West Bengal's Rural Commercial Capital

Abstract

This paper aims to understand the achievement of high agricultural growth alongside persistent poverty and a mediocre record of human development in West Bengal under the democratically elected Left Front over the last 30 years. Contrary to conventional explanations which centre on the nature of land distribution and rental arrangements, it seeks to explain the contrast between the expansion of agriculture and the deprivation of its mainly rural population through an analysis of the social relations of the post-harvest marketing system which links production with circulation and distribution. Based on field work in West Bengal's agricultural commodity markets over the quarter century 1981–2004, it shows how the seemingly contradictory outcome can be explained in some measure through the control over the marketed surplus by a handful of oligopolistic firms and their dominance over petty producers and labour in the agricultural production and marketing system. It also highlights how the Left Front governments, despite their attack on large-scale landed property, continued to enhance the privileges of the local agro-commercial elite which prevented agrarian poverty from being addressed.

Keywords:

• merchant's capital
• agricultural marketing
• West Bengal
• class formation
• poverty

Acknowledgements

This essay, summarizing my book Rural Commercial Capital (Harriss-White 2008), has been written in memory of Professor Biplab Dasgupta, M.P. (Marxist Communist Party of India). The author is very grateful to the three anonymous reviewers for their constructively critical comments on the draft and to the exceptionally good copy editing.

Notes

¹Over this quarter century, the research was regularly discussed with three party-politically engaged Marxian economists, the late Professor Biplab Dasgupta of the CPI(M), the late Professor Sunil Sengupta and the late Boudhayan Chattopadhyay of the CPI, all of whom knew how grateful I was and am for their support.

²Petty production is small scale production organized around the household in which the unit of production and consumption are the same. It is sometimes also called simple commodity production as the surplus is usually occasional or very small scale and not for accumulation. Petty production is sometimes regarded as disguised wage work because of the poor returns. It exists on a continuum of forms between disguised wage work and autonomous production, takes place under a variety of logics and is prevented from accumulating by a range of exchange relations. It is called self-employment, own account enterprise, the small scale sector, cottage industry, artisan production, and so on (see Harriss-White 2012).

³Practical details of the fieldwork, including evolution of research objectives over three rounds, the sites, sample selection, interview methods and schedules of questions are critically discussed in Harriss-White (2008, chapter 1 and appendix 1).

⁴Marketing margins in West Bengal have been twice those of Tamil Nadu in the south of the country throughout the period studied.

⁵These use variations on the Lewis Grant hulling mill, converted from a coffee grinder in 1897 by a Scottish engineer and still appropriate for the “factor endowments” of semi-subsistent rural India—whatever the legal regulations. The populations of the petty sub-circuit are not recorded. This information was estimated by the Chief Inspector, Food and Civil Supplies Corporation, Bardhaman District (personal communication 2004).

⁶See Bottomore et al. (1985) for a sympathetic treatment, and Hodgson (2001) for an unsympathetic treatment.

⁷Primitive accumulation is not just a process of seizure of resources prior to productive accumulation (and resources are sometimes seized and sequestered for indeterminate future use, or seized and immediately squandered in unproductive ways, see Adnan [2012]) but also the “liberation” of labour from the means of production to have no option but to labour “freely” under the shackles of wage work contracts (see debates about wage labour and freedom: Brass [2009] versus Breman Guerin and Prakash [2009]).

⁸See Harriss (1984) for a history of state interventions in trading, warehousing, transport and their finance.

⁹After Independence, but still in the long shadow of the Bengal famine, and after heated parliamentary debate, from 1965, the Indian state has procured and distributed (or buffer-stocked) a fraction of the marketed surplus of food-grains (that part of production that is sold on the market), along with a set of other “essential commodities,” an act of such political salience that the public distribution system has resisted the neoliberal reforms and much criticism in the mass public interest. Over the last four decades, the Public Distribution System—originally targeted from the grain-bowls of the north-west to strategically important frontier regions and the poor in cities—has been constantly interfered with. It has expanded and contracted social coverage, duplicated and subcontracted many practical functions to (provincial) state corporations, procured from farmers' regulated markets and then withdrawn from them, built massive buffers in times of scarcity and released them in times of plenty—the opposite of the textbook role—initiated forced linkages with state production credit and state storage and then withdrawn them. Currently it has a surplus buffer three times the entire production of cereals in Africa and is the object of new justifications in terms of rights to food (Harriss 1984; Mooij 1999; Swaminathan 2000; Khera 2011).

