The document discusses the impact of globalization on Indian agriculture. It notes that while globalization aims to accelerate economic growth through liberalization and privatization, it has negatively impacted Indian farmers and agriculture. Farmers now face lower output prices, higher input costs, less government support and subsidies, and increased competition from imports. This has led to rising farmer indebtedness, poverty, and even suicide in some cases. While globalization provides opportunities for increased exports, Indian agriculture has struggled with quality issues, production costs, and a lack of infrastructure to effectively compete globally. Overall challenges remain for Indian farmers and agriculture under globalization.

2. INTRODUCTION

3.  Liberalization, Privatization and Globalization are the
main thrusts of the new Economic Policy 1991, aimed
at the growth of economic acceleration and to develop
the domestic economy to withstand in the global
competition.
 Globalization can greatly enhance the role of
agriculture as an engine of growth in low-income
countries by making it possible for agriculture to grow
considerably faster than domestic consumption.

4.  To know the concept of globalization.
 To study the impact of globalization on Indian
agriculture.
 To know the major challenges of Indian
agriculture in the era of globalization.

5.  Freedom and ability of individuals and firms to initiate
voluntary economic transactions with residents of other
countries.
 It is a process of increasing interdependence and
interaction among people, companies, and
governments of different nations, driven by
international trade and made possible by innovations in
information technology.

6. Reduction of trade barriers so as to permit
free flow of goods across national frontiers.
Creation of an environment in which free
flow of capital can take place among nation
states.
Creation of environment, permitting free
flow of technology.
Creation of an environment in which free
movement of labour can take place in
different countries of the world.

7. The World Trade Organization (WTO) is the
international organization dealing with the rules of
trade between nations.
General Agreement on Tariffs and Trade (GATT)
functions as the foundation of the WTO trading system,
and remains in force.
As on January 2007, 150 countries are members of the
WTO. These countries undertake to adhere to the 18
specific agreements.

8. Of these agreements, Trade-Related Aspects of
Intellectual Property Rights (TRIPS) appears to
have greatest impact.
The World Bank and the International
Monetary Fund (IMF) play a vital role in the
process of economic globalization.

9. International bodies like the World
Trade Organization , World Bank
infringe on national and individual
sovereignty .

10.  Agriculture Sector is changing the
socioeconomic environments of the
population due to liberalization and
globalization.
 About 75% people are living in rural areas
and are still dependent on Agriculture.
About 43% of India’s geographical area is
used for agricultural activity.
 Agriculture continues to play a major role
in Indian economy.

11.  Total Area Seventh
 Irrigated Area First
 Population Second
 Economically Active population Second
 Total Cereals Third
 Wheat Second

12.  Rice Second
 Coarse grains Fourth
 Total Pulses First
 Oil Seeds Second
 Fruits and Vegetables Second
 Implements (Tractors) Third
 Milk First
 Live Stock (castles, Buffaloes) First

13.  Goods and people are transported with
more easiness and speed .
 Free trade between countries increases .
 Global mass media connects all the people
in the world.
 As the cultural barriers reduce the global
village dreams becomes more realistic .

14.  The interdependence of the nation-states increases.
 The flexibility of corporations to operate across
borders increases.
 The communication between the individuals and
corporations in the world increases.
 Environmental protection between countries
increases.

16.  Agriculture employs 60% of the Indian population today, yet
it contributes only 18.6% to the GDP. Agricultural production
fell by 12.6% in 2003, one of the sharpest drops in independent
India’s history.
 Agricultural growth slowed from 4.69% in 1991 to 2.6% in
1997-1998 and to 1.1% in 2004-2005.
 This slowdown in agriculture is in contrast to the 6% growth
rate of the Indian economy for almost the whole of the past
decade.

17. There is a shift from sellers market to buyers
market, wider variety of goods can be
available at lower prices good quality goods
are available

18.  They undoubtedly a worried lot, because they are
totally unaware of the terms, WTO,TRIPs,TRIMS etc
 Scope for changing their cropping pattern from less
profitable crops to more profitable crops
 Shift from subsistence farming to export-oriented
farming
 Shift their emphasis from productivity to profitability
 Possibility of bridging the knowledge gap between
them and prospective international competitors.

19. They have to face stiff competition from
the MNCs, which have strong financial,
technical and administrative network.

