Indian Agricultural Sector

TECHNOLOGICAL CHANGES AND ITS IMPACT ON PRODUCTIVITY IN INDIAN AGRICULTURAL SECTOR

HIDAYATULLAH NATIONAL LAW UNIVERSITY

ECONOMICS PROJECT

ON

TECHNOLOGICAL CHANGES AND ITS IMPACT ON PRODUCTIVITY IN

INDIAN AGRICULTURAL SECTOR

SUBMITTED TO

MS. ERITRIYA ROY

(Faculty of Economics)

SUBMITTED BY

PRANAV KHANDELWAL

SEMESTER 2

ROLL NO. 94

SUBMITTED ON

9TH APRIL, 2013

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Ackmowledgments

I would like to sincerely thank the Economics Teacher Ms. Eritriya Roy Mam for giving me

this project on Technological Changes and Its Impact on Productivity in Indian Agricultural

Sector which has widened my knowledge on it. Her guidance and support has been

instrumental in the completion of this project. Thank you Mam.

My heartfelt gratitude also goes out to the staff and administration of HNLU for the

infrastructure in the form of our library and IT lab that was a source of great help in the

completion of this project.

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TABLE OF CONTENTS

INTRODUCTION……………………………………………………………………..4

OBJECTIVES ………………………………………………………………………...5

RESEARCH METHODOLOGY …………………………..………………………....5

CHAPTER 1: HISTORICAL OVERVIEW OF TECHNOLOGICAL CHANGE IN

AGRICULTURAL SECTOR…………………………............................................…6

CHAPTER 2: SOME TECHNOLOGY BASED INPUTS USED IN

AGRICULTURAL PRODUCTION………………………………………………......9

CHAPTER 3: IMPACT OF TECHNOLOGICAL CHANGES AND GREEN

REVOLUTION ON PRODUCTIVITY……………………………………….....…12

CHAPTER 4; TECHNICAL CAUSES FOR LOW LEVEL PRODUCTIVITY IN

INDIAN AGRICULTURAL SECTOR……………………………………………...13

CONCLUSION………………………………………………………………………14

REFERENCES…...…………………………………………………………………..15

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Introduction

From a nation dependent on food imports to feed its population, India today is not only self--

sufficient in grain production, but also has a substantial reserve. The progress made by

agriculture in the last four decades has been one of the biggest success stories of free India.

Agriculture is the means of livelihood of about two--thirds of the work force in the country.

This increase in agricultural production has been brought about by bringing additional area

under cultivation, extension of irrigation facilities, the use of improved high yielding variety

of seeds, better techniques evolved through agricultural research, water management, and

plant protection through judicious use of fertilizers, pesticides and cropping practices.

Increase in agricultural production has been mainly possible due to the changes that took

place in agriculture during the Green Revolution whether it is the Institutional changes,

Social changes or Technological changes. As this project is about Technological changes and

its impact on agricultural production so we will discuss it in context to the Green revolution

in the subsequent chapters to follow.

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OBJECTIVES

To discuss about the factors that led to technological changes.

To study and understand about various technologies in use at present in Indian agriculture.

To study how agricultural production is being carried out in India.

RESEARCH METHODOLOGY

This research is descriptive and analytical in nature. Secondary and Electronic resources have

been largely used to gather information about the topic.

Books and other references have been primarily helpful in giving this project a firm structure.

Websites and articles have also been referred.

Footnotes have been provided wherever needed to acknowledge the source.

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Chapter 1

Historical Overview of Technological Change in Agricultural Sector

There was a strong research interest among Indian Scientists in forties on finding out best

way of conjuctive use of organic and inorganic fertilizers. The agronomic ways of weed

control were given importance and overall pest and weed problems in any case were less

severe.

We begin the story of technological change from 1962, the year India had the first major war

with China and realized its poor defense preparedness. National consensus on several macro

policy issues primarily aimed at import substituting self-reliant economy started breaking

down.

