Agricultural Premise in India

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Agricultural sector in India


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History

Indian agriculture began by 9000 BC as a result of early

cultivation of plants, and domestication of crops and

animals. Settled life soon followed with implements and

techniques being developed for agriculture.

Double monsoons led to two harvests being reaped in one

year. Indian products soon reached the world via existing

trading networks and foreign crops were introduced to

India. Plants and animalsconsidered essential to their survival

by the Indianscame to be worshiped.

The middle ages saw irrigation channels reach a new level of

sophistication in India and Indian crops affecting the economiesof other regions of the world under Islamic patronage. Land and

water management systems were developed with an aim of

providing uniform growth. Despite some stagnation during the

later modern era the independent Republic of India was able to

develop a comprehensive agricultural program.


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Current Agricultural premise in India

India ranks second worldwide in farm output.

Agriculture and allied sectors like forestry, logging and fishing

accounted for 15.7% of the GDP in 200910, employed 52.1% of the

total workforce, and despite a steady decline of its share in the GDP, is

still the largest economic sector and a significant piece of the overall

socio-economic development of India.

Yields per unit area of all crops have grown since 1950, due to the

special emphasis placed on agriculture in the five-year plans and

steady improvements in irrigation, technology, application of modern

agricultural practices and provision of agricultural credit and subsidies

since the Green Revolution in India.

Indian states Uttar Pradesh, Punjab, Haryana, Madhya Pradesh,

Andhra Pradesh, Bihar, West Bengal and Maharashtra are keyagricultural contributing states of India


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India receives an average annual rainfall of 1,208

mm(47.6 in) and a total annual precipitation of

4000 billion cubic meters, with the total utilizable waterresources, including surface and groundwater, amounting

to 1123 billion cubic meters.

546,820 Sq Kilometers (211,130 sq mi) of the land area,

or about 39% of the total cultivated area, is irrigated.

India's inland water resources including rivers, canals,

ponds and lakes and marine resources comprising the east

and west coasts of the Indian ocean and other gulfs and

bays provide employment to nearly six million people in

the fisheries sector. In 2008, India had the world's third

largest fishing industry.


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India is the largest producer in the world of milk, jute and

pulses, and also has the world's second largest cattle

population with 175 million animals in 2008. 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.

India is also the second largest producer and the largest

consumer of silk in the world, producing 77,000 million

tons in 2008.


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Role of agriculture industry

1. 17.8 % of our GDP comes from agriculture

alone. It was around 57% in the beginning of

1950s. With gradual industrialization , the share

of agriculture has declined. As an economy

prospers , the share of agriculture in GDP

declines giving place for secondary and tertiary

industries.


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0

10

20

30

40

50

60

% share of agriculture sector in GDP

% share of agriculture

sector in GDP


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2. Agriculture is the back bone of any country s

economic development. It is a popular belief that

economic development takes place because ofrapid industrial development but industrialization

cannot take place without agriculture.

It contributes to economic development in 4 ways

(a) Product contribution

(b) Market contribution

(c) Factor contribution

(d) Foreign exchange contribution.


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3. Industrial sectora product of agriculture

(a). Two essential inputs for industry, viz., raw

material and labor are derived from agriculture.(b). Agriculture is the market to industry.

(c). It contributes to capital formation.

4. Source of livelihood.

5. International trade

Agri. Exports now amount to Rs. 10000 crore perannum . It is expected to rise to Rs. 15000 crore inthe near future.


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6. Fluctuations in agricultural output play a key

role in the state of national economy. Rural

consumption of industrial goods is nearlythree times that of urban consumption.

There is a direct relationship between

agricultural production, income and thedemand for industrial goods.

For example, a rise in agricultural production

results in increased govt. savings both as the

result of the buoyancy of govt. revenues and

reduction in expenditure like drought relief .


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7. The most significant development that took

place in our economy during the past four

decades relates to the farm sector. From

position of a net importer of food grain, our

country has now reached the stage of

sufficiency.Due to green revolution we have an annual

production of more than 200 million tons of

food grains and over flowing buffer stocks, the

problem now is one of storage and not of

shortages.


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Extent of farm output

Indian agriculture has attained both stability andreliance. Output of foodgrains has beenincreasing from year to year.

