AGRICULTURAL INSTABILITY IN INDIA AN IMPEDIMENT TO RURAL DEVELOPMENT *C. PRASANNAKUMARAN Asst. Professor of Management Studies, C.M.

.S College of Engineering, CMS Nagar, Ernapuram, Namakkal-637003. Anna University of Technology, Coimbatore. Contact: 99520 76074 e-mail: icprasanna2005@yahoo.co.in **Dr. RAMESH T. Asst. Professor Department of Co-operation, Govt. Arts College, Salem - 7 Contact: 94435 78757 e-mail: ramulaks77@gmail.com ***P. SUDHA Asst. Professor of Management Studies, Muthayammal Engineering College, Rasipuram, Namakkal Dt-637408. Affiliated to Anna University of Technology, Coimbatore. Contact: 99658 28171 e-mail: sudhaa_periasamy@yahoo.co.in

AGRICULTURAL INSTABILITY IN INDIA AN IMPEDIMENT TO RURAL DEVELOPMENT

1

C. Prasannakumaran, 2Dr. Ramesh T., 3 P. Sudha

ABSTRACT Agricultural growth is a prerequisite for rural development, hence poverty reduction. The agricultural sector is required to absorb an increasing number of employees and income generation of the people occupied in the agricultural sector, hence increasing the purchasing power of the people. The agricultural growth has to be attained through the concomitant process: an increase in the total employment capacity and an increase in the efficiency of production i.e. the added value of production per unit of labour. Broad based agricultural growth in low income countries is essential to reach the millennium development goals (MDGs) of halving the number of people in extreme poverty and cutting hunger in half by 2015. Agricultural growth contributes to the MDGs through improving peoples access to more and better quality food, raising farm incomes, creating employment on and off of the farm empowering poor and marginalized groups including women, it can also promote the sustainable management of natural resources. Therefore, fostering rapid, sustained and broad-based growth in agriculture remains key priority for the government. Yet, agriculture forms the backbone of development, as 52 per cent of Indias work force is still engaged in agriculture for its livelihood and is important for food security and inclusive growth. Indian agriculture is at crossroads and one of the major challenges is to reverse deceleration in agricultural growth. The objective of this article is to examine the issue of Agricultural instability in India, its root cause, consequences of the crisis and to highlight the major suggestions for its development. Keywords: Agricultural sector, Millennium Development Goals, Inclusive growth, Agricultural instability.
1

C. Prasannakumaran, Asst. Professor of Management Studies, C.M.S College of Engineering, CMS Nagar, Dr. Ramesh T., Asst. Professor, Department of Co-operation, Government Arts College, Salem 7,Email: P. Sudha, Asst. Professor of Management Studies, Muthayammal Engineering College, Rasipuram, Namakkal-

Ernapuram, Namakkal-637003, Email: icprasanna2005@yahoo.co.in

2

ramulaks77@gmail.com
3

637408, Email: sudhaa_periasamy@yahoo.co.in

AGRICULTURAL INSTABILITY IN INDIA AN IMPEDIMENT TO RURAL DEVELOPMENT INTRODUCTION Rejuvenating India's agriculture sector, which provides livelihood to nearly 60 percent of the workforce, needs to be made central to the inclusive growth endeavour. India's current policies for the agriculture sector are geared towards short-term solutions and revenue expenditure rather than long-term capital investment solutions. The dependence on subsidies squeezes government spends on critical infrastructure, technology and credit, in the absence of which farmers use inefficient methods of cultivation. The need for increasing agricultural productivity through technology infusion and market-led interventions is gaining urgency. It is well-acknowledged that every rupee of contribution to GDP from farming is twice as effective as other interventions in alleviating rural poverty. Agriculture is an indirect growth driver, as a growth rate of 4 percent in agriculture translates into robust demand for other sectors. In the new millennium, the challenges in Indian agricultural sector are quite different from those met in the previous decades. The enormous pressure to produce more food from less land with shrinking natural resources is a tough task for the farmers. To keep up the momentum of growth a careful economic evaluation of inputs like seeds, fertilizers, irrigation sources etc are of considerable importance. Many such issues have been discussed in the following sections in this article. POPULATION AND AGRICULTURAL WORKERS Indias strong economic growth has consistently sought to include the rural poor, who are concentrated in areas where rain fed agriculture is the main economic activity. During 1951 the rural population contributes to 82.7% of the total population. However, poverty persists because of limited and inequitable access to productive resources, such as land, water, improved inputs and technologies and microfinance, as well as vulnerability to drought and other natural disasters. Low levels of literacy and skills conspire to keep people in the poverty trap, preventing them from claiming their basic rights or from embarking on new activities to earn income or build assets. This leads to a gradual decline in the rural population in the following decades to 74.3% in 1991 to 72.2% in 2001 and 68.8% in the year 2011 (Table 1). The rural population transforms their rural livelihood so that can access new opportunities for income generation and employment. Table 1 Population and Agricultural Workers (In Millions)

