|
CONTRACT/
CORPORATE SECTOR FARMING POLICY
TAMILNADU
FOR THE DEVELOPMENT OF FRUITS & VEGETABLES.
Introduction:
1.
India is predominantly an Agriculture economy and food
production accounts for 26% of India's GDP . Agriculture
accounts for more than 60% of employment. Agriculture
has been growing at 3.3% compared to Industry's 7.5%
a year. India stands second in Fruit production after
Brazil and also second in vegetables production after
China. Thirty three million tonnes of fruits and 70
million tonnes of vegetables are produced in India with
a global market share of 11% and 17.5% respectively.
The fruits and vegetables are processed to an extent
of 1 to 2% in India, compared to 70 to 80% by the developed
countries. The Government of India is offering many
incentives for the food processing industries treating
it as a thrust area.
2.
79% of rural population contribute to the development
of Agriculture. The urbanization process has resulted
in migration of rural people to the urban areas for
non-farming activities. Tamil Nadu is the second most
urbanised State next to Maharashtra. The inequilibrium
between the industrial and agricultural wages causes
unrest and frustration which manifests in the form of
societal violences. The expanded urban markets require
agriculture products especially fruits and vegetables
in a fresh or in a processed form.
3.
Tamil Nadu with its different agro climatic regions
is historically well suited to produce different varieties
of fruits and vegetables in large quantities. Around
5.5 million tonnes of fruits and 5.7 million tonnes
of vegetables are grown in 4 lakh hectares in Tamil
Nadu. However, due to inadequate linkages with markets,
fruits and vegetables produced in abundance during seasons
do not realise the value for the farmers. There are
a large number of intermediaries who deny value to both
farmers and consumers. Inadequate linkages also lead
to loss of large quantities of fruits and vegetables.
4.
Out of the 11 million tonnes of fruits and vegetables
grown in the State, around 25% to 30% are wasted due
to lack of post harvest and proper storage facilities.
In this connection Government of Tamil Nadu has commissioned
a project through ATO-DLO, Netherlands for identifying
critical gaps in linkages between the farm and market
in respect of 6 prominent fruits and vegetables of the
State for setting up commercially viable value added
centres for taking care of post harvest, grading, packing,
cold storage, logistics, etc. ATO-DLO team has observed
that
The
production of fruits and vegetables takes place mainly
in small and marginal holdings. This results in the
production of many varieties, large variation in quality
etc.
For some products the production costs are relatively high, for example potatoes
Crop rotation is often not what it should
be to keep the soil fertile and healthy. Crops grow
too often on the same piece of land. This might lead
to collapse in the future.
Many pesticides and fungicides are used.
One of the reasons for this is the above-mentioned
problem in crop rotation.
More attention is paid to yield than
to quality or to reduce pesticide applications.
5.
Agriculture and Industry have been conventionally viewed
as separate sectors in respect of their characteristics
and their role in economic growth. This view is however
getting changed. Agriculture as a form of industry
is developing different resources integrated activities
through modern technology/mechanisation/scientific farm
management etc. resulting in high productivity, minimum
wastage, better quality, competitive price etc. Fragmented
land holdings, lack of capital, poor infrastructure,
inadequate information dissemination are the main constraints
which can be overcome by a cohesive system with strong
linkages among research, infrastructure, private sector
and the farming community through contract farming system
for the production and marketing of fruits and vegetables
in the State. Industries engaged in Food processing
have been very keen to undertake large scale Horticulture
crop production either through their own farms or leased
land.
6.
The State Government is keen to facilitate more investments
from the corporate sector into this high potential area
so that upgradation of technology, inflow of higher
investment and introduction of modern management practices
are possible. The Govt. held discussions with corporate
groups who made the following suggestions:-
7.
