Groundwater Market and Agricultural Development in West Bengal: Perspectives from a Village Study

[]pn. ]. Rural Econ. Vol. 5, pp. 51-65, 2003] Groundwater Market and Agricultural Development in West Bengal: Perspectives from a Village Study

Koichi Fujita,* Ashok Kundu t and W. M. H. Jaim!

Based on intensive village study this paper tries to show that the rapid agricultural growth in West Bengal since the 1980s is mainly attributable to the development of pri vate shallow tubewell irrigation, rather than the agrarian reforms. Large farmers mainly invested in tubewells, but it does not mean that they monopolize agricultural profit as the so-called 'waterlords'. On the contrary, water sales business became less profitable as the number of tubewells increased in the village, and the real water charge declined through the changes of contractual arrangement in the groundwater market. It also comments on the current situation of irrigation subsidy relating to state-operated DTWs and power subsidy given to electrified tubewells, as well as their effects to irrigated farming. Lastly, it points out the large difference in factor shares in rice production between West Bengal and Bangladesh, arguing that West Bengal agriculture is much more equitable in favor of landless laborers. Key words: tubewell irrigation, West Bengal', competition, factor share, subsidy, agrarian reforms.

Pradesh and it was basically a 'wheat revolu 1. Introduction tion'. This fact was a basic reason why India The 'Green Revolution' since the mid-1960s failed to eradicate mass poverty until the end in India was characterized as both region- and of the 1970s although food self-sufficiency in commodity-specific; i.e. it concentrated in terms of no cereal import was achieved due to northern India regions such as Punjab, the success of the 'Green Revolution' strategy. Haryana, and the western part of Uttar However, since the inception of the 1980s agri culture in India started to record a high growth rate in almost all regions and for most * Kyoto University. commodities for more than a decade,0 which Kalyani University, India. along with the development of non Bangladesh Agricultural University, Bangladesh. agricultural sectors contributed to its overall The authors would like to extend sincere gratitude to Dr. Sudhin K. Mukhopadhyay, Reader in Econom rural development and alleviation of rural ics, Rishi Bankim Chandra Evening College and Fac poverty. Most noteworthy was that the poor ulty Associate, Institute of Study on Population, Ag est and the most backward regions of eastern riculture, and Rural Change (INSPARC), University India also experienced a rapid agricultural and of Kalyani, West Bengal, India, for his patient guid rural development since the 1980s. West Ben ance and suggestions during our research and also gal was not the exception to this wave of dras for his valuable comments on to the draft paper. Spe tic transformation. cial appreciation is also extended to Dr. Bhaswar Groundwater irrigation played a vital role in Moitra, Reader, Economics Department, Jadavpur leading the 'Green Revolution' in India and University, Kolkata for his kind and valuable com also in its eastern state of West Bengal. In spite ments on our draft paper. Last, and not least, we appreciate Mr. Toshihiko Suda, researcher of Re of stagnation for a long period and ]. K. search Institute of Norin Chukin Bank, Japan very Boyce's pessimistic projections (Boyce [2]), much for his full cooperation with our survey in rice production in West Bengal started to the village and useful suggestions and insights pro record a rapid increase from the early 1980s vided to us. (Saha and Swaminathan [15]), most probably 52 because of the rapid diffusion of private shal analysis of the village-level groundwater mar low tubewells and the related expansion of ket') In West Bengal, there is virtually no dry-season paddy (bora) areas with high-yie study so far that clarifies how the lding varieties and agro-chemicals, although groundwater market actually functions in a the increase of the yield of monsoon-season systematic manner, based on analysis of profit paddy (aman) also contributed to it The con ability of shallow tubewell investment and tribution of irrigated bora paddy area expan groundwater-irrigated (bora paddy) farming.5) sion to overall rice sector growth became more The major purpose of this paper is not to re and more evident and important in recent fute the general understanding that agrarian years. This rice sector growth sustained until reforms are the main cause of the agricultural today and the more recent development of growth since the 1980s in West Bengal, but in non-rice sectors such as oilseeds, horticulture, stead, it tries to shed light on the critical role and aquaculture brought about a drastic played by the private shallow tubewell invest change in rural economy and raised the living ment by large farmers in the agricultural de standard of its population to a substantial de velopment In addition, it pays full attention to gree (Gazdar and Sengupta [9]). However, de the neglected aspects of the evolution and the spite its importance, the contribution of tech structure of village-level groundwater mar nological change in agriculture induced by the kets, and through the analysis it tries to reveal development of groundwater irrigation has a more complete picture of the dynamics of ag not been properly appreciated, and academic ricultural change in West Bengal. arguments still seem to accord major credit to Due mainly to the lack of semi-macro level agrarian reforms in West Bengal, including re data already mentioned, this paper focuses on distribution of land, tenancy reforms (such as only a selected village in Nadia district in Operation Barga, a famous registration pro West Bengal, where an intensive field survey gramme of sharecroppers), and panchayat re was conducted in September 2000 after a pre forms.') liminary study in November 1999. Despite ap An important factor that impedes objective parent limitations due to this methodology assessment of the contribution of groundwater adopted, this study tries to cover several criti irrigation to agricultural growth in West Ben cal and wider issues and points. gal is the scarcity of statistical data on private First, it tries to delineate, as much as possi tubewells. In particular, data are lacking on ble, the historical process of irrigation develop the regional distribution of private tubewells ment and agricultural change in the study vil and its changes over time. This is a major con lage from the mid-1960s until today. Besides straint hindering any rigorous economic showing that the agricultural development in analysis of the rapid agricultural growth in the the village is mainly attributable to the private state since the 1980s.') shallow tubewell investment by large farmers, Micro-level intensive studies on ground it attempts to show how the state-level policy water irrigation are also far from abundant, changes affected the development of irrigated and unfortunately the very few studies that farming on the one hand, and how the ground are available are weak in both data set ob water market experienced a structural change tained and analytical depth. For example, over time on the other hand. Second, through based on his study in a village in Bardhaman rigorous economic analysis it tries to question district in 1991, Webster correctly pointed out the existence of 'waterlords' who secure high that "it is the dry season bora paddy cultiva returns from bora paddy cultivation. It shows tion enabled by shallow tubewells which has how groundwater markets became more and been the real base for the rapid growth in more competitive due to the increase of shal foodgrain production in the district in the low tubewells in confined areas, which caused 1980s and early 1990s" (Webster [19], p. 336) a declining rate of return to such investment but found a skewed distribution of private In addition, while it shows how groundwater shallow tubewells in favor of large farmers, markets function relatively well at the village and rushed to conclude that the high returns level, at the same time it points out when and to bora paddy cultivation are secured by the how such markets fail and why. Third, as a by tubewell owners, without sufficient economic product of analysis, the large difference in

hours hours

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abbreviation abbreviation

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2000 2000

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groundwater groundwater

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1999 1999

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Nadia Nadia

village village

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642-acre 642-acre

were were

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October. October.

