Monday, May 21, 2018

Agriculture- Green Revolution


Explain the statement that green revolution enabled the government to procure sufficient food grains to build its stocks that could be used during times of shortage.
Answer
The use of modern technology, extensive use of fertilizers, pesticides and HYV seeds which together formed the Green Revolution led to an Impressive rise in food grains production. The agricultural productivity and average yield also increased considerably. The other measures accompanying Green Revolution such as the development of marketing system, abolition of intermediaries, and subsidised credit for farm investment provided greater portion of marketable surplus to farmers. All these factors contributed to high crop yield which enabled the government lo procure sufficient food grains to build the buffer stock lo be used in times of shortages due lo scanty rainfall, delayed monsoon, drought and other natural calamities.

1.      While subsidies encourage farmers to use new technology, they are a huge burden on government finances. Discuss the usefulness of subsidies in the light of this fact.
Answer:
Subsidy in agriculture means providing some important inputs to farmers at a concessional rate that is much lower than its market rate. During 1960s, in order to adopt new technology. HYV seeds and use of modern fertilizers and insecticides, farmers were provided inputs at a subsidised rate. The following arguments are given to prove the usefulness of subsidies (i) It was necessary to use subsidies to provide an incentive for adoption of the new HYV technology by farmers especially the small farmers. (ii) Any new technology is considered as being risky by farmers. Subsidies were, therefore, needed to encourage farmers to adopt the new technology initially. (iii) Farming in India is still a risky business and subsidies provide hedging against the risk of climatic conditions. (iv) Most farmers are very poor and they will not be able to afford the required inputs without subsidies. (v) Subsidies bring about equity between rich and poor farmers by enabling the poor farmers to use modern technology and inputs. On the other hand, some economists believe that once subsidies should be phased out since their purpose has been served and the technology is now widely adopted due to its profitability. They argue that there is no case for continuing with subsidies as It does not benefit the target group and it is a huge burden on the government's finances. They give the following arguments against subsidies in agriculture (i) Subsidies are benefiting the fertilizer industry more than farmers and it is not making any efforts towards increasing its efficiency as it is protected from market competition by subsidies. (ii) Subsidies are mainly being availed by big farmers in affluent regions who do not actually need them. Hence, based on the above arguments, we can conclude that although subsidies are very useful and necessary for poor farmers and to overcome uncertainties associated with farming. It may lead to wastage of resources and thus put an excessive burden on the scarce government finances. Thus, suitable reforms need to be undertaken in order to ensure allocation of subsidies in a targeted manner only to the needy farmers.

2.      Why, despite the implementation of green revolution, 65 per centof our population continued to be engaged in the agriculture sector till 1990?
Answer:
Although with the advent of Green Revolution, Indian agricultural production increased substantially that enabled India to attain the status of self-sufficiency in food grains, this increase is substantial only in comparison to food grain production in the past. India failed to achieve structural transformation associated with the economic growth and development. The industrial and service sector in India failed to generate significant employment opportunities in order to attract and absorb excess agriculture labour. In India, between 1950 and 1990, the proportion of GDP contributed by agriculture declined significantly (67.5% in 1950 to 64.9% by 1990). This makes it evident that the industrial and service sector growth was not very significant and thus could not provide employment opportunities to the surplus labour from agricultural sector leading to disguised unemployment in agriculture. The slow growth of secondary and tertiary sector has been responsible for majority of population (around 65%) remaining in agricultural occupation till 1990.

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