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ASSIGNMENT SOLUTIONS GUIDE (2016-2017)

B.E.C.E.-214
Agricultural Development in India
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information, data and solution. Student should must read and refer the official study material provided by the university.

(A) Long Answer Questions (word limit-500 words)

Q. 1. Explain the long run effects of current terends in the cropping pattern of Indian agriculture.
Ans. Cropping pattern presently in vogue in India is cereal biased and fails in assuring balanced food secu-
rity. The cropping pattern does not depict a picture of diversified agriculture despite some commercialization and
technological progress.
Other associated aspects of the present cropping pattern are increased use of chemical fertilizers and pesticides,
increase in water demand, and duplication of forest areas which are discussed below.
Increased use of Fertilizers and Pesticides: We are using more and more fertilizers and pesticides of the
inorganic type while growing crops which has two main disadvantages: One is that our health is being affected due
to the fruits and vegetables becoming so toxic that our body cannot tolerate and we fall ill very often. Secondly, the
tolerance of pests to the pesticides develops, and slowly they become ineffective.
Higher production of foodgrains has resulted from inorganic fertiliser and pesticides application. The higher
chemical fertiliser and pesticide application has led to toxicity in feeds.
Area where pesticides use has been increasing vigorously has seeninsurgency among the insects and pests, led to
disturbance in bio-system.
Use of Hybrid and High Yielding Varieties: We were earlier using our indigenous seeds to grow crops, and
those had better nutrition value. Now the hybrid seeds are being used after the onset of the green revolution. They are
not so nutritious and this awareness has lead to the growing importance of organic farming, but it is not been done on
a very large scale, so it does not have a significant impact on total production. This calls for the development of a
new system in which the traditional methods and the modern scientific technique is combined to reap the advantages
of both and minimize the drawbacks.
Increased use of hybrid and high yielding varieties have resulted in theextinction of local varieties which were
known for higher nutritional levels. This has led to awareness on the importance of adopting natural and organic
farming techniques. However, the scale in which such practice are operated needs to be enhanced in order to make
a real dent into system. It must be noted that these very methods were also the ones which contributed to realisation
of GR benefits.
Increased Water Demand: In the last fifty years, the net sown area has been increased from 118 to 142 million
ha. The increase in net sown area and increase in cropping intensity in turn increased the demand for water sources
for irrigation. This increased demand is causing depletion of water resources. The intensive cropping pattern is
always in need of higher irrigation supply. This in turn pushes for development of sources of irrigation. The higher
requirement of water deplete the ground water level. Increased demand for irrigation in turn requires major, medium