20.  Possibility of gaining monopoly status.
 Lead to closure of domestic companies if these
could not maintain quality standard.
 They exploit the measures under AoA viz., lifting
importing restrictions, reducing import tariffs and
imposition of intellectual property rights (IPRs),
thus capturing the domestic market.

21.  They are highly benefited as they can import good
quality raw material at cheaper prices.
 To survive competition, they have to reduce costs,
adopt modern technology and enhance quality of
products.
 Stiff competitions from imported finished goods.
 Provides more employment opportunities.
 Earn good amount of foreign exchange through the
process of value addition.

22.  Immediate adverse effect on farmers was the
devaluation of the Indian Rupee in 1991 by 25% Indian
crops became very cheap and attractive in the global
market, and led to an export drive.
 Farmers were encouraged to shift from growing a
mixture of traditional crops to export oriented ‘cash
crops’ like chilli, cotton and tobacco etc.

23.  Liberalization policies reduced pesticide subsidy by
two thirds by 2000. Farmers who spent Rs. 90 an acre
now spend between Rs. 1000 and 3000 representing a
hike of 1000% to 3333%.
 Fertilizer prices have increased 300% .
 Electricity tariffs have also been increased.

24.  The biggest input for farmers is seeds.
 Before liberalization, farmers across the country had access to
seeds from state government institutions.
 The seed market was well regulated, and this ensured quality
in privately sold seeds too.
 With liberalization, India’s seed market was opened up to
global agribusinesses like Monsanto, Cargill and Syn Genta.
This hit farmers doubly hard in an unregulated market, seed
prices shot up, and fake seeds made an appearance in a big
way.

25.  With a view to open India’s markets, the liberalization
reforms also withdrew tariffs and duties on imports.
 India completely removed restrictions on imports of almost
1,500 items including food.
 As a result, cheap imports flooded the market, pushing prices
of food crops and cash crops down.
 Globalization implies that in a competitive world if the prices
are less than yours in the international scenario, you obliged to
import.

26.  Due to commercialization of agriculture, and
agricultural credit firmed only 15.33% of the total
bank credit in 1990-91.
 As result of liberalization policies credit extended to
farmers was reduced dramatically, falling to 10.3% in
2001 against a recommended target of 18%.
 With input costs and output prices being what they
are, coupled with crop failures and drought, they are
pushed into debt which is impossible to repay. 12 out
of India’s 28 states have 50% and higher indebtedness
among farm households.

27.  Andhra Pradesh has the highest percentage of indebted farm
households — 82%.
 64.4% of Kerala’s farm households and 54.8% of Maharashtra’s
farm households are indebted.
 An NSSO survey in 2005 found that 66% of all farm households
own less than one hectare of land. It also found that 48.6% of all
farmer households are in debt.
 Indebtedness has been identified as the single major cause of
suicides.
 Farmer suicides were 12% of the total suicides in the country in
2000, the highest ever in independent India’s history.

28.  It halted the sharp reduction in rural poverty from
55% in the 1970s to 34% in the 1980s. Not only has
the incidence of poverty in rural areas not gone lower
than 34% in the 1990s, it has gone to higher levels of
42% in individual years.
 Rural development expenditure, which averaged
14.5% of GDP during 1985 – 1990 was reduced to 8%
by 1998, and further to 6% since then.
 Rural employment generation decreased. Due to this
per capita consumption expenditure decreased from
1.5% in 1980 to 1.2% in 2001

30. Commodity
1970-71 to 1980-81 1980-81 to 1990-91 1990-91 to 1997-98
Cost of
production
Commodity
prices
Cost of
production
Commodity
prices
Cost of
production
Commodity
prices
Paddy 6.32 ** 11.28** 7.31** 9.53** 12.04** 8.71**
Wheat 4.25* 7.36* 6.19** 4.38** 13.49** 2.24 NS
Jowar 3.27* 3.97 NS 4.27** 5.26 NS 8.42** 10.72**
Bajra 3.19 NS 4.06 NS 6.29** 6.88 NS 10.83** 9.37**
Maize 4.23** 6.23* 7.26** 7.64* 10.01** 8.95**
Gram 2.36* 3.16* 5.69* 9.26* 10.45** 17.60**
Urad 3.18* 3.65* 7.11* 8.63** 11.85** 13.28**
Groundnut 6.25** 7.27** 7.98** 8.03** 8.06** 8.70**
Cotton 6.27** 7.16** 10.26** 10.15** 18.15** 15.04**
Data source –
Agricultural Statistics at a Glance
**- significant at 1% level
*- significant at 5% level
NS- non significant at both 5% & 1%

