2_Review of ECONOMICS-II(Draft 2)

BACHELOR OF ARTS SEMESTER-II ECONOMICS – II BAQ157 CU IDOL SELF LEARNING MATERIAL (SLM)

CHANDIGARH UNIVERSITY Institute of Distance and Online Learning Course Development Committee Chairman Prof. (Dr.) Parag Diwan Vice Chancellor, Chandigarh University, Gharuan, Punjab Advisors Prof. (Dr.) Bharat Bhushan, Director – IGNOU Prof. (Dr.) Majulika Srivastava, Director – CIQA, IGNOU Programme Coordinators & Editing Team Master of Business Administration (MBA) Bachelor of Business Administration (BBA) Coordinator – Dr. Rupali Arora Coordinator – Dr. Simran Jewandah Bachelor Master of Computer Applications (MCA) of Computer Applications (BCA) Coordinator – Dr. Raju Kumar Coordinator – Dr. Manisha Malhotra Bachelor of Commerce (B.Com.) Coordinator – Dr. Master of Commerce (M.Com.) Coordinator – Dr. Aman Jindal Master Minakshi Garg of Arts (Psychology) Coordinator – Bachelor of Science (Travel &TourismManagement) Dr. Samerjeet Kaur Master of Arts Co-ordinator – Dr. Shikha Sharma (English) Coordinator – Dr. Ashita Bachelor of Arts (General) Chadha Co-ordinator – Ms. Neeraj Gohlan Academic and Administrative Management Prof. (Dr.) R. M. Bhagat Prof. (Dr.) S.S. Sehgal Executive Director – Sciences Registrar Prof. (Dr.) Abhishek Prof. (Dr.) Inderpreet Kaur Executive Director – Management Director – IDOL Prof. (Dr.) Manaswini Acharya Executive Director – Liberal Arts © No part of this publication should be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording and/or otherwise without the prior written permission of the authors and thepublisher. SLM SPECIALLY PREPARED FOR CU IDOL STUDENTS Printed and Published by: SCHOOLGURU EDUSERVE PVT LTD B-903, Western Edge II, Western Express Highway, Borivali (E), Mumbai - 400066 Call Us: +91 22 4896 8005 Mail Us: [email protected] For: CHANDIGARH UNIVERSITY Institute of Distance and Online Learning CU IDOL SELF LEARNING MATERIAL (SLM)

First Published in 2020 All rights reserved. No Part of this book may be reproduced or transmitted, in any form or by any means, without permission in writing from Chandigarh University. Any person who does any unauthorized act in relation to this book may be liable to criminal prosecution and civil claims for damages. This book is meant for educational and learning purpose. The authors of the book has/have taken all reasonable care to ensure that the contents of the book do not violate any existing copyright or other intellectual property rights of any person in any manner whatsoever. In the even the Authors has/ have been unable to track any source and if any copyright has been inadvertently infringed, please notify the publisher in writing for corrective action. CU IDOL SELF LEARNING MATERIAL (SLM)

CONTENTS Unit 1: Agriculture Economy Part-I .................................................................................................5 Unit 2: Green Revolution.................................................................................................................24 Unit 3: Various Revolutions.............................................................................................................41 Unit 4: Problems of Industrial Development ..................................................................................67 Unit 5: Role and Problems of Small and Large Scale Industries ...................................................85 Unit 6: Role of FDI in Industries sector in Indian, Balance of Payments ......................................98 Unit 7: Indian Tax Structure Part-I .............................................................................................. 114 Unit 8: Indian Tax Structure Part-II ............................................................................................ 136 Unit 9: NITI Aayog ........................................................................................................................ 147 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 1: AGRICULTURE ECONOMY PART-I Structure 1.0. Learning Objectives 1.1. Introduction - Agriculture 1.2. Importance of Agriculture 1.3. Causes of Backwardness and Low Productivity 1.4. New Agricultural Strategy 1.5. Summary 1.6. Key Words/Abbreviations 1.7. Learning Activity 1.8. Unit End Exercises (MCQs and Descriptive) 1.9. Suggested Readings 1.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Explain the basis of agricultural economy in India  State the new agricultural strategy 1.1 INTRODUCTION – AGRICULTURE The history of agriculture in India dates back to Indus Valley Civilization. India ranks second worldwide in farm outputs. As per 2018, agriculture employed more than 50℅ of the Indian work force and contributed 17–18% to country's GDP. According to latest report, agriculture is primary source of livelihood for 58% population in India 5 CU IDOL SELF LEARNING MATERIAL (SLM)

In 2016, agriculture and allied sectors like animal husbandry, forestry and fisheries accounted for 15.4% of the GDP (gross domestic product) with about 31% of the workforce in 2014. India ranks first in the world with highest net cropped area followed by US and China. The economic contribution of agriculture to India's GDP is steadily declining with the country's broad-based economic growth. Still, agriculture is demographically the broadest economic sector and plays a significant role in the overall socio-economic fabric of India. India exported $38 billion worth of agricultural products in 2013, making it the seventh largest agricultural exporter worldwide and the sixth largest net exporter. Most of its agriculture exports serve developing and least developed nations. Indian agricultural/horticultural and processed foods are exported to more than 120 countries, primarily to the Japan, Southeast Asia, SAARC countries, the European Union and the United States. Meaning of Agricultural Economy Agricultural economics, study of the allocation, distribution, and utilization of the resources used, along with the commodities produced, by farming. Agricultural economics plays a role in the economics of development, for a continuous level of farm surplus is one of the wellsprings of technological and commercial growth. Agricultural economics is an applied field of economics concerned with the application of economic theory in optimizing the production and distribution of food and fiber. Agricultural economics began as a branch of economics that specifically dealt with land usage, it focused on maximizing the crop yield while maintaining a good soil ecosystem. Throughout the 20th century the discipline expanded and the current scope of the discipline is much broader. Agricultural economics today includes a variety of applied areas, having considerable overlap with conventional economics. Agricultural economists have made substantial contributions to research in economics, econometrics, development economics, and environmental economics. Agricultural economics influences food policy, agricultural policy, and environmental policy. 1.2 IMPORTANCE OF AGRICULTURE 6 CU IDOL SELF LEARNING MATERIAL (SLM)

During Independence there was extremely low productivity per hectare and per worker. However, the previous trend of stagnant agriculture was completely changed due to the introduction of economic planning since 1950-51, and with special emphasis on agricultural development, particularly after 1962. (i) A steady increase in the area under cultivation is noticed. (ii) A substantial growth in the food crops is marked. (iii) During the plan period there had been a constant increase in the yield per hectare. Importance of Agriculture in Indian Economy: Though industry has been playing an important role in Indian economy, still the contribution of agriculture in the development of Indian economy cannot be denied. This can be measured and gauged by the following facts and figures: 1. Agricultural influence on national income: The contribution of agriculture during the first two decades towards the gross domestic product ranged between 48 and 60%. In the year 2001-2002, this contribution declined to only about 26%. 2. Agriculture plays vital role in generating employment: In India at least two-thirds of the working population earn their living through agricultural works. In India other sectors have failed generate much of employment opportunity the growing working populations. 3. Agriculture makes provision for food for the ever increasing population: Due to the excessive pressure of population labour surplus economies like India and rapid increase in the demand for food, food production increases at a fast rate. The existing levels of food consumption in these countries are very low and with a little increase in the capita income, the demand for food rise steeply (in other words it can be stated that the income elasticity of demand for food is very high in developing countries). 7 CU IDOL SELF LEARNING MATERIAL (SLM)

Therefore, unless agriculture is able to continuously increase it marketed surplus of food grains, a crisis is like to emerge. Many developing countries are passing through this phase and in a bid to ma the increasing food requirements agriculture has been developed. 4. Contribution to capital formation: There is general agreement on the necessity capital formation. Since agriculture happens be the largest industry in developing country like India, it can and must play an important role in pushing up the rate of capital formation. If it fails to do so, the whole process economic development will suffer a setback. To extract surplus from agriculture the following policies are taken: (i) Transfer of labour and capital from farm non-farm activities. (ii) Taxation of agriculture should be in such a way that the burden on agriculture is greater than the government services provided to agriculture. Therefore, generation of surplus from agriculture will ultimately depend on increasing the agricultural productivity considerably. 5. Supply of raw material to agro-based industries: Agriculture supplies raw materials to various agro-based industries like sugar, jute, cotton textile and vanaspati industries. Food processing industries are similarly dependent on agriculture. Therefore the development of these industries entirely is dependent on agriculture. 6. Market for industrial products: Increase in rural purchasing power is very necessary for industrial development as two- thirds of Indian population live in villages. After green revolution the purchasing power of the large farmers increased due to their enhanced income and negligible tax burden. 7. Influence on internal and external trade and commerce: Indian agriculture plays a vital role in internal and external trade of the country. Internal trade in food-grains and other agricultural products helps in the expansion of service sector. 8 CU IDOL SELF LEARNING MATERIAL (SLM)

