IÞTRODLCTIOÞ
1lcrc arc scvcral commonalirics lcrwccn !ndia and Clina. lorl arc mosr populous counrrics ol rlc world and lorl arc
gcograplically locarcd in Asian conrincnr lur in rwo dillcrcnr divisions, i.c. Clina is in ¡asr-Asia wlilc !ndia is in Sourl
Asian rcgion. Ar onc rimc rlcy wcrc cquals in rcspccr ol lungcr and povcrry and scvcral orlcr siruarions. Borl arc
agrarian cconomics, lalor inrcnsivc and lasr dcvcloping cconomics ol rlc world and nor mucl cllccrcd ly on going
cconomic rcccssion as in rlc rcsr ol rlc world. Ònc rimc cquals arc nowon vcry dillcrcnr lcvcls in rcrmol dcvclopmcnr.
Now lclorc analyzing srrcngrl gaincd and wcakncsscs ol rlcsc rwo, wc would analyzc major dillcrcnccs as alovc wc
lavc givcn somc similarirics. 1lc polirical sysrcm in lorl is complcrcly dillcrcnr. !ndia is plural narion in many ways
wlcrc as clina is complcrcly dillcrcnr rypc rulc ir is liglly aurlorirarian onc .1lcsc socicral dillcrcnccs go a long way in
all rypc ol progrcss and dcvclopmcnrs ol a narion .!n rlc lollowing lincs wc analyzc all rlc lacrors sysrcmarically.
Primarily rlis srudy is aimcd ar rural cconomy}agriculrurc and purs in ro rlis sccror i.c. linancc and orlcr rclarcd
dcvclopmcnrs including inpurs likc sccds, ncwvaricrics ol rlcsc lcrrilizcrs, pcsricidcs, agriculrural land agriculrural lalor
crc. Wly spccial arrcnrion ro rlis sccror only rcason is simplc lorl arc liglly populous counrrics ol rlc world and lor
livcliloodol rural pcoplc lorlarc dcpcndcnr onagriculrurc only inslorr lorlarc agrariancconomics.
1o lcgin wirl wc slall lavc a look on lasic poinrs rclarcd ro agriculrurc producrion and rlcn rclcvanr
conrriluring cllorrs ro dcvclop rlis sccror in lorl rlc counrrics. Borl rlc counrrics alrcr laving rcalizcd pcoplc's nccds
and pasr lungcr and cvcn lamincs csrallislcd a srrong ncrwork ol Agriculrural \nivcrsirics and collcgcs and largc
numlcr ol cxrcnsion ccnrcrs lor laving maximumpossillc lood grains and orlcr carallcs ro mccr nccds ol rlcir largc
popularions. ¡vidcnrly rcscarclcs in rlcsc placcs ol cxccllcncc could dirccrly lc involvcd in land usc dcvclopmcnr ol ncw
varicrics ol sccds spccilic qualirics ol lcrrilizcrs usc almosr all rlc issuc rclarcd ro agriculrurc could lc solvcd} improvcd in
rlcsc placcs ol agriculrurc rcscarcl and lcarning. !n !ndia virrually cacl srarc is laving an agriculrural univcrsiry ar lcasr
and scvcral cxrcnsion ccnrcrs arraclcd ro ir rlcsc cllorrs cnd up wirl grccn rcvolurion way lack in scvcnrics and madc
!ndia scll rclianr ar lcasr in lood grains. ¡vcry dcvclopmcnr rcquircs linancc and irs sourccs lur lor agriculrurc and
acrivirics rclarcd ro ir !ndia las madc spccilic provisions. ¡vcn as ol roday according ro govcrnmcnr ol !ndia cllorrs and
prioririzarions ol sccrors, agriculrurc sccror is onc ol rlc prioriry arca and cacl lank is supposcd ro lcnd 1+ pcrccnr ro
rlis sccror ol rlc roral crcdir ro lc dislurscd lollowing ligurcs spcak ol rlcsc cllorrs. 1lc crcdir ro rlis sccror las lccn
incrcasing rallc-2 producrion is almosr ncar sraric and conrrilurion ro GÐP ol rlis sccror las lccn lalling ycar ly ycar
IÞTERÞATIOÞAL JOLRÞAL OF SOCIAL SCIEÞCES
& IÞTERDISCIPLIÞARY RESEARCH
\ol.1 No. 6, {unc 2012, !SSN 2277 S6S0
Onlinc Availablc at indianrcscarchjournals.com
AGRICLLTLRAL DEVELOPMEÞT IÞ IÞDIA
AÞD CHIÞA: A COMPARATIVE STLDY
HARPREET KALR SAÞDHL
Bcscerch Sch»/er, Dcpertmcnt »j Ec»n»mics, Penje|i Univcrsity, Petie/e.
ABSTRACT
!n rlis arriclc an arrcmpr las lccn madc ro draw a comparison lcrwccn agriculrurc ol rwo ncigllouring
counrrics !ndia and Clina. !ssucs rclarcd ro agriculrurc including linancc, land crc. lavc also lccn discusscd.
Mosr rclcvanr ro rlis sccror is insrirurional crcdir and posirion ol rlis sccror in lorl rlc counrics is crirically
cxamincd.
Kcywords: agriculrurc, lislcrics, dairy, land rclorms, insrirurional crcdir, co-opcrarivc lanking, agriculrural rax,
sulsidics.
+S
alrcr lilcralizarion and glolalizarion scc rlc dara givcn lclowscc rallc-1. So, ar rlis vcry placc dara rcllccrcd ro prcscnr
lood producrion sccnario ol lorl rlc counrrics. 1lc compararivc producrion ligurcs ol somc sclccrcd ircms !ndia vcrsus
Clina arc givcnlclowwliclarc lascd on(Pallvi Aycr's arriclc ol 2007) scc rallc. -S
Contribution of IndianfChincsc agriculturc scctor incomc to gross domcstic productivity (Tablc 1.)
Tablc 1. Sharc in Gross Domcstic Product (GDP in Pcr-ccnt)
Ycar India China
1980 S8.9 17.5
2000 2+.6 1+.9
200+ 22.0 15.2
2006 17.0 ---
2008 16.S 11.0
2009 16.1 10.6
Tablc 2. Flow of institutional crcdit to IndianfChincsc agriculturc scctor
Financial Institutional Crcdit
Ycar India(Rs incrorcs) China (Yuanintrillion)
2008-2009 2,87000 1.7(rlrougl FCCs)
2009-2010 S,25,000 ----
2010-2011 S,75000 ----
2011-2012 +,75000 ----
S»urcc -veri»us ennue/ |u4¡ct pr»visi»ns |cpt inln4ien|u4¡ct
!r is wcll undcrsroodClina is quirc closcdsysrcmsorlcsc rcccnr ligurcs arc nor availallc.
Comparison somc itcms production in India and China of
Tablc 3
ProductionfHcctarc India China
Ficc S0S+Ig 62SSIg
Wlcar 2688Ig +155Ig
Òil Sccds 909Ig 1778Ig
¡ruirs & \cgcrallcs 55m1 60m1
¡xacr arallc land in !ndia is 161 m!ccrarcs and Clina 1S0 m!ccrarcs. !r is ro lc poinrcd our avcragc larmsizc in
!ndia is largcr rlan Clina ir is 1.+ !ccrarcs lor !ndia and 0.+ !ccrarcs (ol coursc land rclormwcrc carricd in Clina in
Mao's rimc and drasric land rclorms in !ndia wcrc ncvcr carricd cxccpr Icrala and Wcsr Bcngal wlcrc communisrs rulc is
rlcrc ovcr rlc pasr scvcral dccadcs rlis slall lc discusscd scpararcly) orlcr rwo mosr rclcvanr arcas ro lc prcscnrcd lcrc
arc lloriculrurc and poulrry wlicl arc imporranr scgmcnrs ol agriculrurc}rural livclilood. 1lougl lorl counrrics srarrcd
lloriculrurc in 1990 Clina is laving ovcr 20000 !ccrarcs undcr lloriculrurc wlcrcas !ndia is laving only 2000-S000
lccrarcs uscd in rlis acriviry. !n casc ol poulrry also !ndia is lar lclind Clina rlougl somcrimcs lack comparison
HARPREET KALR SAÞDHL
+6
slowcd ir rlar !ndia is sixrl largcsr produccr lclind \S, Brazil, ¡\, and Clina (¡conomic Fcscarcl Scrvicc
\SÐA).clcarly lclind Clina !r is also quirc rclcvanr ro prcscnr lcrc posirion ol lorl rlc counrrics in rcgard ro lislcrics
and milk producrionwliclarc lorlvcry imporranr supporr scgmcnrs ol agriculrurisrs in!ndia and Clina
As lor as roral milk producrion is conccrncd !ndia is rlc liglcsr milk produccr in rlc world and \S is ncxr ro ir lur
wlcn milk is considcrcd pcr animal ir is mucl lowcr ro \S ir is almosr 1}10 only nccdlcss ro mcnrion numlcr ol animals
is rlcc rimcs rlar ol Amcrica. !ndia produccd milk in 2001,8+million rons and would lavc rcaclcd 112 million rons in
2010 wlcrcas Clina ar+S.6 million rons only .!n casc ol lislcrics !ndia srands ar Srd placc in rlc world in lorl rlcsc arcas
rlcrc is a largc scopc ol improvcmcnrs}cxpansions parricularly in milk producrion pcr animal. Fcgarding lullalo milk
Clina is lar lclind rarlcr is alrcr Pakisran. Clina is parricularly wcll known lor soya milk wlicl sccms ro lavc originarcd
lromClina only.
Also, rlcrc is vasr scopc in lislcrics dcvclopmcnrs and rlcsc arc rwo major lruirlul sccrors ol divcrsilicarion ol rural
lalor}agriculrurc in !ndia. Nor only rlis il rlcsc rwo sccrors arc arrcndcd ar rlc prioriry ir can gcncrarc immcnsc rural
cmploymcnr and il producrs lascd on rlcsc rwo sccrors arc rcscarclcd}dcvclopcd ar inrcrnarional lcvcl ir can lcad ro rural
indusrrializarionrlus rural cmploymcnr gcncrarion
!ncrcasc in agriculrurc producrion lavc dccrcascd in !ndia lrom 2.7% ro 2.5% (2005-2007) wlcrc as Clina las
lccn srcadily growing lrom+-5% ovcr rlc lasr 15 ycars. !r is vcry imporranr lcrc irscll ro srarc rlar arallc land in lorl
counrrics is almosr samc (ol coursc roral arca ol Clina is ncarly rlrcc rimcs rlar ol !ndia) Nowro rarionalizc somc lacrors
wc rakc casc ol in purs lor rlis sccror. !n Clina avcragc yicld is almosr doullc rlar ol !ndia and lcrrilizcrs usc is also
doullc rlar ol !ndia. Clina alonc uscs lcrrilizcrs 28% ol rlc cnrirc world consumprion as pcr ligurcs pullislcd ly ¡ood
and Agriculrurc Òrganizarion (¡AÒ) lor somc comparison. !n orlcr sccrors roo lacrs arc liglly amazing in all orlcr
arcas Clina is lcading and !ndia is way lclind mosr promincnr lcing lorriculrurc wlcrc i.c. lruirs and vcgcrallcs. Clina
succcss is lurrlcr indivcrsilicarionol agriculrurc via animal luslandry and lislcrics crc.
So ir is narural ro analyzc wlar lappcncd wirl all rlcsc cllorrs in agriculrurc sccror and incoming lincs wc slall rry ro
clalorarc on dillcrcnccs and causcs lor rlar. So ir is narural ro analyzc wlar lappcncd wirl all rlcsc cllorrs in agriculrurc
sccror and incoming lincs wc slall rry roclalorarc ondillcrcnccs and causcs lor rlar.
