Book

Importance of Agriculture
BLOCK 4
SECTORAL DEVELOPMENT-I: AGRICULTURE
SECTOR IN INDIA
171
Sectoral Development-I;
Agriculture Sector In India BLOCK 4 : SECTORAL DEVELOPMENT-I:
AGRICULTURE SECTOR IN INDIA
You have learnt about Economic Development in Block 1 and Determinants of
Growth in Block 2 and in Block 3 about issues in Indian Economy. This fourth
block covers importance of agriculture, problem of productivity and growth
pattern in detail. This block has three units.
Unit 11 deals with Importance of Agriculture. The unit begins with sectoral
contribution to the Economy, some empirical evidence about agriculture
and economic development are described, role of Agriculture in Economic
Development of a country is highlighted, and the unit ends with the importance
of agriculture in India’s national economy.
Unit 12 deals with Problem of Productivity. The unit begins with productivity
in India’s agriculture,its general causes, institutional causes and technological
factors, measures to raise productivity in Indian agriculture are given, how to
reduce pressure of population on land is discussed, concept of agriculture research
and extension, agriculture marketing, ever green technology are explained in the
end.
Unit 13 deals with Growth Pattern in India's Agriculture. The unit begins
with history and development of India’s agriculture during the first half of the
20th century, British period and post-independence period ranging from ‘The
Pre - Green Revolution Period’ to ‘The Beginning of Green Revolution’ to ‘The
Maturing of Green Revolution’ to ‘Economic Liberalization and Deceleration of
Agricultural Growth’. ‘The Period of Recovery’, the‘The National Democratic
Alliance- II (NDA-II) Rule’ and in the end challenges the Indian agriculture faces
along with the policy suggestions are discussed.
172
UNIT 11 IMPORTANCE OF AGRICULTURE
Structure
11.0 Objectives
11.1 Introduction
11.2 Sectoral Contribution of the Economy
11.3 Agriculture and Economic Development: Some Empirical Evidences
11.4 Role of Agriculture in Economic Development of a Country
11.5 Importance of Agriculture in India’s National Economy
11.6 Let Us Sum Up
11.7 Key Words
11.8 Answers to Check Your Progress
11.9 Terminal Questions
11.0 OBJECTIVES
After going through this unit, you will be able to:
• Explain contribution of different sectors to Indian economy;
• Describe how are agriculture and economic development interwoven;
• Discuss how does agriculture provide employment;
• Explain how does agriculture make available food to the expanding
population;
• Describe how does agriculture supply raw material to the industries; and
• Discuss how does agriculture contribute to the elimination of poverty.
11.1 INTRODUCTION
Agriculture is the oldest organized occupation in the world. It is as old as the
human civilization when the human being started utilization of land for his/
her survival and sustainability. Over the time, a dynamic change took place
in agriculture and its operations. Till the onset of the industrial revolution in
Western Europe, agriculture was the main source of livelihood and employment
and agriculture was basically subsistence in nature. Even today in most of the
developing countries, agriculture sector is the dominant source of employment
and livelihood.
The importance of agriculture in the national GDP and employment depends
very much upon the level of economic development in that country. It is the
agriculture sector, which in the initial stages of development owns much of
resources, be it income, labour or capital. Any economy can be divided into
three broad sectors, namely primary sector, secondary sector and tertiary sector.
Primary sector incorporates agriculture and allied activities, secondary sector
all types of manufacturing and tertiary sector contains the services sector. The
structure of an economy changes as economic development takes place in the
economy. The economists have termed these changes in the economy over a
period time as ‘Structural Transformation of an Economy’. Agriculture continues
to be the mainstay of Indian economy even after 70 years of independence since 173
Sectoral Development-I; agriculture contributes 16.5 per cent of the GDP (Economic Survey, 2019-20) and
Agriculture Sector In India
about 42 per cent of the working population is engaged in agriculture (National
Statistics office,2020). In this unit, you will learn about the sectoral contribution
to the economy, agriculture and economic development, role of agriculture in
economic development of a country and importance of agriculture in India’s
national economy. The role and importance of agriculture in India's economic
development will be discussed in detail.
11.2 SECTORAL CONTRIBUTION OF THE

ECONOMY
Indian economy can also be divided into three sectors, namely, agriculture
and allied activities, industry and services. Agriculture sector includes
agriculture (Agriculture proper and Livestock), forestry and Logging, fishing
and related activities. Industry includes mining and quarrying, manufacturing
(Registered and Unregistered), electricity, gas, water supply, and construction.
Services sector includes 'Trade, hotels, transport, communication and services
related to broadcasting', 'Financial, real estate and profession services, 'Public
Administration, defense and other services.
At the time of independence of the country, the agriculture sector was the
predominant sector of the economy, both in terms of its contribution to the gross
domestic product (GDP) and in providing employment to the country’s labour
force. Table 1 depicts the lopsided picture of the Indian economy on the eve of
independence when the agriculture sector dominated the economy in terms of
contribution to national income and to provision of employment to the labour
force. One half of the national income and three fourth of jobs originated from
the agriculture sector.
Table 1: Structure of Indian Economy on the Eve of Independence
Sectors Income Employment
Agriculture 49.1 72.3
Mines, Manufacturing, Small 17.1 10.7
Enterprises
Services, Trade, Transport and 34.2 18
Communications and other Services
Source: Bettlehem Charges, India Independent
The industrial sector contributed 17 per cent of the national income and about
10.7 per cent of the workforce was working in industries. The industrial activities
where technical progress is the most important source of growth were employing
just one tenth of the workforce. The most of the industries were consumer good
based while the capital goods industries were typically missing from the scenes.
The tertiary sector comprising the services was adding one third of the national
income while employing about one fifth of the workforce.
It can be noted from Table 1 that India’s economy on the eve of Independence
was predominantly rural and agrarian in nature with more than 85 per cent of the
population living in villages and most of them were dependent on agriculture for
their livelihood. In spite of a large proportion of workers employed in agriculture
(70%), the country was not self sufficient in food and raw materials for the
industry. The average food grain availability was deficient in quantity and quality
and country faced recurring famines.
174
Since then a systemic and significant decline in the share of agriculture sector in Importance of Agriculture
the nation’s GDP was observed. The share of employment did not catch up with
GDP resulting in a huge difference in the earning of the agriculture sector and
non-agriculture sector.
Table 2: Composition of Gross Domestic Product since independence
(in per cent)
Year Agriculture and Allied Industries(GDP) Services(GDP)
Activities (GDP)
1950-51 51.81 14.16 33.25
1980-81 35.39 24.29 39.92
2000-01 24.5 25.22 50.27
2010-11 17.74 27.76 54.5
2016-17 15.11 31.12 53.77
2019-20 18 27 55
2020-21 20 26 54
Source: Economic Survey, GOI., (various years)
Table 3: Contribution of Different Sector in Employment
Sectors 1999-2000 (%) 2004-05 (%) 2009-10 (%) 2015-16 (%) 2019-20 (%)
Agriculture 59.9 56.6 53.2 45 42.2
Industries 16.4 18.7 21.5 25 25
Services 23.7 24.7 25.3 30 32.8
Total 100 100 100 100 100
Source: Data.gov.in
As shown in Table 2, the contribution of the agriculture sector to the GDP
has come down from more than fifty per cent in 1950-51 to 35 per cent in
1980-81and to 15 per cent in 2016-17. We observe a consistent decline in the
contribution of agriculture to the national income and its place has been taken
over by the industrial and service sectors, particularly the service sector which
now shares more than 50 per cent of the national income. Whereas the importance
of agriculture as a source of employment is being marked by a small decrease
over time and latest government source says that 44 per cent of the workforce
is engaged in the agriculture for the employment. Thus, we can say that a partial
transformation of the economy has taken place since independence wherein
the share of agriculture in the gross value added (GVA) has marked significant
reduction while the agriculture as the dominant source of employment remains
intact. Most of the studies related to the western developed countries and East
Asian countries verify the stage wise system pattern adopted by these countries.
11.3 AGRICULTURE AND ECONOMIC

DEVELOPMENT: SOME EMPIRICAL
EVIDENCES
Agriculture is the most important sector of the economy and it is the development
of agriculture sector which precedes the development of the other sectors of the
economy. In the initial stages of the economic development, agriculture sector
commands most of the resources. A significant proportion of national output came
from agriculture and most of the labour force found employment in agriculture.
175
Sectoral Development-I; Agriculture dominates low income countries, 70% of whose population depends
on it; amongst the vast majority of the world’s poor, agriculture is still the main
source of income, just as farming is their chief occupation (World Bank,1982). In
India, agriculture was the main source of national income and occupation at the
time of independence. Agriculture and allied activities contributed nearly 50 per
cent to India’s national income and around 72 per cent of total working population
was engaged in agriculture. Agriculture contributes to both income growth and
poverty reduction in developing countries. Agriculture sector generates income
and employment in rural areas and provides food at reasonable prices in urban
areas. The sector matters greatly in low-income countries where about 60 per cent
of the labour force is employed in agriculture. It accounts for 25 per cent of GDP
(but only 9 per cent in middle-income and 1 per cent in high-income countries).
Agriculture provides food, income and jobs and hence can be an engine of growth
in agriculture-based developing countries and an effective tool to reduce poverty
in transforming countries. Agriculture contributes factor, labour and market to
the other sectors in the initial stages of the development.
Kuznet (1968) has identified three important contributions which agriculture
makes to the economic growth of an economy, viz. factor contribution, product
contribution and market contribution. According to the World Development
Report (1982), in Europe, Japan and United States, for example, a dynamic
agriculture accompanied, and in some instances led, process of industrialization
and growth (World Bank,1971). In contemporary development theory, the
agricultural and rural sectors of the less developed countries are believed to be the
key sectors in attaining desired development and growth objectives (Reynolds,
1975; Todaro, 1989). Development of agriculture is crucial for the development
of people directly engaged in agriculture and those in non-agriculture sectors.
The development of agriculture stimulates the development of other sectors
through linkages, both backward and forward. It was Hirschman (1958) who
introduced the concept of ‘sectoral linkages’ in his theory of ‘unbalanced growth’.
He argued that the growth of the sector with larger linkages will increase growth
faster, through linkages other than the alternative means. At the same time,
he mentioned that agriculture cannot be leading sector because of its weak
backward linkages, whereas Kalecki (1960) and Kuznet (1968) emphasized that
agriculture development is the sine qua non for industrialization. Joanson and
Mellor (1961) and Mellor (1976) discussed the importance of agriculture on non-
agriculture sector. The researchers have not only acknowledged the dominant role
of agriculture in economic development of less developed countries, but have
seen technological change as a key dynamic force for transforming conventional
agriculture. Traditional agriculture is seen as a source of food and raw material for
the economy and its people. It is also seen as a source of income and employment.
While the above-mentioned contributions of agriculture are a common knowledge
what is not so common is a twofold contribution of agriculture and its people. One
of these is that this sector provides a demand base for the rest of the economy,
which has multiplier effects for the development of secondary and tertiary sectors
at the local, regional and national level. And second is that the development of
agriculture is conducive to reducing the poverty ratio. Agriculture also contributes
to the economy by providing savings and foreign exchange.
The empirical studies regarding the economic development and agriculture come
from the study of Kuznet (1966) who observed that as economies develop, the
importance of agriculture in employment and income diminishes. Timmer (2002)
using a panel of 65 developing countries over 1960 – 1985 found a positive
176 correlation between growth in agricultural, GDP and its lagged values and non-
agricultural GDP growth. Self and Grabowksi (2007) established a positive Importance of Agriculture
relation between different measures of agricultural productivity and average
growth of real GDP per capita over 1960 – 1995 for a cross-section of countries.
De Janvry and Sadoulet (2009) studied in China over 1980 – 2001 and found that
a 1 per cent agricultural growth had an effect on aggregate growth of 0.45 per
cent, whereas the indirect effect through the non-agricultural sector represents
half this effect. In his study, ‘Agricultural growth and Industrial performance
in India’, Rangarajan (1982) maintained that one per cent growth in agricultural
production brought about a resultant increase by about 0.5 per cent in industrial
production and by more than 0.7 per cent in national income. So, development of
the agricultural sector is essential for achieving a faster rate of economic growth.
Chand and others (2012) calculated that a one per cent increase in agriculture
GDP contributes about 0.25 per cent to overall GDP growth in India. It means
if agriculture attains the four per cent annual growth rate, it would contribute
additional two per cent to India’s national output. Whereas the World Bank report
(2008) from cross country evidence suggests that growth in agriculture GDP is
at least twice as effective as the other sectors in reducing poverty.
The World Development Report (2008) has classified the operation of agriculture
in three distinct worlds- the developing countries, the transforming countries and
the urbanized countries. The agriculture sector plays different roles in the above
mentioned countries accordingly. In agriculture-based economies, agriculture
contributes on average 32 per cent to overall economic growth and the majority
of the poor live in rural areas, whereas in transforming countries, agriculture
contributes on average 7 per cent to overall growth but poverty is still mostly
rural. In urbanized countries, agriculture accounts for only 5 per cent of economic
growth and urban poverty is higher than poverty in the rural areas.
Agriculture dominates low-income developing countries, where 60-70 per cent
of the population depends on agriculture for their sustenance. Its growth in
large part dictates the growth of their GDP. The chunk of the population spends
60 to 70 per cent of its income on food. As the development proceeds, role of
agriculture diminishes, eventually accounting for the smaller share in both output
and employment. For the developing countries, growth in agriculture will further
speed up the process of industrialization in these countries. A clear positive
relationship between the agriculture and economic development emerges from
different experiences of the developing countries.
In the agriculture based poor countries, which include Sub Saharan Africa,
agriculture and its allied activities are essential to growth and to reducing mass
poverty and food insecurity. These sub-Saharan countries are dominated by the
small size farm holdings, so increasing the small holder farming’s productivity is
a prerequisite for the agriculture development in these countries. It is not so that
small holders are less productive or less motivated than the large farm holders.
Given the right incentive and institutional framework, small farmers are equally
responsive and productive.
In transforming countries, which include most of the South and East Asia and
Middle East and North Africa, ever increasing rural–urban income inequality
and continuing extreme rural poverty are primary sources of social and political
tensions. These countries have been relying on agriculture protection and
subsidies which in fact is not sustainable nor can it solve the problems of income
disparities. The right approach to the income disparities in these countries requires
a comprehensive approach-shifting to high value agriculture, decentralizing
nonfarm economic activities in rural areas, and providing assistance to help 177
Sectoral Development-I; move people out of agriculture. All these require a bold and a committed political
decision and innovative policy initiative.
In urbanized countries, which include most of Latin America and much of Europe
and Central Asia, agriculture can help reduce the remaining rural poverty if small
holders become direct suppliers in modern food markets. In this way, good
jobs are created in agriculture and agro industry, and markets for environmental
services are introduced.
Check Your Progress A
1. What was the contribution of agriculture to income and employment on the
eve of independence?
2. How did the contribution of agriculture to GDP change from 1950 to 2021?
3. Name three contributions of agriculture to the economic growth.
4. Which of the following statements are True or False?
i) Agriculture is the oldest organized occupation in the world.
ii) Economic development leads to ‘Structural Transformation of an
Economy’.
iii) India’s economy on the eve of Independence was predominantly urban.
iv) Agriculture also contributes to the economy by providing savings and
foreign exchange.
v) The agriculture sector plays same role in the developing countries, the
transforming countries and the urbanized countries.
11.4 ROLE OF AGRICULTURE IN ECONOMIC

