India, a country which is known as one of the most important agricultural economies of the world, has some very basic paradoxes with its agriculture sector. It is a fact that agriculture provides livelihood to around 58% of our population yet it contributes less than 20% to the GDP of the Indian economy.
In the Financial year 2019–20 Agriculture Sector contribution to GDP was 19.9% which is very low considering the proportion of the population that is dependent on it for livelihood. There are many reasons for which agriculture is such a poor performer in India, some of them are followings;
The first and most important thing is that Indian agriculture handles more population pressure than it can. The fact we are a country of 140 million people indicates that we are consuming most of what we are producing. This is the reason that despite producing enough we don’t have much surplus to indulge into agricultural trade.
Second thing is the small and unsustainable agricultural land holdings. The average landholding in India is less than two hectares. According to the Agricultural Census 2014 nearly 140 million landholdings in India are around average of 1.15 hectares and out of these the average size of two third landholdings is just 0.39 hectares. This small size of landholdings makes modernization of agriculture unviable. Farmers with marginal lands can not use technologies because they are too costly for them. This makes Indian agriculture less productive.
Lack of institutional support is another problem that haunts Indian farmers. Despite the efforts of the governments for so many years 28% of the credit requirements are met through non-institutional sources and due to that many farmers fell into the trap of local money lenders. Another cause of concern is the variance in institutional credit availability. Some states have upto 10% of all available credit and some have even as low as 0.5% of the available credit. This unavailability of credit reduces productivity and hampers related agricultural industries from growing.
Lack of forward and backward linkages to agriculture is a thing without which Indian agriculture can never escape from the vicious cycle of poverty and low productivity. Lack of these linkages is one of the most hazardous problems for Indian agriculture. Indian farmers are not aware about the reliable sources of scientifically designed better seeds, affordable and user friendly technology and proper means to know about the needs of the soil. Because of this they use their own produce as seeds which results in lower production, lack of technological awareness leads to disguised unemployment and extra burden on farmland and lack of knowledge about the soil requirements results in over use of pesticides and salinization of soil. And the problem doesn’t end here. Lack of market facilities is another significant problem. Because of insufficient marketing facilities farmers are forced to sell their products at a lower price than they should have received.
Last but not the least over dependence on monsoons for irrigation. Around 55% of arable land in Indian agriculture is dependent on the monsoon for its irrigation. And the irregularity of the monsoon helps maintain the vicious cycle of poverty.
Along with these there are other problems like lack of agricultural research, abundance of natural calamities, poor livestock and lack of scientific methods of cultivation. All these problems acting together makes the lives of Indian farmers tough and impact the overall performance of agriculture.
To improve this, governments should work collaboratively and try to support agriculture by facilitating it with institutional development. Institutionalization of Indian agriculture is the need of the hour. Only then it can move forward on the road of sustainability and prosperity. And it is a well known fact now that the salvation of Indian economy is in the salvation of Indian agriculture.