On the political economy of corporate encroachment in agriculture: short term macroeconomic concerns

Macroeconomic interactions between agriculture and non-agricultural sectors of a developing economy are irreducibly linked to corporate encroachment in agriculture. In this paper we discuss some short run aspects of macroeconomic interaction between the agricultural and non-agricultural sectors of a developing economy like India with implicit and explicit policy support to the process of corporate encroachment in agriculture. We then set out a simple mathematical model to evaluate the macroeconomic consequences of policy support to the process of corporate encroachment in agriculture. An important component of inter-sectoral relationships in India has been the institution of a system of public procurement of agricultural commodities and its disbursal through a public distribution system. Policy support to corporate encroachment in agriculture has involved both these components for instance an attenuation of public procurement and a diminution of the public distribution system due to targeting. Though the Three Farm Laws have been repealed, the threat of further corporate encroachment into agriculture, through other means, remains.