Indian Economy - Agriculture (Notes)


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History of Agriculture in India:

ü  India has the History of cultivation of various crops since times immemorial.
ü  The crops like Wheat and Barley were cultivated in the Indian sub continent by 9000 BC.
ü  Some animals like sheep and Goat were also domesticated.
ü  There was also history of storing the grains in the granaries.
ü  By 5th millennium BC Cotton was cultivated.
ü  Some fruits like Mango were native to the Indian sub continent.
ü  Peas, Sesame and dates were cultivated by the Indus valley people.
ü  Even today the agriculture is considered to be the main stay of Indian economy.

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Importance of Agriculture in Indian Economy:
ü  Agriculture is the predominant occupation in India employing more than 50% of the population In India.

ü  The GDP (Gross Domestic Product) is the indicator of the performance of an economy.
ü  At present (2010) the Indian GDP is $1.53 trillion.
ü  By the year 2015 it is expected that the India’s GDP would touch $ 2 trillion.

ü  The agriculture contributes about 18% to the India’s GDP.
ü  Though the input into the agriculture is declining for past few years, the agriculture still continues to be the biggest contributor. 
ü  This provides raw material to various agro-based (agriculture based) industries such as Sugar, Cotton textile, Jute etc.
ü  Through the system of transport, processing and marketing it contributes to the tertiary sector.
ü  Agriculture meets the food requirement of the people in India.
ü  The surplus produced is exported to other countries and can generate foreign exchange.
ü  It provides a large market for industrial goods like fertilizers, pesticides, machinery etc.
ü  Agriculture reduces the inequalities in income if the agricultural income is increased.

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Progress of Agriculture in India since Independence:

ü  In 1947, the agricultural productivity was very low, about 50 million tonnes.
ü  The agriculture was mainly rained and was being done as a subsistence farming using mainly animate sources of farm power and traditional tools and equipment’s.
ü  More than 80% of the population living in rural areas was dependent on agriculture for their livelihood.
ü  The ICAR (Indian Council of Agriculture Research) was set up in the year 1929.
ü  ICAR is located in New Delhi
ü  Up to 1947 the efforts in agricultural engineering research and education was very low.
ü  Agriculture requires developing equipment and technologies for mechanization of agriculture for maximizing efficiency of costly inputs like seeds, fertilizers, irrigation water, plant protection chemicals, and energy sources to increase higher production and productivity, reduction of drudgery; post-harvest technology and value addition, waste utilization, and generating income and employment in rural areas.
ü  Besides these research-cum-academic institutions, a good amount of research opportunity was opened up in the soil and water engineering with the establishment of the 1st river valley project, the Damodar Valley Corporation in 1949, to tackle the problems of soil and water conservation in Bihar and West Bengal.

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ü  First five year plan (1951 to 1956) gave high priority to agriculture
ü  Soil conservation centres at different regions of the country from the First Five-Year plan.
ü  Subsequently all these centres were administratively combined together as a Central Soil and Water Conservation Research Institute at Dehra Dun under the ICAR in 1975, with 6 regional centres.
ü  Some organizations other than the ICAR have shown interest in sponsoring research in different areas of agricultural engineering, by giving financial support and as integral part of the activity of these organizations.

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Example:
ü  Organizations are Ministry of Non-conventional Energy Sources
ü  Department of Science and Technology; Department of Agriculture and Co-operation
ü  Tata Energy Research Institute
ü  Indian National Committee of Irrigation and Drainage
ü  The ICAR has remained the most important organisation in the country supporting the research in all areas of agricultural engineering and technologies
ü  In 1954 the ICAR for the first time sponsored a scheme to conduct state-wise survey of the existing tools and implements used by farmers.
ü  Note: Before that ploughs, bulls and horses were used for ploughing. Even today also the same practices are continued.
ü  During sixties and seventies the indigenous production of power tillers, stationary engines, power threshers, plant protection equipment and other agricultural equipments were started and expanded to cope up with the increasing demand of improved agricultural machinery for crop production and processing.
ü  During this period, 3 ICAR Institutes namely Central Institute of Agricultural Engineering (CIAE), Bhopal Central Institute of Post-Harvest Engineering and Technology (CIPHET), Ludhiana and National Research Centre on Women in Agriculture with a unit at CIAE Bhopal (to work on reducing drudgery of Women in Agriculture) were established and 10 All India Coordinated Research Projects and number of AP Cess funded ad-hoc schemes were initiated in the discipline of Agricultural Engineering by the ICAR, as a result of which very good work have been done, both, in quality and quantity in development of equipment and technology.
Agriculture engineering:
This comprises four segments
1.      Farm implements and power
2.      Rural structures
3.      Soil conservation, drainage and irrigation
4.      Rural electricity.

