Agriculture : Green Revolution

Why agriculture important economically?

WB’s WDR 2008

says that Agri Growth is TWICE as effective in reducing poverty than non-agri
growth
Huge population supported
47% farmers
According to economic survey, growth currently is virtually domestic driven only
Raising agricultural income would have spurred demand
subsidy will remain high- fiscal discipline will take hit
No Trickle Down
Gap between rural & urban consumption has grown
Even with the high growth of agri between 05-12 & favourable terms of trade, NON
FARM INCOME IS THRICE (X 3 ) of the FARM INCOME
Inflation control
50% in CPI
Equity
Explain the growth of agriculture. (Gulati’s classification)

growth_agri

1950-1966

In this time period agriculture growth rate was reducing. In 1965 it fell to just
1%. Whole country was facing issues of hunger. There was import dependence. It was
due to obsolete technology (talk with data related to 10% seed, 97% wooden plough),
poor credit availability (93% moneylenders), etc.

1966-1972

Government of India started two schemes for green revolution.

IADP – Intensive Agriculture Development Program in 1960

Assured water supply

Minimum hazard
Well developed village institution
Maximum potential for increasing agriculture production in short span of time
HYVP – HYV program in 1967

18k tonnes of HYV seeds from Mexico

Use of better inputs such as HYV seeds, chemical fertilizers, agricultural
machinery, education programmes etc.
It was combined with incentives to farmers in the form of MSPs and better credit.
Institutional credit doubled between 1968 and 1973.

The result was miraculous.

Between just 1967 and 1970, food production rose by 35%

Increase in foodgrain output from 75 MT in 1966-67 to 105 MT in 1971-72 and India
became self sufficient in food
Agri growth rise from 0.8% to 3%
India was food self-sufficient by 1971-72, with imports falling nearly to zero
By the 1980s, India was regularly maintaining huge buffer stocks, using food
exports to pay back earlier loans, and issuing loans to food-deficit countries
Agri production also trickled down
Datanet (2006) – Rural Poverty declined from 64% to 56% – 8% point decline in
Poverty
Income increased
1973-1980

In this phase production declined. Growth rate came down to 2.2%, India has to
switch back to import from USA.

Reasons

2 consecutive droughts in 72-73

Oil shocks raised the price of feriliser
Decline in public and total GCF.
There was also a substantial increase in groundwater irrigated area, aided both by
public and private investment
Increase in subsidies
Power Subsidies made up 45% of the total
Fertiliser subsidy 2nd highest at 35% of the total
Under Retention Price Scheme for Urea [Difference between retention price and MRP
paid by government]
1981-1990

In the period there was steady rise in agri growth from 2.2% to 3%.
HVY use was extended to rice. Thus rice production soared to 64 mt in 1986, up from
37mt in 1964.
Wheat output grew, too, from 12 MT to 48MT in 1986 (X4)
When a really bad drought hit in 1987, we were able to meet our food needs without
any loss of lives
During this phase, the HYV technology spread eastward to states like West Bengal
and Bihar where yields of rice increased by 5% and 4% respectively
However growth was still stagnant at 3% because

Itran out of steam in rest of India

Increase in input subsidies: With the slowdown in yields, input subsidies were
further increased to maintain the production.
From 4% of agriculture GDP in 1980s they rose to 7% in 1991 and has stayed there
since.
Although ToT worsened due to High Indirect Taxes
Investment in Agri R&D stagnated to 0.3% of Agri GDP ( 2-3% in west)
1990 – 1996

Increase in agricultural GDP growth rate (≈ 3.7% avg.). It was because

The boom in economic growth created higher food demand, thus increasing prices of
food grains. Hence, ToT for agriculture increased
This notwithstanding, there was some increase in private investment in agriculture
due to increasing ToT, and this led to the agricultural GDP growth at about 4% per
annum between 1991-96, as against 3% in the 1980
Exports rose (doubled between 1991 and 1996) because of considerable reduction in
import duties and devaluation of the rupee; thereafter, declined
However, this growth in agricultural GDP did not lead to a significant reduction in
rural poverty
1996-2005

Slowdown in agricultural growth to about 2% p.a., and this slowdown happened across
the board (in all agricultural sub-sectors) and across all region. Exports declined
after having significantly shot up post 1991, largely because of East Asian Crisis
and sharp reductions in global commodity prices.

