Problem of Productivity

UNIT 12 PROBLEM OF PRODUCTIVITY

Structure
12.0 Objectives
12.1 Introduction
12.2 Major Food Crops Production in India
12.3 Productivity in India’s Agriculture
12.3.1 General Causes
12.3.2 Institutional Causes
12.3.3 Technological Factors
12.4 Measures to Raise Productivity in Indian Agriculture
12.5 Let Us Sum Up
12.6 Key Words
12.7 Answers to Check Your Progress
12.8 Terminal Questions

12.0 OBJECTIVES
After going through this unit, you will be able to:
• Describe major food crops in India;
• Explain India’s position in world agriculture;
• Describe different reasons of low agricultural productivity in India; and
• Explain measures for raising agricultural productivity in Indian agriculture.

12.1 INTRODUCTION
With a population of 1.30 billion, India is the world's second most populous
country. It is the seventh largest country in the world with an area of 3.288 million
sq kms. It has a long coastline of over 7,500 kms. With the highest mountain range
in the world, the Himalayas to its north, the Thar desert to its west, the Gangetic
delta to its east and the Deccan Plateau in the south, the country is home to vast
agro-ecological diversity. India is the world's largest producer of milk, pulses
and jute, and ranks as the second largest producer of rice, wheat, sugarcane,
groundnut, vegetables, fruit and cotton. It is also one of the leading producers of
spices, fish, poultry, livestock and plantation crops. In this Unit, you will learn
the causes and measures to raise productivity in Indian agriculture.