8. Contribution in government budget: 9 Right from the First Five Year Plan agriculture is considered as the prime revenue collecting sector for the both central and state budgets. However, the governments earn huge revenue from agriculture and its allied activities like cattle rearing, animal husbandry, poultry farming, fishing etc. Indian railway along with the state transport system also earn a handsome revenue as freight charges for agricultural products, both-semi finished and finished ones. 9. Need of labour force: A large number of skilled and unskilled laborers are required for the construction works and in other fields. This labour is supplied by Indian agriculture. 10. Greater competitive advantages: Indian agriculture has a cost advantage in several agricultural commodities in the export sector because of low labour costs and self- sufficiency in input supply. 1.3 CAUSES OF BACKWARDNESS AND LOW PRODUCTIVITY The main causes for low productivity of agriculture are broadly of three types; 1. Human Factors: Human favors are those which are related to training and efficiency of the farmers. (i) Social atmosphere: Social climate includes customs and traditions. Indian farmer is illiterate and has no knowledge for latest techniques of production. He believes in God and fatalist in thought. He wastes money on customs and traditions. So social climate is not suitable for agriculture. (ii) Pressure of population on land: Heavy pressure of population is the main cause of low productivity of Indian agriculture. In 1901, 16.30 crore people were dependent on agriculture. The number has gone up to 58.80 crore. So per capita cultivable land had reduced from 0.43 hectare to 0.23 hectare. Heavy CU IDOL SELF LEARNING MATERIAL (SLM)

pressure has led to subdivision and fragmentation of land holdings. 2. Technical Factors: Technical Factors include techniques and methods of production: (i) Traditional methods of Cultivation: Traditional methods of cultivation like manual ploughing, two crop pattern and old system of irrigation are mainly responsible for low productivity of agriculture. (ii) Old implements: Traditional equipment’s like wooden ploughs, sickles and spades are commonly used. Tractors & Combines are not so common in use. Due to the use of these old implements agriculture is backward. (iii) Insufficient irrigation facilities: Indian agriculture is mainly dependent on rain. Even after 60 years of Independence only 40% of the agricultural land has permanent irrigation facility. Due to improper irrigation facility, farmer can produce one crop only in a year. (iv) Problems of soil: Indian soil has many problems like soil erosion, water logging, nitrogen deficiency and swamps. These are the reasons for low productivity of agriculture. (v) Problems of pests and diseases of crops: Plant diseases like rust and smut and rats, insects and pests destroy large portion of crops. (vi) Feeble cattle: Due to limited mechanization of Indian agriculture, cattle have significant place in agriculture. Cattle are generally weak. Farmer has to spent a lot on these Cattle farming is more time consuming and expensive than tractor. So these also increase the cost of agriculture. 10 CU IDOL SELF LEARNING MATERIAL (SLM)

(vii) Lack of credit facility: Credit facilities are inadequate in rural areas. Farmers cannot be able to raise credit from rural banks easily. They have to depend on ‘Mahajan’s’ and ‘Shahukars’. These money lenders charge heavy rate of interest. Farmers have to sell their produce at low price to these money lenders. So farmers have low Income and thus low productivity. (viii) Lack of High Yielding Variety (HYV) seeds: HYV seeds are not commonly used. Farmers do not understand their significance. They cannot afford to buy them and also these seeds are not easily available. (ix) Improper marketing: Improper marketing is a significant factor for low productivity of agriculture. Farmers fail to get suitable price for their produce. Inadequate means of transport forces the farmers to sell their produce to local money lenders at low prices. Due to lack of warehousing facilities, farmers can not able to store their produce when prices are low. So these attribute a lot for low productivity of agriculture. 3. Institutional Factors: Institutional factors include land holdings and land system. (i) Small size of farms: Land holdings in India are of very small size. Average size of holding is 2.3 hectare and 70% of the holdings are even less than 2 hectares. These holdings are fragmented. Due to these small holdings, mechanized cultivation is difficult. Implements and irrigation facilities are not properly utilized. It affects Indian agriculture. (ii) Defective land tenure system: Zamindari system has been an important factor responsible for the low productivity of Indian agriculture. In this system cultivator is not owner of land. Zamindar is the owner of land and he can evict the tenant any time. So, the cultivator does not take interest in the development of land and Zamindar does not take interest in the development of cultivation. Though 11 CU IDOL SELF LEARNING MATERIAL (SLM)

Zamindari system was abolished after independence yet the position of cultivator has not improved. There are many factors responsible for backwardness of agriculture which has been summarized below: 1. Small Size of Holdings: The agricultural productivity is low due to small size of holdings. Indeed small size of the farm fails to provide profitable employment to the farmers. In our country average size of holdings is 1.8 hectares while in developed countries like U.S.A. it is 122 hectares. Apart from this, subdivision and fragmentation of holdings is another obstacle in the way of low agricultural productivity. In this small size of holdings the scientific cultivation with latest techniques is almost impossible. 2. Vicious Circle of Poverty: To a greater extent, the vicious circle of poverty is also responsible for the poor performance of agriculture. The vicious circle of poverty takes the following form in agricultural sector: The crucial deficiencies in Indian agriculture relate to land, capital and management, etc. which in turn hampers the agricultural productivity. 3. Indebtedness: Another reason for low agricultural productivity is the indebtedness of the farmers. To perform the social ceremonies a farmer has to borrow from moneylender at a very high rate of interest. Unproductive borrowings do not add to his income and he always remains under debt. Consequently, the farmer fails to avail incentives to improve the agricultural production. 4. Inadequate Irrigation Facilities: Indian farmer is almost dependent on climatic conditions for irrigation. Monsoons are irregular. Only a few farmers avail the facilities of irrigation from various sources such as 12 CU IDOL SELF LEARNING MATERIAL (SLM)

canals, tube wells, etc. Moreover these facilities are found in some areas and where these are available, they are not fully utilized. The result is that the produce is of bad quality and results in low productivity. 5. Lack of Adequate Finance: Availability of finance is the basis of every industry. The supply of finance is inadequate in case of Indian agriculture. Money is required for short period as well as for long period in order to improve the agricultural production. According to All India Rural Credit Survey Committee, in 1950-51 more than 90 per cent of the total agricultural credit was advanced by the moneylenders. The co-operative societies accounted for about 3 per cent respectively. 6. No Scientific Methods of Cultivation: The ignorance and conservation of Indian farmer also results in the poor performance of agriculture. They do not know the importance of modern technology. Still, seeds are sown by wooden ploughs. Poor quality of seeds yields poor quantity of crops. 7. Lack of Marketing Facilities: The defective marketing system also poses difficulties to the farmers. The farmers do not get a due reward from the sale of his produce. The middleman takes away portion of their profits. Unless farmers are guaranteed fair and remunerative prices there is little inducement for agricultural output to increase. Indian marketing has no facilities of godowns and warehousing where the cultivators may keep their produce for a better price. Moreover, they lack transportation facilities. This results in low price of the produce. 8. Agricultural Research: Undoubtedly, a huge amount of money is spent on agricultural research; still the fruits do not reach to the poor cultivators. There is a lack of co-ordination between laboratory and the farm. 13 CU IDOL SELF LEARNING MATERIAL (SLM)

9. Lack of Productive Investment: Investment in jewelry, trade and money lending seems to be more attractive. Therefore, there is less investment in land improvement. In the absence of productive investment in agriculture, there is little scope for expanding production. 10. Social Factors: In our country, poor performance of agriculture is also found due to the operation of various socio economic factors. Illiteracy, ignorance, superstition and conservative outlook stands in the way of the adoption of modern technology. As such, farmers are against the use of bone manure and chemical fertilizer. Besides, they are prejudiced against killing of monkeys and rats at the farm. 11. Natural Calamities: Another reason of low productivity of Indian agriculture is that crops worth crores of rupees are destroyed every year due to floods and other natural calamities. The soil erosion has been regarded as creeping death of the farm. 12. Poor Livestock: The quality of livestock is very inferior and they are thin and feeble. On account of their poor quality, they are needed in more quantity which adds unnecessary burden on the poor cultivators. Malnutrition is another cause for the degeneration of cattle in our country. As a result, they suffer from one disease or the other. 13. Land Policy and Legislation: The piece-meal character of land reform policy and its legislation is greatly, responsible for the backwardness of agriculture. Excessive reliance on the administrative machinery has adversely affected agricultural development, unnecessary delay in implementation and uncertainty about the rights on land has tended to diminish land productivity. 1.4 NEW AGRICULTURAL STRATEGY 14 CU IDOL SELF LEARNING MATERIAL (SLM)

