Chapter 3 – Livelihoods in Coastal Jagatsinghpur, Keonjhar and Sundergerh: A Case of Missing Data and Statistical Lies

3.1  Introduction

“I have 12 cases on my name… what can I do? I see it as part of my wealth… what else can I do… when you own land and your land has a blemish (a fault)… you don’t complain about it… you accept it as part of your wealth… because that’s how it came to you…. These cases are like that… I had to fight for my land and as part of that fight I have 12 cases… what else can I do but think of it as part of my wealth…” – Surender, owner of 3 decimals of betel vine, resident of Gobindpur

The controversy surrounding the POSCO project has clearly emerged as a struggle around material issues of livelihood and the economic future of local communities in coastal Jagatsinghpur and the Khandadhar hills of Keonjhar and Sundergerh.  The local community in the three gram panchayats of Dhinkia, Nuagaon and Gada Kujanga clearly see the agrarian economy, based primarily around betel vine, as one that assures them a future. However, the Government of Orissa claims that the POSCO project, among others, is a crucial part of the economic advancement of the State. Large industrial projects such as POSCO are often seen as valuable to a local economy because of the employment they generate. Both sides – those opposed to the POSCO project and those promoting it – argue their positions based on claims centered around the local economy. Therefore, there is an inherent comparison that is already in place. When those promoting the project argue for it, the underlying message is always that this will benefit the local community and its economy, and therefore the fears that are being expressed are faulty. On the other hand, those opposing the project express the fear that the new economy that will be imposed on them is bound to make their lives worse. The task of this chapter is to make this implicit comparison, already in place, explicit, and as measurable as possible. There are two primary axes along which the comparison can be setup:

  1. Current Livelihood vs. Promised Livelihood: The current local economy yields incomes to different classes of people differentially – those who own land vs. those who don’t, those involved in betel vine vs. those involved in pisciculture, etc. This differentiated local economy is to be replaced by a local economy in which the POSCO steel plant, port and mines are central. Our first task will be to build a comparison between these two economies in terms of the livelihoods the two economies will afford the local population.
  2. Long Term Economic Success: Beyond the question of immediate livelihoods is the question of a longer term future.  Economic betterment in the future is dependent on the capacity to build both savings and assets. Again it is important to compare the scope for such long term success under both conditions – the continuation of the status quo, and with the POSCO project in place.

When we began our investigation of the project in February 2010, we were alarmed at the outset by one simple realization. In spite of the five years that had elapsed since the conceptualization of the project, and in spite of very strict guidelines set out in the National Rehabilitation and Resettlement Policy, 2007 (NPRR) 92 and the Orissa Resettlement and Rehabilitation Policy (2006),93 no responsible party – whether it is the Government of Orissa, the Government of India, or POSCO – has released any data on the current local economy. In other words, all the justifications for the POSCO project had been undertaken without baseline data on the nature and scope of the current local economy. The only organization of any repute that has put out a report on the POSCO project – the National Council for Applied Economic Research (NCAER) – has surprisingly not bothered to assess the current baseline economy even though this would be a minimum requirement for a reasonable cost-benefit analysis of any project. This failure has severe implications. For one, it does not allow a neutral observer to assess the project. When the government, or POSCO, announces a compensation package, for instance, there is no basis of comparison as to whether the said package is adequate and/or fair. In short, the controversy acquires a degree of opaqueness, and unsubstantiated assertions from all parties become possible.

In response, MZPSG commissioned a short independent research project to assess the nature and scope of the local economy so as to make comparisons possible. Two research teams of two members each visited the three affected gram panchayats and the Khandadhar Hills over the months of July and August 2010. As a detailed survey of the local economies was not possible in this time frame, MZPSG limited itself to developing a rigorous but preliminary data set through a series of focus groups. Accordingly, this chapter outlines the following:

  1. A brief description of the local economies in the three gram panchayats of Dhinkia, Nuagaon and Gada Kujanga and a preliminary survey of livelihoods in the Khandadhar mining area of Keonjhar and Sundergerh districts.
  2. Based on the data outlined in Section 1 above, we undertake a comparison of the current local economy vs. the proposed POSCO centered economy. This is done in three parts: (a) a critical evaluation of the employment projections offered by POSCO/NCAER/GoO. We assessed this as a requirement because of many anecdotal challenges posed to the projected employment figures. Our effort in this section is to evaluate the projected employment figures from both best case and realistic scenarios.  (b) a comparison of the current economy livelihoods vs. a POSCO centered economy livelihood possibilities. In this section we bring into focus a comparison between the data collected in our research on the local economy against the projected employment and compensation figures announced by POSCO/GoO and (c) Potential for Long term economic success under conditions of the currently prevalent economy vs. the POSCO centered economy.
  3. Based on the above comparative framework the final section will draw conclusions, offer recommendations and discuss the future research needs for any further evaluations required.

3.2.  Current Livelihoods

Researchers from the Mining Zone Peoples Solidarity Group (MZPSG) visited the nine villages (seven revenue villages and two hamlets) included in the 4004 acres of POSCO plant and port area in coastal  Jagatsinghpur district and the mining area in Keonjhar and Sudergarh districts in July/August 2010. The primary purpose of the research team was to acquire preliminary data about local livelihoods – the data that is entirely missing in all published documentation on the POSCO project from NCAER, the GoO, the GoI and POSCO.

Methodologically, we used a combination of preliminary open-ended interviews to establish the basic contours of the current economy, followed by focus group discussions and case-based data collection.

3.2.1  Livelihoods in Jagatsinghpur

An initial survey of existing literature on coastal Jagatsinghpur and consultations with academics and journalists in Orissa and Delhi familiar with the area yielded some clear points of departure:

  1. Betel vine is the central crop of the local economy in the 9 villages earmarked for displacement by the POSCO project.
  2. Beyond betel vine, other crops in the area included cashew, coconut, kewra and rice.
  3. Further, a large part of the community also used fishing as part of their subsistence economy.
  4. There is also a small but significant community of fisher folk local to the area. A part of this population is involved in fishing as a livelihood and a second segment has invested heavily in pisciculture.
  5. Finally, the Jatadhar river and the mouth of the Jatadhar are the preferred site for small boat fishermen from over a 15 km radius. Estimates of the number of fishermen supported by the Jatadhar and the segment of the bay earmarked for the port ranged from 20,000 to 25,000.

These observations yielded the need for four focus groups: (a) those whose primary source of income is betel vine, (b) those with significant source of income being from wage labor, (c) those involved in pisciculture, and (d) those whose primary source of income was fishing in the Jatadhar/Bay. Of these the research team was able to complete only two focus groups, namely the betel vine cultivators and wage labor.

In the case of the pisciculture sub economy, the research team conducted only two interviews with Pisciculturists. The last mentioned category, fishermen who depend on the Jatadhar/Bay for a livelihood also remained incomplete. However in both the latter cases some preliminary data was collected.