Year

Total Population

Average Annual Exponential Growth Rate (%) 1.25 1.96 2.20 2.22 2.16 1.97

Rural Population

1951 1961 1971 1981 1991 2001

361.1 439.2 548.2 683.3 846.4 1028.7

298.6 (82.7) 360.3 (82.0) 439.0 (80.1) 523.9 (76.7) 628.9 (74.3)

742.6 (72.2) 2011 1210.2 1.64 833.1 (68.8) Figures within parentheses are percentages to the total population. Source: Registrar General of India, Census results 2011 SHARE OF AGRICULTURE AND ALLIED SECTORS IN INDIAS GDP Agriculture was considered to be the backbone of Indian economy and its contribution to the National Income was estimated at about 57 per cent in the early fifties. This position got altered steadily and significantly since independence (Table 2). In 2000/01, the contribution of agriculture to GDP was halved again to about 26 per cent. In 2007-08, it is estimated that agriculture contributes only 16.81 percent to the GDP. It is interesting to note that the growth rates of agriculture in Indias GDP had been growing during early periods, but in the last few years, it is constantly declining. Though it is expected that in the process of development the sectoral contribution to the GDP would change, the issue is whether the observed trends in Indias agricultural sectors share over time is justifiable or desirable? Table 2 Trends in Share of Agriculture and Allied Sectors in Indias GDP at constant 2004-05 prices Period Share of Agriculture and Allied Sectors (% to total GDP) 1950-51 56.70 1960-61 52.48

1970-71 46.00 1980-81 39.93 1990-91 34.04 2000-01 26.18 2004-05 19.03 2005-06 18.27 2006-07 17.37 2007-08 16.81 2008-09 15.77 2009-10 14.70 2010-11(QE) 14.51 2011-12(RE) 13.92 RE: Revised Estimates. QE: Quick Estimates. Source: Central Statistical Organization (CSO); Advance Estimates dated 7 February, 2012 GCF IN AGRICULTURE AND ALLIED ACTIVITIES The Gross Capital Formation (GCF) in agriculture and allied sectors as a proportion to the GDP in the sector stagnated around 14 per cent during 2004-05 to 2006-07. However, there is a marked improvement in this figure during the current Five Year Plan. It increased to 16.03 per cent in 2007-08 and further to 19.67 per cent in 2008-09 (provisional) and to 20.30 per cent in 2009-10 (quick estimates [QE]). However, the GCF in agriculture and allied sectors relative to overall GDP has remained stagnant at around 2.5 to 3.0 per cent (Table 3). As a result the share of GCF in agriculture and allied sector in total GCF has remained in the range of 6.6 to 8.2 per cent during 2004-05 to 2009-10 (Table 3). There is need to significantly step up investment in agriculture, both by the private and public sectors to ensure sustained target growth of 4 per cent per annum. Table 3 GCF in Agriculture and Allied Activities (Rs crore at 2004-05 prices) Year GCF in Agriculture & Allied Sector Share of Agriculture & Allied Sector in Total GCF (%) Public Private Total Public Private Total 2004-05 16187 59909 76096 6.7 7.8 7.5 2005-06 19940 66671 86611 7.1 7.4 7.3 2006-07 22987 67723 90710 7.1 6.5 6.6 2007-08 23257 81777 105034 6.1 6.7 6.5 2008-09P 22628 106031 128659 5.3 9.5 8.3 2009-10QE 23635 109742 133377 5.2 8.6 7.7 Source: Central Statistics Office, New Delhi Notes: P- provisional. Q-quick estimates. PLAN OUTLAYS IN AGRICULTURE & ALLIED SECTORS FOR CENTRE, STATES & UTs

