AGRICULTURAL ECONOMY OF KERALA A PROFILEshodhganga.inflibnet.ac.in/bitstream/10603/628/9/09_chapter 3.pdfAGRICULTURAL ECONOMY OF KERALA - A PROFILE ... namely marutham, ... Kerala

CHAPTER Ill

AGRICULTURAL ECONOMY OF KERALA - A PROFILE

3.1 Introduction

Kerala has a unique place in the geographical map of India. A narrow

coastal belt lying sandwiched between the western ghats on the east and the

Arabian sea on the west with an area of 38,863 sq. Kms, (1.1 per cent of the

geographical area of India) and a total population of 3 1.84 million (3.1 per

cent of India's population-200 I census), the state has all the characteristics of

a distinct geographical unit. It lies between 8'18' and 12' 48' North latitude

and 74'22' and 77" 22' East longitude. The union territory of Lakshadweep -

a cluster of islands 1s situated in the Arabian sea off the coast of North Kerala.

The state of Tamil Nadu borders it on the south and partly on the east, the

state of Karnataka on the North and partly on the east.

Kerala state although very small in geographical extent comprises

different types of land resource configurations and land use patterns. The state

is quite different in physiography, climate, soil and crops when compared to

other states of India. There is multiplicity of natural resource endowments in

the state unlike the extensive and monotonous agro-climatic situations

prevalent in other states of India. Kerala is relatively rich in resources which

are needed for agricultural production. Kerala has a high bio-mass production

potential. The state is endowed with solar radiation for 365 days despite

cloudy days during the rainy months, average annual precipitation of 300

cms, 5-6 types of soil, undulating topography alternating with hills and

valleys, altitude ranging from below sea level to soaring 25000m. Like the

adversity and richness in land resources, Kerala is better endowed with water

resources also.

Kerala is well known for its biological wealth. Biological scientists

consider Kerala as a genetic paradise since almost every household is a

genetic garden The land, water, flora and fauna of the state provide

opportunities for the livelihood security of the people of the state. Kerala's

rich wild life offers opportunities for eco-tourism.

Agriculture continues to be the most important and single largest sector

of the state's economy accounting for 21.38 per cent of state's income in

2000-2001 ' and providing livelihood security for vast majority of the people.

The sector supports 38 per cent of the workers of the state. It is the raw

material base for the traditional industries like coir, cashew, oil mill etc. Most

of the crops grown in the state are of national importance by way of earning/

saving of valuable foreign exchange by exportJimport substituion.

In spite of the relative richness in resource endowments and high gross

income per un~t of land the yield of most of the crops grown in Kerala is

lower than all India average. Notwithstanding the investment and

development activities which took place during the last few decades the yield

of many of the crops have not improved substantially. In fact the yield of

some of the crops are showing declining tendencies.

I Government ot Kerala - Econorn~c review 2001 Kerala state planning Board Thlruvanathapuram, p 7

3.2. Physiographic Divisions and Cropping Patterns

The vernacular name for the district Malabar, 'Malayalam' (the land

of hills)' the ancient name of modem Kerala which properly includes cochin,

Travancore and Malabar and is the product of States Reorganization Act

(central Act xxxvii) of 1956~. Both Kerala Mahatrnyam and Kerololpatti start

with the legend that the Malanad was miraculously reclaimed from the sea by

Parasuraman and peopled by him with Brahmans. Ancient Kerala was divided

into five regions (tenais) on the basis of soil formation and topography

namely marutham, (cultivable area) palai (uncultivated barren and rockey

region) Kurinji (hilly area) neytal (coastal area) and mullai (pasture land14. In

modem times Kerala has been divided into three natural physiographic

divisions on the basis of physical features. They are the high land, the low

land and the m ~ d land.

The western ghats which bound Kerala on its eastern side and

dominate its topography constitute the high land. While the upper ranges in

these mountainous area are covered by thick forest, the lower ranges have

their plantations which lay interspersed with forests. Teak, rosewood and

other valuable trees grow in these areas which present every where a splendid

luxuriance of foliage and flowers. Crops like tea, coffee, cardamom and

turmeric abound in the higher elevations while in the sub mountain tracts in

and below the ghats are grown crops like pepper, ginger and rubber.

' Malabar yazateer C.A. Innes - Government of Kerala 1997 (First published in 1908-vol I&Il page chapter 11.

' Census of India 196 1 , vol. VII- Kerala part I A (i) general Report. A. Sreedhara Menon (1997) Land and People. The Natural Resources of Kerala (ED) 1997 K Balachandran Thampi, N.M. Nayar, C.S. Nagar world wide fund for Nature. Kerala state office Thiruvanathapuram, p.302.

The low land is comprised of the long and narrow coastal belt on the

west with stretches of sand and backwaters. The landscape in this area is

dominated by extensive paddy fields and numerous coconut plantations.

In between the high land and low land is the midland which presents an

undulating country covered by laterite soil cut across by rivers. Here may be

seen the villages broken intermittently by isolated hills and also the plains

leading to the forest clad uplands. The area is rich in agricultural production

and a variety of crops including rice, tapioca, banana, pepper, ginger coconut,

arecanut and rubber are grown. Considerable variations are observed in the

soil and cropping patterns between the three natural physiographic divisions.

These div~sions are given in the following table.

Table 3.1

Physiographic Divisions of Kerala

Source: Report of the committee on Agro-Climatic zones and cropping pattern. Government of Kerala April 1974, p.3.