12.2 MAJOR FOOD CROPS PRODUCTION IN INDIA

While agriculture’s share in India’s economy has declined to 20% in 2021, it was
once consistently declined to 15 % in 2010-11 then improved to current level,
due to the high growth rates of the industrial and services sectors. The sector’s
importance in India’s economic and social fabric goes well beyond this indicator.
First, nearly three-quarters of India’s families depend on rural incomes. Second,
the majority of India’s poor (some 770 million people or about 70 percent) are
found in rural areas. Third, India’s food security depends on producing cereal
crops, as well as increasing its production of fruit, vegetables and milk to meet
the demands of a growing population with rising incomes. To do so, a productive,
competitive, diversified and sustainable agricultural sector will need to emerge
185
at an accelerated pace .
Sectoral Development-I; Agriculture, with its allied sectors, is the largest source of livelihoods in India.
Agriculture Sector In India
Seventy percent of its rural households still depend primarily on agriculture for
their livelihood, with 87 percent of farmers being small and marginal. In 2020-
21, total food grain production was estimated at 305.44 million tonnes (MT)
(Advance Estimate). India is the largest producer (25% of global production),
consumer (27% of world consumption) and importer (14%) of pulses in the world.
India's annual milk production was 165 MT (2017-18), making India the largest
producer of milk, jute and pulses, and with the world's largest cattle population
303 million in 2020.India's cattle inventory amounted to over 303 million in 2020.
While the global cattle population stood at over 987 million, India had the highest
cattle population, followed by Brazil, the United States, and China that year. It
is the second-largest producer of rice, wheat, sugarcane, cotton and groundnuts,
as well as the second-largest fruit and vegetable producer, accounting for 10.9%
and 8.6% of the world fruit and vegetable production respectively .
As per “Third Advance Estimates” for 2020-21, total food grain production in
the country is estimated at record 305.44 million tonnes, which is higher by
7.94 million tonnes than the production of food grain of 297.50 million tonnes
achieved during 2019-20. Further, the production during 2020-21 is higher by
26.66 million tonnes than the previous five years’ (2015-16 to 2019-20) average
production of food grain.
Table 1 Production of Major food crops in India (in million tonnes)
Crop Season 2005-06 2010-11 2015-16 2020-21 (Advance Estimate)
Kharif 78.27 80.65 91.41 104.30
Rice Rabi 13.52 15.33 13.00 17.16
Total 91.79 95.98 104.41 121.46
Wheat Rabi 69.35 86.87 92.29 108.75
Kharif 12.16 16.64 16.05 20.95
Maize Rabi 2.55 5.09 6.51 9.29
Total 14.71 21.73 22.57 30.24
Kharif 105.01 113.73 119.56 139.87
Cereals Rabi 90.21 112.52 115.66 140.00
Total 195.22 226.25 235.22 279.87
Tur Kharif 2.74 2.86 2.56 4.14
Gram Rabi 5.60 8.22 7.06 12.61
Kharif 0.90 1.40 1.25 1.56
Urad Rabi 0.35 0.36 0.70 0.82
Total 1.25 1.76 1.95 2.38
Kharif 0.69 1.53 1.00 1.99
Moong Rabi 0.26 0.27 0.59 0.65
Total 0.95 1.80 1.59 2.64
Kharif 4.86 7.12 5.53 8.49
Total Pulses Rabi 8.52 11.12 10.79 17.09
Total 13.38 18.24 16.32 25.58
Kharif 109.87 120.85 125.09 148.36
Total Foodgrains Rabi 98.73 123.64 126.45 157.08
Total 208.60 244.49 251.54 305.44
Kharif 167.67 219.22 166.98 245.52
Total Oilseeds Rabi 112.11 105.57 85.53 120.13
Total 279.78 324.79 252.51 365.65
Sugarcane Total 2811.72 3423.82 3484.48 3927.97
Cotton # Total 184.99 330.00 300.05 364.92
Source: Ministry of agriculture and farmers' welfare.
# Lakh bales of 170kgs each.
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The Table 2 shows the production of agriculture commodities in India from the Problem of Productivity
triennium 2005-06 to triennium 2020-21. The production of all the crops depicted
in the table shows a progressive increase in the output over the years. According
to the ministry’s calculation, total production of rice during 2020-21 is estimated
at a record 121.46 million tonnes. It is higher by 9.01 million tonnes than the
last five years average production of 112.44 million tonnes. Production of wheat
during 2020-21 is estimated at a record 108.75 million tonnes. It is higher by
8.32 million tonnes than the average wheat production of 100.42 million tonnes.
Total pulses production during 2020-21 is estimated at 25.58 million tonnes which
is higher by 3.64 million tonnes than the last five years’ average production of
21.93 million tonnes. Total oilseeds production in the country during 2020-21
is estimated at a record 36.57 million tonnes which is higher by 3.35 million
tonnes than the production of 33.22 million tonnes during 2019-20. Further, the
production of oilseeds during 2020-21 is higher by 6.02 million tonnes than the
average oilseeds production. Total production of sugarcane in the country during
2020-21 is estimated at 392.80 million tonnes. The production of sugarcane
during 2020-21 is higher by 30.73 million tonnes than the average sugarcane
production of 362.07 million tonnes. Production of cotton is estimated at 36.49
million bales (of 170 kg each) is higher by 4.59 million bales than the average
cotton production.
Table 2: India's Position in World Agriculture During 2016
Item India World % India's Next to
Share Rank
1. Total Area (Million Hectares) 328.73 13490.08 2.44 Seventh Russian Federation,
Canada, Brazil,
Australia U.S.A.,
China,
2. Arable Land 156.46 1423.79 10.99 First
3. Crop Production (Million Tonnes)
(A): Total Cereals 297.85 2909.2 10.24 Third China, U.S.A.
Wheat 92.29 749.01 12.32 Second China
Rice( Paddy) 163.7 756.16 21.65 Second China
(B): Total Pulses 18.15 83.46 21.75 First
(C): Oilseeds
Groundnut (in shell) 7.46 44.91 16.62 Second China
(D) Commercial Crops
Sugarcane 348.45 1861.18 18.72 Second Brazil
Tea 1.25 5.91 21.14 Second China
Jute 1.90 3.31 57.31 First
Tobacco Unmanufactured 0.78 6.40 12.23 Second China
4. Fruit & Vegetables Production
( Million Tonnes)
(A): Vegetables Primary & Melons 123.63 1229.51 10.06 Second China
(B): Fruits Primary (excluding Melons) 88.47 710.5 12.45 Second China
(C): Potatoes 43.42 374.25 11.6 Second China
(D): Onion( Dry) 20.93 94.94 22.05 Second China
5. Livestock ( Million Heads)
(A): Cattle 186.04 1488.96 12.49 Second Brazil
(B): Buffaloes 112.57 199.39 56.46 First
(E): Goats 134.13 1025.64 13.08 Second China
6. Animal Products (Million Tonnes)
(A): Milk Total 165.33 809.8 20.42 First

