Indian Agriculture

Indian Agriculture

1. Introduction to Indian Agriculture

Agriculture remains the most important sector of the Indian economy, both in the pre-independence and post-independence periods, significantly impacting the livelihood of a large portion of the population.

Special Features of Indian Agriculture:

  • Economic Contribution: From a monetary point of view, the share of the agriculture sector in the economy stands at approximately 17.4% of the GDP (as per the provided data). *[Value Addition: Recent data from 2022-23 indicates agriculture's share in GVA (Gross Value Added) at current prices is around 18.3%, highlighting its continued significance despite diversification.]*
  • Livelihood Dependence: Around 49% of the people in India depend on the agriculture sector for their livelihood.
  • Private Sector Dominance: It is not only the biggest sector but also the biggest private sector, and notably, it's the only profession which still carries no burden of individual income tax.
  • Unorganized Sector: It is the biggest unorganized sector of the economy, accounting for more than 90% share in the total unorganized labor-force.
  • Agri-Exporter: India has emerged as a significant agri-exporter in a few crops, namely—cotton, rice, meat, oil meals, spice, guar gum meal, and sugar.
  • Inter-sectoral Linkage: According to export figures, agriculture is deeply related to industrial growth and national income. A 1% increase in agricultural growth leads to a 0.5% increase in industrial output (growth) and 0.7% increase in the national income of India.
  • Productivity: Productivity of major crops is lower in India compared to the world’s best practice.

2. Land Tenure Systems (Historical Context)

A. The Zamindari System (Permanent Settlement System)

  • Introduced by Lord Cornwallis in 1793 through the Permanent Settlement Act.
  • Prevalent in provinces of Bengal, Bihar, Orissa, and Varanasi.
  • Zamindars were recognized as owners of the lands and were given the rights to collect rent from the peasants.
  • The collected amount was divided: 1/11th share belonged to Zamindars, and 10/11th belonged to the East India Company.

B. The Mahalwari System

  • Introduced in 1833 during the period of William Bentick.
  • Prevalent in Central Province, North-West Frontier, Agra, Punjab, Gangetic Valley, etc., of British India.
  • The system included provisions of both Zamindari and Ryotwari Systems.
  • Land was divided into 'Mahals' (villages or groups of villages), with each Mahal comprising one or more villages.
  • Ownership rights were vested with the peasants.
  • The village committee was held responsible for the collection of the taxes.

C. The Ryotwari System

  • Individual cultivators (Ryots) were supposed to pay the rent directly to the government without any intermediary.
  • Prevalent in parts of Madras, Bombay province, and Assam.
  • In practice, all three systems had features of each other, leading to exploitation of agricultural laborers, exorbitant rents, lack of incentive for technological progress, and a rigid system of land transfer across the country at independence.

3. Land Reforms After Independence

Land reform involves changing of laws, regulations, or customs regarding land ownership. It aimed at government-initiated or government-backed property redistribution to address the exploitative nature of pre-independence land systems.

Objectives of Land Reforms:

  • To remove such impediments to increase in agricultural production as arise from the agrarian structure inherited from the past.
  • To eliminate all elements of exploitation and social injustice within the agrarian system.
  • To provide security for the tiller of soil and assure equality of status and opportunity to all sections of the rural population.

Types of Land Reforms After Independence:

  • Abolition of Intermediaries: Intermediaries like Zamindars or Jagirdars were abolished. This led to about 30 lakh tenants acquiring land ownership over an area of 62 lakh acres throughout the country.
  • Tenancy Reforms: Aimed to confirm the rights of occupancy of tenants and to regulate rent of leased land. However, these reforms were often not implemented due to lack of political will and issues like "voluntary surrender" rules and unavailability of accurate land records.
  • Reorganization of Land Holdings (Ceiling Laws): Laws were imposed which laid down the maximum land that could be owned by a landholder. The excess land was to be surrendered to the government for redistribution. Its performance remained dismal, leading to redistribution of less than 2% of operated area by 1992, excluding the abolition of intermediaries.

Reasons for Failure of Land Reforms:

  • Social Prestige of Land: Land in India is considered a symbol of social prestige, status, and identity, unlike other economies where it is primarily an economic asset.
  • Lack of Political Will: Required for effective implementation of land reforms.
  • Rampant Corruption: Corruption, hypocrisy, and leadership failure hindered the program.

4. Green Revolution

The Green Revolution (GR) refers to the introduction of new techniques of agriculture in the 1960s, primarily for wheat and later for rice. It revolutionized the traditional idea of food production, increasing productivity by over 250%. It was centered around the use of High Yielding Variety (HYV) seeds developed by US agro-scientist Norman Borlaug.

