INDIAN ECONOMY SINCE 1950 1990 1 1

FEATURES, PROBLEMS, AND POLICIES OF AGRICULTURE EXPLAINED

Q1. Explain the Importance of Agriculture in the Indian Economy?

Agriculture is the backbone of the Indian economic system and economic activity. It plays a vita-role in an economy About two-third of India’s population depends directly or indirectly on agriculture for livelihood and about 70 percent of the population lives in rural areas. The role and contribution of agriculture in the Indian economy are clear from the following consideration.

Contribution to GDP :

About one-fourth of India’s GDP depends on the primary sector of which agriculture is the core component. This was as high as 50 per. cent in 1950-51 and as low as 14.0 percent in 201 l-12. Reduced percentage contribution of agriculture does not imply a reduction in farm production. It only implies relatively greater growth of non-farm production.

Supply of Wage Goods :

Wage goods are the necessities of life such as wheat, rice, pulse, maize, bajra, oilseeds. etc. The agricultural sector in India provides food to about 121 crores of people and fodder to about 38 crores of animals.

Employment :

In India, agriculture is a significant source of employment. Over fifty percent of the working population in India is engaged in the agricultural sector. Implying that agriculture is the principal source of subsistence for the people in India.

Industrial Raw Material :

Agriculture supplies industrial raw materials in terms of cotton for the textile industry, seeds for the oil industry, sugarcane for the sugar industry, and so on. In fact, the growth of the secondary sector (industrial sector) significantly depends on the growth of the primary sector (the agricultural sector).

5. Contribution to International Trade :

Agriculture makes a significant contribution to India’s international trade. India exports tea, jute, cashew nuts, tobacco, coffee, and spices, all of which are farm products. Thus, the agricultural sector makes a substantial contribution to forex. (foreign exchange) reserves of the country.

6. Central to the Transport Industry :

Agriculture plays a central role in the growth of the transport industry in India. Both railways and roadways are the bulk carriers of farm products in India.

Q2. Explain the Features of Indian Agriculture

  1. Low Productivity :

Productivity means output per hectare of land. It is extremely low in India compared to advanced nations in the world.

  1. Disguised Unemployment :

Disguised unemployment is a situation of hidden unemployment. It is found to be on a large scale in Indian agriculture. Because of the joint family system, the number of persons engaged on a piece of land is much more than what is actually needed. So, apparently, all are employed. But, in reality, some are unemployed: even when some are withdrawn, total output will not fall.

  1. Dependence on Rainfall :

Agriculture in India is heavily dependent on rainfall. Accordingly, crop production is highly uncertain. Good rainfall means good crop and bad rainfall means a bad crop.

  1. Subsistence Fanning :

Farming in India is subsistence-oriented. It means the primary objective of the farmer is to secure subsistence for his family; it is not to earn profits. It implies that farming in India is not much commercial in nature.

  1. Traditional Inputs :

Most farmers in India rely on traditional inputs, like cow dung to be used as manure. Modern inputs like chemical fertilizers, insecticides, and pesticides are not judiciously used.

  1. Small Holdings :

Smallholdings (or small size of a farmer’s land under cultivation) is a characteristic feature of Indian agriculture. It compounds the problem of the ‘subsistence outlook’ of the farmers.

  1. Backward Technology :

Because the bulk of the farms in India are small in size and the bulk of the farming population is poor, the use of backward technology becomes a compulsive choice.

These features of Indian agriculture lead to an important conclusion: that Indian agriculture is extremely backward, even though it is of significant importance in the Indian economy. Because a significant sector of the economy is extremely backward, the Indian economy as a whole continues to grapple with backwardness.