-

lands

Low land5 .-

The criteria for the natural physiographic divisions of Kerala considers

only one variable namely the altitude above Mean Sea Level (MSL). Hence

each division (highlands, midlands and low lands) would comprise diverse

agro-ecological entities and resultant land use patterns. In order to identify

homogenous agro-climate regions the criteria should include more variables

like climate soil etc. Based on the recommendation of the National

Definition Revenue villages lying 250' (76.2m) and more above MSL Revenue vlllages lying between 25' and 250' (7.62 m and 76.2m) above MSL Revenue vlllages lying below 25' (7.62m) above MSL ElE - _ - _ - Total area

Area ~m's .

18653

16231

3979

%of total

48.00

41.76

10.24

38863 100.00

Commission on Agriculture (1976) on Agro-Climate Zones and the

Committee on Cropping Pattern (Govt. of Kerala), the state has been

delineated into thirteen agro-climate zones on the basis of four principal

parameters viz. altitude, rainfall, soil type and topography.

Table 3.2 and Map 1 give an account of the agro-climatic zones of

Kerala from 1974 onwards.

Table 3.2 Agro- climatic Zones of Kerala

** Lower values show percentage share in the total. Source: Report of the committee on ago-climate zones and cropping pattern, Deparhnent of

Agriculture. Government of Kerala, p.12.

Map Y

iigro-Climatic zones of Kerala

' ' : :!LACY SOIL , ,

'-, . ,i :: SkNDY ,' --

' ~ . r h o . .

--. . ,.. V , l : ) A > ' 8 ,I . .,~ <- . - ..)-r,r, uini~arios pSs ? T . :?$,,,. . \ - :;

.,,""7 ,. - - v ~ ~ h ~ ~ ; r I,' , ~ I W M F I I T ~ ~ ~ T S 3 ,

",

,-.>:..'I l , , , l r , , . ' , n , . n : " , " r ~ . ,, , ,.ih,,..., * .,.., ,,,, ~ ~ " " c ~ . : Y i i Y w II,KR_III 1 " l , i 1 i : *nil( I.',\. 1

s",ll.cc : I . . , , - ! I . ;:!. ~ .~

i<e~-ala, Report of the Committee on Agro-Climatic ,', ,!><:.. ,.,.' ,-nppinq Pattern. ..

7.3 1,and i r L r . 3 . 1 f r ropping Systems

!<.*.!:'I '. . , ; (>I-y high degree of land use and cropping intensity even

c!urlng t ' l , : ~ . ~ , ! : ~ r ~ ~ n c i e n t days. The state has opted for an extensive

a i . r i c ~ ~ l ~ ~ l r ! ~ #,il cluite often leading to situations beyond the canying

capacity of the ecological systems. The Kerala state has the distinction of

having attained a very high degree of land use with an intensity of cropping of

1 3 ~ ~ . The scope for bringing new areas under plough is rather limited with

only a meager four per cent of geographical area.

The soils of the state can broadly be classified into sandy, alluvial,

laterite, red black, peaty and forest and hill soils. Of this laterite soils are by

far the most important group found in Kerala and cover the largest area

(29%16. Diversity, beauty and economic value are the special characteristics

of the flora of Kerala.

A study of the land use pattern shows that the land put to agricultural

use has reached a saturation point recording a level of 57.9 per cent. The net

area sown has recently shown a declining trend. The main reasons for this are

the high density of population (819 per sq Krn, 2001 census) and the diversion

of land for non-agricultural purposes like construction of houses and creation

of infrastructural facilities. A perceptible trend noticed with regard to area

under cultivation IS the fall in the area under food crops like grains, pulses,

cereals etc and the increase in the area under plantation and commercial crops

eg:- rubber, tea, coffee etc. Corresponding trends have been noticed in

production in these fields as well. The following table (Table 3.3) give an

account of the classification of the area under different land use from 1960-61

to 2000-2001.

Report of the Taskforce on Agriculture IXth Plan, State Planning Board Thimvanathapuram, Chapter 1, p. 16.

6 Census of India- 1961-vol VII. Kerala part I a(i), General Report, Chapter I, Section 11, pp.1-22.

Table 3.3 Area under the different land use classification in Kerala during the period 1960-61 to 2000-01

(Area '000 hectares) [>and use 11992.93 / 1993-94 (1994-95 ~p

2) Agricultural statistics (various issues), Dept of Economics and Statistics, Govt..of Kerala.

Total geographical area

1 3885 1 3885 ; 3885 3885 3885 ; 3885 - ~ --

Forest 1056 1055 1082 1082 1082 1082 Land put to non- 205 275 270 297 301 303 agricultural uses -- Barren and

151 72 86 58 55 55 uncultivable land Permanent pastures and 45 28 5 2 2 2 grazing land Land under miscellaneous tree 204 132 64 34 34 34

I ! I I I 3885 388, i 3885 : 3885 3885 ' 3885 ' 3885 : 1885

1082

320

38.9

.83

22.03

-. 1082

308

51.5

1.57

36.7

1082

323

48.4

1.46

32.4

1082

313

43

1.11

26.85

1082

318

41

.93

23.26

- i 1082 t

29.3 3821 .16

15.41

- C--- 1082

327

28.5

.52

19.04

1 0 8 2

354

28.8

.25

18.52

The land use systems of the state present a complex pattern with a

great diversity of trees and field crops. Cropping systems include

intercropping, mixed cropping, sequential cropping and many other forms of

poly cultures involving a wide spectrum of crops like cereals, pulses, tubers,

fruits, vegetables, latex and oil yielding tree and annual crops, beverages,

continents and spices, sugar crops, forages, medicinal plants, green manure

crops and timber yielding species.

