economics of on-farm development - Institute for Social and ...

factors l8 . As a result. the agricultural wages in Kerala have been almost moving
in tandem with the wages in the construction sector, as shown in table 7.14. [t
may also be noted that the agricultural wage indices outpaced the construction
wage indices since the mid 80s.
Table 7.14: Trends in wage rates in Kerala, 1960-97 (Index <strong>of</strong> wages, 1952 =100)
Year Carpenter Mason Paddy (male) Paddy (female)
1960 117 126 122 140
1970 304 294 320 370
1976 558 567 526 663
1980 654 645 589 739
1985 1598 1618 1727 1697
1990 2209 2212 2869 2372
1995 4275 4240 5111 5749
1997 5714 5720 9586 7792
As already discussed, the price <strong>of</strong> paddy has never been attractive so as to
motivate farmers to stick on to paddy cultivation even at higher levels <strong>of</strong> wages
and cost <strong>of</strong> inputs. The increase in wages at current prices has been very high in
relation to prices <strong>of</strong> paddy during the last one and half decade and this adversely
affected the net barter terms <strong>of</strong> trade as the wages equivalent quantity <strong>of</strong> paddy
substantially increased from 6.25 kg. in 1983 to 17.93 kg. in 1998 (Table 7.15).
As evident from the table, there was only three fold increase in the price <strong>of</strong>
paddy during the last 15 years, compared to about 8-9 fold increase in the wages
<strong>of</strong> the male agricultural labourer and 7 times increase in the wages <strong>of</strong> female
18 Numerous studies have tied wage gains in Kerala to institutional factors, namely,
state intervention and un ion isation (Bardhan, 1970; Kannan, 1988 , Pushpangadan,
1992; Krishnan, 1991; Baby, 1996) The fact that no serious reversals <strong>of</strong> real wage
levels have occurred since the mid-70s, despite a continuous decline in the price <strong>of</strong>
rice, suggests that institutional factors have insulated wages from downward pressures.
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