Source: Pocket Book of Agricultural Statistics, 2018

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Sectoral Development-I;
Agriculture Sector In India 12.3 PRODUCTIVITY IN INDIA’S AGRICULTURE
India is primarily an agricultural country, as the sector provides livelihood to
more than 50% of the population and contributes nearly one fifth of the country’s
GDP. However, India lags behind many other countries as far as agricultural
productivity is concerned. The reasons are several. The agricultural productivity
can be measured in two ways; a) productivity per hectare, and b) productivity
per labour. If we compare the productivity of the India’s agriculture with the
rest of the world, India lags behind not only the developed western countries
but the developing countries as well. Some of the major causes behind the low
productivity of Indian agriculture are discussed below:
India’s yield per hectare for rice and wheat is low if we compare with the BRICS
countries. If India’s yield rates for the two crops are at China’s levels, it can double
our yields or halve the land used for the purpose. At present, India produces
106.19 million tonnes of rice a year from 44 million hectares of land. That is a
yield rate of 2.4 tonnes per hectare, placing India at 27th place out of 47 countries.
China and Brazil have yield rates of 4.7 t/ha and 3.6 t/ha, respectively. If Indian
agricultural productivity was at these rates, we could produce 205.52 million
tonnes and 160.01 million tonnes of rice, respectively. Egypt leads the world in
rice yields—at Egypt’s yield rate, India could almost triple its rice output. As
far as wheat is concerned, India has a higher yield rate than for rice, but it still
lags a large part of the world. India’s yield rate of 3.15 tonnes per hectare for
wheat places it 19th out of 41 countries. Here, India does better than Brazil’s
yield rate of 2.73 tonnes per hectare, but lags behind South Africa (3.4 t/ha) and
China (4.9 t/ha). If India’s wheat productivity is at these countries’ levels, it
would be producing 101.22 million tonnes and 147.53 million tonnes of wheat,
respectively. New Zealand has the highest productivity of wheat in the world. If
India produces wheat at the rate at which New Zealand does, then it can produce
2.5 times more than what it produces. This is not to say that Indian agricultural
productivity in wheat and rice has not improved over the years. Yield rates in
wheat have grown at a compounded annual growth rate of 1.8% from 1983 to
2013 and in rice by 1.71% over the same period. These are not particularly slow
growth rates. The improvement in yield rates for rice would place it at number
13 in the world while that in wheat would peg it at 14th rank .
12.3.1 General Causes
a) Demographic Factors: As we know India is second most populated country
in the world and at the present rate of growth of population the country will
very soon overtake China as the most populated country. With the increasing
pressure of the population on land, the average landholding in the country is
consistently decreasing and the size of average land holding declined from 2.1
hectares in 1970-71 to 1.15 hectares in 2010-11 to 1.08 hectares in 2015-16.
Small and marginal farmers with less than two hectares of land account for
bulk of all farmers in India, but own about half of the crop area, according to
provisional numbers from the 10th Agriculture Census 2015-16. The survey
showed that while Indian farms became more fragmented between 2010-11
and 2015-16, holdings continue to be inequitably distributed. The increasing
pressure of population on land is partly responsible for the subdivision and
fragmentation of holdings resulting in low productivity. We expect that in
the course of time, the economic growth in the country will open new job
opportunities in the non agricultural sectors. In India this has not happened
188 and the employment in the manufacturing sector for the last three decades is
 stagnant, employing less than one fifth of the workforce. Thus, the increasing Problem of Productivity
pressure of the population is directly falling to the agriculture sector resulting
in consistent decline in the size of the holding and low productivity.
b) Social Environment: The social environment of the villages is regarded as
one of the major hindrances to the development of Indian agriculture. It has
been observed that in general the Indian farmers are illiterate, superstitious,
conservative and do not respond to the new and modern agricultural
techniques. Again the working conditions as well as the health conditions
are very poor and it has lessened the productive capacity of the farmers.
12.3.2 Institutional Causes
a) Land Tenure System: Zamindari system has been an important factor
responsible for the low productivity of Indian agriculture, the form of
land tenure system which India inherited from the colonial powers. The
zamindari system was highly exploitative in character and ruined the capacity,
willingness and enthusiasm of the cultivators to increase the production and
productivity. In this system the cultivator is not the owner of land. Zamindar
is the owner of land and he can evict the tenant at any time. So the cultivator
does not take interest in the development of land and Zaminder does not
take an interest in the development of cultivation. Though the zamindari
system was abolished after independence, yet the position of the cultivator
has not improved. Legislation passed after the independence of the country
for the abolition of intermediaries did not break the stronghold of the
zamindars and it only changed the nomenclature from the “zamindars” to
big landlords. Moreover, the land reforms carried out in the country in the
post reform period did not make any significant changes in the stronghold
of the zamindars in the rural areas and except few states like West Bengal,
Kerala and Jammu Kashmir, the reforms failed miserably. Regulation of rent,
security of tenure, ownership rights of tenants did not make much aspired
changes in the tenant’s life, they are still at the mercy of big landlords.
b) Uneconomic Holding: As discussed in demographic factors, according to