After considering the various aspects, the Government
of Tamil Nadu has decided to adopt the following policies:
INFRSTRUCTURE
DEVELOPMENT:
(
I ) EXEMPTION FROM LAND CEILING ACT:
a)
OWNED LAND: The state Govt. would consider favorably
the request for exempting any industrial or commercial
undertaking , holding or acquiring any land in excess
of the ceiling area under Sec.37-A of the Tamil Nadu
Land Reform(Fixation of Ceiling on Land) Act 1961 on
a case to case basis with a view to promoting
cultivation of fruits and vegetables by industries which
are engaged in the business of value addition viz. grading,
packing, distribution, storage etc. Any land held on
lease for development of (commercial crops) agro industry
will also be eligible for exemption. However, no permission
will be required for Government land held in lease.
The permission will be for a minimum period of 10 years
and subject to the maximum of thirty years.
b)
DEGRADED FOREST LAND: Based on the the Government
of India’s guidelines issued recently the degraded forest
lands, reserved forests, as well as other forests can
be allotted for the development of plantations on public,
private partnership / joint ventures basis. The State
agencies / corporations or State forest departments
can seek the permission from the State Government for
the use of the land on a long term lease basis after
selecting and earmarking such areas suitable for this
purpose.
The
proposed structure for this joint venture shall enable
the Government / Corporation or agency to retain the
ownership / title of the land and put to use as per
the plantations project of the corporate body / private
sector in which the Government agency/ Corporation shall
manage the plantations and the other party shall fully
bear the cost of inputs, i.e. necessary for plantation
maintenance, commission to Government, if any, etc.
Under this structure, the corporation / agency of the
Government shall maintain an optimum stock of plantation
and guarantee a minimum quantity of usufructs for supply
to the corporate / private sector. The private sector
provides the entire financial and technical inputs in
lieu of this. The Memorandum of Understanding or a
joint agreement can contain the provision for arbitration,
crop insurance and other general issues. Thus a highly
efficient public / private sector partnership for the
use of the degraded forest lands for the beneficial
economic use can be achieved. The entire project shall
require the prior approval of the Government of India
on a case to case basis.
The Government of Tamil Nadu will encourage
and support all initiatives based on the above model.
(II
)DEVELOPMENT OF WASTE LANDS (NON-FOREST).
Out
of 1.5 million Hectare of non forest waste land in
the state, 1.37 million Hectares are identified as cultivable
lands. The cultivable waste land or poramboke land including
lands in hill areas which are owned by the Government
will also be made available for the purpose of developing
agro based industry (development of commercial crops).
The lease period for the cultivable waste lands/poramboke
lands etc. shall be provided for the above activities
for a minimum period of 10 years upto a maximum period
of 30 years on a case to case basis.
(III)
STATE GOVERNMENT SUPPORTS
a)
POWER TARIFF: The
industries involved in the processing of fruits and
vegetables shall be levied industrial tariff as per
the prevailing norms and classifications. Industrial
feeder lines may be provided on priority basis, wherever
possible.
b)
CAPITAL SUBSIDY:
Capital subsidy will be granted to fruits and vegetables
industries upto 20% of the fixed assets subject to a
ceiling of Rs.20 lakhs. The following items will also
be considered as fixed assets in addition to the fixed
assets already defined:-
I.
Green house structure
II. Irrigation
and Fertigation equipment
III. Cold
room, grading /packing room and mobile refrigerated
truck /equipment.
IV. Mother
planting material in Tissue Culture units & nurseries
c)Sales
Tax
Sales
tax as applicable to fresh fruits and vegetables will
apply to packed fresh fruits and vegetables whether
branded or otherwise.
d)
Pollution clearance charges:
Exemption
will be granted from payment of the charges of Rs.10,000/-
(Rupees ten thousand only) per annum levied by the Tamil
Nadu Pollution Control Board for clearance of setting
up of the units.
e)
Industry Status:
The
following industries involved in the production of fruits
and vegetables shall be given industry status for the
purpose of availing of concessions/incentives/subsidies
at par with the industrial units.
o
Fruit & Vegetable processing including
dehydration, irradiation, distillation and fermentation,
etc. value added centres including grading, sorting
and cleaning, individual quick freezing (IQF) and preservation,
etc. of fruit and vegetable in fresh form for export
/ domestic market.
