Department of Management Studies

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Department of Management Studies

• Presented By
• Kamlesh Kumar Jangid
• Manisha vyas
• Kadambari sapra

2
Role of Agriculture in the Development of Indian
Economy

• In context of India, in a nutshell, its position
  is an all-embracing one.
• So much so that the very existence of economic
  activities of the entire people is bound up with
  the state and health of this sector. This
  all-pervading influence can be gauged from the
  following facts and figures

3

• Large share of National Income
• Provides large employment and support for many
  activities
• Large supplies of food and fodder
• Large foreign trade
• Significant placing in government budgets
• Influences industrial structure, transport and
  other services
• Considerable capital investment

4
Large share of National Income

• An important aspect of its stature can be seen
  from the large contributions it makes to the
  countrys gross domestic product (GDP).
• This fact highlights the largeness of the
  proportion of agricultural products which mark
  the profile of domestic product by industrial
  origin.
• Though over the years, its share has fallen, yet
  it continues to be significant at about 24
  percent at present.

5
Provides large employment and support for many
activities

• Being the producers of the largest amount of
  commodities in the country, it provides
  employment and work for living to an overwhelming
  majority of the Indian masses.
• Besides, a large number earn their living by
  working in occupations dependent upon
  agriculture, like storage, processing, and trade
  and transport of agricultural products.
• In villages, a large majority of people earn from
  cultivation and allied agro-industries.
• A considerable part of the labor force in towns
  and cities also finds jobs in marketing, export
  and other activities connected with agriculture.

6
Large supplies of food and fodder

• Excepting the two years, 1966 and 1967, when food
  imports were higher than 10 percent of the net
  availability of food grains in the country, in
  most of the years these were less than 5 percent.
  In some years these imports were marginal and in
  others there were in fact export of food grains.

7
Large supplies of food and fodder continues.

• Agriculture also provides fodder to sustain
  livestock, comprised of cattle, buffaloes, sheep,
  goats, horses, ponies etc., and poultry.
• These provide employment and income to the many
  in rural and hilly areas.
• Their produce constitutes a significant
  proportion i.e. 26 percent, of the output from
  agriculture sector.

8
Large foreign trade

• Agriculture contributes a sizeable part to
  exports and is an important segment of the
  country. The exports of agricultural products
  have been quite large and rising all through
  these years, particularly since 1970s.
• These exports at present constitute 15 to 20
  percent of the total exports of the country.
• Imports of agricultural products form 5 to 7
  percent of countrys total imports.

9
Significant placing in government budgets

• The budgets of the government of both the States
  and the Centre have been considerably influenced
  by land revenue and tax-income on the one hand
  and expenditure on its development on the other.
• The total estimated yield from land revenue and
  other agricultural tax has been, for example,
  around Rs 1600 crores.
• The more important budgetary operation having
  relevance to agriculture is the massive
  expenditure that is being incurred on it for
  several purposes, including a large part for
  agricultural development. This expenditure has
  increased from plan to plan and has been incurred
  for several activities like irrigation projects,
  animal husbandry, forestry, rural development,
  etc.

10
Influences industrial structure, transport and
other services

• Agriculture, through the provision of raw
  materials, determines a large part of countrys
  industrial set-up.
• Many industries process agricultural products
  into finished goods. Examples are Vanaspati,
  Rice bran oil, cotton seed oil, coconut and copra
  oil, cotton textiles, jute manufactures, etc.
  These constitute a significant part of the
  industrial profile of the country, particularly
  in respect of consumer goods for domestic
  consumption and exports.

11
Considerable capital investment

• A considerable part of the productive capacity of
  the country is in the form of agricultural assets
  like irrigation facilities, plough, storage
  capacity, etc.
• Every year, additions to this stock, at around
  6-7 percent of the gross capital formation, are
  being made on both government and private
  accounts.
• In absolute terms the gross capital formation in
  a year(at 1993-94 prices) is at present (2000-01)
  about Rs. 16,500 crore.

12
STEPS TAKEN TO INCREASE AGRICULTURAL PRODUCTIVIY
13

• Package plan of rs 25000crore
• Emphasis was given to raise production of
  wheat,rice,pulses,edible oils to ensure their
  availability over the years
• NDC adopted a resolution to raise wheat
  production by 8 million tonnes,rice by 10 million
  tonnes,pulses by 2 million tonnes

14

• Steps taken to provide fertilizer subsidy
  programme ,boosting use of bio fertilizers and
  organic manures to enhance soil health.
• Additional resources for irrigation through AIBP
  scheme

15
Macro management scheme

• Initiated in 2000-2001 by integrating 27
  centrally sponsered schemes.
• Pattern for assistance was I ratio 9010 for
  centre and states.except for north eastern states
  that get 100central assistance with launching of
  national horticulture mission in 05-06 10 shemes
  were also undertaken

16
National agriculture insurance scheme

• Available since 1999-2000
• Its useful for farmers growing risky crops
• In this scheme premiums for important crops are
  fixed at all india level.