DEVELOPMENT OF A COUNTRY
Agriculture is strategically very important for the development of other sectors
of the economy. The development of secondary sector and also tertiary sector
of most of the developed countries relied on agriculture sector in the initial
stages of economic development. It was the agriculture sector that preceded the
development of industrial sector in the modern day in England and America. Even
the most prosperous nation of Asia, Japan owes the development of economy to
the development of agriculture. Agriculture sector stimulates the development
of other sectors through multiple ways. Simon Kuznet classifies the three types of
contributions which agriculture makes for the economic growth of a country as:
(1) The factor contribution
(2) The product contribution
(3) The market contribution
Let us learn them in detail.
1) The factor contribution: When agriculture starts developing, it releases the
factors/resources productive in nature to the other sectors of the economy.
The release of these useful, productive resources to the non-agriculture
sector of the economy is called Factor Contribution of agriculture. The factor
contribution can further be divided into:
a) Provision of Capital
b) Provision of labour
178
a) Provision of Capital: In the initial stages of development, all the important Importance of Agriculture
desirable factors of productions like labour, capital, entrepreneurship and
income are in the agriculture sector. Development of other sectors require the
funds to invest in the non-agriculture sector. It is agriculture which generates
the necessary funds for the other sectors and the transfer of capital to the
non-agriculture sector can be voluntary or compulsory. It is voluntary when
the landlords, farmers and the agriculturists themselves invest in the non-
agriculture sector. The historical evidences show that the farmers of England
and Japan were prominent to save and invest in the industrial projects in their
respective countries. When the government levies taxes on the movement of
agricultural products and income and generates revenue, such generation of
revenue is known as compulsory transfer of the funds from the agriculture to
other sectors. Land tax, which was imposed by the government of Japan at the
end of the 19th century, formed 80 % of the total revenue of the government.
Further, the growth in the agriculture sector itself brings down the prices of
agricultural commodities which helps in increasing the real income of the
consumers and reduces the cost of industrial input resulting in more profit
for the industries. In densely populated countries like India, a bulk of the
population is engaged in agriculture without any real contribution to the
marginal product. Prof. Nurkse has called them “disguised unemployed”
and if we withdraw a part of the population from the agriculture sector, it
would help us to raise the marginal product. Thus, if this excess or disguised
unemployed labour can be utilized to produce the social overhead capital
like roads, canals, it would help in the development of the non-agriculture
sector.
b) Provision of labour: In the initial stages of development, most of the
labour force is engaged in the agriculture sector. The release of labour from
the agriculture sector to other sectors of the economy is another important
contribution of agriculture towards the development of the non- agriculture
sector. We have seen that the importance of agriculture as the largest
employer decreases in the course of time as the economy develops. Today,
most of the developed countries like America, England and Japan even the
Australia and New Zealand employ only 3 to 5 per cent of the workforce
in the agriculture sector. In the beginning of the development, the farm
population is one of the important sources of the labour supply and at the
same time, the movement of farm labour to another sector is not always easy.
The transfer of labour from the agriculture to non-agriculture sector may not
be a problem in an over populated country since labour is already surplus in
these countries. The transfer would actually increase the productivity of the
remaining labour. But the transfer of labour from the agriculture sector to
non-agriculture sector may create a problem in sparsely populated countries.
In such countries, there is no disguised unemployment and a transfer may
actually reduce the agricultural production. So, in a less populated country,
the movement of labour from the agriculture sector to non-agriculture sector
must be preceded by the increase in overall agricultural productivity. Kuznet
has added another economic dimension to the movement of labour from
the agricultural sector to non- agriculture sector. He iterates that transfer of
labour means the transfer of capital invested in the agricultural labour.
2) Product contribution:
a) Provision of wage goods: When other sectors of the economy develop,
people move from the primary sector to other sectors of the economy for 179
Sectoral Development-I; better employment. The demand for the food grain will increase resulting
from increasing income for the other sector employees. At the same time
the demand for the food grain also increases because the income of those
engaged in agriculture also increases. This happens because of the increase
in prices of agricultural commodities they produce. Thus, provision of wage
goods is the most important contribution of the agriculture sector to the
other sectors. With the development of the economy the dependence on the
agriculture for the labour, capital and industrial raw materials are reduced.
But the dependence on raw material will remain intact unless the scientific
innovation makes it possible for provision of synthetic food.
b) Provision of industrial raw materials: Another important contribution to
the non agriculture sector and especially to the development of the industrial
sector is provision of raw materials to the industries. Historical evidence
suggests that agro - based industries were first to develop in the advanced
economies. Agro - based industries were easier and economical to develop
since they are flexible in the sense that the labour can be adjusted without
investing much on training and the capital required to invest is in limited
supply in the initial stages of development.
3) Market Contribution
This contribution covers following activities:
a) Market for the products of other sectors: Agriculture sectors provide not
only the inputs important for the development of the non-agriculture sector,
but also the market for the other sectors growing production. As we have seen
that in the initial stage, most of the income is generated in the agriculture
sector so the demand for most of the goods and services also comes from
the agriculture sector. In countries like India, where a considerable part of
the population depends on agriculture, the demand for the industrial and
service products very much depends on the growth of the agriculture sector.
(b) Flow of agricultural product to other sectors of the economy: As
agriculture develops and its production becomes more market oriented,
many other institutions generally non-agriculture in nature, come into
existence. They include services like packaging, processing, and distribution.
Agriculture development provides the necessary inputs and consumer
goods while promoting the development of the industrial sector. In return,
the developed industrial sector helps the development of agriculture sector
through modern technology and an expanded market for the agricultural
products.
(c) Development of international trade: The agricultural surplus products can
move into the international markets after meeting the domestic market needs.
In this way, agriculture connects the domestic market with the international
market through the surplus. This international movement of agriculture
products helps the country in question to earn valuable foreign exchange
and brings the capital most needed for the investment.
You have learnt the sectoral contribution of the economy, agriculture and economic
development and role of agriculture in economic development of a country. Let
us now learn the importance of agribulture in India’s national economy.
180
11.5 IMPORTANCE OF AGRICULTURE IN
INDIA’S NATIONAL ECONOMY
As we stated earlier, agriculture is the mainstay of India’s economy. Its importance
to the national economy can be gauged from the following facts:
1. Agriculture as a source of employment: As reproduced in Table 3,
agriculture is the largest employer in India. The proportion of the workforce
employed in agriculture has come down in the course of time, but it is still
the single largest employer in the country. About 42 per cent of the workforce
is engaged in agriculture in India according to the latest government figures.
In the western developed countries like the United States of America and
United Kingdom, a meager 2 to 3 per cent of the working population is
employed in agriculture. Even Australia and New Zealand which have a
well developed agriculture employ a miniscule part, less than 10 per cent
of its working population in agriculture.
2. Contribution to national income: When India got independence in 1947,
agriculture contributed more than fifty per cent of India’s national income.
Since then, there has been a consistent net decline in the agriculture’s
contribution to national income which is depicted in Table 2. The share of
agriculture in GDP increased to 19.9 per cent in 2020-21 from 17.8 per cent
in 2019-20. Following 2003-04, the share has remained between 17 and 19
per cent.“The growth in GVA (gross value added) of agriculture and allied
sectors has been fluctuating over time. However, during 2020-21, while the
GVA for the entire economy contracted by 7.2 per cent, growth in GVA for
agriculture maintained a positive growth of 3.4 per cent,” according to the
Economic survey, 2020-21. The share of agriculture in the national income
is regularly used as an indicator of economic development.
The the share of agriculture in the national income of the developed countries
has become very low and the sector contributes only between 2 to 3 per
cent of their national income. It suggests that as a country develops, the
significance of agriculture as a source of employment and income declines.
3. Supply of food to the expanding population: India is the second largest
populated country in the world and according to the United Nations
Population Fund (UNPF), India will surpass China as the most populated
country in the world. Agriculture in India is facing the twin challenges of
supplying food grain to a large and growing population. Further, the demand
for food will increase in the course of time with increase in income. In other
words, income elasticity of demand for food in a developing country is high.
According to Ramesh Chand (member NITI Aayog), domestic demand for
food grain is expected to increase from 207 million tonnes in 2004-05 to
235.4 million tonnes by the end of eleventh five year plan and further to
280.6 million tonnes by the end of 2020-21.
Thus, combined with the growth in per capita income and urbanization, the
demand for food grain and specially the high value crops will increase in
future. That would be another challenge to meet for India’s agriculture given
the shrinking land size and climatic variability.
4. Provision of raw materials to industries: Agriculture provides raw
materials to various industries of national importance. Sugar industry, jute
industry, cotton textile industry are examples of some such industries which 181
Sectoral Development-I; completely rely on agriculture for their inputs. Further, the entire range of
food processing industries is similarly dependent on agriculture for supply of
raw materials. So, development of agriculture is sine qua non for development
of the industries dependent on agriculture. Agriculture is the main support
for India’s transport system, since railways and roadways secure bulk of their
business from the movement of agricultural goods. India’s internal trade is
mostly in agricultural products.
5. Poverty eradication: Agricultural growth has a direct impact on the
poverty eradication and has special powers in reducing poverty across all
country types. According to a World Bank Study (2008), the GDP growth
originating in the agriculture sector is at least twice as effective in reducing
poverty as GDP growth originating outside agriculture. In China, the growth
in agriculture GDP was 3.5 times more effective in reducing the poverty;
for Latin America, it was 2.7 times more. In India and China, according to
the World Bank, following the green revolution and market liberalization,
rapid growth in the agriculture sector was seen which resulted in a drastic
reduction in the proportion of the population living under the poverty line.
6. Importance in global trade: When India got independence in 1947, in spite
of the bulk of the population working in agriculture sector, the country was
not self sufficient in agriculture production. The country heavily relied on
the imports to feed its growing population. The condition changed soon
after the success of the green revolution. The country has now become self
sufficient in food grains and exports them as well. According to a WTO report
(2021), India became one of the top 10 exporters of the agricultural products
in 2019 with a considerable share in export of rice, cotton, meat and soya
bean. India’s share in global agri export was 3.7% in 2019 and India has
overtaken Thailand as the largest exporter of rice in 2019. India is also the
third-largest cotton exporter (7.6%), and the fourth-largest importer (10%)
in 2019. In the largest traded agri product, soya beans, India (0.1%) has a
meager share, but was ranked ninth in the world. In the “meat and edible
meat" category, India was ranked eighth in the world with a 4% share in
global trade. The above facts state the story of India’s successful transition
from ‘ship to mouth’ situation to top ten agricultural exporters in the world.
Check Your Progress B
1. Name three types of contributions of agriculture to the economic growth.
2. Name three Indian industries to which agriculture provides raw material.
3. Explain the concept of green revolution.
4. Which of the following statements are True or False?
i) Agriculture generates the necessary funds for the other sectors.
ii) Agro-based industries were first to develop in the advanced economies.
iii) Agricultural growth has a direct impact on the poverty eradication.
iv) In 1947, India was self-sufficient in agriculture production.
v) India became one of the top 10 exporters of the agricultural products
in 2019.
182
11.6 LET US SUM UP
“Everything else can wait, but not Agriculture”, the first prime minister of India,
Pt. Nehru said while addressing a group of farmers. India’s economy on the
eve of Independence was predominantly rural and agrarian in nature with more
than 85 per cent of the population living in villages and most of them were
dependent on agriculture for their livelihood. In spite of a large proportion of
workers employed in agriculture (70%) and the country was not self sufficient
in food and raw materials for the industry. Since then a systemic and significant
decline in the share of agriculture sector in the nation’s GDP was observed. Its
place has been taken over by the industrial and service sectors, particularly the
service sector which now shares more than 50 per cent of the national income.
Kuznet (1968) has identified three important contributions which agriculture
makes to the economic growth of an economy, viz. factor contribution, product
contribution and market contribution. Agriculture dominates low-income
developing countries, where 60-70 per cent of the population depends on
agriculture for their sustenance. Its growth in large part dictates the growth of
their GDP. Agriculture is the largest employer in India. The proportion of the
workforce employed in agriculture has come down in the course of time, but its
still the single largest employer in the country. About 42 per cent of the workforce
is engaged in agriculture in India according to the latest government figures. The
share of agriculture in GDP increased to 19.9 per cent in 2020-21 from 17.8 per
cent in 2019-20. Agriculture in India is facing the twin challenges of supplying
food grain to a large and growing population and at the same time, the demand
for food will increase in the course of time with increase in income.
Agriculture provides raw materials to various industries of national importance.
Sugar industry, jute industry, cotton textile industry are examples of some such
industries which completely rely on agriculture for their inputs. Agricultural
growth has a direct impact on the poverty eradication and has special powers in
reducing poverty across all country types. According to a World Bank Study, the
GDP growth originating in the agriculture sector is at least twice as effective in
reducing poverty as GDP growth originating outside agriculture. According to a
WTO report (2021), India became one of the top 10 exporters of the agricultural
products in 2019 with a considerable share in export of rice, cotton, meat and
soya bean. The above facts state the story of India’s successful transition from
‘ship to mouth’ situation to top ten agricultural exporters in the world.
11.7 KEY WORDS

