Presented by IWMI's Fraser Sugden at a seminar held at the SOAS (the School of Oriental and African Studies) University of London, on January 6, 2016.

1. Charting the political economy of
ethnic unrest in Nepal’s Tarai-
Madhesh: Shifting class relations,
agrarian crisis and globalisation
Fraser Sugden – International Water Management
Institute, Kathmandu

2. Introduction
• Ethnic politics since 2007 – driven a federal agenda for
a post conflict constitution in Nepal.
• The unrest has reached its peak in the last stages of the
constitution drafting process over the monsoon of
2015.
• Analysis of ethnic politics in Nepal is however often
flawed:
• Identity understood as an end in itself – rather than being
part of a larger struggle for resources
• Studies on ‘political economy’ of Nepal often conducted in
isolation from changing trends in the political sphere post
2006.
• Critical need for a new approach to understand ethnic
politics through the lens of political economy
• Ethnic unrest and political change in Nepal’s Tarai
Madhesh – complex interaction

3. PART 1: Rise of ethnic politics in
Tarai-Madhesh
Photo: Fraser Sugden/IWMI

5. Background to a crisis
• 1960-1990: Panchayat system: One country one nation
policy, led by absolute monarch
• Solidified the economic, political and cultural power of the hill
castes
• 1996-2006 People’s war. Addressing the ‘national
question’ as part of the Maoist agenda following decades
of unitary rule.
• Post 2006 constitution drafting –
• Perception of broken promises amongst ethnic minorities by
Nepali congress led government
• Particularly in the Tarai amongst the two majority ethnic groups
Madheshi and Tharu.
• 2007 and 2008 Madhesh Andolan
• Reaction against the interim constitution which was perceived
to not address ethnic demands
• Sought to place federalism on the political agenda - including
demand for a Tarai state.
• Rise to power of Madhesh based political parties

6. Background to a crisis
• 2008 Constituent Assembly 1 election
• Success for parties sympathetic to ethnic federal agenda (Maoist
and Madhesh based parties)
• Addressing federalism issue was key task for the new
constitution
• 2009 Tharuhat movement
• Exposed complexities in Tarai ethnic politics
• Tharu minority demanded rights separate from Madheshis
• 2012 dissolution of Constituent Assembly
• Primarily due to failure to reconcile demands for ethnic
federalism by Maoists and ethnic parties with the mainstream
political parties
• 2013 Constituent Assembly 2 Election:
• Fragmentation and factionalism amongst Maoists and Madheshi
parties weakened their political power
• Restored majority of mainstream centrist parties (NC/UML) - set
the stage for a backlash

7. Background to a crisis
• 2015 earthquake and agreement to ‘fast track the
constitution’
• Withdrawal of Maoists from former alliance with ethnic
based political outfits – and forging of new links with the
mainstream centrist parties.
• The monsoon uprising
• Demands of Tharu and Madhesh based parties and earlier
agreements overlooked in new constitution
• Promulgation of new constitution on Sep 20th amid
uprising in Tarai-Madhesh
• Border blockade by protestors and Indian involvement.
Fuel shortage and impending humanitarian crisis.

8. Points of disagreement in
constitution
Most of the disagreements are over clauses in the
interim constitution which have been changed, or past
agreements with ethnic activists which have been
overlooked
1. Proportional representation: reduced % of PR seats
and inclusion of quotas for dominant community
2. Electoral constituencies not in proportion to
population – leaving Tarai under represented, and
realignment every 20 years rather than 10 years.
3. Reactionary citizenship provisions and creation of
two tiers of citizenship.
4. Delineation of provinces, with 12 out of 20 Tarai
districts merged with the hills. Earlier agreement was
for two Tarai provinces to ensure self governance.

9. Purpose of this paper
• Not an analysis of the constitutional debate, or of the
Indian involvement
• Seeks to engage with the political economy and shifting
class relations within the largely agrarian Tarai-
Madhesh region to understand current political
trajectory
• Unfortunately there has been a tendency of scholars
and civil society to shy away from an economic analyses
of the current political juncture.
• Perception that a class approach cannot comprehend the
more complex category of ‘identity’.
• By some on the left, there has been a derision of ethnic
movements in Nepal as being led by local landed elites,
claiming it fails to address the aspirations of the poor from
multiple ethnicities.
• The links between ethnic and class based inequalities
are complex, but emerge from the same political-
economic conjuncture

10. Approach
• The Tarai Madhesh can be viewed as part of two
overlapping social formations
• Nepal: a relatively recent ‘political’ amalgamation of diverse
cultural, ecological and agrarian zones, unified under a
centralised state.
• Mithilanchal: a cultural and agro-ecological region split
between Nepal and Bihar, with a shared history.
• Both social formations are home to multiple ‘modes of
production’ articulated in a complex yet functional
unity.
• Ethnicity is one among many contradictions within
these social formations, and in Nepal, it has long been a
vehicle through which existing modes of production
and political alliances are reproduced and transformed.

