Agricorps: A Contemporary Approach in Agriculture Management


Prateek K Anand


The predominately agrarian economy in Bihar is in desperate need of innovations. Agriculture management stands out as a critical area for such innovative intervention.  At present, agriculture management is beset with a number of crippling challenges. Some of these are as follows:

·         Fragmentation of land holding

o   Increasing pressure of population

o   Further accentuated by breaking up of joint families in a marked trend towards nuclear family.

·         Change in sociological needs:

o   Gender equity warranting ownership of land by daughters

o   Need to move towards restricted family size resulting in more common instances of daughters only family,  warranting acceptance of daughters as the sole inheritor of property

·         Need to  perpetuate ownership of meagre landholdings while striving for supplementing source of Income through add on means

o   Migration in search of supplementary income

o   Search for dependable regular income to reduce reliance on vagaries  of agriculture productivity

o   Providing assurance of ownership by protecting from unlawful land grabbing.

Tackling these emerging challenges would most probably require a new model of ensuring a collaborative framework of agriculture management so as to achieve a desired critical mass of land holding. This critical mass should be good enough in size to support modern farming techniques, including desired level of farm mechanization as would be warranted by planned state of agriculture economy. Again, going by the aforementioned challenges, there is a definite need to make the land assets more liquid and easily transferable while also providing assurance of protecting land ownership right of the rightful owners.  Such a model would call for ushering in ‘Virtual Corporatization’ of agriculture management. This would be a De Facto corporate model with necessary enabling statutory modifications peculiar to it.

Virtual corporatization as such will entail setting up of Agriculture Management Companies (agriccorps).  These agricorps should be vested with legally recognized uses rights on the land transferred by participating members without having ownership controls. Shares can be issued to participating members in lieu of their landholding in an equitable manner having regards to quantity and relative quality of lands.  Transfer of such shares would necessarily involve transfer of identifiable land holdings. A guiding policy framework can be adopted by the promoting members, and as may be modified/adopted by subsequent body of participating members. However, since ownership of land would not to be vested in such agricorps, a new formulation would be required to handle the liabilities whether direct or contingent.  It would also require an elaborate detailing of the kind of liabilities such agricorps can take and how those liabilities are going to be secured, subject of course to policy laid down unanimously by participating member. At any stage, participating member should have right to take control of his landholding along with  retained profit, if any,  away from agricorp after providing for a suitable notice period, say six months, on surrendering his/her shares. 

To facilitate development of agricorps, government will have to bring in enabling statutes.  Changes would be required in stamp act/ registration act, apart from other statutes, to facilitate smooth operation and popularity of such agricorps. Since activities of these organizations would be limited within state, I believe state government would be a competent authority to legislate in regards to developing this breed of corporate.  Moreover, agriculture stamp duty and registration falling under the jurisdiction of state government, state government would be in and ideal position to cultivate this new breed of agricorps.  Even the taxation on agriculture income would be under purview of legislative power of state.

Promoting this new breed of innovatively structured agricorps can have multiple benefits. Moreover, it can certainly help address the aforementioned challenges in the agriculture management.  Specifically, it would help in:

1.       Resolving the problems arising out of excessive fragmentation of landholding by consolidating the land owned by shareholders under these agricorps. This would help create an aggregated investible fund.   Large scale mechanization and optimization of investment would be possible when land holdings are aggregated under such agricorps.  Economy of scale can be other off shoot of such structuring.

2.       Such agricorps will be in a better position to tap Quality inputs, throughput. It will also be in a better position to access markets.

3.       Land as an asset will become highly liquid as these will be represented by tradeable instrument inform of shares.. This will help address numerous challenges necessitated by some highly desirable societal changes as mentioned earlier.

4.       These agricorps would provide a regular source of income to manpower employed on its rolls.  Other members of such agricorps would be free to pursue alternate source of income without being tied down.  At the same time, these members would continue to enjoy regular income commensurate with the size of their landholdings.

5.         Such structuring will also bring down instances of land disputes and illegal land grabbing.

Unless aforementioned emerging issues in agriculture management are addressed appropriately, associated problems will get further aggravated.  It is time to resolve these issues in innovative way to reduce the build up of unwarranted stress in agriculture management.


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