ABSTRACT
It is time for some stock-taking. The preceding chapters have dealt with an emerging principal reality in the Indian economic system. In recent years, the domestic terms of trade in the country have moved continuously in favour of farm products in general, and, within the agricultural sector, in favour of those specific crops that are marked by a relatively greater order of ‘product dominance’ on the part of the richer sections of the peasantry. This shift in terms of trade can be viewed as mirroring a political arrangement entered into by the urban bourgeoisie with the rural obligarchy. Its rationale can be easily explained. Given the frame of parliamentary democracy based on adult suffrage, urban industrialists, to maintain their control over political institutions, need to enlist support from amongst the rural electorate. The task is immensely facilitated by the understanding they reach with surplusraising farmers and their trading partners, who are in a position to ensure the votes of major sections of small peasants and landless labourers. The fact that the latter are economically extremely vulnerable, and the rate of literacy amongst them is as low as ten to fifteen per cent, contributes to the process. It is not simply that-as generally argued-attempts to raise the level of productivity and income of the poorer farmers are adversely affected by the slow spread of elementary education. Their educational backwardness keeps the rural poor away from analysing the factors underlying their economic plight, and makes it difficult to mobilise them politically. Precisely because of their vulnerability, a kind of unequal exchange too gets established between them and the surplus-raising farmers and traders, who find the circumstances opportune for the exercise of a virulent form of monopsony power. The unequal exchange is reflected in the prices at which the poorer peasants are forced to sell their products to the rural oligarchs or traders at the beginning of the season or those at which they are
forced to buy these back toward the close of the season, in the extortionary share which the share-cropper has to yield to the landlord, in the exorbitant interest charged by the surplus farmer-cum-moneylender-cum-trader from the poor, and in the low wages an agricultural labourer is fobbed off with by a big farmer. It is, however, also overwhelmingly reflected in the political pressures which the richer peasants and traders succeed in applying on the small farmers and farm workers. The threat to deny grain or lower wages or raise the lending rate or lower the proportion of the shared crop or eject from land can be-and is-held against the weaker sections so as to make them fall in line with the political wishes of the big farmers and the mercantile elements. The notorious ‘vote banks’ come to operate, and the urban bourgeoisie therefore find it altogether expedient to enter into an informal, quasi-contractual arrangement with the rural oligarchy. The arrangement, at least in part, is also helped by the fact of the urban bourgeoisie being closest to the rich peasants in terms of social alignments.1
