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Subject Economics

Paper No and Title Paper 10: Sectoral Growth in India

Module No and Title Module 5: Green Revolution

Module Tag ECO_P10_M5

ECONOMICS Paper 10: Sectoral Growth in India

Module 5: Green Revolution
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TABLE OF CONTENTS
1. Learning Outcomes
2. Introduction
3. New Agricultural Strategy and Green Revolution
4. Achievements of New Agricultural Strategy
5. Limitations of New Agricultural Strategy
6. Green Revolution: future prospects
7. Second Green Revolution in India
8. Summary

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1. Learning Outcomes
After studying this module, you shall be able to

 Know the reasons behind the implementation of the technological reforms in Agriculture
in India.
 Understand the “New Agricultural Strategy “or Green Revolution.
 Understand the achievements and limitations of Green Revolution.
 The future prospects of Green Revolution.
 New thrust areas of the Indian agriculture.
 Need for second green revolution. Remedy to agrarian distress.

2. Introduction
At the time of independence, Indian economy was in total mess, especially in agricultural
production. We produce less than what we need to feed the population of our country. There was
widespread hunger and malnutrition in the country. The agriculture sector was desperately
waiting for a reform. A large section of the population was directly dependent on farming
activities.

In order to tame the situation and improve the production of food grains, government adopted two
pronged strategy: a) institutional reforms such as land reforms, irrigation and power projects etc.
as long term and sustainable strategy, b) import of food grains to feed the populace.

However, the strategy of land reforms, due to improper implementation and loopholes in the land
reform act could not catapult in substantial production up-surge. Hence, it was felt that
institutional reforms are insufficient to increase the production and productivity of food grains.
During the Nehruvian (till 1964) era policy-makers believed that mere institutional measures
were enough to increase the food grains production. Thus, Agriculture remained neglected till the
mid 1960s in the light of technological improvement.

3. New Agricultural Strategy and Green Revolution

Nonetheless Indian Agriculture witnessed a growth rate of 3% between 1949 and 1965; our
country had been facing food shortages. India was in the throes of crisis. Agricultural growth had
begun to stagnate in the early 1960s. The massive population burden further exacerbated the
problem. The rising food prices and rising cases of hunger death forced our Government to resort
to import foods from abroad. India made agreement with US to import wheat under PL 480
scheme in 1956. Nearly 3 million tonnes of foodgrain were imported under this scheme in the
very first year and volumes of import kept increasing over the years. The wars with China (1962)
and Pakistan (1965) and two successive drought years in 1965-66 further worsen the problems.
The nightmare does not end here; US wanted India to support on Vietnam War, return of import

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of foodgrains from his country. It was a direct attack on the sovereignty of any country. India was
against the war. US were facing severe criticism for waging war against Vietnam.

Given this scenario of the mid-1960s, economic self-reliance and particularly, food self-reliance
became the top priority. The New Agriculture Strategy began to be implemented in the right
earnest.

In common parlance, New Agriculture Strategy refers to adoption of HYV (High Yielding
Varieties) crops with more irrigation facilities and fertilizers usages.

A team of experts sponsored by Ford Foundation was invited by Government of India to suggest
ways and means to increase agricultural production and productivity. Team submitted report in
April, 1959, suggesting emphasis on modern agricultural inputs.

On the basis of the recommendations of the team, our government introduced an intensive
development programme in seven districts selected from seven states in 1960 and programme
was named Intensive Area Development Programme (IADP). The programme was later extended
to remaining states by selecting one district from each state, on an experimental basis during the
Third plan. G. S. Bhalla rightly commented that IADP implemented during the Nehru’s life, but
realized after his death.

It is pertinent to mention that Norman Borlaug and his associates developed new HYV for wheat
in Mexico during 1960s and later adopted by a number of countries, including India. It led to
substantial increase in production and productivity of wheat. In the context of India the
contribution of M.S. Swaminathan is exceptional. He is dubbed as “Father of Green Revolution in
India”. He is a geneticist and international administrator, who made tireless attempts to develop
Indianised HYV of wheat. His stated vision is to make the world free of hunger and
poverty. Swaminathan is an advocate of moving India sustainable development, especially using
environmentally sustainable agriculture, sustainable food security and the preservation of
biodiversity, which he calls an "evergreen revolution” 1

This “New Agricultural Strategy”, also known as the seed-water-fertilizer strategy, was adopted
in 1966.The new strategy primarily introduced more It was introduced in seven selective areas,
which includes, inter alia- West Godavari in Andhra Pradesh, Shahabad in Bihar, Raipur in
Madhya Pradesh, Thanjavur in Tamil Naidu, Ludhiana in Punjab, Aligarh in U.P. and Pali in
Rjasthan. The strategy focused on improved water supply, greater use of chemical fertilizers and
pesticides. Mechanisation of agriculture was not part of the strategy although it led to an
increased use of tractors and other machines. This is so because the strategy was supposed to be
neutral to scale and machine are not divisible inputs and hence not neutral to scale. Most of the
inputs were purchased inputs and hence the role of cash was critical to the adoption of this
strategy.

