This article however was written in reference to Land Acquisition Bill, 2015; analysis given in this article on Agriculture as a sector of economy , fate of farmers in this country and possible solutions of reviving farming again as an affordable economic activity- makes it readable even today’s times.
There has been much clamor on government proposed new LAB (Land Aquisition BIll) in recent time. One dvantage this clamor has brought, is back of issues relating to agriculture as a sector & farming as an occupation, into prime notice of public and intellectuals. However, unfortunately present direction of debate in the issue is primarily emotional, politics-driven & factually-disabled rather than logical, rational & fact oriented (as it ought to be). Most of the discussions happening in this regard, are ignoring not only “Big Picture” of economy but intrinsic issues of agriculture being faced by farmers today.
Agriculture sector:Then & Now
India, traditionally, is believed to be an agricultural economy. Some economists say it is still the case while some reject it passionately. Why such a confusion on a fundamental idea like this ?? The answer lies in data. Agriculture as a sector contributes only 14% in GDP while engages 56% of the population of country. So productivity wise India is no longer an agricultural economy while employment wise it is still so. And here lies the great misery of both- the indian economy and agriculture sector. Economy suffers from hidden unemployment, loss of productivity & imbalance in allocaton of human resource across it’s sectors due to it. While farming due to burden of it’s excessive dependents, doest not remain economical, productive & profitable. There are offcourse other reasons as well, which hit farming; but this hits it hardest. While a distant tribe of 100 people, does not deploy 56 persons for preparing food while leaving only 44 persons for fulfilling other need of the community, as a civilised and advanced economy we must show maturity at this level minimum.
Farmers: Facing a double-edge sword
India is an unique part of land where farmer comes to same pathetic state – when there is no crop in the season & when his seeds do excessivelly well in field !! When crops get destroyed, it is quite understand-able that farmer gets setback because on non-recovery of the cost he has invested. But he returns to same fate when crops in field do well in general. Because in latter case farmers face ruthless law of demand & supply. Due to excessive supply while demand being as it is- grain prices drop. And again farmer finds it difficult to recover the cost, leave profit. There are largely three reasons behind this ironic condition:
Firstly, as indicated earlier, here in India 56% of people feed rest 44%. As a result market gets a type of “monopoly” over farmers, rather than farmers getting “monopoly” over market. Majority is an idea which may bring favour in politics, but in business it invites all un-fovourability.
Secondly, Our food supply chain is largely “local” in nature due to absence of basic infra. And with negligible storage infra, farming relies on instant demand-supply equations which adds to the crisis.
There is a third factor as well, we will discuss in next section.
Not only farmers but governments also finds itself grinding between two parts of a mill while dealing farmer’s issues. Because if it allows farmers to recover cost+ some profit, food inflation rises. A limitedly resourceful consumer refuses to pay for it. Following chaos of inflation,finally government has to intervene. Eventually it is farmers who get the load. And here is the third factor hidden, we indicated in previous section. As stated, unbalanced allocation of human resource hits national productivity hard. Less productivity brings less prosperity, less money to people. This in turn makes a weak consumer base for agriculture who can not afford higher food prices at times to let farmer recover his investment+ some profit.
The way for Resolution
First and foremost, we need to release pressure of excessive dependents on agriculture. This as explained earlier, will not only help agriculture sector alone but overall economy in terms of productivity, prosperity & richness. Now question arises- where to re-engage this released manpower. Answer is in indusries & enterprises. In increased industries. These increased industies will not only absorb the released manpower but also boost our national productivity & prosperity with making a more rich consumer base for agriculture as a by-product.
Secondly, agriculture can never be profitable and will never be unless there is good infrastructure to support it. Broad highways to connect farms to consumer centers, good and big enough cold stores to stock agricuture products, big canals to make irrigation reliable; along with a rich, resourceful consumer base who dosn’t mind to pay at times some extra notes to fulfill his need of stomach, to cover cost+ smart profit for farmers.
LAB in Scene
All above solutions require land. Land to develop supporting infra, to make roads, to make dams, to make canals, to make cold stores and as well to make industry. And LAB comes as a tool for that. LAB is not anti-farmer in any sense. Infact it is the only tool, with which existing problems of agriculture can be eredicated effectively. It as any life-saving medicine, may taste bitter initially, but will boost health of currently sick and over-burdened agriculture sector, in long run.