Plantation agriculture is the principal land use activity in the state. Trees

including perenn~al horticultural crops have formed an integral component of the

Kerala landscape since early times. In the relatively low lying areas rice and rice

based cropping systems are dominant. Though a poly culture cropping pattern

involving many crops is common throughout the state four major cropping systems

can be delineated. These are rice based cropping system, coconut based cropping

system, tapioca based cropping system and homestead farming system. In certain

isolated parts cropping systems based on banana, arecanut and pepper also exist.

Although rubber occupies a dominant position in respect of area it is generally

grown under mono-cultural situations.

Rice based Cropping System

Rice the staple food of the people is grown predominantly in the low

lands where water is abundant. One to three rice crops are taken in the same

land in a year depending on the availability of water. Many crops like pulses,

tubers, vegetables and green manures are often grown in succession with rice

during winterisummer seasons.

Since the mid seventies agriculture in Kerala had been undergoing a

structural transformation in favour of cash crops. Food crops in general and

rice crop in particular suffered severe set back in area and production. Even

though the cropping pattern in general was predominated by perennial cash

crops, as a single crop rice could retain its pride of place by accounting for the

largest area. The area under rice in Kerala touched its peak of 8.85 lakh

hectares in 1975-76 with an annual record production of 13.65 lakh tones. The

trend after mid seventies witnessed a sharp decline in area under the crop to

3,47,455 lakh hectares in 2000-2001. Rice cultivation was gradually sinking

in to a high cost low productive small holder crop regime. Production of rice

has declined to 7,50,328 tonnes in 2000-2001 though yield increased from

1,520 kgmsha in 1975-76 to more than 2,000 kgmsha in the 90's. It is

remaining more or less stagnant at 2,162 kgmsha in 2000-2001 per capita

rice production in the state has been reduced from 65 kgms in the 70's to 30

kgms in the 90's and to 23.57 kgrns in 2000-2001.

Coconut based Cropping System

Coconut is the most important tree crop of the state. The seventies and

eighties witnessed a steady and continuous increase in the area as well as

production and yield. The area which was 6.93 lakh hectares in 1975.76 has

consistently increased over the years and reached 9.26 lakh hectares in 2000-

2001. Production also increased from 3439 million nuts in 1975-76 to 5536

million nuts in 2000-2001. Productivity also increased from 4963 nuts per

hectares in 1975-76 to 5980 nuts per hectare in 2000-2001. The annual

average growth in area coverage and yield works out to be 3.37 per cent and

two per cent. Coconut cultivation in the state is now in the midst of a severe

crisis due to the adverse effect on production and yield. Crop diseases like

root wilt diseases and attack of mite (mandari), increased cultivation in

neigbouring states, import of coconut oil at lower rates of duty and

fluctuations in the price of coconut etc. adversely affect the income of coconut

cultivators in the state. To overcome the crisis, the cultivators practice inter

cropping. Inter cropping a wide spectrum of crops including woody

perennials is the hall mark of this farming system. The combination of crown

architecture and the wide spacing adopted in coconut plantations facilitate

such intercroppmg of perennials like pepper, arecanut, nut mug, clove, cocoa

and pineapple and annuals like banana, turmeric, ginger, fodder crops, pulses,

oilseeds and many multi-purpose trees.

Tapioca based Cropping Systems

Tapioca is a crop of much significance to the state. It is the most

important supplementing food crop. Despite this, its area and production have

been steadily declining. The area of the crop has come down drastically from

3.27 lakh hectares in 1975-76 to 1,14,609 hectares in 2000-2001 and

production from 53,90,2 17 tonnes to 2,586,903 tonnes in 2000-2001. A

positive trend in the case of this crop is a steady improvement in yield from

16,491 kgmstha to 22,257 kgmslha during the same period.

Homestead farming

93.96 per cent of the holdings of the state are marginal (<1 hectare) as

against 58.98 per cent at the all India level and the average size of the

operational holdings is only 0.33 ha7. As a result cultivation in the uplands

involves an assertment of trees, shrubs and herbs growing together in a small

area and form~ng special land use systems known as homestead farming.

Home gardens (homestead farms) are operational farm units that integrate

trees with field crops, livestock, poultry, fish having the basic objective of

ensuring sustained availability of multiple crops such as food, vegetables,

fruits, fodder, fuel, timber, green leaf manure, medicines, ornamentals,

besides generating cash income and employment. (The income per unit of

homestead farm is higher in Kerala by 1.5 times than the all India average). In

this type of farm no single crop dominate. Coconut is however an integral

component of most of the homesteads in Kerala. An interesting feature of the

home garden system is that more than 80 per cent of the produce generated in

the homestead IS consumed within the family itself and the remaining 20 per

cent is only disposed off to provide any subsidiary incomes

Other salient tree based land use systems of the state include growing

multipurpose trees either or farm boundaries or as scattered trees in the'fields,

growing commercial crops (tea, coffee, pepper etc) under shade trees or

trailed on to them, growing commercial crops (cardamom) under the shade of

trees in natural forests, live fences, shelter belts etc.

Agricultural Census 1995-96 Directorate of Economical and statistics - Government of Kerala, p. 195.