¹⁰This is in dramatic contrast to the strongly and explicitly acknowledged structuring role of caste in South India (Harriss-White 1996, 2010).

¹¹The caste system—a hierarchical and exclusive ordering of society in terms of ritual purity, occupation, diet and kinship probably never existed in a pure form and is undergoing profound changes. There are four main orders (varna), thousands upon thousands of endogamous sub-castes (jati) within the orders, and a lively debate about whether the 16% of the population which are out-castes (whose work is to clean the material fabric of society and who are thus most polluted) are within the “system” at its base or outside the system altogether (Ilaiah 1996). For higher castes, the institution is either being dissolved or persists as a structure of difference. But for lower castes it very frequently persists as relations of upper-caste contempt and economic and social domination (Guru 2011). Tribal India (8% of the population) is regarded as “pre-Hindu” and whether tribes complement out-castes or have a different principle of social order is also debated. For purposes of positive discrimination (called “reservations”) the state scheduled a subset of eligible very low castes and tribes (Scheduled Castes and Scheduled Tribes). Their special favours are hotly contended by upper castes, have generally under-performed but have created a “creamy layer” of beneficiaries. Reservations persist because even the creamy layer continues to face discrimination.

¹²By “conglomerate capital,” Chattopadhyay means combinations of commercial, industrial, agricultural, financial capital—both rentier and directly productive—investments in which are shifted according to circumstances and are often mediated through political accommodations with the state.

¹³Analysed in detail in Harriss-White (2008, chapters 6 and 7).

¹⁴Food Department and Municipal Market officials extort on grounds of the site, weights and measures and licencing of firms. Electricity is fickle and licences for electricity supplies are rationed and slow to be granted—so sums that are significant to their donors are transferred to the Electricity Board. The relation between the modern rice mill contracted to the Food Department or the Food Corporation of India is festooned in rules, the easing of which is lubricated by bribes. The laws are then not enforced so that complicity and extortion go hand in hand in the forces actually regulating the petty producing circuit of the market system.

¹⁵Our evidence is thus at variance with the thesis of Sanyal (2007) and other post-colonial Marxists (Chatterjee 2008) to the effect that this part of the economy is non-capitalist, or a “needs economy”—or indeed a “reserve army” (Altvater 1993); or a “labour bog” (Patnaik 2011). Also see the theoretical critique of Sanyal by Jan (2011). Our evidence suggests that petty commodity trade is subsumed within the circuits of circulation of the capitalist economy and represents a form of contemporary capitalism in which expansion is by multiplication rather than accumulation and concentration (Harriss-White 2012).

¹⁶For reasons of nutrition and employment, the “government should formulate a programme for the replacement of the huller type of rice mills by the organised hand pounding of rice” (Government of India 1955, 103, 43–47, 322). These aims accorded with those of the First Five Year Plan which envisaged a cooperative condominium of organized cottage industries as the goal of development. Rules and regulations on the statute book reflect this vision to this day, but material conditions rapidly evolved to render them unimplementable.

¹⁷Source of data: raw data from the Food Corporation of India Eastern Zonal HQ, Kolkata.

¹⁸The West Bengal Secretariat.

¹⁹For direct testimony from female mills workers in Bolpur in 2002 and 2004, please see Ghosh (1998).

²⁰Lecture in Nuffield College, Oxford University (personal communication).

²¹See Banerjee et al. (2002), Bandhyopadhyay (2001, 4790) and Chatterjee (1997, 67–68) on the limits to a paternalistic project for the small peasantry.

²²It had earlier commissioned other international management consultancy firms for advice on industry: Arthur D. Little and Price Waterhouse, as reported from an interview with the CPI(M) Minister for Industry and Commerce (Ganguly 1997, 123).

²³They are not to be read as accepting a passive role as agents of industrial capital.

²⁴Sarkar's formulation that the LFG's stability is due to the physical-political protection it provides to livelihoods in the non-farm economy (while being deduced without evidence and needing further research) is an indictment of the poverty of the political project for petty production and trade in the informal economy (Sarkar 2006).

²⁵See Harriss-White (2003) and also the Editorial of Economic and Political Weekly (2002) in which Tamil Nadu's efforts to encourage corporates and contract farming, and the amendments needed to the Regulated Agricultural Markets Act to legalize contract farming and the transformation of “wasteland,” are critically discussed.