How small farmers can exploit current growth in organized retail and infrastructure

Abstract

Agriculture in India represents one of the most important economic activities in India. Agriculture and allied sectors like forestry and fishing accounted for 18.5 percent of total Indian Gross Domestic Product (GDP) in 2005-06 (at 1999-2000 constant prices) and employed about 58 percent of the country's workforce. It accounted for 10.95 percent of India’s exports in 2005-06 and about 46 percent of India's geographical area is used for agricultural activity. i However, in an economy being driven by strong growth in emerging sectors, the share of agriculture in the country’s GDP has been decreasing. Consider an 18.5% share in the GDP in 2007, when compared to 24.4% in 1996-97 and 48.7% in 1950. The growth of industrial and services sector has far outpaced these figures. The share of mining, manufacturing, electricity and construction sector has increased from 21.6 percent in 1970-71 to 27 percent in 2004-05 and services sector has increased significantly from 32 percent to 52.4 percent during the same period. Agriculture, then assumes importance not for its overall contribution to the GDP of the country, but for the fact that almost 58% of the country’s workforce are dependant on agriculture and allied activities. 70% of the populace living in rural areas depends on agricultural activity for their livelihood, and 46% of India’s geographical area is under agricultural cultivation. Agriculture assumes utmost importance in Indian society for the sheer impact it has on the socio economic fabric of the country. Agricultural activity in India is characterized by a heavy dependence on monsoon rains. The lack of proper irrigation systems in many parts of the country has made rainfall the sole source of irrigation. The situation is so severe that the agricultural output of the country has closely followed the magnitude and the duration of the monsoon season. This has made agricultural activity unpredictable and risky. Adverse societal factors like a strong and regressive class hierarchy and rampant population growth have also had their impact on agriculture, chiefly by concentrating a large portion of fertile tracts of land to a few hands, while the rest would have to do with minimal land holdings. Inability to obtain sufficient capital for agricultural activity is an outcome on a strict class hierarchy as well.