Chapter 9: Zero Budget Farming and Export Competitiveness of Agricultural Sector in LDCs: An Introspection with Reference to India

Introduction of organic farming and reduced dependence on inorganic family has positive implications for the economic viability of the small farming units in India’s agricultural sector. The privatization of access to seeds, fertilizers and other inputs, as an outcome of economic liberalization, has deeply dented the affordability of agriculture, especially at the level of small and micro farms, thereby undermining the export potential of the agricultural sector as well. Zero budget farming can be potentially effective in weathering out the affordability crisis and restoring economic viability of farming at large. This chapter is a moderate attempt to explore how a shift towards zero-budget farming from inorganic farming can improve the access of agricultural goods, as predominant component of their export basket, to the markets in developed countries (DCs), given the rising stringency of sanitary and phytosanitary and environmental standards, as well, coming disproportionately against the exports from developing and less-developed countries (LDCs), including India. With reference to Balassa’s the measure of revealed comparative advantage, the chapter points to the dwindling competitive advantage of India’s agriculture in global market during the last decade. Given the stringent environment standard facing, disproportionately, the exports from LDCs, zero-budget farming can improve the access of agricultural goods, as predominant component of their export basket, to the markets in DCs. The benefit from the creation of public goods by means of organic farming practices can be utilized to deepen the fiscal support to small and marginal farms.