Introduction || APPENDIX (CH-4) || APPENDIX (CH-9) || ANNEXURE (CH-12) || APPENDIX (CH-14) || APPENDIX (CH-24) || APPENDIX (CH-29) || Conclusion
Chapter- 1 || 2 || 3 || 4 || 5 || 6 || 7 || 8 || 9 || 10 || 11 || 12 || 13 || 14 || 15 || 16 || 17 || 18 || 19 || 20 || 21 || 22 || 23 || 24 || 25 || 26 || 27 || 28 || 29 || 30 || 31 || 32 || 33 || 34 || 35 || 36 || 37 || 38 || 39

Chapter 9:
THE STATE OF THE AGRICULTURAL ECONOMY

The largest portion of the natural resources of India, consists of land and by far the larger roportion of its inhabitants are engaged in the exploitation of land. In any scheme of lanned economic development of the country, therefore, agricultural reorganisation and sform hold a position of basic importance. Recently on account of the growing need for ood and raw materials this importance has been brought home to all sections of the ommunity. While the several parts of the nation's economy are mutually inter-dependent and ley must all receive their proper share of attention from the economic planner, the success f the whole Plan will vitally depend on the results achieved in making the most advantageous se of the land and labour resources engaged in agriculture. In this sense the importance of .griculture is both basic and vital.

Land Utilisation And Crop Pattern

2. The total geographical area of the country is 8n million acres, but land use statistics are available for only about 615 million acres which are as follows :—

* The area under forests, for the Indian Union as a whole, including the non-reporting portion is estimated at 147 million acres.
! Includes 3.5 million acres for which details are not available.

The bulk of the 196 million acres, for which land utilisation statistics are not available, consists of mountains, deserts and inaccessible forests. The cultivated area (items 2+3) comes to 324 million acres. About 35-5 million acres grow more than one crop.

3. Including the conventional estimates which have been framed for non-reporting areas in respect of foodgrains, the gross cropped area is about 317 million acres. Its break up by crops is given in the appendix to this chapter. The appendix shows that food crops cover about 78 per cent. ofth& cropped area, and commercial crops, which provide raw, material for industries, account for 17 per cent. Plantation crops and spices cover no more than l • i per cent. of the area, though they not only occupy a position of great importance in the economy of the valleys in the north-east and the strip of territory along the south-west coast of India but also play a vital role in India's foreign trade.

Trends In Land Use Pattern

4. Due to changes in coverage and methods of reporting it is difficult to obtain comparable data for the Indian Union as a whole over a sufficiently long period to indicate trends. A study of the data for some of the principal States where only slight changes in coverage have occurred, was, therefore, undertaken over a period of about 40 years (ending 1946-47) which brings out the following trends :—

1. The net area sown* has not increased appreciably except in Uttar Pradesh The area growing more than one crop has increased by about 20 per cent. and the total cropped area, therefore, shows some increase, which, however, lags far behind the rapidly increasing population.
2. Irrigated area has increased by about 10% mainly through the extension of canals. It has been noticed that the area irrigated from minor irrigation works has remained almost static over this long period. It seems to indicate that the new constructions have at best kept pace with works going out of use for want of repairs or otherwise, e.g., through extension of canal irrigation.
3. The area under current fallows remained at the level of 1919-20 till the early forties and thereafter showed some increase, particularly in the cotton growing tracts, possibly because of a sudden decrease m cotton area which was left partly fallow. Hyderabad is the only State which shows a continuous increase in fallows. In the opinion of a special committee set up by the Hyderabad Government the apparent increase in the area under fallows is somewhat of an exaggeration.

