Agriculture in India

Why in news?

For a variety of reasons, farmers in several states have been agitating

aggressively for some time now.

Due to poor crop productivity and failing monsoons, several states like

Uttar Pradesh, Maharashtra, Punjab and Karnataka, (which account for

around one-third of India's population) have announced farm loan

waivers.

States like U.P and Punjab announced it in an election year. Thus, this

issue has become socio-politically important. Further, this may lead to

competitive populism and other states may also resort to such

measures.

Overview

The history of Agriculture in India dates back to Indus Valley Civilization

and in some parts of Southern India, it was found to be practised even

before the Harappans.

Today, India ranks second worldwide in farm output. The economic

contribution of agriculture to India's GDP is steadily declining with the

country's broad-based economic growth, yet, having nearly 50% of the

population dependent on it for livelihood.

Agriculture, along with fisheries and forestry, is one of the largest

contributors to the Gross Domestic Product (GDP). As per the estimates

by the Central Statistics Office (CSO), the share of agriculture and allied

sectors (including agriculture, livestock, forestry and fishery) is expected

to be 17.3 per cent of the Gross Value Added (GVA) during 2016-17 at

2011-12 prices.

The Department of Agriculture and Cooperation under the Ministry of

Agriculture is responsible for the development of the agriculture sector

in India. It manages several other bodies, such as the National Dairy

Development Board (NDDB), to develop other allied agricultural sectors.

Indian agriculture: Potential, Prospects and Prescriptions

Potential: Facts about Agriculture in India

Index Figure

Gross cropped area 195 million hectare

Net sown area 141 million hectare

Agricultural irrigated land (% of total

agricultural land)

36% (As per 2014 World bank data)

Animal husbandry output Constitutes about 32% of country s

agricultural output

Agricultural growth 4.1% in the current year from 1.2% in

2015-16 (Economic survey)

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%.

India is the highest producer of milk and second highest producer of

fruits and vegetables.

India accounts for 57% of the world s buffalo population and 14% of

cattle population.

India holds 6th place with 7% world s market share in medicinal and

aromatic plants.

Problems faced by Indian Agricultural sector:

Productivity

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.

Rice productivity in India was less than half that of China. Other staples

productivity in India is similarly low.

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.

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.

Infrastructure:

Poor penetration of forward and backward linkages

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.

India has poor rural roads affecting timely supply of inputs and timely transfer

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

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.

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.

Again raising the minimum support prices and procurement prices

offered incentive to the producers to increase their production but these

benefits were mostly restricted to large farmers. Moreover, the public

distribution system in India is also subjected to various limitations such

as its restricted operation in wheat and rice only, insufficient coverage of

rural areas, inadequate coverage of the people lying below the poverty

line and it s too much expensiveness due to lack of targeting.

As argued by several economists, continuous increase in the

procurement prices has resulted inflationary pressures in the economy.

This increase in the price of food grains has also resulted in huge

hardships to the rural poor consisting of marginal farmers and landless

labourers who constitute the bulk of rural population.

Other problems include:

Falling water levels, Expensive credit.

A distorted market.

Many intermediaries who increase cost but do not add much value.

Laws that stifle private investment.

Produce that does not meet international standards.

Inappropriate research.

Crop pattern.

Related issues:

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.

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.

Why is it important?

Agriculture Growth has decreased since 2011-12 to around 1%

Input cost is increasing due to rise in prices of seeds, fertilisers etc.

Distress migrations- causing burden on destinations.

Growth of unorganised credit sector- lack of access to organised sector

lending, many farmers resort to unorganised credit sector.

Increasing attrition rate in agriculture

Concerns:

A farm loan waiver undermines an honest credit culture and discipline.... It

engenders moral hazard and entails transfer from tax payers, there’s a need

to create consensus that farm loan waiver promises are eschewed. -

RBI Governor Urjit patel

Loan waivers provide some relief to farmers in such situations, but there

are debates about the long-term effectiveness of the measure. Critics

demand making agriculture sustainable by reducing inefficiencies,

increasing income, reducing costs and providing protection through

insurance schemes.

They point out that farm loan waivers are at best a temporary solution

and entail a moral hazard — even those who can afford to pay may not,

in the expectation of a waiver. Such measures can erode credit discipline

and may make banks wary of lending to farmers in the future.

It also makes a sharp dent in the finances of the government that

finances the write-off.

A blanket waiver scheme is detrimental to the development of credit

markets. Repeated debt-waiver programmes distort households

incentive structures, away from productive investments and towards

unproductive consumption and wilful defaults.

These wilful defaults, in turn, are likely to disrupt the functioning of the

entire credit system.

Economic cost of farm loan waiver:

The loan waiver for small and marginal farmers will push up states' fiscal

deficit to 2.71% (Budgeted: 1.53%) in FY 18 of gross state domestic

product (GSDP).

