C HAPTE R
ECONOMICS AND POLICY
1 Causes of Low Productivity Per Acre
3 Remedial Measures
PROBLEMS OF AGRICULTURE SECTOR:
The problems of agricultural sector in LDCs are varied and
complex. Low productivity cannot be attributed to any single factor.
• Defective Land Tenure System:
The land Tenure system of a country throws light on the
relationship between land owners and cultivators. Such
relationship between the owners and tenants is not very cordial
and plausible. It is the tenants who cultivate the lands but the
major share of the farm produce is taken away by the owners and
landlords. In such state of affairs, the tenants do lose their interest
in respect of cultivation and production.
in addition to this, because of greater role of natural calamities in
agriculture sector and rapid increase of wages and incomes in the
non-agriculture sector have shown a great resentment on the part
of the poor cultivators.
• Govt. Policies:
The development of agri. Sector is based upon public policy and
govt. priorities for agri. Sector. The farmers are complaining that
agri. Sector has not been given due importance as least attention
was paid on agri. Investment, availability of inputs, credit and
intervention in agri. Markets. The role of support prices
remained limited and it failed to benefit the small farmers as it is
furnished with official formalities and corruption. In the
presence of higher outputs the farmers get lower prices, while
the advantage is taken away by commission agents and brokers.
This means that the agri. Environment in the country is hardly
been beneficial for the small farmers and govt. policies never
supported the interests of small farmers.
• Lack of agricultural credit:
The availability of financial resources plays an important role in
the promotion of agriculture. The farmer is in need of funds
starting from preparation of land to purchase of inputs and finally
to sale of outputs. The banks always hesitate to advance loans to
farmers as because of lack of securities to pledge. It remained too
difficult for the banks to recover the loans.
• Natural Calamities:
It is a bitter reality that the role of natural disasters and calamities
is far more in agriculture as compared with other sectors of the
economy. The floods, insects, shortage of water often affect out
• Lack of infrastructure facilities:
High agricultural productivity requires infrastructural facilities like
roads and communication. If there are roads from the farm to the
market, the farmers will bring the produce to the market otherwise
the farm produce will be consumed at the village. Thus the farmer
will not get good reward for his labour. Next time he will reduce
his effort to produce only for himself.
Again, If there are well communication facilities in the rural areas,
the farmers will be able to talk to big traders. They will have access
to the terminal markets where they will get fair reward for their
produce. If they receive fair reward for their agri. produce, they
will be encouraged to work hard next time.
Unfortunately, in almost all of the LDCs, the infrastructure
facilities are very low in the rural areas which directly contributes
to the low productivity of the agri. sector.
• Lack of Agriculture Markets:
The major share of agriculture is based upon traditional and
subsistence farming. The farmers, especially the small farmers
fail to transport their agri. Produce in the big agri. markets of the
country. The poor farmers have shortage of financial resources
and they had borrowed from big landlords and commission
agents, they are bound to sell their produce to these people.
Because of shortage of means of transportation the agri. Goods
are sold in the local agri. Markets which benefits the
commission agents and brokers at the cost of farmers. It means
that our agri. markets are imperfect they have benefited the
stockiest instead farmers.
• Lack of Agricultural research:
it is the time of research & development and every country of
world both poor and rich are making research in every field of life.
The new techniques, new seeds and high yielding seeds are being
invented and made popular but we lack agri. research facilities.
The agri. universities and colleges do not make research to the
desire extent. There is a big brain-drain of agri. Scientists. The
agri. Institutions are prey to shortage of funds. This is the reasons
the agri. scientists and institution have not been helpful in attaining
self-sufficiency in agri. Sector.
• Farmer’s Illiteracy:
Our farmer is not only backward but illiterate also. He practices
the traditional ways of farming. The modern farming is made by
big land lords etc. all such may be attributed to non-availability
of modern technology to farmers especially small farmers.
Moreover, the farmers are reluctant to accept new changes. If,
on the one side govt. has ignored them, then on the other side,
they too are least interested to accept modern way of farming.
• Sub-Division and Fragmentation of land:
By Sub-Division we mean the division of land of forefathers
amongst their heirs. Sometimes, it also happens when owners
sell some part of their lands or may gift some part of their lands
to their friends, relatives and charitable institutions. Thus the
division of land in smaller parts is called sub-division.
Fragmentation represents the situation where the land of an
owner or the undivided family does not occur at the same place.
As if 3 acres of land of any persons is situated at 20 different
places, this would represent fragmentation of holdings.
When the lands are subdivided and fragmented, the cultivators
fail to cultivate the land diligently, can not introduce modern
technology etc which has a sever negative impact on the
• Inadequate irrigation facilities:-
Water is an important input for agricultural production. The
good agri. production is attained through giving a reasonable
amount of water. In most of the LDCs water supply to the farms
is mostly provided through canals. Such system of irrigation has
worstly affected the health of soil. A greater seepage of water is
observed resulting in water-logging as well as in salinity.