Agriculture: The occupation concerned with cultivating land, raising crops, and
feeding, breeding, and raising livestock.
Economic Development: The increase in the production, distribution, and use
of income, wealth, and commodities.
Disguised Unemployment: Concealed fact about the actual percentage of people
not having appropriate means of earning livelihood.
Primary sector: The area of priorotised necessity.
11.8 ANSWERS TO CHECK YOUR PROGRESS

A 4 i) True, ii) True, iii) False, iv) True, v) True
B 4 i) True, ii) True, iii) True, iv) False, v) True 183
Agriculture Sector In India 11.9 TERMINAL QUESTIONS
1) Discuss the importance of agriculture in India’s economy. Describe its
contribution to the national economy.
2) How does agriculture play a dominant role in the development of an
economy? Explain.
3) What do you mean by structural transformation of an economy? Does Indian
economy follow complete structural transformation? Discuss with examples.
4) What are the important contributions that agriculture makes according to
Simon Kuznet?
FURTHER READINGS
Ramesh Chand, “Demand for Foodgrains”, Economic and Political Weekly,
December 29,2007.
Kapila Uma, Economic Development and Policy in India, Academic Foundation,
New Delhi, 2009-10.
Soni, R.N, Leading issues in Agriculture economics
Witt,L.(1965), “Role of Agriculture in economic development,: A Review” journal
of Farm Economics, Feburary, 1965.
Kuznet, S.(1965), Economic Growth and structure, Oxford and IBH Publishing
Co., New Delhi.
Government of India; Economic Survey-various issues.
184
Problem of Productivity
UNIT 12 PROBLEM OF PRODUCTIVITY
Structure
12.0 Objectives
12.1 Introduction
12.2 Major Food Crops Production in India
12.3 Productivity in India’s Agriculture
12.3.1 General Causes
12.3.2 Institutional Causes
12.3.3 Technological Factors
12.4 Measures to Raise Productivity in Indian Agriculture
12.5 Let Us Sum Up
12.6 Key Words
12.0 OBJECTIVES
• Describe major food crops in India;
• Explain India’s position in world agriculture;
• Describe different reasons of low agricultural productivity in India; and
• Explain measures for raising agricultural productivity in Indian agriculture.
12.1 INTRODUCTION
With a population of 1.30 billion, India is the world's second most populous
country. It is the seventh largest country in the world with an area of 3.288 million
sq kms. It has a long coastline of over 7,500 kms. With the highest mountain range
in the world, the Himalayas to its north, the Thar desert to its west, the Gangetic
delta to its east and the Deccan Plateau in the south, the country is home to vast
agro-ecological diversity. India is the world's largest producer of milk, pulses
and jute, and ranks as the second largest producer of rice, wheat, sugarcane,
groundnut, vegetables, fruit and cotton. It is also one of the leading producers of
spices, fish, poultry, livestock and plantation crops. In this Unit, you will learn
the causes and measures to raise productivity in Indian agriculture.
12.2 MAJOR FOOD CROPS PRODUCTION IN INDIA