11. Methods
• This study is an amalgamation of multiple sources, following
a decades’ work in the plains of Nepal and Bihar.
• The primary data source on agrarian change is two large
random surveys on agriculture and livelihoods.
• CCAFS survey in 2013: 427 households in Bihar’s Madhubani
district, Nepal’s Dhanusha district Morang district.
• SRFSI survey: 809 households in Bihar’s Purnea and
Madhubani district, and Nepal’s Dhanusha and Sunsari
district
• Data from qualitative interviews with 127 women farmers in
Madhubani (India), Saptari and Dhanusha (Nepal)
• 51 FGDs and interviews for both studies covering
agricultural, labour, climatic and political change

12. Kathmandu
Tibetan Autonomous
Region
Nepal
Survey sites
Darbhanga
Madhubani
MITHILANCHAL
Bihar
Janakpur
Biratnagar
Purnea

13. PART 2: Evolution of modes of
production in Mithilanchal
Photo: Fraser Sugden/IWMI

14. Evolution of modes of production in
Mithilanchal: 15th to late 19th century
• Madheshi heartland between Koshi and Bagmati river:
Feudalism had its origin in centralised state formations
and caste hierarchy.
• Petty kingdoms of the medieval period home to Hindu castes;
• Sen Kingdom and then Gorkhali kingdom, both with Mughal
influenced tax collection apparatus
• Conquering rulers propped up local tax collecting class –
emergence of local zamindars.
• Channeling of surplus to the centre through hierarchy of
intermediaries with control over land and sharing of surplus
between local landlords and state.

15. Evolution of modes of production in
Mithilanchal: 15th to late 19th century
• On Tarai forest frontier, adivasi modes of production
retained relative autonomy until late 18th century
Gorkhali conquest, after which state intervention led
to subjugation to feudalism
• Distribution of land grants to elites from hills
• Clearing of forest land and disruption to shifting cultivation
(jhum)
• Creation of intermediary/landlord class within tribal social
structure, breaking redistributive mechanisms
• Feudalism entrenched across the Tarai by the time of
the Rana regime in 19th and early 20th century.
• Primary flows of surplus were between the Tarai and
Kathmandu – through land tax.
• Intensification in distribution of land grants

16. Ethnicity and class under Ranas
• While Rana era centralization of power, set the state for
future ethno-regional inequalities, ethnicity itself as an
ideology did not play a critical role in the Rana political
project.
• Rana pragmatism: As in the British empire to the south (and
earlier Mughals), Ranas harnessed the political authority of local
elites as tax collectors, giving them local level power over the
peasantry.
• Creation of tribal functionary class in adivasi regions
• In Madheshi regions, Ranas propped up local upper castes to
collect tax, or invited landed families from as far away as Bengal to
take up these roles.
• These local zamindars encouraged further migration from India to
settle their estates and join the burgeoning class of Muslim, caste
Hindu and indigenous farmers who sharecropped their land.
• Hill nobility who received land grants however, possessed
some of the largest estates, particularly in the adivasi areas,
where local opposition was weaker

17. 20th century: Ethnic politics from above
• Early 20th century: ‘Centralized’ to ‘decentralized’
feudalism
• New sources of revenue through taxing trade
• Land tax became negligible source of revenue
• At a local level, landlord-tenant relations became the
primary form of surplus appropriation.
• Return of Shah kings under Panchayat system in 1960s
• New sources of wealth accumulation through foreign aid
and tax on imported goods in an expanding market
=> new measures to restrict access to state power and
resources in the centre
• Ultra-nationalism was central to Panchayat political project,
facilitating concentration of economic and political power
amongst dominant Nepali speaking community

18. 20th century: Ethnicity as a new tool for
feudal reproduction
• New definition of national identity
• Citizenship laws and language policy perceived to
discriminate against Madheshi and Tarai adivasi
communities.
• Migration from the hills, especially in adivasi regions
• Not direct disenfranchisement, but unequal opportunities.
• Creation of loyal political base in adivasi regions, and
emergence of cities such as Biratnagar as ‘outposts’ for
Kathmandu political elite.
• Land reforms in 1960s:
• American anti-communist pressure; ideology of modernization;
desire by the state to seek moral legitimacy
• In Tarai, led to the disintegration of estates of some zamindars,
• Didn’t affect larger hill origin landlords with political
connections. Greatest losers were the adivasi landlords

19. Photo: Fraser Sugden/IWMI

20. 1990s-2000s: Neo-liberal globalisation and
changing patterns of development
• Across Mithilanchal, there was significant expansion
of markets, monetization of the economy following
1990s economic liberalization.
• Greater regional disparities within Mithilanchal
throughout 1990s and 2000s
• Concentration of economic development in adivasi belt
of Morang-Sunsari
• Strong links to Kathmandu, high hill settler population,
powerful hill origin absentee landlords, and large captive
labour force of landless adivasi households.
• Economic stagnation in the Madheshi districts west of
Koshi, restriction of economic activity to highway belt.

