Module – 2 : The Agricultural Sector

1) Institutional Structure & land reforms in India

2) Technological change

3) Agricultural finance

4) Agricultural Marketing

5) Agricultural Pricing

6) National Agricultural Policy, 2000

INSTITUTIONAL STRUCTURE & LAND REFORMS

Institutional constraints

Land Reforms:

Objectives

Reforms

Critical evaluation

MODULE 2: CHP 1

Institutional constrains

Defective agrarian structure small & fragmented land

Zamindari mahalwari ryotwari

Low incomeLow productivityNo incentiveUncertaintyExploitationPovertyinequality

Agricultural statistics 2004In 1994-95,Avg.size of land holding 1.42 hec61.6% total land holdings uneconomical.

Reasons : population pressure, law of inheritance, Nuclear family, decline of handicraft industry, debts

Effects : non mechanization, low productivity, poverty, further debts

Land reforms

Objectives

1) Equal distribution of land2) Removal of exploitation3) Land to tiller4) Equality of status & opportunities5) Economic size of land holding6) Create healthy work culture7) Increase productivity8) Generate rural unemployment9) Optimum use of land10)Developing co-operative spirit11)Regulating rent

LAND REFORM MEASURES

1) Abolition of intermediaries zamindari abolition by paying compensation , 20 million cutivators brought into direct contact with state

It led to…… End of absentee land-lordism Ownership of land to actual cultivator Reduction of exploitation Incentive to work hard

2) Tenancy Reforms regulation of rent 1/4th or 1/5th.

Security of tenure land for personal cultivation

Ownership rights for tenants

3) Reorganization ofAgricultureceiling on land holding undistributed, 10 lakh acerIn litigation, unsuitable forCultivation,records manipulation

Consolidation of land holdingFertile land to rich, failed voluntary consolidationLand records

Co-operative farmingLack of motivation,Corrupt administration,Few coop.s by poor farmers,Lack of team spirit,Lack of trust on co-ops.,Emotional attachment to land,Political interference

. Limitations: land for personal useOwnership rights to intermediariesHuge compensation

Occupancy tenantsTenants at willSub tenants

Limitations:Rent not knownNo records of tenancy

LIMITATIONS: zamindari abolition only on paper farmers not aware about rent limit fixed Lack of recordsdominance of landlordsvoluntary surrender of landLow grade landilligal transactions

QUESTIONS:1)Write a note on ‘land reforms (april 2009) (april 2008)2)Describe the reasons for poor implementation of land reforms in Indian( nov 05)

Chp. 2 Technological Change in AgricultureThe New Agricultural Strategy ( Green Revolution) 1966: New Technology was introduced which was a package of measures offered to Indian FarmersTo increase production and productivity and make India self sufficient and self reliant in food grain production

Intensive Agricultural District Programme (IADP) in 1960-61 in 7 districts

Extension in 1966 –Measures undertaken under IADP are 1) use of HYV seeds 2) better water management 3) use of fertilisers & pesticides 4) educating farmers 5) providing better credit & marketing 6) better irrigation 7) better mechnisation

Impact of Green Revolution

Achievements1) Foodgrain production

Wheat: 11 to 76 M. T.(60-61 to 99-00)Rice: 35 to 90 M.T.(60-61 to 99-00)Foodgrains: 212 to 217.3 million T. during 01-02 to 06-07

2) More productivityFoodgrains: 783 to 1626 kgs per hectare (67-68 to 00-01) 3) Changes in Agricultural Practices4)Employment Generation

5) Linkage with Industry6) Changes in attitude of farmers

LimitationsLIMITED COVERAGEINSIGNIFICANT INCREASE IN PRODUCTION & PRODUCTIVITYCAPITALIST FARMINGINCREAED INEQUALITYUNEMPLOYMENT

TECHNOLOGICAL CHANGES IN AGRICULTURE

BASIC INPUTS:

Cultivation – Japanese method of rice cultivation.

Seeds – HYV Seeds. Institutional framework has been developed to generate Quality seeds through central & state Government participation. Indian Council of Agricultural Research (ICAR) State Agricultural Universities National Seed Corporation (NSC) 15 State Seeds Corporations (SSCs) State Farms Corporation of India (SFCI) & seed companies

Irrigation – major & minor dams, borewells, pumpsets, drip irrigation.

In India about 60% of foodgrains production comes from 39% of irrigated area and 40% of remaining production comes from 61% of rainfed area.

During 50 years of independence, the Government had spent about 231,400/- crores( at 1996-97) prices) on major ,medium and minor irrigation works, leading to growth in The country’s irrigation potential from 23 million hectare (1950-51) to 89 million heatare (1996-97)

Pest Control – pest control methods have been developed to Integrated Pest Management (IPM). Efffective IPM packages are designed & developed for rice, cotton, sugarcane, pulses, oilseeds etc.

