UPSC Mains 2015 · GS III · Q3 · 12.5 marks · 200 words

In 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.

हिन्दी में

भारत में कृषिभूमि धारणों के पतनोन्मुखी औसत आकार को देखते हुए, जिसके कारण अधिकांश किसानों के लिए कृषि अलाभकारी बन गई है, क्या संविदा कृषि को और भूमि को पट्टे पर देने को बढ़ावा दिया जाना चाहिए ? इसके पक्ष-विपक्ष का समालोचनात्मक मूल्यांकन कीजिए ।

Land ReformsAgricultural Marketing

How a topper answered the closest question

Toppers wrote this one in a test series: “Explain the potential advantages and challenges associated with the practice of contract farming. Discuss suitable measures to address the concerns raised by different stakeholders in the implementation of contract farming in India.”

Yarasi Tusharika178 wordsTheir whole copy

Opening · a definition

Contract farming refers to the practise where a company forms an agreement with a farmer or group of farmer prior to production or after production of agricultural commodities.

Body · points and prose

Diagram
Company <--- Raw materials (seeds, pesticides), Capital, Technology --- Farmer Company ---> produce with specific requirements ---> Farmer Fig:- Contract farming

Advantages of contract farming

  1. Farmers can fix the price for the produce Prior to production. → reduces market based vulnerabilities like low rate for produce.

  2. Company can source the raw materials directly from farmers: → helps to maintain quality. → elimination of middle men.

  3. Technology transfer enables farmers to increase productivity.

  4. Reduced dependence on informal credit by farmers: → reduces farmers suicides (MS Swaminathan committee)

Challenges associated with contract farming

  1. Issue of small land holdings with small and marginal farmers. → avg. size of land = 1.08 hectares (2021) → 86% of land holdings with small and marginal farmers.

  2. May lead to exploitation of illiterate farmers by complex agreements.

  3. Preference to big farmers → inequality.

Measures required in implementation of

contract farming in India.

Diagram
Measures to address concerns of farmers: 1. Model contractual agreement to be devised to address exploitation concerns. 2. Rate fixed should not be less than Market price, minimum Support price. 3. Agreement made should have clauses for compensation in events of crop failure. Concerns of companies: 1. Pooling of land from small, marginal farmers for adequate produce. 2. Adequate support from government in case of failure of agreement.

Close · a summary

Contract farming can help increase the income of farmers (doubling farmers income) and increase productivity.

How toppers approach this question, and more on its topic: open the question.

Toppers’ answers to other close questions

Source: UPSC, Civil Services (Main) Examination 2015, General Studies Paper III, Q3. The paper on upsc.gov.in. Themes and links to toppers’ answers are by UPSC Grade, not by UPSC.