AGRICULTURE : ECONOMICS AND POLICY

1. C H A P T E R 3 AGRICULTURE:ECONOMICS AND POLICY

2. Chapter Outline: Causes of Low Productivity Per Acre 1 Remedial Measures 3

3. PROBLEMS OF AGRICULTURE SECTOR: • The problems of agricultural sector in LDCs are varied and complex. Low productivity cannot be attributed to any single factor. • Defective Land Tenure System:The land Tenure system of a country throws light on the relationship between land owners and cultivators. Such relationship between the owners and tenants is not very cordial and plausible. It is the tenants who cultivate the lands but the major share of the farm produce is taken away by the owners and landlords. In such state of affairs, the tenants do lose their interest in respect of cultivation and production. • in addition to this, because of greater role of natural calamities in agriculture sector and rapid increase of wages and incomes in the non-agriculture sector have shown a great resentment on the part of the poor cultivators.

4. Govt. Policies:The development of agri. Sector is based upon public policy and govt. priorities for agri. Sector. The farmers are complaining that agri. Sector has not been given due importance as least attention was paid on agri. Investment, availability of inputs, credit and intervention in agri. Markets. The role of support prices remained limited and it failed to benefit the small farmers as it is furnished with official formalities and corruption. In the presence of higher outputs the farmers get lower prices, while the advantage is taken away by commission agents and brokers. This means that the agri. Environment in the country is hardly been beneficial for the small farmers and govt. policies never supported the interests of small farmers.

5. Lack of agricultural credit:The availability of financial resources plays an important role in the promotion of agriculture. The farmer is in need of funds starting from preparation of land to purchase of inputs and finally to sale of outputs. The banks always hesitate to advance loans to farmers as because of lack of securities to pledge. It remained too difficult for the banks to recover the loans. • Natural Calamities:It is a bitter reality that the role of natural disasters and calamities is far more in agriculture as compared with other sectors of the economy. The floods, insects, shortage of water often affect out cultivated land.

6. Lack of infrastructure facilities:High agricultural productivity requires infrastructural facilities like roads and communication. If there are roads from the farm to the market, the farmers will bring the produce to the market otherwise the farm produce will be consumed at the village. Thus the farmer will not get good reward for his labour. Next time he will reduce his effort to produce only for himself.Again, If there are well communication facilities in the rural areas, the farmers will be able to talk to big traders. They will have access to the terminal markets where they will get fair reward for their produce. If they receive fair reward for their agri. produce, they will be encouraged to work hard next time. Unfortunately, in almost all of the LDCs, the infrastructure facilities are very low in the rural areas which directly contributes to the low productivity of the agri. sector.

7. Lack of Agriculture Markets:The major share of agriculture is based upon traditional and subsistence farming. The farmers, especially the small farmers fail to transport their agri. Produce in the big agri. markets of the country. The poor farmers have shortage of financial resources and they had borrowed from big landlords and commission agents, they are bound to sell their produce to these people. Because of shortage of means of transportation the agri. Goods are sold in the local agri. Markets which benefits the commission agents and brokers at the cost of farmers. It means that our agri. markets are imperfect they have benefited the stockiest instead farmers.

8. Lack of Agricultural research:it is the time of research & development and every country of world both poor and rich are making research in every field of life. The new techniques, new seeds and high yielding seeds are being invented and made popular but we lack agri. research facilities. The agri. universities and colleges do not make research to the desire extent. There is a big brain-drain of agri. Scientists. The agri. Institutions are prey to shortage of funds. This is the reasons the agri. scientists and institution have not been helpful in attaining self-sufficiency in agri. Sector.

9. Farmer’s Illiteracy:Our farmer is not only backward but illiterate also. He practices the traditional ways of farming. The modern farming is made by big land lords etc. all such may be attributed to non-availability of modern technology to farmers especially small farmers. Moreover, the farmers are reluctant to accept new changes. If, on the one side govt. has ignored them, then on the other side, they too are least interested to accept modern way of farming.

10. Sub-Division and Fragmentation of land:By Sub-Division we mean the division of land of forefathers amongst their heirs. Sometimes, it also happens when owners sell some part of their lands or may gift some part of their lands to their friends, relatives and charitable institutions. Thus the division of land in smaller parts is called sub-division.Fragmentation represents the situation where the land of an owner or the undivided family does not occur at the same place. As if 3 acres of land of any persons is situated at 20 different places, this would represent fragmentation of holdings.When the lands are subdivided and fragmented, the cultivators fail to cultivate the land diligently, can not introduce modern technology etc which has a sever negative impact on the agricultural production.

