MANAGERIAL ECONOMICS PROJECT ON

URBANIZATION: A PROBLEM TO FOOD PRODUCTION

Submitted by
AAYUSH
Division: A Roll No: 15010224001 Class: BBA LLB
Of Symbiosis Law School, NOIDA
Symbiosis International University, PUNE
In
MARCH, 2016
Under the guidance of
Prof. Shweta Saurav,
Professor, SLS-NOIDA
1

C E R T I F IC AT E

The Project entitled Urbanization: A Problem to Food production submitted to the

Symbiosis Law School, NOIDA for Managerial Economics as part of Internal Assessment is
based on my original work carried out under the guidance of Prof. Shweta Saurav from
December to March. The research work has not been submitted elsewhere for award of any
degree.
The material borrowed from other sources and incorporated in the project has been duly
acknowledged. I understand that I myself could be held responsible and accountable for
plagiarism, if any, detected later on.

Signature of the candidate:

_______________________
Name of the Candidate: Aayush

Date:

ACKNOWLEDGEMENT

I would like to offer Prof. Shweta Saurav my heartfelt appreciation for

providing me the opportunity to undertake a research project on the topic,
Urbanization: A problem to Food Production I would like to thank
them for all the necessary help and guidance they offered in completing
my project. Without their help, it would have not have been possible to
carry out this research project. I would like to thank my college,
Symbiosis

Law

School-

Noida,

for

providing

me

with

excellent

opportunities and facilities to help me complete my project.

I would also like to thank my parents and my classmates for helping me,
in one way or the other, who have been constant pillars of support for the
successful completion of the research project.

TABLE OF CONTENTS

TOPIC
INTRODUCTION

PAGE NO.
5

RESEARCH METHODOLOGY
6
LITERATURE REVIEW
6
OBJECTIVES OF STUDY
8

RESULTS AND DISCUSSION

LIMITATION OF STUDY

12

CONCLUSION

12

REFERANCES

13

INTRODUCTION:Globalization combined with urbanization along with factors such as educational infrastructures and
employment opportunities in urban areas have reduced farm labour availability in multifarious cultures.
Information and communication technologies have reduced the spatiality of rural and urban areas in many
countries. Historically, cities were first established in alluvial plains and valleys. Rapid urbanization has led
to intrusion of these fertile lands and valleys. Besides, increasing water and energy requirements place
further constraints on agriculture production in many countries. However it must be noted that human
activities, rather than natural forces are the major sources of the contemporary changes in the state and flow
of the biosphere. UN projections suggest that the world's urban population will grow by more than a billion
people between 2010 and 2025, while the rural population will hardly grow at all. It is likely that the
proportion of the global population not producing food will continue to grow, as will the number of middle
and upper income consumers whose dietary choices are more energy- and greenhouse gas emission-intensive
(and often more land-intensive) and where such changes in demand also bring major changes in agriculture
and in the supply chain.

It is with these concerns we need to understand what has urbanization

pinned in the past and it is bringing changes in the future. While their numerous issues that could be
addressed concerning urban influences on the biosphere ranging from the conversion of land itself to a
broader context of the ecosystem services required for the recycling urban metabolic by products . Hence the
food security and the loss in the agricultural products is the most distinct impact of the wide spread
expansion of the activities in both rural and urban areas and this is why the impact of urbanization on the
food production needs to be addressed upon further. This would entail a clearer picture regarding the actual
state of affairs regarding food production and the direction in which the agriculture sector has been headed.
Urbanisation and economic development are broadly synonymous and therefore the issue of agricultural
production needs to be dealt in the context of recent developments of sustained growth in incomes and
urbanisation as well. Urbanisation per se becomes significant since it affects employment, migration,
literacy, access to markets and infrastructure. Therefore, an attempt is made in this paper to analyse and
decipher the relationship between urbanisation and agriculture growth.

RESEARCH METHODOLOGY: DATA COLLECTION:

This project involves research and analysis of existing research work and data, hence replicating a
"secondary research methodology". The data abstraction sources include previous research papers on
related topics as well as articles and journals. The project is aimed at following and examining the large scale
trends experienced in our society. Further this project looks at the topic in an objective manner using tables
and statistics to quantify the information and could be considered as having a "quantitative character".

