Agriculture contributes to 6.4% of the total world’s economic production. China is the largest contributor followed by India accounting for 19.49% and 7.39% of the total agricultural output respectively. India is the first and foremost an agriculture-based economy with 47% of its working population employed in the agriculture sector while China employs only 29.5% of its population in agriculture. With about half its population employed in agricultural activities, this should be a prominent source of India’s GDP if not the main source. In India, agriculture constitutes 17.32% of GDP as per 2018 data and this value has remained somewhat constant since 2011.
Problems with Agricultural Reforms
- Farming Debt –
With the advancement of technology, capital is becoming a key factor in the development of agriculture. According to the NABARD, All India Financial Inclusion Survey (NAFIS) conducted by National Bank for Agricultural and Rural Development (NABARD) in 2016-17, 43.5% agricultural households reported to have borrowed any money from some source or the other. 60.4% of them reportedly borrowed from institutional sources exclusively.Further, 30.3% borrowed from only informal sources and 9.2% of agricultural households borrowed from both sources.
- Agriculture Land-
According to NAFIS, the average size of agricultural land holding of a household is 1.1 hectare in 2015-2016.Even the state wise average land holding was quite uneven. While Nagaland (2.1 ha), Rajasthan (1.9 ha) and Haryana (1.7 ha) reported higher land sizes per household, it was around 0.5 Ha in Bihar, West Bengal, Tripura, Sikkim and Jammu & Kashmir.
- Lack of Marketing and Storage problems-
After harvest, farmers usually sell off their produce at throw-away prices due to lack of storage facility and the ever-increasing burden of debt. This produce is often sold to local traders and money lenders at very low price. The Rural Credit Survey Report remarked that producers in general sell their produce at an unfavourable place and at an unfavourable time and usually get unfavourable terms. Many market surveys have revealed that middlemen take away about 48% of the price of rice, 52% of the price of groundnuts and 60% of the price of potatoes offered by consumers.
- Low Farm Productivity –
Although India’s total land area is slightly more than one-third of China’s, its arable land is marginally bigger than China, being second only to that of USA. Despite this, India contributes to only 7.39% of the global agricultural output while China contributes 19.49%. The productivity of Indian agriculture is quite low as compared to that of China which can be attributed to the high land-man ratio, lack of mechanisation, lower capital and many other reasons.
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