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60-70 60-70

irrigation, irrigation,

whole whole

253 253

implemented, implemented,

10 10

information information

1999 1999

most most

STW) STW)

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double double

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of of

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diesel diesel

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Webster Webster

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horticultural horticultural

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24-Parganas 24-Parganas

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feet feet

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referred referred

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and and

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buried buried

territory territory

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Nadia Nadia

cropping cropping

3 3

and and

average average

Population Population

SM SM

main main

implementation; implementation;

in in

district district state-operated state-operated

types; types;

the the

Aman Aman

feet feet

land) land)

the the

diesel diesel

in in

and and

Bengal: Bengal:

irrigation irrigation

basically basically

deep deep

to to

from from

acreage, acreage,

[19] [19]

Bengal Bengal

a a

hereinafter hereinafter

obtained obtained

100% 100%

is is

electric) electric)

monsoon monsoon

called called

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village. village.

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1,474 1,474

survey survey

STW, STW,

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also also

district district

not not

preliminary preliminary

the the

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60 60

to to

relatively relatively

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while while

i.e. i.e.

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irrigation. irrigation.

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land land

at at

STWs, STWs,

called called

of of

the the

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water water

is is

(South) (South)

the the

of of

(monsoon-season (monsoon-season

as as

(hereinafter (hereinafter

of of

feet feet

be be

major major

mm mm

even even

the the

is is

paddy) paddy)

diesel-operated diesel-operated

Census Census

the the

only only

rice rice

mini-DTW mini-DTW

and and

exploits exploits

in in

which which

local local

DTW) DTW)

farmers farmers

STWs STWs

in in

the the

reform reform

426 426

from from

persons) persons)

noted noted

the the

nuclear nuclear

development development

and and

is is

season season

in in

e.g., e.g.,

end end

tubewells). tubewells).

MSTW, MSTW,

and and

the the

referred referred

tapped tapped

deep deep

village. village.

September September

below below

18 18

submergi

(aman (aman

rainfall rainfall

7,800 7,800

Operation Operation

that that

farmland farmland

thousand thousand

i.e. i.e.

same same

cropping cropping

terms terms

office office

elevated elevated

Another Another

are are

electric electric

several several

that that

cultiva

vegeta

lies lies

of of

survey survey

rain rain

can can

and and

88% 88%

that that

meas

redis

tube

were were

from from

Sep

it it

1991 1991

area area

hec

53 53

the the

fol

liv

fig

fed fed

by by

the the

by by

By By

an an

be be

of of

31 31

at at

to to

in in

of of

in in

of of is is 54 the Minor Irrigation Department of the State Table 1. Diffusion of tubewells in the study Government, a brief history of irrigation devel village opment and agricultural change in the village Diesel STW Electric STW SM can be presented as below. 1) Mid-1960s to mid-1970s 1982 2 The construction of two DTWs was com 83 4 pleted in April 1964.") Both were electricity 84 2 operated and the lifted groundwater was dis 85 tributed through a network of underground 86 2 pipes. It means that the command area of each 87 6 DTW was technically fixed. These DTWs have 88 4 been operated directly by the West Bengal 89 2 State Government until today. One operator 90 and two assistants were officially nominated for each DTW. All the operation and mainte 91 nance costs, including operator's (and assis 92 2 tants') salary, spare parts, electricity charges, 93 etc., have been borne by the State. Farmers 94 only paid a fixed amount of highly subsidized 95 3 water charge on a per acre basis. For the task 96 2 2 of problem solving and necessary coordina 97 2 tion, a beneficiary committee was organized 98 for each DTW, comprised of some key persons 99 such as the local official of the Minor Irriga 2000 tion Department, the chairman (and/ or mem bers) of gram panchayat office, operator, and a Total few representatives of beneficiary farmers. (Current 3 13 9 The total command area irrigated by the number) two DTWs was approximately 150 acres; and Source: Field survey in September 2000. has not changed much until today. It means that about 17% of the village farmland was ir notable fact is that at that time farmers did not rigated by the public sector. At that time there purchase irrigation water from STW owners, was also some small-scale tank irrigation, but but the latter rented land seasonally from the it was very limited. Thus during the mid-1960s former for growing boro paddy. Rent for the through the mid-1970s most of the village land was paid mostly in kind; i.e. 3 maunds farmland was single cropped with aman paddy (one maund=31.3 kg) of paddy per bigha (one in the monsoon season, while in the dry season bigha = 1/3 acres) of land. being left fallow or sown with some low 3) Mid-1980s to mid-1990s productive pulses like khesari (grass pea). West Bengal experienced a poor harvest of Boro cultivation was limited to the relatively rice for two succeeding years at the beginning narrow irrigated areas. of the 1980s due to severe drought. Various 2) Mid-1970s to mid-1980s policies and programs were planned and im In this period some changes took place with plemented by the State Government for in the introduction of diesel STWs. Tank irriga creasing rice production. In particular, it pro tion also expanded to some extent because the moted enthusiastically the electrification of diesel engines (of STWs) were also utilized for STWs through the 'cluster' system, under lifting tank water. A village informant esti which at least six STWs were introduced (or mated that the ratio of irrigated farmland in converted from diesel STW) in a block of area the village increased to 50-60% by the mid- called a 'cluster'. The wave of such rural elec 1980s, although another informant's estimate trification reached to the study village also was more conservative. In any case, cropped and many electric STWs were installed during area of boro paddy expanded gradually as pri the latter half of the 1980s. Table 1 illustrates vate diesel STWs spread in this period. One the process of the diffusion of STWs in the Groundwater Market and Agricultural Development in West Bengal: Perspectives from a Village Study 55 village, based on the synthesized information Table 2. Distribution of tubewells in the obtained from all the STW owners inter study village viewed. It indicates how rapid the diffusion of Land ownership Diesel Electric SM STWs was during the period. By the beginning (acre) STW STW of the 1990s almost all the farmland in the vil lage came to be covered under irrigation. 0 The mode of transaction of irrigation water 0.01-1.49 started to change gradually from this period. 1.50-2.49 3 Instead of renting out land to STW owners, 2.50-4.99 2 2 3 farmers started to purchase water for a fixed 5.00-9.99 6 3 amount of charge in cash per acre to grow bora 10.00- 2 2 paddy by themselves. It is estimated that at Cooperative the end of the 1980s the number of cases of purchasing water exceeded that of seasonal Total 3 13 9 land lease. Average farm 2.72 6.54 7.00 4) Mid-1990s until today size (acre) As the exploitation of groundwater acceler ated, however, the groundwater level contin Source: Field survey in September 2000. ued to decline and the water depletion prob lem became severer especially at the end of the were obliged to choose just renting out land irrigation season; i.e. March and April. Thus during the dry season), but such capital con some STW owners were obliged to convert to straints gradually disappeared after the mid- SM. Table 1 shows that in the study village 1980s as the living standard of villagers im two SMs were first installed in 1992 and during proved after the 'Green Revolution'-induced 1995-97 another 7 SMs were introduced. The agricultural and rural development.') maximum technically irrigable area per unit of 3. Economic Analysis of Shallow tubewell drastically increased from 40-50 Tubewell Management bigha for electric STWs to 120 bigha for SMs, despite only a slight change in the horsepower In this section an economic analysis is at of motors. However, the cropping pattern. of tempted for private shallow tubewell manage aman-boro and their productivity experienced ment in the study village. no substantial changes. As mentioned earlier, at the time of the main At the time of our survey in 2000, all the survey in September 2000 there were in total farmers purchased water either from DTWs, 31 private shallow tubewells in the village, STWs, or SMs, paying a fixed amount of cash comprised of 3 diesel STWs, 18 electric STWs, on a per acre basis. In other words, seasonal and 10 SMs. However, it was found that out of land lease by tubewell owners had completely these private tubewells, 5 electric STWs and disappeared. It was found that farmers do not one SM were owned and operated by the resi want to rent out land any more even if dents in other villages, who could not be in tubewell owners desire it. cluded in the survey. Thus the sample size for · It seems that there are at least two reasons the cost and return survey came down to why the mode of transaction in the ground twenty-five. Table 2 shows the farm size (in water market changed completely. First, bora terms of ownership) distribution of the tube paddy cultivation technology became more well owners. Note here that 25 tubewells were and more popular and standardized, which owned and operated by 21 individual residents made the choice between renting-out land and in the village, since two individuals each purchasing water indifferent and further gave owned two electric STWs and one SM. In addi farmers more incentives to cultivate by them tion, the Gotera Village Cooperative Society8l selves so as to secure family labor income. Sec owned and operated one SM. ond, farmers became generally rich enough to From Table 2 the tendency of a very skewed cultivate bora paddy by themselves. In the old distribution of tubewells in favor of large days they were too poor to afford necessary farmers is evident. It is also clear that larger working capital for cultivation (and thus they farm households tend to hold more electric 56

