LESSON – 9
AGRICULTURE
OBJECTIVES
After going through this chapter, you should be able to
- Understand the meaning and role of industrialisation
- Know the growth and problems of Iron and Steel Industry, Cotton Textile Industry and Sugar Industry.
- Understand the role and problems of small scale industries.
- Know the measures of government to develop small scale industries.
- To know the meaning, causes and remedies for industrial sickness.
Structure
9.1. ROLE OF AGRICULTURE
9.1.1. Agricultural Productivity
9.1.2 Land Reforms
9.1.3 Food Problem
9.1.4 Green Revolution
9.1 ROLE OF AGRICULTURE
Development of agriculture, in the broad sense, is the core of all strategies of planned economic development of underdeveloped and developing countries of the world. It can be taken as the base of economic development of a country because industrialisation is basically made possible by agcultural development. Despite their urge for industrialisation, almost all backward. underdeveloped and even many developing countries of the world still continue to be heavily dependent on agriculture.
The role of agriculture in the economic development of a country is evident from the following:
(1) Source of Food Supply: Agriculture is the main source of food supply of all the countries of the world-whether underdeveloped, developing or even developed. Due to heavy pressure of population in underdeveloped and developing countries and its rapid increase, the demand for food increases at a fast rate. If agriculture fails to meet the rising demand of food products, it is found to affect adversely the growth rate of the economy. Raising supply of food by agricultural sector has, therefore, great importance for economic growth of a country. Increase in demand for food in an economy is determined by the following equation:
D = P + 2g
Here,
D stands for Annual Rate of Growth in demand for food.
P stands for Population Growth Rate.
g stands for Rate of Increase in per capita income.
2 stands for Income Elasticity of Demand for Agricultural Products.
When an agricultural underdeveloped country passes through a process of economic growth, its demand for food rises due to several factors, such as:
(i) Growth rate of population in most of the underdeveloped countries of the world ranges between 1.5% to 3%. As a result, the demand for food in these countries is also very high.
(ii) As compared to developed countries, income elasticity of demand of underdeveloped and developing countries for food products is quite high. Hence, with increase in the rate of per capita income in underdeveloped and developing countries demand for food products increases at a much faster rate as compared to developed countries.
(iii) Population of underdeveloped and developing countries is increasing rapidly and thereby the demand for food is also increasing rapidly.
(iv) In most of the underdeveloped and developing countries, demand for food products has been rising at the rate of 3%. As such, growth rate of agriculture should be more than 3%. In order to stabilise the growth rate of the economy, it is essential that the growth rate of agricultural sector should be quite high.
If the agricultural sector fails to increase the supply of food products in accordance with the demand, it will have the following adverse affect on economic development:
(i) Prices of food products will begin to rise. Consequently, wage-rate will have to be raised adversely affecting rate of profit, investment and economic growth.
(ii) In order to meet the domestic shortage of food products, the same will have to be imported from abroad. For example, after the partition of the country, India America
(iii) Imports of food products will lead to payment crisis causing a serious problem of the shortage of foreign exchange.
(iv) On account of the foreign exchange shortage problem, countries importing food products at times were compelled to cut down heavily the imports of capital goods and machinery, adversely affecting the process of industrial development.
(v) Further, the imports of food products which the underdeveloped and developing countries have been forced to undertake have made them vulnerable to political pressures from the developed (donor) countries. For example, India used to import large quantities of food products (foodgrains) from the U. S. A. under the P. L. 480 programme, This food aid was used by the U. S. A. as ‘political weapon’ for pressurising India to toe the line on a number of International political issues like U. S. A.’s aggression on Vietnam. When India
(vi) Undue dependence on food products (foodgrains) imports weakens the incentives for agricultural programme in the country. The governments too adopts a complacent attitude towards agricultural development because they are sure of easy availability of food products from abroad.
In short, agricultural sector by increasing supply of food products in the countries according to its requirements can contribute to the economic development of underdeveloped and developing countries. Valuable foreign exchange can also be saved which can be used for importing machinery and raw materials so badly needed for industrialisation and economic development.
(2) Supply of Industrial Raw Material. Agriculture provides raw materials to various industries of national importance and thereby assists economic development of underdeveloped and developing countries. Consumer goods industries like sugar, tea, jute, paper, cotton textiles, vegetable oils, oilseeds etc. get their raw material from ‘agriculture. The entire range of food processing industries is similarly dependent on agriculture. If agriculture does not provide these industries with adequate supply of raw materials, then their progress will slow down and growth rate will remain sluggish. By making adequate supply of necessary raw materials available to industries, agricultural sector makes valuable contribution to economic development.
(3) Contribution to Capital Formation. Underdeveloped and developing countries need huge amount of capital for economic development. In the initial stages of economic development, it is agriculture that constitutes an important source of capital formation. Agriculture sector provides funds for capital formation in many ways, such as, (i) agricultural taxation, (ii) export of agricultural products (iii) collection of agricultural products at low prices by the government and selling it at higher prices. This method is adopted by Russia and China, (iv) disguised unemployment, largely confined to agriculture, is viewed as a source of investible surplus, (v) transfer labour and capital from farm to non-farm activities etc.
(4) Ensuring Supply of Labour to Industry. Agriculture promotes industrial development by ensuring the supply of labour. Development of industry and all other expanding sectors of the economy depend crucially on the availability of labour from the agricultural sector because there is practically no other source of supply. There is a large potential of increasing agricultural productivity in developing countries merely by adopting a right mix of policies. As agricultural productivity increases, the number of persons required to feed the total population of the country declines. This enables the ‘extra’ labour to migrate to cities and work in the industrial sector. The migration of labour from villages to cities helps in raising the overall marginal productivity labour and leads to a more efficient distribution of labour resources the economy.
