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Commercialization Of Agriculture During British Rule in India

Commercialization Of Agriculture During British Rule in India

What is Commercialization of Agriculture?

  • Commercialisation of agriculture is a phe­nomenon where agriculture is governed by commer­cial consideration i.e. certain specialised crops began to be grown not for consumption in village but for sale in national and even in international market.
  • Commercialization of agriculture in India began during the British rule.
    • Revolutionary changes had occurred in the agrarian property relations towards the end of the 18th century.
    • The commercialization of Indian agriculture mostly started post 1813 when the industrial revolution in England gained pace.
    • Commercialization of agriculture became prominent around 1860 A.D (during American Civil War which boosted demand of Cotton from India to Britain as Aerica was not able to export Cotton).
  • The commercialization of Indian Agriculture took place not to feed the industries of India because India was far behind in industrial development as compared to Britain, France, Belgium and many other European countries of eighteenth century.
    • The commercialization of Indian Agriculture was done primarily to feed the British industries that it was taken up and achieved only in cases-of those agricultural products which were either needed by the British industries or could fetch cash commercial gain to the British in the European or American market.
    • For example, several efforts were made to increase the production of cotton in India to provide raw and good quality cotton to the cotton-textile industries of Britain which were growing fast after the Industrial Revolution in Britain.
    • Therefore, cotton growing area increase in India and its production increased manifold with gradual lapse of time.
    • Indigo and more than that, tea and coffee plantation were encouraged in India because these could get commercial market abroad.
  • Jute was another product that received attention of the English company because the jute made products got a ready market in America and Europe.
  • Other cash crops which were encouraged were: jute, sugarcane, oilseeds, opium, indigo, black pepper, tea, silk etc.
  • Most of the plantations for commercial crops were controlled by the English.
  • Cash transactions become the basis of exchange and largely replaced the barter system.

How Commercialization of Agriculture happened?

  • The commercialization of India agriculture was initiated in India by the British through their direct and indirect policies and activities.
  • The new land tenure system introduced in form of permanent settlement and Ryotwari Settlement had made agricultural land a freely exchangeable commodity.
  • The Permanent settlement by giving ownership right to the zamindars created a class of wealthy landlords; they could make use of this ownership right by sale or purchase of land.
  • Further, the agriculture which had been way of life rather than a business enterprise now began to be practiced for sale in national and international market.
  • Moreover, crops like cotton, jute, sugarcane, ground nuts, tobacco etc. which had a high demand in the market were increasingly cultivated.
    • East India Company procured and exported the Indian commodities and gained profits and later agricultural export increased as raw materials for Industries in Britain.
  • The beginning of the plantation crops like Tea, coffee, rubber, indigo etc heralded a new era in agricultural practices in India.
  • The commercialization of agriculture was a forced and artificial process for the majority of Indian peasants.
    • Commercialisation of agriculture favours differentiation within the peasantry, capital accumulation and production for the market and considered to be a sign of progress towards capitalist agriculture.
      • In the Indian case, however, the initiative often did not come from within the peasant society and the benefits did not accrue to them either.
      • It was introduced under coercion of the British and not out of the incentive of peasantry at large.
      • In the case of indigo in eastern India, planters (had no right to buy land until 1829) had to persuade, and later force, the local peasants to accept advances to produce indigo in their lands.
      • As for other crops, there is a persistent view that the peasants were “forced” to cultivate cash crops because of high revenue demand, the necessity to pay revenue and rent in cash and above all for debt servicing.
    • The peasantry went for cultivation of commercial crops under duress. He had to pay the land revenue due to the British government in time. Moreover, he had to grow commercial crop on a specified tract of his land under the oppression of planters.
  • Commercialisation got more impetus in those regions where cultivation was intended for export; such  regions were the wheat region of Punjab, Cotton region of Gujarat, Jute region of East Bengal, Cotton region of Berar etc.

What factors encouraged and facilitated Commercialization of Agriculture in India during British?

