Importance of Agriculture in India
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Importance of Agriculture in India
Importance of Agriculture in Indian Economy
The following points emphasize the importance of agriculture in Indian Economy.
( i ) Share of Agriculture in National Income
Agriculture has got a prime role in Indian economy. Though the share of agriculture in national income has come down, still it has a substantial share in GDP The contributory share of agriculture in Gross Domestic Product was 55.4% in 1950 – 51, 52% in 1960 – 61 and is reduced to 18.5% only at present. The share of the agricultural sector’s capital formation in GDP declined from 2.2% in the late 1999s to 1.9% at present.
( ii ) Important Contribution to Employment
Agriculture sector, at present, provides livelihood to 65 to 70% of the total population. The sector provides employment to 58.4% of country’s work force and is the single largest private sector occupation.
( iii ) Important Source of Industrial Development
Various important industries in India find their raw material from agriculture sector – cotton and jute textile industries, sugar, vanaspati etc are directly dependent on agriculture. Handloom, spinning oil milling, rice thrashing etc are various small scale and cottage industries which are dependent on agriculture sector for their raw material. This highlights the importance of agriculture in industrial development of the nation.
( iv ) Importance in International Trade
India’s foreign trade is deeply associated with agriculture sector. Agriculture accounts for about 14.7% of the total export earnings. Besides, goods made with the raw material of agriculture sector also contribute about 20% in Indian exports. In other words, agriculture and its related goods contribute about 38% in total exports of die country.
Minimum Support Price of Agriculture Products
Keeping in view the interests of the farmers as also the need of self reliance, Government has been announcing Minimum Support Price ( MSP ) for 24 major crops. The main objectives of announcing MSP are :
- To prevent fall in prices in the situation of over production.
- To protect the interest of farmers by ensuring them a minimum price for their crops in Minimum support price announced by the government is that price at which government is ready to purchase the crop from the farmers directly if crop price becomes lower to MSP.
As a result, market price of the crop never comes down from the level of MSP This minimum price security gives incentives to farmers to increase their production. These minimum support prices of various crops are announced on the basis of recommendations made by Agriculture Cost and Price Commission ( ACPC ) which takes into consideration the inputs costs and favourable returns to the farmers while recommending MSP.
Food grains Procurement and Stocks in India
Food grains procurement by the Government serves the dual purpose of providing support prices to the farmers and of building up public stocks of food grains. Procurement operations are carried out by the Food Corporation of India ( FCI ) and the state agencies designated by State Government Procurement prices are based on support prices recommended by CACP ( Commission for Agricultural Costs and Prices ).
Food stocks are maintained by the Central Government for 3 purposes :
- Meeting the prescribed minimum buffer stock norms for food security.
- For monthly release of food grains for supply through PDS ( Public Distribution System ).
- For market intervention to augment supply so as to help moderate the open market prices.
Buffer Stock in India
The years 2001 – 02 and 2002 – 03 witnessed high levels of stock buildup in the central pool. Food grains stocks reached a peak of 64.7 million tonnes, an all time record in June 2002. The year 2003 – 04 witnessed a general easing in the food grains stocks with relatively lower procurement of rice and wheat following a bad agricultural year in 2002 – 03 and relatively high off – take of food grains especially for drought – related relief operations and under the welfare schemes.
The steady reduction, in stocks prompted the Government to stop fresh allocation of rice and wheat for export with effect from August 2003, which has continued till date. The year 2004 – 05 started with a much lower stock of 20 million tonnes on April 1, 2004, down from 32.8 million tonnes on April 1, 2003. Stocks however, remained consistently higher than the buffer requirement during 2004 – 05 with sufficient procurement of rice and wheat and relatively lower off – take than in the previous year. On April 1, 2005, the stock at 17.40 million tonnes was above the buffer norm of 16.2 million tonnes.
Green Revolution in India
- Indian Green Revolution is associated with the use of HYVS ( High Yielding Variety Seeds ), chemical fertilizers and new technology which led to a sharp rise in agricultural production during the middle of 1960.
- The term Green Revolution was given by American scientist, Dr. William Gande.
- During the middle of sixties, Indian agriculture scientists developed a number of new high yielding varieties of wheat by processing wheat seeds imported from Mexico. A similar improvement in variety of rice was also observed.
- The credit of this goes not only to Nobel Laureate Dr. Norman Borlaug, but also to India’s Dr. MS Swaminathan.
