Description
the role of agriculture in economic development and why agriculture is important. It also explains the relationship between agricultural and non-agricultural sector, features of indian agriculture
Role of AGRICULTURE in Economic Development
Why Agriculture Is Important
Before the Green Revolution, agriculture was widely seen as a stagnant, low-productivity, and residual sector Agriculture came to be seen as a growth sector that could: 1. Generate more food and raw materials at lower prices; 2. Free up foreign exchange for the importation of strategic industrial and capital goods;
3. with rising rural incomes, provide a growing domestic market for nascent national industries;
4. reduce poverty by increasing labor productivity and employment in rural areas,
Role in Economic Development: 1. Contribution to National Income 2. Major source of Livelihood 3. Provider of Employment 4. Industrial development 5. International Trade 6. Capital Formation and Investment 7. Food and Fodder
Simon Kuznets identifies four factors contributing to the overall economic development. 1.Product contribution i.e., making available food and raw materials. 2. Market contribution i.e., providing the market for producer goods and consumer goods produced in the non-agricultural sector. 3.Factor contribution; making available labour and capital to the non-agricultural sector 4. Foreign Exchange contribution.
Relationship between Agricultural and non-agricultural sector
During the process of development, inter-dependence Between agriculture and industry has become stronger
Production Linkages Arise from the interdependence of agriculture and industry for productive inputs. Linkages have got further strengthened with agriculture’s dependence on industry reflecting the modernization of agricultural sector.
Demand linkages There are strong demand linkages between the two sectors.
There is an impact of income and industrialization on the demand for food and agricultural raw materials.
Savings and Investment linkages There is an impact of rural income on industrial consumption goods, i.e., clothing, footwear, sugar, edible oils, TV sets, washing machines, refrigerators, motor bikes, etc. “Rural bazaar out buys urban market”.
Features of Indian Agriculture
Dependency on Monsoons
Multiplicity of Crops
Diversity in other Spheres
Semi-commercialized farming
Predominance of small farmers Low level of productivity
Factors responsible for the backwardness of agriculture. Factors can be classified as under:
1. Demographic factors 2. General factors 3. Technological factors
1. Demographic factors Important Demographic factor responsible for low yield in agriculture is the increasing pressure of population on land. Increasing population has fallen back on land for its livelihood, Created problems like fragmentation and subdivision of holdings; The supply of improved practices and services has always fallen short of requirements.
General Factors Excess or surplus labour in Agriculture
Discouraging climate
Inadequate non-farm services
Size of holdings
Defective land tenure structure Indebtedness of the farmers
Technical Factors
Inadequate Research
Inadequate irrigation facilities
Poor inputs and techniques
Agriculture Policy of India
Agricultural policy followed during the last five decades can be broadly distinguished In 3 phases. The period from 1950/51 to mid 1960s which is also called pre green revolution period witnessed:
1. Tremendous agrarian reforms,
2. Institutional changes and
3. Development of major irrigation projects.
The intermediary landlordism was abolished, tenant operations were given security of farming and ownership of land.
Land ceiling acts were imposed by all the states to eliminate large sized holdings Cooperative credit institutions were strengthened to minimise exploitation of Cultivators by private money lenders and traders
Expansion of area was the main source of growth in the pre green revolution period.
The scope for area expansion diminished considerably in the green revolution period Increase in productivity became the main source of growth in crop output There was significant acceleration in yield growth in green revolution period.
The country faced severe food shortage and crisis in early 1960s which forced the policy makers to realise that;
Continuous reliance on food imports and aid imposes Heavy costs in terms of political pressure and economic instability
There was a desperate search for a quick breakthrough in agricultural production. One choice before the country was to go for spread of new seeds of high yielding varieties (HYV) of wheat and rice This marked second phase of agriculture policy in the country. The green revolution technology involved use of modern farm inputs, its spread led to fast growth in agro input industry.
