CONTRIBUTION OF AGRICULTURE

TO GNP, ITS ROLE AS A SOURCE OF

SAVINGS AND MARKETING AND
MANUFACTURING GOODS
Presented By : Pamodi Edirisinghe
Presented To: Dr .Meera M

Contents

Introduction

Contribution of Agriculture to GNP

Recent Trends of Agriculture to GNP

Role played by Agriculture in Savings

Contribution of Agriculture in Marketing and Manufacturing Goods

Conclusion

Introduction

In many developing countries, agriculture provides employment to more than 66%

of the population and contributes nearly 27% to the GNP.

In most of the developed countries such as USA, England, Germany and Japan the
percentage of people engaged or employed in agriculture is 3%, 2%, 4% and 7 %
respectively. In the USA the share of agriculture in GNP is 3%, in England and
France the share of agriculture in GNP is 2% and 5 % respectively

Agriculture is the main occupation of most of the underdeveloped countries and

at the same time it is the most backward sector out of all

Thus Agriculture can be considered as the back bone of the country and the
economic system of India. Nearly 2/3 rd of people in India depends upon
agriculture directly or indirectly and 70 percent of this population lives in rural
areas. The role played by agriculture in the GNP can be discussed in various
dimensions.

1.Share in national Income

2.Share in Employment

3.Basis of Industrial Development

4.Importance in foreign trade

5.Importance in household consumption

6.Significance for trade and services

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Recent Trends in Agriculture to GNP

300

250

200

150
259.23
100
137.17

162.62

141.77

139.39

FY 9

FY 10

157.35

160.8

FY 11

FY 12

140.77

132.71

FY 13

FY 14

50

0
FY 7

FY 8

FY 15

Some of the recent major government initiatives in

the sector are as follows:

India and Lithuania have agreed to intensify agricultural cooperation, especially in sectors
like food and dairy processing.

Gujarat Government has planned to connect 26 Agricultural Produce Market Committees

(APMCs) via electronic market platform, under the National Agriculture Market (NAM)
initiative.

The State Government of Telangana plans to spend Rs 81,000 crore (US$ 12.1 billion) over
the next three years to complete ongoing irrigation projects and also undertake two new
projects for lifting water from the Godavari and Krishna river.

The National Dairy Development Board (NDDB) announced 42 dairy projects with a
financial outlay of Rs 221 crore (US$ 34.02 million) to boost milk output and increase per
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animal production of milk.

The government planned to invest Rs 50,000 crore (US$ 7.7 billion) to revive four
fertilizer plants and set up two plants to produce farm nutrients.

The Ministry of Food Processing Industries took some new initiatives to develop the foodprocessing sector that would enhance the income of farmers and export of agro and
processed foods, among others.

The Government of Telangana allocated Rs 4,250 crore (US$ 654 million) for the first
phase of the farm loan waiver scheme. The scheme is expected to benefit 3.6 million
farmers who took loans of Rs 100,000 (~US$ 1,539) or below before March 31, 2014.
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Agriculture as a source of Savings

Contribution to National Income

Supply of Wage Goods

Increase in Employment

Agricultural Industrial development

Agriculture and Foreign Trade

Role Played in Internal Trade

Capital Formation
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Role of agriculture in marketing and

manufacturing of goods.

Agricultural marketing is mainly the buying and selling of agricultural products.

The task of distribution system is to match the supply with the existing demand by whole selling
and retailing in various points of different markets like primary, secondary or terminal markets.
Most of the agricultural products in India are sold by farmers in the private sector to moneylenders
(to whom the farmer may be indebted) or to village traders.

There are many reasons for the bulk of produce being sold by the farmer in the village.

The farming units are small and most of the farmers do not have the transportation facilities.

Road development is not quite adequate.

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Agricultural Marketing

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Agricultural goods that are manufactured are different from industrial goods
Most of the agricultural products are perishable in nature
Farm products are produced on a particular season and they cannot be produced whole
through the year

similarly most of the agricultural goods are produced in bulks therefore storage facilities
and transportation is difficult and at the same time expensive.

With the globalization agricultural production and marketing of commodities have become
competitive

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Trends in Agricultural Production

1.Agricultural Production and productivity

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2.Diversification of Agriculture

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3.Modernization of Agriculture
With the start of the Green revolution, modern technology, improvement of
irrigation facilities took place. It also introduces the use of High yielding
variety of seeds and use of chemical fertilizers, pesticides which are
produced outside the agricultural sector.

With the intervention of new technology instead of single crop, two or

three crops could be able to grow with the increasing agricultural output.
Thus most of the farmers in Punjab, Haryana, Andhra Pradesh and Uttar
Pradesh majority of farmers shifted in to the intensive cultivation.

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4.Improvement of the agrarian system :

Central Government has enacted a number of laws regarding the land reforms.

The laws were mainly implemented to abolish the Zamindari system, land ceiling
and the tenancy reforms. The government succeeded in abolishing the
Zamindari.

This created a considerable rate of improvement in the lives of the farmers.

Rents came down and the concept of land to the tiller became strong.

The land ceiling was not effective even though there was redistribution of land,
to the beneficiaries. The land reforms were successful in West Bengal and in
Kerala more than in other districts
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5) Cooperate Entry to Agriculture

Co operations know that agriculture is not an area which is not tapped fully. With the entry of
the co operations the farmers have lot of reasons to be happy.

Many cooperation such as Reliance, ITC ,Trinethra and others are making a beeline for the
doorstep of the farmers to buy there products. During the earlier days it was the farmers who
took their produced to the market and searched for channels of marketing .

Giving entry to the cooperates can be a best solution to outrun the problems that can be seen
in the sector, by ensuring proper prices for the farmers for the products they have produced.

Several experts comments that cooperate farming could be a possible solution for the crisis in
which that is being faced by the agricultural sector, because they are capable of undertaking
the risk and face financial losses more easily than small and medium farmers.
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Conclusion

When considering all the above factors it is quite evident agriculture plays a significant
role in the GNP of India. Apart from that it also provides evidence that how Agriculture
can contribute to mobilize savings within the country, through expanding and
diversifying its production processes. It also indicates how agriculture is playing a
significant role in the process of production of goods and marketing .

Finally it also gives us a glimpse of how the agricultural production has changed
overtime and its modern trends, highlighting the importance of the sector as a major
sector of economic development of the country.

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References

Emmanuel.M ;( 2012) Basics of Business and Management (Second Edition); Pearson

Education South Asia.

Dr.Tyagi V; Indias Agriculture : ( 2012); Challenges for Growth and Development in present
scenario; International Journal; Volume 2; Issue 1.

TNAU Agricultural Portal; Agricultural Marketing And Agri Business;

http://agritech.tnau.ac.in/agricultural_marketing/agrimark_India.html

https://www.indiaagronet.com/indiaagronet/Agri_marketing/contents/Concept.htm

http://www.hillagric.ac.in/edu/coa/AgriEcoExtEduRSocio/lectures/AgEcon244.PDF

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