Reasons
Chand – Structural break in 1996 ( also in 2004 )
OVERALL between 1990 to 2006, YIELD RISE Only to 2%
Stagnation in Public Investment – Fell to <2% of GDP
Significant deceleration in public and overall investment is main reason (Bhalla)
Low irrigation cover led to severe rainfall dependency
Subsidies, MSP -> Unsustainable cropping pattern
restriction on wheat and rice exports
Swaminathan – Technology FATIGUE
Structural issues
Smaller Landholding Size
Environmental issues – Water and Soil Health
Green revolution had lost its steam and no technology came which could compensate
the productivity decline
2005 onwards

From 2005 onwards, the rate of growth has hovered around 4% p.a, as compared to the
average of around 2.5% p.a. growth between 1992 and 2002.
Also, there has been no year since 2005 when agricultural growth has been negative;
the variability in growth rate has also been minimal.
A few characteristics of the growth revival:
Most of this growth came from areas that have traditionally been characterized by
low-productivity and low-irrigation, such as Jharkhand, Chhattisgarh, Rajasthan,
Maharashtra etc.
Growth revival was weak in areas with high land productivity and high levels of
irrigation, such as Punjab, Haryana, Western UP, West Bengal etc.
The clear lesson here is that without new technology, growth is difficult to
accelerate in areas with high productivity
Growth since 2005 has been broad based, that is, the increase in output hasn’t been
confined to a few segments or commodity groups. Crops, fruits, livestock,
fisheries; has shown an upward trend.
Growth has been driven by increase in productivity, rather than in area under
cultivation, or by change in area allocation among crops
Exports: Apart from achieving self-sufficiency in food, India has also emerged as a
large exporter of agricultural goods; growth in exports has been much larger than
growth in imports
Reasons

Better prices: ToT improved, because of increase in MSP, in procurement, in

domestic demand, and increases in international prices of agricultural commodities
Higher use of inputs: Increase in use of quality seeds, fertilizers etc.
Increased credit flow: Doubling of credit flow to agriculture within a period of 3
years between 2005 and 2007 (MOST IMPORTANT). Also, by 2011-12, institutional
credit supplied to agriculture turned out to be 33% higher than the value of inputs
used in agriculture (a.c.t. 2004); this means that the proportion of credit
requirement of agriculture sector met by institutional sources has been increasing
substantially
Increase in irrigation, and technology for drought proofing: % of irrigated arable
land increased from 20% in 1981 to 35% today (mostly using groundwater);
Capital formation: Gross capital formation in agriculture increased to about 20% in
2010, as compared to an average of around 7% of agri-GDP in 1994; Investments in
on-farm and watershed development projects
Examine the impacts of green revolution.

POSITIVES

India became self sufficient in 1972 and dependence on PL 480 was done away with.
Food Grain Production has risen from 75 MTA in 1967 to about 250 MTA now
Share
Wheat – up from 13% in 1960s to 33% now & Production – 11 MT to 95 MT now.
Rice – picked up late and overall its share has fallen though production has jumped
from 35 MT to 100 M.
Pulses – 61 gm in 1951 per person per day to 42 gm now
Equity
IN the early period, it did increase inequality
Later phases have reduced Inequality ( Blyn, Bhalla )
in 2001-02 in unirrigated land 53% of land small and marginal farmers used HYV
seeds while only 30% of land under large farmers used them. Similar for irrigated
land and technology
decline of food grain prices and food Security accrues more benefits to lower
segment.
Increased commercialization of agriculture. Increased linkages with industry.
Import Dependency to exports worth 40 billion $ now
Need for post harvest management: The new seeds have shorter maturing period. Thus
the farmers can do multi cropping.
Negative effects

