19

Agriculture Growth and Performance

K. P. Mani

19.1 Introduction

The significance of agriculture and allied activities in the economic development is well accepted and documented since times immemorial. Agriculture can be a source of growth for the national economy, a prime provider of investment opportunities for the private sector and a driver of agriculture-related industries and the rural non-farm economy. Two-thirds of the world’s agricultural value added is formed in the developing countries. In the agriculture-based countries, it generates on an average 29 per cent of the Gross Domestic Product (GDP) and employs 65 per cent of the labour force. Agriculture is a source of livelihood for an estimated 86 per cent of the world’s rural population. It provides jobs for 1.3 billion small holders and landless workers. The industries and services, linked to agriculture in value chains, often account for more than 30 per cent of the GDP in the transforming and urbanized countries.

The way agriculture works for development varies across the countries, depending on how they rely on agriculture as a source of growth and an instrument for poverty reduction. The contribution of agriculture to growth and poverty reduction can be seen by categorizing the countries according to the share of agriculture in the aggregate growth over the past 15 years, and the current share of total poverty in the rural areas, using the 2 dollar a day poverty line norm. This perspective produces three types of countries (Table 19.1).

The scope for using the merits of agriculture for poverty reduction and as an engine of growth for the agriculture-based countries is still very much alive. The effective use requires adjusting agendas to each country type and within countries as well. However, despite convincing successes, agriculture has not been used to its full potential in many countries because of the various reasons.

The objectives of this chapter are: (1) to give an overall idea of the performance growth of the Indian agriculture over the years, (2) to emphasize the significance of agriculture in the Indian economy and (3) to analyse the trends in the area, production and yield of the major crops in India.

 

 

19.2 Agriculture Sector in India

Agriculture is considered to be the pivotal sector in India, even prior to the British period. Since independence, the government gave sufficient attention to the development of agriculture and allied sectors, in all the five year plans. Table (19.2a) presents the growth and share of agriculture in India since 1950.

It is seen that the share of agriculture has been consistently coming down over the years. However, a noticeable fall happened after 1991. By 1990, the share of agriculture in the GDP of India came down to 34.9 per cent, this further reduced to just 17.8 per cent in 2009. From these trends it is clear that the Indian agriculture is moving towards stagnation. At the same time, the percentage of population depending on agriculture continued to be at a higher level. In 1951, 69.5 per cent of population depended on agriculture, which continued only with marginal variations in the later years. According to the latest statistics, still 59.2 per cent of the population depends on agriculture. It is also found that over the years, the average age of the farmers is going up indicating that the younger generation is withering away from the agricultural operations. These trends raise two questions. Firstly, even after a significant share of population depending on agriculture and allied sectors, why is there a fall in contribution towards the GDP? Secondly, why has the average age of farmers gone up? It is found that the share of agricultural exports, in the total exports of India remained at 15.8 per cent in 1951, which continued more or less the same until 1991. Between 1991 and 2001, there was a notable fall in the exports. This is mainly due to the impact of globalization and the consequent reduction in exports, as a result of difficulties in maintaining the quality standards. In the recent years, the share of agriculture exports in the total exports of India improved. This implies that the agriculture sector is adjusting to the changing international standards. The last parameter is the average growth rate of agriculture. It is seen that the growth rate of agriculture in the initial years of planning was relatively better, compared to the recent growth rates. From these trends it is clear that between 1951 and 2009, the Indian agriculture underwent structural changes. The overall trends in the growth rates are clearer from Table 19.3.

 

 

TABLE 19.2b Agriculture Sector: Key Indicators 2007–08 and 2008–09

Item	2007–08	2008–09
Growth in GDP in agriculture and allied
sectors (1999–2000 price)	4.7	1.6
Share in GDP agriculture and allied sectors	16.4	15.7
Agriculture	13.9	13.2
Forestry and logging	1.7	1.7
Fishing	0.8	0.8
Share of agriculture and allied sectors
in the total gross capital formation	7.01	9.05
Agriculture	6.43	8.39
Forestry and logging	0.07	0.09
Fishing	0.51	0.58
Agriculture exports to national exports	12.5	10.23
Agriculture imports to national imports	2.95	2.74
Employment (average)	59.2	52.1

 

There are many other factors too, which make agriculture sector prominent in India (Table 19.2b).They are briefly explained below.

