This article deals with ‘G20 and India – UPSC.’ This is part of our series on ‘International Relations’ which is an important pillar of the GS-2 syllabus. For more articles, you can click here.
Introduction
Genesis
The G20 was established in 1999 in the backdrop of the 1997-99 Asian Financial Crisis to bring together the finance ministers and Governors of the Central Banks of the major advanced and emerging economies to discuss key issues related to global economic stability and growth.
Later, the world again faced the 2008 economic crisis. In response, it was raised to the Summit level (meeting of the Heads of State)to address the global financial and economic crisis.
Latest Summit: Rio de Janeiro, Brazil (2024)
Membership
19 countries + European Union+ African Union)
Latest Entry: In 2023 (hosted by India), the African Union (AU) was accepted as a permanent member of the G20.
G-20 has no permanent secretariat.
Objectives of G-20
Policy coordination between its members to achieve sustainable growth and global economic stability.
To create a new international financial architecture.
Importance of G-20
G-20 members together constitute
85% of global GDP
75% of global trade
2/3rd of the global population
84% of fossil fuel emissions
Ensure Global Economic Growth and Stability: Owing to its size and strategic importance, the G20 plays an important role in setting the path for the future of global governance and economic growth.
Address Global Crisis: Previous summits have addressed the 2008 financial crisis, the Iranian nuclear program, the COVID-19 pandemic and climate change.
Global Tax Reforms: International taxation has been a regular feature of G20 deliberation since the summit’s start in 2008.
Recast Bilateral Ties: Bilateral meetings on the summit’s sidelines have occasionally led to major international agreements.
Platform to deliberate on Climate Change: Since the member countries constitute 84% of fossil fuel emissions, the platform provides a great opportunity to deliberate on the challenge of climate change, which poses an existential crisis to the global ecosystem.
Issues with G-20
Lack of Effective Power: The decisions of the G20 are not legally binding.
Lack of Transparency: The G-20 decisions are made behind closed doors, making the organization’s work non-transparent and unaccountable.
Lack of Accountability: The G20 is ‘No Charter and No Treaty Organization’ without any Permanent Secretariat, making it difficult to hold its members accountable for their actions and decisions.
Inadequate Representation: Some critics argue that the G20 does not adequately represent the global community, as it excludes many small and developing countries that may be affected by the decisions made by the group. Additionally, G20 does not include enough representation from the private sector, civil society, and non-state actors.
Contrasting Interests of the Member Countries: Partner countries have contrasting interests, such as the USA vs Russia, India vs China, etc.
Lack of Enforcement: G-20 decisions are non-binding in nature, and G-20 doesn’t have a permanent secretariat, thus reducing the group’s effectiveness.
Limited Effectiveness: Some argue that the G20 has not lived up to its potential in terms of addressing global economic issues and achieving meaningful results.
This article deals with ‘Satyendra Nath Bose – UPSC.’ This is part of our series on ‘Science and Technology’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Introduction
Satyendra Nath Bose was an Indian physicist renowned for developing the theory of Bose-Einstein statistics and the concept of the Bose-Einstein condensate.
He hailed from the Nadia district in West Bengal and pursued his education at Presidency College, Kolkata.
Contribution 1: Bose-Einstein Statistics
It describes how a collection of non-interacting and indistinguishable particles distribute themselves among a set of available discrete energy states, at thermodynamic equilibrium.
Bose sent his findings to Albert Einstein. The statistics was extended to gas molecules by Einstein, and particles that obey the B–E statistics principle are referred to as “Bosons”(named after S. N Bose). Bosons are fundamental articles that have integer values of spin (0, 1, 2, etc.). E.g. Photon, Gluon, etc.
Contribution 2: Bose-Einstein Condensates (BEC)
At extremely low temperatures (near 0 Kelvin or -273.15 Celsius), a large fraction of bosons can occupy the same lowest-energy quantum state and become indistinguishable from each other, forming a unique state of matter (e.g., superfluid helium or ultra-cold atomic gases). BEC is referred to as the ‘fifth state of matter.’
Properties of BEC include:
Superfluidity: Bose-Einstein Condensates (BEC) have zero viscosity and can flow without resistance.