Agrarian reforms during this period took back seat while; Research, Input supply, Credit, Marketing, Price support and Spread of Technology were the prime concern of policy makers
Two very important institutions were created in this period, namely: Food Corporation of India
To maintain buffer stock to guard against adverse impact of year to year fluctuations in output on price stability.
Agricultural Prices Commission, To ensure remunerative prices to producers, maintain reasonable prices for consumers. These two institutions have mainly benefited rice and wheat crops which are the major cereals and staple food for the country.
The next phase in Indian agriculture began in early 1980s.
While there was clear change in economic policy towards de-licensing and deregulation in Industry sector, agriculture policy lacked direction and was marked by confusion. There has been a considerable increase in subsidies and support to agriculture sector during this period
Investments by farmers kept on moving on a rising trend
The rural economy started witnessing process of diversification which resulted into fast growth in non food grain output like milk, fishery, poultry, vegetables, fruits etc which accelerated growth in agricultural GDP during the 1980s. Though green revolution has been widely diffused in irrigated areas throughout the country,
The dryland areas did not see benefit of technological breakthrough.
National Agricultural Policy in July 2000.
Formulated to meet challenges facing Indian agriculture Grouped in four categories relating to (1) Growth (2) Sustainability (3) Efficiency and (4) Equity.
There are also other important concerns like; Food security, Livelihood, Employment, Improvement in standard of living of agricultural population. The National Policy on Agriculture seeks to actualize the vast untapped growth potential of Indian agriculture
Over the next two decades, the national agriculture policy aims to attain:
• A growth rate in excess of 4 per cent per annum in the agriculture sector • It is based on efficient use of resources and conserves our soil, water and bio-diversity • With equity, i.e., growth which is widespread across regions and farmers
• It
should be demand driven and caters to domestic markets and
• Maximizes benefits from exports of agricultural products
Growth that is sustainable technologically, environmentally and economically Food and nutrition security
Food and nutritional security has remained central to India’s agricultural and development policy since Independence. However, importance being accorded to food and nutrition security has receded during 1990s because of two reasons.
There was accumulation of very large stock of grains in government stock after April 1998 which. Reduction in cereal consumption
Credit Facility To curtail Exploitation from money lenders credit facilities Were provided to farmers through co-operatives, regional Rural banks and government loan. NABARD (National Bank for Agriculture and Rural Development)
There has been steady increase in the flow of Institutional Credit to agriculture over the years
There has been steady increase in the flow of Institutional Credit to agriculture over the years Loans are provided to farmers for farming and other related Activities like; well digging, equipments etc.
Kisan Credit Card Scheme:
Introduced in 1998 -99. Banks have issued more than 435 lakh cards in 2006. The objective was to provide adequate and timely support from baking system to the farmers for their cultivation need. The card is coupled with a passbook where as per the credit limit the transactions are recorded. The limit is fixed on the basis of operational land holdings, And cropping pattern and cycle. Each withdrawal is to be repaid within 12 months.
Self Help Groups These are linked to banks to offer support to the farmers or rural population in variety of income generating programs.
There are various Insurance schemes and different covers Introduced specifically for farmers.
These are linked to banks to offer support to the farmers or rural population in variety of income generating programs.
Provision for Irrigation facilities In spite of irrigation being given importance since 1950 – 51 There is a wide gap between potential and actual irrigation. AIBP (Accelerated Irrigation Benefits Program) was launched To encourage the states for completion of ongoing irrigation Projects. Fast Track Program in 2002 was launched through Central Loan Assistance Provision for Irrigation facilities Subsidies for fertilizers, electricity, seeds
Provision for Proper Marketing Cooperative marketing is started by government to ensure Reasonable prices to the farmers.
Regulated markets are being set up through out the country.
Regulated markets are being set up through out the country.
A committee was formed to analyze agriculture marketing in India in 2002; the recommendation given were :Contract farming
Development of agricultural markets in private and Cooperative sector.