The total Plan outlays during the Third Five Year Plan (1961-66) of Rs. 8576.5 crores contributes to 12.7% to the expenditures of Agriculture and Allied Sectors and the percentage contribution is reduced to 5.8% during Seventh Plan (1985-90). Further it drops to 3.9 % in the tenth plan (2002-07) then to a steep 3.7% in the Eleventh Plan (2007-12). Similarly the percentage contribution to irrigation and flood control reduces from 20.5% in the Third Plan (1961-66) to 13.4% in the Seventh Plan (1985-90) to further low of 9.5% in the Eleventh Plan (2007-12) .Plan outlays in agriculture and allied sectors and in irrigation and flood control for the Centre, States, and Union Territories (UTs) are presented in Table 4. It would be seen from the above table that during the consecutive five year plans, even the plan outlay increases, the percentage contribution to agriculture and allied sectors and to irrigation and flood control is showing a gradual downfall when compared to the previous plans. Table 4 Plan Outlays for the Centre, States and UTs (At Current Price) (Rs Crore) Total Plan Agriculture and Irrigation and Total Outlay Allied Sectors Flood Control Third Plan 1088.9 664.7 1753.6 8576.5 (1961-66) outlay (12.7%) (7.8%) (20.5%) Fourth Plan 2320.4 1354.1 3674.5 15778.8 (1969-74) outlay (14.7%) (8.6%) (23.3%) Fifth Plan (19744864.9 3876.5 8741.4 39426.2 79) outlay (12.3%) (9.8%) (22.1%) Sixth Plan (19805695.1 12160.0 17855.1 97500.0 85) outlay (5.8%) (12.5%) (18.3%) Seventh Plan 12792.6 16589.9 29382.5 218729.6 (1985-90) outlay (5.8%) (7.6%) (13.4%) Eighth Plan 22467.2 32525.3 54992.5 434100.0 (1992-97) outlay (5.2%) (7.5%) (12.7%) Ninth Plan 42462.0 55420.0 97882 859200.0 (1997-02) outlay (4.9%) (6.5%) (11.4%) Tenth Plan 58933.0 103315.0 162248 1525639.0 (2002-07) outlay (3.9%) (6.8%) (10.7%) Eleventh Plan 136381 210326 346707 3644718 (2007-12) outlay (3.7%) (5.8%) (9.5%) Note: Figures in brackets indicate % of total Plan outlay. Source: Economic Survey 201112. RATES OF AREA, INPUT USE, CREDIT AND CAPITAL STOCK IN AGRICULTURE The poor performance of agriculture could be attributed to a large number of factors such as natural resource base (including rainfall), technology, infrastructure (including irrigation), and

the economic environment comprising price signals and institutions. The Steering Group for the Eleventh Plan identified technological change, public investment, and diversification as the most important determinants of growth. The Steering Group analysis showed that progress on technology and public investment slowed down from early 1990s. However, the negative effect in growth was offset by private investment which improved during 199097. As a result, growth continued to be relatively high in this period. However, terms of trade turned against agriculture from 19992000 to 200405 and reduced profitability of farming quite sharply (Table 5). This occurred partly because of low domestic food demand and partly because removal of quota restrictions under World Trade Organization (WTO) made Indian farm prices to become more aligned with corresponding international prices at a time when these were in decline. Private investment in agriculture stagnated as a result, the area cultivated fell, and diversification slowed downall leading to deceleration. Moreover, public investment remained low and technology generation became negligible. Cutbacks following the Fifth Pay Commission in 1997 may have contributed to the problem as these cutbacks severely weakened the reach of critical support institutions notably cooperatives, seed farms, and the extension system. The trends in the area, input use, capital stock and technology also reflect the agricultural instability and the farmers response accordingly. Though it is difficult to infer the cause and effect relationship based on the above data, the trend over time reveal the behaviour and/or needs of cultivators and the changing cultivation practices in India. The Gross Cropped Area (GCA) and Net Sown Area (NSA) showed a negative growth rate in the period III. The Public sector net fixed capital stock also reduces to 1.42 period III from 3.86 in period I. But the private sector capital stock improves over periods (Table 5). The share of agriculture & allied sector in total GCF after showing a marginal increase during 1999-2000 to 2001-02 has been continuously declining. The decline was mainly attributed to decline in the private sector despite increase in the share of public sector. The agricultural contribution should be more than 15% of the total GDP, being the share of agri sector in the GDP which again means that investment in agri infra like irrigation, power, rural roads, godowns etc, should be doubled. The cropping intensity had declined from 0.5 to 0.1 between the periods I and III. The use of inputs such as fertilizers, electricity and irrigation (as measured by irrigated area), technology and fixed stock had been declining during the reference periods (Table 5). Table 5 Trends in Growth Rates of Area, Input Use, Credit and Capital Stock in Agriculture198081 to 200506 Period I Period II Period III Particulars 198081 to 199091 199091 to 199697 199697 to 200506 Technology# 3.3 2.81 0.00 Public sector net fixed 3.86 1.92 1.42* capital stock Gross irrigated area 2.28 2.62 0.51*