Some 32 million acres of land, about 10% of the total cultivated area, was initially chosen in the
water-assured areas for package programme. Government investment rose significantly in
agriculture. Government made efforts to ensure remunerative prices and provide access to

1 M.S. Swaminathan, “Growth and Sustainability”,Frontline,9-22 August 1997

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modern technology to the farmers. Gross capital formation in agriculture began to increase as a
result of increase public investment.

4. Achievements of New Agricultural Strategy

 Boost to the production of cereals

With the adoption of new technology in agriculture production of food grains, particularly wheat
and rice, has increased. Table 1 shows that the total food grains production increased from 82
million tonnes in 1960-61 to 176million tonnes in 1990-91 to 259.32 million tonnes in 2011-12.

Table1: Progress in Foodgrain Production in India, (Million tonnes)

1960-61 1990-91 2011-12

Rice 35 75 105.3
Wheat 11 55 94.9
Coarse Cereals 23 32 42.04
(a)Total cereals 69 162 242.2
(b)Total Pulses 13 14 17.1
Total foodgrains (a+b) 82 176 259.3

Source: Economic Survey

Adoption of modern technology in agriculture led to a rise in the production of wheat followed by
rice. Growth in output till 1990/91 was due mainly to growth in productivity more than growth in
acerage. In the 1990s for the two crops productivity growth slowed down and growth in area
accelerated but there was a reversal of these trends in the period after 2000/01 to 2011/12.
However, the spread of green revolution remained confined wheat and rice. There has been
virtually no impact on coarse cereals like jowar and bajra etc. Pulses and oilseeds production
remained stagnant throughout the period. Similarly, no new technology was available for cash
crops.

 Increase in the production of commercial crops

In the first phase of the introduction of new technology production of cash crops or commercial
crops such as sugarcane, cotton, jute, oilseeds etc was not affected. After 1973-74, modern
technology was introduced in other crops whereby these crops registered robust growth.

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Table 2: production of cash crops in India

1960-61 1990-91 1999-2000 2011-12

Oilseeds(MT) 7 19 21 20.7
Sugarcane(MT) 110 254 299 361
Cotton(m. Bales) 6 10 12 35.2
Jute(m. Bales) 4 8 11 10.7

Source: Economic Survey

Table 2 reveals that all the above mentioned cash crops have shown robust growth in production.

 Significant changes in cropping pattern

The cropping pattern in India has undergone significant change due to effect of green revolution.
The proportion of rice in total foodgrains has declined. It has been due to rapid rise in the
production of wheat. Similarly the pulses proportion also has shown substantial decline. The
coarse cereals proportion has also declined from 37 percent to 17 percent.

 Boost to agricultural production and employment

The New Agricultural Strategy adopted involved the use of high yield variety of crops, chemical
fertilizers, irrigation, improved technology, pesticides etc which has resulted in higher levels of
output. Demand for hired labour has also increased.

 Forward and backward linkages strengthen

It is established fact that there is a close demand-supply linkage between agriculture and industry.
An improvement in the agricultural production means higher income for farmers. This generates
higher demand for manufactured products, which in turn promotes investment in industry. In
return, industry provides inputs by developing new implements and tools for agriculture. The
agro-based industries depend on the agricultural sector for their main raw materials.

5. Limitations of New Agricultural Strategy

Introduction of modern technology in agriculture has made India self-sufficient in food
grains to a large extent. Increases in output have been more due to improvement in
productivity than in increase in acerage. In order to fully reap the benefits of modern
technology in agriculture the government should have played a complementary role by
undertaking a sustained level of public investment in infrastructure, marketing and
storage of agricultural produce and ensured provision of institutional credit to ease the
adoption of new technology for cash-trapped farmers. This is the reason that the benefits
of green revolution have been distributed more in favour of large farmers than small and
marginal or medium farmers. Not only has the distribution of benefits across farmers
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been asymmetric but also it has also been skewed across regions and crops. Intensive use
of pesticides and fertilizers has resulted in soil and water pollution which in turn has a
negative impact on the health of the local population.

