Non-farm employment and social customs hold the key to agricultural reforms

The same article also stated, “Some states, particularly Punjab, may enjoy high levels of agricultural-growth-driven prosperity and equity if adults who leave agriculture are not successfully absorbed by other productive sectors.” If it goes, then the problem of stagnation may have to be faced.” (bit.ly/3xc2lNn)

The abrogation of three agriculture laws announced by Prime Minister Narendra Modi last week was a sudden reversal of the government’s stand. As mentioned in our March article, the debate on agricultural reforms is often overlooked, but here it is: the success of any effort to reform the agricultural sector in India will largely depend on the non-state of its economy. . Agricultural sectors as well as social culture.

The fall in the level of income is painful for the poor as well as the rich. Most of today’s ‘rich’ farmers, who have benefited from Indian agricultural policies, including the current system of offering Minimum Support Prices (MSP), are rice and wheat farmers, especially in Punjab, Haryana and western Uttar Pradesh. They fear that a change in price guarantees for rice and wheat, whose production far exceeds demand, resulting in massive surpluses, would make a fall in prices inevitable. If this happens, farmers will be unable to maintain their current income levels and lifestyles.

Think about the following analogy, even if it is not a perfect match: Would it be possible to tell India’s public sector employees that neither their pay level nor their salary increase could be assured by the government, and That both will now depend on their work performance. , Should we be surprised if an employee backlash emerges? Are we able to implement performance-based pay system in the public sector?

To sustain their current lifestyles, India’s ‘rich’ farmers must find alternative sources of income, an effort that will involve women and younger adults in paid working farmer families. There is one more catch. Given the social conditions on the ground, resuming paid work by women withdrawing from the workforce would indicate a decline in social status, something that would be considered culturally unacceptable.

In 2018-19, data shows that only 12-13% of adults in the age group of 20-59 years were involved in agricultural activities in Punjab and Haryana. This is the lowest ratio among all the major states, except Kerala. In 2004-05, 32-35% of this age group was involved in agriculture in these states. The dramatic decline in agricultural employment in these states appears to have been attributed to two factors, both of which were sustainable if farm incomes remained high.

Firstly, only 5-7% of women (in the age group of 20-59) reported being employed in agriculture in 2018-19, a drop of almost 30% within a period of 15 years. There has been little growth in the proportion of women employed in non-agricultural work. Higher agricultural incomes have, in fact, allowed women to return to their homes.

Second, higher agricultural income means that around 28% and 34% of young men (aged 20-29 years) may remain unemployed or in education in Punjab and Haryana respectively in 2018-19. Fifteen years ago this ratio was around 12-14 per cent.

There is one more concern. If more family members also want to work, is the economy generating enough jobs? Even as almost three-quarters of India’s working-age women are not looking for paid jobs, unemployment among men, especially among young men in most states, exceeds double digits, accelerating over the past 15 years. and the same ratio is still at a high level. Education after the age of 20, as we noted in an article earlier this month. (bit.ly/3CzOwJL)

An obvious question that arises is why did the poor farmers not protest? While this may seem surprising in the beginning, the fact remains that the poor farmers of Punjab and Haryana have not benefited as much from the country’s agricultural policies, including the system of MSP. In fact, if they had little to gain from the status quo, they would have little to lose.

Today’s poor farmers may be better able to understand the benefits of agricultural reforms, especially if these are implemented with the establishment of Farmer Producer Unions. Better price-negotiating power with better warehousing and marketing facilities, lower commissions for middlemen and higher corporate investment in supply chains can be major benefits.

There is no doubt that agricultural reforms in India are necessary to uncover the true potential of the agriculture and agro-processing industry and for efficient allocation of private and government resources. It is absurd and unimaginable for any other industry to overestimate prices and supplies, both of which see sustained growth, as seen in the case of foodgrains such as wheat and rice.

However, any effort to reform agriculture in India will yield positive results only if sufficiently high-paying jobs are created in the non-farm sectors and/or women resume paid work. There may be other prerequisites for successful agricultural reforms, such as better irrigation and a better functioning agricultural insurance market.

An invisible trade-off is a powerful but neglected idea. The repeal of agricultural reforms is a prime example of the country’s failure to recognize and reduce invisible trade-offs.

Vidya Mahambare is Professor of Economics at Great Lakes Institute of Management, Chennai.