Agriculture

Problems of Indian Agriculture

  1. General Problems
    1. Social Environment. The social environment of villages is an obstacle in agricultural development Most farmers are illiterate, superstitious and conservative and do not want to either give away their ancestral land or use modern techniques.
    2. Pressure of Population on Land. The population in India is increasing at an alarming Since there is no possibility of bringing more land under cultivation the same land is divided and subdivided among farmers for carrying out production process. The result is that new mechanised techniques of production cannot be applied on these fragmented landholding. As a result producitivity fails to increase.
    3. Land Degradation. Continuous cropping without replenishment of lost fertility leads to depletion of soil connection.
    4. Subsistence Farming. Majority of farmers stick to farming for raising foodgrains for their subsistence and do not produce for selling in the market. This adversely affects productivity.
    5. Crop Losses. Considerable losses are reported in agricultural production on account of weeds, insects, crop diseases, untimely rains, drought, etc., which reduces the productivity of agricultural products.
  2. Technical Problems
    1. Obsolete Techniques of Production. Majority of the farmers still use traditional wooden ploughs, bullocks and depend upon monsoon for irrigation. The use of High Yielding Variety (HYV) seeds, fertilizers, pesticides, irrigation facilities, etc. is limited and this leads to low productivity.
    2. Lack of Irrigation Facilities. It has been estimated that 60 per cent of the gross cropped area still depends upon rains which are very uncertain, insufficient and irregular. Rest 40 per cent of the area is provided with the facility of assured irrigation. Thus, productivity is very low in 60 per cent area which is dependent on rain. The costs of irrigation are also increasing continuously and the small farmer is, therefore unable to make use of available irrigation facilities.
    3. Cropping Pattern . In most cases, there is persistence of traditional cropping pattern with same old cycle of crops which reduces crop productivity.

Q. Explain the reforms in the Agricultural sector?

INSTITUTIONAL REFORMS OR LAND REFORMS

Measures Regarding Agrarian Reforms

  1. Institutional Reforms (Land Reforms)
  2. Technical Reforms (Green Revolution) 3. General Reforms

Land Reforms/Institutional Reform

Land reforms aimed at removing all obstacles in agricultural development which arose from land ownership patterns, the land tenure system, the pattern of agricultural landholdings, and agricultural tenancy.

Land Reforms of India

The land reforms were more successful in Kerala and West Bengal because the government of these states was committed to the policy of land to me tiller.

  1. Abolition of Intermediaries

After independence, the abolition of intermediaries was given great importance. Nearly 20 million tenants have been brought into direct relationship with the state and around 173 million acres of land have been taken away.

3+69 beryuop\-+ from the intermediaries and given away to landless cultivator0.0s.

The zamindars were paid comp0ensation for the land taken away from them by the government.

  1. Tenancy Reforms

Zamindars did not cultivate the land by themselves; they rented it out to the tenants. Tenants were at the mercy of zamindars. Tenancy reforms are concerned with the following three aspects.

  1. Regulation of Rent. After independence, all states enacted law for fixing the rent payable by the tenant cultivators. Each state has a different rent structure which varies between 33 to 40 per cent of the produce.
  2. Security of Tenure. Most of the states have passed legislation to provide security to tenant cultivation. The tenant cannot be removed from land, except under law. In case landowners reserve the land for self or personal cultivation, the tenant has

to be given prescribed minimum area for cultivation.

  1. Ownership Rights for Tenants. In some states, tenants have been made the owners and asked to pay compensation to previous owners, i.e., landlords in suitable installments. In some other states, states have become the owners of land. The tenants have been given the option either to continue as tenants or become the owners of land by paying the prescribed minimum price to the state.
  2. Reorganisation of Agriculture

It means making changes on the holding size one can own. It includes the following three policies:

  1. Redistribution of Land. In this programme, ceilings are imposed on landholdings. It refers to maximum and minimum limits to the size of a holding which one is permitted to hold. By fixing a ceiling or an upper limit on the holding, the surplus land can be acquired by the government and redistributed among landless labourers and small farmers.
  2. Consolidation of Holdings. It is a measure to fight fragmentation. Small scattered bits of land can be grouped together into a single compact block and these can be exchanged for land at one place. In this way different plots of the land of one holder may be formed into one plot. This work started in Punjab in 1921. But, despite efforts made over nearly half a century only about 30 per cent of cultivated area could be consolidated in India, mostly in the states of Punjab, Haryana and Uttar Pradesh. The progress has been slow because of the following reasons :
    1. The farmers are extremely attached to their ancestral land and do not want to part with it in exchange for some other land.
    2. There is fear among farmers that they may not get equally better quality of land in exchange.
    3. The consolidation machinery of the government is very slow and corrupt.
    4. There is lack of cooperation from the poorer section of peasant who fear that under the influence of mighty landlords, the government officials will discriminate against them by taking away more fertile land and giving them inferior land in exchange.

All these accounts for lack of cooperation and the slow pace of

work on consolidations.

  1. Co-operative Farming. It is a compromise between collective farming on one hand and peasant proprietorship on the other. Under this scheme, all the landowners in the village form co-operative society for cultivation of land in the village. Small holdings should be pooled and cultivated jointly to increase the size of the operational unit and to benefit from economies of scale. The land is pooled but each cultivator retains the right of property.

The produce is distributed among the members in proportion to the land and the labor contributed by each. The program is not very successful in India.

2. Causes of Slow Progress of Land Reforms

These reforms could not make much progress because of the following reasons :

(a) Lack of Political Will. Implementation of land reforms calls for hard political decisions and effective political support, direction, and control. Land reforms have failed because of the lack of political will.

(c) Substantial Limits for Personal Cultivation. The intermediaries were allowed to retain substantial areas of land for personal cultivation.

  1. Inadequate Proof of Tenants. Tenants cultivating land are not in a position to prove they are the actual tillers of soil because their names do not appear in records.
  2. Problem of Voluntary Surrender. Landlords often forced their tenants to voluntarily surrender the land being cultivated by them. For this purpose, tenants were often threatened and even beaten up. The poor tenants often left the land under such pressures voluntarily.
  3. Inadequacies of Ceiling Laws. Till 1972, levels of ceiling among different states differed considerably This created a lot of confusion and disputes. Only after 1972, uniform laws were made. But till then a considerable amount of damage had been done already.

The results of this program Were very revolutionary There was a significant breakthrough in the production and productivity of food grains. From a food shortage country, India was transformed into a food surplus country This was revolutionary and earned the name ‘Green Revolution’.

Green Revolution was restricted only to 5 crops:

(a)wheat,(b)rice,
(c)bajra,(d)maize and

(e) jowar.

But since the best results have been shown by wheat, the Green Revolution in India is also called the wheat revolution.

The green revolution refers to the tremendous increase in agricultural production and productivity that has come about with the introduction of new agricultural technology. It transformed the economy of scarcity into an economy of plenty,

The main features of the Green Revolution are :

  1. Use of Package Inputs. Application of a package of inputs, consisting of high yielding varieties of seeds, pesticides, fertilizers and improved agricultural practices in the area of assured water supply.
  2. Scientific Rotation of Crops. Introduction of short-term high yielding varieties of major crops which enabled the farmers to grow two or more harvests in one year.
  3. Credit and Package Inputs Provided by Government Agencies. The government was authorised to provide adequate and timely credit facilities and package inputs to the farmers well in advance of the sowing season.
  4. Announcing Minimum Support Prices. Minimum support prices were announced in advance of the sowing season so as to assure farmers reasonable prices for their produce. This was done to avoid wide fluctuation in their income.
  5. Minor Irrigation Works. The emphasis was on minor irrigation works.

GENERAL REFORMS

  1. Expansion of Irrigation Facilities :

To promote and stabilize productivity in agriculture, irrigation facilities have been expanded. Several major and minor irrigation projects have been launched across different parts of the country. Dry farming techniques have been introduced in areas where irrigation is not possible.