21. Dhanusha image
Photo: Fraser Sugden/IWMI

22. Photo: Fraser Sugden/IWMI

23. 1990s-2000s: Changes in mode of production
in Madheshi heartland
• Rise in absentee landlordism as landlords sought
opportunities in urban centres or India.
• Break in ideological ties and bondage between landlords
and tenants
• Blocked development of mechanization and irrigation as
landlords reduced their contact with tenants
• Declining in size of landed estates:
• Distance from market centres and economic stagnation
led to sales of land perceived to have little value, often
to local large farmers.
• Fragmentation of holdings amongst sons

24. • Only in some pockets such as the Koshi floodplains, did
the local landlords retain their past political and
economic power and their large estates – as in Bihar.
• In most regions such as Dhanusha and Siraha, a shift
towards ‘petty feudalism’ and small scale peasant
production
• Still large population of indebted and marginal tenants
– but largest landowners are now local large farmers
• Extract surplus through rent, labour and usury, yet have far
more limited power than the zamindars who preceded them.
• Expansion of markets and rising cost of living not
matched by an increase in industry and local
employment opportunities, leading to huge out-
migration – articulation of modes of production
1990s-2000s: Changes in mode of production
in Madheshi heartland

25. Thadi jijha image
Photo: Fraser Sugden/IWMI

26. Consolidated power of middle farmers
% of land belonging to households with 1 - 2ha (NSCA)
0
5
10
15
20
25
30
35
1971-2 1981-2 1991-2 2001-2
Sarlahi Mahottari Dhanusha Siraha Saptari

27. 1990s-2000s: Perpetuation of feudalism in
adivasi belt
• In Morang-Sunsari (and much of West Tarai), hill origin
landlords retained vast estates, managed via kamtiya.
• As with landlords in Bihar, these landlords had access to
state power
• Political influence to avoid land reform legislation.
• Source of revenue to expand holdings
• Concentration of industry and commerce in this belt
gives landlords desire to hold on to estates.
• As in Madheshi heartland, ideological ties have
weakened as this group is primarily absentee. However,
core relations of production remain feudal. Patron-
client relations with tenants through political party
apparatus.
• Articulation of modes of production, in which poor and
tenant farmers work simultaneously in capitalist sector
while sharecropping for landlords - sharing of surplus

28. Sitpur, Morang
Photo: Fraser Sugden/IWMI

29. Rising land poverty
% of land owners, landless and tenant households in
east and central Tarai (NLSS)
% part or pure
tenant, 44
% renting out land,
8.8
% owning land, 72.9
% landless, 27.1
0
10
20
30
40
50
60
70
80
90
100
1995/6 2003/4 2010/11
%

30. 0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
1971-2 1981-2 1991-2 2001-2
Sarlahi Dhanusha Mahottari Siraha Saptari Sunsari Morang
Morang
Sunsari
Sarlahi
Dhanusha
Mahottari
Siraha
Saptari
Tenancy continues to increase in adivasi regions
% of land under tenancy (NSCA)

31. 0
5
10
15
20
25
30
35
40
Madhubani Purnea Sunsari Morang Dhanusha
landless labourer tenant part tenant
landowner <0.5ha landowner 0.5-1ha landowner 1-2ha
Agrarian structure in 14 village study (2013-
15)
INDIA (Bihar) NEPAL Tarai (ADIVASI)
NEPAL Tarai
(MADHESHI)

32. 0
10
20
30
40
50
60
70
80
90
Madhubani Purnea Sunsari Morang Dhanusha
% area under tenancy
% area under tenancy in 14 village study
(2013-15)

33. Charting trajectory of political
mobilisation and change
Photo: Fraser Sugden/IWMI

34. Political awakening: 1990s-2000s
• While inequalities persist, the breaking of ideological
ties with landlords and increased exposure to outside
world due to migration, has contributed to a political
awakening across Mithilanchal in both Nepal and Bihar.
• Maoist ‘People’s War’ from 1996-2006, generated
support of land poor tenants and labourers across the
Tarai, particularly in adivasi regions, where largest
landlords were present.
• Rise of populist caste politics in Bihar to the south had
challenged authorities of caste and class and increased
the assertiveness of peasants – with an impact across
the border.
• Across Mithilanchal, most past struggles have been on
class lines – so how does one interpret the shift to
ethnic mobilisation?