The new agricultural strategy was adopted in India during the Third Plan, i.e., during 1960s. As suggested by the team of experts of the Ford Foundation in its report “India’s Crisis of Food and Steps to Meet it” in 1959 the Government decided to shift the strategy followed in agricultural sector of the country. Thus, the traditional agricultural practices followed in India are gradually being replaced by modern technology and agricultural practices. This report afford Foundation suggested to introduce intensive effort for raising agricultural production and productivity in selected regions of the country through the introduction of modern inputs like fertilizers, credit, marketing facilities etc. Accordingly, in 1960, from seven states seven districts were selected and the Government introduced a pilot project known as Intensive Area Development Programme (IADP) into those seven districts. Later on, this programme was extended to remaining states and one district from each state was selected for intensive development. Accordingly, in 1965, 144 districts (out of 325) were selected for intensive cultivation and the programme was renamed as Intensive Agricultural Areas Programme (IAAP). During the period of mid-1960s, Prof. Norman Borlaug of Mexico developed new high yielding varieties of wheat and accordingly various countries started to apply this new variety with much promise. Similarly, in the kharif season in 1966, India adopted High Yielding Varieties Programme (HYVP) for the first time. This programme was adopted as a package programme as the very success of this programme depends upon adequate irrigation facilities, application of fertilizers, high yielding varieties of seeds, pesticides, insecticides etc. In this way a new technology was gradually adopted in Indian agriculture. This new strategy is also popularly known as modern agricultural technology or green revolution. In the initial stage, HYVP along with IAAP was implemented in 1.89 million hectares of area. Gradually the coverage of the programme was enlarged and in 1995-96, total area covered by this HYVP programme was estimated 75.0 million hectares which accounted to nearly 43 per cent of the total net sown area of the country. 15 CU IDOL SELF LEARNING MATERIAL (SLM)

As the new HYV seeds require shorter duration to grow thus it paved way for the introduction of multiple cropping, i.e., to have two or even three crops throughout the year. Farmers producing wheat in Punjab, Haryana, Western Uttar Pradesh, Rajasthan and Delhi started to demand heavily new Mexican varieties of seeds like Lerma Rojo, Sonara-64, Kalyan and PV. -18. But in case of production of rice, although new HYV varieties of seeds like TN.-l, ADT-17, Tinen-3 and IR-8 were applied but the result was not very much encouraging. Some degree of success was only achieved in respect of IR-8. 1. Consolidation of Land Holdings: Land ownership rights to the tillers and basic forward outlook Punjab farmers was the basic reason for providing ground to the green revolution in the northern India. 2. Improved Variety of Seeds: Agricultural revolution is primarily due to the miracle of improved varieties of seeds which have increased yields per acre. Among these, we may mention the new dwarf varieties of wheat PV-18, Kalyan Sona 27, HD 2329, Hybrid Maize, Rice IR-8, PR 106, Padma and Jaya etc. 3. Greater Intensity of Cropping: The new agricultural strategy is not only concerned with higher yield but also with greater intensity of cropping. Therefore, new crop rotations have been made possible by developing short duration varieties of paddy, jowar, bajra and maize which are suited to different agro- climatic conditions. In the same way, other crops like barley, oilseed, potato and vegetables have also been considered for rotation. 4. Extension of Irrigation: In the areas, where new agricultural strategy is being applied, irrigation facilities are speedily being expanded to assure the adequate water supply. During the last 10-12 years, there has occurred a remarkable growth of tube-wells, pump-sets etc. 16 CU IDOL SELF LEARNING MATERIAL (SLM)

5. Modern Farm Machinery: Modern farm machinery like tractors, harvesters, pumping sets, tube-well, etc. are being increasingly used and are replacing the bullocks. Being, time saving, use of modern machinery in agriculture is conducive to multiple cropping. Because of accuracy and timelines of use of inputs by machines, the costs have been reduced. 6. Role of Public Institutions: Several new public institutions like National Seeds Corporation, Agro Industries Corporations, National Co-operative Development Corporation etc. have been set up to promote services to the cultivators at door steps. Moreover, they have been provided with sufficient funds to lend liberal loans to peasants to adopt latest farm technology. 7. Package of Inputs: The main thrust of the new agricultural strategy is the application of the package of improved practices. In other words, it aimed at making the cultivators to adopt simultaneously all the elements needed for augmenting production. The main constituents of the package practices are improved seed, fertilizers, plant protection measures and water use etc. 8. Guaranteed Minimum Prices: The guaranteed minimum prices have been given due recognition as an incentive to agricultural production. Support price policy for food-grains was adopted in 1964 throughout the country. In order to advice the govt. for suitable price policies for agriculture, Agricultural Price Commission was set up in the subsequent years. Similarly, Food Corporation of India was also set up to purchase food-grains. 9. Agricultural Research and Education: A number of measures have been adopted in this direction of facilitate organisation and development of agricultural research. The Indian Council of Agricultural Research was reorganized in 1965. Agricultural Universities have been set up in most of the states which were conceived as combining the function of education, research and extension. 17 CU IDOL SELF LEARNING MATERIAL (SLM)

States Agro Industries Corporation have been set up to motivate the cultivators for the application of improved inputs and infrastructure and further to Co-ordinate the demand with production, quality control and distribution of supporting services. 10. Plant Protection Measures: As pests and diseases have been causing severe damage to crops, plant protection has been considered another major component of new agricultural strategy. This programme includes seeds treatment, intensive aerial and ground spraying against insects, weed control and rodent control. 1.4.1 Features of New Agricultural Strategy (i) Development of Agricultural Land: Special efforts were done during five-year plans to develop agricultural land. Land surveys were conducted. Soil erosion and water logging has been checked. Leveling of land was done. (ii) Plant protection: The process of protecting the plants against diseases, invasion of pests and insects is called plant protection. Special efforts were made to protect the plants from pests and insects. 14 Central Plant Protection Centre’s have been working under the control of ICAR Indian Council of Agricultural Research. (iii) Use of High Yielding Variety (HYV) seeds: High Yield Variety seeds are those whose output is more than normal seeds. HYV seeds are used in the production of wheat rice, Bajra and Jowar. National Seeds Corporation has been setup for production and distribution of HYV seeds. (iv) More Use of Fertilizers: Optimum use of fertilizers has increased the production. Steps have been taken to use cow dung as manure. Use of Chemical fertilizers has also increased. 18 CU IDOL SELF LEARNING MATERIAL (SLM)

(v) More Irrigation Facilities: Irrigation is the life line for crop production. During plan period irrigation facilities has increased a lot. Multipurpose projects have developed to increase irrigation facilities Deep Tube wells and lift irrigation schemes were launched to provide better irrigation. In 2004-05 total irrigation area was 546 lakh hectares. (vi) Mechanization of Agriculture: Intensive use of tractors, thrashers and combines is called mechanization of agriculture. With mechanization of agriculture it has become easy and time saving occupation. Co-operative Societies, Regional Rural Banks and national banks provide loan to farmers for purchases of agricultural machinery. (vii) Improvement of Animal Husbandry: To increase livestock wealth, 86 intensive cattle development Projects have been started in the plan period Many veterinary centers have been opened to check cattle diseases. In Punjab, Guru Angad Dev University of Animal Husbandry has been opened in 2006. (viii) Scientific Cultivation: Scientific cultivation aims at using superior agricultural technology. It involves the use of quality seeds, proper manure, crop rotation and control of pests and insects. Many agricultural universities are doing their best in the field of scientific methods of cultivation. (ix) Increase in the Areas Under Cultivation: During plan period it is aimed to increase the net area under cultivation. The waste lands are brought under cultivation. Efforts have been made to reclaim the land lying waste due to soil erosion. Area under cultivation can be increased by multiple cropping. It means raising more than one crop during the year. 1.5 SUMMARY Agricultural Economics, as its title implies is that branch of economics which deals with all aspects of problems related to agriculture. According to Snodgrass and Wallace, 19 CU IDOL SELF LEARNING MATERIAL (SLM)

“Agricultural economics is an applied phase of the social science of economics in which attention is given to all aspects of problems related to agriculture.” Prof. Gray treats agricultural economics as a branch of general subject of economics. It is only one of the many branches of applied economics. Such as Industrial Economics, Labour Economics, Monetary Economics, Transport Economics, Public Economics, International Economics, Household Economics, etc. Thus according to Prof. Gray, agricultural economics only a phase of an immense field called economics in which primary attention is paid to the analysis of the economic problems associated with agriculture, Prof. Gray defines agricultural economics, “as the science in which the principles and methods of economics are applied to the special conditions of agricultural industry.” No doubt both these definitions are wider in scope, but these are not explanatory and are characterized by vagueness unsettled. 1.6 KEY WORDS/ABBREVIATIONS  Agribusiness: Agriculture operated by business and involving all activities in the business of agricultural production.  Agriculture: The occupation of farming animals, plants and fungi needed for human life.  Agropoly: A term coined to describe when only a few companies control the majority of the food system. 1.7 LEARNINGACTIVITY 1. Explain the term agriculture ____________________________________________________________________________ ____________________________________________________ 2. Note on agricultural strategy ____________________________________________________________________________ ____________________________________________________ 20 CU IDOL SELF LEARNING MATERIAL (SLM)

