Agriculture and Economy

Summing up there were mainly three reasons justifying a specific appreciation of agricultural
activity:
the farmer is producing the most basic goods for human livelihood;
the farmer is providing social stability through his hard work and the particular structure of the
rural society;
the farmer is, in his production, subject to the volatility of weather conditions.
The Community dimension added a fourth reason which became very powerful over time:
the regional disparities which the Community was supposed to overcome.
These four aspects and the ingredient of cultural nostalgia ensured a particular place for the
farmer in society. s the farmer is ensuring the livelihood of society, society has to ensure the
farmer!s livelihood. "n addition he was still representing the good old times, when #uropean
countries were basically rural societies.
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 .!" in #$%&#, '" in #$(%&(# and is reduced to
#)." only at present. The share of the agricultural sector*s capital formation in GDP declined
from '.'" in the late #$$$s to #.$" at present.
(ii) Important Contribution to Employment
Agriculture sector, at present, pro+ides li+elihood to ( to ,%" of the total population. The sector
pro+ides employment to ).!" of country*s wor- force and is the single largest pri+ate sector
occupation.
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(iii) Important Source of Industrial Development
/arious important industries in India find their raw material from agriculture sector &cotton and
0ute te1tile industries, sugar, +anaspati etc are directly dependent on agriculture. 2andloom,
spinning oil milling, rice thrashing etc are +arious small scale and cottage industries which are
dependent on agriculture sector for their raw material. This highlights the importance of
agriculture in industrial de+elopment of the nation.
(iv) Importance in International Trade
India*s foreign trade is deeply associated with agriculture sector. Agriculture accounts for about
#!.," of the total e1port earnings. 3esides, goods made with the raw material of agriculture
sector also contribute about '%" in Indian e1ports. In other words, agriculture and its related
goods contribute about 4)" in total e1ports of die country.
inimum Support !rice of Agriculture !roducts
5eeping in +iew the interests of the farmers as also the need of self reliance, Go+ernment has
been announcing 6inimum 7upport Price 867P9 for '! ma0or crops. The main ob0ecti+es of
announcing 67P are :
a. To pre+ent fall in prices in the situation of o+er production.
b. To protect the interest of farmers by ensuring them a minimum price for their crops in
6inimum support price announced by the go+ernment is that price at which go+ernment
is ready to purchase the crop from the farmers directly if crop price becomes lower to
67P.
As a result, mar-et price of the crop ne+er comes down from the le+el of 67P This
minimum price security gi+es incenti+es to farmers to increase their production.
These minimum support prices of +arious crops are announced on the basis of
recommendations made by Agriculture ;ost and Price ;ommission 8A;P;9 which ta-es
into consideration the inputs costs and fa+ourable returns to the farmers while
recommending 67P.
"oodgrains !rocurement and Stoc#s in India
<ood grains procurement by the Go+ernment ser+es the dual purpose of pro+iding
support prices to the farmers and of building up public stoc-s of food grains.
Procurement operations are carried out by the <ood ;orporation of India 8<;I9 and the
state agencies designated by 7tate Go+ernment Procurement prices are based on support
prices recommended by ;A;P 8;ommission for Agricultural ;osts and Prices9.
<ood stoc-s are maintained by the ;entral Go+ernment for 4 purposes:
a. 6eeting the prescribed minimum buffer stoc- norms for food security.
b. <or monthly release of food grains for supply through PD7 8Public Distribution
7ystem9.
c. <or mar-et inter+ention to augment supply so as to help moderate the open
mar-et prices.
$uffer Stoc# in India
The years '%%#&%' and '%%'&%4 witnessed high le+els of stoc- buildup in the central
pool. <ood grains stoc-s reached a pea- of (!., million tonnes, an all time record in =une
'%%'.
The year '%%4&%! witnessed a general easing in the food grains stoc-s with relati+ely
lower procurement of rice and wheat following a bad agricultural year in '%%'&%4 and
relati+ely high off&ta-e of food grains especially for drought&related relief operations and
under the welfare schemes.
The steady reduction, in stoc-s prompted the Go+ernment to stop fresh allocation of rice
and wheat for e1port with effect from August '%%4, which has continued till date.