Electricity consumed 14.07 9.44 0.53@ in agriculture Area under fruits and 5.60 5.60 2.71@ vegetables Private sector net 0.56 2.17 1.17* fixed capital stock Terms of trade 0.190 0.95 1.69* Total net fixed capital 2.00 2.06 1.28* stock NPK use 8.17 2.45 2.30 Credit supply 3.72 7.51 14.37* Total cropped area 0.43 0.43 0.10 Net sown area 0.08 0.04 0.22 Cropping intensity 0.51 0.39 0.12 Note: # Yield potential of new varieties released of paddy, rapeseed/mustard, groundnut, wheat, maize, and cotton; * Upto 200304; @ Upto 200405. Source: Eleventh Five Year Plan (20072012), Agriculture, Rural Development, Industry, Services and Physical Infrastructure, Volume III, Planning Commission, Government of India, 2008. INDIA'S EXPORTS OF AGRICULTURAL PRODUCTS Indias Agricultural exports were 14.22 % of total exports in the year 2001-02; they decreased to 11.08 % in the year 2004-05, to 10.22 % in the year 2008-09, to 10.47 % in the year 2010-11 (Provisional). This drop in share of agriculture in total exports was somewhat misleading because agricultural products, such as jute and cotton, which were exported in the raw form in the 1950s, have been exported as cotton yarn, fabrics, ready-made garments, coir yarn, and jute manufactures since the 1960s (Table 6). The composition of agricultural and allied products for export changed primarily due to the continuing increase of demand in the domestic market. This demand cut into the excess available for export in spite of a continuing desire, on the part of government, to shore up the invariant foreign-exchange shortage. Excellent export prospects, competitive pricing of agricultural products and standards, which are internationally comparable have created enormous trade opportunities in the Indian agro industry. Indias agri-exports also face certain constraints that arise from conflicting domestic policies relating to production, storage, distribution, food security, pricing concerns etc. Unwillingness to decide on basic minimum quantities for export makes Indian supply sources unreliable. Higher domestic prices in comparison to international prices of products of bulk exports like sugar, wheat, rice etc. make our exports commercially less competitive. Market intelligence and creating awareness in international market about quality of products need to be strengthened to boost agricultural exports.

Table 6 India's Exports of Agricultural Products Period % Share of Agricultural Exports in National Exports 2001/02 14.22 2002/03 13.58 2003/04 12.7 2004/05 11.08 2005/06 10.78 2006/07 10.92 2007/08 12.05 2008/09 10.22 2009/10 10.57 2010/11(P) 10.47 P-Provisional Source: Director General of Commercial Intelligence & Statistics, Ministry of Commerce, Kolkata. ALL INDIA RAINFALL DISTRIBUTION Table 7 All India Rainfall Distribution from 1992-93 to 2010-11 (In Millimeters) Year Overall Rainfall (from June to May) Actual Normal % Departure 1992-93 1091.6 1175.6 -7.1 1993-94 1184.3 1192.6 -0.7 1994-95 1297.3 1190.7 9.0 1995-96 1154.6 1189.3 -2.9 1996-97 1195.5 1190.3 0.4 1997-98 1291.5 1198.3 7.8 1998-99 1275.5 1198.8 6.4 1999-00 1183.5 1197.0 -1.1 2000-01 1043.7 1195.5 -12.7 2001-02 1120.2 1196.0 -6.3 2002-03 981.4 1205.4 -18.6 2003-04 1278.0 1196.5 6.8 2004-05 1085.9 1197.3 -9.3 2005-06 1185.4 1196.8 -1.0 2006-07 1133.0 1195.5 -5.2 2007-08 1180.2 1194.8 -1.2 2008-09 1075.0 1196.4 -10.1 2009-10 972.8 1195.6 -18.6 2010-11 1212.3 1191.7 1.7 Source: Directorate of Economics and Statistics, Department of Agriculture and Cooperation.