Use of information technology to provide in time information
Establishment of direct purchase centres Complete Transparency in pricing
Payments to be done on the same day.
Provision and expansion of storage and warehousing Government worked on provision of cooperative storage Food Corporation of India Central Warehousing Corporation State Warehousing Corporation Institutions are engaged in Scientific Storage in rural India.
Food Security Public Distribution System
Traditional food problem in India is caused by large fluctuations in production of food-grains
Lead to gravity due to absence of suitable transport systems And infrastructure. Qualitative Deficiency Rapid Growth of Population Large part of income is spent in necessities, thus a rise in Income leads to a large demand for food grains.
Government’s Food Policy
Government has been taking various steps to solve the food Problem. Which constitute as food policy. Important measures: Increasing Supplies:
Increase in production through the extension of Irrigation, propagation of high yielding varieties of Crop.
Efforts are made to save food-grains: Scientific Storage Pest control measures are also popularised
Improving Distribution: Strengthening the distribution network Wide network of ration / fair price shops Statutory rationing of food grains in case of severe shortage
For Insulating prices from the market fluctuations, bufferStock operations are undertaken. In case of shortage releases are made from the stocks to Ensure lowering of prices Provision has been made to supply food grains to the poor at Prices lower than that for the others.
Stabilizing Prices: Fixation of minimum support price Procurement on announced prices for building reserves and Feeding public distribution system Fixation of issue prices usually lower for fair price shops
Subsidies for ration shops
In case of excessive supplies food grains are purchased and stocked to prevent prices from falling below the MSP
State Trading has also been under taken to reduce distribution Costs and to check speculative trading on the part of private traders
Controlling Demand : Government has adopted three measures 1. Rationing 2. Wholesale Traders and retailers are required to declare their stocks 3. Measures are adopted to reduce population growth Reducing Poverty: 3 types of measures are relevant 1. Augmenting general growth; expansion of SSI and cottage industry; employment generation 2. Measures adopted to transfer resources to the poor; agriculture credit, subsidies, land ceilings
3. Formulating anti-poverty programs like:
Swaran Jayanti Gram Swarozgar Yojana
Jawahar Gram Samridhi Yajana
Prime Minister’s Rozgar Yojana etc…
These programs are meant to improve the economic conditions Of the poor
To expand employment opportunities for the weaker section
Suggestions to Revive The Agriculture Growth 1. Increase the area under double cropping cultivation 2. Increase the Fertiliser use : 28 kg / hectare in Assam & 328 kg / hectare in Punjab
3. Increase in Electric Supply for promoting irrigation
9 kw / hectare 30 kw / hectare 34 kw / hectare 80-300 kw/h 1000 kwh Assam Orissa Himachal Pradesh Kerala, J & K, Bihar, M P, WB, UP AP, Rajasthan, Punjab, Tamilnadu
4. Augmenting Irrigation Programs
Public Distribution System The name suggests that it is a mere means of making available Some essential food items at low price but it has other relevance too Instrumental in development of the economy Real wages of the workers are protected (food security) Price levels of several consumption goods is kept stable Anti – Poverty Measures Food security for the poor, under employed
Steps that are involved in Public Distribution System
Procurement: for the purpose of collecting produce from Farmers at a fixed and profitable price government fixes MSP before the harvest. FCI undertakes operations to procure and distribute food Grains.
Storage: Food grains are stored in a scientific manner ; Buffer stock; and selling stock
Distribution: objective is, unbiased distribution to vulnerable Sections. The distribution should be timely and location should be Closer to the buyers
Food Corporation of India
Food Corporation of India (FCI) is the main agency responsible for the execution of the food policies of the Central Government. Functions of the FCI primarily relate to the purchase, storage, movement, transportation, distribution and sale of foodgrains on behalf of the Central Government.