 Indian Agriculture is still a gamble in monsoon

The new technology is also known as the ‘seed-water-fertilizer package’ and depends on
assured water supply for best results. However, vast tracts of agricultural land are still
deprived of irrigation facilities and depend on the rains. As a result, in the year of good
monsoon, there is a bumper crop and if the rains fail we have a lean crop. In 1950-51, gross
irrigated area as a percentage of gross cropped area was only 17 percent. Despite massive
investment in irrigation projects over the planning period gross irrigated area has increased to
45 percent in 2009-10. Thus, even now 55 percent of gross cropped area depends on rains.
That is why Indian agriculture is called “a gamble in monsoon.”

 Growth of capitalist farming

The new Agricultural Strategy, although neutral to scale, has an important aspect which does
not allow small and marginal farmers to reap its benefits. The three critical inputs need to be
purchased from the market as they are not available within the rural households. This requires
cash which is a problem for the small and marginal farmers. Given the paucity of institutional
credit only the large farmers manage to have access to HYV seeds, fertilizer and an assured
water supply. This has been further complicated by the capacity of the large farmers to
mechanise various farm activities which is not neutral to scale. This results in a larger share
of marketable surplus and hence agricultural income in the hands of large farmers. This
enhances their ability to implement the new technology and appropriate its benefits further.
Thus new technology. In other words, only the big farmers have financial ability to undertake
investment in modern technology. Consequently, income inequalities between small and big
farmers have widened overtime.

A study reveals that big farmers of Punjab invested more and resulted in more wealth. They
are referred to as the “gentlemen or progressive farmers.” Gentlemen farmers comprise ex-
servicemen, retired civil servants, businessmen etc. Regions which have been well endowed
with resources (like Punjab, Haryana and western U.P.) have benefited the most from the use
of modern technology. Other regions remain backward and underdeveloped. Regional
disparities have thus increased.

 Neglect of Institutional Reforms

New Agricultural Strategy has not laid stress on institutional reforms. As a result land
reforms have not been implemented properly and thus remain a distant dream. Other areas of
neglect include provision of irrigation works, institutional credit, insurance, marketing and
warehousing facilities. Our policy-makers thought that green revolution would be panacea for
all evils in agriculture, but it was proved ill-conceived idea.

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 Widening Disparities in Income

Technological changes in Indian agriculture have resulted in greater income inequalities.

C.H. Hanumantha has opined, “Technological changes have contributed to widening the
disparities in income between small and large farms and between landowners on the one hand
and the landless on the other.”2

 Problems of labour displacement

Under the garb of green revolution mechanisation of agricultural activities has resulted in the
displacement of labour. However, a number of agriculture experts believe other way round.
C.H. Hanumantha Rao bring out favourable and unfavourable effects of new technology on
employment: “if the green revolution is regarded as a package consisting of HYVs and
fertilisers, its contribution to employment has been substantial.......” However, “the net use of
tractors may turn out to be negative.....”3

 Impact on socio-economic relations in rural areas

A number of the studies have been done on the impact to of green revolution on socio-
economic relations in India. The studies may be summarised as follow:

(a) Small and medium farmers have benefited the least. They have very small holdings.
These farmers invested a little in their farms, hence increase in production is also
small. Sometimes these farmers take land on lease from large farmers and cultivate
on them, but high rentals, leave them with a pittance amount of grains. Thus, their
condition has not improved.
(b) Large farmers with surplus capital to invest have benefited the most from the green
revolution.

V.K. R.V.Rao once said that it is now well known that the so-called green revolution
which helped the country to raise its output of foodgrians has also been accompanied by a
widening of the range of inequality in rural incomes, the loss of their status as tenants by
a number of small farmers and emergence of social and economic tensions in the
countryside....the challenges which Indian agriculture faces is not only of production but
also that of distribution, and in our anxiety to concentrate on production problems, we
should not forget the human and social implications of agricultural developments.

6. Green Revolution: The Future Prospects

Green Revolution was initiated in mid 1960s with the objective of improving the
production and productivity of agricultural produce. The success of green revolution is
discernible to all. India’s agricultural production has increased by multiple times and we
have become self-reliant in foodgrains. The key role has been played by the HYVs, along
with chemical fertilisers, pesticides and irrigation facilities.
2 C.H.Hanumantha Rao,Agriculture: Policy and Performance, in Bimal Jalan, ed., The Indian
Economy: Problems and Prospects, New Delhi, 1992, pp. 128-29.
3 C.H.Hanumantha Rao, op. cit., pp. 129-30.