Superconductivity: Bose-Einstein Condensates (BEC) have zero resistance, leading to optimal conductivity.
Coherence: All particles in the BEC are in the same quantum state, behaving as a single entity.
Bose-Einstein Condensates has important complications and usage in areas of
Quantum Computing
Superconductivity
Precision Measurements
Sensing Technologies
Atom Lasers
Side Topic: God Particle
The Higgs Boson, also known as the God Particle, was discovered using scientific principles rooted in Bose-Einstein statistics and the concept of BEC.
This article deals with ‘R&D in Agriculture.’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Why to focus on R&D?
Return on Investment: The Economic Survey (2021-22) explicitly highlighted the correlation between spending on agri-R&D and agricultural growth. Every rupee spent on agri-R&D yields much better returns (11.2), compared to returns on every rupee spent on fertilizer subsidy (0.88), power subsidy (0.79), etc.
Food Security: R&D helps in the development of high-yielding crops and thus achieve food security.
Climate Smart Crops: R&D can help create climate-smart crops that can survive extreme climate.
Help Small Farmers: R&D is helpful in the Indian context as it can help to create new technologies designed to help small and marginal farmers.
Schemes
Bodies
Indian Council of Agricultural Research (ICAR): ICAR is an autonomous organization for co-ordinating and guiding research & education in agriculture, including animal sciences, horticulture and fisheries in the country.
State Agricultural Universities (like Punjab Agricultural University) are dedicated to the development of agricultural technologies.
Krishi Vigyan Kendra (KVK)
KVKs are the institutions at the district level aimed at
On-farm testing to assess the adaptability of new agricultural technologies
Frontline Demonstrations of the latest agricultural technologies to the farmers
Provide Advisory Services on various aspects like cropping patterns, pest control, post-harvest technology, etc.
Production of good quality seeds & planting materials for distribution to the farmers.
Issues with R&D in Agriculture
R&D in Agriculture is facing problems in India because
1. Lack of Funds
The private sector doesn’t contribute much investment in agriculture research, and government funding for R&D is decreasing considerably. This funding needs to be increased.
Allocation for agri-R&D in Budget 2021 was just Rs 8,514 crore. It is even lower than that of a single private global company like Bayer, whose annual spending on agri-R&D is almost Rs 20,000 crore.
2. Problem with ICAR
The problem with ICAR is that a single body plays several roles, from education to research to extension. Hence, it has become the jack of all trades but the master of none.
3. Problem with Agriculture Universities
The agriculture universities have been plagued & not able to do much because of
Resource crunch
Difficulty in attracting talented faculty
Limited linkages and collaborations with international counterparts
Weakening of the lab-to-land connect
Lack of innovation
4. Low-Quality Research
The R&D sector is suffering from ‘technology fatigue’, i.e., no innovative invention has been done by the scientific community in the previous two decades.
5. Cereal Centric Research
Indian agriculture research has become too much ‘cereal-centric’. Instead, Indian farmers must focus on pulses, oilseeds, horticulture and animal husbandry.
What can be the way ahead?
Increase expenditure on R&D in Agriculture by the Government sector.
Kremer’s HIV Vaccine Idea / Government Pull System of Research: Private research in crops grown at a small scale can be boosted by offering the winner proportionately large cash, but the IPR for that innovation is transferred to the government.
Address the regulatory lacunae in GM Crops technology: Pass the BRAI Act (Biotechnology Regulatory Authority of India) to remove the issues associated with the present regulatory framework under the aegis of the Genetic Engineering Appraisal Committee (GEAC).
Last Update: Jan 2025 (Extension Services (Agricultural Inputs))
Table of Contents
Extension Services (Agricultural Inputs)
This article deals with ‘Extension Services (Agricultural Inputs).’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Introduction
Extension Services are expert services provided to the farmers that can help improve productivity by delivering timely advisory services to farmers to adopt best practices, technology, meet with contingencies, market information etc.
But Problems
In India, there is 1 Extension worker per 800-1000 farmers.
60% of farmers don’t get any service from Extension workers, according to the NSSO survey.
Farmers depend on the progressive farmer of their area or marketing agent of some company for advice on the product they should use. But the problem is they will suggest only those products which give maximum profits.
There is no lab to farm connectivity.