5. Another study of trends'in crop pattern was based on the data relating to the main growing areas of different crops. This indicates the following trends :—

1. The area tinder food grains shows a small increase during the forties when the area under cotton declined.
2. During the periods of the two world wars the acreage under cotton decreased. This trend was reversed in the post-war periods.
3. Area under oil seeds, mostly groundnuts has steadily increased by about 4 million acres.
4. A considerable increase of about a million acres has occurred in jute area since partition because of the intensive efforts made to fill the large gap created in the supply position after Partition.
5. The area under sugarcane has increased by about a million acres. A steady increase, though small in extent, is noticed in the area under cane in Madras and Bombay.

6. The above trends bring out two main facts of the agricultural situation, namely that (;) although gross cropped area has increased as a result of double cropping, little new area has come under cultivation during the last four decades and ( changes in price structure do affect the pattern of crops even though a large part of the area is cultivated in tiny holdings. A part of the area of cultivable waste can be utilised for extension of cultivation and afforestation. Though much of it may be fragmented, there is a considerable area in sizeable blocks. On the abolition of zamindari most of it has been nationalised. Inspite of the increasing pressure of population, very little extension of cultivation to waste lands has taken place during the last 40 years. This seems to indicate that the available cultivable waste does not generally lend itself to reclamation within the present resources of the cultivators. Small areas may be added here and there, but for any schemes of materially increasing the area under cultivation, reclamation and rehabilitation work has to be undertaken on an organised scale. Only State efforts or State sponsored efforts can hope to do this. For making the best use of all available land a rapid survey to locate cultivable areas and classify them according to the measures necessary for their reclamation appears to be the first essential step.

7. In areas thus selected for agricultural development a major State effort at reclamation will be necessary. A primary necessity is of course to examine the schemes from all relevant technical and economic angles. Time, talent and money spent in this preliminary effort is an indispensable precaution and a profitable investment. Once the scheme is prepared, it may be put into effect through a public corporation or through a development board ; but when colonization or rehabilitation has commenced, the maximum possible scope should be given to co-operative action. While prospects of a significant increase in the area under cultivation are mostly connected with major schemes of development, no measure which is calculated to bring suitable land under profitable cultivation, even within the existing village settlements, should be neglected.

Yield Trends

8. Extension of cultivation can be an important factor in stepping up agricultural production over a period of time. For meeting the immediate needs of the nation, however, reliance has to be placed mainly on increasing production from the existing area by improving the yields. The official estimates framed on a comparable basis indicate that while the area under cereals during the three years ending 1949-50 compared to the period immediately preceding the war has not changed appreciably, there has been a decline in the yield per acre from 619 Ibs. to 565 Ibs. The yield estimates which are based on normal yield and condition factor suffer from the defect of being subjective and the reported fall may be ascribable in part to caution on the part of State Governments in reporting their suroluses and deficits from year to year for the, purposes: of the Basic Plan for food. Since 1944, a scientifically designed procedure for estimating production, based on the technique of random sampling and crop cutting experiments, has been introduced for some crops by the Indian Council of Agricultural Research. The estimates of production based on this technique are now available for 1949-50, 1950-51 and 1951-52, which indicate that while the official estimate for

1949-50 based on the standard yield and condition factor was slightly optimistic compared with the estimate based on the technique of random sampling, the official estimates for 1950-51 and 1951-52 were under-estimates by 6 to 7 per cent. as detailed below :—

These figures suggest that while during favourable seasons the official estimates may be somewhat over-estimates, in bad seasons there is a distinct tendency to under-estimate production.

9. A study undertaken by the Ministry of Food and Agriculture to determine yield trends over the last 40 years indicates that in no State do all the crops show a consistent decline in yield. For commercial crops the data revealed clear evidence of generally increasing yields, and in respect of sugarcane an expansion of area as well. In respect of food crops also an expansion in area is perceptible in several cases as also an increase in the proportion of irrigated areas, but yield trends are not uniform ; yields show an increase for certain crops in certain States, a decline in certain others and absence of any perceptible change in the rest. Generally speaking, an expansion of area under a crop has been seen to be a factor associated with the lowering of yield rates, while an increase in the proportion of irrigated area has the opposite effect. In a few cases yield trends are difficult to explain on these grounds and these cases merit further examination. The study concludes that there is little ground for the belief that there has been a deterioration in soil fertility or in the standard of husbandry in recent years.

