Agricultural Crisis in India: Causes, Consequences and Remedies

Dr. Lipishree Das

Lecturer in Economics,
Ravenshaw University, Odisha
India
Abstract
More than twenty years of economic liberalisation had adversely affected the Indian
agriculture. The most prominent sign of this is in the drastic decline in the growth rate of food
grains. Again, if one observes Indian agriculture is currently passing through a period of
severe crisis. Although some features of the crisis started manifesting themselves in certain
parts of India during the late 1980s, the crisis has assumed a serious dimension since the
middle of the 1990s. There is a general perception that unbearable burden of debt and
augmented competitions from imports are indicative of a crisis in Indian agriculture. In this
paper an attempt has been made to find out the trends in agriculture, causes of the crisis,
problems faced by the agriculture sector and at the end some remedial measures are
suggested for the betterment of this sector. To overcome the hurdles in this sector especially
the farmers in the rural areas should be empowered with credit facilities. For this, policy and
programs involving timely and adequate investment in agriculture would facilitate farmers’
access to technologies and other relevant help in farming process.

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Introduction
More than twenty years of economic liberalisation had adversely affected the Indian
agriculture. The most prominent sign of this is in the drastic decline in the growth rate of food
grains. The rate of growth of agricultural output was gradually increasing in 1950-1990, and
it was more than the rate of growth of the population. In the 1980s the agricultural output
grew at about four per cent per annum. India has attained self-sufficiency in wheat and rice.
But after liberalisation and towards the end of the 90’s the rate of growth declined to 2 per
cent. The rate of growth of agriculture and allied sectors was just one per cent per annum
during the year 2002-05. As a result, per capita availability of food grains decreased; the
growth rate of population became higher than that of food grains and India started to import
food grains at a much higher price than that in the domestic market. Further, agriculture
(including allied activities) accounted for only 14 per cent of the Gross Domestic Product
(GDP-at constant prices) in 2012-13 (Economic Survey2013-14) while it was 15.2 per cent
during the 11th plan period. But, the role of agricultural sector remains critical as it accounts
for about 54.6 per cent of the employment in the country, (2011 census) apart from being the
provider of food for the people, fodder for livestock and raw materials to industries. Based on
the fact that, the relative contribution of agriculture to the GDP has been declining over time
whereas there is not much decline in the percentage of people depending on this, it could be
inferred that the performance of the sector is depressing. In general, the poor performance of
agricultural production and food production is not a healthy sign for the economy.

Again, if one observes “Indian agriculture is currently passing through a period of severe
crisis. Although some features of the crisis started manifesting themselves in certain parts of
India during the late 1980s, the crisis has assumed a serious dimension since the middle of
the 1990s. One of the tragic manifestations of the crisis is the large number of suicides
committed by the farmers in some parts of India.” (EGAI, 2007, p13). We hear often about
India as a country with a very high economic growth, a country with the highest numbers of
billionaires in Asia, and a country of world famous information technology. But, there is no
mention about the serious problems in agriculture. Those who govern us do not seem to be
concerned about this problem; probably they do not want to. But we cannot easily ignore this
problem any longer. (Mathew, 2008)

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There is a general perception that unbearable burden of debt and augmented competitions
from imports are indicative of a crisis in Indian agriculture. Both these phenomena are real;
inability to bear debt has led to farmers' suicides on a record scale. However suicides are
intense mostly in low rainfall, poorly irrigated regions and among a rather small portion of
the population. Import liberalisation has had a strong dampening outcome on the prices of
several crops, especially farm crops. This has caused significant suffering in regions where
they are prominent in the farm economy. On this background, the present paper is an
endeavour to analyse the nature, causes, consequences of agrarian crisis and suggested a few
remedies to minimise such crisis.

The objective of this paper is to examine the issue of agricultural crisis in India, its root
cause, consequences of the crisis and to highlight the major suggestions for its development.
Section 1 examines the nature and recent trends in agriculture in India along with the
crisis. Section 2 examines the root cause for the observed trends in agriculture in India and
analyses the consequences. Third section provides the remedial measures and suggestions for
betterment of this sector.