Steps taken by the Government
1. Various Apps started
These include
mKisan
PUSA Krishi App
2. Kisan TV
Government can’t send the person to each village, but each village has TVs. Hence, the Government of India started Kisan TV in 2015.
3. Pradhan Mantri Kisan Samridhi Kendra (PMKSK)
PMKSK works under the Ministry of Chemicals and Fertilizers (announced in 2022)
The program aims to convert existing Fertilizer shops into Pradhan Mantri Kisan Samridhi Kendra that will act as a “One Stop Shop” for all agriculture-related inputs (like fertilizers, seeds, insecticides, pesticides, etc.) and other agricultural services.
4. AgriClinics and Agribusiness Centres
Agriculture Graduates set these up to provide paid advice to farmers on various issues. The Agriculture Ministry and NABARD support this scheme.
5. Krishi Vigyan Kendras
Krishi Vigyan Kendras are set up by the Indian Council of Agricultural Research (ICAR) and Agricultural Universities for frontline demonstration of agriculture technologies on the field, updating farmers about modern agriculture technologies and providing advisories to farmers using ICT.
6. Helplines
Kisan Call Centre schemes
SMS portal for farmers
7. Student Ready
Under this scheme, the village students are given Agro education.
8. Krishi Unnati Mela
Fairs organized by ICAR to demonstrate new agricultural technologies to farmers.
This article deals with ‘Farm Insurance.’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Main problems with previous Farm Insurance Schemes
Low Penetration: Only 22% of agricultural land was covered under crop insurance in 2014.
Low Sums Insured (SI): The sums insured (SI) were low. It was based on the cost of inputs rather than prospective income.
High Premium: Huge premium was charged. It was as high as 10% of the sums insured.
Delayed claims settlement: Claims used to lie unclaimed till six months & beyond.
Low Literacy: Farmers don’t know about these schemes and their benefits.
Inadequate Infrastructure: Absence of infra to measure data accurately at farm level.
Pradhan Mantri Fasal Bima Yojana (PMFBY)
PMFBY has been formulated according to the One Nation–One Scheme theme. It replaced the existing two schemes (i.e. NAIS (National Agricultural Insurance Scheme and Modified NAIS) by removing their inherent drawbacks and incorporating the best features of all previous schemes.
Features of PMFBY
Target: To bring at least 50% cropped area under Insurance Cover.
PMFBY removes any artificial capping of the Sums Insured(SI). The SI will be calculated by multiplying the MSP of a crop by the average seven-year yield for the particular village panchayat area where it is grown.
Uniform premium: Farmers will pay a uniform premium of
2 per cent for all Kharif crops
1.5 per cent for all Rabi crops
5 per cent for annual horticultural and commercial crops.
Governments to fully meet the gap between the actuarial premiums and the rates payable by farmers at Union and State levels.
Use of technology: Government will encourage the use of technology, especially mobiles and remote sensing, for quick estimation and early settlement of losses.
The scheme is extended to cover post-harvest losses as well.
In 2018, the Centre allowed States to set up their own insurance companies for implementing Pradhan Mantri Fasal Bima Yojana (PMFBY). The move comes after several requests from states.
Working of PMFBY
Increase in Insured Area: The area insured has reached 610 lakh ha (2023-24), insuring 5.5 crore farmers. PMFBY has become the largest crop insurance scheme in the world in terms of farmer enrolments and the third largest in terms of insurance premiums. It fares well in this regard.
Methodology of Risk Assessment: Earlier, risk assessment was done at the district level, which was later changed to the block level. The Sum Insured (SI) is now measured at the Village level, which is closer to reality.
During the arduous seasons of 2017, 2018 and 2019 marred by weather extremities, the scheme proved to be a decisive factor in securing the livelihoods of farmers, wherein the claims paid ratio in several states averaged more than 100 per cent against the gross premium collected. For example, the States of Chhattisgarh (2017), Odisha (2017), Tamil Nadu (2018), and Jharkhand (2019) received 384 per cent, 222 per cent, 163 per cent and 159 per cent of claims ratio against a gross premium.
To improve the efficacy, the government has started various initiatives under PMFBY. These include
DigiClaim: All the claims are worked out through the National Crop Insurance Portal (NCIP).