LITERATURE REVIEW:

(Stage, Stage, & Mcgranahan, 2010) have concluded that urbanization in poor countries may
affect food prices is that it increases the number of households that depend on commercial food
supplies, rather than on own production, as their main source, and hence are likely to hoard food if
they fear future price increases. In respect to it, a policy option has been suggested for managing
larger food reserves. However, attempts to curb urbanization have been ill-advised and are not

suggested.
(Russell, 1952) opines that the problem of increasing food production is being handled in different
ways; by increasing the output per acre of land by increasing the number of acres cultivated, by
reducing the wastes and losses caused by animals large and small, and by plant diseases and pests. A
further important need is to increase the certainty of crop production, for India is very liable to large
crop failures due, among other things, to drought, floods, hail, frost, fungus epidemics, locusts,
grasshoppers, and earthquakes.

(Winfield, 1973) examines the significant changes in land utilization due to the heavy migrations
from rural to urban areas. According to him, the land converted to urban areas is increasing, though
it has little effect on total crop production. The technological transformation of agriculture has had
much larger effects and has operated as a push-pull on the city ward movement of people as farm
functions have moved to the city. Some ramifications of this exodus is also increase in the demand
for animal products. Apart from that there has been substantial escalation of solid waste production
in cities and on farms. The researcher also posits his environment induced development pattern by
emphasizing that future planning must meet the challenge of wasteful land utilization, the overshift
of population to cities, and the problems of restoring the organic matter cycle.

(Chanchal & Ananta) have concluded that urbanization has no effect on Indian agriculture in near
future. Probably the Green Revolution and innovative agricultural technologies have dampened the
effect of urbanization and population growth on agriculture. The research has been conducted with
data collected online from www.indiastat.com from 1950-51 to 2009-10 on Total Food
Grain production (TFG), Total Cropped Area (TCA), Urbanized Area (UA) and Population. Then on
the basis of 60 years of data a Multiple Linear Regression (MLR) has been fitted taking TFG as
dependent variable and TCA, UA and Population as independent variables. The statistical
significance of the model is determined based on Coefficient of Determination (R2). The
significance of the estimated independent variables is tested based on the respective p-values, taking
5 percent level of significance as standard.

(Kalamkar, 2009) also makes an attempt to analyse the relationship between urbanisation and
agricultural growth in India. Though urbanisation is a worldwide phenomenon, it is especially
prevalent in India, where urban areas have experienced an unprecedented rate of growth over last
three decades. India shares most characteristic features of urbanisation in the developing countries.
Urbanisation and economic development are broadly synonymous and therefore the issue of
agricultural production needs to be dealt in the context of recent developments of sustained growth
in incomes and urbanisation as well. There is a need to control poverty and population growth
below replacement level in the country and unless significant measures are taken to incorporate
environmental concerns into agricultural development, urban planning, technological innovations,
industrial growth, and resource management, the situation is likely to worsen in the future.

(Streeter, 1970) in his report states that the result of a sudden abundance of food crops has produced
a series of "urgent second-generation problems". His report suggests for more irrigation water,
fertilizer, machinery, pesticides storage, better roads, easier credit, and firm price supports. The
research also makes use of the simultaneous great efforts taking place in the field of population
control to establish the hurdles which the agriculture sector is facing in lieu of stable food
production. It has also been suggested that research needs to be undertaken to improve the qualities
of rice and wheat wherein the improved new varieties are resistant to many pests, have proved
capability of maintaining their higher productivity under a wide range of different conditions, and,
under favourable conditions, of yielding much larger crops a year than had been possible before.
From this it is implied that as developing industries move faster in expanding their industrial as well
as urban capabilities, they will be able to buy more of their food from highly developed regionsNorth America and Europe, which have increased their output of food grains.