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and minor irrigation projects, which are highly expensive. The construction of irrigation projects many times faces
bureaucratic hurdles and opposition from local residents because irrigation projects cause various social and envi-
ronmental problems.
Increased Water Demand: New production techniques require the usage of ore water. In fact, we are using
70% of our water in the agricultural sector, and the need would increase if intensive cropping is done. The result is
that our ground water resources are used up. More and more irrigation projects have to be undertaken by the
government, which have adverse effects on the environment, and also use of agricultural land for non-agricultural
purposes. This is however a project that the government has to undertake, but an additional step of water conserva-
tion needs to be undertaken, as agriculture cannot generate so many jobs as industry and is also less productive.
That is why industrial development is all the more important.
Depletion of Forest Areas: The present cropping pattern emphasised on bringing more and more land under
agriculture thereby depleting the forestland. There has been an increase in the agricultural area through deforesta-
tion during the thirty year period 1950-81. The area under field crops rose from 118.7 mha to 142.9 mha by bringing
an additional 24 mha under crop through deforestation of private and rural forests or older fruit orchards. The land
use pattern has moved towards higher food production leaving the forestry neglected.
Depletion of forest areas: There is need for a minimum forest area to be maintained, the specification being
33%, for the ecological balance to be maintained. Increasing the cropping intensity reduces the forest cover. We
have tried to maintain a reasonable forest cover by afforestation methods and maintenance of the existing reserves.
In many areas this ecological balance has been disturbed because of increase in agricultural activities, which needs
to be taken care of.
The main areas of concern regarding the cropping pattern have been discussed above, indicating the need for
evolving such methods that would emphasize upon the benefits of the advantages and disadvantages.
Q. 2. What adverse impacts could be generally expected on account of a foreign trade policy and what
mechanisms are needed to be developed to cope with these?
Ans. The EXIM Policy, announced by the Ministry of Commerce and Industry, stipulates the countrys
provisions for imports and exports. The government announced this policy once in five years. The last EXIM policy
covers the period 2009-14. The policy is updated every year on March 31 and changes become effective from
April 1. The changes include the budget announcement with measures like:
(i) Cutting/increasing of customs duties to make imports cheaper/expensive;
(ii) Applying extra duties or lowering to make the exports costlier/cheaper;
(iii) Changes in tariff rates.
After following a closed door import-substitution policy till early 1980s, India partially adopted trade liberalization
policy for industrial goods in the 1980s and later for agricultural goods in the second half of 1990s. We will thus
discuss the policies in agriculture in the post-1990s. Besides, in the context of the two instruments: imposition of:
(i) Quantitative restrictions; and
(ii) Tariffs, we shall look into on the changes in these tools. India has also signed bilateral and multilateral
agreements with other countries to promote trade.
Quantitative Restrictions and Tariffs
Quantitative restrictions refer to quotas. Import quotas are applied to make domestic prices for imported goods
expensive. A tariff on the price of the commodity is like quotas, but they have a major difference. Tariff yields
revenue, quotas do not yield any revenue for the country. Import tariff also helps importers to earn higher profits at
the cost of a distortion in price levels. Particularly in the case of monopoly market, an import quota lead to higher
domestic price than with an import tariff. The cost of quota for the importing countries is higher than that of
tariffs. Besides, tariffs is an easier instrument for use in negotiations on trade.
Agriculture reforms in India accelerated after 1993-94. The three components in the taxation on agricultural
imports in the country are: a basic duty, an additional countervailing duty which is equal to VAT and other taxes
applied to similar products produced in the country, and a 2 per cent surcharge. On these components, the rates of
tariff however vary. After 2000 on the basis of WTO guidelines, the quantitative restrictions on the import of
agricultural goods such as wheat and wheat products, rice, pulses and oilseeds were removed. The average tariff for