While agriculture’s share in India’s economy has declined to 20% in 2021, it was
once consistently declined to 15 % in 2010-11 then improved to current level,
due to the high growth rates of the industrial and services sectors. The sector’s
importance in India’s economic and social fabric goes well beyond this indicator.
First, nearly three-quarters of India’s families depend on rural incomes. Second,
the majority of India’s poor (some 770 million people or about 70 percent) are
found in rural areas. Third, India’s food security depends on producing cereal
crops, as well as increasing its production of fruit, vegetables and milk to meet
the demands of a growing population with rising incomes. To do so, a productive,
competitive, diversified and sustainable agricultural sector will need to emerge
185
at an accelerated pace .
Sectoral Development-I; Agriculture, with its allied sectors, is the largest source of livelihoods in India.
Seventy percent of its rural households still depend primarily on agriculture for
their livelihood, with 87 percent of farmers being small and marginal. In 2020-
21, total food grain production was estimated at 305.44 million tonnes (MT)
(Advance Estimate). India is the largest producer (25% of global production),
consumer (27% of world consumption) and importer (14%) of pulses in the world.
India's annual milk production was 165 MT (2017-18), making India the largest
producer of milk, jute and pulses, and with the world's largest cattle population
303 million in 2020.India's cattle inventory amounted to over 303 million in 2020.
While the global cattle population stood at over 987 million, India had the highest
cattle population, followed by Brazil, the United States, and China that year. It
is the second-largest producer of rice, wheat, sugarcane, cotton and groundnuts,
as well as the second-largest fruit and vegetable producer, accounting for 10.9%
and 8.6% of the world fruit and vegetable production respectively .
As per “Third Advance Estimates” for 2020-21, total food grain production in
the country is estimated at record 305.44 million tonnes, which is higher by
7.94 million tonnes than the production of food grain of 297.50 million tonnes
achieved during 2019-20. Further, the production during 2020-21 is higher by
26.66 million tonnes than the previous five years’ (2015-16 to 2019-20) average
production of food grain.
Table 1 Production of Major food crops in India (in million tonnes)
Crop Season 2005-06 2010-11 2015-16 2020-21 (Advance Estimate)
Kharif 78.27 80.65 91.41 104.30
Rice Rabi 13.52 15.33 13.00 17.16
Total 91.79 95.98 104.41 121.46
Wheat Rabi 69.35 86.87 92.29 108.75
Kharif 12.16 16.64 16.05 20.95
Maize Rabi 2.55 5.09 6.51 9.29
Total 14.71 21.73 22.57 30.24
Kharif 105.01 113.73 119.56 139.87
Cereals Rabi 90.21 112.52 115.66 140.00
Total 195.22 226.25 235.22 279.87
Tur Kharif 2.74 2.86 2.56 4.14
Gram Rabi 5.60 8.22 7.06 12.61
Kharif 0.90 1.40 1.25 1.56
Urad Rabi 0.35 0.36 0.70 0.82
Total 1.25 1.76 1.95 2.38
Kharif 0.69 1.53 1.00 1.99
Moong Rabi 0.26 0.27 0.59 0.65
Total 0.95 1.80 1.59 2.64
Kharif 4.86 7.12 5.53 8.49
Total Pulses Rabi 8.52 11.12 10.79 17.09
Total 13.38 18.24 16.32 25.58
Kharif 109.87 120.85 125.09 148.36
Total Foodgrains Rabi 98.73 123.64 126.45 157.08
Total 208.60 244.49 251.54 305.44
Kharif 167.67 219.22 166.98 245.52
Total Oilseeds Rabi 112.11 105.57 85.53 120.13
Total 279.78 324.79 252.51 365.65
Sugarcane Total 2811.72 3423.82 3484.48 3927.97
Cotton # Total 184.99 330.00 300.05 364.92
Source: Ministry of agriculture and farmers' welfare.
# Lakh bales of 170kgs each.
186
The Table 2 shows the production of agriculture commodities in India from the Problem of Productivity
triennium 2005-06 to triennium 2020-21. The production of all the crops depicted
in the table shows a progressive increase in the output over the years. According
to the ministry’s calculation, total production of rice during 2020-21 is estimated
at a record 121.46 million tonnes. It is higher by 9.01 million tonnes than the
last five years average production of 112.44 million tonnes. Production of wheat
during 2020-21 is estimated at a record 108.75 million tonnes. It is higher by
8.32 million tonnes than the average wheat production of 100.42 million tonnes.
Total pulses production during 2020-21 is estimated at 25.58 million tonnes which
is higher by 3.64 million tonnes than the last five years’ average production of
21.93 million tonnes. Total oilseeds production in the country during 2020-21
is estimated at a record 36.57 million tonnes which is higher by 3.35 million
tonnes than the production of 33.22 million tonnes during 2019-20. Further, the
production of oilseeds during 2020-21 is higher by 6.02 million tonnes than the
average oilseeds production. Total production of sugarcane in the country during
2020-21 is estimated at 392.80 million tonnes. The production of sugarcane
during 2020-21 is higher by 30.73 million tonnes than the average sugarcane
production of 362.07 million tonnes. Production of cotton is estimated at 36.49
million bales (of 170 kg each) is higher by 4.59 million bales than the average
cotton production.
Table 2: India's Position in World Agriculture During 2016
Item India World % India's Next to
Share Rank
1. Total Area (Million Hectares) 328.73 13490.08 2.44 Seventh Russian Federation,
Canada, Brazil,
Australia U.S.A.,
China,
2. Arable Land 156.46 1423.79 10.99 First
3. Crop Production (Million Tonnes)
(A): Total Cereals 297.85 2909.2 10.24 Third China, U.S.A.
Wheat 92.29 749.01 12.32 Second China
Rice( Paddy) 163.7 756.16 21.65 Second China
(B): Total Pulses 18.15 83.46 21.75 First
(C): Oilseeds
Groundnut (in shell) 7.46 44.91 16.62 Second China
(D) Commercial Crops
Sugarcane 348.45 1861.18 18.72 Second Brazil
Tea 1.25 5.91 21.14 Second China
Jute 1.90 3.31 57.31 First
Tobacco Unmanufactured 0.78 6.40 12.23 Second China
4. Fruit & Vegetables Production
( Million Tonnes)
(A): Vegetables Primary & Melons 123.63 1229.51 10.06 Second China
(B): Fruits Primary (excluding Melons) 88.47 710.5 12.45 Second China
(C): Potatoes 43.42 374.25 11.6 Second China
(D): Onion( Dry) 20.93 94.94 22.05 Second China
5. Livestock ( Million Heads)
(A): Cattle 186.04 1488.96 12.49 Second Brazil
(B): Buffaloes 112.57 199.39 56.46 First
(E): Goats 134.13 1025.64 13.08 Second China
6. Animal Products (Million Tonnes)
(A): Milk Total 165.33 809.8 20.42 First
Source: Pocket Book of Agricultural Statistics, 2018
187
Agriculture Sector In India 12.3 PRODUCTIVITY IN INDIA’S AGRICULTURE
India is primarily an agricultural country, as the sector provides livelihood to
more than 50% of the population and contributes nearly one fifth of the country’s
GDP. However, India lags behind many other countries as far as agricultural
productivity is concerned. The reasons are several. The agricultural productivity
can be measured in two ways; a) productivity per hectare, and b) productivity
per labour. If we compare the productivity of the India’s agriculture with the
rest of the world, India lags behind not only the developed western countries
but the developing countries as well. Some of the major causes behind the low
productivity of Indian agriculture are discussed below:
India’s yield per hectare for rice and wheat is low if we compare with the BRICS
countries. If India’s yield rates for the two crops are at China’s levels, it can double
our yields or halve the land used for the purpose. At present, India produces
106.19 million tonnes of rice a year from 44 million hectares of land. That is a
yield rate of 2.4 tonnes per hectare, placing India at 27th place out of 47 countries.
China and Brazil have yield rates of 4.7 t/ha and 3.6 t/ha, respectively. If Indian
agricultural productivity was at these rates, we could produce 205.52 million
tonnes and 160.01 million tonnes of rice, respectively. Egypt leads the world in
rice yields—at Egypt’s yield rate, India could almost triple its rice output. As
far as wheat is concerned, India has a higher yield rate than for rice, but it still
lags a large part of the world. India’s yield rate of 3.15 tonnes per hectare for
wheat places it 19th out of 41 countries. Here, India does better than Brazil’s
yield rate of 2.73 tonnes per hectare, but lags behind South Africa (3.4 t/ha) and
China (4.9 t/ha). If India’s wheat productivity is at these countries’ levels, it
would be producing 101.22 million tonnes and 147.53 million tonnes of wheat,
respectively. New Zealand has the highest productivity of wheat in the world. If
India produces wheat at the rate at which New Zealand does, then it can produce
2.5 times more than what it produces. This is not to say that Indian agricultural
productivity in wheat and rice has not improved over the years. Yield rates in
wheat have grown at a compounded annual growth rate of 1.8% from 1983 to
2013 and in rice by 1.71% over the same period. These are not particularly slow
growth rates. The improvement in yield rates for rice would place it at number
13 in the world while that in wheat would peg it at 14th rank .
12.3.1 General Causes
a) Demographic Factors: As we know India is second most populated country
in the world and at the present rate of growth of population the country will
very soon overtake China as the most populated country. With the increasing
pressure of the population on land, the average landholding in the country is
consistently decreasing and the size of average land holding declined from 2.1
hectares in 1970-71 to 1.15 hectares in 2010-11 to 1.08 hectares in 2015-16.
Small and marginal farmers with less than two hectares of land account for
bulk of all farmers in India, but own about half of the crop area, according to
provisional numbers from the 10th Agriculture Census 2015-16. The survey
showed that while Indian farms became more fragmented between 2010-11
and 2015-16, holdings continue to be inequitably distributed. The increasing
pressure of population on land is partly responsible for the subdivision and
fragmentation of holdings resulting in low productivity. We expect that in
the course of time, the economic growth in the country will open new job
opportunities in the non agricultural sectors. In India this has not happened
188 and the employment in the manufacturing sector for the last three decades is
stagnant, employing less than one fifth of the workforce. Thus, the increasing Problem of Productivity
pressure of the population is directly falling to the agriculture sector resulting
in consistent decline in the size of the holding and low productivity.
b) Social Environment: The social environment of the villages is regarded as
one of the major hindrances to the development of Indian agriculture. It has
been observed that in general the Indian farmers are illiterate, superstitious,
conservative and do not respond to the new and modern agricultural
techniques. Again the working conditions as well as the health conditions
are very poor and it has lessened the productive capacity of the farmers.
12.3.2 Institutional Causes
a) Land Tenure System: Zamindari system has been an important factor
responsible for the low productivity of Indian agriculture, the form of
land tenure system which India inherited from the colonial powers. The
zamindari system was highly exploitative in character and ruined the capacity,
willingness and enthusiasm of the cultivators to increase the production and
productivity. In this system the cultivator is not the owner of land. Zamindar
is the owner of land and he can evict the tenant at any time. So the cultivator
does not take interest in the development of land and Zaminder does not
take an interest in the development of cultivation. Though the zamindari
system was abolished after independence, yet the position of the cultivator
has not improved. Legislation passed after the independence of the country
for the abolition of intermediaries did not break the stronghold of the
zamindars and it only changed the nomenclature from the “zamindars” to
big landlords. Moreover, the land reforms carried out in the country in the
post reform period did not make any significant changes in the stronghold
of the zamindars in the rural areas and except few states like West Bengal,
Kerala and Jammu Kashmir, the reforms failed miserably. Regulation of rent,
security of tenure, ownership rights of tenants did not make much aspired
changes in the tenant’s life, they are still at the mercy of big landlords.
b) Uneconomic Holding: As discussed in demographic factors, according to
National Sample Survey (NSS), since the first agriculture census over 45
years ago, the number of farms in India has more than doubled from 71
million in 1970-71 to 145 million in 2015-16. The average farm size more
than halved from 2.28 hectares (ha) to 1.08ha. Between 1970-71 and 2010-
11, the number of farms increased by 194%, almost exactly in line with the
rural population, which increased by 189%. In India as per latest NSS report,
small and marginal farmers with less than two hectares of land account for
86.2% of all farmers in India, but own just 47.3% of the crop area. At the
same time, semi-medium and medium land holding farmers owning between
2-10 hectares of land account for 13.2% of all farmers, but own 43.6% of the
crop area. During this period the proportion of small and marginal farmers
grew from 84.9% to 86.2%, while the total number of operational holdings
grew from 138 million to 146 million. The total area under farming, however,
fell from 159.6 million hectares in 2010-11 to 157.14 million hectares in
2015-16. Between 2010-11 and 2015-16, the number of small and marginal
farms rose by about 9 million. Further, these 126 million farmers together
owned about 74.4 million hectares of land —or an average holding of just
0.6 hectares each—not enough to produce surpluses. Thus, a booming small
and marginal farmers and consistent decline in the farm size makes Indian
agriculture uneconomic and less productive.
189
Sectoral Development-I; c) Inadequate Marketing and Credit Facilities:
i) Inadequate/Improper Warehouses: There is a near absence of proper
warehousing facilities in the villages. This compels the farmers to store their
produce in pits and mud vessels. Such unscientific methods of storage lead
to considerable losses of produce by wastage. Absence of adequate storage
in villages forces farmers to sell the crops in one go that creates an abundant
supply yielding low and un-remunerative prices to the producers. The large
producers may have the capacity to arrange required storage facilities. The
small producers do not have storage facilities. While the setting up of central
and state warehousing facilities has improved the situation to some extent,
there is every need to expand the facilities much more on this front.
ii) Lack of Grading and Standardization: The practice of selling graded
items which can fetch better return is missing among the small farmers. The
common practice is to sell them in heaps of one lot with items of different
qualities mixed up. The low returns received as a result of this practice do
not induce the farmers to adopt better methods and practices for producing
quality products.
iii) Inadequate Transport Facilities: Good road connectivity to transport the
produce to Mandi (the places where produce are sold in bulk) with adequate
motorized transport facilities is a must. The practice in India, particularly
for small farmers, is to transport their goods in bullock carts. The feasibility
to transport items to far off places is greatly constrained by this means of
transportation.
Presence of Large Number of Intermediaries: As we have seen above, the
iv)
length of marketing channel is not small or optimum to realise maximum
returns to the producers. The situation is particularly adverse due to number
of intermediaries or middle men operating in the names of village traders,
kutcha/pucca arhtiyaas, brokers, wholesalers, retailers, money lenders, etc. A
number of middle men in the marketing of agri produce leads to a situation
where in both the producers and consumers are at receiving end and a good
part of margin goes to the middle man. Empirical evidences suggest that
the marketing margin varies for different commodities and farmers receives
only 30 to 25 percent of the consumer price.
v) Inadequate Market Information: Very often, farmers do not get the right
information about prices in the markets. Taking advantage of this ignorance
on the part of farmers, middlemen take undue benefit of the situation. The
situation is changing with the government making use of media like radio,
newspapers, etc. to announce and disseminate information on prices in
markets. However, there are problems of time lag and the consequent less
reliable information reaching the sellers. This leads to traders often paying
less than the prices quoted by the government in the news media.
vi) Inadequate Credit facilities: The farmers need credit for various purposes
like purchase of seeds, fertilizers, irrigation, etc. In India the scope of formal
institutional lending has been limited and curtailed in post liberalization
period. At the same time, many formalities are associated with formal credit
institutions so farmers rely on the informal sources like money lender and
Mahajan who not only charge exorbitant interest rate but they also indulge
in many malpractices. This exorbitant interest and unscrupulous practices
adopted by informal credit sources are a major reason behind the farmer
190 suicide in India. According to P. Sainath, a veteran journalist, in India every
four hours a farmer kills himself. Timely provision of credit is must for the Problem of Productivity
efficient and sustainable agriculture.
12.3.3 Technological Factors
The following technological factors are also responsible for low agricultural
productivity in Indian agriculture:
(a) Traditional Methods of Cultivation: The farmers in India have been
adopting orthodox and inefficient methods and techniques of cultivation.
As they are tradition bound and poor, thus they could not adopt modern,
efficient methods adopted by western countries of the world. These farmers
were relying on centuries old wooden plough and other implements. It is
only in recent years that the Indian farmers have started to adopt improved
implements like steel ploughs, seed drills, harrows, hoes etc. to a limited
extent only. Thus, Indian agriculture is dualistic in nature wherein the
developed regions of the country, Punjab, Haryana and Western Uttar Pradesh
apply the most sophisticated technology used by their counter parts in the
western developed countries. On the other hand in most of the country’s
hinterland farmers are using the traditional methods used by their fore father
resulting in low productivity. Thus, Indian agriculture is traditional and
therefore, productivity is low.
(b) Lack of High Yielding Seeds: Indian farmers are still using seeds which
are not of good quality. In the post green revolution period, the use of high
yielding varieties of seeds increased substantially resulting in a considerable
increase in the productivity. But the use of high yielding varieties of seeds
is limited to irrigated areas of the country. Still a large number of farmers
use low quality seeds resulting in low productivity.
(c) Lack of Fertilizer: Fertilizer consumption measures the quantity of plant
nutrients used per unit of arable land. Fertilizer products cover nitrogenous,
potash, and phosphate fertilizers (including ground rock phosphate).
Traditional nutrients--animal and plant manures--are not included.
Indian farmers are not applying sufficient quantity of fertilizers on their lands.
Constant cultivation of land causes deterioration of the fertility of soil. For the
revitalization of soil fertility and to use fallow land for cultivation, application of
various types of fertilizer is indispensable. The use of fertilizers in India increased
after mid 1970’s, but is still confined to few agriculturally advanced regions of the
country. As of 2018, fertilizer consumption in Hong Kong was 3,573.9 kilograms
per hectare. The top 5 countries also include Malaysia, Bahrain, New Zealand,
and Ireland. India with 175 kg per hectares was ranked 45th according to the
world bank data. Thus, the fertilizers used per hectare is very low compared to
the world standards.
(d) Inadequate Irrigation Facilities: Water is the most critical input for
enhancing agricultural productivity, and therefore expansion of irrigation
has been a key strategy in the development of agriculture in the country.
The ultimate irrigation potential of India has been estimated to be 139.5
mha, comprising 58.5 mha from major and medium schemes, 15 mha from
minor irrigation schemes and 66 mha from groundwater exploitation. India’s
irrigation potential has increased from 22.6 mha in 1951 to about 90 mha
at the end of 1995.An adequate and assured water supply at the appropriate
time is essential for increasing the yield of the crops. In India, agriculture
largely depends on the rainfall, which is mostly uncertain and unseasonable.
191
Sectoral Development-I; Before independence, only 19 per cent of the total land was irrigated in India.
But in-spite of vigorous programme of major and minor irrigation projects
undertaken since 1951, currently about 45 percent of country’s cropped area
is irrigated. This shows that 55 percent of cropped area is still dependent on
the rains. Rainfall is becoming erratic in India owing to the climate change
and variability in precipitation in the last twenty years has increased. This
has resulted in droughts in some parts of the country and excess rainfall and
flood in other parts of the country. The Country’s full irrigation potential
is not wholly utilised because of defective management and water cost is
constantly increasing, thus, making farming difficult and costly for small
farmers.
(e) Lack of pesticides: Farmers in India lose a considerable part of their
produce to pests and insects which eats the plants. According to a study
by the Associated Chambers of Commerce and Industry of India in 2015,
annual crop losses due to pests and diseases amount to Rs.50,000 crore
($500 billion), which is significant in a country where at least 200 million
Indians go to bed hungry every night. About 30-35% of the annual crop yield
in India gets wasted because of pests, According to a research by Indian
Council of Agriculture Research (ICAR) paper in 2017, the use of pesticides
and insecticides is still limited to a few areas and larger farms. Thus, over a
wider area, crops suffer much damage due to pests and insects resulting in
lower output and low productivity.
(f) Lack of Agricultural Research: Public spending on agriculture is one
of the key policy instruments of the government to promote growth and
alleviate poverty in rural areas. Amongst the various types of government
spending, Agricultural Research and Education (R&E) is found to be one
of the most critical for promoting farm yields, which contributes towards
augmenting yield and thus income of the peasantry. According to Ashok
Gulati, a renowned Agricultural Economist, India spends about 0.7 per
cent of its GDPA (2014-15) on aggregate agriculture research, including
education, extension and training (AgRE&XT) as against the recommended
level of 2 per cent of agri-GDP by the world Bank. Further, According to
the Economic Survey 2017-18, the total R&D expenditure in India as a
percentage of GDP has been stagnant at 0.6 to 0.7 per cent in the last two
decades — much lower than the US (2.8 per cent), China (2.1 per cent),
South Korea (4.3 per cent) and Israel (4.2 per cent). Comparing India and
China’s spending on agricultural research and development, “Agriculture
Science and Technology Indicators (ASTI)” data reveal that India currently
spends 0.30 per cent of agriculture GDP on agricultural research, which is
just half the share invested by China (0.62 per cent).
Thus, Productivity of most of the crops in the country is low and there is
considerable scope to raise it. Except wheat, productivity of most other crops
in the country is below the world average and much lower than agriculturally
advance countries. Even, within the country there are large variations in yield
across states. A large variation in yield across states is due to variation in the
factors discussed above, even the variations are found in the states with the similar
irrigation coverage, productivity show significant variations due to poor level or
low adoption of improved technology.
1. What are the main cereal crops in India?
192
2. List the main reasons for the low agricultural productivity in India. Problem of Productivity
3. What do you mean by technological reasons of low productivity?

