Corporate Farming in India: Is it Must for Agricultural Development?

Abstract

Indian agriculture is under policy reforms for some time now. One of the issues it faces is that of lack of viability of smaliholdings and lack of international competitiveness of its produce. In this regard, new initiatives of reorganizing the production systems are being attempted in the form of contract farming and corporate farming. At the state level, laws are being amended to facilitate the practice of contract farming and corporate farming. Where contract farming means working with small growers most of the time and, therefore, high costs for agribusinesses, the alternative of corporate farming is being seen to resolve this problem. For facilitating this, prime agricultural land and wastelands are being allowed to be bought or leased in by corporate agribusiness houses, the latter (wastelands) being given away by the state on nominal lease. This paper profiles cases of corporate farming practice and examines the rationale for allowing corporate farming in India in the context of its agriculture and rural sector. It points out that the rationalç is weak and not supported by international evidence on corporate farming. It rather argues for other alternatives, like consolidation of land holdings and contract farming, for making better use of corporate resources for agricultural development.