 40.7 38.7 29.5 24.1 40.08 35.4All India 55.89 43.3 34.14 30 50.42 39.1

Source: Rural Labour Enquiry 1987–88 Report on Indebtedness Among Rural Labour Households,115.

Table 11(a) shows that the average hereditary loan of indebted agriculturallabour households in Orissa was Rs. 44 during 1983 but had increased to Rs. 64 by1987–88. Similarly the contracted loan of indebted agricultural households wasRs. 792 during 1983 and increased to Rs. 1371 by 1987–88. Thus, of the averagetotal loan among indebted agricultural labour households of Rs. 1435 in 1987–88,only Rs. 64 was a hereditary loan and the rest (Rs. 1371) was a contracted loan ofwhich Rs. 211 was in kind and Rs. 127 partly in cash and partly in kind. The averageloan per agricultural labour household was Rs. 341 in 1983, and increased to Rs. 518during 1987–88.

Similarly, Table 11(b) shows the average amount of debt among rural labour house-holds by nature of loan and average loan per household. Of the average total loanamong indebted rural labour households of Rs. 1419 in 1987–88, only Rs. 75 was ahereditary loan and the rest (Rs. 1344) was a contracted loan, of which Rs. 216 wasin kind and Rs. 141 partly in cash and partly in kind. The average loan per rurallabour household was Rs. 324 in 1983, and increased to Rs. 503 during 1987–88.




Tabl

e 11

(a)

Ave

rage

am

ount

of

debt

am

ong

agri

cult

ural

labo

ur h

ouse

hold

s by

nat

ure

of lo

an a

nd a

vera

ge lo

an p

er h

ouse

hold

s (R

s.)

4+6

+8 5

+7+9

10+2

11+

3

Stat

es/I

ndia

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

12

34

56

78

910

1112

1314

15O

riss

a44

6458

310

3317

721

132

127

792

1371

836

1435

341

518

All

Indi

a41

102

921

1346

491

261

6324

314

7518

5015

1619

5277

476

9

Sour

ce: R

ural

Lab

our

Enqu

iry

1987

–88,

Rep

ort

on I

ndeb

tedn

ess A

mon

g R

ural

Hou

seho

lds,

118.

Her

edit

ary

loan

(ind

ebte

dho

useh

olds

)in

cas

hin

kin

d

Part

ly in

cash

& p

artl

y in

kind

Ave

rage

loan

(her

edit

ary

and

cont

ract

ed)

per

inde

bted

hous

ehol

dA

vera

ge lo

an p

erho

useh

old

(all

hous

ehol

ds)

Con

trac

ted

Loan

(In

debt

ed H

ouse

hold

s)

Tota

l




Tabl

e 11

(b)

Ave

rage

am

ount

of

debt

am

ong

rura

l lab

our

hous

ehol

ds b

y na

ture

of

loan

and

ave

rage

loan

per

hou

seho

lds

(Rs.

)

Stat

es/I

ndia

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

12

34

56

78

910

1112

1314

15O

riss

a41

7556

698

716

721

634

141

767

1344

808

1419

324

503

all

indi

a50

101

103

1406

448

286

6122

115

4919

1315

9820

1480

678

7

Sour

ce: R

ural

Lab

our

Enqu

iry

1987

–88,

Rep

ort

on I

ndeb

tedn

ess A

mon

g R

ural

Lab

our

Hou

seho

lds,

121.

Her

edit

ary

loan

(ind

ebte

dho

useh

olds

)in

cas

hin

kin

d

Part

ly in

cas

han

d pa

rtly

in k

ind

Ave

rage

loan

per

(her

edit

ary

and

cont

ract

ed)

per

inde

bted

hous

ehol

d

Ave

rage

loan

per

hous

ehol

d(a

ll ho

useh

olds

)

Con

trac

ted

Loan

(In

debt

ed H

ouse

hold

s)

Tota

l




Thus in agricultural labour households (Table 11a) and rural labour households(Table 11b) the situation is quite similar and points to increases in indebtedness.