The year 1964-65 was a major drought. Stoppage of US shipments of cheap food aid

provided the right stimuli for searching alternatives for self-reliance in food sector. Indian

Scientists were aware of the high yield responsiveness of Mexican varieties of wheat and IR

varieties of paddy. Decision to bulk import the wheat seeds heralded the massive effort for

technological change primarily in the Indo-Gangetic plain with good rich soil and abundant

waters. Even though the extension machinery was quite weak and so were the markets, the

alleged resistance of Indian farmer to a visibly ‘viable’ technology evaporated in the thin air.

Bankers by then had begun to see the potential of mobilizing rural savings accruing on

account of technological charge. Government wanted to prove its socialistic ideals and thus

nationalised the banks among other measures. Rural credit also started being pumped into the

agricultural sector to improve incentives for technological transformation.

By early seventies, several subsidy linked programmes for provision of credit for irrigation,

land development and other assets started. There was a brief spell when several programmes

aimed at solving eco-specific problems of the country were launched e.g. Drought Prone

Area Programme, Hill or Tribal area development programme etc.

By 1973, the failure of poverty alleviating programmes was obvious. It was also clear that

trickle down of growth made possible though new technology may not take place at sufficient

pace and scale. The land reforms had got stuck through complicated but easy loopholes left in

the acts leading to large scale litigation.

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Among other things, two things had crystallized by now:

i) World Bank had extended massive line of credit for mechanization and minor

irrigation;

ii) Technological change was indeed diffusing rather widely leading to perceptible

change in food supply;

While Price Commission had been set up in mid sixties, the terms of trade were moving

against agriculture. Even though there were a few announcements ostensibly to help poor but

it was clear that government had lost contact with people.

Emergency excesses led to the change in government. The new political alignment was

certainly to the right but also had some committed socialists. The direct attack on the poverty

through IRDP (Integrated Rural Development Programme) started in 1978. Agricultural

prices were made more favourable and input subsidies continued. Good monsoon coupled

with continued supply of new varieties of wheat and paddy helped in achieving new heights

in food production. Emphasis remained on input responsive technologies for increasing the

yield.

By 1983-84, thanks to the recognition of seed distribution as a major bottleneck, attention

was shifted to Eastern India where growth rate had been low. Good monsoon coupled with

good management of input distribution, food grain production increased again.

By now however, two major signals started appearing:

- The input output ratio was becoming seriously adverse in the agricultural sector.

- Efforts of the government to reduce subsidies to contain budget deficit were not

meeting much success.

Despite the drought of 1979, the scientists and the public officials were happy that food

production had not dipped too low. The mechanization, which was slowed down due to large

scale studies on its labour displacing effects was reintroduced in early eighties. Mounting of

inventories in tractor industry was the major reason. But pressure from affluent farmer had

also made some difference. The credit constraint had been removed. Fertilizer subsidies

continued. Emphasis was shifting towards high tech approach to agricultural development

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through reliance on Biotechnology and in fact import of seeds made more easily possible than

hitherto.

It was realized belatedly that standardized approach for agricultural development relying on

the most favored and well endowed regions may not work anymore. The attention started

increasing towards regionalization of technological change policies.

But this time next yield barrier was crossed in 1988-89, the non-sustainability of agricultural

technology was becoming more and obvious. At the same time need for better soil and water

conservation through watershed management in dry regions and restoration of ecological

balance in hill areas denuded severely in the past was being felt. But the patience for

technologies which could generate surplus in longer period of time but in a sustainable

manner was just not there. The research funds per scientists in the country had gone down in

real terms by as much half and in many states more than that. Budget of Indian Council of

Agricultural Research was almost equal to or slightly more than the budget of Department of

Biotechnology alone.

Sustainability of the institutions in which research for sustainable agriculture could be done

was itself under doubt. The private and public corporate sector (particularly agri-input

industries) was thriving on the work of agricultural scientists but was hardly making any

investment in improving research productivity.1

In 1991, Indian economy was liberalised and made an open economy this resulted in

investments in agricultural sector which in turn led to the coming of new technologies and

bringing up the standard of Indian agricultural sector. Since then there had been ups and

downs in this sector but overall productivity has increased and technology has advanced to a

great extent.

