The opening up of the village economy is irrevocably altering rural livelihoods in village India. Market forces are drawing many rural households out of relative poverty. However, the transformation of patron-client relationships into fluid business transactions has caused simultaneous movements into and out of poverty. Some households have been able to take advantage of new economic opportunities whilst the livelihoods of others have stagnated or declined.

A study from the Overseas Development Institute draws on ethnographic evidence to examine household livelihood mobility within two contrasting villages in the same district of the state of Madhya Pradesh. It explores the different ways in which these households cope with changes that affect their livelihoods. It compares the strategies that the villagers adopt in order to survive the immediate shocks as well as to capitalise on the opportunities that the changes bring.

Sadangarh’s 2700 inhabitants belong to 31 different sub-castes. The village has significant commercial farming and non-farm sectors and good transport links. Livelihood diversification has occurred due to government land redistribution schemes, adoption of modern farming techniques, adaptation of traditional caste occupations and increased rural-urban linkages. But, not all have benefited from rising incomes and economic integration. Pressures on common land have reduced the viability of pastoralism and traditional artisans are threatened by changing consumer tastes and availability of new goods.

Villanpur, a satellite village of a small town, is economically and politically isolated. Belonging to a single caste group, most households depend on subsistence farming and wage labour. There is no internal market for the exchange of goods and services. Decision-making is dominated by short-term survival and many have to skip meals. While poorly positioned to take advantage of the external economy, it is also less susceptible to the threats that integration can simultaneously present.

In both villages:

• Trade liberalisation and commercialisation has enhanced economic disparities – these differences cut across caste divisions.
• Indebtedness has increased – largely as a result of expensive medical treatments, dowries and significant investment in agricultural equipment and wells.
• Credit schemes promoting traditional occupations have had minimal impact due to the changing needs of producers and consumers and availability of cheap manufactured goods.
• Out-migration is a strategy used by the poorest households and the most important way in which the poorest households move out of poverty because the money is invested in improving agricultural livelihood security.
• Health of the migrant labourers is jeopardised as they are often ill, injured by work accidents – after which they receive no compensation – and spend large amounts on medical treatment.
• Knowledge about state pensions and benefits available to those below the poverty line is limited to the literate and better off with connections to local government.

In order to help the socially and economically disadvantaged to benefit from the free market policy-makers need to:

• improve conditions and encourage union representation for casual labourers: this could help them to receive fair wages, reduce employers’ search costs for labourers and encourage more people to migrate for shorter periods of time
• provide agricultural and business training for those freed from stigmatised occupations ordained by the caste system – especially for villagers in isolated settlements who receive no benefits from out-migration.
• facilitate wider access to healthcare schemes or loans to prevent the poor from having to sell their assets for throwaway prices during a health crisis
• reform local governance to ensure effective political representation for sub-groups and isolated hamlets not currently represented by the system of panchayats (lower tier of government).

Assistance is needed to help the chronically poor who do not have the physical and social capability to help themselves. Until these people can adequately be identified and receive assistance, external interventions will continue to achieve little and many will remain poor.

Source(s):
‘Understanding the dynamics of socio-economic mobility: tales from two Indian villages’ by Caroline Wilson, Working Paper 236, Overseas Development Institute, March 2004 Full document.

Funded by: Department for International Development, UK

id21 Research Highlight: 7 May 2004

Further Information:
Caroline Wilson
Department of Sociology
University of Sussex
Brighton BN1 9RE
UK

Tel: +44 (0) 01273 678891
Contact the contributor: C.H.Wilson@sussex.ac.uk

University of Sussex, UK

Overseas Development Institute
111 Westminster Bridge Road
London
SE1 7JD
UK

Tel: +44 (0) 20 7922 0300
Fax: +44 (0) 20 7922 0399
Contact the contributor: publications@odi.org.uk

Overseas Development Institute, UK

Other related links:
'Widening non-farm employment opportunities in Madhya Pradesh'

'Agricultural transformations & rural livelihoods'

'Livelihood options' - ODI

Livelihoods Connect