18. Forests for poverty alleviation:the Orissa experience
Ramvir Singh^[27]

ABSTRACT

This paper asserts that "the poverty debate" in India has been brought into the mainstream since early 1970s and that our understanding of poverty issues has gradually evolved. Policy-makers, scholars, concerned citizens and external donors all have contributed to this debate and understanding. Poverty is currently perceived as "multi-dimensional deprivation". The incidence and special characteristics of poverty in Orissa, one of the poorest states in India, are also analyzed. The paper also explores the role of forests, an important land-based natural resource, in providing livelihood support to millions of the rural poor in Orissa. It is premised that forests can substantially impact poverty reduction. Two past projects that aimed at natural resources development, i.e., (i) evolution of kendu leaves trade and (ii) Orissa Tribal Development Project (OTDP) have also been critically examined with a view to learning from these experiences. The paper concludes that high broad-based economic growth is necessary for faster poverty reduction and that desirable poverty reduction strategies should focus on: (i) enabling policy framework that improves the investment climate and expand income generating opportunities, (ii) mobilizing and empowering the poor and developing their employable skills, (iii) building productive infrastructure, and (iv) strengthening social sector. R&D institutions can significantly contribute to developing appropriate policies and strategies for poverty reduction.

INTRODUCTION

Poverty in India

Though policy-makers, academics and concerned citizens have remained pre-occupied with issues relevant to economic development and poverty reduction in India from early 1950s, the poverty debate was brought into mainstream only in the early 1970s. The seminal work of Dandekar and Rath (1971) fuelled this debate. They estimated that, at 1960-61 prices, the desirable national minimum level of consumer expenditure was Rs. 180 per capita per annum for rural households and Rs. 270 per capita per annum for urban households and that about 40 percent of the rural population and 50 percent urban population lived below this poverty line in 1960-61. Thereafter, intellectual contributions to this continuing debate have been very rich and varied. Several scholars and organizations (including Bardhan 1973, Ahluwalia 1978, Minhas 1978, Sen 1984 and others), many expert groups and task forces appointed by the Planning Commission (e.g. Lakdawala Committee 1993), and external donors (e.g. World Bank 1990 and 1998) have added, and continue to add, to this debate.

Measuring poverty in economic basis

Attempts have been made over time to define and measure absolute poverty and relative poverty. Measures of absolute poverty in economic basis are generally based on some form of "minimum subsistence needs". Initially poverty lines were defined on the basis of biological requirement of specified calories (Ahluwalia 1978). However, needs for an ideal measure of poverty have been articulated from time to time with a view to reflecting levels of living based on: (i) basic physical needs of food, shelter, clothes and health, and (ii) basic social and cultural needs of education, security and leisure (Bardhan 1973). Planning Commission have periodically estimated the incidence of poverty in terms of head count ratio (HCR, i.e. percentage of people below poverty line) from 1973-74 at a regular interval of five years on the basis of consumer survey data generated by National Sample Survey Organization (NSSO). Direct attacks on poverty also began in early 1970s. In order to effectively target the poor households, the Ministry of Rural Development, Government of India, has also surveyed below poverty line (BPL) households in 1992-93, 1997-98 and 2002-03. The latest BPL household survey is an attempt to measure relative poverty on the basis of thirteen objective criteria.

There is also recognition that widely spread higher economic growth is absolutely necessary for reduction of poverty. There is a good deal of evidence that long term change in extent of poverty in Orissa and other states has been largely determined by the growth factor in mean per capita income (Panda 2003). In fact, poverty reduction has been higher in those states which have grown more than 5 percent per annum. Thus, our understanding of poverty issues has been gradually evolving.

Measure of poverty on non-economic bases

The concept of poverty is no longer confined to only material deprivation. It has acquired several dimensions. In most general terms, poverty can be defined as "deprivation in well-being" (Brandis 1873). Poverty encompasses several dimensions of deprivation:

• Material deprivation (lack of income; poverty of assets)

• Social deprivation (discrimination on account of caste, gender, region and religion; unable to enjoy social relationships in their full scope)

• Political deprivation (a sense of voicelessness and powerlessness; not able to influence political decisions that profoundly affect their lives)

• Intellectual deprivation (poverty of education and skills; lack of opportunities)

• Deprivation in health (health poverty; poor or no access to health services)

• Inability to cope with vulnerabilities and risks.