1 http://www.ncap.res.in/upload_files/policy_brief/pb9

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Chapter 2

Some Technology Based Inputs Used In Agricultural Production

Irrigation

Irrigation in India refers to the supply of water from Indian rivers, tanks, wells, canals and

other artificial projects for the purpose of cultivation and agricultural activities. In country

such as India, 64% of cultivated land is dependent on monsoons. The economic significance

of irrigation in India is namely, to reduce over dependence on monsoons, advanced

agricultural productivity, bringing more land under cultivation, reducing instability in output

levels, creation of job opportunities, electricity and transport facilities, control of floods and

prevention of droughts. At present most of irrigation is carried out by canals and tubewells.

Increase in agricultural production and productivity depends, to a large extent, on the

availability of water. Hence there lies importance of irrigation.

Fertilisers

Chemical fertilizers played a vital role in the success of India’s Green Revolution and

consequent self-reliance in food grain production. However, the association between fertilizer

consumption and food grain production has weakened during recent years due to the

imbalanced use of nutrients and deficiency of micro-nutrients, which demands a careful

examination and policy action.

Almost the entire increase in the consumption of fertilizers in recent years was met from

import as domestic production has been almost stagnant or even declined in some years since

2002–03. Imports of fertilizers, which accounted for about 10 per cent of consumption in

2002–03 now account for more. This increasing dependence on imports necessitates a

strategic analysis of the trade-off s between domestic production and imported fertilizers with

a view to ensuring that the domestic industry faces a policy environment conducive for

growth and expansion on an efficient and sustainable basis.

In some areas excessive use of chemical fertilizers has led to degradation of natural

resources, such as land and water, which needs urgent attention.

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Fertilizer use in most parts of the country is highly concentrated towards nitrogenous

fertilizers and imbalance in the use of fertilizers is observed almost everywhere. This

imbalance in use of plant nutrients and neglect of micro-nutrient deficiencies in Indian soils

has led to declining fertilizer response and deterioration of soil health. The extent and nature

of the problem differs in different parts of the country.

Fertilizer subsidy has lately increased very fast partly due to increases in fertilizer

consumption and partly due to increase in the per unit subsidy element. From 2010–11, the

Government of India has introduced a nutrient-based subsidy regime wherein the subsidy on

fertiliszers, other than urea, will remain fixed based on the nutrient composition and the retail

prices of fertilizers will be decided by the manufacturers/ importers. To safeguard the

interests of farmers, the government will intervene in a manner to keep farmgate prices of

these fertilizers near the current prices as far as possible while allowing a small increase in

urea prices, which will remain controlled.2

Mechanization

Farm mechanization is regarded as sine-qua-non to reduce the human drudgery and enhance

the agricultural productivity. During the post-green revolution period, the impact of farm

mechanization on agricultural production and productivity has been well recognised in India.

Depending upon the use of other inputs such as irrigation, high yielding seed varieties,

chemical fertilizers, herbicides and pesticides, different States in India have attained different

levels of mechanization. Consequently the agricultural production & productivity has

witnessed three to four fold increase. Studies have been conducted by various organisations

& individuals which have highlighted the impact of agricultural mechanization on farm

production and productivity. Agricultural mechanization has made significant contribution in

enhancing cropping intensity. The growth in irrigated areas and tractor density has had direct

bearing on the cropping intensity.3

2 http://planningcommission.nic.in/plans/mta/11th_mta/chapterwise/chap4_agri.pdf

3 http://infochangeindia.org/agenda/agricultural-revival/an-evolutionary-view-of-indian-agriculture.html

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http://infochangeindia.org/agenda/agricultural-revival/an-evolutionary-view-of-indian-agriculture.html

http://planningcommission.nic.in/plans/mta/11th_mta/chapterwise/chap4_agri.pdf


Pesticides

Pesticides is defined as any substance or mixture of substances, intended for preventing,

destroying or controlling any pest including vectors of human or animal diseases. The use of

pesticides was negligible in early 1950s.. However with the adoption of new agricultural

strategy and green revolution pesticides consumption increased.

