AGRARIAN-URBAN POLITICS

Observers in the past decades have commented on increased urbanization in India, which has led to new challenges for development, housing, and labor. But the majority of India's population, and thus electoral power, remains in rural regions.

In a 2018 article, SAI BALAKRISHNAN examines how agrarian political power manifests in urban spaces, looking to real estate markets in Mumbai.

From the paper:

"The electoral power of the agrarian countryside is evident in the relationship of Mumbai to its hinterland. India is the second largest exporter of sugar in the world and more than 40% of India’s sugar exports come from the western Maharashtra region. Sugar production in the region is organised in the form of cooperatives. These sugar cooperatives have been heavily subsidised by the state: 90% of sugar cooperative finances came from state-guaranteed cooperative bank debt; over three quarters of the equity was a direct handout from the state budget. It was Mumbai’s thriving industrial economy that was the source of sugar subsidies. Mumbai’s industrial classes tolerated the diversion of capital from the city to the countryside, as they understood that the state government legislators relied on the peasants for their votes, and that capital diversion was the price to be paid for the political stability from subsidised agrarian prosperity.

In a market-oriented urbanising economy, these elites continue to influence the making of urban real estate markets by flexing their regulatory muscle. The price of a plot of land increases when it is well connected to roads and transport networks, when it has uninterrupted water supply, when it can rise high in the air and thus maximise development rights. Politicians control these road, water and air resources, and in a context where local governments are not yet fully empowered as decisionmakers, state-level politicians wield immense control over resources that get capitalised into the price of land."

PEASANT REVOLTS

This week marked the 640th anniversary of the 1381 Great Rising, a rebellion which swept across medieval England demanding an end to serfdom and an overhaul of the legal system and the aristocracy.

A 2009 book edited by A. Haroon Akram-Lodhi and Cristóbal Kay examines the past, present, and future of peasant studies, paying close attention to the impact of globalization on configurations of rural power.

From the book's conclusion:

"Agrarian restructuring has altered the land-, labour- and capital-intensity of production, in ways that have profoundly altered the terrain of the agrarian question. In Brazil and Vietnam, significant linkages between the export-oriented and peasant production subsectors has facilitated an asymmetrical but mutually reinforcing expansion of both subsectors, and consequently domestic demand. In both, the agricultural export sector now drives growth that, through its impact on product prices and wages, fosters increases in domestic demand in the rural economy in the first instance, but also more generally in the economy as a whole. Within both Brazil and Vietnam, rural accumulation continues to be of importance for both capital and labour and, in this sense, the classical concerns of the agrarian question remain salient.

By countrast, in countries as varied as Bolivia, Egypt, Ghana, Guatemala, Honduras, India, Indonesia, Kenya, Morocco, Namibia, Pakistan, Peru, the Philippines, South Africa, Tanzania, Tunisia, Uganda, Uzbekistan and Zimbabwe, the processes of market-led land appropriation can be witnessed, though contingent trajectories of variation have produced manifestly different outcomes in specific settings. In particular, higher-value agricultural exports are an important determinant of aggregate rates of rural accumulation, but substantially weaker linkages between the export and peasant subsectors have fostered a significantly weaker distribution of the gains from rural accumulation and thus equality-deteriorating patterns of rural growth. Indeed, the greater emphasis on higher-value agricultural exports, coupled with devaluations and the removal of import restrictions resulting from ongoing structural adjustment in agriculture, has effectively, and in some cases deliberately, neglected agricultural production for the home market. Thus a range of countries in Africa, Asia and Latin America are increasingly engaged in the production of specialist farm output for niche consumer markets in developed capitalist economies, usually under the aegis of agro-food transnational corporations operating upstream in the commodity chain. The result, in many countries, has been to generate a reproduction squeeze within the increasingly fragmented peasant sector."

Link to the text.

LAND GRABS

In the late 2000s, the term "land grab" rose to prominence to describe large-scale acquisitions of farmland in Africa, Asia, and Latin America. Reports of "land grabs" also inspired debates around the specific functions of foreign investment, domestic policies in the global South, and commodity prices in development.

A 2012 article by LORENZO COTULA takes a critical approach towards "land grab" literature and distinguishes contemporary land acquisition patterns from their historical counterparts.

From the article:

"There is nothing new in the acquisition of land in the global South to produce crops for export to the global North, and some crops have a long history in tropical plantations (e.g. rubber). However, the biofuels boom has brought new actors (e.g. constellations of energy, agribusiness and biotech companies) and new crops (e.g. jatropha), or has reinvigorated interest in longstanding crops (e.g. sugar cane, palm oil). Carbon markets are changing the nature of the financial returns at stake and, more fundamentally, the very relationship between humankind and nature. The growing participation of financial players in the global land rush brings to the land arena a new set of players, motivations and investment models. In the words of Peluso and Lund, 'there is no one grand land grab, but a series of changing contexts, emergent processes and forces, and contestations that are producing new conditions and facilitating shifts in both de jure and de facto land control.'