(5) Source of Foreign Exchange Earnings for the Country. Most of the developing countries of the world are exporters of primary products and these products contribute 60 to 70 per cent of their total export earning. Therefore, the capacity to import capital goods and machinery for industrial development depends crucially on the export earning of the agriculture sector. if exports of agricultural goods fail to increase at a sufficiently high rate, these countries are forced to incur heavy deficit in the balance of payments resulting in a serious foreign exchange problem. However, primary goods face declining prices in international market and the prospects of increasing export earnings through them are limited. It is on account of this reason that large developing countries like India are trying to diversify their production structure and a promote the exports of manufactured goods even though this requires the adoption of protective measures in the initial period of planning.
6) Employment Opportunity for Rural People. Agriculture as is proved, provides employment opportunities for rural people on a large scale in underdeveloped and developing countries It is an “important source of livelihood there. Mostly, landless workers and marginal farmers are engaged in jobs like handicrafts, furniture, textiles, leather, metal work, processing industries, and in other service sectors. These rural units fulfil merely local demands. In India about 70.6% of total labour force depends upon agriculture. According to World Development Report, the corresponding percentage stood at 3 in the U. K., 4 in the U. S. A. Russia
(7) Improving Rural Welfare. As a matter of fact the rural Teconomy depends on agriculture and allied occupations in an underdeveloped country. The rising agriculture surplus caused by increasing agriculture production and productivity tends to improve social welfare, Particularly in rural areas. The living standard of rural masses rises and they start consuming nutritious diet including eggs, milk, ghee, and fruits. They lead a comfortable life having all modern amenities - a better house, motor cycle, radio, television and use of better clothes.
(8) Extension of Market for Industrial Output. As a result of progress, there will be extension of market for industrial products. As a matter of fact, increase in agricultural productivity leads to increase in the income of rural population which in turn leads to more demand for industrial products Consequently there is development of industrial sector paving the way for accelerating the pace of economic growth. In this way, agricultural sector helps to promote economic growth by serving as a supplement to industrial sector.
(9) Agricultural Expansion as Part of Economic Development. Agriculture can play a key role in the development of an economy. However, for the maximum performance of this role, as also for its own sake, it is highly desirable that agriculture should itself develop. Its development can supply larger quantities of food and raw materials and thereby support a greater Industrial labour force and provide larger Inputs. The rise in agricultural income, which the development insures, will provide larger stimulus to industrial development. Further, with increase in agricultural productivity, more labour can be released for works and the larger investible resources made available for capital accumulation. All this amounts to agriculture contributing to economic development directly and indirectly. It has now been accepted by almost all economists that besides industrial development, agricultural development is also essential for economic development of a country.
(10) Dominating Share in National income. In the early stages of economic development of a country agriculture commands a dominating share in national income. For example, between 1950-51 to 1960-61, the share of agriculture in the national income of India U. S. A. Canada Australia
9.1.1 Agricultural Productivity
The term, “agricultural Productivity” can be variously defined. Productivity expresses the varying relationship between agricultural output and inputs like land or labour or capital, other complementary factors remaining the same. In India
The problem of low agricultural productivity in India
Vicious Circle of Poverty
The vicious circle of poverty is largely responsible for the poor performance of Indian agriculture. This vicious circle takes this form in agriculture: Low production—low marketable surplus—low income—low savings—low investment and it ends in low agricultural production The crucial deficiencies in Indian agriculture relate to land, capital, management and organisation. These deficiencies account for low productivity.
The factors that retard the growth of agricultural production in India
(a) Natural Factors;
(b) Techno-economic Factors; and
(c) Socio-economic Factors.
Natural Factors
Agriculture in India
Techno-economic Factors
Superfluous Manpower. ‘Too many cooks spoil the broth’ is a proverb which applies to Indian agriculture. Agricultural productivity is in inverse proportion to the number of people engaged in it. There is excessive pressure of population on land resulting in small, uneconomic and fragmented holdings. The area sown per capita works out to about 0.86 acres only.
It has been estimated that about 25 per cent of the working force in Indian agriculture is surplus and is therefore in disguised unemployment. The surplus labour constitutes unproductive dependants who reduce agricultural incomes which would have been otherwise saved and invested. Lack of investment is responsible for the continuance of primitive techniques, insufficient use of essential inputs like fertilizers and irrigation of land. This inevitably results in low agricultural productivity.
Lack of improved Seeds, Manures and Plant Protection. The Indian farmer selects his seeds indiscriminately and often hastens to buy them from the grocer’s shop when the sowing season is on him. Poor quality of seeds must yield poor quantity of crop. Dr. Burns is of the opinion that the average outturn of paddy could be increased by 38 per cent, viz., 5 per cent by using improved seeds, 28 per cent by improved manuring and 5 per cent by protection from pests. The adoption of modern technology in recent years consisting of HYV seeds, fertilizers, irrigation facilities has clearly demonstrated the vast scope for improving yields.
Out-of-date Implements. The Indian farmers, by and large, use centuries-old implements which are incapable of efficient agricultural operations. The Indian plough cannot break the soil effectively; it can only scratch the surface. Output is bound to be low.
Lack of Irrigation Facilities or Their Non-utilisation or Under utilisation. Nearly one-fifth of the total sown area has the benefit of assured irrigation, the rest has to depend on the vagaries of the monsoons. Even when irrigation facilities are available, they are not fully utilised. For instance, 9.2 million hectares had irrigation available, but actually 7.7 million hectares were irrigated.
Lack of Adequate Finance. Financial facilities are utterly inadequate so that the farmer has to depend on the village money-lender, who charges exorbitant rates. More than 90 per cent of the total agricultural credit is advanced by the money-lenders. The institutional credit covers barely 6.4 per cent of it. “The vicious circle resulting in poverty, debt and high interest rates holds the small cultivator in a tight grip”.
Absence of Productive investment. Investment in jewellery, trade and money-lending seems to be more attractive. Investment in land is not found to be so remunerative. In the absence of investment, production cannot expand.
