Wednesday, February 12, 2014

Commercialization of Agriculture - Economic Impact of The British

Commercialization of agriculture was one of the most notable features of the colonial economy in late eighteen and the nineteenth centuries even though it was not a colonial innovation. Irfan Habib is of the opinion that the phenomenon of commercialisation of agriculture was not the creation of the British colonialism It was a continuation from the Sultanate and the Mughal periods. He asserts that a large part of the agricultural production in pre-British India was produced for the market. However, what changed during the British was the transformation of the economy in to a new raw material base. Rajat K Ray and Ratnalekha Ray too opine that cash crop cultivation along with a well developed cash nexus, trade network and rural credit system were already in existence in Bengal. What changed in the composition of commercialisation of agriculture under the British was now the exchange of agriculture products in the market was in response to the demand of revenue in cash. Another important change was the penetration of capital in determining production. Also, under the British there was a substantial shift from grain production to cash crops.

What is commercialisation of agriculture?

Commercialisation of agriculture implies increase in the cultivation of cash crops- cotton, indigo, opium, jute, silk, etc for sale in the market or commodity production over and above simple self-consumption or local absorption.

So what are the implications of commercialisation of agriculture?

In its classic model of commercialisation of agriculture acts

  1. As a solvent of feudal or pre-capitalist relations

  2. It is accompanied by commutation of rent in money

  3. Leads to monetisation of out-put and in-put

  4. Transition of crop-sharing tenancy into cash rents

  5. Rise in acreage under cash crops

  6. Swelling in the number of landless labourers who join the ranks of wage labourers leading to commoditisation of labour.

However, under the colonial economy commercialisation of agriculture did not follow the above mentioned path.

Commercialization of Agriculture

While commercialisation of agriculture was not an innovation of the colonial economy, it had the potential of leading to capitalist commodity production given the involvement of India in the global trading circuit. But manner inwhich commercialisation of agriculture operated in India under the colonial economy proved to be just another way of exploiting the resources of India and increased the burden on the peasantry.

An important question that needs, to be considered is while commercialisation of agriculture by its nature leads to capitalist agrarian production.... why did it failed to do so in India?

The answer lies in the manner in which commercialisation of agriculture was implemented in India.

  1. The peasants were largely forced to grow cash crops. For example, the European planters forced indigo plantation on local farmers under tinkathia system that required cultivation of indigo on the three-twentieth part of their land. The farmers were forced, against their will, to take small amount of loans and bound into a contract. In most of the cases, this meant that the cultivators were forced to assign a certain part of their fields to indigo cultivation in consideration of a forced contract. For this reason indigo cultivation was called 'predial slavery’. Moreover, the planters preferred small peasants or ryots to grow indigo over the system of wage labour or zerat. Due to the nature of the advances, the ryoti cultivation of indigo came to be based on nearly unpaid labour process. The advances also ensured planter’s control over land and labour of the peasants. The demand for indigo was never uniform and it went through cycles of low and high. The exploitation of the indigo peasants finally led to indigo rebellion in 1859-60.

  2. Furthermore, the planters did not invest in providing implements and tools. The cost that went into cultivation was borne by the cultivators. This not only increased the burden of the cultivators but there was no real development of ancillary industries. In a way the planter was using the resources of the peasant without actually investing in land or equipment. And if the cultivator protested, the officials and the courts supported the European planters.

  3. Instead of transforming the cultivators into progressive section, commercialisation of agriculture added to their burden. Differentiation in the peasantry if occurring in its proper course leads to increase in the landless labourers who join the labour market for wages. While some form of differentiation did exist before commercialisation of agriculture but due to the manner of revenue collection it led to increasing differentiation in the peasantry. Commercialisation of agriculture made the farmer dependent on the middlemen for the sale of his produce. The middlemen, however, took advantage of the poverty of the peasant and extracted a very large share as profit. More and more peasants lost their lands and the land came to be concentrated in few hands.

  4. Under the colonial government the revenue was commuted (revenue demanded in cash). The revenue demand was comparatively high and the peasants had to sell a higher proportion of their agricultural produce to meet the high cash revenue demand. But what really added to the burden of the peasantry was the timing of revenue collection that coincided with the period of minimum liquidity of the cultivator. In such a situation, the peasant was faced with two options-

    • Default in payment of revenue which would result in the peasant losing his land, or

    • Resort to what is identified as ‘distress-borrowing’ or loans in order to meet his revenue obligations. Seldom being in a position to pay back the loan, the peasant would enter in ‘debt trap’.

  5. The peasant growing cash crops by getting connected to a wider economic nexus was now exposed to the erratic market where the demand and the prices were not stable. The peasants did not have any direct contact with this distant and unknown foreign economy and their contact with it was dependent on scores of intermediaries. The peasants were left alone to bear the cost of the wildly fluctuating prices. For example, the cotton boom of 1860s gave way to heavy indebtness, famine, and agrarian riots in the mid-1870s when America emerged as a major supplier of cotton.

Thus, even commercialisation of agriculture with its capacity to generate high revenues and industrialisation could not do either due to the nature of its implementation in India during colonialism. It infact not only increased the burden of the peasantry but also led to further exploitation of Indian agricultural resources.


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