September , 2018
Private farming: an overview
22:20 pm

Kuntala Sarkar

What is private farming?

A private agricultural farm is an enterprise to cultivate agricultural products under the control of one or more investor. Any individual farming initiative cannot be broadly incorporated within private farming. Two features are important. The whole production process must be for commercial purposes and not for individual consumption. Secondly, private farming entails large capital investment in the form of state-of-the-art equipment, advanced processing units and an integrated production-to-market chain. In private farming, it is mostly contractual labourers who work in the farm. The decision making powers regarding the cultivated crops rests with the private entity who owns the land. The idea of private farming is to create a holistic agricultural practice and simultaneously link it to the market.

Private farms offer good quality seeds, use mechanised agricultural solutions that are aimed at maximising production and mostly use superior quality of seeds. The underlying principle for private farming is to maximise agricultural profit. There are a few categories of private farms. Estate farming, corporate farming and contract farming are some of the important variants. This type of farming is more popular in the industrialised and developed nations like the US, Australia and UK.

In the early 1990s, privately owned farms started to emerge as one of the most important part of Russia's agrarian reforms. This structure of farming is considered to be one of the pillars of the capitalist system. In India, the land reforms have fragmented large land holdings. West Bengal and Kerala has left remarkable milestones in this process. However, extensive land reforms have reduced the prospects of extensive private farming as availability of large land holdings in India is a rarity. In India, capitalists invest in agricultural equipment, inputs and in agro-processing units. Some form of private farming can be seen in India in form of tea and coffee plantations.

Private investors in India

Adani’s agro-business has three main agro verticals namely Adani Wilmar Limited (AWL), Adani Agri Logistics Limited (AALL) and Adani Agri Fresh Limited (AAFL). They produce cooking oils, basmati rice, soya chunks and besan.

Syngenta India Ltd., which is a part of a Swiss company called Syngenta AG operate largely in India. They have products in seeds, seed care, crop protection, crop nutrients and yield protection. Under a public-private partnership programme, Punjab Agricultural University (PAU) has signed an MoU with Syngenta India to undertake projects jointly aimed towards sustainable development.

The Keventer Group is a Kolkata based conglomerate. They have forayed in fruit farming and food processing. The Keventer Agro is also currently dealing in dairy products, bananas, frozen food, export of food commodities, and also have a presence in the beverage business.

Advantages of private farming

Private farming entails large capital investment which assures scope for developed, state-of-the-art agricultural practices that are aimed to maximise production and earn profit. Such advanced agricultural practices ensures employment, helps to attain food security and also acts as an incentive for further investments in the sector. Additionally, this type of farming ensures market linkage which helps the consumers to get easy access. Since private faming is most done in an industrial scale, ensuring quality is easy and verifiable and associated processing units also ensure an integrated agro-industries market. 

Disadvantages of private farming

There are also drawbacks. It entails large displacement of labour. A large number of human labours are imperiled due to excessive mechanisation which is aimed at extending profit margins. Dipankar Deb, Assistant Director of Agriculture, Chanchal-I Block, Maldah, told BE, “Often famers and agricultural workers are exploited and do not receive suitable wages. Apart from that, the whole intention of this kind of farming is not to enable food security but to earn profits.”

Governmental support

India is trying to attract corporate investment in agriculture. Prime Minister Narendra Modi on July 2, 2018, said his government has a plan to double the farmers' income by 2022. He assured that farmers would be given a Minimum Support Price (MSP) which will be at least 1.5 times of the input cost for some specific crops. Modi also added that collective corporate investment in the domestic farming sector has been just 1% which was in manufacturing urea or in manufacturing farm equipment. Modi had urged industrialists to invest in institutional aspects of agriculture like value addition, warehousing, cold storage and in packaging. Dr. Tuhin Roy, Professor, Department of Agricultural Economics, Uttar Banga Krishi Viswavidyalaya, told BE, “It is obvious that the government is planning to attract more investors in this sector. But for that to be successful, they will have to relax the rules and regulations for contract farming.”



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