August 04, 2021
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Corporatise Farming

In agriculture, there is a minimum critical size of land holding for farming to be productive and powerful. And that is not do beegha zameen Farmers need to pool their land together.

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Corporatise Farming

India, our text books and our netas have always told us, is a land of farmers. That is an incomplete sentence. The full sentence should read: India is a land of poor, impoverished, debt-ridden, marginal, no-hope-in-sight, exploited, driven-to-suicide farmers. 

Oh, to be sure, many people profess to be their friends and are apparently working to uplift their lot. Trillions of dollars have been poured, and continue to being poured, in schemes that are supposed to benefit the farmer. But the situation doesn’t seem to change. What gives?

It began, as most such things do, with the noble intentions of the government. It was called land redistribution. Millions of labourers became land owners in one of the triumphs of social justice. But, what should have been a first step was left as an end in itself. In this lies the story of their problems.

With an acre of land, or maybe a little more, the farmer never had a chance. He needed to make investments in seeds, fertilizer, water and power. Having no working capital, his only chance was to borrow the money. Even if he did, the resultant produce was never enough to take care of his living requirements and bear the interest burden.

Worse, very soon the already small holding got divided between the sons. This compounded the problem. Debts were not repaid, fresh investments could not be made and the productivity of the land kept going down. 

The collective turmoil was dealt with promises of free power, debt write-off, lower interest rates, and increased funds for debts. None of these have worked and none of them ever will.

In agriculture, there is a minimum critical size of land holding for farming to be productive and powerful. And that is not do beegha zameen. It runs into thousands of acres. The truly agricultural countries, the ones which produce far more per capita than us, are an example of what the land holding should be. 

So, how can that be achieved? Should land be taken back from the farmers? No, there is a way out. Farmers need to pool their land together. And this can be done only through "corporatising" farming. 

Let a corporate come forward and treat each acre of land as one unit of "share". Consider 1000 acres pooled together. It has a thousand 1-acre "shares" , and let’s say that the corporate "owns" another thousand "shares" for managing and running it. 

So, a farmer with one "share" owns one-two thousandth of the "company". This is equivalent to a person having, roughly, thirty three thousand shares of Infosys.

The farmer doesn’t give away his land. He retains it, gets "dividends" on it, sees its value rise and can trade it. Once we start farming in large units, new jobs open up in processing, storage, transportation. All of them will be around the farming areas, which are essentially villages. This will get employment down to the base of the great Indian pyramid and arrest migration to the cities. 

Farming on this scale can, and will, demand water and power on a sustained basis. It’ll be willing to pay for it as well. There will be savings in subsidies as they can be phased out confidently over time. 

This preserves the farmer’s land, creates economies of scale, increases productivity and creates jobs. This eliminates the annual sinking of billions of dollars into the black hole of subsidies, debt write-offs and the pockets of an unscrupulous few. This is how we can end the cruel inefficiency of 75% of population producing 25% of the GDP. This is how we can bring economic progress with the famous, but yet unseen, human face. 

This is the alternative. Not what we are getting.

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