As pointed out in section I, private seed companies play a predominant role in production and marketing of hybrid cottonseed. In A.P., about 98 per cent of seed production is currently being organised by private seed companies through their agents i.e. seed organisers who mediate between them and local seed farmers. Though companies are not directly involved in production process, their control over various aspects, such as fixing seed prices, advancing production capital and quality supervision, largely influence the way production is being organised. Financial institutions like public sector banks and new generation financial institutions that are liberally advancing loans to seed production directly or indirectly (directly to seed producers and indirectly through seed companies and organisers) also play an important role in influencing the production process. In recent years, the issue of engaging child labour in production process brought entire seed industry and financial institutions under severe criticism. The present section discusses the responses/reactions of seed companies and financial institutions to the growing criticism for employing child labour in production process.
Response from seed industry
The cottonseed industry in India acknowledges the existence of child labour in production of seeds and does not condone it in any way. Most of the companies, including the multinationals, are justifying the use of child labour on one pretext or the other. The following are some of the important arguments advanced in support of their justification.
- Child labour is inevitable given the nature of work.
- Child labour is not inevitable but it is cast effective. The replacement of child labour with adult labour would involve substantial increase in the production cast and market prices of seeds.
- Children labour is inevitable because of poverty.
Nimble finger argument
One of the important arguments used in favour of employing child labour is that the children provide irreplaceable skills. In particular children are said to have specicial physical dexterity (often nimble fingers) not possessed by adults. The emasculation and pollination work in cottonseed production involves a lot of dexterity. It needs to be done carefully, patiently and delicately. Lot of concentration is needed while doing this work. The children especially girls can
do this work properly as they are having nimble fingers. Adults lack these qualities. More over, if it is children they can do this work quickly also. The female children are more suitable to do this work than boys because they exhibit a lot of patience while doing the work. The justification for child labour used here is that seed companies which require children's nimble fingers will disappear if child labour is eliminated, and with the absence of hybrid seeds, there will be a drastic decline in production of cotton.
As already discussed in section IV, there is no truth in the nimble finger argument. It can not answer the question why adult labourers were engaged in emasculation and pollination work when hybrid seed production was first introduced in the early 70s. There are few examples available now also in some areas, which indicates that the use of adult labour would not effect the quality of seed at all16.
Cost effective argument
Another important argument used for justifying the use of child labour is that it is cost effective. Hybrid cottonseed production is highly capital and labour intensive. Labour costs alone account for about half of the total cost of production. The replacement of child labour with adult labour would involve substantial increase in the production costs and subsequent raise in the market prices of seeds. Compared to ordinary seeds, the prices of hybrid seeds in market are already very high and any further rise, it is argued that, would effect the purchasing power of farmers, particularly small and marginal farmers, who are already burdened with a rise in other input costs.
From company's side, the estimates vary between 50% to 100% (25,000-50,000 per acre) increase in the cost of production if children are to be replaced with adults. Such a rise, they argue that would adversely effect the prices of seed in market. These estimates are inexact and most instances are only wild guesses. Based on the rough estimates, the study found that though there will be definitely some rise in the cost of production, yet it may not have severe adverse impact on prices of seed in the market. It is estimated that the cost of production might go up by 20-25% maximum. An increase in the prices of seed by 20-25% might not be a great additional burden on the farmers who spends about 4-5% only on buying seeds out of their total expenditure. Alternatively, this additional cost can be shared by different players - seed producers, seed organisers and seed companies - by cutting their profit margins a little and farmers by paying some extra money.
Poverty argument is essentially used by the companies to shift the blame on to parents and prevailing socio-economic environment, which supports the use of child labour. In its simplest form, the poverty argument states that children work because they belong to poor families, which can not survive without the income which accrues to them on account of child labour. Parents are willingly sending their children to work, as they are dependent on their income. The withdrawal of children from work would effect the families, which can not survive otherwise. Child labour is a general phenomenon, which cannot be eliminated in one sector. There is little that the seed companies can do about this issue. Given the situation, if children are removed from seed production there is no guarantee that they wiIl not be employed in other activities.
