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Opening up the Agriculture Sector: A New Approach to Help Our Farmers

By: Admin In: Agriculture Last Updated: 2015-06-19

In a country like India, which is widely identified as an agrarian economy, where the agriculture sector singlehandedly contributes about 12% to the GDP and 50% of the population is dependent on it for its livelihood, why is it that our farmers are perpetually in crisis? Even with thousands of organizations working for their cause and government offering them several subsidies and special welfare schemes, the number of farmers' suicides in the country shows no signs of declining. Several explanations are given by the incumbents and industry experts but the situation remains unchanged.Role of Agriculture in Indian Economy
So what is the way out? What can be done now that hasn't been done in the last 68 years? Famous author and columnist Chetan Bhagat in his blog for TOI suggested a campaign called 'Bake in India' (an idea derived from the campaign Make in India) to be introduced. He advocates that the Indian agriculture industry is a land of opportunities and should be opened up for global private players so that farmers can also reap the advantages of globalization. "The world needs food. We have the farmers. Can't we use this to create a Bake in India revolution?"

How can Opening the Agriculture Sector help the farmers and the economy?

  • After the reforms in 1991, India has welcomed global players into almost every field where they have brought about significant improvement in terms of quality of products and services at hand and also created job opportunities for our young professionals. The same can be done for agriculture as well.
  • This will allow farmers to establish direct links with MNCs which can buy their produce at fair prices, much better than the dirt cheap prices offered by middlemen. This way they can get to earn more, expand their business and reach out to a larger set of buyers.
  • Companies can collaborate with farmers and introduce them to better cultivation practices and help boost mechanization. This can be seen as an investment by the company as the produce will be sold to them.
  • Overall development in agriculture, which employs around half of our population, will lead to higher contributions in the GDP, higher per capita income, lowered disguised unemployment and in turn, economic growth.

What are the possible side-effects and challenges?
Every time there's a talk of letting in global players, heated debates in the parliament and on news channels sprout up, which is valid as an already distressed agriculture industry cannot afford more setbacks.Indian former watch the sky for rain

  • In opening doors to MNCs, there's a worry that farmers might be treated as nothing more than cheap laborers by these multinational giants and the seeds sown by them might be harvested by other countries.
  • Concerns are there for the consumers as well, particularly the middle-class who will bear the brunt of rising prices of food commodities.
  • Inclusion of small farmers in this process and giving them a fair share of the benefits would be a challenge. A change in policies should not mean an increased gap between rich and poor farmers and farm laborers.
  • Land acquisition laws have always been a bone of contention and will play a major role in how things work out for farmers as well as private players.
  • While many of these risks can be covered by pro-farmer laws, the same will also discourage companies from investing in this sector. And thusly, a balanced approach will be needed and laws will at least have to be not-anti-companies if not in their favor entirely.

The road ahead...
Currently, global players are allowed to deal in allied industries like food processing, fertilizers and agriculture services and machinery. But the farmers are still nowhere in the vicinity of this playing field. After the agrarian crisis in 1960s, Indian government emphasized the idea of self-sufficiency in food and was also successful in achieving it. But a sad fact of the matter is that we were never able to look beyond this. India has the second largest farm output in the world and hence, the potential to feed the world. To realize this potential, agriculture sector will have to open its doors for the world and also take a step outside its domestic boundaries.

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