Paper IV (B) agricultural economics block 1-agriculture and economic development

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Unit 1 Indian Agricultural Economics
Unit 2 Livestock Economics

The block opens with introduction to agricultural economics in India. It discusses in detail the scope and nature of agriculture in India followed by rural economic development. Role of agriculture in economic development will be dealt in depth and relationship between agriculture and industry will be tackled. Agricultural development and its impact over poverty and environment will finally be taken into consideration.
Second unit highlights the livestock in India. It deals with livestock resources. Livestock system will be discussed and white revolution will be explained. Other areas of consideration in this unit will remain fishery development; poultry; forestry; horticulture; floriculture; rural industrialization and relevance of agro based industries in Indian economy.

After studying this unit, you should be able to understand and appreciate:

  • The scope and nature of agriculture in India

  • The concept of rural economic development

  • The role of agriculture in economic development

  • The relationship between agriculture and industry

  • The impact of agricultural development over poverty and environment

1.1 Introduction

1.2 Scope and nature of agriculture in India

1.3 Rural economic development

1.4 Role of agriculture in economic development

1.5 Agriculture and industry

1.6 Agricultural development and poverty

1.7 Environmental impact of agricultural development

1.8 Summary

1.9 Further readings

Agriculture in India has a long history dating back to ten thousand years. Today, India ranks second worldwide in farm output. Agriculture and allied sectors like forestry and logging accounted for 16.6% of the GDP in 2007, employed 52% of the total workforce and despite a steady decline of its share in the GDP, is still the largest economic aman and plays a significant role in the overall socio-economic development of India.

India is the largest producer in the world of milk, cashew nuts, coconuts, tea, ginger, turmeric and black pepper. It also has the world's largest cattle population (281 million). It is the second largest producer of wheat, rice, sugar, groundnut and inland fish. It is the third largest producer of tobacco. India accounts for 10% of the world fruit production with first rank in the production of banana and sapota.

India's population is growing faster than its ability to produce rice and wheat.


Agriculture in India is the means of livelihood of almost two thirds of the work force in the country. It has always been INDIA'S most important economic sector. The 1970s saw a huge increase in India's wheat production that heralded the Green Revolution in the country. The increase in post -independence agricultural production has been brought about by bringing additional area under cultivation, extension of irrigation facilities, use of better seeds, better techniques, water management, and plant protection. Dependence on India agricultural imports in the early 1960s convinced planners that India's growing population, as well as concerns about national independence, security, and political stability, required self-sufficiency in food production. This perception led to a program of agricultural improvement called the Green Revolution, to a public distribution system, and to price supports for farmers. The growth in food-grain production is a result of concentrated efforts to increase all the Green Revolution inputs needed for higher yields: better seed, more fertilizer, improved irrigation, and education of farmers. Although increased irrigation has helped to lessen year-to-year fluctuations in farm production resulting from the vagaries of the monsoons, it has not eliminated those fluctuations.

Non traditional crops of India, such as summer mung (a variety of lentil, part of the pulse family), soyabeans, peanuts, and sunflowers, were gradually gaining importance. Steps have been taken to ensure an increase in the supply of non-chemical fertilizers at reasonable prices. There are 53 fertilizer quality control laboratories in the country. Realizing the importance of Indian agricultural production for economic development, the central Government of India has played an active role in all aspects of agricultural development. Planning is centralized, and plan priorities, policies, and resource allocations are decided at the central level. Food and price policy also are decided by the central government. Thus, although agriculture in India is constitutionally the responsibility of the states rather than the central government, the latter plays a key role in formulating policy and providing financial resources for agriculture. Expansion in crop production, therefore, has to come almost entirely from increasing yields on lands already in some kind of agricultural use.

The monsoons, however, play a critical role in Indian agriculture in determining whether the harvest will be bountiful, average, or poor in any given year. One of the objectives of government policy in the early 1990s was to find methods of reducing this dependence on the monsoons.

1.2.1 Initiatives

The required level of investment for the development of marketing, storage and cold storage infrastructure is estimated to be huge. The government has not been able to implement various schemes to raise investment in marketing infrastructure. Among these schemes are Construction of Rural Go downs, Market Research and Information Network, and Development / Strengthening of Agricultural Marketing Infrastructure, Grading and Standardization.

The Indian Agricultural Research Institute (IARI), established in 1905, was responsible for the research leading to the "Indian Green Revolution" of the 1970s. The Indian Council of Agricultural Research (ICAR) is the apex body in agriculture and related allied fields, including research and education. The Union Minister of Agriculture is the President of the ICAR. The Indian Agricultural Statistics Research Institute develops new techniques for the design of agricultural experiments, analyses data in agriculture, and specializes in statistical techniques for animal and plant breeding.

Recently Government of India has set up Farmers Commission to completely evaluate the agriculture program. However the recommendations have had a mixed reception.

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