33. Year % of Agril. Exports to total
national exports
% of Agril imports to total national
imports
1960-61 44.2 NA
1965-66 41.6 NA
1970-71 31.7 NA
1980-81 30.7 NA
1985-86 27.7 NA
1990-91 18.49 2.79
1991-92 17.80 3.09
1992-93 16.84 4.54
1993-94 18.05 3.18
1994-95 15.99 6.60
1995-96 19.18 4.80
1996-97 20.33 4.76
1997-98 19.67 5.70
1998-99 18.25 8.17
1999-00 15.91 7.45
2000-01 14.23 5.31
2001-02 14.19 6.63
2002-03 13.10 5.77
CGR (%) -1.71 7.15

34. Trade liberalization, WTO and Indian agriculture.
Import and export of oilseeds and its products ($ lakh)
Year
Import Export
Soybean
oil
Palm
oil
Rape colza/
Mustard oil
Other
oilseed
products
Total
Oilcake/
Meal
Castor
oil
Other
oilseed
products
Total
1990-91 214 1532 17 163 1926 3390 338 969 4697
1991-92 205 721 31 174 1131 3765 496 674 4935
1992-93 370 140 4 232 746 5340 326 584 6250
1993-94 186 280 6 261 733 7400 858 986 9244
1994-95 292 1550 19 423 2284 5730 1200 1142 8072
1995-96 695 5332 158 936 7121 7030 2009 1470 10509
1996-97 143 6526 9 1936 8614 9850 1549 2251 13650
1997-98 337 6105 37 1296 7775 9250 1373 2879 13502
1998-99 2967 11035 1577 3478 19057 4610 1600 1308 7518
1999-00 2821 12211 1396 3112 19540 3700 2199 2269 8168
2000-01 1979 8912 190 3048 14129 4480 1882 2636 8998
2001-02 4744 7837 79 2073 14733 4729 1121 2311 8161
Source: Chand, 2002

35. • Lack of efforts on improving the quality of
agricultural products.
• Lack of suitable varieties, which are fit for agro-
processing and to suit the consumers’ demand in the
international market.
• Slow preparedness towards the competition from
other countries.
• No efforts were made towards reducing the cost of
production of agricultural crops. As a result the
products were less competitive in the international
market.

36. • The products that are exported from the country do not
match the quality requirements of the imported countries.
• Majority of the country’s exports were surplus-oriented
exports rather than importers need based.
• Inadequate facilities to collect and build the market
information regarding export of commodities.
• Lack of sufficient awareness on the part of farmers, traders,
processors and other market intermediaries about the
implication of the WTO on the Indian agricultural sector in
general and on the export competitiveness of agricultural
commodities in particular.

37.  Even the information pertaining to the Amber Box, Green
Box, Blue Box measures and tariff rates for different countries
were not build up and popularized so as to compare them with
our country to assess the support given to the agricultural
sector.
 The scientific community was also less trained to study the
export competitiveness of Indian agricultural commodities and
the actual implications of WTO on the agriculture and allied
sectors.

39.  A long-term policy is essential to promote agricultural
exports on a sustainable basis.
 Strengthening grading, storage, processing and market
information network facilities even at least after realizing the
importance of joining in WTO and the consequences the
country faced due to increased import surge during the reforms
period.
 Farming systems approach should be given special attention
by including different enterprises like dairying, sheep, goat,
poultry, fisheries, apiculture, sericulture etc. by contract
farming.

40.  Strengthening grading, storage, processing and
market information network facilities even at least after
realizing the importance of joining in WTO and the
consequences the country faced due to increased
import surge during the reforms period.
 Future trading should be encouraged and promoted
as this protects the farmers and traders from price risks
in International trade.

41.  Quality consciousness should be promoted among
the farmers, traders and exporters in the country as this
directly enhances the export competitiveness of
agricultural commodities besides cost-effectiveness.
 Studies should be conducted to explore the export
potential of different agriculture commodities,
transaction cost involved both for domestic trade and
export trade, identification of markets where they can
find potential buyers.
 Export promotion organizations should be
strengthened in India.

42. CONCLUSION

43.  In the process of globalization, the developing
countries and the least developed countries are still
unprepared for accepting challenges of the global
market and are lagging very much behind the
developed countries.
 India has the potential to become the global
leader in agriculture.

44. THANK YOU