FERTILIZERS AND MANURES

YEAR PRODUCTION 000 TONNES

IMPORTS 000 TONNES

CONSUMPTION000 TONNES

CONSUMPTION PER HECTARE OF CROPPED AREA (KG)

1951-52 39 52 70 0.5

1990-91 11,860 2,760 12,550 76.8

2000 -01 14,750 5,253 16,700 90.1

2006-07 16,096 6,058 21,651 112.2

Production, imports & consumption of chemical fertilizers in India

Economic survey 2008-09

Agricultural Engineering - Indian Council of Agriculture Research (ICAR) has designed a variety of marketable implements & machines for field operations

Technology Mission on Oilseeds, pulses & maize - launched by the Central Government in 1986 and was extended to pulses, oil palm & maize in 1991, 1992 & 1996 Various schemes were implemented. Oilseeds Production Programme (OPP) National Pulses Development Project (NPDP) Accelerated Maize Development Programme (AMDP) Oil Palm Development Programme ( OPDP)

Extension Services – for farmers trainingKisan Call Centre – introduced in 2004. 144 Call Centre Agents use 21 local dialects toll free number 1551 & 1800-180-1551 from 6am to 10 pm for 7 days Department of Agriculture & Cooperation has developed a data structure Kisan Knowledge Management System (KKMS) to help KCC provide correct answersI.T. use of IT for information & also to update land ownership records

QUESTIONS:WRITE A NOTE ON GREEN REVOLUTION EXPLAIN THE NEW AGRARIAN TECHNOLOGY

AGRICULTURAL PRICINGNeed for agricultural price policy…..???

To provide remunerative pricesTo provide incentivesTo promote capital formationTo have better terms of trade between agri & non-agri sector.To reduce income inequalityTo prevent inbuilt fluctuations

ADMINISTERED PRICES: YEARLY BASIS

Recommendation of Jha committee1964-65Agricultural Price Commission – 1965 recently called as –COMMISSION FOR AGRICULTURAL COSTS & PRICES ( CACP)

FACTORS CONSIDERED WHILE DETERMINING PRICES BY CACP:

cost of production

Risk factors

Effect on industrial cost

Effect on cost of living

Effect on general price level

International price situation

Changes in agricultural input prices

Market prices

Demand & supply

Trends in the past price levels

Floor price/24 cropsJute & sugarcane

ANNOUNCEMENT OF ADMINISTERED PRICES

Generally Lower thanMarket price& higher thanM.S.P.

Lower thanProcurement Prices.

( in 2009-10, issue price per quintal for wheat was 610)- & for rice,795/- for APL for BPL, 415/- for wheat & 565/- for rice; for AAY, it was 300/- per quintal)

M.S.P.: ANNOUNCED EACH YEAR BY CACP.CONSIDERS MANY FACTORS WITH SPECIAL EMPHASIS ON COST FACTOR; IMPORTANT COST CONCEPTS USED ARE C2 & C3 costs:

C2 = all actual expenses in cash and kind incurred in production by actual owner + rent paid for leased land + imputed value of family labor + interest on value of owned capital assets + rental value of owned land ( net of land revenue).

C3 = C2 + 10% of cost to account for managerial remuneration to the farmer.

ADMINISTERED PRICES

1. MINIMUM SUPPORT PRICES (M.S.P.)

MINIMUM SUPPORT PRICES 2009-10 Rs. PER QUINTAL

COMMODITY M.S.P. 2010 -11CROP YEAR

COMMODITY M.S..P. 2009-10CROP YEEAR

KHARIF CROP RABI CROP

paddy (common) 950 + 60 per quintal bonus

Wheat 1,100

Paddy ( grade A) 980 + 50/- per quintal bonus

Masur 1,870

Cotton ( F-414/H-777/J-34)

2,500 Other crop

Groundnut in shell 2,100 sugarcane 129.84

Source: Department of Agriculture & Cooperation

IMPLEMENTATION OF ADMINISTERED PRICES

FOOD CORPORATION OF INDIA (FCI) FOR FOODGRAINSNATIONAL AGRICULTURAL COOPERATIVE MARKETING FEDERATION (NAFED) FOR, CEREALS, PULSES & OILSEEDSCOTTON & JUTE CORPORATIONS, TOBACCO BOARD ETC.

AGENCIES:

NATIONAL CROP FORECASTING CENTRE ( NCFC): IN JAN 1999, TO WATCH PRICES ON PRIMARY GOODS &PUT AN ADVANCED WARNING SIGNAL

HIGH POWEREDPRICE MONITORING BOARD: 1999, MONITORING ESSENTIAL COMMODITY PRICES & ANTICIPATING THE NEED FOR GOVERNMENT INTERVENTION

TARGETTED PUBLIC DISTRIBUTION SYSTEM: 5 LAKH FPS

BUFFER STOCKS: BY FCI & NAFED OF ESSENTIAL COMMODITIES.WAREHOUSINGREGULATED MARKETSCREDIT FACILITY

LIMITATIONS

DIFFICULTY IN DECIDING ‘FAIR’ PRICES

NO INTEGRATION BETWEEN DIFFERENT CRITERIA

BENEFIT TO LARGE FARMERS

MOUNTING DEFICIT

EXCESSIVE BUFFER STOCKS

SEASONAL & SHARP RISE IN VEGETABLE PRICES

FLAWS IN PDS

CONTRIBUTION TO INFLATIONARY TREND

NOT ALL COMMODITIES COVERED