Thursday, January 10, 2008

Do we have a solution to revive Kerala Agriculture?

This fortnight’s stay in Kerala made me realize one thing – there is no future for agriculture or farmers in Kerala in the present form. It has become the most unprofitable profession you can ever imagine. Being the son of agricultural scientists’ agriculture was always part of my life. During the last 15 days I observed few things that made me realize that last nail has been hit on the coffin called Kerala Agriculture.

I met one of the retired professors from my parents’ college who has lot of land and who does farming as a full time hobby. He knows the latest technology in this field and has lot of money to spend. He works on his field each and every day. He was telling me “With the increasing labor cost and stagnant price” he never got the money he invested in the last few years. He still does it for the love of it. Since he is rich and this is his hobby he can do it but if it was some one who does this for livelihood he could have stopped that long back.

We have pepper cultivation in the back yard and we used to get about 10 kilograms of pepper every year. I was helping my father pluck them this time and there was some pepper at some height we could not climb with the ladder we have. My father was telling me that if he calls some one to help him out he has to pay him over Rs 200 and the total quantity of pepper he plucks wont fetch him that amount. So what does my father normally tempted to do – not to pluck the pepper that is at a height we cannot climb. Why to waste money on labor when we are not gaining anything appreciable? Again the villain is “labor cost”.

During my stay I had seen how much profit a middle man makes at the expense of agriculturists. My father had planted about 50 cents of land with high yielding variety of tapioca and it is now time to sell it. It is very tough for the owner to sell on its own as he does not have an established market. There are people who are whole sale dealers of tapioca and my father contacted few of them. The highest quote he got was for Rs 5000 and that was much less than what he spent initially to cultivate it. My father sold that for Rs 5000 but do you know how much that dealer got after selling it to customers like you and me? About Rs. 15000. He got a profit of Rs 10,000 just like that. In such kind of deals the winner is always the middle man and the loser is always the cultivator and end customer.

In the first 2 examples the main culprit for loss was labor cost. One can easily tell that reducing the labor cost can save agriculture to some extent. But I cannot agree to that. I believe the increase in labor cost is on par with the increase in living cost.

I had a first hand experience of the increase in living cost the other day. During my college days (1991-97) one of the cheapest restaurants in the town was “Indian Coffee House”. I went there the other day with my parents and my brother and ordered something like 4 cutlets and 4 coffees. The bill came to something like Rs 80. In my college days I could have got that for Rs 16. In about 15 years there is a cost increase by about 5 times. So to cope with that labor cost has to improve. But what about agricultural products – it has remained the same or reduced over 15 years. Under this situation who would want to take up agriculture as a means of livelihood?

Many people argue that government should intervene and increase the price of agricultural products. But does the government have the necessary resources to interfere and make a difference? A coconut that was sold by the farmer for Rs 5 about 15 years back should be sold for at least Rs 20 to make up for the increased in living cost. But would that change happen in the near future? Is that practical?

My Solution

I always think about a solution to this problem. I am pretty sure that most of the “socialist” and “communist” minded people of Kerala cannot digest this idea I am proposing. This is what I have in my mind. There won’t be any concept of farmers any more. All land owners will be giving their land on lease to some big companies (say for example Reliance). The company in return will pay a lump sum amount to the owner at first for the lease. Then the company will take the land owner and his co-workers as employees of the company on a monthly salary. The owner and his co-workers have to take orders from company and cultivate the crop the company wants. The land owner is paid monthly like an employee of the company. Now it is the headache of the company to make use of the resources and make it profitable. These companies have infrastructure/ resources and farmers on the other hand will get a monthly salary that can be more than what they can actually earn if they cultivate on their own.

I am pretty sure that most of you may be thinking that I am advocating the coming back of boss-servant relationship that existed in Kerala before the land reform act was enacted by the first communist government in 1957. I see this similar to - say a software engineer employed in a MNC. If an engineer can be paid by Infosys for his efforts why cant a “farmer” be paid monthly salary for working in his field under the guidance of say Reliance? At least he can be sure that he gets something in the month end to make both ends meet and not always in loss.


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