1.8 UNITENDEXERCISES(MCQSANDDESCRIPTIVE) A. Descriptive Type Questions 1. Write a note on importance of agriculture. 2. State the causes of backwardness & low productivity. 3. Explain the features of agricultural strategy. 4. Express your views on new agricultural strategy. B. Multiple Choice Questions 1. Which of this statement are correct? (a) Agriculture economic may be taken as the branch of both of agriculture and economics (b) Agriculture economic is more intimately related to economics then to agriculture (c) Agricultural economics is nothing but application of economic principles to agriculture (d) All of these 2. Which of the following is an economic factor, affects the type or system of farming? (a) Availability of capital (b) Water (c) Land (d) All of these 3. The history of agriculture in India dates back to ___________ 21 (a) Indus Valley Civilization CU IDOL SELF LEARNING MATERIAL (SLM)

(b) Harappa Civilization (c) Both (a) & (b) (d) None of these 4. __________________ is the main cause of low productivity of Indian agriculture (a) Social factors (b) Pressure of population on land (c) Technical factors (d) All of these 5. Which of the following is the cause of backwardness in agriculture (a) Lack of finance (b) Poverty (c) Inadequate irrigation facility (d) All of these Answers: 1.(d), 2.(a) 3. (a) 4. (b) 5. (a) 1.9 SUGGESTED READINGS  Bajpai, P. & Bhandari, L. (2009). Social and Economic Profile of India. Hyderabad: Orient black Swan.  Datta, R. &Sundaram, K.P.M. (2007). Indian Economy. New Delhi: S. Chand & Co. 22 CU IDOL SELF LEARNING MATERIAL (SLM)

 Dhar, P.K. (1999). Indian Economy. Ludhiana: Kalyani Publishers.  Ghosh, A. (2004). Bhartiya Arth Vivstha. Patiala: Punjabi University.  Gill, J.S. (2004). Evolution of Indian Economy. New Delhi: NCERT.  Gupta, K.R. & Gupta, J.R. (2009). Indian Economy. New Delhi: Atlantic Publishers  Jalan, B. (2008). India's Economy in the New Millennium. New Delhi: UBS Publishers.  Misra, S.K. & Puri, V.K. (2006). Indian Economy. Mumbai: Himalya Publishing House.  Sen, R.K. & Chatterjee, B. (2008). Indian Economy. New Delhi: Deep & Deep Publications.  Singh, B. N. (2008). Economic Reforms in India. New Delhi: APH Publishers.  Singh, B.N. (2008). Indian Economy Today: Changing Contours. New Delhi: Deep & Deep Publications.  Singh, C.G. (2005). Bharti Arth Shastar. Patiala: Punjabi University.  Soni, R.N. (2008). Leading Issues in Agriculture Economics. New Delhi: S. Chand & Co.  Tandon, B. & Tandon, K.K. (1998). Indian Economy. New Delhi: Tata McGraw Hills Pub. Co.  Vasudeva, P.K. (2009). India & World Trade Organisation: Planning and Development. New Delhi: APH Publishers. 23 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 2: GREEN REVOLUTION 24 Structure 2.0. Learning Objectives 2.1. Introduction 2.2. Green Revolution 2.2.1 Features 2.3. Positive and negative impact of Green Revolution 2.3.1 Advantages of green revolution 2.3.2 Disadvantages of green revolution 2.4. Summary 2.5. Key Words/Abbreviations 2.6. Learning Activity 2.7. Unit End Exercises (MCQs and Descriptive) 2.8. Suggested Readings 2.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Explain the green revolution in India  Describes the positive impact of Green Revolution  State the negative impact of Green Revolution 2.1 INTRODUCTION CU IDOL SELF LEARNING MATERIAL (SLM)

The new agricultural strategy was adopted in India during the Third Plan, i.e., during 1960s. As suggested by the team of experts of the Ford Foundation in its report “India’s Crisis of Food and Steps to Meet it” in 1959 the Government decided to shift the strategy followed in agricultural sector of the country. Thus, the traditional agricultural practices followed in India are gradually being replaced by modern technology and agricultural practices. This report of Ford Foundation suggested to introduce intensive effort for raising agricultural production and productivity in selected regions of the country through the introduction of modern inputs like fertilisers, credit, marketing facilities etc. Accordingly, in 1960, from seven states seven districts were selected and the Government introduced a pilot project known as Intensive Area Development Programme (IADP) into those seven districts. Later on, this programme was extended to remaining states and one district from each state was selected for intensive development. Accordingly, in 1965, 144 districts (out of 325) were selected for intensive cultivation and the programme was renamed as Intensive Agricultural Areas Programme (IAAP). During the period of mid-1960s, Prof. Norman Borlaug of Mexico developed new high yielding varieties of wheat and accordingly various countries started to apply this new variety with much promise. Similarly, in the kharif season in 1966, India adopted High Yielding Varieties Programme (HYVP) for the first time. This programme was adopted as a package programme as the very success of this programme depends upon adequate irrigation facilities, application of fertilizers, high yielding varieties of seeds, pesticides, insecticides etc. In this way a new technology was gradually adopted in Indian agriculture. This new strategy is also popularly known as modern agricultural technology or green revolution. In the initial stage, HYVP along with IAAP was implemented in 1.89 million hectares of area. Gradually the coverage of the programme was enlarged and in 1995-96, total area covered by this HYVP programme was estimated 75.0 million hectares which accounted to 25 CU IDOL SELF LEARNING MATERIAL (SLM)

early 43 per cent of the total net sown area of the country. As the new HYV seeds require shorter duration to grow thus it paved way for the introduction of multiple cropping, i.e., to have two or even three crops throughout the year. Farmers producing wheat in Punjab, Haryana, Western Uttar Pradesh, Rajasthan and Delhi started to demand heavily new Mexican varieties of seeds like Lerma Rojo, Sonara-64, Kalyan and P.V.-18. But in case of production of rice, although new HYV varieties of seeds like T.N.-l, ADT-17, Tinen-3 and IR-8 were applied but the result was not very much encouraging. Some degree of success was only achieved in respect of IR-8. 2.2 GREEN REVOLUTION The introduction of High Yielding Varieties (HYV) of seeds and the increased use of fertilizers, pesticides and irrigation facilities are known collectively as the Green Revolution, which resulted in the increase in crop yield needed to make India self-sufficient in food grain. The Green Revolution, or the Third Agricultural Revolution, is the set of research technology transfer initiatives occurring between 1950 and the late 1960s, that increased agricultural production worldwide, beginning most markedly in the late 1960s. The initiatives resulted in the adoption of new technologies, including High-Yielding Varieties (HYVs) of cereals, especially dwarf wheat and rice. It was associated with chemical fertilizers, agrochemicals, and controlled water-supply (usually involving irrigation) and newer methods of cultivation, including mechanization. All of these together were seen as a 'package of practices' to supersede 'traditional' technology and to be adopted as a whole. Both the Ford Foundation and the Rockefeller Foundation were heavily involved in its initial development in Mexico. One key leader was Norman Borlaug, the \"Father of the Green Revolution\", who received the Nobel Peace Prize in 1970. He is credited with saving over a billion people from starvation. The basic approach was the development of high-yielding varieties of cereal grains, expansion of irrigation infrastructure, modernization of management techniques, distribution of hybridized seeds, synthetic fertilizers, and pesticides to farmers. 26 CU IDOL SELF LEARNING MATERIAL (SLM)

Green revolution, great increase in production of food grains (especially wheat and rice) that resulted in large part from the introduction into developing countries of new, high-yielding varieties, beginning in the mid-20th century. Its early dramatic successes were in Mexico and the Indian subcontinent. The new varieties require large amounts of chemical fertilizers and pesticides to produce their high yields, raising concerns about cost and potentially harmful environmental effects. Poor farmers, unable to afford the fertilizers and pesticides, have often reaped even lower yields with these grains than with the older strains, which were better adapted to local conditions and had some resistance to pests and diseases. 2.2.1 Features 1. Introduction of new and high yielding variety of seeds. 2. Increased use of fertilizers, pesticides and weedicides in order to reduce agricultural loses. 3. Increased application of fertilizers in order to enhance agricultural productivity. 4. Use of latest agricultural machinery like tractor, seed drills, threshers and harvester. 5. Use of high disease resistance varieties so that production will enhance. 2.3 POSITIVE AND NEGATIVE IMPACT OF GREEN REVOLUTION 2.3.1 Advantages of green revolution 1. It may be helping to reduce the number of greenhouse gas emissions. The Proceedings of the National Academy of Sciences of the United States performed a research study in 2013 that looked at the influence of the Green Revolution on greenhouse gas emissions. In the absence of the improvements made in crop growth during this time, the level of emissions could have been up to 7.4 Gt higher than what they were observed through 2004. The high-yield approach to agriculture has a dramatic impact on how carbon cycles through the atmosphere. 2. It allows us to produce more food than traditional growing methods. 27 CU IDOL SELF LEARNING MATERIAL (SLM)

