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How to pull out indian farmers from red

N.Srinivasan 
on 11 May 2015

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For ages Indian farmers are suffering with the following multi-dimensional problems. One or the other pulls him to the quick sand. His efforts as well as the Government efforts did not bring desired results. Plan after plan for 60 years, Government talks and allocate funds for the agriculture. Still, why this malady of Farmers suicides?

Let us list out the basic causes and then analyse as to how Indi can overcome this issue.

1.Sub-division and fragmentation” of the farm land due to collapse of the joint family system

2.Disguised un-employment

3. Over dependence on monsoon

4. Un-economical land holding

5. Conventional methods

6. In adequate working capital

7. Dependence on money lenders and perennial indebt

8. Wrong crop patterns

9. Inadequate storage facilities

10. No capacity to withstand the natural calamities

11. Sale of agricultural land to real estate promoters

12. Poor availability of agricultural labourers due to inadequate compensation

13. Do not attempt soil testing and sow the same crops year after year

14. Increased family commitments etc.,

Indian farmers’ problems are multi-dimensional, and then the question arises as to how all the problems of the farmers can be addressed.

The solution is very simple, but implementation is difficult in the sense that the Government should try to change the mindset of the farmers to accept the suggestion that is proposed in this article.

The answer to this problem is to Corporatise the Farm Sector. Uneconomical holdings, inadequate capital, and other bottle necks can be removed only when the farm sector is brought under Corporate sector.

Earlier lots of attempts were made by individual and other promoters to tap the savings of the people with a promise of high returns. But they have failed due to obvious reasons which I do not want to elaborate here.

As a pilot scheme, government should try to create subsidiaries under big Public sector Navarathna Companies and banks of its own, to undertake agriculture in the farm sector.

Proposed Methodology

i. Central Government must constitute a national “Agricultural advisory Board” to formulate schemes and guidelines to implement this project. Eminent persons like MS Swaminathan may be asked to join this endeavor.

ii. Central Government must order the profitable Government companies and banks to start subsidiaries (Joint Stock Companies) in the farm sector.

iii. It should select as a pilot scheme, suitable districts in every state to promote joint stock companies as subsidiaries to the Holding Company.

iv. Farmers may get the confidence if the Government directly involves it selves and may be willing to deposit their land holdings to the Joint-stock companies.

v. Sizeable Land bank will help to achieve the scales of economy. 

vi. Funds allocated by the Government Companies under CSR activity can be used as a seed capital.

vii. Government can also infuse adequate capital for this purpose.

viii. Based on the size of the Holding from the farmer Deposit forms can be issued.

ix. Land deposits should be at least for a period of 5 years.

x. Option can be given to convert the Land deposit to shares at the end of the fifth year.

xi. If a farmer wants to withdraw the land deposit, the same size of the land deposited will be given back at an alternative area without affecting the operational needs or compensation at the end of the fifth year an equivalent money value.

xii. Based on the valuation of the land surrendered, suitable monthly interest can be given on the deposited value.

xiii. Willing farmers can be absorbed as employees of the Companies at different levels.

xiv. Adequate infrastructure facilities can be created such as labs, farm implements, storage facilities, etc., for large scale farming to attain economic viability.

xv. The Surplus from the farm activity, after allocating 25% for the reserves the balance 75% can be given to the farmers every year if they wish to join as shareholders.

xvi. Co-operative form is not suggested as the scheme is not very successful in Indian context except a few distinguished ones.

Central government can have two alternatives

1. Either the farmers can be taken as shareholders and share the proceeds as dividends  OR

2. Land can be taken over as Land deposit and suitable rate of interest can be given periodically

My question is very simple. Why the government should engage it selves only in Industry or Banking sector in a big way?

To start with the Government can also start Big companies in Farm Sector.


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