Jahidul Islam Khan delves deep into the possibilities of as well as impediments in the development of agricultural sector in Assam and its impact on the State Domestic Product.

While many states in India are gradually moving away from their traditional agriculture-based economy toward industry or service-oriented economy, Assam is still heavily dependent on the agricultural sector. Assam is considered a less developed state, which depicts a gloomy picture. While the socio-political problems afflicting the state are partly to blame a lack of conducive environment for economic development, particularly in industry or service-oriented areas, there are various economic reasons (e.g., fragmented land) responsible for the lagging agricultural sector in the state.


The agricultural sector of Assam has immense potentialities especially because of the presence of Brahmaputra and Barak Rivers. These two rivers keep the land fertile throughout the year. The soils of river valleys are so much fertile that it is possible to produce most agricultural crops that are produced in most parts of the Indian sub-continent. Even the weather is quite compatible. Assam’s climate is suitable for maximum cereals production, such as tea, rice, jute, rubber, sugarcane, wheat, potato, cotton, pulse, oil, and various fruits.

Tea is the main commercial crop of this state. Even, the land is world-famous for this green grain. Every year Assam alone produces more than 57% of India’s tea production and supplies it to different states and countries around the globe. Depending upon Assam’s tea production, India upgraded its rank into 2nd position after China. Along with tea, it exports rice, jute, areca nuts, and many other crops. There are still possibilities of rice, tea and jute cultivation in Assam. Implementing modern ideas in agriculture will definitely grow this region’s socio-economic condition to a better level.


Assam’s economy is fundamentally based on agriculture. Over 70% of the state’s population relies on agriculture as farmers or as agricultural labourers or both. A majority of population, almost 90% of an estimated 22.4 million, live in rural areas, where the mainstay of business is agriculture. In terms of the State Domestic Product (SDP), the agriculture sector contributed over 38% of the income in 1990-91. Fragmentation occurred due to two principal factors: (i) inheritance-related, i.e., breaking down land parcels to distribute among heirs, and (ii) government land reform measures which set the ceiling for land holding per family (50 bighas at present), thereby promoting and facilitating land fragmentation.

Numerous studies show that small and fragmented land holdings are one of the principal causes of low productivity; for, such land holdings do not facilitate economic and efficient use of modern technology (e.g., agricultural machinery, chemicals, and hybrid seed). Assam is far behind in the use of modern agricultural technology to improve its agricultural productivity. For example, the agricultural productivity index for Assam was 156 in 1989-90 compared to 183 for India.

Another problem of land fragmentation is the hidden unemployment or underemployment, which understates the true unemployment level in the state. Assam produces both food and cash crops. The principal food crops produced in the state are rice, maize, pulses, potato, wheat, etc., while the principal cash crops are tea, jute, oilseeds, sugarcane, cotton, and tobacco.

Although rice is the most important and staple crop of Assam, its productivity over the years has not increased while other crops have seen a slight rise in both productivity and land acreage. For example, while rice yield per hectare in 1970-71 was 1,022 kgs compared to 1,261 kgs in 1990-91, wheat yield jumped almost three-fold from 583 kgs per hectare in 1970-71 to 1,455 kgs in 1990-91. A similar increase was observed in jute, sugarcane, potato, and rapeseed and mustard.

Tea is the most important cash crop in Assam. The total land area under tea cultivation (gardens) was estimated at over 229,000 hectares, employing an average of over half-a-million people a day. In addition, a considerable number of Assam’s population depends on secondary and tertiary sectors-related to the tea industry. However, the exploitation of both precious land and labourers by the tea companies, most of which are either foreign-owned (non-Indian) or owned by Indian conglomerates (e.g., Tata), is well-documented. Bagchi (1997) reported that although such exploitations are going on for decades and even well-documented in the state government’s own inquiry reports, the government (under both AGP and Cong-I periods) has failed to take any appropriate action to end such exploitations.


Agricultural development and economic development problems go hand-in-hand in Assam. Thus, while most of the development problems discussed below are agriculture-related, some of these are also related to the economic development problems. Besides some of the major problems discussed above like land fragmentation, lack of modern technology, or continued reliance on rain for irrigation, there are several other problems that hinder the development of agricultural sector. Identification of such problems should facilitate finding their remedial measures.

(1) Natural Calamities:  Assam has been suffering from flood problems. The Brahmaputra and its tributaries generate terrible floods in almost the whole valley. Floods and dry spells are the principal natural disasters faced by farmers in Assam every year. Although there is decades-old proposal to dredge the Brahmaputra, its progress is unknown. It is estimated that such yearly losses amount to millions of rupees. Although current estimates of losses from these annual floods are not available, it costs over Rs. 400 million which is almost 2.4% of SDP during a year.

(2) Capital Deficiency: Commercial capital, i.e., loans from banks or other credit agencies, is not generally accessible to farmers in Assam. As a result, borrowing from unscrupulous, unregulated lenders, at an extremely high interest rate is common in the state. In many instances some borrowers lose their livelihood, i.e. their cultivable land, to these unscrupulous lenders.

(3) Marketing Problems: Agricultural markets in Assam are under-developed. Farmers sell to nearest dealers/buyers, mostly immediately after harvesting when the price is at the lowest. Geographical isolation, weak transportation and communication systems, poor marketing facilities, poor or non-existent market intelligence are some of the principal marketing-related problems. A re-orientation of the government’s focus from revenue collection to marketing facilitation will be necessary if farmers are to benefit.

(4) Land Reform: Although the intent of land reform may have been to distribute land to all eligible landless citizens of the state, it resulted in increased land fragmentation, discouraged use of modern and efficient production technology, and increased bureaucracy and corruption. It is high time to examine the real impact of land reform in terms of its effects on the growth and development of the agricultural sector in the state.

(5) Non-economic Factors: Lack of education, ignorance about the changing economic conditions, outdated thinking, prejudiced cultural values, disturbed law and order situation, and lack of scrupulous legislative and administrative machinery are some of the principal non-economic factors that hinder agricultural development in Assam.

Reflecting the characteristics of a typical, less-developed economy, the economy of Assam is acutely dependent on the agricultural sector. Various economic and socio-political factors are responsible for the continued lack of growth and development of this sector. In addition, ineffective or inefficient government programmes also contribute to this sector’s lack of growth.

[The writer is Assistant Professor of English at Uttar Barpeta College, Dhanbandha, Barpeta, Assam.]

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