Impact of Globalization on Indian Farmer

INTRODUCTION

The agriculture sector is one of the most important industries in the Indian economy. In terms of
employment, the agriculture sector provides livelihood, to over 151 million people. Approximately 60
percent of the Indian population works in the industry, contributing about 18 percent to India’s GDP.
Far reaching changes have occurred in India’s economic policy since the beginning of 1990. Policies
relating to economic reforms and adjustment have broadly aimed at macroeconomic system, but do
not have any particular proposal as regards agriculture. New policies will have farreaching effects on
agricultural output, prices, employment and technology. In the period after accomplishment of green
revolution, application of new technology and research in agriculture were limited to only two major
crops of wheat and rice. In recent years, Indian agriculture is getting diversified and a variety of
commercial crops in addition to horticultural crops. Diversification of agriculture will take place on a
continuous scale under the aegis of economic liberalization and reforms is the much-expected factor.
With a view to move towards liberalizing the agricultural sector and promoting free and fair trade,
India, a member nation of the WTO signed the Uruguay Round Agreements On 1st January 1995. It is
essential of know that how agricultural sector in the country is connected to this process.

Globalization and Indian Agriculture

Globalization is the free movement of people, goods and services across boundaries. This movement
is managed in a unified and integrated manner. Further, it can be seen as a scheme to open the
global economy as well as the associated growth in trade. India was one of the prime nations which
gained immensely post the introduction and implementation of globalization. India entered in the
process of globalization by 1991, when there was a severe economic crisis in the country. Indian
Agriculture is directly linked with the global market and the focus of the agriculture changed from
basic consumption to commercialization. India is the country which is known as agrarian economy, it
is essential to know that how Agriculture sector in the country is connected to this process.
Liberalization created an unprecedented demand in all sectors of trade including Agriculture. This
demanded pragmatism on the part of Indian Government. With globalization marking headway
everywhere, Government had to introduce reforms in Agriculture sector too. Reforms in agriculture
polices were felt necessary for achieving trade liberalization in the agriculture sector.

GENERAL IMPACT OF GLOBALIZATION ON AGRICULTURE

With the operationalisation of the provisions of the World Trade Organization, the process of
globalization commenced in the major parts of the world. There has always been an air of confusion
among the members and non-members of the WTO in assessing the pros and cons of globalization
on the health of their economy. The sector which has created the highest number of deliberations in
the WTO as well as views and counterviews has been the agriculture, an area of utmost concern for
the developed and the developing world alike. India is no exception to it. Better say it has been
among few countries in the world spear heading the campaign against the biased provisions of the
WTO concerning agriculture.

POSITIVE IMPACT OF GLOBALIZATION ON AGRICULTURE

1. Growth of National Income: As a result of the green revolution and liberalization, agricultures
GDP has increased. Receiving the International market for the agricultural goods of India, there is an
increase in farmer’s agricultural product. New technology, new seeds, new agricultural products etc.
helped to grow the agricultural product. From the monetary point of view the share of agricultural
sector in the economy is raised to 14.2.% of the GDP (2010-11). 17.32% (2016-17). 18.4% (2019-20).
20.3% (2020-21). 19% (2021-22).

2. Rise in Production and Productivity: Due to adoption of HYV (High Yielding Varieties) technology
the production of food grains increased considerably in the country. The production of wheat has
increased from 8.8 million tons in 1965-66 to 184 million tons in 1991-92. The productivity of other
food grains has increased considerably.

3. 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.

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 allied industries has
created employment in various like packing exporting. Standardizing, processing, transportation and
cold storage etc. the industries depending on agricultural are stored and it made an increase in
employments. Agricultural is the biggest unorganized sector of the Indian economy accounting for
more than 90% share in the total unorganized labor force. The share of agricultural in total
employment stands at 52.1%.

5. Growth of Agro Exports: The prices of agricultural goods are higher in the international market
than Indian markets. It the developed countries reduced grants, they have to increase in the prices.
So there will be increase in the export in Indian market and if the prices grow, there will be profit.
Agricultural products account for 10.23% of the total export income of the economy, while
agricultural imports account for just 2.74% of the total imports.

6. Reduction in Poverty: It is also true that globalization is commonly characterized as increasing the
gap between the rich and the poor, but it is a matter of looking at poverty in relative terms. 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 2011-12.

7. Increasing Export-Oriented Cash-Crops: With globalization farmers were encouraged to shift from
traditional crops to export-oriented ‘cash crops’ such as cotton and tobacco but such crops needed
far more inputs in terms of fertilizers, pesticides and water. The growth in yields of principal crops
notably rice and wheat have also decelerated. These are some positive impact of globalization on
Indian agriculture. But as far as a developing country like India is concerned the negative
consequences are proved as more effective. These are as follows.

NEGATIVE IMPACT OF GLOBALIZATION ON AGRICULTURE

1. Availability of Less Manpower: One of the negative impacts of globalization on the Indian
agriculture sector was the availability of lesser manpower in the fields as people started migrating to
cities in search of jobs in different sectors.

2. Lower Income of Rural Farmers: According to Nobel prize-winning economist Joseph Stieglitz,
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. And since 60 per cent of
those in the developing countries depend directly or indirectly on agriculture, this means that the
incomes of the developing countries are depressed.
3. Migration of Labours: For the Indian farmer, who if 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
labour from agricultural to other industrial activities.

4. Vicious Debt Trap and Farmers Suicides: There is need to examine each of the causes which have
led to the current crisis in agricultural sector, and analyse the role that liberalization policies have
played. For instance, the state of Andhra Pradesh led to the first ever state level agreement with the
world Bank, which entailed a loan of USD 830 million in exchange for a series of reforms in his state
industry and government. It has implemented the World Bank liberalization policies with great
enthusiasm and zest and as result the rate of formers suicides in the state gone up. 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. is critical.

5. 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
grant 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.

6. Fall in Growth Rate: India is second largest producer of food in the world. However Indian
agriculture has shown a slow average annual growth rate. It was 3.1% during the decade 1980-1990
prior to liberalization of the economy. But since then, the annual growth rates have declined
consistently relative to annual growth rate of population. Several factors were responsible for this fall
in growth rate; lack of credit, inadequate irrigation cover, indebtedness, improper use of inputs and
decline in the public investments.

7. Shifted to Manufacturing and Service Sector: The decline in overall growth of employment during
1993-94 to 2004-05 was largely due to fall in creation of employment opportunities in agriculture.
With increase in knowledge and entry of many foreign in the non- agriculture sectors, the labor has
Shifted to manufacturing and service sector.

8. Fall in Agricultural Employment: In 1951, agriculture provide employment to 72 percent of the

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

V. CONCLUSION An overview of Indian agriculture sector indicates that globalization did not yield the
desired results in India. The desired objectives of this process have not been achieved in India. After
adoption globalization in 1991 Indian agriculture growth rate increase but at present the economy
condition of the farmer is not satisfactory because input cost is high and output cost is low.