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Are You Aware of the Pros and Cons of Corporate Farming? Buzzle.com, 2016
Have you ever heard of the concept of corporate farming? Yes, the world of corporates has ventured into
agriculture too. While this may not sound surprising to some, many still seem to be unaware of this new
business approach.
Asian economies like India and Pakistan have resorted to
corporate farming in a bid to lure multinationals into investing
in the agricultural sector to reform it through industrialization.
This trend has especially been noted among textile industries.
Cotton seems to have attracted many such agricultural
companies that want to produce high-yield good quality fabrics
to fulfill the demand for exports. Economies of UK and US
have already witnessed this business phenomenon in their
agricultural sector. They are proofs of a highly developed food
industry with a well-developed agricultural system.
Merits of Corporate Farming
1. Reduced Agricultural Wastage
Timely harvesting of crops helps avoid wastage of food. This increases the yield produced from the same
input. Did you know? About 2% of the total farmlands in the US, under this type of farming, produce as
much as 14% of the overall crop production. Increase in output leads to decrease in food prices.
2. Better Quality Yield, Protect crop
Corporates are in a better position to protect crops through
extensive use of pesticides. This helps ensure minimal damage
to crops and a better quality yield. This farming also encourages
the employment of food cultivation techniques that increase the
storage life of crops for exports.
3. Reduced Minimum Support Price, Food inflation
This farming is definitely synonymous with large outputs that
lead to economies of scale. Hence, it helps reduce the minimum
support price. This means you pay lesser for the same food than
you did 5 years back. This will help keep a check on food inflation and bring down the prices of crops
and, thus, makes cheap food available to all and in large quantities.
4. New Technology, Combine harvester
A concept that is predicted to soon popularize in capitalintensive economies is the precision technology. Tractors will
be run through the control of satellites to harvest crops in a
much lesser time. This will inadvertently avoid wastage due to
deterioration.
5. Boosting the Agricultural
Sector, Agricultural in GDP
Industrialization of agriculture has helped in rapid production of crops to
meet the needs of the economy and revived the importance of agriculture in the GDP. It will also
contribute to the development of exports. Increase in agricultural production through the use of advanced
technology has obviously boosted the agri-scenario in developed and developing economies.
Demerits of Corporate Farming
1. Lower Profits for Farming Households, Lower profit
As agribusinesses are widening their horizons in agriculture, this has
severely affected the livelihood of many farmers. In economies
thriving on this type of farming, farmers face problems of reduced
profits or increased costs. This has largely affected the sustainability of
their occupations. They are then forced to enter into contracts with
companies for growing contracted crops on their farmlands that these
corporates buy at their quoted prices. They are left with no decision-making controls.
2. Reduced Nutrition, Agricultural chemistry
It also compromises on the nutritional value of food by using high
amounts of insecticides and pesticides to prevent damage to crops.
They blindly use food additives, coloring agents, chemicals and
hormone injection to speed up the process of crop maturity. Such
genetically modified crops lack nutritional content in comparison to
organically grown nutritious crops. This has become a great topic of
political and economic debate in recent times.
3. Higher Environmental Costs
Mechanization of agriculture through the use of technology has although increased the pace of all
production processes, it has made it difficult for the environment to cope up with this speed. It interferes
with the natural and biological processes of the environment. Moreover, corporate farming may soon be a
threat to the water bodies that will quickly dry up from excess irrigation, polluting of fisheries by disposal
of chemical wastes, depletion of oxygen in the atmosphere and increasing threat to all those engaged in
agriculture. It also pollutes the soil and is negligent towards animal health welfare.
4. Risk of Monopolistic Economies, Oligopolystic economies
It tends to encourage food production by only a handful of large
companies. This will promote monopoly or oligopoly in the
markets by concentration of production capacity and power and
create flaws in the existing system of market forces.
Corporate farming is not as rosy as it seems. Although its benefits
cannot be denied, its negative consequences have far-reaching
effects in the long term. Short-sightedness of the government to reap benefits in the present can lead to
economic disparity in the future. It also willingly invites intrusion from strong foreign corporates to
interfere with the economic and agricultural situation of a country. In translation, there will be
insensitivity to the demands of the people as they focus on profit maximization in agriculture. This may
mark the onset of severe global food crisis. Contract farming is another way forward to deal with the
usefulness of agribusinesses when corporate farming is not used to abuse the commercialization of
agriculture.