But the ground reality does not support poverty argument. The experience of MVF in withdrawing children from work in Rangareddy district is a good example. During last one decade MVF has withdrawn thousands of children, including the children working in cottonseed fields, and their withdrawal from work did not reduce the economic status of their families. In fact, in many cases, the economic conditions of families have improved after they have withdrawn their children from work due to increase in the wage rates and availability of work for adults. Contrary to popular belief, the experience of MV Foundation showed that poverty is not the main reason for child labour, but the absence of a strong social norm against employing children and governmental response in providing facilities are. The recent study by the author (D. Venkateswarlu, 2001b) on the impact of withdrawal of children from cottonseed work on work sharing and income contributions of family members commissioned by MV Foundation has revealed that despite the loss of working hands (due to withdrawal of children from work and joining schools) families are able to improve their incomes. This was partly due to rise in wage rates and availability of work for adults. Parents also came forward willingly to take up additional work and seriously think of alternative ways of improving their income when their children are withdrawn from work.
Response from Financial Institutions
The response from financial institutions like public sector commercial banks which are advancing capital to seed production, to the issue
of child labour is much similar to that of seed companies. Commercial banks which are known for their stringent attitude while extending loans to farming community are willingly coming forward to liberally advance capital to seed producers. The problem of child labour is viewed by these institutions as a 'harsh reality', which is linked to poverty and cannot be wished away as long as poverty persists.
Unfortunately, the new generation of financial institutions like MACS (Mutually Aided Co-operative Societies) and BASIX17 (an innovative private financial institution) which are aimed at promoting rural livelihoods are also liberally extending credit to seed organisers and producers knowing very well that their credit support is being utilised by them for exploitations of children. In the name of promoting livelihood opportunities, these institutions are indirectly strengthening the environment, which support the employment of child labour.
The efforts of Seedsmen Association
The issue of child labour came for discussion in recent years in the meetings of Seedsmen Association, an organisation working for the interests of seed companies in A.P. About 150 private seed companies are members of this association. In the annual general body meeting of the association in 1999, many companies have expressed their concern about the growing criticism on seed industries for employing child labour from local NGOs, activists and labour department officials. Several members complained that they are being unnecessarily harassed by labour department officials by threatening to file cases against them simply for bribes. Some members also complained that the local NGOs are only targeting cottonseed employers leaving the other employers who also use child labour. Members requested the association to look into the issue and initiate dialogue with NGOs.
The growing concern about the issue of child labour by the seed industry is being reflected in a memorandum, which was submitted to the government of A.P. by Seedsmen Association in 1998. In memorandum, companies made a suggestion to the government to develop high yielding variety of seeds which are cost effective and do not involve large number of labourers in production process. To quote the memorandum: 'The cost of production of hybrid seeds, more particularly cotton hybrids is going up year after year. The NGOs are also pointing out the employment of child labour in hybridisation techniques and also payment of minimum wages and the problems of pollution. We feel, to remedy the situation, the scientific community may concentrate on evolving of high yielding varieties of various crops, more particularly in cotton. So that the farmer can depend on his own seeds, minimising the outside supply. This will reduce the seed cost. Alternatively there is a need to develop hybrids with cost effective seed production, and avoiding pollution.'
Business and Community Foundation18 (an associate organisation of The Prince of Wales Business Leaders Forum), a non-profit business coalition, working towards promoting socially responsible business practices among corporate bodies, has recently initiated a dialogue between all the key actors i.e. Government, Seed companies and NGOs on the issue child labour in general and cottonseed production in particular. It has organised a two-day workshop in June 2000 in Hyderabad involving all these key actors.
An important outcome of this workshop is that, for the first time the seed companies have come forward to openly admit the seriousness of the issue and associate with NGOs and government to explore the possibilities of eliminating the child labour in cottonseed production. The two important seed companies i.e., Pravardhna Seeds and Amerewara Agri Tech, which took part in the workshop, have already initiated some steps in this direction. As a first step they have requested their seed producers to remove the younger children from work. They have also initiated a dialogue with local NGOs working on child labour issue.