Of late we are facing a lot of inflation in food prices. Also, the farming business is tough but not too remunerative leading to poverty in rural India. Farms are small and scattered, the framers often debt ridden and in drought prone areas like UP, Maharashtra etc. cash is hard to come by and most of the rural community remains mired in abject poverty. What should be done about it?
One, looking at the larger picture, agriculture contributes
only 5-6 % to the World GDP. Prior to the Industrial revolution, agriculture
might have been a prime source of GDP along with natural resources. But
nowadays it is value added goods and services which fetch a premium or profits.
Commodities have base level pricing and so also the remuneration. Even in India,
even though 50% of the population is engaged in agriculture, it contributes
only 18 – 20 % to the GDP. In developed economies like the US or the EU,
agriculture contributes 1-5 % to the GDP. While agriculture will remain a core
sector as it meets the basic food need, but in a post industrial world farming
can never become the mainstay of any economy.
But despite employing only 1 -5 % of the population, EU and
US together produce the largest amount of food. What is their secret to
success? Basically they have mechanized large farms run on technical as well as
marketing know-how. Economies of scale play a big role and scientific farming
methods thus allow them to maximize productivity. In most of the developing
world, farms are small and scattered and agricultural practices are rudimentary,
basically dependent on the vagaries of nature. In China too which as a single
country has become the largest food producer, its success is owing to huge
state owned farms which are using scientific methods and machines to maximize productivity.
Its Heliogjiang province has been developed to this effect. So, large farms
using modern scientific methods are key to improving agricultural production.
Few centuries back when countries like the UK were also
rural and agrarian, Britain brought in some enclosure acts to amalgamate small farms.
At the same time, industrial revolution led to huge demand for workers in
factories and the farming population basically moved to industries.
In light of this, the SEZ policy announced by the government
is a step in the right direction – we set up industries in remote areas,
providing the hitherto rural population avenues for employment. And at the same
time, there ought to be some way of converting these tiny plots of lands into
large/ huge farms either run by cooperatives or move to commercial farming.
This is also critical not just to increase our food production and modernize
the rural population but also from the point of view of a critical commodity –
water.
Our ground water table is falling primarily due to overuse
in agriculture and water will be the most critical resource (world over
actually) in the 21st century. To optimize its usage and maximize productivity,
we need modernization of agriculture. Like the green revolution of the 60s, it
is time for a blue revolution in the farming sector.
It is time to focus on rural India and modernization seems
like the right way forward. Of course infrastructure development must go hand
in hand to do that. Lack of reforms in the agriculture sector is also a prime
cause of inflation especially in food prices. With 70% of the country still
rural and nearly half the population employed in agriculture, a restructuring
is required to keep pace with the needs of the 21st century. Simply
giving sops to farmers will not help. A complete rural restructuring will go a
long way in modernizing the sector and that will have far reaching consequences
for the nation in terms of poverty removal, tackling food inflation as well as dealing
with water scarcity.