17
National project on cattle breeding and buffalo
brreding

• Under the scheme of department of animal
  husbandry ,dairying and fisheries DAHDF
• Initiated in 2000
• It envisages genetic upgradation of indeginous
  cattle and buffaloes ,dvelopment and conservation
  of indigenous breeds and to evolve susatinable
  breeding policy

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Soil health management and fertilizer subsidy

• Nitrogeneous fertilizers are subsidized more than
  potassic and phosphatic fertilizers thus subsidy
  tends to benefit more the crops and regions that
  require high use of nitrogeneous fertilizer
• Creates distortions in price ratio in favour of
  nitrogeneous fertilizer and adversely affects
  productivity

19
Agricultural credit

• 2001-2002 62045 rs crore
• 2006-2007 200000 rs
  crore
• Share of banks increased from 54 in 2001-2002 to
  69 in 2006-2007
• Total flow of credit in 10 five year plan is
  about 650000 rs crore

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Msp support price for kharif crops

• Crops incrase from 2007-
• 
  08-2008-09
• Paddy 155
• Maize 220
• Bajra 240
• Moong 780
• Soyabean 440

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• Share of agriculture in GDP of 2007-2008 is 17.8
• Agriculture sector grew by 2.6 during this year

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• Slow agricultural growth is a concern for
  policymakers as some two-thirds of Indias people
  depend on rural employment for a living. Current
  agricultural practices are neither economically
  nor environmentally sustainable and India's
  yields for many agricultural commodities are low.
  Poorly maintained irrigation systems and almost
  universal lack of good extension services are
  among the factors responsible. Farmers' access to
  markets is hampered by poor roads, rudimentary
  market infrastructure, and excessive regulation.
• World Bank "India Country Overview 2008"

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Composition of Indias agricultural output in
2003-04
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• Agriculture production-
• In 1998 99 it grew by 6.2
• grew by just 0.3 in 1999 2000in 2001 02 it
  grew by 6.5 respectively.
• It declined by 0.10 in 2000 2001 and 5.2 in
  2002 2003
• It grew by 9.1 in 2003 04
• The amount of capital formation in agriculture
  declined from 1.9 of GDP in the early 1990s to
  1.3 of GDP after 2000 01.

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• The low productivity in India is a result of the
  following factors
• According to World Bank's "India Priorities for
  Agriculture and Rural Development", India's large
  agricultural subsidies are hampering
  productivity-enhancing investment. Overregulation
  of agriculture has increased costs, price risks
  and uncertainty. Government intervenes in labor,
  land, and credit markets. India has inadequate
  infrastructure and services.13 World Bank also
  says that the allocation of water is inefficient,
  unsustainable and inequitable. The irrigation
  infrastructure is deteriorating.13
• Illiteracy, general socio-economic backwardness,
  slow progress in implementing land reforms and
  inadequate or inefficient finance and marketing
  services for farm produce.
• The average size of land holdings is very small
  (less than 20,000 m²) and is subject to
  fragmentation, due to land ceiling acts and in
  some cases, family disputes. Such small holdings
  are often over-manned, resulting in disguised
  unemployment and low productivity of labour.
• Adoption of modern agricultural practices and use
  of technology is inadequate, hampered by
  ignorance of such practices, high costs and
  impracticality in the case of small land
  holdings.
• Irrigation facilities are inadequate, as revealed
  by the fact that only 52.6 of the land was
  irrigated in 200304,14 which result in farmers
  still being dependent on rainfall, specifically
  the Monsoon season. A good monsoon results in a
  robust growth for the economy as a whole, while a
  poor monsoon leads to a sluggish growth.15 Farm
  credit is regulated by NABARD, which is the
  statutory apex agent for rural development in the
  subcontinent.

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New agricultural policy

• Over the next two decades, it aims to attain
• A growth rate in excess of 4 per cent per annum
  in the agriculture sector
• Growth that is based on efficient use of
  resources and conserves our soil, water and
  bio-diversity
• Growth with equity, i.e., growth which is
  widespread across regions and farmers
• Growth that is demand driven and caters to
  domestic markets and maximizes benefits from
  exports of agricultural products in the face of
  the challenges arising from economic
  liberalization and globalization
• Growth that is sustainable technologically,
  environmentally and economically.

