Nation needs small farmers. They are no waste contrary to the popular view that they are wasting their life on small farmers. Thus we may recall to facts about Indian agriculture.
(i) The share of agriculture in the nations GDP has come down from 56% in 1950 to 14% in 2011-12, but still lot more than half of the nations’ population lives on agriculture.
(ii) In the last 15 years more than a quarter million farmers have committed suicide which the policy makers are unable to face these two facts.
But the third fact-less know one that even by 2051 less half of India will live in Urban areas (Twenty-first century India, Oxford University Press) make a laughing stock of the current policies that assume rural India to be a passing phase India will then be a strange nation-an emerging global super power with majority rural population.
Thus, agriculture will continue to sustain more than half India even after four decades from now. These facts are a more trailer. If we look minutely at the anatomy of the Indian agricultural economy will show how the policy making, budgeting and national economic discourse are disconnected from reality.
Shortage of Labour:
Indian farming is fundamental for the food security of 120 crore peoples (Indian) projected to rise to 170 crore by 2061. No. country in the world has the land or labour to supply even a fraction of the food that India will need if it falls short in food production.
If we study minutely the
discussion paper No. 2 of National Commission for Agricultural Costs and Prices (December 2012) it stated that the cost of production of rice and wheat has gone up by 45% for three years to 2012-13 average of 15% every year. The main reason is raising of labour and energy costs sharply. Further it stated that shortage of labour has cropped up in the last three years.
The discussion paper stated that labour costs have gone up 100% in the last three years and margin of farmers have been declining for wheat and rice. This has led to average annual rise in procurement cost by 11% for paddy and 8.6% for wheat for five years from 2007-08 to 2012-13.
The rural employment guarantee scheme of the UPA Govt. has contributed to labour shortage and high labour costs in agriculture according to the reports.
Let us see how this scheme hits govt. finances twice over (i) employment guarantee handout costs the govt. over Rs. 40,000/- crore a year and it creates shortage of agriculture labour and pushes up cost and leads to higher procurement costs which pushes up food subsidies.
But according to the report of the Ministry of Rural Development (March 2012) gloats over the labour shortage saying that it will lead to technology advances is agriculture like it happened all over the world. If the look at the report of the working group on Agriculture to the Planning Commission (January 2007) would demonstrate hold absurd is such a comparison of Indian agriculture with the world’s.
Small is indispensable:
About 60 million small and marginal framing households (with over 33 crore dependents) cultivate 34% of the land and produce 49% of rice and 40% of wheat and over hair of fruits and vegetables. Their productivity is 44% more in rice, 18% more in wheat and 47% more in fruits and vegetables.
Their incremental contribution to national food production during the period 1971 to 1991 was 68% for rice, 48% for wheat – the incremental production of the resk medium and large farms, being just 32% for rice and 52% for wheat.
According to Global Studies (Dietrich Vollrath) May 4, 2004 it confirms that economies of scale do note operate in farming-small farms being more efficient than large ones. The Working Group also says that the small and marginal famers are certainly going to stay for a longtime in India-though they are going to face a number of challenges. Thus what happens to them larger implication for the entire economy and people’s livelihood? It is thus small farmer who is hit by labour shortage and higher labour costs caused by employment guarantee. He cannot go far mechanization. He can only give up farming.
Let us imagine that all small farmers are replaced by large ones, the oretically, rice production will instantly fall by 15% wheat by 6% and fruits and vegetables by 16%. Where will the nation go for food? Thus nation needs small farmers. They are no waste-contrary to the popular view that they are wasting their life on small farms.
According to Parliament’s 19th Standing Committee Report (April 2007), and NSSO Surve has revealed that some 71% of the farmers were unware of the Minimum Support Price (MSP) which the Govt. announce with great fanfare and 81% of those who have heard of MSP do not know how to use its. It is on the basis of these facts the Standing Committee recommended a ban on futures trading in food grains, on the farmers who are unware of MSP could hardly benefits from the price determination by futures market.
Under the changed economic environment rural and tribal market can be financially supporting units and source of income to finance further development activities.
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