Qst 1.Critically discuss Poverty and Hunger in India.

Ans 1. Poverty indicates a condition in which a person fails to maintain a living standard
adequate for a comfortable lifestyle. India boasts of a high economic growth,but there is still
large scale poverty in India. It is defined as a situation when a certain section of people are
unable to fulfill their basic needs. India has the world’s largest number of poor people living in a
single country. Out of its total population of more than 1 billion, 350 to 400 million people are
living below the poverty line. Nearly 75% of the poor people are in rural areas, most of them are
daily wagers, landless laborers and self employed house holders. There are a number of reasons
for poverty in India. Poverty in India can be classified into two categories namely rural poverty
and urban poverty.

Reasons for Rural Poverty:

•
Unequal distribution of income.
• High population growth.
• Illiteracy.
• Large families.
• Caste system.

Problems of Rural Poverty

• Presence of malnutrition, illiteracy, diseases and long term health problems.

• Unhygienic living conditions, lack of proper housing, high infant mortality rate, injustice
to women and social ill-treatment of certain sections of society.

Steps Taken by Government to Reduce Rural Poverty

The government of India has been trying its best to remove poverty. Some of the measures which
the government has taken to remove rural poverty are:

• Small farmer’s development Programme.

• Drought area development Programme.
• Minimum needs Programme.
• National rural employment Programme.
• Assurance on employment.

Causes for Urban Poverty:

The causes of urban poverty in India are:

• Improper training
• Slow job growth.
• Failure of PDS system
Problems of Urban Poverty

• Restricted access to employment opportunities and income.

• Lack of proper housing facilities
• Unhygienic environments
• No social security schemes
• Lack of opportunity to quality health and educational services.

The steps taken by government to remove urban poverty are:

• Nehru Rozgar Yojna.

• Prime Minister Rozgar Yojna.
• Urban Basic services for the poor Programme.
• National social Assistance Programme.

Hunger: Hunger is not just the need to eat; hunger, as the word is used by food and health
experts can be defined as the continuing deprivation in a person of the food needed to support a
healthy life.

Several population groups are especially vulnerable to hunger.

These are children, rural inhabitants, slum dwellers. In the developing countries, it is in the rural
areas that the largest masses of the poor are to be found. It may seem paradoxical that a high
proportion of those who live in the countryside - and who are actually involved in growing food -
are undernourished but in times of shortage or crisis, rural areas are usually the hardest to reach
with food and other supplies. Women, who are often active in food production as well as taking
care of a family, are more likely than men to suffer from malnutrition.

Causes of hunger:
• Agriculture being denied national priority.
• Land scarcity and its unequal distribution.
• Harmful agricultural practices.
• The dilemma of low prices.
• The international trade situation
• Problems of food distribution
Plan against hunger :

1. Promoting greater self-reliance in countries suffering from hunger - hence reducing

dependency on imports.
2. Re-examining farm policies in developing countries to make sure that they encourage -
rather than discourage - farmers to produce food on a dependable basis. Policies should
aim to ensure fair prices for farm produce, access to the means of production, and wise
land and water use.
3. Improving transportation, marketing and storage systems to ensure that available food
reaches areas where and when it is needed most.
4. Re-examining food aid to make sure it reaches the hungry but does not disrupt national
production.
 5. Greater co-operation among developed and developing nations to remove trade barriers
and help stabilize international prices for agricultural commodities.
6. Avoiding over consumption and the waste of food in all countries.

There are other related causes of poverty and hunger:

• Land rights and ownership

• Diversion of land use to non-productive use
• Increasing emphasis on export-oriented agriculture
• Inefficient agricultural practices
• War
• Famine
• Drought
• Over-fishing
• Poor crop yield
• Lack of democracy and rights

Qst.5 Give a performance appraisal of Land reforms in India.

Ans5: Land reforms: Land reform means any improvement in agricultural economic
institutions .i.e. agricultural landownership and tenancy, land rent, taxation of agricultural
land or income from land and also agricultural credit and produce marketing.

Land reforms include:

• Regulation of conditions concerning ownership of land.

• Ceiling on land holdings and redistribution of land.
• Regulation of the conditions under which the land is cultivated by a farmer.
• Tenancy reforms.

With the twin objectives of achieving social equity and ensuring economic growth, the land
reforms programme was built around three major issues:
1. Abolition of intermediaries.
2. Settlement and regulation of tenancy.
3. Regulation of size of holdings.
Implications:

• The slums of metros like New Delhi and Mumbai thrive with countless landless labourers
who have flocked to the city in search of livelihood. Many among the migrants are from
Uttar Pradesh and Bihar - states which have a terrible record in land reform.
 • State of Karnataka in southern India tried to grant occupancy rights to tenants. Many state
governments have banned agricultural tenancy but concealed tenancy still exists. Many of
the affluent states like Punjab and Haryana show a growing tendency towards 'reverse
tenancy' in which large farmers lease land from small and marginal ones.