Lack of Marketing Facilities and Price-incentive. The Indian farmer does not get a due reward from the sale of his produce owing to defective marketing organisation and procedure. A large portion of his profit is taken away by middlemen. Unless farmers are guaranteed fair and remunerative prices, agricultural output cannot increase.
Land Policy and Land Legislation. The piecemeal character of land legislation and its excessive reliance on the machinery of revenue administration have adversely affected agricultural development in the country. Delay in implementation and uncertainty about the rights on land have checked investment in improvements in land and in agricultural inputs.
Neglect of Agricultural Research. Expenditure on agricultural research is ridiculously small and is not at all commensurate with requirements of Indian agriculture. There is also little co-ordination between the laboratory and the farm.
Socio-Economic Factors
Low agricultural productivity in India is no less due to the operation of the socio-economic factors. Among them mention may be made about the conservative outlook of the farmer, his fatalism, ignorance and illiteracy. They stand in tile way of tile adoption of modern techniques.
Another socio-economic factor responsible for low agricultural yield is the antiquated organisation of agriculture run by illiterate, ignorant and ill-equipped individuals. The corporate entrepreneur is altogether absent. Hence, progressive agriculture is out of the question.
Remedies
Ample irrigation facilities must be provided through the extension of major and minor irrigation works. Extensive flood control measures should be adopted to prevent havoc and devastation caused by the ever-recurring floods. Liberal supplies of insecticides and pesticides should be distributed to the farmers free or at very cheap rates.
Agricultural techniques must be improved; fertilizers and manures should be made available in ample quantity all over the country side. The possibility of the land lying fallow should be minimised by means of scientific rotation of crops and careful crop planning. Improved varieties of seeds should be supplied in adequate quantities at the village stores. Anti-soil erosion measures should be adopted. Active steps should be taken to reclaim land which has gone under water-logging. Cheap modern tools and equipment should be designed and manufactured on a large scale. Research work should be intensified and the results of research made available to the farmers. Extension workers and farmers should be brought in close contact with research stations.
Economic factors affecting agricultural productivity must be made more favourable so that agriculture becomes more remunerative. Farm organisation and land management must be improved. Surplus labour must be withdrawn from agriculture and absorbed in the non agricultural sector. The vicious circle of poverty affecting agriculture must be broken at the end of low output. Adequate credit facilities at a reasonable cheap rate must be provided so that the farmer does not fall into the clutches of the money-lender; integrated scheme of rural credit must be implemented. Marketing facilities must be improved and regulated markets set up all over the country; price support policy must be adopted and minimum prices guaranteed to the farmers.
Structural and institutional reforms are also called for, if productivity is to be increased. Uneconomic small farms should be enlarged and fragmented ones grouped together through consolidation and co-operatives.
The quality of man behind the plough should be improved through education, general and technical. Adequate public health measures should be adopted to save him from the ravages of epidemics and other diseases. The farmer’s attitude should become more rational. He should become more responsive to new ideas and shed off his fatalism and develop self-confidence. Above all, administrative set up connected with agriculture should be stream lined and purged of corrupt elements.
Thus, a very comprehensive set of measures is called for to raise agricultural productivity in India
9.1.2 Land Reforms
Land reform is a means to an end, the end being maximization of total welfare consistently with its egalitarian distribution. The underlying purpose of land reform is both social and economic. From the social point of view, it is essential that there should be equal access to the agricultural occupation and the various interests involved in cultivation should have a fair treatment. There should be no exploitation of one interest by another and each interest should get a fair and reasonable reward for its labour and investment. From the economic point of view, the purpose of land reforms is to bring about such organizational changes so as to maximize agricultural output. There should be no waste of resources. For maximizing output, the land system must offer appropriate incentives.
Thus land reforms in a developing economy have to achieve the twin objectives of raising agricultural productivity and introducing a measure of social justice. They must therefore include redistribution of land ownership in favour of the tillers of the soil so that they have a sense of participation in the life of the rural community. They must bring into existence holdings of economic size, provide security of tenure and fair rent to the tenants. It is in this sense that land reforms have a special significance in a developing economy.
Scope of Land Reforms
The scope of land reforms, therefore, entails
(a) abolition of intermediaries; (b) tenancy reforms, i.e., regulation of rent, security of tenure for tenants and conferment of ownership on them;
(c) ceiling and floors on land holdings; (d) agrarian reorganisation including consolidation of holdings and prevention of sub-division and fragmentation; and (e) organisation of cooperative farms.
(c) ceiling and floors on land holdings; (d) agrarian reorganisation including consolidation of holdings and prevention of sub-division and fragmentation; and (e) organisation of cooperative farms.
It is customary to classify the various categories of land tenure systems before independence into three broad heads : Zamindari, Mahalwari and Ryotwari.
(i) Zamindari Tenure. Under the Zamindari System, which was introduced by Lord Cornwallis in 1793 in Bengal , land was held by one person or at the most by a few joint owners who were responsible for the payment of land revenue. The revenue collectors were raised to the status of land owners. Earlier they were responsible for collecting land revenue for which they received a commission. The Zamindari settlements made them owners of land, thereby creating a permanent interest in land. The Zamindari settlements were of two types-permanent settlement and temporary settlement. The permanent settlement fixed land revenue in perpetuity. Under temporary settlement land revenue was assessed for a period ranging between 20 and 70 years in various states. Land revenue, therefore, was subject to revision.
(ii) Mahalwari Tenure. Under the Mahalwri tenure, the village lands were held jointly by the village communities, the members of which were jointly and severally responsible for the payment of land revenue. The system was first introduced in Agra Oudh and later on in Punjab . Under the system, the village common or Shamlat is the property of the village community as a whole. Similarly, the waste lands also belong to the village community and it is free to rent it out and divide the rents among the members of the community or partition it to bring it under cultivation.
