Aggregates are useful, because they hide essential things. The Indian economy grew by 6.1% in the past year. Indian agricultural output, on the other hand, has fallen by $7 billion in the same period. The soaring manufacturing growth rate pushes the aggregate high enough to conceal the fall in agricultural output. If we see the tonnes of food produced in India, then starting from the year of 2001-02 till date, there has been an 18% fall in quantity produced PER YEAR. 2001-02 showed food production of 212 million tonnes of food, 2002-03 showed 174.2 million tonnes, and the trend seems to have continued. If you ever make the effort of finding nominal GDP growth rates in agriculture from 2001 to 2009, and the consumer price inflation for each of those years, and then adjust each of those figures for inflation, you will find something interesting. Real growth rare in agriculture has shown a fall of 12% in 2009, a fall of 10% in 2008, a fall of 3.1% in 2007, a fall of 0.4% in 2006, a fall of 2.6% in 2005, a fall of 4.8% in 2004, a rise of 7.4% in 2003, and a fall of 4.5% in 2002. I really hope I have made an error of principle here, because these basic calculations reveal a 27% fall in agricultural output from 2001 to 2009.
Growth is taken for granted, because it tends to be typical in most nations; only concern being whether it is slow or whether it is fast. However, retrogression, instead of growth, is also very common. Retrogression happened in Uganda after Dada Idi Amin threw the Indian industrialists out. Retrogression happened in Argentina which fell from being a First World nation to a Third World nation in the 20th century. Various industries can show retrogression, even if the whole economy does not. Agriculture in Soviet states has shown retrogression, especially in Ukraine, Russia, Moldova, and others – the long lasting effects of central planning policy. Indian agriculture now shows classic retrogression.
Retrogression itself is just a fall in economic activity, but it’s related to aggregates. It still doesn’t reveal how much is being produced per worker, because having more workers for more output doesn’t tell whether each worker is able to produce more. If there is an increase in what is produced per worker, we call that development, which is different from growth. And when the opposite happens, we simply call it backwardness. By and large, agricultural growth has been meager and less significant in total GDP across the past few decades, even with a rising agricultural population. So there is less increase in agricultural production, and more increase in number of agricultural workers.
When we consider these basic facts, we arrive at the chilling conclusion that India’s agriculture has become more and more backward since Independence, and hasn’t merely just been falling in the last decade. The nation’s poverty rate was falling drastically in the 1950s, but doubled across the 1960s and 1970s, before it started falling again in the 1980s thanks to urban migration. These facts should contradict the fact that we have had huge food surpluses and have better fertilisers and seeds after the Green Revolution. And yet here it is. Considering the fall in what is produced per worker, we arrive at the other chilling conclusion that our agriculture has been sent back by more than a hundred years, and is at the level of feudal era agriculture. No doubt that there is no comparison – we grow a far wider range of food grains and commercial crops in this era, but there is less produced per worker and less to be earned per worker.
You can’t avoid the laws of diminishing returns, which is why labour needs to be combined with more capital in order to produce more per worker. But capital is the exact thing lacking in rural India. Foreign investment is not allowed, “exploitative” middlemen are to be prohibited, large land ownership is not allowed, agricultural property rights are severely restricted, and no liberal markets may exist in food grains. The intention of India’s agricultural policy was to liberate enserfed farmers, but the farmers are nothing but serfs now, who are votebanks for policies of price supports and subsidies, while all other agricultural allocation of resources is strictly controlled by government, and still under central planning.
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