X P.K Ashokan and B. Mohankumar Cropping Systems and their Water use'. Page 200-206. Natural Resources of Kerala (Ed) 1997, K. Balachandran Thampi, N.M. Nayar, C.S. Nayar - Worldwide Fund for Nature, Kerala State Office, Thiruvananthapuram, pp.200- 206.

92

Rubber

Rubber is a major crop of the state. It is experiencing a steady increase

in area and production in the last two and a half decades. It is largely grown

as a monocrop. Recently Rubber Board, the agency concerned with its

development has approved the growing of various intercrops like banana,

vegetable etc in rubber plantations during the juvenile phase. Area under

cultivation of rubber has increased from 2,06,686 hectares in 1975-76 to

4,74,364 hectares 2000-2001, production from 1,28,769 tonnes to 5,79,866

tonnes and yield 623 kgmsha to 1222 kgsha during the same period9.

Instability and fluctuations in the price of rubber is a matter of serious

concern for the rubber cultivators.

Spices and condiments

Kerala has been the principal producer of pepper, cardamom and

arecanut. The area under pepper increased from 108251 hectares in 1975-76

to 202133 hectares in 2000-2001, production from 24580 tonnes to 60929

tonnes in 2000-2001 and yield from 227 kgm/ha 301 kgm/ha during the same

period. The area under arecanut during the period declined from 93042

hectares to 87360 hectares, but production has increased from 11387 million

nuts to 87950 tonnes and yield from 148620 nutsha to 22599 nutsha in 1997-

98 and declined to 1007 kgmsha in 2000-2001'~. In the area and production

and yield of spices and condiments wide fluctuations occur due to diseases

like qulck wilt of pepper, yellow leaf disease of arecanut etc. Still the state

accounts for CJ6 per cent of pepper, 73 per cent of cocoa, 67 per cent of

cardamom, 24 per cent of arecanut, of production in the country.

'i Farm Gulde,(Various issues), Farm Information Bureau, Thimvananthapuram. 10 Farm Guide,(Various issues), Farm Information Bureau, Thimvananthapuram

Horticultural Development

The agro-climatic endowments in the state are considered to be

suitable for a wide variety of horticultural crops ranging from tropical to

semi-temperate varieties of fruits vegetables and flowers. However there was

no organized effort for tapping the potential with a commercial outlook in the

past. Kerala is the homeland of'a wide variety of banana and plantatain which

have very wide market potential. The area under banana and other plantatain

has increased from 52351 hectares in 1975-76 to 99412 hectares in 200-2001,

production from 395054 tonnes to 731650 tonnes in 2000-2001, and yleld

from 7556 kgmslha to 9838 kgrniha in 97-98 and declined to 7360 kgms/hal'

in 2000-2001.

Thus the land use systems of Kerala present a complex scenario with

tremendous diversity of trees and field crops grown in poly cultural systems

including home gardens or as sole crops. The cropping intensity is one of the

highest in India. Rice, Coconut, rubber, pepper, tapioca, cashew, banana and

other plantations represent 80 per cent of the total cropped area in Kerala. The

cropping pattern of the state has been undergoing drastic changes during the

last few decades. There has been a steady drift towards less labour absorbing

land use systems. Rice that occupied the principal position in the cropping

pattern of the state had been relegated to the third position. Much of the area

originally under rice has been replaced by plantation crops such as coconut,

rubber, arecanut or are lying fallow. This shift in land use pattern can be

attributed to the ever increasing labour wages, fragmented holdings, non-

availability of farm labour especially during the peak seasons, high cost of

inputs, besides several socio-economic and socio-cultural factors. This shift in

land use pattern further reveals the commercialization of the cropping pattern.

Thus the emerging land use pattern even after a decade long persistent efforts

through legal interventions backed by special incentives1 schemes1

promotional measures does not appear to have made any significant

development in arresting the shift in land use from seasonallannual food crops

to perennial cash crops.

Out of the 22.5 lakh hectares of net cropped area 12.5 lakh hectares are

under mono cropping systems comprising rubber, tea, coffee, cashew,

cardamom combined with net area under paddy. No inter cropping is possible

under these crops. Out of the remaining 10 lakh hectares coconut occupies

nearly 9 lakh hectares and the balance 1 lakh hectare is accounted by

miscellaneous crops. It is clear from these figures that most of our traditional

crops like pepper, arecanut, banana, ginger, turmeric, tapioca, nutmeg, clove,

vegetables, minor tubers etc are all mainly grown as intercrops in coconut

gardens. Thus it is mainly the coconut gardens which supports the seasonal

and annual crops of the state. The prosperity of the agriculture sector and the

farmers particularly the weaker sections is closely linked with the

development of'the coconut based agricultural system.

3.4 Trends in the Agricultural Development in Kerala

Kerala state formed in 1956 inherited a very strong agricultural base as

stated in the Malabar gazateer, Travnancore state Manual and the Cochin state

Manual. Two thirds of the population of Malabar were agriculturists. The

riotwari d~stricts of the east coast were mainly grain producing districts. The

Malabar district was largely a horticultural one. The average agricultural

holding measured 6.43 acres. According to a census taken in 1827,788 square

miles of area is estimated to be under rice cultivation, 120 square miles by

extensive gardens and enclosures of coconut, areka, jack, and other

production trees and the reminder by low hillsI2.

