It is often believed that the colonial administration encouraged the commercialization of agriculture that improved the position of peasants in many areas of the Indian colony. From the 1860s onwards, the nature of agricultural production was determined by the demands of the overseas markets for Indian primary products. The items exported in the first half of the nineteenth century included cash crops like indigo, opium, cotton and silk. Gradually raw jute, food grains, oil seeds and tea replaced indigo and opium. Raw cotton remained the most in demand item. This expansion in cash crop production was accompanied by the building of railways, after 1850, to improve trade networks.
But commercialization seems to have been a forced artificial process that led to very limited growth in the agricultural sector. It led to differentiation within the agricultural sector, but did not create the figure of the ‘capitalist landowner’ as in Britain. The lack of any simultaneous large scale industrial development meant that accumulated agrarian capital had no viable channels of investment, for it to be converted into industrial capital. Initiatives to expand the productive capacity and organization of agriculture was also a risky proposition, as the sector catered to a distant foreign market with wildly fluctuating prices, while the colonial state provided no protection to agriculturists. Commercialization thus, increased the level of sub-infeudation in the countryside and money was channelised into trade and usury.
The so called process of commercialization, which was supposed to lead to capitalist agriculture, was often carried out through very exploitative and almost unfree forms of labour. Tea was grown in plantations in Assam, owned by whites, and they used inden- tured labour, which was almost like slavery. White planters had to force farmers to grow indigo because it yielded low profits and upset the harvesting cycle. This involved inhuman levels of coercion, which eventually led to the indigo-rebellion in 1859-60. Commercialization did lead to limited phases of success in the cotton producing areas of western India in 1860s and in jute production in eastern India, but they were because of increases in demand rather than capitalist innovation in production and organization.
Farmers were forced to grow cash crops also because they had to pay the high revenue, rents and debts in cash. The shift away from food crops like jowar, bajra and pulses to cash crops often created disaster in famine years. A decline in world demand for Indian cotton led to heavy indebtedness, famine and agrarian riots in the Deccan cotton belt in the 1870s. The jute industry collapsed in the 1930s, which was followed by a devastating famine in 1943 in Bengal. Although, causes of these famines have been widely debated by historians, it is undeniable that the aggregate pro- duction of food crops remained far behind population growth, and millions of people died of starvation and epidemics.