Agriculture Industry Linkages in the Economy of Jammu and Kashmir Essay

kitchen-gardening plays an serious consumption in alter to socio-economic culture in m either countries. It is the ancient source for employment, livelihood, and victuals security for the majority of rural people. The success of this law of continuation depends spectacularly on the direct concussion it has on the national preservation as substantially as how the countrified sphere stimulates the result of new(prenominal) orbits in the thrift. Consequently, understanding the role of husbandry and its gene gene gene linkages to the sopor of the thriftiness is important. The inter- kin surrounded by agribusiness and fabrication has been a farsighted debated issue in the organic evolution literature. In the Indian context the issue has acquired interest since industrial stagnancy in the mid 1960s.Over the years the Indian thrift has undergone a structural change in its sectoral composition from a primary agro-based miserliness during the 1970s, the economy has emerged as predominant in pains. This has triggered an interest in readdressing the analytical and methodological aspects of the interlinkages among the both(prenominal) sectors the wait on sector since the 1990s. This structural changes and the un even out pattern of starting of farming, attention and service sector economy in the post reforms item is standardizedly to appear existent changes in the production and demand linkages among various the economy. At the same time the growing integration with the rest of the world in the post-reform period (post 1991 period) and the repenny special K of service sector led addition ar in any case likely to keep back significant mend on the linkages in the midst of the market-gardening and labor.This has triggered an interest in read dressing the analytical and methodological aspects of the interlinkages amongst the devil sectors. That agriculture and attention being inviolate component of stopment process due to their interchangeable interdependency and symbiotic relationship, the contribution of agriculture to the economy in general and to industry in special(prenominal) is well known in almost only the developing countries. However, the degree of inter dependance may set out and also change over time. In the supposition and empirical literature, the inter-relationship surrounded by agriculture and industry has been discussed from unalike channels. First, agriculture supplies food grains to industry to facilitate engrossment of labour in the industry sector.Secondly, agriculture supplies the inputs like raw cotton, jute, tea, coffee and so on needed by the agro-based industries. Thirdly, industry supplies industrial inputs, much(prenominal) as fertilizer, pesticides, machinery and so forth to the agriculture sector. Fourthly, agriculture influences the output of industrial consumer goods by demand. Fifthly, agriculture generates surpluses of savings, which can be mobilized f or investment in industry, and aboriginal(a) sectors of the economy. Sixthly, fluctuations in untaught production may affect private corporate investment decisions by dint of the impact of the cost of great deal on profitability, whereas around of these channels emphasize the agriculture-industry linkage on the turn in slope or production side, others stress the linkages done the demand side.The production linkages basically arise from the interdependence of the sectors for meeting the needs of their productive inputs, whereas the demand linkage arises from the interdependence of the sectors for meeting final consumption. Further, the linkages surrounded by the 2 sectors can also be categorized into both groups based on the direction of interdependence. One is the slow-witted linkage, which identifies how a sector depends on others for their input supplies and the other is the forward linkage, which identifies how the sector distributes its outputs to the remaining eco nomy. More importantly, these two linkages can indicate a sectors economic pull and push, be actor the direction and level of such linkages present the potential capacity of each sector to stimulate other sectors and then reflect the role of this sector accordingly.As far as Jammu and Kashmir is pertain factory farm is the predominant sector of the economy. Directly and indirectly, it supports slightly 80 per cent of the population besides contributing nearly 60 per cent of the postulate revenue, which adequately explains the over-dependency of the population on agriculture. The overall economic offset of the kingdom depends largely on the progress of the uncouth sector, the development of which becomes even more important in the context of the very nominal progress it has do in the secondary sectors. With the introduction of planned development in the state during 1951-56, production of foodgrains and fruits has increased considerably.During 1998-99, the state produced 15. 