CROPIC i.e. Collection of Real-Time Observations and Photo of Crops: Collect periodic photographs of crops during their life cycle. These photographs validate sown crops and assess crop damage.
Yield Estimation Based on Technology (YES-Tech): It is a technology-based yield estimation mechanism.
Weather Information and Network Data Systems (WINDS): It aims to develop hyper-local weather data by setting intense network of Automatic Weather Stations (AWS) at the block level and Automatic Rain Gauges (ARGs) at the Panchayat level.
Government has also approved the creation of the Fund for Innovation and Technology (FIAT) with the corpus of Rs. 824 crore to fund the technological innovations like YES-TECH, WINDS etc. and other research and development activities.
But Issues
The critical factor of analyzing the efficacy of an insurance scheme is the ability to settle its claims quickly. PMFBY failed in this aspect as it took several months to pay compensation to the farmers.
There are allegations of profiteering by Insurance Companies.
It is alleged that most of the increase in insured areas is due to mandatory insurance for loanee farmers. According to the Public Account Committee Report (2023), the percentage of non-loanee farmers is negligible. Additionally, there is poor awareness of the scheme among small and marginal farmers.
PMFBY does not cover tenant farmers.
No governance reforms have been initiated. This scheme is also implemented with the help of rusted old machinery consisting of Patwaris and revenue officers.
Lack of farmer awareness: According to the CAG, out of 5,993 farmers surveyed, only 37% were aware of the schemes.
One-size fits all approach: All the farmers in the country have been treated as similar without any option to choose an insurance that meets the specific needs of their region.
No provision for competitive pricing: As per the scheme guidelines, every cluster has a specific insurance company selling insurances, creating infrastructure and manpower for three years. Lack of competition creates a monopoly over the scheme.
Due to the above issues, various states are replacing PMFBY with their own insurance schemes. E.g., Jharkhand has started its own insurance scheme (in 2021) called Kisan Fasal Rahat Yojana, which will be implemented by Jharkhand’s Department of Agriculture, Animal Husbandry and Co-operative. Gram Sabha has been assigned a major role in accessing crop loss.
Beed Model of PMFBY
The Beed is drought prone district in Maharashtra. The private insurance companies hesitate to do agricultural insurance in the district because many times the insurance claims paid is more than premium collected.
The government has come up with novel solution under which Maharashtra Government has roped in Agriculture Insurance Corporation (AIC) under which the private insurance company will insurance claims upto 110% of premium. On the other hand, if the insurance claims are lesser than 80% of premium, the private insurance company will share part of its profit with AIC.
This article deals with ‘Agro-Credit.’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Introduction
Agri credit is an essential input for agriculture to improve productivity. Access to institutional credit enables the farmer to enhance productivity by investing in machinery, purchasing variable inputs like fertilizers, quality seeds, and manure, and providing funds until the farmer receives payment from the sale of produce.
Every 1% increase in agricultural credit produces 0.29% increase in agricultural GDP and consequently aiding in increased income of farmers.
Issues with Agro-Credit
The predominance of informal sources: 44 % of agro finance comes from money lenders. These money lenders are highly exploitative and charge exorbitant rates.
Although Short Term Loan quantity has increased, Long Term Investment in agro infrastructure has decreased both by private & public sectors.
Regional Disparity: The coverage is meagre in the north-eastern and eastern regions of the country.
Agri credit / Agricultural loans are not used for the stated purpose. Primarily, they are used for marriage & consumption purposes by the farmer.
Credit for Small Farmers: Small and marginal farmers are not covered by banks and other institutional creditors.
Banks indulge in coercive actions for repayment, which leads to increased instances of farmer suicides.
Steps taken by the Government
1. Priority Sector Lending Norms for Banks
Banks are mandated to give 10% of their loans to Agriculture & Allied Sector, and 8% of their loans should be explicitly given to Marginal and Small Farmers.
Target for 2023-24 is Rs. 20 lakh crore.
2. Modified Interest Subvention Scheme (MISS)
Under this, loans up to ₹ 3Lakh are given to the farmer at an interest rate of 7% & if his credit history is good, then 5% additional subvention is providedby the government, making the effective interest rate of 2%
3. Kisan Credit Card (KCC) Scheme
KCC is a smart debit cum credit card for farmers. The farmer can later pay credit at a very low rate of interest.