• Land reforms are the responsibility of individual states. Therefore the degree of success
in implementing land reforms has varied considerably from state to state with the agenda
remaining unfinished in most states.

• Today, land reform in rural India is at a turning point. Despite the inequity, the
constituency advocating land reform is weakening day by day and the number of people
pushing for a revocation of land ceilings is increasing.

The land reforms have not put an end to absentee ownership of land nor has it led to
the disappearance of tenancies. Although the contribution of tenancy reforms could
not be totally neglected but the programs including these reforms did not lead into
any significant redistribution of land, or the removal of all the obstacles to increasing
agricultural production.
Qst 6 Critically discuss farm size and Productivity in Indian agriculture.
Ans 6: Farm size and productivity: Farm size and productivity has inverse relationship one is
based on technological development and other is on institutional reforms. It is argued that the
inverse relationship does not reflect a superiority of peasant production over wage-labour-based
production as is often supposed. It exists independently of production relations and thus reflects
only a static superiority of small-scale over large-scale production. An essential precondition for
this superiority, however, is a backwardness of technology. With technological progress
involving the introduction of chemical fertilizers, labour-saving machinery and modern irrigation
equipment, the inverse relationship is, therefore, likely to disappear. In this if the average size of
the farm should be reduced because yield per acre on smaller farms was higher than that on
larger farms.
Qst 7 Give an account of sources of Agricultural credit and also describe the
limitations of agricultural credit in India
Ans 7: Agricultural credit: Loans, notes, bills of exchange, and bankers' acceptances financing
agricultural transactions. Banks lend to farmers for a variety of purposes, including (1) short-
term credit to cover operating expenses; (2) intermediate credit for investment in farm equipment
and real estate improvements; (3) long-term credit for acquisition of farm real estate and
construction financing; and (4) debt repayment and refinancing. Commercial banks are the
largest source of agricultural credit, followed by the Farm Credit Bank.
Sources of agricultural credit
• Non institutional credit agencies or informal sources
• Institutional credit agencies or formal sources.
Non institutional credit agencies are further divided:
1. Traders and commission agents.
2. Landlords
3. Money lenders
Money lenders are of two types –agriculturist money lenders who combine their money
lending job with farming and professional money lenders whose sole job is money
lending a number of reasons have been attributed for the popularity of money lenders
such as:
• They meet demand for productive as well as unproductive requriment.
• They are easily approachable at odd hours
• They require very low paper work and advances are given against promissory
notes or land.
B.institutional credit agencies:
• Commercial banks
• Government
• Cooperative credit societies
• Regional rural banks

• Micro financing
• Agricultural refinance and development corporation
Qst 8 Discuss terms of trade between agriculture and industry
Ans.8 Terms of trade : The weighted average of a nation's export prices relative to its
import prices. Agricultural and the industrial sectors depend upon each other for their
mutual growth. Both help each other in different ways. For eg. Agriculture helps the
industrial sector by providing capital and labour, Industrial raw materials and wage goods
and market for the industrial products. Industrial sector on the other hand promotes the
development of agricultural sector by providing market for its products and by supplying
modern inputs to it for production, reducing population pressure on it , and by providing
infrastructure for its development . it also supplies consumption goods to the rural sector
and creates suitable intellectual environments for the rural people.
Impact of a change in terms of trade in favour of the agricultural sector :
• The agricultural sector benefits by getting agricultural inputs from the industrial
sector at lower rates. The lower cost of fertilizers, pesticides ,agricultural
machinery etc will increase the profitability of agriculture .
• Industrial products for the rural people will also be available at the lower rates. As
the price elasticity of demand for the industrial products is generally more than
unity ,it is likely that the total revenue earned by the industrial sector will also
increase after the change in terms of trade in favour of agriculture.
• The agricultural sector gains both from the consumption as well as production ,
the industrial sector suffers because of relatively high prices of food and industrial
raw materials.
• It is generally felt that people in the agricultural sector have lower propensity to
save as compared with those in the industrial sector. Terms of trade favourable to
the agricultural sector will transfer income from the industrial sector to the
agricultural sector.
Impact of change in terms of trade against agriculture:
The effect of a change in terms of trade in favour of industry are just the reverse of what
happens when these change in favour of agriculture. The industrial sectors gains through
reduction in the cost of production due to lower wages and lower cost of raw materials
supplied by the agricultural sector. Income distribution shifts in favour of those with
higher propensity to save. Capital formation is thus encouraged. The changes in terms of
trade , favourable to industry , may also increase the flow of labour to the industrial
 sector, from the agricultural sector . The exports of the industrial sector will suffer if
terms of trade is made favourable to the industrial sector by raising the prices of the
industrial products .the agricultural sector suffers . Its profitability goes down. Investment
in agricultural sector goes down. Sometimes crop pattern undergoes a change. Farmers
start producing cash crops rather than food crops if attempts are made to peg the food
prices at a fixed level, inorder to change the terms of trade against agriculture.