However one looks at it, the land rush, if sustained over the next few years, will have profound implications for the future of world agriculture, including the roles of states and markets, of agribusiness and family farming, and of the global trading system. For example, as companies increase their degree of vertical integration and as governments acquire land overseas to import agricultural produce, a growing share of world agricultural trade will occur within the 'closed circuit' of corporate or country systems – deepening a trend that has emerged over the past few decades. In turn, this trend may have repercussions in multiple directions: to name a few, greater vertical integration of value chains can squeeze local operators; intra-firm transactions may increase opportunities for tax avoidance through transfer pricing; and mercantilist approaches to outsourcing agricultural production for national food security can ultimately undermine the multilateral trading system."

Link to the text.

AGRICULTURE AND TRADE

The US government spends upwards of $20 billion annually on domestic agricultural support programs, but with over 20 percent of farm products exported, these programs interact with trade policies that have fluctuated in the last century between protectionism and liberalization.

Investigating the origins of US agricultural trade policy, a 1989 article by JUDITH GOLDSTEIN looks to the New Deal to locate where a "divergence" emerged between policies for the agricultural and manufacturing sector.

From the article:

"Until the mid-1930s, both agriculture and manufactures were treated essentially alike: when either suffered economic decline, the usual state response was to increase trade barriers. The great economic decline of the 1930s undermined existing economic policy. [By the mid-1940s], a two-pronged strategy to address sectoral problems was enacted. The government was to help manufacturers gain access to foreign markets through a program of reciprocal tariff reductions. Agriculture was also to benefit from some tariff reductions, but largely it would be protected through a system of internal price supports and land-use policies. By the time the United States entered into negotiations over the workings of the trade regime, a decade of legislation had already established a policy of trade liberalization for industrial projects and trade protectionism to maintain farm incomes for agricultural products. A hegemonic position in the world economy did not ensure a consistent trade policy within the Unites States.

In this article, I trace this divergence in industrial and farm policies. I argue that the key difference in the two policies turned not only on political interests but also on the beliefs of policymakers. Agricultural trade had run deficits consistently since the mid-1920s. When considering a range of possible remedies, policymakers dismissed liberalization as an option for farm products while embracing that "idea" for manufactures. And although agricultural has had surpluses since the war and manufacturing has had deficits since the early 1970s, the decision of the 1930s continue to structure current policy."

Link to the text.

AGRICULTURAL REFORM

Since November 2020, thousands of Indian farmers from Punjab, Haryana, and other states have protested the implementation of national market-based agricultural reforms.

A look to a series of liberalization measures in the 1990s, which did not specifically address agriculture, reveals a dramatic restructuring of the agricultural sector. In a 2017 paper, Abhijit Sen and Jayati Ghosh investigate the impacts of these measures, highlighting shifts in investment, subsidies, and credit that inform the current debate.

From the paper:

"In the initial years, the reforms package did not include any specific policies specifically designed for agriculture. In the early 1990s, it was felt that the devaluation of the rupee had already provided sufficient incentive to agriculture, because it was expected to make it more attractive to export crops and thereby improve farm incomes. However, even if no explicit attention was paid to agriculture, various economic policies and other changes in patterns of government spending and financial measures had significant implications for the conditions of cultivation.

Over the initial period of economic reforms, which coincided with government attempts at fiscal stabilisation, there were actual declines in government expenditure on agriculture and rural development. Thereafter, there were cuts in particular subsidies such as on fertilizer in real terms, and the 1990s experienced overall decline in per capita government expenditure on rural areas in both absolute per capita terms and shares of GDP and aggregate public spending. There were also very substantial declines in public infrastructure and energy investments that affect the rural areas. These were especially marked in irrigation and transport, both of which matter for agricultural growth and productivity. In addition, financial liberalisation measures, including the emerging scope of what was designated as 'priority sector lending' by banks, effectively reduced the availability of institutional credit. Although the problem of credit access to cultivators was far from solved in India, the nationalization of banks had caused some positive differences, as public sector banks made more efforts to open rural branches and rural accounts, and to provide more crop loans to farmers. But after 1993 in particular, various financial liberalization measures, and the explicit and implicit incentives provided to public sector banks, made this much less attractive for bankers who anyway faced very high transaction costs when dealing with agricultural lending. The growth of branches, accounts and lending to agriculture all decelerated and in some states showed absolute declines. This forced many cultivators, particularly smaller farmers, tenant farmers and those without clear titles to land, to seek recourse to informal channels of credit like input dealers and traditional moneylenders. All this made farm investment and working capital for cultivation more expensive and more difficult, especially for smaller farmers."

Link to the text.