National Sample Survey (NSS), since the first agriculture census over 45
years ago, the number of farms in India has more than doubled from 71
million in 1970-71 to 145 million in 2015-16. The average farm size more
than halved from 2.28 hectares (ha) to 1.08ha. Between 1970-71 and 2010-
11, the number of farms increased by 194%, almost exactly in line with the
rural population, which increased by 189%. In India as per latest NSS report,
small and marginal farmers with less than two hectares of land account for
86.2% of all farmers in India, but own just 47.3% of the crop area. At the
same time, semi-medium and medium land holding farmers owning between
2-10 hectares of land account for 13.2% of all farmers, but own 43.6% of the
crop area. During this period the proportion of small and marginal farmers
grew from 84.9% to 86.2%, while the total number of operational holdings
grew from 138 million to 146 million. The total area under farming, however,
fell from 159.6 million hectares in 2010-11 to 157.14 million hectares in
2015-16. Between 2010-11 and 2015-16, the number of small and marginal
farms rose by about 9 million. Further, these 126 million farmers together
owned about 74.4 million hectares of land —or an average holding of just
0.6 hectares each—not enough to produce surpluses. Thus, a booming small
and marginal farmers and consistent decline in the farm size makes Indian
agriculture uneconomic and less productive.
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Sectoral Development-I; c) Inadequate Marketing and Credit Facilities:
Agriculture Sector In India
i) Inadequate/Improper Warehouses: There is a near absence of proper
warehousing facilities in the villages. This compels the farmers to store their
produce in pits and mud vessels. Such unscientific methods of storage lead
to considerable losses of produce by wastage. Absence of adequate storage
in villages forces farmers to sell the crops in one go that creates an abundant
supply yielding low and un-remunerative prices to the producers. The large
producers may have the capacity to arrange required storage facilities. The
small producers do not have storage facilities. While the setting up of central
and state warehousing facilities has improved the situation to some extent,
there is every need to expand the facilities much more on this front.
ii) Lack of Grading and Standardization: The practice of selling graded
items which can fetch better return is missing among the small farmers. The
common practice is to sell them in heaps of one lot with items of different
qualities mixed up. The low returns received as a result of this practice do
not induce the farmers to adopt better methods and practices for producing
quality products.
iii) Inadequate Transport Facilities: Good road connectivity to transport the
produce to Mandi (the places where produce are sold in bulk) with adequate
motorized transport facilities is a must. The practice in India, particularly
for small farmers, is to transport their goods in bullock carts. The feasibility
to transport items to far off places is greatly constrained by this means of
transportation.
Presence of Large Number of Intermediaries: As we have seen above, the
iv)
length of marketing channel is not small or optimum to realise maximum
returns to the producers. The situation is particularly adverse due to number
of intermediaries or middle men operating in the names of village traders,
kutcha/pucca arhtiyaas, brokers, wholesalers, retailers, money lenders, etc. A
number of middle men in the marketing of agri produce leads to a situation
where in both the producers and consumers are at receiving end and a good
part of margin goes to the middle man. Empirical evidences suggest that
the marketing margin varies for different commodities and farmers receives
only 30 to 25 percent of the consumer price.
v) Inadequate Market Information: Very often, farmers do not get the right
information about prices in the markets. Taking advantage of this ignorance
on the part of farmers, middlemen take undue benefit of the situation. The
situation is changing with the government making use of media like radio,
newspapers, etc. to announce and disseminate information on prices in
markets. However, there are problems of time lag and the consequent less
reliable information reaching the sellers. This leads to traders often paying
less than the prices quoted by the government in the news media.
vi) Inadequate Credit facilities: The farmers need credit for various purposes
like purchase of seeds, fertilizers, irrigation, etc. In India the scope of formal
institutional lending has been limited and curtailed in post liberalization
period. At the same time, many formalities are associated with formal credit
institutions so farmers rely on the informal sources like money lender and
Mahajan who not only charge exorbitant interest rate but they also indulge
in many malpractices. This exorbitant interest and unscrupulous practices
adopted by informal credit sources are a major reason behind the farmer
190 suicide in India. According to P. Sainath, a veteran journalist, in India every
 four hours a farmer kills himself. Timely provision of credit is must for the Problem of Productivity
efficient and sustainable agriculture.
12.3.3 Technological Factors
The following technological factors are also responsible for low agricultural
productivity in Indian agriculture:
(a) Traditional Methods of Cultivation: The farmers in India have been
adopting orthodox and inefficient methods and techniques of cultivation.
As they are tradition bound and poor, thus they could not adopt modern,
efficient methods adopted by western countries of the world. These farmers
were relying on centuries old wooden plough and other implements. It is
only in recent years that the Indian farmers have started to adopt improved
implements like steel ploughs, seed drills, harrows, hoes etc. to a limited
extent only. Thus, Indian agriculture is dualistic in nature wherein the
developed regions of the country, Punjab, Haryana and Western Uttar Pradesh
apply the most sophisticated technology used by their counter parts in the