1lc lall ol agriculrurc conrrilurion ro GÐP srarrcd in 1990-1991 wirl rlc lilcralizarion proccss and is likcly ro lall
lurrlcr ro 10 - 15%.!r was lur narural orlcr conrriluring sccrors ro producriviry}cconomy lad morc loosr in rlc givcn
siruarions rarlcr gaincd morc spccd ovcr agriculrurc sccror .1lis rrcnd rlougl looks disrurling lur was likcly ro lappcn
in rlc givcn circumsranccs and cconomic rclorms wlicl wcrc iniriarcd in 1991 onwards wlcrc as rclorms in cconomy in
Clina srarrcd lromÐcng pcriod1978 mucl carlicr rlan !ndia. As !ndian govcrnmcnr laid cmplasis on agriculrurc rimc
and again and crcdir ro rlis ir las lccn doullcd rlcn wlar lappcncd ro agriculrurc producrion ir is almosr sraric. !ndian
agriculrurc siruarion las lccn locus and conccrn ol various livc ycar plans clcvcnrl livc ycar plan rricd lor improving rlc
posirion wlicl did nor lappcn and is admirrcd ly planning commission rlar agriculrurc growrl is almosr slowing
down(Goi 2005) lccausc ol pullic sccror lunds }crcdir non availaliliry lur as sucl crcdir is doullcd as onc sccs lromrlc
rallc-2. Also lanking sccror( wlicl arc ourlcrs lor pullic lunds) wlcrcin agriculrurc is sripularcd prioriry arc lor crcdir
and now in rcccnr ycars cmplasis on linancial inclusion i.c. FB! slogn is lank lor all and lcncc cxccss ro crcdir wirl
cmplasis on ir slould go ro poorcsr ol rlc poor slould lavc rcacl ro ir. Now ro scc low crcdir is gonc during somc
sclccrcdycars 1990ro2008 scc rallc -+
¡romrlcsc ligurcs ir is vcry clcar lcrwccn1990-2008 crcdir supplicd ly rural lranclcs is dccrcascd in casc ol mcrros
and orlcrs ir is incrcascd clcar conclusion lromrlcsc ligurcs is agriculrurc crcdir is nor going dirccrly ro agriculrurc lur
ro irs rclarcd acrivirics as pcr lroadcncd dclinirion lor larming acrivirics as modilicd ly FB!.!nspirc ol rlcsc cllorrs
rcsulrs on producrion sidc lavc ncvcr lccn liglly visillc rarlcr in !ndia larming lavc lccn non arrracrivc and also gap
AGRICLLTLRAL DEVELOPMEÞT IÞ IÞDIA AÞD CHIÞA: A COMPARATIVE STLDY
+7
lcrwccn rural and urlan lavc lccn widcning Anorlcr rcason could lc sulsidics givcn ro larmcrs lor lis purposc onc
srarcmcnr is rcproduccd lcrc 'Pullic invcsrmcnr on agriculrurc in counrrics likc !ndia is lcavily skcwcd rowards
providing sulsidics rarlcr rlan invcsrmcnrs.' !n lacr, sulsidcs arc morc rlan lour rimcs rlar ol pullic invcsrmcnrs in
agriculrurc (WÐF, 2008)
Tablc 4.
S»urcc : Stetistice/ rcturns »j schc4u/c4c»mmcrcie/ |en|s in ln4ie
Nor only rlis rlcrc arc scvcral orlcr lacrors also risk ol rccovcrics and ro mccr rlc lixcd rargcrs lanks lind salc ro
look undcr rural inlrasrrucrurc dcvclopmcnr lund F!С.Bur Govr. Òl !ndia always rricd ro scc llow ol gocs ro
agriculrurc. Clina las lccn consranrly growing in agriculrurc sccror ly +-5%during rlc pasr lilrccn ycars lcrc in rlis
arriclc rlcsc slall also lc analyzcd. ¡mplasis on agriculrurc as wcll as irs poor growrl is dirccrly admirrcd ly primc
minisrcr ol !ndia in 2009 (lor dcrail scc cconomic rimcs 2009, 10rl Augusr) anorlcr conccrn is rlc rarc ol growrl ol
agriculrurc is vcry slow in comparison ro incrcasc in popularion according ro onc csrimarc (\N rcporr 1998) !ndia
would surpass Clina ly 20S0 ar rlc rarc wirl wlicl !ndian popularion is incrcasing. 1lis ycar !ndia popularion srands
ar 1.21 lillion and Clina 1.SS lillion. 1lis rcsulr is ly drasrically adopring lamily planning rulcs rlrcc dccadcs ago
(1978) wlcrcas !ndia adoprcdlamily planning (1965) lur nor vcry rigidly.
Òn papcr so mucl ol cllorr is rlcrc lor crcdir dclivcry lur docs nor sccmro lc vcry lruirlul as indicarivc lromrlc
rallc -5 wlicl slows rlc picrurc ol 27 ycars and invcsrmcnr in agriculrurc in crorcs ly govcrnmcnr ol !ndia 1lis picrurc
clcar picrurc ol sccrors rclarcd ro ir likc. Slarc in gross domcsric producriviry gross capiral lormarion ol !ndia ly
agriculrural sccror. 1lis lalancc slccr is always dcsirallc lor any cvaluarioncrircria
Tablc 5. Invcstmcnt in Agriculturc (Rs in Crorc at 1ººº-2000 Pricc)
S»urcc: Neti»ne/ Acc»unts Stetistics 2008 (Ncw Scrics), Ccntre/ Stetistice/ Or¡enieeti»n, Ministry »j Stetistics en4
Pr»¡remmc lmp/cmcnteti»n, Ncw Dc/hi.
HARPREET KALR SAÞDHL
+8
Agriculturc Rcscarch inIndia andChina
!crc, in rlis sccrion aurlors wisl ro rarionalizc wlar ails}prollcmro crcdir lor agriculrurc in lorl counrrics. Apparcnrly
!ndia madc cllorrs in cconomic rclorms lur no rclorms in rural sccror as a rcsulr rlc rural sccror las lccn lccoming lcss
lucrarivc. So mucl invcsrmcnr lur growrl rarc ol agriculrurc lavc lccn consranrly lclling down, in 200+-2005 ir was
+.5 pcrccnr in 2008-2009 ir is down ro 1.6 %. So our agriculrurc producrion las rcaclcd ncar sarurarion poinr. !r is
imporranr ro mcnrion lcrc 67% ol corron B1 and 100% paddy is lrommosr ncwvaricrics dcvclopcd ly Clina and rlis
is nor lappcning in casc ol !ndia Anorlcr major dillcrcncc is privarc parriciparion in rlis aspccr also in !ndia rlis viral
rcscarcl lack is wlolly on govcrnmcnr moncy. As pcr rcliallc ligurcs !ndia is laving largcsr numlcr ol Govr. paid
agriculrural scicnrisrs in rlc world i.c. S0,000 ir's also wcll known 90% ol ludgcr ol rlc !ndian agriculrurc \nivcrsirics
and collcgcs gocs inro gocs inro rlcir salary componcnr rypical casc is rlar ol Punjal Agriculrurc. \nivcrsiry. ¡udliana.
Agriculrurc producrion ol !ndia roday is is jusr rlar wlar Clina aclicvcd way lack in 1980 rlis dirccrly purs a qucsrion
mark on agriculrural rcscarcl and indicarcs rlar rlcrc is no good scicnrilic lackup. !n conrrasr Clina is invcsring in F &
Ð S 1.5 lillions pcr ycar (2005). 1lis cnrirc F&Ð ludgcr gocs inro rcscarcl componcnr; salarics and ovcr lcads arc
carncd ly rcscarclcrs ly involving acrual uscrs in rlc lcginning ol rlcir rcscarcl work and lavc morc rlan 1000 rcscarcl
ccnrcrs. !r is also worrl mcnrioning scvcral rcscarcl srall is likc privarc and arc lircd}cmploycd on conrracr lascs. \nlikc
!ndia Clina docs nor cxrcnd any rypc ol sulsidics ro irs larmcrs il rlcsc arc givcn rlcsc arc casc lascd and nor gcncral ro
all wlcrlcr dcscrvcd or nor ly rlc rcccivcr ,rlis wcck poinr wc poinrcd in carlicr lincs also.1lis vcry slow}nor visillc
agriculrural rcscarcl makcs !ndian agriculrurc as a non arrracrivc acriviry undcr prcvailing siruarion cvcn rlougl crcdir
and scvcral orlcr inccnrivcs arc givcn ro larmcrs wlicl is in slarp conrrasr ro Clina and also arc indicarivc ol dillcrcnr
acrual posirion.. Òrlcr vcry imporranr lacror is land availaliliry ro larmcrs lcrc is widc dillcrcncc lcrwccn rlc rwo
counrrics. So liglly appropriarc would ro lc discuss lcrc land rclorms ly lorl counrrics Nowkcy qucsrion is onc rimc
cquals alour 25 ycars ago lowClina succccdcd in rlis agriculrurc sccror so vcry imporranr ro discuss lcrc land rclorms
wlcrc clina did drasrically
Landrcforms inIndia andChina
!n !ndia land rclorms las lccn primary conccrn cvcn lclorc indcpcndcncc rlc congrcss parry promiscd land ro rlc rillcr
and was a conccrn ro pcasanrry World land rclorms wcrc iniriarcd in mid lilry(\N 195+)Broadly land policy ol lrcc
!ndia canlc sccnlivc plascs
1 Alolirionol inrcrmcdiarrics and rcnancy clangcs
2 ¡and cciling lcgislarions ly various srarc govcrnmcnrs
S !ncrcasing rlc culrivarallc ly lringing morc landundcr culrivarion
+ Soil and warcr conscrvariondcscrr dcvclopmcnr wasrc landdcvclopmcnr crc.
1lc lasr plasc is rlc currcnr plasc ir conccrns rlc rclcvancc ol land cciling lcgislarions crc 1lc currcnr plasc is in a
way conccrnwlar acrually las lappcncdsolor and lacunas lclr ar somc placcs incoming lincs.
!mmcdiarcly alrcr indcpcndcncc congrcss camc our as ruling parry on only rwo occasions orlcr parrics comlinc
was in powcr likc {AN1A parry and NÐA lcad govcrnmcnrs Always land rclorms agcnda was lollowcd lur wirlour any
major succcss. 1o cmplasizc social claracrcr ol congrcss lcad govcrnmcnrs cvcn consrirurion ol !ndia was amcndcd
during cmcrgcncy pcriod rlrougl +2ndAmcndmcnr and rcrm socialisr was addcd ro rlc dclinirion ol rcpullic. ¡and
rclorms agcnda was lollowcd ro scc landlcss lamilics do lavc acccss ro land lor lorming crc .various srarc govcrnmcnrs
passcd lcgislarions on land cciling crc and lor rcdisrrilurion ol land ro landlcss pcoplc. As pcr union rural dcvclopmcnr
minisrry rcporr upro S0sr Scprcmlcr 1998 and lccausc ol various land cciling laws in srarcs ol !ndia, availallc land rlus
was 7S.7+ lakl acrcs in rlc wlolc counrry. Òur ol rlis roral land availallc wirl rlc union ol !ndia wlicl is in posscssion is
AGRICLLTLRAL DEVELOPMEÞT IÞ IÞDIA AÞD CHIÞA: A COMPARATIVE STLDY
+9
65.11 lakl acrcs our ol rlis only so lar 5S.05 lkal acrcs arc rcdisrrilurcd ro 55.S7 lakl lcncliciarics. 1lis ligurc wlcn
onc sccs rlc wlolc counrry sidc is vcry small rlis sccms ro lc somc prollcms during cnacring land cciling laws in various
srarcs likc 1amil Nadu (lor dcrail scc S. \iswanarlan, ¡ronrlinc, vol 21, Òcr. 9, 200+). Prcscnr aurlors do lccl similar is
consrrainr in orlcr srarcs wlcrc land cciling laws wcrc pur in placc may lc Icrala and Wcsr Bcngal wlcrc communisr
rulc is rlcrc lor rlc lasr scvcral dccadcs.
!n Clina, a scrics ol land rclorms wcrc iniriarcd and implcmcnrcd wirl lorcc. ¡and laws wcrc rclormcd in rlc carly
1950s and land was conliscarcd ly rlc govcrnmcnr in onc go and rcdisrrilurcd ro poor pcasanrs on long lcasc lascs and
ir was pcriod ol Mao 1sc-rong rcgimc. Nor only rlis in mosr ol rlc cirics rlis is rlc posirion. Nowlromrlc pollcd land ar
rlc lcvcl ol villagc lcad cacl lousclold lavc acccss ro lavc land lor agriculrurc on long lcasc lur rlis land can nor lc sold
in opcn markcr. !n cirics also salc and purclasc can nor lc donc likc rlc !ndian casc. So cnormous pricc risc is nor
possillc. !r musr lc mcnrioncd lcrc lor cxprcssion sakc also Clina is closcd rypc sysrcm and cvcryrling is nor liglly
rransparcnr and ir may nor lc irrclcvanr ro mcnrion lcrc according ro inrcrnarional srandards lor corruprionClina (S.S)
and !ndia (S) arc almosr ar rlc samc lcvcl. As said in rlcsc lincs rlc villagc lcad wlo is laving poolcd land in rurn is
connccrcd wirl rlc srarc and ccnrral govcrnmcnr ruling communc sysrcm. 1lcsc rclorms lavc dramaric cllccr on
agriculrurc inClina lur incasc ol !ndia rlcrc is novisillc cllccr inagriculrurc producrioncrc.