  • The political unity established by the British and the resultant rise of the unified national market was an important factor.
  • Further, the spread of money economy replaced the barter and agricultural goods became market items.
  • The chief factor was the colonial subjugation of India under the British rule.
    • India was reduced to the supplier of raw materials and food grains to Britain and importer of British manufactured goods.
    • Many commercial crops like, cotton, jute, tea, tobacco were introduced to meet the demand in Britain.
  • The replacement of custom and tradition by competition and contract also led to the commercialization of Indian agriculture
  • Better means of communication (equipped with rapid development of railways and shipping) made trade in agricultural products feasible, especially over long distances.
    • This development ended the isolated condition of rural areas.
    • The connectivity between rural and the rural urban areas also gave impetus to commercialisation.
    • The emergence of grain merchants was a natural adjunct to this and greatly facilitated agricultural trade.
  • Monetization of land revenue payments was another important factor for agricultural commercialization.
  • Another boosting factor was the gaining of speed of Industrial Revolution in England.
    • This led to factor in commercialization as more and more agricultural goods were produced to satisfy the demand for raw materials by the British industries.
  • The enlargement and expansion of international trade and the entry of British finance capital also belted commercialization of agriculture.
  • Increasing demand for some of the commercial crops in other foreign countries gave impetus to commercialization of agriculture.
  • One of the aspect with regard to export of agricultural products was trade with China in which the balance of trade was in favour of China.
    • In this field the company needed to tilt the balance of trade in its favour.
    • The Company fulfilled this objective in two ways: Tea farming was encouraged in India itself and Opium cultivation was encouraged in India and it was exported to China.
    • This way a triangular trade developed between London, Calcutta and Canton.
  • The American Civil War also indirectly encouraged commercialization of agriculture in India:
    • The British cotton demand was diverted to India.
    • The demand of cotton was maintained even after the civil war ceased because of the rise of cotton textile industries in India.
    • In western India, cotton cultivation grew in response to the cotton boom in the 1860s caused by the American Civil War.
      • It created a pocket of prosperity in the Deccan cotton belt, which disappeared very soon after the end of the war and was followed by a famine and agrarian riots in the 1870s.
  • British policy of one way free trade also acted as sufficient encouraging factor for commercialization as the manufactured items in textile, jute etc could find free entry in Indian markets, where as the manufactured goods did not have similar free access to European markets.
  • The peasants went in for growing commercial crops to pay back the interests due to money lenders in time.
  • Economic motive:
    • Jute cultivation in eastern India developed as the peasants failed to meet the subsistence necessities and hoped to earn more by cultivating the “golden crop”.
    • So an economic motive was certainly there in peasants’ decision to shift to jute cultivation.
    • But as Sugata Bose has shown, the primary producers could hardly reap the benefit of the boom in jute market between 1906 and 1913, as “jute manufacturers and exporters (majority of whom were British) were able to exercise their monopsony power as purchasers of raw jute“, leaving the jute growers no space to bargain for prices.

What was Impact of Commercialization of Agriculture?

(1) Increase in inequality

  • Normally speaking, it should have acted as a catalyst in increasing agricultural productivity.
  • But, in reality this did not happen due to poor agricultural organization, obsolete technology, and lack of resources among most peasants.
  • It was only the rich farmers; who benefited and this in turn, accentuated inequalities of income in the rural society.
  • Tirthankar Roy has argued that: “It is possible that the capitalists captured most or all of the increase in value-added. The rich may have become richer. But that does not mean that the poor got poorer. For, total income had increased.
    • One could argue however that if the rich got richer and the poor remained poor (though not poorer) or became just marginally better off, that was not a very happy state of development either.

(2) Major benefits went to planters, traders and manufacturers

  • The commercialization of agriculture beneficial to the British planters, traders and manufacturers, who were provided with opportunity to make huge profits by getting the commercialized agricultural products at, throw away prices.
  • The commercialization of Indian agriculture also partly benefited Indian traders and money lenders who made huge fortunes by working as middlemen for the British.

(3) Increased dependency on moneylenders

  • The poor peasant was forced to sell his produce just after harvest at whatever prices he could get as he had to meet in time the demands of the government, the landlord, the money lender and his family members’ requirements.
    • This placed him at the money of the grain merchant (who was very often also the village money lender) who was in a position to dictate terms and who purchased his produced at much less than the market price.
    • Thus, a large share of the benefit of the growing trade in agricultural products was reaped by the merchant, who was very often also the village money lender.
  • Indian money lenders advanced Cash advances to the farmers to cultivate the commercial crops and if the peasants failed to pay him back in time, the land of peasants came under ownership of moneylenders.
  • Commercialization of agriculture did not encouraged growth of land mar­ket because major profit of commercialisation went to company traders and mediators.