In Travancore out of the total population of 2,901,085 in the year 193 1,

1,167,451 were engaged in agriculture of which 7,85,190 accept it as the

principal occupation, 1,18,338 as working dependants and 2,63,923 as

subsidiary occupation which comes over 39 per cent of the total working

population'3. Thus Travancore also is pre-eminently an agricultural country. It

is a country of small holdings. The total number of holdings 6 per cent were

less than 20 cents in extend, 26 per cent less than 60 cents, 38 per cent less

than 5 acres and 95.5 per cent less than 10 acres and only 4.5 per cent are 10

acres or more. 77.2 per cent of the value of the total production of the state

was represented by agricultural produce'4. Out of the 31,00,000 acres of

cultivable land 80.65 per cent is subject to some kind of agricultural effort.

Rice is the staple food grain and occupied the largest area of 6,63,184

acres(2 1.4 per cent).

In Coch~n agriculture supports 51 per cent of the population and

agriculture is the predominant occupation of the people as well as their chief

p~ -

'' C. A Innes Malahar Gazetteer, government of Kerala vol I & I1 page 228-para 3, Part I a Descriptive Memoir of Malahar, p.228.

" T.K Velluppillai- The Travancore State Manual vol I general features government of Kerala p 249.

14 Ibid., vol 111. Economic Affairs, page I para I.

means of livelihoodi5. The state's income from agriculture and allied

activities increased from Rs.18,923.24 lakhs in 1950-51 to 25,102.96 lakhs in

1960-61 of wh~ch the share of agriculture alone was Rs.16,884.4 lakhs and

Rs.2 1,995.68 lakhs respectively'6.

Agricultural Development from 1960-1990.

Agriculture in Kerala which has the distinction of having the highest

gross income per net cropped area at the very beginning of the plan era could

not sustain this after. The average gross income generated per hectare in

Kerala is Rs.3 1,468 while the national average is only ~s .14 ,178 '~ . The

average growth rate recorded by the Kerala agriculture between 1960 and

1990 is estimated to be 1.66 per cent as against the national average of 2.7 per

cent". The sectoral contribution made by the agriculture to the state's

domestic product declined from 54.6 per cent in 1960-61 to 42.6 per cent in

1972-73 and further to 34.47 per cent in 1990-91 in conformity with the

natural trends in the diversification of the economy. The growth rate of

agricultural income in Kerala was not stable, steady, consistent and uniform.

In the m ~ d seventies it was stagnant. During the 1980's it came out of the

stagnancy witnessed in the mid seventies. However this positive trend in

growth has not been steady and consistent. The reasons are multifold.

I". Achuyta Menon (1995) Government of Kerala, The Cochin state Manual. Chapter VI p.340.

16 Census of lndla 1961 vol VU Kerala part I A general report, p.211. 17 Government of Kerala (1998) Economic Review-Directorate of Economics and Statistics,

p.32. I X National Bank for Agriculture and Rural Development (2003), State Focus Paper, Kerala

2003-2004. Th~ruvanathapuram, p. 12

The Growth of Agriculture from 1990's to the Millennium

The growth rate of agriculture in Kerala fluctuated from just 0.43 per

cent in 1992-98 to over four per cent in 1997-98 and to 3.73 per cent in 2000-

2001. The pattern of growth shows variations among different crops, regions

and also in relation to the other sectors of the economy. The following table

3.4 shows the growth of agricultural income from 1960-61 to 2000-01 and the

sectoral contribution to the state's income.

Table 3.4

Growth of agricultural income in Kerala from 1960-61 to 2000-2001

# 1.66 per cent average rate of growth over the period from 1960-61 to 1990-91. Source: 1. Government of Kerala Agricultural statistics (various issues)

Department of Econon~ics and statistics- Thiruvanathapuram. 2. Government of Kerala - Economic review (various issues), Kerala state

planning Board-Thiruvanthapuram 3. Statistics for Planning (various issues) - Government of Kerala,

Department of Economics and Statistics- Thimvanthapuram. 4. Nat~onal Bank for Agricultural and Rural Development (2003) State

Focus paper Kerala 2003-2004 Thimvanathapuram.

As noted by many studies the period following mid seventies has been

marked by a general decline in agriculture. The trend in growth rates of Net

State Domestic Product as well as primary sector during 1975-87 were either

negligible or negative. As summary table 3.5 is presented below.

Table 3.5

Trend growth rates of different sectors in Kerala economy

Another notable feature of the development of agriculture in Kerala is

Period I (1965-75)

- . -

Secondary

Tertiary 4.24 --

the increase in the share of population depending on this sector for

employment and income even though the share of agricultural income in Net

Period 1 Kannan K.P, Pusphangadhan K (1990) Disserting Agricultural stagnation in Kerala - An analysis across crops-seasons and regions - Economic and political weekly September 1990.

Period I1 & 111 K.N. Harilal and K.J Joseph (2000) Stagnation and Revival of Kerala Economy- an open Economy perspective C.D.S working paper No: 305.

Period I1 (1975-87)

1.99

-0.86

1.65

4.06

State Domestic Product is declining. 1991 census reveals that there was a net

Period 111 (1987-1997)

6.00

4.57

6.3 1

6.96

addition of 1.28 lakh cultivators and 2.03 lakh agricultural labourers in the

working population dependent on agriculture during the decennium ending

1991. The cultivators (10.15 lakhs) and agricultural labourers (21.70 lakhs)

together account for more than 37 per cent of the total working population.

According to 2001 census 38 per cent of the total working population is

engaged in agr~culture for their livelihood.