A full understanding of poverty in its multiple dimensions requires extensive qualitative and quantitative data. The poor need to be heard and treated with empathy.

POVERTY IN THE STATE OF ORISSA (INDIA)

Status of poverty in Orissa

Orissa is the major poorest state in India. 47.15 percent population lives below poverty line, the highest HCR as per 1999-00 NSS survey (55th round). Table 1 summarizes poverty HCR for Orissa and India from 1973- 74 to 1999-2000. Table 2 compares the poverty in 13 major states in India from 1973-74 to 1999-00. The depth of poverty and extent of inequality in consumption/income distribution in Orissa is given in Table 3.

Table 1. People below poverty line (percent) in Orissa and India

Note: 30-day recall total poverty.

Table 2. Incidence of poverty in Orissa compares with other major states

Table 3. Poverty and related indicators for Orissa: 1957/58 to 1993/94

Source: World Bank (1997).

Notes: HCR - Head Count Ratio, PG - poverty gap, SPG - squared poverty gap, GINI - Gini Coefficient.

Incidence of poverty in rural Orissa has also been estimated and compared for 1999-2000 and 1993- 94 in Table 4 by social groups: scheduled tribes (STs), scheduled castes (SCs), other backward castes (OBCs) and others. It may be observed in Table 4 that the STs and SCs communities are poorer than the others. 73.1 percent of STs and 52.3 percent of SCs are poor. About two-thirds (64 percent) of the total poor in rural Orissa belong to either the STs or SCs groups.

Table 4. Incidence of poverty by social groups in rural Orissa

Notes: MPCE: Monthly Per Capita Consumption Expenditure.Source: NSSO unit level data from consumption expenditure schedules of 50th round for 1993-94 and 55th round for 1999-2000.

Spatial ditribution of poverty

There are substantial regional variations in extent of rural poverty in Orissa. The southern Orissa is not only the poorest region of the state, it is one of the poorest in the country. Based on an analysis of NSSO data, Table 5 reports poverty in three regions: coastal, northern and southern. District level poverty estimates have also been made for 13 districts of Orissa and are given in Table 6. The old Koraput, Kalahandi, Phulbani, Mayurbhanj and Keonjhar districts have very high incidence of poverty.

Table 5. Incidence of poverty by regions

Table 6. Incidence of rural poverty by districts, 1999-2000

Source: NSSO 55th round unit level data from consumption expenditure survey.

Special characterstics of poverty in Orissa

On the basis of analysis of NSSO data, the households with the following characteristics constitute the Core Poverty Group in Orissa:

• Belong to ST/SC households;

• Are engaged as hired labourers;

• Are landless or marginal farmers with 0.5 hectares (or less) of land;

• Have household size of 5-7.

The falling trend in poverty ratio witnessed from mid-1970s onwards in Orissa seems to have been halted during the 1990s. The poverty HCR fell by a mere 1.4 percentage points between 1993-94 and 1999- 2000 as against about 10 points for India as a whole during the same period.

Rural poverty is highest in Orissa. Rural people depend mostly on agriculture and forest resources to eke out their subsistence. However, Orissa's agriculture is virtually stagnant. Agricultural productivity is roughly half that of the national average. Use of improved inputs (better seeds, irrigation and management practices) is also far below the national average. Want of adequate irrigation facilities (except in certain pockets) is a major limiting factor that keeps agriculture undeveloped.

It is not only that growth rate is low in Orissa, but annual fluctuations in GSDP have also been large mainly due to frequent natural calamities and other reasons. While the Indian economy has been able to absorb shocks due to natural calamities more smoothly in recent years, the Orissa economy continues to heavily depend on 'vagary of nature'. The instability in the state income leads to high fluctuations in poverty incidence.

Poverty is spatially concentrated in Orissa. Southern and northern Orissa are poorer than the coastal region. Orissa is also deficient in infrastructure (railways, paved roads, ports and telecommunication). Optimal exploitation of its vast natural resources demands heavy investments in infra-structural development. For want of improved connectivity, the poor in general and ST and SC people in particular lack access to quality education, safe drinking water and quality health services.