(iii) Ryotwari Tenure. Under the Ryotwari tenure, land may be held in single independent holdings. The individual holders were directly responsible to the state for the payment of land revenue. The ryot is at liberty to sub-let his land and enjoys a permanent right of tenancy so long as he pays the assessment of land revenue. Thus, on the eve of independence, on the one extreme, there were landless labourers and tenantsat-will and on the other, were big landlords owning huge estates. But a very disquieting feature of the situation was the absence of the proper revenue records which made the task of abolition of intermediaries more difficult.
Abolition of Intermediaries
Although steps were taken earlier the actual abolition of intermediaries started in 1948 with the enactment of legislation in Madras
Abolition of intermediaries was not done in India
TENANCY REFORMS
Under the Zamindari and Ryotwari systems, tenancy cultivation had been quite common in India
According to 1961 census, 77 per cent of the total cultivating households were in the nature of ownership holdings, 8 per cent on pure tenancy and 15
per cent in mixed tenancy. Besides this open tenancy, there is a considerable amount of land leased out on the basis of oral or hidden tenancy which accounts for anything between 35-40 per cent of total cultivated area. Informal tenancy has been a common feature of traditional agricultural societies. Although attempts have been made to provide security of tenure, redistribution of land and fixation of fair rents, yet informal or oral tenancy has continued to exist even to this day. The term ‘informal tenancy’, loosely referred to as oral tenancy, refers to tenancy without legal sanction and permission, or without any written agreement.
per cent in mixed tenancy. Besides this open tenancy, there is a considerable amount of land leased out on the basis of oral or hidden tenancy which accounts for anything between 35-40 per cent of total cultivated area. Informal tenancy has been a common feature of traditional agricultural societies. Although attempts have been made to provide security of tenure, redistribution of land and fixation of fair rents, yet informal or oral tenancy has continued to exist even to this day. The term ‘informal tenancy’, loosely referred to as oral tenancy, refers to tenancy without legal sanction and permission, or without any written agreement.
The principal purpose of shifting to informal tenancy is to extract higher land rents from tenants. This is more so in view of the high-yielding varieties programme which has brought a realisation among landlords that land is a very valuable asset and promises high rate of return. In a country marked by land hunger, it is possible to take advantage of the situation by charging high rents. Secondly, informal tenancy arrangements are a convenient device with the landlords for modifying tenancy reforms.
Measures of Tenancy Reform
Measures of tenancy reform pertain to (i) regulation or rent; (ii) security of tenure; and (iii) conferment of ownership on tenants.
Regulation of rents
During the pre-Independence period, rents were fixed either by custom or were the result of the market forces of demand and supply. Supply of land being fixed, the demand for land growing with an increasing population, there has been a continuous tendency for rents to rise. The decay of handicrafts increased the dependence on land further and thus pushed up rents. The rates of rent prevalent were one-half of the produce or more. Historically, rents have been paid in kind in India
Security of Tenure
The personal interest of a cultivator in land with rights of temporary tenancy is very thin. Tenants, therefore, take much less care in preparing land, sinking capital in the form of wells or tubewells on land, or putting up a permanent fence etc. The fear of loss of tenancy right saps all initiative to make improvements on land, reclaim waste-land or make long-term schemes of preserving soil fertility. While framing legislation pertaining to security of tenure, three essential aims have to be kept in mind-firstly, that large-scale ejectments of tenants do not take place; secondly, that resumption of land may be taken by the owner for personal cultivation only; and thirdly, that in the event or resumption, a prescribed minimum area is left with the tenant.
Ownership Rights
During the Second Plan, states framed provisions for resumptions broadly on the following three different patterns :
i) All tenants have been given full security of tenure, without giving the owners the right of personal cultivation.
ii) Owners have been given the right to resume a limited area (not more than a family holding in any case) subject, however, to the condition that a minimum area is left with the tenant.
iii) A limit has been placed on the extent of land which a land-owner may resume, but the tenant is not entitled to retain minimum area for cultivation in all cases.
Legal Protection to Tenants
Unable to bring about redistribution of ownership of land, the legislation attempted to provide security of tenure to tenants, to fix land rents and conditions of tenancy. Besides this, legislation aimed to provide security to a minority of tenants who paid fixed rentals.
Ceiling on Land Holdings
Land reforms in India
In the rural sector, land is the principal source of income. The best course of bringing a reduction in inequalities of income is to bring about a reduction in inequalities of land-ownership.
A policy of application of capital-intensive methods in Indian agriculture will lead to unemployment on a massive scale. Consequently, the Indian government would like to create a large number of small peasant proprietors. Legislation for ceiling on existing holdings and unit of application has been enacted in two phases. During the first phase which lasted up to 1972, ceiling legislation largely treated land holder as the unit of application. After 1972, it was decided to have family as the basis of holding. Further, the ceiling limit was also reduced to bring about a more equitable distribution of this scarce assets. The legislation pertaining to ceiling on holdings led to a large number of mala fide transfers. These transfers are principally of three types : (a) transfers among the members of the family, (b) benami transfers and other transfers which have not been made for valuable consideration and through a registered documents, and (c) transfers made for valuable consideration through a registered document.
Ceiling legislation aims at obtaining surplus lands above a specified limit and then passing it on to small holders, evicted tenants or landless persons against the payment of a purchase price. Thus, this problem has two aspects – (i) compensation that may be paid to the landowners for the acquisition of surplus land; and (ii) the price that may be recovered from the allottees of surplus lands.
With regard to the price to be recovered from the allottees, it has been suggested that the purchase price should be so fixed that the annual burden falling on the allottee on account of instalments of compensation and interest payable thereon, if any, and the land revenue should not exceed the fair rent i.e., one fourth, or one-fifth of the gross produce. The total amount payable as compensation should be recovered from the allottees so that there is no net liability on the state.
