Revolutionary changes had occurred in the agrarian property relations towards the end of the 18th century. This was over a period of time, followed by a commercial revolution in the agricultural sector. Commercialization of agriculture became prominent around 1860 A.D. This brought about a change from cultivation for home consumption to cultivation for the market. Cash transactions become the basis of exchange and largely replaced the barter system.
Various factors led to the commercialization of agriculture during the British rule in India. 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.
Better means of communication (equipped with rapid development of railways and shipping) made trade in agricultural products feasible, especially over long distances. The emergence of grain merchants was a natural adjunct to this and greatly facilitated agricultural trade. Monetization of land revenue payments was another important casual factor for agricultural commercialization.
Coming to the impact of the commercialization of agriculture, normally speaking, it should have acted as a catalyst in increasing agricultural productivity. But, in reality this did not happen due to poor agricultural organization, obsolete technology, and lack of resources among most peasants. It was only the rich farmers; who benefited and this in turn, accentuated inequalities of income in the rural society.
A significant feature of commercialization of agriculture in India was the substitution of commercial non-food grains in place of food grains. George Byn records that between 1893-94 to 1945-46, the production of commercial crops increased by 85 percent and that of food crops fell by 7 percent. This had a devastating effect on the rural economy and often took the shape of famines.
Regional specialization of crop production based on climatic conditions, soil etc., was an outcome of the commercial revolution in agriculture. Deccan districts of Bombay presidency grew cotton, Bengal grew jute and Indigo, Bihar grew opium, Assam grew tea, Punjab grew wheat, etc.
Another important consequence of the commercial revolution in agriculture was linking of the agricultural sector to the world market. Price movements and business fluctuations in the world markets began to affect the fortunes of the Indian farmer to a degree that it had never done before. The farmer in his choice of crops attached greater importance to market demand and price than his home needs. The commercialization of agriculture had mixed effects. While it assisted the industrial revolution in Britain, it broke the economic self-sufficiency of villages in India. Nonetheless, the new development was not without any benefits as it provided for a national economy and also brought about regional specialization of crops on an efficient basis.