Opinion
To not land in trouble
05 Jun 2011 |
Dr Ibrahim H Rehman
| Hindustan Times
Every year, industrial development projects displace about 10 million people globally. In India alone, involuntary resettlement has affected about 50 million people over the last five decades. Three-fourths of them still face an uncertain future. People displaced by such projects are prone to being rendered landless, jobless, homeless and marginalised.
Yet, the policies and programmes related to their relocation and rehabilitation are yet to find satisfactory answers to questions like: Is the land acquisition in terms of the quantity and quality of the land acquired justified? Does the process follow the principle of causing minimum displacement?
If it affects the habitat or livelihood or both of the displaced, does the form and content of compensation reflect the current value of the land? Does the compensation package provide sustainable means of livelihood?
The land acquisition processes by the corporates hasn't moved in tandem with the needs and aspirations of affected communities. The first issue is that of identifying a piece of land based on parameters that depend on intensive assessments of social and environmental aspects.
For instance, while setting up a water-intensive industry, a detailed assessment of current and future estimation of aquifer conditions in the area must be undertaken.
Further, productive and fertile land is often acquired when non-productive land may serve the purpose. At times, even the quantum of land acquired exceeds the immediate and near-future needs.
To begin with, corporates should avoid as much displacement as possible. They should also look beyond the technical requirements and availability of raw materials to focus on social and environmental issues. Once the land to be acquired is identified, it's critical to determine the number of families that will get affected, as there is always a conflict on the actual number of 'victims'.
The scenario is further complicated as the process often takes two to three years to get completed. During this period, there is lot of in-migration to the potential site. Consequently, there is often dispute on the residential status of families and the grievance redressal mechanism to resolve such concerns is usually lacking.
It’s desirable that a credible grievance redressal system is in place wherein collective complaints are addressed among people, corporates and the district administration.
The compensation package is usually worked out on the basis of the number of potentially affected families. The problem here is that relocation and rehabilitation packages treat the displaced as an obstacle to be overcome rather than as partners in the process of industrialisation.
Further, neither the Land Acquisition Act, 1894, nor the Land Acquisition (Amendment) Bill, 2007, prescribes an accurate methodology to determine the rate at which land should be acquired. So a scientific process to determine land rates should be devised and an appropriate legal and regulatory framework should be set up.
One-time compensation packages don't last for long. Therefore, along with a paradigm shift in the compensation packages, we need to devise innovative experiments like giving equity participation as part of compensation or a subsistence allowance along with pension schemes.
On the issue of relocation, corporates often shy away from constructing relocation and rehabilitation colonies. It's desirable that these colonies provide good quality health and education facilities and reflect, and address, the socio-cultural sensitivities and sensibilities of the displaced communities.
While the livelihood concerns are planned to be addressed by creating employment opportunities, either a detailed analysis of livelihoods and their disruption is not undertaken or the promises made aren't kept. Further, in case of the acquisition of agricultural land, monetary compensation doesn't adequately address the concerns of livelihood and economic sustenance of the displaced family.
A subsistence allowance should be given to every affected family till adequate means of livelihood are made available.
The Land Acquisition (Amendment) Bill, 2011, and the Rehabilitation and Resettlement Bill, 2011, will soon be tabled in Parliament. They promise to bring radical changes to the existing process of acquisition. However, acts and regulations alone won't bring about the real change.
A new thinking and a spirit of inclusion at the level of corporates are equally important.
Power from all
30 May 2011 |
Dr Debajit Palit
| The Financial Express
Off-grid power can supplement the government's rural electrification efforts and help ensure power for all by 2012.
New pricing tiers add to instability
02 May 2011 |
Ms Aastha Mehta
| The Financial Express
The building blocks of coal security - availability and affordability - have recently been questioned. The coal availability that was believed to be in plenty is proving to be a myth. Now there are concerns about its affordability too, given the frequent price revisions. The domestic demand and supply gap is widening. The Annual Plan Document (2011-12) has projected the coal imports at 137 million tonnes as against 83 million tonnes in the last fiscal. Such high import levels are likely to destabilise the financial structure of the coal-dependent sectors.
Though coal pricing is decontrolled, the industry, with its low price elasticity and a majority of its production and demand coming from the government sector, continues to be under the influence of the ministry of coal.
Prior to nationalisation, the price of coal was determined by the market forces, with very little government intervention. However, the nationalisation of the industry in 1973 brought the sector under a monopoly market structure with coal pricing shifting to an administered regime. Under that regime, several committees were constituted and the prices were revised at frequent intervals to cover the rising input costs. Subsequently, the prices were linked to the useful heat value of coal, and the Bureau of Industrial Costs and Pricing (BICP) developed a formula for estimation of coal prices based on the average long-run marginal cost. Finally, coal prices were completely decontrolled in 2000. Coal producing companies were given the right to determine the price levels, but in practice the ministry still is in full control.
Now different grades of coal are supplied at different prices fixed by Coal India in consultation with the ministry. The supply of coal is ensured to the regulated sectors, based on the historical prices set by the BICP. The regulated sector is defined to include power, fertiliser and defence sectors, however, the latter two constitute only a miniscule share. For other sectors about 75% demand maybe met through the Fuel Supply Agreement and the rest is acquired via imports or e-auction. In addition, due to the shortage of coal and high transportation costs to the western region, the consumers are compelled to accept the cost-plus pricing. But the price of premium quality coal is estimated at import parity level. Therefore, different grades of coal are priced either on historical rates i.e. price determined under ministry's guidance; or via e-auction i.e. highest bid price; or at an import parity price level; or at cost-plus price. To add to the complexity, the Union Budget (2011-12) has rolled out a dual pricing mechanism for the first time. This implies same-grade coal will now be available at differing prices to different consumers.