Though extensive forest resources are an important source of sustenance to a majority of rural poor, they are highly degraded and lack desired financial and managerial inputs. Large forest areas are devoid of regeneration and, therefore, cannot provide livelihood support on a sustained basis unless substantial investments are made in them.

FORESTS IN POVERTY REDUCTION STRATEGIES

Forests have historically provided, and continue to provide, sustenance to many people and are, therefore, an important natural resource that can substantially impact poverty reduction in general and livelihood security in particular. For about six months from April to September, most households in forested regions in western and southern Orissa subsist on nearby forests. A socio-economic survey (Singh 1997 and 2002, Datta and Ravallion 1991) of 329 households, living in four villages on the fringes of forests in Sambalpur, Mayurbhanj and Ganjam districts, has revealed that an average household draws as much as 49.2 percent of total annual income/benefits from forests. Labour including wage labour contributes another 24.6 percent to the mean annual household income. Incomes from cultivation and cattle amount to about 18.6 percent and 7.6 percent respectively. Further analysis of socio-economic survey data suggests that grazing is the most important benefit that the villagers, close to forests, derive from forests. This benefit is of the order of 38 percent of total forestry contributions to rural household subsistence. Other benefits, drawn legally or illegally from forests, include: timber (25 percent), firewood (19 percent), bamboo (5 percent) and NTFP (13 percent). About 44 percent of average annual household forest income is not accounted in the state GDP.

Singh (1997) has also observed a number of inefficiencies and inequities in the use of forests by the rural people. First, a glaring social inefficiency is in the use of forests for cattle grazing. On an average, cattle contribute income worth Rs. 1672 per annum to a household and consume fodder worth Rs. 4241 per annum. This is a case of divergence between private and social benefits and costs. In this case, a household privately benefits from cattle income and passes larger parts of cattle maintenance costs in the form of forest grazing to society. It is, therefore, necessary that divergence between social and private benefits and costs need to be reconciled. Second, heavy removals of timber, firewood and bamboo are illegal and, therefore, undervalued in the hands of the poor in the absence of socially desirable trading arrangements. Larger gains of illegal forest trade accrue to unscrupulous middlemen. There is a need to create socially desirable harvesting and trading arrangements for timber and other forest products so that the welfare of the poor can be enhanced. Third, the State also sacrifices its share of revenue. A resource starved Government cannot adequately invest in forests and other income generating assets. Fourth, failure of regulating agencies to effectively control theft of forest products and poaching of wildlife increases conflicts between people and the agencies and impose greater transactions costs on the state forest Department. Social welfare can be enhanced if transactions costs are lowered by way of increasing cooperation between different stakeholders. Fifth, richer villagers are generally able to draw larger benefits from nearby forests than their poorer neighbours. The trust of the poor and other weaker sections can be gained only if all stakeholders share benefits and costs in an equitable manner. Sixth, in the absence of commensurate investments in forests, huge removals from forests would continue to deplete them. Therefore, it seems desirable that, if investment of managerial, technical and financial inputs in forests is increased and the rural communities are actively involved in forest management, the problem of forest degradation and that of their acute poverty can be simultaneously addressed.

These concerns are not entirely new. As early as in 1873, Brandis, the first Inspector General of Forests of India, observed that "the maintenance and good management of [forests] was of much greater moment for the welfare of the peasantry, and that this point was not well recognized in India". In support of his contention, he compared the land uses in Saxony, a principality in Germany with Gorakhpur, a district of UP that shared some common characteristics (see Table 7). He argued that though Gorakhpur and Saxony had the same proportion of land under cultivation, which was extensive in Gorakhpur and intensive in Saxony. While the remaining land was allowed to be put to low value uses and wasted in Gorakhpur, Saxony had well-managed 26 percent forest land which significantly contributed to social welfare. Timber and other forest products of these well-managed forests provided means to diversify the Saxon economy and created opportunities for additional employment and income generation. This helped absorb the increasing labour force. This also afforded higher level of living to the people and relieved pressures from cultivation. In contrast, the increasing population in India continued to add pressure on cultivation and swell the landless labour force. The extensive cultivation helped only a small segment of population. It could not relieve pressure from cultivated land. Nor could it improve levels of living of the people and the economy remained trapped in subsistence mode. These observations still seem relevant in case of Orissa.

