ECO213: Indian Economy

The Agricultural Sector

Agriculture and Economic Development

Dr. Deepak Pandey

Economics
Mittal School of Business
Learning Outcome
● Student will be able to understand the agriculture and associated terms
● Role of agriculture in economic development
● To infer the problems generated out of technological development
● To develop an appraisal of technological advancement of agriculture
● To enumerate various problems in agriculture
● To analyze the performance of agriculture sector
Introductory Question
Do you consider the agricultural sector in India as the backbone of the economy?
Agriculture
● Agriculture is the art and science of cultivating the soil, growing crops and
raising livestock.
● It includes the preparation of plant and animal products for people to use and
their distribution to markets. Agriculture provides most of the world's food
and fabrics.
Agriculture
● Agriculture in India is one of the most important sectors of its economy. It is
the means of livelihood of almost two thirds of the work force in the country.
● According to the economic data for the financial year 2019-20, agriculture
accounts for 16.4% of India’s GDP.
Agriculture
Contribution of Agriculture
In 2016, agriculture and allied sectors like animal
husbandry, forestry and fisheries accounted for 15.4% of the GDP (gross
domestic product) with about 31% of the workforce in 2014.
India ranks first in the world with highest net cropped area followed by US and
China. The economic contribution of agriculture to India's GDP is steadily
declining with the country's broad-based economic growth. Still, agriculture is
demographically the broadest economic sector and plays a significant role in
the overall socio-economic fabric of India.
Agri as a business
● India exported $38 billion worth of agricultural products in 2013, making it the
seventh largest agricultural exporter worldwide and the sixth largest net
exporter. Most of its agriculture exports serve developing and least developed
nations. Indian agricultural/horticultural and processed foods are exported to
more than 120 countries, primarily to the Japan, Southeast
Asia, SAARC countries, the European Union and the United States
Post Independence Agri
Before the mid-1960s India relied on imports and food aid to meet domestic
requirements. However, two years of severe drought in 1965 and 1966
convinced India to reform its agricultural policy and that they could not rely on
foreign aid and imports for food security. India adopted significant policy reforms
focused on the goal of food grain self-sufficiency. This ushered in India's Green
Revolution. It began with the decision to adopt superior yielding, disease
resistant wheat varieties in combination with better farming knowledge to improve
productivity.
History of Agriculture: GR

The Green Revolution started in 1965. It was founded by Dr. M.S Swaminathan.
The Bengal famine of 1943 under the British rule was one of the most severe
famines that killed over 3 million people. There was no help from the industrial
sector, so the agricultural sector during the British rule was a disaster for the
people of India. Shortly after independence from the British in 1947 India realized
that there was a need to become self-sufficient. This ushered in India's Green
Revolution. It began with the decision to adopt superior yielding using disease
resistant wheat varieties in combination with better farming knowledge to improve
productivity. The major parties involved in executing the plan were the
Government of India, multilateral and bilateral donors, International Agricultural
Research Institution, and farmers.
Green Revolution
The state of Punjab led India's green revolution and earned the distinction of
being the country's bread basket. The initial increase in production was centered
on the irrigated areas of the states of Punjab, Haryana and western Uttar
Pradesh.
With the farmers and the government officials focusing on farm productivity and
knowledge transfer, India's total food grain production soared. A hectare of Indian
wheat farm that produced an average of 0.8 tonnes in 1948, produced 4.7 tonnes
of wheat in 1975 from the same land. Such rapid growth in farm productivity
enabled India to become self-sufficient by the 1970s.
Discussion Question
When we have so glorious past in Agri then where are we still lacking in terms of
Agri products export?
Problems in Agriculture in India
● Impact of Climate Change
● Infrastructure
● Productivity
● Farmer suicides
● Diversion of agricultural land for non-agricultural purpose
How to improve agriculture productivity in India
Solution to
climate change
Infrastructure
Solution
Performance of agriculture sector
● Scenario in 2011

○ Agriculture is the main occupation of the Indian

peoples. Performance of Indian economy is dependent upon the growth
of Agriculture sector. It contributes nearly 16% of India's Gross
Domestic Product (GDP) & 13% of total exports.
Agriculture Sector in 2020
● Amid the coronavirus lockdown across the country that brought economic
activity to a near halt, it is expecting that agriculture sector could be a silver
lining for the Indian economy as it is estimated to grow at a rate of 3 per cent
for the year 2020-21, according to NITI Aayog.

■ Apr 29, 2020

Other ways to improve Agri situation
Modern farming technology
● Modern farming technology is used to improve the wide types of production
practices employed by farmers. It makes use of hybrid seeds of selected
variety of a single crop, technologically advanced equipment and lots of
energy subsidies in the form of irrigation water, fertilizers and pesticides.
● Organic Farming
● Genetic farming
● Greenhouse Farming
Importance of Technological Development
Benefits include:
Decreased use of water, fertilizer, and pesticides, which in turn keeps food prices
down.
Reduced impact on natural ecosystems
Higher crop productivity.
Negative effects of Agricultural Technology?
● Limits or destroys the natural habitat of most wild creatures, and leads to soil
erosion.
● Use of fertilizers can alter the biology of rivers and lakes.
MCQs
● An economic system in which both the private enterprise and a degree of
state monopoly is present, called:

○ A) Market economy

○ B) Socialist economy

○ C) Mixed economy

○ D) Democratic economy
MCQs
● Major portion of working population in India is in”

○ a. Tertiary sector

○ b. Primary sector

○ c. Public sector

○ d. Secondary Sector
MCQs
● Disguised unemployment is common in _______________

○ a. Agricultural sector

○ b. Industrial sector

○ c. Service sector

○ d. None of these
MCQs
Father of the Green Revolution in India and renowned farm scientist M S
Swaminathan has given the call for 'evergreen revolution’

A) True
B) False
Exercise for Home Work