In this year's Budget, the price revision has been three-tiered: 30% hike for the sectors whose prices are market-driven (excluding power, defence and fertiliser); price hike for coal produced by MCL to bring it on a par with SECL; and price hike for higher grades of coal to bring it on a par with international rates.
Besides, it is being speculated that Coal India may increase prices across all sectors again during July-August 2011, after it has negotiated a salary hike for its employees.
These unstable prices and the lack of transparency translate into a highly complex market structure.
Emitting confusing signals
18 Apr 2011 |
| The Financial Express
The National Clean Energy Fund (NCEF), announced in Budget 2010-11, was a major step in India's quest for energy independence and climate change mitigation.
NCEF's objective was to fund research and innovative projects in clean energy technologies. It has been estimated that a nominal clean energy cess of R50 per tonne on coal, both domestic and imported, would bring in about R2,500 crore. The launch of NCEF has raised the expectations that it would help galvanise clean energy-related R&D.
Last year, environment minister Jairam Ramesh hinted at utilising NCEF for climate change adaptation. Now, by any stretch of imagination, such actions cannot be linked to clean energy or for that matter, energy. On the other hand, there are proposals to use NCEF for facilitating large-scale deployment of renewable energy. While no one disputes the urgent need for accelerating diffusion of renewable energy, it is also a fact that R&D in renewable energy does not get the kind of attention it deserves.
Unless substantial public investments are made in R&D it would be very difficult to achieve the goal of deep cost reductions in this field. Besides, the NCEF corpus could be leveraged appropriately to bring in additional funds for innovative renewable energy projects. Indeed, a portion of NCEF can be earmarked as venture capital to provide financial capital to early-stage and high-potential projects.
In keeping with the intention behind such a fund, it may be worthwhile to use NCEF ingeniously to provide the much-needed impetus to development, incubation and demonstration of renewable energy technologies through the relevant entities, both public and private.
R&D activities being pursued by different establishments in India need to be reviewed with a view to bring about greater synergy among all developmental activities pertaining to clean energy technologies. It would be helpful if a complete road map, indicating clear-cut milestones, quantum and nature of resources (both, financial as well as technical expertise) to reach the predetermined goals, is prepared.
It is high time the objectives and goals of NCEF were defined transparently, and a mechanism for its implementation was put in place along with an institutional set up for operationalising it. This is important to ensure that NCEF does not become yet another general pool of fund.
Bihar’s rising power demand
21 Mar 2011 |
Mr Gurudeo Sinha
| The Financial Express
Bihar has low electricity consumption but it might see a big jump in its power demand soon, with rural electrification programme in the state progressing at a brisk pace. The state should deal with the emerging challenge through a strategy involving both supply and demand side measures.
Bihar has achieved very high growth rate in the past five years. Sustenance of this growth rate requires huge jump in electricity demand. Bihar's per capita annual consumption of electricity of around 100 kWh against the national average of around 700 kWh is due to very poor state owned generation (only one unit of 110 MW is in operation with 38% plant load factor) and low allocation from CPSU (around 1,600 MW). Rural electrification which currently stands at around 10% is expected to grow to around 100% in the next two years thanks to RGGVY.
With T&D losses at 38%, the finances of Bihar State Electricity Board are in poor shape. The Government provided the Board with revenue subsidy and grant of R720 crore in the financial year 2008-09. It is essential for the state to adopt a multi-pronged strategy so that in a short time frame availability of power can be increased, T&D losses can be reduced, wasteful consumption is controlled, demand side management used to reduce peak power demand and Distributed Generation used to provide security of supply in rural sector.
An option of arranging for electricity in a short time lies in procurement of electricity through; bidding process from generation which is neither fuel nor location specific. This is especially important as it normally takes around four years to set up and commission a thermal power plant. In addition, new plants can get bogged down by issues of land acquisition, environmental clearances, coal linkages and financial closure; the State can actively engage with Nepal to set up Hydel based generation in the Himalayan Rivers. Although time consuming, this is one source which is perennial in nature, is carbon neutral and will assist in flood management of North Bihar. Engaging corporate entities to participate in unique and sustainable initiatives by the government can be another source. The Public-Private-Partnership model will enhance the promotion of alternate energy source schemes already available. TERI's ‘Lighting a Billion Lives (LaBL)' campaign has succeeded in illuminating the lives of over 1.5 lakh people, spread over 600 villages across 16 states in India, since its inception. The campaign receives support from corporates and PSUs among its various partners, who believe that corporate responsibilities go beyond the financials.
Bihar is essentially an agrarian state and various renewable means of generating electricity can be effectively employed. Distributed Generation using biomass such as rice husk, corn cobs/other renewable sources has the potential to enhance security of supply and provide employment in rural areas. Co-generation in sugar mills should also be promoted.