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• The Policy resolution describe in detail the
  strategy and policy alternatives which are
  grouped under the following heads
• Sustainable agriculture
• Food and nutrition security
• Generation and transfer of technology
• Inputs management
• Incentive for agriculture
• Investment in agriculture
• Institutional structure
• Risk management

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Sustainable Agriculture

• The policy will seek to promote
• technically sound,
• economically viable,
• environmentally non-degrading,
• and socially acceptable use of country's natural
  resources - land, water and genetic endowment.

31
Contd.

• Conjunctive use of surface and ground water will
  receive highest priority
• Emphasis will be placed on promotion of water
  harvesting structures and suitable water
  conveyance systems in the hilly and high rainfall
  areas for rectification of regional imbalances.
• The use of bio-technologies will be promoted for
  evolving plants which consume less water, are
  drought resistant, pest resistant, contain more
  nutrition, give higher yields and are
  environmentally safe.
• Specific measures will also be taken to conserve
  indigenous breeds facing extinction.
• A nation-wide programme for utilization of rural
  and urban garbage, farm residues and organic
  waste for organic matter repletion and pollution
  control will be worked out.
• Concerted efforts will be made to pool, distill
  and evaluate traditional practices, knowledge and
  wisdom and to harness them for sustainable
  agricultural growth.
• Farmers will be encouraged to take up
  farm/agro-forestry for higher income generation

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Food and Nutritional Security

• Special efforts will be made to raise the
  productivity and production of crops to meet the
  increasing demand
• augmentation of food supply, exports and
  generation of employment in the rural areas
• Development of animal husbandry, poultry,
  dairying and aqua-culture will receive a high
  priority in the efforts for diversifying
  agriculture, increasing animal protein
  availability in the food basket and for
  generating exportable surpluses.
• Generation and dissemination of appropriate
  technologies in the field of animal production as
  also health care to enhance production and
  productivity levels

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Generation and Transfer of Technology

• Up gradation of agricultural education and its
  orientation towards uniformity in education
  standards, women empowerment, user-orientation,
  vocationalization and promotion of excellence
• The research and extension linkages will be
  strengthened to improve quality and effectiveness
  of research and extension system.
• organizing demand driven production systems

34
Inputs Management

• Balanced and optimum use of fertilizers will be
  promoted together with use of organic manures
  bio-fertilizers to optimize the efficiency of
  nutrient use.
• A National Seed Grid will be established to
  ensure supply of seeds especially to areas
  affected by natural calamities.
• Protection to plant varieties will be granted to
  encourage research and breeding of new varieties
  particularly in the private sector .
• Integrated pest management and use of biotic
  agents in order to minimize the indiscriminate
  and injudicious use of chemical pesticides

35
Incentives for Agriculture

• economic environment for increasing capital
  formation and farmer's own investments by removal
  of distortions
• A favourable economic environment and supportive
  public management system will be created for
  promotion of agricultural exports.
• continuous monitoring of international prices
  will be undertaken and appropriate tariffs
  protection will be provided.
• Import duties on manufactured commodities used
  in agriculture will be rationalized.
• Appropriate measures will be adopted to ensure
  that agriculturists by and large remain outside
  the regulatory and tax collection systems.
• Farmers will be exempted from payment of capital
  gains tax on compulsory acquisition of
  agricultural land.

36
Investments in Agriculture

• A time-bound strategy for rationalization and
  transparent pricing of inputs will be formulated
  to encourage judicious input use and to generate
  resources for agriculture.
• A conducive climate will be created through a
  favorable price and trade regime to promote
  farmers' own investments as also investments by
  industries producing inputs for agriculture and
  agro based industries.
• Rural electrification will be given a high
  priority
• Bridging the gap between irrigation potential
  created and utilized.
• Emphasis will be laid on development of marketing
  infrastructure and techniques of preservation,
  storage and transportation with a view to
  reducing post-harvest losses and ensuring a
  better return to the grower.
• Setting up of agro-processing units in the
  producing areas to reduce wastage, especially of
  horticultural produce, increased value addition
  and creation of off-farm employment in rural
  areas will be encouraged. Collaboration between
  the producer cooperatives and the corporate
  sector

37
Institutional Structure

• The approach to rural development and land
  reforms will focus on the following areas
• ? Consolidation of holdings all over the country
  on the pattern of north western States.
• ? Redistribution of ceiling surplus lands and
  waste lands among the landless farmers,
  unemployed youth with initial start up capital
• ? Tenancy reforms to recognize the rights of the
  tenants and share croppers
• ? Development of lease markets for increasing the
  size of the holdings by making legal provisions
  for giving private lands on lease for cultivation
  and agri business
• ? Updating and improvement of land records,
  computerization and issue of land pass-books to
  the farmers and
• ? Recognition of women's rights in land.

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Contd..