1. Agriculture sector provides raw materials to other industries: Though apparently it may seem that the developments in the agricultural sector are isolated, in reality, the role of the agriculture sector is critical in any economy. Our traditional and large scale industries like cotton textiles, jute and sugar are examples of interdependence. In the current scenario of globalization, there is an added significance. The government is giving more importance to processing and the value-added units. These industries directly and indirectly depend on the agriculture sector. Similarly, food-based industries also depend on agriculture. The present concept of agri business also promotes this significance. In other words, there are noticeable, effective, forward and backward linkages for agriculture.
2. Providing food supply: The agriculture sector is the key to provide food. As far as India is concerned, in the initial years, the food grains supply was limited because of the traditional agriculture and outdated practices. This food crisis necessitated Green Revolution, and as a result food supply enhanced. India became self sufficient, as far as food supply was concerned. The public distribution system also played some role in this direction. After 1980, the food production became a problem due to shifts in the cropping pattern and the consequent problems. As far as the estimates are concerned, production of food grains in 2008–09 is estimated to be 229.85 million tonnes, which is a marginal improvement of 1.97 million tonnes over the estimates for 2008–09. This, however, is lower than the target of 233 million tonnes set out for the year. Thus, today, one of the important concerns is the supply of food to all, otherwise popularly labelled as the problem of food security. Food security is a global phenomenon also. The food security problem is the result of two factors. Firstly, the shift in the cropping pattern in favour of the non-food crops. Secondly, the imperfections in the public distribution system. Thus there is a positive association between the food production, agriculture sector performance and the growth of population.

    

   TABLE 19.3 Average Growth Rates: Overall and in Agriculture (Percentage per Year at 1999–2000 Prices)

   

   Source: National Accounts Statistics 2008 (New Series), Central Statistical Organization, Ministry of Statistics and Programme Implementation, New Delhi.

    

3. Role in capital formation: The rate of capital formation and the rate of economic growth are directly related. Since agriculture is one of the most important sectors, the rate of capital formation in this sector is very important. But it is found that, in recent years, there is a fall in capital formation in the agriculture sector. Various reasons are put forth to explain this. One explanation is that the capital formation is low because of the absence of complementarities between public investment and private investment (Table 19.4).

 

 

From the above discussions, it is clear that there are structural changes in the performance of agriculture sector over the years. Thus, in the succeeding pages, an attempt is made to examine the growth trends in the Indian agriculture. For this purpose, the agriculture sector growth is divided into four time phases—(1) 1951–66 (2) 1966–85 (3) 1986–95 (4) 1995–2009.

Phase I (1951–66): This phase can be considered as the traditional phase of the Indian agriculture. The initial years of this phase, which complement with the First Five Year Plan period, was the golden period of Indian agriculture. The average growth rate of agriculture was 3–3.5 per cent. The food production position was also satisfactory. In the Second Five Year Plan, when the government diverted attention towards the industries, the priority given to agriculture naturally declined. However, the performance was satisfactory because of the commendable performance in the first five year plan. But problems started from early 1960. The first setback was the Chinese aggression in 1962. When China attacked India in an unexpected moment, it was really a setback for the entire planning process in the country. Many of our priorities had to be changed, and consequently priority given to agriculture was also reduced. This was followed by bad monsoon in the country. India was experiencing one of the worst climatic situations. This led to a shortage in the agricultural production, particularly food production. India was virtually moving towards a famine. To revive the situation, the government initiated several measures. One of the strong policy interventions was launching of a strong public distribution system.