Second Green Revolution in India
Strategy Adopted In 11th Plan. The urgent need for taking agriculture to a higher trajectory of 4 per cent annual growth can be met only with improvement in the scale as well as quality of agricultural reforms undertaken by the various states and agencies at the various levels. These reforms must aim at efficient use of resources and conservation of soil, water and ecology on a sustainable basis, and in a holistic framework. Such a holistic framework must incorporate financing of rural infrastructure such as water, roads and power.
The Approach Paper to the Eleventh Five Year Plan has aptly highlighted such a holistic framework and suggested the following strategy to raise agricultural output.
- Doubling the rate of growth of irrigated area
- Improving water management, rain water harvesting and watershed development
- Reclaiming degraded land and focusing on soil quality
- Bridging the knowledge gap through effective extension
- Diversifying into high value outputs, fruits, vegetables, flowers, herbs and spices, medicinal plants, bamboo, bio – diesel, but with adequate measures to ensure food security
- Promoting animal husbandry and fishery
- Providing easy access to credit at affordable rates
- Improving the incentive structure and functioning of markets; and
- Refocusing on land reforms issues.
National Commission on Farmers has already laid the foundation for such a framework. Program formulation as well as their implementation in the States must be based on unique regional contexts incorporating agro – climatic conditions; and availability of appropriate research and development ( R and D ) backed by timely and adequate extension of finance.
Agriculture Holdings in India
Type Holding (in hect.) (% of Total)
Marginal Holding Less than one 59%
Small Holding 1 - 4 32.2%
Medium Holding 4 - 10 7.2%
Large Holding More than 10 1.6%
Yellow Revolution Oil seeds
White Revolution Milk
Blue Revolution Fish
Pink Revolution Shrimp
Gray Revolution Wool
Golden Revolution Horticulture
White Revolution and Operation Flood in India
White revolution is associated with a sharp increase in milk production. During 1964 – 65, Intensive Cattle Development Program ( ICDP ) was introduced in the country in which a package of improved animal husbandry was given to cattle owners for promoting white revolution in the country. Later on, to accelerate the pace of white revolution, a new program named ‘Operation Flood’ was introduced in the country. The Operation Flood Program, which is the world’s largest integrated dairy development program, has made considerable progress in achieving its outlined objectives.
Buffaloes, Cows and Goats contribute 50%, 46% and 4% respectively in total milk production of the country. India stands first in the world in milk production. USA stands second in the world. Dr. Varghese Kurien is the pioneer of operation flood in India.
Agriculture has been the backbone of Indian economy since its independence and in colonial era also. Agriculture accounts for 14.1% of the country’s gross domestic product ( GDP ). Agriculture recorded more than 4% growth in 2006 – 07 and 2007 – 08, while was 2.5% during the 10th plan period. However agri – biotech sector witnessed a growth of 30% in the last 5 years and it is growing steadily. India can become a major grower of transgenic rice and several genetically engineered vegetables in the coming years.
Production of foodgrains is estimated at 218.20 million tonnes in 2009 – 10 ( As per 4th Advance estimates ). This is about 16.27 million tonnes lower than the last year.’ The production of rice is estimated at 89.13 million tonnes, production of wheat is estimated at 80.71 million tonnes, production of coarse cereals is estimated at 33.77 million tonnes and production of pulses is estimated at 14.59 million tonnes. The oilseeds production during 2009 – 10 is estimated at 249.28 lakh tonnes.
The sugarcane production is estimated at 2777.50 lakh tonnes which is about 73 lakh tonnes less than the production during 2008 – 09. Cotton production is estimated at 239.35 lakh bales ( of 170 kgs each ) which is 16.59 lakh bales more than the production during 2008 – 09. Jute and Mesta production during 2009 – 10 is estimated at 112.91 lakh bales ( of 180 kgs. each ) which is about 9.26 lakh bales higher than the production during 2008 – 09.
The total area coverage under food grains in 2009 – 10 has been reported at 121.37 million ha. against 122.83 million ha. in 2008 – 09. The area under rice is estimated at 418.47 lakh ha. which is lower by about 37,000 ha. as compared to 2008 – 09. However, the area coverage under wheat during 2009 – 10 is estimated at 285.21 lakh ha. which is higher by 7.69 lakh ha. than the area covered under wheat during 2008 – 09. The total area coverage under coarse cereals during 2009 – 10 is estimated at 276.44 lakh ha. which is higher by 1.94 lakh ha. than the area during the last year.
India’s output of fruits and vegetables increased by 3.7 percent to over 213 mt in 2010 – 11 compared to 205.24 mt in 2009 – 10 period. The planning commission has set a 4% growth for agriculture and relate sector for 12th plan period.