Cereal centricity
Didn’t cover coarse cereals and pulses. Per capital productivity declined from 61
gm to 42 gm
C.H Hamnumantha Rao claimed the inter crop imbalance in early year is redressed to
some extent in recent years (1992)
But overall it led to the fall in employment elasticity of agriculture – Bhalla
Due to increased Mechanisation
Increased Casualisation of Labour – 25% to 40%
Initially not scale neutral
Benefited richer farmers more
But, as Bhalla shows, the benefit gradually trickled down
Subsidy – EXIT Issues
Risen from 0.5% of Agri GDP to about 7% now
Crowding out and fiscal costs
Degradation of soil, environmental impacts- Water crisis ( 30cm a year drop), soil
degradation , Soil composition
Distortion in farm ecology: Require a technologically optimum mix of fertilisers,
water. But economic signals may be distorted and may not reflect the technological
optimum.
Counter
Environmental degradation and GR: In India more than the harm done by fertilizers
and pesticides it is the degradation and deforestation of marginal and common land
which causes environmental problem. GR has reduced the pressure on land and
empirical studies suggest that deforestation is higher in areas where penetration
of new technology is low
Decline in Public Investment – Has Highest Externalities but still Only 16% share
now
Wide regional disparity – Punjab, Haryana and Western UP benefitted. Even till 2000
covered 40% of gross crop area
Counter – Despite wide differences, the Benefits of Green Revolution have
permitted to most states now ( Bhalla), a process which started esp since the 1990s
Didn’t benefit dryland farming.
Utsa Patnaik – Over period 1970-1985 real wages increased only by 14%
The adoption of new technology has reduced labor absorption in agriculture
Many large farmers evicted tenants as they found more profitable cultivating land
themselves
“The success of the Green Revolution shows the importance of the State in agrarian
transformation.” Comment..

Talk about agri as state subject and then how state is contributing.

How LPG impacted agriculture?

Impact of LPG on agriculture

Positive Impact

Diversification in consumption and increased demand – per capita incomes, growing

at 4% per annum in this phase as opposed to 3.% in the 80s,
Led to the diversification of food demand into non-food grain crops such as
fruits and vegetables, as well as meat-mainly poultry-and dairy product
Engels Law – percentage of income allocated for food purchases decreases as income
rises
Improvement in the domestic ToT between agricultural and industrial rises, which
rose from 0.9 to 1.2 between 1991 and 2000, as industrial prices reduced due to LPG
and depreciation boosted exports
Increased profitability led to increase in private investments which became double
the public investment in agriculture. Pvt investment directed to horticulture
produce, but started declining soon
Devaluation of rupee and trade liberalization created a pro- export environment for
agriculture. Agri- exports doubled during 1991 to 1996-97.
Access to new technologies like bio technology
11th FYP 2007-12 – CHAND et al – All positive things
Period of high growth
4% against 2.1% in the 10th FYP
Real income grea @ 7% pa
And diversification of crops – Horticulture increased by 2.5%in 1995-2005 but 6% in
this period
Export earnings: 3 to 6 billion during 1991-91 to 2001-02. Then reached $40 billion
in 2011-12
Growth much higher in the states with low irrigation cover – Gujarat, Jharkhand,
Raj – Consistent with the fact the period gave greater emphasis on filling the gaps
rather than new technology
Reasons
Role of NFSM
High Input Growth – Mahendra Dev
Boost in Investment – Planning Commission
Both public and Private
Rose from 16% of GDP to 21% of Agri GDP
Esp in Irrigation
Schemes like BHARAT NIRMAN
Private rose because of improvements in ToT ( MSP and international prices) and due
to complementarity benefits associated with the growth induced demand
Augmentation of Agri Extension services , Tech
Major reason behind the reduction in poverty
A negative impact

Volatility in global process is higher than domestic prices.

Little impact on poverty figures which increased from 35% to 45% ( Lakadwala and
Tendular – 2 different data set though)
Increased cost of farming but agriculture market was not liberalized.
Result
Developments, agriculture GDP growth went-up from 3% in the 1980s to 4.1% in the
aftermath of reforms between 1991 and 1996 but then Deceleration again in 1996 to
2004 period @ only 2%.

Has LPG reforms bypassed agriculture?

In 1991 LPG reforms were introduced in India. It was largely aimed at industries
and little towards agriculture. During the reforms production side of agriculture
was liberalized but there were lots of restriction on agricultural market.
APMC still had monopoly. It exploited the farmers. APMC was preventing other
players to enter into the agricultural market. It also deterred contract farming.
Agriculture market have lots of import export restriction. Agricultural prices can
be deliberately kept low in favor of urban population.

Infrastructure in agriculture is woefully inadequate. Credit delivery is

inefficient. It prevented growth of agriculture. Laws like Essential Commodities
Act prevented growth of storage facilities and food processing industries. It
costed farmers a lot.

