Q18.In view of the declining average size of land holdings in India which has made agriculture non–viable for a majority of farmers should contract farming and land leasing be promoted in agriculture? Critically evaluate the pros and cons.

Declining average land holdings render traditional agriculture non-viable for many farmers. Contract farming and land leasing emerge as potential solutions to address these structural challenges, aiming to improve farmer income and agricultural efficiency.

• Contract Farming: Offers assured market, price stability, access to technology, quality inputs, credit, and risk sharing for farmers.
• Land Leasing: Provides rental income to small/marginal farmers, enables efficient cultivators to achieve economies of scale, and ensures better resource utilization.

• Contract Farming: Risks include exploitation by corporates, price manipulation, weak farmer bargaining power, and challenges in dispute resolution.
• Land Leasing: Concerns involve tenancy insecurity, potential displacement, land alienation, impact on food security if non-food crops are prioritized, and lack of formalization.

While offering significant benefits, their success hinges on robust legal frameworks, formalization of leases, effective dispute resolution mechanisms, and strong farmer protection to ensure equitable outcomes and prevent exploitation. Promoting these models requires a balanced approach, integrating policy support and institutional safeguards to transform agriculture sustainably and inclusively.