Cold chain, cold storage systems used for transport
and storage of agro based products
o
Processing of aromatic, herbal, medicinal
plants and their oils and sericulture
Tissue culture units and nurseries involved in
the propagation of mother planting materials for the
production of fruits and vegetables
o
Hybrid seeds production for Fruit &
Vegetable
8.
OTHER SUPPORTS:
Government
Institutions will be requested to extend priority to
give financial assistance for the projects:
A)
Depending on viability, priority will be given in granting
financial assistance to purchase refrigerated trucks
for carrying the fruits and vegetables from the farm
to processing units, marketing centres / sea & air-ports
for export, etc. by TIIC and from State and Central
sponsored schemes.
b)
Govt. through
its agencies will liaise with Financial Institutions
and facilitate grant of Financial assistance for establishing
value added centers for grading, packing, distribution,
cold storage etc.
9.
LEGISLATION SUPPORT:
Government
will come forward with a legislation with a view to
promote production of fruits and vegetables and aromatic,
herbal, medicinal plants and sericulture through contract
or corporate farming which will provide for early settlement
of disputes between farmers and promoter / promoters
by providing for an arbitration machinery and other
relevant matters connected with contract farming.
10.
TECHNOLOGY DEVELOPMENT CENTRES
Government will encourage private sector to establish
technology development centers in order to disseminate
modern technology/processing methods etc to the field
level.
11.
PROSPECTS
It
is expected that above measures will increase the Fruits
& Vegetable production and result in the rapid development
of Agro Processing / Food Industry in the State which
will enable the achievement of multiple goals viz. Rural
industrialisation, provision of high quality food products
to the consumers, drastic reduction in the post-harvest
losses of Agricultural-Horticultural products, increased
exports and employment generation.
Report visit Tamil Nadu by ATO-DLO and CHIPL
15th
of June –22nd of June
Marlies
Jonker (ATO-DLO)
Department
Marketing & Logistics
6700
AA Wageningen
The
Netherlands
Phone:
+31.317.475095
Fax:
+31.317.475347
Observations
of the project-team of ATO-DLO during their visit to
the state of Tamil Nadu. are as follows:
1.
Production
The production of fruits and vegetables
takes place by of many small farmers. This results in
the production of many varieties, a large variation
in quality etc.
For some products the
production costs are relatively high, for example potatoes
Crop rotation is often
not what it should be to keep the soil fertile and healthy.
Crops grow to often on the same piece of land. This
might be collapse in the future.
Many pesticides and fungicides
are used. One of the reasons for this is the above-mentioned
problem of crop rotation.
More attention is paid
to yield less to quality or to reduce pesticide
2.
Markets
Major part of the production
of fresh fruits and vegetables is destined for the domestic
market. Major reasons for this:
-
No export facilities
-
Supply by many small farmers: no homogeneity
in quality, variety etc.
-
Quality does not fulfil requirements out of the
market
-
High transport costs
Only a few products like
mango, onion and chillies are exported. However countries
of destination are limited as most of the export finds
their way to the Gulf-countries and Singapore.
The wish exists to expand
the export to the European market.
Fluctuating prices: supply-demand
market
Farmers have no direct
relationship with retailers. The role of the middleman
in the supply chain is huge.
Distribution of fresh fruits and vegetables
takes place through small retailers. However, the number
of supermarkets in a few larger cities in Tamil Nadu
increases (for example Foodworld). The increase in supermarkets
can have a positive influence on the chain configuration
(for example Foodworld contracts farmers directly) and
the product quality.
3.
Transport and Infrastructure
The quality of the main
roads is quite well. Farmer roads are often in a poor
condition.
Most of the transport
is by road. Transport by train is less common.
