Globalization of Agriculture and Atomization of Farming: Small Farms Crisis in Asia

Abstract

Agriculture in Asia is being pushed into a new policy regime that uncritically promotes free trade and laissez faire policies. The World Trade Organization agreement on agriculture, regional preferential trading arrangements (PTAs) and neoliberal policies pursued by the individual nations are the central features of the new regime. The new regime is built disregarding the existing knowledge on agricultural commodities that they are prone to market failures, which are unlikely to be corrected if left unregulated. In this article, we portray the new regime in terms of two defining processes that are at work, viz. globalization of agriculture and atomization of farming. Globalization happens on account of integration of the agricultural markets at provincial, national and global levels. Atomization of farming occurs due to fragmentation of holdings on the one hand and weakening of ‘collective action’ on the other. In the farming end of the value chains, millions of small farms, who lack any market power whatsoever, compete among themselves. The post-harvesting nodes have fewer and larger firms. As we have argued at length, the large firms inhabiting the postharvest nodes of the commodity chains are capable of extracting profit out of volatilities in the market. The non-farm nodes are characterized by economies of scale and possible accumulation of market power. Such profiteering will be at the expense of the atomized farms as well as the final consumers of the commodities. The policy has become suddenly very active in abetting competition upstream and limiting it downstream. The regime legitimizes entry barriers downstream and intervenes directly to promote entry, augment supply/competition upstream. The policymakers do not want to intervene in the market to save producers from commodity problems; instead favour players profiteering out of such possible instances of market failure.