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A Glimpse
Agriculture may be defined as an integrated system of techniques to control the growth and
harvesting of animal and vegetables. It is an uncomplicated endeavor comprising of technical
and practical processes that helps in the maintenance of the ecological balance and protects
human resources; and most importantly it is a viable food production system.
Human beings started practicing farming/cultivation some 10,000 years ago. Since then,
agriculture as a practice and as a process have undergone substantial changes which have had
consequential impact on human progress and lifestyle. Over the ages these developments in
agriculture have radically transformed human ecology, society, organizations, demography and
even art and religion and have to a certain extent determined the course of scientific progression.
With the introduction of eco-friendly pesticides and fertilizers, crop yields increased to a
remarkable level. The early 20th century witnessed the usage of synthetic nitrogen, along with
mined rock phosphate, pesticides and mechanization including the synthesizing of ammonium
nitrate. Rice, wheat, and corn were the main crops that gave the best yield, thus introducing the
Green Revolution. Export of technologies, pesticides and fertilizers from the developed countries
to the developing countries, further increased the yields in all regions almost equally.
Organic farming, a concept introduced in the 1900s, that overused pesticides and synthetic
fertilizers, stayed dormant for several decades. This was because the cultivation process damaged
the long-term fertility of the soil. The European Union first certified organic food in 1991 and
then began research, exploration, use of alternative technologies like integrated pest
management and selective breeding. Today the markets of developed and also developing
countries across the world are flooded with genetically modified food.
Forms of Agriculture
Depending upon the purpose for which food is produced and livestock is raised, agriculture can
be divided into two groups. These two are:
Subsistence Agriculture:
This form of agriculture can be definedas production of a certain
amount of food that is enough to sustain the family producing
food. The farmer engaged in such type of farming does not
produce in order to sell the food to the market, but retains it for
himself and his family. It is very rare to have surplus amount of
produce in subsistence agriculture and therefore there is no scope
for any commercial profit. Subsistence agriculture is practiced
without buying any fertilizers. This type of agriculture can
survive for a longer duration in those area where there is sparse
population; but in densely populated areas, it can have serious
repercussions in the form of damage to the environment and
depletion of soil nutrients
Commercial Agriculture:
The practice of producing crops and raising livestock for the purpose of selling the end products
in the market for gaining monetary benefits is termed as 'commercial agriculture'. It is defined
as the production of those products and commodities that can be consumed by the end users
through wholesale and retail distribution. Commercial agriculture includes raising of livestock
but does not include crops that are grown solely for consumption within the household.
• Crop Agriculture: This involves meticulous cultivation of food, fiber, etc. It produces
not just food but also products which are highly used in industries or medicines. Crop
agriculture first came into existence during the Stone Age when hunters made a switch
from hunting to a more sophisticated culture of species which were favored.
India is the second largest producer of food in the world. Whether it is canned food, processed
food,
food grains, dairy products, frozen food, fish, meat, poultry, the Indian agro industry has a huge
potential, the significance and growth of which will never cease.
5. Agriculture has become un-viable due to over supply because new hybrids are giving
excellent yield but due to over supply, the price realization is very low.
6. Cost of transport to market, electricity for water pump, cost of fertilizers, cost of living is
going up several times but the selling price of agriculture produce is stagnating due to over
supply and record productions.
7. Lack of reliable Agriculture publication and media to provide latest and reliable localized
data.
Economic Evolution of Indian Agriculture AND MODERN INDIAN AGRICULTURE
Indian agriculture is undergoing a rapid change particularly since mid-sixties i.e. from the
on-set of ‘Green Revolution’. Therefore, we have witnessed a ‘white Revolution’ marking a
tremendous increase in the milk production. Our horticulture, which includes fruit
production, floriculture and vegetable production is also making a tremendous heading and
it is said that ‘yellow Revolution’ is in the sight.
If we analyse this changing scene in agriculture, we can notice that the traditional
agriculture. Which was a ‘way of life’ for our farmers is now becoming a ‘business
proposition’. In the traditional farming there was no much change in the cropping pattern,
cultivation practices etc. It was based on the experiences transmitted from father to the
son. However, with the developments taking place due to five-year plans and technologies
developments in agriculture, traditional farming is changing into modern farming.