The costs of transportation
are relatively high (share of the transportation costs
in the total costs of a product is high).
Refrigerated transport
is scarcely.
Transport is often outsourced.
A few cold storage facilities
are available for longer storage periods (especially
potatoes, tamarind, dried chillies). Facilities for
pre-cooling are not available.
The traders mainly do
storage of the product. Farmers cannot store the product
as they often need cash for procuring inputs for their
next crop. In this way traders make the money.
4.
Product quality
Quality of the products
varies from good to poor. There is no uniformity.
Quality standards do
not exist. Most of the time no grading is carried out.
For export, but also for a stronger market position
it will be important that products of trustworthy quality
standards are supplied.
There is no quality control
system.
High residues of pesticides.
This might give problems for export.
Some farmers are aware
of the pesticide problems and apply organic farming.
Knowledge of post-harvest
treatments, storage and physiology is not very high.
For example farmers have the idea to solve the problem
of oversupply of tomatoes by storage. They are not aware
of the fact that it is impossible to storage tomatoes
for a longer period than two weeks.
5.
Packaging
No uniformity in packaging.
Packages used are baskets, wooden crates, gunny bags
For perishable sensitive
products these packages are damaging.
For export it is important
to improve and develop good carton boxes.
Introduction of a fustsystem
is only possible at closed distribution chains.
6.
Products
Products
selected for the VAC-project are mango, banana, grape,
tomato and onion. At this moment the 6th
product to be selected for the project is not yet known.
Potatoes are not selected as the area under cultivation
declines very fast. Many farmers switch from the production
of potatoes to the production of perennial crops like
tea. Tea is a profitable crop.
Mango
Tamil
Nadu produces a big volume of mangoes. Quality of the
mango varies from good to poor. Furthermore many mango
varieties are grown in this state. Although the world
market is very competitive, when requirements can be
fulfilled, there will be possibilities for some varieties.
At this moment mango is mainly exported to Gulf countries.
The wish exists to export also to European countries.
A lot has to be reached on maturity, grading, post-harvest
treatments, and packaging.
Banana
Like mango
big volumes of bananas are produced in Tamil Nadu. Also
here quality as well as quantity vary. Due to oligopoly
on the world market (Chiquita, Dole) it seems to be
impossible to export big quantities. Possibility to
serve niche markets with red bananas might be a chance.
Grapes
Production
of grapes is also of importance in Tamil Nadu. The expectation
is that there will be a possibility to export grapes.
This due to a window on the world market. Grapes can
be stored for a longer period.
Tomato
Tamil
Nadu has a large production of tomato. An important
problem for this product is the oversupply in the peak
season and as a consequence the fluctuating prices.
As it is not possible to store tomatoes, under the right
conditions, for a period longer than two weeks extension
of the supply period is no solution. Export possibilities
to European markets seems to be unrealistic. During
summer the Northern European countries produce a lot
of tomato. During wintertime Southern countries are
on the market.
Onion
Another
important crop in Tamil Nadu is onion. In general the
smaller onion varieties are grown in this state. Besides
domestic consumption onions are exported to the Gulf-countries
and Singapore.
7.
Remarks
Most
heard remarks during the visit are summarised below:
Need of cold storage
facilities to deal with oversupply
Need of processing facilities
to handle oversupply
Need for an information
system – mainly price information to react adequately
to variations in price on different markets
Need for guidelines (quality,
how to find new markets etc.) to set up and to stimulate
export
Need for a system of
minimum prices
Observed
by the project team:
It was perceptible that
many of the persons we met tend to look at the supply
chain in a supply driven way in stead of in a demand
driven way. Requirements out of the market often are
not taken into account.
Less initiative is undertaken
by the private sector itself. One take the view that
the government is responsible.
8.