(a) FOCUS GROUP 1: The Betel vine Growers

Betel vine cultivation tends to be restricted to relatively small plots of land because it is labor-intensive. Among those interviewed in the first round, size of betel vine plots ranged from 2 – 30 decimals. We interviewed 6 betel vine cultivators from 3 of the 9 affected villages – Dhinkia, Patna and Gobindpur. The cultivators exhibited significant diversity in size of operations, with a minimum area of 3 decimals and a maximum of 17 decimals (100 decimals = 1 acre) allocated to betel vine production.

Two of the 6 respondents were also betel leaf traders. One of them operates locally – he consolidates leaves from several plots and runs a small processing room. His reported profits from trading were Rs. 36,000, Rs. 19,000 and Rs. 26,000 in the years 2007, 2008 and 2009 respectively. He attributed the decline in profits in 2008 to fluctuations in betel leaf prices.

Another respondent was a medium-sized trader who owned a registered trading company. He not only cultivated betel vine himself, but also procured betel leaves at farm door from other cultivators in the area, processed and transported it to Bhubaneshwar and sold it to traders who then distributed it other markets in Delhi and Mumbai. He estimated his profits at Rs. 180,000 in 2006 and Rs. 140,000 in 2007. Over the past two years, however, he had to incur losses because of his participation in the “andolan” (struggle); there are currently 16 cases registered against him due to which he is unable to travel to Bhubaneshwar to manage his business himself, and has to rely on hired help instead. A summary of the focus group characteristics is presented in the table below.

Table 1: Some Economic Characteristics of Respondents Engaged in Paan Kheti

Betel vine cultivation is housed in a shed constructed of bamboo and/or casurina frame with other forest produce used to create cover against direct sunlight. The bamboo used for the external shed frame is procured in the market, while the sun-filtering cover is procured locally in the forest, and consists of dry fiber, twigs, and leaves derived especially from the significant spread of casurina trees in the area. Within the shed, rows of scaffolding, each about one foot from the next, extend across the length of the shed. These scaffoldings, again constructed of thinner bamboo/casurina reeds stand to a height of about seven feet on which each individual betel vine grows vertically upward. Each vertical reed frame supports one vine. Thus a betel vine shed contains many rows of vines, each row having several reeds supporting vines. The exact number of vines in a shed is of course dependant on the size of the shed/plot.

We reproduce below details about the market income of subject 3 who has a family of 5 and grows betel vine on a 5 decimal plot. The subject has the crop planted in 40 rows each of which carry approximately 100-150 inter linked vines. Each bamboo reed segment of each row produces between 25-30 betel leaves every three months. As the vine grows upward, leaves sprout along its length and it takes three months for the vine to advance to the ceiling of the shed.

Yield in leaves94

  • Total Yield of shed per year: 490,000 leaves

Revenue in Rupees

  • Total revenue at Rs 0.60 per leaf (current price, recorded July 12-19 2010): Rs. 294,000
  • Total revenue at Rs 0.57 per leaf (average price for past 6 months, Jan to June 2010): Rs. 279,300

Costs in Rupees95

  • Replacement costs96 (cost of rebuilding shed, pond etc.): Rs. 15,000
  • Input costs at Rs. 3,000 per month (costs of mustard husk): Rs. 36,000
  • Labor costs for replanting (22 persons for one day per 3 months @ Rs 210/day)97: Rs. 18,480
  • Labor costs for relaying sand and mixing mustard dust (10 persons per month at Rs. 170 per day): Rs. 20,400

Total annual cost: Rs. 89,880

Net Income in Rupees

  • Net Annual Income (assuming price = Rs. 0.60/leaf): Rs. 204,120 (Rs 294,000 – Rs 89,880)
  • Monthly Income: Rs. 17,010
  • Net Annual Income (assuming price = Rs. 0.57/leaf): Rs. 189,420 (Rs 279,300 – Rs 89,880)
  • Monthly Income: Rs. 15,785

While betel vine is the primary source of market income, the respondents produce cashew for the market earning profits ranging between Rs. 7,000 to Rs. 20,000, and engage in subsistence production of rice, sometimes leasing land from other villagers to do so and paying compensation of Rs. 2,000 per 0.5 acres per crop. They also extract forest produce and fish from nearby natural resources for household consumption.

As an example, subject 3 grows cashew as a hedge plant for which he has received between Rs. 10,000-12,000 per year in the recent past. He pays rent of Rs. 3,500 for one acre of land for the second crop and produces approximately 1.5 quintal of rice for household consumption. He secures fish at least 2-3 times a week (except during the monsoons) from the local saline river. He also extracts or harvests a wide variety of fruits and vegetables such as bitter gourd, drum stick, drum stick leaves, potato, desi potato (a local variant that is much larger), squash, guava, mango and jackfruit from the nearby forest. Except for labor time, his household does not incur any other cost to harvest these products. Studies have shown that wild fruits and vegetables are an important component of the diet of rural households, especially due to their nutritional content. If we were to factor in the monetary value of these products into Subject 3’s monthly income it would mean a substantial increase in his income.

The researchers also cross-verified the data by visiting several other betel vine plots of others who were not part of the focus group. With minor variations caused by the size (scale) of the plots, the data was substantiated. Thus the average net income yield per decimal of betel vine ranged between Rs. 37,000/ decimal (at Rs. 0.57/leaf) and Rs. 40,000 (at Rs. 0.60/leaf). The minimum recorded per decimal yield was Rs. 32,000, and the maximum per decimal yield recorded was Rs. 50,000. The centrality and the strength of the betel leaf as crop was best expressed by one of the focus group respondents;

Sometime ago some government officials came and asked for betel vine seeds from us. We laughed at them. Betel vine was sent to us from god, and only god knows that it is a source of all our wealth. It is a plant with no seeds, no fruits and nobody but god can tell you how it came to earth. And now look at the betel vine… it is always trying to escape. It grows upwards towards heaven and wants to leave the earth. But for us it is gold, and so we hold it down on the ground. We keep reburying it and making it stay on earth. And now Navin Patnaik wants to destroy this and keep only seeds. That’s how much he knows about betel vine…

(b) FOCUS GROUP 2: Daily Wage Labor

This focus group comprised five respondents drawn from four villages. While the initial idea was to build a focus group of those who had no land and thus are dependent on available wage labor, once we began the initial interview process it become clear that most of the identified respondents did indeed have access to some land. The reasons they self-identified as landless were: (a) the land they owned was often very small patches – one decimal or two decimal under betel vine or cashew, (b) they did not own pattas (legal title) to the land they were cultivating. Of the five respondents, three had either one or two decimals under betel vine, and one had “about an acre” (“takreeban ek acre”) of land on which he grew cashew. The last of the five respondents did not clarify if he had access to land except that he grew rice of his own (“apna dhan ka kheti tho hai”). However, all five did seek regular employment within the local economy and thus were qualified respondents of this focus group.  While the focus group conversation developed and each subject contributed at different times, all five were asked four questions during the process to ascertain their participation in the wage labor market. The interviews indicated that all five respondents found work whenever they were willing and able to work, and their daily wages depended on the nature of work ranging from Rs. 150-160 for plucking, watering plots or even for processing related work of betel leaves, Rs.170 to Rs.200 for carrying of sand and re-layering of sand mixed mustard dust in the betel vine plots, to Rs.220 to Rs.240 for the work of untying and reburying the betel vines after harvest to initiate the next cycle. In addition to the money wages, all daily wage laborers were also provided with two meals per day of work.

