- Rural unemployment
- Production decline
- Cause of decline in agricultural production
The link between jobs, farming and climate
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- At a panel discussion hosted recently by the students of Delhi’s Ambedkar University, the topic was, ‘Are we heading for an economic crisis?’
- Presumably, they had been prompted by the news of a slowing economy. It is indeed correct that such a slowing is taking place as growth has slowed for the past few quarters.
- Globally, industrial growth driven by mindless consumption is the cause of climate change. But India does need some growth as income levels in India are still very low.
- Figures reported in the report of the last Periodic Labour Force Survey point to a dramatic rise in the unemployment rate since 2011-12.
- Apart from the category of ‘Urban Females’, the most recent estimate of unemployment shows that it is the highest in the 45 years since 1972-73.
- For the ‘Rural Males’, in 2017-18, unemployment is four times the average for the 40 years up to 2011-12.
- The government has responded to the slowing of growth by announcing a range of measures, the most prominent of them being the reduction in the corporate tax rate, a remedy for only stagnant corporate investment.
- However, corporate investment depends on the rural demand as a large part of corporate sales is driven by rural demand.
- The rural scenario matters not only because the largest manpower but also because of their low incomes. This means that the future growth of demand for much of industrial production is likely to come from rural area.
- Crop agriculture is one of the reason for slow progress of crop agriculture. In the majority of years since 2009, Crop agriculture has shown no growth.
- When there is a fluctuation in growth of crop, it results in production decline. This result in Households paying their debt which they incur during the bad crop years. This implies that consumption does not grow even in good years as they are only repaying debts.
- Unstable agricultural production first lowers the demand for agricultural labour and, subsequently, its supply, showing up in greater unemployment.
- The decline in investment rate may be due to the poor agricultural performance. When non-agricultural firms observe slow agricultural growth, they shrink their investment plans. Thus, government should address rural income generation rather than changing investment rates.
Cause of decline in agricultural production
- Any long-term solution to the problem of unemployment to which the slowing growth of the economy is related must start with agricultural production.
- Given the disruption in the crop-yield cycle related to annual variations in rainfall, India would need the expertise of agricultural scientists to confirm what exactly is responsible for the stagnation in crop yield.
- Other ecological factors for stagnation in crop yield are land degradation involving loss of soil moisture and nutrients, and the drop in the water table, leading to scarcity which raises the cost of cultivation.
- In addition, increasingly erratic rainfall is due to climate change entirely induced by human action.
- Almost all of this is directly man-made, related as it is to over-exploitation of the earth’s resources.
- Policy focus is give on the tax rate, the ease of doing business in the non-agricultural sector and a fussy adherence to a dubious fiscal-balance target.
- Hence, it is now time to draw in the public agricultural institutes and farmer bodies for their views on how to resuscitate the sector.
- Intelligent governance, resource deployment and change in farmer behavior would all need to combine for this.