5 Marks Each

Question

Discuss the institutional factors for low agricultural productivity.

Vidyadip · Accepted Answer

agricultural development and productivity is low in India.

The Land Revenue Collection Systems such as the Zamindari system, Mahalwari system, Ryotwari system implemented by British badly affected agricultural productivity.
Farmers did not have access to proper agriculture finance, agriculture marketing system, land ownership system, etc.
All these institutional factors remained negative for farming and farmers and hence agriculture productivity remained low.

The institutional factors are discussed below:
$1.$ Land Revenue Collection Systems:

Even after India became independent, three Land Revenue Collection Systems namely, Zamindari system, Mahalwari system and Ryotwari system existed in India.
The land tenants and landless labourers used to cultivate land under these systems.
Under these systems, the landlords used to forcibly take most of the produced crops from the labourers or tenants as rent. As a result, the farmers had no motivation to increase production.
So, neither individual productivity nor national productivity increased.
To abolish all these systems, the government after independence passed ‘Land to Tiller Act’ and other such acts. However, these acts were not effectively implemented and so exploitation of farmers continued and the productivity remained low.

$2.$ Agriculture finance:

Majority of Indian farmers are poor. They take finance to buy fertilizer, seeds, pesticides, etc.
After independence, private money lenders were one of the easiest and major sources of obtaining agricultural finance. But, these lenders used to charge very heavy rate of interest on the money lent. Moreover, they also used to fool farmers and manipulate records to loot the poor and ignorant farmers.
As per a source, in $1951,$ about $71.6\%$ agriculture finance business was controlled by money lenders.
This problem was somewhat solved when the government established nationalized banks. Government also opened new avenues for agriculture finance by setting up regional rural banks in $1975$ and National Bank for Agriculture and Rural Development $\text{(NABARD)}$ in $1982.$
Due to all these efforts only $27\%$ finance remained in the hands of money lenders and remaining was taken care by agriculture credit institutes.
High rate of interest on agricultural loans, difficulty in obtaining finance and ignorance about systematic channels of finance lowered the profit in agriculture and kept farmers demotivated and so productivity suffered.

$3.$ Lack of agriculture marketing:

Infrastructural facilities such as proper roads and bridges are not well developed in remote Indian villages. So, produce of these villages cannot reach the agricultural markets easily.
Depending upon the season, the markets offer different rates to farmers for their produce.
In any case, the majority of the profit goes in the hands of agents, traders and farce the indebted farmers to sell their crops at cheap rates before they grow fully.
Moreover, farmers are illiterate and ignorant about knowledge of market, market rates, selling procedure, etc.
All these factors break the profit and hence morale of the farmers and so
their productivity remains low.

$4.$ Rural social structure:

Indian farmers are fatalist and possess least information about the government ‘ policies, framework, benefits, market, etc.
Indian rural society is bound with old traditions and orthodox structure.
These people believe that God has given them life full of problems and so they have to live with it.
So, they do minimal farming and do not have any motivation to increase cultivation and income.

Answer