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Nowadays, a number of agricultural scientists have been talking about the exhaustion of
potential of New Agricultural Strategy and they suggest need to do new to improve the
production and productivity further.

The future prospects in Indian agriculture may be underlined in the following manner:

(a) Despite the use of modern technology in agriculture productivity in Indian agriculture
is still very low. Our productivity in comparison to developed countries is quite low.
The following data reveals it.

Table3Productivity of land in some countries, 2010 (kgs/hectare)

Rice/ paddy Wheat

Egypt 9,422 UK 7,673

India 3264 India 2839
Japan Pakistan 2,553
China 6,548 China 4,749

Source: GOI, Agricultural Statistics at a glance, 2012

Hence, Indian policy-makers must focus on increasing the productivity of agriculture sector.

(b) Even, within the Indian economy, there is a gap between potential and actual. It can
be shown through data.

Table 4 Potential and actual productivity (kgs/ hectare)

Crop Potential Actual
Rice 4000/5810 2393
Wheat 6000/6800 3177
Maize 6000/8000 2478
Sugarcane 96000/112000 71667
Source: GOI

There is no denying the fact that after green revolution, total production and productivity
in agriculture has increased, but there is an ample scope to improve it further. The above
table reveals that actual productivity is far below the potential.
(c) As we studied earlier that spread of green revolution has beenskewed, confined to
Punjab, Haryana and Western U.P. These areas benefited from HYVs of crops
because they had ample facilities of irrigation and other relevant inputs. However,
rest of the country could not avail of the benefits of green revolution.
It is a formidable challenge before the policy- makers to spread the benefit to other
parts of the country. Most challenging task would be to bring green revolution to
rain-fed areas of the country. A vast tracts of land in India fall under these categories.
These rain-fed areas have huge potential to increase total production and
productivity.
(d) Contract farming in Indian agriculture may bring high tech inputs due to corporate
players. However it remains to be seen whether farmers would also get a

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remunerative price for their produce. The potential of contract farming has not been
utilised.
(e) More public investment in agriculture is the key to promote more private investment.
(f) Insurance in agriculture is absent. At the current juncture of climate change, the
vagaries of monsoon and brunt of weather has to be borne by the farmers. Here
insurance can play the role of savior.
(g) Despite government’s efforts the presence of middlemen in agriculture has not been
reduced. These middlemen buy grains and other crops especially the perishable
vegetables and fruits at throw away prices and sell the same at a very high margin in
urban areas. Thus on the one hand the producer or the farmer fails to benefit from
getting a price which will help him recover his costs and induce him to remain in
agriculture on the other hand the consumer in the nonagricultural sector, at the mercy
of these middlemen, end up facing the brunt of food inflation curtailing their
purchasing power for other manufactured products. This has a direct implication for
demand for these products and industrial recession. Regulated and co-operative
marketing are important steps that the government can take, but there is still a long
way to go.
(h) Credit facilities are also a crucial missing link. Large farmers manage to appropriate
a large share of institutional credit where as the small and marginal farmers fail to
benefit from any concessional loan facility as they cannot furnish the requisite
collateral. Hence, they have to resort to the local money lender or the informal loan
providers. They charge exorbitantly high interest rate. Generations after generations
remain indebted to the money lender. Such extent of exploitation and dearth of
institutional credit adversely affects private investment in farm development.

Government should provide research and extension activities, subsidized inputs particularly to the
small and marginal farmer, and support via the MSP and procurement of excess output to
stabilize farmers’ income and prices. For the development of high yielding varieties and GM
crops, research institutions in both private and public sector would play the dominant role subject
to approvals from government. It is true that R&D has done commendable act, but more to be
done to ensure food security to the nation. Although a caveat must be added here regarding GM
crops. These GM seeds are not self-propagating seeds where by every time the farmer has to
grow the crop he has to buy the seed from the market for cash. Given a large mass of farmers
comprises small and marginal farmers with limited cash or credit available to them the use of
these seeds will only increase the vulnerability of the poorer farmers.

7. Second Green Revolution in India

While the first Green Revolution was to ensure food security as there was severe scarcity
of food in the country, the second Green Revolution should aim at creating sustainable
livelihood security for the poor and eradication of poverty by generating gainful self-
employment. While the first Green Revolution was aimed at undertaking mass

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production, the second Green Revolution should be to promote production by the masses.
This is in line with the Gandhian philosophy of involving the poor in development for
equitable distribution of our prosperity.