FCI is a perfect example of an efficient supply chain
Minimum Support Price PROCUREMENT
FARMERS DISTRIBUTION To the Deficit Areas
Central Point
Achievements of FCI Level of Procurement has increased Insulation from price fluctuations Dependence of Imports has declined Reduction in storage losses Uninterrupted supplies and advanced planning
Integrated approach
Continuous regulated expansion to cover all areas
Food Security: Alternative Options
Country was reaching to attain self- sufficiency in food production, with growth in income and expansion of consumption base for common man. Abruptly the farming community was left to in lurch on withdrawal from future cultivation. Government of India, during 2001-02 closed its rank & file for an open ended budgetary support towards food grain procurement.
Procurement 1990-91 12.92
Off Take 7.91
Stocks 10.21
1995-96
9.93
18.93 21.12 19 20.78 24.04 26.9 25.13 4.55
11.63
10.42 15.32 24.85 25.04 23.2 25.04 25.06 6.17
13.06
Rice
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 $
23.19 24.91
17.16 13.07 13.34 13.68 13.17 10.98
30 25 20
Procurement
15 10 5 0 1990-91 1995-96 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 $
Off Take Stocks
Procurement 1990-91 1995-96 2000-01 2001-02 11.07 12.33 16.36 20.63 19.03 15.8 16.8 14.79 9.23 11.1
Off Take 8.58 12.72 7.79 15.99 24.99 24.29 18.27 17.16 11.71 2.74
Stocks 5.6 7.76
21.5 26.04
15.65 6.93 4.07 2.01 4.56 12.93
Wheat
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 $
30 25 20
Procurement
15 10 5 0 1990-91 1995-96 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 $
Off Take Stocks
Minimum support price (MSP) had been frozen to in case of paddy Rs. 530 per quintal during 2001-02 and 2002-03, only with a cosmetic increase of Rs.10 to 20 for next three years. For wheat also, MSP of Rs. 620 remained static for two years during 2001-02 to 2002-03.
Other alternatives of gram, moong, arhar and urad were not supported by enhancing MSP to offset the spiraling input cost of production in the hands of farmers. The burden of huge stocks of unsold paddy procured by Chhatisgarh government at MSP of Rs. 540 per quintal had put financial burden on a newly formed state.
It borrowed over Rs.1,400 crore from banks on heavy interest to cover up cost of 1.9 lakh mts. of paddy procured in 2002 and 2 lakh mts. of 2001 stocks. FCI godowns were overflowing with large quantity of procurement made from the states of Punjab and Haryana.
Chhatisgarh faced storage problems also as all the stocks procured by the state government was not only from the state itself , but from neighboring state of Orissa also. The price in open market lowered around on an average of Rs.300 per quintal against the MSP of Rs. 540 offered in the state
Yield/ Hectare, Commercial Crops, (kgs. / hectare)
Three Years’ Average Yield 1990-91 to 1992-93 2004-05 to 2006-07 Change (%)
Oilseed Sugar Cane 762 65502 861 66171 13% 1.6%
Tea 1750 1772 1%
Coffee 740 816 7%
Basis: RBI Report:http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/87404.pdf
Squeezing Acreage: Area under cultivation of rice, wheat and coarse cereals from the year 1990 to 2006-07 has declined from 103.18 million hectares to 100.31 million hectares. Pulses, land area cultivation decline has been from 24.66 million hectares to 23.76 million hectares. Population of India viz-a-viz the consumption has increased substantially during the period
To get rid out of excess stock of food grain by 2001-02, the offtake of rice and wheat was made to accelerate through inorganic mechanisms undertaken, ‘food for oil’ with Iraq which was facing UN sanctions.
Imported fuel traded on barter were burnt in non- farm usages. Indirectly, fund for food subsidy was used in oil consumption, as imports were made without forex outflows
Expanding the base of below poverty line consumers (BPL) and of Mid-Day meal to school children.
