In this essay we will discuss about large-scale farming.
According to Carver, large-scale farming can be defined as farming where there is land enough, capital enough and men enough employed to make it economical for the manager to give his whole time to the work of supervision and management, all manual work being done by employees working under his direction, Tea, coffee and rubber plantations in India are the best examples of large-scale farming.
The advantages of large-scale farming in agriculture are similar to the advantages of the large producing unit in other industries. Thus there are commercial and financial advantages as well as technical and managerial advantages in large-scale farming as in large-scale manufacturing industries.
Commercial and Financial Advantages:
(1) Economies in Buying:
The commercial and financial advantages of the large farm follows from the superior bargaining powers of the large farmer in buying supplies, in selling produce and in obtaining credit.
The merchant who supplies the large farmer with his feeding stuffs fertilizers and other requisites values his custom not only because he buys more than the small farmer, but also because it is more, convenient and cheaper to supply one large order rather than several small ones. Savings in transport, in handling and packing and in book-keeping may justify the merchant in giving the large farmer preferential treatment in prices, in discount and rebates, and in prompt dealing.
(2) Economics in Selling:
Corresponding advantages accrue to the large farmer when he is the seller. Like the merchant, the farmer also finds it more convenient as well as more remunerative to sell his goods in bulk and in large quantities.
(3) Grading:
Large supplies generally make it possible to practise some measure of grading which should, theoretically, result in a higher average price for all the goods sold.
(4) Better Bargaining Power:
These farms have better bargaining power. The big farmer is able to get concessions when he buys his requisites or sells his produce on account of large volume of business he controls. Large producers can establish buying and selling organisations of their own.
(5) Easy and Cheap Credit:
Similar economies of scale occur in the financial sphere, for the large farmer is generally able to borrow money and obtain credit with greater ease and at less expense than can the small man.
(6) Storage Accommodation:
The easier financial situation means that the large farmer is in a better position to buy his requirements when favourable opportunity occurs, and to hold his goods for sale at the most opportune time. In this connection the greater storage accommodation available on the large farm is a great help.
In this way the commercial and financial advantages react on each other, and together they place the large farmer in a relatively vary favourable trading position.
Technical and Managerial Advantages:
The technical and managerial advantages of the large-scale farming, as of the large factory, result from the possibilities of a more effective utilization of the available supplies of the three factors of production.
(1) Reduction in Average Overhead Costs:
Capital in the form of permanent equipment, such as buildings; fences, roads and ditches, makes up a relatively smaller part of total capital requirements as farms increase in size. Moreover, the land area occupied by such permanent equipment also becomes smaller relatively to the total acreage of the farm.
It follows that on the larger, farms a higher proportion of the capital and of the land is available for direct productive use with a consequent reduction in overhead costs per unit of product produced. This should be of particular importance in agriculture which is an industry where the fixed overhead charges form a disproportionately high part of total production costs.
(2) More Efficient use of Machinery:
The large farmer is also better placed to make more efficient use of machinery under his own control. Thus on the large farm there is a better chance of power and other machinery being used to its maximum capacity while the larger fields greatly facilitate the ease and economy of manipulation.
(3) Machines in Skilled and Specialist Hands:
Machines can be placed in expert hands and can be better serviced on farms which are large enough to have workshops of their own and stock their own supplies of spare parts.
(4) Flexible Profit-making Opportunities:
In the financial sphere the large farmer also possesses the advantage of a bigger turnover which gives him a greater total profit even when his margin of profit per acre is low.
For example, a farmer with 500 acres will have a sizeable income if he has a profit margin of only Rs. 25 an acre, but a small farmer with 50 acres would have to make a profit of Rs 200 per acre to make the same total income. In other words, the profit-making opportunities are more flexible on the large farm, and, in particular, the large farmer can adopt systems of farming which return only a small profit per acre.
(5) Efficiencies of Division of Labour and Use of Expert Skill:
Perhaps the most important advantage of all, is the opportunity which exists on the large farm of benefiting from the efficiencies of division of labour and the use of expert skill. Division of labour is only possible where a team of workers is engaged.
Moreover, no fixed hours of work or regular leisure and holidays are possible except when several workers share the task of the farm. Of even greater significance is the division of function between managerial and manual workers.
This is possible only on the larger farms, for on small farms where one or two men constitute the whole labour force there is no time, even though there may be aptitude and ability, for the exercise of any really effective managerial function.
(6) Employment of More Labourers:
On diversified farms it means the employment of more labourers also. If the farm is to take the advantage of both the modern machinery and diversified faming, it will need more labourers to cultivate that part of the land which is not under the crop whose cultivation is most mechanized.
(7) Economies in Skill:
It provides good scope for economies in skill also. In fact there is less scope for acquiring skill by constant repetition of the same job because in agriculture, operations cannot be reduced to a rigid routine, as in industries. But great economies can be secured by the utilisation of natural aptitudes.
(8) Reduction in Labour Costs:
Large farms give opportunity to reduce labour costs by putting each worker to the task to which he is most suited. The efficient manager of the large farm can batter determine what will pay and what will not pay, so that he is in a much better position to direct the labour to the best advantage.
Disadvantages of Large-Scale Farming:
The advantages of large farms are not decisive in agriculture. There are certain disadvantages as will which tend to encourage small ones. Small farms are able to achieve as low costs as the large farms in spite of the above advantages enjoyed by the latter.
This disadvantage of large-scale farming are:
(1) Difficulty in Supervision:
In agriculture, unlike in manufacturing industries, workers are not concentrated in a small area. When the farm is large and the labourers are scattered over a large area, the supervision becomes difficult.
The management, therefore, becomes less effective. As more and more of the details are delegated to hired looked after directly by the master. When the master is absent, as in an army when the general is absent, all things will be at a standstill.
(2) No Personal contact between Farmers and workers:
As the old saying goes, “It is the eye of the master that does more towards fertilizing a field than anything else.” This colse ‘eye’ is not possible in large farms. There are no personal contacts between the farmer and the workers.
(3) Lack of Personal Attention:
Crops which require personal attention cannot be profitably grown on a large farm depending on hired labour. Such labourers have no personal interest in the work and it naturally increases the cost of such crops.
(4) Loss of Time and Energy:
As large-scale farming means large area of land, there will be loss of time and energy in travelling from one end of the farm to the other and transporting tools, machinery, seeds and crops from one part to another part of the farm or form one farm to the other- farm.
(5) No Splitting of Work into Standard Units:
The work to be done on, the farm varies according to the seasons and according to changes in’ the weather. The work cannot be reduced to routine or split up into standard units in agriculture.
Thus, while in a factory where, work is continuous and has been reduced to routine a manager can easily supervise and direct a thousand labourers, in agriculture “to direct a hundred would require the ability of a military commander, a merchant prince, or a railway magnate, while to direct a thousand effectively enough to be economical, may safely be said to be a human impossibility:” (Carver).
(6) Sudden Uneconomical Changes:
Sometimes unforeseeable changes like floods and storms upset the plans of the farmer and sudden changes might necessitate a recollection of the work among the labourers’, at very short notice. This increases the expenditure and large farming becomes uneconomical.
(7) Difficult to Manage and Control:
In large farms there are large number of workers who are temperamentally more individualistic than the labourers in towns and therefore, they are more difficult to manage and control. On the whole the advantages of large-scale operation are much less in agriculture than in industry. Because of these difficulties, the talented businessmen move to industry from agriculture.