Why agriculture is losing its charm?
## Indian Agriculture at a glance.
■ Subsistence Agriculture (i.e. no surplus yield to sell), Low Productivity, Marginal-land holdings (2/3rd of the farmers have marginal-land holdings), Disguised Employment, etc.
## Terms of Trade for Agriculture.
■ Money invested in Agriculture doesn’t gives proportional returns as compared to investments made in other sectors. Hence, not an attractive investment.
■ There is an MSP (Minimum Support Price) on various agricultural commodities. MSPs are necessary so that farmers have assured markets for their produce. MSPs also ensures price stabilisation in the market when prices of commodities shoot up as Govt. of India via FCI (Food Corporation of India) by selling the commodities from the strategic buffer of FCI in the market ensures price stabilisation. Hence, it checks Food Inflation (which can lead to Wage inflation & due to inflation of wages, the cost of factors of production increases & which in turn leads to General Inflation).
Hence, there is no possibility of making huge profits by selling agricultural produce.
■ Restrictions on Export: There are restrictions on the commodities to ensure that market price doesn’t shoots up.
P.S.1. You cannot make huge profits until & unless you have large lands to cultivate. Also, risks are higher in the form of crop failure, unavailability of markets & demand, etc.
P.S. 2. Regulated Corporate/ Contract farming is the need of the hour. It will provide assured markets to farmers & hence will allow farmers to diversify crops & move from cultivation of rice & wheat (which require huge water inputs) to Non- MSP commodities.
It will also encourage Animal Husbandry, Organic farming, Horticulture, etc.
With Great Love,
Er. Amit Yadav