In the allotment of surplus lands those tenants who have been displaced as a result of resumption for personal cultivation should be given preference. Along with the case of farmers with uneconomic holdings, landless labourers, particularly those belonging to scheduled castes and scheduled tribes, should be kept in the priority list.
According to the Annual Report (2004-05) of the Ministry of Rural Development, since the inception of ceiling laws on agricultural holdings, upto 31st March, 2004, total quantum of land declared surplus in the entire country was 73.36 lakh acres, out of which about 64.97 lakh acres have been taken possession of and a total area of 54.03 lakh acres has been distributed to 54.84 lakhs beneficiaries, of whom around 36% belong to the Scheduled Castes and around 15% to the Scheduled Tribes. But as facts stand, the progress of distribution of surplus land was slow. Between March 1990 and March, 2004 a span of 14 years, only 7.36 laksh acres could be distributed. In addition to the distribution of 54.03 lakh acres of ceiling surplus land, an area of 147.5 lakh acres of Government wasteland has also been distributed among the landless and the poor.
Land Ceiling : A Failure
The purpose of ceiling legislation, logically speaking, was to ration out land-the most scarce yet the most basic asset in Indian rural life-among those who were actual tillers, viz., landless labourers, share-croppers or small holders. This could be done by imposing a limit on the possession of land by big holders. Apart from the objection by landlord classes against ceiling legislation, a very large number of loopholes were left in the ceiling legislation. Consequently, evasion was possible even within the legal provision. The natural result of this was that very little surplus could be acquired after the imposition of ceiling. The intentions of land reform and the provision of ceiling were thus watered down in the process of implementation.
Secondly, law provided a number of exemptions for sugarcane farms, orchards, mango groves, grazing lands, lands for charitable and religious trusts, cattle breeding farms, All these provisions of exemption were used by the vested interests to evade ceiling on holdings.
Thirdly, the judgement of the Supreme Court that compensation should be paid at market value added another dimension to the problem in favour of vested interests. On 26th August 1974 , the Parliament, passed unanimously the 34th amendment to 9th Schedule of the Constitution and thus took and land ceiling law away from judicial review.
Fourthly, even when ceiling has been imposed on a family basis, the definition of family includes husband, wife and 3 minor children. For instance, if a ceiling of 15 acres has been provided for a family and there are two major children, then the total land that can be held by the family is 45 acres-15 acres for the family and 15 acres for each of the two major children. This is obviously unjust. A better course would be to treat major children as part of the family and give an additional 3 acres of land to each member of the family, subject to maximum of twice the ceiling. For instance, if there are 7 members of the family, including 2 major children, the total land made available to them would be 7 x 3 = 21 acres and not 45 acres as at present. This has not been accepted as a guideline in national policy. This course can restrict the ration of land to the owning classes so that more surpluses emerge for distribution among the landless labourers and small farmers. The ceiling of land holdings was never implemented properly.
An appraisal of land reforms
Land reforms programmes were started with a thunderous enthusiasm, but soon the vitality of this enthusiasm was lost and the implementation of land reforms became very poor. The principal reasons for poor implementation of land reforms are lack of political will; absence of pressure from below because the poor peasants and agricultural workers are passive, unorganized and inarticulate; lukewarm and often apathetic attitude of the bureaucracy, absence of up-to-date land records, and legal hurdles in the way of implementation of land reforms.
Suggestions
i) Excess land taken over from big landholders should be distributed expeditiously and to assist the land reform beneficiaries, there is a strong need to link them for timely supply of inputs and investment to Jawahar Rozagar Yjana / Prime Minister’s Rozgar Yojana.
ii) Priority should be given to preparation, maintenance and computerization of land records. All tenants including share croppers should be identified and their rights should be recorded.
iii) Special attention should be paid to tribals. Loopholes in laws applicable to them need to be plugged and administrative machinery need to be strengthened.
iv) The definition of personal cultivation should lay stress on the following ingredients : (a) the person claiming to be in cultivation of the land must bear the entire cost of cultivation; (b) He must cultivate his own land by his own labour or by the labour of any member of his family; (c) He or member of his family should reside for the greater part of the year in the locality where the land is located; and (d) cultivation should be the main source of his income.
v) No transfer of agricultural land should be permitted to a non-agriculturist.
vi) Resumptions of land by landowners from tenants for self cultivation should not be allowed except in case of physically handicapped or serving army personnel.
vii) In case of dispute between the landowner and the persons claiming to be tenants / share-croppers, the onus of proof should be shifted to the landowner. The tenant / share-cropper should be allowed to deposit the share of the produce of the land owner with the nearest authority.
viii) Recognised Peasant Organisation / Agricultural Labour Organisations or acknowledged voluntary organizations should be associated with the identification of informal tenants / share-croppers and permitted to file claims for conferment of occupancy right / ownership right to the concerned person before an appropriate authority.
ix) Political will should be created. For this land-less, small and marginal farmers representatives should be given representation in local panchayat bodies and ministries so that they are associated at each decision making level.The poor peasants may be provided legal aid upto the level of the Supreme Court. The Lok Adalats should be empowered to dispose of land reform litigations along with prompt disposal of cases by rural courts i.e. Nyaya Panchayat / rural Nyayalaya.
9.1.3 Food Problem
One of the most serious economic problems which the country has had to contend since independence has been the food problem. Its nature is not simple. Primarily it consists of a shortage of food- grains grown in the country relatively to the people’s demand for them; but it has other aspects too.
The most obvious aspect of the food problem has been the quantitative aspect, i.e., deficiency of food in the country in relation to demand for it. The extent of the shortage has varied from year to year depending largely upon the weather.
Another aspect of our food problem is the qualitative aspect. it is not merely an increase in quantity which will solve the problem; we have to improve the quality too. Our food is unbalanced. It consists mostly of cereals and is lacking in protective foods like eggs, fish, meat and fruit.
