Agriculture LAbour

Prof. M. K. Awasthi
Agriculture Management Centre
Indian Institute of Management Lucknow

Labour market in India

Low level of open unemployment (3.1%)
High level of disguised unemployment, mostly in rural areas
and in agriculture.
Regional demand and supply
High level of womens participation in agri workforce.
Child labours share in workforce declining, but in absolute
numbers still quite large.
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Child Labour in
Agriculture
Poverty is the major cause behind child
labour.
Poor people mainly rely on labour to
earn their livelihoods
Impact of Child labour
Social
Economic
External trade

How to handle this issue ??

Labour market structure

Labour market consists of 3 sectors.
Rural workers constitute about 60% of the workforce.
Organised sector employing 8% of workforce, and
producing 40% of GDP.
Urban informal sector the growing sector
represents the residual.
Workforce shift across sectors

Employment growth
Structural transformation agriculture's share declining.
Implication ?

Low or negative employment elasticity.

Employment is shifting towards services, not industry.
Between 1997-04, 1.8 million (6.4%) jobs lost in organised

sector including 1.2 million (18%) in manufacturing.

In Agriculture ??
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Wages
Agricultural Wages have since 1980s
Yet lower than minimum wages.
Casualisation of employment contracts in all sectors.
Decline in self employment.
Wages still low to overcome absolute poverty.

Major Labour Issues?

Deteriorating employment scene, despite acceleration in output growth
since 1980 need for massive employment generation effort, especially
in rural areas.
Deceleration in agriculture since 1990
Agrarian distress suicides, extremism
Labour market seasonality.
Migration
Shift to non Agri sector
Child labour
Disguised employment
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Labour legislations
Mostly deal with the organised sector. Extent of
protection and benefits increase size of firm or factory.
Minimum wages practically ineffective; no national
minimum wage; no social security.
Job-security law in organised sector reportedly makes it
impossible to lay-off and retrench workers.
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Rigid labour market?

Small and unorganised, and competitive labour market.
Leads to labour market rigidity:
substitution of capital for labour,
reducing economic growth,
hurting labour intensive exports.

Employment concern
Declining employability to increasing sophistication in
agriculture.
Declining opportunities due to lack of agricultural
growth, and agrarian distress.
Employment guarantee scheme.

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Challenges in Agri Labour

Maangement

inadequate employment opportunities in agriculture

(which are driving people away especially youths);
poor working conditions (e.g. low pay, informality,
low job security and inadequate social protection);
poor occupational health and safety;
Low emphasis and awareness on child labour
concepts

Challenges Cont
low labour productivity particularly of women

and youth;
limited access to information, markets and

adequate infrastructure;
weak enforcement of labour related

legislation in rural areas; and

Gender discrimination.

Assignment
Prepare business environment report of a commodity of
your choice