Agriculture in India

The agriculture sector employs nearly half of the workforce in the country. However, it
contributes to 17.5% of the GDP (at current prices in 2015-16). Over the past few decades,
the manufacturing and services sectors have increasingly contributed to the growth of
the economy, while the agriculture sector’s contribution has decreased from more than
50% of GDP in the 1950s to 15.4% in 2015-16 (at constant prices).

India’s production of food grains has been increasing every year, and India is among the
top producers of several crops such as wheat, rice, pulses, sugarcane and cotton. It is the
highest producer of milk and second highest producer of fruits and vegetables.

In 2013, India contributed 25% to the world’s pulses production, the highest for any one
country, 22% to the rice production and 13% to the wheat production. It also accounted
for about 25% of the total quantity of cotton produced, besides being the second highest
exporter of cotton for the past several years.

Horticultural crops occupy 10% of Gross cropped area and producing 160.75 m tones.
Total production of fruits is at 49.36 m tones and vegetables are at 93 m tones. Animal
husbandry output constitutes about 32% of country’s agricultural output. The
contribution of this sector to the total GDP during 2006-07 was 5.26%.

Problems faced by Indian Agricultural sector

 Productivity of Agriculture in India

o Although India has attained self-sufficiency in food staples, the productivity of
its farms is below that of Brazil, the United States, France and other nations.
Indian wheat farms, for example, produce about a third of the wheat per
hectare per year compared to farms in France.
o Rice productivity in India was less than half that of China. Other staples
productivity in India is similarly low.
o Indian total factor productivity growth remains below 2% per annum; in
contrast, China’s total factor productivity growth is about 6% per annum, even
though China also has smallholding farmers.
o Several studies suggest India could eradicate its hunger and malnutrition and
be a major source of food for the world by achieving productivity comparable
with other countries.
 Poor penetration of forward and backward linkages in Agriculture
o Food processing units needs to have strong backward linkages with the
farmers, farmer producer organizations, self-help groups, farmer’s groups etc.
Further, to be able to sell its processed food, it needs to develop strong
forward linkages with wholesalers, retailers, exporters etc.
o India has poor rural roads affecting timely supply of inputs and timely transfer

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 of outputs from farms. In other areas regional floods, poor seed quality and
inefficient farming practices, lack of cold storage and harvest spoilage cause
over 30% of farmer’s produce going to waste, lack of organised retail and
competing buyers thereby limiting Indian farmer’s ability to sell the surplus
and commercial crops.
 Agriculture Price Policy
o The agricultural price policy in India has succeeded in establishing certainty
and confidence in respect of the prices of agricultural commodities through
the fixation of minimum support prices by Commission for Agricultural Costs
and Prices.
o But due to the variations in the degree of enforcement of procurement in
different years, some degree of uncertainty and instability in prices were
experienced by the Indian farmers.
 Other problems include
o Falling water levels, Expensive credit.
o A distorted market.
o Many intermediaries who increase cost but do not add much value.
o Laws that stifle private investment.
o Produce that does not meet international standards.
o Inappropriate research.
o Crop pattern.

Farmer Suicides

In 2012, the National Crime Records Bureau of India reported 13,754 farmer suicides.
Farmer suicides account for 11.2% of all suicides in India. Activists and scholars have
offered a number of conflicting reasons for farmer suicides, such as

 Natural
 Monsoon failure, frequent El-Nino events, and draught have decreased the
production substantially.

 Economic
 Less fund at their disposal, higher interest rate since many buy from local
zamidars and landholders often result into burgeoning effect of actual &
interest money which in adverse case sometime take away their land and
hence their livelihood.

 Social
 Farmers from rural areas have big families which are dependent on the
small farmland which leads to economic burden. Dowry for daughters
Farmers either offer their property or give away the land as dowry to the
groom.

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  Policy paralysis
 Poor targeting of Subsidies mostly benefiting the rich creating wide gap in
earning profit.
 Local administration is often insensitive to the demands and requirements
of farmers.

 Personal issues such as illness, alcohol addiction, stress and family responsibilities.

Farm loan Waiver

The farm credit system in Indian agriculture, evolved over decades has been instrumental
in enhancing production and marketing of farm produce and stimulating capital
formation in agriculture.
Credit for Indian agriculture has to expand at a faster rate than before because of the
need to step-up agricultural growth to generate surplus for exports, and also because of
change in the product mix towards animal husbandry, aquaculture, fish farming,
horticulture and floriculture, medicinal plants, which will necessitate larger investments.

Government to Double the Income of Farmers by 2022

Why Double Farmers’ Income?

 Past strategy for development of the agriculture sector in India has focused
primarily on raising agricultural output and improving food security.
 The net result has been a 45 per cent increase in per person food production,
which has made India not only food self-sufficient at aggregate level, but also a
net food exporting country.
 The strategy did not explicitly recognise the need to raise farmers’ income and did
not mention any direct measure to promote farmers welfare.
 The net result has been that farmers income remained low, which is evident from
the incidence of poverty among farm households.
Doubling real income of farmers till 2022-23 over the base year of 2015-16, requires annual
growth of 10.41 per cent in farmer’s income. This implies that the on-going and previously
achieved rate of growth in farm income has to be sharply accelerated. Therefore, strong
measures will be needed to harness all possible sources of growth in farmers’ income
within as well as outside agriculture sector.
The major sources of growth operating within agriculture sector are:

 Improvement in productivity
 Resource use efficiency or saving in cost of production
 Increase in cropping intensity
 Diversification towards high value crops

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The sources outside agriculture include:

 Shifting cultivators from farm to non-farm occupations, and

 Improvement in terms of trade for farmers or real prices received by farmers.

What is Minimum Support Prices (MSPs)

MSPs are the prices at which the central government purchases food grains from
farmers. MSPs are fixed by the central government in order to ensure remunerative
prices to farmers.
Factors taken into consideration in determining MSPs include costs of cultivation and
production, productivity of crops, and market prices. High MSPs of crops provide
incentives to farmers to adopt modern technologies and farming practices, to increase
the overall productivity of their crops.

Plus Mandatorily Read***

Schemes of Ministry of Agriculture and Farmers Welfare (From Vision IAS Gov Scheme
PDF)

Extra Topics-

 Land Reform

[Link]

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