Traditional farming is slowly becoming absolute and uneconomic. Traditional farming was
more or less self-sufficient. No, farming is becoming market oriented. The needs of the
farmers are increasing. He has to purchase many things such as high yielding seeds,
fertilizers, pesticides, machinery etc. from the market. As a result, his investment and
financial needs are increasing. Naturally, he has to produce and get income to meet the
costs and also to make some profit. This, the costs, returns, markets, profits of the
enterprise become significantly important. This is nothing but ‘Agri-economics’.
With increasing population, rapid urbanization and growing export markets, the demand for
farm products is increasing and is likely to increase in the near future. However, the
competition is also likely to increase. The consideration of economic aspects in the
production process is inevitable.
Farmer has several enterprises (such as crops, dairy, and poultry) on the farm. He has to
consider the economics of each enterprise separately also of the farm as a whole. It helps in
decision making and proper planning of the farm. Now, the time has come that every
activity on the farm has to be viewed from the perspective of economics.
Along with the adoption of new technology in farming, the problems faced by the farmer’s
fare also increasing. There are problems of soil and water management, choice of crops,
technical know-how, pests and diseases, natural hazards, marketing, finance, surplus
production, price fluctuations and so on. In finding the solutions for these problems,
economic criteria are to be applied.
India is a vast country with varied climate, soils, and ecological conditions. In addition to
this, individual farmer is having his own set up of resources and socio-economic situation.
In solving the problems of individual farmers all these situational factors are to be taken
into account.
An important ray of hope, which one can notice in this complex changing scenario of
agriculture, is that a new generation of farmers who are more educated, young and
energetic have taken up to this enterprise. In addition, many non-farming community
entrepreneurs are also attracted towards agriculture. They are very keen on getting more
knowledge about the new technology. Many of them are innovative and experimenting of
their own. Naturally, they are more economics oriented.
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To own and run a agriculture I-van where a van fitted with pc and video projector will tour
entire length and breadth of the country to promote cost effective income generation in
agriculture via a video demo at small villages. Mobile video van for demonstration of good
crop practices and for Medicinal plant, Aromatic plant, Herbals and Organic Farming.
The constraints to development of the region which are examined under four heads as follows:
Socio-cultural : Rapid population growth, high population density, and tribal to non-tribal
composition, shyness of the people, shortage of technical manpower, lack of skilled agricultural
work force, inappropriate land tenure system, private property rights in hill areas, insurgency and
ineffective governance etc.
Infrastructure : Very poor and inadequate road and communication network, markets,
transport (rail, road, air and water including total lack of sea route), banking and other financial
institutions, low investment on health, education and rural electrification, absence of private
sector participation in the development process, lack of skill and enterprises in the region etc.
In order to get greater insights into the development paradigms in the region, a framework of
SWOT analysis is attempted.
Strengths
Water : Numerous rivers, streams, and other water bodies with perennial flow of water in the
region, potential for irrigation, hydropower, water transport, fishery etc.
Tea : Climate-topographical situation is most suitable. Fifty-six per cent of India’s tea
production in the region, most of which is organically grown.
Oil and petroleum products : Over half of oil and natural gas production of the country is in
the northeast region (NER).
Forests : The region possesses richest bio-diversity, good quality usable wood / timber
Potential international markets for exports and imports : The NER is surrounded in all sides
with international borders
Weaknesses
Lack of capital formation : Outside markets for trading the natural resources of the region are
in existence from colonial regimes. But the market is unidirectional, inefficient and does not
favour capital formation
Movement of flow of men and material : Due to various reasons, the flow of man and material
is highly limited
Opportunities
Close society : Better socio-cultural exchange in tribal societies; a model of collective action
Diversification : Agro-based industries using the local raw materials-horticulture, fishery, tea,
rubber, jute, oilseed etc.
Threats
The strategies are suggested based on constraints and SWOT analysis keeping in view the basic
tenets of interdisciplinarity, eco-regional perspective, making business with a changing attitude,
and with strong O&M motivation. The principles involved include ecology, gender and social
equity, economics and employment.
