We know that during the colonial rule, the agricultural sector neither had growth nor had equity. The policies made by Independent India had to consider and address these issues. They did this by promoting 'miracle seeds' and through land reforms, thereby bringing in a revolution in Indian agriculture.
During the time of independence, intermediaries otherwise called zamindars and jagirdars characterized the land tenure system. Like we saw in the previous chapters, these zamindars merely levied taxes and rent from the farmers without contributing to the growth of the farms. The agricultural sector had low productivity because of which we had to import food from USA. Equity in agriculture meant the need for land reforms or the transferring of ownership from the hands of the zamindars to the hands of the cultivator. After just a year of independence, steps were taken to pack off the intermediaries and give ownership of the lands to the cultivator of the lands ie the farmer. The objective of this land reform was that the ownership of land would give the cultivator an incentive to invest in making improvements and increasing productivity if they are provided with sufficient capital.
This was another policy that was adopted in newly independent India in order to promote and establish equity in the agricultural sector. Land ceiling fixed the maximum size of land that could be owned by an individual. The objective was to reduce the concentration of land ownership in the hands of a very few people.
The instant the intermediaries were abolished, around 200 lakh tenants came into direct contact with the government. They were freed from the exploitation of these intermediaries. The ownership of land made provided these tenants with the urge to increase the output and hence contributed to agricultural growth.
Effectiveness of Land Reforms and Land Ceiling
Though the government had abolished the intermediaries, there were instances where the old zamindars still continued to own large agricultural land by making use of the loopholes in the law. They evicted poor tenants even though the tenants had been given ownership rights. Therefore, the poorest of the agricultural labourers like sharecroppers and landless labourers did not benefit from the land reforms.
Land Ceiling also faced a lot of problems because many big landlords challenged the rule and delayed the implementation of the legislation. During the delay caused in the implementation of the legislation, the big landlords registered their lands in the name of the other members of their family and their close relatives. Land Ceiling legislation also had a lot of loopholes which were exploited by the big landlords.
Land reforms were very successful in West Bengal and Kerala because the state governments were committed and strict in enforcing the reforms. Sadly other states did not have the same commitment levels and hence inequality in land holdings exists till today.
When India attained her freedom, about 3/4th of the country's population was heavily dependent on the agricultural sector for livelihood. The productivity of this sector was very low because of lack of use of modern technology and lack of proper infrastructure. Our agriculture was dependent mainly on the monsoon and a failure in the monsoon caused the farmers a lot of trouble because they did no have access to proper irrigation facilities.
The lack of growth and stagnation in the agricultural sector caused by the colonial rule was broken by the coming of Green Revolution. This refers to the increase in the productivity of food grains by using High Yielding Variety (HYV) seeds, especially for rice and wheat. To use these seeds, the use of pesticides and fertilizers in correct quantities was essential. Apart from that, regular supply of water was also needed. Farmers who used HYV seeds had to have regular irrigation facilities as well as the financial resources. Hence during the first phase of the Green Revolution (around mid 1960s to mid 1970s) the use of HYV seeds was restricted to farmers from comparatively richer states like Tamilnadu, Punjab and Andhra Pradesh.
During the second phase (mid 1970s to mid 1980s) the technology spread to a greater number of states and HYV seeds of a greater number of crops were available and hence a wider section of farmers reaped the benefits.
The Green Revolution helped us achieve self sufficiency in food grains and we could meet the requirements of our population without having to import from any foreign nation.
Mere growth in the agricultural output is not enough if a large part of the output is consumed by the farmers themselves. Such a higher output will not make much of a difference to the growth of the economy. If a significant amount of output comes to the market consumption, then the increase in the agricultural output will result the growth of the nations economy. The portion of the agricultural output which is sold in the market by the farmers is called market surplus.
Luckily for us, as pointed out by C.H. Hanumantha Rao, a famous economist, the Green Revolution saw a large proportion of the output of rice and wheat coming into the consumer market as a market surplus which resulted in the reduction in the price of food grains as compared to other essential commodities. The low income groups greatly benefited from this fall in the food prices. The green revolution also enabled the government to obtain a sizeable amount of stock of food grain to be used incase of future short supply of food grains.
Drawbacks at the advent of Green Revolution
- One major drawback was the increase in the disparity between small and big farmers because only the bigger farmers could afford the HYV seeds and hence reaped more benefits and profits.
- The HYV seeds were prone to pest attacks and hence in case of attacks a small farmer couldn't afford the loss.
Methods adopted to overcome the drawbacks of the Green Revolution
- The government gave small farmers loans at very low interest rates and provided them with subsidies so that they could also buy the HYV seeds and benefit.
- The risk of the small farmer losing his crops to the pest was considerably reduced by the services given by the research organizations set up by the government.
Debate over Subsidies
Today, a hot topic of debate is the economic justification of subsidies in the agricultural sector. It was necessary to give subsidies in order to give the farmers an incentive to adopt the use of HYV seeds, especially the small farmers. The farmers would consider any new technology as risky and hence subsidies were required to encourage the farmers to test the new technology.
Some economists feel that once a technology has been tested and proved to be profitable and finds wide acceptance, the subsidies should be slowly removed. Further subsidies are introduced with the intention of helping the farmers, but in this process even the fertilizer industry sees a huge growth and also the farmers of the more fertile and prosperous lands flourish better than the smaller farmers. Hence arguments are put forth saying that the subsidies on fertilizers should not continue as it does not reach the targeted group and hence is a burden on the government.
There is another branch of people who argue that the subsidies in the agricultural sector should continue because there is a lot of risk involved in farming in India and many farmers are poor and need these subsidies without which they cannot try new technologies and increase their output. This set of people believe that eliminating the subsidies will only increase the disparity between the poor and the rich farmers and hence policies should be framed to ensure that the subsidies reach just the small farmer and don't benefit the fertilizer industry or the large farmers.
By late 1960s India had achieved self sufficiency in food grains because of increase in agricultural productivity. Though this is a matter of pride, around 65% of the population was still dependent on agriculture for livelihood even till 1990. This was not very encouraging for the growth of the other sectors of the nation. The findings of economists show that a nation becomes more prosperous when the contribution of agriculture to the GDP decreases while there is a simultaneous decline in the workforce employed in the sector.
In India, between 1950 and 1990, the proportion of GDP contributed by the agricultural sector declined to a great extent but the workforce in the sector did not decrease( 67.5% in 1950 to 64.9% by 1990). The question which comes to the mind immediately is that why should such a huge portion of the population be employed in agriculture when the agricultural output could have grown with much lesser people employed in the sector? The answer is that the industrial and service sector did not absorb people working in the agricultural sector. This, according to many economists is a major failure of our policies followed during 1950-1990.