Loss reduction strategies and load management programmes are required to be implemented by ensuring metering up to distribution transformer level linked to remote computer so that power flows can be monitored on line and segment of high losses identified and corrective actions taken swiftly. Consumer indexing is essential for loss reduction as the difference between energy sent out from each transformer and the energy billed and collected for consumers linked to each transformer provides the real picture of transformer wise T&D loss and AT&C loss. Load flow studies should be used for upgradation , strengthening and expansion of distribution network. This shall also help in loss reduction and improve security of supply.
Re-organisation of the electricity board into transmission, generation and distribution needs to be carried out as it provides operational, managerial and functional autonomy to successor utilities to operate along commercial lines. It also transfers past losses to a holding company thus paving the way for financial turnaround of the sector. An independent SLDC for real time operations and control of state grid, scheduling and dispatch, energy accounting is necessary for efficient and secure functioning of the power sector. Special Electricity Courts as per the Electricity Act, 2003 need to be established to address issues related to illegal abstraction of electricity and help in loss reduction drives. Voltage wise energy audit and energy accounting is necessary to be carried out so that technical and commercial losses can be segregated and suitable targeted interventions identified and implemented.
Demand Side management (DSM) based on ESCO model (Energy Service Companies) being promoted by BEE for replacing inefficient agricultural pump sets provides an opportunity to change them with no cost to the farmer or the Government or the distribution utility and help in reducing demand as well reducing electricity consumption. Bachhat Lamp Yojna being promoted by BEE can be used to promote efficient lighting. These initiatives also help in reducing carbon footprint.
Fast tracking of electricity reforms, IT interventions both for on line monitoring through Supervisory Data Acquisition and Control Systems (SCADA) and Management Information System are necessary for achieving security of supply with a low carbon pathway.
Assured and affordable availability of electricity shall provide the base for all round development and industrial growth of Bihar. It holds the key to fulfilling aspirations of people in Bihar.
Is Nuclear Power Safer Than Other Energy: We need the power, but with scrutiny
18 Mar 2011 |
Dr Leena Srivastava
| The Economic Times
The fact that India needs nuclear energy to contribute to its portfolio seems indisputable. Today, roughly half of India's population does not have access to clean energy forms and the other half that does have access cannot rely on either the quantity or the quality of energy provided.
Therefore, if India needs to sustain an 8-9% annual rate of economic growth based on inclusive development, we would need to add approximately 6,00,000 mw of power by 2030. It is increasingly obvious that India's coal resources are not going to be able to support this growth. While renewable energy is an option, the need for stable base power makes reliance on nuclear power almost a given.
India has made huge efforts, therefore, to enter into the civil nuclear agreement with the US and extended the same with several other countries. The question now, in the wake of developments in Japan , is can India responsibly handle its current and future nuclear generating capacities? One serious accident in a nuclear plant can lead to large-scale and long-lasting impacts - impacts that do not differentiate between the rich and the poor or the young and the old.
But it is also true that our inability to provide clean energy sources to the masses is resulting in around 4,00,000 premature deaths annually from indoor air pollution - largely impacting children under 6. It has also been estimated that air pollution in urban areas leads to approximately 50,000 premature deaths. The key difference between these casualties and those arising from a nuclear accident is that these are widely dispersed geographically and spread through the year, although repeated annually.
As such, we need to carefully evaluate India's options before closing the door on nuclear energy. Having said that, there is a need to open up the nuclear programme in India to greater technical, economic and social scrutiny. The people in the country have to be involved in the decision-making processes on location, safety and regulatory aspects and disposal of nuclear wastes. India needs to evaluate its own options in a local context.
No signals on energy access
07 Mar 2011 |
Dr Leena Srivastava
| The Financial Express
India is poised to enter the last year of the 11th Five-Year Plan period in which we had set ourselves some ambitious targets for strengthening the infrastructure sector, including energy availability. However, it is apparent that we are once again not on the path to meeting the original electricity generation capacity additions by at least 30% if not more.
Imports of coal are slated to go up from 59 million tonnes in 2008-09 to nearly 142 million tonnes by the end of this fiscal. Oil production has stagnated for the last several years while crude oil imports have increased from a 100 million tonnes in 2005-06 to 160 mt in 2009-10. Natural gas has shown a healthy growth but the gas transportation grid in the country still needs huge investments. The signals provided in the current Budget have to be seen in this context.
On the supply side, the finance minister has clearly recognised the challenges faced by the infrastructure sectors, including energy, in raising the magnitude of finances that would be supportive of an aggressive growth plan. To that extent, he has announced several measures to ease this pressure, including: (i) substantially increasing the FII limit for investments in corporate bonds to $40 billion (ii) permitting FIIs to in unlisted bonds of infrastructure SPVs with a minimum lock-in period of three years; (iii) creating special vehicles in the form of notified infrastructure debt funds to attract foreign funds with a substantial reduction on withholding tax rate from 20% to 5% on interest payments and fully exempting the incomes of the fund from tax; (iv) extending the additional deduction of ,000 for investment in long-term infrastructure bonds by another year.
On the energy demand side, too, several positive measures have been announced in the Budget speech. Most significant among these is the move to provide kerosene subsidies in a more targeted fashion directly to intended beneficiaries through direct cash transfers. This was a proposal that Teri has also made nearly five years ago, highlighting the fact that nearly 26-40% of the total kerosene consumed in the country cannot be accounted for and the possible implications this had for adulterating diesel. Teri had, in fact, also pointed out that 76% of the LPG subsidy goes to urban areas and nearly 40% of the LPG subsidy is enjoyed by top 6.75% of the population. One hopes that a similar targeted approach would be taken to LPG pricing as well.