It was started in 2012. In 2018, the facility was also extended to farmers involved in fisheries and animal husbandry.
The scheme aims to reduce farmers’ dependence on the informal banking sector for credit, which can be very expensive and suck them into a debt spiral.
Recent reports suggest high default rates on KCCs, which are becoming a significant source of non-performing assets (NPAs) for banks despite its various benefits.
As of 2024, banks have issued 7.5 KCCs.
4. Negotiable Warehouse Receipt
Under this scheme, the farmer can deposit his produce in a warehouse & get a warehouse receipt in return. The farmer can “mortgage” this warehouse receipt to a banker to get loans or trade at Commodity exchange.
Hence, these Negotiable Warehouse Receipt helps the farmer get a loan for the next cropping season on receipt & sell his produce at a later date when he receives a favourable price of his product.
5. Loan Waivers
Various state governments are giving loan waivers to the farmers.
But the efficacy of such loan waivers and their impacts on the government’s finances is highly debated.
6. NABARD Initiatives
NABARD has started various initiatives for the farm sector like
NABARD refinances Agro Loans.
NABARD operates Rural Infrastructure Development Fund.
7. Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)
The Agriculture Ministry runs this scheme.
Under this, income support of ₹6,000 / annum is given to all farmers in three instalments of ₹ 2,000 each.
The measures have reduced the share of non institutional credit from 90 per cent in 1950 to 23.40 per cent in 2021-22. As of 31 January 2024, the total credit disbursed to agriculture amounted to ₹ 22.84 lakh Crore
This article deals with ‘Farm Mechanization.’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Introduction
Farm mechanization refers to the development and use of machines that can take the place of human and animal power in agricultural processes.
Although India is one of the top countries in agricultural production, farm mechanization is just 40% ( & growing at a very slow pace of 5% per annum), against more than 90% mechanization in the first world. Furthermore, 80% of the value contribution comes from tractors.
Why is Mechanization needed?
Agricultural Mechanization removes the drudgery associated with agricultural labour, overcomes time and labour bottlenecks to perform tasks within optimum time windows and can influence the environmental footprint of agriculture, leading to sustainable outcomes.
Increased Productivity and Reduced Input Costs: The use of proper equipment can increase farm productivity by 30% and reduce the input cost by 20%.
Aid in Outward Migration of Educated Youth: Farm mechanization can also aid in the outward migration of educated youth from the farm sector and help them to contribute better in other sectors.
Alternative to deal with increasing cost of labour: The cost of deploying labour for agriculture operations is increasing substantially. Farm mechanization is the only way to reduce labour costs and, thus, the cost of cultivation.
Improved quality of crops: Mechanized equipment is designed to perform farming operations with precision and accuracy, leading to improved crop quality.
Increased Yields: Machines can uniformly sow seeds, apply fertilizers and pesticides, and harvest crops optimally, leading to better-quality yields.
Sustainability: Farm mechanization can promote sustainable agriculture by reducing the amount of land, water, and energy required for farming operations.
Problems to increase Mechanization in India
Soil, Terrain & Agro-Climatic Diversity: Machines used in Punjab can’t be used in North East. There is a need for Tailormade products.
Small farmers with limited income can’t buy Tractors.
Low loan support by the banks to the agriculture sector compared to the Industrial sector.
Due to Small and fragmented Indian landholdings, it is uneconomical to buy individual machines.
Credit procedure: The procedure to avail agriculture term loan for various activities helping farm mechanization is very cumbersome. Also, the interest rate is higher for such loans than crop loans.
Schemes to increase Farm Mechanization
Sub-Mission on Agricultural Mechanization (SMAM)
It is a sub-part of Umbrella Green Mission.
Aims: promote agricultural Mechanization among small and marginal farmers.
State Scheme: Rajasthan Free Rental Scheme for Farm Tools
The government of Rajasthan has started a scheme under which small farmers (having land less than 2.5 acres) can use tractors and sowing machines without paying any rent.
Yantradoot Scheme of the State of MP provides farm machinery at concessional rates.