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the eight HS-chapter agricultural products By 2005-06, were significantly reduced with the average tariff for the
eight processed food HS-chapters being reduced to 37.6 per cent. On the rates for specific products, however, the
total import tariff applied for food products (in 2005-06) was 30 per cent (for cocoa and cocoa preparations and
miscellaneous edible preparations) to 75.5 per cent (for animal and vegetable fats and oils).
In two situations food products import are encouraged: (i) When there is continuous scarcity in the domestic
supply of certain food items, or (ii) A temporary disruption in the supply affecting the operation of domestic processing
industries. Import tariff on food products has been reduced as compared to the levels prevailing before. Average
tariff for agricultural products in 1986 was 150 per cent and in 1992 it was 115 per cent. In 2006-07, industrial
tariffs were at 12.5 per cent, while agricultural products tariff was at 37.6 per cent. The difference between the
agricultural and non-agricultural goods was consistent with the facts that: (i) Liberalisation for industrial goods
begun earlier; and (ii) The agricultural markets were not opened up a few years later but was kept insulated from
competitive pressures by a policy of gradual opening.
Trade Agreements
Trade agreements refer to contractual deal between two or more countries. They can be Bilateral Trade Agreements
(BTAs) if two countries are involved and Multilateral Trade Agreements (MTAs) if more than two countries are
involved. International trade in most countries is regulated by barriers such as tariffs and non-tariff barriers like
QRs. Trade agreements reduce such barriers and prepare a level playing field for trade between the countries
involved. The extent of concessions show whether it is a free trade agreement or a preferential trade agreement.
Reciprocity is a necessary feature of all trade agreements because no country would become a signatory to a trade
agreement if there is no gain. The Most-Favoured Nation (MFN) clause is another feature of trade agreements.
Trade agreements also include the national treatment of non-tariff restrictions clause which means the countries
involved would not undo the tariff benefits offered by imposing non-tariff barriers like selective excise taxes,
quotas; discriminatory regulation, or special licensing needs.
India has signed more than 40 trade agreements. Out of these, 11 (or 27 per cent) are MTAs and 30 (73 per cent)
are BTAs. The SAFTA (South Asia Free Trade Agreement) and APTA (Asia Pacific Trade Agreement), for example,
are MTAs. Marcos Preferential Trade Agreement (MPTA) signed between India and four Latin American countries
Brazil, Argentina, Uruguay and Paraguay is also an MTA. Examples of BTAs are the Comprehensive Economic
Cooperation Agreement (CECA), signed with Singapore.
New Foreign Trade Policy (2009-14) and Agri-Exports
The two main objectives of the Foreign Trade Policy for 2009-14 are: Increasing Indias exports of goods and
services to double by 2014; and increasing Indias share in global merchandize to double. The policy aimed at
encouraging exports through measures like institutional changes, procedural rationalisation, fiscal incentives, and
facilitating market access by diversification of export markets. To boost agri exports, the government has launched
a special scheme Special Agriculture and Village Industry Scheme (or Vishesh Krishi and Gram Udyog Yojna:
VKGUY) has been launched. To promote employment generation in rural and semi-urban areas, the VKGUY seeks
to export:
(i) Agriculture produce and their value-added products;
(ii) Minor forest produce and their value-added variants; and
(iii) Other products as notified from time-to-time. Besides, the government has introduced a single window
system to reduce transaction and handling costs of perishable agricultural produce under the new trade
policy.
Adverse Impacts
Trade policy aimed at boosting exports also has adverse impacts. In the short run, such impacts can happen if
the institutional systems are not well set up to protect the small farmers. Such impacts occur also because of the
change in tastes and preferences of people resulting in rise in demand for particular type of goods, change in
farming practices on the basis of expected demand and a sudden fall in demand/prices due to certain conditions. For
example, misleading price signals led to change in cropping pattern for vanilla in Kerala, soyabean in Maharashtra.
The fact was that the price of vanilla was rising, when the prices of all other crops grown in Kerala was falling. The
abnormal increase in the vanilla price was because of a sudden drop in production in Madagascar, the highest
vanilla exporting nation. When the production was resumed in Madagascar, the vanila price dropped steeply in
Kerala which put pressure on farmers who had switched from their earlier crop (coffee). It caused undue hardship.

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To mitigate such problems, a well planned crop insurance scheme is needed. Such support systems are yet to be
developed in India.
(B) Medium Answer Questions (Word limit 250 words)
Q. 3. Bring out the major argument implicit in the debate on complete or near-complete ban on tenancy.
Debate on Complete or Near-complete Ban on Tenancy.
Ans. There has been along debate about whether tenancy should be abolished, the motive of the same is to
avoid exploitation of the tenants. To avoid exploitation, proper laws regarding the rights of the tenants must be
formed to protect the tenants. It was agrued that under the following conditions, the termination of tenancy must
also permitted:
(i) Tenant fails to pay rent for a year or within a given period of time
(ii) Tenant uses land for some other purpose, not agriculture
(iii) The land is no longer fit for cultivation
(iv) Tenant does not cultivate land himself
(v) The lease term has elapsed or the landlord has applied to cultivate himself.
Considering the complexity of the situation, some states made provisions to eliminate tenancy, but under given
circumstances. According to National Commission on Agriculture, a complete ban on tenancy is not desired,
considering our ratio of agricultural land per capita. Considering that we have a huge poor population in our rural
areas, a complete ban on tenancy is undesirable. The total area under tenancy as per estimates remained quite the
same, around 10.6% between 1962 and 1971, between 1981-91 area under tenancy increased from 7.2% in 1981 to
8.3% in 1991, which declined between 1971-1991.
Table: Changes in Leasing of Land in India (per cent)