Government Initiatives Some of the recent initiatives taken by the government to accelerate growth include :
- The one – time bank loan waiver of nearly US$ 14,6 billion to cover an estimated 40 million farmers was one of the major highlights of the last Budget. Under the Agricultural Debt Waiver and Debt Relief Scheme ( 2008 ), farmers having more than two hectares of land were given time upto June 30, 2009 to pay 75 per cent of their overdues. In the 2009 – 10 budget, the time frame has been extended by six months upto December 31, 2009.
- The government has already approved 60 Agricultural Export Zones ( AEZs ).
- The Government will provide an additional US$ 6.17 billion for new farm initiatives launched by states to double the growth rate in agriculture to 4 per cent over the 11th Plan period.
- The National Food Security Mission was launched in 2007, with an outlay of US$ 979.51 million over the 11th Plan ( 2007 – 2012 ). It aims at enhancing the production of rice, wheat and pulses by 10 million tonnes, 8 million tonnes and 2 million tonnes respectively, by the end of the 11th Plan.
- The Rashtriya Krishi Vikas Yojana was also launched in 2007. Under this, the States are begin provided with US$ 5.01 billion over the 11th Plan period for investment in various projects based on local requirements.
- Services related to agro and allied sectors have been thrown open to 100 per cent foreign direct investment ( FDI ) through the automatic route.
- The Cabinet has approved 2 per cent interest subsidy on bank loans taken by farmers. The subsidy would cost the exchequer about US$ 826 million in the fiscal year 2009 – 10.
a ) Kisan Call Centre ( KCC )
- Kisan Call Centres have been functioning since 21st January, 2004 and working in 25 different locations covering almost all the States of the counry.
- At present 144 Call Centre Agents have been engaged in KCCs who are answering farmers’ queries in 21 local dialects.
- At each of the KCC locations the Kisan Call Centre Agents known as L – l agents are responding to farmers queries instantly.
- 25 Nodal Officers identified by this Department are facilitating the KCC functioning at local level.
- In order to generate awareness among masses publicity of KCC is being carried out through SAMETIs / DAVR States / UTs, Doordarshan / All India Radio.
b ) National Agriculture Policy
The first ever National Agriculture Policy was announced on July 28, 2000. Over the next two decades, it aims to attain :
- A growth rate in excess of 4 per cent per annum in the agriculture sector.
- Growth that is based on efficient use of resources and conservation our soil, water and bio – diversity.
- Growth with equity, i.e., growth which is widespread across regions & farmers.
- Growth that is demand driven and caters to domestic markets and maximizes benefits from exports of agricultural products in the face of the challenges arising from economic liberalisation and globalisation.
- Growth that is sustainable technologically, environmentally and economically.
c ) Operation Flood
- Operation Flood, the world’s largest integrated dairy development program, attempted to establish linkages between rural milk producers and urban consumers by organising farmer – owned and managed dairy co – operative societies.
- In the early 1990s, the program was in its third phase and was receiving financial assistance from the World Bank and commodity assistance from the European Economic Community.
d ) Animal Husbandry
Animal husbandry and dairy development are two sectors that supplement the agricultural income of the rural populace. The National Dairy Development Board was established in 1965 under the auspices of Operation Flood at Anand, in Gujarat, to promote, plan and organize dairy development through co – operatives; to provide consultations; and to set up dairy plans, which were then turned over to the co – operatives. There were more than 63,000 Anand – style dairy co – operative societies with some 7.5 million members in the early 1990s. The increase in milk production permitted India to end imports of powdered milk and milk – related products. In addition, 30,000 tons of powdered milk were exported annually to neighboring countries.
e ) Milk Production
During past five – year plans, several measures were initiated by the Government to increase the productivity of livestock, which has resulted in significant increase in the milk production to the level of 110 million tonnes in the year 2010 – 11. India continues to be the largest producer of milk in the world.
f ) Poultry Development
India, with poultry population of 556.40 million and estimated more than 53.6 billion eggs production, ranks among the top ( three countries in egg production in the world.
Indian Council of Agriculture Research
The Indian Council of Agricultural Research ( ICAR ) is an apex national organisation for conducting and co – ordinating research and education in agriculture including animal husbandry and fisheries. The Council undertakes research on fundamental and applied aspects in traditional and frontier areas to offer solutions to problem related to conservation and management of resources, productivity improvement of crops, animals and fisheries. It plays a pivotal role in developing new technologies in agriculture and allied sectors and performs the functions of introduction and disseminating it to the end users through its wide network Krishi Vigyan Kendras.
Indian Agriculture – Importance of Indian Agriculture – Agricultural Sector in India – Indian Agricultural Council – India Agriculture Policy.
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