Thanks to the processes which are present because of the Green Revolution, our planet currently produces about 20% more calories through crop production and livestock support than is necessary to meet the nutritional minimums of the current global population. Although some estimates suggest that we might need 70% more kcal availability by 2050 than what is available today, the techniques we continue to develop because of Borlaug’s work allow us to meet this demand level without creating additional environmental problems. 3. It provides us with consistent yields during uncooperative seasons. The Green Revolution adds resiliency to our crops because it focuses on varieties that can produce high yields in a variety of environmental situations. Although there is a need for phosphorus and other nutrients when there is a focused on prolonged production, the new strains that came from Borlaug’s work allow for yields to have consistency even when a regular season might wipe out a crop. In 1993, conditions in the Midwest were so unfavorable for growing corn that some farmers had to plow their fields under to lose the entire crop since the plants were not maturing as they should have been. Those that were able to rescue their fields were the ones who put the practices of the Green Revolution into their farming techniques. 4. It causes a reduction in food prices for the global economy. The agricultural markets are based on supply and demand. When yields are more consistent, then the supply becomes more available. High-yield crops produce more items for harvest, which means additional food is available to consumers. This advantage helps to lower prices for everyone while farmers gain additional profits because they can produce more on less land. Even consumers in developing countries have better food access because of these technologies. Some regions were able to triple their outputs because of the technologies and growing practices introduced by the Green Revolution. That means two additional people were able to have their nutritional quotas met using the same land in just 20 years of agricultural reform. 5. It has reduced the issues of deforestation on our planet. 28 CU IDOL SELF LEARNING MATERIAL (SLM)

Although there can be issues in some parts of the world with deforestation because the practices from the Green Revolution are depleting the soil of its nutrients, the impact of these modern techniques has helped the world protect itself from the growing need for more food. This advantage allows us to protect the environment while working to meet the needs of individual households. Since 1961, human population levels have doubled in our world. At the same time, the amount of food that we have grown using our space has tripled. During this period of expansion, natural lands were converted into new cropland at a rate that was just 10% higher than what happened in the 1950s. 6. It hastened the natural evolutionary process for plant resistance. Because of the techniques introduced by the Green Revolution, crops now have a higher level of natural disease resistance than ever before. We have learned how to create specific strains through genetic modification that allows us to grow items in specific regions without the need to apply heavy loads of chemicals to ensure a harvest is predictable. There is now more access to healthier foods, plentiful choices, and a year-round supply of many items thanks to the modern import-export market. This advantage makes it possible for the average person to achieve their daily dietary quotas for vitamins and minerals while eating fewer food products. Since a 20% reduction in caloric intake is directly attributed to improved health and a longer lifespan, it is easier than ever before to help people from any part of the world to achieve their full potential. 7. It reduces the need for fallowing regularly. When local precipitation levels fail to reach 20 inches for the year, then fallowing is a practice which allows the soil to retain more of its moisture. The traditional farming methods may require 1-2 seasons of zero agricultural activities in low-precipitation areas before another harvest becomes possible. Thanks to the advantages of the Green Revolution, we can generate annual yields without the requirement for the fields to stay fallow. Fertilizer, chemical agents, adds phosphorus, and improved growing methods make it possible to have fields become consistently productive. That means farmers don’t need to be 29 CU IDOL SELF LEARNING MATERIAL (SLM)

in a continual rotation, allowing them to generate more income since their property can remain in constant production. 8. It allows us to grow crops almost anywhere on our planet. Thanks to the processes brought about by the Green Revolution, we can now farm in places where the air feels as hot as an oven. It is possible to grow food on icy landscapes where the sun doesn’t always like to shine. You can find plants growing at the depth of the sea, in the deepest canyons, or near some of the tallest summits and alpine regions where snow might be possible all year long. Nemo’s Garden is an excellent example of this technology. This project, which was created by the Ocean Reef Group, provides 7 biospheres of various shapes and sizes. Each one attaches to the sea bottom and floats at different depths. Then condensed seawater drips onto the plants for the soil-based, substrate, and hydroponic gardens. Suba divers enter the dome to harvest. 9. It creates higher income levels and more jobs in the developing world. Countries that have yet to go through their version of the Industrial Revolution might have 70% or more of their economy based on agricultural services. When the agricultural sector is that important, the policies and procedures from the Green Revolution make it possible for more job creation to occur. Farmers are growing more, which means they need more harvesters and processors to work their fields. Then more retailers are necessary to sell the items to the general market. That process creates more money in the economy that people can use for discretionary spending, which often includes an improvement in household eating standards. By growing more food, we can provide more jobs, which means there is more money in the economy to produce even more food the next year. 10. It allows some croplands to produce multiple harvests in a single year. When you travel to the upper states of the U.S. Midwest, you will find a lot of fields dedicated to the growing of natural grass. This product becomes hay that is fed to the 30 CU IDOL SELF LEARNING MATERIAL (SLM)

livestock in the region, shipped to different states, or even sent into Mexico or Canada. During a good weather year, you could get 2-3 crops of hay from a single field. Thanks to the methods of the Green Revolution, you can know get 4-5 good crops of hay during a strong year. This advantage applies to other food crops as well, such as tomatoes, beans, and squash. Even if the growing season starts a little later than normal, the practices introduced by Borlaug make it possible to double or triple the production of the average field or garden. 11. It reduces the levels of poverty in the countries where it is practiced. Almost every country on our planet has incorporated some type of Green Revolution technology to help the economy in some way. Some nations, like Thailand, have seen a doubling in their critical crop sectors since the methods were introduced in the late 1960s. Not only does the increase in food make it possible to serve domestic hunger needs, but it can also increase the value of the export market each year to give the local economy more cash. That helps people get back onto their feet. Since the implementation of the Green Revolution techniques in Thailand, the levels of poverty have been cut by more than 50%. 12. It supports other sectors of the economy. When you don’t get enough to eat one day, then your energy levels can feel sluggish. If it happens for more than a week, then food might be the only thing that you start thinking about each day. Your productivity levels begin to decrease, and then your creativity levels start to tank. By supplying more people with enough food to meet their basic needs, it becomes possible for other industries to see surges in productivity. The need to support more food or improved growing techniques can also create a forward push of innovation in other sectors. There may be a push to create more effective farming equipment, improve produce transport systems, or even provide better rest to the individual workers after a long day in the fields. All of these activities work to stimulate the economy as well. 31 CU IDOL SELF LEARNING MATERIAL (SLM)

2.3.2 Disadvantages of green revolution on farmers 1. It created a lack of biodiversity in the global cropland structures. The spread of the agricultural practices of the Green Revolution may have helped to reduce hunger issues in developing countries, but it also created a significant deficit in agro-diversity and wild biodiversity around the globe. This disadvantage is present because the practices rely on a handful of high-yield crops for production standards, using only a very few, related strains of species and reducing the kind of planting of previously associated crops like the more nutritious grain legumes. This issue has been written about widely, and the reason for this disadvantage is because farmers participating in the Green Revolution can only use the varieties of rice or wheat that have been developed for this purpose. That means there is greater susceptibility in the food chain to pathogens that we cannot control with chemicals, leading to the loss of valuable genetic traits that were bred into the traditional crops grown for thousands of years. It also means that tasty and nutritious varieties have been abandoned. There has been some effort to bring back some of these varieties, for example, in eastern Cambodia by introducing the System of Rice Intensification (see writings by Dr. Norman Uphoff, Professor at Cornell University). 2. It can be wiped out with one devastating disease. You might not be familiar with Chatsworth House, but nearly every banana that you have ever eaten comes from a descendent of one plant grown on the grounds of this Derbyshire estate almost two centuries ago. 47% of the banana crop each year comes from this one variety. The reason why this happened is because of Panama disease in the 1950s wiping out the primary variety grown then, the Gros Michel, but we are now facing the same threat with this variety. Because the Green Revolution uses a handful of selected crops due to their performance, farmers are growing them year-after-year to maintain their profit margins. That means one devastating disease that has resistance to a blight could wipe out the entire food supply for multiple crops in multiple regions. 3. It reduces the quality of the soil used for growing crops. 32 CU IDOL SELF LEARNING MATERIAL (SLM)