4. Which of the following statements are ‘True’ or ‘False’?
i) Agriculture, with its allied sectors, is the largest source of livelihoods
in India
ii) In wheat production, India’s rank in world is first.
iii) India’s yield per hectare for rice and wheat is low if we compare with
the BRICS countries.
iv) There are very good warehousing facilities in the villages in India.
v) Indian farmers are not applying sufficient quantity of fertilizers on their
lands
12.4 MEASURES TO RAISE PRODUCTIVITY IN

INDIAN AGRICULTURE
There are two sources to increase agricultural output, i.e., area and productivity.
Due to rising demand for land for non agricultural uses and already high share
of arable land in the total geographical area of the country, further expansion
in the area under cultivation is not feasible. Rather, there is a decline of about
10 lakh hectares, as agricultural land has been diverted to non- agricultural uses
since the year 2004-05. Therefore, agricultural output has to be increased through
improvement in productivity per unit of land (Nitti Aayog,2017).
Reduction in the Pressure of Population on Land: Indian agriculture employs
the largest share of the workforce – about 42 percent in 2019 – though its share
in the overall gross domestic product (GDP) is only 20 percent in 2020. India is
still largely a rural economy with 66 percent of the country’s population living
in rural areas (World Bank, 2019). The proportion of the workforce employed
in the agriculture in India is very high from any standard. Thus, there is utmost
need to withdraw a part of the workforce from agriculture and provide them
alternative employment outside agriculture, which would help reduce the pressure
on agriculture and consequently improve the productivity. Over the last four
decades, the absolute number of workers in India has increased from 180.7
million in 1971 to 481.7 million in 2011, indicating an addition of close to 6
million workers to the workforce every year (Census of India, various issues).
Moreover, the absolute number of workforce employed in the agriculture sector
has increased from 125.7 million to 263.1 million during the same period, though
in terms of percentage, this share has declined from 66.5 percent in 1981 to 42.3
per cent in 2019(Gulati,2019). According to Gulati, raising labour productivity
will require raising land productivity by (a) pumping in more capital; (b) creating
employment opportunities in off-farm jobs such as food processing, cold storages,
construction sector; (c) skill formation; and (d) ‘diversification’ towards high
value agricultural activities such as dairy farming, poultry rearing, horticulture
and fisheries.
Agriculture Research and Extension: As we have seen the expenditure made
by the Government of India for agricultural research and extension is very low
as compared to other countries. An increase in the expenditure on agriculture
knowledge and innovation systems is an important factor in the improvement of
productivity of the agricultural sector in India. In a study conducted by Gulati and
Terway (2018) on the impact of investment and subsidies on agricultural GDP 193
Sectoral Development-I; growth and poverty reduction, it was estimated that for every rupee invested in
agricultural research and education (R&E), agriculture GDP increases by INR
11.2. Moreover, for every million rupees spent on agricultural R&E, 328 people
are brought out of poverty. The study confirms the return from per rupee spent
on agriculture research is highest. It shows that every rupee spent on agricultural
research and development yields better returns (11.2), compared to returns on
every rupee spent on fertilizer subsidy (0.88), power subsidy (0.79), education
(0.97) or on roads (1.10).In India, over the years, the ratio of expenditure on
agricultural knowledge and innovation systems as a percentage of agricultural
gross value added (GVA) improved from 0.38 percent in 2000/01, touched 0.64
percent in 2010/11 but fell back to 0.35 percent in 2018/19.Therefore, in order
to improve the sector’s total factor productivity, India needs to invest more in
agricultural R&E (Gulati and Gupta, 2019).
Agricultural Marketing: Agricultural Marketing is riddled with the middlemen
who sucks the benefits accruing to the farmers and end consumers. Some of the
reforms in the marketing suggested by experts are discussed below, which are
essential for improving the productivity in the agriculture sector.
a) Uniform Mandi fees: These fees now range from 0.5% to 5% on the value
of sale, while varying across states and commodities. It is proposed that a
uniform Mandi fee of 0.25% or 0.50% be levied nationwide for foodgrain,
oilseeds and fruits & vegetables. The consequent losses to APMCs may
be compensated by the Centre and state governments, as in the case of the
Goods and Services Tax.
b) Abolish Mandi fees on inter-state trade: Charging Mandi on produce
brought to a state from other states (where it would already have been levied)
amounts to double taxation, besides violating the idea of a single national
market. The practical difficulty is to verify whether the commodity has
actually come from another state, as traders sometimes use this route to pass
on their unaccounted stocks. A way out is to make e-way bills mandatory for
all inter-state trade and Mandi fee exemptions be given only against these.
c) Eliminate Arthtiya-based trading: All trades in APMCs should be through
open auctioning, involving multiple bidders for each lot. Such trades
should be directly between buyers and sellers, with no middlemen charging
commission. The arthtiya can participate only as a trader. The farmer should
have total freedom to sell his produce at the farmgate, haat, APMC yard,
private markets, deemed markets (warehouses/cold storages) or e-trading
platforms.
d) Storage and banking facilities near APMCs: At Mandis the lowest prices
are during the 3-4 post-harvest months and highest in the immediate pre-
harvest period. Farmers undertake maximum sales just after harvest, as they
need to purchase inputs for the next sowing season. Such distress sales can
be avoided if facilities for bagging and storage, along with loans against
warehouse receipts, are available to meet immediate cash requirements.
These should exist in the vicinity of APMCs. When farmers have the choice
to sell or store their crop, it will force traders to pay the actual value of
produce based on quality.
e) Promote Farmers Producers Orgainisation (FPOs) in marketing:
Producer organisations/companies should be encouraged to take up direct
marketing of their members’ produce to large buyers and processors. Besides,
194 they can be given mandi to trade in APMCs. There are some FPOs that do
such trading; it has been found to result in more competition and better prices Problem of Productivity
at APMCs.
f) Relax/abolish Essential Commodities Act: Increased production,
liberalised imports and food inflation well under control, restrictions on
stocking, movement and export of farm produce have become redundant.
The dismantling of such controls under ECA and other regulations would
expand trade and lead to better realisations for cultivators.
g) Common e-NAM trading licence: Electronic National Agriculture Market
(e-NAM) online trading platform has helped connect 585 APMCs across
India. The ground reality, however, is that much of trading in e-NAM is still
being done by traders within the same mandis. The reason is the individual
licencing system adopted by each APMC. What is needed is a common
licence valid across all e-NAM APMCs. This can be issued with a rider that
the trader will deposit upfront the margin money/funds in any APMC where
he wishes to undertake physical buying on any given day. An e-wallet or
plug-and-play facility of this kind will multiply the number of buyers and
meet the e-NAM’s primary objective of promoting better price discovery.
Ever Green Technology: The chemicals induced technology known as green
revolution has made India self sufficient in food grains. The application of new
technology in mid 1960’s not only eliminated India’s dependence on imports
for feeding the ever increasing population, but also increased the productivity
of the crops by leaps and bounds. The productivity of rice and wheat recorded
high growth owing to the application of new technology. The major problems
associated with Green Revolution are related to environmental factors like
depletion and pollution of groundwater, soil erosion and loss of biodiversity.
The chemical technology was not carbon neutral, the excessive use of chemicals;
fertilizers and pesticides resulted in a number of environmental problems. As a
result gain in productivity achieved through the new technology has reached a
plateau. More than that chemical based technology is not sustainable knowing
agriculture is one of the largest users of water in India and the largest polluter of
the environment worldwide. Owing to the resource and technology constraints in
India, the chemical technology cannot be the solution to increase the productivity
and meet nutrition security in India. Hence scientists and the government of
India have come up with the concept of ‘evergreen revolution’; which implies
productivity improvement in perpetuity without social and environment harm.
The evergreen revolution involves the integration of ecological principles in
technology development and dissemination.
The Green Revolution transformed the image of India from being a ‘begging
bowl’ to ‘bread basket’. However, to rectify flaws and loopholes of the Green
Revolution, the country needs to make it evergreen. Though India is now self-
sufficient in many aspects of food production, it still relies on imports for crops
such as pulses and oilseeds, where production has not kept pace with demand.
Dr. M.S.Swaminathan, who 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. The logic
is to produce more from less land, less pesticide, less water and it must be an
evergreen revolution to get sustainable agriculture. Introducing Indian farmers
to innovative information and communication technologies (ICT) can enhance
farm productivity. ICT initiatives can tackle key challenges in the agricultural
value-chain through networking on weather alerts, the sowing period, and the
195
prices of produce.
Sectoral Development-I; According to the ICAR in the dry areas, dry lands produce half the country’s
cereals, 77 per cent of its oilseeds and 85 per cent of its pulses. Implementation
of new and efficient irrigation methods, better watershed management and
maintenance of vegetation cover in catchment areas and development of drought-
tolerant crop varieties is required to optimise water utilisation.
GM food crops are also critical for enabling the success of evergreen revolution.
These crops have been proven to significantly improve yield through high levels
of disease and pest resistance, improved weed management, abiotic stress
tolerance and nutrient-use efficient crops. For example approval and promotion of
Bt.Mustard helps us to reduce the edible oil imports and improve Indian economy
as well as provide nutrition.
With increase in population, there is a dire need to increase food grain production
at a rapid pace. The challenge lies in producing more with less resources. Only
increased productivity which is ecologically sustainable can ensure higher
production of Foodgrains. Food security involves an increase in food grain
production and distribution which is accessible and affordable. Stagnation of
food grain production is the biggest concern of recent time. Evergreen revolution
is the need of the hour.
1. How has the workforce in agriculture in India changed during the last three
decades?
2. Name three measures of agriculture marketing which can help in raising
agricultural productivity.
3. What is ‘Ever Green Technology’?
i) There has been a decline of about 10 lakh hectares as agricultural land
since the year 2004-05.
ii) The farmer should have total freedom to sell his produce at any place
of his choice.
iii) The Green Revolution transformed the image of India from being a
‘begging bowl’ to ‘bread basket’.
iv) India has invested sufficient funds in the agricultural research.
v) Only increased productivity which is ecologically sustainable can ensure
higher production of foodgrains.
12.5 LET US SUM UP

India is primarily an agricultural country, as the sector provides livelihood to
more than 50% of the population and contributes nearly one fifth of the country’s
GDP. However, India lags behind many other countries as far as agricultural
productivity is concerned. India’s yield per hectare for rice and wheat is low if
we compare with the BRICS countries. If India’s yield rates for the two crops are
at China’s levels, it can double our yields or halve the land used for the purpose.
At present, India produces 106.19 million tonnes of rice a year from 44 million
hectares of land. That is a yield rate of 2.4 tonnes per hectare, placing India at
27th place out of 47 countries. There are several reasons for this, which include
demographic factors, Social Environment, Land Tenure System, Inadequate/
196 Improper Warehouses, Uneconomic Holding, Inadequate Transport Facilities,
Presence of Large Number of Intermediaries, Inadequate Market Information, Problem of Productivity
Inadequate Credit facilities and several Technological Factors.
Therefore, agricultural output has to be increased through improvement in
productivity per unit of land (Nitti Aayog,2017). Several desirable measures
have been suggested, such as Reduction in the Pressure of Population on Land,
Agriculture Research and Extension, Agricultural Marketing, Uniform Mandi
fees, Abolish Mandi fees on inter-state trade, Eliminate Arthtiya-based trading,
Storage and banking facilities near APMCs, Promote Farmers Producers
Orgainisation (FPOs) in marketing, and Ever Green Technology, etc.
12.6 KEY WORDS

BRICS countries: Group of Brazil, Russia, India, China and South Africa.
Ever Green revolution: The productivity improvement of foodgrains in
perpetuity without social and environment harm. The evergreen revolution
involves the integration of ecological principles in technology development and
dissemination.
Green Revolution: Application of new technology based on increased use
fertilizers, pesticides and planned rotation of crops led to remarkable increase
in agricultural productivity and made India self sufficient in food grains. It was
called ‘Green Revolution’.
Mandis: The market/place where trading of agricultural products is carried out.
e-NAM: Electronic National Agriculture Market is a platform where online
trading of the agricultural products can be done.
Social Environment: Different customs, traditions, etc. in a society.
Zamindari system: During the British rule in India, Zamindars were recognized
as the owner of the lands and were given the rights to collect the rent from the
peasants. While the zamindars became the owners of the land, the actual farmers
became tenants. It was abolished after Independence.