Rural financial systcm inIndia andChina (Particularly Agricultural Financc)
!n prcvious pagcs wc lavc amply discusscd ourpurs rclarcd ro rural sccror primarily agriculrurc rlrougl vasr cllorrs
on linancc availaliliry ro nccdy larmcrs dcrails lcrc givcn rcsulranr in carlicr pagcs Ònc can rcadily undcrsrand
rural}agriculrural linancc arc synamous ro cacl orlcr so rlcy arc onc and samc rling ro lcgin wirl wc dcscrilc lirsr
!ndian Sysrcm. Ònc can say conlidcnrly ar lcasr lcrc !ndia is lcrrcr rlan Clina rlis is wlar rcccnrly our PM said in
rclarion ro lanking sccror in !ndia . Wc arc lcrc primarily conccrncd wirl agriculrural linancc and rlis is quirc dillcrcnr
rlan orlcr cconomic sccrors}linnacc in many ways Acrually agriculrurc is in rural arcas somcrimcs rcmorc oncs wirl
vcry poor inlrasrrucrurc no roads no rransporr sysrcm(!varuy2006) and lorrowcrs arc ncirlcr vcry nor lircrarcs1lc
agriculrurc lor wlicl linancc is nccdcd crcrnaliry is also liglly risky and dcpcndcnr on many lacrors likc wlcrlcr and
many orlcr scasonal lacrors rains drouglrs crc !n rlis volarilc siruarion only lcw larmcrs can lurnisl granrcc crc.1lcsc
lacrors ncccssirarc spccial arrangcmcnr lor rlis larming communiry ic rural lousclolds(Wampllcr and ¡apanu.2006)
!ndian rural linancial sysrcmcspccially agriculrurc rclarcd, las morc rlan ciglr dccadcs ol lisrory. Wlilc cxamining
ir, Sir MalcolmÐarling srarcd in 1925, "!ndian pcasanr is lorn in dclr, livcs in dclr and dics in dclr". 1lis srarcmcnr
alour larmcr's indclrcdncss apparcnrly srays cvcn nowin !ndia. 1lis is cvidcnr lromlarmcr suicidcs lromrimc ro rimc
and as liglliglrcd ly norcd !ndian cconomisrs also. 1o incrcasc insrirurional crcdir ro agriculrurc scvcral cllorrs arc
madc ly govcrnmcnr ir is rruc lor Clina also lur muslrooming ol privarc moncy lcndcrs arc srill rlcrc in lorl
counrrics
Fural ¡inancial Sysrcm is lroadly dividcd in rwo scgmcnrs- insrirurional crcdir and non insrirurional crcdir .1lc
larrcr compriscs ol moncy lcndcrs, land lords, rradcrs and commission agcnrs(Arrliyas) clarging inrcrcsr according ro
rlcir pcrsonal wlims in conrrasr ro insrirurional oncs wlcrc inrcrcsr rarc is as pcr govr. lixarions. !nsrirurional crcdir
providcrs arc Co-opcrarivc Banks compriscs ol Primary Agriculrural Crcdir Socicrics (PACS) laving alour alovc onc
lakl lranclcs in !ndia carcring ro rlc agriculrural nccds ol morc six lakls villagcs in rlis way rlcrc is onc primary
coopcrarivc socicry in proximiry ro rlcc or lour villagcs. !n rlis ir sccms ro lc cxccllcnr ncr work lor mccring crcdir ol
larmcrs. 1lcrc arc alour 1SS Fcgional Fural Banks (FFB) wirl morc rlan S0,000 lranclcs wlcrcas numlcr ol
sclcdulc commcrcial Banks is 27 laving lranclcs alour S1,796 as on S0rl {unc 2009 Bur crcdir dclivcry ro larmcrs is
srill nor smoorlly going. 1lc srrucrurc in !ndian coopcrarivcs is cmplcxcd ly various srarc govcrnmcnr laws wlicl arc
HARPREET KALR SAÞDHL
S0
dillcrcnr in cacl and cvcry srarc and ro rccrily rlcsc prollcms and lor smoorl dclivcry ol crcdir ro agriculrurc largc
numlcr ol commirrccs lavc lccn consrirurcd larcsr lcing \aidaynarlan commirrcc. A complcrc lisrory ol !ndian
coopcrarivcs can nor lc discusscd lcrc lccausc ol spacc limirarion lro complcrc srory is prcscnrcd in a lricl lisrory parr
ol Paril's rcporr (Paril S. G., 2009). 1lc wlolc idca las lccn ro incrcasc rlc llowol insrirurional crcdir lor somc succcss
scc rallc lclowand ir is lromrlc rcporr lol larcsr rcporr( Sarangi 2010)
Rcport of thc Task Forcc on Crcdit Rclatcd Issucs of Farmcrs
Tablc ó
Numlcr ol Òlliccs ol SclcdulcdCommcrcial Banks in!ndia
March Rural Scmi Lrban Mctropolitan Total Population
-Lrban pcr officc(in'000)
1969 1,++S S,SS7 1,911 1,+96 8,187 65
1970 +,817 +,+01 2,50+ 1,900 1S,622 +1
1975 6,807 5,598 S,+89 2,8S6 18,7S0 S2
1980 15,105 8,122 5,178 +,01+ S2,+19 20
1985 S0,185 9,816 6,578 +,806 51,S85 1+
1990 S+,791 11,S2+ 8,0+2 5,595 59,752 1+
1995 SS,00+ 1S,S+1 8,868 7,15+ 62,S67 15
2000 S2,7S+ 1+,+07 10,052 8,219 65,+12 15
2005 S2,082 15,+0S 11,500 9,S70 68,S55 16
2007 S0,551 16,S61 12,970 11,957 71,8S9 15
2008 S1,076 17,675 1+,S91 12,908 76,050 15
N»tc: Detej»r 1969 rc/etc t» cn4-]unc.
S»urcc: Bcp»rt »nCurrcncy en4Finencc 2006-08, BBl; j»r 2008 http://r|i.»r¡.in(ecccssc4»n22 ]unc 2010).
1lis rallc givcs clcar picrurc ol lranclcs sccror wisc rural urlan crc. Sixry pcrccnr ol rural crcdir nccds arc mcr
rlrougl rlcsc insrirurions. 1lc primc oljccrivcs ol Co-opcrarivc Banks and FFB's arc ro mccr rlc crcdir nccd ol
larmcrs and savc larmcrs lrom rlc cxploirarion in rlc lands ol moncy lcndcrs. !r is worrl mcnrioning lcrc rlar lorry
pcrccnr ol rural crcdir nccds arc lullillcd lrom non insrirurional sourccs Govr. ol !ndia las rakcs many iniriarivcs ro
improvc rlc crcdir dclivcry ro larmcrs inrcnding rlar crcdir slould llowro rlc poorcsr ol rlc poor wlicl did nor sccmro
lappcn. ¡rom rimc ro rimc Govr. consrirurcd various commirrccs ro look inro rlc pcrlormancc and issucs and
rccommcnd ways ro lullill rlc purposc lor wlicl rlcy arc consrirurcd. \yas Commirrcc rccommcndcd appropriarc
amalgamarion ol rlcsc FFB's wirl rlcir parcnr commcrcial lanks. 1lis amalgamarion proccss wlcn iniriarcd rcduccd
non pcrlorming asscrs (NPAs) ol rlcsc lanks. 1lis widcr ncrwork lor inruirional crcdir did dccrccs rlc rolc ol moncy
lcndcrsovcr50ycars pcriod upro2001 (Singl and sagcr 200+) lur rcccnrly rask lorcc undcr rlc clairmanslip ol Sarangi
callcd Sarangi commirrcc rcporr (\C Sarangi 2010) slows growrl ol non inruirional crcdir lcyond any imaginarion
.So nowir is liglly rclcvanr ro prcscnr inruirional crcdir ro agriculrurc via dillcrcnr inruirions likc coopcrarivcs FFBS
and commcrcial lanks and lollowing rallc slows rlis picrurc
AGRICLLTLRAL DEVELOPMEÞT IÞ IÞDIA AÞD CHIÞA: A COMPARATIVE STLDY
S1
Tablc 7
Institutional Crcdit to Agriculturc (Rs. million)
N»tc: Up t» 1990-91 BBBs enc»mmcrcie/ |en|s erc c/u||c4.
S»urcc: Veri»us issucs »j Ec»n»mic Survcy en4 NABABD. 1hc |en| stejj in rure/ erces erc n»t pr»pcr/y treinc4/ ecqueintc4 with vi//e¡c /ijc
pr»pcr treinin¡/»ricnteti»n is ncccssery et /cest j»r c»»pcretivc |en|s this wes »nc wcc|ncss p»intc4 |y »nc c»mmittcc c»nstitutc4 |y ln4ien
G»vcrnmcnt.
¡or lurrlcr simplilicarion ol rural crcdir and savc rimc Iisaan Crcdir Card (ICC) wcrc inrroduccd in 1998 ICC
sccms ro lc mosr cllccrivc crcdir dclivcry sysrcmro agriculrurc and ly cnd marcl 2009 8+.6 million cascs wcrc issucd.
1lcsc wcrc inrroduccd as sulsrirurc ol crop loans (rakavi) and ro savc rimc lur rlcsc arc ycr ro yicld rlc liglly visillc
rcsulrs in rlc counrry rlougl our. Bccausc ol awarcncss or orlcrwisc numlcr ol ICCs in Punjal and !aryana is quirc
good as in rlc wlolc !ndian conrcxr. As pcr our own cxpcricncc and inrcracrion ar villagc lcvcl ICCs ar rlis lcvcl arc ycr
ro lccomc common and popular. Òn linancial inclusion FB! slogan is "lank lor all" rlougl accounr loldcrs in !ndia arc
only 50%, ir is lopcd "lank lor all" rargcr slall lc lullillcd in Punjal may lc in rlc lormol ICCs. Similarly, Scll lclp
group sclcmc (2008-2009) also lclps in rcducing dclr lurdcn ol rural poor larmcrs rlis sclcmc includcd microlinancc
also(Mcyr F, 2007)
CHIÞA
Pcoplc's rcpullic ol Clina (PFC) lavc madc considcrallc cllorr ro rclormlanking sccror and ir is alour scvcnry ycars
ago. !n conrrasr !ndian lanking sysrcm is vcry old rarlcr lcgacy ol Brirsl rulc. 1lougl auronomy ol rlc srarc owncd
lanks in crcdir managcmcnr is incrcascd also supcrvision crc. No doulr good cllorrs arc madc lur srill in lanking sccror
HARPREET KALR SAÞDHL
S2
in Clina grarcr rclorms arc srill wairing. 1lc major prollcm is incrcasc non-pcrlorming asscrs and mosrly rlcsc arc
lccausc ol pullic sccror undcrrakings (PS\s) and rlcsc arc morc rlan S ¡akls clcarly, rlcrc can nor lc any visillc
rclorm in lanking sccror as long as rclorms arc nor carricd in PS\s . Bclorc going ro agriculrurc linancial srrucrurc
aurlors lccl rclcvanr ro prcscnr gcncral lanking sccror. Clincsc lanking srrucrurc srarrcd wirl Pcoplcs Bank ol Clina
(PBC) as rlc ccnrral lank laving rlrcc policy lanks namcly Srarc Ðcvclopmcnr Bank ol Clina (SÐBC).1lc srrucrurc is
as undcr as onc sccs lromrlc lclowgivcn picrurc rlcrc sccms ro lc cnougl ncrworking ol linancial ourlcrs lur sysrcmol
loan guaranry}rccovcraliliry is widcly dillcrcnr. As in casc ol !ndia cacl lorrowcr lavc cirlcr landcd propcrry or
orlcrwisc ro slowro rlc lank lis capaciry ol rcrurning crcdir. !n casc ol Clina wlolc land is poolcd ar rlc lcvcl ol villagc
lcad.