The unintended outcome of this could be reduced availability of credit to

the farmers from banks, forcing them to resort to the unorganised

lending sector.

It affects credit discipline and demand for debt waiver may also come in

from other states as well.

Criticisms

According to Parshuram Ray, director of the New Delhi-based Centre for

Environment and Food Security, the loan waiver was "an electoral sop that

involves a lot of statistical jugglery and very little of real hope for Indian

farmers."

An important feature of the program which has been heavily criticized is that it

covers only formal sources of credit and excludes any kind of informal loan.

Thus, while it benefitted wealthy and large-scale farmers who had access to

institutional credit (about 23% of the total number of farmers), small and

marginal farmers, who borrow the majority of their funds from private

moneylenders, would not benefit from the scheme.

Another criticism of this scheme was that it might cripple the agricultural credit

system.

Recent reformative steps taken by Government:

Budget 2017

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

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.

Niti ayog Agricultural Marketing and Farmer Friendly Reforms Index

The index ranks states based on their initiatives taken in implementing

provision of seven farm sector reforms. These reforms have been proposed

under model APMC Act, joining e-NAM initiative, special treatment to fruits

and vegetables for marketing and level of taxes in mandis. States are ranked

based on score on the scale ranging from 0 to 100. The minimum score of 0

implies no reforms at all and score of 100 means state is friendliest to farmers.

The index identifies three major parameters. They are,

Reforms in agricultural marketing

Land lease

Forestry on private land.

Pradhan Mantri Krishi Sinchai Yojana

The primary objectives of PMKSY are:

To increase the area of agricultural lands covered

by irrigation and reduce dependency on monsoon.

To improve on farm water use efficiency by adopting water

management techniques adoption of precision-irrigation and

other water-saving technologies to reduce wastage of water.

Enhancing recharge of aquifers and introducing sustainable water

conservation practices.

National Agriculture Market

The Depart e t of Agriculture & Cooperatio for ulated a Ce tral Sector sche e for Pro otio of Natio al Agriculture Market through Agri-Tech

Infrastructure Fund (ATIF)  through provision of the common e-platform.

Implications / Benefits for various stakeholders:

Farmers

They can sell produce without the interference of any brokers or

middlemen thereby making competitive returns out of their investment.

Traders

Traders will be able to do secondary trading from one APMC to another

one anywhere in India. Local traders can get access to larger national

market for secondary trading.

Buyers, Processers & Exporters

Buyers like large retailers, processors or exporters will be able to source

commodities from any mandi in India thereby reducing the inter-

mediation cost. Their physical presence and dependence on

intermediaries will not be needed.

Consumers

NAM will increase the number of traders and the competition among

them increases. This translates into stable prices and availability to the

consumers.

Paramparagat Krishi Vikas Yojana

Paramparagat Krishi Vikas Yojana is an elaborated component of Soil Health

Management (SHM) of major project National Mission of Sustainable

Agriculture (NMSA). Under PKVY Organic farming is promoted through

adoption of organic village by cluster approach and PGS certification.

The Scheme envisages:

Promotion of commercial organic production through certified organic

farming.

The produce will be pesticide residue free and will contribute to improve

the health of consumer.

It will raise farmer's income and create potential market for traders.

It will motivate the farmers for natural resource mobilization for input

production.

Pradhan Manthri Fasal Bima Yojana

The new Crop Insurance Scheme is in line with One Nation – One Scheme

theme. It incorporates the best features of all previous schemes and at the

same time, all previous shortcomings / weaknesses have been removed.

Objectives

To provide insurance coverage and financial support to the farmers in

the event of failure of any of the notified crop as a result of natural

calamities, pests & diseases.

To stabilise the income of farmers to ensure their continuance in

farming.

To encourage farmers to adopt innovative and modern agricultural

practices.

To ensure flow of credit to the agriculture sector.

Mechanisation

Mechanisation has the potential to change many agricultural output challenges

as it will lead to higher productivity and economic contribution. Yet, it has

been inaccessible to farmers for long largely due to economic reasons. With

small land ownership and constant fragmentation, small and marginal farmers

find it almost impossible to own a tractor. To make agriculture economically

viable ICAR started many initiatives.

It is working towards developing need-based and region specific

engineering technologies and is engaged in planning, co-ordination and

monitoring of R&D programmes in a national and international level.

It has developed many improved machinery such as laser and leveller,

self-propelled sprayers, precision seeders and planters, harvesters for

cereals and sugarcane etc.

It has introduced gender friendly tools for reduction in the drudgery for

women farm workers.

Lab to Land programme recently set up of modern mechanised farm

units.