Research in agricultural sector is inadequate. Technologically sector is not

upgraded. Land reforms, contract farming related laws were not in place. This all
led to the low growth in agriculture. Thus it can be said that t the economic
reform process has largely bypassed agriculture

What is evergreen revolution and why it is required?

Swaminathan coined the term ‘’Evergreen Revolution” to highlight the pathway of

increasing production and productivity in a manner such that short and long term
goals of food production are not mutually antagonistic.
Produce more from less, less land, less pesticide, less water
Better disease crops, better soil health and fertility without having to resort to
chemical fertilizers and the use of biological controls to reduce damage caused by
pests.
moving from the concept of ’food security’ to ‘nutrition security’ -> favoured
scientific and technological intervention for this
PMKSY is principally for development of rainfed portions of net cultivated &
culturable wastelands and it will act as a bulwark for Evergreen revolution to be
successful. Certified Seed Production of Pulses, oilseeds, Fodder & Green Manure
crops through Seed Village
80% farms belong to small and marginal. Yields need to be increased here.
Precision agriculture for effective use of resources
Even now 52% area depend upon rain
Between 1970-1990 almost 3/4th area came under cultivation due to expansion of
agriculture (A vidyanathan)
Mobile apps for providing timely information
Post harvest losses need to be addresses through marketing reforms
Contract Farming
Future Trading
Credit, Insurance
Land Leasing
Co operative farming
Food processing
Technology Fatigue
Biotechnology for raising yield.
Externalities
Soil Health
Micro Irrigation
Requirement

Talk about stagnancy and cons of first revolution (diversification, north east,
etc).

What factors are affecting growth of agriculture & its impact on economy?

Factors affecting growth

Irrigation – 51.2 per cent is rainfed.

Credit
Monsoon
Capital Formation – Investment, R&D
Land Reforms
Small size of land holding prevent economies of scale benefit
Economics perspective
Opposite
Amartya Sen (1964) showed smaller farms are more productive per hectare (Using
Indian data) which balance the more capital intensive argument of larger farms
Reason being Family Labour which works more intensively
China’s farm size average is half that of India but productivity is double
Environmental
Water export, Fertiliser overuse, Climate change, 90% water
Dumping
Talks ongoing for developing countries to use SSM
Special Safeguard Mechanism
To be used when, agri import prices go down
Demand side
Paradox of plenty (More natural resources less growth)
Calories demand failing down (NSSO). Reason- lives more automated and lesser
incidences of acute diseases ( Deaton, Dreze )
Also, because of switch to non veg especially chicken which is more efficient meat
Thus Price falling
Elasticity to price and income are low
Engle’s law
Elasticity to price factors lesser than non price factors
Hence, more than MSP, infrastructure required
Cereal centric – Broader Issue MSP
Because of Green Revolution
Need to change this through Rainbow Revolution
Land under agriculture decreasing
Around 2.25 lakh hectare of agriculture land is being diverted to non agro uses
Area under cultivation has gone down to 1830 hectares in 2012 from 1850 hectares in
1980
Per capital land has thus fallen to 0.18 hectare from 0.27 hectares
Market segmentation
APMC, lack of transport, storage capacity impedes creation of a national market
Maximum Price dispersion for prices received by farmers (highest rate to lowest
rate) in US is less than the minimum price dispersion for any crop in India
Regional variation in dispersion
Variation for crops too with higher markup for perishables
Wastage is 15% (Eco survey)
Upto 40% for fruits, vegetables
Requirement for logistic
Price volatility
Others
Farmers tend to be risk averse as they live near subsistence level
Diminishing returns
Urban Bias
Most schemes, subsidies, tax benefits, infra benefits to urban area
Also attempts to keep food prices low (Inflation targeting -CPI) to keep industry
and middle class better
Share cropping – reduced incentive to invest
Employment only for a few months
Niti Aayog points to the necessity of Digitalisation of Land records for better
access and to reduce leakages
Technological fatigue
Effect of these factors
Low Yield
Indian wheat yield at 3k kg/ ha less than the world average of 3.25k kg
Pulse yield in MP the largest producer has 60% of the yield of China
China’s total sown area is 166 m ha compared to India’s gross cropped area of 198 m
ha. Even with much lesser land under cultivation, China produces agricultural
output valued at $1,367 billion—more than three times that of India’s $407 billion.
Wheat, rice, pulses in particular stagnated in productivity
Regional variation
Yields generally highest in Punjab, Haryana
Domestic convergence required
Yield of pulses would rise by 40% if all states were to converge to even Bihar’s
productivity
Translates into a low income
NSS data – Average annual income of median farmer in 17 states < 20k
Non farm income thrice as farm
Low growth rate in agriculture
3.2% in 11th FYP vs 7.8% overall – Growth graph required
12th FYP target is only 4%
Also agri growth becoming more volatile
Coefficient of variation in agri growth is 6X GDP growth
Gujarat, Nagaland 2 states that have grown by over 10%
Perhaps catching up effect
Farmer suicide
@ 3 lakh in the last 20 years – given this no need to learn the figure
Majority by Marginal and Small Farmers
More for cash crops as their prices are more volatile
Highest in Maha, MP, AP – Monsoon dependent
In the drought years, farm riots increased by 4 fold as per NCRB data
Inflation – Rapidly increasing prices while price declining in the West
Changing Sectoral Composition: Declining relative incomes and smaller OHLs have
forced diversification into livestock, horticulture and fisheries. The relative
share of livestock in total agriculture production has gone up from 20% in 1991 to
25% in 2009-10, horticulture from 6% in1991 to 33% in now . Rising fisheries too
(5% of agri GDP)
Growing role of private sector: Share of public investment in total agricultural
investment has gone down from 50% in 1980s to 20% now. The Green revolution of
1960s was driven by public sector but this time the Bt Cotton and hybrid Maize have
come from private sector.
TRADE: The reforms in 1991 led to liberalization of trade and devaluation of
exchange rate. As a result, agriculture got more integrated with the world. Trade
in agriculture to GDP agriculture has gone up from 5% in 1990-91 to 13% in 2010-11.
Cotton, marine products, oil meals, basmati rice and sugar are main exports.
How to bring resource efficiency for small and marginal farmers.