The team also asked all respondents whether, in the case that they were assured employment in the POSCO plant, they would prefer that over this form of paan kheti employment. After responding with questions such as what kind of work would they do in the plant, and how many days a week they would most likely have to work, a consensus emerged quickly and with considerable sharpness.  One of the respondents put it succinctly:

Aare… I will take 10 rupees less and still work on paan kheti…. If we work for POSCO what will we get, hundred rupees, hundred and twenty rupees? We anyway get more than that… but more than that, look at the condition of those who work for IOC in Gada Kujanga… their situation is terrible…. They have to work when they are asked to work and stop when they are asked to stop… in paan kheti we can always negotiate…. If one paan kheti does not employ us we can go to another… can we do that with POSCO? And who wants to work in a factory for less money when we can work outside in the open with people you know and live your life with. Here I can depend on Sain bhai for any problems. Will POSCO help me like that?

All of them seemed to have a clear image of the kinds of jobs that will be available to them. “We will get jhadu safaye (cleaning) jobs … or chaprasi (peon or security personnel)… what else can we get? We don’t know how to operate the machines…” One of the respondents pointed to an old man who was arranging the paan leaves in bundles of 50 before they were boiled and made ready for transportation. “Will he get a job in POSCO? At least in paan kheti he can do this and make a little money for himself.”

It also became clear during the course of the interviews that several workers from outside of the immediate three panchayats came to work on the betel vines. Several references were made by all the participants in response to questions about how easy or difficult it was to find employment that indicated that the betel vine area is a site for employment for others outside the betel vine area in neighboring inland panchayats. Though it would take further research, it is possible to prima facie hypothesize that the betel vine areas had net surplus employment available, and the further inland we went, the more deficits in employment we would find.

Thus it’s possible to conclude that for those local to the three gram panchayats paan kheti employment was preferable to industrial employment, and that they were able to find work regularly and at wage rates far higher than the Orissa minimum wage. Further, the preliminary findings suggest that paan kheti is a source of employment to labor from panchayats further inland though the extent of this phenomenon remains unmeasured.

(c) FOCUS GROUP 3: The Pisciculturists

The two respondents interviewed on Pisciculture were both active pisciculturists. They were interviewed separately and not as a focus group. Overall, the following salient aspects of pisciculture in the project affected area were identified:

  1. Pisciculture farms extend across the entire project-affected area except the village of Nuagaon. The maximum spread of pisciculture farms is in the Gada Kujanga gram panchayat. The farms are on both sides of the Mahanga river that flows through the three gram panchayats before emptying into the Jatadhar near Dhinkia.
  2. Both respondents reported that all pisciculture farms in the three gram panchayats were on private patta land, and not on government or forest land.
  3. Respondent 1 estimated the total number of pisciculture farms to be in the range of 2500-3000. Respondent 2 estimated it to be approximately 2500.
  4. Respondent 1 owned two pisciculture ponds just south of Gobindpur. Respondent 2 owned 14 pisciculture ponds, mostly in Gada Kujanga, but also in Gobindpur.
  5. From the data reported by both respondents it is impossible to assess the total income derived from per acre of pisciculture, especially given the significant disparity between the total coverage area under pisciculture between the two respondents. However, it is clear that pisciculture is a high investment/high revenue operation. For instance, one of the two ponds owned by respondent 1 was over an approximately 0.5 acre plot on the western bank of Mahanga river. Respondent 1 was anticipating a yield of approximately 60,000 to 70,000 shrimp, each weighing about 70 to 80 grams from this pond. When the research team visited the pond, the shrimps were at approximately 40 grams and had six more weeks of rearing remaining. Shrimp of such quality sells at about Rs. 340/kg and hence Respondent 1’s total revenue from over one season from one pond would be well above Rs. 15 lakhs. He estimated his total cost for the season to be about Rs. 5 lakhs including cost of labor (2 workers), seedlings, feed, cleaning and aerating. So while it is difficult to estimate the per acre yield based on just two respondents, it is amply clear that pisciculture is a high-yield, high-investment operation. It is not surprising that only a very small number of pisciculturists exist. In the project-affected area the estimate was that between all the nine villages there were 150 families in pisciculture.

(d) FOCUS GROUP 4: Fishermen

Information obtained from this focus group was scattered and incomplete. Though several initial interviews were conducted it was difficult, given the fishing schedules, to gather an adequate number of fishermen for a focus group. However, some preliminary data has been identified:

  1. It is estimated that about 20,000 – 25,000 small fishermen operate in the Jatadhar and the Bay area immediately adjoining the Jatadhar. This is the area that would be lost to POSCO’S captive port.  This range was reported in 11 of the 14 preliminary interviews.
  2. Overall, these 20,000-25,000 fishermen are estimated to be from 30-35 surrounding gram panchayats. While we were unable to collect the names of all the gram panchayats from where fishermen came to this area, some of the most crucial panchayats were identified as follows: Fatehpur, Gandikpur, Kaliapata, Khurusia, Badabisnupuru, Balitut, Bogodia and Ambiki.
  3. It was also gathered from the preliminary interviews that fisher folk tended to depend almost exclusively on fishing and rarely entered any other labor market.
  4. While Solobhaya, the local fishermen’s organization, has extended support to the anti-POSCO stir, the extent and scope of the support remains the subject of further research.

Thus, while no clear estimate of income levels derived from fishing were developed, it is clear that the Jatadhar and the Bay serve as the livelihood source for a large number of residents both from within the three project-affected gram panchayats, but also far beyond it.