In addition to canal system of irrigation, a fairly large number
of lands have to depend upon “Rains” for water. The rains are
uncertain. Sometimes they are in short, creating a lot of
problems for the farmers – thus affecting the production. On the
other occasions, there is an abundance of rains leading to the
floods and affecting the production.
Again, the water can also be obtained through tube-wells and
water pumps but the poor peasants are unable to purchase them.
• Soil Erosion:-
Soil erosion is the loss of soil due to water movement. erosion
occurs when excess rainfall move the top fertile soil of the land.
Runoff occurs when rain falls faster than it can be absorbed into
the soil. Runoff water carries soil particles into streams and
rivers and cause the land barren for agri. Productivity.
• Water logging and salinity:
Land is like a producing unit. Every year a large area of land is
affected by Water-logging and salinity. This is not only a
national wastage but it also affects the productivity of land.
• Non-agricultural use of cultivated land:
in the recent years, investment in the real estate is considered
very profitable. The agricultural lands are becoming the prey of
the different housing schemes and colonies which is reducing
the amount of the cultivatable land for agri. purpose.
• Under utilization of cultivatable land:
in almost all of the LDCs the cultivatable land is under-utilized
or un-utilized. For example, Afghanistan has an area of 64.5
million hectares of extremely steep and mountainous land.
Despite the fact that only 12% of its total area is cultivatable
only 6% is currently cultivated and the remain 6% is not utilized
for agri. purposes.
• Inadequate supply of modern inputs:
in agri. Development, the agri. Inputs like fertilizers, implements
and insecticides play an important role. But in our country, the
phosphorus type of fertilizers is not available on proper time.
Rather, there is a big adulteration in fertilizers. The multi-national
companies have monopolies over the sale of insecticide. They
charge the prices whatsoever they like.
In addition to fertilizers and pesticides, the availability of modern
seeds and especially the High Yielding Variety (HYV) Seeds are
very important for green revolution. the farmers fail to get fair
amount of superior seeds.
• Lack of Cold-Storages and Warehouses:
Because of weak financial position the farmers are unable to
construct the warehouses and cold-storages. They have to store
their crops in their houses where they are at the mercy of rats and
other insects – thus reducing their value. This situation rises
particularly because of perishable nature of agricultural goods. If
they sell their produce just after harvesting, they will not be able to
get handful amounts against the products sold.
The official Cold-Stores and warehouses are fore official stocks of
wheat, rice, fruits etc. the private cold-storages facilities are very
expensive and are beyond the range of small and poor peasants. In
such situation, the incomes of the farmers remain low.
• Lack of farm mechanization:
Farm mechanization implies the use of mechanical technology in
the varied farming operations like sewing, harvesting, thrashing,
leveling, watering, spraying etc. farm mechanization bring more
area under cultivation, save the farmer’s time for off-the-farm
business like beekeeping, fisheries, livestock, timely water and
spray etc which result in bumper crops. Unfortunately, in almost all
of the LDCs the farmers are not in the position to mechanize the
• Lack of Health facilities in Rural areas:
Most of the rural areas do not have any health facility therefore,
when the farmers fell ill or their child or wife get ill they bring
their patients to the cities where they stay for the patient recovery
and due to which they are unable to pay attention to their field.
Thus the lack of rural health facilities, the farmer’s productivity
• Racial Disputes:
The rural farmers are often found to be involved in racial
disputes. Due to racial disputes they are often involved in
criminal activities like blazing the crops of the rival farmers etc
furthermore, they are unable to pay due attention to the farm
productivity due to criminal suits they face in the courts.
Furthermore, the amount of money they have and they can utilize
for the farm mechanization or purchasing modern inputs is spent
out in facing the criminal suits.
Measures to Solve Agri-Problems
The following measures if implemented can greatly help in
increase the Per Acre Yield of farm productivity.
• Consolidation of holdings:
• Improved quality of seeds
• Credit facilities
• Efficient marketing system
• Supply of irrigation water
• Modern methods of cultivation
• Control on water logging and salinity
• Farmer’s Education
• Provision of transportation and communication
• Research Facilities
• Control of diseases
• Govt. compensation in case of natural calamities
• Govt. should provide subsidies on agricultural inputs.
• Socio-Economic Change in the Rural Life:
Most of the villages lack even basic amenities of life. This results
in migration from villages to cities. If the same talented people had
retained themselves in the villages, their contribution to
agriculture would have been far greater. Accordingly, there is big
need to retain such youth in the villages. For this purpose, the
social and infrastructure amenities will have to be provided in the
villages. The status of farming as a profession will have to be
improved. An improved infrastructure and provision of basic
education, health, communication and recreation facilities in the
rural areas will help in preventing them from migration.