The following points highlight the four important farming systems. The farming systems are: 1. The Traditional System 2. Commercial Farming 3. Collective Farming 4. Cooperative Farming.

Farming System # 1. The Traditional System:

This is a system which is generally prevalent in a backward, segment of agriculture. The main feature of this farming system can be traced to the characteristics of an overall backward economy. Industrial sector is non-existent and therefore the population mainly depends upon agriculture.

Population pressure on agricultural, has resulted in perpetual sub-division of holdings and therefore, size of the farm is very small. In some cases, the size of the farm is so small that it is difficult for the farmer to use the family labour and other resources optimally on the farm.

As agriculture is backward, there is no marketable surplus on such small farms. This system is therefore, also called subsistence farming. Large size of the family makes agricultural labour intensive. The capital used on the land, is of crude form.


In terms of the elements which distinct traditional system from other farming we can say that the farm, that is cultivated is generally owned by the farmer himself. He is the controller of the operations on the farm. That is, he decides what should be produced, what quantity of various inputs each of the various crops.

He is also the operator of the farms i.e. he cultivation the land with his labour along with that of his family. In other words, in such a farming system the farmer combines in himself, the rules of an owner, a controller and an operator of the farm, This system is also known as peasant farming.

One could also visualize a variant of this system with regard to the ownership of land. The farmer cultivating the small piece of land may be a tenant rather than the owner. However in actual practice tenancy is on a very limited scale in such a system. Two factors work against tenancy. One is that the size of the farm is rather small and as such, there is generally no surplus land available with the owner to lease it out.

Secondly even when the small farmer wishes to lease out his land, he may ultimately decide against doing so simply because he himself will not fine suitable job opportunities outside agriculture as industrial sector is practically, non-existent.

Farming System # 2. Commercial Farming:


Commercial farming represents, as against the peasant farming. The other extreme of farming system. Here, as against the private ownership of a farm by a single farmer, the ownership is generally in the hand of a large number of personal who form a joint stock company to won the form. (However, commercial farming is compatible even a single owner if he can own a large farm-large enough, as to necessary the use of hired labour), so far as the control of over production i.e. decision making power with regard to production is concerned it is generally in the hands of employed managers. The hired labourers operate the farms.

They constitute a class different from that of the managers who supervise the work. In India, various tea and coffee plantations are the fine examples of commercial farming. Commercial farming is quite popular in U.S.A. Australia and U.K. Commercial farming is also known as estate farming or corporate farming in case a joint stock company owns the farm. Another name for commercial farming is capitalistic farming simply because, in this, case production is carried on with the help of machinery which is generally hired.

And this system is called commercial farms because, unlike in subsistence farming, the production is meant for the market. Almost the whole of the product (except that which is necessary for seeds etc.) is marketed.

As the farms purchases most of the inputs from the market and sells most of its produce in the market the commercial motive of such a farm becomes strong. The crop pattern becomes totally market oriented and is influenced fully by the changes in the market forces.


One is not wrong when one point out that whereas the commercial motive (to get maximum profit) is the guiding force for a commercial farm, the technical motive (to get the maximum physical output) is the guiding force for a subsistence farms.

Advantages of Commercial Farm:

A commercial farm is free from the main disadvantages from which a subsistence farm suffers. A commercial farm, for example, have sufficient financial resources with it. As such he can purchase new and improved inputs from the market.

It can resources for the purpose but also because the large size of farm can use reduce their cost per unit of output. Fencing, drainage and leveling of land can be taken up. Rotation of crops can be introduced Wells can be dug up. Farm building and roads can be built on the farm

Further, the commercial farms provide much marketable surplus of food grain to the industrial sector, too, are produced on the commercial farms. Commercial farms thus encourage the development of the industrial sector. Various commercial economies in marketing etc. can also be reaped by the commercial farm due to its large size. As the commercial motive on such farms is quite strong the crop pattern responds to price changes and the allocation of resources becomes optimum.

