Students must practice these AP Inter 2nd Year Economics Important Questions 4th Lesson National Income to boost their exam preparation.
AP Inter 2nd Year Economics Important Questions 4th Lesson National Income
Long Answer Questions
Question 1.
Explain the importance of agricultural sector in the Indian Economy. [Mar ’19 (AP)]
Answer:
Agriculture plays a key and important role in the Indian economy and it is the back bone of Indian Economy. Agriculture development is crucial for the economic development of India.
The following points explain the importance of agriculture in India.
1) Share of Agriculture in GDP: The share of agriculture is our national income, though declining from 56.5 per cent in 1950-51 to 13.9 per cent in 2013-T4, still share is considerable. But in developed economies like UK and USA – it is 2 to 3 per cent, 7 per cent in France and 6 per cent in Australia.
2) Employment providing sector: Agriculture dominates the economy to such an extent that a very high proportion i.e. 54.7 per cent (in 2011) of working population in India is engaged in agriculture. It is only less than 10 percent in the developed countries.
3) Importance in International Trade: By exporting agricultural commodities like cotton Textiles, Tobacco, sugar, Jute goods, spices, coffee, tea, etc. India is earning about 55 per cent of its foreign exchange.
4) Effective social safety net: The agriculture sector acts as an effective social safety net. Our poverty can be removed with the development of agriculture and its related activities.
5) Food supplier to the expanding population: According to FAO, India is a hunger affected country. The per capita availability of food grains is only 468.9 grams per day in 2013. The total production of food grains is to be increased considerably. Otherwise, there may be food grains crisis in India.
6) Role of Agriculture in Industrialisation: Agro based industries like Cotton, Jute, Sugar, Edible oil, etc. directly depend on agriculture for raw materials. Similarly Handloom, food processing, horti culture, rice and flour mills, etc. also depend on agriculture. The development of agriculture sector helps the development of industrial sector. With the development of industries such as chemical fertilizers, pesticides, machines, our agriculture sector also develops. Thus, agriculture and industrial sectors are interdependent.
7) Market for industrial products: In countries like India, still 60 per cent of population lives in rural areas. If agriculture develops, the purchasing power of rural people improves. Then, the market for industrial products also increases.
8) Other factors: Apart from the above factors, the following also suggest the importance of agriculture in India.
- The development of agriculture helps the development of the transport sector in India.
- The development of agriculture helps in the expansion of banking facilities in rural areas.
- Agriculture development controls the migration of people from rural areas to urban areas.
- By supplying food and fodder to the cattle, it plays an important role in the development of animal husbandry and dairying.
- Agriculture development encourages Farm Tourism in rural areas.
- Agriculture and allied activities plays a key role in protecting biodiversity.
- The central and state governments are allocating more funds in their budgets for the development of agriculture. It shows the importance of agriculture.
- Indian agriculture has international reputation in the production of crops like Tobacco, Wheat, groundnut, spices, etc.
Thus, the above points clearly show the importance of agriculture in the Indian economy and agriculture is considered as the back bone of Indian economy.
Question 2.
Explain the present conditions of agricultural labour and suggest measures to improve the conditions of agricultural labour.
Answer:
The proportion of people depending on the agricultural sector in India is very high. Most of the agriculture labour belongs to the economically depressed and socially backward class of small economy. Though the other sectors of the economy in India have been developed, it is found that about 263 millions still depend on agriculture for their survival.
Meaning of Agricultural labour: People who work in the farm sector for their livelihood is treated as farm or agricultural labour.
The second agricultural labour enquiry commission, 1957 defined the farm labour “As the labour who receive more than 50 per cent of their income from the agricultural sector.”
Conditions of Agricultural labour: The agricultural labour in India are neglected for ages. Their conditions are pitiable.
a) Low Social Status: Most of them belong to depressed classes and exploitation has become common.
b) Unorganised: Agricultural labourers are scattered in villages. Moreover they are illiterates. Hence they cannot be easily organised. So, they cannot bargain for better wages.
c) Seasonal Employment: Since agricultural activities are seasonal in India, the agricultural labourers are facing the problems of unemployment and under employment.
d) Low wages and income: Wages in agriculture are very low and so their family income. In case of attached labour, the wages are miserable.
e) Rural Indebtedness: Because of low income level and poverty, the agricultural labour is debts. Most of the farm labour depend on land lords and village money lenders for debts who charge high rate of interest.
f) Femanisation of Agricultural labour: Female farm labour are forced to work harder, but they are paid less wages than the male labourers.
g) High incidence of child labour: It is estimated that 1/3 of child labour in Asia is in • India. The largest number of child workers are engaged in our agriculture,
h) Lack of subsidary professions: Most of the farm labour do not have non-agricultural occupations in the villages. They remain unemployed.
Measures to improve the conditions of Agricultural Labour:
1) Minimum wages Act was passed in 1948. According to this Act, minimum wages are to be fixed by the state governments.
2) The government is providing land to landless agricultural labourers. Approximately 70 lakh hectares of land is distributed among the landless agricultural labourers.
3) The Agricultural labourers are being provided with house sites and houses through schemes like IAY, MNP, etc.
4) A number of special schemes and programmes are being implemented by the government to provide employment facilities. Some of the important schemes are: RWP, CSRE, EGS, FWP, NREP, RLEGP, DPAP, JRY MGNREGS, etc.
5) Loans and subsidies are being granted.
6) The government passed ‘Bonded Labour System, Abolition Act, 1976 to abolish the bonded labour system.
7) To reduce the pressure of population on land the government is taking steps to start the cottage and small scale industries in rural areas.
8) The government is implementing various programmes for the welfare of farm works.
Question 3.
What are the factors affecting the cropping pattern in India ? Suggest the measures to correct the cropping pattern.
Answer:
Cropping pattern is defined as “The pattern of utilization of total farm land for « producing different crops in the country at a point of time”.
Factors affecting cropping pattern in India: The cropping pattern in India is affected by factors like physical, economical, technical and government policies.
I) Physical Factors: Physical factors play an important role in determining the cropping pattern of a country, the physical factors are:
- Climate and rainfall
- Nature of soil and fertility of the soil
- Irrigation facilities available
10 Economic Factors: The economic factors that affect the cropping pattern are:
- Price of the products of agriculture.
- Income maximisation objective of the farmers.
- Farm size.
- Availability of agricultural inputs such as seeds, water, pesticides, fertilisers, machines, storage, transport, marketing, etc. facilities.
- Insurance against risk affects the cropping pattern.
- Existing land tenancy system, and
- Social factors like social environment, customs, traditions, etc. also influence the cropping pattern.
10 Policies of government relating to different crops, export chances, taxes, subsidies, supply of inputs, credit facility, fixing support prices to agricultural products, etc. influence the cropping pattern to a large extent.
Of all the factors, the economic factors are most important factors in determining the cropping pattern.
Steps to improve the cropping pattern: In order to maintain an optimum cropping pattern, The National Council of Applied Economic Research (NCAER) made the following suggestions. They are:
- The government should enact legislation, fixing the production of certain crops in certain suitable regions.
- The government should appoint officials at local level to encourage farmers to produce more foodgrains to meet the demands of growing population.
- The government should encourage the mechanisation in agriculture by providing the necessary farm machinery at a cheaper price.
Question 4.
What are the causes for low productivity in agriculture in India ? Suggest some measures to improve it. [Mar ’19 (TS); Mar ’18, ’17]
Answer:
Though agriculture is the back bone of Indian Economy, its productivity is very low. The causes for low productivity is our agriculture are grouped into four broad categories as explained below. They are:
1) General Causes: The general causes for productivity in our agricultural sector are: Pressure of population on Agriculture is high:
The pressure of population on land is heavy due to excessive population growth and backwardness of non-agricultural sectors. So, the average size of land holding is declining leading to low productivity.
2) Discouraging Social Environment: The social environment such as illiteracy, superstitions, conservative attitudes of villagers, etc. is responsible for the low agricultural productivity. The rural atmosphere is discouraging. Peasants are wasting their time and money by involving infactions conflicts, litigations, etc. These conditions in the rural areas spoil the atmosphere and make it difficult to improve the productivity.
3) Absence of infrastructural facilities: Infrastructural facilities like transport storage, credit, power supply, marketing, etc. are inadequate in the rural areas. This is affecting our agriculture productivity.
4) Impact of the British Regime: The Britishers who ruled India for nearly 200 years did not show any interest in the development of our agriculture. They treated India as a colonial economy and a market for their industrial products. During the British rule of India no constructive steps were taken such as irrigation, etc. for the development of agriculture. Hence, the productivity is low.
II) Institutional Causes: The institutional causes for low productivity in our agriculture are:
1) Uneconomic land holdings: The size of land holdings are very small. In 2010-T1,85 per cent of total land holding are less than 2 hectares. In the small size land holding, it is not possible to follow new techniques of cultivation. Hence, the productivity is low.
2) Defective land tenure system: In India, before independence, agriculture productivity is adversely affected due to the defective land tenure systems like Zamindari, Mahalwari, Jagirdari systems. The farmers were exploited. After independence, these systems were abolished and the Ryotwari system came into existence. Later, in the tenancy system, the outcome of Ryotwari system, came into being in which three was no certainty in rent, security of tenure and ownership right to the tenants, fn these conditions, the tenants do not show any interest to develop agriculture and so low productivity.