Components of the Green Revolution:

  • High Yielding Variety (HYV) Seeds: These 'dwarf' seeds were non-photosynthetic and hence non-dependent on sun rays for targeted yields.
  • Chemical Fertilizers: Required in high concentrations (urea (N), phosphate (P), and potash (K)) to increase productivity, as traditional composts were insufficient.
  • Irrigation: Controlled growth of crops and adequate fertilizer application necessitated controlled water supply. Free flooding and artificial water supply were crucial.
  • Chemical Pesticides and Germicides: Became compulsory to protect the new HYV seeds from pests, germs, and diseases, ensuring higher yields.
  • Chemical Herbicides and Weedicides: Used to prevent costlier inputs of fertilizers from being consumed by herbs and weeds.
  • Credit, Storage, Marketing/Distribution: Availability of easy and cheaper credit was essential. Storage and distribution of harvested crops were done region-specific.

5. Recent Developments in Agriculture

  • Foodgrain Self-Sufficiency: The Green Revolution made India self-reliant in foodgrain production.
  • Environmental Concerns: Imbalanced use of fertilizers, decreased organic manure, and over-exploitation of groundwater have led to deterioration of natural resources.
  • "Bringing Green Revolution to Eastern India (BGREI)": A sub-scheme of Rashtriya Krishi Vikas Yojana (RKVY), implemented since 2010-11 in seven (7) eastern states (Assam, Bihar, Chhattisgarh, Jharkhand, Odisha, Eastern Uttar Pradesh, and West Bengal) to address resource depletion in north-western India and boost foodgrain production in the east. Post-implementation, rice production in these states increased from 45.65 million tonnes (2009-10) to 57.18 million tonnes (2017-18).
  • Key Schemes (Extended till 12th Five Year Plan and beyond):
    • National Food Security Mission (NFSM)
    • Mission for Integrated Development of Horticulture (MIDH)
    • National Mission for Sustainable Agriculture (NMSA)
    • Sub-Mission on Seeds and Planting Material (SMSP)
    • Sub-Mission on Agricultural Mechanisation (SMAM)
    • Green Revolution–Krishonnati Yojana
    These schemes aim for holistic and scientific development of agriculture and allied sectors to increase farmers' income by enhancing production, productivity, and returns.
  • *[Value Addition: **Pradhan Mantri Fasal Bima Yojana (PMFBY):** Launched in 2016, this crop insurance scheme provides comprehensive risk cover against non-preventable natural risks from pre-sowing to post-harvest. **PM-KISAN (Pradhan Mantri Kisan Samman Nidhi):** Launched in 2019, provides income support of ₹6,000 per year in three equal installments to all landholding farmer families. **e-NAM expansion:** Continued efforts to integrate more mandis under the e-National Agriculture Market platform.]*

6. Food Management and Food Security

Managing enough food has been a prime focus since Independence, balancing the physical target of food production with the challenge of procuring and distributing food for a large population. Post-WTO entry, producing surplus and competing globally became essential.

A. Minimum Support Price (MSP)

  • Definition: A form of market intervention by the Government to insure agricultural producers against any sharp fall in farm prices—a guarantee price to save farmers from distress sales.
  • Announcement: MSPs are announced at the beginning of the sowing season for certain crops (currently for 24 commodities) based on recommendations of the Commission for Agricultural Costs and Prices (CACP).
  • Objectives: To support farmers from distress sales and to procure food grains for public distribution.
  • Procurement Prices: In 1966-67, a 'procurement price' for wheat was announced, higher than MSP, for food security of the PDS. This increased price had limited purpose as it should have been announced before sowing for optimal farmer incentive. MSP is considered the effective procurement price since 1968-69.

B. Market Intervention Scheme (MIS)

  • Similar to MSP, implemented on request of state governments for procurement of perishable and horticultural commodities in case of a fall in market prices.
  • Scheme is implemented when there is at least a 10% increase in production or a 10% decrease in the ruling rates over the previous normal year.
  • The Centre and States/UTs share the cost in a 50:50 ratio (75:25 for North Eastern states).

C. Buffer Stock

  • India has a policy of maintaining a minimum reserve of foodgrains (only for wheat and rice) to ensure food availability at affordable prices.
  • Main supply comes from FCI to PDS, and Open Market Sale (OMS) checks rising prices.
  • Buffer stocking norms were revised by mid-2014 due to increased foodgrain requirement.

D. Open Market Sale Scheme (OMSS)

  • The FCI undertakes sale of wheat at pre-determined (reserve) prices in the open market from time to time.
  • Objectives: To enhance market supply of foodgrains; to exercise a moderating influence on open market prices; and to offload surplus.
  • Under OMSS (Domestic), the government adopts a policy of differential prices to encourage sale of older stock first.

E. Price Stabilization Fund (PSF)

  • Launched by the Government of India (by late March 2015) as a Central Sector Scheme.
  • Supports market interventions for price control of perishable agri-horticultural commodities (initially onion and potato).
  • Cost is borne between the centre and the states in equal ratio (75:25 in case of North Eastern states).

