Monday, August 12, 2013

Indian Farm Labor - Misaligned policies, Misdirected potential

Disruption of agricultural labor supply always looms close on the horizon for any operations like ours. There are multiple macro and micro economic factors at play so it becomes especially important to ascertain the localized labor availability (risk) that a new agri-operation might face.With increased literacy rates in rural areas coupled with government supported welfare policies, farm labor is becoming scarce. Despite lower education levels, even north Indian rural populace manage to eek out minimum wage due to programs like MNREGA. While higher wages and better quality of life is indeed a desirable outcome - But at what cost and long term impact?


Personally I am not a big fan of the MNREGA program for many reasons, apart from the obvious impact it has on our operations. The program has spectacularly failed in it's primary objective - to provide gainful employment to rural populace. Projects are initiated on paper and workers are recruited, only to be seen congregating under trees, smoking and drinking during the workday - I speak from personal account. The reality is that they do not earn wages for a days work - the poor are being appeased with 'charity' as part of populist political agenda.Thousands of infrastructure and local projects have been created on paper but very few have been concluded with even fewer that have provided the intended social benefit. Wage rates are very disproportionate to the work output, which has skewed local labor rates. In other words, the output is not worth INR120 per day per person. As a result, prevailing agri-labor rates have been artificially elevated. This illustration (inline) is from several years ago, so we can easily imagine that the scheme has much greater proliferation by now.


Unfortunately, individual operations like ours can do little to directly combat the aggressive increase in wage rates and the poorly designed programs promoting them. In Tamil Nadu wages have risen at an average 10% p.a since 2006 - which is almost twice the inflation rate for that period! The genesis of these programs is often well intended but lack of macro level foresight and on-the-ground enforcement translates into huge drain from the national exchequer with little to show for it. Net result is that the tax paying citizen is subsidizing non-productive operations and in return increasing inflationary pressures upon themselves!  Operators like us have to alleviate the current labor constraints with farm mechanization to reduce dependency. At Savera Farms, we are entirely drip irrigated which is a huge savings in time, effort and labor. Investments in chaff cutter, tractor, brush cutter, automated sprayers, power weeders and others form part of our productivity enhancing toolset. 

Apart from mechanization, I would like the community to share their recommendations on combating this huge problem and managing this scarce resource. Do share your ideas around how do you retain the human resource. Insights into availability of 'farm labor' in particular locations or states would be a win-win solution for all.

Credits : Original publishers reserve copyrights

12 comments:

  1. few options to retain labourers
    1) Give year round employment
    2) Provide shelter
    3) Employ Wife too - Both husband/wife work
    4) Sponsor Children education in good school/hostel
    5) Good Harvest Bonus - Atleast 3 months salary

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  2. I agree with you, being very near to Hyderabad I have felt a sever problem of labor and unfortunately I had to back out from my effort.

    Even if you pay right amount and support in all the way you can that is beneficial for them, there is no guaranttee that they will be with you and do proper job. Honesty, Ethics, Discipline and other words like these are available now on paper only not in reality.

    They (locals) treat us a medium to earn money without doing any job and this behavior/tendency has come in them by programs like MANREGA.

    Good luck for your effort.

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  3. I have tried this long back in 1993 when I came back from Mumbai to my farm after the sad demise of my father in 1992. I raised the wages, started medical reimbursement, interest free advance, free tea, free milk, free wood, and free share of each and everything which is produced on the farm ( except cotton - which in tern substituted by free clothes as Pola / Diwali gift ).For this I faced lot of criticize from the fellow farmers. But I was surprised and sad to see the outcome. It only proved to be a loss making act. I bought Cows, Buffelows, Ships and Goats, Chickens and fishery but ultimately closed every thing and shifted to Clonal Eucalyptus Plantation due to ever-rising demands of labor without any assurance to do better work on their part. I used to show them the accounts and tried to take them in confidence but it did not worked.

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  4. I agree with Narayan. Howmuch ever you give, they will not be happy. End of the day they look the employer as money vending machine. Even I have tried to give free breakfast,food & dress during Deepavali and Pongal, but no use. They will prefer to be lazy/sitting idle at home wihtout any earnings, but don't realize that they have to earn for their family....

    BTW, why should they earn when everything is available for free from the govt !!!!!?????

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  5. MONO CROPPING WILL REDUCE THE LABOUR

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  6. Completely agree with the side effects of MNREGA.

    Kerala has a different story. Average male labour charge for full day is 600/- and female is 300/-.

    So in Kerala MNREGA has only been able to attract female workers. They get less than half the wage. but since few months there has been unrest to increase the wage to 200 per head.

    Even with 120 most of them are happy because work hours is very less and almost no hard work.

    I also feel they should be utilized for public work. Instead in Kerala they are mostly used in farms and small land holders for clearing weed and other petty work.

    Employing Husband and Wife worked well few years back. It is very rare to get a trust worthy family nowadays. During olden times landlords were very authoritative. Giving perks don't work, look at some of the big giants who offer good salary and other amenities but still employees abscond.

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  7. For those who are interested - there are several reports of rampant corruption, delay in wage payments and overall ineffectiveness of this program. Here are a few links :

    http://www.ndtv.com/video/player/news/madhya-pradesh-s-rs-9-cr-nrega-scam/189159

    http://www.ndtv.com/video/player/politically-incorrect/is-it-time-to-scrap-nrega/205795

    http://articles.economictimes.indiatimes.com/2013-08-16/news/41417588_1_nrega-scheme-parliamentary-panel-rural-employment-guarantee-scheme

    Learn and be aware :)

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  8. I can understand your plight. I went from being an engineer to a farmer in 1983. Tried being very forward and increased daily wages from existing Rs18 to Rs 40 and earned the ire of my neighbors. It all lasted just 4 years. Employees who left the farm were jealous of the guys on the job and took their frustration on my crops virtually destroying the plants under cover of darkness. Automation is the way to go. Plan properly and take up activity which can be automated and have just a couple of loyal guys employed all year around. ( even the loyal will go away if you did not provide 365 day support). Everything should be at the touch of a button.Make sure you have self generated power too. Here in Australia with good automation a couple can tend to 400 milk cows milking twice a day. The dogs take care of bringing in the herds and taking them out to pasture again.Even with 400 cows they cannot afford paid help as the minimum wage is $40,000 per year??!!

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  9. It is a serious challenge. I can only think of one idea which is used in marketing and sales. Giving them % on returns. I know it's reducing owners returns but don't see other option to motivate them. Let me know your thoughts and has anyone tried this.

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  10. Great response to the post, thanks all for sharing your ideas and experiences. It is evident that the common denominator is that the loyalty/predictability of labor is diminishing. We are heading towards tough times, thanks to the popilist policies.

    Anoop - alarming figures out there..no wonder Kerala imports everything fro TN and other states, right from hay, buffaloes to veggies...

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  11. Hey Kaustab,

    Sorry missed your reply, was going through some old mails and landed on this page.

    True. almost no farming is viable here.
    But off late there is a drop in labor need for construction. Things are slowing down. But still people not willing to work in soil.

    As India and most other countries are speculative. Lets wait and see whats in future.

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  12. Yes , As all we experience are same because of the other major reason in "Liquor".. they are addicted to it and now they come at 9.00 am in morning and leaving at 4.00 Pm not even meeting white collar job duration... For sure the free rice will not be handy in next comming 10 years.More over now climatic condition are drastically changing and many are quitting from farming...

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