Nearly 60% of Indias agricultural land, which accounts for a substantial part of agricultural output, is rain-dependent. Today, farmers in rain-dependent areas are being pushed against a wall. The rains are vital also because just around 40 per cent of the total arable land in the country is under irrigation. In 1996-97 to 1998-99 the percentage of rainfall departure from normal remained on the positive side for four consecutive years. From 2004-05 to 2009-10, it experienced a negative epoch of rainfall when the percentage departure was on the negative side in all the years with six deficient years. In 2010-11, the nation had seen a rare positive spell. If the crop failed due to adverse climatic conditions and poor rainfall, the risk is more felt by the farmers. Though the initiatives such as modern irrigation system and energisation of wells make agriculture less dependent on monsoon, it cannot completely do away with the nature and climate (Table 7). GROWTH IN REAL PUBLIC EXPENDITURE ON RESEARCH AND EXTENSION Table 8 Growth in Real Public Expenditure on Research and Extension Year Research and Extension and Education (Per Training (Per cent) cent) 1960s 6.5 10.7 1970s 9.5 -0.1 1980s 9.3 7.0 1990-2005 4.8 2.0 Note: Figure for Extension and Training in the '1980s' is for1980-94. Source: For 1990-2005 authors' estimates from 'Finance Accounts'; rest from Pal and Singh (1997). In Table 8 are presented data on the growth of public expenditure on research and extension, at constant prices, decade-wise for four decades up to 2006. For both the main components of knowledge production and dissemination namely 'research and education' and 'extension and training', respectively, growth has slowed since 1990. In the case of extension services the slowdown is particularly sharp. It is interesting to note that for this category the growth of expenditure was highest by far in the sixties the period of the last acceleration in the agricultural growth rate, suggesting that extension is a crucial component of an enabling policy. The rate of growth of expenditure on extension services has declined three-fold since the nineties. By comparison spending in India is woefully inadequate. It is clear that public support for expanding the knowledge base for agriculture is shrinking since 1991 precisely when, for reasons stated by us, the need for it is rising. OTHER ISSUES IN AGRICULTURE The point is that farming is no more a profitable business even for the affluent farmer; it is an utterly losing proposition for the poor farmer, who comprises 80 per cent of the the farm

population. Agriculture in India has to be given the status of an industry and dealt with accordingly, like every other sector of the economy. The first area of concern is the allocation for the agriculture sector that has been increasing exponentially in recent budgets but it cannot be said that India has done enough for the farming sector. The second area of concern is around pricing of food grains. In agriculture, however, even as the farmer spends a lot on fertilizers, water, pesticides and such inputs, he does not have a right to choose his price. The government decides a minimum support price (MSP) for his produce. It needs to be noted that it is this minimum support price not a maximum within which he has to sustain himself for the entire year. Admittedly, the MSP has gone up by a huge sum in the last five to six years but it is still pre-determined by the government and not decided by market forces, as is the case with other commodities. The third area of concern is finance. The target for agricultural lending has been increased in the current budget given that some years ago; farmers did not have any access to bank loans. Most banks would assume that the loan would become non-performing assets. However, even today, the recipients of this loan are only those who are literate, can fill forms, get no-objection certificates, and get all the paperwork required by the banks done, which means only the better off farmers and not the small and marginal farmers can succeed. The small land holders whom the government has devised these schemes for are not able to benefit from them. The fourth area of concern is that for farmers with small land holdings those with less than half a hectare of land it is becoming increasingly difficult to produce enough food grain to feed their families and also save some cash for the rest of the year, to spend on other things like education and medical care. This desperate situation leads to suicides. It is most shameful for any Indian to live with a badge that food producers are killing themselves in this country because they are not able to produce food. Neither budget in the past nor even the present one has taken note of the acute crisis in Indian agriculture. The fifth area of concern is that while farmers and their issues are important, they do not have the kind of lobbying required for them. The reason is that the farming community is huge, it runs into millions. A small tobacco company or a brewery, for instance, may have a very strong advocacy group but, in the farming sector, the individual recipients of the advantages of lobbying are so large that the per capita gain is not a big enough incentive for people to organize themselves. The sixth area of concern is food security and productivity of the farms. Food security is more important than energy security and even internal security. The others can be handled but a half fed nation is an unsustainable proposition. India is one of the youngest countries in the world but 46 per cent of its children below the age of five are under-nourished or malnourished. Food security is, therefore, extremely important and India needs to produce more. The idea about having handsome buffer stocks makes us proud, so does the fact that India is the largest producer of milk and milk products in the world, second largest in terms of fruits and vegetables and the third largest in the production of food grains. The truth, however, is that India has to import milk in the summers and pulses and oilseeds too to meet its requirements. In the USA, only four per