 

Phase II (1966–85): To overcome the problems of famine and miserable performance, various measures were taken by the government. The most popular is the Green Revolution, which was initiated by the three eminent scientists, namely, Norman Blauge, MS Swaminathan and C Subraminam. The Green Revolution broadly refers to the use of technology in agriculture. It is otherwise known as crop irrigation technology. The package includes use of High Yielding Variety Seeds (HYV), use of chemical fertilizers for more productivity, extensive use of irrigation facilities, use of pesticides and also the supply of sufficient credit. The package was first tried in selected districts of Punjab. The results were marvelous. Punjab could make a record production in wheat. Within a short while, the package got praise from the scientists and farmers.

The success of the Green Revolution motivated the government to decide extending the package to other parts of the country. To make this extension smooth, the government took many measures. The important measures are the nationalization of the commercial banks in 1969, starting of agricultural universities and research institutions, setting up few irrigation projects and so on. As a result of these measures, Indian agriculture became more technology centred in the early 1970s. A wide network of agricultural universities and research institutions was started across the country. Education in agriculture became widespread. The productivity of crops also improved. But this dynamism continued only for a short period. By the early 1980s, signs of stagnation appeared. The farmer’s preferences for HYV marginally declined. This is mainly due to the problems associated with input management, which covers the problem of input use efficiency, distribution of inputs, creating farmer awareness, etc. For instance, fertilizers must be applied only after soil testing. Various reports indicate that only less than 10 per cent of farmers go for soil testing. In short, by mid-1980, there was a feeling that Indian agriculture is moving towards stagnancy.

Phase III (1985–95): This phase can be labelled as pre-reforms phase. In this phase, there were some noticeable shifts in the Indian agriculture. One noticeable shift was the geographical shift in agriculture production. Until the mid-1980s, Punjab and Haryana dominated in the agriculture production in the country. But by the late 1980s, this dominance was shifted to the north-eastern states like Bengal, Bihar and Odisha. Second change was the shift in the cropping pattern. Almost all the states started cultivating commercial crops/cash crops/horticultural crops instead of food crops. Certain states recorded a substantial fall in the area under food crops. For instance, in Kerala, the area under food crops was only less than 20 per cent in 1990, which came down in the recent years. The third feature was the low priority given to irrigation. Even though Green Revolution promoted irrigation in the 1970s, in the 1980s the added thrust on irrigation was reduced. Various reasons were put forward for this. One argument is the lack of complementarities between the public investment and the private investment. The signs of stagnancy were exaggerated in the 1990s.

Phase IV (1995–2009): This phase is consistent with the era of globalized agriculture. Under the agenda of reforms, the agriculture strategy is ‘export-led growth’. To cope with this strategy, the government encouraged the farmers to cultivate more of commercial/ plantation crops. However, at the same time, the farmers complained that they did not get remunerative price for their produce. These problems can be rectified only if we promote processing and value addition. Currently, only less than 4 per cent of the fruits and vegetables produced in the country are processed, while the average rate of processing in the developed countries is 60–75 per cent. Another challenge in this phase is the low competitive strength of our agricultural commodities. A low competitive strength is due to bad technology, high cost of cultivation, diseconomies of scale, etc. Our main concern today is how to make our agriculture globally competitive. While discussing the strategies for making our agriculture globally competitive, there are several issues to be addressed. Any discussion on agriculture growth should start with the land utilization pattern followed by trends in area, production and yield.

19.2.1 Land Utilization Pattern

The Table 19.5 gives the land utilisation pattern of India between 1960–61 to 2005–06. It is seen that the gross sown area which stood at 182,242 thousand hectares in 1991–92 increased to 197,762 thousand hectares in 1977–78, the per cent increase being 8.52. At the same time, the change in the net sown area and the land available for agriculture remained marginal, being 0.37 per cent and 0.06 per cent, respectively. Just like the land utilization pattern, land holding pattern has a direct bearing on the size of economy. The share of the marginal farmers in the notable number of holdings stood at 50.62 per cent in 1970–71, which increased to 58.99 per cent in 1990–91. The marginal and small farmers together accounted for 69.67 per cent of holdings in 1970–71, which also increased to 77.98 per cent in 1990–91. At the same time, the per cent share of the large holdings declined from 3.93 per cent in 1970–71 to just 1.59 per cent in 1990–91, while the medium and large farmers accounted for 60.60 per cent of the area operated in 1990–91. All these trends are sufficient to infer that the Indian agriculture is dominated by small holdings. The end result of these changes summarizes that the average size of holdings in the country declined from 2.30 hectares in 1970–71 to just 1.57 hectares in 1990–91. The small size of land holdings directly affects the cultivation practices and also the yield.