“FARMS-app”
It was developed by Agriculture Ministry. It connects farmers and Custom Hiring Service Centres so that farmers can rent agricultural machinery.
Subsidies
Land Conservation Department offers subsidy of up to 90% to women establishments for purchasing the machines.
Issues with Agriculture Mechanization
Higher Agricultural Mechanization has led to higher water usage, stubble burning, smoke from machines and soil erosion, thus impacting the environment negatively.
Higher use of agriculture machines leads to displacement of unskilled labour from the rural areas.
The agricultural tools in the market are not gender friendly.
The agricultural tools are costly, and since the farms are small, they are not utilized to their full potential.
Regional Disparities: Northern India has higher mechanization levels than other regions. (Rice and Wheat crops having the largest extent of mechanization).
Farm mechanization in India is marked by ‘tractorization’. India’s farm equipment market is 7% of the global market, with more than 80% of the value contribution coming from tractors.
Solution
Companies and governments should invest in R&D for making machinery suitable for different terrains and agro-climatic regions of India.
Cooperative farming: The cooperative group can buy mechanical tools instead of individual farmers.
Rental Model: Like ZoomCar for Tractors, Reapers etc., can also be used.
Custom Hiring Centers (CHCs)
Invent cheap machines suited to Indian conditions. E.g., small farmers can use power tiller instead of tractor and power reaper instead of Combines as they are more affordable, have low operational cost and can be used in rugged topography.
Kisan Drones: Budget 2022 has proposed Kisan Drones for spraying insecticides and pesticides, crop assessment and digitization of land records.
Last Updated: Jan 2025 (Pesticides (Agricultural Inputs))
Table of Contents
Pesticides (Agricultural Inputs)
This article deals with ‘Pesticides (Agricultural Inputs).’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Introduction
15-25% of the crop in India is lost to weeds, pests, diseases and rodents.
Statistics of Pesticide Use in India
Total pesticide consumption is the highest in Maharashtra, followed by Uttar Pradesh, Punjab and Haryana.
On the other hand, per hectare consumption of pesticides is the highest in Punjab.
Amongst the crops, paddy accounts for the maximum share of consumption (26-28%), followed by cotton (18-20%).
Problems in India
Even though per hectare pesticide is much lower in India (0.5 kg per ha) than other advanced economies like 7.0 kg per ha in the USA and 12 kg per ha in Japan. But there are some issues:-
The quality of the spray is substandard.
Farmers use pesticides without following proper guidelines.
Use of broad-spectrum pesticides, which kills beneficial insects and pollinators as well.
Residues of pesticides are found in fruits and veggies. It leads to a ban on their exports to first-world nations (especially the EU).
When a pesticide is sprayed on crops, most of it bounces off the leaves, falling on the ground. It then mixes with soil and water, contaminating both, and entering the food chain leading to biomagnification.
93 chemicals banned in most of the developed world are sold in India.
Carcinogenic pesticides like Monsanto’s Glyphosate (brand-named ‘Roundup’) are still sold in India despite the proven fact that it can cause cancer.
Pesticides like Endosulfan (used on Cashew Plantations in Kerala) have proven genotoxic.
Rising usage: Warmer climate and growing population are expected to increase the use of pesticides to combat the possible rise in pest invasions and feed more people.
Pesticide poisoning: According to NCRB, in 2019, 6,962 deaths were reported out of 7,007 pesticide poisoning cases.
Opaque and out of date regulatory framework: Pesticide Management Bill (PMB) has been discussed since 2008. The cabinet approved the latest draft in February 2020.
The private sector monopoly: There is a private sector monopoly in pesticide trade whose decision is guided by the profit motive alone.
Wayout
Move towards Organic Farming.
Use narrow-spectrum pesticides.
Using biocontrol agents and biopesticides: It is a method of controlling pests such as insects, mites, weeds and plant diseases using other organisms.
Adopt Integrated Pest Management approach, which encompasses a judicious mix of pest control methods like bio-pesticides, bio-control agents and pesticides. (Vietnam Case Study: In Vietnam, almost all the farmers of Mekong Delta adopted a policy of “no-spray for first 40 days”. They used predatory beetles that prey on rice pests.)
