The word agriculture is derived from latin tern Ager and cultura.

Agriculture = Ager + Cultura

Field Cultivation
☆Agriculture –
Agriculture can be defined as the cultivation or/and production of crop plants or
livestock products.
The term include science of crop and animal husbandry, horticulture, dairy,
forestry, fishery, etc.
The word Economics is originated from Greek word ‘Oikonomikos’ It is a social science.

☆ Oikonomikos = Oikos + Nomos

House Management

Thus, Economics means ‘House Management’. The head of a family faces the problem of managing the
unlimited wants of the family members within the limited income of the family. Similarly, considering the
whole society as a ‘family’, then the society also faces the problem of tackling unlimited wants of the
members of the society with the limited resources available in that society. Economics; thus, would mean the
study of ways in which mankind organizes itself to tackle the basic problem of scarcity of resources. All
societies have wants more than resources available to satisfy them. Hence, economics is the study of alternate
systems requisite to allocate these resources between competing ends.
☆Economics (Definition) -
Economics is the science that studies as to how people choose to use scares productive
resources to produce various goods and to distribute these goods to various members of
society for their consumption.

☆Father of Economics = Adam Smith

☆Agricultural Economics –
The science in which principles and methods of economics are applied to the special
conditions of agricultural industry.
(A/c to Prof. Gray)
Or
Agricultural economics as a social science is concerned with human behaviour during
the process of producing, processing, distributing and consuming the products on farm
and ranches.
(A/c to Goodwin)
☆Agribusiness –
Agribusiness refers to the sum total of all operations involved in the production and
distribution of food and fibre.
(A/c to Davis)
The sum total of all operations involved in the manufacture and distribution of farm
supplies, production operations on the farm, and the storage, processing and distribution
of farm commodities and items made from them.
(A/c to Davis & Goldberg 1957)

☆1955 – 1st time Agribusiness term given by John H. Davis of Harvard University.

1957 – Agribusiness as a concept was given in the book “A concept of

Agribusiness” (Harvard university) by John H. Davis & Goldberg

1966- Introduced in Philippines at University of Philippines offered An

Agribusiness Management Programme (ABM) at UG Level
☆Meaning of Agribusiness-
Agribusiness is made up of two words Agriculture and business. It refers to any business related to
farming and farming related commercial activities. It involves all the steps required to send an
agricultural good to market, namely production, processing, and distribution.

☆Examples –
• Small family farms and food producers up to multinational conglomerates involved in the
production of food on a national scale.
• Seed and agrochemical manufactures such as Monsanto.
• Farm machinery producer such as Deer & Company
• Food processing companies
• Makers of Biofuels, animal feeds & other related products.
 ☆Role of Agriculture in the Indian Economy
1.Contribution in GDP
Since the time of Independence, the agriculture sector has been the major contributor to the country’s GDP. In the financial
year 1950-1951, agriculture and other related activities had a share of 59% of the country’s total GDP in that financial year.
Although there is a constant drop in the agriculture sector, it is still one of the most crucial sectors in the Indian Economy.
On the other hand, in developed countries such as the UK and USA, the agriculture sector contributes only about 3% of the
country’s total GDP.
2. Largest Employee Sector

In India, the agriculture sector has more than half of the total population of the country engaged, which makes it the sector
with the most number of employees in the country. Comparing it with the developed nations, India has about 54.6% of the
total population in the agriculture sector engaged, while in developed nations such as the UK, USA, France, and Australia,
only 2%-6% of its total population is engaged in the agriculture sector.
3. Source of Food
India is the second-most populous country in the world. And to feed such a huge population, there is always a constant need
for a supply of food. Therefore, there is a need for agriculture and a need for less dependency on the agriculture sector for the
Economy.
4. Relation between Agricultural and Industrial sector
For the continuous manufacturing of products, there is a constant need for raw materials, and to fulfil this need, most of the
industries in the country collect this raw material directly from the agricultural fields.