• Progressive institutionalization of rural and
  farm credit will be continued for providing
  timely and adequate credit to farmers. The rural
  credit institutions will be geared to promote
  savings, investments and risk management.
• Promotion of cooperative-form of enterprise and
  ensure greater autonomy and operational freedom
  to them to improve their functioning. The thrust
  will be on
• ? Structural reforms for promoting greater
  efficiency and viability by freeing them from
  excessive bureaucratic control and political
  interference
• ? Creation of infrastructure and human resource
  development
• ? Improvement in financial viability and
  organizational sustainability of cooperatives
• ? Democratization of management and increased
  professionalism in their operations and
• ? Creating a viable inter-face with other
  grass-root Organizations

39
Risk management

• National Agriculture Insurance Scheme covering
  all farmers and all crops throughout the country
  with built in provisions for insulating farmers
  from financial distress caused by natural
  disasters and making agriculture financially
  viable will be made more farmer specific and
  effective.
• contingency agriculture planning, development of
  drought and flood resistant crop varieties,
  watershed development programmes, drought prone
  areas and desert development programmes and rural
  infrastructure development programmes will
  receive particular attention.
• The Government will enlarge the coverage of
  futures markets to minimize the wide fluctuations
  in commodity prices as also for hedging their
  risks

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Management Reforms

• The Central Government will move away from
  schematic approach to Macro-Management mode and
  assume a role of advocacy, articulation and
  facilitation to help the States in their efforts
  towards achieving accelerated agricultural
  development.
• Quality consciousness amongst farmers and agro
  processors will be created. Grading and
  standardization of agricultural products will be
  promoted for export enhancement
• The database for the agriculture sector will be
  strengthened to ensure greater reliability of
  estimates and forecasting which will help in the
  process of planning and policy making.

41
Mahatma Gandhi preferred to be known as a farmer,
while signing the Visotors Book of the NDRI,
Bangalore in 1927. Let us prove worthy of his
trust that India will care for its farmers
42
Loopholes in new agricultural policy
43
1 Growth rateThe target mentioned in the NAP
policy document does not seem to suffice with the
given conditions. Table-1 Average Annual
Growth Rate in Agriculture Sector from 1985 to
2005 Five Year Plan
Agriculture Allied
Sectors
(percent) Seventh Plan (1985-1990)
3.2 Annual Plan (1990-92)
1.3 Eighth Plan (1992-97)
4.7 Ninth Plan
(1997-2002)
2.1 Tenth Plan (2002-07) 2002-03 -
-
6.9 2003-04
10.0 2004-05
0.7
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Table-2 Food Grains Productions during
2000-05 (Million Tonnes) Crop/Year 2000-01
2001-02 2002-03 2003-04 2004-05 Rice
85.0 93.3 71.8 88.3
85.3 Wheat 69.7 72.8 65.8
72.1 72.0 Coarse Cereals
31.1 33.4 26.1 38.1
33.9 Pulses 11.1 13.4 11.1
14.9 13.4 Foodgrains (i) Kharif
102.1 112.1 87.2 116.9
103.3 (ii) Rabi 94.7 100.8 87.6
96.6 101.3 Total (i)(ii) 196.8
212.9 174.8 213.5 204.6
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2 employment in agriculture sectorThe share
of agriculture as percentage of GDP is declining
but the share of employment in agriculture shows
no major change Table-4 Employment in
Agriculture Sector (In Millions) Agricultural
1951 1961 1971 1981
1991 2001 Workers/Year Cultivators
69.9 99.6 78.2
92.5 110.7 127.3 Agricultural
27.3 31.5 47.5 55.5
74.6 106.8 Labourers Total
97.2 131.1 125.7
148.0 185.3 234.1
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• 3 exports the agricultural exports
• as percent of total exports is declining.
• 4 risk management The NAIS is currently being
  implemented in 23 States and two Union
  Territories and till now, 7.51 crore farmers have
  been covered under this scheme from 1999-2000 to
  2005-06
• The insurance scheme and institutionalisation of
  rural credit however intends to stabilise the
  conditions of the farmers but the suicides by the
  farmers are increasing continuously and
  alarmingly.

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5 credit availibility The total credit flow to
the agriculture and allied activities has
increased but still lakhs of farmers are
dependent on informal sources of credit like
local moneylenders who invariably exploits them
by charging very high rate of interests and the
farmers are forced into indebtedness. Table-6
Institutional Credit to Agriculture Sector (Rs
crore) Agency 2000-01
2001-02 2002-03 2003-04 2004-05
2005-06 Cooperative Banks 20800 23604
23716 26959 30639
28947 Regional Rural Banks 4220 4854
6070 7581 11718
11146 Commercial Banks 27807 33587
39774 52441 72886
77806 Total 52827
62045 69560 86981 115243
117899
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• Thank you

very much.
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?
Queries!!!