!mmcdiarcly alrcr rlc lormarion ol rlc Pcoplcs Fcpullic ol Clina rlc Clincsc communisrs lanncd all sorr ol
privarc moncy lcnding including pawn lrokcring and orlcr rypc ol linancial lcnding (!asio1971) Clina csrallislcd
rural crcdir coopcrarivcs(FCC) lur vasrly dillcrcnr lrom!ndian coopcrarivcs wlicl wcrc lcgacy lromBririsl rulc . \cry
larc in1970rlcy srarrcd grass roor lanking luncrions.
Bccausc ol polirical modc, ollicial dara on Clina lank indusrry is liglly skcrcly lur indcpcndcnr analysis indicarcs
in Clina S0-+0%. Òl roral loans arc lad loans ic non pcrlorming loans. Bur moncy in circularion is doullc rlan !ndia
wlicl mcans Clincsc savc morc moncy so ccrrainly !ndian lanks lavc smallcr amounr in circularion. So in conclusion
!ndia is laving mucl smallcr linancial sysrcmrlan Clina. Wlilc drawing comparison ir can lc salcly rcaclcd ar !ndia is
laving srrongcr and Clina is laving liggcr linancial sysrcm.Givcn lclowarc dcvclopmcnrs ol Clina s lanking sysrcm
1o our knowlcdgc scpararc lank likc Narional Bank ol Agriculrurc and Fural Ðcvclopmcnr (NABAFÐ 198S) is srill
nor rlcrc il ar all ir was lormcd and dissolvcd many rimcs. Clina did dcvclop rural crcdir coopcrarivcs(FCCS) lur nor on
rlc parrcrn ol !ndian sysrcmwlicl was dcvclopcd during Bririsl rulc rcally ol rlc rypc cxisring ar rlc lcsr possillc way
in rlc World in cxacr mcaning ir was ol rlc co-opcrarivc rypc in rcal; scnsc wirl rlc moncy poolcd lromrlc slarc loldcrs
and rlcir involvcmcnr in ir. 1lc !ndian coopcrarivcs lavc wirncsscd massivc clangcs largc no. ol commirrccs lookcd
inro rlcsc lrom rimc ro rimc larcsr dcvclopmcnr lcing as ol now a consrirurional amcndmcnr lill is pcnding lclorc
parliamcnr wlicl is ro lc rakcn up soon (dcrailcs arc carily pragrapls) 1lc FFCS in Clina arc sorr ol liscal insrirurions
rlrougl wlicl govcrnmcnr gocs ro rural Clincsc!n1980 minisrry ol agriculrurc csrallislcd a ncr work ol rural
coopcrarivc loundarions(FC¡S).ro scrvc ro larmcrs lur Pcoplc Bank ol Clina ncvcr considcrcd rlcsc linancial
insrirurions and in 1990 could closc rlcsc down rlis ropsy rcrvy is rural linancc lisrory. !n 1998 luncrioning ol FC¡s
rorally climinarcd (1sai, 2002a, p.1). By rlis closing down only opcrarivcs wcrc ++000 FCCs ar rlc rown slip lcvcl and
280000 ar villagc lcvcl and rlcsc arc rlc only sourccs approvcd lor rural linancc in Clina. 1o improvc rlc crcdir
pcrlormancc (Warson, 200S) ol rlcsc insrirurions Ccnrral lank ol inluscd \SS + lillions ro rccapiralizc rlcsc
insrirurions. 1lis magnirudc ol moncy inlusion is also onc ol rlc ways ro asscss rlc amounr ol NPAs in Clina. Ar rlis
sragc camc signilicanr rolc ol non govcrnmcnr organizarions (NGÒs), micro lionincc insrirurions (M¡!s) and scll lclp
AGRICLLTLRAL DEVELOPMEÞT IÞ IÞDIA AÞD CHIÞA: A COMPARATIVE STLDY
S3
groups (S!Gs)
Agricultural Tax Subsidics. Agricultural Labour andOthcr Social Factor
1) Agriculrural !ncomc. !n !ndia agriculrural incomc is nor raxallc lur in Clina ir is lur rax rarcs arc nor unilormrlcy
vary lromrcgion ro rcgion and also rlcrc arc cxcmprions in rlis sccror also. 1lcsc arc dcpcndcnr on rlc narurc ol
agriculrural land lromwlcrc incomc is likc lromlarrcn land or wlcn sizc ol agriculrural land is cxpandcd using
wasrcland crc.Also cxcmprions arc on rlrusr sccrors likc mullcrry liclds rca gardcns and also narural calamiry
losscs crc
2) Subsidics:
As srarcd carlicr clina docs nor givc sulsidics ro larmcrs jusr gcncral ro all lur sclccrivcly on sclccrcd crops wlicl
arc cxporrcd}imporrcd inClina
S) Labour: \nlikc !ndia wlcrcin ir is scarrcrcd ovcr six lakls villagcs in Clina ir is organizcd onc. So ir was dilliculr ro
organizc ar rlc parrcrn ol indusrrial lalour.Ònc rrcnd is rlcrc in lorl counrrics slilr ol lalour ro indusrrics wlicl is
morc lucrarivc
4) Misccllancous: Othcr social factors Mainly quality of lifc
!ndia is wcll known dcmocracy and largcsr dcmocracy in rlc World wlcrc in Clina ir is aurlorirarian rulc !n !ndia
cxccss ro inrcrncr numlcr ol ncws papcrs lrccdom ol spcccl in rlcsc do dcscrvc mcnrion rlis conrrasrs' rlc
monolirlic sysrcmin clina and surcly lilc is lcrrcr in !ndiaSo mucl so ir is said Clina cxccurcs morc pcoplc in a
wcck rlan!ndia cxccurcdsincc19+7( A Scn2011)
Farmcr's Suicidcs inIndia andChina
!r is onc ol rlc mosr csrallislcd paramcrcr ol lappincss}dcvclopmcnr ol a narion (lappincss indcx lor Clina is +9% and
!ndia is +0%) rlc mcnral lcalrl and rcvcrsc is ill lcalrl and rcsulr dcprcssion and linally cnding lilc mcans suicidc. So
mucl ol dcrails arc givcn alovc lor rural povcrry clcvarion}climinarion in lorl counrrics lur suicidcs arc going on
ar rapid pacc and incrcasc is rccordcd cvcry ycar. !r mcans somc dissarislacrion in rural !ndia and Clina or larmcrs pliglr
in lorl counrrics rarlcr rlcrc is agrarian crisis in lorl. According ro a rcporr in rlc !indu {an 22, 2010 rlc incrcasc in
suicidcs in !ndia is alarming, 1lc Clina Posr srarcs dcspirc cconomic dcvclopmcnr in cirics rwo our ol rlrcc !ndian srill
livc in rural !ndia and as many as 150000 larmcrs lavc commirrcd suicidcs during pasr dccadcs rlis dara rlcy quorc
lrom1ara !nsrirurc ol Social Scicnccs sourccs and is lascd on rlc ycar 2009. According ro anorlcr rcpor pullislcd in
lcadig daily 1lc 1clcgrapl ocr.7- 2010 in cvcry lall an our onc !ndian larmcr commirs suicidc Fcgarding Clina
according ro dcpury !calrl Minisrcr wlo srarcd 2 million Clincsc arrcmpr suicidc cacl ycar our ol wlicl 250000
succccdmajoriry is rlar womcnsuicidcs and wirl rlc usc ol roxic pcsricidcs
COÞCLLSIOÞ
As ol now lorl arc lasr dcvcloping cconomics in rlc world and also mosr populous counrrics and laving popularion
rcaclcd ar 1.S lillion and 1.2 lillion. Borl arc agrarian cconomics and rlcrclorc arc conccrncd alour rlc dcvclopmcnr
ol rlis sccror. Bur wlcn onc gocs rlrougl all rlc ligurcs prcscnrcd lcrc picrurc is nor vcry good. Ccrrainly Clina is
sranding nownumlcr rwo in rlc world alrcr \SA lur picrurc as prcscnrcd}sccn lcrc alour agriculrurc sccror linancc is
nor liglly promising rlougl producrion ligurc arc mucl lcrrcr rlan !ndia. Also agrarian disrrcss in lorl rlc
counrrics is vcry clcar lromrlc unalarcd suicidcs. Qualiry ol lilc is surcly lcrrcr in !NÐ!A. Sclccrivc sulsidics in !ndia is
alsoundcr considcrallc dclarc raxarion alsodrawing arrcnrionol our counrrymcn
HARPREET KALR SAÞDHL
S+
ACKÞOLEDGEMEÞT:
Aurlor is liglly rlanklul Prol. Mrs. Anira Gill lor consrrucrivc criricismand guidancc and lclplul discussion during rlc
prcpararionol rlis manuscripr.
REFEREÞCES AÞDÞOTES
Aiycr, Pallavi (2007) 'Agriculrurc. wlcrc !ndia and Clina srand', 1lc !indu, Scpr. 0S.
!varury, G(2006) '\sing 1cclnology roBuild !nclusivc ¡inancial Sysrcms', CGAP, ¡ocus Norc no. S2, {anuary.
Mcycr F (2007) 'Micro-linancc Scrviccs lor agriculrurc. Òpporrunirics and Clallcngcs'; Papcr lor rlc !nrcrnarional
conlcrcncc. Wlar Can Micro-linancc Conrrilurc ro Agriculrurc in Ðcvcloping Counrrics·, Paris, Ðcccmlcr +-6
(Plcnary Scssion1. !owCanMicro¡inancc Fcspondrorlc Nccds ol ¡armcrs·).
Muklcrjcc, \. (2010) '¡orcvcr Sruck ina Cyclc Ðclr and Ðcarl', 1lc 1clcgrapl, Òcrolcr 7.
Paril, S. G. (2009) 'Fcporr ol rlc ligl Powcrcd Commirrcc on Coopcrarivcs', Minisrry ol Agriculrurc Govcrnmcnr ol
!ndia. May. Norc. ¡arcsr numlcr ol commirrccs mcnrionis inrlis rcporr.
Scn, A. (2011) 'qualiry ol ¡ilc. !ndia \s Clina', ¡urllispacc, April 29.
Sarangi, \. C. (2010) '1ask ¡orcc on Crcdir Fclarcd !ssucs ol ¡armcrs', Sulmirrcd ro rlc minisrry ol agriculrurc
govcrnmcnr ol !ndia, {unc.
Singl Surjir and \ Sagar(200+) Agriculrurc crcdir in !ndia;Srarc ol !ndian larmcrs a Millinnium Srudy,Acadcmic
¡oundarionandMinisrry ol Agriculrurc.Govr ol !ndiaNcwÐclli
1sai, I. S. (2002a). Back-allcy lanking. Privarc cnrrcprcncurs inClina. !rlaca. Corncll \nivcrsiry Prcss.
1sai, ¡. ¡. (2002l) Cadrcs, rcmplc and lincagc insrirurions. 1lc Clina {ournal, +8, 1-27.
\N (\nircd Narions, 195+), Progrcss in ¡and Fclorms, Ncw York. Ðcparrmcnr ol ¡conomic and Social Allairs,
\nircd Narions.
\aidyanarlan, A. (2005) 'Fcvival ol Crcdir Coopcrarivc !nsrirurions', ¡clurary15. \iswanarlan S. (200+), '¡and ol
incqualirics' ¡ronrlinc, 21, Òcrolcr 9.
Warson, A. (200S) ¡inancing larmcrs. 1lc rclorm ol rural crcdir coopcrarivcs and provision ol linancial scrviccs ro
larmcrs. !n C. ¡indlay, A. Warson, ¡. Clcng, & Z. Gang (¡ds), Fural linancial markcrs in Clina (pp. 6S-88). Canlcrra.
Asia Pacilic Prcss ar 1lc Ausrralia Narional \nivcrsiry.
Wampllcr, B and Cccilc ¡apcnu (2002), ¡a micro-linancc Au scrvicc dc l'agriculrurc lamilialc. ¡xccurivc Summarylor
conalcrcncc lcld on {anuary 21-2+, 2002, Ðakar, Scncgal. Alraca}Cirad}C1A}MA¡}¡nda-Gral}!¡AÐ, Ccrisc.
¡rcncl}¡nglisl. ¡rcnclMinisrry ol ¡orcignAllairs, "Parrcnariars" Scrics (as quorcdinMorvanr-Foux, 2008).