Disadvantages of Commercial Farming:

Commercial farming is not free from certain drawbacks. The most important flaw with this farm organization is the displacement of labour that takes place due to excessive use of machinery on the commercial farm. The size of the farm is quite large to permit the use of sophisticated machinery and at the same time, ‘free’ family labour is not available. Labour has to be hired and, to be paid for. Use of commercial displaces hired labour and becomes attractive alternative.

A commercial farm is also likely to suffer from the malady of poor supervision. A large farms will have to employ a large number of supervisors to look after the workers of agricultural labourers whose area of operation is quite large. As they themselves have an incentive of ownership, they may not be fully devoted to their job.

State Farming:


This farming system is somewhat similar to the commercial farming or capitalistic farming. The only difference is with regard to the ownership of the farming. Where as in case of a commercial farm the ownership of the farm lies with a joint company (or in some cases with a land lord), in case of state farming, the state itself is the owner of the farm. So far as the control over population or operating of the farm is concerned, in both cases, the hired managers have the decision making power with regard to production and the hired workers work on the farm.

State farming has all the advantages of capitalistic farming. There are no financial problems for a state farm. Necessary improvements in the land can be made; improved agricultural practices can be adopted, productive as sets for efficient production can be procured; well can be dugs up, tube wells can be installed and necessary buildings and roads on the farm can be built commercial economies of various types can be reaped.

Market surplus of food grain and raw materials required by the industrial sector are produced on such farms. The state farms, in-fact, in some measures can be an important over a commercial farms owned by an individual or a joint stock company.

It can substitute the motive by some social motive. That can result in a lesser use of machinery of the farms, this displacing labour to a smaller extent when compared with a commercial farm. Exploitation of the hired labour can also be curbed.


Further as the earnings of a state farms go to fill the coffee of the Government, a part of a earned money can be used for the welfare of the workers working on the farm. The distribution of income-this can be corrected to some extent through indirectly.

Of course as in case of commercial farms managers and supervisors on a state farm may not be fully devoted to their jobs due to lack of incentive of ownership. It may be noted that state farming is not suitable for an open and democratic society. It works against the principles of freedom of enterprise.

Farming System # 3. Collective Farming:

This is another farming system which was introduced in U.S.S.R. Sometime after 1917 revolution. This system replaces the feudal system of farming enforced by a communist regime. The revolutionary regime decided that in place the feudal lords owing the land, henceforth the village community, as a whole would own the land.

The community itself would take decisions about production and itself would operate upon the land it possessed. This decision led to the emergence of what are now collective farms. The land and other production assets are held jointly by the village’s society.


There is no individual ownership. The village community as a whole constitutes the general body of the collective farm. Its members out of themselves elect an executive board which manages the farm. Some nominees of the Government also represents on the executive board.

The board plans the crop production arranges for various inputs to be used on the farm and also looks after the disposal of the crops produced. It also keeps in touch with the government for seeking advice and guidance from it with regard to production on the farm and also for the produce. The board also makes arrangement for providing various social services like education, health care and entertainments to its member.

Member of the village community work as labourers on the collective farm. These workers are divided into work Brigades and their work is recorded by foreman who is elected as such by the workers themselves. As the various agricultural operations require different skill and energy, the work put in by them is standardized.

Each worker is paid according to the standardized work put in by him. However, we must note the whatever the workers get is not their wages. They do not act as wage earners. They share according to the works put in the surplus which they create on the farm after paying for the intermediate inputs, depreciation and taxes and other demands made by government.

As there is no individual ownership of land the incentive generated by ownership is missing. In order to motivate workers to put in their best other types of incentives in the forms of money and in kind are offered to the worker.

No doubt, the collective farms have all the advantage of commercial farms. However they are not popular in open societies. They represent a political system and are confined to the regimented economics of Eastern Europe and China.

Farming System # 4. Cooperative Farming:


We know that the traditional system of farming no doubt has certain advantages like higher intensity of cropping, higher employment level and higher productivity per acre, it suffers from certain disadvantages due to the small size of the holding some improved crop practices e.g. rotation of crops and difficulties in carrying out some developmental operation like fencing, digging of a well, weak bargaining power in the market etc. To overcome these difficulties associated with small farms and at the same time, to reap the incentives of ownership, a new system of farming has been suggested. It is known as cooperative farming.