AGRIULTURE, INDUSTRY AND FOREIGN

TRADE
AGRICULTURE
 IMPORTANCE OF AGRICULTURE IN INDIAN ECONOMY

Indian Economy is usually described as an

agricultural economy.
§ CONTRIBUTION OF AGRICULTURE TO NATIONAL
INCOME.
§ SOURCE OF LIVELIHOOD. .
§ SOURCE OF FOODGRAINS.
§ CONTRIBUTION TO INDUSTRIAL DEVELOPMENT.
§ CONTRIBUTION TO GOVERNMENT REVENUE.
§ CONTRIBUTION TO DOMESTIC AND
INTERNATIONAL TRADE.
POLICIES OR REFORMS TO SOLVE AGRICULTURAL PROBLEMS
Agricultural policy contains government measures for the increase in
agriculture production and productivity. The important policy measures can
be classified into three broad categories:
INSTITUTIONAL • Abolition of Intermediaries.
• Tenancy reforms.
MEASURES OR LAND • Ceiling on land holdings.
REFORMS • Cooperative Farming.

• Use of HYV seeds and chemical fertilizers.

TECHNICAL REFORMS • Mechanised farming.
• Use of scientific farming techniques

• Provision of credit to farmers.

• Expansion of irrigation facilities.
OTHER REFORMS • Improving the system of Agricultural Marketing.
• Storage and warehousing facilities.
• Minimum Support Price.
 INSTUTUTIONAL MEASURES

 The land tenure system during British Rule was very exploitative , hence Land Reform measures
were initiated in the country.
 The major land reform measures were as follows:
v ABOLITION OF INTERMEDIARIES OR ZAMINDARS AND TENANCY REFORMS;
Ø British rulers had introduced new land tenure system which was namely: Zamindari System,
Mahalwari System and the Ryotwari System.
Ø On account of this, the abolition of intermediaries was considered necessary and legislations
were also passed.
Ø With the abolition of Zamindari system, the actual cultivators of land acquired the ownership
rights over the land.
Ø The change in ownership rights provided incentives to the cultivators to make improvements on the
farm and this helped in increasing the agricultural output.
Ø Tenancy Reforms aim to secure the position of a tenant. Tenancy reforms include:Regulation of
Rent, Security of tenants.
v LAND CEILING:
Ø It refers to the maximum amount of land which an individual may
hold.
Ø The main purpose of land ceiling was to reduce the
concentration of land holdings in few hands and it further
empowers government to acquire surplus land from such owners
and allot to small landholders and landless labourers.
Ø The progress in this field of land ceilings has been extremely
disappointing due to poor enforcement of ceiling laws.
v CONSOLIDATION OF LAND HOLDING AND COOPERATIVE FARMING:
Ø Consolidaion of holdings means allotting equivalent land in one
compact block, in lieu of various plots of land for a farmer,
scattered all over the village.
Ø Cooperative farming allows farmers to merge their land and
various inputs so that land and all the inputs are put to their
best use. It is encouraged to enhance the bargaining power of
small land holders.
 TECHNOLOGICAL MEASURES: THE GREEN REVOLUTION
§ After Independence, the traditional agricultural practices were
replaced by modern technology in Indian Agriculture.
§ This new agricultural technology consisted of use of HYV seeds,
chemical fertilisers, pesticides, extensive irrigation and modern
agricultural implements.
§ After adoption of HYV seeds , a sudden boost in foodgrain production
was noticed during the period 1967-68. This boost was just like a
Revolution in the history of Indian Agriculture and that is why it is
termed as :GREEN REVOLUTION. It was marked by two phases.
 ACHIEVEMENTS OF GREEN REVOLUTION

§ An increase in productivity.
§ Accumulation of surplus produce.
§ Shift from subsistence farming to commercial farming.
§ Facilitated multiple cropping.
 SHORTCOMINGS OF GREEN REVOLUTION

§ Restricted to limited crops and areas.

§ Widened gap between rich and poor.
§ Environmental Degradation.
 DEBATE OVER SUBSIDIES TO FARMERS

§ Subsidies means that farmers gets inputs at prices lower than the market price.
§ The GOI has provided massive subsidies to farmers on agricultural inputs like irrigation
facilities, fertilizers and power.
§ The supporters argue that subsidies is necessary to induce the farmers in general and small
farmers in particular to adopt new agricultural technology.
§ Subsidisation of inputs also motivates farmers to use these inputs. Thus it is argued that
subsides in India are necessary to enable the poor and marginal farmers to have an access to
modern inputs.
§ On the other hand some economists believe that subsidies should be phased out as the small
farmers have benefitted to a very small extent. They have also argued that fertilizer
subsidy has outlived its utility because it ahs benefitted fertilizer industry more in
comparison to farmers.