Class of Farmers 1961-62 1970-71 1980-81 1990-91

No. Area No. Area No. Area No. Area
Small 23.1 14.0 27.8 14.6 17.9 8.5 14.9 8.5
Marginal 24.1 16.6 27.0 18.9 14.4 9.7 9.3 8.7
Medium 20.5 9.6 20.0 8.7 14.5 6.6 13.1 6.9
Large 19.5 8.3 15.9 5.9 11.5 5.3 16.7 19.4
All Sizes 23.5 10.7 25.7 10.6 15.2 7.2 11.0 8.3
The major planks of tenancy reform included security of tenure, termination of tenancy, resumption for personal
cultivation by the landlord, regulation of rent and confirmation of ownership rights. Various state laws were enacted
between 1960 and 1972. These differed across the states and territories. Owing to the diverse and complicated
nature of social and agrarian structure in the countryside, no uniform guidelines could be formulated for the whole
country. However, some broad guidelines were given in addition to the directives in the successive plan documents.
The consensus on the policy of tenancy reforms favoured neither complete expropriation of landlordism nor the
interests of the tenants. In the national guidelines the following measures were communicated to the state governments
for incorporation in the state legislation:
security of the tenancy to be conferred on the actual cultivator;
fair rent to be fixed between 20 and 25 percent of the gross produce;
landowners may be permitted to cultivate land for their personal use;
the surrender of the tenancy rights with mutual consent;
in respect of some of the area, the landlord - tenant relationship to be ended and the tenant cultivator be
brought directly into contact with the state;
disabled persons, defence personnel and other such exemptions to be allowed to lease their land;
the term personal cultivation should be clearly defined if landlords are allowed to remove tenants in order
to resume cultivation;
tenancy records should be corrected and oral tenancies should be abolished.

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Because land is subject to state control in India and the relationship between production and land tenure varies
from state to state, the national policy recommendations resulted in differing tenancy reform laws in each state.
Tenancy is completely prohibited in some states but completely free in others. Punjab and Haryana have not
prohibited tenancy whereas Karnataka has a near complete ban on tenancy. Some states have conferred ownership
rights on tenant cultivators except for sharecroppers, whereas West Bengal chose to provide owner-like rights only
to the sharecroppers. Some states, such as Maharashtra and Orissa, chose to provide different tenancy reform
regimes for different areas within the state. Many states allowed tenancy only for certain limited groups of people,
often broadly termed disabled (referring to physical disability). Orissa law considers a landowner owning less
than 3 acres of land as a disabled person. In Rajasthan a student pursuing studies in an educational institution and
less than 25 years old is also a disabled person. In Uttar Pradesh, such a student is included if his father is dead. In
Uttar Pradesh all minors, women and unmarried daughters are not treated as disabled, unless their husband or father
is dead. In Bihar a public servant whose salary is below the given norm is treated as disabled.
Among the various exceptions given under the tenancy acts, provisions allowing the landlords to remove tenants
in order to resume personal cultivation assumed greater importance as the dominant landlords took advantage of
this clause. The clause was entered with a view to induce the landlord to undertake personal cultivation and also to
control absentee landlordism. Tenancy acts in almost all the states allowed the landlord to return land, if required,
for personal cultivation, but the terms and definitions differed.
Q. 4. What do you understand by the term bio-diversity?
Ans. Biodiversity is most commonly used to replace the more clearly defined and long established terms,
species diversity and species richness. Biologists most often define biodiversity as the totality of genes, species
and ecosystems of a region. An advantage of this definition is that it seems to describe most circumstances and
presents a unified view of the traditional types of biological variety previously identified:
taxonomic diversity (usually measured at the species diversity level)
ecological diversity often viewed from the perspective of ecosystem diversity
morphological diversity which stems from genetic diversity
Functional diversity which is a measure of the number of functionally disparate species within a population
(e.g. different feeding mechanism, different motility, predator vs prey, etc.)
Biodiversity and Agriculture
Agricultural diversity can be divided into two categories: intraspecific diversity, which includes the genetic
variety within a single species, like the potato (Solanumtuberosum) that is composed of many different forms and
types (e.g.: in the U.S. we might compare russet potatoes with new potatoes or purple potatoes, all different, but all
part of the same species, S. tuberosum).
The other category of agricultural diversity is called interspecific diversity and refers to the number and types
of different species. Thinking about this diversity we might note that many small vegetable farmers grow many
different crops like potatoes and also carrots, peppers, lettuce etc.
Agricultural diversity can also be divided by whether it is planned diversity or associated diversity. This is a
functional classification that we impose and not an intrinsic feature of life or diversity. Planned diversity includes
the crops which a farmer has encouraged, planted or raised (e.g.: crops, covers, symbionts and livestock, among
others), which can be contrasted with the associated diversity that arrives among the crops, uninvited (e.g.: herbivores,
weed species and pathogens, among others).
The control of associated biodiversity is one of the great agricultural challenges that farmers face. On monoculture
farms, the approach is generally to eradicate associated diversity using a suite of biologically destructive pesticides,
mechanized tools and transgenic engineering techniques, then to rotate crops. Although some polyculture farmers
use the same techniques, they also employ integrated pest management strategies as well as strategies that are more
labor-intensive, but generally less dependent on capital, biotechnology and energy.
Interspecific crop diversity is, in part, responsible for offering variety in what we eat. Intraspecific diversity, the
variety of alleles within a single species, also offers us choice in our diets. If a crop fails in a monoculture, we rely
on agricultural diversity to replant the land with something new. If a wheat crop is destroyed by a pest we may plant
a hardier variety of wheat the next year, relying on intraspecific diversity. We may forgo wheat production in that
area and plant a different species altogether, relying on interspecific diversity. Even an agricultural society which
primarily grows monocultures, relies on biodiversity at some point.