I. Nature
The nature of the current agrarian crisis as observed from various literatures is briefly
elaborated as follows. First, there has been a decline in the trend growth rate of production as
well as productivity for almost all crops from the mid-nineties. Further, the value of output
from agriculture has been declining from late nineties (CSO). Second, there is an excessive
dependence of a large section of the population on agriculture (in 2011 census nearly 55 per
cent of the rural persons were from households whose members major activity status was
either self-employed in agriculture or agricultural labour). This also indicates that rural non-
farm employment opportunities are limited. Third, with declining size-class of holding and an
increasing prevalence of marginal holdings (67 per cent as per 2010-11 agricultural census)
along with poor returns from cultivation indicates that income for farm households is very
low. Fourth, the much talked about green revolution had a greater focus on rice and wheat
under irrigated condition bypassing crops and regions under rain fed or dry land conditions
(which is three-fifths of the 141 million hectares of net sown area in the country during 2003-
04). There has been a failure to take advantage of on the vast network of institutes to provide
and regulate new technology (including the usage of biotechnology), and a virtual absence of

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extension service. Fifth, the neglect of agriculture in plan resource allocation has led to a
decline of public investments in irrigation and other related infrastructure. Sixth, supply of
credit from formal sources to the agricultural sector are inadequate leading to greater reliance
on informal sources at higher interest burden. Last, but not the least, with changing
technology and market conditions the farmer is increasingly being exposed to the
uncertainties of the product as well as factor. (Mishra, S., 2007).Thus, there are multiple risks
in agriculture – income, yield, price, input, technology and credit.

.Trends in Indian Agriculture and Its Crisis

Agriculture was considered to be the backbone of Indian economy and its contribution to the
National Income was estimated at about 57 per cent in the early fifties. This position got
altered steadily and significantly since then (Table 1). In 2000-01, the contribution of
agriculture to GDP was halved again to about 26 per cent. In 2007-08, it is estimated that
agriculture contributes only 19.78 percent to the GDP. Though it is expected that in the
process of development the sectoral contribution to the GDP would change, the issue is
whether the observed trends in India’s agricultural sector’s share over time is desirable. The
reality is that, still it accounts for about 54.6 per cent of the employment in the country where
as this percentage is much less in advanced countries.

Table- 1
Trends in Share of Agriculture and Allied Sectors in India’s GDP

Period 1960 1970 1980 1990 2000 2005 2007 2010 2011 2012
-61 -71 -81 -91 -01 -06 -08 -11 -12 -13

Percent 52.4 46.00 39.3 34.04 26.1 21.65 19.7 14.60 13.9 13.9
age 8 9 8 8
Share
Source: Computed from Economic Survey.2014-15.

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As per estimates by the Central Statistics Office (CSO), the share of agriculture and allied
sectors (including agriculture, livestock, forestry and fishery) was 16.1 per cent of the Gross
Value Added (GVA) during 2014–15 at 2011–12 prices. So, there is little improvement but at
2011-12 prices.

On one side, the country is the largest producer, consumer and exporter of spices and spice
products. It ranks third in farm and agriculture outputs. Agricultural export constitutes 10 per
cent of the country’s exports and is the fourth-largest that exported principal commodity. The
agro industry in India is divided into several sub segments such as canned, dairy, processed,
frozen food to fisheries, meat, poultry, and food grains. But, on the other hand, when the
Indian economy is growing at about eight to nine per cent per annum and moving towards the
double-digit figure the rural/agrarian scenario is not doing well. At 1999-2000 prices, share
of agriculture in gross domestic product is at 21 per cent in 2004-05, down from 41 per cent
in1972-73; whereas during the same period the share of employment in agriculture using
usual principal and subsidiary status declined at a much slower pace from 74 per cent to 57
per cent only. Ratio of worker productivity in agriculture to worker productivity in non-
agriculture is about one fifth. The agrarian/rural sector is lagging behind but it continues to
employ a large proportion of the workforce. Agricultural activity (cultivation, livestock and
other agricultural activities) was reported to be the principal source of income for majority of
the households in all the major States, except Kerala where there are about 61 percent of the
households depends on agriculture. Among the major States, more than 80 percent of
agricultural households from Assam, Chhattisgarh and Telangana reported agricultural
activity as their principal source of income.

