In Lewis Carroll's Through the Looking Glass, Alice finds herself running as fast as she can but not moving anywhere. The Red Queen explains to her 'Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that.'

Such is the situation in global agriculture. Global demand for agricultural products continues to rise as population grows and people get richer. As they get richer, people have fewer babies but eat more. And they use a lot more energy, which is increasingly derived from agricultural products. Crop technologies have to move incredibly fast just to keep up. Remarkably, over the past 50 years they have, with yields (production per hectare of land) for most crops more than doubling since 1960, and real prices of food falling for most of the period. In many ways we have come to take continued yield growth for granted. But, as Lin and Huybers show elsewhere in this issue, there is increasing evidence that this growth has stalled in many regions.

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This paper looks at past and likely future agricultural growth and rural poverty reduction in the context of the overall Indian economy. The growth of India’s economy has accelerated sharply since the late 1980s, but agriculture has not followed suit. Rural population and especially the labor force are continuing to rise rapidly. Meanwhile, rural-urban migration remains slow, primarily because the urban sector is not generating large numbers of jobs in labor-intensive manufacturing. Despite a sharply rising labor productivity differential between non-agriculture and agriculture, limited rural-urban migration, and slow agricultural growth, urban-rural consumption, income, and poverty differentials have not been rising. Urban-rural spillovers have become important drivers of the rapidly growing rural non-farm sector—the sector now generates the largest number of jobs in India. Rural non-farm self-employment has become especially dynamic with farm households rapidly diversifying into the sector to increase income.

The growth of the rural non-farm sector is a structural transformation of the Indian economy, but it is a stunted one. It generates few jobs at high wages with job security and benefits. It is the failure of the urban economy to create enough jobs, especially in labor-intensive manufacturing, that prevents a more favorable structural transformation of the classic kind. Nevertheless, non-farm sector growth has allowed for accelerated rural income growth, contributed to rural wage growth, and prevented the rural economy from falling dramatically behind the urban economy. The bottling up of labor in rural areas, however, means that farm sizes will continue to decline, agriculture will continue its trend to feminization, and part-time farming will become the dominant farm model. Continued rapid rural income growth depends on continued urban spillovers from accelerated economic growth, and a significant acceleration of agricultural growth based on more rapid productivity and irrigation growth. Such an acceleration is also needed to satisfy the increasing growth in food demand that follows rapid economic growth and fast growth of per capita incomes.