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BUSINESS ENVIRONMENT Indian Agriculture : A General Overview Kaushik Ranjan Goswami
Introduction Role of Agriculture in the Indian Economy
Features of Indian Agriculture
Problems of Indian Agriculture
Low Agricultural Productivity
The majority of the total population of India is living in rural areas. Agriculture is considered as the only source of primary occupation as a huge size of rural population of the country is solely depending on agriculture. Thus, the development of the rural areas should receive top priority in our developmental programmes. Accordingly, it requires development of agriculture, implementation of land reform measures & development of co-operatives.
ROLE OF AGRICLUTURE IN THE INDIAN ECONOMY Agriculture is considered as the backbone of the Indian Economy. More than 70% of our total population earns their livelihood from agriculture. Following are some of the important points which explain the role of agriculture in the Indian economy :
Contribution to National Income : From the very beginning, agriculture is contributing a major portion in our National Income. In 1950-51, agriculture & allied activities contributed about 59% of total National Income. However, with the growth of other sectors, its contribution has gradually declined to 48% in 1970-71 & further to 23% in 2004-05.
Source of Livelihood : In India, over two-third of our working population are engaged directly in agriculture & also similarly depend for their livelihood. According to an estimate, about 66% of our working population is engaged in agriculture. Agriculture & Industrial Development : Agriculture in India has been the major source of supply of raw materials to various important industries of the country. About 50% of the income generated in the manufacturing sector comes from the agro-based industries of the country. Commercial Importance : Indian agriculture is playing a very important role both in the Internal & External Trade of the country. Nearly 70% of India’s exports
agriculture is helping the country in earning foreign exchange to meet the required Import Bill of the country. Sources of Government Revenue : Agriculture is one of the major sources of revenue to both the Central & the State Government of the country. The Government gets a substantial income from raising land revenue.
Agriculture & Economic Planning : The prospect of planning in India also depends much on agricultural sector. A good crop always provides impetus towards a planned economic development of the country by creating a better business climate. Similarly, a bad crop leads to a total depression in climate of the country, which ultimately leads to a failure of Economic Planning.
Thus, the agricultural sector is playing a very important role in the country like India & the prosperity of the Indian Economy still largely depends on agricultural sector. Agricultural development is the basic pre-condition of sectoral diversification & development of the economy.
FEATURES OF INDIAN AGRICULTURE The agriculture in India was totally backward at the time of independence. There are certain factors which are responsible for this poor condition of the Indian agriculture. All these factors will broadly outline the features of the Indian agriculture in the following manner : Feudal Character of Production : The character of Indian agricultural production was totally feudal at the time of independence. The land tenure system were mostly of Zamindary, Mahalwary & Ryotwari type. Dualism in Labour Market : Dualism in the labour market became prevalent in India due to excessive pressure of population on land. This started to exist in Indian labour market due to worker’s ignorance of better opportunities outside agriculture.
Usurious Capital & Growing Indebtedness : In Indian agriculture, the use of usurious capital is quite high in volume & this leads to growing indebtedness among the poor farmers.
Orthodox Farming Techniques : Indian agricultural is still characterized by the use of orthodox farming techniques. Major portion of the agricultural operations are still depending on biological energy sources. Diversity in Indian Agriculture : Presence of agricultural diversities is another notable feature of Indian agriculture. Besides difference in natural conditions in different regions, there exists a considerable difference in land tenure system & labour relations among the various states of the country.
PROBLEMS OF INDIAN AGRICULTURE In spite of dominating among all the sectors, agricultural sector in India has been subjected to a number of problems. The following are some of the major problems responsible for the poor state of Indian agriculture : Inequality in Land Distribution : The distribution of agricultural land in India has not been fair. Rather there has been a considerable degree of concentration of land holding among the rich landlords, farmers & moneylenders throughout the country. The vast majority of small farmers own a
very small & uneconomic size of land, resulting in higher cost per unit. Land Tenure System : The land tenure system practiced in India has been suffering from a lot of defects. Insecurity in tenancy was a big problem for the tenants, particularly during the pre-independence period, which still prevails to some extent due to the presence of absentee landlords & benami transfer of land in various states of the country. Poor Farming Techniques & Agricultural Practices : The farmers in India have been adopting orthodox & inefficient methods & techniques of cultivation. It is only in the recent years that the Indian farmers have been started adopting improved implements in agriculture.