It is interesting to note that the growth rates of agriculture in India’s GDP had been growing
during early periods, but in the last few years, it is constantly declining. This is evident
from the table- 2, which presents the long-term growth rates of agriculture in comparison
with the whole economy.

The growth performance of agriculture has been always lower than that of the total economy
since the early independence period say pre-green revolution era (1951-52 to1967-68).
The difference is the highest during the Tenth Plan Period where the total economy was
growing at 7.77 per cent, the agriculture and allied sector was witnessing a growth of 2.47

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per cent only. The growth rate of agriculture was relatively high during the eighties and
early nineties say 3.52 and 3.66 per cent respectively. However, during the ninth plan, the
growth rate of agriculture dripped down to 2.50 and further to 2.47 during the tenth
Plan Period. As evident from the table below, this sector has shown a remarkable average
growth rate, i.e., 4.1 per cent during the eleventh plan period, may be due to a better
monsoon in some of the years.

Table-2
Average GDP Growth Rates—Overall and in Agriculture in India
(% per period (Years) at 1999–2000 Price and 2004-05 prices for eleventh plan)
Period Total Agriculture and
Economy Allied Sectors
1.Pre Green Revolution: 1951-52 to 1967-68 3.69 2.54

2.Green Revolution Period:1968-69 to 1980-81 3.52 2.44

3. Technology Dissemination Period:1981-82 5.40 3.52

to1990-91

4. Early Reform Period : 1991-92 to 1996-97 5.69 3.66

5. Ninth Plan Period: 1997-98 to 2001-02 5.52 2.50

6. Tenth Plan Period : 2002-03 to 2006-07 7.77 2.47

7. Eleventh Plan Period : 2007-08 to 2011-12 8.4 4.1

Economic Survey, 2014-15

The growth of GDP at factor cost (at constant 1999-2000 prices) was at 6.7 per cent in
2008-09 representing a deceleration from a high growth of 9.0 per cent and 9.7 per cent
in 2007-08 and 2006-07 respectively. The deceleration of growth in 2008-09 was spread
across all sectors except mining & quarrying and community, social and personal

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services. The growth in agriculture and allied activities decelerated from 10 per cent in
2003-04 to 4.9 per cent in 2007-08 and further to 1.6 per cent in 2008- 09, mainly on
account of the high base effect of 2007- 08. Further, against the target of 4 per cent growth
for the agriculture and allied sectors the growth was 3.7 per cent in 2012-13 and only 1.1 per
cent in 2014-15. Thus, during the last five decades, agricultural production has increased at
an average annual rate of 2.5-3 per cent.

Today, statistics show that the contribution made by the agricultural sector to the overall
GDP has declined and the service sector has emerged as the primary contributor to GDP
growth. This clearly indicates that income generation is not occurring in the agriculture sector
or is taking place at a dismal rate. Indian agriculture is heading for a crisis as food output
stagnates and millions of poor farmers struggle with high debt and crop failures, economic
growth averaging 9% a year, fuelled by manufacturing and services, has covered the crisis in
the countryside. While the contribution of manufacturing and services is laudable, it is still
the farm sector that provides the largest employment in the subcontinent.” (M.S.
Swaminathan)

II. Causes
There is a need for analysing the reasons for the crisis to know what measures could be
adopted to face this challenge. However, there are two reasons to be concerned that Indian
agriculture may indeed be facing a wider, deeper crisis: (1) The long term growth trend in
production and productivity of agriculture, considerably less than required to sustain the
projected high overall growth rates in the coming decade, may actually be slowing down; and
(2) the growing economic and social disparities between agriculture and the rest of the
economy and between rural and urban sectors. Apart from these other important causes
observed are as follows.

