11. BECE-214 Agricultural Development in India

IGNOU BA Economics Study Material

Source : Economics – eGyanKosh

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Block-1 Agriculture and Economic Development

Block-2 Indian Agriculture : Institutional Perspectives

Block-3 Agricultural Development through the Plans

Block-4 Technological Changes in Indian Agriculture

Block-5 State and Agricultural Sector

Block-6 Issues in Agricultural Sector-I

Block-7 Issues in Agricultural Sector-II

Block-8 Agriculture and International Context

Block-1: Agriculture and Economic Development

The agricultural sector has historically played a pivotal role in the economic development of nations, and India is no exception. Its contributions are multifaceted and foundational. Firstly, it ensures food security for a burgeoning population, a prerequisite for social stability and economic progress. Secondly, it is a significant source of livelihood for a substantial portion of the Indian workforce, thereby influencing rural incomes and poverty levels.

Furthermore, agriculture provides raw materials for a host of industries, such as textiles and food processing, establishing crucial forward linkages. It also creates a market for industrial products like tractors, fertilizers, and pesticides, fostering backward linkages. Historically, surpluses generated from the agricultural sector have been a key source of capital for industrialization. A vibrant agricultural sector also contributes to price stability by ensuring an adequate supply of food grains.

Block-2: Indian Agriculture: Institutional Perspectives

The performance of Indian agriculture is deeply influenced by its institutional framework, which encompasses land tenure systems, agricultural credit, and marketing infrastructure.

Land Tenure: Post-independence, India initiated comprehensive land reforms aimed at abolishing intermediary tenures like the zamindari system, providing security of tenure to tenants, and imposing ceilings on landholdings to distribute surplus land. While the success of these reforms has been varied across states, they have significantly altered the agrarian structure.
Agricultural Credit: Access to timely and affordable credit is crucial for farmers. The institutional credit system, comprising cooperative banks, commercial banks, and regional rural banks, has expanded significantly to reduce reliance on informal and often exploitative sources of credit like moneylenders. The establishment of NABARD (National Bank for Agriculture and Rural Development) as an apex institution has further strengthened the rural credit delivery system.
Agricultural Marketing: An efficient marketing system is vital for farmers to get remunerative prices for their produce. The government has promoted the establishment of regulated markets through the Agricultural Produce Market Committee (APMC) Act. However, these markets have faced challenges of inefficiency and monopoly. Recent reforms are focused on creating a more integrated and competitive national market for agricultural produce.

Block-3: Agricultural Development through the Plans

Since the advent of planned economic development in 1951, agriculture has been a central focus of India’s Five-Year Plans. The initial plans prioritized institutional and land reforms. However, recurring food shortages in the 1960s led to a shift in strategy towards a technology-led approach. Subsequent plans have continued to emphasize increasing agricultural production, with a growing focus on diversification, sustainability, and farmer welfare. Each plan has allocated significant resources towards irrigation, agricultural research, and extension services to boost productivity and rural incomes.

Block-4: Technological Changes in Indian Agriculture

The most profound technological transformation in Indian agriculture was the Green Revolution of the mid-1960s. This period saw the introduction of high-yielding varieties (HYVs) of seeds for wheat and rice, coupled with the increased use of chemical fertilizers, pesticides, and assured irrigation. The Green Revolution led to a dramatic increase in food grain production, transforming India from a food-deficient nation to one of self-sufficiency.

Following the Green Vevolution, other technological advancements have been adopted, albeit at a slower pace. These include the development of biotechnology and genetically modified (GM) crops, advancements in water management techniques like drip and sprinkler irrigation, and the promotion of farm mechanization. These innovations have been crucial in enhancing productivity and addressing the challenges of a growing population and limited natural resources.

Block-5: State and Agricultural Sector

The state has played a proactive and interventionist role in shaping Indian agriculture. Government policies have spanned various domains:

Price Policy: To protect farmers from price volatility and ensure food security, the government announces Minimum Support Prices (MSPs) for major crops and undertakes procurement operations through agencies like the Food Corporation of India (FCI). It also maintains a buffer stock of food grains.
Input Subsidies: The government provides subsidies on critical inputs like fertilizers, power, and irrigation water to reduce the cost of cultivation for farmers.
Public Investment: Successive governments have made significant public investments in creating and strengthening agricultural infrastructure, including irrigation projects, rural roads, and storage facilities.
Research and Extension: The Indian Council of Agricultural Research (ICAR) and a network of state agricultural universities are at the forefront of agricultural research and development. Krishi Vigyan Kendras (KVKs) play a crucial role in disseminating new technologies to farmers.

Block-6: Issues in Agricultural Sector-I

Despite significant progress, the Indian agricultural sector is beset with numerous challenges:

Low Productivity: While productivity has increased since independence, it remains low compared to global standards for many crops. This is attributed to factors like small and fragmented landholdings, inadequate irrigation, and limited adoption of modern technology.
Land Degradation and Water Stress: The intensive agricultural practices of the Green Revolution have led to soil degradation, declining groundwater tables, and increased salinity in many parts of the country. This poses a serious threat to long-term sustainability.
Farmer Indebtedness: A combination of rising input costs, volatile output prices, and crop failures has led to widespread indebtedness among farmers, contributing to agrarian distress.

Block-7: Issues in Agricultural Sector-II

The challenges confronting Indian agriculture are complex and continue to evolve:

Post-Harvest Losses: Inadequate storage, processing, and transportation facilities result in significant post-harvest losses, reducing the net income of farmers and leading to food wastage.
Climate Change Vulnerability: Indian agriculture is highly vulnerable to the impacts of climate change, including erratic monsoons, droughts, floods, and heatwaves. This threatens to disrupt production and exacerbate farmer distress.
Lack of Diversification: There is an over-reliance on a few major crops like rice and wheat, often driven by procurement policies. There is a need for greater diversification towards high-value crops like fruits, vegetables, and pulses to enhance farmer incomes and improve nutritional outcomes.
Fragmented Supply Chains: The agricultural supply chain in India is long and fragmented, with multiple intermediaries, leading to inefficiencies and a wide gap between the price received by the farmer and the price paid by the consumer.

Block-8: Agriculture and International Context

In an increasingly globalized world, Indian agriculture is significantly influenced by international trade and agreements. The World Trade Organization’s (WTO) Agreement on Agriculture has implications for India’s domestic support policies, market access, and export competition. India has been a vocal advocate for the interests of developing countries in international trade negotiations, particularly on issues related to food security and livelihood protection for small farmers.

The international context also presents opportunities for Indian agriculture in terms of accessing global markets for its diverse range of products. However, to be competitive, it needs to address issues of quality, sanitary and phytosanitary standards, and supply chain efficiency. Balancing the imperatives of protecting its farmers with the opportunities of global trade remains a key challenge for policymakers.

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