FINANCE AND FARMLAND

Land acquisitions have been on the rise since 2008, when rising oil prices and an international food crisis dramatically increased demand. Changing ownership patterns have the potential to influence not only the terms of agricultural supply chains, but the structure of political power in economies across the Global South.

A new book by MADELEINE FAIRBAIRN analyzes the trajectory of global land grabs, focusing especially on the expanding role of the financial sector.

From the introduction:

"The giant US pension fund Teachers Insurance and Annuity Association (TIAA), one of the largest players in the emerging farmland investment sector, illustrates how recently financial interest in farmland has emerged—and how rapidly it has grown. In 2007, TIAA suddenly began acquiring enormous tracts of farmland as part of the investment portfolio it manages on behalf of retired teachers and other professionals. By 2012, it already controlled $2.8 billion worth of farmland in the United States, Australia, Brazil, and Eastern Europe, making it one of the largest farmland owners and managers in the world. This included more than four hundred individual farm properties totaling 600,000 acres, most of them leased out to tenant farmers and operating companies. By the end of 2017, less than a decade after its first farmland purchase, TIAA—a firm created to manage the retirement accounts of teachers—had come to control over 1.9 million acres of farmland worldwide.

The amount of financial-sector capital so far invested in global farmland markets is fairly paltry. But financial-sector spittle has the potential to buy a lot of land. In Iowa, where farmland cost an average of $7,943 per acre in 2014, $40 billion could buy slightly over 5 million acres—approximately a sixth of the state’s farmland. In Brazil’s soy frontier state of Piauí, where farmland cost around $1,000 an acre in 2014, it would buy well over half the state. Ultimately, the prospect of landownership concentration in the hands of the financial sector matters because it has the potential to propel economic inequality. It matters greatly if the financial institutions that control much of the accumulated wealth of society decide that land is a preferred route for storing that wealth and generating income from it."

Link to the book.

• "We devised a new methodology for uncovering corporate organization and actors who benefit from farmland investment through an analysis of creditors and proprietors." Loka Ashwood, John Canfield, Madeleine Fairbairn and Kathryn De Master draw on county-level tax parcel data to analyze corporate land ownership structures in Illinois. Link.
• International investment law, which construes land as a commercial asset, can facilitate access to land for foreign investors and impose discipline on the exercise of regulatory powers in land matters. But shifts in the political economy that underpins international investment law can create new opportunities to reflect the non-commercial relations within which land rights remain embedded in many societies." Lorenzo Cotula's 2013 article on the legal underpinnings of global land acquisition. By the same author, a 2013 book looks at landgrabs across Africa. Link, link.
• Another new book by Stefan Ouma presents an ethnography of agricultural-focussed asset management, through case studies of New Zealand and Tanzania. Link.

STATE CAPACITY IN THE US

Analyses of variation in state-level responses to the coronavirus tend to focus on party determination: On the whole, states led by Democrats have been found to undertake more rapid and extensive responses to the crisis. The focus on immediate political factors, however, masks the broader history of America's uneven and disaggregated bureaucratic capacity.

A 1982 book by STEPHEN SKOWRONEK presents one of the most comprehensive accounts of the origins of the US administrative state. Focusing on reforms in civil administration, the army, and national railroad regulation from 1870-1920, the book demonstrates how regional differences contributed to the particular character of American state development.

"Unravelling the state-building problem in modern American political development places the apparent statelessness of early America in a new light. The governmental forms and procedures necessary for securing order in industrial America emerged through a labored exercise in creative destruction. Modernization of national administrative controls did not entail making the established state more efficient; it entailed building a qualitatively different kind of state.

The Civil War brought national military conscription, a national welfare agency for former slaves, a national income tax, national monetary controls, and citizenship. Yet, this was a state grounded in only half the nation. As the South returned, national electoral politics changed, and these institutional achievements began to be undone. Here, then, was a state only in the sense of the word imputed to it by the interests and strategies of the mass electoral organizations controlling its offices. No institution stood beyond the reach of party concerns. The fate of the wartime governmental apparatus suggests that if new institutional forms are to constitute a new state, they must alter the procedural bonds that tie governmental institutions together and define their relationship to society."

Link to the publisher's page.

• Theda Skocpol and Kenneth Finegold expand Skowronek's research into the New Deal era. Link.
• "In societies where social status is a cleavage, elites can use the threat of desegregation to unite wealthy and poor members of high-status groups against taxation and the bureaucratic capacity required to collect taxes." Pavithra Suryanarayan and Steven White on "Slavery, Reconstruction, and Bureaucratic Capacity in the American South." Link. In another article, Roberto Stefan Foa and Anna Nemirovskaya analyze the development of state capacity on the frontier. Link.
• Daniel Berliner, Anne Greenleaf, Milli Lake, and Jennifer Noveck present "systematic study of relationship between state capacity and labor rights." Link.