Model for Food Security Grid
doc_247554651.pptx
the role of agriculture in economic development and why agriculture is important. It also explains the relationship between agricultural and non-agricultural sector, features of indian agriculture
Role of AGRICULTURE in Economic Development
Why Agriculture Is Important
Before the Green Revolution, agriculture was widely seen as a stagnant, low-productivity, and residual sector Agriculture came to be seen as a growth sector that could: 1. Generate more food and raw materials at lower prices; 2. Free up foreign exchange for the importation of strategic industrial and capital goods;
3. with rising rural incomes, provide a growing domestic market for nascent national industries;
4. reduce poverty by increasing labor productivity and employment in rural areas,
Role in Economic Development: 1. Contribution to National Income 2. Major source of Livelihood 3. Provider of Employment 4. Industrial development 5. International Trade 6. Capital Formation and Investment 7. Food and Fodder
Simon Kuznets identifies four factors contributing to the overall economic development. 1.Product contribution i.e., making available food and raw materials. 2. Market contribution i.e., providing the market for producer goods and consumer goods produced in the non-agricultural sector. 3.Factor contribution; making available labour and capital to the non-agricultural sector 4. Foreign Exchange contribution.
Relationship between Agricultural and non-agricultural sector
During the process of development, inter-dependence Between agriculture and industry has become stronger
Production Linkages Arise from the interdependence of agriculture and industry for productive inputs. Linkages have got further strengthened with agriculture’s dependence on industry reflecting the modernization of agricultural sector.
Demand linkages There are strong demand linkages between the two sectors.
There is an impact of income and industrialization on the demand for food and agricultural raw materials.
Savings and Investment linkages There is an impact of rural income on industrial consumption goods, i.e., clothing, footwear, sugar, edible oils, TV sets, washing machines, refrigerators, motor bikes, etc. “Rural bazaar out buys urban market”.
Features of Indian Agriculture
Dependency on Monsoons
Multiplicity of Crops
Diversity in other Spheres
Semi-commercialized farming
Predominance of small farmers Low level of productivity
Factors responsible for the backwardness of agriculture. Factors can be classified as under:
1. Demographic factors 2. General factors 3. Technological factors
1. Demographic factors Important Demographic factor responsible for low yield in agriculture is the increasing pressure of population on land. Increasing population has fallen back on land for its livelihood, Created problems like fragmentation and subdivision of holdings; The supply of improved practices and services has always fallen short of requirements.
General Factors Excess or surplus labour in Agriculture
Discouraging climate
Inadequate non-farm services
Size of holdings
Defective land tenure structure Indebtedness of the farmers
Technical Factors
Inadequate Research
Inadequate irrigation facilities
Poor inputs and techniques
Agriculture Policy of India
Agricultural policy followed during the last five decades can be broadly distinguished In 3 phases. The period from 1950/51 to mid 1960s which is also called pre green revolution period witnessed:
1. Tremendous agrarian reforms,
2. Institutional changes and
3. Development of major irrigation projects.
The intermediary landlordism was abolished, tenant operations were given security of farming and ownership of land.
Land ceiling acts were imposed by all the states to eliminate large sized holdings Cooperative credit institutions were strengthened to minimise exploitation of Cultivators by private money lenders and traders
Expansion of area was the main source of growth in the pre green revolution period.
The scope for area expansion diminished considerably in the green revolution period Increase in productivity became the main source of growth in crop output There was significant acceleration in yield growth in green revolution period.
The country faced severe food shortage and crisis in early 1960s which forced the policy makers to realise that;
Continuous reliance on food imports and aid imposes Heavy costs in terms of political pressure and economic instability
There was a desperate search for a quick breakthrough in agricultural production. One choice before the country was to go for spread of new seeds of high yielding varieties (HYV) of wheat and rice This marked second phase of agriculture policy in the country. The green revolution technology involved use of modern farm inputs, its spread led to fast growth in agro input industry.