High- Yielding Varieties of Seeds

Under the new agricultural strategy special emphasis has been placed on the development of

high-yielding varieties of seeds. These seed yields higher productivity because of which

government has focused on their development and production. At present a large number of

farmers use these seeds for agricultural production.

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Chapter 3

Impact of Technological Changes & Green revolution on Productivity

As a result of new agricultural strategy and technological changes, foodgrains output

increased substantially from 81.0 million tonnes in the Third Plan (annual average) to 202

million tonnes in the tenth plan (annual average). In 2010-11, it stood at 241.6 million tones.

According to Third Advance Estimates for the year 2011-2012, the production of foodgrains

increased further to 252.6 million tonnes in 2011-12.

Among foodgrains, wheat seems to have made rapid strides with its production increasing

from 11.1 million tonnes in the Third Plan to 70.2 million tonnes in the Tenth Plan. The

production of wheat rose to 85.9 million tonnes in 2010-11 and is estimated to have touched

90.2 million tonnes in 2011-12. The production of rice has increased slowly in the early

period of green revolution and picked up late. The average annual production of rice rose

from 35.1 million tones in the Third plan to 85.6 million tones in the Tenth Plan. It stood at

95.3 million tones in 2010-11 and is estimated to have touched 103.4 million tones in 2011-

12.4

The production of other foodgrains also increased simultaneously but there had been decrease

in per capita availability and consumption because of rapid increase in population and slow

pace of increase in agricultural productivity.5

4 S.K. Mishra and V.K. Puri; Indian Economy (Mumbai, Himalaya Publishing House Pvt. Ltd., 30 th Edition

2012) Pg. 287

5

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Chapter 4

Technical Causes for Low Level Productivity in Indian Agricultural Sector

1. Outmoded Agricultural Techniques: Most of the Indian farmers continue to use outmoded

agricultural techniques. Wooden ploughs and bullocks are still used by a majority of farmers.

Use of fertilisers and mew high-yielding varieties of seeds is also extremely limited. In

summary, Indian agriculture is traditional. Therefore productivity is low.

2. Inadequate Irrigation Facilities: Gross cropped area in India in 2007-08 was 195.83 million

hectares of which 87.26 million hectares had irrigation facilities. Thus, 44.6 per cent of gross

cropped area had irrigation facilities in 2007-08. This shows that even now more than 55 per

cent of the gross cropped area continues to depend on rains. Rainfall is often insufficient,

uncertain and irregular. Accordingly, productivity is bound to be low in all those areas which

lack irrigation facilities, and are totally dependent on rains. Even in areas having irrigation

facilities, potential is not wholly utilised because of defective management. The costs of

irrigation are also increasing continuously and the small farmer is, therefore, unable to make

use of available irrigation facilities.6

6 S.K. Mishra and V.K. Puri; Indian Economy (Mumbai, Himalaya Publishing House Pvt. Ltd., 30 th Edition

2012) Pg. 262

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CONCLUSION

Technological changes and Green Revolution has certainly proved that Indian farmers are

now capable enough to produce enough foodgrains for the entire nation. However, these

changes have also led to depletion of groundwater, soil fertility, severe effects on health,

extinction of natural varieties of foodgrains, etc. There is a need to use these technologies in a

rational and sustainable manner rather than in an unorganised and hasty manner. Further,

emphasis should be laid on organic fertilisers so as to protect the quality of soil and the

pollution caused by inorganic fertilisers. India had come a long way from the era of pre-

Green Revolution to the era of post-Green Revolution, still there has not been much change

in agricultural sector. Policies framed have been not successful in achieving their goals. It is

the need of hour that research and development in agricultural technology be encouraged for

sustainable use so as to prevent depletion of resources and at the same time increase the

productivity.

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References

Bibliography

S.K. Mishra and V.K. Puri; Indian Economy (Mumbai, Himalaya Publishing House

Pvt. Ltd., 30th Edition 2012)

Webliography

www.infochangeindia.org

www.ncap.res.in

www.planningcommission.nic.in

www.agricoop.nic.in

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http://www.planningcommission.nic.in/

http://www.ncap.res.in/

http://www.infochangeindia.org/

Indian Agricultural Sector

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