A 4 i) True, ii) False, iii) True, iv) True, v) True
B 4 i) True, ii) True, iii) True, iv) False, v) True
12.8 TERMINAL QUESTIONS

1. What are the factors responsible for the low productivity of agriculture in
India?
2. Describe various methods being implemented for improving agricultural
productivity.
3. “The Green Revolution was a watershed in Indian agriculture” Elaborate.
4. What is the difference between the “Green Revolution” and “Ever Green
Revolution”?
5. How middlemen can be eliminated in the trade of agricultural products?
FURTHER READINGS
Kapila, Uma, Economic Development and Policy in India, Academic Foundation
(2009-10) Edition, New Delhi. 197
Sectoral Development-I; “Reform 2.0: focus must shift from agricultural production to marketing”, Indian
Express, 27th June, 2019.
NITI Aayog. 2018. Demand and Supply Projections Towards 2030: The Working
Group Report. New Delhi, NITI Aayog, Government of India.
World Bank. 2019. World Development Indicators. Washington, DC., The World
Bank https://databank.worldbank.org/source/world-development-indicators.
Gulati,Ashok and Juneja,2021, “Transforming Indian Agriculture”. Nitti Ayog,
New Delhi.
198
Growth Pattern
UNIT 13 GROWTH PATTERN IN INDIA'S
AGRICULTURE
Structure
13.0 Objectives
13.1 Introduction
13.2 India’s Agriculture during the first half of the 20th century –British period
13.3 India’s Agriculture in Post Independence Period
13.3.1 1950-51 to 1964-65: The Pre-Green Revolution Period
13.3.2 1967-68 to 1979 -80: The Beginning of Green Revolution
13.3.3 1980-81 to 1990-91: The Maturing of Green Revolution
13.3.4 1990-91 to 2003-04: Economic Liberalization and Deceleration of Agricultural
Growth
13.3.5 2004-05 to 2014-15: The Period of Recovery
13.3.6 2014-15 to 2019-20: The National Democratic Alliance- II (NDA-II) Rule
13.4 Challenges of Indian Agriculture

13.5 Policy Suggestions
13.6 Let Us Sum Up
13.7 Key Words
13.0 OBJECTIVES
• Compare the agricultural growth pattern of the post-independence era with
that of the pre-independence;
• Explain challenges faced by Indian agriculture;
• Outline the suggestions made by the experts.
13.1 INTRODUCTION
India’s agriculture has moved from very low, subsistent, ship-to-mouth situation
to self- dependent in the food grains and also a net exporter of the agricultural
commodities in the recent years. Today, India is the largest exporter of rice in
the world. The main objective of this chapter is to review the performance of
Indian agriculture since independence. A brief analysis of the performance of
India’s agriculture in the first half of the 20th century is attempted in the first part
and a detailed in-depth analysis of the country’s agriculture post-independence
is done in the subsequent section. The policy recommendations to make the
growth consistent and sustainable have been made in the last section. India’s
agricultural growth trajectory during the British period, especially the first half
of the 19th century, is very important for understanding the growth in the rest
of the post-independence period. In this Unit, you will learn India's agriculture
during first half of 20th century of post independence period. The challenges and
policy suggestions have been further discussed. 199
Agriculture Sector In India 13.2 INDIA’S AGRICULTURE DURING THE FIRST
HALF OF THE 20TH CENTURY - BRITISH PERIOD
According to all the credible estimates, India’s growth performance during the
first half of the nineteenth century was not an impressive one. According to
Sivasubraamonian, the growth rate of the primary sector during the 1900-01 to
1946-47 was only 0.46% per annum (pa) which is very low from any standard.
The growth rate of the secondary sector and the tertiary sector during the same
period was higher than the primary sector. The economy did not show any
credible structural change and three-fourth of the work force was employed in
the agriculture throughout the 20th century. That is the reason why economists
called the performance of the Indian economy in the first half of the twentieth
century as “Static Economy in Progress”.
Table 1. Growth Rates of GDP and per capita Income at 1993-94 Prices
Years GDP GDP Agr. Secondary Tertiary Income Per capita
1900-47 1.05 0.46 1.82 1.66 0.22
1950-65 3.94 2.54 6.88 4.76 1.86
1967-80 3.44 2.04 4.23 4.54 1.23
1981-91 5.62 3.08 7.10 6.72 3.50
1992-04 6.10 2.38 6.29 8.22 4.21
1950-04 4.33 2.54 5.54 5.54 2.12
Source: Sivasubramonian, 2000 and National Accounts Statistics,2004.

The growth rate of agricultural produce was miniscule. According to George
Blyn’s estimate prepared on the basis of 18 major crops during 1901-04 to 1940-
44, agricultural output recorded a growth rate of 0.262 pa at the 1925-29 prices.
Similarly, as per Sivasubramonian’s extended study of the princely states of India
covering 25 instead of 18 crops using the 1938-39 prices used by Blyn, the growth
rate of total agricultural output was 0.41% pa during 1900-01 to 1946-47. While
foodgrains grew at 0.15% p.a., the growth of non-foodgrains was 0.77% pa. The
growth rate of population during that interval was slightly higher than the growth
rate of the food grains; hence the per capita availability of food grains declined
during that time interval.
Table 2. Change in the Structure of GDP and Workers
% Share in GDP % Share in Workers
Sectors 1900-01 to 1909-10 1940-41 to 1946-47 1900 1946
Primary Sector 63.1 51.9 74.7 74.8
Secondary Sector 12 14.4 10.7 10
Tertiary Sector 24.9 33.7 14.4 15.1
Source: Sivasubramonian S. pp.469 & 477.

Further, the precarious condition of the economy in general and agriculture
sector in particular can be gauged from the structure of gross domestic product
(GDP) and employment as depicted in Table 2. At the advent of independence,
the primary sector, mainly consisting of agriculture, generated more than half
of the national income and employed three-fourth of the work force. No visible
transformation in the economy during the first half of the 19th century has been
observed, resulting the economy one of the lowest per capita consumption and
income in the world.The first half of the 19th century in India can be better
200 categorized as the period of near stagnation.
Table 3. Growth Rates: Pre-Independence Period in Per Cent Per Annum* Growth Pattern
Area Yield Output

All Crops 0.4 Neg. 0.4
Foodgrains 0.3 -0.2 0.1
Non Foodgrain 0.4 0.09 1.3
*Pre-Independence Period: 1891 to 1946.

Source: Pre-independence period growth rates are exponential rates of growth
based on the data from George Blyn, "Agricultural Trends in India 1891-1974:
Output, Availability and Productivity", University of Pennsylvania Press, 1966.
Table 3 presents the growth rates of area, per hectare yield and aggregate output
in the agriculture sector in the pre-independence period. There is an obvious
indication of stagnancy of overall agricultural output, especially of foodgrains in
the studied period. Yield improvements are difficult to discern and the foodgrain
yields appear to have had a negative trend. Historical studies of agrarian change
in the pre-Independence period clearly bring out the stagnancy-inducing
characteristics of the socio-economic and technological environment prevailing
then.
13.3 INDIA’S AGRICULTURE IN POST-

INDEPENDENCE PERIOD
India, at the time of independence, inherited one of the most backward agriculture.
In spite of having an overwhelming population dependent on the agriculture,
the country was not self- sufficient in the food grain production. The country
had to depend heavily on imports to feed its large and ever growing population.
The agricultural economist Dr Ashok Gulati termed this phenomena as “ ship-
to-mouth”. The study of agriculture growth in India can be divided into five
phases, first four are named by another prominent agriculture economist, Prof.
G.S.Bhalla, while the period from the 2004-05 to 2014-15 has been named as
period of recovery by Dr. Ramesh Chand, member, NITI Aayog.
a) 1950-51 to 1964-65: The Pre-Green Revolution Period
b) 1967-68 to 1979 -80: The Beginning of Green Revolution
c) 1980-81 to 1990-91: The Maturing of Green Revolution
d) 1990-91 to 2003 -04: Economic Liberalization and Deceleration of
Agricultural Growth
e) 2004-05 to 2014-15:The Period of Recovery
f) 2014-15 to 2019-20: The National Democratic Alliance- II (NDA-II) Rule
Table 4. Growth Rate of GDP and Per Capita Income at 1993-94 prices
Years GDP Agriculture Secondary Tertiary Income Per capita
1900-47 1.05 0.46 1.82 1.66 0.22
1950-65 3.94 2.54 6.88 4.76 1.86
1967-80 3.44 2.04 4.23 4.54 1.23
1981-91 5.62 3.08 7.10 6.72 3.50
1992-04 6.10 2.38 6.29 8.22 4.21
2004/05-2014/15 7.7 3.72 8.44 8.96 -
Source: Growth up to 1994-05 to 2003/04 has been taken from Sivasubramonian,

2000 and NAS,2004. 201
Sectoral Development-I; 13.3.1 1949-50 to 1964-65: The Pre-Green Revolution Period
During this period, the major thrust soon after independence was on institutional
and agrarian reforms. India passed a significant body of land reform legislation.
According to Prof. Kaushik Basu, a leading economist, the most obvious argument
in favour of land reform is equity. In a land-scarce country with a significant
section of the rural population below the poverty line, the case for ensuring that
everyone has access to some minimum amount of land seems compelling from
this point of view. The two basic objectives of the land reforms were:
1) To remove the intermediaries or impediments that were widespread owing
to the kind of land tenure system which the country inherited from colonial
rulers.
2) To eliminate the kind of exploitation of the landless and small farmers through
the distribution of land in their favor.
During this phase, some other steps needed for the development of agriculture
were also taken. These were: the construction of new roads, provision of additional
irrigation facilities through multipurpose projects, provision of additional
credit facilities and production of more fertilizers in the country. Community
development programme (CDP) was started to involve people in the process of
agricultural and rural development. Many agricultural research institutions and
agricultural universities and college were set up during this period in the country.
Consequently, foodgrain output increased from 51 million tonnes in 1951-52 to
68 million tonnes in 1955-56 and it was 82 million tones in 1960-61. Intensive
Agriculture Districts Program (IADP) was launched in 1961. In the begining,
IADP programme was initiated in three districts and it was extended in stages
to thirteen other districts in later period.To motivate the farmers to adopt better
technology, the Government had started the incentive price policy in 1964. The
Agriculture Price Commission was institutionalized to advise the government on
the fixation of support prices of agricultural crops. As a result of initiatives like
IADP, the agricultural output increased to 89 million tonnes in 1964-65 which
was significantly higher than the 82 million tonnes produced in 1960-61.
Table 5. Growth rates of Production, Area under Cultivation and Productivity
(per cent per annum)
Plan Period Production Area Productivity
First Plan (1951-56) 4.1 2.6 1.4

Second Plan (1956-61) 3.1 1.3 1.8
Third Plan (1961-65) 3.3 0.6 2.7
Source: Soni, R.N., Leading Issues in Agricultural Economics, pp 416.

