Is agriculture good for India ?

Summer is here in Finland for good two weeks and hopefully many more to go. With the onset of summer all the snow has melted. We can now see black asphalt or cobbled stone road, the grassy surface and also the soil in the vast stretches of what look like agricultural farms. In these two years, I have found something strange with many of these agricultural farms, particularly those lying along Hameenlinna - Helsinki highway. I have never seen any crops ever on them. In winter it is understandable but why not in summer? The answer is there in the figures of Finnish economy. I don’t have the exact data but the trend is no different from most of the developed economies. The proportion of agriculture is very less in GDP. This also means that a small portion of Finnish population is actually engaged in agricultural activities. Hence much of land remains unutilized. Finnish agricultural is also heavily subsidized and the efforts are made by government to reduce the output of some of the crops (sugar beet).

This becomes quite interesting and relevant if I extrapolate it to India. As much as we hear about India becoming economic superpower we also hear about the burgeoning ‘urban-rural’ or ‘have-have not’ divide. India still has a sizeable population living below poverty line. So why hasn’t the economic prosperity trickled down to lower strata of Indian society? The answer is here. 56.7% of Indian work force and 70% of population is dependant on agriculture which as 21% share in GDP. The annual growth rate in agriculture is 1.3% as compared to 10.6% of services sector. This is exactly the reason why the impressive GDP growth has failed to lift the economic status of much of Indian population. So, what can be done?

There are two ways to deal with this. Increase the growth rate of agriculture to match with that of services and manufacturing or decrease the Indian work force (hence population) dependant on agriculture. It is too easy for anyone to guess that latter option is easier to achieve and more feasible. So like other developed counties, India should move its population towards services sector which has more stable and guaranteed income. Of course the question about food reliability will arise. But in today’s world economy, if a country has money from the services export then buying food grain won’t be a problem. The large demand population will further help by increasing the bargaining power. The Indian food demand has also the potential to change the economy of other countries as well. Imagine India sourcing rice from Bangladesh. Along with this, also lies the fact that India can’t totally eliminated agriculture. But lesser workforce will make agricultural activity lean and efficient leading to increased productivity.