3) Lack of institutional credit and marketing facilities: The farmers are unable to invest sufficient funds in agriculture due to inadequate credit facility and marketing facility. So, they are unable to follow new techniques, of cultivation and the result is e low productivity.
III) Technological Causes: Out moded agriculture techniques, inadequate irrigation facilities and scarcity of modern agricultural inputs, etc. are responsible for low productivity in our agriculture.
IV) Environmental factors: The important environmental factors that affect agricultural productivity are:
- Global warming
- soil degradation
- Intensive cultivation of HYV seeds,
- Reckless use of chemical fertilisers,
- Shifting cultivation,
- Lack of environmental planning and
- Displacement of traditional practices of cultivation.
Measures to improve productivity of our Agriculture:
1) To eliminate the institutional problems, the Government of India is implementing land reforms with a slogan ‘land to the tiller’. Land reforms i.e., elimination of intermediaries, tenancy reforms, ceiling on land holdings and cooperative farming, etc. help to improve the productivity of our agriculture.
2) Provision of irrigation facilities by constructing major medium and minor irrigation projects, the government is trying to improve the productivity of Indian agriculture. Government is also encouraging drip irrigation and sprinkler irrigation systems.
3) Various development institutions are being started by the government to provide the required infrastructural facilities to the agricultural sector. For e.g. ATMA, SALT, etc.
4) The government is taking steps to improve ftie infrastructural facilities such as transportation, chemical fertilizers, pesticides, improved seeds, power supply, water supply, credit, storage, marketing, etc. which play a key role in the development of agriculture.
5) Both the central and state governments are encouraging farm mechanisation activities.
6) To reduce the pressure of population land, steps are being taken to control population growth and to develop non-farm sector activities.
7) Institutional credit facilities and marketing facilities are being expanded and strengthened.
8) Literacy programmes are undertaken so that the farmers are able to follow new techniques of agriculture.
9) ICAR and Agricultural universities and other institutions are conducting research to develop HYU seeds. Laboratories are established for soil testing. Research is being conducted about the suitability of crops for a particular region.
Question 5.
Explain various sources of irrigation and its importance.
Answer:
Irrigation is the most important input for the development of agriculture. To agriculture production, water is indispensable. In some areas, the rainfall is scanty and uncertain so cultivation may not be possible for the whole year. Even today 55 per cent of cropped area depends on rain. That is why Indian agriculture is described as a “gamble in monsoons”. In such a situation, irrigation facilities are essential for growing multiple crops and thus the development of our agriculture.
Sources of Irrigation in India: The sources of irrigation in India are mainly classified into A) Canal irrigation B) Well irrigation C) Tank irrigation and D) Other sources.
A) Canal irrigation: Canal irrigation is the important source of irrigation in India. Though expensive, canals provide water to a wide extent of cultivated area. Canal irrigation is more prevalent in states like UP, Punjab, Haryana, Rajasthan, AP and West Bengal. The total irrigated area under canals accounted for nearly 16.01 million hectares in 2011-12.
Canals are classified into two types,
- Perennial Canals: These canals supply water throughout the year to irrigate lands as they are connected to the dams on rivers.
- Inundation Canals: These canals are constructed to control floods rather than supplying water for cultivation.
B) Well irrigation: Wells are important and dependable source of irrigation, wells are of two types: 1) Common wells and 2) Tube wells. Common wells irrigate less area when compared with tube wells. The total area irrigated under wells recorded as 40.17 million hectares in 2011-’12. Well irrigation is more popular in UP, Punjab, Telangana, Gujarat and Bihar. The area irrigated under tube wells is more in U.P. Q Tank irrigation: Tank irrigation is common in those areas where canal and well irrigation is not possible. Generally, tanks are filled with rain water and later on the water is used for agriculture. Tank irrigation is popular in Southern states like AP, Tamil Nadu, Karnataka. The total area under tank irrigation is 1.93 million hectares in 2011-12.
Importance of irrigation:
- With the help of irrigation facility, the country can face the drought and famines can be effectively controlled.
- Irrigation helps greatly in raising the productivity of land.
- Multiple cropping is possible.
- Irrigation plays a crucial role in the New Agricultural Strategy and in Green Revolution.
- It is possible to bring more lands under cultivation.
- Irrigation facilities helps to achieve stability in agricultural production and income of the farmers which in turn results in prosperity of rural sector.
- Increased production in agriculture, because of irrigation helps to stabilize the prices of agricultural products.
Question 6.
What are the causes for small size of land holdings in India ? Mention the problems of small holdings.
Answer:
The extent of land cultivated by a farmer is called as land holding. The size of land holding in India is small and fragmented. It is only 2.28 hectares in 1970-71 and it declined to 1.16 hectares in ‘2010-11.
Causes for small size of land holdings in India: The following are the important causes for small size land holdings in India.
1) The Laws of inheritance: The system of inheritance is leading to division and fragmentation of land holdings. According to Hindu and Mohammedan Laws all children, boys and girls have an equal share in the prosperity of their parents. Consequently division and subdivision, and fragmentation takes place causing the small size of land holdings.
2) High population growth: The rate of growth of population is very high. Moreover the non-agricultural sectors are growing slowly. So, the pressure on land is increasing and size of land holding is becoming small.
3) Break of Joint family system: The joint family system is breaking up because of western culture, spread of education and change in the attitude of people. So, sub division and fragmentation of land holdings are taking place.
4) Farmer’s indebtedness: The indebtedness of farmers is forcing them to sell off a part of their land to clear off their debts.
5) Land Hunger: Rural people are fond of land because of sentimental, social, Sychological and economical attachment to land. They treat the ownership of land as a status symbol and prestige. Hence everyone wants to have a share in the parental prosperity, however small it is. This is called land hunger which leads to subdivision and small size land holdings.
6) Decline of Rural Handicrafts: As a result of competition from machine made goods, the village handicrafts are fast declining. The handicrafts are a source of employment and livelihood to rural artisans. With the decline of handicrafts, the rural artisans are forced to depend on agriculture. So, subdivision and fragmentation of land holdings.
Problems of small size land holdings:
1) Cultivable land is wasted because of subdivision and fragmentation.
2) Simultaneous supervision of agricultural activities are not possible when the lands are fragmented.
3) Small size land holdings are not suitable for mechanisation. The small farmers cannot invest on costly equipment like tractors, motors, drillers, threshers, harvesters etc.
4) There may be disputes over boundaries, pathways, etc. This leads to court litigations and causes wastage of times and money. These conditions disturb the rural atmosphere.
5) Transportation of factors of production like cattle, labour, machines, etc. from one holding to another causes waste of time and money.
6) Small holdings lead to disguised unemployment in agriculture.
7) There is under utilisation of labour and machines when the land holdings are small and fragmented. This leads to increase in the cost of production.
8) Small farmers cannot get credit and marketing facilities adequately.
Question 7.
Explain the advantages and disadvantages of Co-operative farming.
Answer:
Co-operative farming, as a part of land reforms, was suggested by experts as a good solution to the problems of small size of land holdings.
Co-operative farming indicates that all the small farmers of a village form themselves voluntarily a society and the entire land of the farmers will be pooled into one unit. Later the land is handed over their land, cattle, implements, etc. to the society. The co¬operative society will cultivate all these holdings as one farm. After the harvest, the returns will be distributed among the farmers in proportion to their land handed over to the society. In co-operative do not lose their ownership rights on their land.
Advantages of Co-operative farming:
- In co-operative farming, both the production and marketable surplus will increase.
- There will be economies of large scale production. So, the cost of production will fall.
- Land development activities like land conservation, land reclamation, construction of watersheds, etc. can be easily under taken by the co-operatives. These activities will improve the production of agriculture.
- Co-operative farming enables the farmers to adopt new farm technology. This results in the development of agriculture.
- Farm management will be more effective and efficient.
- The demand for labour increases because of intensive cultivation.
- Co-operative farming inculcates the spirit of cooperation among the members of cooperative society. Everyone in the society is treated alike. Thus, social equality can be achieved.
Problems of (Disadvantages) co-operative farming: Indian farmers are not interested in co-operative farming due to the following problems.
1) The farmers fear that they may lose ownership rights on their lands.
2) Due to lack of efficient managerial persons in villages, the co-operative farming is being discouraged.
3) Land lords dominate the co-operative farming and they never treat the small and marginal farmers equal with them.
4) There is the danger of unemployment as agriculture is being mechanised.
5) Due to lack of trained personnel, cooperative farming is not successful.
6) Other Problems: a) It is a voluntary programme without any motivation to farmers,
b) Most of the co-operative societies are formed by big farmers to evade from ceiling on land holdings and to get benefits from the government,
c) The principles of distribution of profit between farmers and workers are not clearly defined.
Thus, the system of co-operative farming failed to make significant progress in India.
Question 8.
Explain the tenancy reforms in India.
Answer:
After independence, the government of India, as a part of land reforms, implemented tenancy reforms to protect the tenants, from the exploitation of landlords. They are:
- Regulation of rent
- Security of tenure, and
- giving ownership rights to tenants.
1) Regulation or fixation of rent: Prior to independence rents were very high and they varied from state to state. Moreover the cultivation expenses were to be born by the tenants.
So, after independence, legislations were made fixing rent. The First Five Year Plan also stated that rent should not exceed more than 1/4 or 1/5 of the total produce.
However, the tenants failed to benefits from the legislation of fixing rent.