western developed countries. On the other hand in most of the country’s
hinterland farmers are using the traditional methods used by their fore father
resulting in low productivity. Thus, Indian agriculture is traditional and
therefore, productivity is low.
(b) Lack of High Yielding Seeds: Indian farmers are still using seeds which
are not of good quality. In the post green revolution period, the use of high
yielding varieties of seeds increased substantially resulting in a considerable
increase in the productivity. But the use of high yielding varieties of seeds
is limited to irrigated areas of the country. Still a large number of farmers
use low quality seeds resulting in low productivity.
(c) Lack of Fertilizer: Fertilizer consumption measures the quantity of plant
nutrients used per unit of arable land. Fertilizer products cover nitrogenous,
potash, and phosphate fertilizers (including ground rock phosphate).
Traditional nutrients--animal and plant manures--are not included.
Indian farmers are not applying sufficient quantity of fertilizers on their lands.
Constant cultivation of land causes deterioration of the fertility of soil. For the
revitalization of soil fertility and to use fallow land for cultivation, application of
various types of fertilizer is indispensable. The use of fertilizers in India increased
after mid 1970’s, but is still confined to few agriculturally advanced regions of the
country. As of 2018, fertilizer consumption in Hong Kong was 3,573.9 kilograms
per hectare. The top 5 countries also include Malaysia, Bahrain, New Zealand,
and Ireland. India with 175 kg per hectares was ranked 45th according to the
world bank data. Thus, the fertilizers used per hectare is very low compared to
the world standards.
(d) Inadequate Irrigation Facilities: Water is the most critical input for
enhancing agricultural productivity, and therefore expansion of irrigation
has been a key strategy in the development of agriculture in the country.
The ultimate irrigation potential of India has been estimated to be 139.5
mha, comprising 58.5 mha from major and medium schemes, 15 mha from
minor irrigation schemes and 66 mha from groundwater exploitation. India’s
irrigation potential has increased from 22.6 mha in 1951 to about 90 mha
at the end of 1995.An adequate and assured water supply at the appropriate
time is essential for increasing the yield of the crops. In India, agriculture
largely depends on the rainfall, which is mostly uncertain and unseasonable.
191
Sectoral Development-I; Before independence, only 19 per cent of the total land was irrigated in India.
Agriculture Sector In India
But in-spite of vigorous programme of major and minor irrigation projects
undertaken since 1951, currently about 45 percent of country’s cropped area
is irrigated. This shows that 55 percent of cropped area is still dependent on
the rains. Rainfall is becoming erratic in India owing to the climate change
and variability in precipitation in the last twenty years has increased. This
has resulted in droughts in some parts of the country and excess rainfall and
flood in other parts of the country. The Country’s full irrigation potential
is not wholly utilised because of defective management and water cost is
constantly increasing, thus, making farming difficult and costly for small
farmers.
(e) Lack of pesticides: Farmers in India lose a considerable part of their
produce to pests and insects which eats the plants. According to a study
by the Associated Chambers of Commerce and Industry of India in 2015,
annual crop losses due to pests and diseases amount to Rs.50,000 crore
($500 billion), which is significant in a country where at least 200 million
Indians go to bed hungry every night. About 30-35% of the annual crop yield
in India gets wasted because of pests, According to a research by Indian
Council of Agriculture Research (ICAR) paper in 2017, the use of pesticides
and insecticides is still limited to a few areas and larger farms. Thus, over a
wider area, crops suffer much damage due to pests and insects resulting in
lower output and low productivity.
(f) Lack of Agricultural Research: Public spending on agriculture is one
of the key policy instruments of the government to promote growth and
alleviate poverty in rural areas. Amongst the various types of government
spending, Agricultural Research and Education (R&E) is found to be one
of the most critical for promoting farm yields, which contributes towards
augmenting yield and thus income of the peasantry. According to Ashok
Gulati, a renowned Agricultural Economist, India spends about 0.7 per
cent of its GDPA (2014-15) on aggregate agriculture research, including
education, extension and training (AgRE&XT) as against the recommended
level of 2 per cent of agri-GDP by the world Bank. Further, According to
the Economic Survey 2017-18, the total R&D expenditure in India as a
percentage of GDP has been stagnant at 0.6 to 0.7 per cent in the last two
decades — much lower than the US (2.8 per cent), China (2.1 per cent),
South Korea (4.3 per cent) and Israel (4.2 per cent). Comparing India and
China’s spending on agricultural research and development, “Agriculture
Science and Technology Indicators (ASTI)” data reveal that India currently
spends 0.30 per cent of agriculture GDP on agricultural research, which is
just half the share invested by China (0.62 per cent).
Thus, Productivity of most of the crops in the country is low and there is
considerable scope to raise it. Except wheat, productivity of most other crops
in the country is below the world average and much lower than agriculturally
advance countries. Even, within the country there are large variations in yield
across states. A large variation in yield across states is due to variation in the
factors discussed above, even the variations are found in the states with the similar
irrigation coverage, productivity show significant variations due to poor level or
low adoption of improved technology.
Check Your Progress A
1. What are the main cereal crops in India?
192
2. List the main reasons for the low agricultural productivity in India. Problem of Productivity