Table 3. Cost and return of tubewell management Diesel STW Electric STW SM

Sample size 2 11 8 Initial investment (Rs.) 12,500 13,158 56,388

2.5 2.5 14.7 7.7 0.5 0.9 32.5 16.7 1.9 Irrigated area (bigha) (bora) (veg.) (bora) (aman) (aus) (veg.) (bora) (aman) (veg.)

Self-cultivated 2.5 2.0 6.4 2.5 0.4 0.4 9.5 6.4 0.5 Water sales 0 0.5 8.3 5.2 0.1 0.5 23.0 10.3 1.4 Water charge (Rs. /bigha) 350 300 395 58 100 300 351 110 150 Gross revenue (Rs. /unit) 1,625 6,130 13,375 Cost Diesel/Electricity 2,050 4,273 4,501 Repair 750 1,280 1,759 Family labor 860 2,845 2,588 Hired labor 0 382 1,125 Total (Rs. /unit) 3,660 8,780 9,973 Surplus (Rs. /unit) -2,035 -2,650 3,402 Source: Field survey in September 2000.

STWs than diesel ones, and more SMs than tubewells but it is estimated to be about Rs. electric STWs. No households with less than 3,000 per year for SMs, which cannot be ne 1.5 acres of farmland possessed any kind of glected. Interest for working capital was not tubewell at all. It should be noted here that the incorporated because of the fact that a major distribution of operated farmland in Chakuda portion of operational cost comprises family C. D. Block in 1990-91 was as follows; 69.2% for labor and electricity charge, which is not actu less than 1 acre, 21.2% for 1-2 acres, 8.1% for 2- ally paid or can sometimes be paid later. Thus 4 acres, 1.5% for 4-10 acres, and 0.02% for 10 the estimated profit tends to be over-valued, acres and more (Bureau of Applied Economics but not to a large extent. and Statistics [3]). Although we have no data The figures for profit in Table 3, although on the distribution of land for all the house over-valued to some extent, are negative ex holds in the village it is evident that the distri cept for SMs. Such very low (and actually bution of STWs is highly skewed in favor of negative) returns to shallow tubewell invest large farmers. ment become much clearer from the individual Table 3 summarizes the results of the cost data shown in Fig. 1. Almost all the STWs and return analysis of shallow tubewell opera brought about negative profit to the owners, tions with average figures per unit of tubewell, and even in the case of SMs, only just half of shown separately for diesel STWs, electric them enjoyed positive profit. STWs, and SMs. Gross revenue was calculated It should also be noted that even in the case for each irrigated crop by multiplying the irri of the most profitable three SMs, the amount gated area (including self-cultivated area) by of profit per year ranges Rs. 10,000-15,000. the unit price of water sales and then by sum When the depreciation cost of Rs. 3,000 men ming them up. Regarding the cost, only opera tioned above is deducted the rate of return to · tion and maintenance costs were estimated initial investment will be only 12-21%. Thus it and incorporated; i.e. capital costs such as de can be concluded that the argument of preciation of machinery and capital interest 'waterlords' is far from the reality in the study were not included. Depreciation cost was not village. The skewed distribution of tubewells incorporated because of the old ages (and so in favor of large (and relatively rich) farmers the low historical prices) of most of the does not necessarily mean the monopolistic Groundwater Market and .Agricultural Development in West Bengal: Perspectives from a Village Study 57 20,000 ,------.