Infrastructure interventions

Mega food park scheme

The Scheme of Mega Food Park aims at providing a mechanism to link

agricultural production to the market by bringing together farmers,

processors and retailers so as to ensure maximizing value addition,

minimizing wastage, increasing farmers income and creating

employment opportunities particularly in rural sector.

The Mega Food Park Scheme is based on Cluster approach and

envisages a well-defined agree/ horticultural-processing zone containing

state-of-the art processing facilities with support infrastructure and well-

established supply chain.

9 Mega Food Parks namely Patanjali Food and Herbal Park, Haridwar,

Srini Food Park, Chittoor, North East Mega Food Park, Nalbari,

International Mega Food Park, Fazilka, Integrated Food Park, Tumkur,

Jharkhand Mega Food Park, Ranchi, Indus Mega Food Park, Khargoan,

Jangipur Bengal Mega Food Park, Murshidabad and MITS Mega Food

Park Pvt Ltd, Rayagada are functional as on 30.06.2017.

Cold Storage

India is the largest producer of fruits and second largest producer of

vegetables in the world. In spite of that per capita availability of fruits and

vegetables is quite low because of post-harvest losses which account for about

25% to 30% of production. The Task Force on cold-chain development in India

had suggested in its report to establish a National Centre for Cold-chain

Development (NCCD) in India as an autonomous centre for excellence to be

established as a registered society to work in close collaboration with industry

and other stake holders to promote and develop integrated cold-chain in India

for perishable F&V and other perishable allied agri – commodities to reduce

wastages and improve the gains to farmers and consumers substantially.

Food processing and Safety

Food processing levels are quite low in India at 3% when compared to 30-70%

in developed countries and wastage of agriculture produce is as high as

40%. National Food Processing Mission was launched to address these

problems and create potential for higher revenues. The objectives of the

program are:

Promote Primary processing centres close to the farms and link them with

Clusters through hub and spoke models.

Facilitate exports of high value products like Cheese, Peanut butter etc. and

encourage such facilities through subsidies.

Develop food processing clusters, Food parks and Agriculture SEZs; Contract

farming, Warehouses (Cold chains) development was also given an important

role by providing tax rebates. This scheme has resulted in some

positive outcomes like

Exports from Agriculture SEZs have increased over the years.

Exports of Meat, Marine products have improved.

But the performance of this scheme on the whole has left us much to be

desired with warehouses, processing facilities have not been developed.

In the absence of APMC reforms, contract farming and private procurement is

virtually absent.

Crop pattern

Record productions of sugarcane, ground nuts, and vegetables were

seen but wastage was higher as export opportunities shrunk.

Indian farming suffers from excess cropping of water-intensive crops like

sugarcanes in dry areas. This is one of reason for agricultural and farm

distress. The high dependency on Monsoon adds to worry.

The recent initiative from government which has emphasized the crop

diversification and climate-appropriate agriculture and cropping are

helping the shift from switch to value added and less water intensive

crops.

Model Land Leasing Law

Taking note of increasing incidents of leasing in and out of land and suboptimal

use of land with lesser number of cultivators, NITI Aayog has formulated a

Model Agricultural Land Leasing Act, 2016 to both recognize the rights of the

tenant and safeguard interest of landowners. A dedicated cell for land reforms

was also set up in NITI.

Soil Health Card

The campaign to provide soil health card with nutrient information of soil

would help the farmers to educate about most viable and appropriate

cropping pattern suiting the climatic conditions in region. Shortage of

infrastructure like soil testing labs is hindrances but it s a move in right

direction.

Higher MSP increase in Pulses and Oil Seeds

From last two years, the MSP has tried to address the issues of higher MSP in

cereal and lower in Pulses and oil seed. The recent move to increase pulses

MSP by 7% in move towards the Crop-neutral MSP regime.

DEPARTMENT OF ANIMAL HUSBANDRY, DAIRYING AND FISHERIES

Two National Kamdhenu Breeding Centers opened in the country, one in

the North and one in the South.

National Gokul Mission started for development and conservation of

indigenous cattle breeds.

Blue Revolution initiated to increase fisheries production.

Coverage under National Livestock Mission (NLM) extended to entire

country.

AGRICULTURE RESEARCH AND EDUCATION

New schemes such as Mera Gaon Mera Garav, Mission 2050, Farmers First,

and Student Ready started in 2015. Krishi Vigyan Kendras (KVKs) are the

frontline agricultural extension center funded by the Indian Council of

Agricultural Research (ICAR). The KVKs focus on training and education of

farmers, rural youth, on field demonstration of new and improved farming

techniques etc. Web-based Farmers Portal and mobile based mKisan SMS

portal along with two mobile Apps ( Kisan Suvidha & Pusa Krishi ) have been

launched. Information is also being disseminated through the Kissan Call

Centre and DD Kisan Channel .