(Howard, 1920) believes that Agriculture will remain, India's greatest industry and also gives prime
importance to his crops in his study. In addition to this he also differentiates the problems faced by
the food industry in India which is entirely different from anything to be found in the west. It was
realized by the investigators speedily that they were in a new world. The research brought forward
the importance of small cultivators in India-which is not much of contributing factor in the West. Set
amidst this context of such shifts in demand, specialized agribusinesses have stepped in to exploit
economies of scale, in both the provision of farm inputs and marketing of farm outputs, while
household enterprises continue to dominate food production. The changes in food preferences and
food supply chains provide opportunities for smallholder peri-urban farmers, and for others linked
through transportation and other means to urban markets. However, a significant portion of
smallholders continue to be excluded from these opportunities. Research therefore needs to
examine how the opportunities provided by urban markets can be better exploited by smallholders
not just in peri-urban communities but also in communities further away from cities.

OBJECTIVES OF THE STUDY:This research project looks upon the

The already existing agricultural practices and methodology in India and the ramifications of
avant-garde agricultural techniques.
The impact of Urbanization on the Agriculture-the backbone of Indian Economy and how it
effects the total food gain production.
The difference in the consequences resulting out of the same factors in India when compared
to the Western countries.

RESULTS AND DISCUSSION: IMPLICATIONS OF CURRENT AGRICULUTAL PRACTICES

Agriculture is the mainstay if Indian economy because of its high share in employment and its significant
contribution in creation of livelihood notwithstanding its reduced contribution to the countrys gross
domestic product (GDP).The share of agriculture in the GDP has registered a steady decline from 55.4 per
cent in 1950-51 to 38.1 per cent in 1980-81 and 20.5 per cent in 2006-07.

Agriculture remains the leading sector in terms to employment and livelihood with more than half of Indias
workforce engaged in it as the principal occupation. Even after taking into account the slower growth of
GDP in agriculture than non-agriculture is expected, the main cause for concern has been the inability to
reduce the dependence of the workforce on agriculture to a significant extent creating enough non-form
opportunities to absorb the redundant labour in rural areas and assigning those in agriculture to access such
opportunities.

Considerable changes could be observed since the late 1960s following the execution of green revolution
technology leading to considerable progress in food-grain production. However, the trend of this highgrowth was limited to regions which adopted these technologies. Besides, the negative externalities of the
technological changes began to surface in different forms under the pressure of inter-sectoral growth which
decelerated the investment trends in agriculture which could also be obviated by the signing of WTO
Agreement on Agriculture placing additional factor beside the policy planners.

INCREASING POPULATION : CAUSE OF CONCERN

India

is

at

urbanisation

the
in

activities

in

reside

Class

in

distribution
factors,

acceleration

India

is

large
I
due

cities.

towns,
to

of

characterised
but

of urban population

created

stage

by

Nearly
they
is thus

emergence

of

the

process
continuous

62

account

of

concentration

per
for

skewed.
economic

urbanisation.

cent
only

Cities

grow

opportunities

of

of
per

The

of

on account
and

of

population

urban
cent

pattern

push

and

population
towns.

The

of urban pull
factors

from

rural areas. After taking into account the thrust of sustained growth in the gross domestic product, it can be
concluded that urbanisation and economic development will be irreversible and will have a circular effect on
agricultural production.

After reviewing all the evidence, it can be safe to say that problem of feeding India will remain extraordinarily difficult if the population continues to increase at this rate. The definitive steps which would be
required to facilitate maintenance of even low standards of nutrition would include addition of 32 million
10

acres of land in the next ten years, increment in the output per acre by 15 per cent and purchase of 12 million
additional acres to be brought under irrigation. These extensions would be possible only if industries are
developed to provide fertilizers, better implants and better transport, besides a market for food that will act
as a catalyst to the cultivator to improve his methods.
COMPARATIVE CONSEQUENTIALSITIC ANALYSIS