World Ðcvclopmcnr rcporr, (2008) 'Agriculrurc lor Ðcvclopmcnr', 1lc World Bank, Waslingron, ÐC
AGRICLLTLRAL DEVELOPMEÞT IÞ IÞDIA AÞD CHIÞA: A COMPARATIVE STLDY
SS
doc_345997935.pdf
1lcrc arc scvcral commonalirics lcrwccn !ndia and Clina. lorl arc mosr populous counrrics ol rlc world and lorl arc
gcograplically locarcd in Asian conrincnr lur in rwo dillcrcnr divisions, i.c. Clina is in ¡asr-Asia wlilc !ndia is in Sourl
Asian rcgion. Ar onc rimc rlcy wcrc cquals in rcspccr ol lungcr and povcrry and scvcral orlcr siruarions. Borl arc
agrarian cconomics, lalor inrcnsivc and lasr dcvcloping cconomics ol rlc world and nor mucl cllccrcd ly on going
cconomic rcccssion as in rlc rcsr ol rlc world. Ònc rimc cquals arc nowon vcry dillcrcnr lcvcls in rcrmol dcvclopmcnr.
Now lclorc analyzing srrcngrl gaincd and wcakncsscs ol rlcsc rwo, wc would analyzc major dillcrcnccs as alovc wc
lavc givcn somc similarirics. 1lc polirical sysrcm in lorl is complcrcly dillcrcnr. !ndia is plural narion in many ways
wlcrc as clina is complcrcly dillcrcnr rypc rulc ir is liglly aurlorirarian onc .1lcsc socicral dillcrcnccs go a long way in
all rypc ol progrcss and dcvclopmcnrs ol a narion .!n rlc lollowing lincs wc analyzc all rlc lacrors sysrcmarically.
Primarily rlis srudy is aimcd ar rural cconomy}agriculrurc and purs in ro rlis sccror i.c. linancc and orlcr rclarcd
dcvclopmcnrs including inpurs likc sccds, ncwvaricrics ol rlcsc lcrrilizcrs, pcsricidcs, agriculrural land agriculrural lalor
crc. Wly spccial arrcnrion ro rlis sccror only rcason is simplc lorl arc liglly populous counrrics ol rlc world and lor
livcliloodol rural pcoplc lorlarc dcpcndcnr onagriculrurc only inslorr lorlarc agrariancconomics.
1o lcgin wirl wc slall lavc a look on lasic poinrs rclarcd ro agriculrurc producrion and rlcn rclcvanr
conrriluring cllorrs ro dcvclop rlis sccror in lorl rlc counrrics. Borl rlc counrrics alrcr laving rcalizcd pcoplc's nccds
and pasr lungcr and cvcn lamincs csrallislcd a srrong ncrwork ol Agriculrural \nivcrsirics and collcgcs and largc
numlcr ol cxrcnsion ccnrcrs lor laving maximumpossillc lood grains and orlcr carallcs ro mccr nccds ol rlcir largc
popularions. ¡vidcnrly rcscarclcs in rlcsc placcs ol cxccllcncc could dirccrly lc involvcd in land usc dcvclopmcnr ol ncw
varicrics ol sccds spccilic qualirics ol lcrrilizcrs usc almosr all rlc issuc rclarcd ro agriculrurc could lc solvcd} improvcd in
rlcsc placcs ol agriculrurc rcscarcl and lcarning. !n !ndia virrually cacl srarc is laving an agriculrural univcrsiry ar lcasr
and scvcral cxrcnsion ccnrcrs arraclcd ro ir rlcsc cllorrs cnd up wirl grccn rcvolurion way lack in scvcnrics and madc
!ndia scll rclianr ar lcasr in lood grains. ¡vcry dcvclopmcnr rcquircs linancc and irs sourccs lur lor agriculrurc and
acrivirics rclarcd ro ir !ndia las madc spccilic provisions. ¡vcn as ol roday according ro govcrnmcnr ol !ndia cllorrs and
prioririzarions ol sccrors, agriculrurc sccror is onc ol rlc prioriry arca and cacl lank is supposcd ro lcnd 1+ pcrccnr ro
rlis sccror ol rlc roral crcdir ro lc dislurscd lollowing ligurcs spcak ol rlcsc cllorrs. 1lc crcdir ro rlis sccror las lccn
incrcasing rallc-2 producrion is almosr ncar sraric and conrrilurion ro GÐP ol rlis sccror las lccn lalling ycar ly ycar
IÞTERÞATIOÞAL JOLRÞAL OF SOCIAL SCIEÞCES
& IÞTERDISCIPLIÞARY RESEARCH
\ol.1 No. 6, {unc 2012, !SSN 2277 S6S0
Onlinc Availablc at indianrcscarchjournals.com
AGRICLLTLRAL DEVELOPMEÞT IÞ IÞDIA
AÞD CHIÞA: A COMPARATIVE STLDY
HARPREET KALR SAÞDHL
Bcscerch Sch»/er, Dcpertmcnt »j Ec»n»mics, Penje|i Univcrsity, Petie/e.
ABSTRACT
!n rlis arriclc an arrcmpr las lccn madc ro draw a comparison lcrwccn agriculrurc ol rwo ncigllouring
counrrics !ndia and Clina. !ssucs rclarcd ro agriculrurc including linancc, land crc. lavc also lccn discusscd.
Mosr rclcvanr ro rlis sccror is insrirurional crcdir and posirion ol rlis sccror in lorl rlc counrics is crirically
cxamincd.
Kcywords: agriculrurc, lislcrics, dairy, land rclorms, insrirurional crcdir, co-opcrarivc lanking, agriculrural rax,
sulsidics.
+S
alrcr lilcralizarion and glolalizarion scc rlc dara givcn lclowscc rallc-1. So, ar rlis vcry placc dara rcllccrcd ro prcscnr
lood producrion sccnario ol lorl rlc counrrics. 1lc compararivc producrion ligurcs ol somc sclccrcd ircms !ndia vcrsus
Clina arc givcnlclowwliclarc lascd on(Pallvi Aycr's arriclc ol 2007) scc rallc. -S
Contribution of IndianfChincsc agriculturc scctor incomc to gross domcstic productivity (Tablc 1.)
Tablc 1. Sharc in Gross Domcstic Product (GDP in Pcr-ccnt)
Ycar India China
1980 S8.9 17.5
2000 2+.6 1+.9
200+ 22.0 15.2
2006 17.0 ---
2008 16.S 11.0
2009 16.1 10.6
Tablc 2. Flow of institutional crcdit to IndianfChincsc agriculturc scctor
Financial Institutional Crcdit
Ycar India(Rs incrorcs) China (Yuanintrillion)
2008-2009 2,87000 1.7(rlrougl FCCs)
2009-2010 S,25,000 ----
2010-2011 S,75000 ----
2011-2012 +,75000 ----
S»urcc -veri»us ennue/ |u4¡ct pr»visi»ns |cpt inln4ien|u4¡ct
!r is wcll undcrsroodClina is quirc closcdsysrcmsorlcsc rcccnr ligurcs arc nor availallc.
Comparison somc itcms production in India and China of
Tablc 3
ProductionfHcctarc India China
Ficc S0S+Ig 62SSIg
Wlcar 2688Ig +155Ig
Òil Sccds 909Ig 1778Ig
¡ruirs & \cgcrallcs 55m1 60m1
¡xacr arallc land in !ndia is 161 m!ccrarcs and Clina 1S0 m!ccrarcs. !r is ro lc poinrcd our avcragc larmsizc in
!ndia is largcr rlan Clina ir is 1.+ !ccrarcs lor !ndia and 0.+ !ccrarcs (ol coursc land rclormwcrc carricd in Clina in
Mao's rimc and drasric land rclorms in !ndia wcrc ncvcr carricd cxccpr Icrala and Wcsr Bcngal wlcrc communisrs rulc is
rlcrc ovcr rlc pasr scvcral dccadcs rlis slall lc discusscd scpararcly) orlcr rwo mosr rclcvanr arcas ro lc prcscnrcd lcrc
arc lloriculrurc and poulrry wlicl arc imporranr scgmcnrs ol agriculrurc}rural livclilood. 1lougl lorl counrrics srarrcd
lloriculrurc in 1990 Clina is laving ovcr 20000 !ccrarcs undcr lloriculrurc wlcrcas !ndia is laving only 2000-S000
lccrarcs uscd in rlis acriviry. !n casc ol poulrry also !ndia is lar lclind Clina rlougl somcrimcs lack comparison
HARPREET KALR SAÞDHL
+6
slowcd ir rlar !ndia is sixrl largcsr produccr lclind \S, Brazil, ¡\, and Clina (¡conomic Fcscarcl Scrvicc
\SÐA).clcarly lclind Clina !r is also quirc rclcvanr ro prcscnr lcrc posirion ol lorl rlc counrrics in rcgard ro lislcrics
and milk producrionwliclarc lorlvcry imporranr supporr scgmcnrs ol agriculrurisrs in!ndia and Clina
As lor as roral milk producrion is conccrncd !ndia is rlc liglcsr milk produccr in rlc world and \S is ncxr ro ir lur
wlcn milk is considcrcd pcr animal ir is mucl lowcr ro \S ir is almosr 1}10 only nccdlcss ro mcnrion numlcr ol animals
is rlcc rimcs rlar ol Amcrica. !ndia produccd milk in 2001,8+million rons and would lavc rcaclcd 112 million rons in
2010 wlcrcas Clina ar+S.6 million rons only .!n casc ol lislcrics !ndia srands ar Srd placc in rlc world in lorl rlcsc arcas
rlcrc is a largc scopc ol improvcmcnrs}cxpansions parricularly in milk producrion pcr animal. Fcgarding lullalo milk
Clina is lar lclind rarlcr is alrcr Pakisran. Clina is parricularly wcll known lor soya milk wlicl sccms ro lavc originarcd
lromClina only.
Also, rlcrc is vasr scopc in lislcrics dcvclopmcnrs and rlcsc arc rwo major lruirlul sccrors ol divcrsilicarion ol rural
lalor}agriculrurc in !ndia. Nor only rlis il rlcsc rwo sccrors arc arrcndcd ar rlc prioriry ir can gcncrarc immcnsc rural
cmploymcnr and il producrs lascd on rlcsc rwo sccrors arc rcscarclcd}dcvclopcd ar inrcrnarional lcvcl ir can lcad ro rural
indusrrializarionrlus rural cmploymcnr gcncrarion
!ncrcasc in agriculrurc producrion lavc dccrcascd in !ndia lrom 2.7% ro 2.5% (2005-2007) wlcrc as Clina las
lccn srcadily growing lrom+-5% ovcr rlc lasr 15 ycars. !r is vcry imporranr lcrc irscll ro srarc rlar arallc land in lorl
counrrics is almosr samc (ol coursc roral arca ol Clina is ncarly rlrcc rimcs rlar ol !ndia) Nowro rarionalizc somc lacrors
wc rakc casc ol in purs lor rlis sccror. !n Clina avcragc yicld is almosr doullc rlar ol !ndia and lcrrilizcrs usc is also
doullc rlar ol !ndia. Clina alonc uscs lcrrilizcrs 28% ol rlc cnrirc world consumprion as pcr ligurcs pullislcd ly ¡ood
and Agriculrurc Òrganizarion (¡AÒ) lor somc comparison. !n orlcr sccrors roo lacrs arc liglly amazing in all orlcr
arcas Clina is lcading and !ndia is way lclind mosr promincnr lcing lorriculrurc wlcrc i.c. lruirs and vcgcrallcs. Clina
succcss is lurrlcr indivcrsilicarionol agriculrurc via animal luslandry and lislcrics crc.
So ir is narural ro analyzc wlar lappcncd wirl all rlcsc cllorrs in agriculrurc sccror and incoming lincs wc slall rry ro
clalorarc on dillcrcnccs and causcs lor rlar. So ir is narural ro analyzc wlar lappcncd wirl all rlcsc cllorrs in agriculrurc
sccror and incoming lincs wc slall rry roclalorarc ondillcrcnccs and causcs lor rlar.
