Commercialisation of Indian Agriculture

At a Glance

• Period Latter half of the nineteenth century
• Crops Cotton, jute, groundnut, oilseeds, sugarcane, tobacco
• Plantations Tea, coffee, rubber and indigo, mostly European-owned
• Effect Peasants exposed to price swings; debt, famine and riots
• Exam link UPSC Prelims, Modern History: Economic Impact of British Rule

Where Does It Fit?

This is the fifth topic of the category on the economic impact of British rule. The previous topic covered intermediaries and the stagnation of agriculture. This topic covers the commercialisation of Indian agriculture. The next topic covers famines and poverty. Previous topic: Intermediaries, Absentee Landlordism and the Ruin of Old Zamindars.

What Was Commercialisation?

In the latter half of the nineteenth century, another significant trend was the commercialisation of agriculture. Until then agriculture had been a way of life rather than a business enterprise. Now it began to be influenced by commercial considerations. Certain specialised crops began to be grown not for consumption in the village but for sale in national and even international markets.

Commercial crops like cotton, jute, groundnut, oilseeds, sugarcane and tobacco were more remunerative than foodgrains. The cultivation of condiments, spices, fruits and vegetables could serve a wider market. The commercialisation trend reached its highest level in the plantation sector, tea, coffee, rubber and indigo, which was mostly owned by Europeans and whose produce was sold in a wider market.

What Factors Encouraged It?

The railway side is in Railways and the Growth of Trade.

Why Was It a Mixed Change?

Commercialisation changed the countryside in ways that were not all harmful. Money economy and market links meant that cultivators of cash crops could earn cash, and the growth of internal trade and railways allowed the sale of produce in distant places. The argument of the nationalists, and of this account, is that these gains were limited because the peasant lacked the capital to specialise, did not control the terms of sale, and had to sell soon after harvest to pay rent and debts, when prices were lowest. The intermediaries, who bought the produce and lent against the next crop, were the ones who gained from the rise in prices. Where indigo and other plantation crops were grown for European owners, the planters, as in the Champaran case described in Champaran Satyagraha, 1917, forced cultivation and kept the profits. As an analytical point, commercialisation raised the share of farming that depended on markets without raising the peasant’s capacity to handle the market risk, and it is for this reason that it is described as a forced process.

How Did Commercialisation Affect the Peasant?

For the Indian peasant commercialisation seemed a forced process. There was hardly any surplus for him to invest in commercial crops, given the subsistence level at which he lived, while commercialisation tied Indian agriculture to international market trends and their fluctuations. For example, the cotton boom of the 1860s pushed up prices, but this mostly benefited the intermediaries, and when prices slumped in 1866 it hit the cultivators hardest, bringing heavy indebtedness, famine and the agrarian riots of the Deccan in the 1870s. The cultivator thus hardly emerged better from the new trend. The riots are in Early Peasant Movements: Indigo Revolt, Pabna Leagues and Deccan Riots.

The Company’s earlier abuses of the trade are summed up by Macaulay: the servants of the Company forced the natives to buy dear and sell cheap, and enormous fortunes were made at Calcutta while thirty millions of human beings were reduced to the extremity of wretchedness. As an analytical point, the commercial crops brought money into the village but not security, because the peasant carried the risk of prices and weather, while the profit went to the traders, intermediaries and moneylenders, a pattern that continued the earlier exploitation described in Ruralisation and the Impoverishment of the Peasantry. The link with famine is in Famines and Poverty Under British Rule.

Why Is This Topic Important?

• Cash crops Examples and the plantation sector are Prelims facts
• Slump of 1866 Links with the Deccan riots
• Forced process A key Mains argument

What Came Next?

The next topic covers famines and poverty under British rule. Next topic: Famines and Poverty Under British Rule.

Key People and Terms

• Commercialisation Production for sale in markets
• Cash crop A crop grown for sale, such as cotton or jute
• Plantation Large European-owned estates for tea, coffee, rubber and indigo
• Money economy An economy using money for payments
• Specialisation Growing particular crops for the market
• Finance capital Investment capital, here from Britain

Exam Corner

Mains Angle

Questions ask about the effects of commercialisation on the peasant. These points add depth.

• Causes Money economy, rail, finance capital
• Effect Linkage to market swings
• Outcome Debt, famine and riots