15,000

"~ g 5,000 r------

STW(E) STW(E) + STW(E)

0 f--- •..--~ • sTW

STW(E)• + STW(E) -5,000 • STW(E) + S~------ + SM • STW(E) -10,000 '------' Total irrigated area in boro-unit (bigha) Figure I. Profitability of tubewell investment in the study village acquisition of agricultural profit by them, and economy in the labor cost for irrigation. It actually the majority incurred a loss from the should be remembered here that the maximum groundwater irrigation 'business'. irrigable area is 40-50 bigha for STWs and 120 Why does the rate of return to shallow bigha for SMs. The low profitability is mainly tubewell investment tend to be so low and attributable to such very a low capacity utili even negative? From Fig. 1 it seems that the zation. small command area was the major reason. It Some background information can be given was found that all the STWs except for some for such a low capacity utilization. First, the SMs covered less than 25 bigha of boro existing 3 diesel STWs installed in 1985, 1986, unit•J land under their irrigation, and the aver and 1993 can be characterized as 'marginal'. It age command area in bora-unit actually is found from Table 1 that 8 out of 11 diesel achieved was 4.6 bigha ( = 1.5 acres) for diesel STWs had already been electrified, and only 3 STWs, 16.6 bigha ( =5.5 acres) for electric remained at the time of the survey. They were STWs, and 38.5 bigha ( = 12.8 acres) for SMs re basically not for the sale of water, but for irri spectively (Table 3).1t can be judged from Fig. gating a small area for self-cultivation. The 1 that at least 25-30 bigha ( =8-10 acres) is nec owners might not be able to purchase water essary for STW owners in order not to lose from the surrounding electrified tubewells be from their 'business'. Of course under the situa cause their land was located on a relatively ele tion that all the non-SM STWs actually cov vated area, and they were obliged to introduce ered less than 25 bigha, the difference with and/or continue to depend on their own diesel SMs in terms of profitability can be attributed STWs at a higher cost. Second, it was found to the difference in irrigation technology. that 4 out of 13 electric STWs could secure However, non-SM STWs can irrigate much only a very small command area, due to either larger areas than they do if there is no compe their 'marginal' nature similar to the diesel tition with surrounding tubewells and the ad STWs mentioned above or due to competition ditional cost for expanding command area is with the neighboring SMs. But as was pointed very small, considering the 'flat rate' system of out earlier, even the remaining 9 electric STWs electricity pricing adopted in West Bengal as could not cover sufficient command area due in other parts of India as mentioned later in to the competition. Third, the same story can this paper, as well as the existence of scale- be applied to SMs; i.e. more than half of them 58 Table 4. Cost and return of crop production in the study village A man (share%) Bora (share%)

Sample size 9 11

Average cropped acreage 5.9 5.8 Yield (maund/bigha) 14.3 15.9 Gross revenue (Rs. /bigha) Paddy 2,951 3,380 Straw 279 250 Total 3,230 100 3,630 100 Cost (Rs. /bigha) Current inputs Seedling 173 206 Urea 93 167 TSP 60 122 MP 55 69 Other chemical fertilizers 53 50 Manures 0 218 Insecticides/Pesticides 68 69 Sub-total 502 15.5 901 24.8 Labor Land preparation 307 314 Transplanting 190 199 Weeding 277 226 Harvesting 486 553 Others 81 81 Sub-total 1,341 41.5 1,373 37.8 Irrigation Sub-total 103 3.2 395 10.9 Total 1,946 60.2 2,669 73.5 Surplus (Rs. /bigha) 1,284 39.8 961 26.5 Note: 1 maund=37.3 kg; 1 bigha=0.33 acre. Source: Field survey in September 2000. could not get enough irrigated area. because of the harsh competition among the In conclusion, it seems that at the time of our tubewell owners. survey the groundwater market in the study 4. Economic Analysis of Irrigated Farming village was in a process of adjustment, in which low-capacity STWs were being con Data on the cost and return of agricultural verted to high-capacity SMs and, therefore, production were collected for major crops in under such a temporarily excessive competi the study village, although due to time con tion in a 'transitional' period almost none the straints the survey was limited only to the tubewells could earn enough profit from the shallow tubewell owners (cum-farmers). The water sales business. results on aman and boro paddy production are Still at the same time, it should also be em summarized in Table 4. Sample size was 9 and phasized that even when the adjustment proc 11 respectively and the average figures are ess is completed, most probably the water shown in the table. sales business will not become very profitable The average yield of paddy in terms of Groundwater Market and Agricultural Development in West Bengal: Perspectives from a Village Study 59 maunds per bigha was 14.3 for aman and 15.9 much as 12%. Under the simplest assumption, for bora, which was equivalent to 3.95 tons and the share of implicit irrigation charge to gross 4.40 tons per hectare respectively. Gross reve revenue at earlier days can be estimated at nue was estimated by summing up the value about 23% (11% at present plus 12%). Tube of main product (paddy) with by-product well owners might have been enjoying a large (straw). Cost was estimated by classifying it amount of profit from their business, through into three components; i.e. current inputs, irri rent land from farmers paying a low price to. 13) gation, and labor. The cost of seedlings was di However, as more tubewells were introduced, rectly estimated from the market price since the groundwater market in the village became sales of seedlings were popular in and around more and more competitive, resulting in the the village and thus it includes some labor continued decline of real water charges. costs. Labor cost includes bullock labor and Second is the comparison with a Bangladesh sometimes the cost of farm machinery such as case study conducted by the same author. power tillers.10l Surplus was obtained by de Table 5 summarizes the results of the cost and ducting the cost from the gross revenue. return survey of aman and bora paddy produc It is evident from the table that compared to tion in a study village in Bogra district, Bang aman, bora cultivation requires much more ladesh in December 1999 (Fujita [8]). Irriga current input (especially chemical fertilizers tion by STWs also prevailed in the village, al and manures) and irrigation, and therefore, though the majority were diesel-operated. It higher cost per acre. On the other hand, not a was found that the share of irrigation cost in .large difference was observed between the two gross revenue for bora cultivation was 13%, crops in the labor cost. only a little bit higher than 11% in Gotera vil Theoretically, the surplus (Rs. 1,284 for aman lage. and Rs. 961 for bora per bigha) should be equal Another surprising point that Table 5 indi to land rent under a well-functioning land cates is that the factor share of labor in rice rental market. The actual land rent in the vil production is much higher in West Bengal lage observed, on the other hand, was Rs.1,000- (38-42%) than in Bangladesh (20-30%) and 1,500 for aman and Rs. 1,000-1,200 for boro.u) vice versa for that of land (27- 40% in West Considering that the rice price was declining Bengal vs. 49-58% in Bangladesh).1') It means at the time of the survey due to the bumper that the irrigated agriculture developed in harvest of rice in Bangladesh/') which put West Bengal is more equitable in favor of downward pressures on land rent for adjusting landless laborers compared to that in Bangla itself to the decreasing surplus, but with time desh. lag, it can be concluded that the land rental The large difference in labor share between market in the village was functioning rather the two regions cannot be explained only by well. the difference in agricultural wage rate. The It is found from Table 4 that in the bora agricultural wage rate in West Bengal was Rs. paddy cultivation the share of irrigation cost 40-45, only about 35% higher than in Bangla to gross revenue was only 11% on average, desh, where the wage rate was Tk. 40, equiva which may not put much financial burden on lent to Rs. 33 at the market exchange rate. water buyers. This point can be more clearly There is a strong possibility that the produc understood from the following two different tion of rice, especially bora in West Bengal, is viewpoints. much more labor-intensive than in Bangladesh First is a historical point of view. In the but the reasons why remain unclear.15) It re study village, as mentioned above, seasonal mains as one important part of the future re land lease by tubewell owners has long been search agenda. the major mode of groundwater transaction 5. Structure of Groundwater Market and the land rent was 3 maunds of paddy per bigha. Considering that the average yield of Finally, let us discuss factors affecting the bora was a little bit higher at that time (about structure of the groundwater market in the 18 maunds), the share of land rent to gross study village. We first discuss the issue of revenue was only about 15%, much lower than state-operated DTWs, followed by the impact the 27% shown in Table 4. The difference is as of -power subsidy to the minor irrigation 60

