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Planning and Agrarian Challenges

Amelioration of Agrarian Markets

In many countries, and virtually every less developed country (LDC), agriculture is the biggest single
industry. Agriculture typically employs over fifty percent of the labour force in LDCs with industry and
commerce dependent upon it as a source of raw materials and as a market for manufactured goods.
Hence many argue that the development of agriculture and the marketing systems which impinge upon it
are at the heart of the economic growth process in LDCs. Economic development itself provides the
impulse towards more sophisticated and more efficient marketing systems.

Economy of agrarian market before planning commission:

While the population increased by about 39 per cent in the last four decades of post independence, the
production of foodgrains has not kept pace with it. This indicates an appreciable decrease in per capita
availability of foodgrains from internal sources. The Planning Commissions webpage states the
condition of Indian agro markets after independence:

‘ For more than three decades India has been getting a much larger quantity of grains (mainly rice) from Burma than what it was exporting
to other countries.. With their high yields per acre Potatoes have a special importance in a country deficit in foodgrains. Potatoes are
consumed on a small scale as vegetables rather than as the staple diet because of their high price over a large part of the year. The gap
between production and consumption was met largely by importing 0-83 million bales during the year. The requirements for 1956 have
been estimated at 5-4 million bales and the gap between production and requirements may thus increase to about 2-4 million bales unless
production is stepped up meanwhile. A part of the requirements of long staple cotton, which is not grown in India in sufficient quantities,
has, however, to be imported for a long time to come.In spite of the large expansion of the area under jute which has taken place during the
last few years, the gap between availability and requirements is still wide. The official estimate of production during 1950-51 was 3-3
million bales of raw jute and 0-6 million bales of mesta—an inferior type of substitute .Plantations of tea, coffee and rubber cover less than
0-4 per cent. of the cropped area, concentrated mainly in the valleys of the north-east and along the coast on the south-west of India. They
provide employment to more than a million families and thus play a vital role in the economy of these regions. In addition, they earn for
India about Rs. 80 crores of foreign exchange. Tea alone accounts for Rs. 78 crores. A remarkable fact about tea plantations is that while
the area under tea has remained unchanged for over a decade under international agreements, production has increased by about 43 per
cent. over this period. This incidentally brings out that where sufficient capital is invested, yields can be increased appreciably. Coffee and
rubber, which used to be export commodities are now largely consumed within the country. India actually imported about 12 million
pounds of rubber during 1950-51. Rubber occupies a key position in industrial development and for defence. In view of the uncertainties of
the international situation dependence on imports may be inadvisable. ‘

In short, the most the consumption as well as commercial crops were being imported. The Government
of India had to set up a committee to examine the whole position in respect of these crops, and
particularly the question of their production and marketing being brought under a single organisation.

Implementation of Five Year Plans:

From the Second Five Year Plan, the primary consideration for the development of agricultural
marketing was so to reorganise the existing system as to secure for the farmer his due share of the price
paid by the consumer and subserve the needs of planned development To achieve these objects,

malpractices associated with buying and selling of agricultural produce have to be eliminated,
arrangements made for the efficient distribution of marketable surpluses from producing to consuming
areas and cooperative marketing has to be developed to the maximum extent possible. Rural marketing
and finance have to be integrated through the development of marketing and processing on co-operative
lines. It was estimated that cooperative agencies may be able to handle about 10 per cent of the
marketable surplus by the end of the second plan. The rest of the surplus will continue to be sold through
other marketing agencies. In the interest of the primary producer, therefore, the importance of regulating
markets and market practices needs more emphasis. Moreover, the success of cooperative marketing
itself depends on the efficiency with which regulated markets function. It has been observed that in
States in which regulated markets have not been established to any extent, the cultivator is in a situation
of much greater disadvantage than elsewhere.

The lack of accurate and up-to-date market information places both the fanner and the administration at
disadvantage. Failure in making market information promptly available is one of the factors accounting
for price variations for the same commodity in different markets. Commercial agencies engaged in
export have information in respect of important markets, but the information received by them is not
made public. The plan provides for the setting up of an all-India market news service mainly for
farmers, to be organised in collaboration with the States. For providing trained personnel facilities for
imparting specialized training in agricultural marketing to 20 to 30 candidates every year are also being
arranged. Market research comprising marketing surveys, studies and analysis of price spreads,
standardisation of grade specifications and packages etc. is essential for the development of agricultural
marketing- The Central Agricultural Marketing Organisation has so far undertaken marketing studies on
about 40 principal commodities and published reports on them. The data contained in some of the
reports are, however, largely out of date. There have been substantial changes in the pattern of
agricultural production and in the composition of foreign and internal trade. It is therefore essential that
fresh studies should be undertaken and the data brought up to date. For important crops regional studies
should also be undertaken. To facilitate agricultural exports, compulsory quality control and grading
under Agmark whrh is in operation in respect of 34 agricultural commodities, will be continued.
Another important scheme in the Fourth Plan relates to Central AgiTiark Research and Training Institute
which will be set up to help in the adoption of technological improvements in the marketing of
perishable products like fruits and vegetables.

For better access to markets, emphasis will be given on developing infrastructure such as roads and
communication/information services. the railways in the first three year of 2nd planning commision be
equipped to carry an estimated originating freight traffic of 250 to 260 million tonnes, of which the
largest single commodity would be 98 million tonnes of coal. emphasis has been laid on better
utilization of existing track and rolling stock capacity by maximising movement in block rakes and
reducing turn-round time. And also completion of spill over works of the Fourth Plan, which included a
number of missing bridges and road links. The traffic handled at Major Ports is expected to increase
from 65.84 million tonnes in 1974-75 to about 77 million tonnes in 1978-79. The main increase is
expected to be in iron ore and general cargo. In view of a number of major and far-reaching
developments such as decline in the import of crude oil, opening of the Suez Canal, non-materialisation
of the projected coastal movement of coal, and escalation in the price of ships, the target for shipping
tonnage has been reduced from 8.6 million GRT to 6.5 million GRT.Suitable provision has also been
made for expansion of training facilities and programmes for the welfare of seamen and for loan
assistance to the sailing vessels industry.

