Indian agriculture is passing through a critical phase. Farmers are facing problems related to crop production, marketing and profitability. The new farm laws may enhance farm productivity, but these are bound to change the prevailing system. The ownership farming system is prevalent in Punjab, Haryana and other states as owned land forms a major part of operational landholdings. The model of the Green Revolution (GR) improved the economy of the farmers, but later their economic condition started deteriorating, along with the depletion of natural resources and environmental degradation. Capital-intensive technologies reduced work opportunities on the farm for labour. Globalisation policies pushed farmers into debt, depeasantisation and suicide. Every day, 28 farmers/farm labourers commit suicide (according to a report of the National Crime Records Bureau) and about 2,400 leave farming in our country. In Punjab, every farmer family has an average debt of Rs 10 lakh. On an average, two farmers and one labourer have been committing suicide daily since 2000.
Of the 10 lakh farming families in 1991, about 5 lakh were small ones in Punjab. In just a decade, the number of these small farming families came down to 3 lakh. Under the capital-intensive system of farming, 2 lakh families had to give up farming in the state. In contrast, the number of small farmers in India increased from about 11 crore to 12 crore during the same period.
The GR model pushed many farmers out of agriculture. But it is believed that the new farm laws would push even greater number of farmers out of agriculture. What would these farmers do? It is expected that the farming population is likely to move in the same direction as during the GR period. Studies found that small farmers in Punjab were pushed out of agriculture due to crisis-induced factors such as low crop productivity, crop failure and high living costs. In contrast, some large farmers left agriculture due to growth-oriented factors and joined remunerative occupations. About 40 per cent of the marginal farmers (owning up to 2.5 acres), after leaving farming, joined the labour market. A small portion of them became farm labourers, while a large chunk commute to nearby cities for work. Similarly, 23 per cent of the small farmers (owning 2.5-5 acres) became labourers after quitting farming. The transformation of farmers into labourers is considered to be a misfortune in the socio-economic and cultural milieu of Punjab. About one-fifth of the small farmers who quit farming started their own petty occupations. About 3 per cent of the farmers started selling their vegetables or opened shops in the village. Some started earning a livelihood as mechanics or skilled workers. Around 7 per cent of the farmers started dairy or animal trading after quitting farming. None of the small farmers entered the dealer or arhtiya (commission agent) business, while some large and medium farmers went that way. Small farmers also quit farming because they got employment in the government or the private sector. Some middle and large farmers settled abroad. After leaving farming, some people sold a part or all of their land and many began to make a living by selling their land or by renting it out. Many people took up an activity after quitting farming, but failed at it and then started another activity. Even now, many people are dissatisfied with the new post-farming occupations. In such a situation, it is imperative to keep people engaged in farming.
In the new farm policy paradigm, contract farming under the aegis of corporate farming will be enabled with artificial intelligence, which would further reduce the demand for human resources. The condition of small-scale industries in the country and the state is deplorable. In Punjab, about 18,700 industrial units were shut down between 2007 and 2015. This phenomenon has led to an increase in unemployment as these units were mainly labour-intensive. It is believed that the new farm laws may land the peasants and other people in deep trouble and make them unemployed. In this situation, even the large farmers may be devastated by ownership farming. The market-oriented model propagates that growth can only be achieved by getting people out of farming. The National Skill Development Council suggested in 2015 that the overall development of the country could be achieved by reducing the farming population from the current 57 per cent to 38 per cent. It is being presumed that the productivity of the labour force in the agricultural sector is much lower than that of other sectors. The displaced labour force can be engaged in other areas for generating ‘surplus value’.
The question arises: why is the corporate world showing keen interest in Indian agriculture? The huge farm subsidies of the developed countries reduce the costs and prices of some crops. A major scarcity of foodgrains is feared at the global level. Cereal crops are mainly grown in developing countries like India, whereas horticultural crops are predominantly cultivated in developed countries. The World Food Programme received the Nobel Peace Prize in 2020 for distributing food among 10 crore hungry people in 88 countries. This shows that there is a big role of food in the economy. That’s why corporates have been trying to gain control over agricultural production and markets.
Under the Essential Commodities (Amendment) Act 2020, the oligopolistic market would be developed in which a few companies may control the food market. The higher prices of these commodities, especially of processed products, may adversely affect consumption by labourers in general and the poor in particular. Four companies — ADM, Bunge, Cargill and Dreyfus — control the bigger part of the world’s agri-business. These companies have plundered the world’s farmers and consumers through contract farming and agri-business.
The new farm policy regime is different from the GR model. While the GR model ensured control only over the farm input market, the new farm laws would allow corporates to establish control over both the farm input market and the farm output market. In the GR era, the small peasantry was eventually pushed away from agriculture. In the process, the small farmers joined as wage labourers, whereas the large ones joined lucrative occupations. But it is likely that the new farm policy would push small as well as large farmers towards wage labour.
In an agrarian economy, it is important to keep people engaged in agriculture. The prospects of gainful employment in most other sectors of the Indian economy are dismal. Therefore, the emphasis should be on the promotion of cooperative/state farming. Micro and macro-level planning of crop production and consumption requirements should be prepared. The backward linkages (farm inputs) and forward linkages (processing and value addition) of agriculture should be set up in the public domain. This would generate ample employment opportunities in the rural areas. So, the need of the hour is to initiate reforms for improving the livelihood of the peasantry.
The author is Principal Economist, PAU, Ludhiana
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