 

 

19.3 Trends in the Area, Production and Yield of Major Crops

The cropping pattern refers to the distribution of cultivated land among different crops. As mentioned above, the cropping pattern of the country underwent significant changes particularly after 1980. Until 1980, the major crops cultivated were the food crops. But after 1980, almost all the states made a significant shift from the food crops to the commercial/ plantation/horticultural crops. The mid-1960s which were marked by the beginning of the Green Revolution were something like a watershed in the growth of the Indian agriculture. During the pre-revolution period, production of all crops recorded an impressive average growth rate of 3.13 per cent per annum. During the subsequent period, the growth rate remained subdued at 2.10 per cent. The rate of expansion of the agricultural production was remarkably higher during the 1980s. The production indices of the food grains showed a steep rising trend throughout the decade, except for a downward movement during 1986–87 and 1987–88. More spectacular was the rising trend in the output of non-food grains, particularly during the second half of the decade. The production of all the crops recorded a growth rate of 2.77 per cent during the first half of the 1980s, and it accelerated to 3.92 per cent during the second half of the decade, compared with 2.10 per cent during 1964–65. During the 1990s, however, the growth rate of agricultural production slowed down considerably to 2.64 per cent and the growth rate of food grains decelerated to 1.63 per cent. Not only the growth rate decelerated, but the absolute production levels of food grains also remained far below the plan targets. The food grains output failed to keep pace with the population growth and, consequently, the per capita availability of food grains which had reached a level of 510 grams per day in 1991 declined to an average level of 482 gram per day during the subsequent years, and reached 464 gram per day in 2002. Table 19.6 presents the growth rates of the output of the various sub-sectors of agriculture.

 

 

These broad trends in the growth rates of agricultural production are directly or indirectly linked to a series of related issues like input supply, markets, price policy, trade policy, etc. In Tables 19.7, 19.8 and 19.9 an attempt is also made to assess the changes in area, production and the yield of selected crops.

 

Rice: Rice is the most important crop of the country, cultivated in almost all the states. The area under rice is about 30 per cent of the global area under rice.

Rice production in India underwent three phases. In the first phase, prior to the Green Revolution, the productivity of rice was very low because of the outdated technology. In the second phase, after the Green Revolution, productivity substantially improved; and, in the current phase, the area under rice recorded a significant fall. This is mainly due to the farmer preferences towards commercial or plantation crops. Over the last 25 years, area under rice recorded only a marginal increase of 2 million hectares while production and yield recorded a noticeable increase. In 2004–05, production stood at 85,310 thousand tonnes and yield 2047 kg per hectare. The increase in production is due to yield effect rather than area effect. A substantial fall in the area under rice in many states is a matter of concern. The compound rates of index in area under rice show a negative growth of 0.1 per cent per annum during 2001–08, compared to the 1990s. The area under rice cultivation has remained more or less stagnant in the recent years, while growth in yield has shown an increase.

 

Wheat: India and China are the leading wheat producing countries in the world. The country accounted for about 12 per cent of the global land area under the production of wheat. The Green Revolution was a breakthrough in wheat production in the country. The area under wheat, which stood at just 17.65 million hectares in 1969, increased to 22.27 million hectares in 1980 and to 27.32 million hectares in 2006. Compared to rice, area expansion in wheat is high. Between 1980 and 2004, the production doubled and the yield improved from 1630 in 1980 to 2713 in 2005. As far as wheat is concerned, the area effect and the yield effect are positive. The yield rate of wheat in India is almost equal to the yield standards set by the FAO. The area under wheat, which was around 25 million hectares in 2002–03, increased to 26.4 million hectares in 2005–06 and further to 28 million hectares in 2007–08. The coverage under irrigation has been about 87–89 per cent of the area for wheat. The compound growth rates of indices of area, production and yield of wheat during 1991–2000 show a perceptible decline. The index of yield increased significantly, leading to an increase in the growth of production.

