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Day 39 – Q 1. Has globalisation been advantageous to the farmers of India? Do a critical assessment.

1. Has globalisation been advantageous to the farmers of India? Do a critical assessment.     

क्या वैश्वीकरण भारत के किसानों के लिए फायदेमंद है? समालोचनात्मक मूल्यांकन करें।


World Trade Organization was established in January 1995. The member countries including India involved themselves in globalization through WTO. Initially the World Trade Agreement of 1994 brought agriculture within its policy framework. The obligations and disciplines incorporated in the agreement which seek to reform trade in agriculture and provide the basis for market-oriented policies on agriculture. Government had to introduce reforms in agricultural sector too. Reforms in agricultural policies were felt necessary for achieving trade liberalization in the agricultural sector.


Following are some positive consequences of globalization on Indian agriculture.

  1. A) Positive Consequences-

1) Availability of modern Agro- technologies:

There is availability of modern agro technologies in pesticides, herbicides, and fertilizers as well as new breeds of high yield crops were employed to increase food production. These technologies included modern implementations in irrigation projects, pesticides, synthetic nitrogen fertilizer and improved crop varieties developed through the conventional, science-based methods available at the time. HYVs significantly outperformed traditional varieties in the presence of adequate irrigation, pesticides, and fertilizers.

2) Rise in production and productivity:

Due to adoption of HYV technology the production of food grains increased considerably in the country. The production of wheat has increased from 8.8 million tonnes in 1965-66 to 184 million tonnes in 1991-92. The productivity of other food grains has increased considerably. It was 71% in case of cereals, 104%for wheat and 52% for paddy over the period 1965-66 and 1989-90.

4) New areas employment-

While exporting agricultural products it is necessary to classify the products, its standardization and processing, packing etc. Therefore, after LPG the agro allied industries has created employment in various sector like packing, exporting, standardizing, processing, transportation and cold storage etc. The industries depending on agriculture are stored and it made an increase in employments. Agriculture is the biggest unorganized sector of the Indian economy accounting for more than 90% share in the total unorganized labour force. The share of agriculture in total employment stands at 52.1%

5) Reduction in poverty-

India’s prior concern is to remove poverty, which is worse than death, and if India makes efforts, globalization can be a key to get rid of it. Moreover, the percentage of people below the poverty line has been decreasing progressively, from 36 percent in 1993-94 to 21.9 percent in 2004-05.

  1. B) Negative Consequences-
  2. Vicious debt trap and farmers suicides-

The National Sample Survey Organization (NSSO) Report 2005 indicates that 1 in 2 farm households are in debt and only 10 per cent of the debt was incurred for non-production purposes. Also, 32.7 per cent of farmers still depend on money lenders. The National Crime Records Bureau reports that between 1997-2005 1,56,562 farmers committed suicide. Nearly 60% of them took place in the 4 progressive states, viz., Maharashtra, Andhra Pradesh, Karnataka and Madhya Pradesh. More than 20 per cent of suicides have taken place in Karnataka.

  1. Migration of labours-

For the Indian farmer, who is already paralyzed by low productivity and lack of postharvest storage facilities has resulted in heavy loss of produce and revenue. It is only because of low tariff in imports due to liberalized import duties which came as a bombshell. The domestic farmer could not stand the competitiveness of international market, which has resulted in migration of labor from agriculture to other industrial activities.

  1. Lower income of rural farmers

Trade agreements now forbid most subsidies excepted for agricultural goods. This depresses incomes of those farmers in the developing countries who do not get subsidies.

4) Lessening international competitiveness –

In India 60% of population depend on agriculture. This pressure on agriculture is increasing day by day because of the increasing population. Because of marginal land holding the production cost of Indian farmers is higher as well as the quality and standardization of agro produce is much neglected. Along with this, the curtailment in subsidies and grants has weakened the agricultural sector. On the contrary before the reduction in grants by WTO, developed countries had distributed grants on large scale. They had grown the amount of the grants on large scales in agriculture during 1988-1994. So they have not to face many difficulties if there is a reduction in grants. On this background the farmers are not in a position to compete international market.

5) Abnormal hike in Fertilizers and Pesticide prices-

Immediately after globalization Indian rupee was devaluate by 25% and Indian crops became very cheap and attractive in the global market, which led Indian farmer for export and encouraged them to shift from growing a mixture of traditional crops to export oriented ‘cash crops’ like chilli, cotton and tobacco. These need far more inputs of pesticides, fertilizers and water than the traditional crops require. It automatically increased Fertilizer and pesticide prices by 300%.

6) Electricity tariffs have also been increased-

Pre liberalization, subsidized electricity policy helped farmers to keep the costs of production low. The electricity costs increased dramatically when farmers turned to the cultivation of cash crops, which needed more water, hence, more water pumps were needed and there was higher consumption of electricity. Andhra Pradesh being traditionally drought prone, the situation further worsened. In Andhra Pradesh tariff was increased 5 times between 1998 and 2003. This caused huge, unsustainable losses for the Andhra Pradesh State Electricity Board, so it increased the electricity tariff.

7) Price crash-

As per reforms of WTO, Indian government removed import tariffs and duties. Earlier these were working as cushion to protect and encourage domestic producers. By 2001, India completely removed restrictions on imports of almost 1,500 items including food. As a result, cheap imports flooded the market, pushing prices of crops like cotton and pepper down. As a result, most of the farmers committing suicides in Maharashtra were concentrated in the cotton belt till 2003 (after which paddy farmers followed the suicide trend).

8) Fall in agricultural employment-

In 1951, agriculture provided employment to 72 per cent of the population and contributed 59 per cent of the gross domestic product. However, by 2001 the population depending upon agriculture came to 58 per cent whereas the share of agriculture in the GDP went down drastically to 24 per cent and further to 22 per cent in 2006-07. This has resulted in a lowering the per capita income of the farmers and increasing the rural indebtedness


Write a suitable and apt conclusion

Best answer: Dazy Rani

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