Table 5. Cost and return of crop production in a Bangladesh village A man (share%) Boro (share%) Sample size 7 8

Average cropped acreage 4.6 4.4

Yield (maund/bigha) 11.7 16.2 Gross revenue (Tk. /bigha) Paddy 3,122 4,049 Straw 393 256 Total 3,515 100 4,305 100 Cost (Tk. /bigha) Current Inputs Seed 61 96 Fertilizer 250 477 Insecticides/Pesticides 0 22 Sub-total 311 8.8 595 13.8 Labor 684 717 Capital rental 355 131 Sub-total 1,039 29.6 848 19.7 Irrigation Sub-total 0 0 546 12.7 Capital interest Sub-total 135 3.8 199 1.0 Total 1,485 42.2 2,188 50.8 Surplus (Tk. /bigha) 2,030 57.8 2,117 49.2 Note: 1 maund=37.3 kg; 1 bigha=0.33 acre. Source: Field survey in Titkhur village, Bogra district, Bangladesh in December 1999. sector. Lastly several characteristics of the and share the burden of his wage equally groundwater market are discussed in relation (based on irrigated acreage) among them. The to the economic behaviors of shallow tubewell salaries paid to the official operator and assis owners and water buyers. tants are far from negligible and so it can be 1) State-operated DTWs pointed out that not-a-small portion of subsi As mentioned earlier, state-operated DTWs dies to the minor irrigation sector in West Ben have a distinct boundary with their network gal are thus completely wasted. of underground pipes. There are two enclaves Another critical problem for the state in the village formed by the DTWs, where operated DTW s is that they are approaching farmers have been enjoying subsidized irriga the end of their expected life. The installation tion water from the State Government for year of the DTWs in the village was 1964 and more than 35 years. The subsidized water more than 35 years have already passed, dur charge in the year 2000 was Rs. 80 per bigha for ing which no major rehabilitation was done. boro and Rs. 20-25 for aman, while the market At the time of the survey there was no symp rate was Rs. 350-400 and Rs. 100, respectively. tom of any functional disorder, but it was ex Officially it is not necessary for the beneficiary pected that the 'time' would come in the near farmers to incur any other costs, but actually future. What will happen at that time? Let us because of the complete 'idleness' of the official examine the case of a nearby village in the operator and the assistants, they are obliged to neighboring Haringhata C. D. Block, Nadia dis employ another operator on a seasonal basis trict. seven ground cated

etc., change cost more other for ies

new conceal lage. should huge village.

of the farmers years should

it especially

lower cessfully. the ing optimistic hand, sidy.

to groundwater subsidy beneficiaries 16% mized, the

1999 the of cording through rate'. tive the

lower

(due

[16]).

The

Next,

the

old

transfer

aman,

debt

private

marginal

other

operation

the

will

from

short,

plausible

water

Power

there-excavation

Still

interest

The amounts

and

facilities

Birohi

and

old

power

years,

state

name

Under

State

the

tariff

which

only

enabling

pipes

The

repay

his

let

operator's

has

did

and

adopting

the

one

and

January

and

states

West

thereby

motors

about

to market

the

charge

shallow the rehabilitated

anxiety

DTWs borne

subsidy

Government

seemed

pay

been

not

way

village

with

continue DTW

charged

tariff

special

and

continued

cost

the will

excessively.

this discuss

was

and

that

State

such

the

difficult

motor's

Bengal

the

forth,

the

know

power

from tubewell

let

minor

lift

Groundwater

given

two

for

was

agreed rate

fixed

village

1999.

the water

benefit

about

salary,

maintenance

the

system

expenses

India,

whether

tubewells

was

Government's

farmers'

that

future

tariff

them

imposed.

the West sufficient

for

the

pumping

the

years'

Kalyani

'flat

almost

implemented,

minor

the

cheaper

during

It subsidy the

horsepower,

Government,

amount not

irrigation

Rs.

operate

announced

DTWs

farmers.

charge

December

Rs.

tubewell

one

to is

village

was

But

tubewells,

issue

has

water

electricity

manage

Bengal.

system

owners

network

500

rate'

Birohi,

exact

only

tubewell

they

grace

475,000,

leaders

utilized.

irrigation

could

Market

as in

same

been after

recent

town

for

the

water

marginal

large

the

buyers

costs,

the

Shah

Perspectives

system)

was

the

through

addition, could

figure.

agriculture,

intention

sector.

power

period,

and

bora,

called

beneficiar

money

them.

