Context- The economic calculus needs to shifts from ‘economies of scale with standardization’ to ‘economies of scope for sustainability’.
How farm productivity can be increased and what are the consequences of this?
The agriculture sector contributes 17 per cent of India’s GDP. As per estimate, about 57 per cent of the working population is engaged in agriculture.
According to economists the farm productivity can be increased by –
- India needs to shift from basic farming to more efficient, sustainable, productive farming.
- More technology and automation will be required to improve productivity.
- Reduce the number of employed– The agriculture sector should employ only 17 per cent of the workforce as to become more productive like other sectors.
Concern with such approach-
- Landholdings are too small for mechanization
- Mono-cropping– Mechanized farming will initiate mono-cropping, as mechanization requires standardization of work, which results in-
- Fluctuate the ecological balance.
- Reduced diversity of flora enables pests to spread more easily.
- Soil quality gets reduced and waters resources deleted.
Therefore, India must figure out a way to provide meaningful employment to hundreds of millions of people outside agriculture.
What is government’s contention with new farm laws?
- Farmers will get higher prices – These Acts are intended to empower the farmers and ensure doubling of their incomes.
- Provide wider markets for farm produce – The Acts will only increase options for farmers in the output markets.
- Connections into global supply chains can increase volumes of sales.
What are the major issues with new farm reforms?
- Promote corporate control– The farmers contend the federal government is making ready to withdraw from the procurement of food grain and hand it over to the company gamers.
- Will not have adequate pricing power-Small and marginal, would be left at the mercy of the corporates, with reduced collective bargaining capacity.
- Trade will always favour the larger players in the supply chains who have easier access to capital.
- Against the Spirit of Cooperative federalism– Since agriculture and markets are State subjects, the ordinances are being seen as a direct encroachment upon the functions of the States
What is the way forward?
- Experts from many disciplines must collaborate to find systemic solutions for low income in farm sectors.
- The intended beneficiaries of the new policies must be included in the designing of the new policies right at the beginning.
- Policymakers must listen to the institutions that represent small people — associations and unions of farmers, informal workers and small enterprises.
- Cooperative ownership and collective bargaining must be strengthened to give power to small farmers before opening markets to large corporations.