ü  Because of the peculiar local conditions, the lack of development of electricity in a large scale, and immediate utility of implements, agricultural engineering in India has come to mean more of agricultural implements and machinery. But in fact, agricultural engineering is a very vast subject.
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What was done?
ü  Application of the knowledge, techniques and disciplines of various fields of engineering to the solution of problems arising in the fields of agriculture and rural living
ü  Object is to reducing labour
ü  Improving agricultural productivity per worker
ü  Raising the standard of living of the farmers
ü  Increasing the overall earnings per worker
ü  Agricultural universities, several agricultural engineering colleges were established, offering graduate and postgraduate courses.
ü  In most of the states, where such colleges were established, they took over research, education and extension from the state departments of agriculture.
ü  The most important step in the reorganization has been the establishment of agro-industries corporations, one in each state, with the financial assistance of the Central Ministry of Agriculture.
ü  Some of these industries are being substantially assisted by the Industrial Finance Corporation of India.
ü  The private industries as well as the government, through their agro-industries corporations, are in the field now for the supply of agricultural machinery to the farmers. To present the charging of exorbitant prices for tractors the government has fixed the maximum prices of tractors with the assistance of the Bureau of Cost Accounting in the Ministry of Finance. This organisation has helped the farmers a lot.
ü  Agricultural electronics has also begun and the remote-control tractors are being designed and tested in some countries.
ü  Linking of rivers is under consideration for quite long period of time
ü  India is in a position to generate more electricity in future. Availability of more electricity from atomic energy will make the progress of farm mechanization in India speedier.


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Problems in Indian Agriculture:
1.      Infrastructure
2.      Irrigation (surface irrigation and ground irrigation)
3.      Note: Ineffective management of protecting surface water
4.      Lack of mechanization
5.      Low capital
6.      Inadequate number of warehouses
7.      Transportation
8.      Small land holdings
9.      Seeds and fertilizers
10.  Productivity
11.  Farmer’s suicide
12.  Using agricultural land for other for industrial purposes
13.  Knowledge deficit
14.  High risk because of volatile nature
15.  Ineffective banking system to provide loans (hence Money lenders)

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National Policy for farmers:
ü  The National Commission on Farmers (NCF) was headed by professor MS Swaminathan
ü  Final report was submitted in the year 2006
ü  It also submitted National Policy for Farmers
ü  The primary focus is on farmer. It was defined holistically and not just on agriculture
ü  It is more comprehensive than the agriculture policy
ü  The objective is to improve economic viability of farming through sustainably improving net income of farmers.
ü  Emphasis will be on increased productivity, profitability, institutional support, and improvement of land, water, and support services apart from provisions of appropriate price policy, risk mitigation measures and so on.

ü  Government has already implemented the National Policy for Farmers (NPF), 2007, which aims to improve economic viability of farming and increase net income of farmers.
(As per Minister of Agriculture in March 2015 in Rajya Sabha)
ü  Policy provisions in NPF-2007 include, inter-alia, asset reforms in respect of land, water, livestock, fisheries and bio-resources; supply of good quality seeds and disease-free planting material, issue of soil health passbooks to the farmers and integrated pest management system; region and crop specific implements and machinery; support services for women; timely, adequate and easy reach of institutional credit at reasonable interest rates and farmer-friendly insurance instruments; support services and inputs like application of frontier technologies; agricultural bio-security system; use of Information and Communication Technology (ICT) and setting up of farm schools to revitalize agricultural extension; coverage of farmers under a comprehensive national social security scheme; effective implementation of Minimum Support Price (MSP) across the country and establishing community foodgrain banks; development of agricultural market infrastructure and terminal markets for agriculture; curriculum reforms in agricultural universities; special categories of farming like organic farming and contract farming; rural non-farm employment initiative for farm households; and integrated approach for rural energy, etc. 

