Indian Agriculture: Before and After Economic Reforms

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European Journal of Business and Management ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol 3, No.4, 2011

www.iiste.org

Indian Agriculture: Before and After Economic Reforms
Navjit Singh Assistant Professor, Deptt. Of Management, Khalsa College Lyallpur, Jalandhar-14401, Punjab, India Contact: +9198555-29321 Abstract Agriculture once known as the backbone of Indian Economy is at present at its worst, thanks to the anti farmer, pro-Industry policy of the various Indian Governments since 1991. India is once considered as the “Ann Data” of the entire world is struggling even to manage the own demand-supply problem of various agricultural commodities. The farmers are committing suicides, are celebrating “Crop Holidays” and are fighting with Govt. for illegal acquisition of land for developing Real estate or other commercially viable projects at the cost of Agriculture. The aim of this paper is to bring out the present scenario in the field of agriculture that leads to the minimum contribution of Agriculture in the Indian GDP, once the main contributor. This paper will discuss the various issues like less technical support to farmers, poor quality seeds, inappropriate storage, Minimum Support Price, irrigation, the problem of credit availability and above all the impact of Liberalization, Globalization and Privatization on the Indian Agriculture Sector. The issues related to the WTO and their impact on Indian Agriculture and the consequences of various treaties of WTO on Indian Agriculture sector will be discussed. Key Words: Indian Agriculture, Economic Reforms, WTO, Gross Capital Formation 1.0 Introduction Agriculturists in general and the small and marginal farmers in particular have been the worst sufferers from the onslaught of globalization. With more than 40 percent of agricultural lending even today coming form the non-institutional sources charging anywhere between 30-40 percent interest per annum, the farmers are in an immiserizing situation. They are committing one of the worst human tragedies – suicides. Rural India without them definitely is not shining. And with the woeful lack of infrastructure there is a gloom not a bloom in the countryside. A decline in the share of agriculture in the national income form over 50 per cent during the 50s to less than 20 per cent today may be a sign of structural transformation but the question today is whether Indian agriculture will be able to meet the new demands placed upon it by Liberalization, Privatization and Globalization (LPG). 1.1 Reforms in Agriculture A common criticism of India’s economic reforms is that they have been excessively focused on industrial and trade policy, neglecting agriculture which provides the livelihood of 60 percent of the population. Critics point to the deceleration in agricultural growth in the second half of the 1990s (shown in Table 1) as proof of this neglect. However, the notion that trade policy changes have not helped agriculture is clearly a misconception. The reduction of protection to industry, and the accompanying depreciation in the exchange rate, has tilted relative prices in favor of agriculture and helped agricultural exports. The share of India’s agricultural exports in world exports of the same commodities increased from 1.1 percent in 1990 to 1.9 percent in 1999, whereas it had declined in the ten years before the reforms. But while agriculture has benefited from trade policy changes, it has suffered in other respects, most notably from the decline in public investment in areas critical for agricultural growth, such as irrigation and e-mail: er_smarty@yahoo.co.in

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European Journal of Business and Management ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol 3, No.4, 2011

www.iiste.org

drainage, soil conservation and water management systems, and rural roads. As pointed out by Gulati and Bathla (2001), this decline began much before the reforms, and was actually sharper in the 1980s than in the 1990s....
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