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Green capitalism

By Darryl D'Monte

Can the collateral damage of a growth-at-all-costs economic model be addressed by a "regenerative" economy as opposed to a "degenerative" one based on fossil fuels and outmoded notions of industrialisation?Veteran social activist K R Datye believes it can

Environmentalists and activists have often been criticised for opposing so-called development projects and not having anything constructive to offer in their place. The late Anil Agarwal, founder of the Centre for Science and Environment in Delhi, underlined this by pointing out that the greens opposed dams, coal-based thermal power stations and nuclear plants. But, he noted, the dilemma remained: How is a developing country like India going to obtain electricity to run a modern economy?

The question becomes all the more significant in the context of the contemporary "LPG" ideological framework -- liberalisation, privatisation and globalisation. How does one combat this juggernaut, which sees all economic growth as an end in itself, no matter that it excludes huge swathes of the population?

Some answers have been provided by the Pune-based Society for People's Participation in Ecosystem Management. Since 1991, it has been working on participatory irrigation management and has since broadened its activities to include watershed management, gender and livelihoods, water conflicts and river basin studies. Its mentor is K R Datye, who, for 25 years, worked as an irrigation engineer but then turned to exploring various alternative technologies. At the end of March, likeminded activists and academics paid tribute to Datye, who is now 82, by organising a two-day conference on his seminal ideas at the Tata Institute of Social Sciences (TISS) in Mumbai.

The key word in the deliberations was the emphasis on a "regenerative" economy, as opposed to a "degenerative" one based on fossil fuels and outmoded notions of industrialisation. In Datye's view, the 73rd constitutional amendment is a vital step forward. He bases his alternative development paradigm on the gram sabha, the smallest unit of self-governance in the village. If one unit in a village consisted of 100 households, the first task was to demarcate its boundaries, including common lands, and to evaluate its resource base. The objective is to establish what entitlement such a unit has to that most previous resource -- water.

The village as a whole, typically, may consist of 400 households. The area suitable for producing crops and biomass (organic matter) may be 800 hectares, while the village would have a watershed extending over 1,000 hectares. After meeting these vital needs, there would be sufficient land available for irrigated commercial crops, dryland cultivation, pastures, grass, shrubs and trees. The average availability of water would be estimated by adding up the surface water, groundwater as delayed run-off and groundwater storage. Half this water, in a regenerative economic model, would be allocated to a 100-household gram sabha for priority use.

But, as has been pointed out time and again in any discussion on rural society, it is far from being homogeneous. Caste and class intervene at every stage to make any equitable distribution of natural resources that much more complicated. This is why Datye and his acolytes refer to the "resource poor" among villagers who, again typically, may comprise 20-40 households out of the 100 in a gram sabha. These are jobless artisans, nomadic and denotified tribes, destitute women and project-affected people awaiting resettlement. They are also entitled, as a priority, to water for domestic use and their cattle.

Proponents of this approach recognise the need to boost land productivity without resorting to capital- and resource-intensive inputs. They believe that this can be achieved by boosting the production of biomass, celebrated in Datye's book Banking on Biomass. This is radically different from the environmentally destructive production of ethanol and biofuels throughout the world, almost all of which either divert land from food crops or are dependent on expensive inputs.

A fifth of the area available for a 100-household unit could be used to grow wood, bamboo and fibre. Around 15% could be devoted to what is known in foresters' jargon as "non-timber forestry". Foodgrain would comprise a fifth, as would sweet sorghum, pulses and fodder 10%, and 4% devoted to organic vegetables. Nitrogen-fixing varieties could be grown on another 10%. The output would be over 1,100 tonnes of biomass a year. Such a gram sabha would be entitled to preferential employment assistance under the National Rural Employment Guarantee Act, which entitles a person to 100 days of paid work in a year.

K J Joy, who with Suhas Paranjpye is a close associate of Datye's, breaks down these figures and arrives at a scenario where a poor family of five would produce 18 tonnes of biomass a year. In addition, it would produce 3 tonnes of surplus biomass "for value-addition -- the basis for a transition to a dispersed industrial system". This surplus consists of fruits, vegetables and other high-value agricultural produce, which is perishable. Instead, other produce like bamboo, fibres, oils or medicinal plants are a valuable alternative. Such an option, it should be noted, is in direct contrast to Special Economic Zones (SEZs), which represent a highly concentrated, egalitarian form of virtual forced industrialisation.

In this situation, there is a distinction between "assured water", which is the minimum required to guarantee livelihoods and should be 80% dependable, and "variable" water, which could include supplies from outside the area. Joy explains the position succinctly: "We need to use the assured component of water to provide an equitable basic service for all, and utilise the variable component to provide water as an economic service to the enterprising." If the variable water is used to grow perennial tree species, which produce bulk biomass, these serve as a fallback when the seasonal farm crop fails, as is unfortunately only too often. Indeed, with climate change, such fluctuations in weather are going to become more frequent. The biomass produced per family represents both an energy and capital stock.

