The aura around Kerala model of development often appears to be pretentious, considering the macro economic factors of the state which is a remittance economy piloted by the service sector. The survey of India’s inward remittances[1] in 2016-17, states that Kerala accounts for the highest share which is 19 percent of total inward remittance vis-à-vis other states. The commercial exploitation of oil in the 1950s and 1960s opened doors of opportunities for Keralites, initiating the stride of remittance dependent growth of the economy.

It could be construed as a structural transformation[2] of the economy wherein the relative importance of agriculture sector in the state’s economy got transformed in between 1980-81 to 2010-11. The service sector led growth was not able to generate employment opportunities matching with its income, it contributed more than 50 per cent of the economy. The unemployment in Kerala[3] at present is 12.5 per cent as against the national level of 5 per cent,

Kerala would not deign to consider agriculture as a sector of significance for providing job opportunities mainly due to the preference for white collar jobs and lack of credence that agriculture is a profitable venture. But the share[4] of cultivators and agricultural labourers reduced from 2001 to 2011 at a rate of 7.4 percent and 18.4 per cent respectively, not just due to the condescending attitude towards agriculture. It is also intriguing to note that the growth[5] of manufacturing sector at constant prices (2011-12) marked a steep fall, as it came down to 2.2 per cent in 2016-17 from 12 per cent in 2015-16. Things look grimmer for Kerala in face of the cumbersome task to rebuild the economy post flood. It is also the right time to ponder whether it is presumptuous to assume that dependence on service sector and remittance alone will suffice to ensure smooth growth of the economy and solve the age old problem of unemployment in the state.

The contribution[7] of agriculture to state’s GSDP was 52 per cent in 1960-61 which stooped to 11 percent in 2014-15 and 10.58 per cent in 2016-2017.  The area occupied by food crops[8] like rice, tapioca and pulses account for only 10.21 per cent of the total cultivated area and a major share of 62 per cent was occupied by cash crops in 2015-16. The decline in production of food crops not only gives an apparition of food shortage and price inflation for staple food but also hints on ecological imbalance due to conversion of paddy fields. While it is not justifiable to enforce that paddy fields can only be used for its cultivation which is not profitable, it is to be pondered what could be done to revive it so that paddy production will increase and ecological balance will also be maintained.

The flood has left a surpassing damage to agriculture sector affecting cash crop cultivation, dairy farming and took a greater toll on paddy cultivation causing an estimated loss[9] of INR 1355.68 crore to 3.14 lakh farmers. The actual loss will be even more considering its impact on the industries hitched to it and loss of jobs. It is going to cause more people to shift from farming and it can become inexorably worse if the state continues to remain laid-back .

As per the norms[10], the state can only give INR 233 crore as compensation for the loss of more than INR 1000 crore which accounts only for a meagre hunk of the damage caused by the deluge and will serve only as temporary relief package. Kerala needs to undergo another structural transformation for economic development post flood and revival of agriculture is inevitable as it complements industrial development also.

It is true that the number of people employed in agriculture decrease as nations progress, with better technology and adoption of productive practices, . Kerala has been a highly progressive state whose per capita income[11] superseded that of the national income during 2012-13 to 2016-17 and service sector grew at the expense of commodity producing sectors. The non-profitability of agriculture sector, cultural transformation of the people and the tendency to be dependent on remittance subverted the convention of treating land as a means of production thereby increasing the demand for non-agricultural use of land.

The state needs to promote modernised practices in agriculture and encourage collective farming as small landholdings can deter productivity and adoption of technology. It will also be a pat endeavour of the state to make agriculture more inclusive for women. Oxfam[12] India states that women are responsible for 60-80 per cent of food production and 90 per cent of dairy production which often goes unnoticed. The paddy based lowland cropping system and homestead based cropping system in Kerala provided more employment opportunities for women, but the former system is on a downturn now. The transition[13] in the cropping pattern from food crops to cash crops cultivation which preferred men, is a plausible reason for a lower work participation of women in the sector. Also the cash crop cultivation being less labour intensive plummeted employment opportunities. The state can’t afford to neglect agriculture totally as it still provides employment for many including women and can propel growth of economy. ‘To make agriculture sustainable, the grower has got to be able to make profit[14]’ and state needs to be proactively involved in providing financial and technical aid for the farmers. It is high time the state leaves its lukewarm approach to agriculture and strive for a constructive progress of the sector rather than temporary relief measures which are par for the course.


[1]https://www.thehindubusinessline.com/money-and-banking/at-19-kerala-tops-in-remittances-rbi/article24645964.ece
[2] VP, Sanitha. Singla, Naresh. “Structural transformations in kerala’s economy: Is there any role of agriculture sector”. Journal of Regional Development and Planning 5(2016): 45-58. Accessed on October 13, 2018 https://www.researchgate.net/publication/313845245_STRUCTURAL_TRANSFORMATIONS_IN_KERALA’S_ECONOMY_IS_THERE_ANY_ROLE_OF_AGRICULTURE_SECTOR
[3] http://spb.kerala.gov.in/ER2017/web_e/ch412.php?id=41&ch=412
[4] Census 2001,2011. Agriculture in kerala an overview
[5] http://spb.kerala.gov.in/ER2017/web_e/ch311.php?id=31&ch=311
[6] GDP of Kerala & India 2004-05 to 2013-14, Dept of Economics & Statistics,
Kerala and website of Planning Commission (http://planningcommission.nic.in)
[7]https://www.thehindubusinessline.com/economy/agri-business/the-perennial-paradox-of-keralas-agriculture/article9512785.ece
[8] http://spb.kerala.gov.in/EconomicReview2016/web/chapter02_02.php
[9]http://www.newindianexpress.com/states/kerala/2018/aug/25/kerala-floods-agriculture-production-badly-hit-losses-may-cross-rs-1356-crore-1862433.html
[10]https://indianexpress.com/article/india/kerala-floods-standing-crops-destroyed-states-food-production-to-take-a-hit-5321983/
[11] http://spb.kerala.gov.in/ER2017/web_e/ch12.php?id=1&ch=12
[12] https://www.thehindu.com/opinion/op-ed/helping-the-invisible-hands-of-agriculture/article25221707.ece
[13] https://mpra.ub.uni-muenchen.de/82427/1/MPRA_paper_82427.pdf
[14] Quote by Sam Farr

*Sara John is a Senior Project Associate at CPPR.   

Sara John
Sara John
Sara John is Senior Associate (Business Development) at CPPR. She conducts research, contributes to proposal writing and writes articles on various public policy-related aspects. She had earlier worked as a Senior Project Associate at CPPR and has published many articles and papers.