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Types of Agricultural Policies

Types of Agricultural Policies

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Published by Digesh Shah

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Published by: Digesh Shah on Apr 16, 2011
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Submitted to: Prepared by:Prof. K.M. Joshi Digesh ShahKunal ShahKirti ChauhanRajesh BhattiMehul Makwana
:Agriculture is described as the backbone of Indian economy, mainly becauseof three reasons.(1) Agriculture constitutes largest share of country's national incomethough the share has declined from 55 percent in early 1950s to about 25percent by the turn of the Century.(2) More than half of India¶s workforce is employed in its agriculturesector.(3) Growth of other sectors and overall economy depends onperformance of agriculture to a considerable extent.Besides, agriculture is a source of livelihood and food security for largemajority of vast population of India. Agriculture has special significance forlow income, poor and vulnerable sections of rural society. Because of thesereasons agriculture is at the core of socio economic development andprogress of Indian society, and proper policy for agriculture sector is crucialto improve living standards and to improve welfare of masses.Agriculture has played a dominant role in the Indian economy. Itprovides employment to about 65% of the working population. Theperformance of this sector depends on numerous factors or agriculturalinputs such as farm mechanisation, land reforms, organized markets, creditsupply, irrigation, pesticides, fertilizers and financing industries. Cotton andJute textile industries, sugar, vanaspati and plantation-all these depend onagriculture directly. Agricultural products like tea, sugar, oil seeds, tobacco,spices, etc. constitute major part of exports. Broadly speaking, theproportion of agricultural goods, which are exported, may amount to 50% of exports.
Agriculture in India is in the hands of millions of peasant households, abulk of which comprise tiny land holdings with preponderance of ownercultivation. There is hardly any direct government intervention in theproduction and investment decisions of the farmers but the governmentdoes influence the legal, material and economic environment in whichfarmers operate.
Though tremendous progress has been made to exploit irrigationpotential in the country still two third of area under cultivation is unirrigatedand there is thus heavy dependence of production on vagaries of nature i.e.rainfall. Irrigated areas have experienced sharp increase in productivity leveland large part of output at such farms is for market. On the other hand,productivity in unirrigated areas has remained either stagnant orexperienced very small growth and most of the farmers in such areasproduce for subsistence purpose.At overall level, agricultural growth remained slow (below 3 percent) inthe country. Apart from that, agricultural growth remained confined to a fewwell endowed pockets which have created regional disparities.
There is a close association between agricultural policy followed in thecountry and the magnitude and sources of output growth. Based on these,agricultural policy followed during the last five decades can be broadlydistinguished in 3 phases.The period from 1950/51 to mid 1960s which is also called pre greenrevolution period witnessed tremendous agrarian reforms, institutionalchanges and development of major irrigation projects. The intermediarylandlordism was abolished; tenant operations were given security of farmingand ownership of land. Land ceiling acts were imposed by all the states toeliminate large sized holdings and cooperative credit institutions werestrengthened to minimize exploitation of cultivators by private moneylenders and traders. Land consolidation was also affected to reduce thenumber of land fragments.Expansion of area was the main source of growth in the pre greenrevolution period. The scope for area expansion diminished considerably inthe green revolution period in which growth rate in area was less than half the growth rate in the first period. Increase in productively became the mainsource of growth in crop output and there was significant acceleration inyield growth in green revolution period. The main source of productivityincrease was technological breakthrough in wheat and rice. The countryfaced severe food shortage and crisis in early 1960s which forced the policymakers to realize that continuous reliance on food imports and aid imposes

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