Under agriculture crop sector accounts for the largest share of state's

agricultural income. The balance sheet emerging from the agricultural

development of the state brings into light the unfinished tasks in agricultural

development for exploiting its potential. On the production front crop sector

in general shows a sound picture with plantation segment comprising of

rubber, tea, coffee, performing well till recently and the cash crops consisting

of coconut, arecanut, pepper, cashew-nut also performing reasonably well.

Food crops in general have suffered severe set back in production mainly on

account of the drastic reduction in area under rice and tapioca. Thus over the

years the state has transformed itself from a producer state to a consumer state

with respect to major agricultural commodities mainly food grains. At the

same time the state continues to remain as a major producer of commercial

and cash crops like pepper, cardamom, ginger, turmeric, coconut, rubber, and

cashew. In the production of spices and condiments India is the world's

largest producer, consumer, and exporter with a share of 45 to 50 per cent of

world's spice trade in volume and 25 per cent by value. 8.5 per cent of India's

export earnings from agriculture and allied products come from spices which

constitute 1.24 per cent of the total export earnings during 1999-2000'~.

Kerala still holds near monopoly in the export of pepper (93 per cent) ginger

'" Cited In K.V Peter and E.V Nybe dominating global markets- The Hindu survey of Indian Agriculture 2002 p- 87 to 95.

(90 per cent), cardamom (47 per cent) coffee (68 per cent) tea (43 per cent)

turmeric (30 per cent) coir and coir products (90 per cent).

Table 3.0 presents the cropping pattern of Kerala from 1960-61 to

2000-2001. The agricultural sector of the state has undergone drastic

transformation. There is an incessant drift from rice based farming systems in

the low lying areas to perennial mono cropping systems. The shift in

cultivation area was mainly from rice to coconut and banana in the low lying

areas and from tapioca to rubber in the midlands and uplands.

Another ~mportant development in the agricultural front is the decrease

in the size of holdings and hence the predominance of the small and marginal

holdings leading to marginalisation of agriculture as a full time occupation.

The per capita availability of land in the state is ust 0.12 hectares as per the

census of India 200 1. The number and area of operational holdings in Kerala

as per 1995-96 Agricultural census is presented in table 3.7. It is reported that

85 per cent of coconut, 79 per cent of arecanut, 76 per cent of pepper, 60 per

cent of cashew. 55 per cent of rubber, 45 per cent of coffee, 91 per cent of

mango and 86 per cent of banana are grown in holdings of less than 2

hectares2'.

"I Cited in National Bank for Agriculture and Rural Development (2003), State's Focus Paper, Kerala 2003-2004.

Table 3.6

( 'ropping pattern of Kerala 1960-6 1 to 2000-2001

decrease (-)

Annual cash crops Ginger 0.5 0.4

Turmeric 0.2 0.2 Banana + 1 9 1.7

lantaln u 2 . 0 1.5

+ Sesamern ~

+ Cotton + Su arcane

4 4 . 6 Total - 3.8

Pepper Cashew 7.3

nut Total

Food crops Rice

Tapioca Pulses

Totalfood

Note: The data were obtained from various issues of season and crop reports- published by Directorate of Economics and Statistics, Kerala government.

Plantation cro s cm2.0 2.2 1.6 1.37 +O. 17

33.2 10.3 1.9

45.4

1.3 Coffee 0.7 2.0 Rubber 5.2 6.1 8.2 Total 8.7 - 10.1 13.5

29.8 10.0 1.3

41.1

1.2 2.5 12.7 18.6

27.8 8.5 1.2

37.5

1.3 3.0 16.5 22.4

18.5 4.9 0.8

24.2

1.22 2.80 15.70 21.09

-0.38 +2.1

+10.5 +12.39

17.3 4.4 0.6

22.3

11.50 3.79 0.23 15.52

-21.70 -6.5 1 -1.67 -29.88

Another significant indicator of the development of agriculture in

Kerala is the variations in the consumption of fertilizers (NPK) which was

97,531 tonnes in 1980-81, increased to more than 3 lakh tones in the

beginning of 1990's and declined to 1,73,205 tonnes in 2000-2001 recording

a decline (-18 per cent ) over the previous year. The average fertilizer

consumption per Ihaigross cropped area decreased to 57.7 kgms in 2000-2001

as against 71.19 Kgs in 1999-2000 which is not in the right direction as it is

much lower than the national average of 89.90 kgm/ha2'.

Table 3.7

Number and Area of operational Holdings in Kerala 1995-96- As per 1995-96 Agricultural Census

Class and size of holdings operational

holdings (lakhs) Marginal 59.18 1 93 69

(1 to 2 ha)

Semi-medium (2 t o4 ha) Medium 0.21

(4 to 10 ha) 0.31

Note: Figures in italics are percentage to total.

Average size of holdings (area in

hectares)

~~ ~ ~~

62.98 Total

L p-

Source: Centre for Monitoring, Indian Economy, September 1998 India's agricultural Statstics, cited in Farm guide 2003-farm information Bureau Government of Kerala- Thiruvanathapuram. P . l l .

Area (lakhs hectares)

0.18

1.36

2.60

5.27

9.11 53.24 3.50 20.46 2.43 14.20 1.04 6.08

55.74

0.33

1.03 6.02 17.11 100

Based on the above discussions, over the years of agricultural

transformation four parallel scenarios emerged in the farm front of Kerala.

1. Heterogeneous resource based multiple opportunity endowed crop-

livestock tree composed small and tiny homestead systems.