The year '%%!&% started with a much lower stoc- of '% million tonnes on April #, '%%!,
down from 4'.) million tonnes on April #, '%%4. 7toc-s howe+er, remained consistently
higher than the buffer re>uirement during '%%!&% with sufficient procurement of rice
and wheat and relati+ely lower off&ta-e than in the pre+ious year. ?n April #, '%%, the
stoc- at #,.!% million tonnes was abo+e the buffer norm of #(.' million tonnes.
%reen &evolution in India
Indian Green @e+olution is associated with the use of 2A/7 82igh Aielding /ariety
7eeds9, chemical fertilizers and new technology which led to a sharp rise in agricultural
production during the middle of #$(%.
The term Green @e+olution was gi+en by American scientist, Dr. Billiam Gande.
During the middle of si1ties, Indian agriculture scientists de+eloped a number of new
high yielding +arieties of wheat by processing wheat seeds imported from 6e1ico. A
similar impro+ement in +ariety of rice was also obser+ed.
The credit of this goes not only to Cobel Daureate Dr. Corman 3orlaug, but also to
India*s Dr. 67 7waminathan.
Second %reen &evolution in India
87trategy Adopted In ##th Plan9
The urgent need for ta-ing agriculture to a higher tra0ectory of ! per cent annual growth
can be met only with impro+ement in the scale as well as >uality of agricultural reforms
underta-en by the +arious states and agencies at the +arious le+els.
These reforms must aim at efficient use of resources and conser+ation of soil, water and
ecology on a sustainable basis, and in a holistic framewor-. 7uch a holistic framewor-
must incorporate financing of rural infrastructure such as water, roads and power.
The Approach Paper to the Ele+enth <i+e Aear Plan has aptly highlighted such a holistic
framewor- and suggested the following strategy to raise agricultural output.
a. Doubling the rate of growth of irrigated area
b. Impro+ing water management, rain water har+esting and watershed de+elopment
c. @eclaiming degraded land and focusing on soil >uality
d. 3ridging the -nowledge gap through effecti+e e1tension
e. Di+ersifying into high +alue outputs, fruits, +egetables, flowers, herbs and spices,
medicinal plants, bamboo, bio&diesel, but with ade>uate measures to ensure food
security
f. Promoting animal husbandry and fishery
g. Pro+iding easy access to credit at affordable rates
h. Impro+ing the incenti+e structure and functioning of mar-etsE and
i. @efocusing on land reforms issues.
Cational ;ommission on <armers has already laid the foundation for such a framewor-.
Program formulation as well as their implementation in the 7tates must be based on
uni>ue regional conte1ts incorporating agro&climatic conditionsE and a+ailability of
appropriate research and de+elopment 8@ and D9 bac-ed by timely and ade>uate
e1tension of finance.
Agriculture 'oldings in India
Type 'olding (in hect() () of Total)
6arginal 2olding Dess than one $"
7mall 2olding # F ! 4'.'"
6edium 2olding ! F #% ,.'"
Darge 2olding 6ore than #% #.("
*ther &evolutions
&evolution Area
Aellow @e+olution ?il seeds
Bhite @e+olution 6il-
3lue @e+olution <ish
Pin- @e+olution 7hrimp
Gray @e+olution Bool
Golden @e+olution 2orticulture
+hite &evolution and *peration "lood in India
Bhite re+olution is associated with a sharp increase in mil- production. During #$(!&(,
Intensi+e ;attle De+elopment Program 8I;DP9 was introduced in the country in which a pac-age
of impro+ed animal husbandry was gi+en to cattle owners for promoting white re+olution in the
country.
Dater on, to accelerate the pace of white re+olution, a new program named G?peration <lood* was
introduced in the country.
The ?peration <lood Program, which is the world*s largest integrated dairy de+elopment
program, has made considerable progress in achie+ing its outlined ob0ecti+es.
3uffaloes, ;ows and Goats contribute %", !(" and !" respecti+ely in total mil- production of
the country. India stands first in the world in mil- production.
H7A stands second in the world. Dr. /arghese 5urien is the pioneer of operation flood in India