You will encounter varying opinions about how wild biodiversity is impacted by the results of the Green Revolution. What we do know is that the repetitive use of the same crops on the same land results in a depletion of soil nutrients. This outcome forces farmers, especially in the developing world, to look for new areas to keep up with their production quotas. It is a disadvantage that has led to continued deforestation because the current croplands cannot support the changing agricultural biome. The Rio Treaty in 1992 acknowledges this disadvantage, assigning the loss of biodiversity to the expansion of agriculture. This agreement was signed by 189 countries. 4. It requires the use of non-sustainable agricultural methods. Almost all of the high-intensity agricultural production that occurs using Green Revolution technologies and concepts requires non-renewable resources to generate results. People must use agricultural machinery to maintain their fields to achieve higher yields. There is a necessity for transport logistics within this industry as well. Pesticides and nitrates are mandatory components of the growing process. Phosphorus tends to be the limiting factor in the developing world when trying to create high- yield harvests. This essential mineral is necessary to maintain soil health, and the mines which supply this nutrient are being rapidly depleted around the world. If we continue to lean on these practices to supply ourselves with food, the entire agricultural system could collapse before the end of the century. 5. It creates health impacts that we must consider with its practices. When humans consume pesticides or receive exposure to the chemical agents while working in their fields, then it may increase the risk of cancer for some operators. Poor farming practices, which include over-using products and not using masks, kill up to 20,000 people each year because of direct exposure. There are also links to soft tissue sarcomas and malignant lymphoma to certain herbicides and pesticides. Several cancers, such as non-Hodgkin’s lymphoma, leukemia, and certain breast and ovarian cancers are linked to these practices as well. 33 CU IDOL SELF LEARNING MATERIAL (SLM)

6. It has advanced beyond our current distribution networks. There is no denying the effectiveness of the growing processes of the Green Revolution. It is also notable that our transportation and distribution networks have been unable to keep up with the pace of production. We are wasting more food today than ever before in the history of humanity. 40% of the losses that happen in modern agriculture occur at the post-harvest level, which includes processing services. Another 40% occur at the customer level, and that includes the retail services that provide individual access to items. Over 1.3 billion pounds of food are lost in some way each year, and root crops are the worst offenders. 7. It encourages more resistance to pests, chemicals, and other hazards. We have benefitted from the growing practices of the Green Revolution for over five decades, but that time may be drawing to a close. Plants are growing a resistance to the various herbicides that we use to control their growth. Pests are adapting to the chemical agents that try to keep them away from the foods that we grow. Nature always adapts if given enough time, which means it takes more chemicals and added agents to achieve the yields that are necessary for profitability. There may come a day in the near future when the current set of pesticides and herbicides is no longer useful because the resistance levels have built up so effectively. 8. It can encourage seed sterility. New technologies allow seed producers to prevent future crop growth by collecting seeds from mature plants. This patented process would require farmers to keep purchasing new seeds each year for their fields from the manufacturer, which is typically Monsanto. That means the increased profits from these practices would go to the big companies instead of the small farmers who need them – which is already what happens when you look at the farm subsidy structures in the United States. 9. It may not produce enough results to create a profitable outcome. Farmers must look at the composition of their soil to determine if the practices encouraged by 34 CU IDOL SELF LEARNING MATERIAL (SLM)

the Green Revolution are useful in their situation. If the 30-30-30 barrier is crossed, then the risk of negative returns increases exponentially. This threshold means the farmer would need to use 30 pounds each of potassium, phosphorus, and nitrogen for their farming needs. That investment would create a neutral, zero-profit return. Anything below it creates profit potential while losses occur on the other side. 10. It promotes monocropping. The Green Revolution promotes the agricultural practice of growing the same crop on the same land, in perpetuity, instead of growing multiple crops on the same land and/or rotating crops on the land. Mon cropping causes problems, such as pesticide seepage onto surrounding soil, soil nutrient depletion, and in some cases, deforestation. Mon cropping has been reported to have largely eliminated the use of intercropped grain legumes in much of India, which has resulted in severely reducing the production of these high-protein grains, which are an important source of protein for the largely vegetarian Indian population. 11. It requires expensive investment which promotes inequality between farmers. Farmers need to have sufficient irrigation systems to support the technology of the Green Revolution. The bio-engineered seeds for this type of farming need a heavy amount of water and chemical fertilizers to succeed in their increased crop yields. Farmers, especially rural ones, who could not afford the investments in irrigation and these chemical fertilizers suffered from deepened inequality as other farmers who could afford it because richer than the vast majority. 12. It depends on fertilizer subsidies. In the key part of the world where the Green Revolution became most successful, the Punjab of India and Pakistan, the farming system depends heavily on fertilizer subsidies. The billions of dollars spent by the national governments on fertilizer subsidies could have been used to improve social infrastructure for the people, but wasn’t. Sadly, some report that the heavy use of fertilizers in the soils of the Punjab have resulted in soil and that salinized and largely devoid of organic matter, with some large areas of the Punjab becoming wastelands or near- wastelands. 35 CU IDOL SELF LEARNING MATERIAL (SLM)

13. It has failed on our earth’s second-largest continent: Africa. The Green Revolution has not worked in Africa, even after three major attempts, which include one by Borlaug and the current attempt by the Gates Foundation through AGRA. Where it is having signs of success in Africa, it is reportedly due to unsustainably high levels of government subsidies, such as in Zambia, in amounts that could have resulted in significant long-lasting social infrastructure for its people. Without the subsidies, farmers would have to buy the synthetic fertilizers at a price that would make their farming unprofitable. In addition, huge areas of soil in Africa are naturally somewhat acidic, and need to be treated with lime to counteract the effect of that acidification. Smaller farmers likely cannot afford this lime, and so their lands would be extremely unproductive without lime treatment. 2.4 SUMMARY A large increase in crop production in developing countries achieved by the use of artificial fertilizers, pesticides, and high-yield crop varieties is referred to as Green revolution. To increase global food supply and reduce world hunger, farmers started to cultivate land using new farming techniques. These methods worked, crop yields climbed but also created a few unwanted side effects. There are both positive and negative impacts of Green Revolution on farmers. Due to Green Revolution there was the considerable increase in the food grains production which was extremely necessary for a farmers to increase production so that agriculture become remunerative. Due to Green Revolution agricultural sector of India is able to meet the increasing demand for food grains. However, now is the high time to take to bring a green revolution which is farmer’s friendly also. 2.5 KEY WORDS/ABBREVIATIONS 36 CU IDOL SELF LEARNING MATERIAL (SLM)

 Carbon Footprint - The total amount of carbon dioxide (CO2) and other greenhouse gases emitted over the full life cycle of a product or service.  Decomposition - The breakdown of organic wastes by various means. Complete chemical oxidation leaves only carbon dioxide, water, and inorganic solids.  Renewable Resource - A natural resource that can be replenished by natural means at rates comparable to its rate of consumption.  Savings- The difference between income and expenditure in the current time period.  Scarcity- A physical or economic condition where the quantity desired of a good or service exceeds the availability of that good or service in the absence of a rationing system.  Shortage- A market condition where the quantity demanded of a particular good or service exceed the quantity available. 2.6 LEARNING ACTIVITY 1. Explain the term Green Revolution __________________________________________________________________________________ ________________________________________________ 2.State the features of Green Revolution __________________________________________________________________________________ ________________________________________________ 2.7 UNIT END EXERCISES (MCQS AND DESCRIPTIVE) A. Descriptive Type Questions 1. State the advantages of Green Revolution. 2. Explain the disadvantages of Green Revolution. 3. Write a note on Green Revolution. 37 CU IDOL SELF LEARNING MATERIAL (SLM)

4. State the positive impact of Green Revolution. 5. Explain the negative impact of Green Revolution. B. Multiple Choice Questions 1. Green Revolution in India was introduced in 20th century during decade’s of_______for adopting new agricultural strategy. (a) 1960s (b) 1970s (c) 1980s (d) 1950s 2. Who is the father of Green Revolution in the World? (a) Norman Borlaug (b) M.S Swaminathan (c) Raj Krishna (d) R.K.V Rao 3. Who was the father of Green Revolution in India? (a) Norman Borlaug (b) M.S Swaminathan (c) Raj Krishna (d) R.K.V Rao 38 CU IDOL SELF LEARNING MATERIAL (SLM)

4. The Green Revolution in India was an introduction of high-yielding varieties (HYV) of seeds for _________ (a) Millet (b) Pulse (c) Wheat (d) Oilseed 5. Food production increased due to Green Revolution (a) True (b) False Answers: 1. (b) 2. (a) 3. (b) 4. (c) 5. (a) 2.8 SUGGESTED READINGS  Bajpai, P. & Bhandari, L. (2009). Social and Economic Profile of India. Hyderabad: Orient black Swan.  Datt, R. & Sundram, K.P.M. (2007). Indian Economy. New Delhi: S. Chand & Co.  Dhar, P.K. (1999). Indian Economy. Ludhiana: Kalyani Publishers.  Ghosh, A. (2004). Bhartiya Arth Vivstha. Patiala: Punjabi University.  Gill, J.S. (2004). Evolution of Indian Economy. New Delhi: NCERT.  Gupta, K.R. & Gupta, J.R. (2009). Indian Economy. New Delhi: Atlantic Publishers 39 CU IDOL SELF LEARNING MATERIAL (SLM)