10. The study referred to above was also based on the official estimates, though for the States selected for the study the estimates of production were comparatively more reliable. The official estimates of average and total yields for individual years, were useful as guides for administrative action, particularly for food crops. It would not, however, be justifiable to place too great a reliance on them for purposes of comparison of yields as between different years as a measure of land fertility. The estimates based on sample surveys are available only for a few years and they do not cover all crops. On the basis of the data available to us, we would hesitate to arrive at any conclusion regarding yield trends. With a more extensive coverage and with an accumulation of data for several years these surveys will produce significant data on long term trends. In the interest of a planned agricultural policy, therefore, the adoption of the technique of random sample surveys for the preparation of official estimates of production in all States should get a high priority.

Availability And Requirements

11. Cereals—While the population has increased by about 39 per cent. during the last four decades, the production of foodgrains has not kept pace with it. This indicates an appreciable decrease in per capita availability of foodgrains from internal sources. For more than three decades India has been getting a much larger quantity of grains (mainly rice) from Burma than what it was exporting to other countries. The separation of Burma in 1936 has reduced internal supplies by about i -3 million tons, and the Partition in 1947 by a further 0-77 million tons. Since 1948 we have been importing large quantities of foodgrains, 2-8 million tons in 1948, 3-7 million tons in 1949, 2-i million tons in 1950, and 4-7 million tons in 1951.

12. Defects in agricultural statistics introduce an element of uncertainty in estimating the overall deficit which has to be met. The existing gap between availability and requirements and that which may come to exist in 1956, if in the meantime, production does not increase may be seen from the following statement* :

To do away with imports and maintain consumption at the level of 1950, i.e., 13'71 ounces per adult per day, the additional quantity offoodgrains needed in 1956 will be 6-7 million tons. The requirements of cereals for a balanced diet have been laid down by the Nutrition Advisory Committee at 14 ozs. and to raise consumption to this level the additional quantity required is estimated at 7 • 8 million tons. These figures indicate the magnitude of the problem that lies ahead.

13. Pulses—The position regarding availability of pulses is no better. The production of gram and other pulses during 1950-51 is estimated at 8-4 million tons. After allowing about 20% for stock feeding and seed etc. the net quantity available for human consumption may be estimated at 6-7 million tons. This means an availability of2-i ounces per adult per day as against 3 ounces recommended by the Nutrition Advisory Committee for a balanced diet. At the level of 1951 availability the additional requirements of the increased population during 1955-56 will be 0-5 million tons and to obtain the nutritional standards the additional requirements will be 4 million tons.

14. Subsidiary Foods—The principal subsidiary foods in use. in India are potatoes, tapioca and sweet potatoes. With their high yields per acre they have a special importance in a country deficit in foodgrains. Potatoes are consumed on a small scale as vegetables rather than as the staple diet because of their high price over a large part of the year. Lower ing their cost depends very largely on providing facilities for storage, dehydration and transport more cheaply than at present. Tapioca which is rich in starch forms an important article of diet in parts of Madras, Mysore and Travancore-Cochin. Though, by itself, it has a low nutritive value, it makes a good supplement to both rice and wheat.

15. Protective Foods—The present availability of fruits and vegetables is estimated at i '5 and 1-3 ounces per adult per day respectively. The requirements of a balanced diet are, on the other hand, estimated at 3 ounces of fruits and 10 ounces of vegetables. The availability of milk is estimated at 5-5 per adult per day as against the nutritional requirements of 10 ounces. Similar figures for fish are 0-2 and 1-3 ounces. Little information is available regarding the availability of meat and eggs ; it is, however, known to be very low. Generally speaking, there is throughout the country too great dependence on foodgrains and insufficient consumption of protective foods.