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The Irish potato blight of 1846 was a major factor in the deaths of one million people and the emigration of
about two million. It was the result of planting only two potato varieties, both vulnerable to the blight,
Phytophthorainfestans, which arrived in 1845.
When rice grassy stunt virus struck rice fields from Indonesia to India in the 1970s, 6,273 varieties were
tested for resistance. Only one was resistant, an Indian variety and known to science only since 1966. This
variety formed a hybrid with other varieties and is now widely grown.
Coffee rust attacked coffee plantations in Sri Lanka, Brazil and Central America in 1970. A resistant variety
was found in Ethiopia. The diseases are themselves a form of biodiversity.
Monoculture was a contributing factor to several agricultural disasters, including the European wine industry
collapse in the late 19th century and the US southern corn leaf blight epidemic of 1970.
Although about 80 per cent of humans' food supply comes from just 20 kinds of plants, humans use at least
40,000 species. Many people depend on these species for food, shelter and clothing. Earths surviving biodiversity
provides resources for increasing the range of food and other products suitable for human use, although the present
extinction rate shrinks that potential.
Q. 5. What was the impact of commercialization of agriculture in British Inida?
Ans. The commercialization of agriculture means that the agricultural crops and goods are produced by the
peasants for sale in the market and not for their own consumption. Commercialization of agriculture in India began
during the British rule. The commercialization of Indian Agriculture took place not to feed the industries of India
because India was far behind in industrial development as compared to Britain, France, Belgium and many other
European countries of eighteenth century.
The commercialization of Indian Agriculture was done primarily to feed the British industries that it was taken
up and achieved only in cases-of those agricultural products which were either needed by the British industries or
could fetch cash commercial gain to the British in the European or American market.
For example, several efforts were made to increase the production of cotton in India to provide raw and good
quality cotton to the cotton-textile industries of Britain which were growing fast after the Industrial Revolution in
Britain. Therefore, cotton growing area increase in India and its production increased manifold with gradual lapse
of time. Indigo and more than that, tea and coffee plantation were encouraged in India because these could get
commercial market abroad.
Impact of Commercialization of Agriculture:
It should have acted as a catalyst in increasing agricultural productivity. But, in reality this did not happen
due to poor agricultural organization, obsolete technology, and lack of resources among most peasants. It
was only the rich farmers; who benefited and this in turn, accentuated inequalities of income in the rural
society.
The commercialization of agriculture beneficial to the British planters, traders and manufacturers, who
were provided with opportunity to make huge profits by getting the commercialized agricultural products
at, throw away prices. The commercialization of Indian agriculture also partly benefited Indian traders and
money lenders who made huge fortunes by working as middlemen for the British.
The poor peasant was forced to sell his produce just after harvest at whatever prices he could get as he had
to meet in time the demands of the government, the landlord, the money lender and his family members
requirements. This placed him at the money of the grain merchant, who was in a position to dictate terms
and who purchased his produced at much less than the market price. Thus, a large share of the benefit of the
growing trade in agricultural products was reaped by the merchant, who was very often also the village
money lender.
Indian money lenders advanced Cash advances to the farmers to cultivate the commercial crops and if the
peasants failed to pay him back in time, the land of peasants came under ownership of moneylenders.
Most of the Indian people suffered miserably due to the British policy of commercialization of Indian
agriculture. It resulted in reduced area under cultivation of food crops due to the substitution of commercial
non-food grains in place of food grains. Between 1893-94 to 1945-46, the production of commercial crops
increased by 85 per cent and that of food crops fell by 7 per cent. This had a devastating effect on the rural
economy and often took the shape of famines. The misery was further enhanced became the population of
India was increasing every year, fragmentation of land was taking place because of the increasing pressure