Low level of income of Small Farmers

Overall, there is not much diversification and the income of an average farmer household
from cultivation would hardly suffice to meet some basic day-to-day requirements. The
Situation Assessment Survey of Farmers, 2013 (SAS), NSSO 70th round indicates that the
monthly per capita income to a farmer household within 1 hectares land is much lower than
the monthly per capita consumption expenditure (Table 3).

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Table-3
Monthly PCI and Consumption by Size- Class of Holdings, 2013-14
Size class of land Total Total
in hectares income(inRs) consumption
expenditure(in
Rs)
< 0.01 4561 5108

0.01- 0.40 4152 5401

0.02-
0.41-1.00 5247 6020

1.01-2.00 7348 6457

2.01-4.00 10730 7786

4.01-10.0 19637 10104

10.00 + 41388 14447

All sizes 6226 6223

Source: NSSO 70th Round

As evident from the table-3 average monthly income of the agricultural households included
net receipts from cultivation, farming of animals, nonfarm business and income from
wages/salaries. At all-India level, average monthly income per agricultural household during
the year 2012-2013 was estimated as Rs.6426/-.

During the mention period, net receipt from farm business (cultivation and farming of
animals) accounted for 60 percent of the average monthly income per agricultural household
in the country. Nearly 32 percent of the average monthly income was contributed by income

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from wages/salary. During the same period, the average monthly consumption expenditure
per agricultural household was Rs.6223/-.

Another concern is widening economic disparities between agricultural and non-agricultural

sectors and between rural and urban areas. Rural-urban disparities in basic social amenities
have also increased in quality though not in quantity. All these have led to resentment among
the rural population that the benefits of development have gone to the urban areas.

Declining Growth Rate in Agriculture

Statistics show that not only the contribution made by the agricultural sector to the overall
GDP has declined but also the growth of agriculture sector itself is declining gradually
(Table-1 and Table-2).

The slowing down of agricultural growth is widely attributed to the slowing down of
investment, especially public investment. The Planning Commission seems to share this
perception and sees increased investments in irrigation and watershed development as the
means to achieve the projected growth. But what is relevant is not the magnitude of
investment but its contribution to increasing production capacity. For a variety of reasons
peculiar to agriculture, production capacity has not increased in proportion to the quantum of
investment.

Thus outlay on surface irrigation, which accounts for the bulk of public investment in
agriculture, is concentrated on projects that have taken a long time to complete. Costs have
risen and outlays have not resulted in any significant additions to irrigated area. The efficacy
of public investments in soil and water conservation is in serious doubt. They are marked by
huge waste and corruption; and there are hardly any mechanisms at the local level to manage
the works and ensure the potential for expansion is properly exploited. They have had hardly
any impact on raising product potential or productivity of rain fed lands.

Private investment has been concentrated on groundwater exploitation deepening wells and
installing more powerful pumps and mechanisation. In the context of falling water tables a
sure sign of overexploitation of groundwater these investments do not increase the volume of
groundwater available for irrigation and therefore production capacity. The impact of

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mechanisation is primarily to replace human and animal labour with tractors, harvesters, and
threshers. Their contribution to increasing productive capacity is, if at all, of a very secondary
importance.

It is, therefore, important to focus on deeper, more basic, reasons for the slowdown of
agricultural growth. For this it is useful to distinguish between three broad phases of
agricultural growth in the post-Independence period. During the first phase, lasting from the
early 1950s through the mid-1960s, the major part of growth came from expansion of area.
Expansion of surface irrigation and fertilizer use brought about modest yield improvement.
During the second phase, from the mid-1960s through the 1980s, the scope for extending area
was more or less exhausted. But this was more than compensated by an unprecedented
increase in the rate of yield improvement due to massive investment in irrigation and the
advent of new seed-fertilizer technology. The pace of expansion in surface irrigation slowed
down during the latter part of the period despite continuing large-scale investments. The flow
of technology improvements was irregular. Progress was particularly disappointing in rain-
fed agriculture.

This was also a period marked by imprudence in the use of land, water, fertilizers, and other
key inputs due to failures of governance, poor management of public systems catering to
agriculture and pricing, and subsidy policies inimical to the prudent use of resources and
effective exploitation of the potential of available technology. With the scope for expanding
area being exhausted and the scope for further expansion of irrigation getting diminished, the
institutional barrier comprising governance, the quality of public systems, and economic
policies has become the most serious impediment to agricultural growth.