Non-Monetized Aspects of Livelihood: Dependence on Forest/Forest Land

As outlined in the previous sections, betel vine is the backbone of the local economy and cashew and kewra are other crops of some significance. However, despite its centrality to the local economy, a measurement of betel vine output alone does not give us a comprehensive view of the nature of livelihoods in the area. There are several aspects of the betel vine economy that are dependent on the specific characteristics of the forest land on which it is grown, and remain non-monetized and thus unaccounted for. Our research team identified four such aspects, one which is a significant part of the health and well-being of the community, and three which are directly connected to paan kheti:

  1. Food in the community: The research teams sampled seven meals at random in different households of both betel vine growers and wage laborers to record its contents and locate the origin of the contents. The carbohydrate in all the meals, with one exception, was rice. In all the six meals that involved rice, the rice was locally grown by the family in plots of land that they had rented for one crop season. The rice, however, was not grown on forest land. The non-carbohydrate segments of all the seven meals sampled were almost entirely based in forest produce. Three of the seven meals served at least one portion of fish. In two of the three fish portions, the fish consumed was a local variety of silver fish (a variety similar to anchovy fish). In the last case, the meal served included dry fish also caught locally and dried over the summer months. This is a traditional breakfast food in the area. Apart from the fish, two of the seven meals had a significant portion of vegetables. These included drum sticks, tindora, bitter gourd, unripe jack fruit, drum stick leaves, potato and desi aalu. All of these vegetables were procured from the forest as and when required. Finally, on one occasion, the meal included a dal (lentil), and for an older man in one family bread (chappati) was served. In sum, barring the chappatis and the dal on one occasion, all of the food consumed was locally produced and extracted from forest land. Our team was told that apart from oil, salt, sugar and dal (used on occasion) nothing else that was consumed on a daily basis by the local communities was procured from the market. Thus, it would not be incorrect to surmise that over 80% or more of the local food intake is based on local forest produce or rice grown by families for self consumption.
  2. Forest Land Sand/Baloo: As explained in the Wage Labor section above, a crucial part of betel vine production involves the transfer of sand, locally called baloo, into the betel vine plot, and mixing the same with mustard husk dust and re-layering the plot. The sand involved is of a very unusual kind that extends to about three kilometers from the coastline. Thus, every betel vine plot is dependent on an adjacent plot of forest land for the sand that is required to re-layer the plot. This process happens once a month on all betel vine plots and is a central part of the production process.
  3. Forest Land Water: The second crucial aspect of paan kheti is the availability of sweet water to irrigate the plot. In almost all plots we observed, the water source was within 20 meters of the plot and was accessed through a simple kaccha (unsecured) well dug adjacent to the plot. Some important aspects of this water that bear mentioning: (i) In as much as it is adjacent to the plots, the water is also located on forest land (ii) The water table is very high; most wells we observed were less than 20 to 30 feet deep (iii) The water available is sweet. This is a unique aspect of this area, and we need to understand the complex ecological formation that allows for the water table less than a kilometer or two from the coast line to have no trace of brackishness.
  4. Paan Kheti Sheds: The paan kheti sheds create the controlled micro environment in which the betel vine is grown and protect the vine from direct sunlight (filtered sunlight is required) and wind. The sheds are constructed with commercially available bamboo for the frame of the shed and the fibers used as sunlight filters are procured from the forest. While several dry forest plant fibers are involved in the construction of a shed, the most important of these is the branches, twigs and leaves of the casurina tree. In some sheds, we observed that the casurina tree branches were used instead of the commercially procured bamboo even for the frame of the shed.

It is critical to note that all of the last three mentioned aspects of betel vine cultivation- the baloo, the sweet water, and the casurina and other forest produce used in the sheds are specific to the local ecology, and therefore not replicable in other areas of Orissa or India. It is clear that the core betel vine economy is specific to this area and depends on forests and forest land – a sub-ecology that is specific to this narrow stretch off the coast line.

3.2.2.  Livelihoods in Khandadhar – Mining Area

The mines earmarked for POSCO would be located in the Khandadhar region, straddling two districts– Keonjhar (also called Kendujhar) and Sundergerh. While the specific coordinates of the POSCO mines are unclear, data drawn from government notices and two lawsuits filed against the allotment of mines to POSCO indicate that 32 villages will be impacted in Keonjhar district, residents of 12 of which will face displacement, and residents of the remaining 20 villages will lose their sources of livelihood and access to water. According to the 2001 census, of the total population of 5886 persons, 171 of those impacted fall under the SC category, 4,830 in the ST and 885 in the ‘Other’ category. In Sundergerh district, 84 villages are expected to be impacted. Details about how many of these villages will be displaced is yet unclear, but residents in these villages are largely STs. The affected villages are spread between the higher reaches of the hill range as well as the foothills.

Affected villages are inhabited mostly by the Bhuiyan Adivasis, though other groups such as the Juang and Munda also reside here. The residents practice a mix of shifting and settled agriculture; those in the higher reaches of the hills are more likely to practice shifting agriculture than those in the foothills. In addition to agriculture, residents are highly dependent on surrounding forests. Minor forest produce is extracted both for household consumption but also for the market economy, some of which have a considerably high market value. While we were unable to gather details about the agrarian economy, the table below presents information about forest products extracted by residents and their market value.

Table 2: Local Market Prices for Non-Timber Forest Produce Collected Locally

We interviewed one family who provided us details with the total harvest of the most commonly extracted forest produce. The revenue generated from these products provides the family with enough income and employment for 1-2 months per year.

Table 3: Revenue generated by Sale of Selected Forest Products

In addition to these products, which are sold commercially, many types of food products for consumption are also obtained from the forests. These include 14 types of roots, 60 varieties of greens, 19 varieties of mushrooms and 52 types of nuts. During the monsoon months of June, July, August and September, these foods are the primary types of foods consumed by the locals.

Finally, in order to compensate for the fact that data collection is impossible when the specifics of a mining site are not available, the research team visited some adjoining areas where iron ore mines are operational. While the observations presented here are preliminary, and based only on visual examination of the area and anecdotal narratives, there is, in our opinion, much cause for concern. In the block adjoining Keonjhar– Joda – where several mining operations are currently under full production, we witnessed several Adivasi villages that had been completely abandoned. Anecdotal narratives from local residents suggest that these villages were all cases of “self-eviction” as life and livelihood in these villages had become entirely unsustainable because of the mining operations. Large scale ecological degradation, leading to loss of control over forest produce and water made it imperative that these communities “self-evict” themselves. These communities, local respondents insist, have not received any compensation, nor has there been any implementation of Forest Rights Act (FRA) in the area. We record these observations here, solely to suggest that the current economic and political trends suggest that expansion of mining into the Khandadhar would most likely have similar impacts.

3.3 Evaluating Employment Claims of the POSCO Project and Comparing with Current Livelihoods

As recently as June 2010, the Orissa government underscored its determination to go forward with the POSCO project in Jagatsinghpur and Khandadhar, and quoted extensively from a report issued by the National Council for Applied Economic Research (NCAER)98  to justify its continued commitment to the project. Based on the data published in the NCAER report, Raghunath Mohanty, the Orissa Steel and Mines minister claimed that the POSCO project “will create about 8.7 lakh of direct and indirect employment, of which 18,000 will be direct employment.”99

The two main stakeholders in the POSCO project – POSCO and the Government of Orissa, have consistently used the NCAER report as a basis to justify the project for the last three years since the study was published. As such, the figures and statistics in support of the project come from three sources: NCAER, POSCO and the GoO. In this section we do the following:

  • Critically examine the data related to the POSCO project released by POSCO, NCAER and the GoO.
  • Introduce these figures from POSCO/NCAER/GoO into a comparative framework with baseline data produced through our research study in coastal Jagatsinghpur and Khandadhar areas reported in the preceding section.