The finance minister has also done well to recognise the emerging role of electric and hybrid vehicles and has announced the setting up of a national mission on the subject. The developments in this area would need to be watched in the coming months. Several other initiatives to facilitate the development of green mobility options: (i) concessional excise duty of 10% on fuel cell/hydrogen driven vehicles; (ii) exemption from basic customs duty and special CVD on parts of hybrid vehicles; and (iii) a concessional rate of excise duty of 5% to incentivise domestic production of hybrid vehicles.
What continues to be disappointing in terms of policy signals is the totally inadequate attention being given to energy access issues. With over 600 million people continuing to be dependent on traditional biomass energy forms for meeting their cooking energy needs and nearly 400 million people having absolutely no access to electricity in their homes, the delivery of inclusive development becomes questionable. The fact that energy must be provided in order to meet the other eight millennium development goals is a universally accepted. Yet, no clear strategy seems to be implicit in any part of the Budget exercise. The only exception being the reduction of basic customs duty on solar lanterns from 10% to 5% and that on a few other inputs used in the manufacture of solar modules/ cells being reduced to nil.
Finally, "a group of ministers has been set up to consider all issues relating to reconciliation of environmental concerns emanating from various departmental activities, including those related to infrastructure and mining. This group will also suggest changes in the existing statutes, rules, regulations and guidelines and make its recommendations in a time-bound manner." For the coal and power sectors, in particular, the recommendations of this committee are going to be crucial. However, in arriving at their recommendations, one can only hope that the committee would undertake a careful evaluation of the longer-term trade-offs involved and would appropriately balance the different - economic, social and environmental - pillars of sustainable development.
Budgeting for the environment
01 Mar 2011 |
Dr Leena Srivastava
| Mint
Just three years ago (2008-09), the Budget speech of the Finance Minister found barely a mention of environment, with the exception of possibly clean drinking water and an introduction to climate change. By contrast, today, environmental considerations are sprinkled throughout the text of the Budget speech which is encouraging in that the Government is becoming sensitive to the need to appear environmentally conscious and, maybe, to the fact that environmental concerns could potentially derail the economic growth prospects. Having said that, the speech also makes transparent the long way India has to go to fully understand the complex environmental implications of its policies and regulations and achieve the policy coherence needed to ensure long term sustainability.
A good illustration of such incoherence is provided in the context of agriculture and the environment. Thus, there is a recognition in the Budget of the need to expand the green revolution to the eastern region while at the same time lamenting the deterioration in soil health due to indiscriminate use of chemical fertilizers and distorted pricing structures. Similarly, the virtues of palm oil (which is a water guzzling crop) have been highlighted to meet the edible oil shortage while emphasizing the need for water conservation in the context of using a by-product of palm oil in laundry soap!
The budget does well in recognizing the contribution of solar lanterns to rural development and providing customs duty relief on its components but stops short of reviewing the efficacy of the Rajeev Gandhi Grameen Vidyutikaran Yojana (RGGVY) in providing reliable electricity in rural areas nor does it recognize the role that solar energy can play in supporting the cold chain infrastructure for agricultural produce. The telecom towers sprinkled all over rural India still largely use diesel gensets for meeting their energy requirements at a very high cost - India would do well to learn from this experience and look for clean alternatives for the cold chain business.
Also, the support to the small and medium enterprise sector must extend to the provision of clean technology development support if environmental concerns are not to hamper development needs.
Environmentally positive aspects of the Budget revolve around the long-pending recognition of the futility of kerosene subsidies and the explicit sections on environment and climate change in both parts of the FM's speech. However, if one compares the couple of hundred crores of rupees each allocated to forests, environmental management and the cleaning of rivers with the tens of thousands of crores allocated to economic growth supporting and social inclusion programmes, it is obvious that the third pillar of sustainable development continues to get short shrift in the country. Finally, as the self-confessed statement of the FM himself ("..... the implementation gaps, leakages from public programmes and the quality of our outcomes are a serious challenge.") begs the answer: is the annual budget balancing exercise the best place to look for strategic policy statements and outcomes from the government?
NREGS and Agriculture: Manifestations and Opportunities
01 Mar 2011 |
Dr Shailly Kedia
,Dr Shilpi Kapur
,Mr Anandajit Goswami
| Agriculture Today
The National Rural Employment Guarantee Scheme (NREGS) is an important milestone and mechanism, the manifestations of which help us in reviewing crucial issues regarding the impact of development interventions in Indian rural ecosystems. This commentary by Shailly Kedia, Anandajit Goswami and Shilpi Kapur, from the Energy and Resources Institute (TERI), New Delhi , India , revisits manifestations of such large-scale government interventions to discuss some cross-cutting issues and opportunities pertaining farm labour, multiplier effects and human capital. Government emphasis needs to continue focus on need of the hour, which is that of effectiveness and efficiency in public delivery by consolidation and convergence of government programmes that could be vital in synchronizing livelihood security and rural agriculture.