Table 7. Comparison of land-uses in Gorakhpur (India) and Saxony (Germany)

Source: Singh (1997).

While strong regulatory measures are desirable in a state like Orissa, pure regulatory mechanisms are not expected to yield outcomes that are sustainable, efficient and equitable. It has been increasingly realized that: (i) since forests and other common lands are a significant source of livelihood support to the rural people, their involvement in management of forests is essential, (ii) since local people have considerable site specific knowledge of forests, they can effectively and continuously monitor the impact of their actions on local forests, and (iii) participation of most local communities in management of forests requires enabling these communities and instilling faith in them in discharging their new responsibilities. That is, local communities are to be encouraged to evolve into viable organizations, which can manage their assigned forests in an efficient, equitable, stable and environmentally sustainable manner. It is in this context that the National Forest Policy 1988 asserted that involvement of local people in forest management and conservation was desirable. It was a major policy shift as regards future management of country's forests. However, participatory forest management practices need to be carefully evolved as comprehensive tenurial reforms exercises. This requires considerable intellectual, managerial, technological and financial inputs and has several implications for both policy-makers and R&D Institutions.

SOME RESOURCE DEVELOPMENT INITIATIVES IN ORISSA

Orissa has taken a number of initiatives to develop forests and other resources with a view to improving livelihood support to the rural people in general and the poor in particular. Two such past projects: (i) Evolution of Kendu Leaves Trade, and (ii) Orissa Tribal Development Project (OTDP) are analyzed here.

Kendu leaves trade in Orissa

Orissa accounts for about 15 percent of the country's total production of kendu leaves (KL) (Govt. of Orissa 2000a) and is the second largest producer of KL after Madhya Pradesh, which produces about 40 percent of the total production. Orissa has, however, pioneered processed production of KL and the institutional arrangements for production and marketing of KL have gradually evolved since 1948. Each year, about Rs. 1 billion flows to local economies and employment opportunities worth 15 000 000 person-days are generated. The programme benefits mainly the rural poor including women and tribals at a time when other employment opportunities are generally not available. The KL trade in Orissa is well established and successful. Some salient aspects of this programme are:

• The programme is self-targeted.

• It is economically efficient. The average production has increased from about 80 000 quintals in 1950s to 450 000 quintals in 2000s. Nett revenue has increased by about 5 times from Rs. 57 800 000 in 1948-72 to Rs. 315 200 000 in 1973-2000 periods. Local value-addition is encouraged. The State also earns decent revenues (of the order of Rs. 700-800 million per annum).

• The programme has met equity objectives in that the operations are labour intensive and labour share in production has risen from about 30 percent in 1970s to 40 percent in 2000s. Orissa generates employment opportunities worth about 43 person-days per quintal of processed production as compared to only 19 person-days in MP. An income of about Rs. 2270 per quintal is passed to KL workers and Gram Panchayats. KL purchase prices have increased 32 times in 1973-2000 period as compared to only 20 times increase in minimum wages during the corresponding period. 50 percent of nett benefits flow to Gram Panchayats. Orissa Forest Department (OFD) also extends a welfare programme, through World Food Programme, to KL binders and other workers, whereby an additional food subsidy worth Rs. 16 per food-day is passed on to the participating labourers. In a single year, about 1 million food-days are generated.

• The programme is self-sustained. It does not depend on any external loan or State budgetary support.

• The programme has evolved imbibing local knowledge, employing locally available skills and taking into account local needs and is, therefore, politically acceptable.

• The evolved institutional arrangements are very robust and stable.

Orissa Tribal Development Project

Orissa Tribal Development Project (OTDP), an IFAD-funded project, was implemented in Kashipur block of Koraput district from 1988 to 1997. The projected outlay was of the order of USD 24.4 million. The project targeted mainly 12 500 tribal households and 400 non-tribal households and was implemented by the State Tribal Department. It was not a typical forest development project. Though OTDP was successful in creating some physical infrastructure, it generally failed to create a visible impact on the targeted households. Some salient aspects of OTDP implementation are:

• The project did not attempt to assess the strengths and weaknesses of available local knowledge. Nor could it identify the training needs of local people in terms of skill development, decision-making capacities and social mobilization. Therefore, targeted families were not prepared to internalize suggested changes in their life styles (e.g. new agricultural practices, crop diversification and introduction of new technologies) and human development aspect was neglected.

