Does Contract Farming really help Farmer’s in 2021 | UPSC

• India’s agriculture sector makes a significant contribution to its Gross Domestic Product and provides livelihood for many millions of people.
• Agriculture is not only a means of trade and a source of livelihood, but is fundamentally associated with our culture.

• These new developments will set into motion an exodus from villages to cities.
• Contract farming will prove to be disastrous for the lives of millions of people in India who are associated with the agriculture sector.

THE DANGERS WITHIN

• CORPORATE ENTRY : Contract farming will give corporates an entry into the agriculture sector.
• LAND ACQUISITIONS : Corporates will proceed to aggressively capture new lands, thereby rendering many farmers penniless.

• LAND PRESERVATION : But a corporate that only intends to maximise profits and is engaged in contract farming, would least likely be interested in the preservation of land and soil.
• SUSTAINABLE DEVELOPMENT : Sustainable development is not on the corporate agenda.
• FOREIGN VARIETIES : Contract farming could entail foreign varieties being grown in India’s fields.
• NUTRITION CONTENT : For millions, locally grown varieties of crops have provided nutrition and sustenance for centuries.

• MECHANISED FARMING : Farms cannot operate without labour. However, mechanised farming will receive enhanced importance in contract farming, resulting in a decrease in the numbers of farm labourers.
• SMALL SIZED FARMS : The deployment of machinery in small-sized farms is uneconomic. But it would be the obvious option for a contractual farming agency possessing larger lands.
• RURAL UNEMPLOYMENT : Increasing rural unemployment would be the consequence.
• CONTRACTUAL COMPANIES COME ONLY FOR PROFIT : Farming becomes a business, not a way of life or a baseline that maintains the welfare and dignity of the family.
• SOIL FERTILITY : Corporates neither look after the farmers’ interests nor are interested in increasing the fertility of the soil.

• PROBLEMS FACED BY GROWERS : Undue quality cut on produce by firms, delayed deliveries at the factory, delayed payments, low price and pest attack on the contract crop which raised the cost of production.
• LACK OF ENFORCEABILITY OF CONTRACT : Contracting agreements are often verbal or informal in nature, and even written contracts often do not provide the legal protection in India that may be observed in other countries .
• MARKET MONOPOLY :  Single Buyer – Multiple Sellers (Monopsony) .
• ADVERSE GENDER EFFECTS : Women have less access to contract farming than men.

ANIMAL HUSBANDRY

• In India, agriculture and animal husbandry are complementary activities.
• Our economy, especially, the rural economy, is dependent upon both, agriculture and animal husbandry.

• They usually take their animals to the grazing lands of the village, vacant lands or farms owned by farmers.
• Arrangements exist in many places where cattle graze in farms and fertilise them with their dung.
• However, if farmers were to entrust their lands to somebody on a contract basis, livestocks will have no place to feed on.