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‘Down to Earth' at 300
Business Line, India Wednesday, August 11, 2010

Sharad Joshi
The farmer needs the right price incentives to increase output and improve technology. The prices in a truly free market will cover the cost of cultivation. Any attempt to block advancement of technology in agriculture can only be disastrous. All agriculture loans are both illegal and immoral, writes Sharad Joshi in Business Line.

My views on agriculture are essentially those of an outsider. I was not born into a farmer's family, nor did I receive any landed inheritance. I developed my perceptions by making farming my sole means of livelihood.


The main burden of my argument has been that the poverty and backwardness of Indian agriculture cannot be put down to farmers' laziness, illiteracy, addictions to vices or extravagance in celebrating festivals or weddings.

They are a result of the deliberate policies followed by successive governments, both before and after Independence, to depress agricultural prices and twist the terms of trade against agriculture, starving it of investment and technology.

I have described such policies as amounting to the imposition of “negative subsidies” under the pretext of ensuring a “low-cost” economy.


My views on other issues in agronomics that are equally unorthodox have not, as yet, been as widely accepted. Here is a brief inventory.


For the growth of agriculture, infrastructure and technology are undoubtedly important. But far more important is the incentive for the farmer to increase production. The incentive can come only if the prices obtained in the market are higher than, and not less than, the cost of cultivation. The Indian religious-cultural traditions appear to have been designed to keep the farmer needy and poor.

The prices in a truly free market do cover the cost of production/cultivation. It is only in cases where the Government intervenes in the market to the detriment of the farmer that he needs the mechanisms related to CACP or MSP.

The greatest beneficiary of increasing agriculture prices is the class of agricultural wage earners and the landless. Agricultural wages increase much faster than agricultural prices; NREGA or no NREGA.

... ... ...

Technology rather than land is the most important cause of agricultural productivity. Any act or attempt to block advancement of technology in agriculture can only be disastrous, particularly in an age of climate uncertainty.

There is nothing like bad technology per se. Every technology is good or bad depending on how it is used.

The evil effects of a technology are taken care of by going ahead to more advanced technologies.


All agriculture loans are both illegal and immoral. They are illegal because the moneylender forbids the performance of the contract by the farmers. They are immoral because the government owes the farmers, on account of the negative subsidy, much more than the farmers owe the government.

Agriculture needs an exit policy. The exodus from agriculture is a measure of development. Special Economic Zones and booming land prices can represent a great opportunity for a second Green Revolution and the liberation of most farmers from the burden of inherited land, if his right to property is scrupulously respected.

Human ingenuity and the capacity for innovation are the most wondrous things on this planet. It is this ingenuity that falsified Malthus and many a forecaster of impending doom.

This article was published in the Business Line on Wednesday, August 11, 2010. Please read the original article here.
Author : Mr Joshi is founder, Shetkari Sanghatana (Farmers' Organisation) & Member of Parliament, Rajya Sabha
Tags- Find more articles on - green revolution | loans

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