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on land and modern techniques of agricultural production were not introduced in India. Thus, the
commercialization of agriculture in India by the British was also one of the important causes of the
impoverishment of the Indian people.
Commercialization of agriculture did not encouraged growth of land market because major profit of
commercialisation went to company traders and mediators.
Regional specialization of crop production based on climatic conditions, soil etc., was an outcome of the
commercial revolution in agriculture. Deccan districts of Bombay presidency grew cotton, Bengal grew
jute and Indigo, Bihar grew opium, Assam grew tea, Punjab grew wheat, etc.
Another important consequence of the commercial revolution in agriculture was linking of the agricultural
sector to the world market. Price movements and business fluctuations in the world markets began to affect
the fortunes of the Indian farmer to a degree that it had never done before. The farmer in his choice of crops
attached greater importance to market demand and price than his home needs. The peasant class got adversely
affected owing to imbalances in market condition.
Commercialization of agriculture adversely affected self-sufficiency of village economy and acted as major
factor in bringing the declining state in rural economy.
Commercialisation effected traditional relations between agriculture and industry. In India, traditional
relations acted as factors for each others development which were hampered.
Commercialization of agriculture indicated a commercial revolution. But this was devoid of any support
from any technological revolution. Owing to true the healthy ben-efits which agriculture and associated
fields would have enjoyed were lacking.
The commercialization of agriculture had mixed effects. While it assisted the industrial revolution in Britain,
it broke the economic self-sufficiency of villages in India. The commercialization of agriculture was a new
phenomenon in Indian agriculture scene introduced by the British. While the upper class and British industries
benefited-from it, the Indian peasants life was tied to remote international market. The worst effect of
commercialization was the oppression of Indian peasants at hands of European. This found expression in
the famous Indigo revolt in 1859. Moreover, commercialization of Indian agriculture got manifested in
series of famines which took a heavy toll of life.
Q. 6. Evaluate the performace of agricultural cooperatives in india.
Ans. The assessment if cooperatives can be done on the basis of the number of members, etc. from the given
table. The cooperative sector has been playing a distinct and significant role in the countrys process of socio-
economic development. There has been a substantial growth of this sector in diverse areas of the economy during
the past few decades. The number of all types of cooperatives increased from 1.81 lakh in 1950-51 to 4.53 lakh in
1996-97. The total membership of cooperative societies increased from 1.55 crore to 20.45 crore during the same
period. The cooperatives have been operating in various areas of the economy such as credit, production, processing,
marketing, input distribution, housing, dairying and textiles. In some of the areas of their activities like dairying,
urban banking and housing, sugar and handlooms, the cooperatives have achieved success to an extent but there are
larger areas where they have not been so successful. The PACS, as the foundation of the Cooperative system are
meeting the development needs of the farmers by providing credit, inputs and storage and processing and marketing
facilities at the grassroot level. The Cooperative federation at the district and State level constitutes the Cooperative
system. But it is found that the Apex institutions have grown stronger whereas the primaries and in some cases,
Central Cooperatives have gone weaker. The situation has to be changed and the primaries have to grow stronger.
The business of the primary Societies have to be diversified.
From the table we can see that the long-term average annual growth rate over the period 1951-2010 is quite
high at 14.4%. The outstanding loans have also increased at the same rate, keeping the ratio of loans outstanding to
loans advanced above 1. Thus, recovery has been poor, though there have been individual success stories.