35. How to interpret shift towards
ethnic politics?
• The 2007, 2008 and 2015 Madhesh Andolans, and
associated Tharuhat movements can be read as an
outcome of the earlier class based movements.
• Convergence between class and ethnic demands in
adivasi belt:
• Not just a particular class, but an entire ‘mode of production’
was subordinated to feudalism
• Destruction of adivasi landlord class and increased control of
land by politically powerful absentee landlords from the
dominant hill community.
• The Tharuhat movement in West emerged in this context
• However, the focal region of the recent movement has
been the Madheshi heartland, where inequalities are
primarily within the ethnic group.

36. 1. Decline in the power of the Madheshi
landlord class
• The Maoist movement precipitated the further selling
off of estates by large Madheshi landlords
• Dilution of some of the old axes of inequality has
opened new avenues for class alliances, as the
contradictions between marginal/tenant farmers and
medium/large farmers decline.
• Class nature of Madhesh movement
• The increasingly small Madheshi landed elite themselves play
a marginal role in the movement
• Strong representation of Madhesi middle castes, mostly from
middle and large farmer background, although Tharus, and
Dalit marginal and tenant farmers have backed protests during
this movement, and earlier andolans.
Photo: Fraser Sugden/IWMI

37. 2. Agrarian crisis
• Just as there have been changes in the structure of the
landlord class, an agrarian crisis has unraveled over the
last decade. Has affected entire agrarian sector.
• Climate change:
• Increased unpredictability of monsoon onset
• Rise in extreme precipitation events (droughts and floods) and
extreme heat events (cold spells and heatwaves)
• Breakdown in state services
• Unequal terms of trade for agriculture, with economic
liberalization and spiraling rise in price of inputs.
• Rising cost of living
• Increase in food costs
• Increased monetisation of the economy as markets expand.
Rising demand for cash, inflated dowry demands.
Photo: Fraser Sugden/IWMI

38. Irrigation as an ‘adaptation’ strategy limited by energy and
institutional constraints
Photo: Fraser Sugden/IWMI

39. 2. Agrarian crisis
• Has precipitated growing articulations between feudal
and capitalist economic formations.
• Marginal and tenant farmers:
• Increased vulnerability to usury
• Greater participation in capitalist labour market through
migration for menial work abroad and in Indian cities
• Feminisation of production and associated stresses
• Medium and large farmers
• Low profitability of agriculture and inability to develop
productive forces on farm
• Preference to invest funds not in agriculture but in education of
youth, who compete for limited opportunities.
• Burgeoning population of educated unemployed – who in many
ways are the forefront of the movement
• Crisis affecting all segments of farming population,
allowing class alliances for greater regional autonomy

40. 3. Centralisation of resources and new
forms of feudalism
• Weakening of class inequalities within farming population is matched
by intensifying regional disparities in distribution of resources
• Neo-liberal cultural and economic globalisation has strengthened the
comprador bourgeoisie and dependence of Nepal on imports.
• Rising consumerism
• Huge decline in Tarai industries. In Morang-Sunsari (40 units closed from
2009-14), and complete closure of factories in towns such as Janakpur.
• New sources of revenue for political-bureaucratic elite
• Taxation of imports; Cartels in service delivery and goods distribution.
• Manpower sector which absorbs a portion of migrant labour income
• Foreign aid
• Patron-client based political party system
• Mediates distribution of resources at a local level, yet also facilitates
concentration of resources in regions where political power is channeled –
such as Kathmandu and other centres of political power.
• Stakes in the struggle for resources between regions likely to be significant in
the context of a federal set up.

41. Concluding thoughts
• Ethnicity has a complex relationship with political
economy – but is nevertheless one mechanism through
which existing socio-economic fault lines are reproduced
• In adivasi regions, a more clear cut link between historic
ethnic privilege/discrimination and economic inequality
in agriculture. Persisting semi-feudalism, despite the
presence of industry and infrastructural ‘development’
• In Madheshi regions, agrarian class hierarchy is present,
yet it has declined significantly. Convergent interests
amongst richer and poorer farmers, and between
Madheshi and adivasi communities in context of
agrarian crisis, climate change and growing regional
disparity.
Photo: Fraser Sugden/IWMI

42. Thank you… Email: F.Sugden@cgiar.org
Photo: Fraser Sugden/IWMI