Table 5 depicts the compound growth rates for agriculture production, area and
productivity of the all crops taken together from 1951 to 1965.The productivity
growth had been increasing in every successive plan and significantly in the
intensive plan period. At the same time, the growth rate of the area under the
crops was more than the yield growth except in the intensive period. During
the first period, 1949 - 50 to 1964 - 65 total crop output in India recorded a
trend growth rate of 3.15% pa. This growth rate was fairly high compared to
the pre-independence period and was achieved mainly as a result of increase in
irrigation and net sown area. The growth rate of yield was rather low during this
period. As per Ramesh Chand, first five year plan allocated a substantial outlay
to the agriculture sector, followed by tenancy reforms, institutional changes and
202 completion of major irrigation projects. He further mentions that the priority and
importance that agriculture sector received in the first plan was not sustained and Growth Pattern
growth of sub sector decelerated in the beginning of 1960’s resulting in shortages
of food. The large quantity of foodgrains was imported. Another important
characteristic of growth in this period was that growth of output was relatively
more and this was contributed by the new area brought under cultivation. The
growth of output in this period was contributed 50 per cent by the area whereas
the yield supplemented another 38 per cent to the output growth shown in the
Table 6.
13.3.2 1967-68 to 1979 -80: The Beginning of Green Revolution
In the mid sixties, a new agriculture strategy was adopted which laid stress on
the application of new draft high yielding varieties (HYV) of seeds. As a policy
support measure in January 1965, the Agriculture Prices Commission was set up
to recommend MSP. This was followed by the Food Corporation of India (FCI)
to take charge of the logistics of procuring major agricultural commodities. These
seeds were innovated by the American scientist Norman Borlaug. The introduction
of Borlaug’s new seed- fertilizer technology during the mid–sixties resulted in a
spectacular jump in the yield levels of wheat, rice and later oilseeds and cotton.
The growth rate of total crop output during 1967- 68 to 1979-80 decelerated to
2.19 % pa compared with a growth rate of 3.15 % pa during the earlier period.
The growth rate of food grain output also decreased to 2.15% pa during this
period, compared with 2.82% pa earlier. The limited impact of new technology
as per Bhalla was due to:
1) New technology was limited to wheat in the initial period, and had a low
weight in cereals during the 1960s. In spite of wheat output being doubled
by 1970-71, it only constituted about 22% of total food grain output in that
year.
2) The geographical coverage of HYV was also confined to the northwestern
states of Punjab, Haryana and western U.P. So, its overall impact on the
growth of food grain output was limited. Further, this decline in the growth
of agricultural GDP happened because of the after effect of the 1965-66 and
1966-67 drought and also the result of the after effects of wars. There were
two oil crises and conflict with the neighbours and a drastic reduction in
foreign aid that resulted in a big decline in public and overall investment
(Bhalla, 2007). Further, an important point to notice in this period is that
the major contribution to the output growth was coming from the growth of
yield rather than area. The wheat production registered a compound growth
rate of 5.03 per cent per annum during this period. The yield’s contribution
to the growth in this period was 58.45 per cent, while the area contributed
23.29 per cent. Other than Punjab, Haryana and western part of Uttar Pradesh,
state of West Bengal also benefitted from the wheat revolution. The southern
states comprising of Tamil Naidu, Kerala and Karnatka also recorded medium
to high growth rate.Thus, we can conclude that growth in this period was
prominently assisted by the yield, and the influence of new technology was
limited to few crops and limited regions in the country.
13.3.3 1980-81 to 1990-91: The Maturing of Green Revolution
This period witnessed the wider dissemination of new technology into new areas
and extension to new crops resulting in very impressive growth of the agricultural
output from 2.19 % achieved in the earlier period to 3.19%. The new technology
made roads into new regions of the country which otherwise was confined to
the northwestern states, Panjab, Haryana and western Uttar Pradesh. The new 203
Sectoral Development-I; technology was extended to wheat, rice, maize and a few other commercial
crops like cotton, sugarcane and oilseeds. During this period, all the major crops
registered higher growth rate in yield rice marked production and yield growth
rate of 3.62 per cent and 3.19 per cent, respectively. Wheat yield also registered
impressive growth of 3.57 per cent. Growth in yield of pulses and coarse cereals
was commendable. The production of food grains observed a high growth rate
of 2.73 per cent, mainly assisted by high growth rate of yield of 2.97 per cent.
The technology mission on oilseeds was started in the mid 1980s to boost the
production and productivity of oilseeds and the mission succeeded in raising
the production and productivity which registered a growth rate of 5.46 per cent
and 2.95 per cent. Potato, coconut and cotton all showed high growth rates in
production and yield and cotton registered a high growth of 3.50 per cent and
5.19 per cent respectively.More than that, the notable feature of this period was
that growth in output was contributed more by the increase in yield rather than
the increase in area as enumerated in the Table 6. The yield contributed the 80
per cent of the growth in output and the area supplemented less than 5 per cent
to output growth. This period was very significant in the agriculture development
of the country. In this period, not only the new technology spread to the other
regions especially of the rainfed areas but also many new crops also benefitted
from new technology. The agricultural growth of the eastern states of the country
particularly West Bengal during this period was remarkable and also rainfed
states like Rajasthan and Madhya Pradesh performed spectacularly on account
of shifting of the areas from coarse cereal to oil seeds. This period also witnessed
the narrowing down of regional inequality in output growth and yield level.
Years Area Contribution Yield Contribution
1949-50 to 1964-65 50.16 38.41
1967-68 to 1980-81 23.29 58.45
1980-81 to 1990-91 3.13 80.25
1990-91 to 2003- 04 -15.82 56.96
Source :Bhalla (2007).
13.3.4 1990-91 to 2003-04: Economic Liberalization and
Deceleration of Agricultural Growth
This period was marked by a perceptible decline in the growth of output and
most crops recorded negligible growth rate of output. Almost all the crops
registered a decline in the growth rate of yield in this period. The overall growth
in the crop sector recorded decrease relative to the previous period. India faced
a serious balance of payments crises at the end of the 1990s, which pushed the
country to go for major reform in its economic policy popularly known as the
liberalization, privatization and globalization in 1991-93. As per Ashok Gulati,
“The macroeconomic reforms of 1991-93 have had at least two important impacts
on the agricultural sector. First, deregulation of the industry, more open trade,
and devaluation are widely agreed to have stimulated a significant improvement
in the rate of economic growth. This has strengthened and diversified the food
demand. Second, domestic and border policies directly affecting agriculture were
not included in the reforms. The reduced levels of industrial protection have
improved incentives for investment in agriculture through improvements in the
sector's domestic terms of trade”. Further, the agricultural sector was not targeted
directly by the reforms for a couple of years, but it was affected indirectly through
changes in the exchange rate, export liberalisation and terms of trade resulting
204 from disprotection to industry. The only measure taken during the early years
of reform that had a direct impact on agriculture was decontrol of fertilisers and Growth Pattern
reduction in the fertiliser subsidy .
Despite major reforms in the economy, the performance of agriculture output
came down in the initial years of the reforms and the growth rate of agriculture
GDP decelerated from 3.08% pa during the 1980-81 to 1990-91 to 2.38% during
1992-93 to 2003-04.The growth rate of overall crop sector decelerated from 3.19%
pa during the 1980’s to only 1.18% pa during the later period. The deceleration
was aided by negative growth in oilseeds (-1.07%) and fibers (-1.17%) and the
poor performance of cereals (0.51%) and pulses (0.23%). It was only drugs and
narcotics, fruits and vegetables, and spices and condiments that performed well
in this phase. Similarly, the terms of trade, which had shown improvement in the
1980s and the early part of 1990s deteriorated in the late 1990s and remained so
till 2003-04. The growth rate of food grains in this period could not keep pace
with the growth rate of the population, resulting in reduction in the availability
of food gains per capita. The adverse effect of falling growth in agriculture was
manifested in the form of severe rural agrarian crises including farmers’ suicide.
Some of the important causes behind the poor performance of the agriculture in
the initial years of the post reform period has been delineated as:
1. The capital formation in the agriculture followed a rising trend since the
1960s and 1970s and that continued till the mid 1980s. After that, it started
declining and the trend has been reversed after late nineties. The declining
trend since 1990s suggests there has been low investment in agriculture
compared to the non-agriculture sector. Total investment in agriculture as
a share of GDP declined from 9.9% during 1980s to 6.0 per cent during
2003-04 predominantly pulled down by a reduction in public investment.
2. Research and extension services: Gulati and Tervey (2019) found that among
the major investment components of growth of agriculture, the elasticity
of research and extension is highest. The green revolution in India was
successful because of the international research collaboration. The spending
on research and extension services in India has been very low as compared
to the developed and other developing countries. Lack of public spending in
research and development has resulted in the non-availability of any major
invention in new technology like biotechnology resulting in increased input
in Indian agriculture.
3. Credit extension: Credit, especially the institutional credit is the sine qua
non for the development of the agriculture sector. Empirical evidences show
that the share of rural bank branches in total branches increased soon after
the nationalization of banks in late 1960s reached a maximum in 1990 and
since then it has a declining trend. Further, the trend in credit-deposit ratio
and lending to priority sector and agriculture declined in the 1990s compared
to 1980s. Reduction of rural bank branches and the priority sector lending
in outstanding credit of commercial banks led the farmers to approach the
non institutional lenders. These lenders charged exorbitant interest from the
borrowers resulting a number of farmer suicides in rural India.
13.3.5 2004-05 to 2014-15: The Period of Recovery
The year 2004-05 was a turning point. To reverse the declining trend in the
agriculture production in the country, the mid-term appraisal of the Eleventh
Five year plan reviewed the performance of the farming sector and proposed
multi-pronged steps to revive agriculture. As a result, a number of steps were
taken to revive the growth in the agriculture produce after 2004-05, which are
205
highlighted below:
Sectoral Development-I; 1) A substantial increase in the budget outlay was made to the departments
associated with the development of Agriculture, Animal husbandry and
Agriculture Research and Education.
2) The National Horticulture Mission started in 2005-06 and its scope was
expanded to include the medicinal plants and spices.
3) Support to State Extension Program for Extension Reform, a centrally
sponsored scheme was launched in 2005-06.
4) In 2005-06, a National Fund for Basic, Strategic and Frontier Application
Research in Agriculture and a National Agricultural Innovation Project (in
July 2006) were launched.
5) The terms of trade started favouring agriculture soon after 2005-06, when
central government started a massive increase in procurement prices of
food grains aided by a significant increase in international food prices. At
the same time, in 2005, trade in agriculture was opened under the World
Trade Organisation (WTO) agreements.
6) An initiative to reform the domestic agricultural marketing was already
undertaken through Model Agriculture Produce Marketing Committee
(APMC) Act, 2003.
The initiatives paid off and the overall growth rate of the economy bounced to 8.57
per cent per annum and agriculture and allied activities marked an impressive
growth of 3.33% per annum. This period of high growth in the agriculture output
has been termed as period of recovery. The growth movement which picked up
after 2004-05 reached its plateau in 2012-13 and thereafter it started falling.
The growth rate in agriculture in the period 2009-10 to 2013-14 was 4.3% per
annum. This is one of the highest growth rates recorded in independent India.
The net positive impact of high growth rate on the economy can be gauged from
the fact that the number of farmer suicide in India came down from 18,241 in
2004 to 11,772 in 2012. The robustness of the agriculture growth during this
period can be supplemented by the instability index, which shows the year-to-
year fluctuations or variability of the production in the agriculture. This is due
to dependence on the rainfall and other vagaries of nature, and is measured by
the coefficient of variation.The coefficient of variation has declined from 2.76%
during 1961-1988, to 1.87% during 1988-2004 and to 0.75% during 2004-2014
(Table 2). It shows that volatility in agricultural growth has been declining and it
was low in the decade (2004-14). Variability in pulses was very high at 20% and
5% for cereals during 1990-2004. But it declined drastically in the decade 2005-
2014. In other words, resilience to rainfall has been rising for Indian agriculture
during this period.
Table 7 Volatility in Agricultural GDP Growth: All India
Years Coefficient of variation
1961-1988 2.76
1988-2004 1.87
2004-2014 0.75
Source: Economic Survey, 2016. GOI.
We have observed that India’s agriculture bounced back to its long term trajectory
in this period. It is pertinent to discuss the important ingredients of growth in
this period. The public investment in agriculture, which observed a declining
trend in the post reform period had been reversed. A significant improvement in
206 public investment was observed followed by private investment in agriculture.
Total gross capital formation as a percentage of agricultural GDP averaged 12.9% Growth Pattern
during the five year period ending 2003-04. Thereafter, it has continuously risen
from 13.5% in 2004-05 to 17.0% in 2012-13. The private investment also flowed
positively though moderately from 10-11% of private investment to the agriculture
gross domestic product (GDP) in early 2000s to 14% in 2008-09 and remained
at that level thereafter.
Another noticeable features of farm sector growth in this period was
overwhelming performance of Rabi season production compared to the Kharif
season production. For the first time, the Rabi food grain production surpassed the
Kharif food grain production between 2004-05 to 2014-15. Further, a Planning
Commission study of the state level growth performance of states found that high
growth occurred not only in the irrigated areas and high productivity states, but
in the rain - fed, low productivity states also in the country.
As a result of the structural changes that took place in the agriculture sector, a
quantum jump in the productivity of the crops has been recorded. An examination
of the sources of the growth during the period 2004-05 to 2014-15 reveals that
growth in agriculture output in the study period was prominently contributed by
improvement in the crop yield (Table 3.8). Improvement in yield contributed
maximum to the growth of cereals (92%) followed by foodgrains (88%), pulses
(76%), oilseeds (67%). In case of cotton, the area attributed 31% and yield a
45 % increased in crop output. Hybrid Bt cotton seeds not only replaced the
traditional variety, but also brought new area under the cotton cultivation. It is
clear from Table 13.8 that during the period of rapid improvement, increase in
yield attributed most of the growth registered in crop production. Lastly, Indian
agriculture experienced a rapid drive towards the diversification of traditional
crops to the horticultural crops resulting from the direct consequences of the
National Horticulture Mission which was operationalised in 2005-06. The area
under fruits and vegetables recorded a splendid growth rate of 41.3% and 23.5%
per annum respectively during that interval.
Table 8 Growth Rate in Production of Selected Crop Groups and its
Decomposition: 2004-05 to 2014-15
Crop Group Growth Rate(%) Decomposition of Production Change (%)
Area Yield Production Area effect Yield effect Interaction Effect
Foodgrains 0.15 2.57 2.72 9 88 3
Cereals 0.01 2.63 2.64 6 92 2
Pulses 0.73 3.03 3.78 18 76 6
Oilseeds -0.32 2.14 1.81 26 67 7
Cotton 4.44 3.68 8.28 31 45 24
Source: Ramesh Chand and Shrivastva(2017)

In the last two years of the United Progressive Alliance (UPA) rule, the growth
in the agriculture output declined.
13.3.6 2014-15 to 2019-20 The National Democratic Alliance II
(NDA-II) Rule
In May, 2014 a new National Democratic Alliance (NDA) government under
Prime Minister Narender Modi took charge at the Centre. As we have observed
that the growth movement in the farm sector output, which picked up from
2004-05 peaked in 2012-13 and thereaftert started falling. If we exclude the
year 2014-15 from the decadal interval, the average growth rate in agriculture
improves to 4% per cent per annum. The Modi government’s performance in the 207
Sectoral Development-I; agricultural sector in the first five years in office is mediocre compared to the
growth achieved under the previous period. The growth rate achieved in the first
five years of NDA-II rule was 2.4%, which is significantly lower than the more
than 4 per cent achieved during UPA-II rule. The first two years of Modi’s first
tenure in office had been marred by two successive droughts.The agricultural
growth rate declined 0.2% in 2014-15 and it barely grew at 0.6% in 2015-16.
A good monsoon in 2016-17 drove the rate to 6.3%. The sector slowed again
in 2017-18, with a 3% growth rate. The average agricultural growth rate under
NDA’s five years is 2.3%, which was the lowest since the economic reforms
in India. In Feburary 2016, Prime Minister Modi set an objective of doubling
farmers' income by 2022, which signalled a policy shift from production to income
enhancement. To meet the above stated objective of doubling farmers' income, a
committee under the chairmanship of former agriculture secretary Ashok Dalwai
was set up to make recommendations in that direction. The committee came to
the conclusion that India’s agriculture ought to grow by 10.4 per cent per annum
in real term to reach that level by 2022. From the level of real growth which has
been achieved during the first five years of Modi government at the Centre, the
aim of doubling farmers' income by the year 2022 appears hard to achieve, but
can be met in near future.
Table 9 Agriculture Growth under the National Democratic Alliance –II
(2014-18)(In Per cent)
Year 2014-15 2015-16 2016-17 2017-18 2018-19 2014-2018
AGDP Growth -0.2 0.6 6.3 5 2.7 2.9
Souce: MOPSI,GOI
1. What was the growth rate of agriculture in the pre-independenc period?
2. Explain salient features of the ‘Beginning of Green Revolution’.
3. What is meant by ‘Maturing of Green Revolution’.
4. Name three reasons of the poor performance of the agriculture in the initial
years of the post reform period.
i) The first half of the 19th century in India can be categorized as the
period of stagnation.
ii) The period from the 2004-05 to 2014-15 has been named as period of
recovery.
iii) Despite major reforms in the economy, the performance of agriculture
output came down in the initial years of the reforms.
iv) A number of steps were taken to revive agricultural growth just before
2004-05,
v) In Feburary 2016, the government set an objective of doubling farmers'
income by 2022.
13.4 CHALLENGES OF INDIAN AGRICULTURE