Qst 9 Discuss the role of agriculture in economic development of a country.

ANS.9 AGRICULTURE: Agriculture had been associated with production of crops, forestry
and animal husbandry. Economic growth was previously defined as a "sustained rise in the level
of consumption or real income per person." Economic development, a broader concept, relates to
progress along a wide spectrum of technological, economic, social, and cultural dimensions.
Thus it is much more difficult to characterize a country in terms of development than it is to
characterize it in terms of growth. One index of development is the extent to which an economy
can free its resources from the production of basic food and fiber requirements. In a society in
which a high proportion of resources must be devoted to meeting basic subsistence requirements,
most people are engaged in the production of food and fiber for themselves and for their
neighbors. They do not have the time, the ability, or the tools to produce other goods and
services. In a highly developed economy, only a small proportion of the population is engaged in
agriculture, agricultural productivity is relatively high, and most of the working population is
engaged in the production of other goods and services.

The processes by which a nation achieves the transition from a low to

a high level of productivity and income are still poorly understood. It is clear that rapid industrial
development is difficult to achieve without the support of a progressive rural economy. And it is
equally true that a highly productive agricultural sector is easier to achieve when it is part of a
rapidly growing urban industrial economy. Most countries of the world continue to be
characterized by low productivity and income in rural and urban areas alike.

There are 4 ways in which the agricultural sector can contribute to national economic
development.

1. Most essential, it can provide the food and fiber necessary for an expanding population
that is growing in income and wealth.
2. It can release workers needed for the production of nonagricultural goods and services.
3. It can serve as a market for nonfarm goods and services, thus providing a stimulus for
expansion of employment and output in the nonfarm sector.
4. It can provide a source of capital that can be invested in improved productive facilities in
the rest of the economy.

Agriculture makes three types of contribution to the overall growth of an economy. These
are:
 • The factor contribution
• The product contribution
• The market contribution
Factor contribution can be in the following forms:
• Provision of capital
• Provision of labour
And the product contribution can be in the following forms:
• Provision of wage goods
• Provision of industrial raw materials
And the market contribution can be in the following forms:
• Expanded market for the products of other sectors
• Flow of agricultural products to other sectors of the economy
• Development of international trade.

Qus 1 Analyze the effects of economic reforms on Indian agriculture.

Ans Agricultural Sector is the mainstay of the rural Indian economy around which socio-
economic privileges and deprivations revolve and any change in its structure is likely to have a
corresponding impact on the existing pattern of Social equity.

Indian Agricultural Sector

The Indian Agricultural sector provides employment to about 65% of the labour force, accounts
for 27% of GDP, contributes 21% of total exports, and raw materials to several industries. The
Livestock sector contributes an estimated 8.4 % to the country GDP and 35.85 % of the
agricultural output. India is the seventh largest producer of fish in the world and ranks second in
the production of inland fish. Fish production has increased from 0.75 million tons in 1950-51 to
5.14 million tons in 1996-97, a cumulative growth rate of 4.2% per annum, which has been the
fastest of any item in the food sector, except potatoes, eggs and poultry meat.

• new technologies which are not only "cost effective" but also "in conformity" with
natural climatic regime of the country;
• technologies relevant to rain-fed areas specifically;
• continued genetic improvements for better seeds and yields;
• data improvements for better research, better results, and sustainable planning;

Effects of Economic Reforms Process on Indian Agricultural Sector

Agricultural sector is the mainstay of the rural Indian economy around which socio-economic
privileges and deprivations revolve, and any change in its structure is likely to have a
corresponding impact on the existing pattern of social equality. No strategy of economic reform
can succeed without sustained and broad based agricultural development, which is critical for

• raising living standards,

• alleviating poverty,
• assuring food security,
• generating buoyant market for expansion of industry and services, and
• making substantial contribution to the national economic growth.

According to the three sectors of economy in India, the tertiary sector has diversified the fastest,
the secondary sector the second fastest, while the primary sector, taken as whole, has scarcely
diversified at all. Since agriculture continues to be a tradable sector, this economic liberalization
and reform policy has far reaching effects on

(i)agricultural exports and imports,

(ii) investment in new technologies and on rural infrastructure

(iii) patterns of agricultural growth,

(iv) agriculture income and employment,

(v) agricultural prices and

(vi) food security