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Commercial Agriculture: Need and Benefits

By | on November 4, 2016 | 0 Comment

advantagesA farmer is not a subsistence farmer by choice; it is his uneconomical landholding and lack of access to finance which are two major handicaps for him to produce for the market. However, we cannot increase the productivity of the agriculture sector if we do not develop it on commercial lines and integrate the small farmers with the new reality of commercial farming, either as an individual farmer or as member of a commercial cooperative.

Small farmers can be integrated in this value chain through different forms of cooperative farming. Traditional cooperatives have unfortunately not worked despite all the efforts of the state to popularize it among the farmers. We need to develop new forms of cooperative farming whereby all the stakeholders i.e. farmers, input suppliers, banks and buyers, are engaged. Essentially there are three ways in which a farmer can be gainfully integrated in commercial farming

Contract farming-Also known as “outgrower scheme” in Africa) is a formal arrangement whereby agricultural production is carried out on the basis of an agreement between the buyer, usually a firm and the farmers, specifying the quantity, quality, price and date of supplying the produce. Government should promulgate proper legislation backed with effective implementation machinery and dispute resolution mechanism, encouraging agri-based processors to supply inputs & technology packages to farmers on deferred payment with buy-back of produce at guaranteed prices.

Commercial Cooperative farming– These are the new forms of cooperative farming whereby all the stakeholders i.e. farmers, input suppliers, banks and buyers, are engaged.After pooling in the small and medium sized land holdings of the individual farmer members, these farms are professionally managed, adopt mechanized farming and use collective bargaining to increase their profits which are then fairly distributed according to respective land holding

Corporate farming-Corporate farming refers to lease of commercially viable tracts of land to corporate level entrepreneurs who are willing to practice high-tech export oriented agriculture and share profits with the owners. Recently these have come under heavy criticism but Government should encourage corporate farming as it helps in increasing the agricultural production by bringing new areas under cultivation and increasing the productivity of inputs with the help of technology and better management.

We should neither blindly oppose corporate farming nor allow the corporations to fleece the farmers and the consumers with impunity; they must be allowed to flourish, with proper safeguards, for the emergence of an efficient agricultural sector. Respecting the right of the farmers to land, the government should encourage the firms to enter into leasing agreements with the farmers themselves with the spirit of mutual advantage.

In fact there is a strong case for a diverse agricultural sector, involving small landholders, co-operatives and farming corporations. Each will bring its own relative advantages to different parts of the supply chain-large-scale corporations buying the raw input from local farmers at reasonable rates without the involvement of traditional middleman and processing and marketing the finished products at affordable prices for the consumers by reaping the economies of scale. Such developments are mutually rewarding. Local farmers benefit from best practice and technology transfer. The wider availability of fertilisers and other inputs represents a form of technology diffusion.

Government should also consider leasing of cultivable waste under the federal or provincial control for corporate farming. As these cultivable waste lands are sources of livelihoods for the communities living in and around these areas and serve as grazing fields and pastures for their cattle, respective provincial and federal governments will ensure that the legitimate rights of these communities are adequately protected while leasing out the cultivable waste.

Similarly, in order to achieve rapid growth in meat and milk production we will have to convert this sector from a subsistence and side business to commercial and mainstream activity through its shifting to market oriented enterprises. For this purpose not only big commercial farms should be encouraged but small livestock farmers be also given the same technology package and financial support. Females who normally rear these animals should be encouraged and facilitated to own these farms on commercial basis. Government should expand animal health service, allow duty free import of veterinary dairy, and livestock machinery/equipment and also allow import of feed inputs, vaccines etc., at concessional rates.

 

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