Pulses: Gram and tur are the major pulses produced in India. India ranks first in production of pulses in the world. The total area under pulses, which stood at 21.14 million hectares in 1970–71, increased to 22.46 million hectares in 1980–81 and 26.58 million hectares in 2004–05. Indications are that pulses production will be more in the coming years. The production of pulses is spread over Madhya Pradesh, Uttar Pradesh and Rajasthan.

Sugar Cane: In the case of sugar cane also, India has a noticeable position in the world. We are very close to the leading sugar cane producers like Cuba and Brazil. The production of sugar cane is subject to high volatility, and thus the production and price of sugar also fluctuate. The major sugar cane producing states are Uttar Pradesh, Maharashtra, Karnataka and Tamil Nadu. The area under sugar cane in India declined from 4174 thousand hectares in 1996–97 to 3760 thousand hectares in 2004–05. Correspondingly the production and yield also declined. But this setback was recovered immediately. The area under sugar cane showed an increase from 3.93 million hectares in 2003–04 to around 5.04 million hectares in 2007–08. Accordingly, the yield increased from 59.4 tonnes per hectare to 69.1 tonnes per hectare in 2007–08. Despite a decline in the growth index of yield during 2001–08, as compared to the 1990s, the index of production growth was more or less sustained by the growth in index of area during the period.

Cotton: Cotton occupies an important place among the cash crops in India. It is grown in nine states, the major ones being, Punjab, Haryana, Rajasthan, Gujarath, Maharastra, Madhya Pradesh, Andhra Pradesh, Karnataka and Tamil Nadu. The area under cotton increased from 7.60 million hectares in 2003–04 to 9.43 million hectares in 2007–08. The yield of cotton went up from 307 kg per hectare in 2003–04 to 466 kg per hectare in 2007–08. The compound growth in the index of yield has shown an increase from—0.4 per cent during the 1990s to 15.8 per cent during 2001–08. However, the growth in index of the area moderated, but remained positive. The combined effect on the index of production was an increase in growth from 2.3 per cent during the 1990s to 17.5 per cent during 2001–08.

Oilseeds: The list of oilseeds includes groundnut, castor seed, linseed, Niger seed, safflower, sesame, soybean, sunflower, rapeseed and mustard. These seeds play a very important role in agriculture and the economy as well. The fluctuations in the price of oilseeds affect the oil price, and ultimately the economy. Oilseeds together occupied 12.54 million hectares in 1969, which gradually increased to 19 million hectares in 1990–91, and 27 million hectares in 2005. At the same time there was a steep increase in production. From a small level of 9.37 million tonnes in 1980, production increased to about 25 million tonnes in 2005—an increase of about three times. This is well reflected in the yield also. Coming to the recent trends, the area under all oilseeds which together stood at 23.66 million hectares in 2003–04 increased to 26.54 million hectares in 2007–08. The production of oilseeds, which stood at 25.19 million tonnes in 2003–04, increased to 29.76 million tonnes in 2007–08. The growth in indices of the yield and area under oilseeds has shown a perceptible improvement during 2001–08 as compared to the 1990s.

Coarse cereals: The area under cereals occupies a significant position in the cropping pattern of the country. The important cereals are jower, bajra, maize, ragi, barley and millets. The area under cereals, which is spread over rain fed areas, stood at about 41 million hectares in 1980, consistently declined to 37 million hectares in 1990, and 30 million hectares in 2005. At the same time, the production recorded a substantial increase from 28 million tonnes in 1980 to 38 million tonnes in 2005. This increase is due to an expansion in the yield. The yield was only 695 kg per hectare in 1980, which increased to about 1300 in 2005, an increase of about 100 per cent.

