Harvesting Profits: Exploring the corporatization of Indian agriculture

Lynn Rita Shmitt

TYBA

India, with an impetus to be a developed country, is still an agrarian society where the majority of the population thrives on agricultural occupations.  According to the Economic Survey Report 2022-23, the growth rate of agriculture fell to 3% in 2021-22 from 3.3% in 2020-2021. The decrease in public-sector investments in agriculture, adverse climatic conditions, fragmented landholdings, unprecedented outcomes and increased input costs are debated as reasons for the declining trend in agricultural growth rate from the late 1990s. 40% of farmers in India do not like farming and encourage their children to opt for better employment. The promise of development enabled corporates to acquire land from rural areas which resulted in the growth of non-agricultural GDP yet the employment rates haven’t profited rather has declined due to the increased mechanisation and advanced technologies. According to National Sample Survey Office data, during 2004-05 and 2011-12, around 34 million farmers moved out of agriculture. With climate change, the increase in frequencies of natural disasters, and a push by the State to increase employment in non-farm sectors, the numbers will only increase. 

The agricultural extension services by the Public Extension System refers to the act of educating farmers on the application of scientific knowledge and adaptation of modern technology to improve the productiveness of agriculture and income of the farmers. India saw the beginning of this system in the 1860s with the help of few philantropists and has gone through an evolutionary process to adapt to the need of the hour. Undertaken by the State, the agricultural extension service introduced various programmes over the years to create rural employment, proposing a better standard of living and income through provision of resources and infrastructure required for greater production rate of agriculture. However, as the farming communities across the country have various socio-economic backgrounds, crops and geographical locations, the extension system by the central government fails to adequately address specific farmer’s needs. India, having the largest extension system has to work out an alternative for the mounting budgetary crisis and fiscal deficits. Thus, privatisation sets foot in to curb the inefficiency of the nation-state to provide for the heterogeneous farming systems in the country. 

 

The 1960s saw the country’s drive to alleviate poverty and feed its people through aid from industrialised countries and technological advancements. The Green Revolution can be defined as the beginning of the corporatization of agriculture in India. It helped the country transform from a food-deficient country to the largest agricultural nation. The project aimed to increase agricultural production through science and modern methods like high-yielding variety seeds, irrigation facilities, pesticides, tractors, and fertilisers. While the revolution saw an increase in the food supply of the country and major profits for the farmers, their livelihood converted from that of subsistence farming to commercial farming. Although the green revolution helped in improving the grain exports of the country, the benefits of larger production were only evident in regions concentrated with better resources. This led to interregional disparities wherein states like Haryana, Uttar Pradesh and Punjab profited due to their infrastructural facilities in comparison to the other states which did not benefit much from the program and are still prone to famines. The marginal farmers, which accounts for 85% of total farmers, fail to meet the financial requirements to buy the advanced technologies which pushes them behind in the race. It also resulted in the elimination of the knowledge of indigenous crops and its nutritional benefits from the future generations in the race to produce more yields. The HYV seeds required a lesser amount of time frame of approximately 120 days to reach harvest due to its genetic modification as compared to the traditional grains which took 180 days or more. This resulted in more grains per year and greater preference for the HYV seeds.

 

Opening up our economy in the 1990s resulted in the increase of participation in the farming sector. Liberalisation allowed competition in the agriculture field and promoted contract farming. The agrarian distress influenced the government to  encourage contract farming and land leasing agreements to pull in private sector investments and enhance the agriculture industry to relax its burden of subsidies for the farmers. Agriculture Produce Marketing Committee (APMC) laws regulate the fair trade between buyers and sellers to ensure transparency and discover the effective price of farmer’s produce. Eyeing the agri-business, corporate houses are entering into extension services, farming activity and R&D. Amendments in the APMC Act by the State government allows direct exchange between the farmers and agri-business companies paving the way for contract and corporate farming. Intending to make more capital, private investors demand that the farmers grow high-value cash crops to quench the growing demands of national and foreign urban consumers in return for guaranteed direct purchase of the produce and predetermined monetary benefits. Contract farming is the agreement between the private investors and farmers to grow a specific seed at a certain quantity of a certain quality for a priorly agreed rate. It helps to maintain the corporate control over raw materials and a secure market for the farmers. Contract farming also helps the farmers to reduce costs due to the lack of transportation and bypassing mandis as mediators between the farmers and the traders. This leads to greater backing for farming of fruits, flowers and vegetables as they have greater demand in the international market which threatens food crops and the government’s food management system and eventually the food security of the country.

The corporatization of agriculture is strengthened through the policies of the government with the impression of reducing the government’s input subsidy. To protect the rights of seed breeders and the right to gene pools of new varieties of seeds, government policies have attracted private investors. With amendments in agricultural acts, the policy has allowed the seed breeding agencies to retain the right to sell, buy, barter, import or export to only those who are accredited with the agencies. This in turn leads to the complete ownership of seeds by the corporate houses rather than the farmers, making them dependent on the seed breeding companies. Agriculture then becomes a capitalist system where the land property, resources and labour are controlled and distributed by private investors in a way to make a profit.

 

Development through globalisation and liberalisation has resulted in mixed effects on Indian agriculture. Although we see the rise in production rate, the Indian farmers have been adversely affected by the lack of public investment in agriculture. Marginal and small-scale farmers face the worst effects due to the easing of trade laws consequently increasing social inequality. The neglect of the government in the field of agriculture is to be pointed out as agriculture embodies a crucial role in the Indian economy. The insufficiency in adequate policy making regarding the farmers and their livelihood will also result in an economic crisis and collapse of the food distribution system in the future years. 

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