The Crisis in Indian Agriculture

Jaya Mehta

On 24th March 2008, Shrikant Kalamb, a fifty year old farmer of five acres in Murtijapur, Akola hanged himself to death. The world of literature perhaps does not know of him, but while toiling for his meagre livelihood, he also wrote some very beautiful poetry. Two days before he ended his life he penned his last poem

            My life is different;
            My death will be like untimely rain
                        The cotton in black soil is like a poem to me
            Its roots as sweet as sugarcane………….

(See: Jaideep Hardikar, India Together, 4 January 2009)

Notwithstanding the media attention and government’s debt relief packages, the suicides in Vidarbha continue unabated. The prime minister first announced the debt relief package in 2006. The Vasantrao Naik Sheti Swawalamban Mission, a nodal agency of the Maharashtra government, recorded 1,246 farmer suicides in 2007 (in Vidarbha), 1,147 suicides in 2008 and 966 in 2009. It is being happily reported that there is a declining trend (PTI 12th January 2010). Vidarbha is not alone. Andhra has equally horrifying figures to report. Farmers’ suicides have been reported across the country – from Kerala, Andhra, and Karnataka to Bundelkhand and Punjab. This, of course, is the extreme symptom of a very deep rooted and widespread rural distress.

Slow Growth of Agricultural Sector

One can begin with a more sober expression, namely the deceleration in agricultural GDP growth. The agricultural output in India fluctuates widely because of its dependence on distribution of rainfall. The long term trend is observed by taking the three year moving average data. The agricultural GDP growth rate came down from 3.3 percent during 1980-1995 to 2 percent during 1995-2005.

Growth rate in output of various sub sectors of agriculture at 1993-94 prices

Crop sector
Fruits &
culture crops

Source: Report of the Steering Committee on Agriculture & Allied Sectors
for Formulation of the 11th Five Year Plan (2007-2012)

The table above presents the growth rates of agricultural sub-sectors. We notice that the crop sector which grew at 3.22 percent during 1990-91 to 1996-97 collapsed in the next period i.e. during 1996-97 to 2003-04, the growth rate came down to 0.61 percent. If we exclude horticulture from the crop sector then the growth rate was negative in absolute terms (-0.31 percent).

The agricultural output growth rate has slowed down because on one hand the acreage under crop is shrinking and on the other hand the crop yield per unit of land has also remained stagnant in most cases. The total operated area was 125.10 million hectares in 1991-92. It has come down to 107.65 million hectares in the year 2002-03 (NSSO report no. 493). The net irrigated area declined from 57.1 million hectare to 55.1 million hectare during this period. Surface water irrigation has taken a back seat in most areas and dependence on ground water irrigation has increased dramatically. The water table has come down in 264 out of 596 districts. The period has also witnessed increasing input costs and deteriorating soil conditions. As a result, the growth in crop yields per hectare has plummeted across the board. (

The Steering Committee on Agriculture and Allied Sector constituted by Planning Commission for the formulation of the 11th Five Year Plan observes that after independence, such a long term deceleration in the growth of agricultural output is being witnessed for the first time.

Food Security

With the crop sector growth going down, the per capita net availability of food grain declined to the levels attained in 1950s. Net availability of food grain is estimated as gross production (-) seeds, (-) wastage, (-) export, (+) import, (+/-) changes in stock. In the decade of the 1990s, per capita availability of food grain fluctuated around 174 kg per annum. It was 186.2 kg in 1991. Since 2000, it has come down to 160 Kg and below. It was 151.9 Kg in the year 2001. Just for comparison, one should note that the per capita annual availability of food grain in USA is in the range of 1000 Kg. Correspondingly to the decline in food grain availability, the per capita per diem calorie intake has also gone down from 2153 Kcal. (1993-94) to 2047 Kcal. (2004-05) in rural India and from 2071 Kcal. (1993-94) to 2026 Kcal (2004-05) in urban India (NSSO report no. 513).

These are average figures. To capture the stark reality, we have to also take into account the unequal access to food. The poverty estimates in India are based on a single norm, namely adequate intake of calories. The norms are 2400 Kcal per diem per capita for Rural India and 2100 Kcal per diem per capita for Urban India. The Planning Commission claims that in the year 2004-05, 28.1 percent of rural population was below the poverty line. However, the poverty line of Rs. 356.30 corresponds not to 2400 Kcal but only to 1800 Kcal. Thus 28.1 percent of rural population consumes less than 1800 Kcal. per day. If we consider the norms of 2400 Kcal. then we find that actually 87 percent of rural population should be classified as below poverty line. In other words 87 percent of rural population does not have sufficient purchasing power to buy food which will fulfil the calorie requirements.