Future Prospects:

Irrigation: Per Drop More Crop

India also has much less per capita water as compared to other leading

agrarian countries. This problem exacerbated because India has been

exporting virtual water embedded in crops, which is marked by its

feature of non-replenishment.

Once it is exported, it cannot be recovered. Given this scenario, it is time

to make a shift to micro irrigation so that the efficient and judicious use

of scarce water resources can be made.

High initial costs deter farmers to adopt this technology. While big

farmers can easily avail this technology, the government should consider

giving subsidies to small farmers to boost the adoption of this

technology.

Second green revolution:

India needs second green revolution to bring food security to its billion

plus population, to remove distress of farming community and to make

its agriculture globally competitive.

To achieve these goals, yield rates of food grains, pulses, oil seeds,

dairying and poultry, horticultural crops, and vegetables need to be

enhanced; and forward-backward linkages of agriculture with

technology, food processing industry needs to be strengthened to match

soil to seed and product to market.

High productivity and better value addition by agro-processing are its

key parameters.

R&D is the future:

India spent 31% of its agricultural GDP on research and development in

2010, in the same year China spent almost double that amount. Even

our neighbour Bangladesh spent 38% of its agricultural GDP on research

and development in that year.

As a result of this resource crunch there has not been diffusion of new

agricultural innovations and practices that is critical for enhancing farm

productivity.

As the Economic Survey notes, even in states where agriculture is

relatively more important (as measured by their share of agriculture in

state GDP), agriculture education is especially weak if measured by the

number of students enrolled in agricultural universities.

There has also not been any major contribution from the private sector

towards research and development. Government should thus woo

private players by giving them incentives to play a major role in

agricultural research and development.

Other Initiatives needed:

More from less should be the aim of agriculture because rapid

industrialization and climate change have raised the scarcity value of

land and water.

Indian agriculture is the victim of the Green Revolution s success. It has

become cereal-centric, regionally-biased and resource-intensive. A

rainbow revolution must follow the green and white revolutions.

Genetically modified crop technologies have significant net benefits.

Evolved regulation is needed to allay public fears so they can be

deployed.

Pulses and oilseeds must be supported with procurement and support

prices that reflect their social contribution – less water use and

enrichment of soil with atmospheric nitrogen.

Advancements in Seed Technology - New varieties need to be tested and

seeds of these varieties should be made available to the farmers for

cultivation in the regions in which it is suitable.

Regulatory measures for quality seed production have to be tightened so

as to discourage the sale of spurious seeds to the farmers.

Subsidies on power must end to curb water wastage. Cheap power

makes India a net exporter of water through commodities like cotton,

sugar and soybean, while China is a net importer of water through

soybean, cotton, meat and grains.

Agricultural research has the biggest impact on yield and profitability but

it is weak in states where agriculture is relatively more important

(eastern and northern states, except Punjab and Haryana).

The private sector must be enticed into pulses research (which it has

shunned) by offering a disproportionately large enough award to the

winner for innovating in desirable traits, but the intellectual property

rights must vest with the government. There should be equal treatment

of the private, public and citizen sectors in this respect.

Conclusion

The recent initiatives taken by the Government are definitely steps

taken in the right direction. The agreements signed between India and

Israel further underscore the fact how water management, and judicious

usage of limited resources is vital for a thriving agricultural sector.

Recent developments further underscore the fact that India urgently

needs to diversify its cropping pattern- this will help conserve moisture

and thus help in judicious usage of resources. Efforts described above

can further the objective of the Government of doubling farmer s

income by the year 2022.

Such an effort would involve the collective participation of various

stakeholders, including the wider farming community, pressure groups,

private sector, banking sector, and both the central and state

governments.

Approach to Civil Service

GS-2

Government policies and interventions for development in various

sectors and issues arising out of their design and implementation.

GS-3

Major crops cropping patterns in various parts of the country, different

types of irrigation and irrigation systems storage, transport and

marketing of agricultural produce and issues and related constraints; e-

technology in the aid of farmers

Issues related to direct and indirect farm subsidies and minimum

support prices; Public Distribution System- objectives, functioning,

limitations, revamping; issues of buffer stocks and food security;

Technology missions; economics of animal-rearing.

Food processing and related industries in India- scope and significance,

location, upstream and downstream requirements, supply chain

management.

Land reforms in India.

GS-4

Values- empathy in admin

Farm suicides- Possible case study

Practice questions

1. What are the impediments in marketing and supply chain management in

developing the food processing industry in India? Can e-commerce help in

overcoming these bottlenecks? (250 words)

2. Critically discuss the ethical aspects of farmer suicides in India. (250 words)

3. Livestock rearing has a big potential for providing non-farm employment and

income in rural areas. Discuss suggesting suitable measures to promote this

sector in India. (250 words)