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Large farmers in Punjab find expansion tough

Sikh farmers sit inside their makeshift tent at Singhu, the Delhi-Haryana border camp for protesting farmers against three farm bills, in New Delhi, India, Wednesday, Jan. 27, 2021. Leaders of a protest movement sought Wednesday to distance themselves from a day of violence when thousands of farmers stormed India's historic Red Fort, the most dramatic moment in two months of demonstrations that have grown into a major challenge of Prime Minister Narendra Modi’s government. (AP Photo/Manish Swarup) (AP)Premium
Sikh farmers sit inside their makeshift tent at Singhu, the Delhi-Haryana border camp for protesting farmers against three farm bills, in New Delhi, India, Wednesday, Jan. 27, 2021. Leaders of a protest movement sought Wednesday to distance themselves from a day of violence when thousands of farmers stormed India's historic Red Fort, the most dramatic moment in two months of demonstrations that have grown into a major challenge of Prime Minister Narendra Modi’s government. (AP Photo/Manish Swarup) (AP)

  • Troubled by limited profits in farming, large-scale farmers in Punjab have tried to diversify their incomes but have found little success, says research

For farmers in Punjab, profits from agriculture have become limited and unpredictable over the years. Large-scale farmers try to resolve this by investing in other businesses. But a study shows these investments haven’t worked as they don’t generate the income farming does.

The study, by Shreya Sinha of University of Cambridge, UK, is based on a 2014-15 survey of 93 agricultural households across four villages in Ludhiana district of Punjab. Of these, 32 were large farmer households who have tried to diversify their income sources.

The easiest way to diversify is to invest in activities around agriculture itself, such as dairy farming or milk production. But respondents complained about poor returns and high costs for cattle feed and workers. Rice mills that process paddy grains into polished rice are another alternative, but these need an investment of 1.5-2 crore, which not many can afford. Renting out equipment such as combine harvesters is also possible. But rental rates have dropped due to an oversupply of such equipment in Punjab.

Farmers have also diversified into non-agriculture businesses. One example is transporting goods, with the farmer either owning the business or driving trucks themselves. One respondent did this for 10 years but quit as he made a much smaller profit than he had hoped for.

Two large-scale farmers in the study had tractor dealerships but said their profits had come down. They said they used to get commission on sales earlier, but now had to buy tractors from manufacturers outright and then sell them on.

Since it’s hard to invest successfully in businesses outside farming, many households focus their attention back on agriculture. All this means that large-scale farmers in Punjab find it difficult to grow either inside agriculture or outside of it.

Also read: “Revisiting agrarian questions of capital: examining diversification by capitalist farmers in Punjab, India"

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