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Table: Growth of PACs: 1951 to 2010

Year 1951 1961 1971 1981 1991 2001 2006 2010
Number (Lakhs) 1.1 2.1 1.6 0.9 0.8 1.0 1.1 1.0
Members (Lakhs) 44.1 170.4 309.6 576.5 801.2 999.2 1252.0 1264.2
Average members 42.0 80.4 192.3 613.3 966.4 1011.3 1176.8 1264.2
per PACs
Deposits (Rs. Crore) 4.5 14.5 69.4 291.3 1349.0 13481.1 12561.2 35286.1
Loans Advanced (A) 22.9 202.7 577.9 1769.4 4678.9 25698.3 42919.6 74937.5
(Rs. Crore)
Loans Outstanding (B) 29.1 218.0 784.5 2450.6 6877.2 34522.3 51779.0 76479.8
(Rs. Crore)
Ratio of B to A 1.3 1.1 1.4 1.4 1.5 1.3 1.2 1.0

Evidence of Non-Credit Cooperative Success

It has been found that the cooperative institutions in production and other sectors have been more successful,
for example, the case of Amul in Gujarat in the dairy sector. These cooperatives have helped the Green Revolution
by providing new varieties of seeds, fertilizers, etc. At present more than there are more than 170 district cooperative
milk producer unions in India, and it has made India the largest milk producing nation, though now it has reached its
peak and production cannot increase further.
Factors Influencing the Performance of Cooperatives
(i) Membership Size: The Maclagan Committee had advocated a small size of membership for the cooperatives
as that would ensure peer pressure to ensure that the recoveries are made, but it did not work that way. Due to
pressure of population, the membership size increased and the recoveries became difficult, creating outstanding
loans.
(ii) Government Participation and Control: The cooperatives are based on the principle of self-help and
member-centric operation. Too much help by the government was against the very basic principles of cooperatives
and made them too dependent on government aid.
(iii) Bureaucratization/Politicization of Cooperative Leadership: The British had created the post of registrar
of cooperatives to control them and not let them become a successful peoples movement. After independence, this
position was kept and more bureaucratic shackles were put to administer and manage them. This affected their
independence and led to unnecessary political control.
Missing Multi-dimensional Reform Agenda: After globalization, the government has reduced control in
various areas. So, it is also desirable that the function of the cooperative enterprises have more contribution towards
an opened up economy. The cooperative and self-help initiatives should have been up-scaled, but that did not
happen.the cooperative sector has to be revamped at all levels: legal, institutional and policy-making.
(C) Short Answer Questions (Word limit 100 words)
Q. 7. Write a note on Food Insecurity.
Ans. Food insecurity, exists when all people, at all times, do not have physical and economic access to the
sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy. Food
insecurity can lead to lower cognitive ability, diminished work performance and substantial productivity losses. All
of these can hamper the growth and development of national economy. India has made substantial progress in health
determinants over the past decades. The critical indicators of health, including Infant Mortality Rate, maternal
mortality ratio, disease prevalence, and morbidity as well as mortality rates have shown consistent decline over the
years.
This is mainly due to lack of improvement in agricultural productivity owing to inadequate resources and
markets needed to obtain agricultural stability. An agrarian crisis is currently being unleashed in India and it has a
variety of causes, the prominent being the huge cut in government's development expenditure in the nineties,
particularly in rural areas.