The link between livelihood security and rural agriculture can be derived from the stated objective in the National Rural Employment Guarantee Act, which mentions the creation of durable assets and strengthening "livelihood resource base" of the rural poor. Moreover one of the stated goals of the National Rural Employment Guarantee Scheme (NREGS) is to act as a "growth engine for sustainable development of an agricultural economy" through provision of employment in public works that address causes of chronic poverty such as drought, deforestation and soil erosion. When over 58.4% of the nation's population is dependent on agriculture for their livelihoods, it becomes an important imperative not to digress from the conceptual basis of programmes like NREGS in terms of its relevance as a poverty alleviation measure that links livelihood security to long-term enhancement of rural livelihood resources, rise in agricultural productivity and increase in income earning of rural farmers. Also, a synergy between rural employment guarantee programmes and agricultural activities could lead to better domestic agricultural output, which in turn would be vital in ensuring that the country is self-reliant in terms of food sufficiency.
India is facing agricultural challenges. Trends in growth rates of different agricultural indicators (viz. irrigated area, input use, credit, and capital stock) have been declining in the post-reform period. Production of foodgrains has slipped during 2009-10 mainly owing to a fall in the Kharif output. This decline was mainly attributed to drought that has affected 316 districts in 13 states; other factors like lack of crop diversification, and water availability.
The 2010 report to the citizens, speaks of NREGS as the "forefront" of government's effort to promote inclusive growth. GoI also talks of measures taken in the agriculture sector in context of food security and welfare of farmers, which include investing in land, focus on inputs, the National Food Security Mission (NFSM), Rashtriya Krishi Vikas Yojana (RKVY), and support to state extension reforms.
Interrelating development issues becomes important for considerations and re-considerations that need to be made for large-scale government programmes like NREGS to evolve simultaneously and converge with other related rural agricultural interventions.
NREGS has demonstrated an immense potential to reach the rural population and benefit agriculture through public works in water and irrigation works, and weather risk mitigation. With this rationale, we comment on the manifestations and opportunities relevant to NREGS and agriculture under three heads:
- Farm Labour
- Multiplier Effects, and
- Human Capital.
Farm labour
Evidence shows that rural employment guarantee schemes have led to an increase in bargaining power in agricultural markets. Theoretically in an agrarian ecosystem, the demand for work by rural beneficiaries under employment schemes should vary inversely with agricultural wage rates and public works programmes should not compete with agricultural labour hiring decisions - this balance is important as the trade-offs should not occur at the cost of agricultural activities.
Agriculture in rural India is largely rain-fed, and is characterized by seasonality that results in slack season when agricultural labour demand is low and a peak/harvest season when labour demand is high. Moreover there is movement of labour across and within states. In India , rural-rural migration contributes substantially–an estimated 62% of all migratory movements. Studies find that NREGS has led to reduction in migration. Here it would be interesting to see how in the long- run, the additional agricultural labour availability within states responds to implementation of the first element of the four-pronged strategy as announced by the government in the 2010 budget, that mentions of extending the green revolution to states like Bihar, Uttar Pradesh and Orissa.
Anecdotal evidence has linked poor agricultural performance to NREGS induced rural labour market distortions. In Tamil Nadu for instance, NREGS is said to have created multiple impacts such as diverting large tracts of agricultural land for non-agricultural purposes along with causing shortage of farm labour in rural areas. Similarly Punjab has reported of acute farm labour shortage and shifts to mechanical ways of agricultural processes. Despite a fair agricultural wage of Rs 100 in Punjab , there has been shortage of migrant agricultural labourers from Bihar and UP, who have preferred the marginally lower NREGS wage and the comfort of staying back in their home states.
CDS (2009) also finds negative impacts in the agricultural sector in Kerala, where frequent replanting and harvesting in rice fields have been delayed because of NREGS induced labour shortage. The study recommends a proper work calendaring so that NREGS works are done during agricultural lean season to reduce the problem of labour shortage in agricultural peak season. Andhra Pradesh in this regard has responded with a rationing mechanism to ensure that local farming activities are not impacted due to shortage in labour.
From an environmental perspective, the increasing farm mechanization as already happening in case of Punjab may in the long-run further add to environmental degradation and depletion at the cost of agriculture if technologies deployed herein are not environmentally- benign. These apart, for the small and marginal farmers—many of who are already reeling in debt—the trend towards increased mechanization and greater capital investment in farm machinery and equipment could prove to be uneconomical.
In absence of detailed studies, such reported cases are however not sufficient by any means to say that NREGS wages have competed with agricultural wages at the cost of farming activities. Nevertheless, it is of relevance that agricultural activities continue uninterrupted provided farmers are able to anticipate and adequately respond to uncertainties pertaining agri-labour.
Multiplier Effects
Public works under NREGS include flood control and protection, water conservation and harvesting, drought proofing, micro-irrigation, provision of irrigation facility, and renovation of traditional water bodies, rural connectivity and other land development activities as approved by the Ministry of Rural Development (MoRD). The non-inflationary nature of the expenditure under NREGS could be further justified if ‘multiplier-accelerator' benefits from public works could lead to a spur in agricultural growth. This aspect is of further relevance to agriculture due to the recent amendment by MoRD that has enlarged the scope of NREGS works to small and marginal farmers.
