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| Changing Scenario of Indian Agriculture in the Wake of Globalization |
By:
M.S.toor,S.Singh and I Kaur |
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Agriculture in the backbone of Indian economy as major chunk of population of the country is engaged and dependent on agriculture. It provided employment to large number of people, raw material to industrial units and food for survival to all. The introduction of scientific farm technology during mid-sixties has increased the agricultural production and the country turned out from a position of deficit in foodgrain production to surplus one. The foodgrain production increased from about 74 million tonnes in 1966-67 to about 130 million tones in 1980-81. It further increased to 176 million tones in 1990-91 and 212 million tones in 2003-04. India is second largest producer of wheat and rich in the world. It’s share in case of rich and wheat is about 22 per cent and 11 per cent of the world rice and wheat production, respectively.
The share of world production in relation to major agricultural commodities produced in India presents mixed picture. India’s share increased from 19.3 per cent to 21.9 per cent in case of paddy, 1.7 percent to 1.9 per cent in case of maize, 8.7 per cent to 12.3 per cent in case of wheat, 18.5 per cent to 23.3 per cent of sugarcane and 7.3 per cent to 9.8 per cent relating to tobacco leaves during the triennium ending 1984-86 to 1999-01 respectively (GOT, 2004-05). Further, the yield level of all these commodities except groundnut showed an increasing trend. However, the analysis of comparison of world’s highest yield with the Indian yield showed a mix response. Over time, yield has shown an improvement in case of paddy maize and wheat whereas Indian yield as percentage of world’s highest yield has declined in case of groundnut, sugarcane and tobacco leaves. But still there exists a wide gap between world’s highest yield and Indian yield. The Indian farmers can bridge this gap by making use of more advanced techniques of production.
The performance of agriculture sector is crucial to realize the goal of raising GDP growth for two reasons, One, agriculture continuous to be the largest sector of Indian economy contributed 22.6 per cent of total national output during the triennium ending 2003-04. Two, due to strong forward and backward linkages with rest of the economy, performance of agriculture causes significant effect on growth of non-agriculture sector, particularly in the case of industry (Chand, 2004). Recent empirical evidence suggests that on one per cent change in agriculture growth results in 0.38 per cent change in growth rate of industrial out put (Bhanumurthy and Sinha, 2004). After initiations of economic reforms during the year 1991-92 India emerged as one of the fastest growing economics of the world. However, the growth rate of GDP has slightly slowed down after 1996-97 (Chand, 2000). Researchers, academicians and policy planners are curious and concerned about this deceleration and are seriously thinking for policy measures to increase the pace of agriculture growth of the economy. Therefore, the present paper has been planned to highlight the changing scenario of Indian agriculture in the wake of globalization.
Changing Population and Foodgrain Production
Population has a very important role to play in the development of economy as a whole. It is not always considered as a burden rather it can be an asset if used in an efficient manner. It provides labour, technical expertise, human resource and finally creates adequate demand for commodities. In agriculture, being a labour intensive sector the role of population and its growth occupies very pivotal position. In India, population is not a scarce resource rather it is surplus in nature. The demand for foodgrain depends on the size of population. To analyze the growth of foodgrain production, makes sense when it complied with growth of population.
It is evident that growth of population showed a positive trend up to 60s and decline afterwards. But in case of growth of foodgrain production, continuous fall is noticed except for the decade of 80s. Moreover, in the beginning of 21st Century the growth rate of population is higher than the growth rate of foodgrains, which poses a very serious question on the food security of the country in the near future.
Changing Structure of Land Holdings
Although agriculture has made remarkable progress in the foodgrain production, but the number of small and marginal farmers is on the increase. More than sixty per cent of total numbers of operational holdings are marginal i.e. below one hectare in size. More than eighty per cent of total number of holdings are less than two hectares in size. The number of operational holdings is increasing every year and the additional holdings fall in the category of small and marginal holdings.
The analysis of date relating to operational holdings during 1976-77 to 1995- indicated that the number of marginal holdings increased from 45.52 million during 1976-77 to 71.18 million during 1995-96. Similarly the number of small and semi-medium holdings has increased from 14.73 and 11.67 million to 21.64 and 14.26 million respectively during the same period. However, the number of medium and large farms has decreased from 8.21 and 2.44 million to 7.09 and 1.40 million during 1976-77 to 1995-96. The total number of operational holdings increased from 81.57 million to 115.58 million during the above said period. Further, the proportion of marginal and small farms increased from 54.6 and 18.1 per cent during 1976.77 1.7 and 18.7 per cent during 1995-96 respectively whereas the figures for semi-medium, medium and large farms decreased from 14.3, 10.0 and 3.0 to 12.3, 6.1 and 1.2 per cent respectively during the same period.
Further, the date indicated that over time the farm size has been declining. In case of semi-medium, medium and large categories, the size decreases from 2.78, 6.05 and 17.57 to 2.73, 5.84 and 17.21 hectares during 1976-77 to 1995-96. the declining size and increase in number of holdings affect the economic viability of various categories of farms especially the small and marginal ones. Data indicated that majority of farms in India owned a land in very small quantity. It is not possible to cultivate the small farm efficiently by using modern equipment. It indicated that 80 per cent of the farmers owned land on an average less than 1.42 hectare, one can well imagine the level of technology they can adopt and commercialization of agriculture, which is the need of the hour due to globalization of agriculture.