cent of the population is involved in farming but it produces enough. Indias productivity per hectare is dismal and does not leave room for complacence. The seventh area of concern is around the mismatch between crops sown and the regional water availability. There is insistence on growing sugarcane and paddy even if the soil and water do not permit it. Given that 60 per cent of our agricultural land is rain fed, this makes things difficult. The eighth area of concern is around marketing with a paucity of cold chain linkages, processing, and other sources of value-addition. This needs to be tackled on a war footing. On a different note, the farmers dont want their children to become a farmer. If the tiller of the land is not able to take pride in his work, it is not a very healthy sign for the country. This decade is even more crucial for us as the challenges of environment and climate change are increasing. We need to leverage technology, resources and the tremendous man power that we have to create a farming sector in India that is robust, growing and that not only takes care of the food security of our country but also makes it a food bowl for the entire region. Everybody feels that a farmer is only concerned about his income but no one looks at his costs: he has to be concerned about his daughters wedding, medical care for parents and his childrens school admission. In the days of barter, there was little worry but now everything costs money and the farmer has no option but to try and earn more of it. Moreover, his income has come down a fair bit in the last 10 years. He could buy a lot more things then with the money earned from one quintal of wheat than now and even without his knowledge the farmer is becoming poor. Even if his production from the same land remains the same, the hike in the prices of consumables in the market has led to his purchasing power going down. The agricultural budget this year has been a mixed bag. The good things are that the budget has addressed the issues of storage of food grains and increased farm credit. The problem of food grains rotting every year has reached a critical state and, therefore, needed to be looked at urgently. There is, however, a huge gap between what the budget has proposed and the problem. Agricultural labour too has become expensive due to the success of MNREGA (The Mahatma Gandhi National Rural Employment Guarantee Act) in some states so there is a need for mechanization not only for large holdings but also small farmers. Not many machines have been designed to operate in small holdings, keeping the cost factor in mind so that the farmer can afford it. MAJOR PROVISIONS FOR FARM SECTOR IN BUDGET 2013 14 i. Average annual growth rate of agriculture and allied sector was 3.6% during XI Plan against 2.5% and 2.4% in IX and X plans respectively. ii. In 2012-13, total food-grain production will be over 250 million tonnes. Minimum support price for every agricultural produce has increased significantly under the UPA Government. iii. Rs.27,049 crore allocated to Ministry of Agriculture, an increase of 22 per cent over the RE of current year.

iv.

Agricultural research provided Rs.3,415 crore.

Agricultural Credit i. For 2013-14, target of agricultural credit kept at Rs.7 lakh crore. ii. Interest subvention scheme for short-term crop loans to be continued scheme extended for crop loans borrowed from private sector scheduled commercial banks. Green Revolution i. Bringing green revolution to eastern India a remarkable success. Rs.1,000 crore allocated in 2013-14. ii. Rs. 500 crore allocated to start a programme of crop diversification that would promote technological innovation and encourage farmers to choose crop alternatives. iii. Rashtriya Krishi Vikas Yojana and National Food Security Mission provided Rs.9,954 crore and Rs.2,250 crore respectively. iv. Allocation for integrated watershed programme increased from Rs.3,050 crore in 2012-13 (BE) to Rs.5,387 crore. v. Allocation made for pilots programme on Nutri-Farms for introducing new crop varieties that are rich in micro-nutrients. vi. National Institute of Biotic Stress Management for addressing plant protection issues will be established at Raipur, Chhattisgarh. vii. The Indian Institute of Agricultural Bio-technology will be established at Ranchi, Jharkhand. viii. Pilot scheme to replant and rejuvenate coconut gardens implemented in some districts of Kerala and the Andaman & Nicobar extended to entire State of Kerala. Farmer Producer Organizations i. Matching equity grants to registered Farmer Producer Organization (FPO) up to a maximum of Rs.10 lakhs per FPO to enable them to leverage working capital from financial institutions. ii. Credit Guarantee Fund to be created in the Small Farmers Agri Business Corporation with an initial corpus of ` 100 crore. Food Security i. Additional provision of Rs.10,000 crore for National Food Security Act. PROVISIONS FOR FARM SECTOR IN BUDGET 2013 14: A CRITICAL ANALYSIS There are incremental allocations for the same schemes that have become the hallmark of the second term of the UPA government: a focus on taking the Green Revolution to the eastern states and offering higher credit to farmers at hugely subsidized interest rates but no initiatives