Plantation crops: In recent years, there is an increased shift towards plantation crops particularly rubber. Kerala is the home of rubber production. Since 1980, there has been a noticeable increase in the area under rubber in non-traditional areas also. In Kerala, the rubber plantations spread from the traditional district of Kottayam to other districts. High price of rubber is the most important attraction for the farmers to shift towards rubber cultivation. The growth of demand for tyres actually promoted the rubber industry. In 1996–97, the area under rubber stood at 533 thousand hectares, which increased to 574 thousand by the end of 2004. The production increased from 550 thousand tonnes in 1996–97 to 750 thousand tonnes in 2004–05. Correspondingly, the yield improved from 1030 to 1240, during the same period. The price of natural rubber continues to be high.

The next plantation crop is tea. India is the leading producer of tea in the world. Tea is mainly grown in Assam, West Bengal, Tamil Nadu and Kerala. The total area under tea plantations, which stood at 421 thousand hectares in 1971, marginally improved to 431 thousand hectares in 1996–97 and to 524 thousand hectares in 2005–06. The production of tea increased from 780 thousand tonnes in 1996–97 to 800 thousand tonnes in 2004–05. In the recent years, there has been a fall in the yield of tea. This is mainly due to plant disease.

The next important plantation crop is coffee. The share of India in the world production of coffee is also significant. Compared to other crops, coffee is grown only in Karnataka, Kerala and Tamil Nadu. Of the total area under coffee plantations, nearly 50 per cent is in Karnataka. The totals area under coffee stood at 304 thousand hectares in 1996–97, which substantially improved to around 400 thousand hectares in 2005–06. The production and yield of coffee also recorded an improvement. The production of coffee increased from 206 thousand tonnes in 1996–97 to 300 thousand tonnes in 2004–05, the rate of growth being about 30 per cent. The yield, which stood at 678 kg per hectare, reached 775 kg per hectare, by the end of 2005. Thus it is seen that almost all the plantation crops recorded an increase in their area and, consequently, the production and yield.

 

From the above discussions, it is clear that there is a noticeable shift in the cropping pattern in India since 1980. The following are the important factors which brought about a shift in the cropping pattern in the country.

1. Agro climatic conditions: The agro climatic conditions play a very important role in the selection of crops. The nature of the soil, climatic conditions, availability of rainfall, etc. decides the agro climatic conditions. The concept of agro climatic planning deserves a special mention in this context. But when we go through the cropping pattern of the country, it is seen that in many cases the agro climatic conditions are rarely practised. The greedy nature of the farmers, to make quick income, is the main reason for this situation. For instance, if we consider the rubber plantations in Kerala, we will see that in the earlier years rubber plantations were concentrated only in the Kottayam district where the agro climatic conditions were suitable for rubber plantations. When the price of rubber increased due to different reasons, farmers started cultivating rubber across the country without considering the agro climatic conditions. This is true for many other crops also. When the crops are cultivated in unsuitable agro climatic conditions, the yield will be low and the agricultural operations become uneconomic in the short run. Thus, it is said that the shift in the cropping pattern is unscientific in many cases.

    

   TABLE 19.10 Compound Growth Rates of Area, Production and Yield (Per cent per Annum with Base TE 1981–82 = 100)

   

   Source: Economic Survey 2008–09, 2009–10 Government of India.

    