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National Food Security Mission (NFSM):
ü  It was adopted during the 11th plan in the year 2007
ü  The mission is to increase the production of rice by 10 million tones , wheat 8 and pulses by 2MT by the end of 11th plan
ü  It continued even during the 12th plan with a total production of food grains by 25 million tones
ü  Rice 10 MT, wheat 8 MT, pulses 4 MT and 3 MT coarse cereals
ü  The government also introduced Krishi Karman awards  in the year 2010-11for best performing states in food grain production
ü  The latest awards were issued in February 2015 for the year 2013-14



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Irrigation in India:
ü  Water is the most critical input for enhancing agricultural productivity, and therefore expansion of irrigation has been a key strategy in the development of agriculture in the country.
ü  India’s irrigation potential has increased from 22.6 mha in 1951 to about 90 mha at the end of 1995. It is estimated that even after achieving the full irrigation potential, nearly 50 percent of the total cultivated area will remain rain fed.
ü  The share of water use other than for agriculture was only 13 percent in 1985, which is likely to become 27 percent by 2025. Such a fast growth of water need in the face of emerging supply constraints is likely to result in a wide supply gap for irrigation water in the near future.
ü  Rain water is the main source of water in India
ü  The Ministry of water resources divided the country into 20 river basins for the effective management of waters.
ü  UP has the highest length of rivers followed by J and K
ü  Water resources are divided into rivers, canals, reservoir, tanks etc
ü  Types of irrigation in India:
1.      Border irrigation
2.      Drip irrigation (trickle irrigation)
3.      Sprinkler irrigation
4.      Basin irrigation


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ü  Management of water resources:
ü  Supplemental irrigation by run-off recycling
ü  Watershed management including agriculture
ü  Pond culture adjunct to canal system
ü  Rice-fish integrated farming
ü  Using pressurized irrigation system
ü  Groundwater management
ü  Flood water management
ü  Management of drainage and water-logging.
ü  Note: Ultimately the approaches have to be compatible with socio-economic adjustments of the target population.