that will lift farmers from the debt-ridden operations or offer a vision of agriculture that is sustainable. Shockingly, irrigation finds no mention at all in the 2013 budget. There is no clarity if Indian Council of Agricultural Research (ICAR) will be the sole beneficiary of this allocation. It is also not clear what the R&D priorities are since one of two new institutions announced by the minister is one for agricultural biotechnology although there are several such laboratories in the ICAR stable apart from those set up by the Department of Biotechnology. One interesting initiative is the provision to allow the National Bank for Agriculture and Rural Development (NABARD) to finance the construction of grain storage godowns by panchayats to enable farmers to store their produce. The other promising initiative is support for Farmer Producer Companies which will get a maximum of Rs 10 lakh per farmer producer organizations (FPO) to enable them to leverage working capital from financial institutions. However, just Rs 50 crore is earmarked for this. The big project continues to be the spread of the Green Revolution to the eastern states with an allocation of Rs 1,000 crore as in last years budget. However, the outlay for rescuing farmers in the original Green Revolution states through crop diversification is just Rs 500 crore. The big bang figure is the target of Rs 700,000 crore for providing agriculture credit to farmers. The figure has been hiked from the previous years Rs 575,000 crore which itself was an increase of Rs 100,000 crore. Unfortunately, much of this credit, according to studies by the RBI itself, is going not to farmers but to agri-businesses such as input dealers, irrigation equipment suppliers and nonbanking financial companies. The farmer, specially the small farmer, is missing in this view of agriculture. CONCLUSION Agriculture in India is undergoing a structural change leading to a crisis situation. The rate of growth of agricultural output is gradually declining in the recent years. It is argued that the consequence of agricultural crisis in India is very vast and likely to hit all the other sectors and the national economy in several ways. In specific, it has adverse effects on food supply, prices of food grains, cost of living, health and nutrition, poverty, employment, labour market, land loss from agriculture and foreign exchange earnings. In sum, it revealed that the agricultural crisis would be affecting a majority of the people in India and the economy as a whole in the long run. And therefore, it can be argued that the crisis in agriculture is a crisis of the country as a whole. The solution of the problem is not in a few packages but in drastic changes in the present economic policies related to agriculture. No other sectors growth and development must be at the cost of agriculture. All farmers, agricultural labourers, societies, Government and Peoples Organizations should work collectively to revive agriculture and Save India from Agriculture Instability. India cannot be a front-ranking country without caring for its farming community.

REFERENCES 1. Aerthayil,Mathew (2008): Agrarian Crisis in India is a Creation of the Policy of Globalization, Mainstream, Vol XLVI, No 13. 2. Annual Report 2010-2011, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India. 3. Balakrishnan, Pulapre, Ramesh Golait and Pankaj Kumar (2008): Agricultural Growth in India since 1991: Development Research Group (DRG), Study No-27, Reserve Bank of India, Mumbai. 4. Central Statistical Organization (CSO); Advance Estimates dated 7th February, 2012. 5. Data book for the use of Deputy Chairman, Planning Commission, 18th May 2011. 6. Directorate General of Commercial Intelligence & Statistics, Ministry of Commerce and Industry, Government of India (http://www.dgciskol.nic.in) 7. Directorate of Economics and Statistics, Department of Agriculture and Cooperation (http://eands.dacnet.nic.in) 8. Economic Survey 201112 and previous years from the Ministry of Finance, Government of India (http://indiabudget.nic.in) 9. Eleventh Five Year Plan (20072012), Agriculture, Rural Development, Industry, Services and Physical Infrastructure, Volume III, Planning Commission, Government of India, 2008. 10. Government of India, Union Budget of India (http://indiabudget.nic.in/) 11. Ministry of Statistics and Programme Implementation (http://mospi.nic.in/Mospi_New/site/India_Statistics.aspx?status=1&menu_id=14)