2) Security of Rent: Tenants take much interest in agriculture if they have security of tenure. If they have security of tenure, they can invest more on land for its development. For e.g. Digging wells, arrange fence, preservation of soil fertility, etc.
3) Ownership rights to tenants: The main objective of tenancy legislation is to provide “Land to the tiller”. According to, some states have passed legislations to confer ownership rights to the tenants. They were allowed to purchase their holdings at a fair price determined by the tribunals. As a result of legislation, ownership rights for tenants in different states, 12.42 million tenants have acquired ownership rights over 6.32 million hectares of land.
However the tenants did not get much benefit from the tenancy legislation due to illiteracy, social and economic backwardness of tenants, etc.
Question 9.
Briefly explain various land reforms in India.
Answer:
The Government of India implemented various land reforms after independence. They are:
- Abolition of Intermediaries,
- Tenancy Reforms, and
- Ceiling on land holdings.
1) Abolition of Intermediaries (Abolition of Zamindari system etc.): Soon after Independence, the first Act to abolish Zamindari system i.e., intermediaries was passed in composite Madras state in 1948. Later on other states also passed legislations abolishing intermediaries. As a result, 30 lakh tenants and share croppers got ownership rights over 62 lakh areas. Compensation was paid to all the intermediaries on installment basis.
2) Tenancy Reforms: The tenancy system was common under the Zamindari and Ryotwari system. Farmers who take lands from the land lords on lease basis for cultivation are called tenants. For the welfare of tenants, the government implemented the following tenancy reforms.
- Fixation of Rent
- Security of Tenure, and
- Giving ownership rights to tenants.
3) Ceiling on land holdings: The ceiling on land holdings means imposing a statutory limit on the amount of land which an individual farmer or a household can possess. The government will take over the land beyond the limit of ceiling and redistribute it among the landless poor and marginal farmers. Ceiling on land holdings is of two types.
- Ceiling on Existing land holdings and
- Ceiling on further acquisition of land.
However the limit of ceiling changes from state to state, while fixing the ceiling limit, the government has taken into consideration the fertility of land, irrigation facility, methods of cultivation, cropping pattern, etc.
A) Ceiling limit: The ceiling limit on lands which have assured irrigation facility where at least two crops are raised in a year has been fixed 18 acres. In case of lands where there is provision for raising only one crop, the upper limit of ceiling has been fixed as 27 acres. For the remaining types of land, the ceiling has been fixed as 54 acres.
B) Unit of Application: The unit of application shall be a family of five members. For families with more than five, there is a provision for holding land in excess of ceiling for every addition but in no case, the total land with a family exceed twice the ceiling limit of a family. Every major son is treated as a separate unit.
C) Exemptions: The lands under sugar mills, co-operative farming societies, plantation crops like coffee, tea, rubber, etc. are exempted from land ceiling. Lands under agricultural universities for crop research are also exempted.
D) Distribution of surplus lands: The lands obtained as surplus shall be distributed among the landless poor and marginal farmers. Priority shall be given to SC & STs in the distribution of surplus land.
Out of the total declared as surplus was 73.36 lakh acres out of which 54.03 lakh acres was distributed by the government in 2004.
Question 10.
Explain the factors responsible for “Green Revolution ” in India and its impact on Indian economy.
Answer:
The “New Agricultural Strategy” implemented during 1960-70 by the Indian government resulted in revolutionary progress in the farm sector is termed as “Green Revolution”. William S.G. and was the first economist who used the term green revolution. However, Prof. Norway Borlog in the father of green revolution. With the implementation of “New Agricultural Strategy” by the Government of India in 1965, there was a substantial increase in the production and productivity of our agriculture, resulting in”Green Revolution”.
Factors responsible for green revolution:
- Implementation of Intensive Agriculture District Programme (IADP) in 1964.
- In 1967, the government introduced Intensive Agricultural Area Programme (TLAAP) with a view to extend the area under intensive cultivation.
- The government initiated High Yielding Variety seeds (HYV) programme in 1965.
- Introduction of crops with short gestation period developed by ICAR, ICRISAT and and agriculture universities.
- Expansion of irrigation facilities in the country.
- Encouragement to farm mechanisation of agriculture.
- The use of chemical fertilisers, pesticides and insecticides.
- Other factors such as Agricultural extension services, Adult education centres and expansion of institutional credit and marketing facilities.
Impact of Green Revolution on India Economy:
The Green Revolution recorded a significant impact on the Indian economy in the following ways.
- Boost upto the production of food grains such as wheat and Rice. The food grains production increased to 257 million tonnes in is 2012-T3.
- There is an increase in the production of commercial crops like sugarcane, oil seeds etc.
- There is boost to employment generation in the farm sector activities.
- The forward and backward linkages between agriculture and industries are strengthened.
- The green revolution has resulted in increase in the incomes of farmers and agricultural labour.
- Green Revolution helped to reduce poverty by increasing the real income of the rural poor people.
Thus, Green revolution recorded a substantial quantitative and qualitative changes in the Indian agriculture.
Criticism: However, there is difference of opinion among economists on the impact of green revolution. Some economists opined that
- Green revolution confined to particular crops like paddy, wheat, cotton, sugar cane etc.
- It is confined to some states only like UP, Punjab, Haryana, Andhra Pradesh.
- Green revolution gave birth to capitalist farming.
- Only big and rich farmers are benefitted and small and marginal farmers failed to enjoy the benefits of green revolution.
- Green revolution is responsible, to some extent, for the increase of rural unemployment as machines replace the labour.
- The indiscriminate and reckless use of chemical fertilizers and pesticides caused pollution and affected human health.
- Green Revolution increased regional disparities and inequalities in incomes.
Question 11.
What are the various sources of rural credit in India?
Answer:
Credit plays a key role in the farm activities. The important sources of rural credit are classified into
- Institutional sources and
- Non-institutional sources.
A) Institutional sources: Nowadays the importance of institutional sources of rural credit is steadily increasing. The following are the some important sources of institutional sources of rural credit in India. They are:
1) Government: The government gives direct loans to the farmers during the times of
natural calamities such as droughts, famines, floods, cyclones etc. The loans given to the farmers are called “Taccavi Loans”. The rate of interest is low. These loans can be repaid in easy instalments. These loans are very insignificant because of rigid rules of the government. They are about 2.3 per cent in the total credit requirements of the farmers.
2) Reserve Bank of India: The RBI, since its inception in 1935, is providing finance farm sector indirectly through state cooperative Banks, SFDA, MFAL, Central and State governments and NABARD.
3) Co-operative credit societies: PACs at the village level, DCCBs at the district level, State Cooperative Banks at the state level are the important co-operative credit institutions which are providing the short, medium and long term credit facilities to farm sector. The total volume of credit provided by the cooperative credit institutions to the farm sector amounted to 87,963 crores by 2012.
But, the Cooperative Credit System is organisationally and financially weak to meet the credit needs of the farmers. We can say that the cooperative credit system is India is a failure.
4) Commercial Banks: After the nationalisation of the Commercial banks (14 banks in 1969 and 6 banks in 1980), the Commercial banks in India are playing an important role in rural credit.
The public sector commercial banks advanced an amount of Rs. 5,30,000 crores for agriculture, and the private sector banks advanced Rs. 1,11,900 crores by the end of 31 March, 2013, to develop Indian agriculture.
5) Regional Rural Banks (RRBs): RRBs, started in 1975, October 2, are providing credit to the small and marginal farmers, agriculture labourers, artisans, small entrepreneurs, etc. in the rural areas. In 2011-T2, the RRBs provided Rs. 54,550 crores to agriculture which accounted for 10.65 per cent of total institutional credit.
6) National Bank for Agriculture and Rural Development (NABARD): The NABARD was established in July, 1982. It provides finance indirectly for the development of our agriculture. The main functions of NABARD are A) Refinancing, B) Insti-tutional development, and C) Inspection of client banks.
The total amount disbursed by NABARD as refinance amounted to Rs. 17,674.29 crores in 2012-T3.
B) Non-institutional sources: Money lenders, Land lords, Traders and commision agents, Friends and relatives are the non-institutional sources of rural credit.
The non-institutional sources of credit are disadvantageous to the farmers. The rate of interest is high, farmers are exploited by compound rates of interest and in other ways also. Still about 30 per cent of credit needs of farmers are met through the non- institutional sources in 2002.
Question 12.
What are the causes for rural indebtedness in India? Suggest some remedial measures to reduce it. [Mar ’19 (TS); Mar ’18]
Answer:
Rural indebtedness, is an ever green companion of the Indian farmers, which is badly affecting our agricultural development. It is observed that a major portion of borrowed funds is spent on unproductive activities which does not give any income. Consequently, the rural people fail to pay off their debts promptly. The farmers borrow money year after year and never repay their old debts fully and so, the rural poor are caught up in the clutches of money lenders. This is known as rural indebtedness. According to the Royal Commission on agriculture, “The Indian farmers are born in debts, live in debts and die in debts.”
The amount of debt of rural households is increasing. The total rural debt amount increased to Rs. 1,11,468 crores in 2002 from Rs. 22,211 crores in 1991.
Causes of Rural indebtedness: The main causes of rural indebtedness are:
1) Ancestral debts: Like assets, the farmers in India also inherit debts from their parents/Ancestors.
2) Poverty: Because of poverty, the farmers go for loans and due to the same poverty, they are unable to repay the loans.