 Jalan, B. (2008). India's Economy in the New Millennium. New Delhi: UBS Publishers.  Misra, S.K. & Puri, V.K. (2006). Indian Economy. Mumbai: Himalya Publishing House.  Sen, R.K. & Chatterjee, B. (2008). Indian Economy. New Delhi: Deep & Deep Publications.  Singh, B. N. (2008). Economic Reforms in India. New Delhi: APH Publishers.  Singh, B.N. (2008). Indian Economy Today: Changing Contours. New Delhi: Deep & Deep Publications.  Singh, C.G. (2005). Bharti Arth Shastar. Patiala: Punjabi University.  Soni, R.N. (2008). Leading Issues in Agriculture Economics. New Delhi: S. Chand & Co.  Tandon, B. & Tandon, K.K. (1998). Indian Economy. New Delhi: Tata McGraw Hills Pub. Co.  Vasudeva, P.K. (2009). India & World Trade Organisation: Planning and Development. New Delhi: APH Publishers. 40 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 3:VARIOUS REVOLUTIONS 41 Structure 3.0. Learning Objectives 3.1. Introduction 3.2. White Revolution 3.2.1 Phases 3.2.2 Outstanding Results: 3.2.3 Problems of Dairy Industry in India 3.3. Yellow Revolution 3.3.1 The Course of Yellow Revolution 3.3.2 Historical Perspective of Yellow Revolution 3.3.3 Success Factors 3.3.4 Secrets of Success 3.4. Summary 3.5. Key Words/Abbreviations 3.6. Learning Activity 3.7. Unit End Exercises (MCQs and Descriptive) 3.8. Suggested Readings 3.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Explain the white revolution CU IDOL SELF LEARNING MATERIAL (SLM)

 Describes the impact of white revolution  State about yellow revolution  Describe the impact of yellow revolution 3.1 INTRODUCTION After the huge success of world renowned Green Revolution in India that resulted in tremendous increase in production of rice and wheat, the India government took up “Operation Flood” Programme with a motive of increase in milk production and make India one of the largest producers of milk in the world. Indeed, this programme was a huge success and the entire world knows it as “The White Revolution”. Operation Flood was a rural development programme initiated by India's National Dairy Development Board (NDDB). This revolution started in the year 1970 following the Indian Green Revolution and was aimed to create a nationwide milk grid. To achieve the yellow revolution Oil Technological Mission was launched in 1986 in India. Along with the use of the hybrid seed, various other measures were also used. There was an increase in agro land to about 26 million hectares along with the use of modern technological inputs. Providing incentives to farmers like warehousing, transportation, minimum support price, and other processing facilities (like fertilizers, pesticides, irrigation, etc.). Many boards were entrusted with responsibilities to promote oilseed production like The National Dairy Board was given the responsibility to increase the production of groundnut oil in Gujarat, the National Oilseeds and Vegetable Oils Development Board was given the task to increase the production of oilseeds in non-traditional areas. To popularize the four major oilseeds — groundnut, mustard, soybean, and sunflower, a project called oilseeds production thrust was established. There were about 3000 oilseed societies established with 13 lac farmers and 25 hectares of cultivable land in a different state of the country. 3.2 WHITE REVOLUTION It resulted in making India the largest producer of milk and milk products, and hence is called as the White Revolution of India. It also helped in reducing the malpractices by milk traders 42 CU IDOL SELF LEARNING MATERIAL (SLM)

and mercenary merchants and ultimately helping in eradicating poverty. Operation Flood helped the dairy farmers, in directing their own development, by empowering them with the controls of the resources that they create. A 'National Milk Grid' was formed that connected milk producers throughout the country along with the consumers of more than 700 towns and cities. This helped in reducing seasonal and regional price variations ensuring consume satisfaction and at the same time ensuring that the producers get a major share of the price that consumers pay. The basic foundation of Operation Flood was laid by the village milk producer’s cooperatives that procured milk and provided services, making optimum use of modern management and technology. Operation Flood had the following objectives:  Increase production of milk ( creating \"a flood of milk\")  Augment rural incomes  Offer fair prices for consumers \"Anand Milk Union Limited\", popularly known as Amul- a Gujarat-based co-operation was the engine that drove the success of the programme. At the time when the programme was implemented VargheseKurian was the chairman of NDDB. He pushed forward the co- operatives with his sheer professional management skills, and is considered the architect of India's 'White Revolution'. There were several other big Co-operatives that empowered that transformed Operation Flood into White Revolution. 3.2.1 Phases Operation Flood was implemented in three phases. Phase I was spread over a span of 10 yrs., starting from 1970 to 1980. It was financed by the sale of skimmed milk powder and butter oil which were donated by the European Union through the World Food Programme. NDDB planned the programme- “Operation Flood” and linked 18 premier Indian milksheds 43 CU IDOL SELF LEARNING MATERIAL (SLM)

with consumers in India's major metropolitan cities, thus establishing mother dairies in 4 metros. In the initial stage of Phase I in 1970 certain well defined aims were kept in view for the successful implementation of the programme. Improvement of milk marketing in the organized dairy sector in the metropolitan cities- Mumbai, Kolkata, Chennai and Delhi was one such step to accomplish the goals. Starting from 1981, the Phase II of Operation Flood lasted till 1985. It increased the number of milksheds from 18 to 136. It was attributed to the fact that milk outlets were expanded to 290 urban markets. By the end of second phase, a self-sustaining system was set up that included 43,000 village cooperatives along with 4,250,000 milk producers. Domestic milk powder production also increased from 22,000 tons in the year 1980 to 140,000 tons by 1989. All of the increase in production was solely due to the dairies set up under Operation Flood. Ultimately, direct marketing of milk by these cooperatives increased by several million liters a day. Phase III of Operation Flood from 1985 to1996 gave a finishing touch to the programme by enabling dairy cooperatives to expand. This phase saw the strengthening of infrastructure required to market the increasing volumes of milk. Operation Flood's final phase strengthened India's dairy cooperative movement, by adding 30,000 new dairy cooperatives to the already existing 42,000 societies. Number of milksheds peaked to 173 and also the number of women members and Women's Dairy Cooperative Societies increased significantly. Towards the end of Operation Flood Programme 73,930 dairy cooperatives had set up linking more than 3.5 crore dairy farmer members. Due to the innovative strategies and sheer management skills adopted by these dairy cooperatives under the leadership of Dr. Kurian, the milk production peaked to an estimated level of 710 lakh tones. At present there are several hundred Co-operatives in India that are working very efficiently. Many such co-operatives were also set up by Verka Milk Plant, situated at Ludhiana in Punjab state of India. Now its subsidiary has also set up in Canada. Verka has played a 44 CU IDOL SELF LEARNING MATERIAL (SLM)

significant role in White Revolution. In 1972 Verka started with 1 Lac. Liter milk per day and today it provides 4 Lac. Liter milk per day. It set up co-operatives on the “Anand Pattern” and today is one of the biggest chains of Co-operatives. Another such brand is “Parag” of Pradeshik Cooperative Dairy Federation Limited (UP). It has a total of 30 cooperative unions and 16 Dairy plants. It produces 1,680 thousand liters of milk per day. Serving the country, it produces a wide variety of milk products such as Cheese, Ghee, White Butter, Table Butter, Skim Milk Powder, and Milk Cake. “Saras” is another such brand name that comes to the mind while talking about White Revolution. It is a brand of Rajasthan Cooperative Dairy Federation Limited. It has 16 cooperative unions and 15 Dairy Plants. It is serving the nation while producing 1,425 thousand liters of milk every day. It produces a wide variety of milk products ranging from Pure Ghee to Sweets and even Ice Creams. Some other Co-operatives and their Brand names are: • Andhra Pradesh Dairy Development Cooperative Federation Ltd. - Vijaya • Bihar State Cooperative Milk Producer’s Federation Ltd. – Sudha • Haryana Dairy Development Cooperative Federation Ltd. – Vita • Himachal Pradesh State Cooperative Milk Producer’s Federation Ltd. – Him • Karnataka Cooperative Milk Producer’s Federation Ltd. – Nandini • Kerala State Cooperative Milk Marketing Federation Ltd. – Milma • Madhya Pradesh State Cooperative Dairy Federation Ltd. – Sneha & Sanchi • Orissa State Cooperative Milk Producer’s Federation Ltd. – Omfed • Tamilnadu Cooperative Milk Producer’s Federation Ltd. – Aavin • West Bengal Cooperative Milk Production Federation Ltd. – Ben’s, Bhagirathi, Himul, Midmilk, Mother Dairy, Metro Dairy & Ben’s Torsha 45 CU IDOL SELF LEARNING MATERIAL (SLM)

