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It is worth trying to encourage agribusiness and promote the corporate farmer
Posted On Sunday, March 14, 2010 at 09:54:05 PM
This year’s budget has also been presented with the usual hoopla. Corporate India has by and large welcomed it. The stock market rallied after the budget was presented.
The finance minister claimed in his speech, “This budget belongs to the aam aadmi. It belongs to the farmer, the agriculturist, the entrepreneur and the investor.”
But is this claim valid? A perceptive analyst who specialises in analysing agricultural problems has gone on record stating that “This is a budget crafted for and, perhaps not for the ordinary farmer, by the corporate farmer and agribusiness.”
A basic fact about Indian economy is that, even though in terms of the GDP services may be contributing more than agriculture or manufacturing, when it comes to employment, it is in agriculture that a large part of our population is employed.
From time to time there are also disturbing reports of suicides by farmers. The continuing migration of people from rural areas to the cities further underlines the poor prospects of agriculture as a profession.
Nevertheless, it is the millions of the toiling farmers who wrought the green revolution. But all that seems to be old history today. We still lag behind China in agricultural productivity.
What is worse, even though we produce more food grains, and perhaps, the largest quantity of fruits and vegetables, due to lack of proper infrastructure 10 per cent of our food grains and nearly 40 per cent of our fruits and vegetables are lost.
This loss is due to the lack of proper infrastructure and supply-chain facilities like cold storages as well as restrictions in marketing dictated by our government policies.
At the same time, some corporate houses are entering agribusiness, especially organised retail, in a big way. We still do not have a thriving agribusiness as in the West.
Another sad reality is that there is a vast gap between the price for agricultural produce received by the farmer and the price paid by the consumer. This margin is exploited by the middlemen.
One advantage of the corporatisation of agribusiness will be the improvement in productivity of the supply chain and reduction in the loss between the farmgate and the consumer. But will the farmer get a better price for his produce?
In the dairy sector, Amul achieved the White Revolution using the co-operatives as the main instrument to ensure not only improvement in productivity but also realisation of a better price by the producer.
Even if the criticism that this year’s budget has favoured agribusiness or the corporate farmer, from an objective point of view is it bad for the country?
What is the experience in the rest of the world about agribusiness? Has the interest of the primary producer been neglected? The very fact that the private sector operates on the principle of enlightened self-interest must act as a guarantee to ensure that the interests of the producers are not neglected.
Even if the government is accused of encouraging agribusiness, can’t the government fine-tune the policies to remove the element of exploitation?
That brings us to the basic question. Agribusiness is a part of the corporate sector. Is India Inc against the Indian people? Unless there is objective evidence that corporate India goes against the national interest even when one finds that the budget encourages agribusiness, can it considered as something undesirable or objectionable?
We have had the traditional form of agricultural production for generations.
Technologies like hybrid seeds and modern agricultural practices helped in the green revolution. Why not give a chance to corporatisation of agriculture as another way forward? After all, in practically in all the developed countries the population dependent on agriculture is less than 10 per cent unlike us where still 60 per cent find employment in that sector.
The time has come for a fresh look at agribusiness. If the budget helps the agribusiness so much the better. We must hope that the FM’s gamble pays off.
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