Question

How can underemployment be reduced in agriculture? What steps should be adopted by the Government?​

Answer 1

There are two mechanisms by which lead firms can reduce underemployment among the rural poor, thus, achieving inclusive growth. A lead firm can provide permanent employment in a processing plant or a packaging plant (for aggregators).

Second, a lead firm can eliminate underemployment by making use of a farmer’s extra time to produce inputs, for example, cacao beans that a lead firm needs. Coconut farmers who work every three months may now be fully employed if they grow cacao to intercrop with coconuts to supply the lead firm (aggregator) with cacao beans. This is important since not all farmers can be directly employed by the lead firm. Government must put in special attention to attract lead firms. But, the process of attracting lead firms is different from that of non-agriculture manufacturing lead firms. The main problem of lead firms in agriculture is supplying the minimum input volume required to keep the plant running or to meet the demand of the aggregator. To meet the volume requirement, a lead firm should either produce all the inputs on its own, buy from contract growers, or a use a combination of producing the inputs and buying from contract growers.