3) Natural Calamities: Failure of crops due to failure of monsoons, pests, floods, etc. natural calamities are also responsible for the indebtedness of farmers.
4) Extravagance of farmers: Indian farmers spend their money wastefully on social and religious functions like marriages, births, funerals, purchase of gold, etc. beyond their capacity, Funds borrowed for such unproductive purposes cannot be paid off easily.
5) Activities of money lenders: Farmers generally take loans from the money lenders. They are least concerned with the well being of farmers and often they encourage farmers to borrow funds for unproductive purposes. They also adopt many unfair methods to exploit the farmers.
Apart from the above causes, small size land holdings, litigations and court expenses, passion for land, purchase of luxury goods, etc. are also responsible for the increase of rural indebtedness in India.
Remedial measures: The problem of rural indebtedness among the farmers and other rural people should be solved by taking the following remedial measures.
- Expanding institutional credit facilities.
- Enacting legislation to control and regulate the activities of money lenders, etc.
- Imposing moratorium on rural debts by the central and state governments.
- Educating the farmers about the disadvantages and bad effects of unproductive spending on litigation, social and religious functions.
- Credit should be provided in the form of agricultural inputs like seeds, fertilisers, etc. but not in money.
- The farmers should also undertake activities such as poultry farming, dairying, sheep breeding to supplement their income from agriculture.
Because of indebtedness, some farmers in India committing suicides. So, the problem of rural indebtedness should be solved effectively.
Question 13.
Explain the role and progress of NABARD in the field of agriculture and rural credit. [Mar ’19 (TS)]
Answer:
As per the recommendations of the Committee to Review the Arrangements for Institution Credit for Agriculture and Rural Development (CRAFICARD), National Bank for Agriculture and Rural Development (NABARD) was established in July, 1982. The rural planning and credit cell of RBI National Agricultural Funds and Agricultural Refinance and Development corporation (ARDC) are incorporated in NABARD. The authorised share capital of this organisation is Rs. 500 crores and paid up capital is Rs. 100 crores; equally contributed by RBI and central government.
Functions: Generally NABARD performs three main functions. They are:
- Refinancing,
- Institutional Development and
- Inspection of client banks.
Specially, NABARD performs the following functions.
1) NABARD provides short term, medium term and long term credits to state co-operative Banks, RRBs, Land Development Banks and other Financial Institutions engaged in rural development and approved by the RBI.
2) NABARD gives long term loans to state governments to enable them to subscribe share capital of co-operative societies.
3) It provides credit to agriculture, small scale industries, cottage and village industries, handicrafts and artisans to achieve integrated rural development.
4) It undertakes inspection of co-operative Banks and RRBs and acts as an advisor to government.
5) NABARD coordinates the activities of central and state governments, the planning commission and other institutions entrusted with the development of small scale industries, cottage industries and handicrafts etc.
6) NABARD undertakes monitoring and evolution of the projects undertaken by it.
7) NABARD lends long term loans to any institution approved by the central government of India as far as it is concerned with agriculture and rural development.
8) NABARD maintains research and development fund to promote research in agriculture and rural development.
Disbursement of Refinance: NABARD introduced several innovative schemes like Rural Infrastructure Development Fund (RIDF), Farm Innovation and Promotion Fund (FIPF), Kisan Credit Cards Scheme (KCCS), Farmer Technology Transfer Fund (FTTF), Farmers club etc. NABARD’s role is crucial in strengthening rural credit structure in our economy.
A) Rural Infrastructure Development Fund (RIDF): The annual allocation of funds to RIDF has gradually increased from Rs. 2000 crores in 1995-’96 to Rs. 20,000 crores in 2012 – ’13. In addition to this, RIDF funded an amount of Rs. 18,500 crores for rural roads, which is the objective of “Bharat Nirman Programme”.
B) KCC System: This system was introduced 1998 – 99 to facilitate short term timely credit to farmers. Commercial banks, RRBs, co-operative Banks which are refinanced by NABARD, are implementing this scheme. Till the end of August, 2012 Rs. 91676 crores have been issued to nearly 9.54 crore Kisan Credit Card holders.
C) Micro Finance: It is novel approach to banking with the poor. The main aim of Micro Finance is being banking service to the door steps of the poor, under this, bank credit is extended to the poor through self help Groups (SHGs). NABARD disbursed Rs. 3916.64 crores in 2012 – 13 to SHGs.
D) Swamajayanthi Gram Swarojgar Yojana (SGSY): SGSY which was reconstructed as “National Rural livelihood Mission” an 1st April 2010. A total amount of Rs. 42,168 crores were given as assistance to 168.46 lakh swarojgaries, under this scheme upto March, 2011.
Progress of NABARD: The total amount of refinance by NABARD is increasing continuously. It is observed that, share of non-farms sector is high i.e., Rs. 5150. 88 crores (29.49%) in 2012-13. Minor irrigation, land – development, mechanisation, plantation, dairy development and self help groups derived much attention of NABARD in the distribution of refinance. The total amount disbursed by NABARD is Rs. 17,674.29 crores in 2012-13.
Question 14.
Explain the defects in agricultural marketing and suggest some remedial measures. [March 2018]
Answer:
Agricultural Marketing is the process of selling the products at the market price. The National Commission on Agriculture defined agriculture marketing as “A process which starts with the decision to produce a saleable farm commodity and it involves all aspects of market structure of the system”. In India the marketing efficiency of farmers is very low and disadvantageous.
Problems of Indian Agriculture Marketing:
The agriculture marketing system in India is highly exploitative. The farmers are unable to get a fair price for their produce. The important defectives of Indian agricultural marketing are:
1) Existence of Middlemen: The existence of too many middlemen between the farmers and actual consumers.
2) Too many Middle men: The middlemen and traders combine together to cheat the innocent, illiterate farmers. False weights and measures are used.
3) Inadequate Transport facilities: The transport facilities are inadequate and miserable in villages. Still ‘Bullock cart’ is the main means of transport. Many farmers are forced to sell their produce in their villages local mandies at low prices.
4) Lack of storage facilities: Most of the farmers do not have proper storage facilities. Because of unscientific storage facilities, about 10 to 15 per cent of agricultural produce is eaten away by rats and bandicoots etc. every year. The quality of the agricultural produce also deteriorates.
5) Lack of Latest Market Information:
The Indian farmers do not have latest information about the prices that are prevailing in various markets all over India and international. So, they are unable to get remunerative prices for their products.
6) Lack of credit facilities: Due to lack of sufficient institutional facilities, most farmers depend on money lender for their credit needs. So, the farmers are forced to sell their products immediately after harvest, though prices on low at that time.
Lack of grading and standardisation facilities, Lack of organisation among the farmers, etc. are also responsible for the poor agricultural marketing systems in India.
Remedial Measures: After independence, the Government of India took some steps to improve the agricultural marketing.
1) Regulated markets: To eliminate the defects in the agriculture marketing system and to provide a fair price to farmers, government established regulated markets. By the end of March, 2005 there were 7521 regulated markets in India.
2) Cooperative marketing: The Government of India started the co-operative marketing societies with a purpose of giving credit to farmers and marketing their products.
3) Contract farming: It is another good remedy for solving the problems of agricultural marketing in India. Contract farming is defined as “That farming in which sale contract is made between farmers and users of farm products.” Industries like tobacco, sugar, cotton, Jute etc. have sale contracts with the farmers.
4) Rythu Bazars: The Government of Andhra Pradesh, under the Chief Ministership of Sri N. Chandra Babu Naidu, introduced the concept of Rythu Bazar in 1999, as a better programme to market agricultural products. In these markets, farmers directly sell their products like vegetables, fruits, rice, pulses, etc. at reasonable prices. Both farmers and consumers are the beneficiaries of Rythu Bazars.
5) Grading and standardisation facilities: The Government of India had established grading centres of Jaipur, Bhopal, Nagpur, Bhubaneswar, Shillong, etc. To facilitate grading, standards have been laid down for 162 agricultural and allied goods. The graded goods are given with a seel of “AGMARK” and they have a wider market and better prices.
6) Warehousing facilities: The Government of India is constituting warehouses to improve the storage facility. Similarly, the state governments. On the basis of receipts issued against the products stored in the warehouses, the farmers can also get loans from the commercial banks and co-operative credit societies.
7) Transport facilities: Several steps are taken transport facilities in the villages during the Five Year Plans. Now, the farmers can easily transport their products to the nearby markets in towns and cities.
8) Credit facilities: Steps are taken by the government to improve institutional credit facilities like commercial banks, RRBs, co-operative agriculture societies etc. So that the farmers need not sell their produce at low prices.
9) Market Information: The latest market information relating to prices, market trends, etc. should be provided to the farmers through News Papers, Radio, Television, etc.
Short Answer Questions
Question 1.
Explain the features of Indian agriculture.
Answer:
Some of the important features of Indian agriculture are explained below.
1) Uncertainty in crop output: Agriculture in India is described as a “Gamble in monsoons”. Due to some unforeseen contingencies such as cyclones, floods, pests etc. the production and productivity are uncertain.
2) Feudal relation of Agriculture: In India, most of the farmers are tenants. Though the Zamindari, Mahalwari systems are abolished and Ryotwari System came into existence, the problem of giving for lease continued. There is no security of tenure to the tenants.