50 lakh quintals of food grains against 4.53 lakh quintal in 1950-51. Of this, Kashmir region contributed 27.20 per cent, Jammu region 72.14 per cent and Ladakh and Kargil region 0.66 per cent Industries play a vital role in the development of an economy. In this regard unfortunately, J&K has non been able to attract investments in industries and remained as an industrially backward state. The state does not defecate a strong industrial base, because geographical localization of the state is such that the setting up of large industries with a large Capital base is not feasible, besides adverse environmental consequences. Nevertheless, galore(postnominal) slender and medium-scale industries have come up basically in the traditional sectors along with areas like food processing, agro-based units and bronze and non metallic products.Thus in such an sectoral environment were industrial sector has low opportunity, Agriculture take into account basic linkages in its development . Thus the state of Jammu and Kashmir were main source of income is agriculture for masses of people, the linkages between Agriculture and Industry is very important to poll in order to know the potential of Agriculture to develop an industrial environment in the state. In mean while it is important to study the dependence of agriculture on industry, so that both sectors allow for flourish the development in the state of Jammu & Kashmir.The macroeconomic linkage between the country sector and industrial growth has been one of the most widely investigated in the development literature. In the early stages, researchers paid owing(p) attention in studying the relationship between the agricultural and industrial sectors, and how these sectors were inter-related. They argued that agriculture only plays a passive role which is to be the most important source of imaginations (food, fiber, and raw material) for the development of industry and other nonagricultural sectors (Rosenstein-Roda n, 1943 Lewis, 1954 Ranis and Fei, 1961). Many of these analysts highlighted agriculture for its resource abundance, and its ability to point surpluses to the more important industrial sector.India being a predominantly agrarian economy and an agro-based industrial structure, the interrelatedness between agriculture and industry has been one of the major issues for the researchers and policy makers since the beginning of the planning period. In the pre and early post-independence period, the industry sector had a close relationship with agriculture due to the agro-based industrial structure (Satyasai and Baidyanathan, 1997). Satyasai and Viswanathan (1999) plant that the output elasticity of industry with respect to agriculture was 0.13 during 1950-51 to 1965-66. Rangarajan (1982) has plunge that a 1.0 percent growth in agricultural production increases industrial production by 0.5 percent, and thus, GDP by 0.7 percent during 1961-1972.However, the industrial sector witnessed a s low growth, stagnation since the mid 1960s, which was largely attributed to the stunnedagricultural growth and favourable agricultural TOT, among other factors (Patnaik, 1972 Nayyar, 1978 and Bhatla, 2003).10 In fact the interdependence between the two sectors has prepare to be weakened during the 1980s and 1990s (Bhattacharya and Mitra, 1989 Satyasai and Viswanathan, 1997). For instance, Bhattacharya and Rao (1986) have found that the partial output elasticity of industry with respect to agriculture has declined from 0.15 during 1951/52 1965/66 to 0.03 during 1966/67-1983/84. Contradictorily, Satyasai and Viswanathan (1999) found that the output elasticity of industry with respect to agriculture has increased from 0.13 during 1950/51-1965/66 to 0.18 during 1966/671983/84, and then remained at the same level 0.18 during 1984/85-1996/97.The deteriorating linkages between agriculture and industry have been primarily credited to the deficiency in demand for agricultural products, dec line in dowery of agro-based industries coupled with slow employment growth (Rangarajan, 1982 Bhattacharya and Rao, 1986 and Chowdhury and Chowdhury, 1995). Sastry et al. (2003), for the period 1981-82 to 1999-2000, found that the forward production linkage between agriculture and industry has declined, whereas backward production linkage has increased. They also found significant impact of agricultural output on industrial output, and that agricultures demand linkage to industry has declined, while that of from industry to agriculture has increased.Economic and Political Weekly deluxe 26, 1989 1963 wean agriculture and merely the set of industrial consumption goods like c dole outhing, footwear, sugar and edible oils, it may be paused that the overall intersectoral linkages appear kinda an modest. The early writers, for example Rosestein-Rodan (1943), Lewis (1954), Scitovosky (1954), Hirchman (1958), Jorgeson (1961), Fei and Ranis (1961) and others emphasized the role of agric ulture only as a primary provider of wage goods and raw materials and abundant labour come forth to industry (Johnston and Mellor, 1961 and Vogel, 1994). The role of agriculture in the mutation of a developing economy was seen as adjuvant to the central strategy of accelerating the pace of industrialization (Vogel, 1994).Kalecki (1976) also pointed out the importance of investment and technological advances in agriculture for the rapid development of industry. The traditional literature on inter-sectoral linkages in the growth process broadly speaking emphasises the role of agriculture as a primary supplier of wage goods and raw materials to industry (supply-linkage on the one hand and as a provider of major output for in- dustrial goods (demand linkage) on the other Johnston and Mellor, 1961 and 3rd sector in a modern economy. Further, it may be noted that with growing mechanization of agriculture it becomes dependent on industry for basic inputs, like, fertiliser, power, pest icides, etc. Incidentally the agriculture-industry relationship becomes more complicated in this process. A slow growth of net availableness of food- grains or alternatively the movement of inter-sectoral terms of trade in favor of the agricultural sector is believed to cause deceleration of the industrial sector.However, empirically speaking there was no slow down in the growth of production of food- grains after the mid-sixties Ahluwalia 1985. Nor was there any fall in the marketed surplus of agriculture rhamarajakshi 1977 so as to be related to the industrial decelera- tion. But, so far as the agriculture vis--vis industry terms of trade is concerned, one en- counters a series of conglomerate evidence. Whe Thamarajakshi 1977, and Mitra 1977 visualised a favouralJe terms of trade for the agricultural sector during the mid-sixties andearly seventies, Khalon and lyagi 1983 obtained evidence that stand quite contrary to others view.Mundle 1977, however main- tains that in terms of intersectoral resource flow-of which terms of trade is just a individual component-the industrial sector has been undergoing loss since the mid-sixties. Prior to that it was agriculture which was experiencing an outflow of resources. Rangarajan 1982a in his macro econometric position makes an attempt to capture the demand linkage between agriculture and industry. He identifies a positive impact that agricultural output has on the demand for industrial consumption goods. The resolution of foodgrain terms of trade on industrial products has been negative but elasticity is negligible. some(prenominal) agricultural output and terms of trade had a positive influence on household saving and investment.Keeping in view such divide impact of agriculture on industry zplaining the behaviour of indugtrial produc- tion purely in terms of agricultural exploit .Bhattacharya and Rao 1986 emphasisesthe sluggishness that continued in the per-formance of industry even after the relative relaxat ion of the wage goods shyness that occurred during the green revolution period. Thus, the supposed literature in the agriculture-industry linkages has broadly highlighted the place of agriculture and non-agriculture sector, especially industry in the development process and contribution of each in augmenting growth of output and employment. Most of the theoretical literature has largely focused only on one side of the agriculture-industry linkages i.e. either the supply side linkages or demand side linkages. However it is both the demand side and supply side linkages that stimulate together in an inter-sectoral framework, which determines the interlinkages between the two sectors. In this respect Bhaduri (2003) and Bhaduri (2007) are two important contributions in the literature.Bhaduri (2003) extends Kaldors model by considering the role of the agricultural surplus from the supply side as well as the importance of the demand side effect for industrial goods. In this set up, bo th the sectors grow in tandem, reinforcing and reinvigorating each others growth impulse, by resolving each others potential realization problem (Jha, 2010). Further, Bhaduri et al. (2007) have lengthy the Kaldors model by contrasting between the supply side and demand side linkages of the two sectors from the TOT point of view. Thus there has been lot of researches, publication and models on the topic Agriculture industry linkages in the economy dropn by many renowned economists, and peoples associated with this field. Everyone concluded that there is an unlimited linkage between two sectors which not only develop one other but also give birth to other sectors as well. Thus to conclude it can be said that in an economy mostly there is a large take of linkages originated from a primary level and put economy to those sectors which keep it in the level of developed ones.