An influential segment of opinion in and outside the government believes the solution is to
accelerate the pace of GDP growth. The Planning Commission's approach to the 11th Plan is
firmly rooted in this belief. It postulates a target growth rate of 8-9 per cent per annum for
overall GDP. This is considered feasible, indeed could even be surpassed, provided the
process of privatisation, globalisation, and better fiscal management is accelerated. The
sustainability of the projected overall growth rate depends on accelerating the growth of
agriculture to 4 per cent per annum. Neither privatisation nor globalisation can work this
miracle.

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Liberal Import of Agricultural Products
One of the reasons for the crash of prices of agricultural products, especially of cash crops, in
India was removal of all restrictions to import these products. As, for example, when the
Government of India reduced the import duty on tea and coffee from Sri Lanka and Malaysia,
their prices in the domestic market got reduced drastically. Thus cultivation of such products
became unprofitable and so their production was fully or partly stopped. Since the removal of
quantitative restrictions and lowering of import duties were according to the restrictions of
the World Trade Organisations (WTO), the crash in the prices of agricultural products is
directly related to the liberalisation policy of the government.

Reduction in Agricultural Subsidies

In the post-reform period the government reduced different types of subsidies to agriculture,
and this has increased the production cost of cultivation. Cutback in subsidy and control of
fertilisers over the last few years has adversely affected the agricultural sector. It has
increased the input cost and made agriculture less profitable. The decrease in subsidy to
agriculture is part of the regulations of the WTO which is binding on the developing
countries. The Table below shows the comparison of some countries regarding subsidies to
agriculture and also the percentage of population depending on agriculture.

Table 4
Comparison of Country Regarding Subsidies to Agriculture
Country Subsidy per Percentage of population
Hectare depending on
Agriculture
USA $32 5

Japan $35 4
China $30 24
India $14 59
Source: WTO Reports

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Lack of Easy and Cheap Loan to Agriculture
After 1991 the lending pattern of commercial banks, including nationalised banks, to
agriculture considerably changed with the result that loan was not easily available and the
interest was not affordable. This has forced the farmers to rely on moneylenders and thus
pushed up the spending on agriculture. The National Commission for Agriculture, headed by
Dr M.S. Swaminathan, also pointed out that removal of the lending facilities and concessions
of banks during the post-reform period have accelerated the crisis in agriculture. When the
farmers were not able to pay back loan with high interest, they fell into the debt trap. Studies
show that most of the farmers’ suicides were due to the debt trap. It is part of the policy of
privatisation that banks, even nationalised banks, look for profit over their societal
responsibilities to the people. Credit is often considered to be the key element in increasing
the productivity in agriculture through modernisation.

The credit flow to agriculture, more importantly after introduction of financial sector reforms
in early-nineties, increased from Rs.2,85,146 crore during the Ninth Plan (1997-2002) to
Rs.6,91,739 crore (243%) during the Tenth Plan (2002-07). Credit disbursement during the
Eleventh Plan (2007-12) further shot up to Rs.19,20,400 crore (277%). But, there are
significant disparities in the flow of credit among States, districts, villages and even within
the village. There is also disparity between credit disbursed to agriculture and allied activities
as also across components of agricultural term loans, viz. irrigation development, farm
mechanization, land development, plantation and horticulture, hi-tech agriculture, etc. (Patel,
2014).Sometimes there may be difficulties experienced to easy and reliable access of
institutional credit by small, marginal and tenant farmers, share croppers, landless labourers,
households residing in hilly, tribal, desert, drought prone and most backward and vulnerable
areas in particular problem of loan repayments leading to building up huge amount of NPAs
leading to serious consequences.

In order to ensure that credit in particular and financial services in general achieve their
intended objectives, now there is need to create enabling policy environment and effective
credit planning. Policy should address to create enabling environment that can significantly
enhance credit absorption capacity of the farmers in each village.