Agrarian reforms during this period took back seat while; Research, Input supply, Credit, Marketing, Price support and Spread of Technology were the prime concern of policy makers
Two very important institutions were created in this period, namely: Food Corporation of India
To maintain buffer stock to guard against adverse impact of year to year fluctuations in output on price stability.
Agricultural Prices Commission, To ensure remunerative prices to producers, maintain reasonable prices for consumers. These two institutions have mainly benefited rice and wheat crops which are the major cereals and staple food for the country.
The next phase in Indian agriculture began in early 1980s.
While there was clear change in economic policy towards de-licensing and deregulation in Industry sector, agriculture policy lacked direction and was marked by confusion. There has been a considerable increase in subsidies and support to agriculture sector during this period
Investments by farmers kept on moving on a rising trend
The rural economy started witnessing process of diversification which resulted into fast growth in non food grain output like milk, fishery, poultry, vegetables, fruits etc which accelerated growth in agricultural GDP during the 1980s. Though green revolution has been widely diffused in irrigated areas throughout the country,
The dryland areas did not see benefit of technological breakthrough.
National Agricultural Policy in July 2000.
Formulated to meet challenges facing Indian agriculture Grouped in four categories relating to (1) Growth (2) Sustainability (3) Efficiency and (4) Equity.
There are also other important concerns like; Food security, Livelihood, Employment, Improvement in standard of living of agricultural population. The National Policy on Agriculture seeks to actualize the vast untapped growth potential of Indian agriculture
Over the next two decades, the national agriculture policy aims to attain:
• A growth rate in excess of 4 per cent per annum in the agriculture sector • It is based on efficient use of resources and conserves our soil, water and bio-diversity • With equity, i.e., growth which is widespread across regions and farmers
• It
should be demand driven and caters to domestic markets and
• Maximizes benefits from exports of agricultural products
Growth that is sustainable technologically, environmentally and economically Food and nutrition security
Food and nutritional security has remained central to India’s agricultural and development policy since Independence. However, importance being accorded to food and nutrition security has receded during 1990s because of two reasons.
There was accumulation of very large stock of grains in government stock after April 1998 which. Reduction in cereal consumption
Credit Facility To curtail Exploitation from money lenders credit facilities Were provided to farmers through co-operatives, regional Rural banks and government loan. NABARD (National Bank for Agriculture and Rural Development)
There has been steady increase in the flow of Institutional Credit to agriculture over the years
There has been steady increase in the flow of Institutional Credit to agriculture over the years Loans are provided to farmers for farming and other related Activities like; well digging, equipments etc.
Kisan Credit Card Scheme:
Introduced in 1998 -99. Banks have issued more than 435 lakh cards in 2006. The objective was to provide adequate and timely support from baking system to the farmers for their cultivation need. The card is coupled with a passbook where as per the credit limit the transactions are recorded. The limit is fixed on the basis of operational land holdings, And cropping pattern and cycle. Each withdrawal is to be repaid within 12 months.
Self Help Groups These are linked to banks to offer support to the farmers or rural population in variety of income generating programs.
There are various Insurance schemes and different covers Introduced specifically for farmers.
These are linked to banks to offer support to the farmers or rural population in variety of income generating programs.
Provision for Irrigation facilities In spite of irrigation being given importance since 1950 – 51 There is a wide gap between potential and actual irrigation. AIBP (Accelerated Irrigation Benefits Program) was launched To encourage the states for completion of ongoing irrigation Projects. Fast Track Program in 2002 was launched through Central Loan Assistance Provision for Irrigation facilities Subsidies for fertilizers, electricity, seeds
Provision for Proper Marketing Cooperative marketing is started by government to ensure Reasonable prices to the farmers.
Regulated markets are being set up through out the country.
Regulated markets are being set up through out the country.
A committee was formed to analyze agriculture marketing in India in 2002; the recommendation given were :Contract farming
Development of agricultural markets in private and Cooperative sector.
