Model Answer
0 min readIntroduction
India’s agricultural sector, a cornerstone of the economy employing over 58% of the population (as of 2023), witnessed a significant deceleration in growth post-1991, despite the Green Revolution’s earlier successes. Prior to economic liberalization, agricultural growth averaged around 3.5% per annum. However, this rate declined to around 2.5% in the subsequent decades. This slowdown is a complex issue stemming from a confluence of factors, including changes in government policies, inadequate infrastructure, and emerging challenges like climate change. Understanding these reasons is crucial for formulating effective strategies to revitalize the sector and ensure food security.
Decline in Public Investment
One of the primary reasons for the deceleration is the decline in public investment in agriculture. Post-reforms, there was a shift in focus towards market-led growth, leading to reduced budgetary allocations for irrigation, agricultural research, extension services, and rural infrastructure.
- Reduced Irrigation Coverage: Investment in irrigation projects slowed down, leaving a significant portion of agricultural land dependent on erratic monsoon rains. The percentage of net sown area irrigated declined from 37.3% in 1991-92 to 48.8% in 2018-19, indicating a slower pace of irrigation expansion.
- Stagnant Agricultural Research: Public spending on agricultural research as a percentage of GDP declined, hindering the development of new technologies and improved crop varieties.
- Weakened Extension Services: The extension system, crucial for disseminating knowledge and best practices to farmers, suffered from inadequate funding and manpower.
Market Distortions and Policy Issues
Economic reforms, while aimed at liberalization, also introduced certain market distortions that negatively impacted agricultural growth.
- Removal of Input Subsidies: The gradual removal of subsidies on fertilizers, electricity, and water led to increased production costs for farmers, particularly small and marginal farmers.
- Inefficient Procurement System: The Minimum Support Price (MSP) system, while intended to protect farmers, often suffers from inefficiencies in procurement and distribution, benefiting only a limited number of farmers in certain regions.
- Lack of Marketing Infrastructure: Inadequate storage facilities, transportation networks, and market information systems resulted in post-harvest losses and reduced price realization for farmers.
- APMC Regulations: The Agricultural Produce Market Committee (APMC) regulations, while intended to protect farmers, often created monopolies and restricted competition.
Climate Change and Natural Disasters
Increasingly frequent and intense climate change-related events have significantly impacted agricultural production.
- Erratic Monsoon Patterns: Changes in monsoon patterns, including delayed onset, prolonged dry spells, and excessive rainfall, have led to crop failures and reduced yields.
- Increased Frequency of Extreme Weather Events: Floods, droughts, heat waves, and cyclones have become more frequent, causing widespread damage to crops and livestock.
- Water Scarcity: Depletion of groundwater resources and increasing water stress have exacerbated the challenges faced by farmers.
Socio-Economic Constraints
Several socio-economic factors also contribute to the deceleration of agricultural growth.
- Land Fragmentation: Small and fragmented landholdings limit the adoption of modern technologies and economies of scale.
- Lack of Access to Credit: Small and marginal farmers often face difficulties in accessing institutional credit, forcing them to rely on informal sources with high interest rates.
- Rural Indebtedness: High levels of rural indebtedness trap farmers in a cycle of poverty and discourage investment in agriculture.
- Migration of Labor: Migration of agricultural labor to urban areas in search of better employment opportunities leads to labor shortages in the agricultural sector.
Impact of Trade Liberalization
Trade liberalization, while promoting exports, also exposed Indian agriculture to increased competition from global markets.
- Competition from Subsidized Imports: Imports of agricultural commodities from countries with higher levels of subsidies put pressure on domestic prices and reduced the profitability of Indian farmers.
- Limited Access to Global Markets: Indian farmers often face barriers to accessing global markets due to stringent quality standards and trade regulations.
| Period | Average Agricultural Growth Rate (%) | Key Factors |
|---|---|---|
| Pre-1991 | 3.5 | Green Revolution, Public Investment |
| 1991-2005 | 2.5 | Economic Reforms, Reduced Public Investment, Initial Market Distortions |
| 2005-2014 | 3.7 | Increased Public Spending (e.g., NREGA), Improved Credit Access |
| 2014-2023 | 2.8 | Climate Change Impacts, Market Volatility, Continued Investment Gaps |
Conclusion
The deceleration in agricultural growth post-economic reforms is a multifaceted issue stemming from a combination of declining public investment, market distortions, climate change impacts, and socio-economic constraints. Addressing this requires a holistic approach involving increased and targeted public investment in irrigation, research, and rural infrastructure, reforms in agricultural marketing, promoting climate-resilient agriculture, and empowering small and marginal farmers. A renewed focus on sustainable agricultural practices and diversification is crucial for ensuring long-term food security and rural prosperity.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.