Commercialization of Agriculture during British Rule in India | History Optional for UPSC (Notes) PDF Download

What is Commercialization of Agriculture?

• Commercialisation of agriculture involves growing specialized crops not for local consumption but for sale in national and international markets.
• In India, this process began during British rule, particularly post-1813 when the Industrial Revolution in England gained momentum.
• Commercialization became prominent around 1860 A.D., influenced by events like the American Civil War, which increased demand for Indian cotton.
• Indian agriculture was not commercialized to feed its own industries, as India was less industrialized than Britain and other European countries.
• Instead, it was aimed at supplying British industries and generating cash for the British through products needed by British industries or those with strong commercial potential in Europe and America.
• For instance, the production of cotton increased significantly to meet the needs of Britain’s growing cotton-textile industry.
• Other crops like indigo,tea,coffee, and jute were also promoted for their export potential.
• Plantations for these cash crops were mostly controlled by the English.
• With this shift, cash transactions became the primary mode of exchange, replacing the barter system.

How Commercialization of Agriculture happened?

Commercialization of Agriculture in India under British Rule:

• The British initiated the commercialization of Indian agriculture through various direct and indirect policies.
• New land tenure systems like the Permanent Settlement and Ryotwari Settlement transformed agricultural land into a freely exchangeable commodity.
• The Permanent Settlement empowered zamindars with ownership rights, creating wealthy landlords who could buy and sell land.
• Agriculture shifted from being a way of life to a business, with a focus on producing for national and international markets.
• High-demand crops such as cotton, jute, sugarcane, groundnuts, and tobacco were increasingly cultivated.
• The East India Company exported Indian commodities, leading to increased agricultural exports as raw materials for British industries.
• New plantation crops like tea, coffee, rubber, and indigo marked a shift in agricultural practices.
• The commercialization of agriculture was often a forced and artificial process for most Indian peasants.
• While commercialization is seen as a step towards capitalist agriculture, in India, it was driven by British coercion rather than peasant initiative.
• Peasants were often forced to cultivate cash crops due to high revenue demands, the need to pay rents and debts in cash, and other pressures.
• Regions focused on export-oriented cultivation, such as the wheat region of Punjab, cotton region of Gujarat, jute region of East Bengal, and cotton region of Berar, experienced more intense commercialization.

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

Commercialization of Agriculture in Colonial India

• The political unity established by the British and the resultant rise of the unified national market was an important factor.
• 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 urban areas also gave impetus to commercialization.
• 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 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 aspect with regard to export of agricultural products was trade with China in which the balance of trade was in favour of China.
• 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 for 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.
• The British policy of one way free trade also acted as a sufficient encouraging factor for commercialization as the manufactured items in textile, jute, etc., could find free entry into Indian markets.
• Whereas 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

   • Commercialization was expected to boost agricultural productivity.
   • However, due to poor organization,outdated technology, and resource shortages, most peasants did not benefit.
   • Only wealthy farmers gained, increasing income inequality in rural areas.
   • Tirthankar Roy suggested that while the rich became richer, it didn’t mean the poor got poorer. Total income increased, but the disparity remained.

2. Major Benefits to Planters, Traders, and Manufacturers

   • Commercialization of agriculture benefited British planters,traders, and manufacturers.
   • They profited by purchasing commercialized agricultural products at low prices.
   • Some Indian traders and moneylenders also benefited by acting as middlemen for the British.

3. Increased Dependence on Moneylenders

   • Poor peasants had to sell their produce immediately after harvest to meet various financial obligations.
   • This situation often forced them to sell at low prices to grain merchants, who were often also moneylenders.
   • Moneylenders provided cash advances for the cultivation of commercial crops. If peasants failed to repay on time, they risked losing their land.
   • Commercialization did not promote the growth of a land market because the profits mainly went to company traders and middlemen.

4. Decline in Food Crop Production and Frequent Famines

   • Commercialization led to a decrease in the area under food crop cultivation, with non-food commercial crops replacing food grains.
   • Between 1893-94 and 1945-46, the production of commercial crops increased by 85%, while food crop production fell by 7%.
   • This shift had a detrimental impact on the rural economy, resulting in frequent famines.
   • For instance, the jute economy collapsed in the 1930s, leading to the devastating Bengal famine of 1943.
   • Historian Sekhar Bandopadhyay noted that while there might not be a direct link between commercialization and famines, the replacement of food grains with cash crops in some areas could have impacted food output.

5. Impoverishment of the Indian People

   • The situation was worsened by the increasing population,land fragmentation, and the lack of modern agricultural techniques.
   • Thus,commercialization of agriculture contributed significantly to the impoverishment of the Indian people.

6. Regional Specialization of Crop Production

   • Regional specialization in crop production emerged based on climatic conditions and soil types.
   • For example:Deccan districts of Bombay Presidency grew cotton; Bengal produced jute and indigo; Bihar cultivated opium; Assam became known for tea; and Punjab focused on wheat.
7. Linking Agriculture Sector to the World Market
   • The commercial revolution in agriculture linke d the agricultural sector to the world market.
   • Price movements and business fluctuations in world markets began to significantly impact the fortunes of Indian farmers.
   • Farmers started prioritizing market demand and price over personal needs in their crop choices.
   • The peasant class faced adverse effects due to imbalances in market conditions and intense competition.
   • Ordinary peasants were negatively impacted by market competition.
8. Adverse Effect on Self-Sufficiency
   • Commercialization of agriculture supported the industrial revolution in Britain but harmed the self-sufficiency of the village economy.
   • It was a major factor in the decline of the rural economy.
9. Effect on Traditional Agriculture-Industry Relation
   • Commercialization disrupted the traditional relationship between agriculture and industry.
   • In India, these traditional relations, which historically supported each other's development, were hampered.
10. No Technological Development
    • Commercialization of agriculture indicated a commercial revolution but lacked support from any technological revolution.
    • The absence of technological support hindered potential benefits for agriculture and related fields.
    • Commercialization did not boost agricultural production or organize the agricultural system in any meaningful way.
    • While the upper class and British industries benefited, Indian peasants were tied to distant international markets.
11. Peasant Revolts
    • The most severe impact of commercialization was the oppression of Indian peasants by Europeans.
    • This discontent led to notable peasant revolts, such as the Indigo revolt in 1859.

Positive Impacts of Commercialization of Agriculture

Commercialization: A Mixed Impact:

• Despite its negative effects, commercialization was a progressive event in some ways.
• It encouraged social exchange and facilitated the transformation of the Indian economy into a capitalistic form.
• Commercialization linked India with the world economy, leading to the growth of a high-level social and economic system.
• It contributed to the integration of the economy and created a foundation for the growth of a national economy.
• Commercialization fostered the growth of national agriculture, with agricultural problems acquiring a national character rather than remaining local or regional.
• It brought about regional specialization of crops on an efficient basis, encouraging the production and favorable distribution of specific crops.
• To some extent, commercialization also gave impetus to production.