Department of Management Studies

1. Department of Management Studies Presented By: Kamlesh Kumar Jangid Manisha vyas Kadambari sapra

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

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

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

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

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

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

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

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

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

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

12. STEPS TAKEN TO INCREASE AGRICULTURAL PRODUCTIVIY

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

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

15. Macro management scheme • Initiated in 2000-2001 by integrating 27 centrally sponsered schemes. • Pattern for assistance was I ratio 90:10 for centre and states.except for north eastern states that get 100%central assistance with launching of national horticulture mission in 05-06 10 shemes were also undertaken

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

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

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

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

20. Msp support price for kharif crops • Crops %incrase from 2007- • 08-2008-09 • Paddy 155 • Maize 220 • Bajra 240 • Moong 780 • Soyabean 440

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

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

25. Composition of India’s agricultural output in 2003-04

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

27. The low productivity in India is a result of the following factors: • According to World Bank's "India: Priorities for Agriculture and Rural Development", India's large agricultural subsidies are hampering productivity-enhancing investment. Overregulation of agriculture has increased costs, price risks and uncertainty. Government intervenes in labor, land, and credit markets. India has inadequate infrastructure and services.[13] World Bank also says that the allocation of water is inefficient, unsustainable and inequitable. The irrigation infrastructure is deteriorating.[13] • Illiteracy, general socio-economic backwardness, slow progress in implementing land reforms and inadequate or inefficient finance and marketing services for farm produce. • The average size of land holdings is very small (less than 20,000 m²) and is subject to fragmentation, due to land ceiling acts and in some cases, family disputes. Such small holdings are often over-manned, resulting in disguised unemployment and low productivity of labour. • Adoption of modern agricultural practices and use of technology is inadequate, hampered by ignorance of such practices, high costs and impracticality in the case of small land holdings. • Irrigation facilities are inadequate, as revealed by the fact that only 52.6% of the land was irrigated in 2003–04,[14] which result in farmers still being dependent on rainfall, specifically the Monsoon season. A good monsoon results in a robust growth for the economy as a whole, while a poor monsoon leads to a sluggish growth.[15] Farm credit is regulated by NABARD, which is the statutory apex agent for rural development in the subcontinent.

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

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

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

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

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

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

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

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

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

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

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

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

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

41. Mahatma Gandhi preferred to be known as a farmer, while signing the Visotors’ Book of the NDRI, Bangalore in 1927. Let us prove worthy of his trust that India will care for its farmers

42. Loopholes in new agricultural policy

43. 1 Growth rate:The target mentioned in the NAP policy document does not seem to suffice with the given conditions. Table-1: Average Annual Growth Rate in Agriculture Sector from 1985 to 2005 Five Year Plan Agriculture & Allied Sectors (percent) Seventh Plan (1985-1990) 3.2 Annual Plan (1990-92) 1.3 Eighth Plan (1992-97) 4.7 Ninth Plan (1997-2002) 2.1 Tenth Plan (2002-07) 2002-03 - - 6.9 2003-04 10.0 2004-05 0.7

44. Table-2: Food Grains Productions during 2000-05 (Million Tonnes) Crop/Year 2000-01 2001-02 2002-03 2003-04 2004-05* Rice 85.0 93.3 71.8 88.3 85.3 Wheat 69.7 72.8 65.8 72.1 72.0 Coarse Cereals 31.1 33.4 26.1 38.1 33.9 Pulses 11.1 13.4 11.1 14.9 13.4 Foodgrains (i) Kharif 102.1 112.1 87.2 116.9 103.3 (ii) Rabi 94.7 100.8 87.6 96.6 101.3 Total (i)+(ii) 196.8 212.9 174.8 213.5 204.6

45. 2 employment in agriculture sector:::The share of agriculture as percentage of GDP is declining but the share of employment in agriculture shows no major change Table-4: Employment in Agriculture Sector (In Millions) Agricultural 1951 1961 1971 1981 1991 2001 Workers/Year Cultivators 69.9 99.6 78.2 92.5 110.7 127.3 Agricultural 27.3 31.5 47.5 55.5 74.6 106.8 Labourers Total 97.2 131.1 125.7 148.0 185.3 234.1

46. 3 exports: the agricultural exports as percent of total exports is declining. 4 risk management: The NAIS is currently being implemented in 23 States and two Union Territories and till now, 7.51 crore farmers have been covered under this scheme from 1999-2000 to 2005-06 • The insurance scheme and institutionalisation of rural credit however intends to stabilise the conditions of the farmers but the suicides by the farmers are increasing continuously and alarmingly.

47. 5: credit availibilityThe total credit flow to the agriculture and allied activities has increased but still lakhs of farmers are dependent on informal sources of credit like local moneylenders who invariably exploits them by charging very high rate of interests and the farmers are forced into indebtedness. Table-6: Institutional Credit to Agriculture Sector (Rs crore) Agency 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06* Cooperative Banks 20800 23604 23716 26959 30639 28947 Regional Rural Banks 4220 4854 6070 7581 11718 11146 Commercial Banks 27807 33587 39774 52441 72886 77806 Total 52827 62045 69560 86981 115243 117899

48. Thank you … … very much.

49. ? Queries!!!