The findings of the National Family Health Survey for the year 2005-06 also subscribe to serious nutritional inadequacy. As many as 47 percent of India’s under-three kids are underweight, 19 percent are severely malnourished and 79 percent are anaemic. At the same time, 56 percent of adult women are also anaemic.

When such a large section of the population is nutritionally deprived over extended period of time, even a slight perturbation in terms of monsoon failure or fluctuations in prices can lead to a major catastrophe. The reports on starvation deaths from different parts of the country are as alarming as those on farmers’ suicides. 

The memories of Bengal famine are again of special importance. Ashok Mitra, in his memoir Apila-Chapila (Ananda Publishers, 2003) [in English translation A Prattler’s Tale (SAMYA, 2007)], tells of millions from the countryside dragging themselves to the cities to beg and to die in the streets. ‘We went to college, stepping over these live corpses, these half-dead men, women and children. It was an appalling situation. Yet the daily lives of the middle and upper classes were largely unaffected’ (Ref: Analytical Monthly Review 16.05.08).

Crisis Resolution or Crisis Management

When there is a crisis situation, the policy response can either be towards resolving it or towards managing it.

Resolution of Crisis

Resolution of the present agrarian crisis demands a radical restructuring of not just the agrarian sector but the entire Indian economy. The crisis is rooted in the distorted capitalist development trajectory that we inherited from our colonial past.

Imbalance between industry and agriculture

In order to transfer surplus from India to Britain, the colonial power forcibly ruptured the domestic links between agriculture and industry. The artisan manufacturing was destroyed and linkages from new industry and railways were not allowed to spread out domestically. This led to lumpy and uneven industrialisation. While surplus was transferred from agriculture to industry abroad and industry at home, sufficient employment could not be generated in manufacturing to facilitate the shift of workforce in that direction.

The post independence Nehruvian development model failed to make a decisive break from our colonial past. The transfer of surplus from agriculture to industry and services continued but the workforce remained confined to agriculture and allied sectors for lack of productive employment possibilities outside. The share of agriculture in the National Income declined from 59 percent in 1950-51 to 36.4 percent in 1982-83 to 18 percent currently. The share of agriculture in workforce remained more or less unchanged at 70 percent till 1972-73 and after that declined slowly to 59 percent by 2004-05. In absolute numbers the agricultural workforce has increased from 191 million in 1993-94 to 257 million in 2004-05. Division and subdivision of holdings has reduced the average size of operational holding from 2.63 hectare in 1960 to 1.34 hectares in 1991-92 to 1.06 hectares in 2003-04.

Industrialisation in Colonial Empire & In the Colony

Industrial revolution in Britain took place in the second half of 18th century. A series of innovations like flying shuttle, power loom, spinning jenny, water frame and mule, and finally the steam engine completely transformed the textile production process. The production process was speeded up and it could be carried out with far fewer workers. Even then, the size of the workforce in manufacturing did not reduce. Rather it expanded rapidly. The innovations in textile production gave a tremendous boost to investments in textiles itself and also in a wide range of industries which were linked to the textile industry. Thus, coal, iron and machine making industries grew all at once and generated employment opportunities. Further, steam engine was applied to railroads in 1804 and development of railroads created widespread geographical and sectoral linkages attracting enormous investment.

Thus, capitalist transformation of Britain resulted in industrial output dwarfing the agricultural output in national income. At the same time there was a massive shift of workforce from agriculture to industry. This shift took place first in England, where the share of the workforce in agriculture sank to 14% by 1871 and that of industry and trade increased to 55%.

Early industrialisation of other European countries followed more or less a similar course. Industrial linkages led to an extensive spread of manufacturing activities which created employment opportunities in manufacturing and facilitated the shift of workforce from agriculture to industry.