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These include unstable social and political environments that preclude sustainable economic growth, war and
civil strived, macroeconomic imbalances in trade, natural resource constraints, poor human resource base, gender
inequality, inadequate education, poor health, natural disasters, such as floods and locust infestation and the absence
of good governance. All these factors contribute to either insufficient national food availability or insufficient
access to food by households and individuals.
Natural disasters and climate variability are major sources of vulnerability to food insecurity. They particularly
affect those in countries that largely depend on rain fed farming and those highly dependent on agriculture. Examples
of such natural disaster include drought and land slide. Poor people are also less able to cope with the impacts of
climate shocks and variability. These events can result in massive crop losses, loss of stored food and damage to
infrastructure and consequent increases in food prices. Degradation and declining productivity of agricultural soils
are a serious threat to agriculture in many areas.
Q. 8. Distinguish between Marketed Surplus and Marketable Surplus.
Ans. Marketed versus Marketable Surplus: Farmers keep with some part of the produce for seeds, self-
consumption, wages, etc. and the rest is sold in the market. This marketable surplus, is thus, equal to total production
less utilization for self consumption. Whether the farmer has to sell immediately, or he can withhold selling for
some time affects the price of the commodity. What the farmer finally sells is determined by the small farmers
condition, distress sale, need for cash to repay loans, social commitments, etc. Many a times the farmers sell all of
their produce immediately and then buy later for their own needs. The following will be the case if the farmer has
sold all of his produce, i.e. the marketable surplus is the same as total production.
Marketed surplus = Marketable surplus (losses on account of storage) = Production (Utilisation + Losses on
account of spoilage)
This marketed surplus is strategic from the point of view of national food security, this throws light on how
much is available for non-farm production. Marketed surplus depends upon price of the produce in the market and
possibility of wait on the producers part. The government thus, has to give incentives to producers so that they
increase production and also make the essential commodities available to consumers at affordable prices.
The larger the quantity actually marketed, greater the cash income to a farmer. Accordingly, crops also came to
be known as cash crops, which earn more cash income to the farmers. The marketable or marketed surpluses depend
upon type of crop i.e. foodgrain, other food crop or non-food crop. In the case of foodgrain and other food crops, the
surpluses are generally less on small and marginal farms and their proportions very widely according to the size of
holding and other related factors. But in the case of non-food crops viz. Cotton, sugarcane, etc. which are used as
raw material in agro-based industry, almost all the production is available for sale except small quantities kept for
seed. In these crops, marketable surpluses are nearly 100 per cent. Such crops are called as cash crops or commercial
crops. On the same analogy, even food crops with large marketable surpluses, can be regarded as cash or commercial
crops.
As a result of the development of these two concepts, the studies regarding marketable and marketed surpluses
have aroused interest in the minds of researchers in Agricultural Marketing with a view to identify or categorise
certain crops as cash crops or commercial crops.
Identification of certain crops as commercial or cash crops has many policy implications from the point of view
of development of good organized markets and other infrastructure facilities such as roads, storages (including
cold storage's for perishables), communication, market information, banking services, etc.
Some oil seed crops like groundnut, sunflower, safflower, soyabean, castor and other crops like cotton and
sugarcane are also recognized as commercial crops as the marketable surpluses in them are almost 100% and
therefore they are cash crops for the farmers. In addition, there are some crops, which are grown in small pockets,
but they have large marketable surpluses and hence they are cash crops for farmers in those areas.

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