More than 75% of the total output during 1994-

95 is accounted for by two crops, viz., rice(43%)and wheat(32%). The remaining has beencontributed by coarse cereals(17%) and pulse(8%)

The net availability, per day per capita, offoodgrains increased from 395 kg in 1951 to 470kg in 1994. This was despite the rise inpopulation.


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This growth has been achieved mainly from domesticproduction. We hardly depend on imports which, infact ,

came down from 2.6 million tonnes per year during theseventies and to 4.4 lakh tonnes during the eighties.

year production Of foodgrains inmillion tonnes

1950 - 51 50.821990 - 91 176.39

2000 - 01 196.10

2001 - 02 212.90

2002- 03 174.80

2003- 04 213.20

2004 05 198.40

2005 06 208.30

200 6- 07 217.28

2007 - 08 227.32


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Problems of Indian agriculture

Slow agricultural growth is a concern forpolicymakers as some two-thirds of Indias peopledepend on rural employment for a living. Current

agricultural practices are neither economically norenvironmentally sustainable and India's yields formany agricultural commodities are low. Poorlymaintained irrigation systems and almost universallack of good extension services are among the factors

responsible. Farmers' access to markets is hamperedby poor roads, rudimentary market infrastructure, andexcessive regulation.

World Bank: "India Country Overview 2008"[12]
http://en.wikipedia.org/wiki/Agriculture_in_Indiahttp://en.wikipedia.org/wiki/Agriculture_in_India


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The low productivity in India

According to World Bank, Indian Branch: Priorities forAgriculture and Rural Development", India's

large agricultural subsidies are hampering productivity-

enhancing investment. Overregulation of agriculture has

increased costs, price risks and uncertainty. Governmentintervenes in labour, land, and credit markets. India has

inadequate infrastructure and services.World Bank also

says that the allocation of water is inefficient,

unsustainable and inequitable.

The irrigation infrastructure is deteriorating.The overuse

of water is currently being covered by over pumping

aquifers, but as these are falling by foot of groundwater

each year, this is a limited resource.


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Illiteracy, general socio-economic backwardness,slow progress in implementing land reforms andinadequate or inefficient finance and marketing

services for farm produce. Inconsistent government policy. Agricultural

subsidies and taxes often changed without noticefor short term political ends.

The average size of land holdings is very small (less

than 20,000 m) and is subject to fragmentationdue to land ceiling acts, and in some cases, familydisputes. Such small holdings are often over-manned, resulting in disguised unemployment andlow productivity of labour.

Adoption of modern agricultural practices and useof technology is inadequate, hampered byignorance of such practices, high costs andimpracticality in the case of small land holdings.


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Irrigation facilities are inadequate, as revealed by the factthat only 52.6% of the land was irrigated in 2003

04,which result in farmers still being dependent on

rainfall, specifically the Monsoon season. A good

monsoon results in a robust growth for the economy as a

whole, while a poor monsoon leads to a sluggish growth.

Farm credit is regulated by NABARD, which is the

statutory apex agent for rural development in the

subcontinent. At the same time over pumping made

possible by subsidized electric power is leading to analarming drop in aquifer levels.


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Agenda for action

1. Building institutions for peoplesparticipation

2. Freeing up agricultural markets

3. Carving an investment policy

4. Restructuring rural credit

5. Irrigation

6. Dry land farming7. Revitalizing research

8. No more discrimination


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Agricultural policy

The new policy on agriculture was announced onJuly 29, 2000. It almost resembles to industrialpolicy and is reforms oriented. Main features ofnew agriculture policy are

Restrictions on the movement of agriculturalcommodities will be progressively dismantled.

Private sector investment in areas such asresearch, marketing and human resource

development will be encouraged. All controls that checked incomes of farmers will

be removed and agricultural market will beliberalized.


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In the field of land reforms, the policy aims atdeveloping lease markets for increasing the size of

the holdings by making legal provisions for givingprivate lands on lease for cultivation and agri-business.

The policy envisages the future trading in allimportant products to minimize the market

fluctuations and allowing hedging of risks. Agriculture to be kept outside the regularity and tax

collection systems. Farmers to exempted frompayment of capital gains tax on compulsoryacquisition of agricultural lands.

The policy aims at creation of a favorable economicenvironment for increasing capital formation and toregister a growth rate in excess of 4%.

Agricultural Premise in India

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