Thrust areas for second green revolution

(a) Second green revolution may focus on fruits and vegetables can double
agricultural growth to 4% per year.
(b) Contract farming may be the key modus operandi. It has potential to attract from
corporate capital and technology. It could also ensure handsome remunerative
price for farmers.

Land reform laws ban corporates from farming. But contract farming is possible:
corporates contract to provide high-tech farm inputs on credit, and lift the output at
guaranteed prices.

The biggest rural initiative comes from ITC, whose e-choupals cover over lakhs of
villages over the period, accounting for two-thirds of rural GDP. E-choupals are
electronic buying and selling centres, which also provide information to farmers on
prices, weather, and scientific farming practices. By cutting out middlemen, e-
choupals can pay farmers a higher price than they get in mandis, yet lower ITC’s
procurement costs. The company started with soyabeans, wheat and shrimps, and is
now diversifying into oilseeds, spices and fruit.

FieldFresh, run by Sunil Mittal of Bharti Telecom, already has 1000 acres under
horticulture in Punjab. Pepsi and McDonalds have started contract cultivation of
citrus fruit and lettuce respectively.

But these illustrations are baby steps and a lot more needs to be done.

(c) Back-end infrastructure development would be a formidable challenge for the

government. There is a huge shortage of warehousing, resulting in wastages of
foodgrain. India is facing dearth of supply-chain. As a result deficit regions a
donot benefit from surplus regions. Rural India needs warehousing facilities for
storing produce. At present only a few warehousing facilities are present.

Warehousing, cold storage and logistics network need huge investments and that is
the vital missing link in the conventional system leading to huge crop losses. Here
again, the organised retail along with government/ public sector agencies is expected
to pump capital to augment capacity. A better policy option would be to have the new
overseas players mandated to invest a portion of their capital for augmenting our
warehousing, supply chain, logistics through a public-private partnership model. The
augmenting of logistics capacity will in turn benefit the entire stakeholders in the
agriculture supply chain.

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(d) The second Green Revolution should focus on generation of employment for the
small and marginal farmers and the landless, while enhancing agricultural
production. As these families mostly own degraded and low fertile lands,
deprived of irrigation, the focus should be on efficient use of such lands. As such
lands are not suitable for intensive cropping of high yielding food and cash crops,
priority should be given to dryland horticulture and agri-silvi pastures. Tree crops
have the ability to withstand the vagaries of nature without causing heavy losses.
Tree farming can also provide year-round employment while protecting the soil
from erosion and runoff of rain water. Promotion of tree farming will also enrich
soil fertility and increase the water table. Therefore, such programmes can
improve the quality of life and protect the environment.
(e) Traditionally, Indian farmers engage in livestock tendering and management to
supplement their income. However, livestock caring is not done in scientific
manner as a result; sometimes it becomes their liability rather than asset. The need
of the time is to promote livestock with some professionalism and technology.

Fortunately, in India we have the largest population of livestock in the world and
the demand for livestock produce is increasing steeply. While the present milk
production is 98 million tons, the demand in the year 2022 is likely to rise to 180
million tons. This will provide greater opportunity to small farmers to expand
their dairy husbandry programme.

(f) To ensure better result, involving rural masses particularly those at the bottom of
the pyramid, is necessary to build the capabilities of the participant farmers,
particularly, the women. As they are semi-literate with lack of confidence, it is
necessary to provide mentoring services at their doorsteps by posting well-trained
para extension workers selected within the community.

So, while the potential for a second green revolution is huge, the hurdles are high
too. High-tech farmers with assured irrigation will surely link up with the best
companies. But progress will be slow in rain-fed areas, and for small and
marginal farmers. Here, government has to play proactive role to materialise
second green revolution in letter and spirit.

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8. Summary

 At the time of independence, India was not self-reliant for food, has to import.
 Food-deficit compelled the government to undertake technological reform to
ensure food for all. Land reforms could meet the expectation.
 New Agricultural Strategy based on HYVs crops result in higher production and
productivity.
 However, green revolution was confined to a limited area. Hence, it benefited a
few farmers for few crops in few regions.
 Now, it is the high time to make an effort to bring in second green revolution.
 Second green revolution primarily focuses on sustainable agriculture and
livestock. Climate change is posing formidable challenges to food security. These
challenges can be met by sustainable agriculture.

ECONOMICS Paper 10: Sectoral Growth in India

Module 5: Green Revolution