Between the period of 1960 and 1990, world agricultural production per capita increased
almost constantly largely because of increased agricultural productivity. Apart from a boost in the 1970s,
linked to the commodities price rise, prices have declined in parallel with the increase in food
production. In nations where food is a large share household expenditure, the rise in food prices created
political and economic chaos. The ramifications of this could be witnessed in the attempt of various
countries to contain the shock through price controls, export restrictions or other calculated measures.
Another practice that could be observed is the reduction in the storage of food reserves by the government.
Historically, countries managed the effects of poor harvest on domestic prices by selling food from these
food reserves; today most counties meet this demand by purchasing food on the world markets. An important
effect of urbanization validated is an increase in number of people dependant commercially on supplied food
for whom expenditure on this takes up a large part of their overall budget. In a nutshell, there is an
established nexus between agricultural productions due to changing diets, loss of farmland due to urban
expansion and soil degradation due to increased population but it is too far-fetched to conclude that
urbanization per-se is driving those other processes in foreign nation. This is synonymous to the findings in
the Indian context where urbanization has also no direct linkage to food production, a factor which could
have been mitigated by innovation agricultural technologies and diversified food production regions.
Although instances such as substantial reduction in per capita availability of food grains during the last
decade of reforms stand firm leading to the potential rapid growth in demand for high value food
commodities by 2020, this detailed study shows that urbanization has no effect on Indian agriculture in near
future.

LIMITATIONS OF THIS STUDY:

11

Although through this project I have tried to bring forward a true picture regarding the objectives which I
wanted to seek but still I would like to state certain factors which would mitigate its brevity and propounding
effect. They are: Limited to electronic medium - The crux of this research is built upon journals and articles
available through the online library. I was unable to discover specific books in the college library
which could have galvanized me to include more robust and substantial sources of content in this
research project.
Lack of prior research studies on the topic Citing prior research studies forms the basis of any
literature review and unavailability of more number of research studies on this topic amounted to be
of considerable magnitude of hindrance prohibiting me to fill further gaps on this topic.

CONCLUSION:
There
are
many
things
that
we
can
do
to
restore
the
long-term
trend
towards
lower
food
prices.
It
would
be
better
to
do
those
things
rather
than try to limit urbanization, which at best would not have any effect on
the
problems
currently
causing
higher
prices
and
at
worst
might
actually
make them worse. Urbanisation is an important determinant of demand for high value commodities. By
2020, urban population is expected to be nearly 35 per cent of the total population. This is
expected to fuel rapid growth in the demand for high value food commodities. There
is a need to control poverty and population growth below replacement level in the
country
and
unless
significant
measures
are
taken
to
incorporate
environmental
concerns
into
agricultural
development,
urban
planning,
technological
innovations,
industrial growth, and resource management, the situation is likely to worsen in the
future. Limiting urbanization, on the other hand, is unlikely to lead to lower
food
prices.
Unless
policies
to
curb
urbanization
also
reduce
income
growth,
the
shifts
in
diet
would
continue
regardless,
and
the
increased
pollution
often
linked
to
economic
growth
would
simply
be
emitted
in
rural
areas
instead.
The
building-over
of
arable
land
would
likely
be
even
worse
if
people
with
rising
incomes
stayed
in
rural
areas,
and
the
productivity
gains
from
larger
farms
would
be
foregone.
If
anything,
reduced
urbanization
might
well
lead
to
less
agricultural
production
and
higher food prices.

REFERANCES:
Chanchal, P., & Ananta, S. (n.d.). Effect of Urbanization on Agriculture in India.
National Academy of Agricultural Research Management .
12

Howard, A. (1920). THE IMPROVEMENT OF CROP PRODUCTION IN INDIA. Journal of

the Royal Society of Arts , 555-564.

Kalamkar, S. (2009). Urbanisation and Agricultural Growth in India . Indian Journal of

Agriculture Economist .

Russell, J. (1952). Food Production Problems in India. International Affairs , 15-28.

Stage, J., Stage, J., & Mcgranahan, G. (2010). Is urbanization contributing to higher
food prices? Environment & Urbanization , 199-215.

Streeter, C. P. (1970). A Partnership to Improve Food Production in India: A Special

Report. The Annals of the American Academy of Political and Social Science , 189191.

Winfield, G. F. (1973). The Impact of Urbanization on Agricultural Processes. The

Annals of the American Academy of Political and Social Science , 65-74.

13