  1. Provision of Credit :

Co-operative Credit Societies have been set up to provide credit to the farmers at a moderate rate of interest. Also, Rural Development Banks have been established, to cope with the emerging credit needs of the farmers. After nationalization, Commercial Baraks have also been catering to the credit needs of the farmers. Regional Rural Banks have been established to further enhance credit facilities to the farmers.

  1. Regulated Markets and Co-operative Marketing Societies :

Regulated markets have been established across all parts of the country. This is to offer remunerative prices to the farmers and protect them against exploitation by the middlemen. These markets are governed by the market committees appointed by the government. Representatives of the farmers are also members of these committees. Land Reforms of India

Co-operative marketing societies have been established to enhance the bargaining power of the farmers in the markets. The cooperative societies ensure that there are no excessive supplies in the market so that the crop price does not crash. Provision for storage of the crops is made by the societies on behalf of the member farmers.

  1. Price Support Policy :

To motivate the farmers to increase farm output it is necessary to protect them against uncertainties of the market. Here comes the role of price support policy. Under this policy, the government assures a minimum price to the farmer for his produce. The government is committed to buying the surplus produce of the farmer at the minimum support price.

Q. Explain the objective of land reforms in India?

Important objectives of Land Reforms in India

  1. To make provision for more rational use of scarce land resources, by changing the conditions of holdings or imposing ceilings on land holdings.
  2. To raise the production level by motivating farmers and by giving incentives.
  3. To remove exploitation of poor farmers by redistributing agricultural land in favour of less privilaged class of farmers and improving terms and conditions for possessing land for cultivation by actual tillers, through abolition of intermediates.
  4. To promote social welfare by distributing land to landless cultivators and aquiring ceiling surplus land;
  5. To attain planned development of agricultural sector on long-term ba-

are;

  1. To raise standard of living of the rural poor through redistributive packages and programmes

Green Revolution / Technical Reforms

Green revolution refers to the large increase in production of food grains resulting from the use of high-yielding variety (HYV) seeds, especially for wheat and rice. Its main features are :

  1. Use of package inputs : Its consist of package of inputs. Say HYV seeds, pesticides, fertilisers and regular supply of water in the correct quantities.
  2. Irrigation facility as well as credit facilty : It is the responsibility of farmers to provide adequate and timely credit facilities and package inputs to the farmers well in advance of the sowing seasons.

The Ist phase of the Green Revolution was from the mid-1960s up to the mid-1970s.

INDIAN ECONOMY EXPERIENCED THE SUCCESS OF THE GREEN REVOLUTION IN TWO PHASES

  1. In the first phase (Mid 60s – Mid 70s), the use of HYV seeds was restricted to more affluent states (like Punjab, Andhra Pradesh, Tamil Nadu, etc.). Further, the use of HYV seeds primarily benefited the wheat growing regions only.
  2. In the second phase (Mid 70s – Mid 80s), the HYV technology spread to a larger number of states and benefited more variety of crops. The spread of Green Revolution technology enabled India to achieve self-sufficiency in food grains.

India was no longer at the mercy of America, or any other nation, for the food requirements.

The main features of the Green Revolution are :

  1. Use of Package Inputs. Application of a package of inputs, consisting of high yielding varieties of seeds, pesticides, fertilizers and improved agricultural practices in the area of assured water supply.
  2. Scientific Rotation of Crops. Introduction of short-term high yielding varieties of major crops which enabled the farmers to grow two or more harvests in one year.
  3. Credit and Package Inputs Provided by Government Agencies. The government was authorised to provide adequate and timely credit facilities and package inputs to the farmers well in advance of the sowing season.
  4. Announcing Minimum Support Prices. Minimum support prices were announced in advance of the sowing season so as to assure farmers reasonable prices for their produce. This was done to avoid wide fluctuation in their income.
  5. Minor Irrigation Works. The emphasis was on minor irrigation works.
Also Read Indian Economy since [1950 – 1990]

ACHIEVEMENTS OF GREEN REVOLUTION

The Green Revolution acted as a breakthrough and virtual transformation of Indian agriculture. The main achievements of the Green Revolution are :

  1. Rise in Production :

The Green Revolution resulted in a manifold increase in food production. It helped in relieving the country of the persistent food shortages, that were witnessed in the economy in the pre-revolution period.

