Context:
With increasing contributions, the focus is on how Corporate Social Responsibility (CSR) can support Indian agriculture to become both economically viable and ecologically sustainable.
Relevance:
GS III: Agriculture
Dimensions of the Article:
- The Need for Corporate Social Responsibility (CSR) in Agriculture
- How CSR Can Transform Agriculture
- Challenges in CSR Implementation in Agriculture
- About Corporate Social Responsibility (CSR)
The Need for Corporate Social Responsibility (CSR) in Agriculture
Context and Challenges
- Dependency on Agriculture: Nearly 47% of India’s workforce is employed in agriculture, highlighting its critical role in the economy. The sector supports over 70% of rural households, with a majority being small and marginal farmers who face significant challenges.
- Access to Resources: Many farmers struggle with high interest rates and limited access to formal credit sources, which hampers their ability to invest in necessary inputs like seeds, equipment, and fertilizers.
- Infrastructure Deficiencies: Inadequate rural infrastructure, including storage, transportation, and irrigation systems, often leads to post-harvest losses, inefficient supply chains, and reduced market access.
- Environmental and Operational Challenges: Unpredictable weather patterns, poor irrigation practices, and overuse of chemicals contribute to soil degradation, water scarcity, and increased vulnerability to natural disasters.
How CSR Can Transform Agriculture
Technological Integration
- Precision Agriculture: CSR programs can facilitate the adoption of advanced technologies such as sensors, drones, GPS, and data analytics. These tools can help farmers optimize irrigation, fertilization, and pest control, enhancing crop health and sustainability.
Financial Support
- Affordable Financing: Collaborations between companies and financial institutions can provide farmers with low-interest loans and subsidies, improving their access to essential agricultural inputs and services.
Sustainable Practices
- Renewable Energy: CSR initiatives can promote the use of renewable energy sources in farming operations, such as solar power, wind energy, and biogas. This shift not only supports sustainable agriculture but also reduces the carbon footprint of farming activities.
Biotechnological Advancements
- Biotechnology and GMOs: Supporting the development of biotechnology and genetically modified organisms can make crops more resistant to pests and diseases, enhance stress tolerance, boost yields, reduce dependency on pesticides, and improve overall food security.
Capacity Building
- Skill Development: Providing farmers with access to knowledge and skill-building programs can equip them with modern farming techniques. This empowerment enables them to enhance productivity, minimize risks, and adopt more efficient farming practices.
Market Linkages
- Value Chain Integration: CSR can help create and strengthen market linkages for farmers, ensuring they receive fair prices for their products and gain access to broader, more lucrative markets. This integration is crucial for improving the economic stability of farming communities.
Challenges in CSR Implementation in Agriculture
Lack of Clear Definition and Scope
- Ambiguous Demarcation: CSR activities related to agriculture often lack clear definitions and well-defined objectives, making it challenging to align and execute these initiatives effectively.
- Broad Legal Framework: Under Schedule VII of the Companies Act, 2013, agricultural sustainability activities could fit into multiple development sectors, such as gender equality, poverty alleviation, technology incubators, and animal welfare, adding to the complexity of categorization and focus.
Focus on Short-Term Goals
- Short-Term Orientation: Many CSR programs are designed to achieve quick results, whereas agriculture benefits from long-term investments and continuous support to achieve significant and sustainable outcomes.
Measurement Challenges
- Difficulties in Impact Assessment: The social impact of CSR initiatives in agriculture, especially in rural settings, is often hard to quantify. Metrics like improvements in farmers’ incomes or enhancements in livelihoods and well-being due to CSR activities can be subjective and difficult to measure accurately.
Integration with Business Strategies
- Business Alignment Challenges: Companies may find it challenging to integrate CSR strategies in agriculture with their core business strategies, particularly if there is no direct linkage or benefit. For example, cosmetic companies might see little incentive to invest in farming practices.
Resource Allocation
- Competition for CSR Funds: Agriculture often receives less focus as CSR funding is predominantly directed towards education and health sectors.
- Diversion of Funds: Significant CSR funds are sometimes redirected to broader purposes like the PM CARES Fund, which can reduce the availability of funds for specific sectors like agriculture.
Focus and Implementation Issues
- Narrow Focus: CSR initiatives may target isolated aspects of agriculture, such as providing training or technology, without addressing broader challenges like climate change, market access, or financing.
- Partnering Difficulties: Finding NGOs in rural areas that align with specific CSR objectives can be challenging, complicating the implementation of projects.
- Geographic Disparities in Funding: A significant portion of CSR funds is often allocated to more industrialized states such as Maharashtra, Karnataka, Gujarat, and Tamil Nadu, leaving less-developed regions with fewer resources.
- Strategic Misalignment: Companies may prefer to channel their CSR efforts into regions where they have existing operations or stronger ties, rather than strategically allocating resources to areas with greater needs.
About Corporate Social Responsibility (CSR)
- The term “Corporate Social Responsibility” in general can be referred to as a corporate initiative to assess and take responsibility for the company’s effects on the environment and impact on social welfare.
- Section 135 of the Companies Act mandates corporates who are beyond a certain level of profits and turnover to pay at least 2% of their net profits before tax to the development space.
- India is the first country in the world to mandate CSR spending along with a framework to identify potential CSR activities.
- The indicative activities, which can be undertaken by a company under CSR, have been specified under Schedule VII of the Act. The activities include:
- Eradicating extreme hunger and poverty,
- Promotion of education, gender equality and empowering women,
- Combating Human Immunodeficiency Virus, Acquired Immune Deficiency Syndrome and other diseases,
- Ensuring environmental sustainability;
- Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women etc.
How is the CSR law helping?
- Corporate Social Responsibility (CSR) grants, which wouldn’t necessarily have flowed had it not been for the CSR law, have assumed importance to provide the much-needed sustenance to NGOs and CSOs as key players in non-state governance.
- This law gives corporates the necessary impetus to collaborate with non-state actors like Non-Governmental Organisations (NGOs) and Civil Society Organisations (CSOs).
- This strengthening of citizenry-private partnerships is a major component of development activities and this is a classic case of state-driven governance mechanism promoting collaboration among non-state actors.
-Source: The Hindu
