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Agriculture — Land Reforms & Green Revolution

Land reforms, Green Revolution, achievements, risks, and subsidy debate.

Notes

Features (Problems) of Agriculture

At independence, land tenure was characterised by intermediaries (zamindars) who collected rent from actual tillers. Low productivity forced India to import food from USA. Agricultural sector accounted for largest share of workforce (~70-75%).

Land Reforms

Land Reforms primarily refer to change in the ownership of landholdings. Introduced by various underdeveloped and developing countries for rational land distribution and viable farming structure.

Abolition of Intermediaries

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Indian Government took steps to abolish intermediaries (zamindars) and make tillers owners of land. Ownership would give incentives to actual tillers to make improvements and increase output.

The Soviet Anecdote

Farmers in the former USSR were careless packing fruits — rotten fruits packed with fresh ones. Since they didn't own land, they neither enjoyed profits nor suffered losses. No ownership = no incentive for efficiency.

Abolition brought 200 lakh tenants into direct contact with government. Ownership rights gave incentive to increase output → contributed to agricultural growth.

Why equity was NOT fully served

Former zamindars continued owning large land by exploiting loopholes. Tenants were evicted and zamindars claimed to be self-cultivators. Even after getting ownership, the poorest agricultural labourers did not benefit.

Green Revolution — Origin & Phases

Green Revolution
The large increase in production of food grains due to the use of High Yielding Variety (HYV) or miracle seeds, especially for wheat and rice.

Dr. Norman E. Borlaug(American agricultural scientist) = ‘Father of the Green Revolution’. Awarded Nobel Peace Prize in 1970. In India, mainly founded by M.S. Swaminathan.

In kharif season 1966, India adopted HYV Programme for first time. In 1967-68, food grain production increased by nearly 28.8% over 1966-67 level. India became self-sufficient in food grains.

HYV Seeds — Requirements

These seeds need heavy doses of chemical fertilizers (4 to 10 times more than ordinary seeds). To benefit from HYV seeds, farmers need: (1) Reliable irrigation facilities, and (2) Financial resources to purchase fertilizers and pesticides.

First Phase (Mid 60s to Mid 70s)

HYV use restricted to more affluent states (Punjab, Andhra Pradesh, Tamil Nadu, etc.). Primarily benefited wheat-growing regions only.

Second Phase (Mid 70s to Mid 80s)

HYV technology spread to larger number of states and benefited wider variety of crops — rice, maize, and millets were also included.

Achievements of Green Revolution

Marketable Surplus

A good proportion of rice and wheat produced was sold by farmers in the market. Growth in output makes difference only when large proportion is sold.

Buffer Stock

Enabled government to procure sufficient food grains to build stock for times of food shortage. India maintained buffer stocks of 20-30 million tonnes.

Benefit to Low-Income Groups

Large proportion of food grains sold → prices declined relative to other consumption items. Low-income groups, who spend large percentage of income on food, benefited.

Think about it

Before the Green Revolution, India was begging the US for wheat under PL-480. Today, India exports rice worth ₹50,000 crore annually. The difference? HYV seeds + irrigation + fertilizers. A farmer in Punjab using HYV wheat gets 4 tonnes/hectare vs 1 tonne/hectare with traditional seeds.

Risks of Green Revolution

Risk 1 — Pest Attack

HYV crops were more prone to pest attack. Small farmers adopting this technology could lose everything in a pest attack. Risk considerably reduced by services rendered by research institutes established by government.

Risk 2 — Income Inequalities

Costly inputs (HYV seeds, fertilizers) could increase disparities between small and big farmers since only big farmers could afford required inputs. However, government provided loans at low interest rate to small farmers. Since small farmers could obtain inputs, output on small farms equaled output on large farms. Green Revolution benefited small as well as rich farmers.

Subsidy Debate

Agricultural Subsidy
Financial assistance provided by the government to producers to fulfil social welfare objectives — farmers get inputs at prices lower than market prices.
The Subsidy Debate
AspectEconomists IN FAVOUREconomists AGAINST
Argument 1Farming in India continues to be risky; subsidies necessarySubsidies don't reach poor/small farmers; benefits go to fertilizer industries and prosperous farmers
Argument 2Majority of farmers are very poor; can't afford inputs without subsidiesHuge fiscal burden on government finances
Argument 3Eliminating subsidies will increase income inequality, violate equity goalAfter wide acceptance of technology, subsidies should be phased out — purpose has been served

Additional Observations on Subsidies

Prices as Signals: When a good becomes scarce, its price rises, forcing efficient decisions. Example: sanitizers/masks became costly during coronavirus due to short supply. Petrol price rise signals scarcity → incentive to use less or find alternatives.

Subsidies may be beneficial

  • • Ensure everyone gets food they need
  • • Ensure steady income for farmers during price changes/bad harvests
  • • Facilitate growth of local economy in rural areas

Subsidies may lead to wasteful use

  • • Free electricity used wastefully
  • • Free water → farmers cultivate water-intensive crops even in scarce regions
  • • Fertilizer/pesticide overuse harms environment
  • • Subsidies influence market prices causing global trade confusion

Critical Appraisal of Agriculture (1950-1990)

Indian economy inherited stagnant, backward agricultural sector from British rule. Government undertook various measures to improve agriculture. Land Reform measures and Green Revolution were greatest achievements in enhancing agricultural production and productivity.

The Paradox

Proportion of GDP contributed by agriculture declined significantly, BUT not the population dependent on it (67.5% in 1950 to 64.9% by 1990). Around 65% of country's population continued in agriculture until 1990. Agricultural output could have grown with far fewer people working in the sector. Industrial and service sectors could NOT absorb extra workforce from agriculture. This involvement of large proportion in agriculture = important failure of policies during 1950-1990.

Key Takeaways

  • India became self-sufficient in food production (Green Revolution)
  • Land reforms abolished zamindari system
  • Agricultural productivity increased substantially (1950-1990)
  • BUT ~65% population remained in agriculture — failure to shift workforce to industry/services
  • Proportion of GDP from agriculture fell, but workforce share did not decline proportionally