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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.