Capitalist industrialisation in India, as a colony of British Empire was altogether a different story. The colonial rulers systematically destroyed artisan manufacturing in India. The British restricted marketing of Indian textiles within the country by imposing internal tariffs and completely stopped export outside through exorbitant tariffs or an outright ban. At the same time British textiles were imported into India at low tariffs. India was converted from a leading manufacturer and exporter of textiles to a nation importing textiles. The share of industry in workforce fell and so did its share in the national income. The share of agriculture in the workforce and national income increased. This happened not because of any growth in agricultural productivity but because of the shrinkage of industry. Mechanised production of textiles was introduced in India in the latter half of 19th century. However, unlike Britain, in India it failed to create external linkages. Whether the firms were owned by British entrepreneurs or by Indian ones, the machinery for the textile mills was imported from Britain. Thus, the machine making industry or heavy industry did not develop within the country and no new employment was generated in manufacturing. The same was the case for modern sugar and iron industry. Even introduction of railways did not result in any spread out industrial activity. Instead the investment linked to Indian railways materialised in Britain and dividends on these British private investment became another source of a major drain of India’s wealth. Railway routes were so designed as to facilitate transport of imported goods from ports to the interior, but connectivity between different points in the interior was not established. In 1948, the three presidency states of Bombay, Madras and Calcutta accounted for 77 percent of industrial workers and 77 percent of industrial production.

In short industrialisation was lumpy and spread unevenly. Overall industrial growth was stunted and did not create employment opportunities for labour in manufacturing.

(Ref: Aspects of India’s Economy, No. 44-46)

Inequitable resource base in agriculture

Apart from imbalance between agriculture and industry, colonial rule was also responsible for distorting the production structure within agriculture. The British rulers restructured the land holding arrangements so as to maximise extraction of surplus. This was done without much disturbing the feudal relations in rural India. The land revenue levels were steeply increased and the farmers were forced to increase the share of cash crop production. The decline of subsistence farming depressed consumption of peasantry and increased landlessness.

The cash crops were exported and Britain paid for these exports out of the land revenue collected from Indian farmers. Surplus was thus transferred from India to Britain. At the same time Indian agriculture got integrated into world market. Starting with the fall in jute prices, the great depression of the thirties dislocated Indian farmers in a major way. In the year 1931, 32 percent of rural workforce was classified as landless. The depression was followed by a steep rise in agricultural prices during 2nd World War. The end result was the Bengal famine of 1943.

The land reform programme of Independent India abolished absentee landlordship and intermediaries but failed to correct the skewed distribution of land holdings. According to the NSS survey for the year 2003-04 , the top 5.2 per cent of rural households own 42.8 per cent of the area, and the top 9.5 per cent own 56.6 per cent of the area. The remaining 90.5 per cent of households owned just 43.4 per cent of the area. The bottom 60.15 per cent of rural households own only homestead land (less than 0.4 hectares) and 10 per cent do not own even homestead land. (NSS report no 491.)

Resolution of crisis demands that both these anomalies are corrected:

1. The land ownership restructuring is done which enables viable productive possibilities within agriculture.

2. At the same time productive employment opportunities are created on a massive scale in manufacturing and service sector so that surplus labour can move out of agriculture. In an NSSO survey 40 percent farmers expressed the opinion that they would quit farming if better options were available outside agriculture. (Report 496)

Management of Crisis

Management of crisis is a different proposition. It does not demand a change in basic production relations. Instead, it demands measures for immediate relief without a major restructuring.

Management of crisis requires that in the present conjuncture, the farmers are protected from world market price fluctuations. World prices for food commodities increased more than 75 percent from January 2006 to July 2008. With the financial meltdown they have now started sliding down. Violent fluctuations in prices play havoc with livelihood security of farmers. Management of crisis requires that government imposes tariffs and quota restrictions to protect the farmers. Management of crisis at this stage requires the government to undertake the responsibility of providing quality inputs at reasonable prices and ensuring support price for farm produce. It requires that restrictions are imposed on corporate sector so that rather than exploiting the vulnerability of farm sector it enters into fair and transparent contracts with the farmers.

Management of crisis requires that the corporate sector is restricted from forcibly acquiring land from farmers and transferring it to non-agricultural usage. It requires increased public expenditure for providing better (physical) infrastructure like irrigation, road connectivity, electricity and (social) infrastructure like education and health facilities, universal public distribution system and so on.

Unfortunately the neo-liberal reforms adopted by the economic regime since 1991 do not permit the government to accede even to this relatively moderate set of demands in a systematic manner. When the stress is acute, the government provides relief measures in an arbitrary and ad hoc manner otherwise, in the normal course the neo-liberal agenda of facilitating maximum profits to the domestic and foreign companies proceeds unhindered. At the same time the agrarian crisis acquires deeper roots and becomes more intractable with each passing day.

When moderate demands are not acceded to, peoples’ politics can either further dilute the demand agenda or it can cross over and radicalise the demand agenda to the extent where it cannot be accommodated in the present regime. People then demand a regime change.

In other words if the government is not able to manage the crisis, let us demand its resolution.

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