INFRASTRUCTURE: The agricultural marketing infrastructure has not kept pace with the
accelerated growth of production in the country. This has resulted in significant post harvest losses of
agricultural produce. The Central Government has provided assistance for the creation of infrastructural
facilities for marketing and for the setting up of rural godowns. During the Ninth Plan, the Panchayats
were encouraged to involve themselves actively in creating marketing infrastructure at the rural level.
Marketing extension, being a key factor in bringing desirable changes in attitude, skills and behaviour of
the farmers, traders and consumers, the agricultural marketing extension were strengthened. Direct
marketing were promoted in the interests of both the producers and the consumers.Another feature of
agricultural performance during 6th planning commission is that the bulk of increase in output
particularly foodgrains, has been concentrated in a few regions which are well-

Progress of Crop Production and Selected Inputs

Item Unit 1978-79 Sixth Plan 1983-84 1984-85 Anticipated

Target Actual
(i) Foodgrains Million tonnes 131.9 153.6 151.5 148-150.5
(ii) Oilseeds Million tonnes 10.1 13.0 12.8 13.0
(in) Sugarcane Million tonnes 151.6 215.00 177.0 180.00
(iv) Cotton Million bales 7.9 9.20 6.58 8.50
(v) Jute and Mesta Million bales 8.3 9.08 7.40 7.80
(vi) High yielding Million hectares 41.1 56.00 52.50 56.00
TOTAL Million tonnes 5.1 9.60 7,80 8.4
Potential Million hectares 54.46 70.35 65.62 67.89
Utilisation Million hectares 50.65 66.24 58.71 60.47

endowed with infrastructure like surface irrigation, rural electrification, roads and markets and where
farmers are resourceful in terms of their capacity to invest and bear risks. The favourable institutional
framework in such areas is also responsible for the initiative and drive displayed by the farmers.Efforts
will be made to increase public investment in agriculture. The private investment would also increase
along with public investment since there is complementarity between the two

One of the important objectives of the Sixth Plan is to increase production of export-oriented
agricultural and agro-based commodities so as to double our income through foreign exchange earnings.
This we did, out of necessity, to earn the much needed foreign exchange to meet the import bills. Our
entire capacity of monitoring international trends in agricultural trade was greatly improved. The table
below indicates export targets visualised for the selected agricultural commodities for the Sixth Plan.

Table: Export projections of selected agricultural Commodities for the Sixth Five Year Plan

Sl.No. Commodity Unit Export projections 1984-

(0) (1) (2) (3)
1 Rice Lakh tonnes 30
2 Sugar 000'tonnes 600 to 1000
3 Cotton Lakh bales of 170 Kgs. 3
4 Oil seeds (HPS groundnut etc.) 000' tonnes 160
5 Castor Oil 000' tonnes 90
6 Tobacco Million Kgs. 105
7 Spices 000' tonnes 185
8 Cashew 000' tonnes 45
9 Tea Million Kgs. 260
10 Coffee 000' tonnes 94-1
11 Cardamom Tonnes 4100
12 Marine products 000' tonnes 150 to 160

•Possibility of exporting larger quantities will be kept under re/iew depending on domestic output and

To achieve these export targets, we have to back our efforts with a well thought of strategy and also to
generate investment. In the international market, there was intensive competition both in terms of quality
and prices. There were various other inhibiting factors like tariff and non-tariff barriers in the importing
countries. Effort requirement to generate substantial additional exports were much greater than what
were needed for increasing production. Another important fact to be noted is that the exports of
agricultural commodities did’nt receive the same degree of promotional effort as the industrial products.
This is in spite of the fact that most of the commodities exported are produced by small farmers, who, in
fact, need much greater support than well organised industries and business houses.Finally, in the export
marketing effort also, agricultural commodities have been left far behind. The fact that export of
agricultural commodities has continued and even shown some increase does not mean that without
adequate effort and investment the same trend will continue in future. Cost of packaging in India is so
high that most of our products are out of reach of the domestic consumers and cannot compete in the
international market. A large potential for the development of agro-based industries has remained

SUMMARY: Measures envisaged in the Plans in the fields of industry and communications have
considerable bearing on the growth of the rural economy, for they raise its economic potential, bring
new resources into action and, above all, alter the milieu in which the peasant lives and works. Some of
the traditional items like tea and coffee have made good progress and further promotional efforts would
yield rich dividends. It has become necessary to identify new areas where the growth rate can be much
higher. In this regard items like rice, cotton, vegetables, fish and fish products, eggs, meat, processed
foods and minor spices can be mentioned. In some of these areas we are yet to make a mark as potential
exporters. It should be our endeavour to give an export orientation to agriculture after ensuring that the

basic needs of our population for various food items are fully met. Full advantage needs to be taken of
growing opportunities for international agricultural trade. For this purpose it will be necessary to
strengthen arrangements for transport and shipping in addition to packaging and forwarding. In short, in
order to have exportable surpluses, we seed to adopt aggressive policies to induce suitable investments
in production, storage, transport and other marketing infrastructure. Stability of supply, quality of
produce and price competitiveness will determine our success in becoming an important country in
international agricultural trade. Thus, although agricultural programmes lie at the very centre of the
Planning Commission, they have to be seen in the perspective of a larger plan that comprehends all
aspects of national development.


 - Agriculture and Development
 Indian economy since independence (twenty third edition)