Does Contract Farming really help Farmer’s in 2021 | UPSC
Is contract farming in India really worth it?
WHY IN NEWS:
It is a novel idea; but in a country where the ruling class openly favours corporates, it could prove disastrous for farmers
SYLLABUS COVERED: GS 3: Agriculture
- Contract farming can be defined as agricultural production carried out according to an agreement between a buyer and farmers, which establishes conditions for the production and marketing of a farm product or products.
- 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.
- 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.
- The agricultural practice of cultivating more than one food grain in a single farm for retaining fertility of the land has been followed through generations.
- This development runs contrary to the attempts to maintain or switch to conventional or organic farming or cattle-based farming.
- Feeding India is a national and political obligation.
- Contract farming is a novel idea but its short term gains are far less than longer-term demerits.
SOURCES: DownToEarth | Does Contract Farming really help Farmer’s in 2021 | UPSC