1lc lall ol agriculrurc conrrilurion ro GÐP srarrcd in 1990-1991 wirl rlc lilcralizarion proccss and is likcly ro lall
lurrlcr ro 10 - 15%.!r was lur narural orlcr conrriluring sccrors ro producriviry}cconomy lad morc loosr in rlc givcn
siruarions rarlcr gaincd morc spccd ovcr agriculrurc sccror .1lis rrcnd rlougl looks disrurling lur was likcly ro lappcn
in rlc givcn circumsranccs and cconomic rclorms wlicl wcrc iniriarcd in 1991 onwards wlcrc as rclorms in cconomy in
Clina srarrcd lromÐcng pcriod1978 mucl carlicr rlan !ndia. As !ndian govcrnmcnr laid cmplasis on agriculrurc rimc
and again and crcdir ro rlis ir las lccn doullcd rlcn wlar lappcncd ro agriculrurc producrion ir is almosr sraric. !ndian
agriculrurc siruarion las lccn locus and conccrn ol various livc ycar plans clcvcnrl livc ycar plan rricd lor improving rlc
posirion wlicl did nor lappcn and is admirrcd ly planning commission rlar agriculrurc growrl is almosr slowing
down(Goi 2005) lccausc ol pullic sccror lunds }crcdir non availaliliry lur as sucl crcdir is doullcd as onc sccs lromrlc
rallc-2. Also lanking sccror( wlicl arc ourlcrs lor pullic lunds) wlcrcin agriculrurc is sripularcd prioriry arc lor crcdir
and now in rcccnr ycars cmplasis on linancial inclusion i.c. FB! slogn is lank lor all and lcncc cxccss ro crcdir wirl
cmplasis on ir slould go ro poorcsr ol rlc poor slould lavc rcacl ro ir. Now ro scc low crcdir is gonc during somc
sclccrcdycars 1990ro2008 scc rallc -+
¡romrlcsc ligurcs ir is vcry clcar lcrwccn1990-2008 crcdir supplicd ly rural lranclcs is dccrcascd in casc ol mcrros
and orlcrs ir is incrcascd clcar conclusion lromrlcsc ligurcs is agriculrurc crcdir is nor going dirccrly ro agriculrurc lur
ro irs rclarcd acrivirics as pcr lroadcncd dclinirion lor larming acrivirics as modilicd ly FB!.!nspirc ol rlcsc cllorrs
rcsulrs on producrion sidc lavc ncvcr lccn liglly visillc rarlcr in !ndia larming lavc lccn non arrracrivc and also gap
AGRICLLTLRAL DEVELOPMEÞT IÞ IÞDIA AÞD CHIÞA: A COMPARATIVE STLDY
+7
lcrwccn rural and urlan lavc lccn widcning Anorlcr rcason could lc sulsidics givcn ro larmcrs lor lis purposc onc
srarcmcnr is rcproduccd lcrc 'Pullic invcsrmcnr on agriculrurc in counrrics likc !ndia is lcavily skcwcd rowards
providing sulsidics rarlcr rlan invcsrmcnrs.' !n lacr, sulsidcs arc morc rlan lour rimcs rlar ol pullic invcsrmcnrs in
agriculrurc (WÐF, 2008)
Tablc 4.
S»urcc : Stetistice/ rcturns »j schc4u/c4c»mmcrcie/ |en|s in ln4ie
Nor only rlis rlcrc arc scvcral orlcr lacrors also risk ol rccovcrics and ro mccr rlc lixcd rargcrs lanks lind salc ro
look undcr rural inlrasrrucrurc dcvclopmcnr lund F!С.Bur Govr. Òl !ndia always rricd ro scc llow ol gocs ro
agriculrurc. Clina las lccn consranrly growing in agriculrurc sccror ly +-5%during rlc pasr lilrccn ycars lcrc in rlis
arriclc rlcsc slall also lc analyzcd. ¡mplasis on agriculrurc as wcll as irs poor growrl is dirccrly admirrcd ly primc
minisrcr ol !ndia in 2009 (lor dcrail scc cconomic rimcs 2009, 10rl Augusr) anorlcr conccrn is rlc rarc ol growrl ol
agriculrurc is vcry slow in comparison ro incrcasc in popularion according ro onc csrimarc (\N rcporr 1998) !ndia
would surpass Clina ly 20S0 ar rlc rarc wirl wlicl !ndian popularion is incrcasing. 1lis ycar !ndia popularion srands
ar 1.21 lillion and Clina 1.SS lillion. 1lis rcsulr is ly drasrically adopring lamily planning rulcs rlrcc dccadcs ago
(1978) wlcrcas !ndia adoprcdlamily planning (1965) lur nor vcry rigidly.
Òn papcr so mucl ol cllorr is rlcrc lor crcdir dclivcry lur docs nor sccmro lc vcry lruirlul as indicarivc lromrlc
rallc -5 wlicl slows rlc picrurc ol 27 ycars and invcsrmcnr in agriculrurc in crorcs ly govcrnmcnr ol !ndia 1lis picrurc
clcar picrurc ol sccrors rclarcd ro ir likc. Slarc in gross domcsric producriviry gross capiral lormarion ol !ndia ly
agriculrural sccror. 1lis lalancc slccr is always dcsirallc lor any cvaluarioncrircria
Tablc 5. Invcstmcnt in Agriculturc (Rs in Crorc at 1ººº-2000 Pricc)
S»urcc: Neti»ne/ Acc»unts Stetistics 2008 (Ncw Scrics), Ccntre/ Stetistice/ Or¡enieeti»n, Ministry »j Stetistics en4
Pr»¡remmc lmp/cmcnteti»n, Ncw Dc/hi.
HARPREET KALR SAÞDHL
+8
Agriculturc Rcscarch inIndia andChina
!crc, in rlis sccrion aurlors wisl ro rarionalizc wlar ails}prollcmro crcdir lor agriculrurc in lorl counrrics. Apparcnrly
!ndia madc cllorrs in cconomic rclorms lur no rclorms in rural sccror as a rcsulr rlc rural sccror las lccn lccoming lcss
lucrarivc. So mucl invcsrmcnr lur growrl rarc ol agriculrurc lavc lccn consranrly lclling down, in 200+-2005 ir was
+.5 pcrccnr in 2008-2009 ir is down ro 1.6 %. So our agriculrurc producrion las rcaclcd ncar sarurarion poinr. !r is
imporranr ro mcnrion lcrc 67% ol corron B1 and 100% paddy is lrommosr ncwvaricrics dcvclopcd ly Clina and rlis
is nor lappcning in casc ol !ndia Anorlcr major dillcrcncc is privarc parriciparion in rlis aspccr also in !ndia rlis viral
rcscarcl lack is wlolly on govcrnmcnr moncy. As pcr rcliallc ligurcs !ndia is laving largcsr numlcr ol Govr. paid
agriculrural scicnrisrs in rlc world i.c. S0,000 ir's also wcll known 90% ol ludgcr ol rlc !ndian agriculrurc \nivcrsirics
and collcgcs gocs inro gocs inro rlcir salary componcnr rypical casc is rlar ol Punjal Agriculrurc. \nivcrsiry. ¡udliana.
Agriculrurc producrion ol !ndia roday is is jusr rlar wlar Clina aclicvcd way lack in 1980 rlis dirccrly purs a qucsrion
mark on agriculrural rcscarcl and indicarcs rlar rlcrc is no good scicnrilic lackup. !n conrrasr Clina is invcsring in F &
Ð S 1.5 lillions pcr ycar (2005). 1lis cnrirc F&Ð ludgcr gocs inro rcscarcl componcnr; salarics and ovcr lcads arc
carncd ly rcscarclcrs ly involving acrual uscrs in rlc lcginning ol rlcir rcscarcl work and lavc morc rlan 1000 rcscarcl
ccnrcrs. !r is also worrl mcnrioning scvcral rcscarcl srall is likc privarc and arc lircd}cmploycd on conrracr lascs. \nlikc
!ndia Clina docs nor cxrcnd any rypc ol sulsidics ro irs larmcrs il rlcsc arc givcn rlcsc arc casc lascd and nor gcncral ro
all wlcrlcr dcscrvcd or nor ly rlc rcccivcr ,rlis wcck poinr wc poinrcd in carlicr lincs also.1lis vcry slow}nor visillc
agriculrural rcscarcl makcs !ndian agriculrurc as a non arrracrivc acriviry undcr prcvailing siruarion cvcn rlougl crcdir
and scvcral orlcr inccnrivcs arc givcn ro larmcrs wlicl is in slarp conrrasr ro Clina and also arc indicarivc ol dillcrcnr
acrual posirion.. Òrlcr vcry imporranr lacror is land availaliliry ro larmcrs lcrc is widc dillcrcncc lcrwccn rlc rwo
counrrics. So liglly appropriarc would ro lc discuss lcrc land rclorms ly lorl counrrics Nowkcy qucsrion is onc rimc
cquals alour 25 ycars ago lowClina succccdcd in rlis agriculrurc sccror so vcry imporranr ro discuss lcrc land rclorms
wlcrc clina did drasrically
Landrcforms inIndia andChina
!n !ndia land rclorms las lccn primary conccrn cvcn lclorc indcpcndcncc rlc congrcss parry promiscd land ro rlc rillcr
and was a conccrn ro pcasanrry World land rclorms wcrc iniriarcd in mid lilry(\N 195+)Broadly land policy ol lrcc
!ndia canlc sccnlivc plascs
1 Alolirionol inrcrmcdiarrics and rcnancy clangcs
2 ¡and cciling lcgislarions ly various srarc govcrnmcnrs
S !ncrcasing rlc culrivarallc ly lringing morc landundcr culrivarion
+ Soil and warcr conscrvariondcscrr dcvclopmcnr wasrc landdcvclopmcnr crc.
1lc lasr plasc is rlc currcnr plasc ir conccrns rlc rclcvancc ol land cciling lcgislarions crc 1lc currcnr plasc is in a
way conccrnwlar acrually las lappcncdsolor and lacunas lclr ar somc placcs incoming lincs.
!mmcdiarcly alrcr indcpcndcncc congrcss camc our as ruling parry on only rwo occasions orlcr parrics comlinc
was in powcr likc {AN1A parry and NÐA lcad govcrnmcnrs Always land rclorms agcnda was lollowcd lur wirlour any
major succcss. 1o cmplasizc social claracrcr ol congrcss lcad govcrnmcnrs cvcn consrirurion ol !ndia was amcndcd
during cmcrgcncy pcriod rlrougl +2ndAmcndmcnr and rcrm socialisr was addcd ro rlc dclinirion ol rcpullic. ¡and
rclorms agcnda was lollowcd ro scc landlcss lamilics do lavc acccss ro land lor lorming crc .various srarc govcrnmcnrs
passcd lcgislarions on land cciling crc and lor rcdisrrilurion ol land ro landlcss pcoplc. As pcr union rural dcvclopmcnr
minisrry rcporr upro S0sr Scprcmlcr 1998 and lccausc ol various land cciling laws in srarcs ol !ndia, availallc land rlus
was 7S.7+ lakl acrcs in rlc wlolc counrry. Òur ol rlis roral land availallc wirl rlc union ol !ndia wlicl is in posscssion is
AGRICLLTLRAL DEVELOPMEÞT IÞ IÞDIA AÞD CHIÞA: A COMPARATIVE STLDY
+9
65.11 lakl acrcs our ol rlis only so lar 5S.05 lkal acrcs arc rcdisrrilurcd ro 55.S7 lakl lcncliciarics. 1lis ligurc wlcn
onc sccs rlc wlolc counrry sidc is vcry small rlis sccms ro lc somc prollcms during cnacring land cciling laws in various
srarcs likc 1amil Nadu (lor dcrail scc S. \iswanarlan, ¡ronrlinc, vol 21, Òcr. 9, 200+). Prcscnr aurlors do lccl similar is
consrrainr in orlcr srarcs wlcrc land cciling laws wcrc pur in placc may lc Icrala and Wcsr Bcngal wlcrc communisr
rulc is rlcrc lor rlc lasr scvcral dccadcs.
!n Clina, a scrics ol land rclorms wcrc iniriarcd and implcmcnrcd wirl lorcc. ¡and laws wcrc rclormcd in rlc carly
1950s and land was conliscarcd ly rlc govcrnmcnr in onc go and rcdisrrilurcd ro poor pcasanrs on long lcasc lascs and
ir was pcriod ol Mao 1sc-rong rcgimc. Nor only rlis in mosr ol rlc cirics rlis is rlc posirion. Nowlromrlc pollcd land ar
rlc lcvcl ol villagc lcad cacl lousclold lavc acccss ro lavc land lor agriculrurc on long lcasc lur rlis land can nor lc sold
in opcn markcr. !n cirics also salc and purclasc can nor lc donc likc rlc !ndian casc. So cnormous pricc risc is nor
possillc. !r musr lc mcnrioncd lcrc lor cxprcssion sakc also Clina is closcd rypc sysrcm and cvcryrling is nor liglly
rransparcnr and ir may nor lc irrclcvanr ro mcnrion lcrc according ro inrcrnarional srandards lor corruprionClina (S.S)
and !ndia (S) arc almosr ar rlc samc lcvcl. As said in rlcsc lincs rlc villagc lcad wlo is laving poolcd land in rurn is
connccrcd wirl rlc srarc and ccnrral govcrnmcnr ruling communc sysrcm. 1lcsc rclorms lavc dramaric cllccr on
agriculrurc inClina lur incasc ol !ndia rlcrc is novisillc cllccr inagriculrurc producrioncrc.
