Working Papers

In the new economic environment of liberalisation, privatisation and globalisation, the role of the Multi-National Corporations (MNCs) has come under scrutiny once again as their record in the past in terms of contribution to development in general, and rural development in particular, has been less than satisfactory. The agribusiness MNCs are perceived to be harmful to domestic production and social systems as they affect large sections of rural economy and society by way of intervening in rural production systems. This paper looks at the role of two MNCs in employment generation in the agriculturally grown, but stagnating since the early 1980s, rural economy of Punjab. The state was subjected to contract farming under these MNCs in the early 1990s for improving rural employment and incomes. It is found that the MNCs have hardly generated any employment of the kind which was required. Most of the employment generated is in the farms which is seasonal and low paid and hence, more for women and children. This employment may also disappear as these MNCs are going for more and more labour saving farm practices. Also, the MNC projects are perpetuating many of the existing problems of the farm sector in the state. The paper concludes by suggesting a more pragmatic approach while dealing with the MNCs in terms of not being too optimistic about their contribution to rural development, and argues for regulation of such projects and state participation in development projects.