Inadequate Use of Inputs : Indian agriculture has been suffering from inadequate use of inputs like fertilizers & HYV seeds. Indian farmers are not applying sufficient quantity of fertilizers on their lands. Moreover, the supply of HYV seeds in the country is also minimum.
Inadequate Irrigation Facilities : Indian agriculture is still suffering from lack of assured & controlled water supply through artificial irrigation facilities. Thus, Indian farmers have to depend much upon rainfall which is neither regular nor even. The proportion of irrigated land to total cropped area is only about 53% as per 1998-99 reports. Therefore, in absence of assured & controlled water supply, the agricultural productivity in India is bound to be low.
Absence of Crop Rotation : Proper rotation of crops is very much essential for successful agricultural operations as it helps to regain the soil fertility. As the Indian farmers are mostly illiterate, they are not very much conscious about the benefits of crop rotation due to which the land loses its fertility.
Lack of Organized Agricultural Marketing : Indian farmers are facing the problem of low income from their marketable surplus crops in the absence of proper organized markets & adequate transportation & communication facilities.
Agricultural Indebtedness : One of the greatest problems of Indian agriculture is its growing indebtedness. The rural people are borrowing heavy amounts of loans regularly for meeting their requirements needed for production,
commitments. Due to crop failure, poor income arising out of low prices of crops, the farmers fall into debt trap & cannot arrange for sufficient money to repay their debts. Thus, the debt of farmers gradually increases leading to the problem of rural indebtedness.
LOW AGRICULTURAL PRODUTCIVITY The condition of Indian agriculture still largely remains backward although it is considered as the backbone of the Indian economy.
Agricultural productivity which is composed of both productivity of land & labour as well, is among the lowest in the world. Average yield per hectare in India is quite below the world average in all crops. It is much lower as compared with even the yield rates prevailing in less advanced countries of the world.
CAUSES OF LOW AGRICULTURAL PRODUCTIVITY IN INDIA Factors which are responsible for this backwardness or low
agricultural productivity in Indian agriculture can be convenient grouped under three broad headings : a) General Factors b) Institutional Factors c) Technological Factors
General Factors Following are some of the General Factors which are responsible for low agricultural productivity in Indian agriculture :
Socio-Economic Factors : Various socio-economic factors like farmer’s conservative outlook, ignorance, illiteracy, superstition etc. stand in the way of adoption of
discouraging rural atmosphere is changed, it is not possible to improve the condition of agriculture in this country.
Lack of Adequate Finance : Indian agriculture still remains backward due to its inadequate financial provisions. Until recent times, farmers had to depend much on village money lenders who charged high rates of interest, to repay which the farmers had to part with their land & become landless
although exists, their contributions are almost insignificant in quantity.
Lack of Productive Investment : There is nearly absence of productive investment in Indian agriculture as the investment in land is found to be less attractive than the alternative investments in jewellary trade & money lending. This also adds up to be one of the causes of low agricultural productivity in the country.
Institutional Factors The following are some of the Institutional Factors which are equally responsible for the backwardness of Indian agriculture :
Small Size of Holdings : The average size of agricultural holding in India is very small & uneconomic & it is even less than 2 hectares or 5 acres. Besides, the agricultural holdings in India are fragmented too. With such uneconomic & fragmented holdings, no scientific cultivation with improved implements, seeds etc. are ever possible. This has resulted in low yield in Indian agriculture.