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Decline in Government Investment in the Agricultural Sector
Studies show that after the economic reforms started, the government’s expenditure and
investment in the agricultural sector have been drastically reduced. This is based on the
policy of minimum intervention by the government due to the policy of globalisation. The
expenditure of the government in rural development, including agriculture, irrigation, flood
control, village industry, energy and transport, declined from an average of 14.5 per cent in
1986-1990 to six per cent in 1995-2000. When the economic reforms started, the annual rate
of growth of irrigated land was 2.62 per cent; later it got reduced to 0.5 per cent in the post-
reform period. As a result of this, rate of capital formation in agriculture came down, and the
agricultural growth rate was also reduced. This has affected the purchasing power of the rural
people and subsequently their standard of living.

Apart from this there are many other reasons like taking over of land by Government for
industrial purposes and acquisition of fertile land for special economic zones.
 Problems of Agrarian Sector and their Consequences
a) Policy of economic liberalisation has adversely affected Indian agriculture. The most
prominent manifestation of this is in the drastic decline in the growth rate of food
grains. The rate of growth of agricultural output was gradually increasing in 1950-
1990, and it was more than the rate of growth of the population. In the 1980s the
agricultural output grew at about four per cent per annum. Thus India became self-
sufficient in food and started exporting wheat and rice. But during the 10-year period
after the start of liberalisation, the rate of growth declined to two per cent. During
10th plan the growth rate of agriculture was only 2.4 per cent. During the period
2012-13 growth rate of agriculture was only 1.42 per cent. As a result, per capita
availability of food grains decreased; the growth rate of population became higher
than that of food grains, and India started to import food grains at a much higher
price than that in the domestic market.
b) Secondly, unemployment in the agricultural sector increased as agriculture was not
considered as a profitable venture due to the fall in the price of farm products. As a
result, the number of people who are employed in the primary sector and the area
under cultivation decreased, which in turn caused a decline in rural employment.
According to the National Sample Survey, the annual rate of growth of the
employment in the rural areas was 2.07 per cent in 1984-1987, while it declined to a

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 mere 0.67 per cent in 1993-94 to-2004-05, which corresponds to the period of
liberalisation. Again during the period1999-00 to 2009-10 employment in primary
sector is negative (-0.13 per cent). Hence, it is not only the farmers but also the
Dalits and tribals, who heavily depend on agriculture, became unemployed.
c) The suicide of farmers is the third fall-out of stagnation in agriculture. When
agriculture was not yielding remunerative income, the life of the farmers became
very desperate. Many of them committed suicide as a last resort. As revealed by
Sharad Pawar, the Union Agricultural Minister, in the Lok Sabha in 2004, over one
lakh farmers committed suicide in India after the economic reform started. According
to the National Crime Records Bureau, 17,060 farmers committed suicide in the
country in 2006 with Maharashtra having the highest number of (4453) suicide
deaths. Again in the year 2014 total number of farmers’ suicide deaths comes to
5650. Out of which1163 are due to indebtedness and 952 are due to failure of crop.
This is a record in the agricultural history of India. It points to the acute nature of the
problem which has affected the vast majority of the population, and which has
created a real crisis. So, there is need to solve the problems of agriculture that are
having serious consequences.

III. Remedial Measures for Betterment of Agriculture

The agricultural crisis is affecting a majority of the people in India. The farmers who produce
food materials for the country are in deep suffering. The marginalised people like the Dalits
and tribals, who depend on agriculture, are getting unemployed and struggling for their
livelihood. The ordinary people, especially the poor, have lost their food security. The crisis
in agriculture is a crisis of the country as a whole and so needs urgent attention. Some of the
remedial measures are being listed here.

1. Since the import policy was the major reason for the crash in prices of many agricultural
products, there should be restrictions on the quantity and customs duty of such products.
Quantitative restrictions should be imposed on import of agricultural products. It is required
to impose import duty and quantitative restrictions on imported goods to protect our farmers.
2. Subsidy and concessions given to agriculture sector should be increased. This is a must to
make agriculture remunerative. One of the main disputes in the Doha Round of talks is the

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high subsidy given by the United States and European Union to their farmers in spite of the
WTO regulation. India should affirm its right to give adequate subsidy to its farmers to offset
the rising cost of cultivation and protect their living.