Further progress of the project
From
the signing of the agreement the duration of the project
will be 18 months. During this period a techno-feasibility
study for the redesign of the supply chain of fresh
fruits and vegetables is carried out. The project consists
of 3 phases namely:
Phase I
: Inventory and Analysis
Phase II:
Redesign of the supply chain
Phase III:
Implementation plan
The
first phase will take six months. The deliverable of
phase I will be a report consisting of:
A short but clear description
of the present situation in the supply of fresh fruits
and vegetables (six selected products);
A checklist of the major
improvement areas /opportunities;
A marketing study to
identify potential product-market combinations;
Recommendations for phase
II in which we will come to a redesign of the supply
chain.
During
phase I the team of CHIPL is responsible for collecting
the data in India. The team is guided by the ATO-DLO
who already prepared questionnaires. The ATO-DLO is
responsible for editing and analysing the data and for
the writing of the report. Furthermore, gathering information
on world level is also the responsibility of ATO-DLO.
Report visit Tamil Nadu by ATO-DLO and CHIPL
15th
of June –22nd of June
Marlies
Jonker (ATO-DLO)
Department
Marketing & Logistics
6700
AA Wageningen
The
Netherlands
Phone:
+31.317.475095
Fax:
+31.317.475347
This
document summarises the most important impressions and
observations of the project-team of ATO-DLO obtained
during their visit to the state of Tamil Nadu. During
this visit the districts of Chennai, Salem, Dharmapuri,
Erode, Coimbatore, Ooty, Dindugal, Madurai, Tirunelveli
and Tuticorin were visited. The organisation of the
programme was carried out by the TIDCO.
For
this report different subjects are identified. The subjects
are as follows:
1.
Production
2.
Markets
3.
Transport and Infrastructure
4.
Product Quality
5.
Packaging
6.
Products
7.
Remarks
8.
Further progress of the project
9.
Production
The production of fruits and vegetables
takes place by of many small farmers. This results in
the production of many varieties, a large variation
in quality etc.
For some products the
production costs are relatively high, for example potatoes
Crop rotation is often
not what it should be to keep the soil fertile and healthy.
Crops grow to often on the same piece of land. This
might be collapse in the future.
Many pesticides and fungicides
are used. One of the reasons for this is the above-mentioned
problem of crop rotation.
More attention is paid
to yield less to quality or to reduce pesticide
10. Markets
Major part of the production
of fresh fruits and vegetables is destined for the domestic
market. Major reasons for this:
-
No export facilities
-
Supply by many small farmers: no homogeneity
in quality, variety etc.
-
Quality does not fulfil requirements out of the
market
-
High transport costs
Only a few products like
mango, onion and chillies are exported. However countries
of destination are limited as most of the export finds
their way to the Gulf-countries and Singapore.
The wish exists to expand
the export to the European market.
Fluctuating prices: supply-demand
market
Farmers have no direct
relationship with retailers. The role of the middleman
in the supply chain is huge.
Distribution of fresh fruits and vegetables
takes place through small retailers. However, the number
of supermarkets in a few larger cities in Tamil Nadu
increases (for example Foodworld). The increase in supermarkets
can have a positive influence on the chain configuration
(for example Foodworld contracts farmers directly) and
the product quality.
11. Transport
and Infrastructure
The quality of the main
roads is quite well. Farmer roads are often in a poor
condition.
Most of the transport
is by road. Transport by train is less common.
The costs of transportation
are relatively high (share of the transportation costs
in the total costs of a product is high).
Refrigerated transport
is scarcely.
Transport is often outsourced.
A few cold storage facilities
are available for longer storage periods (especially
potatoes, tamarind, dried chillies). Facilities for
pre-cooling are not available.
The traders mainly do
storage of the product. Farmers cannot store the product
as they often need cash for procuring inputs for their
next crop. In this way traders make the money.
12. Product quality
Quality of the products
varies from good to poor. There is no uniformity.
Quality standards do
not exist. Most of the time no grading is carried out.
For export, but also for a stronger market position
it will be important that products of trustworthy quality
standards are supplied.
There is no quality control
system.
