[Answered] “Any long-term solution to the problem of unemployment to which the slowing growth of the economy is related must start with agricultural production.” Comment.

Growth has slowed for the past few quarters. Figures reported in the report of the last Periodic Labour Force Survey point to a dramatic rise in the unemployment rate since 2011-12. Rural incomes are growing so slowly. The low productivity of agriculture is one of the reason and thus need to be focused to reduce unemployment in India.

Why focus on agriculture production is important to tackle unemployment?

1. The rural population focus is important because of their low incomes. The future growth of demand for much of industrial production is likely to come from there.
2. The high unemployment rate for ‘Rural Males’ does suggest that unemployment is mainly due to lack of focus on rural stimulus.
3. A focus on agricultural production is important as it would help in stimulating demand in market that would boost economy and would lead to employment.
4. Unstable agricultural production first lowers the demand for agricultural labour and, subsequently, its supply, showing up in greater unemployment.
5. It has been pointed out that the investment rate has declined. When non-agricultural firms observe slow agricultural growth, industrialist likely to reduce their investment plans. Thus, attempting to influence the private investment rate is to only deal with a symptom. It is rural income generation that is the problem.
6. Farming and the food industry sustain a significant proportion of employment and income. In recent decades, a number of trends in agribusiness have reduced the capacity of those activities to sustain employment.
7. Unemployment rates are generally significantly higher in rural than in urban regions. In rural areas, it is estimated that “hidden unemployment” (involving underemployed farmers and farm workers) is higher than in urban areas.

What should be done?

1. A decentralisation of food processing, packaging and marketing functions could bring new employment to rural cities creating local value-added.
2. The main economic challenges for young entrepreneurs and small farms are access to farming resources (such as land and capital) and access to markets, particularly in terms of bargaining power in the food chain. Such bottlenecks should be removed.
3. The new communication technologies and infrastructures, like the Internet, have made numerous jobs independent of the place they are performed. These technologies also give access to knowledge, consultancy services and to the world market. Rural cities, or individuals living in rural areas, can thus offer their products, skills and services to a broader market. Thus digitisation drive should reach rural areas and remote places.
4. By developing strong partnerships, local producers can engage in ‘cooperation’, or the sharing of resources from equipment to ideas while operating as competing individuals.

Agri-food production still plays an important role in terms of GDP, employment and environmental sustainability. When implemented successfully, a local food system can have a positive impact on three critical levels: environmental sustainability, economic viability and social equity. Acting on these three critical levels generates opportunities for young workers to start up new business, create qualified jobs, improve their quality of life and wellbeing, strengthen their sense of belonging and integrate them into the community.