Government should pass the Pesticide Management Bill, 2017, which aims to replace the Insecticide Act of 1968 with larger penalties and jail time for selling substandard or fake pesticides.
Note: India is a signatory to United Nations Environment Programme (UNEP) led Stockholm Convention for persistent organic pollutants and Rotterdam convention for export-import of pesticides.
Last Updated: Jan 2025 (Fertilizer (Agricultural Inputs))
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Fertilizer (Agricultural Inputs)
This article deals with ‘Fertilizer (Agricultural Inputs).’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Basics of Fertilizers
Plants require Nitrogen, Phosphorus and Potassium (NPK) for their balanced growth. If soil is deficient in these nutrients or if the farmer is using High Yielding Variety seeds that require more nutrients than any natural soil can supply, different fertilizers are used to boost nutrients in the soil.
Nutrient
Fertilizer used
Nitrogen (N)
Urea – Urea is produced using Haber’s Process using LPG as raw material. – It is the most widely consumed fertilizer in India. The Ministry of Chemical and Fertilizer gives subsidies to the Indian companies to manufacture and sell it at a lower price to farmers.
Phosphorus (P)
Diammonium Phosphate (DAP) – 80% of its demand is met via imports.
Potassium (K)
Muriate of Potash (MOP) – It is not manufactured in India. Hence, 100% of its demand is met via imports.
Fertilizer Subsidies
Fertilizers are provided to the farmers at subsidized rates. In 2020, Rs 71,000 crore was paid in fertilizer subsidies by the Union Government.
There are two types of subsidies on fertilizers
Nutrient Based Subsidy
Nutrient Based Subsidy is used in the case of DAP & MOP.
It was framed under Fertilizer (Control) Order, 1985 and issued under Essential. Commodities Act, 1955.
The government fixes per kilogram subsidy on DAP & MOP in this system. (Cost of Fertilizer for farmer = Market Price MINUS Fertilizer Subsidy)
But, imports of DAP & MOP aren’t controlled.
Subsidy on Urea
The case of urea is very different. The government intervenes in the sector in five ways:
It sets the Maximum Retail Price (MRP).
It provides a subsidy to 30 domestic producers on a cost-plus basis, meaning more inefficient producers get larger subsidies.
It provides a subsidy to importers.
Imports are canalized—only three agencies can import Urea into India.
Half of the movement of fertilizer is directed—that is, government tells manufacturers where to sell their urea.
These distortions feed upon each other, leading to a series of adverse outcomes.
Problems created by the way urea is subsidized
1. Leakages
Urea is subsidized 75% of its price.
Due to this, it is smuggled to
Industry (Ammonia-based industry)
Across the border to Bangladesh and Nepal
Additionally, larger—presumably richer— farmers consume subsidized urea. Ideally, subsidized urea should be given only to poor farmers
2. Shortages
The regulation under canalization creates shortages. Under the provisions of canalization, the government orders specific companies to when to import, what quantities to import & where to sell. But estimating the demand is a difficult task & shortages can’t be addressed instantaneously (it takes 60 days at least).
3. Inefficient Fertilizer Manufacturers
Earlier, the main objective of the Indian government was self-sufficiency & this led to Subsidy on Cost Plus Basis, where the subsidy a firm receives is based on its cost of production: greater the cost, the larger the subsidy. Consequently, inefficient firms with high production costs survive, and the incentive to lower costs is blunted.
4. Environmental & Health Externalities
Since Urea is cheaper than other Fertilizers, it creates a situation of urea overuse which is detrimental for the soil. Consequently, the soil’s N:P: K ratio is disturbed (Rajasthan – N:P: K = 25:12:1 instead of 4:2:1).
The declining response ratio or marginal productivity of fertilizers since the 1970s is a pointer to their inefficient use in Indian agriculture.
Fertilizer use is leading to harmful effects on the human health such as respiratory diseases, cancer etc.
Steps to rectify Fertilizer Usage
1. Direct Benefit Transfer
Earlier, the government used to give subsidies to the fertilizer company when fertilizer left the company’s godowns.
This system has been changed. Now, Fertilizer companies are paid subsidies only after the retailer has sold the fertilizer to the farmer through a Point of Sale (PoS) device.