Then, there is the administrative aspect. The food problem in India
Finally, there is the economic aspect. The Indian food problem is due to the poverty of the people. They lack the necessary purchasing power. It is poverty which accounts for both the insufficient quantity of food and its poor quality.
Causes of Food Shortage
Food shortage is a matter of demand and supply. When demand for food exceeds the supply, food shortage is inevitable. Several factors have been operating in India which have increased the demand for food and several others have either curtailed the supply or at any rate hindered the expansion of supply in proportion to demand. The combined effect of these two sets of factors has been the persistence of a food gap which assumed serious proportions in years of drought and other natural calamities.
Factors Affecting Demand
increase in Population. The most important and obvious cause of increase in demand for food is the rapidly growing population of the country which is increasing at an alarming rate. Mounting investment Outlays. Under the Five-Year Plans, the investment outlays have been growing progressively. When every year such large amounts of money are being injected into the economy, the money incomes of the people go up, raising their purchasing power and intensifying demand for all goods including food articles.
Increase in income Elasticity of Demand for Food. It is the experience of all developing countries, including India India
Higher Self-consumption by Growers. Rise in agricultural prices, in recent years, has made the farmers much better off than before. Consequently, they now consume their own produce to a much greater extent than they could afford before. Thus, to the already existing demand for foodgrains is added this new demand for sell-consumption. by the growers themselves, increasing the aggregate demand for food.
Factors Affecting Supply
There are several factors which adversely affect the supply of foodgrains, thus aggravating the food shortage in the country. These factors are:
Low Agricultural Productivity. The basic cause of the insufficiency of food supply in India
Substitution of Cash Crops for Food Crops. Before the beginning of the HYV programme, growing of cash crops being relatively more profitable, the cultivators took to growing such crops. Naturally, the supply of foodgrains was adversely affected. Even now this is so, where for one reason or the other the HYV programme has not spread.
Man-made or Artificial Shortage. In years of every good harvest, an artificial shortage is created by large- scale hoarding on the part of consumers, traders and growers. This results in appreciable reduction in marketed surplus. The marketed surplus has also been reduced, because the growers’ need for cash to meet their commitments can be met with reduced sales on account of the prevailing higher prices. Increase in self-consumption has also decreased the marketed surplus.
Inadequate Transport. Sometime the supply is adversely affected by transport bottlenecks. Foodgrains may be available at home or abroad, but the shipping or the railway capacity may not be able to cope with increased traffic.
Government Food Policy. The Government policy regarding procurement and price control has also been a very important factor affecting the supply of foodgrains. For instance, price-control, inefficiently administered, may send stocks underground.
Faster Economic Development
The rise in food prices in recent years is basically the consequence of the rate of economic development and the mode of financing it. The high level of investment expenditure in public and private sectors accompanied by deficit financing and large-scale credit expansion led to a general increase in the demand for foodgrains.
Consumption Pattern
Further, there has been a change in the pattern of food consumption of many sections of the people. People who used to live on roots like tapioca or sweet potatoes have been transferring their demands to millets or coarse rice and people who used to take millets or coarse rice formerly have gradually been shifting over to superior kinds of rice and wheat
Industrialisation and Urbanisation
The increasing industriulisation and urbanisation have increased the demand for marketed surplus and also increased the demand for rice and wheat as against millets and minor foods
Shortages
Persistent shortages in certain areas of the country, owing to failure of crops though unfavourable weather conditions, and reports of scarcity also exercise bullish effect in other areas as well and thus aggravate the rise in food prices.
Thus, increase in demand due to increase in population, mounting investment outlays, increase in money incomes, high income elasticity of demand for food, higher self-consumption by the growers, coupled with low agricultural productivity, shortage, psychology, attraction for cash crops, transport bottlenecks and government policy regarding price control operating on the supply side, all combined to create a state of chronic food shortage in the country. Frequent failure of rains and the prevalence of near famine conditions in some parts of the country created a panic and increased propensity to stock.
Measures Adopted for Solution of the Food Problem
The following are the measures that have been taken for the solution of the food problem: movement of foodgrains from one zone to another was restricted. The object was to ensure that movement of foodgrains out of a particular Zone may not create food shortage there.
Anti-hoarding and Profiteering Measures. Legislative measures have been adopted to punish anti-social elements in the business community and the growers for hoarding and profiteering. Action has been taken under the Essential Commodities Act and the Defence of India Rules.
Anti-Speculation Measures. The speculators are no less responsible for the serious food situation which existed till very recently. The Reserve Rank of India has been operating selective credit control to check speculation in foodgrains.
Increasing Production. The ultimate solution of the food problem is to increase domestic production. This has been done in our Five-Year Plans and it consisted of extension of irrigation facilities through major, medium and minor irrigation works, supply of fertilisers and improved seeds. extension of credit facilities, reclamation of waste lands, adoption of improved agricultural practices like the Japanese methods of cultivation, land reforms to ensure incentive to the cultivators, and so on.
Import of Food grains. Increasing food production sufficiently to meet the requirements of the growing population being a long- run problem, the people had in the meantime to be fed. Hence imports have been essential. The Government has been making strenuous efforts to secure food supplies from friendly countries like the U.S.A. Australia Canada Burma
Compulsory Procurement. The Government has been increasingly taking upon itself the responsibility of feeding the people. For this purpose it cannot rely on the stocks with dealers which have behaved like ‘fair weather’ friends. The Government must build up buffer stocks of its own to serve as price supports and meet a food crisis. For this purpose the Government has been making purchases not only in the open market through ordinary trade channels hut has also resorted to compulsory procurement.
Fair Distribution. Increased food production and imports are of no avail if the food supply made so available is not equitably distributed. The danger of hoarding and profiteering is always present in countries facing chronic food shortage. In order to meet this danger the Government has opened a large number of fair price shops which supply foodgrains to the consumers at reasonable prices. Distribution is also arranged through co-operative stores.