NCAER conducted a social cost-benefit analysis of the POSCO project comparing two scenarios: (a) POSCO only mines iron ore, and (b) POSCO produces steel in addition to mining.

3.3.1 Evaluating Employment Claims

The claim behind the high employment figures is that those affected by the POSCO project could be gainfully employed, and that the GoO and POSCO have given substantial thought to the predicament of those displaced by the project. For instance, POSCO circulated a poster advertising the following employment claim:

The labour force in Orissa amounts to 153 lakhs. Among them 9.9 lakh are unemployed. Newly created 8.7 lakh jobs by POSCO-India project will drastically reduce unemployment rate. 100 (emphasis ours)

Again, quoting the NCAER report, a POSCO power point presentation brings the two figures of 8.7 lakhs new jobs and the 9.9 lakhs unemployed (2005-2006 figures) in Orissa together to advance a specific claim that the POSCO project would bring unemployment down to 1.2 lakhs (9.9 – 8.7 = 1.2 lakhs):

Employment Opportunities generated by POSCO-India would consume almost the entire backlog of current unemployment. Decrease in backlog of employment: 9.9 lakh → 1.2 lakh 101 (emphasis ours)

Apart from touting the “8.7 lakh jobs” claim, POSCO asserts that the project will produce 48,000 jobs per year, of which 18,000 will be direct employment and the remaining 30,000 will be indirect employment.102 However, even these lower employment figures are for the steel plant running at its full capacity of 12 mtpa. According to a POSCO press release dated June 21, 2006, “[d]uring the first phase itself, POSCO-India is expected to offer direct employment to over 7,000 people.”103

Clearly there are some wild claims being made here. The figures of 8.7 lakhs of direct and indirect employment, the 18,000 jobs of direct employment, 48,000 jobs of direct and indirect employment, the 7000 jobs in phase 1 and the reduction of 9.9 lakhs unemployment to 1.2 lakhs as a result of the POSCO project, do not all add up. Not all of these figures could be true at the same time. To be sure, we need to go back to the NCAER report to verify the origin of these claims.  Arguing for steel production rather than only iron-ore mining, NCAER sets up the high employment claims as follows:

On the other hand, if POSCO puts up the steel project to utilise the entire iron ore mined in the State, the impact on the economy would be much greater— 8,70,000 person years of additional employment each year over the next 30 years. 104(emphasis ours)

NCAER derives its employment multiplier105 assuming certain linkages between different sectors of the economy. For instance, it estimates that the POSCO steel plant operating at its maximum capacity would generate 159,734 additional jobs in the “trade” sector, 5,809 additional jobs in the “animal husbandry” sector, 10,912 jobs in the “food crops” sector, 63,984 jobs in the “cotton + wool + art silk + textile products” sector and so on. However, there is no clarity in the report on the quality of data used to derive these linkages.

NCAER also assumes that these sectoral linkages would remain unchanged for the duration of the project. In other words, a forecast based on a point estimate of 2003-2004 figures is assumed to hold until 2040 (assuming the POSCO project will start in 2010). No justification is proffered for this highly questionable assumption. In fact, it is very reasonable to expect significant changes not only in the inter-sectoral linkages and the number of jobs produced in various other sectors, but also in the core sector of iron and steel production. There are two fundamental problems with this method of predicting increases in employment.

  1. The prediction of potential employment is based on unrealistic assumptions about technology and prices. Historically, technological changes in iron and steel production, manufacturing (to which iron and steel is an input), and mining (which are inputs into iron and steel production) are labor displacing (see Table 5, for instance). Therefore, the potential for direct jobs created in the iron and steel sector and the indirect jobs created in manufacturing and mining is likely to decrease with technological innovations. Further, the NCAER report admits to considerable price fluctuations after March 2004 (pg. 25), but still arbitrarily assumes “constancy of prices” and takes as its reference the average price in 2006. While it may be true that price volatility is a recent phenomenon, nevertheless, it is an important factor to consider given the tremendous economic and social costs associated with this project. If the price of steel decreases, the value of POSCO’s output would decrease thereby creating fewer direct and indirect jobs; this would induce economic uncertainties compared with the current situation where there is relative economic stability. The omission of a prediction interval that takes into account technological, market and price changes (at the very least), in view of the length of the period of analysis, does not conform with best forecasting practices and casts doubts on the reliability of the figures.
  2. The potential for the predicted number of jobs to materialize in each of the sectors that the NCAER report claims will experience increases in employment is also dependent on the competitive strength of each sector and therefore its capacity to scale upwards in a timely and responsive fashion. For instance, the Economic Survey of Orissa, 2010, characterizes the textile sector in Orissa as comprising 7,842 micro, small and medium sized units.106 The NCAER report predicts an increase of 63,984 jobs in the cotton, wool, art silk and textile sector. However, there is no automatic transmission of benefits from the iron and steel sector to others within the Orissa economy. The prediction of increased jobs is conditional on the competitiveness of the textile sector in the state vis-à-vis other stronger production centers in India or abroad; this is significant in today’s competitive globalized economy. The NCAER report notes that POSCO-India assumes that imported procurement is 65 per cent of total input materials.” (page 53). This implies that POSCO has determined that only 35 percent of its requirements will be sourced from India; Orissa will likely have an even smaller share of this. Therefore, not only does the employment multiplier touted by NCAER not account for market dynamism, it also relies on the demonstrably false assumption that POSCO-India will create strong backward linkages with other sectors, and that all of these linkages will be within the state of Orissa itself.

Further, the disingenuity of NCAER’s use of the employment multiplier is visible in its actual calculation of total employment. The 8.7 lakh jobs number is derived by using the employment multiplier in conjunction with the annual production at factor cost – the cost of goods sold (COGS) including depreciation and interest expenses. The estimation of COGS, however, is made based on the Blast Furnace process rather than the Finex process that POSCO proposes to adopt despite acknowledging that the latter is the least cost option and preferable to the former. This sleight of hand can be explained by the fact that the considerably higher COGS figure for the Blast Furnace process inflates the estimate of total employment generated thereby making the POSCO project more desirable than it actually intends to be.

