Agriculture economy has vital role in overall economic growth in India. It is source of employment for 55% of population and contributes around 14% in GDP growth.
However, the agrarian economy is in constant down turn. Its share in GDP has continuously shrunk since Independence.
Why its share in GDP is shrinking? Is this a new phenomenon? Let's briefly see how agriculture has progressed in India since Independence.
To overcome the harm done by colonial rule, government of newly Independent India had paid special attention on agriculture sector. The First five year plan laid foundation of land reforms. Zamindari system was abolished and more stress was given on legitimate distribution of land resource.
In mid 60's, India realized that to earn global respect, it is imperative to have self sufficiency in food products. India should reduce her dependency on other countries particularly on U.S. for food supply.
Food security of the people of India was one of the major challenges at that time. These critical situations gave birth to Green revolution. After Green revolution India become food surplus country, thanks to visionary Dr. M.S Swaminathan,
Since the liberalization policies of 90's, agriculture sector is in tremendous pressure. It is not able to meet the people's expectations. Those who follow agriculture practices are still in poor and vulnerable state. The incident of suicides of farmer has increased more than ever.
Many economists believe that agriculture sector has stagnated. It became a business of high risk and low returns.
What could be the reason for such apprehension? Why a widely practiced sector is not economically strong?
To find answer of such questions, we have to introspect deeply into the issues.
Major issues can be classified as:-
More hand, less work:
Agriculture is a seasonal activity. There is no constant work available throughout the year. This has caused the problem of seasonal unemployment.
Moreover, 55% of population is practicing agriculture; it means engagement of people is more than the requirement. This arise the problem of disguised unemployment.
Also, GDP share of agriculture is only 14%, which gets divided to 55% of population, leads to very low percapita income.
Uncertain Monsoon Season:
Monsoon play significant role in agriculture. Around 70% of area depends on rainfall for irrigation.
Many times the natural phenomena like EI-Nino, cyclone, climate change etc. leads to monsoon failure, which causes severe drought all around the country. This impacts Agriculture production. The situation gets more adverse due to lack of infrastructure in irrigation facilities.
In the age when farmers of western countries are using aeroplanes for agriculture practices, it will be no wonder to find people in India who still use bulls and animals for the same.
Technological inefficiency in producing cheap equipments has forced poor farmers to stick with old tools and technology.
Moreover, educated youth are not willing to take agriculture as their professional carrier. There is still a stigma attached with agriculture practices that it is job of menial.
Poor storage, transport and marketing:
Being perishable in nature, agriculture products particularly vegetables and fruits cannot be kept for long time without proper storage facilities.
India is losing tones agro products because of poor storage facilities. A large share of farm production gets waste before reaching to the market.
Moreover, poor access of market due to lack of transport facilities force farmers to sell their products in cheaper rates to the middle men. The actual profit of agro products is siphoned off by these middle men.
Urbanization and Industrialization:
In the lack of basic necessities, people become helpless in village and move towards cities for work. This situation has created unequal distribution of labour. Many villages are now facing problem of less man power to take up agriculture practices.
Industrialization has given impetus to manufacturing and services sector. But, it has severely impacted the agriculture sector.
Industries acquire fertile land to set up plants. Area of arable land is decreasing rapidly. This has increased the stress on the existing agriculture land.
Moreover, the pollution created by industries, particularly in air and water, has adversely impacted the productivities of crops and other agro products.
In 12th five year plan, government has taken steps to make agrarian economy more sustainable. The set target of 4% agriculture growth is necessary for overall economic development.
Moreover, after 65 year of independence, India is still a developing country where people die with hunger and malnutrition. The need of the hour is to ensure food security and good health for its people. This can only be achieved with strong agrarian economy.