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High Yielding Variety (HYV) Seeds:
ü  HYV seeds are very delicate and sensitive and therefore require a great deal of care if a successful harvest is to be obtained.
ü  In order to get a satisfactory agricultural return, the farmer should be in a posi­tion to arrange the costly inputs on time for which sufficient surplus capital should be available. In the case of non-availability of capital, the farmer should have an easy access to the credit facilities.
ü  Irrigation is the most important input required for the successful cul­tivation of HYV.
ü  Better results from HYV depend largely on assured and controlled irrigation.
ü  The timings of irrigation and the quantity of water supplied are decisive for the performance of the crop.
ü  The associated inputs like chemical fertilizers, insecticides and pesticides also perform satisfactorily only if timely irrigation is pro­vided to the crop.
ü  It may be emphasized that excessive irrigation and inadequate irrigation are both injurious to HYV of wheat and rice.
ü  In the case of wheat, for example, appropriate timing and spacing of ir­rigation raise the yield by as much as 50 per cent even if the other in­puts are not given.
ü  The first irrigation to wheat around the third week of sowing alone raises yield by as much as 30 per cent than that when it is delayed.
ü  In the case of rice, inadequacy of moisture in the primordial initiation can reduce production to the extent of 50 per cent.
ü  To meet water requirements, there must be a controlled source of water at the disposal of farmers.
ü  The other inputs like chemical fertilizers and plant pro­tection chemicals can enhance the yield further.
ü  The natural fertility of land is declining with the passage of time. For the recuperation of fertility, the soils are rested in the form of fallowing or they are en­riched by applying manures (compost and green) and chemical fertil­izers (NPK).
ü  After irrigation, chemical fertilizer is the second most important input required for the successful cultivation of HYV.
ü  The recom­mended dose of chemical fertilizer for the new seeds of wheat and rice in terms of NPK in 90-45-45 kg per hectare.
ü  In the developed countries like the UK, Germany, Netherlands and Japan the consumption of chemical fertilizers is much higher to that of India. For example, the per hectare consumption of chemical fertilizers in India is only about 75 kg per hectare as against 525 kg per hectare in the Netherlands and about 500 kg per hectare in Japan. Most of the Indian farmers being poor have very little purchasing power and are unable to supply the prescribed doses of fertilizers.(Ministry of Agriculture)
ü  These insects and pests seriously attack the plants, hamper their growth and reduce the yield substantially. The danger of pests and insects may be reduced by using plant protection chemicals. The problem may be tackled either by developing the dis­ease resistant seeds or by spraying insecticides and pesticides at the prescribed schedules devised for different crops.
ü  Availability of capital is also a vital constraint in the adoption and successful cultivation of HYV. The adopters of HYV must have op­erational capital for the purchase of seeds, installation of tube wells, drilling of pumping sets, chemical fertilizers, plant protection chemi­cals, tractors, harvesters, threshers and other accessories. In case the farmer does not possess the operational capital, he should have an easy access to credit.
ü  In India, most of the farmers, excepting a few larger ones, have no surplus over consumption, and therefore, no saving or operational capital at their disposal. The agrarian institutions like banks and cooperative credit societies have great responsibili­ties. They should advance loans to the farmers at a reasonable rate of interest.
ü  Unfortunately, the credit agencies in India, generally, serve the larger farmers who are economically well off and politically well connected.
ü  The poor and small farmers are thus deprived of the re­quired inputs, so essential for the successful cultivation of HYV of wheat and rice.
ü  The infrastructural facilities like transport network, marketing and storage facilities are also very crucial for the successful cultivation of HYV.
ü  It is the transport network which determines the types of crops grown in an agricultural region.
ü   It also helps in the marketing and storage of the agricultural commodities.

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MISCELLANEOUS:
ü  On December 13, 2012 the Cabinet Committee on Economic Affairs approved a urea investment policy, which is likely to incentivize Fertilizer Company to set up new plants and expand existing capacity.
ü  At present India imports 30 percent of urea requirement.
ü  The new policy is aimed at attracting Rs. 35, 000/- crore to increase domestic production.
ü  Under new policy the government gives 12 to 20 percent post tax return on fresh capital infused by the manufacturers for setting up of new plants as well as expansion and revamp of the existing ones.
ü  To ensure the return the government would cover the entire cost of natural gas which is the main feedstock of urea and accounts for 80 percent of the cost. The government controls the urea sector and fixed the MRP (maximum retail price) at Rs. 5360/- a tonne. The difference between the cost of production and MRP is given as subsidy to manufacturers.
ü  The new policy was approved by a GoM headed by Pranab Mukherjee on February 24, 2012.
ü  The country produces 22 million tonnes against the requirement of 32 million tonnes.
ü   
ü  The agriculture sector in India provides employment to more than 50 percent of the population.
ü  The agriculture meets the food requirement of the people in India.
ü  The agriculture also contributes to the service sector (tertiary) through transport, processing and marketing.
ü  India is one of the leading producers of vegetables in the World.
ü  India is also one of the leading producers of fruits in the World.
ü  Agricultural products are the prominent exports for India.
ü  The Primary sector (agriculture) gives an impetus to the growth of secondary (industry) sector and trade and commerce (tertiary) by providing needed raw material and wage goods.

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ü  What measures taken by the government to increase the productivity?
ü  The net area under the cultivation during 1950-51 was 118.7 million hectares.
ü  It has been increased to 142.6 million hectares by 2006-07.
ü  At present about 47 percent of the land in India is under cultivation.
ü  Note: In India the total estimated area is 304.2 million hectares.
ü  Gross Sown area: Raising more than one crop during the year from the same area. At present it is 192 million hectares.
ü  Land Productivity: Yield per hectare.
ü  The fertilizer consumption also increased rapidly to 22.5 million tonnes from 66,000 tonnes in the year 1952-53.

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