2. Traditions: It is a fact that certain crops are cultivated in certain locations. Either accidentally, or due to some historic reasons, certain crops are cultivated in certain regions from time immemorial. The ownership pattern of this cultivation will also be in the hands of a few, a continuation of the old landlordism. The land reforms enacted in the country brought changes in this cropping pattern, recently.
3. Social factors: The social environment, customs, traditions, outlook towards material things, etc. also influence the cropping pattern to some extent. For example, in the pre-independence period, the outlook of a majority of farmers was very narrow, and they were bound by traditions. Therefore, the same cropping pattern was continued to be adopted by the successive generations.
4. Availability of inputs: The availability of inputs also plays a very important role in deciding the crop. HYV, fertilizers, rainfall and irrigation facilities are the critical inputs which influence the cropping pattern. One of the outcomes of the Green Revolution was the popularization of the use of the HYV and chemical fertilizers. Immediately after the Green Revolution, the area under the HYV made a rapid expansion. But after a few years, the farmers’ preference for the HYV declined. The main reason is that the HYV can be cultivated only if there is a corresponding supply of various inputs in the optimum manner. This takes place very rarely. Seed management is a very crucial element for growth in productivity and the present situation is highly unsatisfactory. In 1996–97 production of breeder seeds stood at 43.72 Qts which increased to 73.83 Qts in 2006–07. The production of foundation seeds increased from 6.45 lakh Qts in 1996–97 to 8.00 Qts in 2006–07. The distribution of certified quality seeds increased from 79.01 Qts in 1996–97 to 191.98 Qts in 2006–07. These changes are not substantial compared to the demand.
5. Use of fertilizers: Similarly, there are instances where there is a negative relation between the use of chemical fertilizers and the agricultural productivity. This also generated many discussions about the fertilizer-use efficiency. In reality, the root cause is the absence of soil testing. The farmers have to go for soil testing, and have to use fertilizers with only those nutrients which are deficient in the soil. For example, if phosphorus is deficit, the farmers have to apply phosphoric fertilizers. However, the reports suggest that only less than 10 per cent of the farmers go for soil testing. There is a saying that the Indian agriculture is a gamble on monsoons. Even after 60 years of independence, this has not changed. So, in certain areas, we have to go for rain-fed crops alone. The increase in area under irrigation stagnated after 1985. This made the cultivation of many crops uneconomic or unsuitable. The untimely, inappropriate and inefficient supply of inputs brought changes in the cropping pattern due to chance and compulsions.

    

   TABLE 19.11 Consumption of Fertilizers in India (in Thousand Tonnes)

   

   Source: Economic Survey 2008–09, Government of India.

    

   Figure 19.5: Consumption of Fertilizers (NPK000 Tonnes) in India 1960–61

   

   Figure 19.6: Consumption of Fertilizers (NPK000 Tonnes) in India 2007–08

   
6. Size of operational holdings: Another factor which decides the cropping pattern is the size of the operational holdings. The holdings are divided into marginal, small, semi-medium, medium and large. In India, about 75 per cent of our holdings are marginal and small. When the holdings are small, modern agricultural practices cannot be done, or crops grown with modern practices cannot be chosen. The average holdings stood at 1.32 hectare in 2004–05, compared to 1.41 in 1995–96. The division of holdings, as a result of the breakdown of the joint family system also contributed to this.

    

   TABLE 19.12 Percentage of Irrigated Area in India Under Different Crops

   

   Source: Economic Survey 2008–09, Government of India.

    

7. Agricultural credit: Agricultural credit also plays an important role in deciding the cropping pattern. The major agencies supplying agriculture credit are cooperatives, commercial banks and regional rural banks. The availability of credit is more liberal in the case of certain crops, as a part of the government policy. When such offers are made by the government, farmers deliberately choose those crops, just to enjoy the credit facilities. The scale of finance is also essential here. The credit available for growing certain crops in a unit area is called the scale of finance. The scale of finance is prepared after considering the cost of cultivation. The scale of finance is high for certain crops, and low for the others. Naturally the farmers are compelled to choose the crops for which the scale of finance is high. One of the major measures taken by the Reserve Bank of India, to augment agriculture credit, is the launching of Kisan Credit Cards (Table 19.14).
8. Government policy: The government policy plays a significant role in deciding the cropping pattern. The policy interventions of the government are not uniform for all crops. For certain crops, the conditions are very liberal, with large number of concessions and facilities as in the case of credit mentioned above. Naturally, there will be a tendency on the part of the farmers to enjoy the facilities and thus to choose the crops for which the terms are liberal. Thus, it may be inferred that the cropping pattern is decided by many factors. The unscientific selection of the crops is not the exclusive fault of the farmers. The need for making the farmers aware, educating them, etc. are important policy instruments in this context. The discussions get more momentum in the context of reforms in the agriculture sector.

    

   TABLE 19.13 Flow of Institutional Credit to Agriculture and Allied Activities (Rupees in Crore)

   

   Source: Economic Survey 2008–09, Government of India.

    

   TABLE 19.14 Agency-wise Kisan Credit Cards Issued (Lakh)

   

   Source: NABARD 2009.

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