Agricultural exports from India were 44 percent of total exports in FY 1960; they decreased to 32 percent in FY 1970, to 31 percent in FY 1980, to 18.5 percent in FY 1988, and to 15.3 percent in FY 1993. This drop in agriculture's share was somewhat misleading because agricultural products, such as cotton and jute, that were exported in the raw form in the 1950s, have been exported as cotton yarn, fabrics, ready-made garments, coir yarn, and jute manufactures since the 1960s.
The composition of agricultural and allied products for export from India changed mainly because of the continuing growth of demand in the domestic market. This demand cut into the surplus available for export despite a continuing desire, on the part of government, to shore up the constant foreign-exchange shortage (see Foreign-Exchange System, ch. 6). In FY 1960, tea was the principal export by value. Oil cakes, tobacco, cashew kernels, spices, and raw cotton were about equal in value but were only one-eighth of the value of tea exports. By FY 1980, tea was still dominant, but coffee, rice, fish, and fish products came close, followed by oil cakes, cashew kernels, and cotton. In 1992-93 fish and fish products became the primary agricultural export, followed by oil meals, then cereals, and then tea. The share of fish products rose steadily from less than 2 percent of all agricultural exports in FY 1960, to 10 percent in FY 1980, to approximately 15 percent for the three-year period ending in FY 1990, and to 23 percent in FY 1992. The share of tea in agricultural exports fell from 40 percent in FY 1960 to roughly 17 percent in the FY 1988-FY 1990 period, and to only 13 percent by FY 1992.
Foreign aid--financial and technical--since the 1950s has made a significant contribution to the agricultural progress in rural India. Aid has come from many sources: the United States government, the Ford Foundation, the Rockefeller Foundation, the World Bank, the Food and Agriculture Organization (FAO--see Glossary) of the United Nations (UN), the European Economic Community, the former Soviet Union, Britain, and Japan, among others .
Agricultural aid to India also has come in many forms. Between 1963 and 1972, for example, under a program of the United States Agency for International Development, some 400 American scientists and scholars served on the faculties of India's agricultural universities, while more than 500 faculty members from Indian institutions received advanced training in the United States and other countries. Several hundred agricultural research projects, financed with funds generated from sales of American farm commodities under the United States Public Law 480 program, fueled technological breakthroughs in Indian agriculture.
Aid to the agricultural sector in India continued in the late 1980s and the early 1990s; the FAO, the European Union, the World Bank, and the United Nations Development Programme (UNDP) provided the bulk of the assistance. The FAO provided technical assistance in a number of emerging areas; it provided quality control for exports; videos for rural communication and training; and market studies for wool processing, mushroom production, and egg and poultry marketing. Operation Flood--a dairy development program--was jointly sponsored by the European Economic Community, the World Bank, and India's National Dairy Development Board (see Livestock and Poultry, this ch.). The UNDP provided technical assistance by sending foreign experts, consultants, and equipment to India. The World Bank and its affiliates supported agricultural extension, social (community-based) forestry, agricultural credit, dairy development, horticulture, seed development, rain-fed fish farms, storage, marketing, and irrigation.
India has not only been a receiver of aid. Increasingly since independence, India has been sharing its agricultural technology with other developing countries. Numerous foreign scientists have received special and advanced training in India; hundreds of foreign students have attended Indian state agricultural universities. Among other international agricultural endeavors, India has contributed scientists, services, and funds to the work of the International Rice Research Institute, headquartered in the Philippines. In the late 1980s and early 1990s, India provided short- and long-term training courses to hundreds of foreign specialists each year under a variety of programs, including the Technical Cooperation Scheme of the Colombo Plan for Cooperative Economic and Social Development in Asia and the Pacific and the Technical Cooperation Scheme of the Commonwealth of Nations Assistance Program .
The serious foreign-exchange crisis in 1990 led to a number of well-publicized economic reforms in the early 1990s dealing with trade, industrial licensing, and privatization. The reforms had an impact on the agricultural sector through the central government's effort to withdraw the fertilizer subsidy and place greater emphasis on agricultural exports. The cut in the fertilizer subsidy was a result of the government's commitment to reduce New Delhi's fiscal deficit by removing grants and subsidies from the budget. The government action led to a reduction in the use of chemical fertilizers and protests by farmers and opposition political parties. The government was forced to continue the subsidies but at a somewhat lower level.
New import and export policies aim at enhancing export capabilities of the agricultural sector by increasing productivity and promoting modernization and competitiveness. The measures to facilitate export growth include allowing the import of capital for the agricultural sector, reducing the list of agricultural products that cannot be exported, and removing the minimum export price from a number of products. Agricultural exports increased by 30 percent in FY 1991 and 14 percent in FY 1992 in terms of rupee value, but declined by 8 percent from FY 1990 to FY 1992 in United States dollar terms because of the devaluation of the rupee in 1991.
In the mid-1990s, it was expected that agriculture would continue to be the most important sector of the economy for the rest of the decade in terms of the proportion of GDP. However, even when it is not the sector providing the largest share of GDP, the importance of agriculture is not likely to diminish because of its critical role in providing food, wage goods, employment, and raw materials to industries. Despite their preoccupation with industrial development, India's planners and policy makers have had to acknowledge the critical role of agriculture in the early 1990s by changing basic policy. The gains in agricultural production should not lead to complacency, however. Continuing increases in productivity, developing allied activities in rural areas, and building infrastructure in rural areas are essential if India is to continue to be self-reliant in food and agricultural products and provide a modest surplus for exports.
LOC Data - 1995
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