A study finds that deepening and widening of canals have curbed the flow of saline water to agricultural lands in pockets of Kerala. This apart, according to the study, micro irrigation works and renovation of small irrigation have benefited collective farming in Kerala. Also, CSE (2008) finds percolation of benefits to the agricultural sector from NREGS works—the survey finds a 14.5% increase in sown area under vegetables due to increased water availability from public works under NREGS in Nuapada (Orissa). The survey also reports of increase in crop diversification due to improved access to irrigation brought by NREGS and Rajiv Gandhi Watershed Development Programme in Sidhi district (Madhya Pradesh). Moreover, an additional 371.6 acres of fallow land was brought under cultivation in the state.
Civil society groups have often expressed concerns on lack of technical capacity at the field level in terms of designing and implementing public works under NREGS. In Kerala, CDS (2009) finds overburdening of field level technical personnel leading to irregular supervision by engineer and overseer. Both CDS and CSE studies find that even though there were many works created under categories like water conservation, most of the funds were actually diverted towards the category of rural connectivity. For example in Trikarpur Panchayat, rural connectivity accounted for 28% of expenditure compared to its recommended limit of 10% in 2008- 09; same was the case in districts of Nuapada (Orissa) and Sidhi (Madhya Pradesh). A reason for this is that remuneration is easily calculable in road works and hence implementing agencies preferred rural connectivity to water conservation. This apart, the 60:40 fund allocation rule between wage and material have restricted quality asset creation in coastal areas of Kerala, according to the CDS study. NREGS has been successful in targeting and as a risk mitigating mechanism by providing a source of income for the poorest of poor households. For households, ensuring food security includes both physical availability and economic accessibility to sufficient, safe and nutritious food. Provision of supplementary wage employment under NREGS is creating the minimum purchasing power for household food security. Furthermore, additional income from NREGS can facilitate investments in better quality seeds, and agricultural assets like tractors and livestock.
Whereas evidence of actual impact of additional income on improvement in farm asset holdings has been scarce, studies paint a mixed picture. A survey on the earlier Maharashtra Employment Guarantee Scheme has found that additional income has led to increased investment in construction of wells and installation of pump sets in farm households. However in case of NREGS, an IAMR survey finds negligible impact on farm asset base like cultivable land, tubewells, bullock carts and tractors owing to additional income; for example, a mere one percent increase in bullock cart holding and less than one percent in other categories.
In future, convergence of NREGS with schemes such as the National Rural Livelihood Mission (NRLM) will be seen as an opportunity to enhance the potential to create a sustained income opportunity for the local people as has happened in case of Kalghati Taluka (Karnataka), where 7500 acres of mango plantations have been carried out. Similarly programmes under the Ministry of Environment and Forests (MoEF) have been scheduled for convergence with NREGS to enhance use of degraded forest land. NREGS in convergence with other government programmes thus has a potential to generate ‘multiplier accelerator synergies' for rural India by reaching out to agricultural households. However the realisation of this potential at the grassroots would still remain a challenging task.
Human Capital
At present, agriculture is a principal means of livelihood for over 58.4% of India 's population. In 2020, about half of the country's population would be in age group of 15 to 44 years, and a bulk of which could be concentrated in rural areas. Percentage of male and female population in age group of 15-44 years in 2020 is projected to be 24.52% and 23.11% respectively, which could mean nearly half of the nation's population. If the country wants to tap into this demographic dividend for its future economic growth, the challenge would be to create jobs in rural areas, which includes the agricultural sector. Whereas there might be a declining preference for agricultural activities, considerations for skill enhancement in the agriculture sector are important. Moreover from a gender dimension, contribution of rural women in farm labour is significant– about 55-66%. With employment guarantee programs becoming an additional (or alternate) source of employment for rural populace, it also becomes relevant to consider enhancement of human capital including components of skill enhancement, training and education.
With regard to NREGS and agriculture, a vital question would be whether we are ‘de-skilling' an agricultural economy without ‘re-skilling' the farm workforce. A survey in the Madikai, Ajanoor and Trikarpur panchayats of Kerala by the Centre for Development Studies (CDS, 2009) finds that many young workers who are coming into rural labour market as a result of NREGS are not willing to work in the agricultural sector. This unwillingness in the young rural workforce is attributed to low wages with more efforts in agricultural works.
The study also find that in case of women, NREGS has been able to bring some dormant labour force into the paid labour market by drawing majority of NREGS female work force from the female marginal workers category. However, despite the increase in wage rate for women workers in agricultural works from Rs. 80 to Rs. 110 for a full day's work in the regions, young women prefer employment in NREGS works over agriculture due to lack of skills related to replanting and weeding. Recently, the government announced a sub-scheme named “Mahila Kisan Sashaktikaran Pariyojana” under NRLM to meet specific needs of women farmers.
Scope of NREGS could be expanded to facilitate knowledge-intensive farm practices like precision farming, organic farming, integrated crop and nutrient management sys- tem. Presently, MoRD in its convergence guidelines lists basic human development as one of the building blocks for facilitating sustainable livelihood opportunities. The 115 pilot districts selected for convergence include schemes under the MoWR, ICAR and MoE, but none include schemes specific to skill building under the labour ministry.
In this regard, Rural Self Employment Training Institutes (RSETIs) and other provisions under the NRLM, and other ongoing state and central level vocational training programmes could have an immense potential to benefit rural beneficiaries in terms of skill enhancement activities in agricultural and other sectors.
