Agriculture Booster- Commercialization of Agriculture

Commercialization of Agriculture


Commercialization of agriculture  means production of agricultural crops for sale in the market, rather than for family consumption. For marketization of agricultural products thus ‘surplus’ of production over consumption is required. But agriculture at that time was merely of the subsistence type. It had not been a consequence of conscious response of peasants to the market forces.

Commercialization of Agriculture in India

The transition of India’s agriculture to commercial propositions was the result of a series of developments which took place in the second half of the 19th century.

The introduction of money-economy: Firstly, the process of commercialization snow-balled with the introduction of money into the village. However, trade and money relations existed in the countryside even during the Mughal reign. As soon as the EIC desperately began to acquire more and more territories it insisted land tax to be paid in cash. The British rule introduced cash assessments in the system of land revenue. Gradually, the former system of payment of land revenue in kind went out of fashion. This compelled the cultivator to sell a part of his produce. This was, however, not the whole problem. A new merchant class appeared in rural India who took advantage of the abysmal indebtedness of the peasantry.

Ease of means of communication

Secondly, the effect of monetization could not go far until internal means of transport were improved. The railway lines were built by the British rulers. The agricultural crops reached the parts of the then Madras, Calcutta, Bombay or Karachi from self-sufficient villages with the expansion of the railway lines. “The commercialisation of agriculture had progressed most in those tracts where the crops were largely grown for export out of the country. Through the operations of exporters an efficient market organisation for moving the crops quickly to the ports had come into existence.”

The basic motive behind the tremendous spurt in the construction of the railway lines was to subserve the interests of the British industrialists in England. The colonial commerce brought industrial revolution there. The raw material of British cotton industry was almost entirely colonial, if not purely Indian.

Consequences of Commercialization of Agriculture

The opening up of national and international markets for agricultural goods of India should have served as a catalytic agent in the development of agriculture in India! But the actual results were different. It is said that trade is ‘indirect production’ and ‘efficient production’. But paradoxically, Indian agriculture lacked responsiveness to these forces of trade and commerce. Agriculture became the hand-maiden of trade.

Commercial interests became the guiding star. By the second half of the 19th century, overseas trade came under British control. So the bulk of the profits from the agricultural surplus was appropriated by the British business houses and went out of the country as ‘foreign leakage’. And, in the process, a new merchant class emerged as subsidiary and junior partners of the British mercantile capital. In the ultimate analysis, merchants became the symbol of colonial exploitation.

The Effects of Commercialisation of Agriculture

  • The growth of commercialization will impoverish India as the funds earned through this, will get accumulated in companies treasury
  • The commercialisation of agriculture will add an element of stability to India’s rural economy.
  • Commercialization will check the growth of labour market, land market, input market and credit market
  • One of the advantages of commercialisation is that it significantly increases food production, allowing local consumers to buy the same quantity of food for a lower price.


Problem in commercialization Level of investment required for development of marketing and storage infrastructure is very huge. Government is not able to implement the schemes to raise investment in marketing infrastructure. This scheme includes construction of rural godowns, market research and information network. High cost of agricultural inputs, poverty, high interest rates, corruption, illiteracy, political interferences, unfavourable government regulatory environment, information gap, among others are some of the challenges in commercialization of agriculture.

Commercialization of Agriculture in india

Till the end of the first half of the 19th century, the Indian village was essentially self-sufficient. It had hardly any contact with the world outside except for the occasional visits of the grain or cloth merchant who carried the surplus of one village to make good the deficiency of another. In such a village, production was dictated by its self-sufficient character.

The development of transport and foreign trade led to the introduction of a variety of new crops such as tobacco, groundnuts and potatoes while, at a later stage, the Commercial requirements of the Company led it to encourage the cultivation of indigo, jute, tea and coffee.

Dependent as he became on foreign markets, the farmer now realised that it was more paying to live on the profits earned from his farm than on the products that he grew. This change in Indian agriculture is called the commercialisation of Agriculture.

A point worth noting is that all these crops, which now came in vogue, had been grown for a long time on small patches around every village. The change which now came about was not so much an increase in the total area under commercial crops. This was not possible because India had also to produce sufficient food grains for her increasing population.

The change which came about with commercialisation was in the direction of increasing localisation and specialisa­tion. The irrigated areas in Deccan took to the cultivation sugar-cane; cotton growing became localised in Berar, Jute in Bengal and wheat in the canal colonies of the Punjab.


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