Socio-economic and policy : Thrusts on land reform, institutional reform, marketing, transport,
communications, energy, industry, handloom and handicrafts, trade and transit, tourism, banking
and finance and effective governance.
India’s massive agricultural sector employs about 60% of the population, yet
accounts for only about 17% of total GDP. Growth in agriculture has stagnated
relative to other sectors: last year the agricultural sector grew at a rate of 2.7%,
relative to 11% growth in both the service and industry sector. Agricultural incomes
are lower and growing slower than incomes in other sectors. The government has a
clear imperative to seriously examine whether existing policies are optimal.
There is a staggering amount of literature analyzing agricultural policy in India.
From my admittedly cursory review I noticed several recurring themes, which I
discuss in no particular order:
In spite of the gains of the Green Revolution, Indian agriculture lags behind in terms
of technology take-up and production efficiency. Lack of access to credit, which we
discussed earlier, may be one of the factors inhibiting farmers from investing in
technology. However, the ground reality also suggests that poor education and lack
of awareness of the benefits of new technology is also a factor. In addition, the epic
and recurring issue of poor irrigation and infrastructure is widely recognized as a
drain on productivity in many regions (Its estimated that about 10% of all
agricultural production in India is wasted due to lack of storage, transport, etc). The
government already proved itself capable of stimulating advances in agricultural
productivity with the Green Revolution. Future policies should focus on providing
incentives to farmers to adopt better production technology, bridging the
information gap that currently exists in the agricultural sector, and remedying
severe underdevelopment of irrigation and infrastructure facilities.
Currently, the Indian government sets a minimum support price for almost all
agricultural commodities. Farmers who produce various goods are guaranteed the
option of selling directly to the government at a price fixed in the beginning of the
season. The stated goal of this policy is to “ensuring remunerative prices to the
growers for their produce with a view to (sic) encouraging higher investment and
production.” The inherent endogeneity of MSP policy makes a rigorous impact
assessment difficult, but the persistently low productivity growth in agriculture
suggests that the MSP policies have failed to stimulate sufficient capital
investments by farmers. Its conceivable the virtual subsidy provided by MSPs might
actually dampen incentives for technology take-up by guaranteeing a basic level of
income security. Furthermore, the existence of MSPs may encourage agricultural
production for which there is actually limited demand in private markets, leading to
unbalanced and suboptimal production choices by individual farmers. The process
by which which MSPs are set is also somewhat dubious, and many have suggested
that the current price-setting system is vulnerable to political manipulation and lack
of parity across goods. Although scrapping MSPs would obviously expose a large
number of farmers to the risk of price shocks, it seems to me that improving
farmers access to insurance products and commodity futures markets is more
sustainable and optimal way to manage such risks.
Although India’s rural poor are by and large uneducated, many of them are capable
of operating small businesses that have higher returns than traditional agriculture.
However, their ability to start such business is often hampered by lack of access to
credit and capital. In spite of the microfinance “revolution” and government policies
designed to stimulate capital flow to the rural population (such as priority sector
lending), there is still a massive failure of credit markets to meet the demands of
the rural population. Empirical research has demonstrated that returns to capital
are extremely high in microenterprises (roughly 80% in Sri Lanka), which of course
suggests that there is tremendous potential for farmers who start operating small
businesses to supplement or replace their primary line of work.
I’d be interested in hearing peoples opinions on any of these issues, and think this
discussion would particularly benefit from the observations of people working in
rural ares.
These are some of the pesticides you can find in the food you eat. The list is not,
unfortunately, exhaustive. To know how some of these pesticides affect humans and the
environment, click here.
One of the most negative results of the commercialisation of agriculture is the total
dependence by the farmer on external sources for all his farming inputs, including seeds.
Whereas earlier farmers used to save and share their seeds, today they depend wholly upon
seed companies for their requirements. Indigenous seeds are more suitable to a particular
region or situation than any hybrid variety.