Next, Table 12(a) shows the average amount of debt per indebted agriculturallabour household and Table 12(b) rural labour households by purpose of debt separ-ately. In Table 12(a), the total debt of agricultural labour households is Rs. 836 during1983. Consumption loan constitutes Rs. 262 (31.33 per cent), loans for marriageand other ceremonial purposes constitute Rs. 105 (12.55 per cent); for productivepurposes it was Rs. 412 (49.28 per cent), for the purchase of land and constructionof buildings it was Rs. 24 (2.87 per cent). For repayment of old debts, the data are notavailable. For other purposes it was Rs. 33 (3.94 per cent). During the 1987–88 periodthe total amount of debt increased from Rs. 836 to Rs. 1434. Thus, Table 12(a)shows that agricultural labour households borrowed most for productive purposesfollowed by consumption purposes, then marriage and other ceremonial purposesduring the period 1983–87. In the case of rural labour households the situation issimilar (Table 12[b]).

We now move on to consider the average amount of debt per indebted agricultural labour household (Table 13[a]) and rural labour household (Table 13[b]) bysource of debt, for 1983 and 1987–88 respectively. The source-wise distribution ofloan raised by agricultural and rural labour households during the years 1983 and1987–88 for Orissa shows that the institutional financing of debt through thegovernment, Co-operative Societies and banks is gaining in popularity compared toinformal sources of loans such as moneylenders, shopkeepers, friends, relatives andothers. In both cases, banks are the largest source of loans, followed by Co-operativeSocieties, then the government (among formal sources) during 1987–88. For informalborrowing, the village moneylender remains the largest source, followed by friends,relatives and then shopkeepers.

Concluding Thoughts

The evidence provided above relating to rural labour households and agriculturallabour households in Orissa clearly shows that in the case of both male and femalelabour there has been a decline in employment over the years. Further, there hasalso been a decline in the average number of earning members per household. Onthe other hand, average amounts of debt per indebted household during the period1983–87 for both agricultural and rural labour households have increased. The actualearnings of all these households will therefore have been lower. Clearly, both rurallabour households and agricultural labour households in the state are characterisedby declining earning, low income, low consumption and high debt. It is, however,shown that the incidence of indebtedness among the Scheduled Caste rural labourhouseholds was 40.70 per cent during 1983, and declined to 38.70 per cent during1987–88. Similarly, in case of Scheduled Tribes it was 29.50 per cent in 1983, decliningto 24.10 per cent in 1987–88. This means that not all rural households in Orissa areindebted, but those which are would face growing difficulties for their livelihood.




Tabl

e 12

(a)

Ave

rage

am

ount

of

debt

per

ind

ebte

d ag

ricu

ltur

al la

bour

hou

seho

lds

by p

urpo

se o

f de

bt

Purc

hase

of

land

Hou

seho

ldM

arri

age

&Pr

oduc

tion

& c

onst

ruct

ion

Rep

aym

ent

cons

umpt

ion

othe

r ce

rem

onia

lspu

rpos

esof

bui

ldin

gsof

deb

tO

ther

Tota

l

Stat

es/I

ndia

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

12

34

56

78

910

1112

1314

15O

riss

a26

230

110

512

641

282

524

66—

1133

106

836

1434

(31.

33)

(4)

(12.

55)

(9)

(49.

20)

(5.8

)(2

.87)

(5)

—(1

)(3

.94)

(7.1

)(1

00)

(100

)A

ll In

dia

461

670

222

270

628

567

9616

6—

2310

925

615

1619

52

Sour

ce: R

ural

Lab

our

Enqu

iry

1987

–88,

Rep

ort

on I

ndeb

tedn

ess A

mon

g R

ural

Lab

our

Hou

seho

lds.

Not

e: F

igur

es in

bra

cket

sho

w p

erce

ntag

e va

lue.




