Role of agriculture in indian Economy
- During the first two decades of the twentieth century, agriculture contributed between 48 and 60 percent of the gross domestic product. In the years 2001-2002, this contribution was only around 26%.
- At least two-thirds of India’s working population makes their living from agriculture. Other sectors in India have failed to provide enough jobs for the growing working population.
- Food production is increasing at a rapid rate due to the excessive pressure of population labour surplus economies like India and the rapid increase in demand for food. Food consumption in these countries is currently very low, and even a small increase in per capita income causes food demand to skyrocket (in other words it can be stated that the income elasticity of demand for food is very high in developing countries).
- As a result, unless agriculture is able to increase its marketed surplus of food grains on a consistent basis, a crisis is likely to emerge. Many developing countries are going through this phase, and agriculture has been developed to meet the rising food demands.
- The necessity of capital formation is widely acknowledged. Agriculture, as the largest industry in a developing country like India, can and must play a significant role in increasing capital formation rates. If it fails to do so, the entire economic development process will be hampered.
- Agriculture provides raw materials to agro-based industries such as sugar, jute, cotton textiles, and Vanaspati. Agriculture is also important to the food processing industry. As a result, agriculture is completely dependent on the development of these industries.
- Because two-thirds of India’s population lives in villages, an increase in rural purchasing power is critical for industrial development. Because of their increased income and low tax burden, large farmers’ purchasing power increased after the green revolution.
- Agriculture is extremely important to India’s internal and external trade. Internal trade in food grains and other agricultural products aids service sector expansion.
- Starting with the First Five-Year Plan, Agriculture is the most important source of revenue for both the federal and state governments. Agriculture and related activities such as cattle raising, animal husbandry, poultry farming, and fishing, on the other hand, generate significant revenue for governments. Freight charges for agricultural products, both semi-finished and finished, bring in a lot of money for the Indian railway and the state transportation system.
- For construction and other fields, a large number of skilled and unskilled labourers are required. Agriculture in India provides this labour.
Recent contribution of Agriculture to Indian Economy
- India’s total horticultural product production in 2019-20 was around 310 million tonnes.
- India produced approximately 24 million tonnes of onion in 2019-20 and exported approximately 2 million tonnes.
- In 2019-20, potato production was around 51 million tonnes, while tomato production was around 19 million tonnes.
- According to estimates, total fresh vegetable production was around 97 million tonnes, with approximately 16 lakh tonnes exported.
- In 2019-20, grape production was around 1.9 lakh million tonnes, while mango production was around 49 thousand million tonnes (besides processed mango pulp adding another 85 thousand tonnes).
- Cattle, buffaloes, goats, sheep, pigs, and poultry make up about 530 million of India’s livestock population as of 2019.
- India is the world’s largest milk producer, exporting milk to Bangladesh, Nepal, Bhutan, the United Arab Emirates, and Afghanistan, among others.
- In 2019-20, India exported approximately 11 lakh million tonnes of buffalo meat, 14,000 million tonnes of sheep/goat meat, and 3.5 lakh million tonnes of poultry products.
Indian Agriculture’s Challenges
- Instability: In India, agriculture is heavily reliant on the monsoon. As a result, food grain production varies from year to year. A year of abundant cereal production is frequently followed by a year of severe scarcity.
- Cropping Pattern: Food crops and non-food crops are the two broad categories of crops grown in India. The former includes food grains, sugarcane, and other beverages, while the latter includes various fibres and oilseeds.
- Land Ownership: Although agricultural land ownership in India is fairly evenly distributed, there is some concentration of land ownership. The fact that land ownership in India changes frequently contributes to inequity in land distribution. Large tracts of land are thought to be owned by a small group of wealthy farmers, landlords, and moneylenders in India, while the vast majority of farmers own very little or no land.
- Sub-Division and Fragmentation of Holding: Due to population growth and the breakdown of the joint family system, agricultural land has been continuously subdivided into smaller and smaller plots. To repay their debts, small farmers are sometimes forced to sell a portion of their land. This leads to more land subdivision.
- Land Tenure: India’s land tenure system is also far from ideal. The majority of tenants suffered from tenancy insecurity prior to independence. They could be kicked out at any moment. However, after Independence, various steps were taken to ensure tenancy security.
- Conditions of Agricultural Labourers: The majority of agricultural labourers in India have poor working conditions. Surplus labour, also known as disguised unemployment, is a problem. As a result, wage rates fall below the subsistence level.
- Manures, Fertilizers and Biocides: Over thousands of years, Indian soils have been used to grow crops with little regard for replenishment. As a result, soils have been depleted and exhausted, resulting in low productivity. Almost all crops have among the lowest average yields in the world. This is a serious issue that can be addressed by increasing the use of manures and fertilisers.
- Irrigation: Even though India is the world’s second-largest irrigated country after China, irrigation covers only one-third of the cropped area. In a tropical monsoon country like India, where rainfall is unpredictable, unreliable, and erratic, irrigation is the most important agricultural input. India will not be able to make sustained progress in agriculture unless and until more than half of the cropped area is irrigated.
- Lack of mechanisation: Despite the large-scale mechanisation of agriculture in some parts of the country, most agricultural operations are still carried out by hand in the majority of the country, using simple and traditional tools and implements such as the wooden plough and sickle. Ploughing, sowing, irrigating, thinning and pruning, weeding, harvesting threshing, and transporting the crops are all done by hand.
- Agricultural Marketing: In rural India, agricultural marketing is still in dire straits. Farmers must rely on local traders and middlemen for the disposal of their farm produce, which is sold at a low price due to a lack of adequate marketing facilities.
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