3) Rural indebtedness: Rural indebtedness is increasing even though institutional credit facilities are increased. Because of indebtedness, farmers are unable to invest more on agriculture to reap much harvest.
4) Dualism in labour market: Because of pressure of population on land wages in the agricultural sector are considerably low when compared with industrial labour.
5) Diversities in Agricultural sector: Nature of lands, amount of rainfall, irrigation facilities, methods of cultivation etc. change from one region to another region. Similarly the fertility of soil, i.e. the elements of nitrogen, potash, phosphates, minerals etc. also differ from area to area. The size of land holdings differ in different regions. These affect the cropping pattern.
6) Outmodel Farming Techniques: Most of the Indian farmers still use outmoded farming techniques. This causes low productivity and leads to subsistence cultivation.
With the introduction of ‘New Agriculture Strategy’ in 1965 and the use of HYV seeds, chemical fertilisers, pesticides, improvement in irrigation, and mechanisation of cultivation activities, there is some improvement in the production. Thus, technological dualism has emerged in our agriculture.
Question 2.
Explain the present conditions of agricultural labouerers. [March 2018]
Answer:
The proportion of people depending on the agricultural sector in India is very high.
Most of the agriculture labour belong to economically depressed and socially backward class of rural economy. Though the other sectors of the economy in India have been developed, it is found that about 263 millions still depend on agriculture for their survival.
Meaning of Agricultural labour: People who work in the farm sector for their livelihood is treated as farm or agricultural labour.
The second agricultural labour enquiry commission, 1957 defined the farm labour “As the labour who receive more than 50 per cent of their income from the agricultural sector.”
Conditions of Agricultural labour: The agricultural labour in India are neglected for ages. Their conditions are pitiable.
a) Low Social Status: Most of them belong to depressed classes and exploitation has become common.
b) Unorganised: Agricultural labourers are scattered in villages. Moreover they are illiterates. Hence they cannot be easily organised. So, they cannot bargain for better wages.
c) Seasonal Employment: Since agricultural activities are seasonal in India, the agricultural labourers are facing the problems of unemployment and under employment.
d) Low wages and income: Wages in agriculture are very low and so their family income. In case of attached labour, the wages are miserable.
e) Rural Indebtedness: Because of low income level and poverty, the agricultural labour is debts. Most of the farm labour depend on land lords and village money lenders for debts who charge high rate of interest.
f) Femanisation of Agricultural labour: Female farm labour are forced to work harder, but they are paid less wages than the male labourers.
g) High incidence of child labour: It is estimated that 1/3 of child labour in Asia is in India. The largest number of child workers are engaged in our agriculture.
h) Lack of subsidary professions: Most of the farm labour do not have non-agricultural occupations in the villages. They remain unemployed.
Measures to improve the conditions of Agricultural Labour:
1) Minimum wages Act was passed in 1948. According to this Act, minimum wages are to be fixed by the state governments.
2) The government is providing land to landless agricultural labourers. Approximately 70 lakh hectares of land is distributed among the landless agricultural labourers.
3) The Agricultural labourers are being provided with house sites and houses through schemes like LAY, MNP etc.
4) A number of special schemes and programmes are being implemented by the government to provide employment facilities. Some of the important schemes are: RWP, CSRE, EGS, FWP, NREP, RLEGP, DPAP, JRY, MGNREGS, etc.
5) Loans and subsidies are being granted.
6) The government passed Bonded Labour System Abolition Act, 1976 to abolish the bonded labour system.
7) To reduce the pressure of population on land the government is taking steps to start the cottage and small scale industries in rural areas.
8) The government is implementing various programmes for the welfare of farm works.
Question 3.
Explain the factors affecting cropping pattern.
Answer:
Cropping pattern is defined as “The pattern of utilization of total farm land for producing different crops in the country at a point of time”.
Factors affecting cropping pattern in India: The cropping pattern in India is affected by factors like physical, economical, technical and government policies.
Physical Factors: Physical factors play an important role in determining the cropping pattern of a country, the physical factors are:
- Climate and rainfall
- Nature of soil and fertility of the soil
- Irrigation facilities available
Economic Factors: The economic factors that affect the cropping pattern are
- Price of the products of agriculture.
- Income maximisation objective of the farmers.
- Farm size.
- Availability of agricultural inputs such as seeds, water, pesticides, fertilisers, machines, storage, transport, marketing etc. facilities.
- Insurance against risk affects the cropping pattern.
- Existing land tenancy system, and
- Social factors like social environment, customs, traditions, etc. also influence the cropping pattern.
Policies of government relating to different crops, export chances, taxes, subsidies, supply of inputs, credit facility, fixing support prices to agricultural products etc. influence the cropping pattern to a large extent.
Of all the factors, the economic factors are most important factors in determining the cropping pattern.
Steps to improve the cropping pattern: In order to maintain an optimum cropping pattern, The National Council of Applied Economic Research (NCAER) made the following suggestions. They are:
- The government should enact legislation, fixing the production of certain crops in certain suitable regions.
- The government should appoint officials at local level to encourage farmers to produce more foodgrains to meet the demands of growing population.
- The government should encourage the mechanisation in agriculture by providing the necessary farm machinery at a cheaper price.
Question 4.
Explain the importance of irrigation.
Answer:
Irrigation is the most important input required for the development of agriculture.
Water is the most necessary one to improve agriculture production. The following points explain the importance of irrigation in India. They are:
1) In India, the rains are insufficient, irregular and uncertain. With the development of irrigation facilities, we can effectively control droughts and famines.
2) Irrigation helps greatly in raising the productivity of land.
3) Provision of irrigation facility makes it possible the cultivation of multiple cropping on thp same land in a year.
4) Irrigation facilities facilitates the expansion of New Agricultural strategy in larger areas.
5) Irrigation helps to bring more lands under cultivation.
6) Irrigation helps in stabilizing the output and yield level. Thus, it brings prosperity.
7) By helping increased production in agriculture, it stabilises the prices of agricultural products directly and thus control inflation indirectly.
Thus, irrigation is important in India where agriculture is one of the priority sector.
Question 5.
What are the causes for low productivity ?
Answer:
Though agriculture is the back bone of Indian Economy, its productivity is very low. The causes for low productivity is our agriculture are grouped into four broad categories as explained below.
They are:
I) General Causes: The general causes for productivity in our agricultural sector are:
1) Pressure of population on Agriculture is high: The pressure of population on land is heavy due to excessive population growth and backwardness of non-agricultural sectors. So, the average size of land holding is declining leading to low productivity.
2) Discouraging Social Environment: The social environment such as illiteracy, superstitions, conservative attitudes of villagers etc. is responsible for the low agricultural productivity. The rural atmosphere is discouraging. Peasants are wasting their time and money by involving infactions conflicts, litigations etc. These conditions in the rural areas spoil the atmosphere and make it difficult to improve the productivity.
3) Absence of infrastructural facilities: Infrastructural facilities like transport storage, credit, power supply, marketing etc. are inadequate in the rural areas. This is affecting our agriculture productivity.
4) Impact of the British Regime: The Britishers who ruled India for nearly 200 years did not show any interest in the development of our agriculture. They treated India as a colonial economy and a market for their industrial products. During the British rule of India no constructive steps were taken such as irrigation etc. for the development of agriculture. Hence the productivity is low.
II) Institutional Causes: The institutional causes for low productivity in our agriculture are:
1) Uneconomic land holdings: The size of land holdings are very small. In 2010-11,85 per cent of total land holdings are less than 2 hectares. In the small size land holding, it is not possible to follow new techniques of cultivation. Hence, the productivity is low.
2) Defective land tenure system: In India, before its independence, agriculture productivity is adversely affected due to the defective land tenure systems like Zamindari, Mahalwari, Jagirdari systems. The farmers were exploited. After independence, these systems were abolished and the Ryotwari system came into existence. Later, in the tenancy system, the outcome of Ryotwari system, came into being in which three was no certainty in rent, security of tenure and ownership right to the tenants, these conditions, the tenants do not show any interest to develop agriculture and so low productivity.
3) Lack of institutional credit and marketing facilities: The farmers are unable to invest sufficient funds in agriculture due to inadequate credit facility and marketing facility. So, they are unable to follow new techniques of cultivation and the result is low productivity.
III) Technological Causes: Out moded agriculture techniques, inadequate irrigation facilities and scarcity of modern agricultural inputs etc. are responsible for low productivity in our agriculture.
IV) Environmental factors: The important environmental factors that affect agricultural productivity are:
- Global warming
- soil degradation
- Intensive cultivation of HYV seeds.
- Reckless use of chemical fertilisers,
- Shifting cultivation,
- Lack of environmental planning and
- Displacement of traditional practices of cultivation.
Question 6.
Examine the present pattern of land utilization.
Answer:
Land is the most important natural resource in any countiy. The supply of land is perfectly inelastic. The economic development of a country directly depend on the quantity and quality of land. Optimum utilisation of land is very essential. The present pattern of land utilisation (2009-10) is shown in the following table.
(In million hectares) | |
1. Total geographical area | 328.72 |
2. Total reported area | 305.61 |
3. Not available for cultivation | 42.95 |
4. Forests | 70.04 |
5. Permanent pastures & other grazing land | 10.14 |
6. Land under misc, tree crops and groves | 33.53 |
7. Culturable waste land | 12.85 |
8. Fallow lands other than current fallow | 10.48 |
9. Current fallows | 15.75 |
10. Net area sown | 140.02 |
11. Area sown more than once | 52.17 |
12.Total cropped area | 192.19 |
The above table shows that the total geographical area of India is 328.72 million hectares. The total area reported is about 306 million hectares. The total cropped area is 192.19 million hectares. The area under forests is about 70.04 million hectares under fallow land is 26 million hectares. Still about 43 million hectares of land is not available for cultivation.