Emphasis and Re-emphasis
It becomes essential to approach the threat of declining performance in agricultural productivity as an opportunity for a critical rethinking to make certain long-term considerations for development, implementation and consolidation pertaining large-scale government programmes for realization of the nation's development goals.
We summarize the imperatives for future pathways for synergies between agriculture and programmes like NREGS. First, it becomes important that changes in agricultural labour endowments be taken as an opportunity for revitalizing productivity of farms in home states—in this regard NREGS itself along with other agricultural programmes could play an important role. Second, it is essential that ‘multiplier-accelerator' effects be generated from NREGS public works to benefit agriculture. Finally, the dimension of human cap- ital also becomes important so that beneficiaries ‘graduate' from being mere receivers of cash to becoming informed and skilled citizens.
We conclude by considering two possible scenarios regarding the future of agriculture in India .
Scenario 1: Given that the future is possibly going to witness decreasing preference for farming activities—and perhaps the farming regime were to shift towards being intensive—it would be necessary to ensure a smooth transition to an era characterized by large farms.
Scenario 2: If small-scale agriculture were to stay, then there would be a need to pave development pathways so that we truly achieve the model of local self-governance or the “Gram Swaraj” as envisioned by Mahatma Gandhi.
In either of the two scenarios NREGS, along with other interventions like NRLM, RKVY and NFSM have an important role to play for a smooth transition in the challenging years ahead.
Climate Change Negotiations in Cancun in retrospection: a progress or regress
28 Feb 2011 |
Ms Neha Pahuja
| EQ International
Copenhagen was a setback in climate negotiations since it failed to realize a unanimous outcome, despite the urgency that science demands, and also the mandate of the Bali Action Plan (BAP). While the process was criticized for its lack of transparency and not being inclusive, the substance of the outcome, the Copenhagen Accord, was only 'noted' and not adopted by the Parties. The outcome, thereby, lead to mistrust amongst Parties and other stakeholders. The Copenhagen Accord, for its legal status or the lack of it, did not hold any good but could provide useful inputs as it was representative of the political will. A great challenge for Cancun, therefore, was to restore faith in the multilateral process and to forge an agreement that operationalizes elements of the Copenhagen Accord in conjunction with the two parallel tracks (Adhoc Working Group on Long Term Cooperative Action (AWG-LCA) and the Adhoc Working Group on Kyoto Protocol (AWG-KP)) under the BAP. It was also an opportunity to correct the imperfections of the Accord by further elaborating on many of its elements. Another and most important challenge was to restore lost faith in multilateral process.
Both the process and the substance were, therefore, important for a successful outcome at Cancun. This entails that while the process achieves a delicate balance between transparency and efficiency, the substance brings clarity over scope and future of climate negotiations. Further any outcome is ideal if it meets the criteria of a) environmental efficacy, that is, success of the outcome to achieve the ultimate objective of the Framework Convention on Climate Change (FCCC) which is to is to stabilize greenhouse gas concentrations in the atmosphere to prevent dangerous anthropogenic interference with the climate system within a time frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner ; b) equity, that is, equitable sharing of burden and efforts of Parties in accordance with the common but differentiated responsibilities (CBDR) and respective capabilities ; and c) national interests, that is, fully taking into account economic and social development and poverty eradication as the first and overriding priorities .Outcome at Cancun was nothing less than complex both in terms of the process and the substance.
In terms of the process, while the negotiations leading to the 'Cancun Agreements' took place under the AWG-LCA 13 and AWG-KP 15, the Mexico government also facilitated number of consultations and parallel processes, such as the Cartagena Dialogue, throughout the year to enable constructive progress in negotiations. At Cancun, while number of sub groups (read contact groups) were formed under the AWGs from the very beginning of the talks, informal consultations, facilitated by pairs of ministers from both developed and developing country Parties, took place in the later half to progress on issues including shared vision, adaptation, mitigation, finance and technology transfer amongst others. The progress in these consultations was reported in informal stocktaking plenary convened by COP President and later presented as 'draft texts' reflecting Parties' work under the AWGs. The draft was received well by all but one Party, with some level of compromise by majority of Parties on account of being able to achieve progress. Bolivia was the only Party to oppose it, stating that the text does not reflect converging opinions. The COP presidency, however, gaveled down Bolivia, to reach the substantive outcome, the so-called 'Cancun Agreements'. The outcome has since been hailed for having restored faith in the multilateral process after the setback in Copenhagen.
This has, at the same time, also opened new debates, such as 'what does consensus based decision making entail', 'how different (read convenient) are the decision making rules based on: general agreement, voting and consensus', 'does a consensus based decision making rule provide veto power to each Party'. It needs to be noted that the COP has never been able to adopt a decision in its rules of procedure in this regard. However, there exists a need to rethink the basis of decision making in the rules of procedure before a similar issue arises again in future.
In terms of substance of the outcome, the 'Cancun Agreements' builds upon the Copenhagen Accord and the other track to cover the main elements of the BAP, namely: a shared vision for long-term cooperative action, adaptation, mitigation, finance, technology, and capacity building. The agreement captures the progress, though incremental, in a framework comprising of new institutions and their work plan as basis of future negotiations which, at best, highlights the spirit of compromise in the negotiations at Cancun. The following section analyses the progress on elements of BAP in Cancun Agreements in light of the three criteria (environmental efficacy, equity and national interests) and put forth certain issues to be considered in the future.
