Small farm landholdings prevent economies of scale

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New Delhi | Updated: Aug 12, 2017 6:37 AM

The gradual shrinking in size of land holdings since 1970s has posed a serious challenge in achieving economies of scale in agriculture operations, the Economic Survey said on Friday.

On volatility in agricultural commodity prices, the survey has noted that the farmer faces price uncertainties across years owing to supply and demand fluctuations, speculation and hoarding by traders. (PTI)

The gradual shrinking in size of land holdings since 1970s has posed a serious challenge in achieving economies of scale in agriculture operations, the Economic Survey said on Friday.

The small and marginal land holdings — less than two hectare — account for 72% of land holdings and the small and marginal farmers have low bargaining power, since they have very little marketable surplus and are price takers in a market,” the survey has stated. For improving agricultural productivity of small-scale farming, the survey has said that the controversies on the adoption of high-yielding varieties and genetically-modified (GM) seeds need to be resolved and extended to all crops, not just mustard. The Genetic Engineering Appraisal Committee (GEAC) of the environment ministry has already approved commercial cultivation of the high-yielding GM mustard variety; however, a final decision is yet to taken by the government.

On volatility in agricultural commodity prices, the survey has noted that the farmer faces price uncertainties across years owing to supply and demand fluctuations, speculation and hoarding by traders. “The price risks emanating from an inefficient agricultural produce market committees markets are severe for farmers in India since they have very low resilience owing to the perishable nature of produce, inability to hold produce, hedge in surplus or shortage scenarios or to insure against losses,” the survey has noted.

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