There are a number of reasons why it makes sense to use indigenous or traditional seeds
(called heirloom seeds in the West). Compared to hybrid seeds, they are hardy, pest-
resistant, withstand unfavourable conditions in the area of their origin, require less water
and nutritional inputs, fit in better in the organic method of farming and may even have
special characteristics such as nutrition, fragrance or colour,
Hybrid seeds on the other hand are developed for very specific situations and have precise
water and nutritional requirements, generally on the higher side. They are also more prone
to pest attacks and diseases. Besides being costlier, hybrids cannot be saved or shared with
any benefit to the farmers. In fact, even where improved varieties are not hybrids, it is
usually illegal for farmers to save or share such seeds. In some western countries, it is now
illegal for farmers to share or sell even their local seed varieties on the grounds that the
seeds are not certified!
However, all this does not mean that just about any indigenous seed should be freely used
by farmers. As with hybrids, all varieties are not suitable for commercial cultivation. Many
farmers save seeds selectively after seeing the vigour and growth of individual plants. This
is an old tradition and is and needs to be continued.
growth rate of agriculture, while industry and service sector have been growing rapidly.
As mentioned earlier in this paper, credit in agriculture has been given too much
importance while other factors responsible for productivity have been ignored. The
finance minister also assumes indebtedness to be the major cause of distress amongst
farmer households, but according to the ‘Report of Expert Group on Indebtedness’
chaired by R Radhakrishna, indebtedness is just a symptom and not the root cause of this
crisis, and the committee report says that average farmer household borrowing has not
been excessive. According to the committee report the factors contributing to this crisis
are “stagnation in agriculture, increasing production and marketing risks, institutional
vacuum and lack of alternative livelihood opportunities.” The deceleration in the growth
rate of agriculture is evident in the above table.
Decreasing Yield
A major problem ailing Indian agriculture is the declining efficiency of input use and
thus, adversely affecting the yield. The following table22 on ‘Growth of Area, Production
and Yield of Major Crops in India: 1980-81 to 2003-04’ displays this negative trend
This declining trend of annual growth rate of yield might affect the profitability in
agriculture. According to MS Swaminathan, “The prevailing gap between potential and
actual yields in the crops of rain-fed areas such as jowar, bajra, millets, pulses, and
oilseeds is over 200 per cent even with the technologies on the shelf”, and the benefits of
the loan waiver scheme would be fully realised only if the farmers are “supported with
synergetic packages of technology, services, marketing infrastructure, and public policies
related to input and output pricing.”23
Productivity in Agriculture
22
The above figure24 shows near stagnation in ‘per worker productivity in agriculture’, with
some states exhibiting a declining trend. This trend of falling productivity can lead to
negative consequences for agriculture and should be checked. What makes this issue
even more important is the fact that the per-worker productivity in non-agriculture sectors
has been growing much faster than that in agriculture. The situation is same for all Indian
time.
The table shows that around 75% farmer households use fertilizers, and only 73.5% are
able to use it when required. An important reason for the farmers not using various
modern methods of technology is lack of awareness among them about the existence of
these resources. The following table27 shows the percentage of farmer households
obtaining information on cultivation from any source (extension worker, TV, Radio,
Newspaper, Input Dealer, and Other Progressive Farmers). All over India, only around
40% farmer households access some source for getting information on modern methods
of farming, out of which less than 60% get information on improved seeds, less than 50%
get to know about fertilizer application, while only 24% get information on plant
protection.
27
Water Management
According to Arindam Banik, the share of input subsidies in public expenditure was 44%
in the early 1980s and it rose to 83% by 1990, but “The increasing shares of total public
expenditure on agriculture are allocated to input subsidies (on fertilisers, electricity,
irrigation, and credit, for example), rather than to productivity-enhancing investments
such as research and public investment in irrigation.”28 Irrigation is of vital importance in
agriculture and an individual can not invest in creating infrastructure for the same. The
Apart from the various benefits of land levelling, environmental concerns at some places
make land levelling the need of the hour. According to the Department of Soil and Water
Conservation (Punjab), out of 141 blocks of the state more than 100 are over exploited
due to excessive pumping of ground water. This is evident from the fact that area having
water table below 30 feet depth has increased from 3% in 1973 to 90% in 2004. Levelling
of land can make the situation better because around 20-25% of irrigation water is lost
during application if the land is not level.
Apart from non-optimal use of water, uneven fields have uneven crop stands, increased
weed burden and uneven maturing of crops. All these factors lead to reduction in yield
and also affect the quality of grain. Level land improves water coverage that:34
• Improves crop establishment.