Beyond the highly questionable 8.7 lakh figure, there are other problems which essentially make these figure meaningless. Our concern in this section is specific to the employment scenario that will emerge in the local area of the three gram panchayats of Dhinkia, Nuagoan and Gadkujang and in the Khandadhar mining area. An employment multiplier applied in the “positive” direction to predict the number of additional jobs it will create is equally applicable in the reverse direction to predict the number of jobs that will be eliminated because of the destruction of an existing economy. The previous sections have outlined the current baseline economy in coastal Jagatsinghpur and Khandadhar. Any reasonable prediction of additional jobs created by the POSCO project needs to also account for the total output of the current baseline economy and, based on the relevant coefficients, calculate the total number of jobs in different sectors across the state that would be eliminated and thereby arrive at a net gain or loss in employment figure. The NCAER report fails to do this entirely because it has refused to acknowledge the very existence of a strong local agrarian economy in spite of Asian Development Bank guidelines that insist that the current baseline economy must be included in any analysis. If we take into account the conservative estimate of over 50,000 people who will be affected by the project, and calculate the loss of employment across Orissa in different sectors, based on the inter-sectoral coefficients for betel vine, pisciculture, fishing and other agrarian outputs, it appears likely that any gain in employment due to the POSCO project will be marginal, or even non-existent. This failure, along with the methodological ones outlined above, together make the 8.7 lakh figure entirely unreliable and useless. We are therefore forced to abandon the 8.7 lakh claim, and instead focus on a more concrete claim made by POSCO of 48,000 direct and indirect jobs at a 12 million mtpa capacity.

By POSCO’s own admission, phase 1 of the project will employ about 7000 workers directly but full capacity will be achieved only in the ninth or tenth year after the start of production. In other words, if we look at the current unemployment figures for Orissa, about 9.9 lakhs, and the maximum potential for direct employment available through POSCO for the next five to ten years, it is clear that POSCO’s direct contribution to decrease in unemployment in Orissa is less than 1 percent of total unemployment in 2005-2006 (7,000 out of 10,00,000). If we include indirect employment through Phase 1, and use the ‘official’ indirect employment claim of 30,000 for all three phases, we have a maximum of 17,000 (7,000 + 30,000/3) jobs created over the next five to ten years – a figure that is still less than a 2 percent reduction in Orissa’s unemployment. Neither the NCAER nor POSCO documents outline a clear timeline for the three phases of the project. If the first phase employment of 7,000 direct and 17,000 total employment is to be realized in the first 5-10 years, we can only assume that the 48,000 jobs at full capacity will be realized only in the 10-30 year time frame, and will still be less than 5% of current unemployment. Additionally, these figures leave out other important real factors such as population growth, and therefore the projected unemployment figures ten years from today. But even assuming a magical cessation in population growth, a mere 5% reduction in unemployment in Orissa cannot be considered “drastic” by any means, and will vertainly not “consume almost all of the backlog of current unemployment” – both being claims made by POSCO and the government of Orissa.

The employment scenario gets even more depressing when we consider that none of the official projections account for the number of people whose livelihoods will be destroyed by the POSCO project – a number that exceeds the rosy scenario of 48,000 direct and indirect jobs being touted by POSCO and the government.

Ignoring for the moment the dubious nature of the employment claims presented by POSCO/GoO/NCAER, let us assume the best-case scenario of 7,000 direct jobs and 10,000 indirect jobs created in Phase 1 over the next five to ten years. Even then, the likelihood of the project-affected families getting or benefiting from these jobs is minimal because of the following factors:

  1. Lack of labor mobility across sectors: The best case scenario presented above presumes labor mobility across sectors, i.e., that those engaged in agriculture thus far can easily and quickly transition into producing iron ore, steel, and constructing the POSCO plant. This is unrealistic and not borne out by past experience. It is very likely that the skilled jobs will be given to labor with appropriate technical knowledge and the locals will end up with low-paying, unskilled jobs with no real prospect for advancement. This is borne out by the fact that while POSCO claims to have hired more than 4,000 people already,107 very few of them are locals. Furthermore, when Orissa Chief Minister Naveen Patnaik proposed reserving 90% of unskilled jobs, 60% of semi-skilled jobs and 30% of managerial jobs for the local people, POSCO questioned this move on constitutional grounds and threatened to fight in court.108
  2. Employment generation in the iron and steel sector: The trend of increasing mechanization in the mining sector suggests lower than projected employment generation (see Table 4). Data from the Government of Orissa itself shows that for iron ore production in Orissa, primarily carried out in the districts of Jajpur, Keonjhar, Mayurbhanj and Sundergarh, the number of workers employed to produce one million ton of iron decreased from 374.45 workers in 2005-2006 to 253.85 workers in 2008-2009 (see Table 5), a 32.35% drop in employment over just a three year period.109 From the national as well as state figures on the value of mining output and quantity of output extracted, it is clear that the labor content of production is decreasing at a precipitous rate. Further, according to the Ministry of Labour,110 jobs created in the mining and quarrying sector per lakh rupees of output has fallen from 0.03 percent in 1999-2000 to 0.01 percent in 2004-2005 to 0.009 percent in 2005-2006 (see Table 4).111

Table 4: All India Employment and Value of Output in the Mining sector

Source: Ministry of Labour & Employment, Director General of Employment and Training in Government of Orissa, 2010; MoSPI, GoI, 2008112; Authors’ calculations.

Table 5: Employment and Output in iron ore mining in Orissa

Source: Directorate of Mines, Orissa in GoO, 2010

  1. Increase in informal versus formal jobs: The mining sector in India is known for hiring informal and subcontracted workers rather than putting employees on a permanent payroll. According to a government mining policy study, the ratio of formal to informal workers in the mining sector is 1:10.113 This is consistent with the nationwide trend of increasing levels of flexible or informal workers hired even in the formal sector. In Orissa, marginal workers have risen in numbers from 13.84 percent in 1981 to 32.83 percent of the total workforce in 2001; this is higher than the India-wide rate of 22% in 2001.114 This is of particular concern to the well-being of workers and the local economy since informal work is characterized by little or no job security, low wages, gender inequities in pay, and sexual harassment.115 Given this accelerating trend of expansion of informal work in the industrial sector in the place of permanent employment, the crucial question is whether the POSCO project in the three gram panchayats would take a workforce that has steady agrarian employment because of betel vine cultivation and force them into conditions of informal work in the industrial sector.
  2. Environmental impacts on health, productivity and livelihoods: Iron ore mining and smelting operations are known to be highly toxic and destructive. The plan of building a high capacity road through the forest to carry the minerals out, operating a purifying/processing factors spewing toxic waste into the atmosphere during the smelting process and dumping tons of slag onto the watershed would have an incredibly destructive impact on the delicate ecological balance that has been maintained for millennia by the local farmers. Additionally, it is likely to have a substantial impact on the health and productivity, and thereby negatively impact livelihoods and well-being of the local population, including those not directly affected by the project (see chapter 4 for a more detailed analysis on the impact of the project on the environment).

In summary, the NCAER report compares the employment multipliers for iron ore mining and steel production and concludes that the scenario in which POSCO produces iron and steel rather than restricting itself merely to iron ore mining is more desirable. Based on employment multipliers calculated by NCAER, a claim is advanced that at its maximum output of 12 mtpa, the POSCO steel plant will create 8.7 lakh jobs. This figure has become central to the justification of the POSCO project. We have already demonstrated above that in reality, the total number of direct and indirect jobs that the POSCO project will generate in the next 5-10 years is at the maximum of 17,000, and over the following 10-30 year frame at 48,000. These would only reduce the current unemployment rate of Orissa by 1.7% and 4.8% respectively. In other words, the employment gains from the project are meager compared to POSCO’s claims of drastic reductions in unemployment. It is also important to note that despite providing the value of employment multipliers for agriculture and allied sectors which are higher than that of mining and iron and steel production (10.86  for food crops and 2.75 for cash crops, 2.52 for plantation crops, 0.68 for other crops, 4.15 for animal husbandry, 1.22 for forestry, and 0.71 for fishing activities– against 0.35 for mining and 0.69 for steel production), NCAER is silent on the impact of iron and steel and mining activities on the former.