High residues of pesticides.
This might give problems for export.
Some farmers are aware
of the pesticide problems and apply organic farming.
Knowledge of post-harvest
treatments, storage and physiology is not very high.
For example farmers have the idea to solve the problem
of oversupply of tomatoes by storage. They are not aware
of the fact that it is impossible to storage tomatoes
for a longer period than two weeks.
13. Packaging
No uniformity in packaging.
Packages used are baskets, wooden crates, gunny bags
For perishable sensitive
products these packages are damaging.
For export it is important
to improve and develop good carton boxes.
Introduction of a fustsystem
is only possible at closed distribution chains.
14. Products
Products
selected for the VAC-project are mango, banana, grape,
tomato and onion. At this moment the 6th
product to be selected for the project is not yet known.
Potatoes are not selected as the area under cultivation
declines very fast. Many farmers switch from the production
of potatoes to the production of perennial crops like
tea. Tea is a profitable crop.
Mango
Tamil
Nadu produces a big volume of mangoes. Quality of the
mango varies from good to poor. Furthermore many mango
varieties are grown in this state. Although the world
market is very competitive, when requirements can be
fulfilled, there will be possibilities for some varieties.
At this moment mango is mainly exported to Gulf countries.
The wish exists to export also to European countries.
A lot has to be reached on maturity, grading, post-harvest
treatments, and packaging.
Banana
Like mango
big volumes of bananas are produced in Tamil Nadu. Also
here quality as well as quantity vary. Due to oligopoly
on the world market (Chiquita, Dole) it seems to be
impossible to export big quantities. Possibility to
serve niche markets with red bananas might be a chance.
Grapes
Production
of grapes is also of importance in Tamil Nadu. The expectation
is that there will be a possibility to export grapes.
This due to a window on the world market. Grapes can
be stored for a longer period.
Tomato
Tamil
Nadu has a large production of tomato. An important
problem for this product is the oversupply in the peak
season and as a consequence the fluctuating prices.
As it is not possible to store tomatoes, under the right
conditions, for a period longer than two weeks extension
of the supply period is no solution. Export possibilities
to European markets seems to be unrealistic. During
summer the Northern European countries produce a lot
of tomato. During wintertime Southern countries are
on the market.
Onion
Another
important crop in Tamil Nadu is onion. In general the
smaller onion varieties are grown in this state. Besides
domestic consumption onions are exported to the Gulf-countries
and Singapore.
15. Remarks
Most
heard remarks during the visit are summarised below:
Need of cold storage
facilities to deal with oversupply
Need of processing facilities
to handle oversupply
Need for an information
system – mainly price information to react adequately
to variations in price on different markets
Need for guidelines (quality,
how to find new markets etc.) to set up and to stimulate
export
Need for a system of
minimum prices
Observed
by the project team:
It was perceptible that
many of the persons we met tend to look at the supply
chain in a supply driven way in stead of in a demand
driven way. Requirements out of the market often are
not taken into account.
Less initiative is undertaken
by the private sector itself. One take the view that
the government is responsible.
16. Further progress
of the project
From
the signing of the agreement the duration of the project
will be 18 months. During this period a techno-feasibility
study for the redesign of the supply chain of fresh
fruits and vegetables is carried out. The project consists
of 3 phases namely:
Phase I
: Inventory and Analysis
Phase II:
Redesign of the supply chain
Phase III:
Implementation plan
The
first phase will take six months. The deliverable of
phase I will be a report consisting of:
A short but clear description
of the present situation in the supply of fresh fruits
and vegetables (six selected products);
A checklist of the major
improvement areas /opportunities;
A marketing study to
identify potential product-market combinations;
Recommendations for phase
II in which we will come to a redesign of the supply
chain.
During
phase I the team of CHIPL is responsible for collecting
the data in India. The team is guided by the ATO-DLO
who already prepared questionnaires. The ATO-DLO is
responsible for editing and analysing the data and for
the writing of the report. Furthermore, gathering information
on world level is also the responsibility of ATO-DLO.