Recent Trends in land utilization: The reclamation of waste and fallow lands is in progress as a result of land reforms. Such reforms enabled tenants to reclaim the waste and fallow lands for which they acquired rights.
Increase in the area sown more than once: Expansion of irrigation facilities along with HYV seeds with short gestation period held in significant increase in the area sown more than once.
The use of land for non-farm activities: Increasing demand for non-farm activities resulted in a short fall of cultivable land. In order to meet the requirements of rapidly growing population, optimum use of land is essential.
Question 7.
Consolidation of land holding.
Answer:
Consolidation of land holdings is a proper solution to the problem of small size and scattered land holdings.
By consolidation we mean all the land holdings of a village are pooled together into one compact block. Later, each farmer will be given land equal to his share in the total land as a single compact plot. The owners of scattered land holders may voluntarily exchange their pieces of land into one compact block. As it is not an easy task, the state governments adopted coercive methods to the consolidation of holdings.
As a part of land reforms, consolidation of land holdings in India started in 1951-52 states like Punjab, Haryana have completed the task of consolidation. States like Maharashtra,’Madhya Pradesh and UP actively implemented this programme. Some states like .1 & K, Bihar, Orissa initiated this programme. But states like AP, Tamil Nadu, Rajasthan, West Bengal, Assom have not enacted the laws of consolidation.
According to the Annual Report of Ministry of Rural Development – 2004, totcil area of 163.3 million hectares was brought under consolidation. Taking the country as a whole, only 49% of the total cultivated area has been consolidated.
The progress of consolidation process is slow due to:
- Farmer’s emotional attachment to their ancestral land.
- Variation in the fertility of soil from land to land.
- Lack of reliable revenue records pertaining to the ownership.
- Lack of adequate trained staff to carry on the programme of consolidation.
- Some people believe that they may get inferior lands after consolidation.
- Neglecting the security of tenure to tenants while consolidating the lands.
Question 8.
Creation of Economic land holding
Answer:
Creation of ‘Economic holdings’ is an important method to solve the problem of small size land holdings. To strengthen the Indian agricultural sector, it is inevitable to create economic holdings. Some economists called economic holdings as “Family Holdings” or “Optimum holdings”. This concept of economic holding is defined in the following ways.
A) The Congress Land Reforms Committee in 1949 defined economic holding as, “The size of land holding which provides a decent standard of living and employment to the members of farmers family”.
B) According to Keating, “Economic holding is a holding which allows a man a chance of producing sufficient to support himself and his family in reasonable comfort after paying his necessary expenses”.
C) According to Dr. Mann the economic holding is “One which will provide for an average family the minimum standard of life”.
The government initiative is essential in classifying the lands on scientific and systematic manner in the process of consolidation of small holdings.
The government has to take into consideration fertility, irrigation and transport facilities while evaluating the tiny plots.
The government should fix the minimum limit of land holding known as “Standard area” by enacting legislations.
The government should implement the legislative measures to check the high growth rate of population in order to lesser the pressure of population on land.
The government should induce the extensively small land holders to give up their lands and shift to other occupations.
Question 9.
Need for land reforms. [Mar. ’19 (AP); May, Mar. 17]
Answer:
Though agriculture occupies an important role in India, it has not been developed due to some institutional and technical reasons. So, the Government of India, after Independence, implemented institutional reforms to bring changes directly in our agricultural sector. Such reforms are termed as Land Reforms.’ “Land to the teller” is the main moto of our land reforms.
According to UNO, “The redistribution of land with a view to safe guard the interests of small, marginal farmers and farm labour is called land reforms.”
“Any reforms of land, under taken by the government for agricultural development are called land reforms” – Indian Planning Commission.
The Need for land reforms:
- For achieving agricultural development.
- For achieving economic development.
- Land reforms help to achieve social justice.
- Land reforms are essential to increase the production and productivity of agriculture.
The important land reforms implemented in India are:
A) Abolition of Intermediaries,
B) Tenancy reforms, and
C) Imposing ceiling on land holdings.
Question 10.
Abolition of intermediaries.
Answer:
Soon after Independence, the Government of India implemented land reforms to remove the institutional defects of our agriculture. Abolition of intermediaries i.e., Zamindari system and its alien farms like Jagirdari, Inamdari and Mahalwari systems is one of the land reform measures.
The first Act to abolish intermediaries was passed in 1948 in Madras state. Later every state in India enacted legislations abolishing intermediaries. As a result, 30 lakh tenants and share croppers acquired ownership rights over a total cultivated area of 62 lakh acres. Compensation was paid to all the intermediaries on installment basis.
Effects of Abolition of Intermediaries:
1) The tenants became owners and the exploitation of intermediaries ended. This helped to secure social justice in our agrarian structure.
2) The ownership rights to the tillers of the land enabled them to have a direct contact with the government which resulted in agricultural development.
3) The government provided infrastructural facilities for the development of farm sector since land revenue increased substantially.
4) A considerable area of cultivable waste land and forest land belonging to the intermediaries are brought under cultivation.
Question 11.
Ceiling on land holdings.
Answer:
The ceiling on land holdings means imposing a statutory limit on the amount of land which an individual farmer or a household can possess. The government will take over the land beyond the limit of ceiling and redistribute it among the landless,poor and marginal farmers. Ceiling on land holdings is of two types.
- Ceiling on existing land holdings and
- Ceiling on further acquisition of land.
However the limit of ceiling changes from state to state, while fixing the ceiling limit, the government has taken into consideration the fertility of land, irrigatibn facility, methods of cultivation, cropping pattern etc.
Question 12.
Reasons for poor performance of land reforms. [May 2018]
Answer:
Land reforms were started with good objectives, intensions concentrating on the development and empowerment of the rural poor. But in actual practice, land reforms faced many problems. The task force on agrarian relations pointed out the following reasons for the poor performance of land reforms in India. They are:
- Lack of strong political will.
- Malafide transfers Of land.
- Lack uniformity in land reforms laws.
- The interference of Judiciary.
- Lack of proper and up to date revenue records.
- Various exemptions to land ceiling
- Unorganised rural people.
- Bureaucratic corruption, etc.
Question 13.
Describe the impact of Green Revolution on Indian Economy. [Mar ’19 (AP); Mar ’18, ’17; May ’17]
Answer:
The “New Agricultural Strategy” implemented during 1960-70 by the Indian government resulted in revolutionary progress in the farm sector is termed as “Green Revolution”. Williams S.G. and was the first economist who used the term green revolution. However, Prof. Norway Borlog is the father of green revolution. With the implementation of “New Agricultural Strategy” by the Government of India in 1965, there was a substantial increase in the production and productivity of our agriculture, resulting in”Green Revolution”.
Factors responsible for green revolution:
1) Implementation of Intensive Agriculture District Programme (IADP) in 1964.
2) In 1967, the government introduced Intensive Agricultural Area Programme (IAAP) with a view to extend the area under intensive cultivation.
3) The government initiated High Yielding Variety seeds (HYV) programme in 1965.
4) Introduction of crops with short gestation period developed by ICAR, ICRISAT and and agriculture universities.
5) Expansion of irrigation facilities in the country.
6) Encouragement to farm mechanisation of agriculture.
7) The use of chemical fertilisers, pesticides and insecticides.
8) Other factors such as agricultural extension services, Adult education centres and expansion of institutional credit and marketing facilities.
Impact of Green Revolution on India Economy:
The Green Revolution recorded a significant impact on the Indian economy in the following ways.
- Boost upto the production of food grains such as wheat and Rice. The food grains production increased to 257 million tonnes in is 2012-73.
- There is an increase in the production of commercial crops like sugarcane, oil seeds etc.
- There is boost to employment generation in the farm sector activities.
- The forward and backward linkages between agriculture and industries are strengthened.
- The green revolution has resulted in increase in the incomes of farmers and agricultural labour.
- Green Revolution helped to reduce poverty by increasing the real income of the rural poor people.
Thus, Green revolution recorded a substantial quantitative and qualitative changes in the Indian agriculture.
Criticism: However, there is difference of opinion among economists on the impact of green revolution. Some economists opined that
1) Green revolution confined to particular crops like paddy, wheat, cotton, sugar cane etc.
2) It is confined to some states only like UP, Punjab, Haryana, Andhra Pradesh.
3) Green revolution gave birth to capitalist farming.
4) Only big and rich farmers are benefitted and small and marginal farmers failed to enjoy the benefits of green revolution.
5) Green revolution is responsible, to some extent, for the increase of rural unemployment as machines replace the labour.
6) The indiscriminate and reckless use of chemical fertilizers and pesticides caused pollution and affected human health.
7) Green Revolution increased regional disparities and inequalities in incomes.
Question 14.
Role of Regional Rural Banks in rural credit
Answer:
As per the recommendation of the working group on Rural Banks headed by Prof. Narasimham, the Government of India established Regional Rural Banks (RRBs) in India on 2nd October 1975. In the first instance 5 RRBs were started. Later the number increased to 196.