1998,

DTW

providing

not

the

could

same

and

although

and

group

the

but

years.

Farmers just

charges,

revision

number

became

coming

argued,

also

owners

that

exploit

includ

Gotera it

under

(Shah

repay

Rs.

effec

other

mini

Agricultural

total

than

thus

sub

The The

cost suc

The also

'flat

and

can

not

vil

the

lo all

from

It and system nally, gation),

cussed Rs. STWs

seven could shows, between

considered. power raised actually STWs lage 'trickled dent is tariff ference tion ventional iff rate' of sidies tion16) raised ess, if the village

actual tent.

where

SMs, switched pension 1991-98

1991. STW

none

(probably

Village

Development in

There

can First,

b) 3)

Second,

being

the

was

conventional

190%

sector

could

system

discussed Efficacy

For however,

For

substantially

Major

the

that

owners.

but

not seems

from

years

survey

and

substantially.

area

and

total

tariff

from

here.

which

was high

set

Study

with

in was

(Wholesale

applied.

most

down' the

are

Rs.

STWs

concluded

DTWs

private

STWs

the

succeed

STWs,

rises

the

earn

for

Rs.4,932 considering

SMs

were

agriculture,

capacity

under

operation

123,

after was

revisions

rather

never

was

Rs.

several

per

the

process

inflation

of a

is much

the

high-capacity

low-capacity

electricity

SMs

some

benefit

earlier,

to be

respectively.

and

large

enough

with

1,700 found

and

the with

West

seems

revision

raised

Such

KWh

for

shallow

maintained,

groundwater

STWs.

the

water

groundwater

reflected in

the

raised

for

adopted)

prolonged

follows:

that

SMs

Price

lesser

SMs

congested

kind RLis

There

which

critical

of withdrawing

extent,

3-5

Bengal:

last to

study

SMs,

that

tariff

irrigation

rise

conversion

50%

the

profit,

the

seems

buyers

before,

large-scale

cost

are

Rs.

horsepower,

tubewells

Index

will

of (river

the extent

about

revision

least

some

was

sum,

STWs

December

large

only

State real

which

fact

3,284

resulting

points

registered

village higher

adjustment

rate

was

much SMs.

but

between

period,

take

124%.

power

areas

that

market

sufficiently.

market in

but

negligible

terms

lift

the

minor

in real

conventional

for

exceeded

extent

95%

the Government

that

raised

for

Kolkata) were

means

power

almost

distinction

some lower

level to

a pump

manipula

(Table

tariff

appeared,

'flat

SMs

consider-

large

rate

STWs

new

the

1998

October

the

non-SM subsidy

too,

the

electric

during

almost

irriga

terms,

nomi

Fig.

a being

proc

from

than

time

rate'

time

93%

sub

con

rate was 61

was

sus 'flat

irri

evi

dis

tar

dif but

vil

the

3).

2 62

STW.©

SJW® STW STW SM ·® ·® srn(of® @ DTW (j) ooSM ® .STW SM@ ,.... SM ® .STW'€11 ® STW @ ®. SM00 (Z) ® STw@ STW (D) SM X@ ®l • S"fW • STW@ STW STW @

Figure 2. Location of tubewells in the study village Source: Prepared by the authors. ing that nobody is trying to take initiative for while actually benefiting from the irrigation necessary coordination as is usual in rural scheme. This problem becomes more persis India) until this adjustment process is com tent in all types of land in aman season when pleted, during which tubewell owners will con the need for irrigation depends on the weather tinue to suffer financial losses due to low ca conditions. Such a morally hazardous behavior pacity utilization. of water buyers") puts serious financial pres It should also be pointed out that the conver sure on the water sales business, even within a sion from STWs to SMs is not a fundamental rural community like our study village that solution to the problem of declining ground· could establish and manage an excellent coop water level. The mere exploitation of deeper erative society.") groundwater by introducing new machinery is 6. Conclusions widely observed in other parts of India includ ing Punjab, about which experts have repeat The major findings and their implications of edly raised alarms. It is clear that not only did this article are as follow: the market mechanism fail to solve the prob First, at least in the study village, the engine lem, but the public sector also failed so far to of agricultural development since the 1980s find effective measures. was found to be the rapid diffusion of private Another problem observed in the village shallow tubewells invested in by large farm was that some water buyers, especially those ers, without any direct relation to the agrarian who cultivate low-elevated land, are reluctant reforms such as redistribution of land, regis to pay water charges. Irrigation water can be tration of sharecroppers (Operation Barga), made to flow into their land 'automatically' be and I or strengthening of local government cause of the topographic condition, and bodies. The contribution of agrarian reforms, if thereby they can insist to tubewell owners any, should be argued by exploring their indi that they did not ask them to provide water, rect impacts on the irrigation-led agricultural Groundwater Market and Agricultural Development in West Bengal: Perspectives from a Village Study 63 development.'") For example, the rural electrifi conversion of STWs to SMs is not a fundamen cation during the 1980s in West Bengal, an im tal solution. At the same time, some appropri portant factor that promoted the dissemina ate institutional support should be given to tion of electrified tubewells, might be to some lessen the transaction costs that will inevita extent connected with the strengthened local bly be borne in the process of the adjustment, government bodies. under which STWs are shifted to SMs. Second, it was found that the distribution of tubewells was highly skewed in favor of large 1) According to the official statistics the average farmers in the study village, the same as in annual growth rate of foodgrain production in the other studies, but it does not automatically fol 1980s was as follows: 6.5% in West Bengal, 3.8% in low that tubewell owners monopolize rela Bihar, 2.7% in Assam, 4.1% in Orissa, compared to tively high returns to bora paddy cultivation. 4.0% in Punjab, 4.3% in Haryana, 3.8% in Himachal On the contrary, our study shows that the Pradesh, 3.5% in Uttar Pradesh, 0.9% in Andhra water sales business became less and less prof Pradesh, 0.5% in Karnataka, 2.9% in Tamil Nadu, itable, as more tubewells were introduced in a -2.1% in Kerala, 1.2% in Maharashtra, -1.9% in confined area. Real water charges declined to a Gujarat, and 0.9% in Rajasthan. Note here that in large extent, with the changes in the dominant western and southern India, where coarse grains are the staple cereals, crops other than foodgrains mode of water transaction from the seasonal such as oilseeds and fruits registered a high land lease by tubewell owners to the purchase growth rate and contributed to overall agricul of water by farmers. In a word, water buyers, turai'development. On the other hand, the average not tubewell owners, benefited more from the annual growth rate of various crop productions in 'Green Revolution' in the dry season, at least India in the 1980s was as follows: 4.3% for wheat, after the groundwater market become com· 4.1% for rice, 3.9% for maize, 2.4% for pulses, 6.1% petitive. The argument of 'waterlords' is ques for oilseeds, 4.4% for sugarcane, and 3.2% for cot tionable in the present rural West Bengal ton. situation, the same as in present-day rural 2) Most of the articles contained in Rogaly, Harris Bangladesh (Fujita [8]). White and Bose [14] reflect this basic tone of cred iting rapid agricultural growth to the agrarian re Third, in the West Bengal study village, it forms. Needless to say, the argument of the Left was found that the factor share of land in rice Front government of West Bengal lies along the production is much smaller (and the share of same lines, as reflected in the writings of annual labor much larger) than in a Bangladesh vil Economic Review. An example is as follows: This lage in Bogra district. Therefore, it can be said achievement in the agricultural sector is largely that rural laborers also benefited from the due to the development strategy followed in the irrigation-led agricultural development, espe State. The corner-stone of the strategy is the effec cially when compared to the Bangladesh case, tive implementation of land reform measures. although the reasons remain to be explored Next, the strategy involves the mobilization of the resources of the State to provide crucial non-land more in the future in a systematic manner.20l inputs like seeds, fertilizers, irrigation and credit Fourth, power subsidy to the minor irriga· to the beneficiaries of land reform measures as tion sector in West Bengal seems to show no well as other small and marginal farmers. This al sign of being reduced in spite of the revision of lows the beneficiaries of land reform measures as power tariff in December 1998, but it should be well as other poor farmers to take up productive noted at the same time that the benefit of the activities. Thus the strategy is crucially dependent subsidy is being sufficiently 'trickled down' to on the productive activities of the small farmers water buyers, instead of being monopolized by for agricultural growth. And since per acre pro tubewell owners. duction as well as labour absorption is higher in Fifth, a sound socio-economic study is ur the small farms of the poor working farmers, the gently needed to assess the new policy of West strategy leads to the maximization of output and employment. The strategy is effectively operation Bengal State Government by which state alised through the decentralised district level operated DTWs are gradually transferred to planning process, in which the rural poor through farmers' groups after their major rehabilita· the Panchayats play a decisive role (Government tion. of West Bengal [10], p. 20). Sixth, the problem of declining groundwater 3) Although the latest article of Banerjee, et a!. [1] level should be tackled more seriously as the built an elaborate economic model and it looks 64