2. Homogenous single crop dominant small and medium sized crop-livestock

farming systems such as paddy based farming systems in Palakkad,

Kuttanad, and Kole and coconut based farming systems in the coastal

areas.

3. Mono- crop plantation crop sector of both farmer and estate management

spread over the high ranges, highlands, and of late spilling over to the

midlands.

4. Scattering of skill and labour intensive land and water based small

enterprises of an innovative nature requiring high levels of technology and

capital support.

The nature of and extent of interventions and support at the state level

vary between them.

In the above paragraphs we have examined the growth in Kerala

agriculture and the changing trends. But it is well admitted that agriculture

can prosper and creatively contribute towards the development of the state

only if sufficient funds are allocated for the sectoral growth. Fund allocations

are usually decided based on the Five Year Plan strategies. Hence, it is

appropriate and timely to evaluate the priorities given for agricultural

development in the state under the Five Year Plans.

3.5 Agricultural Development UNDER THE Five Year Plans - Strategy

Planning is an ongoing process in the overall development of the

nation embrac~ng the expectations of millions of people for their socio-

economic well being. The five year plans implemented in Kerala attached

considerable importance to this sector for accelerating the growth of the

economy as well as for employment generation. The sectoral strategy

approved under the earlier plans laid emphasis on both vertical and horizontal

growth in agriculture i.e., the emphasis was on both intensive and extensive

cultivation. However from the Sixth Five Year plan onwards the focus is on

vertical growth. The approach of the various five year plans projected for crop

development shows certain general features and uniform pattern in outlook

and content. They can be summarized as below.

a) Augmenting the yield of both food crops and commercial crops

through ~nfrastructural development and better management.

b) Diversification of the production base by integrating all the land based

activities with a view to maximize the income from the small holdings.

c) Attain a high level of nutritional security by promoting the cultivation

of fruits, vegetables and pulses. The following table 3.8 gives an

account of the total outlays and expenditure for agricultural

development under the various Five Year Plans.

Table 3.8

Outlays and expenditure on agriculture and allied activities in Kerala ----- -~ ,

I !

I Plans j Period 'year

1

1lUd 1956-61 87.01 LI

142.54 36.80

1969-74 258.40

1974-79 752.84

Annual 1990-9 1 635.40

Annual 199 1-92

1992-97 5460.00

1997-2002 16100-00 1100.18

1109.00 2002-2007 24000

(319.28): -

* Allocation offer agriculture in 2002-2003 Kerala state budget for 2002-03.

Source: L ) Kerala State Planning Board, Economic Review (various issues),

Thiruvanathapuram.

2) Farm guide (Various issues) Farm Information Bureau, Government of Kerala, Thiruvanathapuram.

Government support under the five year plans was mostly in the form

of financial assistance for infrastructural development, popularization of new

technologies, organizing the input delivery system, providing research and

education support etc. The Ninth Five Year plan of Kerala and the Ninth Five

Year plan have suggested a paradigm shift in the approach for agricultural

development. Under the new strategy the emphasis was on the optimal

utilization of the biological resources in an integrated manner under a

participatory approach through improvement in yield and quality. With the

introduction of' decentralized planning and the launching of the people's,

planning campaign, the responsibility for planning and implementation of

development projects in agricultural sector along with the required resources

have been transferred from the state to the local bodies to usher a new

dynamism for revitalizing the agricultural sector of the state. In consequence

the share of the plan outlay for agriculture and allied activities has been

reduced from 13.76 per cent in the Eighth Five Year Plan to 6.46 per cent in

the Ninth Five Year Plan and further to 4.62 per cent in Tenth Five Year Plan.

The strategy is one of maximizing the income from a unit of land through a

systems approach to resource use and management integrating crop livestock

and fisheries. The focus will be on ensuring the livelihood security to the

population depending on agriculture, rather than enhancing commodity

production, especially the income base of the marginal, small farmers and

agricultural labourers. For achieving this the natural strengths and advantages

emanating from the favourable resource endowments of the state has to be

strengthened. Further the competitive edge of the state's agriculture has to be

sharpened through improvement in quality and reduction in cost. The state

level machinery will have to assume a different role under the new

dispensation of Panchayat Raj and play primarily that of a facilitating role

which enable the local bodies in discharging their responsibility more

effectively. To achieve this a specific approach and strategy has been adopted

under the Tenth Five Year Plan which includes,

b) Shift from crop based approach to an area based approach related to

farming systems and homesteads.

c) Scientific delineation of agro-ecological zones within two years.

d) Re-orientation of extension services to utilize the modem

commun~cation technology to help the farmer become competitive.

e) Improvement of the delivery system to extend modem technologies

and practices like organic farming and appropriate biotechnology.

f) Value addition as the key element of the agricultural development

strategy.

3.6 Major Challenges of Kerala Agriculture

Agriculture is intended to become not merely an efficient, eco-friendly

production system capable of meeting the basic demands of the rapidly

increasing population, but it has to become a major powerful instrument for a

comprehensive socio-economic transformation of the state including

improvement in the quality of life of every individual. The agricultural

economy in Kerala in the millennium and post WTO regime has to face many

challenges. To meet these challenges a development perspective different

from that pursued in the past has to be evolved.

