Immiserizing growth: Globalization and agrarian change in Telangana, South India between 1985 and 2000

I examine the impact of policies toward agricultural globalization on growth patterns, distribution patterns, commercialization, and the supply response of peasant farmers by analyzing agriculture in the Telangana region of South India between 1985 and 2000. I perform growth computations between 1970 and 2000 for agriculture in this region, track distributional changes based on the National Sample Survey (NSS) data between 1985 and 2000 using non-parametric regression techniques, and estimate an econometric model of supply response for Telangana farmers. This empirical investigation leads to two puzzles—one in the supply response arena and the other in the distributional arena. First, even as the prices of market-oriented crops have declined between 1991 and 2000 (during the phase of globalization), the planted area and the output of these crops have been rising rapidly. Second, between 1985 and 2000, the annual exponential growth rate of real agricultural output in the Telangana region of South India has been more than 4%, higher than much of the developing world during the same period, even as a majority of the farming population has undergone significant income/consumption losses, tragically manifested in the suicides of more than a thousand farmers. I explain these puzzles first by studying the historical antecedents (1925–1985) of agrarian change in the region, then through a theoretical peasant economy model with a lien constraint that is similar to the model that Ransom and Sutch employed in the context of the post-bellum US South, and finally by analyzing village-level institutional mechanisms based on field research (2000–01) in the region. The main conclusion of the dissertation is that the globalization-induced decline in the prices of non-food output in conjunction with local informal lending practices that require these very non-food crops as collateral help explain the tragic puzzles. The policy implications are also analyzed in the dissertation