Use of information technology to provide in time information
Establishment of direct purchase centres Complete Transparency in pricing
Payments to be done on the same day.
Provision and expansion of storage and warehousing Government worked on provision of cooperative storage Food Corporation of India Central Warehousing Corporation State Warehousing Corporation Institutions are engaged in Scientific Storage in rural India.
Food Security Public Distribution System
Traditional food problem in India is caused by large fluctuations in production of food-grains
Lead to gravity due to absence of suitable transport systems And infrastructure. Qualitative Deficiency Rapid Growth of Population Large part of income is spent in necessities, thus a rise in Income leads to a large demand for food grains.
Government’s Food Policy
Government has been taking various steps to solve the food Problem. Which constitute as food policy. Important measures: Increasing Supplies:
Increase in production through the extension of Irrigation, propagation of high yielding varieties of Crop.
Efforts are made to save food-grains: Scientific Storage Pest control measures are also popularised
Improving Distribution: Strengthening the distribution network Wide network of ration / fair price shops Statutory rationing of food grains in case of severe shortage
For Insulating prices from the market fluctuations, bufferStock operations are undertaken. In case of shortage releases are made from the stocks to Ensure lowering of prices Provision has been made to supply food grains to the poor at Prices lower than that for the others.
Stabilizing Prices: Fixation of minimum support price Procurement on announced prices for building reserves and Feeding public distribution system Fixation of issue prices usually lower for fair price shops
Subsidies for ration shops
In case of excessive supplies food grains are purchased and stocked to prevent prices from falling below the MSP
State Trading has also been under taken to reduce distribution Costs and to check speculative trading on the part of private traders
Controlling Demand : Government has adopted three measures 1. Rationing 2. Wholesale Traders and retailers are required to declare their stocks 3. Measures are adopted to reduce population growth Reducing Poverty: 3 types of measures are relevant 1. Augmenting general growth; expansion of SSI and cottage industry; employment generation 2. Measures adopted to transfer resources to the poor; agriculture credit, subsidies, land ceilings
3. Formulating anti-poverty programs like:
Swaran Jayanti Gram Swarozgar Yojana
Jawahar Gram Samridhi Yajana
Prime Minister’s Rozgar Yojana etc…
These programs are meant to improve the economic conditions Of the poor
To expand employment opportunities for the weaker section
Suggestions to Revive The Agriculture Growth 1. Increase the area under double cropping cultivation 2. Increase the Fertiliser use : 28 kg / hectare in Assam & 328 kg / hectare in Punjab
3. Increase in Electric Supply for promoting irrigation
9 kw / hectare 30 kw / hectare 34 kw / hectare 80-300 kw/h 1000 kwh Assam Orissa Himachal Pradesh Kerala, J & K, Bihar, M P, WB, UP AP, Rajasthan, Punjab, Tamilnadu
4. Augmenting Irrigation Programs
Public Distribution System The name suggests that it is a mere means of making available Some essential food items at low price but it has other relevance too Instrumental in development of the economy Real wages of the workers are protected (food security) Price levels of several consumption goods is kept stable Anti – Poverty Measures Food security for the poor, under employed
Steps that are involved in Public Distribution System
Procurement: for the purpose of collecting produce from Farmers at a fixed and profitable price government fixes MSP before the harvest. FCI undertakes operations to procure and distribute food Grains.
Storage: Food grains are stored in a scientific manner ; Buffer stock; and selling stock
Distribution: objective is, unbiased distribution to vulnerable Sections. The distribution should be timely and location should be Closer to the buyers
Food Corporation of India
Food Corporation of India (FCI) is the main agency responsible for the execution of the food policies of the Central Government. Functions of the FCI primarily relate to the purchase, storage, movement, transportation, distribution and sale of foodgrains on behalf of the Central Government.