3. What do you mean by technological reasons of low productivity?

4. Which of the following statements are ‘True’ or ‘False’?
i) Agriculture, with its allied sectors, is the largest source of livelihoods
in India
ii) In wheat production, India’s rank in world is first.
iii) India’s yield per hectare for rice and wheat is low if we compare with
the BRICS countries.
iv) There are very good warehousing facilities in the villages in India.
v) Indian farmers are not applying sufficient quantity of fertilizers on their
lands

12.4 MEASURES TO RAISE PRODUCTIVITY IN

INDIAN AGRICULTURE
There are two sources to increase agricultural output, i.e., area and productivity.
Due to rising demand for land for non agricultural uses and already high share
of arable land in the total geographical area of the country, further expansion
in the area under cultivation is not feasible. Rather, there is a decline of about
10 lakh hectares, as agricultural land has been diverted to non- agricultural uses
since the year 2004-05. Therefore, agricultural output has to be increased through
improvement in productivity per unit of land (Nitti Aayog,2017).
Reduction in the Pressure of Population on Land: Indian agriculture employs
the largest share of the workforce – about 42 percent in 2019 – though its share
in the overall gross domestic product (GDP) is only 20 percent in 2020. India is
still largely a rural economy with 66 percent of the country’s population living
in rural areas (World Bank, 2019). The proportion of the workforce employed
in the agriculture in India is very high from any standard. Thus, there is utmost
need to withdraw a part of the workforce from agriculture and provide them
alternative employment outside agriculture, which would help reduce the pressure
on agriculture and consequently improve the productivity. Over the last four
decades, the absolute number of workers in India has increased from 180.7
million in 1971 to 481.7 million in 2011, indicating an addition of close to 6
million workers to the workforce every year (Census of India, various issues).
Moreover, the absolute number of workforce employed in the agriculture sector
has increased from 125.7 million to 263.1 million during the same period, though
in terms of percentage, this share has declined from 66.5 percent in 1981 to 42.3
per cent in 2019(Gulati,2019). According to Gulati, raising labour productivity
will require raising land productivity by (a) pumping in more capital; (b) creating
employment opportunities in off-farm jobs such as food processing, cold storages,
construction sector; (c) skill formation; and (d) ‘diversification’ towards high
value agricultural activities such as dairy farming, poultry rearing, horticulture
and fisheries.
Agriculture Research and Extension: As we have seen the expenditure made
by the Government of India for agricultural research and extension is very low
as compared to other countries. An increase in the expenditure on agriculture
knowledge and innovation systems is an important factor in the improvement of
productivity of the agricultural sector in India. In a study conducted by Gulati and
Terway (2018) on the impact of investment and subsidies on agricultural GDP 193
Sectoral Development-I; growth and poverty reduction, it was estimated that for every rupee invested in
Agriculture Sector In India
agricultural research and education (R&E), agriculture GDP increases by INR
11.2. Moreover, for every million rupees spent on agricultural R&E, 328 people
are brought out of poverty. The study confirms the return from per rupee spent
on agriculture research is highest. It shows that every rupee spent on agricultural
research and development yields better returns (11.2), compared to returns on
every rupee spent on fertilizer subsidy (0.88), power subsidy (0.79), education
(0.97) or on roads (1.10).In India, over the years, the ratio of expenditure on
agricultural knowledge and innovation systems as a percentage of agricultural
gross value added (GVA) improved from 0.38 percent in 2000/01, touched 0.64
percent in 2010/11 but fell back to 0.35 percent in 2018/19.Therefore, in order
to improve the sector’s total factor productivity, India needs to invest more in
agricultural R&E (Gulati and Gupta, 2019).
Agricultural Marketing: Agricultural Marketing is riddled with the middlemen
who sucks the benefits accruing to the farmers and end consumers. Some of the
reforms in the marketing suggested by experts are discussed below, which are
essential for improving the productivity in the agriculture sector.
a) Uniform Mandi fees: These fees now range from 0.5% to 5% on the value
of sale, while varying across states and commodities. It is proposed that a
uniform Mandi fee of 0.25% or 0.50% be levied nationwide for foodgrain,
oilseeds and fruits & vegetables. The consequent losses to APMCs may
be compensated by the Centre and state governments, as in the case of the
Goods and Services Tax.
b) Abolish Mandi fees on inter-state trade: Charging Mandi on produce
brought to a state from other states (where it would already have been levied)
amounts to double taxation, besides violating the idea of a single national
market. The practical difficulty is to verify whether the commodity has
actually come from another state, as traders sometimes use this route to pass
on their unaccounted stocks. A way out is to make e-way bills mandatory for
all inter-state trade and Mandi fee exemptions be given only against these.
c) Eliminate Arthtiya-based trading: All trades in APMCs should be through
open auctioning, involving multiple bidders for each lot. Such trades
should be directly between buyers and sellers, with no middlemen charging
commission. The arthtiya can participate only as a trader. The farmer should
have total freedom to sell his produce at the farmgate, haat, APMC yard,
private markets, deemed markets (warehouses/cold storages) or e-trading
platforms.
d) Storage and banking facilities near APMCs: At Mandis the lowest prices
are during the 3-4 post-harvest months and highest in the immediate pre-
harvest period. Farmers undertake maximum sales just after harvest, as they
need to purchase inputs for the next sowing season. Such distress sales can
be avoided if facilities for bagging and storage, along with loans against
warehouse receipts, are available to meet immediate cash requirements.