• The project, on the other hand, emphasized hardware aspects (e.g. physical infrastructure, agriculture development, land allocation, etc.) for the development process.

• An effort was made to wean away tribals from shifting cultivation on steep hill slopes. They were rather encouraged to undertake settled agriculture on these encroached lands, which were also surveyed and settled in their favour. However, the programme, though well meant, was misconceived and poorly implemented. The people who had excellent skills in shifting cultivation were not adequately prepared for undertaking settled agriculture of improved variety. The suggested changes in their life style were too much and too drastic and, therefore, could not produce desired impact.

It may be observed that in his 1877 report, Col. Beddome, then Conservator of Forests, Madras Presidency, appreciated shifting cultivation skills of the tribals of Koraput district. He wrote (Govt. of Orissa 2000b), "I have no where in India seen this Kumri cultivation so systematically carried out...". Their agricultural skills are, however, still very primitive. It is, therefore, a great challenge if suitable tenurial arrangements could be devised and these tribals were encouraged to undertake tree cultivation (both forestry and horticulture) and to derive more economic benefits. This would benefit all: tribal families, local ecology and the State. This would, however, call for suitable modifications in forest policy.

• Poor participation of beneficiaries in programme design and implementation was a limiting factor and this was a contributing factor to the mixed results obtained by the project.

• The project management was generally too bureaucratic and unimaginative. It failed to draw upon local socio-cultural strengths to improve programme design and its implementation. Therefore, the programmes had poor acceptability.

• The project objectives and programmes could not be sustained after the project withdrew.

LESSON LEARNED

Persistence of poverty ought to be, and is, a cause of concern. For poverty reduction, it is necessary that the poor's access to income generating assets is increased and that the poor are able to derive intended benefits from the assets on a sustained basis. This calls for substantial efforts and investments in developing human resource: employable skills, good health, quality education, affordable and adaptable technological choices. In addition, an enabling environment and productive infrastructure are also necessary for the poor to benefit from the emerging economic opportunities. The following strategies, therefore, seem desirable to have a frontal attack on poverty:

• Enabling policy framework that improves the investment climate and expands income-generating opportunities, particularly for the poor.

• Mobilizing the poor, developing their employable skills and empowering them to participate in and benefit from economic growth.

• Building productive infrastructure: improved rural connectivity, roads, expanded irrigation potential, watershed development programmes, storage and marketing support to farmers and other economic agents and conserving and enriching natural resources (e.g., forests, soils, water bodies)

• Strengthening social sector: promotion of rural/tribal literacy, female literacy; better health for all; safe drinking water supply; food security; and other social safety net programmes.

There are also lessons for policy-makers and R&D institutions. Creating an enabling policy environment and crafting appropriate institutional arrangements that may help manage forests and other ecological resources in an efficient, equitable and sustainable manner and effectively reduce poverty is a challenging task. This requires considerable intellectual, managerial and financial resources that need to be directed to address the problems faced by the poor. R&D institutions need to generate new knowledge including affordable and adaptable technologies and techniques that may help enhance assets and income generating capacities of the poor. R&D institutions may also help suggest as to how poverty reducing growth could be propelled and how poverty reduction programmes be progressively improved.

CONCLUSION

Poverty reduction has become a wide spread concern. Our understanding of poverty has been gradually evolving and poverty is being perceived as a multi-dimensional deprivation. It is premised that forests can play an important role in reducing poverty. Like other land-based resources, forests provide means to diversify local economies, to absorb excess labour and to significantly contribute to livelihood and food security of the rural poor. If it is accepted that people are the ultimate owners of State forests, the first step is to ascertain through participatory appraisal how they can be productively involved in forest management on a sustained basis and how they can benefit from forests in an economically efficient and equitable manner. This requires a sincere and repeated dialogue with the major stakeholders and to arrive at a mutually agreeable solutions based on a social cost-benefit analysis and available technologies. The rights, responsibilities and roles of all stakeholders should be clearly spelt out and their implementation must be enforced and periodically monitored. A pro-active role of policy-makers and R&D institutions can accelerate this process.

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