Question: In the view of the declining average size of land holdings in India which has made agriculture non – viable for a majority of farmers should contract farming and land leasing be promoted in agriculture? critically evaluate the pros and cons.
Answer: The current population blast and climatic changes has increased the pressure on agriculture sector, making it non-viable economic option for small and marginal farmers. In order to address this situation, contract and lease farming has been suggested as an alternative but various factors have to be considered before seriously making efforts to implement them.
Advantages of contract farming
Large number of people have agricultural land but do not pursue it as employment option. Such individuals can use contract farming or lease farming in order to allow any less privileged individual to use agriculture as an economic activity.
- Supplement agriculture production
Rising population has increased demand for food production but shortage of active farmers has caused threat of food insecurity. By allowing land to be productively used for food production, challenges such as these can be effectively addressed.
Disadvantages of contract and lease farming
- Increase in disputes
Contract and lease farming is full of legal challenges whenever any dispute arises between owner and tenant. This can consume large time and efforts of both and lack of clarity in laws has made the process more complicated to be implemented actively.
- Lack of flexibility in crop selection and selling
Some issues like lack of independence in selecting crops to be grown or for selling the produce is yet to be worked upon. This has created more complications while implementing leasing and contract farming.
Ex: PepsiCo and Gujarat potato farmers issue.
Government has to take active interest to make laws that can support leasing and contract farming.
Thus, the measures should be balanced, that looks after the interest of both owner and tenant. The profits of contract and leasing should be reaped by both.