Agricultural workers in action at a farm in Kaharole upazila in Dinajpur
Syed Zakir Hossain/Dhaka Tribune

The agriculture sector provides a livelihood to nearly 70 per cent of India’s 1.3 billion people

The Indian farming revolts are not directly applicable to the situation here in Bangladesh. The government here has not just changed the law in the manner that so enrages the farmers. However, the underlying problem is relevant. 

The agriculture sector provides a livelihood to nearly 70 per cent of India’s 1.3 billion people and accounts for about 15 per cent of the $2.7-trillion economy.

As many as 70 per cent of the people are labouring away — and no one is going to say that running a small farm isn’t hard work — to produce only 15 per cent of the output. That is a problem. It’s a problem for those doing it and it’s also a problem for the rest of us.

For the farmers, the problem is that your lifestyle can only be financed by whatever it is that you do. 

Whatever the value of your output is, that’s the maximum amount that you can have as your income. 

So, if Indian, or other, farmers are only producing a low value of output, then their incomes can only be low. That’s just how the universe works.

Given that we would like everyone’s income to rise, that means one of two things. Either we would like fewer farmers, or we would like more productive farmers. 

The second means exactly the same thing: higher productivity means having fewer people producing the same output. 

Really, this is true. If 70 per cent of the people were producing 70 per cent of the GDP, then those 70 per cent would have incomes and lifestyles similar to the average across the economy. 

If 70 per cent of the people are only producing 15 per cent of GDP, then their incomes, the incomes of all those 70 per cent of the people, can only amount to 15 per cent of GDP. The other 30 per cent of the people, i.e. those producing 85 per cent of the GDP, must have much higher incomes. 

The mathematically minded can work out the ratio for themselves. It is exactly because that mass of people doing the farming produce such a small portion of value that their incomes are below the average. In fact, lots below the average. 

So, how do we get richer farmers? By becoming more productive, of course. We also know how to do that. 

Farms need to become larger (the average Indian farm is two hectares), which makes the replacement of pure human labour with more expensive machinery work out. 

Each unit of human labour thus becomes more productive, leveraged up by that machinery and automation. 

After all, there is no point in buying a tractor to use on only two hectares, while it makes great sense if it is 200. 

But, clearly, if farms are to increase in size to make the use of machinery sensible, then we are going to end up with fewer farmers.

That is, our solution simply does mean that we end up with fewer farmers. There is no way to avoid this. 

No system allows us to keep 50 per cent or 70 per cent of the people on the land and also increase incomes above those of rural peasantry. Because, if people are doing peasant farming, then their incomes will be those of peasant farmers.

This is what has happened in every rich country too. 

The US has perhaps 1 per cent of the people still working the land. My native UK perhaps has 2 per cent. 

Each individual works on much more land, using the latest machinery. That’s just what the economic development of farming is. 

At the level of the entire society, this is also necessary. 

For it takes human labour to do all the nice things that go into building a civilisation. 

Think of an extreme old-style economy. One where 90 per cent of the people are working on the land, on those small plots, using just human and animal labour.

That is roughly how history was for thousands of years. 

Today, the US uses 13 per cent of all workers just to run the health care system. 

Okay, the American health care system has its problems, but the UK’s health care system uses some 10 per cent of all workers. If we have 90 per cent of the people on the land, then can we cannot have 13 per cent in the hospitals? 

So, there is an argument — perhaps it is an example — that tractors allow us to have hospitals. 

By automating farming, so that we need less human labour there, we can have the human labour, the workers, who can be in our hospital system. 

This carries on: by moving people off the land, we can have schools, universities, factories producing nice things, insurance companies, ballet, opera, libraries, all those things that do make up a civilisation.

That is, if we want to have economic development, then we have got to free up that labour from the fields so that we have got the workers to build the civilisation. 

With the rather nice side effect that as those ex-farm hands are now producing more value, they will also enjoy higher incomes, live better lives.

Quite how we do this can be argued about. Perhaps the Indian example is not quite the way to do it — as it so often is not. 

But it is a simple fact about this reality that we inhabit, that for us all to become richer we need to have fewer — and thus richer — farmers. 

Everywhere in the world that has become rich has done this. 

No path to becoming rich includes still having half the population or more living on one- and two-hectare farms. 

The question is not whether we reform agriculture but how do we do so.

 

Tim Worstall is a senior fellow at the Adam Smith Institute in London



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