Poverty alleviation: State-market collaboration

Poverty alleviation: State-market collaboration

The poverty trend in the country, revealed by various documents, tends to show that income-poverty level has declined over time. This has amply been established by quantitative as well as by qualitative indicators. However, the whole process of the assessment has been put to serious question in recent times as income-poverty is not believed tell the full story. It is being argued that people should not be deprived of the access to some basic social services on the plea that they are income-poor, and are not able to buy the services of what Rawls identified as "primary commodities". If access of the poor can be increased in these respects, their non-income-poverty - such as lives, capability and welfare - can tremendously be influenced. And more importantly, such access would definitely contribute to human capital formation for their future generation, and thus leave noticeable influence on the reduction of inter-generational poverty crisis.

Admittedly, data on non-income side are scant; only a guess could be made about the recent years. Empirics from household surveys show that non-income poverty has also declined to a large extent. In this case, special attention should be given to the access to food as food is the most basic element of survival for mankind. We assumed that households not reporting three satisfactory meals a day (assessment of household members) would be considered to be in hunger. Under this assumption we notice that, the proportion of such 'unsatisfied' rural households has more than halved. But that kind of improvement leaves no room for complacency as, even now, six out of 100 households fail to feed their members three satisfactory meals a day. We can dub this syndrome 'silent famine'. According to our estimates, roughly 10 million people are deprived of the food needed to keep them fit for productive pursuits. That means hunger hunts them every day and drives them to early death. The presence of this 'silent famine' seems to have demeaned much of our successes.

However, apart from the slim success in food access, it is sad to say that access to education above primary level improved very marginally. Still, 10 in every 100 rural households do not send their boys and girls (aged 6-15 years) to schools. All this is happening when we continue to espouse that education is the magic wand for poverty alleviation.

A number of factors could have caused this marginal improvement. We can present some of them very briefly. The causes are partly market-driven and state-driven. Among the market-driven forces, adoption of new technology in crop production is at the top of the list. This has helped increase food production, provide incentives to farmers and exert a downward pressure on food prices. As a consequence, even the extreme poor could access food. Basically, the poor have benefited from this new technology on several counts. First, labour-intensive as they are, modern varieties (MVs) of crops, especially paddy, absorbed more labour per unit to pave ways for employment opportunities for the poor. Their exchange entitlements thus increased to ensure food security. Second, infrastructural development and the growth of non-farm activities tightened the labour market, and raised the wage levels to the benefit of the poor. Third, increased access to the tenancy market associated with changes in terms and conditions favoured the poor to increase income and food security. Finally, some state-sponsored programmes such as safety nets, Vulnerable Group Feeding (VGF) and food for education, etc., also helped households avert hunger. By and large, following the reduction in income-poverty, scopes on the part of the households for spending on non-food items further widened.

But the basic question is: who are the members of hungry households and what are their features? We need to know about them if we want to draw policies to address poverty and hunger. First, we observe that the largest proportion of these households have no homestead land. An inverse relationship exists between land ownership and hunger condition, where more land owned means less hunger. As per farm size, the largest share of the hunger-driven households comprises non-farm households, although we observe substantial improvement on this score over time.  Finally, households where the heads have no formal education seem to be easy prey to hunger. That is, education has an association with hunger: more education means less hunger. But as land is hard to transfer, expansion of education remains at the heart of the anti-hunger programmes.

We thus observe that there is not much difference between the determinants of income and non-income poverty. In fact, both are influenced mainly by per-capita income. This suggests that it is very difficult to think of poverty reduction without raising income. But who fails to raise income? We have already mentioned that small land size and the lack of education hold back income increase. But since the socio-political imperatives have been cited as serious constraints to drastic land reforms in the near future, we are left with three alternatives for policy consideration. First comes the need for increasing the access of the poor to education; second, enabling the poor households through necessary reforms in the tenancy market, expansion of infrastructural and credit facilities etc., and third, distribution of 'khas' lands among the landless households. The first and the third options predominantly lie in the hands of the state, as it is the constitutional obligation of the state to enhance access to basic education for the people. Again, freeing khas lands from the occupation of the influential persons is also the responsibility of the state. The second option could be materialised by both state and market. The partnership of the public and the private sector will play a pivotal role in building physical infrastructure, providing credit and expanding non-farm activities.

Abdul Bayes is a former Professor of Economics at Jahangirnagar University. [email protected]

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