Role of Agriculture In India’S Economic Development

Being one of the strongholds of the Indian economy agriculture accounted for 15.7 percent of the country’s gross domestic product in 2008-09. According to a Rabobank report, the agri-biotech sector in India has been growing at a whopping 30 percent since the last five years, and it is likely to sustain the growth in the future as well . The report further states that agricultural biotech in India has immense potential and India can become a major grower of transgenic rice and several genetically engineered vegetables by 2010. National Economy: The direct contribution of the agriculture sector to national economy is reflected by its share in total GDP, its foreign exchange earnings, and its role in supplying savings and labor to other sectors. Agriculture and allied sectors like forestry and fishing accounted for 18.5 percent of total Indian Gross Domestic Product (GDP) in 2005-06 and employed about 58 percent of the country’s workforce. It accounted for 10.95 percent of India’s exports in 2005-06 and about 46 percent of India’s geographical area is used for agricultural activity. There has been a structural transformation in the Indian economy during the past few decades. There has been a structural transformation in the Indian economy during the past few decades. The composition of Gross Domestic Product at 1993-94 constant prices reveals that the share of agriculture including forestry and fishing has declined as growth in industrial and services sectors far outpaced agricultural sector. The share of mining, manufacturing, electricity and construction sector has increased from 21.6 percent in 1970-71 to 27 percent in 2004-05 and services sector has increased significantly from 32 percent to 52.4 percent during the same period . Despite a steady decline of its share in the GDP, agriculture is still an important sector and plays a significant role in the overall socio-economic development of the country . Therefore, fostering rapid, sustained and broad-based growth in agriculture remains key priority for the government. State Economies: Consistent with the trends of economic development at national level, role of agricultural sector in the state economies is also changing rapidly . The share of agriculture in Gross State Domestic Product (GSDP) has declined significantly during the last two decades. In some states, such as Bihar , Punjab , Uttar Pradesh, Haryana , Rajasthan and Orissa, the sector today contributes more than one-quarter of GSDP, while in some states, such as Gujarat, Kerala, Karnataka, Tamil Nadu and Maharashtra, the sector contributes less than 20 percent to GSDP. However, contribution of agriculture to GSDP has declined in almost all States between 1993-94 and 2004-05. The decline was the higest in Karnataka (16%), followed by Haryana (14.2%) ,and Kerala (13.7%). In Karnataka, decline was mainly due to significant increase in the share of services sector (from 37.9% in 1993-94 to 54.7% in 2004-05) mainly drive by informational technology (IT) industry. Similar is the case with Haryana the decline is due to faster development of services sector around the national capital, Delhi. Despite declining share of agriculture in the economy, majority of workforce continue to depend on agricultural sector for employment and in rural areas dependence on agriculture is more as nearly 75 percent of rural population is employed in agricultural sector. However, there is a disguised employment lead to lower labor and resources productivity in the sector relative to other sectors of the economy. The low labor productivity leads to higher rates of poverty in rural areas. Agriculture in India is constitutionally the responsibility of the states rather than the central government. The central government’s role is in formulating policy and providing financial resources for agriculture to the states. For a proper understanding of the changing agrarian structure, the various strategies adopted for augmenting growth should be evaluated bearing in mind the highly skewed distribution of land ownership and land holdings. Soon after independence India found that the domestic production of food grains was not adequate to meet the domestic demand. It was justifiably considered humiliating for a country of the size of India to be going around with a begging bowl. Hence increasing food grain output and achieving self-sufficiency in food grains become a mtter of high priority for output and achieving self-sufficiency in food grains become a matter of high priority for the policy mkers. The grow More Food campaign, the Community Development Programme and the Intensive Area Development Programmes were all attempts at regenerating Indian agriculture that had stagnated during the British period. Havingt created an institutional structure, it was but obvious those solutions had to be found within that framework. In this context food output could be increased through programmes like JADP, through investment in infrastructure in already irrigated areas and through increasing dependence on the main 3 agents of growth namely the uppermiddle and rich farmers. It was therefore, inevitable that the growth under such circumstaces be concentrated in irrigated regions and in absolute terms a major proportion of incremental income should flow to the rich and very big farmers. Looked at in this context, to blame green revolution technology for distorted pattern of agricultural development is tatally mis-conceived and illogical. It could actually be argued that without the introduction of new technology , India could not have recorded high growth in unequal pattern development , it may be repeated was the creation of skewed land structure as a result of half- hearted land reforms. The nature of distortions that have taken place in the agrarian structure and their implications fro our polity may briefly be analysed. The following seem to be the major characteristics of agrarian scene in India: 1. Inter-personal inequality 2. Inter-regional inequality 3. Poverty. Production: India has become the world’s largest producer across of commodities due to its favorable agro-climatic conditions and rich natural resource base. India is the largest producer of coconuts, mangoes, bananas, milk and dairy products, cashew nuts, pulses, ginger, turmeric and black pepper. It is also the second largest producer of rice, wheat, sugar, cotton, fruits and vegetables. According to the centre for Monitoring Indian Economy (CMIE), crop production is expected to rise by 1.7 percent during FY10 and food grain production is expected to increase by 1.1 percent and wheat production is projected to remain at the same level of 80 million tons as estimated for FY09 while rice production is projected to increase by 1.1 percent to 98.8 million tons. Production of coarse cereals and pulses is also expected to rise in FY10. According to government data, wheat acreage has gone up marginally to 27.75 million hectares by February 4, 2010, compared to 27.58 million hectares in the same period last year. The acreage under pulses ( gram, lentil,urad,moong,) has gone up to 13.74 million hectares, compared to 12.95 million hectares in the same period last year. Cotton production in India, the world’s second largest producer, may rise 10 ercent to about 32 million bales (one bale is equal to 170kg) in the 2009-10 season (October-September), on the back high support price and more sowing of high-yielding BT seeds. India’s coffee output is pegged at 310,000 tons in 2009-10, 4.4 percent higher compared to 2008-09, according to the post – blossom estimates released by the Coffee Board. If the actual output in 2009-10 matches estimates, India is likely to climb up in the ranking list of top 10 coffee-producing countries in the world. According to the International Coffee Organization (ICO), India has a bright chance of becoming the fifth largest coffee producer in the world, replacing Mexico, Currently, it is placed in the sixth position.. Exports and Imports: According to the government’s agri-trade promotion body. Agricultural and processed Food Products Export Development Authority (APEDA) , India’s exports of agricultural and foricultural products and processed food products was worth US$ 7.98 billion in 2008-09 an increase of 13.88 percent from US$ 7.01 billion in 2007-08. India’s agri-export turnover is expected to double in the next five years, according to APEDA. Agri-export turnover is set to rise to nearly US$ 18 billion by 2014. At present , around 70 percent of the country’s agricultural and processed food exports are to developing countries in the Middle East, Asia , Africa and South America. Indian seed companies, such as JK Seeds, Namdhari Seeds, Nuziveedu Seeds, Nath seeds, Rasi and Vibha Seeds, are eyeing the export markets in SAARC (South Asian Association for Regional Cooperation) and African countries with a host of hybrid seeds and best farm practices The seed producers, who are seeking to expand their horizons, are cashing in on the poor market infrastructure in East and West African countries and the appetite for hybrid seeds in the SAARC region.