Following pioneers such as the late Vilasrao Salunkhe's pani panchayats, as well as the phad irrigation system in Maharashtra, Datye believes in delinking water rights from land rights. It is this ideology that has inspired movements in southern Maharashtra for the equitable distribution of water, which began with the well-known Bali Raja dam, constructed by local people with their own labour (Bharat Patankar, a veteran of that struggle, was present at TISS). The idea is that all those who depend on land for their livelihood should get a certain minimum amount of water, which includes farmers, landless labourers, artisans, women, dalits, etc, irrespective of their holdings.

The concept does not mean that all the water is divided equally among all the villagers. The basic requirement is for drinking and domestic use, for livestock, for production (agriculture, processing, etc) to meet consumption as well as to generate income for needs that are mediated by the market (like education, health and recreation). In a typical family, this works out in the region of 6,400 cubic metres of water per year. The basic service is a right; only after meeting this minimum should water be provided as an "economic service" for production for the market. As Joy explains, this is roughly equivalent to treating the first component as a social good and the second as an economic good.

Water has to be priced. The basic service is at an affordable cost, primarily to recover operation and maintenance costs. The second could be priced at full recovery, recovering the capital costs over time. Such an approach would address the opposing viewpoints about pricing water. The World Bank prescribes full cost recovery, whereas the Left believes it is a social good and opposes privatisation. According to Datye, there is a third strand that tries to bridge the two polarised positions.

This would mean that the basic service has necessarily to be subsidised, whether by cross-subsidy within the sector or across different sectors. But the economic service has to be charged at full economic cost and at premium rates to subsidise the basic service. Joy says: "It is difficult to see how free markets can even begin to meet these complex and contradictory demands."

Professor A Vaidyanathan, a former member of the Planning Commission, who was present at TISS and once headed the Irrigation Pricing Committee, advocates a differential or graded tariff system, which can at least partly address the tension between the two components.

Another novel feature of Datye's regenerative economics is that doles and grants, which make people dependent on the state, have to be replaced by concessional credit which is linked to performance. According to researcher Seema Kulkarni, who presented a paper on the role of institutions and finance in the transition to an alternative system, every gram sabha eligible for employment assistance under the National Rural Employment Guarantee Act will have to agree to norms for allocating resources and their use. Thus, if resource-poor and rich asset-owning households agree to share resources, this would qualify the former for employment assistance. The concessional credit would be available for investing and participating in the biomass-based regenerative system. Additional employment assistance could be secured to create food security and produce energy out of biomass, which would ensure minimum needs.

At the conference, Amita Shah from the Gujarat Institute of Development Research in Ahmedabad elaborated the role of finance and credit in the system. There were investments and subsidies by the state, with special emphasis on employment assistance. The creation of a biomass bank was the main source of credit for developing micro-enterprises in a decentralised setting. Alternative energy modes were promoted and costs recovered through affordable and progressive rates of interest. And even the poorest people -- for instance, tribals -- would have access to the biomass bank.

The strong point about this alternative approach is that these aren't merely theoretical ideas -- almost wishful thinking -- that remain on paper. They have been tested on the ground at every stage, over the years. A typical initiative in this context is by the Jagrut Mahila Samaj in a village near Ballarpur, in Chandrapur district of eastern Maharashtra, which is a severely drought-prone area. In Kalamana village, through regenerating the local economy, a person with 2 hectares was able to earn Rs 41,000 after two years. In addition, by using the United Nations Development Programme's small grants scheme, the village started a vermiculture project that generated vermicompost worth Rs 65,000. From experience, a prerequisite was a good women's group that could handle the funds in such projects.

According to M P Parameswaran, a veteran of the renowned Kerala Sastra Sahitya Parishat and the literacy movement, "green capitalism" or "solar socialism" was the order of the day. The concept of land ownership would be replaced by the "right to work on land to earn a livelihood", and growth would be predicated upon sharing, not the accumulation of surplus. He envisages that once, say by 2050, every family is provided with a pucca house, the roofs of all buildings can be designed to collect solar energy. Around 60 square metres of such area would be required to generate photovoltaic electricity -- between 4,800 and 6,000 units a year. He estimated that the average annual household demand would be only around 2,500 units; the rest could be sold to the grid for intensive energy use.

Parameswaran was clear-sighted enough, however, to recognise that "another world was possible", but not probable. As he put it: "It is impossible within a capitalist regime, where profit is the only motive force. It is based on competition and leads invariably to larger and larger scales, increased urbanisation, growing inequalities and imminent eco-catastrophe." The only answer, as he saw it, was for hundreds of small-scale experiments to show the way to a regenerative ecosystem. If nothing else, presumably, sheer desperation will drive the poorest people to learn how to live within their own natural resource base and to build an economy from the base, without relying on the illusory trickle-down.

InfoChange News & Features, April 2008