  1. Increase in Productivity :

The use of High Yielding Varieties (HYV) of seeds brought about a sharp rise in the yield of land in respect of food grains.

  1. Rise in Income :

The adoption of this new technology increased the income of farmers. Peasants invested increased income for the improvement of their farm organizations. In the first phase, benefits of the increase in income were enjoyed by farmers of few states (Punjab, Andhra Pradesh, Tamil Nadu, Haryana, and Western Uttar Pradesh). But, in the second phase, the benefits spread to a larger number of states.

  1. Increase in Employment :

Green Revolution helped in the creation of employment potentials and absorption of the excess labor force in the rural areas. It also led to the effective use of labor.

  1. Commercialisation of Agriculture :

Agriculture became not only living farming but also commercial farming. Green Revolution resulted in ‘Marketable Surplus’. Marketable surplus. refers to that part of agricultural produce that is sold in the market by the farmers after meeting their own consumption requirement.

  1. Industrial Development :

Many industries, producing agricultural machinery (tractors), chemicals, fertilizers, pesticides, etc. were established as a result of the Green Revolution. In this way, there was a favorable impact of the green revolution on industrial development.

  1. Self-sufficiency :

The spread of the Green Revolution technology enabled India to achieve self-sufficiency in food grains.

  1. Change in outlook :

Farmers favorably responded to this new strategy of inputs and it aroused new hopes and confidence for the future. A change in the mental attitude towards better farming is itself progress in the right direction.

SHORTCOMINGS OF THE GREEN REVOLUTION

  1. Restricted to few crops :

The effect of the green revolution is confined to limited crops like wheat, rice, jawar, bajra, maize, etc. It has no impact on commercial crops.

  1. Benefit to rich farmers :

The new strategy has benefitted the rich farmers, who could spend a huge amount on fertilizers, pesticides, and irrigation facilities (like tube wells). Loans were available to big farmers at easy terms as compared to the small farmer. As a result, small farmers were in a disadvantageous position as compared to rich farmers in the use of the new strategy.

  1. Income Disparities :

The green revolution further increased the income inequalities in the villages. Due to the Green revolution, the rich farmers earned a lot of income as compared to poor farmers.

  1. Regional imbalance :

An increase in food production has taken place only in Punjab, Haryana, Maharashtra, Tamil Nadu, Western Uttar Pradesh, and in some selected districts of Andhra Pradesh. Thus, it widened the regional inequalities. 5. Risk from Pest attacks :

The HYV crops were more prone to attack by pests and the small farmers, who adopted this technology could lose everything in the pest attack.

Conclusion

Finally, it can be concluded that as a whole, Green Revolution played an important role in the success of the agricultural sector. With the support of the Government, both big and small farmers were able to derive the benefit of new technology.

GENERAL REFORMS

  1. Expansion of Irrigation Facilities :

To promote and stabilize productivity in agriculture, irrigation facilities have been expanded. Several major and minor irrigation projects have been launched across different parts of the country. Dry farming techniques have been introduced in areas where irrigation is not possible.

  1. Provision of Credit :

Co-operative Credit Societies have been set up to provide credit to the farmers at a moderate rate of interest. Also, Rural Development Banks have been established, to cope with the emerging credit needs of the farmers. After nationalization, Commercial Baraks have also been catering to the credit needs of the farmers. Regional Rural Banks have been established to further enhance credit facilities to the farmers.

  1. Regulated Markets and Co-operative Marketing Societies :

Regulated markets have been established across all parts of the country. This is to offer remunerative prices to the farmers and protect them against exploitation by the middlemen. These markets are governed by the market committees appointed by the government. Representatives of the farmers are also members of these committees.

