Munich Personal RePEc Archive

Agricultural Crisis in India: The Root Cause and Consequences

Dhas, Albert Christopher (2009): Agricultural Crisis in India: The Root Cause and Consequences.

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Agricultue in India is undergoing a structural change leading to a crisis situation. The rate of growth of agricultural output is gradually declining in the recent years. The relative contribution of agriculture to the GDP has been declining over time steadily. The performance of agriculture by crop categories also clearly indicates the slowing down process of agriculture in India. The onset of deceleration in agriculture began from early nineties and it became sharp from the late nineties. The trends in the area, input use, capital stock and technology also reflect the agricultural downfall and the farmer’s response accordingly. It is alarming that India is moving towards a point of no return, from being a self-reliant nation of food surplus to a net importer of food. All these trends indicate that the agricultural sector in India is facing a crisis today.

It is argued that the root cause of the crisis was that agriculture is no more a profitable economic activity when compared to other enterprises. It means that the income derived from these activities is not sufficient enough to meet the expenditure of the cultivators. And therefore, unless agriculture is made a profitable enterprise, the present crisis cannot be solved. The related factors responsible for the crisis include: dependence on rainfall and climate, liberal import of agricultural products, reduction in agricultural subsidies, lack of easy credit to agriculture and dependence on money lenders, decline in government investment in the agricultural sector and conversion of agricultural land for alternative uses.

It is argued that the consequence of agricultural crisis in India is very vast and likely to hit all the other sectors and the national economy in several ways. In specific, it has adverse effects on food supply, prices of foodgrains, cost of living, health and nutrition, poverty, employment, labour market, land loss from agriculture and foreign exchange earnings. In sum, it revealed that the agricultural crisis would be affecting a majority of the people in India and the economy as a whole in the long run. And therefore, it can be argued that the crisis in agriculture is a crisis of the country as a whole.

Ihe only remedy to the crisis is to do all that is possible to make agriculture a profitable enterprise and attract the farmers to continue the crop production activities. As an effort towards this direction, the government should augment its investment and expenditure in the farm sector. Investment in agriculture and its allied sectors, including irrigation, transport, communication, rural market, rural infrastructure and farm research, should be drastically increased, and the government should aim at integrated development of the rural areas.

The solution of the problem is not in a few “packages” but in drastic changes in the present economic policies related to agriculture. No other sector’s growth and development must be at the cost of agriculture. All farmers, agricultural labourers, societies, Government and People’s Organisations should work collectively to revive agriculture and “Save India from Agriculture Crisis”.

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