likely to succeed in proving the hypothesis that 9) Irrigated area was aggregated for all irrigated the land reform measures did significantly con crops, using the water charge (bora= 100) as a tribute to agricultural growth by empirical data weight. persuasively, it also includes serious problems; i.e. 10) Labor cost is estimated operation-wise and type they totally ignored the critical role played by the of labor (family, exchange, or hired)-wise. Farm private tubewell irrigation development in the ag ers utilized either power tiller or bullock for land ricultural growth in the period. They selected the preparation, the cost of which is included in the average rice yield regardless of aus, aman, and bora labor cost in Table 4 so that the table is compara as a key independent variable, and in the explana ble with Table 5. When family production factors tory variables they did not include any variable are used the cost is evaluated by their rental rate relating to the private irrigation development due or the hired wage rate. to (probably) the lack of data. If regions with 11) The major contractual arrangements of ten rapid private irrigation development (and thus ancy in the study village were lease contract, in rapidly expanding bora cropped area, which raises which a fixed amount of cash is paid in advance average rice yield) happen to coincide with the re for a season of aman or bora production. Share gions where Operation Barga was more success cropping was not practiced so far as the authors fully conducted, the result is that they fail to sepa know. According to Table 4 the factor share of rate the effects of private irrigation development land for paddy production in a year is 33% on av from those of Operation Barga. erage, which indicates that under the Operation 4) Webster reported that the tubewell owners in Barga if the share accrued to sharecroppers and his study village refused to sell the water and in landowners is actually 50% each as reported in stead rented land on a fixed contract (fixed rent Banerjee, et a!. [1] it turns out that sharecroppers seasonal tenancy) called 'thika', which seems to be will lose in the study village. This may be one of the major reason why he concluded that the high the reasons why we did not hear about sharecrop returns to bora paddy cultivation are secured by ping and Operation Barga in the village. Note at the the owners. However, he also reported that by 1991 same time, however, that the share accrued to there were approximately forty operating landowners is regulated at no more than 25% tubewells within the village mauza, which seems under the West Bengal Land Reforms Act, 1955. to be a sufficient number to 'compete' with each 12) A prolonged and severe flood attacked Bangla other, so that it is more appropriate to analyze the desh in 1998. After that a large volume of rice was bora cultivation profitability under the prevailing exported from West Bengal to Bangladesh land rent, before reaching his rather strong con (Dorosh [6]), which resulted in a substantial rice clusion. price hike in West Bengal. But in the following 5) There are several pioneering studies conducted year of 1999 Bangladesh enjoyed a bumper harvest in other parts of India. See Janakarajan [11] in and stopped rice imports; thus rice prices started Tamil Nadu, Pant [13] in Uttar Pradesh, Shah [16] to decline in West Bengal. in Gujarat, Kahnert and Levine [12] in several 13) See a case study in Bangladesh by one of the parts of the Gangetic basin, and Shah and Ballabh authors (Fujita and Hossain [7]), where the same [17] in Bihar. See also some case studies in Bangla type of seasonal land lease by tubewell owners desh by one of the authors (Fujita and Hossain called Chaunia was widely observed and analyzed. [7], Fujita [8]). According to their analysis, however, even under 6) Note that the introduction of DTWs started in the Chaunia system tubewell owners did not enjoy West Bengal at the beginning of the 1950s, long exorbitant profit, if the high interest rate in the before the era of the 'Green Revolution'. See rural informal credit market is taken into account. Chowdhury [ 4]. This argument is closely related to how to inter 7) According to the study on the Gotera Village Co pret the argument of Webster [19] mentioned in operative Society by Suda [18], the financial posi Note 4), but he did not conduct any economic tion of the Society experienced an impressive im analysis anyway. provement since the late 1980s, mainly because the 14) The different methodology and the categoriza programme of saving mobilization was successful. tion adopted in labor cost estimate in the Bangla The success of saving mobilization itself indicates desh village with the West Bengal counterpart is the rising living standard of the villagers. problematic, especially considering that in Bangla 8) In August 1998, the number of cooperative mem desh family labor cost is under-estimated. How bers was 714 and 7 permanent staff were working ever, if the fact that the surplus (gross revenue for various activities including credit (saving mo minus production cost including labor cost) was bilization and loan disbursement), sales of fertil more or less equivalent to the actual land rent in izer, multiplication & distribution of improved the Bangladesh case (Fujita [8]) is taken into con seeds for paddy, and irrigation. sideration, the estimated labor cost cannot be very Groundwater Market and Agricultural Development in West Bengal: Perspectives from a Village Study 65 far from the 'real' one. The large difference in fac· Case of a Village in Bogra District," The Developing tor shares in paddy production does exist. Economies, Vol. 33, No.4, 1996, pp. 442-463. 