Contributory Factors
There are several factors responsible for ushering in the Green Revolution in the country. The pride of place, however, goes to agricultural research conducted by the Indian Council of Agricultural Research (I.C.A.R.) and the farm universities like the Agriculture University Ludhiana Punjab ) and at Pant Nagar (U.P.). It is the development of high varieties of crops, especially the cereals and millets, which have brought about this revolution. But there are other contributory factors like inputs and incentives.
(i) Wonder Seeds. Agricultural revolution is primarily due to the miracle of new wonder seeds which have raised agricultural yields per acre to incredible heights. Among these we may mention the new dwarf varieties of wheat PV-18, Kalyan Sona 227, Sona Lika (S-308) for Bajra HB-1, hybrid maize Vijay; for rice IR-8, Jhona 351, for sugarcane Co-1148, Co-67-ll, Mungfali-l Cotton J-34, and so on. The use of improved seeds increased by no less than 40 percent in the Intensive Agricultural District Programme (I.A.D.P.) districts.
(ii) Fertilizers. The increasing use of fertilizers has played a key role in the break-through in Indian agriculture. Nitrogen use increased at 24 per cent nitrogen plus phosphate grew at in 27 percent per year.
(iii) Green Triangle. Thanks to new seeds maturing early, it has become possible to obtain three and even four crops instead of two from the same plot in a year. This is going to make a radical change in farm technology in India. Some dwarf varieties of wheat, e.g. Sonara 64, Sharbati Sanora, Sona Lika, Safed Lernza and NP. 839 are suitable for late sowing from Mid-December to Mid-January. After wheat is harvested in the end of April, the land can be sown with Moong which matures in 65-70 days and land could then be used for sowing a monsoon crop. This completes the triangle.
(iv) Modern Equipment and Machinery. Modern machinery and implements like tractors, harvestors. pumping sets, tube wells. etc.. are being increasingly used and are replacing the bullocks wherever possible. Being time-saving, use of modern machinery in agriculture is conducive to multiple cropping. By extending and improving irrigation it has made possible the growing of high-yielding varieties.
(v) Price Incentives. The Government has taken care to offer support prices to the growers so that a minimum reasonable return for their labour and investment is assured to them. The market arrivals were so heavy that unless the Government offered to lift the crop at procurement prices announced well in advance, the prices would have crashed and spelt ruin to the grower. ‘This would have put a stop to all agricultural progress.
(vi) Extension of Irrigation. The irrigation system of the country ‘is being speedily extended to assure adequate water supply especially in areas where new agricultural strategy is being applied. During the last three-four years, there has occurred a, remarkable growth of tube-wells, pumped in most cases by electricity.
(vii) Processing, Storage and Marketing Facilities. These facilities are being improved and extended -so that the increased agricultural production is put to profitable use.
(viii) Improved Credit Facilities. Farm finance is being given more attention so that the farmer is not handicapped in efficiently carrying on his operations. The share of institutional credit in meeting the credit requirements of the agricultural sector has of late been rising rapidly.
(ix) Good Monsoon. Successive years of good monsoons is another factor responsible for increase in agricultural production.
9.1.4 Green Revolution
ACHIEVEMENTS OF GREEN REVOLUTION:
(i) Boost to the production cereals. The major achievement of the new strategy is to boost the production of major cereals, viz., wheat and rice. There has been an increase in rice production from 35 million tonnes in 1960-61 to 90 million tonnes in 1999-2000 (but declined in the succeeding years), signifying a break through in this major crop of India
(ii) Increase in the production of commercial crops. The Green Revolution was mainly directed to increase the production of foodgrains. It did not affect initially the production of commercial crops or cash crops such as sugarcane, cotton, jute, oilseeds and potatoes; these crops did not record any significant improvement. However, significant improvement in the output of sugarcane, took place Likewise, there was considerable improvement in the production of other cash crops such as oilseeds,, potatoes etc, but the improvement was not such as to be called a revolution.
(iii) Significant changes in crop pattern. As a result of the Green Revolution, the crop pattern in India
Secondly, among cereals, the proportion of rice in total cereals output has come down marginally from 50 per cent 46 per cent between 1950-51 and 2001-02. During the same period, however, the importance of wheat has more than doubled. i.e., from 15 per cent to 36 per cent.
(iv) Boost to agricultural production and employment. The successful adoption of the new agricultural technology has led to continuous expansion in area under corps, increase in total production and rise in agricultural productivity. Impressive results have been achieved in wheat, rice, maize, potatoes, etc. The adoption of new technology has also given a boost to agricultural employment because of diverse job opportunities created by multiple cropping and shift towards hired workers. At the same time, there has been displacement of agricultural labour by the extensive use of agricultural machinery.
(v) Forward and backward linkages strengthened. The new technology and modernisation of agriculture have strengthened the linkages between agriculture, and industry. Even under traditional agriculture, the forward linkage of agriculture with industry was always strong, since agriculture supplied many of the inputs of industry; but backward linkage of agriculture to industry – the former using the finished products of the latter was weak. Now, however, agricultural modernisation has created a larger demand for inputs produced and supplied by industries to agriculture and thus the backward linkage has also become quite strong. In this way, the linkage between agriculture and industry has got strengthened.
WEAKNESSES OF GREEN REVOLUTION :
The new agricultural technology has made the farmer market-oriented. The farmers are largely dependent on the market for the supply of inputs and for the demand for their output. At the same time, the demand for agricultural credit has also increased as the new technology has increased the cash requirements of the farmer. Besides, modern technology has definitely proved its superiority over the traditional technology only in those areas where appropriate conditions prevail. But these conditions prevail only in certain selected areas and the rest of the country is not yet suitable for advanced technology. What is, therefore, wanted is the evolution of a low-cost technology which can be adopted by all small farmers and which can use and exploit the local resources.