3. Credit facilities should be easily made available to the farmers, especially since the input
cost of agriculture has gone up. The government should seriously think of providing loans to
farmers at low rate of interest by banks and other financial institutions. In fact, the M.S.
Swaminathan Commission for Agriculture has recommended a low rate of four per cent
interest for the farmers.

4. The government should increase its investment and expenditure in the agriculture sector.
One reason for the agricultural stagnation is low government expenditure. Investment in
agriculture and its allied sectors, including irrigation, transport, communication and farm
research, should be significantly increased, and the government should aim at integrated
development of the rural areas. Effective implementation of National Rural Employment
Guarantee Scheme can also become a means of revival of the rural economy as agriculture is
already overcrowded.

5. According to the Swaminathan Commission, unless agriculture is made a profitable

enterprise, its present crisis cannot be solved. The Commission has suggested 50 per cent
more of the total production cost as supportive price for foodgrains. So, there is a need for
periodic revision of the procurement prices for farm produce. This will help the farmers to
meet the increasing expenses for farm inputs and ensure at least remunerative income.

6. The government should should not acquire fertile agricultural land for SEZs and revise the
policy on Special Economic Zones as it goes against the interest of farmers and the
agricultural sector. When it does take over land for essential public utilities, it should provide
just compensation and initiate comprehensive rehabilitation measures. The recommendations
of the Swamina-than Commission not to acquire land suitable for agriculture for non-
agricultural purposes, to give adequate compensation for the acquired land and to distribute
surplus land to the landless farmers should be seriously taken into account when the policy of
SEZs is reframed.

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7. The rural economy, particularly agriculture, will be greatly benefit if programmes meant
for economically backward sections, are effectively implemented. Food security of the poor
will be ensured if the public distribution system is efficiently run. All these programmes will
increase the purchasing power of the rural people and indirectly help agriculture itself.
Without it, the target of 4 per cent sustained growth in agriculture will remain a dream.
Last but not the least, according to Amartya Sen, the Nobel Laureate, though the economic
growth rate of India is impressive, India cannot play a significant role in the global economic
scenario unless it completes land reforms. Steps should be taken to implement land reforms
which were not implemented in most States.

To conclude it can be said that agricultural sector in India is facing a crisis today. The
globalisation process, which started in the 1990s, is one of the reasons for this crisis. The
solution of the problem is not in a few “packages” but in drastic changes in the present
economic policies related to agriculture. For this, the government should be ready to take
bold steps. Farmers, agricultural labourers and people’s organisations in civil society should
work collectively to assist and persuade the government to make the necessary changes. It is
high time that the government and the people realised that India can become a real
“superpower” only when the vast majority of the people, especially the farmers in the rural
areas, become prosperous and are really empowered. For this, policy and programs involving
timely and adequate investment in agriculture would facilitate farmers’ access to technologies
for production, food processing and preservation, farm-to-market linkages, agricultural
research and extension, large-scale development of bio-diesel, modernization, mechanization
and commercialization of agriculture. Role of credit to agriculture cannot be viewed just as a
support to food-producing activity but it should focus “need to improve the overall income
and economic well-being of the farmers” as agriculture has been the basic requisite
for national sovereignty. The words of Dr M.S. Swaminathan are relevant here: “In a country
where 60 per cent of people depend on agriculture for their livelihood, it is better to become
an agricultural force based on food security rather than a nuclear force.”

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References
Agriculture Census, (2014): Government of India.
Census of India, 2011.
Indian Economic Survey, 2014-15.
EGAI (2007): Report of the Expert Groups on Agricultural Indebtedness, New Delhi,
Government of India, Ministry of Finance.
Mathew, A. (2008): “Agrarian Crisis in India is a Creation of the Policy of Globalisation”,
Mainstream, Vol XLVI, No 13.
Mishra, S. (2007): “Agrarian Scenario in Post-reform India: A Story of Distress, Despair and
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