BUSINESS

ENVIRONMENT

Indian Agriculture :
A General Overview

Kaushik Ranjan
Goswami
 CONTENTS

 Introduction

 Role of Agriculture in the Indian

Economy

 Features of Indian Agriculture

 Problems of Indian Agriculture

 Low Agricultural Productivity

• Causes
 • Remedial Measures

 Conclusion

INDIAN AGRICULTURE

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 are originated from agricultural sector. Further,
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, consumption & also for meeting their social
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 modern technology in Indian agriculture. Unless this
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 agricultural labourers. Other financial institutions
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 of holdings is the first step towards the

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 co-
operative 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 must introduce minimum price support policy,
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 in certain fields, including methodology of agricultural
production.