A) The shrinking land size: India has 198 million hectares (ha) gross cropped
area which is relatively larger than China where it is 166 million hectares. The
208 average size of the land is decreasing consistently ever since the agriculture
Growth Pattern
census in this country has been started. The average size of landholding
in India has come down from 2.28 hectares in 1970-71 to 1.08 hectares in
2015-16 and would shrink further in near future. So, one of the challenges
before the country is to raise the production and productivity from the small
size farms where it is difficult to adopt the good quality seeds, capital and
technology. It is not so that small size farming is not efficient or can not be
viable. An example from the Chinese economy makes the case clear. China
has an average size of land just 0.7 ha which was 0.46 ha at the time of
economic reforms, and still China produces three times more than what India
produces. The message is clear that if correct incentives are put in the place
and right investment is made on infrastructure and agriculture research and
development (R&D), India can make the small farms viable and sustainable.
Quality Inputs and Efficient Value Chain: Water, seeds, fertilizer and
chemicals are the basic inputs used in the production process and are crucial
determinants of the agriculture growth. Thus timely and sufficient supply of
these ingredients are essential for a robust production system in agriculture.
The Indian agriculture is basically a small holder dominated. One of the key
challenges of small holder agriculture is to build an efficient and inclusive
value chain for the different agricultural commodities. One of the examples of
successful small farmers' participation in the value chain is AMUL in the state
of Gujarat. The Government of India’s initiative to motivate the formation
of Farmers Producers' Organizations (FPOs) is a step in right direction. The
finance minister has announced formation of additional 10000 FPOs in union
budget 2020, which should link the exporters/processors and markets so as
to realize better prices for the farmers. More than that, most of the farmers
sell their produce at the farm gate or small markets in the hinterland. These
markets lack the modern and scientific equipments for weighing, grading
and their functioning is not transparent resulting in lower value realization
by the farmers. There is an urgent need to upgrade the existing marketing
infrastructure so that farmers can receive their rightful dues and a huge post
harvest loss that results from the inefficiency in the system can be corrected.
B. Changing Climatic Patterns: Climate change is a reality. Agriculture is
the sector most vulnerable to climate change due to its high dependence
on climate and weather. The people involved in agriculture are poorer
compared with urban residents. Agriculture is part of the problem and part
of the solution. As we know, India has 198 million hectares of gross cropped
area and about 49 per cent of that is irrigated. The rest, more than half of the
cropped area depends on the rains, mainly monsoon rains to irrigate the land.
In the last 18 years (2000–01 to 2018–19), India faced droughts in five years
(2002, 2004, 2009, 2014 and 2015) and in all of those, India’s agricultural
GDP growth rate and food grain production fell. The sharpest fall in food
grain production was in the year 2002–03 when the rainfall inadequacy was
19.2% and the annual food grain production fell by more than 38 MMTs.
In 2009–10, which was the worst drought year in recent years, the fall in
food grain production was lower compared to 2002–03 at 16.4 MMTs even
though the rainfall inadequacy was higher at 21.8%. It has been witnessed
that rainfall pattern has undergone a dynamic change in recent years in
India. The variability and intensity of rainfall in India have recorded major
change resulting in droughts in one part of the country while floods and
excess rainfall in other parts of the country.
209
Sectoral Development-I; C India’s population is second largest in the world and very soon it is going to
overtake the population of China. The population pyramid of the country
is such that it is dominated by the young population. The country is the
youngest country in the world wherein the median age of Indians was 29
years in 2019. The urbanization is also increasing at the fastest rate ever
since independence. Thus, the demand for higher value crops, especially
vegetables, fruits, eggs, milk and chicken/mutton will increase in future
owing to increase in income and urbanization. Hence, the challenge before
the country is not only to feed the growing population, but also to supply
the nutrients and high value commercial crops to its bulging middle to high
income and urban population. India’s obsession with wheat, rice crop culture
has damaged the north western part of the country. There is an urgent need
to shift from the wheat - rice mono crop culture and to high value low water
intensive crops.
13.5 POLICY SUGGESTIONS

Famous economist T.N.Srinivasan once argued the solution to Indian agriculture
lies outside the agriculture and in the non-agriculture sector. The Indian economy
has breached the traditional development strategy and it has moved directly from
the primary (agriculture and allied activities) sector to tertiary (service) sector as
dominant output contributing sector by passing manufacturing sector. The non-
agriculture sector and urban growth have been also found important in reducing
the poverty. At the same time, agriculture is found two to three times as effective
in reducing the poverty as relative to the other sectors. Hence, one should adopt
a balanced approach regarding the utility of agriculture and non-agriculture in
raising the agricultural productivity, farm income and reduction of poverty. It is
true that India cannot improve the farm productivity unless a considerable size of
the labour force is moved outside the agriculture sector and fruitfully employed
in the non-agriculture sector. At the same time, growth in the agriculture is
important as it is more effective in reducing the rural poverty. You must notice
that the largest source of livelihood comes from the agricultural sector. There
has been more robust backward and forward linkages of agriculture with other
sectors of the economy. Thus, both agriculture and non-agriculture sectors are
complementary for the agriculture population.
Diversification of cropping Pattern: Government policies have been biased
towards cereals particularly rice and wheat. It procures rice and wheat based
on minimum support prices in few states. Cereal-centric policies also provide
subsidies for fertilisers, water, power, credit and seeds. Large part of the subsidy
goes to these two crops. These subsidies also benefit large farmers, few states and
irrigated areas and have adverse impact on soil quality, water quantity, quality and
human health. Punjab, Haryana and other states have been focusing mainly on
rice and wheat because of government support to these crops. There is a need to
shift from cereal-centric policies to non-cereal focused policies. Diversification
of cropping pattern is obvious for improving agricultural growth, incomes of
farmers and environmental sustainability.
1. Name four challenges before Indian agriculture.
2. Why is it necessary to shift from the wheat - rice mono crop culture to high
value low water intensive crops?
210
3. Why are the non-agriculture sector and urban growth important in reducing Growth Pattern
the poverty?
i) The shrinking land size is a challenge to Indian agriculture..
ii) The period from the 2004-05 to 2014-15 has been named as period of
recovery.
iii) India is the youngest country in the world.
iv) The agricultural sector provides minimum source of livelihood.
v) Large part of the subsidy goes to the crops of wheat and rice.
13.6 LET US SUM UP

According to all the credible estimates, India’s growth performance during the
first half of nineteenth century was not an impressive one. The growth rate of
the primary sector during the 1900-01 to 1946-47 was only 0.46% per annum
(pa) which is very low from any standard. The economy did not show any
credible structural change and three-fourth of the work force was employed in
the agriculture throughout the 20th century. That is the reason why economists
called the performance of the Indian economy in the first half of the century as
“Static Economy in Progress”.
The major thrust soon after independence was on institutional and agrarian
reforms. India passed a significant body of land reforms legislation. During this
phase, some other steps needed for the development of agriculture were also
taken. These were: the construction of new roads, provision of additional irrigation
facilities through multipurpose projects, provision of additional credit facilities
and production of more fertilizers in the country. Community development
program (CDP) was started to involve people in the process of agricultural
and rural development. Many agricultural research institutions and agricultural
universities and colleges were set up during this period in the country. During
the first period, 1949 - 50 to 1964-65 total crop output in India recorded a trend
growth rate of 3.15% pa. This growth rate was fairly high compared to the pre-
independence period and was achieved mainly as a result of increase in irrigation
and net sown area. However, the growth rate of total crop output during 1967- 68
to 1979-80 decelerated to 2.19 % pa. The 1980-81 to 1990-91period witnessed
the wider dissemination of new technology into new areas and extension to new
crops resulting in very impressive growth of the agricultural output from 2.19 %
achieved in the earlier period to 3.19%. The new technology made inroads into
new regions of the country which otherwise was confined to the northwestern
states, Punjab, Haryana and western Uttar Pradesh. The new technology was
extended to wheat, rice, maize and a few other commercial crops like cotton,
sugarcane and oilseeds.
The year 2004-05 was a turning point. A substantial increase in the budget outlay
was made to the departments associated with the development of Agriculture,
Animal husbandry and Agriculture Research and Education. The initiatives paid
off and the overall growth rate of the economy bounced to 8.57% per cent per
annum and agriculture and allied activities marked an impressive growth of
3.33% per annum. This period of high growth in the agriculture output has been
termed as period of recovery. Several suggestions have been made to augment
agricultural sector.
211
Agriculture Sector In India 13.7 KEY WORDS
Agrarian reforms: Improvement or amendments in the agricultural policies.
Credit extension: Facility of short time loans.
Diversification of cropping Pattern: Rotation of sowing of the crops in a
scientific manner so that soil fertility is sustained.
Green Revolution: Remarkable improvement in the agricultural productivity
by the use of modern agricultural appliances, high quality of seeds, increased
use of fertilizers and pesticides during 1967- 68 to 1979-80 was termed as the
‘Green Revolution’.
Land reforms: Amendments regarding land holdings, such as abolition of
zamindari.
“ Ship- to -mouth”: Dependent on imports.
Static Economy: Economy with no change.
Subsidy: Financial contribution of the government to the purchase of fertilizers,
pesticides, etc. by the farmers.

A 4 i) True, ii) True, iii) True, iv) False, v) True
B 4 i) True, ii) True, iii) True, iv) False, v) True
13.9 TERMINAL QUESTIONS

1) India’s Agriculture in colonial period was purely stagnant and declining,
discuss.
2) What were the factors responsible for the green revolution in India.
3) Discuss in detail the growth rate of india’s agriculture in the post-independence
period.
4) Discuss the causes of deterioration of agriculture growth soon after the
reforms.
5) Suggest ways to make agriculture in India vibrant and sustainable.
REFERENCES
Planning Commission (2005): Mid-Term Appraisal of Tenth Five Year Plan
(2002-2007), Government of India, June
Bhalla, G.S (2007), Indian Agriculture Since Independence, National Book Trust,
New Delhi.
Soni,R.N(2010), Leading Issues in Agriculture Economics, Vishal Publishing
Company, Jalander(PB).
Gulati et al (2021), Revitalising Indian Agriculture and Boosting Farmers Income.
Springer.
DCR.(2018). Dalwai committee report volume 4. https://farmer.gov.in/
imagedefault/DFI/DFI%
20Volume%204.pdf..
212
Mundial, B. (2008). World development report.Agriculture for Development. Growth Pattern
Washington, DC:
World Bank.
NFHS-4 (2017), National family health survey 2015–16. International Institute
for Population
Sciences (IIPS).
Sivasubramonian,S.(2000),The National Income of India in the Twntieth Century,
Oxford University Press, New Delhi.
Blyn,G.,(1966), Agricultural Trends in India,1891-1947,1891-1947, Philadelphia.
Kannan,E&Sundaram,S.(2011), Analysis of Trends in India’s Agricultural
Growth. Working Paper No. 276.The Institute of Social and Economic Change,
Bangalore.
Chand, R and Shrivasta,S. (2017), Agriculture Performance in India: Main Trends,
Commercialisation, and Regional Disparities. Rural India Perspective, 2017.
NABARD.Oxford University Press(OUP).
213
214

Book

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Book

Uploaded by

Copyright:

Available Formats

Importance of Agriculture

11.2 SECTORAL CONTRIBUTION OF THE

11.3 AGRICULTURE AND ECONOMIC

11.4 ROLE OF AGRICULTURE IN ECONOMIC

11.7 KEY WORDS

11.8 ANSWERS TO CHECK YOUR PROGRESS

12.2 MAJOR FOOD CROPS PRODUCTION IN INDIA

Source: Pocket Book of Agricultural Statistics, 2018

3. What do you mean by technological reasons of low productivity?

12.4 MEASURES TO RAISE PRODUCTIVITY IN

12.5 LET US SUM UP

12.6 KEY WORDS

12.7 ANSWERS TO CHECK YOUR PROGRESS

12.8 TERMINAL QUESTIONS

13.4 Challenges of Indian Agriculture

Source: Sivasubramonian, 2000 and National Accounts Statistics,2004.

Source: Sivasubramonian S. pp.469 & 477.

Area Yield Output

*Pre-Independence Period: 1891 to 1946.

13.3 INDIA’S AGRICULTURE IN POST-

Source: Growth up to 1994-05 to 2003/04 has been taken from Sivasubramonian,

First Plan (1951-56) 4.1 2.6 1.4

Source: Soni, R.N., Leading Issues in Agricultural Economics, pp 416.

Source: Ramesh Chand and Shrivastva(2017)

13.4 CHALLENGES OF INDIAN AGRICULTURE

13.5 POLICY SUGGESTIONS

13.6 LET US SUM UP

13.8 ANSWERS TO CHECK YOUR PROGRESS

13.9 TERMINAL QUESTIONS

You might also like