15) The over-estimation of labor hours in West [8] Fujita, K. "1990 Nendai Banguradesyu niokeru Bengal may be one of the possible reasons, Chikasui Sijyo no Henyo: Hikouritsu no Kozo to because piece rate labor contracts are more popu Syotoku Bunpai eno Ganni (Transformation of lar in West Bengal than in Bangladesh (private Groundwater Market in Bangladesh in the 1990s: communication with Dr. Bhaswar Moitra, Reader, Inefficiency of Market and Implications to Income Economics Department, Jadavpur University, Distribution)," Ajia Keizai (Monthly Journal of In· Kolkata). However, even if this is the case, it ex stitute of Developing Economies), Vol. 42, No. 6, plains only a part of the difference. June 2001, pp. 26-53. 16) There is a possibility that farmers did not ma [9] Gazdar, H. and S. Sengupta. "Agricultural nipulate. SMs require permission from the State Growth and Recent Trends in Well-Being in Rural Water Investigation Department but actually it is West Bengal," in Rogaly, Harris-White and Bose quite difficult in many areas (private communica [14], pp. 60-91. tion with Bhaswar Moitra, Reader, Economics De [10] Government of West Bengal. Economic Review, partment, Jadavpur University, Kolkata). 1999-2000. 17) The problem of moral hazard in both water sell [11] Janakarajan, S. "Interlinked Transactions and ers and buyers is much more serious in Bangla the Market for Water in the Agrarian Economy of desh. See Fujita [8]. a Tamilnadu Village," in S. Subramanian, ed., 18) On the good performance of the cooperative so Themes in Development Economics: Essays in ciety in the village, see Suda [18]. Honour of Malcolm Adiseshiah, New Delhi: Oxford 19) Gazdar and Sengupta submitted an interesting University Press, 1992. hypothesis that the investment in tubewells accel [12] Kahnert, F. and G. Levine, ed., Groundwater Irri erated only when uncertainties about land tenure gation and the Rural Poor: Options for Development disappeared after a thorough implementation of in the Gangetic Basin, A World Bank Symposium, land reforms by the Left Front State Government World Bank, 1993. (Gazdar and Sengupta [9] ). It seems to the author [13] Pant, N. New Trend in Indian Irrigation: Co that this is possible but so far evidence to support mmercialisation of Ground Water, New Delhi: it is lacking. Ashish Publishing House, 1992. 20) The same argument on the difference between [14] Rogaly, B., B. Harriss-White and S. Bose, ed., West Bengal and Bangladesh has already been Sonar Bangia?: Agricultural Growth and Agrarian presented by Dasgupta [5], but further discus Change in West Bengal and Bangladesh, Dhaka: The sions with more solid economic data are required. University Press Ltd., 1999. [15] Saha, A. and M. Swaminathan. "Agricultural References Growth in West Bengal in the 1980s: A Disaggrega [1] Banerjee, A. V., P. J. Gertler and M. Ghatak. tion by Districts and Crops," Economic and Political "Empowerment and Efficiency: Tenancy Reform Weekly, Vol. XXIX, No. 13, March 26, 1994. in West Bengal," journal of Political Economy, Vol. [16] Shah, T. Groundwater Markets and Irrigation 110, No. 2, 2002, pp. 239-280. Development Political Economy and Practical Policy, [2] Boyce, J. K. Agrarian Impasse in Bengal: Institu Oxford: Oxford University Press, 1993. tional Constraints to Technological Change, Oxford: [17] Shah, T. and V. Ballabh. "Water Markets in Oxford University Press, 1987. North Bihar: Six Village Studies in Muzaffarpur [3] Bureau of Applied Economics and Statistics, District," Economic and Political Weekly, Vol. Government of West Bengal. District Statistical XXXII, No. 52, 1997-1998, pp. A-183- A190. Handbook Nadia 1996 & 1997 (combined). [18] Suda, T. "Indo no Sinyou Noukyo Kaikaku: [ 4] Chowdhury, B. K. Economics of Tubewell Irriga Nishi Bengaru Syuu Ichi Yuryou Noukyo no Jirei tion in West Bengal, Santiniketan: Agro-Economic karano Kousatsu (Reforms of Agricultural Credit Research Center, 1971. Cooperatives in India: A Case Study of a Primary [5] Dasgupta, A. Growth with Equity: The New Tech Agricultural Credit Society (PACS) in West Ben nology and Agrarian Change in Bengal, Dhaka: The gal," Ajia Keizai (Monthly Journal of Institute of University Press Ltd., 1998. Developing Institute), Vol. 43, No. 12, pp. 2-29. [6] Dorosh, P. A. "Trade Liberalization and Na [19] Webster, N. "Institutions, Actors, and Strate tional Food Security: Rice Trade between Bangla gies in West Bengal's Rural Development- A desh and India," World Development, Vol. 29, No.4, Study on Irrigation," in Rogaly, Harris-White and 2001, pp. 673-689. Bose [14], pp. 329-356. [7] Fujita, K. and F. Hossain. "Role of the Groundwater Market in Agricultural Develop (Received October 25, 2002; ment and Income Distribution in Bangladesh: A accepted February 17, 2003)