Co-operative marketing societies have been established to enhance the bargaining power of the farmers in the markets. The cooperative societies ensure that there are no excessive supplies in the market so that the crop price does not crash. Provision for storage of the crops is made by the societies on behalf of the member farmers.

  1. Price Support Policy :

To motivate the farmers to increase farm output it is necessary to protect them against uncertainties of the market. Here comes the role of price support policy. Under this policy, the government assures a minimum price to the farmer for his produce. The government is committed to buying the surplus produce of the farmer at the minimum support price.

Subsidies

The subsidy is an economic benefit, direct or indirect, granted by a government to domestic producers of goods or services, often to strengthen their competitive position against foreign companies.

The withdrawal of fertilizer subsidies would raise the price of fertilizers and hence reduce the demand and use of fertilizers. This would have damaging consequences on agricultural productivity But, the demand for fertilizers responds more to the availability of water than to prices. In the future, there is scope for improving resource use efficiency by reducing subsidies and aiming them better to small farmers and regions lagging. The savings from reducing subsidies could be used for : (a) creating employment for the poor,

  1. for increasing investment in public agriculture which has been falling in recent years.
  2. The poorest sections of the population can be protected from large rise in cereal prices through an Employment Guarantee Scheme or strengthening of anti-poverty.

Q. What are miracle seeds?

Ans. Miracle seeds are the high-yielding variety of seeds which combined with assured water supply fertilizer, insecticides, etc. would result in high production levels.

Q. What is a marketable surplus?

Ans. It is that part of the agricultural produce that is sold in the market by the farmer.

Q. Explain the need and type of land reforms implemented in the agriculture sector.

Ans. In India, there existed a large army of middlemen like zamindars, mahalwars, and ryotwari, who collected rent from the actual cultivators and deposited a part of it to the government as land revenue. They treated cultivators as slaves. The measure of the abolition of intermediaries was adopted to make a direct link between actual tillers and government and to pass forests, wasteland, etc. to state government.

Tenancy Reforms are concerned with:

  1. Regulation of Rent
  2. Security of Tenure
  3. Ownership Rights for Tenants.

Reorganization of Agriculture is concerned with:

(a) Redistribution of Land among Landless Labour (b) Consolidation of Holdings (c) Co-operative Farming.

Q. What is Green Revolution? Why was it implemented and how did it benefit the farmers? Explain in brief.

Ans. Green Revolution, This strategy, which was launched in October 1965, has been given different names such as, New Agricultural Strategy (NAS), or Seed-Fertilizers Water Technology. Before adopting the New Agricultural Strategy (NAS), the state of Indian agriculture was as follows:

  1. there was low and erratic growth,
  2. there was extreme regional unevenness and growing interclass inequality
  3. there were serious droughts for two consecutive years
  4. there was a war with Pakistan
  5. USA denied India PL 480 imports.

India decided to get rid of this dependence on foreign aid in such a vital matter as food supply.

Q. Why, despite the implementation of the green revolution, 65 percent of our population continued to be engaged in the agriculture sector till 1990?

Ans. The structural change in the composition of GDP shows that India is on the path of sustained development, But the occupational structure pattern shows that India is still underdeveloped, When nearly 37.1 percent of the Working force is engaged in agriculture Where productivity is low and employment uncertain this would surely lead to low per capita income and widespread poverty for the rural masses which form about 72.2 percent of India’s population. It also means that excessive pressure of population on land would be a hindrance in the way of productivity improvement in the agriculture sector.

Q. Explain the statement that the green revolution enabled the government to procure sufficient food grains to build its stocks that could be used during times of shortage.

Ans. Green revolution refers to the tremendous increase in agricultural production and productivity that has come about with the introduction of new agricultural technology. It transformed the economy

of scarcity into an economy of plenty.

Rise in Production. Green Revolution helped in removing continuing food shortages, HYVP was restricted to only five crops namely Wheat, rice, jawar, bajra, and maize. Commercial crops were excluded from the ambit of the new strategy Substantial increase in wheat production was noticed.

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