Table 6: Comparison of Employment Multipliers Across Relevant Sectors

Source: NCAER, 2007

While it is clear that the gain in employment and output from the POSCO project will come at a loss to current local livelihoods in the agriculture and allied sectors, the state’s failure to do a study of the current baseline economy inhibits the calculation of the total man years expected to be lost with the destruction of the latter. Our field work further indicates that the loss in output from agriculture and allied activities at both the mining and iron and steel plant/port sites will not only destroy livelihoods of those families the project will displace, but also those dependent on the ecology/economy of the project area. The conservative estimate we have argued is either a partial or complete destruction of livelihoods for over 50,000 people (calculations are shown below). The net jobs generated would therefore be calculated as the expected number of jobs created by the POSCO project (17,000 in 5-10 years or 48,000 in 10-30 years of direct and indirect jobs) minus direct and indirect employment lost due to destruction of the current baseline economies or degradation of the environment on which local livelihoods are dependent. The State, POSCO and NCAER have refused to consider the possibility that the net employment could well be negative, a possibility that is strongly suggested by our research. Until this net job loss/gain issue is properly resolved through a baseline study– a procedural responsibility of the state of Orissa which it has not fulfilled so far– no resolution of this matter is possible.

3.3.2 Comparing Livelihoods: Betel Vine vs. POSCO

Thus far we have looked at the data presented by POSCO/NCAER/GoO critically. It is amply clear that the bright picture presented by the above stakeholders is at best dubious and worse an outright lie. This alone should be enough to discredit the project. However, a comparison of the proposed POSCO-led economy with the baseline paan kheti-led economy yields further clarity on the flaws of the POSCO project.

The total number of individuals from the three gram panchayats that will be directly displaced because of the plant and port is estimated to be 22,000. The mining sector projections of the total project-affected individuals is as yet unclear as estimates are currently available only for the Keonjhar district project-affected population. The number of villages that are projected to be affected by the POSCO mines in the Sundergerh district far exceeds those in Keonjhar. The Keonjhar estimate is above 5000 project-affected individuals. Thus a safe and conservative estimate of the total mining affected individuals in Keonjhar and Sundergerh together would be in excess of 10,000. Finally to this we need to add the number of individuals in the fishing and pisciculture sub-economies that will be affected by the project. The fourth focus group yielded an estimate of 20,000 to 25,000 project affected individuals in this segment of the economy. Thus the total project-affected individuals will be in excess of 50,000 if we are to deploy the most conservative estimates. Thus the Phase 1 maximum employment figures of 17,000 direct and indirect jobs, when adjusted for the two significant issues of lack of labor mobility across skill levels and trends of mechanization offers a bleak picture wherein the best case scenario is one where a small handful of the local population may be absorbed into wage labor created by the POSCO project and that too at terms that are entirely unfavorable to them.

This needs to be contrasted with the stable paan kheti-led economy that is currently in place, an economy which absorbs a much larger segment of the local population than the POSCO project could ever absorb, and at wage levels that are much higher than either the Orissa minimum wage or the national average wage for unskilled labor. In contrast, most unskilled industrial workers, especially those hired as informal basis, are paid lower than the minimum wage.116 The potential loss suffered by the project-affected due to the replacement of the existing paan-kheti baseline economy with the POSCO economy will be exacerbated by the shockingly inadequate compensation packages being offered by POSCO/GoO for land.

As we point out in section 3.1.0 above, the highest compensation package offered by the government/POSCO is a one-time payment of Rs. 11,500 per decimal of land under betel vine cultivation. The current average annual income for betel vine growers is about Rs. 40,000 per decimal. Assuming no inflation, the loss of income per decimal of land for a betel vine cultivator over the 30 year lifetime of the POSCO project is therefore Rs. 12 lakhs. The comparison now falls into place– over a 30-year period the cultivator would lose approximately Rs. 12 lakhs per decimal and would gain a paltry  Rs. 11, 500, less than one percent of the crop value! This is appalling even from a purely market-driven perspective, but the idea that a government can uproot historically stable communities and throw them into abject penury for no tangible benefits to the state or the nation defies all logic. These figures would of course be far worse if we take larger land holdings under betel vine cultivation into account (10-30 decimal) where the per decimal average annual income rises to close to Rs. 50,000/decimal.

Finally, a brief word about long-term asset creation and the possibilities for a population such as the one in the three gram panchayats in terms of their longer term future. In the course of our focus group interviews as well as in preliminary interviews, the PRT research team also tried to collect basic family histories. Four of the six respondents in the betel vine focus group traced their history in the region to at least four generations, one subject to three generations, and one subject left early, so we do not have either his family history or annual yield from betel vine. All six subject-families participated in the forest renewal efforts of the 1960s, and all of them have played a significant role in the post super cyclone reforestation efforts, including in the case of three subject-families taking on an active role in the rotational task of guarding the forest each month. These aspects suggest a community that has historically invested in safeguarding the local ecology and should naturally be entitled to leveraging their creation of a long term asset – in this case, the land. With the levels of net income generated from the land, the communities have also already exhibited their own capacity to marshal local resources towards their well being. Though the data from our research is preliminary, there is enough indication that the agrarian surplus has already resulted in significant improvements in their living conditions. In contrast, reducing this population to wage labor, and that too at the lowest levels of informal wage labor in the industrial sector is almost a certainty if the POSCO project is implemented. Thus, even on grounds of long-term stability and prosperity of the local community, the POSCO project, it appears, will certainly do more harm than good.

3.4. Discussion and Conclusions

In this context, implementation of the Forest Rights Act (FRA) (aspects of which have already been covered in the previous chapter), in the three gram panchayats is crucial, as the history of the current peasant community and its role in the development of a highly productive local economy, conservation of a delicate ecological space, and the development of a high wage labor market points to a brighter future than that promised by the POSCO-led economy.  In as much as forest and land rights were not settled in this region in the 1800s when the British first nationalized forests in the country, nor under India’s post-Independence Forest Policy of 1952, the FRA, passed in 2006, was intended to remedy this historic injustice and few other communities could present a more legitimate basis for recognition of rights than the ones under consideration in this report. They have not only historically settled in this area but also have been excellent stewards of forest land in spite of minimal support from the State and its agencies.

