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wheat ) was strongly associated with an excess buffer stock of rice ( and wheat ) accumulated in the government sector ( Food Corporation of India ), and India experienced two peak periods of extremely excess stock ; i . e . the first one was in the mid-1990s and the second one was at the beginning of the 2000s .
3 ) Subsidies for agricultural inputs such as chemical fertilizer , irrigation ( canal ) and electricity ( for electric pump sets such as tube-wells ) has been rapidly increased since the 1980s until the present day . Agricultural subsidies are now very big fiscal burden for the government , especially for the state government . The subsidies are given mainly to the advanced agricultural areas and also to the wealthy farmers in particular . Therefore , the necessary public investment for agriculture and for rural areas is neglected , which causes the disparity between advanced rural areas and backward rural areas fixed .
II .
Role of the Green Revolutions in Economic Development
Now let us summarize the role of the Green Revolution in India , especially the second Green Revolution during the 1980s , on overall economic development process of the country .
The most important lesson we learned is that agricultural growth should be preceded the modern economic growth based on industrialization . The reasons are as follows .
At the beginning of economic development the agricultural sector is „ large ‟. A large share of population depend their livelihood on agriculture and related activities . They are poor and the share of their household expenditures for food and beverages ( Engel ‟ s coefficient ) is usually very high ; around 70 percent . Under such a situation , even if the government tries to promote industrialization ( especially heavy industrialization ) with neglecting the agricultural sector , it tends to fail because of the lack of the market for non-agricultural sectors . Note that export-oriented industrialization is more difficult and entrepreneurs should at first depend on the domestic market which is more familiar to them before going to exploit export market . In this sense , the existence of the domestic market for their products is essential when promoting industrialization . Because the majority of people live in rural areas at this stage of economic development , the key is how to raise income and alleviate poverty in widespread rural areas . Thus the development of agricultural sector , especially staple food sector , should come first because majority of rural population depend their livelihood on it . If raising income of rural population is the key , the agricultural growth should be led by productivity growth , rather than by „ horizontal ‟ expansion of farmland .
Actually , as we had seen before in this paper , India had to pay a huge cost for the negligence of agricultural sector before the mid-1960s , in the form of the „ lost decade ‟ from the mid-1960s to the mid-1970s .