These should exist in the vicinity of APMCs. When farmers have the choice
to sell or store their crop, it will force traders to pay the actual value of
produce based on quality.
e) Promote Farmers Producers Orgainisation (FPOs) in marketing:
Producer organisations/companies should be encouraged to take up direct
marketing of their members’ produce to large buyers and processors. Besides,
194 they can be given mandi to trade in APMCs. There are some FPOs that do
 such trading; it has been found to result in more competition and better prices Problem of Productivity
at APMCs.
f) Relax/abolish Essential Commodities Act: Increased production,
liberalised imports and food inflation well under control, restrictions on
stocking, movement and export of farm produce have become redundant.
The dismantling of such controls under ECA and other regulations would
expand trade and lead to better realisations for cultivators.
g) Common e-NAM trading licence: Electronic National Agriculture Market
(e-NAM) online trading platform has helped connect 585 APMCs across
India. The ground reality, however, is that much of trading in e-NAM is still
being done by traders within the same mandis. The reason is the individual
licencing system adopted by each APMC. What is needed is a common
licence valid across all e-NAM APMCs. This can be issued with a rider that
the trader will deposit upfront the margin money/funds in any APMC where
he wishes to undertake physical buying on any given day. An e-wallet or
plug-and-play facility of this kind will multiply the number of buyers and
meet the e-NAM’s primary objective of promoting better price discovery.
Ever Green Technology: The chemicals induced technology known as green
revolution has made India self sufficient in food grains. The application of new
technology in mid 1960’s not only eliminated India’s dependence on imports
for feeding the ever increasing population, but also increased the productivity
of the crops by leaps and bounds. The productivity of rice and wheat recorded
high growth owing to the application of new technology. The major problems
associated with Green Revolution are related to environmental factors like
depletion and pollution of groundwater, soil erosion and loss of biodiversity.
The chemical technology was not carbon neutral, the excessive use of chemicals;
fertilizers and pesticides resulted in a number of environmental problems. As a
result gain in productivity achieved through the new technology has reached a
plateau. More than that chemical based technology is not sustainable knowing
agriculture is one of the largest users of water in India and the largest polluter of
the environment worldwide. Owing to the resource and technology constraints in
India, the chemical technology cannot be the solution to increase the productivity
and meet nutrition security in India. Hence scientists and the government of
India have come up with the concept of ‘evergreen revolution’; which implies
productivity improvement in perpetuity without social and environment harm.
The evergreen revolution involves the integration of ecological principles in
technology development and dissemination.
The Green Revolution transformed the image of India from being a ‘begging
bowl’ to ‘bread basket’. However, to rectify flaws and loopholes of the Green
Revolution, the country needs to make it evergreen. Though India is now self-
sufficient in many aspects of food production, it still relies on imports for crops
such as pulses and oilseeds, where production has not kept pace with demand.
Dr. M.S.Swaminathan, who coined the term “Evergreen Revolution” to highlight
the pathway of increasing production and productivity in a manner such that short
and long term goals of food production are not mutually antagonistic. The logic
is to produce more from less land, less pesticide, less water and it must be an
evergreen revolution to get sustainable agriculture. Introducing Indian farmers
to innovative information and communication technologies (ICT) can enhance
farm productivity. ICT initiatives can tackle key challenges in the agricultural
value-chain through networking on weather alerts, the sowing period, and the
195
prices of produce.
Sectoral Development-I; According to the ICAR in the dry areas, dry lands produce half the country’s
Agriculture Sector In India
cereals, 77 per cent of its oilseeds and 85 per cent of its pulses. Implementation
of new and efficient irrigation methods, better watershed management and
maintenance of vegetation cover in catchment areas and development of drought-
tolerant crop varieties is required to optimise water utilisation.
GM food crops are also critical for enabling the success of evergreen revolution.
These crops have been proven to significantly improve yield through high levels
of disease and pest resistance, improved weed management, abiotic stress
tolerance and nutrient-use efficient crops. For example approval and promotion of
Bt.Mustard helps us to reduce the edible oil imports and improve Indian economy
as well as provide nutrition.
With increase in population, there is a dire need to increase food grain production
at a rapid pace. The challenge lies in producing more with less resources. Only
increased productivity which is ecologically sustainable can ensure higher
production of Foodgrains. Food security involves an increase in food grain
production and distribution which is accessible and affordable. Stagnation of
food grain production is the biggest concern of recent time. Evergreen revolution
is the need of the hour.
Check Your Progress B
1. How has the workforce in agriculture in India changed during the last three
decades?
2. Name three measures of agriculture marketing which can help in raising
agricultural productivity.
3. What is ‘Ever Green Technology’?
4. Which of the following statements are ‘True’ or ‘False’?
i) There has been a decline of about 10 lakh hectares as agricultural land
since the year 2004-05.
ii) The farmer should have total freedom to sell his produce at any place
of his choice.
iii) The Green Revolution transformed the image of India from being a
‘begging bowl’ to ‘bread basket’.
iv) India has invested sufficient funds in the agricultural research.
v) Only increased productivity which is ecologically sustainable can ensure
higher production of foodgrains.