16. Sugar—Production of sugarcane during 1950-51 stood at 5-62 million {gur) tons and net availability for human consumption at I-62 ounces per adult per day as against the requirements of 2 ounces for a balanced diet. To raise consumption to this level during 1955-56, the additional quantity required is 2-2 million tons.

17. Oils and fats—Production of the five major oil seeds for 1950-51 has been estimated at 5-1 million tons and the net availability in terms of oils at about I -69 million tons (including imports of 23 thousand tons of copra and cocoanut oil and allowing for exports of 168 thousand tons). Of this 118 thousand tons were utilised for the manufacture of soaps, paints and varnishes and as lubricants and the net quantity available for human consumption was thus i -57 million tons of oil. This marks an increase of about 35 per cent. over the pre-war triennium. Even so the availability per adult per day stands at 0-5 ounces only. The other important source of fat in the Indian diet is ghee and the per capita availability of ghee works out at no more than o • i ounce per day. Including all the sources the per capita availability of oils and fats is far below what is considered necessary for nutrition.

18. Cotton—Production of cotton during 1950-51 was officially estimated at 2-97 million bales of 392 Ibs. net each and consumption at 4-07 million bales. The gap between production and consumption was met largely by importing 0-83 million bales during the year. The requirements for 1956 have been estimated at 5-4 million bales and the gap between production and requirements may thus increase to about 2-4 million bales unless production is stepped up meanwhile. A part of the requirements of long staple cotton, which is not grown in India in sufficient quantities, has, however, to be imported for a long time to come.

19. Jute—In spite of the large expansion of the area under jute which has taken place during the last few years, the gap between availability and requirements is still wide. The official estimate of production during 1950-51 was 3-3 million bales of raw jute and 0-6 million bales of mesta—an inferior type of substitute. The requirements for 1955-56 are estimated at 7-2 million bales. This indicates a gap of about 3'3 million bales between supply and requirements.

Tea, Coffee And Rubber

20. Plantations of tea, coffee and rubber cover less than 0-4 per cent. of the cropped area, concentrated mainly in the valleys of the north-east and along the coast on the south-west of India. They provide employment to more than a million families and thus play a vital role in the economy of these regions. In addition, they earn for India about Rs. 80 crores of foreign exchange. Tea alone accounts for Rs. 78 crores. A remarkable fact about tea plantations is that while the area under tea has remained unchanged for over a decade under international agreements, production has increased by about 43 per cent. over this period. This incidentally brings out that where sufficient capital is invested, yields can be increased appreciably. Coffee and rubber, which used to be export commodities are now largely consumed within the country. India actually imported about 12 million pounds of rubber during 1950-51. Rubber occupies a key position in industrial development and for defence. In view of the uncertainties of the international situation dependence on imports may be inadvisable. The bulk of the area under rubber is comprised of small holdings which are on the whole comparatively less efficiently managed than the tea and coffee plantations. The production has declined since 1945 because of a fall in the yields of old plantations and increased suspension of tapping due to unremunerative prices. Their rehabilitation demands immediate attention. The Development Committee for rubber plantations has formulated a fifteen-year plan for their rehabilitation and development and from this large increases in yield are expected.

Condiments And Spices

21. In spite of phenomenal increases in prices little change in area under condiments and spices appears to have occurred. The area under black pepper, an important dollar earner which yielded Rs. 20 crores from exports of 15 thousand tons during 1950-51 as against an annual pre-war average of Rs. 3 lakhs, still stands at 1,98,992 acres and has recorded only a nominal increase. Official estimates of the areas under cardamom and lemon grass are not available ; trade estimates place the average areas in the neighbourhood of one lakh acres and twenty-seven thousand acres respectively. Cardamom yields Rs. 1.46 crores of foreign exchange. Cashew nuts, which bring another Rs. 8 to 9 crores of foreign exchange through exports, are largely imported, processed and then exported, the value of the imports being of the order of about Rs. 2-8 crores. The condiments and spices have acquired a position of great importance in the economy of the plains on the south-west coast of India. It is likely that the industry may have shortly to face competition from Indonesia and Malaya. Moreover, the high level of prices may not be maintained. A downward trend is already evident. This industry lacks the organisational advantages which are enjoyed by other plantation industries like tea, coffee, and rubber. Even the exports are generally not graded and this has often led to avoidable losses. The Government of India have recently set up a committee to examine the whole position in respect of these crops, and particularly the question of their production and marketing being brought under a single organisation.