Generally, the nationalised commercial banks were the sponsorers of the RRBs. Each RRB had an authorised capital of Rs. 1 crore and paid up capital of Rs. 25 lakhs. The share capital was subscribed by the Central Government 50%, the state government concerned 15%, and the sponsoring 35%. The National Agricultural Bank for reconstruction and Development supervises, RRBs functions and acts as a coordinating agency between RBI and RRBs.
The main objective of RRBs is to provide credit and other facilities to the small and marginal farmers, agricultural labourers, artisans and small business men so as to develop agriculture, commerce, industry and other activities.
In 2011-12, RRBs provided an amount of Rs. 54,550 crores to agriculture which accounted to 10.65% of total institutional credit.
The Government of India amalgamated the RRBs in order to consolidate and strengthening them. At present the RRBs are functioning like commercial banks.
Question 15.
Primary Agricultural Co-operative Credit Societies.
Answer:
The co-operative credit movement was started in India in 1904. These societies were organised to relieve the rural people from indebtedness and to promote the habit of thrift among them.
The co-operative credit institutions in India are organised into short term and long term structures.
The short term co-operative credit structure is based on three tier structure. At the village level, Primary Agricultural Co-operative Credit Societies (PACS) are organised. At the second tier are the District Central Co-operative Banks (DCCBs) are organised at the district level. At the third upmost tier are the State Co-operative Banks (StBs).
PACSs are organised at the village level. They can be formed by any ten or more than ten persons. To strengthen the PACSs financially the RBI, in collaboration with the state governments, has been taking a series of steps. The management of PACSs is under an elected body of President, Secretary and Tresurer.
At the end of March 31,2012 – there were 92,432 PACSs providing short term credit are in function. The total volume of credit supplied by the co-operatives for agriculture sector amounted to Rs. 87,963 crores by 2012. The co-operative credit system in India is organisationally and financially weak to meet the credit needs of agriculture. Hence, the cooperative credit structure has failed in India.
Question 16.
Commercial Banks and rural credit
Answer:
After nationalisation of 14 major commercial banks in 1969 and 6 banks in 1980, commercial banks started a viable role in rural credit. By the end of March 31,2013 the public sector banks advanced an amount of Rs. 5,30,600 crores for agriculture. Private sector commercial banks also advanced an amount of Rs. 1,11,900 crores as on March 31, 2013. As far as rural credit is concerned, the role of commercial banks is highly appreciable. Commercial banks supply credit to rural areas in the following ways.
1) Commercial banks are providing short term crop loans which accounted for 42 to 45 per cent of the toted loans disbursed by the commercial banks. Similarly long term loans are extended by commercial banks for purchasing pump sets, tractors and other agricultural machinery which accounted 35 to 37 percent of the total loans distributed by them.
2) Commercial banks are extending credit facilities to agricultural related activities like dairying, poultry farming, fisheries, piggery etc.
3) Commercial banks in collaboration with government institutions are considerably working for the implementation of various rural development programmes like IRDP, JRY etc. by sanctioning and disbursing credit to the beneficiaries.
4) Commercial banks are indirectly helping the farmers by extending credit to fertilizers and pesticides companies, Food corporation of India, Central Warehousing Corporation, Co-operative Credit Societies and Regional Rural Banks.
At present, commercial banks are facing many problems in providing credit for rural development because of debt moratorium, pressure of over dues, insufficient bank branches etc.
Question 17.
Role of Reserve Bank of India in Rural Credit.
Answer:
The Reserve Bank of India, since its inception in 1935, has been rendering viable services for rural development. It started agriculture credit department and two separate funds in 1956 to supply credit to the agriculture sector. They are:
- National Agricultural Credit Fund, and
- National Agricultural Credit Stabilisation Fund.
While the first one is intended to provide long term credit to the farmers and the second one is providing additional finance to them during natural calamities. The RBI provides credit to the farmers through state Cooperative Banks in the following ways.
A) Short term credit: The RBI provides short term credit facilities to state cooperative bank at a lower interest rate for a period of 15 months by providing rediscounting facilities on government securities and debentures of land development banks.
B) Medium term credit: Since 1959, the RBI has been providing medium term credit to the state cooperative banks for a period of 15 months to 5 years on the security of state governmental lower rate of interest less than the current rate of interest.
C) Long term credit: The RBI is providing long term credit to the state governments for agriculture development activities. It purchases the debentures of land development banks and sanctions direct loans to the state governments to enable them to subscribe the share capital of cooperative banks. The long term credit varies from 5 to 20 years.
D) Other services: RBI renders the following services also.
- It provides credit to all the institutions which are engaged in rural credit.
- It provides loans for small farmers Development Agency (SFDA) and Marginal Farmers.
Moreover, the RBI acts as an advisor to the central and state governments regarding rural credit.
Question 18.
Defects in the Agricultural Marketing in India. [May, March 2018]
Answer:
Agricultural Marketing is the process selling the products at the market price. The National Commission on Agriculture defined agriculture marketing as “A process which starts with the decision to reduce a saleable farm commodity and it involves all aspects of market structure of the system”. In India the marketing efficiency of farmers is very low and disadvantageous.
Problems of Indian Agriculture Marketing:
The agriculture marketing system in Indias is highly exploitative. The farmers are unable to get a fair price for their produce. The important defectives of Indian agricultural marketing are:
1) Existence of Middlemen: The existence of too many middlemen between the farmers and actual consumers.
2) Too many Middle man: The middlemen and traders combine together to cheat the innocent, illiterate farmers. False weights and measures are used.
3) Inadequate Transport facilities: The transport facilities are inadequate unu miserable in villages. Still ‘Bullock cart’ is the main mean of transport. Many farmers are forced to sell their produce in their villages local mandies at low prices.
4) Lack of storage facilities: Most of the farmers do not have proper storage facilities. Because of unscientific storage facilities, about 10 to 15 per cent of ago (Cultural produce is eaten away by rats and bandicoots, etc. every year. The quality of the agricultural produce also deteriorates.
5) Lack of Latest Market Information:
The Indian farmers do not have latest information about the prices that are prevailing in various markets all over India and international. So, they are unable to get remunerative prices for their products.
6) Lack of credit facilities: Due to lack of sufficient institutional facilities, most farmers depend on money lender for their credit needs. So, the farmers are forced to sell their products immediately after harvest, though prices on low at that time.
Lack of grading and standardisation facilities, Lack of organisation among the farmers, etc. are also responsible for the poor agricultural marketing systems in India.
Remedial Measures: After independence, the Government of India took some steps to improve the agricultural marketing.
1) Regulated markets: To eliminate the defects in the agriculture marketing system and to provide a fair price to farmers, government established regulated markets. By the end of March, 2005 there were 7521 regulated markets in India.
2) Co-operative marketing: The Government of India started the cooperative marketing societies with a purpose of giving credit to farmers and marketing their products.
3) Contract farming: It is another good remedy for solving the problems of agricultural marketing in India. Contract farming is defined as “That farming in which sale contract is made between farmers and users of farm products.” Industries like tobacco, sugar, cotton, Jute etc. have sale contracts with the farmers.
4) Rythu Bazars: The Government of Andhra Pradesh, under the Chief Ministership of Sri N. Chandra Babu Naidu, introduced the concept of Rythu Bazar in 1999, as a better programme to market agricultural products. In these markets, farmers directly sell their products like vegetables, fruits, rice, pulses etc. at reasonable prices. Both farmers and consumers are the beneficiaries of Rythu Bazars.
5) Grading and standardisation faculties: The Government of India had established grading centres of Jaipur, Bhopal, Nagpur, Bhubaneswar, Shillong, etc. To facilitate grading, standards have been laid down for 162 agricultural and allied goods. The graded goods are given with a seel of “AGMARK” and they have a wider market and better prices.
6) Warehousing faculties: The Government of India is constituting warehouses to improve the storage facility. Similarly, the state governments. On the basis of receipts issued against the products stored in the warehouses, the farmers can also ^ loans from the commercial banks and co-operative credit societies.
7) Transport faculties: Several steps are taken in transport facilities in the villages during the Five Year Plans. Now, the farmers can easily transport their products to the nearby markets in towns and cities.
8) Credit faculties: Steps are taken by the government to improve institutional credit facilities like commercial banks, RRBs, co-operative agriculture societies etc. So that the farmers need not sell their produce at low prices.
9) Market Information: The latest market information relating to prices, market trends etc. should be provided to the farmers through News papers, Radio, Television etc.
Question 19.
Various stages in Agricultural marketing
Answer:
The farmers cannot sell away all their products instantaneously after the harvest. These products must go through a series of stages before they are actually marketed. These stages are as follows.
1) Assembling: Pooling up of small surplus produce of individual farmers to one place is called assembling.
2) Transportation: All the farm products must be transported from the producer markets to the consumer markets. Transportation facilitates the availability of goods in the market.
3) Grading: All the assembled products should be graded and standardised according to quality. The grading facility enables the consumers to buy quality products and enables the farmers to get fair prices.
4) Processing: The agricultural products assembled and graded should be made useful for consumption. For e.g. paddy, pulses, oil seeds etc. cannot be used for direct consumption. Those goods are to be processed.
5) Sampling: Samples are to be made from the graded, standardised and processed produce. Sampling enables the consumers to choose the best goods from the market.
6) Packing: To ensure durability and better quality, the products must be packed properly.
7) Storing: The farm products processed and packed may not be sold immediately.