Defective Pattern of Land Tenure : Land tenure system in India is totally defective & it is standing in the way of its agricultural development. Even after the abolition of
Zamindary System & enactment of Tenancy Legislation, the position of tenants is still far from satisfactory. The cultivators have to pay high rent to the landlords & are subject to frequent ejectment by the landlords. All these have led to lack of incentives & confidence on the part of cultivators to make provisions for any permanent development of their land.
Technological Factors The following Technological Factors are responsible for low agricultural productivity in Indian agriculture :
Lack of High Yielding Seeds : Indian farmers are still applying seeds of indifferent quality. They have no sufficient financial ability to purchase good quality HYV seeds. The supply of HYV seeds is also minimum in the country. Thus, the farmers are mostly applying traditional variety of seeds
whose average yield is just half of the yield of improved variety of seeds.
Scanty Use of Fertilizers : The Indian farmers are not applying sufficient quantity of fertilizers on their lands. Constant cultivation of land causes deterioration of the fertility of soil. For revitalization of soil fertility, application of various types of fertilizers is much required. But the poor cultivators cannot afford to purchase costly chemical fertilizers for applying on their lands. Thus in India, the use of both chemical fertilizers & even farm yard dung manure is totally inadequate.
Inadequate Irrigation Facilities : Indian agriculture is still suffering from lack of assured & controlled water supply through artificial irrigation facilities. Thus, Indian farmers have to depend much upon rainfall which is neither regular nor even. The proportion of irrigated land to total cropped area is only about 53% as per 1998-99 reports. Therefore, in absence of assured & controlled water supply, the agricultural productivity in India is bound to be low. Lack of Agricultural Research : Agricultural research in India is still very poor in comparison to its requirements. Whatever research is being conducted, its result is not even made available to the farmers fully for its application. Thus, many chronic problems of agricultural operation faced by the farmers still remain largely unattended.
Thus, we have seen that there is gross absence of many basic facilities in Indian agriculture & all these have resulted in low agricultural productivity & also backwardness of agricultural sector in the country.
REMEDIAL MEASURES TO RAISE AGRICULTURAL PRODUCTIVITY IN INDIA
The backwardness of agricultural sector & low agricultural productivity are the two serious problems of the Indian economy. For improving the condition of the agricultural sector & for raising the agricultural productivity in India, the following measures should be undertaken :
Consolidation of Holdings : Consolidation
modernization of Indian agriculture & this should be done immediately by enacting proper legislation required in this regard. Uneconomic small farms should be properly consolidated & small fragmented holdings should also be consolidated by forming cooperative farming societies. Overcoming Natural Factors : Proper steps should be taken to overcome various problems of agriculture resulting from natural factors. All these steps include extensive flood control measures, creation of adequate irrigation facilities etc. Application of Modern Techniques : Indian farmers should apply modern techniques of cultivation by utilizing modern implements, using HYV seeds, using scientific crop rotation & careful crop planning. Agricultural research should be carefully intensified & its results should be made available to the Indian farmers.
Economic Measures :
Economic measures should be adopted in order to make the Indian agriculture more remunerative. Proper steps must be undertaken for the improvement of farm organization & land management. Besides, steps must be taken for the establishment of different types of agro-based industries in rural areas. Provisions should also be made for adequate credit & marketing facilities. Moreover, the Government
guarantee minimum prices of the agricultural produce of the country & implement Crop Insurance Scheme to cover the various risks in agriculture. Human Development : For the improvement of agricultural productivity in India, the quality of farmers should be improved & they should be imparted with adequate general & technical education. Adequate public health measures should also be undertaken in rural areas. Farmers should shed off their fatalism & adopt themselves with the changing ideas.
CONCLUSION Thus, the agricultural productivity in India can be improved with the adoption of aforesaid measures in the agricultural sector of the country. Hence, from the above analysis it can be well concluded that although the Indian agricultural sector is subject to certain limitations, it has got enormous potential of growth & development with some changes