Rural financial systcm inIndia andChina (Particularly Agricultural Financc)
!n prcvious pagcs wc lavc amply discusscd ourpurs rclarcd ro rural sccror primarily agriculrurc rlrougl vasr cllorrs
on linancc availaliliry ro nccdy larmcrs dcrails lcrc givcn rcsulranr in carlicr pagcs Ònc can rcadily undcrsrand
rural}agriculrural linancc arc synamous ro cacl orlcr so rlcy arc onc and samc rling ro lcgin wirl wc dcscrilc lirsr
!ndian Sysrcm. Ònc can say conlidcnrly ar lcasr lcrc !ndia is lcrrcr rlan Clina rlis is wlar rcccnrly our PM said in
rclarion ro lanking sccror in !ndia . Wc arc lcrc primarily conccrncd wirl agriculrural linancc and rlis is quirc dillcrcnr
rlan orlcr cconomic sccrors}linnacc in many ways Acrually agriculrurc is in rural arcas somcrimcs rcmorc oncs wirl
vcry poor inlrasrrucrurc no roads no rransporr sysrcm(!varuy2006) and lorrowcrs arc ncirlcr vcry nor lircrarcs1lc
agriculrurc lor wlicl linancc is nccdcd crcrnaliry is also liglly risky and dcpcndcnr on many lacrors likc wlcrlcr and
many orlcr scasonal lacrors rains drouglrs crc !n rlis volarilc siruarion only lcw larmcrs can lurnisl granrcc crc.1lcsc
lacrors ncccssirarc spccial arrangcmcnr lor rlis larming communiry ic rural lousclolds(Wampllcr and ¡apanu.2006)
!ndian rural linancial sysrcmcspccially agriculrurc rclarcd, las morc rlan ciglr dccadcs ol lisrory. Wlilc cxamining
ir, Sir MalcolmÐarling srarcd in 1925, "!ndian pcasanr is lorn in dclr, livcs in dclr and dics in dclr". 1lis srarcmcnr
alour larmcr's indclrcdncss apparcnrly srays cvcn nowin !ndia. 1lis is cvidcnr lromlarmcr suicidcs lromrimc ro rimc
and as liglliglrcd ly norcd !ndian cconomisrs also. 1o incrcasc insrirurional crcdir ro agriculrurc scvcral cllorrs arc
madc ly govcrnmcnr ir is rruc lor Clina also lur muslrooming ol privarc moncy lcndcrs arc srill rlcrc in lorl
counrrics
Fural ¡inancial Sysrcm is lroadly dividcd in rwo scgmcnrs- insrirurional crcdir and non insrirurional crcdir .1lc
larrcr compriscs ol moncy lcndcrs, land lords, rradcrs and commission agcnrs(Arrliyas) clarging inrcrcsr according ro
rlcir pcrsonal wlims in conrrasr ro insrirurional oncs wlcrc inrcrcsr rarc is as pcr govr. lixarions. !nsrirurional crcdir
providcrs arc Co-opcrarivc Banks compriscs ol Primary Agriculrural Crcdir Socicrics (PACS) laving alour alovc onc
lakl lranclcs in !ndia carcring ro rlc agriculrural nccds ol morc six lakls villagcs in rlis way rlcrc is onc primary
coopcrarivc socicry in proximiry ro rlcc or lour villagcs. !n rlis ir sccms ro lc cxccllcnr ncr work lor mccring crcdir ol
larmcrs. 1lcrc arc alour 1SS Fcgional Fural Banks (FFB) wirl morc rlan S0,000 lranclcs wlcrcas numlcr ol
sclcdulc commcrcial Banks is 27 laving lranclcs alour S1,796 as on S0rl {unc 2009 Bur crcdir dclivcry ro larmcrs is
srill nor smoorlly going. 1lc srrucrurc in !ndian coopcrarivcs is cmplcxcd ly various srarc govcrnmcnr laws wlicl arc
HARPREET KALR SAÞDHL
S0
dillcrcnr in cacl and cvcry srarc and ro rccrily rlcsc prollcms and lor smoorl dclivcry ol crcdir ro agriculrurc largc
numlcr ol commirrccs lavc lccn consrirurcd larcsr lcing \aidaynarlan commirrcc. A complcrc lisrory ol !ndian
coopcrarivcs can nor lc discusscd lcrc lccausc ol spacc limirarion lro complcrc srory is prcscnrcd in a lricl lisrory parr
ol Paril's rcporr (Paril S. G., 2009). 1lc wlolc idca las lccn ro incrcasc rlc llowol insrirurional crcdir lor somc succcss
scc rallc lclowand ir is lromrlc rcporr lol larcsr rcporr( Sarangi 2010)
Rcport of thc Task Forcc on Crcdit Rclatcd Issucs of Farmcrs
Tablc ó
Numlcr ol Òlliccs ol SclcdulcdCommcrcial Banks in!ndia
March Rural Scmi Lrban Mctropolitan Total Population
-Lrban pcr officc(in'000)
1969 1,++S S,SS7 1,911 1,+96 8,187 65
1970 +,817 +,+01 2,50+ 1,900 1S,622 +1
1975 6,807 5,598 S,+89 2,8S6 18,7S0 S2
1980 15,105 8,122 5,178 +,01+ S2,+19 20
1985 S0,185 9,816 6,578 +,806 51,S85 1+
1990 S+,791 11,S2+ 8,0+2 5,595 59,752 1+
1995 SS,00+ 1S,S+1 8,868 7,15+ 62,S67 15
2000 S2,7S+ 1+,+07 10,052 8,219 65,+12 15
2005 S2,082 15,+0S 11,500 9,S70 68,S55 16
2007 S0,551 16,S61 12,970 11,957 71,8S9 15
2008 S1,076 17,675 1+,S91 12,908 76,050 15
N»tc: Detej»r 1969 rc/etc t» cn4-]unc.
S»urcc: Bcp»rt »nCurrcncy en4Finencc 2006-08, BBl; j»r 2008 http://r|i.»r¡.in(ecccssc4»n22 ]unc 2010).
1lis rallc givcs clcar picrurc ol lranclcs sccror wisc rural urlan crc. Sixry pcrccnr ol rural crcdir nccds arc mcr
rlrougl rlcsc insrirurions. 1lc primc oljccrivcs ol Co-opcrarivc Banks and FFB's arc ro mccr rlc crcdir nccd ol
larmcrs and savc larmcrs lrom rlc cxploirarion in rlc lands ol moncy lcndcrs. !r is worrl mcnrioning lcrc rlar lorry
pcrccnr ol rural crcdir nccds arc lullillcd lrom non insrirurional sourccs Govr. ol !ndia las rakcs many iniriarivcs ro
improvc rlc crcdir dclivcry ro larmcrs inrcnding rlar crcdir slould llowro rlc poorcsr ol rlc poor wlicl did nor sccmro
lappcn. ¡rom rimc ro rimc Govr. consrirurcd various commirrccs ro look inro rlc pcrlormancc and issucs and
rccommcnd ways ro lullill rlc purposc lor wlicl rlcy arc consrirurcd. \yas Commirrcc rccommcndcd appropriarc
amalgamarion ol rlcsc FFB's wirl rlcir parcnr commcrcial lanks. 1lis amalgamarion proccss wlcn iniriarcd rcduccd
non pcrlorming asscrs (NPAs) ol rlcsc lanks. 1lis widcr ncrwork lor inruirional crcdir did dccrccs rlc rolc ol moncy
lcndcrsovcr50ycars pcriod upro2001 (Singl and sagcr 200+) lur rcccnrly rask lorcc undcr rlc clairmanslip ol Sarangi
callcd Sarangi commirrcc rcporr (\C Sarangi 2010) slows growrl ol non inruirional crcdir lcyond any imaginarion
.So nowir is liglly rclcvanr ro prcscnr inruirional crcdir ro agriculrurc via dillcrcnr inruirions likc coopcrarivcs FFBS
and commcrcial lanks and lollowing rallc slows rlis picrurc
AGRICLLTLRAL DEVELOPMEÞT IÞ IÞDIA AÞD CHIÞA: A COMPARATIVE STLDY
S1
Tablc 7
Institutional Crcdit to Agriculturc (Rs. million)
N»tc: Up t» 1990-91 BBBs enc»mmcrcie/ |en|s erc c/u||c4.
S»urcc: Veri»us issucs »j Ec»n»mic Survcy en4 NABABD. 1hc |en| stejj in rure/ erces erc n»t pr»pcr/y treinc4/ ecqueintc4 with vi//e¡c /ijc
pr»pcr treinin¡/»ricnteti»n is ncccssery et /cest j»r c»»pcretivc |en|s this wes »nc wcc|ncss p»intc4 |y »nc c»mmittcc c»nstitutc4 |y ln4ien
G»vcrnmcnt.
¡or lurrlcr simplilicarion ol rural crcdir and savc rimc Iisaan Crcdir Card (ICC) wcrc inrroduccd in 1998 ICC
sccms ro lc mosr cllccrivc crcdir dclivcry sysrcmro agriculrurc and ly cnd marcl 2009 8+.6 million cascs wcrc issucd.
1lcsc wcrc inrroduccd as sulsrirurc ol crop loans (rakavi) and ro savc rimc lur rlcsc arc ycr ro yicld rlc liglly visillc
rcsulrs in rlc counrry rlougl our. Bccausc ol awarcncss or orlcrwisc numlcr ol ICCs in Punjal and !aryana is quirc
good as in rlc wlolc !ndian conrcxr. As pcr our own cxpcricncc and inrcracrion ar villagc lcvcl ICCs ar rlis lcvcl arc ycr
ro lccomc common and popular. Òn linancial inclusion FB! slogan is "lank lor all" rlougl accounr loldcrs in !ndia arc
only 50%, ir is lopcd "lank lor all" rargcr slall lc lullillcd in Punjal may lc in rlc lormol ICCs. Similarly, Scll lclp
group sclcmc (2008-2009) also lclps in rcducing dclr lurdcn ol rural poor larmcrs rlis sclcmc includcd microlinancc
also(Mcyr F, 2007)
CHIÞA
Pcoplc's rcpullic ol Clina (PFC) lavc madc considcrallc cllorr ro rclormlanking sccror and ir is alour scvcnry ycars
ago. !n conrrasr !ndian lanking sysrcm is vcry old rarlcr lcgacy ol Brirsl rulc. 1lougl auronomy ol rlc srarc owncd
lanks in crcdir managcmcnr is incrcascd also supcrvision crc. No doulr good cllorrs arc madc lur srill in lanking sccror
HARPREET KALR SAÞDHL
S2
in Clina grarcr rclorms arc srill wairing. 1lc major prollcm is incrcasc non-pcrlorming asscrs and mosrly rlcsc arc
lccausc ol pullic sccror undcrrakings (PS\s) and rlcsc arc morc rlan S ¡akls clcarly, rlcrc can nor lc any visillc
rclorm in lanking sccror as long as rclorms arc nor carricd in PS\s . Bclorc going ro agriculrurc linancial srrucrurc
aurlors lccl rclcvanr ro prcscnr gcncral lanking sccror. Clincsc lanking srrucrurc srarrcd wirl Pcoplcs Bank ol Clina
(PBC) as rlc ccnrral lank laving rlrcc policy lanks namcly Srarc Ðcvclopmcnr Bank ol Clina (SÐBC).1lc srrucrurc is
as undcr as onc sccs lromrlc lclowgivcn picrurc rlcrc sccms ro lc cnougl ncrworking ol linancial ourlcrs lur sysrcmol
loan guaranry}rccovcraliliry is widcly dillcrcnr. As in casc ol !ndia cacl lorrowcr lavc cirlcr landcd propcrry or
orlcrwisc ro slowro rlc lank lis capaciry ol rcrurning crcdir. !n casc ol Clina wlolc land is poolcd ar rlc lcvcl ol villagc
lcad.