1)
Government of India, through the Ministry of Food Processing
Industry, have accorded the highest priority for promotion
of Food Processing Industries and a number of promotional
schemes, for the public, co-operative private and joint
sectors, have been formulated by the Government of India.
2)
Tamil Nadu, due to its unique agro-climatic conditions,
is a major producer of a number of agricultural, horticultural
and plantation crops. It is the largest producer of
Coffee, second largest producer of fruits and vegetables,
a major producer of coconuts, spices and flowers and
a significant contributor to the national production
of rice, maize, jowar and a number of food and other
crops.
Investment
Agriculture being subject to the vagaries of nature,
the return on investment could be inadequate. Depending
on the availability of water, commercial crops could
be grown to make agriculture operations economically
viable. The return on investment cannot be as attractive
as that in industry, but the primary objective should
be to carry on agricultural operations and augment
the income of the company by simultaneously resorting
to other allied activities -- dairy farming, poultry,
piggery, khadi and village industries etc.
Since corporate bodies are in a position to achieve
commercial objectives better than individual entrepreneurs,
they could be encouraged to take to agriculture as a
commercial proposition. By commercialisation of agriculture,
one does not suggest that cultivated land already in
the possession of ryots and landlords be taken away
from them and handed over to corporate bodies for carrying
on agricultural operations. The scheme is to persuade
successful entrepreneurs to float companies with the
primary goal of running agricultural farms on poramboke
land and land which is unused.
Constraints
There are, perhaps, several constraints in implementing
this project. But they can be overcome with mutual
understanding between the Government and private entrepreneurs.
Tamil Nadu, for instance, has vast tracts of land, arable
or otherwise, lying unused. The Government could provide
big blocks of unutilised land. They could also carry
on any agricultural operations such as forestry, horticulture,
etc.
the
situation has to be remedied, industrialists should
come forward immediately to help in transforming the
agricultural economy of the country leading to (1) full
employment in villages and (2) provision of minimum
basic necessities to the rural population within the
shortest possible time.
Agricultural holdings will remain intact and will not
disintegrate with the passing of generations. Agricultural
operations will thus be carried on in a most economic
and profitable manner. This might be an example for
land-owners to join together and develop agriculture
on commercial lines.
A direct result of corporate farming will be to provide
employment to agricultural graduates turned out by the
agricultural universities to lend a professional touch
to farm management.
In addition, new avenues would open up for employment
of the rural folk in organised sector. The backward
classes, Scheduled Castes and scheduled Tribes, whose
services are greatly utilised in agriculture, will have
protective employment leading to an improvement in their
living conditions. With opportunities for a better
life, there would be security of employment, health
and educational facilities and a general upliftment
in their social status.
The proliferation of corporate farms will also provide
an infrastructure for the development of various khadi
and village industries, thus arresting the exodus of
rural people to the cities.
The adoption of modern techniques and improved methods
of agriculture would inevitably result in increasing
the purchasing power of the rural people which, in turn,
will generate a market for various goods produced by
the industries. If, as a result of rural demand and
consumption, there is a tendency for a rise in prices,
it would be a mere temporary phase before parity sets
in between urban and rural economic standards.
There could, however, be various hurdles in implementing
such a scheme. Ceiling laws might pose a major problem.
This could be overcome by suitably amending the Land
Reforms Act so that land held by companies in which
the State or Union Government has equity participation
could be exempt from the provision of the Act.
Entrepreneurs should also participate in this scheme in
their own interest. As Clement Attlee said: "If
a free society cannot help the many who are poor, it cannot
save the few who are rich".
It may be asked why commercialisation of agriculture
should be left to corporate bodies? Can it not be done
by co-operative or individual ryots?
Individual ryots may not have resources or access to
new methods of agriculture to bring about the desired
results. The functioning of Co-operatives in the country
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