They must be preserved in the godowns until they are sold. Some perishable products require cold storage.
Question 20.
Regulated Markets
Answer:
Regulated markets are started with a view to ensure remunerative price to the products of farmers, to narrow down the price spread between the producers and consumers and reduce the non-functional margin of the commission agents. The regulated markets help to check all unfair practices prevalent in the marketing of farm produce. In most states, act of Agricultural Marketing has been passed. In 1951 more than 200 regulated markets were started in India. By the end of March 2005, the number of regulated markets increased to 7521.
The regulated markets are managed by a Market committee. They consist of representatives of state government, the local bodies, farmers, traders and commission agents. The important functions of this committee are:
- Fixation of charges for weighing and brokerage
- Enforcing the use of standardised weights
- Providing upto date market prices.
- Prevention of unauthorised deductions and underhand dealings.
- Market licenses are given to the middlemen and their number is to be minimised.
- Settling of disputes among the parties arising in market operations.
- Warehousing and cold storage facilities are to be provided to the farmers wherever necessary.
Regulated markets are helping the farmers in getting reasonable prices for their produce. As much as 80 per cent of agricultural products are sold at regulated markets.
Question 21.
Co-operative Marketing
Answer:
According to the system the farmers of a village form together into a co-operative marketing society to sell their produce at a fair price. The farmers sell their products to the society and get some amount as advance to carry on their agricultural operations etc. As soon as the products are sold, the society pays the farmers the balance amount by deducting the advance already paid. These societies are maintained by efficient paid staff. Each society covers number of villages.
Advantages of cooperative marketing:
- Due to strong collective bargaining, the cooperative marketing helps the farmers to get better and remuneration prices.
- The cooperative marketing has its own storage and warehousing facilities. This can avoid damage to agricultural products.
- By providing grading and standardizing facilities, co-operative marketing encourage farmers.
- Co-operative marketing controls the flow of supply and thus influence the prices.
- Co-operative marketing agencies give advances, loans to the farmers and make them wait for better prices.
- The co-operative marketing system helps to reduce the cost of marketing.
Keeping in view these advantages of co-operative marketing system, the government and the RBI are encouraging them through National Development Bank of India.
Question 22.
Contract Farming
Answer:
Contract farming is another good remedy for solving the problems of agricultural marketing in India.
Contract farming is defined as “That farming in which sale contract is made between farmers and users of farm products” For e.g: some tobacco companies in AP have sale contracts with the producers of tobacco. In the same way industries like sugar, cotton, jute, etc. have sale contracts with the farmers. The benefits of contract farming are:
1) Fluctuations in the prices of farm products can be minimized. Hence, there will be maximum certainty in the income of the farmers.
2) Peasants can receive credit and technological support from the industries with whom they have sale contract.
3) Since the prices of these products are fixed well in advance, the farmers put sincere effort to maintain quality of the products which have sale contract.
4) Collective sale contracts of farmers provide better result than individual contract.
Very Short Answer Questions
Question 1.
Agricultural sector
Answer:
Agricultural sector is the sector which includes forestry, fishing, mining, quarrying and allied activities like animal husbandry, horticulture, etc. along with agriculture.
Question 2.
Agro based industries
Answer:
Industries which depend on agriculture directly or indirectly for their raw materials are called agro-based industries. For eg. Cotton Textiles, Jute, Sugar, Flour mills, edible oil, handloom, Rice mills, food processing, horticulture, etc.
Question 3.
Food security
Answer:
Food security is such a security which enables the people to have all time enough food for an active and healthy life.
Question 4.
Land Reclamation
Answer:
Regaining the ownership on land after the abolition of intermediaries such as zamindars to make the land useful.
Question 5.
Cropping pattern [May 2017]
Answer:
Cropping pattern is the pattern of land utilisation of totcil farm land for producing different crops in a country at a point of time.
Question 6.
Perennial canals
Answer:
Perennial canals are those canals which flow permanently throughout the year.
Question 7.
Drip irrigation
Answer:
Drip irrigation is the system where water is delivered at or near root zones of plants drop by drop.
Question 8.
Sprinkler irrigation
Answer:
In sprinkler irrigation system, water is piped to one or more central locations within the field and distributed by overhead high pressure sprinklers.
Question 9.
Land Reforms
Answer:
The introduction of economic and non-economic changes relating to land in order to achieve social justice and agricultural development is called land reforms.
Question 10.
Organic farming [Mar ’19 (AP); May ’17]
Answer:
Organic farming is the farming which uses natural fertilizers / manures.
Question 11.
Economic holding
Answer:
The size of holding which provides a decent standard of living to the farmer and his family is called Economic holding.
Question 12.
Farm mechanisation
Answer:
The introduction of machines like tractors, pump sets, harvestors, threshers, etc. in farm activities is called farm mechanisation.
Question 13.
Consolidation of holding
Answer:
Consolidation of holdings means bringing together all the scattered holdings of a farmers into one compact block as a single plot is called consolidation of holdings.
Question 14.
Co-operative farming [Mar ’19 (AP); May, Mar ’18]
Answer:
It means, the total land of a village is pooled into one unit and farming is done together.
Question 15.
Objectives of land reforms
Answer:
The Planning Commission on India has announced the following objectives of land reforms, in 1951.
A) The removal of impediments that arise in the agrarian structure inherited from the past.
B) To eliminate all sorts of exploitation and social injustice within the agrarian system, to provide security for the tiller of the soil, assume equality of status and opportunities to all sections of rural people.
Question 16.
Zamindari system
Answer:
Lord Comwalis introduced this system in Bengal in 1793. The Zamindars were declared full proprietors of large area of land. The zamindars were responsible for collecting and payment of land revenue to the British government.
Question 17.
Ryotwari System
Answer:
Thomas Munro introduced this system in 1792 in Madras presidency. Later it was extended to Maharashtra and to other places. In this system, the ryots had full rights regarding sale, transfer and leasing of land. No middlemen exists between the farmer and government.
Question 18.
Occupancy Tenant
Answer:
Occupancy tenants are those tenants whom cannot be removed by the landlords if they pay rent regularly.
Question 19.
Green Revolution [Mar ’19 (TS); May ’18]
Answer:
The new strategy of agriculture which resulted in revolutionary changes and progress in the farm sector of India during 1960-70 is termed as “Green Revolution”.
Question 20.
IADP
Answer:
IADP means “Intensive Agriculture District Programme”. In 1964, the Government of India introduced this programme in the recommendation of Ford Foundation Team.
Question 21.
IAAP
Answer:
IAAP means “Intensive Agriculture Area Programme”. In 1967, the Government of India introduced this programme with a view to extend the area under intensive cultivation.
Question 22.
HYVP
Answer:
High Yielding Variety seeds Programme (HYVP) was introduced by the Indian government in 1965 to improve the productivity of our agriculture. As a result of HYVP, there was a remarkable risk in the production and productivity of paddy, wheat, sugarcane, cotton etc.
Question 23.
RIDF
Answer:
The Rural Infrastructure Development Fund (RIDF) was introduced in 1995-96 by NABARD with an objective of providing funds to state governments and state owned corporations to enable them to complete irrigation projects watershed management, construction of rural roads etc. in rural areas.
Question 24.
Kisan Credit Card (KCC) [March 2017]
Answer:
This was introduced in 1988-’89 with a view to facilitate short term timely credit to farmers. This scheme is implemented by commercial banks. Regional Rural Banks, Co¬operative Banks which are refinanced by NABARD. By the end of August 2012, Rs. 91,676 crores have been issued to nearly 9.54 crore Kisan Credit Card holders.
Question 25.
SGSY
Swarna jayanthi Gram Swarojgar Yojana (SGSY) was launched on 1st April 1999 by the Government of India by combining various programmes like IRDP, TRYSEM, DWCRA etc. The main aim of SGSY is to uplift the poor above the poverty line.
Question 26.
Micro Finance [May 2017]
Answer:
Micro finance is the provision of finance as a small scale to the rural and urban poor.
Question 27.
Assembling
Answer:
“If a stage is agricultural marketing Assembling is the process of pooling up of small surpluses of individual farmers in the market.
Question 28.
Processing
Answer:
The assembled and graded agricultural products cannot be directly used. They should be made useful for consumption. For eg. Paddy, oil seeds, pulses etc. They should be made useful for consumption.
Question 29.
AGMARK [March 2018]
Answer:
The abbreviation of graded agricultural products is AGMARK. It is given by the Agricultural Marketing Department. AGMARK is a symbol for quality agricultural produce.
Question 30.
Marketable Surplus. [Mar ’19 (AP); Mar ’18, ’17]
Answer:
Marketable surplus is the potential surplus available for marketing.lt is the surplus produce available with the farmers after meeting all the requirements of farmers i.e., needs of consumption, seeds, wage payment, etc.
Question 31.
Rythu Bazar. [May 2018; Mar ’17]
Answer:
The Government of A.P. introduced the concept of Rythu Bazars on 26th January, 1999 to improve the agricultural marketing system. In Rythu Bazars, the farmers directly sell their farm products directly to the consumers without the interference of middlemen.
Quality Farm products like rice, cereals, pulses, vegetables, fruits, etc. are sold in these markets at reasonable prices. Both farmers and consumers are benefitted by Rythu Bazars.
Question 32.
Grading
Answer:
Separating the agricultural products according to quality is called grading.