How agriculture could resolve India's unemployment crisis

Two years after millions of daily wager workers trudged home, walking hundreds of kilometres on foot, after a lockdown was suddenly imposed, the Centre for Monitoring of Indian Economy (CMIE) has come out with a study on India's labour force participation rate which says that 900 million people are not even interested in getting a job. "They even stopped looking for employment, possibly too disappointed with their failure to get a job under the belief that there were no jobs available," the report said.

In a country where job creation tops the country's political agenda, you will agree that 900 million not clamouring for any job is not a small number. It is almost equal to the combined population of Russia and the United States. That such a large proportion of India's population is disenchanted with any possibility of finding a decent job, and instead has decided to drop off the employment register, is a pointer to a historical blunder in economic thinking and approach. The bigger tragedy however is that we still fail to acknowledge where we have gone wrong.

When the lockdown happened, an estimated 100 million people had walked back inter-state and intrastate, many with their children in lap and baggage to drag. The reverse migration that the country witnessed on their TV Channels was perhaps no less distressing than the migration that shook the country at the time of the partition. Some migrant workers had returned back to the cities when the pandemic had eased, but a majority had preferred to stay back. Despite such a large influx, a distressed agriculture was still able to absorb the additional migrant workforce.

The CMIE now says that in March alone industrial jobs fell by 16.7 million. Agriculture made up for the job losses, adding another 15.3 million to the already existing workforce. But still I find that the dominant economic thinking relies on the revival of non-farm activities, and not agriculture, to create ample employment opportunities. This is what Economic 101 had programmed us to believe – to achieve higher economic growth; the number of people dependent on agriculture has to be brought down. This outdated economic thinking continues to dominate our public policy. Even now when the world is witnessing a job-loss growth, with automation and artificial intelligence taking over industrial production, our economic thinking – howsoever irrelevant it may be in the times we are living in – hasn't changed.

While a big drop in employment opportunities by the big industry is being pointed to, some media publications even prefer to quote a 2020 study by McKinsey Global Institute, which says India needs to create another 90 million jobs by 2030. In my opinion, this is an outdated economic thought, a narrative built during the era neoliberal economics began to dominate. It still continues to prevail. I find even some of the best brains, and that includes economists, academicians and writers, are unable to look beyond what they had studied in their graduation courses. Times have changed, and so have the employment dynamics but our economic thought process hasn't.

Let's first try to see what we are missing out. In both the cases – first the lockdown period and now the slump in labour force participation rate in March 2022 – the underlying message is that agriculture, despite the neglect and apathy over the decades, alone has the potential to absorb large sections of the population. Instead of pushing small farmers to migrate to the cities in search of menial jobs, revitalising agriculture can easily turn the tables, providing for gainful employment. Give farmers a guaranteed price, along with enhanced public sector investments, and agriculture can easily turn into a powerhouse of economic growth. And let me reiterate, agriculture alone has the potential to reboot the economy.

After all, the 900 million people who have lost interest in seeking employment are not sitting idle. Whether we like it or not, a majority of them have a foot in farming, and with their household food security taken care of, they may be engaged in other part time activities. Instead of still hoping that someday the manufacturing sector will be back on track, and the higher economic growth projections that we continue to make – 9 per cent and above - will provide for additional non-farm jobs, the right challenge that policy makers need to take up now is to shift the focus to rebuilding agriculture.

Although many economists feel elated when some reports appearing at different times indicate an increased rate of out-migration from villages, this economic thought is borne out of a mindset that refuses to see the changes on the horizon. With roughly 50 per cent of India's population, a little more than 600 million, dependent on agriculture, the challenge should be on how to make farming a viable enterprise. Instead of pushing people out of the villages, the better option would be to make villages prosperous. Just because the US and European Union have relentlessly pushed farming population to move to the cities doesn't mean that we too have to blindly follow that prescription.

Let us not forget that a farmer is also an entrepreneur. Despite having small landholdings, 86 per cent owning less than 5 acres, they still continue to produce a record harvest year after year. With a continuous decline in public sector investments in agriculture, which the RBI had in a study calculated it to be around 0.4 per cent of the GDP between 2011-12 and 2017-18, we can't expect the small farmers to perform a miracle. But still they continue to provide a strong economic base for the country to rely on. If only we had given farmers their right due, and provide them with the right kind of public infrastructure, I am sure they would be able to convert farming into a favoured economic enterprise for the future.

But first and foremost, our policy makers must acknowledge the historical blunder to treat agriculture as an economic burden, to treat agriculture as a laggard. For long, I have maintained that the policy of sacrificing agriculture for the sake of industrial growth is only helping in building a strong army of agricultural refugees, who are being deliberately driven out of agriculture to swarm into the cities in need of cheap labour. The over-emphasis on industrial sector had turned focus away from the agrarian community. That was a mistake.

If only, we had stood firm and instead focused on resurrecting agriculture, it would have been the most appropriate way to achieve Sabka Saath Sabka Vikas. Instead of worrying about the lack of non-farm employment, let's shift the attention to making farming a viable entity.

(The author is a noted food policy analyst and an expert on issues related to the agriculture sector. He writes on food, agriculture and hunger)