Approach To Agricultural Development

22. In this chapter we have attempted to state briefly the main features of the agricultural situation in India. The facts cited above may seem to suggest that the rural economy has been largely static. Some notable developments have, however, occurred over the past few decades. Large areas which suffered from repeated failures of rainfall have received irrigaton ; new crops have come to occupy a significant position in the country's production and trade ; the agricultural and the industrial economies in the country now exert a powerful influence on one another ; problems of rural indebtedness and the village moneylender exercise the administration and the people much less than they did fifteen or twenty years ago ; and finally, there is already in the countryside an awakening and a desire for raising standards of living. The even tenor of the agricultural economy was seriously disturbed as a result of the Partition ; but much adjustment has already taken place. In describing the state of the agricultural economy it was necessary to give special attention to the facts of agricultural production. An assessment of the state of production is, however, no more than a starting point for the consideration, of the conditions which determine agricultural development. This task is attempted in the chapters that follow.

23. The peasant's life constitutes an integrated whole and his problems interact lo such an extent that he does not see them in compartments. In the same way, in approaching agricultural development, the peasant's life and problems have to be viewed together, no doubt selecting the points at which special emphasis is needed, but aiming always at a comprehensive and many-sided effort to transform the peasant's outlook and environment. The end in view is the development of the human and material resources of the rural community. This is to be achieved in the main ^by enabling the rural people to solve their own problems and to organise themselves for co-operative action with a view to adapting new knowledge and new resources to their needs. Thus, while co-operation offers the basis of community action, it falls to the administrative machinery of the government and, in particular, to extension workers, to provide guidance and help to the villager.

24. A rigid social structure and unutilised resources have always characterised underdeveloped economies. To change the social pattern built round the ownership of land and to bring new resources and technology into every day operations become, therefore, central to the process of development. It is the purpose of planning to bring about rapid changes in such a way that the economy moves forward in a balanced, integrated manner, keeping in view at all times the major objectives of community development, increased production and equitable distribution. The succeeding chapters are concerned with various aspects of this central theme. In the discussion on land policy we set out the lines on which changes in the social structure might be brought about speedily to the greatest advantage of the country while, at the same time, strengthening the village community, eliminating differences in status and opportunity, and building the village into an organic unit in the structure of national planning.

25. The Five Year Plan envisages substantial increases in agricultural production for foodgrains as well as for commercial crops. The targets proposed in the Plan are to be realised through development programmes relating to major and minor irrigation works, extension of cultivation, reclamation and intensive farming based upon the application of the results of research. Considerable stress is laid on the conservation of existing resources, in particular, of forests and the soil. Diversification and expansion of the rural economy is sought through emphasis on the development of dairying and horticulture and through the growth of village industries, wherever possible, with the aid of power and improved tools. Land resources are to be supplemented by the resources of-sea and river and, therefore, the Plan provides for a new and extensive programme for the development of fisheries. As the rural economy has been largely starved of financial resources, a substantial programme for providing finance for agriculture has, therefore, been proposed.

26. Measures envisaged in the Plan* in the fields of industry, communications, and social services have considerable bearing on the growth of the rural economy, for they raise its economic potential, bring new resources into action and, above all, alter the milieu in which the peasant lives and works. Thus, although agricultural programmes lie at the very centre of the Five Year Plan, they have to be seen in the perspective of a larger plan that comprehends all aspects of national development.