• Reduces weed problems.
• Improves uniformity of crop maturity.
• Decreases the time to complete tasks.
• Reduces the amount of water required for land preparation.
The following table35 shows ‘The additional cost and financial benefit from land
levelling’.
34
The data in the above table clearly shows that in the long run, laser land levelling makes
economic sense. A study done by Punjab Agriculture University (Ludhiana) showed that
average increase in crop yield due to levelling of land was 24%. The data is summarised
Large scale investment in agriculture has to be taken up by the state as the private sector
does not have the capacity to undertake such huge investment, and also there is no
incentive for an individual to take up such investment that falls under the category of
public good. If the infrastructure in agriculture is in its place, we can hope to see more
private corporate companies coming up in agriculture, which would be beneficial for the
farmers. This would incorporate the farmers in the mainstream and it might put an end to
the incessant subsidies in agriculture.
Talking of rural credit, as mentioned earlier also, just the provision of credit will not end
all the problems in agriculture. M Sitarama Murty puts forward this view by saying that it
would be a “fallacy to believe that credit or its waiver alone can mitigate the problems of
the afflicted farmers. Timely availability of the right kind of fertilizers, genuine and
quality seeds is very important. The marketing component of the chain is weak and the
Government can improve the storage, transport and processing facilities of grains, fruits
and vegetables and prevent distress sale of produce.”42
As S Mahendra Dev puts it, the most important need in agriculture is the provision of
“measures for raising output and good prices for production rather than more credit
which, in the absence of viable agriculture, push them back into a debt trap. The issue is
not that of availability of institutional credit, but access, ease, and terms and conditions of
such finance.”43 The C Rangarajan committee report on Financial Inclusion says that 46
million farmer households out of 89 million households do not access credit, either from
institutional or non-institutional sources. Venkitesh Ramakrishnan44 quotes a study,
which says that in large parts of Uttar Pradesh (especially Bundelkhand and eastern UP)
instruments of formal credit delivery hardly ever lend money to small or marginal
farmers.
Sharad Joshi feels that the loan waiver scheme was not designed by keeping the interest
of farmers in mind, and if it was so, then the “Finance Minister would have first tried to
correct market imperfections so that the farmers are not driven to the trap of indebtedness
once again.”45 The indebtedness to moneylenders is another important issue, and
Agriculture Minister was ready with a solution to this complex problem. He said the
since the moneylenders are illegal, the farmers need not repay them. Before considering
this option, it is important to realize that the informal moneylenders are a part of the
traditional Indian agrarian society. Moneylenders have survived for the very basic fact
that they hold a ‘comparative advantage’ in this business, which they have been doing for
generations now. More importantly, they fulfil the credit needs of the farmers in case of
institutional vacuum, and it would be unethical to ask the farmers not to repay them as
they are illegal.
It is important to note that all the above recommendations are long term measures, and
even if indebtedness is not the major cause of agrarian crisis and is just a symptom, it is
still a cause of distress among farmer households and there has to be a short term measure
to take care of this issue. The recommendations of the ‘Report of Expert Group on
Indebtedness’ of immediate measures to be undertaken to solve the problem of rural
indebtedness are very relevant. It says:
Rescheduling of Loans of Farmers Affected by Natural Calamities46
The central and state governments have programmes of rescheduling loans to farmers
affected by natural calamities like floods and cyclones with a view to reviving the
livelihood base of the affected families. The Expert Group recommends that:
a. The loans of all the affected families should be rescheduled.
b. The families whose loans are rescheduled should be eligible for fresh loans.
c. The interest liability of the borrowers for the extended period of up to two years
(both for short and long term loans) should be waived and the financial burden
equally shared between the central and state governments.
Formalisation of Informal Credit47
The Expert Group underlines the need for mitigating the burden of farmers’ indebtedness
to moneylenders. It recommends a one-time measure of providing long-term loans by
banks to farmers to enable them to repay their debts to the moneylenders.
These short term measures would take care of the immediate needs of the farmers, and
they do not require a lot of government resources for implementation. And for the overall
benefits of agriculture, the above stated long term measures have to be undertaken