Increasing Irrigation Water Productivity (IWP) in Agriculture (89% groundwater use)

The cropping pattern in India is highly skewed towards crops that are water
intensive. This is due to incentive structures like MSP, heavily subsidized
electricity, water and fertilizers 3
Adoption of micro-irrigation systems (MI)
Economizing the Use of Fertilizers and Pesticide
promotion of neem-coated urea
Turning to Organic and Natural Farming (Paramparagat Krishi Vikas Yojana)
ZBNF
Adopting Appropriate Technologies for Smallholder Farms (Hiring center)
bridging the information gaps 1
The access to timely credit or finance is a critical determinant of profitability
of agriculture Livestock mission
Horticulture is now the growth driver of India Agriculture. Discuss the issue in
the broad context of rural diversification.
Out of the overall growth rate of 3.5 per cent in agriculture during 2000-2011,
fruits and vegetable alone accounted for 19%.

According to Chand et. al. Indian agriculture is generally marked with a low
profit. Further, the farm income generated is not sufficient to provide a
livelihood. In this context, to double farmers’ income, diversification towards
high value horticultural crops can be major strategy.

Horticulture sector has high productivity. It can also be characterized as high

value crop. It has export potential which can help in earning forex reserve.
Further horticulture opens opportunities in storage, processing, packaging. Its
labor intensiveness opens job opportunities in rural area.

The key instrument in development of the horticultural sector would be location

specific research and development programme, development of infrastructure in terms
of cold storage, marketing yards and rural roads; and deepening and widening
processing facilities.

Write a note on organic farming.

Organic farming is a system which avoids the use of synthetic inputs (such as
fertilizers, pesticides,
hormones, feed additives etc) Rely upon crop rotations, crop residues, animal
manures, off-farm organic waste, and biological system of nutrient mobilization and
plant protection.