In summary, the above three sections of new research data on the local economy, a critical evaluation of the POSCO/NCAER/GoO employment claims and a comparison between the yield of the current local economy and the POSCO compensation packages allows for the following conclusions:

  1. The GoO’s complete failure at developing baseline figures of current livelihoods in the three gram panchayats is a fundamental flaw in the very conceptualization of the POSCO project. This flaw is made much worse because both the GoO and the GoI were obliged under law to develop these baseline figures before approving the project. How a government could have put into motion a project without a detailed understanding of the economy it wishes to undermine is difficult to fathom.
  2. The POSCO-NCAER combine has produced a set of employment numbers to justify the project in livelihood terms. The GoO, having abandoned its legal requirement to conduct a baseline study has also taken to quoting figures provided by NCAER/POSCO. At the outset, the NCAER’s complete wiping out of the current local economy in its social cost-benefit analysis makes the report almost worthless.
  3. Further, the POSCO-NCAER combine have, in our evaluation, deliberately juxtaposed figures and made claims that are meant to mislead. The claim that the total 30 year man-year projection on employment will wipe out the current deficit in employment (unemployment) amounts to a blatant lie with a deliberate intent to mislead the public.
  4. The betel vine led economy of the plant/port region is a unique ecology-economy combine that has been developed into a very high productivity economy by the local peasant community. It affords a relatively high standard of living to both the local peasantry as well as to wage labor in the area.
  5. In the mining area of Khandadhar that is spread across two districts – Keonjhar and Sundergerh – the GoO, GoI and POSCO again have made little or no effort at investigating the local economy and high social costs of mining in the area both on  livelihood and ecological grounds. With regards to livelihood, the local Adivasi community has a richly diverse subsistence economy that is only partially monetized. The levels of destitution caused by mining in the adjoining Joda block of Keonjhar indicate that unless checked, the State/POSCO plan of mining in the area is going to cause gross deprivation of an already marginalized community.
  6. The Jatadhar basin along the coast – the site of the proposed port, is currently the area on which a vast fishing community of over 20,000 (a conservative figure) from over 30 gram panchayats depend. The devastation to this economy by the POSCO project has not been accounted for by the State or POSCO, especially given that a fully functional port exists a mere 9 kms. north of the proposed site.
  7. The GoI and GoO’s disdainful attitude towards the FRA is indicative of its inexplicable attachment to the corporate sector – in this case POSCO. Implantation of FRA is central to long term sustainability of communities, especially around livelihood. There is adequate evidence to suggest that the communities in the three gram panchayats of Jagatsinghpur depend significantly on forest/forest land for their livelihood. In addition, there is documented evidence that these communities have been central to the effective stewardship of this ecologically sensitive coastal zone. The allocation of mines to POSCO, while also irregular for other reasons, fundamentally violates the rights of the local Bhuiyan and other Adivasi communities. The project cannot and should not be set into motion without the full implementation of FRA in Jagatsinghpur, Keonjhar and Sundergerh.
  1. See National Rehabilitation and Resettlement Policy, 2007 []
  2. See Orissa Resettlement and Rehabilitation Policy, 2006 []
  3. The estimates of net income developed below are based on physical verification of number of leaves/vine, number of vines, average wages paid/3 month production cycle, and other average expenses. []
  4. Respondents reported the use of family labor in the production process. For instance, plucking of betel leaf is almost always carried out by family labor. Similarly, subject 3 reported that for the operation of mixing mustard seed husk and sand (which is carried out once a month), in addition to the 22 persons employed as wage labor, 3 family members also participated in the operation. []
  5. Replacement costs vary from Rs. 10,000 to Rs 25,000. We have taken the approximate midpoint as the standard cost. []
  6. Hired workers are paid Rs. 150-240  per day depending on the task  plus two meals. []
  7. The report, “Social Cost Benefit Analysis of the POSCO Steel Project in Orissa: A Report”, was published by NCAER in January 2007 []
  8. Posco project to contribute 11.5% to Orissa GDP, Business Standard, June 22, 2010 []
  9. Economic Impact of POSCO-India Project []
  10. Economic Effect of POSCO-India []
  11. POSCO-India in Socio-Economic Landscape of Orissa []
  12. POSCO Reaffirms Commitment to India []
  13. Social Cost Benefit Analysis of the POSCO Steel Project in Orissa, Mr. R. Venkatesan & Dr. Wilima Wadhwa, January 2007 []
  14. NCAER defines employment multiplier as the total number of jobs created per Rs. 100,000 output in a sector. The jobs include those created in other sectors of the economy due to backward linkages of the given sector with the rest of the economy. Thus, a multiplier of 0.69 for steel production implies that for each lakh rupees of steel output, a total of 0.69 jobs are created in various sectors such as trading, finance, other minerals, and iron and steel. []
  15. Government of Orissa (2010). Economic Survey 2009-1010. Bhubhaneshwar: Directorate of Economics and Statistics, Government of Orissa. []
  16. See POSCO press release dated June 21, 2006, mentioning the hiring of 60% of its employee strength (estimated at 7,000 people in the first phase), POSCO Reaffirms Commitment to India []
  17. Orissa’s job policy delays renewal of MoU with Posco-India, Deccan Herald, August 14, 2010 []
  18. Government of Orissa (2010). Economic Survey 2009-1010. Bhubaneshwar: Directorate of Economics and Statistics, Government of Orissa. []
  19. Ministry of Labour & Employment, Director General of Employment and Training in Orissa government, 2010; MoSPI, GoI, 2008 []
  20. The decrease in labor content may also be explained by an increase in the value of output generated, in addition to increased mechanization and further research may be required to locate the relative impact of the two factors. Nevertheless it underscores the fact that higher value of output does not necessarily generate higher employment. The total value of output likely to be generated by POSCO therefore may not generate adequate jobs to compensate the loss in agrarian livelihoods. []
  21. Ministry of Labour & Employment, Director General of Employment and Training in Government of Orissa, 2010; MoSPI, GoI, 2008 []
  22. Otto, J. M. (2009). Global trends in mine reclamation and closure regulation. In J.P. Richards (Ed.). Mining, Society, and a Sustainable World. New York: Springer []
  23. Government of Orissa (2010). Economic Survey 2009-1010. Bhubaneshwar: Directorate of Economics and Statistics, Government of Orissa. []
  24. See National Commission for Enterprises in the Unorganized Sector (NCEUS), August 2007. The numbers and analysis in the NCEUS report are based on data from the National Sample Survey. []
  25. Ibid. (“Wages in the unorganized sector are arbitrarily fixed, often without regard to the minimum wage legislations, which adversely affect the income of the wage workers in general, and women workers in particular.”) []


Chapter 3 – Livelihoods in Coastal Jagatsinghpur, Keonjhar and Sundergerh: A Case of Missing Data and Statistical Lies — 2 Comments

  1. Pingback: MZPSG Appeal to TIAA-CREF: Withdraw Support for POSCO’s Human Rights and Environmental Violations | Mining Zone Peoples' Solidarity Group

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