Monday, May 19, 2008

Indian Farmer’s: The Way Forward

Indian Farmer’s: The Way Forward

India lives in its villages. The food factory of our country is located among millions of villages scattered across the length and breadth of “Bharat”. The tropical ecological conditions favour cultivation of a variety of crops. It is a commonly know fact that any increase or decrease in the GDP of the country is attributable to the dynamics that rural India goes through. Why then are farmers in India getting their children out of agriculture? Isn’t agriculture a viable activity? While one witnesses this migration of individual farmers from farming, a new revolution is shaping up around corporate agriculture.

Agriculture, especially sustenance agriculture has been plagued with various issues. They range from poor quality seeds/planting materials to inadequate labour and poor irrigation facilities. And finally when the harvest is ready, distress selling leaves the farmer with little gain. Why are these issues chasing the Indian farmer? Are these really issues? Aren’t there solutions?

If one was to analyse corporate farming vis-à-vis individual farming, the glaring weaknesses of individual farmers would throw up. Can a small farmer make realistic incomes by cultivating in 3-5 acres of land? While the corporate cultivates in large tracts and brings hundreds of acreage under cropping. Can farmers be aggregated to produce like a corporate? We have examples of contract farming unleashed by corporates, which has worked to the benefit of farmers (in cases where the corporate does not default on its promises of buy-back!). Majority of the cultivable land, still remains in the hands of the rich. The Bhoodan Movement, a non-violent, voluntary movement initiated by Sri. Vinoba Bhave led to voluntary transfer of excess land owned by the rich to the poor. What a simple innovation! Fear of loosing ownership prevents rich farmers from leasing land to the smaller farmers. India needs another innovation in land leasing to make available vast tracts of fallow land to the hard-working small and marginal farmers.

While corporates have started off with precision farming, irrigation continues to haunt small farmers. If Israel could make wonders out of its dry lands, can’t India do it? There are innovations in micro-irrigation systems which the state can promote. Interestingly many of these products have proved to be sustainable business models while creating lasting social impact. KB Drip has lower life than competing drip irrigation systems but is affordable at one-third the price of competition!

Farm labour is migrating to urban India for want of regular employment. This has negative consequences in cities. How can farm machinery and tools replace the migrating labour? Can small farmers buy these tools and machinery? No, they cannot. But yes, micro-leasing and rental models could play a key role in making these tools and machinery accessible for the small farmers.

Spot and futures trading of fresh commodities are now gaining popularity among farmers. These bring in transparent pricing and payments. Institutional Innovations such as “producer companies” are now a legally permissible form of business organization that permits farmers to engage in business of their fresh or processed produce.

Will India’s small farmer start leasing his land to corporates and make wealth out of rentals? Can corporations make agriculture competitive? Only time will tell!

1 comment:

Anand said...

Arun,
Great piece!
Anand