(1) Indian Agriculture Still a Gamble in the Monsoons. When the new agricultural strategy was introduced in the early 1960’s, it was hoped that the trend of rising output of foodgrains would continue. The then record achievement of 108 million tonnes of foodgrains in 1970-71 was hailed that Green Revolution had materialised and imports were immediately stopped. The euphoria was cut short in 1972-73 when production of foodgrains slumped to 95 million tonnes. Sharp fluctuations in foodgrains output were observed in the later years. From a low level of about 100 million tonnes lin 1974-75, foodgrains output rose gradually to 132 million tonnes in 1978-79 . There was a steep decline in production in the next year due to adverse weather conditions; foodgrains output in that year was 109 million tonnes which was almost the same as 1970-71 output. After many fluctuations the output of foodgrains rose to 176 million tonnes in 1990-91 and 199 million tones in 1996-97 but fell to 194 millilon tonnes in 1997-98, Production of foodgrains then rose continuously and touched 212 million tonnes in 2001-02,
(2) Growth of Capitalist Farming in Indian Agriculture. The new agricultural strategy consisting of IADP and HYVP necessitated heavy investment in seeds, fertilisers, pesticides and water. These heavy investments are beyond the capacity of small and medium farmers. In India India
(3) Side-tracking the Need for Institutional Reforms in Indian Agriculture. The new strategy does not recognise the need for institutional reforms in agriculture. The bulk of the peasant population does not enjoy ownership rights. Besides, we have failed to provide even fixity of tenure and large-scale evictions have already taken place. As a result, the tenants are being forced to accept the position of share-croppers.
(4) Widening Disparities in Income. Technological changes in agriculture have had adverse effects on the distribution of income in rural areas. Technological changes have contributed to widening the disparities in income between different regions, between small and large farms and between landowners on the one hand and landless labourers and tenants on the other. The gains from technological change have been shared by all sections. This is indicated by the rise in real wages and employment and in incomes of small farmers in regions experiencing technological change.
(5) New Strategy and Socio-economic Relations in Rural Areas. Overwhelming majority of the cultivators having uneconomic holdings of 2-3 acres have managed to increase per acre yield from the application of small doses of fertilisers, but aggregate gains in output have been insufficient to create capital surplus for investment in land development.
Often small and marginal farmers are forced to take some land on lease; in some cases, they are pure tenants. Rising rentals in recent years, and/or the tendency of landowner to resume land for personal cultivation has actually led to an absolute deterioration in the economic condition of the small owner-cum-tenant cultivator class. Only the small minority of cultivators with holdings of ten acres or more have been in a position to mobilise surplus capital for investment in land development. Farmers with twenty acres or more have made the greatest gains, partly by mechanising farm operations to take up double or multiple cropping, and partly by diversifying their cropping pattern to include more profitable commercial crops. The majority of farmers – probably as many as 75 per cent to 89 per cent in the rice belt-have experienced a relative decline in their economic position; and same proportion, representing unprotected tenants cultivating under oral lease, have suffered an absolute deterioration in their living standards.
Lessons from the Green Revolution
1. The Green Revolution initiated by the new strategy is initially limited to wheat, maize and bajra only. The major crop of India
2. Spectacular rise in food grains production has taken place since the 1960s in Punjab , Haryana, Western U.P and in some selected districts of Andhra Pradesh, Maharashtra and Tamil Nadu. But these areas cannot claim to cover the bulk of India. The already better-off areas have made their economic position still better. This has initiated a process of unbalanced growth in India. The regions which have lagged behind have to catch up with those that have marched ahead. Unless all the major States enter the take-off stage, it would not be fair to speak of an agricultural revolution.
The spread of the new technology, depends upon the extent of information and this in turn depends upon the level of literacy. A programme of removal of illiteracy can, therefore, become the chief vehicle of the spread of green revolution.
In the present rural set-up of co-operative societies and rural banks, it is the big farmer who is able to secure a loan at low rate of interest. The small farmer who wields very little influence in the village has to borrow from the village money-lender at exorbitant rates of interest varying between 24 to 36 per cent. Whereas official agencies provide about 40 per cent of the total credit at cheaper rates and that, too, mostly to the big farmers, the tenant farmer and the small farmer who need credit at lower rates of interests, get the costliest credit. This introduces a difference in the real price of inputs to the large and the small farmers, obviously to the disadvantage of the latter.
The adoption of new technology depends upon control over water supply and ability of the farmer to regulate its timing. It requires lumpy investment in tubewells or diesel pumpsets. It has been observed that the ownership of tubewells was limited among farmers with ten acres or more. In order to accelerate the pace of new technology, availability of water should be ensured.
The new strategy has created three kinds of conflicts, namely, between large and small farmers, between owners and tenant farmers and between employers and employees on agricultural farms.
The holders of large farms are capable of making heavy investment in the form of fertilizers, pumpsets, tubewells and agricultural machinery. They are also able to procure credit from banks and cooperatives societies and also obtain fertilizers and better seeds. The small farmers are deprived of the much needed inputs. This has, therefore, widened the inequalities of income and fostered the growth of capitalist agriculture in the country.
In India quite a significant group of peasants have small size holdings and consequently, they hire land on tenancy from the large owners. The part of land hired by the tenants is provided with modern techniques and the small fragments of land owned by the tenants continue to be worked by traditional techniques. The conflict is the cause of social tension, more so, when the landlords demand exploitative rents on the land leased out by them.
The application of new technology in large farms has led to the substitution of human labour with mechanical processes. The greatest sufferers in the process of agricultural revolution are landless labourers. Unless alternative opportunities of employment are provided to this most vulnerable section of the rural community, agricultural revolution will be meaningless to the millions of landless peasants in this country.
UNIT QUESTIONS
1. Examine the role of agriculture in Indian economy.
2. Describe the causes for low agricultural productivity and suggest remedies.
3. What are the various land reforms measures.
4. Discuss the causes for food shortage. How will you overcome it?
5. Explain the achievements and weaknesses of Green Revolution.
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