Constraints of Small and Maginal Farmers and Institutional Options

8/8/2019 Constraints of Small and Maginal Farmers and Institutional Options

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Yogesh BandhuGiri Institute of Development Studies, Lucknow

Constraints ofSmall & Marginal Farmers

and

Institutional OptionsOctober 22nd, 2010


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Institutions may be deliberately created, or they simply evolveover time via changes, adaptation, and adjustment to changing

circumstances and growing social needs (North, 1990).

Institutional change is a continuous transformation process in

societies, which means change in the principles of regulation and

organizations, behaviour and interaction patterns (Manig, 1991).

Institutions affect performance of the economy by their effect

on the costs of exchange (transaction costs) and cost of production

(transformation costs) (North, 1990 &Bardhan,1999).

In the absence of efficient institutions the agrarian economy

continues to struggle at a very low-level income, production and

consumption equilibriums (Ruttan,1985).

The Institutions


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Small and marginal farmers are unable to adopt capital goods and HYV

technology during the mid sixties and seventies because of difficulties and

inadequacy of institutions, cumbersome institutional procedures and

network (Parthasarthy & Prasad, 1978)

Small and marginal farmers are practicing traditional methods of

cultivation since research and scientific advice and extension services arelimited. Most of time sometimes farmers depend on the informal

information providers like input dealers and comparatively progressive

farmers.

Small and marginal farmers become less competitive and more vulnerable

in open market economy compared to those in other countries. The post-independence period marks a turning point in the history of Indian

Agriculture (Bhalla 1999) but farmers failed to respond to the opportunities

provided new developments.

The Institutions


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0.0

5.0

10.0

15.0

20.0

25.0

FiguresinPerce

ntage

Percentage of Holdings Using Hybrid Seeds

Marginal Small

Medium Large


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0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

FiguresinPercentage

Percentage of Holdings Using Certified Seeds

Marginal Small

Medium Large


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0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

MAH MP UP WB RAJ GUJ TN PUN ORISSA HAR AP KAR

FiguresinPerc

entage

Percentage of Holdings Taken Foundation Programme

Marginal Small

Medium Large


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0.0

20.0

40.0

60.0

80.0

100.0

120.0

FiguresinPercentage

Percntage of Area Treated with Fertilizers

Marginal Farmers Small Farmers

Medium Farmers Large Farmers


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0

50

100

150

200

250

300

350

400

450

ORISSA MP RAJ GUJ UP MAH ALL

INDIA

HAR PUN WB AP KAR TAN

FigureinNum

bers

Average Quantity of Fertilizers Applied (Kg. Per Hectare)

Marginal Small Medium Large


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0.0

20.0

40.0

60.0

80.0

100.0

120.0

FiguresinPercentage

Percentage of Operational Holdings Using Pest Control

Methods

Marginal Farmers Small Medium Large


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0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

FiguresinNumbers

Average Number of Animal Operated Implements

Marginal Small

Medium Large


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0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

Figuresin

Number

Average Number of Power Operated Implements



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0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

FiguresinN

umber

Average Number of Power Operated other

Implements/Equipments

Marginal Small

Medium Large


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0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

TN AP WB ORISSA KAR MAH ALL

INDIA

UP GUJ MP PUN HAR RAJ

Average Number of Milch Animal



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0.0

2.0

4.0

6.0

8.0

10.0

12.0

FigureinNumbers

Ownership of Other Livestock

Marginal Small

Medium Large


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0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

FigureinP

ercentage

Percentage of Operational Holdings that took Institutional

Credit

Marginal Small

Medium Large


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0

10000

20000

30000

40000

50000

60000

Marginal Small

Medium Large


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Pre-Harvest

Poor crop selection

and diversification

Low SeedReplacement Rate

Low quality seeds

Extinction of

traditional variety

Poor and

unbalanced use of

chemicals

Harvest & Post-Harvest

Poor and

inadequate

mechanization Poor packaging,

sorting, grading &

processing

Poor logistics,

storage and cold

storage

infrastructure Inadequate basic

infrastructure such

as Power, Roads,

Water

Marketing

Inaccessible,

incomplete and

delayed marketinginformation

Presence of too

many

Intermediaries

Soft Infrastructure

Inadequate returns

on investment in

research anddevelopment

Lack of trained

human resources

Lack of efficient

rural support

infrastructure

Reasons for Poor Performance


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Reasons for Poor Performance

agriculture not being market-driven;

distorted incentive structures;

a multiplicity of laws, regulations, and taxes;

inadequate backward and forward linkages;

poor infrastructure, especially for marketing;

the poor state of markets and the way they transact;

inadequate outreach of services and credit to farmers;

lack of modernization in storage techniques and transportation methods;

inadequate information on and linkage with standards


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Emerging Challenges for Marginal and Small Farmers

Liberalization of markets

Reduction of market protection and subsidies

Stringent consumers demands (quality, safety, convenience,

CSR)

Tight legislation on food quality and food safety

Changes in technology (ICT, biotechnology, logistics)

Global agro-food grades and standards

Consumer driven market


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Public Sector Revision

Subsidiarity

Partnership

Decentralisation

Dual System

Privatization

Cost Recovery

Deconcentration

Institutional Options


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Public Revision of public

sector extension viadownsizing & some

cost recovery

(Canada, Israel, USA)

Private Cost recovery

(fee-based) systems

(OECD countries,

previously in Mexico)

Private Pluralism, partnerships,

power sharing

(Chile, Estonia,

Hungary, Venezuela,S. Korea, Taiwan)

Public Transfer (delegation) of

responsibility to other

entities

(Chile, Estonia,Hungary, Venezuela, S.

Korea, Taiwan)

MARKET REFORMS

FUNDING

DELIVERY


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Public Decentralization to lower

tiers of government

(Colombia, Indonesia,

Mexico, The Philippines,Uganda & others)

P

rivate Transfer (delegation) of

responsibility to other

entities

(Bolivia, to farmerorganizations;

Ecuador, mixed with

farmer-led NGO prog;

Peru, extensiondevolved to NGOs)

Non Market Reforms

Political, Fiscal and Administrative Issues


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linking horizontally institutions to vertical supply

chains

organizational reforms for reducing internal

transaction costs

creating financial structures capable of mobilizingventure and equity capital

reinforcing (extra-)regional forms of cooperation

introducing mixed remuneration systems

professionalization of the management.

The institutional initiatives call for:


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The institutional initiatives call for:

pluralism of extension providers, involving coordinated

partnerships with non-profit non-governmental organizations,

partnerships involving farmers and farmers organizations, and

other private sector extension-providers,

cost recovery options,

decentralization to lower tiers of government,

subsidiarity at the grassroots level.


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Thank you

Yogesh Bandhu

[email protected]

Documents

Constraints of Small and Maginal Farmers and Institutional Options