In India, around half of the income generated in the industrial sector comes from agricultural-based industries. Therefore, in
India, the industrial sector is highly dependent on the agricultural sector.
5. Commercial Significance

Indian Agriculture is important for the industrial sector and trading purposes both internally and externally. Agro-products
such as tea, coffee, sugar, cashew nuts, spices, etc., which are edible and textile products such as jute, cotton, and others
contribute 50% and 20% respectively to the total export of the total country. These add up to around 70% of the country’s
total export and help the country in earning foreign exchange.
6. Contribution to the Government’s Revenue

Agriculture is the most significant source of income for the central and state governments. The government of the country
has substantial revenue from rising land revenue. Also, the movement of agricultural goods helps generate revenue for the
Indian railways, which helps the government in revenue generation.
7.Economic Planning and Agriculture

India’s planning prospects are also heavily reliant on the agriculture sector. A good harvest always offers momentum to the
country’s projected economic growth by improving the business climate for the transportation system, manufacturing
sectors, internal commerce, and so on.
A successful harvest also means that the government will have enough money to cover its budgeted expenditures. Similarly,
a bad harvest causes a total depression in the country’s business, which eventually leads to a collapse of economic planning.
Thus, in a country like India, the agricultural sector plays a critical role, and the Indian economy’s prosperity is still heavily
reliant on it. As a result of the above study, it is clear that agricultural growth is a necessary precondition for sectoral
diversity and economic development.

Conclusion

The Indian economy is an agro-economy and depends highly on the agricultural sector. Despite just supporting the Indian
Economy, the agricultural sector also supports the industrial sector and international trade in imports and exports. Although
the contribution of the Agricultural Sector to the Indian Economy is reducing, it is the sector with the most number of people
working in it around the country.
 ☆Evolution of Agricultural Policies
Agriculture has remained a highly regulated sector The main policy measures in the agriculture sector
in India with government agencies and parastatals were adopted in the mid-1960s. These included input
exercising a pervasive influence over it. These subsidies, minimum support prices, public storage,
regulatory controls are imposed by both central and procurement and distribution of foodgrains, and trade
state governments. The state governments, however,
continue to retain the constitutional authority over the protection measures. The gains from green revolution
sector. After independence, India pursued a policy of technologies continued through the mid-1980s, but
food self-sufficiency in staple foods — rice and wheat. slowed down thereafter. Unlike reforms in other
The policies were initially focused on the expansion emerging economies of the world (e.g. Brazil and
of cultivated area, introduction of land reforms, China), a series of reforms instituted in India in the
community development, and restructuring of rural early-1990s, left its agricultural sector relatively
credit institutions. Trade was strictly regulated through untouched, except for the removal of export controls.
quota restrictions and high tariff rates
While reforms in agriculture have been modest, the
macroeconomic reforms of the 1990s had two
important impacts. First, the reforms increased per
capita income and strengthened the domestic demand.
Second, they reduced industrial protection and
improved agriculture’s terms of trade to attain food
self-sufficiency, ensure remunerative prices to farmers,
and maintain stable prices for consumers. India’s
protectionist trade policies, introduced in the 1960s,
continued virtually unchanged, until the major
economic reforms were introduced after signing the
AoA (Agreement on Agriculture) under WTO.
Phase I: Pre-Green Revolution Period (1950-65) Phase II: Green Revolution Period (1965-80)