Features

Relies primarily on local, renewable resources

Makes efficient use of solar energy and the production potential of biological
systems
Maintains the fertility of the soil
Maximises recycling of plant nutrients and organic matter
Does not use organisms or substances foreign to nature (e.g. GMOs, chemical
fertilisers or
pesticides)
Maintains diversity in the production system as well as the agricultural landscape
Weed, disease and pest control relying primarily on crop rotations, natural
predators, diversity,
organic manuring, resistant varieties
Nitrogen self-sufficiency through the use of legumes and biological nitrogen
fixation
Advantages of Organic Farming

Sustainable and environmentally friendly production method, which has particular

advantages for small-scale farmers
Organic agriculture contributes to poverty alleviation and food security
Increasing yields in low-input areas
Conserving bio-diversity and nature resources on the farm and in the surrounding
area
Increasing income and/or reducing costs
Producing safe and varied food
Provide several ecosystem services and being sustainable in the long term
Farmers in India’s poorest region are recording record rice yields by growing
organicaly
Challenges and Concerns

Due to relatively small volumes, the costs of organic food products are relatively
high
The cost of cultivation increases as it takes more time and energy to produce than
its chemicalintensive counterpart
High demand and low supply has further created an inflationary pressure on organic
food products.
Specialised farmer training costs, higher processing and inventory holding costs,
and increased
packaging, logistics and distribution costs add to the price of end products.
The absence of organic food products across all segments in the market is a concern
There is low awareness at the producer level on the difference between conventional
farming and organic farming.
Productivity issues
Asthetic issue
Low shelf life
Write a note on ZBNF

What is zero budget farming?

Subhash Palekar is a seasoned agriculturalist who devised the term zero budget
natural farming
(ZBNF). It is the set of agricultural methods which are intended to boost farmers’
income by minimising the operating expenses and other variable cost heads. It is a
farming practice that believes in natural growth of crops without adding any
chemical fertilizers and pesticides.
Features of ZBNF

The four wheels of ZBNF are Bijamrita, Jiwamrita, Mulching and Waaphasa.
Bijamrita is a natural way of seed treatment using local cow urine and cow dung.
Jiwamrita is made using water, local cow dung, local cow urine, jaggery, dal flour
and soil.
Waaphasa is the aeration in the soil.
Intercropping is an important feature of ZBNF.
Practising composting on the farm itself, so that soil organic matter increases.
Insects and pests are managed using neem leaves, neem pulp and green chillies
Benefits of ZBNF

According to the Food and Agriculture Organisation, the zero budget natural farming
can help in eliminating chemical fertilisers and other crop-specific additives.
Diminish the farmers’ burden by reducing several fixed and variable costs.
Can assist a large section of small-scale farmers to get out of the debt and
increase their operating efficiencies.
They also contribute to sustainable practices in terms of health of soil and the
environment.
Anyone who is having half an acre of land can start ZBNF.
Women’s empowerment and nutrition.
Challenges

In Maharashtra, a considerable number of followers have returned to practicing

chemical farming as they failed to improve their incomes with ZBNF.
The soils which have lost their natural nutritional value owing to injudicious use
of chemicals will not support organic farming unless their vitality is renewed
Farmers do not own indigenous seeds or sufficient number of cattle which are a
prerequisite for this type of cultivation.
There are no concrete answers available for
a. Will ZBNF reduce the cost of production and raise farmers’ net returns from
cultivation?
b. How much output per hectare this practice yields in comparison to chemical
farming?
c. Are farmers equipped with appropriate training and availability of livestock for
urine and dung?
d. Will ZBNF be appropriate for high-value commodities?
The successful cases of ZBNF are too less to make it a policy mandate
What are the factors responsible for large number of farmers’ suicides in
relatively richer Indian States? Examine?.

Relatively richer states like Maharashtra and Karnataka are seeing increasing
number of farmer suicides. There are various socio economic reasons.

Factors Responsible for large number of farmers suicide

Economic Factors

Day by day cost of farming has increase. There is surge in input cost, fertilizers
cost, labor cost. But at the same time agriculture marker is highly volatile. It
led to frequent losses for the farmers. It creates distress for farmers.

Due to volatility in prices there is less surplus remain to repay the loan and run
the livelihood. Thus there are cases of loan defaults for farmers.

Environmental Factors

Farming activity is highly dependent on environmental factors. Drought or heavy

rainfall may damage crop. In the Maharashtra region suicide is prevalent in
Vidarbha. It is rainfed region. A drought season destroys crop which leads to
farmer distress.

Social Factors

Social evils like dowry, alcoholism is pushing farmers towards debt trap. It led to
suicide for farmers.

We need to tackle socio, economic and environmental problems at the same time to
deal with problems of suicide.