Tabl

e 12

(b)

Ave

rage

am

ount

of

debt

per

inde

bted

rur

al la

bour

hou

seho

lds

by p

urpo

se o

f de

bt

Purc

hase

of

land

Hou

seho

ldM

arri

age

&Pr

oduc

tion

& c

onst

ruct

ion

Rep

aym

ent

cons

umpt

ion

othe

r ce

rem

onia

lspu

rpos

esof

bui

ldin

gsof

deb

t O

ther

Tot

al

Stat

es/I

ndia

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

1983

1987

–88

12

34

56

78

910

1112

1314

15O

riss

a25

729

997

127

396

812

2558

—7

3311

380

814

18A

ll In

dia

512

677

248

311

610

541

121

223

—22

107

240

1598

204

Sour

ce: R

ural

Lab

our

Enqu

iry

1987

–88,

Rep

ort

on I

ndeb

tedn

ess A

mon

g R

ural

Lab

our

Hou

seho

lds.




Tab

le 1

3(a)

Ave

rage

am

ount

of

debt

per

inde

bted

agr

icul

tura

l lab

our

hous

ehol

ds b

y so

urce

of

debt

(R

s.)

Co-

oper

ativ

eM

oney

Frie

nds

and

Stat

es/

Gov

ernm

ent

soci

etie

sB

anks

Em

ploy

ers

lend

ers

Shop

keep

ers

rela

tive

sO

ther

sTo

tal

Indi

a19

8319

87–8

819

8319

87–8

819

8319

87–8

819

8319

87–8

8 1

983

1987

–88

198

319

87–8

8 1

983

1987

–88

198

319

87–8

819

8319

87–8

8

Ori

ssa

3711

531

624

917

968

430

5710

011

721

5153

111

102

5183

614

34A

ll In

dia

4470

119

195

505

410

211

254

282

429

7015

116

426

312

117

515

16 1

952

Sour

ce: R

ural

Lab

our

Enqu

iry

1987

–88,

Rep

ort

on I

ndeb

tedn

ess A

mon

g R

ural

Lab

our

Hou

seho

lds.




Tab

le 1

3(b)

Ave

rage

am

ount

of

debt

per

inde

bted

rur

al la

bour

hou

seho

lds

by s

ourc

e of

deb

t (R

s.)

Co-

oper

ativ

eM

oney

Frie

nds

Stat

es/

Gov

ernm

ent

soci

etie

sB

anks

Em

ploy

ers

lend

ers

Shop

keep

ers

and

rela

tive

sO

ther

s T

otal

Indi

a19

8319

87–8

819

8319

87–8

819

8319

87–8

819

8319

87–8

819

83 1

987–

8819

8319

87–8

819

8319

87–8

819

8319

87–8

819

8319

87–8

8

Ori

ssa

3412

229

624

517

966

631

213

9813

020

4851

100

9853

808

1419

All

Indi

a65

7316

319

044

811

919

524

634

043

684

186

186

289

117

175

1598

2014

Sour

ce: R

ural

Lab

our

Enqu

iry

1987

–88,

Rep

ort

on I

ndeb

tedn

ess A

mon

g R

ural

Lab

our

Hou

seho

lds.




Based on the present study, some brief suggestions can be made as part of policyinitiatives for rural labour households and agricultural labour households. In a statelike Orissa, the low demand for labour evidently forces many workers to migrate toother parts of the country in order to secure livelihoods. In order to reduce the flowof migration and generate more local employment and income, local demand foragricultural labour needs to be enhanced, perhaps through improvement of irrigationfacilities and adoption of new technologies in dry areas.

Acknowledgements

An earlier version of this paper was presented at the 44th Annual Conference of the IndianSociety of Labour Economics, held at the Department of Economics, Guru Nanak Dev Univer-sity, Amritsar on 26–27 December 2002. I am grateful to the participants of the Conferencefor their valuable comments and suggestions. However, responsibility for mistakes, if any,rests with me.

Note

1 In 1865–66 occurred a famine of the most intense character, commonly known as ‘NaAnka Durbhikhya’, the greatest calamity in Orissa of the 19th century. Mortality in thethree districts of Cuttack, Puri and Baleshwar was roughly estimated at 10 lakhs out of atotal population of 37 lakhs.

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