• Maharashtra Rajya Sahakari Dudh Mahasangh Maryadit – Vikas, Mahananda, Gokul, Dhawal, Dudh Pandri, Warana, Krishna, Katraj, Rajhans, Koyna & Shivamrut Despite the huge success of White Revolution there are some critics on the other node who argue that the emphasis on foreign cow breeds has led to the decimation of Indian breeds. Albeit foreign breeds give higher yields, but they also require more feed and are not suited to Indian conditions. Critics further argue that operation flood came at the expense of development, research, and extension work in other areas of Indian agriculture. They also say that although the White Revolution has benefited the rural India considerably, yet it cannot be sustained beyond a threshold limit due of the lack of purchasing power of the poor Indians, and the export front of India is bleak. Indeed, the White Revolution has played an important role in improving the living standards of the rural people in India. There is no doubt that the co-operatives, which were set up to accomplish the goals of “Operation Flood” programme, had also played a major role in the progress of the rural economy. There is no exaggeration in saying that White Revolution is the cause of prosperity in many of the Indian villages. 3.2.2 Outstanding Results:  The milk production in India increased from a level of 17 MT in 1950- 51 to about 100.9 MT at the end of 2006-07, i.e. at the end of the Tenth Plan.  The per capita availability of milk increased to about 246 gm per day in 2006-07 from a level of 124 gm per day in 1950-51.  Imports of milk solids have ended. India has also started exporting milk powder to some countries now.  Dairy industry and infrastructure have been expanded and modernised. A Milk Grid has been activated to offset regional and seasonal imbalances in milk production. A stable structure is now present to protect against political instability.  About ten million small farmers in 70,000 villages are earning jointly an incremental 46 CU IDOL SELF LEARNING MATERIAL (SLM)

income of more than Rs 2000 crore, and more than 60 per cent of the milk procurement for Operation Flood comes from small, marginal farmers and the landless.  Most of the dairy needs are met indigenously.  Genetic improvement of milch animals has been made possible by cross-breeding. 3.2.3 Problems of Dairy Industry in India:  Because of small holdings and scattered milk production, the collection and transportation of milk, in good quality, to markets is difficult. This leads to an inefficient utilization of milk products.  Because of unhygienic production, handling conditions and high temperatures, the quality of milk is adversely affected.  Because of inadequate marketing facilities, most of the marketable surplus is sold in the form of ghee which is the least remunerative of all milk products.  Crude methods for milk collection and production are used, which have low productivity.  The Indian cows and buffaloes are generally low yielding and non-descript because of the lack of healthy cattle-feed and fodder, tropical heat and diseases. It has been observed that the milk production per animal is higher where balanced mixed farming is practiced, and the best milch animals are found where there is prosperous agriculture, where fodder, cereal, oilseed by-products and crop residue are available and where the pressure on land is comparatively lower 3.3YELLOW REVOLUTION India’s oilseeds output in 2008-09 were estimated to be 28.16 million tonnes, which is quite deficient as the demand stood at 45.46 million tonnes. The output in 2009-10 is projected to fall due to deficient monsoon this year. It has stood at 25 million tonnes since 1998-99. Oilseeds production accounts for 7.4 per cent of the global production and is considered as 47 CU IDOL SELF LEARNING MATERIAL (SLM)

the fourth-largest edible oil country in the world. The earlier policy allowing free import of oilseeds was detrimental to the interests of oilseeds growing farmers and a set-back on development of oilseeds for achieving self-sufficiency. As a result, the country remained dependent on imported edible oils. There has been a significant increase in imports of crude palm oil from Malaysia and Indonesia. The ‘yellow revolution’ in oilseeds owes its earlier success to a spectacular increase in output to 24.75 million tonnes in 1998-99 from 10.83 million tonnes in 1985-86. But thereafter, we have not been able to achieve self-sufficiency in oilseeds. Current production is not enough to meet the needs of cooking oils of our growing population. The annual demand has risen to over 125 lac tonnes whereas, production is hardly around 75 lac tonnes. The shortage is met by imports every year from Argentina, Brazil, Malaysia and Indonesia. Annual oilseeds imports, which account for about five million tonnes, cost Rs. 15,873.6 crores in 2008-09 from Rs. 10,942.54 crores in 2007-08. It is estimated that the demand in 2020 may touch 20.8 million tonnes, requiring a production of 60 million tonnes of oilseeds, and that the per capita oil consumption may rise to 16 kg annually. Consumption of Yellow Revolution: Edible oil is an important constituent of the Indian diet. Besides being a source of energy, they add a special flavor and palatability to food. The annual per capita consumption is 11.1 kg against the world average of 14.5 kg and the average of 26 kg in developed countries. Edible oil consumption is likely to increase with rising of per capita income. However, the daily in-take of fat should not contribute more than 15-20 per cent calories. There is potential to produce about 25 lac tonnes of oil from non-conventional sources, but hardly about eight lac tonnes are being utilized. It is important to work out a strategy to exploit maximum potential from these sources. The spectacular success of the yellow revolution in 1998-99 could be attributed to an increase in the cultivable area to about 26 million hectares and an integrated approach that gave over- riding priority through a technology mission. Aimed at accelerating self-reliance in oilseeds, the approach adopted envisaged developing and taking modern technological inputs to 48 CU IDOL SELF LEARNING MATERIAL (SLM)

farmers, thereby providing them incentive prices and storage and processing facilities. The National Dairy Board was entrusted with the task to develop groundnut production in Gujarat through farmers’ oilseeds societies. The national Oilseeds and Vegetable Oils Development Board was entrusted to popularize oilseeds in non-traditional areas. Also, an oilseeds production thrust project was initiated to accelerate production of four major oilseeds — groundnut, mustard-rapeseed, soybean and sunflower. Low Productivity of Yellow Revolution: The integrated oilseeds development programme was initiated in different states with more than 3,000 oilseed societies involving 13 lac farmers and 25 lac hectares of land. Despite these efforts, our oilseeds productivity continues to be as low as 944 kg per hectare when compared to the world level at 1,632 kg per hectare. At present, there is not much scope to expand the cultivable area under oilseeds. The continuing shortage of cooking oils would suggest that the Oilseeds Technology Mission and growing oil palms have had little impact. These energy-rich crops suffer from a number of constraints as they are grown in poor environment and are susceptible to pests and diseases. Besides, farmers preferred to grow high-yielding cereals to earn higher profits. However, in the recent past, improved technology has been developed to boost output. As major crops, oilseeds meet the country’s needs for edible oils. A second yellow revolution is crying need of the hour. Also, a technical breakthrough in dry land farming is needed to maximize yield, productivity and farm income. Achieving the aim of making the country self-sufficient in oilseeds would have a great impact on agriculture and the economy and would help reduce dependence on foreign markets. 3.3.1 The Course of Yellow Revolution Oilseeds production scenario in India has witnessed a dramatic turn. The country achieved a status of ‘self-sufficient and net exporter’ during early nineties, rising from the ‘net importer’ state, with a mere annual production of nearly 11 million tonnes from the annual oilseed crops, until the year 1986-87. In a span of just a decade, an all-time record oilseeds production of 25 million tonnes from 49 CU IDOL SELF LEARNING MATERIAL (SLM)

annual oilseed crops was attained during 1996-97. This transformation has been termed as “The Yellow Revolution” and could be primarily attributed to the institutional support, particularly the setup of the Technology Mission on Oilseeds in 1986. Significant outcome of the Mission and other related developments included the following: i. The improved oilseeds production technology ii. The expansion in cultivated area, and iii. The price support policy. As a result, the gains made possible were none short of a revolution and were rightly named as the yellow revolution. The India is among the largest oil economies in the region/world. The country also occupies a distinct position in terms of diversity in annual oilseed crops. The prevailing agro- ecological conditions have been favourable for growing several important annual oilseeds, including edible (namely, groundnut, rapeseed-mustard, soybean, sunflower, safflower, sesame and Niger) and non-edible oilseeds (namely, castor and linseed). In addition, a wide range of other minor oilseeds and oil bearing tree species add to the diversity as well as oilseed production in the country. India contributes a large share to the global castor production (76.9 percent) and also a substantial one to production of sesame (31.2 per cent) and groundnut (25.1 percent). The country is the largest producer of castor and sesame and second largest Producer of groundnut and rapeseed-mustard (next to China). A production jump from 4.9 million tonnes to 8.8 million tonnes in terms of oil equivalent recorded a high annual growth of 6.9 per cent as against 5.0 and 3.4 per cent for the region and the world, respectively. The other countries in the region that showed substantial increase in production (oil equivalent) and growth were Indonesia (8.2 per cent) and Malaysia (6.4 per cent) which could, however, be attributed mainly to increased production in oil palm, in both cases. China topped in production figures in 1995 (12.5 million tonnes) but recorded a low annual growth (3.1 per cent). 50 CU IDOL SELF LEARNING MATERIAL (SLM)