11. Inadequate irrigation facilities:-Water is an important input for agricultural production. The good agri. production is attained through giving a reasonable amount of water. In most of the LDCs water supply to the farms is mostly provided through canals. Such system of irrigation has worstly affected the health of soil. A greater seepage of water is observed resulting in water-logging as well as in salinity.In addition to canal system of irrigation, a fairly large number of lands have to depend upon “Rains” for water. The rains are uncertain. Sometimes they are in short, creating a lot of problems for the farmers – thus affecting the production. On the other occasions, there is an abundance of rains leading to the floods and affecting the production.Again, the water can also be obtained through tube-wells and water pumps but the poor peasants are unable to purchase them.

12. Soil Erosion:-Soilerosion is the loss of soil due to water movement. erosion occurs when excess rainfall move the top fertile soil of the land. Runoff occurs when rain falls faster than it can be absorbed into the soil. Runoff water carries soil particles into streams and rivers and cause the land barren for agri. Productivity. • Water logging and salinity:Land is like a producing unit. Every year a large area of land is affected by Water-logging and salinity. This is not only a national wastage but it also affects the productivity of land.

13. Non-agricultural use of cultivated land:in the recent years, investment in the real estate is considered very profitable. The agricultural lands are becoming the prey of the different housing schemes and colonies which is reducing the amount of the cultivatable land for agri. purpose. • Under utilization of cultivatable land:in almost all of the LDCs the cultivatable land is under-utilized or un-utilized. For example, Afghanistan has an area of 64.5 million hectares of extremely steep and mountainous land. Despite the fact that only 12% of its total area is cultivatable only 6% is currently cultivated and the remain 6% is not utilized for agri. purposes.

14. Inadequate supply of modern inputs:in agri. Development, the agri. Inputs like fertilizers, implements and insecticides play an important role. But in our country, the phosphorus type of fertilizers is not available on proper time. Rather, there is a big adulteration in fertilizers. The multi-national companies have monopolies over the sale of insecticide. They charge the prices whatsoever they like.In addition to fertilizers and pesticides, the availability of modern seeds and especially the High Yielding Variety (HYV) Seeds are very important for green revolution. the farmers fail to get fair amount of superior seeds.

15. Lack of Cold-Storages and Warehouses:Because of weak financial position the farmers are unable to construct the warehouses and cold-storages. They have to store their crops in their houses where they are at the mercy of rats and other insects – thus reducing their value. This situation rises particularly because of perishable nature of agricultural goods. If they sell their produce just after harvesting, they will not be able to get handful amounts against the products sold. The official Cold-Stores and warehouses are fore official stocks of wheat, rice, fruits etc. the private cold-storages facilities are very expensive and are beyond the range of small and poor peasants. In such situation, the incomes of the farmers remain low.

16. Lack of farm mechanization:Farm mechanization implies the use of mechanical technology in the varied farming operations like sewing, harvesting, thrashing, leveling, watering, spraying etc. farm mechanization bring more area under cultivation, save the farmer’s time for off-the-farm business like beekeeping, fisheries, livestock, timely water and spray etc which result in bumper crops. Unfortunately, in almost all of the LDCs the farmers are not in the position to mechanize the farm. • Lack of Health facilities in Rural areas:Most of the rural areas do not have any health facility therefore, when the farmers fell ill or their child or wife get ill they bring their patients to the cities where they stay for the patient recovery and due to which they are unable to pay attention to their field. Thus the lack of rural health facilities, the farmer’s productivity remains low.

17. Racial Disputes:The rural farmers are often found to be involved in racial disputes. Due to racial disputes they are often involved in criminal activities like blazing the crops of the rival farmers etc furthermore, they are unable to pay due attention to the farm productivity due to criminal suits they face in the courts.Furthermore, the amount of money they have and they can utilize for the farm mechanization or purchasing modern inputs is spent out in facing the criminal suits.

18. Measures to Solve Agri-Problems The following measures if implemented can greatly help in increase the Per Acre Yield of farm productivity. • Consolidation of holdings: • Improved quality of seeds • Credit facilities • Efficient marketing system • Supply of irrigation water • Modern methods of cultivation • Control on water logging and salinity • Farmer’s Education • Provision of transportation and communication • Research Facilities

19. Control of diseases • Govt. compensation in case of natural calamities • Govt. should provide subsidies on agricultural inputs.

20. Socio-Economic Change in the Rural Life:Most of the villages lack even basic amenities of life. This results in migration from villages to cities. If the same talented people had retained themselves in the villages, their contribution to agriculture would have been far greater. Accordingly, there is big need to retain such youth in the villages. For this purpose, the social and infrastructure amenities will have to be provided in the villages. The status of farming as a profession will have to be improved. An improved infrastructure and provision of basic education, health, communication and recreation facilities in the rural areas will help in preventing them from migration.

21. Thank You