The main policy thrust in the first phase (after The second phase of agricultural and food policy
Independence) was on enhancing food production and started in the mid-1960s with the advent of green
improving food security through agrarian reforms and
large-scale investment in irrigation and power. The first revolution. The adoption of improved crop
major agricultural legislation enacted by the state technologies and seed varieties became the main source
governments after Independence was the Zamindari of growth during this period. The Government of India
Abolition Act (1950s). The basic objective of this
policy was to eliminate land intermediaries, ensure adopted the approach of importing and distributing the
ownership rights to the tillers of land, and ensure a high-yielding varieties (HYVs) of wheat and rice for
permanent improvement in the quality of the cultivation in the irrigated areas of the country. This
landholding. The government made additional changes was accompanied by the expansion of extension
to the land ownership policy to ensure greater equity
in the rural society. These decisions involved placing services and increase in the use of fertilizers, agro-
a ceiling on the size of holdings, state control on idle chemicals and irrigation. A number of important
or unused lands, and the distribution of some of the institutions were set up during the 1960s and 1970s,
idle land to the underprivileged rural people. Provisions
were also made to ensure that recipients of this land including the Agricultural Prices Commission (now
do not lease out or sell the land. The consolidation of Commission for Agricultural Costs and Prices), the
fragmented and scattered landholdings was encouraged Food Corporation of India, the Central Warehousing
so that farmers could have better access to Corporation, and State Agricultural Universities.
mechanization and land improvements could be made.
Other policy measures during this period included
enhancing of farmers access to credit, markets and
extension services.
Another major policy decision was the The biggest achievement of the green revolution
nationalization of major commercial banks to enhance era was the attainment of self-sufficiency in foodgrains.
credit flow to the agricultural sector. Several other
financial institutions, for example the National Bank
The green revolution also had an impact on the
for Agriculture and Rural Development (NABARD) agricultural input industry, resulting in a rapid growth
and Regional Rural Banks (RRBs), were also in the fertilizer, seed and farm machinery industries. A
established to achieve this objective. The cooperative significant increase in the funding of agricultural
credit societies were also strengthened. research and extension, marketing of agricultural
This strategy produced quick results with a
quantum jump in crop yields and consequently, in the
commodities and provision of credit to farmers was
foodgrain production. However, impact of the green also noted.
revolution technology was largely confined to two
crops, wheat and rice, and in the irrigated regions. The
traditional low-yielding varieties of rice and wheat were
replaced by the high-yielding varieties. Today, more
than 80 per cent of the area under cereals is sown with
high-yielding varieties. The use of fertilizers (NPK)
has risen sharply over the past three decades, albeit
from a low base. In 2011-12, the Indian farmers used
almost 144.3 kg of fertilizer per hectare of cultivated
land. The use of pesticides, including herbicides,
increased until 1990, but has fallen steadily, partly due
to the shift in emphasis, away from the heavy use of
chemical pesticides to a more environment-friendly
integrated pest management system.
Phase III: Post-Green Revolution Period (1980-91)

The third phase in agricultural policy development

started in the early-1980s and was characterized by
the expansion of green revolution technology to other
crops and regions. This resulted in a rapid growth in
agricultural output. During this period, the main
policies aimed at encouraging investment in the sector.
Moreover, the agricultural economy started
experiencing the process of diversification towards
high-value commodities like milk, fish, poultry,
vegetables and fruits. The growth in output of these
commodities accelerated. Finally, the ongoing research
on pulses, oilseeds and coarse grains started showing
a positive impact with the expansion of these crops
into the drier areas.
Phase IV: Economic Reforms Period (1991 onwards)

Following several decades of sustained output

growth, the focus of agricultural policy since 1991
has shifted to improving the functioning of markets,
reducing excessive legislation, and liberalizing
agricultural trade. Economic reforms launched in the
1990s virtually by-passed the agriculture initially.
However, the subsequent trade policy reforms have
been aimed at liberalizing the export and import of
agricultural and food commodities by gradually
removing various restrictions and controls on
agricultural trade.
Over the past 10-15 years, India’s share in world agricultural trade has been gradually increasing, albeit from a low
base. India has also taken an active role in promoting regional economic co-operation and trade in South Asia through
the South Asian Association for Regional Cooperation (SAARC). In April 1993, a regional trading block was formed
with the signing of the SAARC Preferential Trading Agreement, which was improvised in 2004 in the form of an
Agreement on South Asian Free Trade Area (SAFTA) that supersedes the Agreement on SAARC Preferential Trading
Arrangement.
However, there were several policy challenges facing the agricultural sector, including the need to
reverse the sharp decline in output growth, which occurred in the late-1990s, and the need to
ensure more sustainable use of the existing natural resources. A steady fall in the public sector
investment in agriculture posed a big challenge which necessitated policy initiative to attract
private investment in agriculture for the long-term growth and competitiveness of the sector.
Another important challenge during this phase was on improving competitiveness along the agro-
food chain, especially through enhancing efficiency in production, marketing and processing of
agricultural commodities.
In 2000, the Government of India, for the first time, published a comprehensive agricultural
policy statement — the National Agricultural Policy (NAP) that sets out clear objectives and
measures for all the important sub-sectors of agriculture. Over the next two decades, this policy
aims to attain an agricultural growth rate in excess of 4 per cent per annum. The main elements
of the policy include:
Efficient use of natural resources, while conserving soil, water and biodiversity.
Growth with equity, i.e. growth which is widespread across regions and farmers.
Growth that is demand-driven and caters to the domestic markets and maximizes benefits from exports of agricultural
products in the face of challenges arising from economic liberalization and globalization.
Growth that is sustainable technologically, environmentally and economically