A Shared vision for long-term cooperative action: All Parties recognized the need of deep cuts in global greenhouse gas emissions so as to hold the increase in global average temperature below 2oC and also recognized the need to consider strengthening this long-term global goal on the basis of the best available scientific knowledge, including in relation to a global average temperature rise of 1.5oC in its first review, to begin in 2013 and conclude by 2015. In this context, it only recognized the need of deep cuts (and not the specific cuts) and further agreed to only work towards identifying a global goal for substantially reducing global emissions by 2050 to be considered in next COP in Durban in 2011. Similarly, agreed to only work towards identifying a timeframe for global peaking of emissions based on the best available scientific knowledge and 'equitable access to sustainable development' by Durban. The progress, therefore, was nothing but incremental which failed to resolve on crucial elements of the shared vision probably for the lack of clarity on the nature of outcome.
An agreement would have scored high on environmental efficacy, if the nature, level and scope of deep-cuts were known, whereas, the Cancun Agreement has only postponed the decision to Durban. The agreement further adds ambiguity to the basis of equity, by qualifying it as 'equitable access to sustainable development', something which could neither be defined nor be measured. Instead, a win-win reference could have been equitable access to 'global atmospheric space'. The shared vision further recognizes that the time frame for peaking will be longer in developing countries, as their social and economic development and poverty eradication are the first and overriding priorities but qualifies it further that a 'low-carbon development strategy is indispensable to sustainable development', which could be seen as an important regress in position as far as our National interests are concerned.
Mitigation: Mitigation with respect to developed countries and developing countries as elaborated in the Cancun Agreements may result in significant changes in the international climate regime. For it is the first time, that even developing countries are obliged to undertake emission reduction, targets and actions pledged under the Copenhagen Accord. The Agreement hence anchors these pledges (since the INF document does not exist yet, this is an operational assumption) in the formal FCCC process. According to few studies, these pledges are inadequate in terms of environmental efficacy as even if implemented effectively will set the world on a 3-4o C path. It is much evident therefore that the bottom up pledges, that replace science based top down approach, are inadequate to achieve the stated global target of limiting to 2o C. On equity, there has been a major compromise by the developing world as while the developed country Parties' have managed to escape, through their voluntary pledges, the legally binding commitments under the second commitment of Kyoto Protocol for now, they have also succeeded in introducing some form of obligation on the developing country Parties. This entails blurring of the principle of CBDR that called for developed country Parties to take the lead. Further, this raises questions on the future of Kyoto Protocol and its second commitment period and may be perceived as a step backward by postponing a decision on a second commitment period indefinitely through a new regime which is flexible and voluntary. Domestically, it is still not clear of the extent of these pledges since India's pledge under the Copenhagen Accord had caveats associated with it. Further, the level and scope of these pledges will decide the required resources and regulations for effective implementation of these pledges. Important here is to also understand spillover effects on the developmental goals of India and work out if the agreement was truly in our National interest!
Adaptation: The Cancun Agreements establishes the Cancun Adaptation Framework, which is set of institutional arrangements to enhance adaptation efforts by all Parties. It also establishes a work program to consider 'approaches to address loss and damage associated with climate change'. The key elements, however, will only be clear through the next year's work plan and its outcome.
Technology: The Cancun Agreements set up a technology mechanism comprising of Technology Executive Committee, Climate Technology Centre and Climate Technology Network with a broad mandate including research and design, deployment and diffusion, development of national system of innovation and technology action plans amongst others. However, the Cancun Agreement does mention the issue of intellectual property rights (IPR), which has been one of the crucial issues in the negotiations so far. This certainly has a bearing on our National interests as the issue has considerable influence over access to and cost of technology that will be required for the transition necessitated by the new regime (read obligations). In effect, this would have implications of the efficacy of the developing country pledges in general. Besides, there are other issues that need to be addressed such as the linkage between the technology mechanism and finance mechanism, the relationship between the technology executive committee and the Climate Technology Centre and Network etc. A program of work has been established further these discussions and resolve them by 2011. This issue was taken up during ministerial discussions where draft decision text was finalized.
Finance: The Cancun Agreement, formally, establishes the Green Climate Change fund as an operating entity of the financial mechanism of the FCCC with a committee set up to design various aspects of the fund and the World Bank as interim trustee. The agreement also incorporates the finance goals set in the Copenhagen Accord that is 30 billion USD as fast-start finance for 2010-12 and to mobilize 100 billion USD by 2020. While these goals in itself seem inadequate, given the global estimates of costs, the additional qualification 'in the context of meaningful mitigation actions and transparency on implementation' may reduce it even further. This has resulted in further obligation on the developing country Parties on account of MRV (measure, report, verify) and ICA (International consultation and analysis). However, there was no decision on the sources of the fund which has been an impasse in negotiations.
Challenges and way forward: It is much evident that the Cancun Agreement is not the end as much has to be achieved in the coming year. But it was important to be able to restore faith in multilateral process and was an epitome of compromises where in nations readily accepted any incremental progress falling way short of their initial demands. However, it is important to reinstate that in doing so Parties must not renegotiate on the agreed principles and provisions of FCCC but built on that. Further, International community must also restore credibility of science in Durban by some form of agreement on future commitment and the Kyoto Protocol.