Declining Share of Cultivators
Large numbers of changes have been noticed in the composition of population during 1951 to 2001. The total population in the country increased from 361.1 million during 51 to 1028.7 million during 2001. The rate of increase of population in the country was very high during 1950 to 1981 but it was slightly lower afterwards. The percentage of rural population and cultivators has continuously gone down from 82.7 and 71.9 per cent in 1981 to 72.2 and 54.4 per cent in 2001. This trend was noticed because of fast changing scenario of urbanization. More and more people are shifting towards cities and opting for occupations other than agriculture. The other reason for this fall in percentage of cultivators was the transformation of holdings into un-economic size over a period of time. So the large number of people opted for the other occupations because of low returns from agricultural sector. Due to fast growth of industrial sector, a large part of rural population shifted to cities.
Growth Rate and Composition of Rural Workers
It is evident from that overall employment in rural sector increased from 0.33 per cent during 1983-93 to 0.66 per cent per annum during 1994-2000. It is hardly a reflection of an employment friendly scenario. Further, the growth of employment in agriculture differs in accordance with different sectors. The growth rate is found to be decreasing in fishing, plantation and forestry. However, there is a little improvement of employment growth rate in livestock segment. This low growth of employment is attributed to high degree of mechanization and cropping pattern adjustment along with preference to non-farm jobs by young entrants. The changing structure of employment between 1972-73 and 1999-2000 in rural area. It is at once clear that in rural areas of India, the incidence of self-employment and regular employment has been consistently on a relative decline, both for male and female workers. For rural males self-employment declined from around 66 per cent in 1972-73 to 55 per cent in 1999-2000 and for rural females, it dropped from 65 per cent to 57 per cent. The regular employment also declined from 12.1 per cent to 8.8 per cent in case of males and 4.1 per cent to 3.1 per cent for females during the same period. Further, the use of casual labour is on the increase in case of both male and females. This casualization has increased from 22.0 and 31.4 per cent to 36.2 and 39.6 per cent in case of males and female labour during 1972-73 to 1999-2000 respectively. This casualization iss the result of high use of farm machinery and weedicides on various crop enterprises. It also created sharp peak periods of labour use. The labour is required only during the peak periods and most of the day-to-day field jobs like hoeing, irrigation and harvesting operations are decreased from months and days to hours only.
Changing Trends in Yield
Two major crops viz. rice and wheat did not show significant changes in yield when we compare the compou8nd growth rates relating to 1950-51 to 2003-04 and 2000-01 to 2003-04. The growth rate of yield declined from 1.87 to 0.88 in case of rice whereas it turned out to be negative in case of wheat. However, these growth rates in case of cotton, bajra, course cereals, groundnut, jute and mesta and rapessed and mustared has shown a positive change. The change in oilseeds and pulses was much encouraging in respect of yield. The sugarcane crop has shown a declining trend during the period of 2000-01to 2003-04. It is indicated that in almost all the major crops yield seemed to be stagnant.
Changing Growth Rates of Agriculture and Non-Agriculture Sectors
The decadal growth rates of agriculture and non-agriculture sectors showed a wide gap since 1950-51 to 2001-02. The growth rate of GDP of non-agriculture sectors was quite high compared to agriculture sector. Both the growth rates were at peak during 1990-91 to 1995-96. After this period growth rate in agriculture shown a declining trend. The growth rate of value of output of crop sector was found to be the lowest during 1996-97 to 2001-02 period. The growth of livestock and fruits/vegetable crops showed a somewhat high figure as compared to other crops. Further, during 2001-02, the stagnation in agriculture sector was very much visualized. Similarly, GDP of fishery sector also witnessed set back in growth rate during the same period.
Changing Capital Formation in Agriculture and Allied Sectors
Capital is very crucial input for the proper development of any sector. The trend shown by data during 1960-61 to 2002-2003 is not positive in case of agriculture sector. The decline in capital formation in agriculture sector is more pronounced during 1960-61 and 1990-91. During 1960-61, the stress was laid on heavy industries and agriculture was ignored as far as capital formation was concerned. After that during 1970-71 and 1980-81 a slight upward shift was noticed in public sector investment because of foodgrain and export requirements of agricultural commodities. Since 1990-91, the era of economic reforms, the proportion of capital formation in agricultural sector is on decline and it reaches at the bottom as only 6.5 per cent during 2002-03.
The share of agriculture in total capital formation declined from 8.5 per cent during 2000-01 to 6.5 per cent during 2002-03. Moreover, this decline was observed more in case of private sector investment from 9.7 per cent to 6.4 per cent during the above mentioned period. The decline in public sector investment was set in during the early eighties. The declining trend continued for most of the years after eighties. Several studies shown that public investments have strong effect on agricultural productivity and growth in India (Chand 2001); Gulati and Bathia 2001). Therefore, public investment in agriculture sector should be encouraged to put the economy on higher growth path.
Indian Agriculture During Globalization
The impact of WTO on Indian agriculture can be seen from the production performance of major agricultural products before and after trade liberalization . The growth rates of production of selected commodities during 1990-91 to 1995-96 and 1996-97 to 2003-04 indicate decline in case of total foodgrains, cereals, pulses, wheat, sugarcane, oilseeds, milk, egg and fisheries. But the growth rates were observed negative in case of oilseeds, cotton and pulses, which indicated decline in their production after initiation of globalization process. The slow down of growth rates after trade liberalization happened due to unfavorable terms of trade for agriculture during mid 90’s and the impact of lower international prices of agricultural commodities than domestic prices during late 90’s. Similarly, the public investment in agriculture did not increased to keep pace with the needs of output growth and adoption of new and improved technology during this period. Moreover, large-scale imports of some commodities in post WTO period caused adverse affect on the production and productivity of agriculture sector in the country.
REFERENCES
Government of India, Economic Survey of India, Various Issues.
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Gulati, Ashok and Bathla, Seema (2001), Capital Formation in Indian Agriculture, Economic and Political Weekly, Vol. 36 (20), May. 19-25.
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