F. Farm Subsidies

  • Form an integral part of the government’s budget for agriculture.
  • In developed countries, agricultural subsidies are around 40% of the total budgetary outlay, whereas in India, it is much lower and diversified.
  • Direct Farm Subsidies: Direct cash incentives paid to farmers to make their products more competitive globally.
  • Indirect Farm Subsidies: Provided in forms like cheaper credit facilities, farm loan waivers, reduction in irrigation and electricity bills, fertilizers, seeds, and pesticides subsidy, as well as investments in agricultural research, environmental assistance, farmer training, etc.

G. Food Security Programs

  • India attained self-sufficiency in food by late 1980s, but food security still faces challenges related to access and affordability.
  • Lack of food security hampers the nutritional profile of vulnerable sections of the population.
  • India has the second highest number of undernourished people globally at 194.6 million (2015 FAO), comprising 15.2% of the world’s total undernourished population.
  • About 27% of India’s population is BPL.
  • Strong correlation between stability in agricultural production and food security. Volatility in production impacts food supplies and causes price spikes.
  • **Provision of food subsidy and stability in agricultural commodity prices is essential for making poorer sections food secure.**
  • India has one of the largest numbers of food schemes globally:
    • Integrated Child Development Scheme (ICDS) – covers children under six, pregnant and lactating mothers.
    • Mid-Day Meal Schemes (MDMS).
    • Annapurna (10 kgs of free food grain for destitute poor).
    • Employment Programmes like Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS - 100 days of employment at minimum wages) to ensure food security.

7. Public Distribution System (PDS) & Food Subsidy

  • The Public Distribution System (PDS) was changed to Targeted PDS (TPDS) in 1997.
  • Aims to ensure food security through timely and affordable distribution of food grains to BPL population.
  • Involves procurement of food grain at MSP by Government, building up and maintenance of food stocks, their storage, and timely distribution, making food grains accessible at reasonable prices to vulnerable sections.

8. Institutions/Schemes Related to Agricultural Marketing

A. Agricultural Produce Market Committee (APMC)

  • A statutory market committee constituted by a State Government under the Agricultural Produce Market Committee Act.
  • Intended Responsibilities:
    • Ensuring transparency in pricing system and transactions.
    • Providing market-led extension services to farmers.
    • Ensuring payment for agricultural produce sold by farmers on the same day.
    • Promoting agricultural processing including activities for value addition.
    • Publicizing data on arrivals and rates of agricultural produce brought into market area for sale.
    • Setup and promote public private partnership in management of agricultural markets.
  • As of the provided data, there are about 2477 principal regulated markets and 4843 sub-market yards regulated by respective APMCs in India.

B. Model APMC Act 2003

  • The monopoly of Government regulated wholesale markets has prevented development of a competitive marketing system.
  • An efficient agricultural marketing is essential for development, providing outlets and incentives for increased production.
  • Marketing system contributes greatly to commercialization of subsistence farmers.
  • Worldwide governments recognized the importance of liberalized agriculture markets. Model APMC Act was drafted by ministry of agriculture in 2003 to address these issues.

C. National Agriculture Market (eNAM)

  • An online trading platform for agricultural commodities in India.
  • Seeks to network existing APMCs and other market yards to create a unified national market.
  • NAM is a 'virtual' market but has a physical market (mandi) at the backend.
  • Facilitates farmers, traders and buyers with online trading in agricultural commodities, helping in better price discovery and smooth marketing.
  • Over 90 commodities (staple food grains, vegetables, fruits) are currently listed. eNAM markets are popular crops, weighed immediately, stock lifted same day, payments cleared promptly.

D. Promotion of National Market through Agri Tech Infrastructure Fund (ATIF)

  • The Scheme envisages initiation of an e-marketing platform at the national level.
  • Supports creation of infrastructure for e-marketing in 642 regulated markets.
  • For a National Market, a common platform across all States is necessary.
  • Proposed a Service Provider to be engaged centrally to build, operate, and maintain the e-platform on a BOOT Project model (Build, Own, Operate, Transfer) – a PPP project.
  • This platform would be customized/configured to address variations in different states.
  • States have been advised to bring fruits and vegetables out of the ambit of the APMC Act. 12 States have either de-regulated or exempted them from levying market fees.

E. Tribal Cooperative Marketing Development Federation of India (TRIFED)

  • A national-level apex organization under administrative control of Ministry of Tribal Affairs, established in 1987.
  • Organizes National Tribal Craft Expo, "AADISHILP", "Aadi Chitra", "OCTAVE" for North Eastern Artisans and Tribal Artisan Melas to facilitate sale.
  • Promotes sustainable livelihood systems for tribal people by marketing development, remunerative price for products, minimum support price, and value addition of Non-Timber Forest Produce (Minor Forest Produce).
  • Empowers them through capacity building, augments resources, develops marketing partnership with Central/State Government agencies.
  • In 2008, it established the National Spot Exchange, a Commodities exchange as a joint venture of Financial Technologies (India) Ltd. (FTIL).
Tags:
Previous Post Next Post
CRITGRAM