Agriculture in Kerala is at cross roads. Production and yield of all

important crops probably with the sole exemption of rubber is either stagnant

or on the decline. Even in the case of rubber the yield realized is far below the

potential. Thus the vital sector is losing its dynamism and resilience it had in

the past. Most of the crops are affected by diseases like root wilt decease of

coconut, presence of coconut mite (mandari), quick and slow wilt decease of

pepper, bunchy top decease of banana etc. Value addition and product

diversification is not taking place to the desired level due to the inadequacies

of agro-processing facilities. Wide fluctuations in prices have affected most of

the crops. Integration of the domestic economy with that of the global

economy and its subsequent commitments made to international community

via the WTO commitments have adversely affected the prices and income of

the farming community of the state especially of the farmers producing

arecanut, pepper. coconut, rubber, tea, coffee, etc. The fall in prices now

being experienced is all pervasive and as a result even the advantage of mixed

cropping followed by the state of Kerala in the form of high degree of

resilience to meet adverse conditions has dissipated. High cost of production

due to higher wages and high cost of land is another limiting factor. Thus

agriculture in Kerala is facing a serious crisis with the maladies of low yleld,

high cost of production, and increasing international competition resulting in

lower prices and farm income. The review of the agriculture made in this

chapter helped to identify the basic features, issues and problems of Kerala

agriculture.

3.7 Issues and Problems of Kerala Agriculture

Basic and unique features of Kerala agriculture are:

1. Predominance of cash and commercial crops

2. Market oriented agriculture with emphasis in export or import

subst~tut~on.

3. Wide variety of crops - seasonal, annual and perennial

4. Preponderance of perennial crops with long gestation period and heavy

investment

5. Prevalence of mixed farming and intercropping

6. Existence of high value spice crops

7. Dispersed settlement pattern with homestead cultivation and backyard

system of livestock keeping.

8. High pressure of population on land resulting in tiny holdings

9. co-existence of well organized plantation sector, unorganized small

farming sector and subsistence food crop sector and

10.Emergence of large number of part-time farmers and increasing

number of absentee farmers.

24 25 Based both on the findings of various studiesz2, reports23, task force ,

and on our own analysis of the agricultural scenario of the state a number of

basic problems and important issues were identified which include,

" Pillai P.P (1994) Kerala Economy- Four decades of development, Institute Planning and Applied Econom~cs Research John Matthai Foundation University of Calicut.

K.P. Kannan K. Pushpangadhan (1990) Dissecting Agricultural stagnation in Kerala An analysis across crops seasons and regions working paper No: 238 Centre for Development Studies, Thiruvanthapuram

2' Report of the Swaminathan Commission on Kerala Agriculture (2003). 24 Government of Kerala, Report of the Taskforce on Agricultural Infrastructure 1997-2002 IX th Five Year Plan, State Planning Board

'5 Government of Kerala, Report of the Taskforce on Field Crops 1997-2002 IXth Five Year Plan, State Planning Board.

1. Failure to formulate a policy and strategy suitable for Kerala

Agriculture and to design and develop appropriate technology and

infrastructure to meet the special requirements of small farmers.

2. Absence of scientific and systematic crop planning consistent with land

capability and ecological sustainability.

3. Damage to the ecological foundations essential for sustained

agricultural advance such as land, water, forests, and bio diversity.

4. Low level of investment both public and private.

5. Mismatch between production and post harvest technologies and

between production and market demand due to lack of marketing and

processing facilities and linkages with industries.

6. Lack of cost effectiveness and efficiency of production, the basic

principal of globalization resulting in an unequal trade bargain in the

post W 1 0 regime.

7. Absence of systematic programmes for the replanting of perennial

plantation crops.

8. The fiscal policy of the state is not conducive to agricultural

development.

9. Increasing incidence of pests and deceases for crops

10.Fast and continuous decline in the size of holdings and emergence of

large number of part time and absentee farmers.

11. Failure to evolve a price support mechanism to ensure stable and

remunerative prices.

12. Emergence of new social values downgrading agriculture and farming

community in social status and prestige.

These threats, issues and problems both internal and external can be

challenged and solved through integrated attention to regulation, education

and social mobilization through Panchayati Raj institutions, restructured

research strategies, farmer owned and controlled extension services, input

delivery system and technical resource centers for monsoon management and

water security etc. Measures have to be adopted and implemented by the

government in this direction to recognize and develop agriculture as a worth

while occupation, capable of ensuring a decent living with dignity and social

status to farmers. The vitality and dynamism of Kerala agriculture has to be

restored and regained through the judicious use of scarce resources of land,

water, rural manpower and technology with focus on increasing production

and yleld in a planned manner. Efforts must also be made to optimize farm

income through value addition. Possibilities of economic incentives, massive

rehabilitation programme for coconut , cashew, pepper and social security

measures may be explored.

Thus the outlook of the future of the economy of the state would

depend largely on the measures that would be taken to sustain the tempo of

development achieved in the agricultural sector and to make agriculture

globally competitive. For this a supportive agricultural policy and public and

private investment in potential areas viz. minor irrigation, horticulture,

storagelmarket yards, water shed development, agro-processing,

intercropping, multi-storied cropping, organic farming, mixed farming etc

need to be enhanced.

One of the ingredients for agricultural development is the timely

availability of agricultural credit. Realising the importance of agricultural

credit the Brit~sh government and subsequently the government of India

appointed various committees and commissions with the sole purpose of

strengthening the agricultural credit delivery system. In the second chapter of

this thesis we made a comprehensive look into the related

commission/committee reports. In the succeeding chapter an attempt is made

to examine the institutional framework for agricultural credit-specifically to

Kerala state and also to assess the flow of agricultural credit in the state.