FCI is a perfect example of an efficient supply chain
Minimum Support Price PROCUREMENT
FARMERS DISTRIBUTION To the Deficit Areas
Central Point
Achievements of FCI Level of Procurement has increased Insulation from price fluctuations Dependence of Imports has declined Reduction in storage losses Uninterrupted supplies and advanced planning
Integrated approach
Continuous regulated expansion to cover all areas
Food Security: Alternative Options
Country was reaching to attain self- sufficiency in food production, with growth in income and expansion of consumption base for common man. Abruptly the farming community was left to in lurch on withdrawal from future cultivation. Government of India, during 2001-02 closed its rank & file for an open ended budgetary support towards food grain procurement.
Procurement 1990-91 12.92
Off Take 7.91
Stocks 10.21
1995-96
9.93
18.93 21.12 19 20.78 24.04 26.9 25.13 4.55
11.63
10.42 15.32 24.85 25.04 23.2 25.04 25.06 6.17
13.06
Rice
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 $
23.19 24.91
17.16 13.07 13.34 13.68 13.17 10.98
30 25 20
Procurement
15 10 5 0 1990-91 1995-96 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 $
Off Take Stocks
Procurement 1990-91 1995-96 2000-01 2001-02 11.07 12.33 16.36 20.63 19.03 15.8 16.8 14.79 9.23 11.1
Off Take 8.58 12.72 7.79 15.99 24.99 24.29 18.27 17.16 11.71 2.74
Stocks 5.6 7.76
21.5 26.04
15.65 6.93 4.07 2.01 4.56 12.93
Wheat
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 $
30 25 20
Procurement
15 10 5 0 1990-91 1995-96 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 $
Off Take Stocks
Minimum support price (MSP) had been frozen to in case of paddy Rs. 530 per quintal during 2001-02 and 2002-03, only with a cosmetic increase of Rs.10 to 20 for next three years. For wheat also, MSP of Rs. 620 remained static for two years during 2001-02 to 2002-03.
Other alternatives of gram, moong, arhar and urad were not supported by enhancing MSP to offset the spiraling input cost of production in the hands of farmers. The burden of huge stocks of unsold paddy procured by Chhatisgarh government at MSP of Rs. 540 per quintal had put financial burden on a newly formed state.
It borrowed over Rs.1,400 crore from banks on heavy interest to cover up cost of 1.9 lakh mts. of paddy procured in 2002 and 2 lakh mts. of 2001 stocks. FCI godowns were overflowing with large quantity of procurement made from the states of Punjab and Haryana.
Chhatisgarh faced storage problems also as all the stocks procured by the state government was not only from the state itself , but from neighboring state of Orissa also. The price in open market lowered around on an average of Rs.300 per quintal against the MSP of Rs. 540 offered in the state
Yield/ Hectare, Commercial Crops, (kgs. / hectare)
Three Years’ Average Yield 1990-91 to 1992-93 2004-05 to 2006-07 Change (%)
Oilseed Sugar Cane 762 65502 861 66171 13% 1.6%
Tea 1750 1772 1%
Coffee 740 816 7%
Basis: RBI Report:http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/87404.pdf
Squeezing Acreage: Area under cultivation of rice, wheat and coarse cereals from the year 1990 to 2006-07 has declined from 103.18 million hectares to 100.31 million hectares. Pulses, land area cultivation decline has been from 24.66 million hectares to 23.76 million hectares. Population of India viz-a-viz the consumption has increased substantially during the period
To get rid out of excess stock of food grain by 2001-02, the offtake of rice and wheat was made to accelerate through inorganic mechanisms undertaken, ‘food for oil’ with Iraq which was facing UN sanctions.
Imported fuel traded on barter were burnt in non- farm usages. Indirectly, fund for food subsidy was used in oil consumption, as imports were made without forex outflows
Expanding the base of below poverty line consumers (BPL) and of Mid-Day meal to school children.
Model for Food Security Grid
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