Effects on Wage and Employment after Implementation of Social Security Norms in the Agricultural Labour Market

Government of India wants to implement 'Conditions of Work and Livelihood Promotion Bill' for the agricultural workers who are unorganized in nature in such a time when cultivation is not very profitable and employment generations in the agricultural sector are declining. This paper is a theoretical attempt to identify the impact on agricultural employment and profitability of the farmer if the 'conditions of work' are imposed in the agricultural labour market. Here the farmer is a monopsonist and employs both local and migrant labourer during the time of production when the local labourers get full social security from their employer but the migrant labourers are deprived from getting that. This paper proves that any type of social security norm including higher minimum wage not only decreases the overall employment generation in the agricultural sector but also decreases the profitability of the farmer. The profit maximizing farmer will always force the unprotected migrant labourer to work maximum possible extra hours more than the normal one. But if the monetary punishment for the employer after detection of the violation of social security norms is high then the farmer will employ less number of unprotected labourers during the time of cultivation. We here will decide the value of penalty at which the cultivation is not become less attractive and social security norms for most of the labourers can be maintained