!mmcdiarcly alrcr rlc lormarion ol rlc Pcoplcs Fcpullic ol Clina rlc Clincsc communisrs lanncd all sorr ol
privarc moncy lcnding including pawn lrokcring and orlcr rypc ol linancial lcnding (!asio1971) Clina csrallislcd
rural crcdir coopcrarivcs(FCC) lur vasrly dillcrcnr lrom!ndian coopcrarivcs wlicl wcrc lcgacy lromBririsl rulc . \cry
larc in1970rlcy srarrcd grass roor lanking luncrions.
Bccausc ol polirical modc, ollicial dara on Clina lank indusrry is liglly skcrcly lur indcpcndcnr analysis indicarcs
in Clina S0-+0%. Òl roral loans arc lad loans ic non pcrlorming loans. Bur moncy in circularion is doullc rlan !ndia
wlicl mcans Clincsc savc morc moncy so ccrrainly !ndian lanks lavc smallcr amounr in circularion. So in conclusion
!ndia is laving mucl smallcr linancial sysrcmrlan Clina. Wlilc drawing comparison ir can lc salcly rcaclcd ar !ndia is
laving srrongcr and Clina is laving liggcr linancial sysrcm.Givcn lclowarc dcvclopmcnrs ol Clina s lanking sysrcm
1o our knowlcdgc scpararc lank likc Narional Bank ol Agriculrurc and Fural Ðcvclopmcnr (NABAFÐ 198S) is srill
nor rlcrc il ar all ir was lormcd and dissolvcd many rimcs. Clina did dcvclop rural crcdir coopcrarivcs(FCCS) lur nor on
rlc parrcrn ol !ndian sysrcmwlicl was dcvclopcd during Bririsl rulc rcally ol rlc rypc cxisring ar rlc lcsr possillc way
in rlc World in cxacr mcaning ir was ol rlc co-opcrarivc rypc in rcal; scnsc wirl rlc moncy poolcd lromrlc slarc loldcrs
and rlcir involvcmcnr in ir. 1lc !ndian coopcrarivcs lavc wirncsscd massivc clangcs largc no. ol commirrccs lookcd
inro rlcsc lrom rimc ro rimc larcsr dcvclopmcnr lcing as ol now a consrirurional amcndmcnr lill is pcnding lclorc
parliamcnr wlicl is ro lc rakcn up soon (dcrailcs arc carily pragrapls) 1lc FFCS in Clina arc sorr ol liscal insrirurions
rlrougl wlicl govcrnmcnr gocs ro rural Clincsc!n1980 minisrry ol agriculrurc csrallislcd a ncr work ol rural
coopcrarivc loundarions(FC¡S).ro scrvc ro larmcrs lur Pcoplc Bank ol Clina ncvcr considcrcd rlcsc linancial
insrirurions and in 1990 could closc rlcsc down rlis ropsy rcrvy is rural linancc lisrory. !n 1998 luncrioning ol FC¡s
rorally climinarcd (1sai, 2002a, p.1). By rlis closing down only opcrarivcs wcrc ++000 FCCs ar rlc rown slip lcvcl and
280000 ar villagc lcvcl and rlcsc arc rlc only sourccs approvcd lor rural linancc in Clina. 1o improvc rlc crcdir
pcrlormancc (Warson, 200S) ol rlcsc insrirurions Ccnrral lank ol inluscd \SS + lillions ro rccapiralizc rlcsc
insrirurions. 1lis magnirudc ol moncy inlusion is also onc ol rlc ways ro asscss rlc amounr ol NPAs in Clina. Ar rlis
sragc camc signilicanr rolc ol non govcrnmcnr organizarions (NGÒs), micro lionincc insrirurions (M¡!s) and scll lclp
AGRICLLTLRAL DEVELOPMEÞT IÞ IÞDIA AÞD CHIÞA: A COMPARATIVE STLDY
S3
groups (S!Gs)
Agricultural Tax Subsidics. Agricultural Labour andOthcr Social Factor
1) Agriculrural !ncomc. !n !ndia agriculrural incomc is nor raxallc lur in Clina ir is lur rax rarcs arc nor unilormrlcy
vary lromrcgion ro rcgion and also rlcrc arc cxcmprions in rlis sccror also. 1lcsc arc dcpcndcnr on rlc narurc ol
agriculrural land lromwlcrc incomc is likc lromlarrcn land or wlcn sizc ol agriculrural land is cxpandcd using
wasrcland crc.Also cxcmprions arc on rlrusr sccrors likc mullcrry liclds rca gardcns and also narural calamiry
losscs crc
2) Subsidics:
As srarcd carlicr clina docs nor givc sulsidics ro larmcrs jusr gcncral ro all lur sclccrivcly on sclccrcd crops wlicl
arc cxporrcd}imporrcd inClina
S) Labour: \nlikc !ndia wlcrcin ir is scarrcrcd ovcr six lakls villagcs in Clina ir is organizcd onc. So ir was dilliculr ro
organizc ar rlc parrcrn ol indusrrial lalour.Ònc rrcnd is rlcrc in lorl counrrics slilr ol lalour ro indusrrics wlicl is
morc lucrarivc
4) Misccllancous: Othcr social factors Mainly quality of lifc
!ndia is wcll known dcmocracy and largcsr dcmocracy in rlc World wlcrc in Clina ir is aurlorirarian rulc !n !ndia
cxccss ro inrcrncr numlcr ol ncws papcrs lrccdom ol spcccl in rlcsc do dcscrvc mcnrion rlis conrrasrs' rlc
monolirlic sysrcmin clina and surcly lilc is lcrrcr in !ndiaSo mucl so ir is said Clina cxccurcs morc pcoplc in a
wcck rlan!ndia cxccurcdsincc19+7( A Scn2011)
Farmcr's Suicidcs inIndia andChina
!r is onc ol rlc mosr csrallislcd paramcrcr ol lappincss}dcvclopmcnr ol a narion (lappincss indcx lor Clina is +9% and
!ndia is +0%) rlc mcnral lcalrl and rcvcrsc is ill lcalrl and rcsulr dcprcssion and linally cnding lilc mcans suicidc. So
mucl ol dcrails arc givcn alovc lor rural povcrry clcvarion}climinarion in lorl counrrics lur suicidcs arc going on
ar rapid pacc and incrcasc is rccordcd cvcry ycar. !r mcans somc dissarislacrion in rural !ndia and Clina or larmcrs pliglr
in lorl counrrics rarlcr rlcrc is agrarian crisis in lorl. According ro a rcporr in rlc !indu {an 22, 2010 rlc incrcasc in
suicidcs in !ndia is alarming, 1lc Clina Posr srarcs dcspirc cconomic dcvclopmcnr in cirics rwo our ol rlrcc !ndian srill
livc in rural !ndia and as many as 150000 larmcrs lavc commirrcd suicidcs during pasr dccadcs rlis dara rlcy quorc
lrom1ara !nsrirurc ol Social Scicnccs sourccs and is lascd on rlc ycar 2009. According ro anorlcr rcpor pullislcd in
lcadig daily 1lc 1clcgrapl ocr.7- 2010 in cvcry lall an our onc !ndian larmcr commirs suicidc Fcgarding Clina
according ro dcpury !calrl Minisrcr wlo srarcd 2 million Clincsc arrcmpr suicidc cacl ycar our ol wlicl 250000
succccdmajoriry is rlar womcnsuicidcs and wirl rlc usc ol roxic pcsricidcs
COÞCLLSIOÞ
As ol now lorl arc lasr dcvcloping cconomics in rlc world and also mosr populous counrrics and laving popularion
rcaclcd ar 1.S lillion and 1.2 lillion. Borl arc agrarian cconomics and rlcrclorc arc conccrncd alour rlc dcvclopmcnr
ol rlis sccror. Bur wlcn onc gocs rlrougl all rlc ligurcs prcscnrcd lcrc picrurc is nor vcry good. Ccrrainly Clina is
sranding nownumlcr rwo in rlc world alrcr \SA lur picrurc as prcscnrcd}sccn lcrc alour agriculrurc sccror linancc is
nor liglly promising rlougl producrion ligurc arc mucl lcrrcr rlan !ndia. Also agrarian disrrcss in lorl rlc
counrrics is vcry clcar lromrlc unalarcd suicidcs. Qualiry ol lilc is surcly lcrrcr in !NÐ!A. Sclccrivc sulsidics in !ndia is
alsoundcr considcrallc dclarc raxarion alsodrawing arrcnrionol our counrrymcn
HARPREET KALR SAÞDHL
S+
ACKÞOLEDGEMEÞT:
Aurlor is liglly rlanklul Prol. Mrs. Anira Gill lor consrrucrivc criricismand guidancc and lclplul discussion during rlc
prcpararionol rlis manuscripr.
REFEREÞCES AÞDÞOTES
Aiycr, Pallavi (2007) 'Agriculrurc. wlcrc !ndia and Clina srand', 1lc !indu, Scpr. 0S.
!varury, G(2006) '\sing 1cclnology roBuild !nclusivc ¡inancial Sysrcms', CGAP, ¡ocus Norc no. S2, {anuary.
Mcycr F (2007) 'Micro-linancc Scrviccs lor agriculrurc. Òpporrunirics and Clallcngcs'; Papcr lor rlc !nrcrnarional
conlcrcncc. Wlar Can Micro-linancc Conrrilurc ro Agriculrurc in Ðcvcloping Counrrics·, Paris, Ðcccmlcr +-6
(Plcnary Scssion1. !owCanMicro¡inancc Fcspondrorlc Nccds ol ¡armcrs·).
Muklcrjcc, \. (2010) '¡orcvcr Sruck ina Cyclc Ðclr and Ðcarl', 1lc 1clcgrapl, Òcrolcr 7.
Paril, S. G. (2009) 'Fcporr ol rlc ligl Powcrcd Commirrcc on Coopcrarivcs', Minisrry ol Agriculrurc Govcrnmcnr ol
!ndia. May. Norc. ¡arcsr numlcr ol commirrccs mcnrionis inrlis rcporr.
Scn, A. (2011) 'qualiry ol ¡ilc. !ndia \s Clina', ¡urllispacc, April 29.
Sarangi, \. C. (2010) '1ask ¡orcc on Crcdir Fclarcd !ssucs ol ¡armcrs', Sulmirrcd ro rlc minisrry ol agriculrurc
govcrnmcnr ol !ndia, {unc.
Singl Surjir and \ Sagar(200+) Agriculrurc crcdir in !ndia;Srarc ol !ndian larmcrs a Millinnium Srudy,Acadcmic
¡oundarionandMinisrry ol Agriculrurc.Govr ol !ndiaNcwÐclli
1sai, I. S. (2002a). Back-allcy lanking. Privarc cnrrcprcncurs inClina. !rlaca. Corncll \nivcrsiry Prcss.
1sai, ¡. ¡. (2002l) Cadrcs, rcmplc and lincagc insrirurions. 1lc Clina {ournal, +8, 1-27.
\N (\nircd Narions, 195+), Progrcss in ¡and Fclorms, Ncw York. Ðcparrmcnr ol ¡conomic and Social Allairs,
\nircd Narions.
\aidyanarlan, A. (2005) 'Fcvival ol Crcdir Coopcrarivc !nsrirurions', ¡clurary15. \iswanarlan S. (200+), '¡and ol
incqualirics' ¡ronrlinc, 21, Òcrolcr 9.
Warson, A. (200S) ¡inancing larmcrs. 1lc rclorm ol rural crcdir coopcrarivcs and provision ol linancial scrviccs ro
larmcrs. !n C. ¡indlay, A. Warson, ¡. Clcng, & Z. Gang (¡ds), Fural linancial markcrs in Clina (pp. 6S-88). Canlcrra.
Asia Pacilic Prcss ar 1lc Ausrralia Narional \nivcrsiry.
Wampllcr, B and Cccilc ¡apcnu (2002), ¡a micro-linancc Au scrvicc dc l'agriculrurc lamilialc. ¡xccurivc Summarylor
conalcrcncc lcld on {anuary 21-2+, 2002, Ðakar, Scncgal. Alraca}Cirad}C1A}MA¡}¡nda-Gral}!¡AÐ, Ccrisc.
¡rcncl}¡nglisl. ¡rcnclMinisrry ol ¡orcignAllairs, "Parrcnariars" Scrics (as quorcdinMorvanr-Foux, 2008).
World Ðcvclopmcnr rcporr, (2008) 'Agriculrurc lor Ðcvclopmcnr', 1lc World Bank, Waslingron, ÐC
AGRICLLTLRAL DEVELOPMEÞT IÞ IÞDIA AÞD CHIÞA: A COMPARATIVE STLDY
SS
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