An Empirical Exploration of Rural Poverty in Bihar

1. An Empirical Exploration of Rural Poverty in Bihar K.M.Singh, R.K.P.Singh, M.S.Meena and Abhay Kumar ICAR Research Complex for Eastern Region, Patna Presentation at Pre-Annual Review Meeting Workshop (6-7 September 2011) of BMGF funded project “Tracking Change in Rural Poverty in Household and Village Economies in South Asia” at ICRISAT, Hyderabad

2. Background • Bihar is the third largest state with respect to population and seventh in terms of area in India.   • Agriculture is still an important sector in Bihar since it contributes about 16 per cent to State Gross Domestic Product and provides employment to about 70 per cent of working force in rural area. • The state is characterized by small land holders. • More than 90 per cent of farm householders are marginal with less than 1 ha land but own about 44 per cent of cultivated land in Bihar.  • Agriculture sector experienced a drastic change with respect to public investment, use of inputs, extension activities and crop-milk-fish production in recent years.

3. State government assigned priority to the sector through providing fund to this sector by increasing annual average budget allocation from less than Rs 200 crore during 2001-06 to more than Rs 1,000 crore during 2006-11. • State Agricultural GDP was almost stagnant at Rs 32.5 billion during 1981-94 and its growth was negative in Ninth Five Year Plan (-1.4%) which turned positive in Tenth Five Year Plan (0.91%). During 2004-11, State AgGDP grew at the annual growth rate of 2.7 per cent. • However, State Gross Domestic Product recorded growth of 10.9 per cent during the period which was higher than corresponding growth achieved at national level. • State agriculture sector achieved spectacular growth of 31 per cent in the year 2006-07.

4. But the state failed to maintain higher agriculture growth due to floods in 2007 and 2008, and drought in 2009 and 2010. • Despite severe drought, the state recorded the food grain production of 125 lakh tonnes and milk production of 63 lakh tonnes in 2010, indicating sustainability in agricultural production in Bihar. • There was almost no growth in agriculture sector in Bihar during 1983-94. • During 1983-94 Net State Agricultural Domestic product stagnated at Rs 32.5 billion (at 1980-81 prices). • Per Capita income increased by only Rs 31 during the period i.e. from Rs 1003 (1983) to Rs.1034 (1994) • Agricultural production showed increasing trend during last five years.

5. Milk production increased from 3.0 million tonnes in 2004 to 6.3 million tones as 2010-11 Fish production also increased from 0.027million tones in 2004-05 to 0.030 tones in 2010-11 Bihar supports 8.8 percent population of the country with only 2.8 per cent of land mass

6. About 69 per cent of geographical area is under cultivation but about one- third of geographical area faces various problems

7. Growth in SGDP and SAgGDP in Bihar during 9th ,10th and 11th five year plans

8. The Study • Information generated under the project “Tracking Change in Rural Poverty in Household and Village Economies in South Asia” used. • Multi-stage stratified random sampling technique used for selection of districts, blocks, villages and respondent households from two districts (Patna and Darbhanga) from two contrasting agro-ecological situations. • Two blocks; one each from each sample district and two villages from each block were selected randomly. Thus, the sample consisted of 160 households @40 households from each sample village. • Information on various socio-economic aspects collected through panel interview by Resident Investigators. • Information relating to social class, education level, asset, livestock, migration, employment pattern, housing, and drinking water of poor households were considered for meaningful conclusions. • Current study is based on the information collected from 65 Below Poverty Line (BPL) households of four villages of Bihar.

9. INCIDENCE OF POVERTY IN BIHAR VRS INDIA DURING LAST 30 YEARS

20. Destination of Migrants from Households (%)

25. CONCLUSIONS • Bihar agriculture was stagnant in eighties and early nineties and observed poor growth up to tenth five year plan. • In eleventh five year plan, there has been growth in agriculture sector in Bihar. • During last 20 years poverty has declined by more than 14 percent but number of poor persons increased during the period. • On the basis of analysis of household level data of VDS villages, it may be inferred that the education, land and asset poverty have been prevalent in Bihar villages.

26. CONCLUSIONS • Landlessness and low per capita land are also causing poverty in Bihar • The majority of poor persons are getting employment in non-farm sector and migration is main strategy for maintaining livelihood of poor households in Bihar, • Majority of persons who migrated out-side state and were engaged mainly in non-farm sector. • Their access to electricity, improved living condition and sanitation has been very low which may be the cause of their poor health.

27. CONCLUSIONS • Despite various programmes of improving access to financial institutions, the majority of poor households of Bihar, particularly of less developed area are still dependants on money lenders for credit facilities. • Various poverty alleviation programmes have not been effective in reduction of poverty up to desired level in Bihar. • Hence, there is an urgent need to have holistic approach for improving various social and economic dimensions of state for faster reduction in poverty in Bihar

28. THANK YOU …………………………Any Questions?