(4) Decline in food crop production and frequent famines

  • Commercialization of Indian agriculture resulted in reduced area under cultivation of food crops due to the substitution of commercial non-food grains in place of food grains.
    • Between 1893-94 to 1945-46, the production of commercial crops increased by 85 percent and that of food crops fell by 7 percent.
    • This had a devastating effect on the rural economy and often got manifested in series of famines which took a heavy toll of life.
  • The jute economy crashed in the 1930s and was followed by a devastating famine in Bengal in 1943.
  • According to historian Sekhar Bandopadhyay:
    • It is difficult to establish a direct connection between commercialisation and famines, even though cash crops in some areas might have driven out foodgrains from the better quality land, with consequent impact on output.
    • When colonial rule came to an end, food crops were still being grown in 80 per cent of the cropped acreage. But on the whole, the aggregate production of food crops lagged behind population growth.
    • In view of this, the claim of some historians that growth of trade and integration of markets through development of infrastructure actually increased food security and contained the chances and severity of famines in colonial India remains at best a contentious issue, particularly in the context of the Bengal famine of 1943, which was preceded by a long period of consistently declining per capita entitlement of rice in the province.

(5) Impoverishment of the Indian people

  • The misery was further enhanced became the population of India was increasing every year, fragmentation of land was taking place because of the increasing pressure on land and modern techniques of agricultural production were not introduced in India.
  • Thus, the commercialization of agriculture was one of the important causes of the impoverishment of the Indian people.

(6) Regional specialization of crop

  • Regional specialization of crop production based on climatic conditions, soil etc., was an outcome of the commercial revolution in agriculture.
  • Deccan districts of Bombay presidency grew cotton, Bengal grew jute and Indigo, Bihar grew opium, Assam grew tea, Punjab grew wheat, etc.

(7) Linking agriculture sector to the world market

  • Another important consequence of the commercial revolution in agriculture was linking of the agricultural sector to the world market.
  • Price movements and business fluctuations in the world markets began to affect the fortunes of the Indian farmer to a degree that it had never done before.
  • The farmer in his choice of crops attached greater importance to market demand and price than his home needs.
  • The peasant class got adversely affected owing to imbalances in market condition.
  • They had to face competition prevailing in the market and in the competition, the ordinary peasants were adversely affected.

(8) Adverse effect on self sufficiency

  • Commercialization of agriculture assisted the industrial revolution in Britain but adversely affected self sufficiency of village economy and acted as major factor in bringing the declining state in rural economy.

(9) Effect on traditional agriculture-industry relation

  • Commercialisation effected traditional relations between agriculture and industry.
  • In India, traditional relations acted as factors for each other’s development which were hampered.

(10) No technological development

  • Commercialization of agriculture indicated a commercial revolution. But this was devoid of any support from any technological revolution.
    • Owing to true the healthy benefits which agriculture and associated fields would have enjoyed were lacking.
  • Commercialisation did not give boost to agricultural production and did not impart organised form to agricultural system in any way.
  • While the upper class and British industries benefited-from it, the Indian peasants’ life was tied to remote international market.

(11) Peasant Revolts

  • The worst effect of commercialization was the oppression of Indian peasants at hands of European.
    • This found expression in the famous Indigo revolt in 1859.

Positive Impacts of Commercialization of Agriculture:

  • In spite of having many negative effect commercializations in one sense was progressive event.
    • Commercialisation encouraged social exchange and it made possible the transformation of Indian economy into capitalistic form.
  • Commercialisation linked India with world economy.
    • It led to the growth of high level social and economic system.
  • The important contribution of commercialisation reflected in integration of economy.
    • It also created a base for growth of national economy.
  • Commercialisation led to growth of national agriculture and agricultural problem acquired national form.
    • Now the nature of problems no longer remained local or regional but they acquired national character
  • It brought about regional specialization of crops on an efficient basis.
    • Commercialisation encouraged the production of some specific crop and favourably affected their distribution.
  • To some limit, commercialisation gave impetus to production. 


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