Agricultural sector in India

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 economies of 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.

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 key agricultural contributing states of India

 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 water resources, 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.

 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.

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.

% share of agriculture sector in GDP

60 50 40 30 % share of agriculture sector in GDP

20
10 0

2. Agriculture is the back bone of any country s economic development. It is a popular belief that economic development takes place because of rapid 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.

3. Industrial sector a 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 per annum . It is expected to rise to Rs. 15000 crore in the near future.

6. Fluctuations in agricultural output play a key role in the state of national economy. Rural consumption of industrial goods is nearly three times that of urban consumption. There is a direct relationship between agricultural production, income and the demand 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 .

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.

Extent of farm output

Indian agriculture has attained both stability and

reliance. Output of foodgrains has been increasing from year to year. More than 75% of the total output during 199495 is accounted for by two crops, viz., rice(43%) and wheat(32%). The remaining has been contributed by coarse cereals(17%) and pulse (8%) The net availability, per day per capita, of foodgrains increased from 395 kg in 1951 to 470 kg in 1994. This was despite the rise in population.

 This growth has been achieved mainly from domestic

production. We hardly depend on imports which, infact , came down from 2.6 million tonnes per year during the seventies and to 4.4 lakh tonnes during the eighties.
year 1950 - 51 1990 - 91 2000 - 01 2001 - 02 2002- 03 2003- 04 2004 05 2005 06 production Of foodgrains in million tonnes 50.82 176.39 196.10 212.90 174.80 213.20 198.40 208.30

200 6- 07
2007 - 08

217.28
227.32

Problems of Indian agriculture

Slow agricultural growth is a concern for

policymakers as some two-thirds of Indias people depend on rural employment for a living. Current agricultural practices are neither economically nor environmentally sustainable and India's yields for many agricultural commodities are low. Poorly maintained irrigation systems and almost universal lack of good extension services are among the factors responsible. Farmers' access to markets is hampered by poor roads, rudimentary market infrastructure, and excessive regulation. World Bank: "India Country Overview 2008"[12]

The low productivity in India

According to World Bank, Indian Branch: Priorities for Agriculture and Rural Development", India's large agricultural subsidies are hampering productivityenhancing investment. Overregulation of agriculture has increased costs, price risks and uncertainty. Government intervenes 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.

Illiteracy, general socio-economic backwardness, slow progress in implementing land reforms and inadequate or inefficient finance and marketing services for farm produce. Inconsistent government policy. Agricultural subsidies and taxes often changed without notice for short term political ends. The average size of land holdings is very small (less than 20,000 m) and is subject to fragmentation due to land ceiling acts, and in some cases, family disputes. Such small holdings are often overmanned, resulting in disguised unemployment and low productivity of labour. Adoption of modern agricultural practices and use of technology is inadequate, hampered by ignorance of such practices, high costs and impracticality in the case of small land holdings.

 Irrigation facilities are inadequate, as revealed by the fact

that 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 an alarming drop in aquifer levels.

Agenda for action

1. Building institutions for peoples

2. 3. 4. 5. 6. 7. 8.

participation Freeing up agricultural markets Carving an investment policy Restructuring rural credit Irrigation Dry land farming Revitalizing research No more discrimination

Agricultural policy
The new policy on agriculture was announced on July 29, 2000. It almost resembles to industrial policy and is reforms oriented. Main features of new agriculture policy are Restrictions on the movement of agricultural commodities will be progressively dismantled. Private sector investment in areas such as research, marketing and human resource development will be encouraged. All controls that checked incomes of farmers will be removed and agricultural market will be liberalized.

 In the field of land reforms, the policy aims at

developing lease markets for increasing the size of the holdings by making legal provisions for giving private lands on lease for cultivation and agribusiness. The policy envisages the future trading in all important 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 from payment of capital gains tax on compulsory acquisition of agricultural lands. The policy aims at creation of a favorable economic environment for increasing capital formation and to register a growth rate in excess of 4%.