Farmers, like migrant labourers, need more organised support – Here’s what govt can do

The farmer, thus, gets access to a steady income source and is no longer exposed to the risk of low output and weather-related crop losses.

By BS Sivakumar

To give a fillip to the agriculture sector amid the gloom of the coronavirus-induced lockdown, the government has rightly announced a spree of reforms, including additional funds and loans for farming and allied activities and a proposed deregulation of the sector.

The amendment to the Essential Commodities Act to deregulate the prices and sale of cereals, edible oils, oilseeds, pulses, onions and potatoes will help farmers get deserving prices for produce. Post-harvest, surplus leads to a fall in prices. During the off-season, vegetable and fruit prices rise, which hurts consumers. The amendment of the Essential Commodities Act, if implemented properly, will help both farmers and consumers. It will not only save the grains that often rot in government godowns but also help in regulating prices.

Another big reform announced by the government is allowing farmers to sell their produce outside the Agricultural Produce Market Committee (APMC) markets and also the scaling up of the eNAM (e National Agri Markets) initiative. This will go a long way in reducing the control on farmers by the mandis and allow for a larger and more transparent price discovery mechanism and on-time payment to the farmers for their produce.

However, even as the measures announced by the government will help the agriculture sector, I believe, that our farmers, like the migrant labourers, need more organised support. The Covid-19 crisis may be the event to bring about this change. In order to help the rural economy get back to its feet, the government must provide structural reforms to the unorganised rural population. This comprises the unorganised labour in the industrial and service segments and the small and marginal landed and landless farmers.

Simultaneously, the key to increasing farm incomes would be through consolidation of farm holdings that would enable scientific farming and improve yields per acre of land. One way to do this is to allow farmers with small landholdings to lease out their lands to a consolidator or Farmer Producer Companies. In such a set-up, farmers would be entitled to a lease rental for their land and would get priority to work on the land for a monthly wage that should also be standardised under the minimum wages regime.

The farmer, thus, gets access to a steady income source and is no longer exposed to the risk of low output and weather-related crop losses. In return, the consolidator can bring in modern agriculture techniques, plan their cropping cycle and use high-yielding seeds and fertilisers to maximise crop yields. The lease arrangement should be for a minimum period of three to five years, and the consolidator must show improvement in the yields and be subject to inspection for maintenance of soil and water conservation.

Farmers, however, should never have to lose ownership of their landholdings. The government can also work in coordination with the consolidators to plan the crop acreage and decide on the MSP based on the total planned output of various crops and also ensure that the cultivator gets a fair return for their investment.

Excess farm labour should be identified, and skilling institutions be set up for their training, for jobs that are essential or are in demand. The landless labourers working on farms of landowners should be identified. Most of them are temporary and seasonal workers usually identified by the patwaris or panchayats. Initiatives should be taken for them to be able to join the MGNREGS with farm operations to provide more work.

A comprehensive database of farm and farm-less labour in terms of number and their skill sets is essential to put them to optimum and productive employment. This skilled labour can be used to expedite various infrastructure and capital development schemes of the government. This will ensure that labour does not migrate to the cities unless they have the requisite skills and can be linked to any company in the manufacturing or services sector. The organisation of labour is a critical reform if we are to avoid the pain of large scale migration that we saw immediately after the outbreak of Covid-19.

The author is President & key leadership team member, Kotak Mahindra Bank Ltd. Views are personal.