12.5 LET US SUM UP

India is primarily an agricultural country, as the sector provides livelihood to
more than 50% of the population and contributes nearly one fifth of the country’s
GDP. However, India lags behind many other countries as far as agricultural
productivity is concerned. India’s yield per hectare for rice and wheat is low if
we compare with the BRICS countries. If India’s yield rates for the two crops are
at China’s levels, it can double our yields or halve the land used for the purpose.
At present, India produces 106.19 million tonnes of rice a year from 44 million
hectares of land. That is a yield rate of 2.4 tonnes per hectare, placing India at
27th place out of 47 countries. There are several reasons for this, which include
demographic factors, Social Environment, Land Tenure System, Inadequate/
196 Improper Warehouses, Uneconomic Holding, Inadequate Transport Facilities,
Presence of Large Number of Intermediaries, Inadequate Market Information, Problem of Productivity
Inadequate Credit facilities and several Technological Factors.
Therefore, agricultural output has to be increased through improvement in
productivity per unit of land (Nitti Aayog,2017). Several desirable measures
have been suggested, such as Reduction in the Pressure of Population on Land,
Agriculture Research and Extension, Agricultural Marketing, Uniform Mandi
fees, Abolish Mandi fees on inter-state trade, Eliminate Arthtiya-based trading,
Storage and banking facilities near APMCs, Promote Farmers Producers
Orgainisation (FPOs) in marketing, and Ever Green Technology, etc.

12.6 KEY WORDS

BRICS countries: Group of Brazil, Russia, India, China and South Africa.
Ever Green revolution: The productivity improvement of foodgrains in
perpetuity without social and environment harm. The evergreen revolution
involves the integration of ecological principles in technology development and
dissemination.
Green Revolution: Application of new technology based on increased use
fertilizers, pesticides and planned rotation of crops led to remarkable increase
in agricultural productivity and made India self sufficient in food grains. It was
called ‘Green Revolution’.
Mandis: The market/place where trading of agricultural products is carried out.
e-NAM: Electronic National Agriculture Market is a platform where online
trading of the agricultural products can be done.
Social Environment: Different customs, traditions, etc. in a society.
Zamindari system: During the British rule in India, Zamindars were recognized
as the owner of the lands and were given the rights to collect the rent from the
peasants. While the zamindars became the owners of the land, the actual farmers
became tenants. It was abolished after Independence.

12.7 ANSWERS TO CHECK YOUR PROGRESS

A 4 i) True, ii) False, iii) True, iv) True, v) True
B 4 i) True, ii) True, iii) True, iv) False, v) True

12.8 TERMINAL QUESTIONS

1. What are the factors responsible for the low productivity of agriculture in
India?
2. Describe various methods being implemented for improving agricultural
productivity.
3. “The Green Revolution was a watershed in Indian agriculture” Elaborate.
4. What is the difference between the “Green Revolution” and “Ever Green
Revolution”?
5. How middlemen can be eliminated in the trade of agricultural products?

FURTHER READINGS
Kapila, Uma, Economic Development and Policy in India, Academic Foundation
(2009-10) Edition, New Delhi. 197
Sectoral Development-I; “Reform 2.0: focus must shift from agricultural production to marketing”, Indian
Agriculture Sector In India
Express, 27th June, 2019.
NITI Aayog. 2018. Demand and Supply Projections Towards 2030: The Working
Group Report. New Delhi, NITI Aayog, Government of India.
World Bank. 2019. World Development Indicators. Washington, DC., The World
Bank https://databank.worldbank.org/source/world-development-indicators.
Gulati,Ashok and Juneja,2021, “Transforming Indian Agriculture”. Nitti Ayog,
New Delhi.

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