This system prevents the diversion of subsidized urea towards non-agricultural purposes and smuggling to Nepal and Bangladesh.
2. Pradhan Mantri Bhartiya Janurvarak Pariyojana (PM BJP) – One Nation One Fertilizer Scheme
The scheme aims at marketing fertilizers in the country under ‘Bharat’ brand name.
The uniform design of bags across the country will now mention them as ‘Bharat Urea’, ‘Bharat DAP’, ‘Bharat MOP’, ‘Bharat NPK’.
Under the scheme
The new “Bharat” brand name and PMBJP logo will cover two-thirds of the front of the fertilizer packet.
The manufacturing brands can only display their name, logo, and other information on the remaining one-third space.
3. Neem Coated Urea
The government started this scheme in 2015.
Under this scheme, urea is coated with neem, which has the following benefits
It stops diversion to industrial consumers as neem coated urea cant be used in Ammonia-based industry due to adverse reactions that neem can cause.
It helps in slowing down the Nitrification of urea & increasing the efficacy of urea.
Due to the pesticidal properties of neem, the amount of pesticides required is reduced.
4. Soil Health Card
Soil Health Card Scheme is a component of NMSA (National Mission on Sustainable Agriculture).
In this, farmer’s land is tested for 12 parameters and given Soil Health Card (updated every 3 years).
The card also advises the farmer about the type of crops that can be grown and fertilizer requirements to achieve maximum yield for various crops.
Importance
Assist farmers in supplying proper fertilizer mix, which is currently dominated by urea.
It will help the farmer to select the most appropriate crop pattern.
This will lead to a diverse crop pattern that currently revolves around wheat & rice.
5. Size of Urea Bag reduced
In 2018, the size of the Urea Bag was reduced to 45 kg instead of earlier 50 kg.
Reason: Neem Coated Urea has increased the effectiveness of urea. Since farmers mainly assess the requirement of urea in terms of bags, the government has decided to reduce the size of the bag.
6. Nano Urea
Nano Urea is made by IFFCO.
It comes in liquid form and needs to be sprayed on the crop.
It is more efficient than normal urea. Nutrient Use Efficiency (NUE) of nano urea is over 80% against 30-50% of conventional granular urea. Hence, farmer can achieve the same efficiency by applying lower quantity, thus reducing the overall cost per hectare.
Nano Urea’s limitation is that, being a liquid fertiliser, it can only be sprayed after the crop has developed leaves.
7. PM PRANAM Scheme
PM PRANAM: PM Program for Restoration, Awareness Generation, Nourishment and Amelioration of Mother-Earth
Aim: To reduce the use of fertilizers in the farming
The scheme aims to encourage the state governments to reduce the consumption of fertilizers in their state. If state government is successful in reducing the consumption of fertilizers in their state, the Union government will transfer some percentage of the savings in the subsidy bill arising due to decrease in fertilizer consumption as grant.
8. Joint Venture
To reduce the cost of imported urea, the Indian government is setting up Joint Ventures with companies of oil rich countries like Oman, where gas prices are low, resulting in cheaper production of fertilizers.
Further reforms required
1. Bring Urea under Nutrient Based Subsidy (NBS)
Bringing urea under the NBS program would encourage fertilizer manufacturers to be efficient.
Under this model, the government sets the maximum limit on subsidized Urea Bags one can buy. Small farmers will still get all urea at a subsidized rate, but big farmers will have to buy more than the set limit at full price.
3. Leveraging Soil Health Card
Use Soil Health Card to make Tailor-made fertilizer for a particular field.
4. Other Steps
Teach farmers about the Integrated Nutrient Management which uses practices such as organic manures, plantation of legume crops, crop residue management etc.
Organic Alternatives to Fertilizers
1. Manure
Manure is a natural substance made by the decomposition of organic waste.
Apart from nutrients, it also provides humus to the soil.
But manure is less rich in nutrients compared to fertilizers.
The government is promoting the use of manure via schemes like
Gobar Dhan Yojana: For converting cattle dung and solid waste from farms and fields to manure, biogas and Bio-CNG (India has 300 million cows generating 3 million tons of dung).
City Compost Scheme: Fertilizer companies and marketing entities will also co-market City Compost with chemical fertilizers.
2. Vermicompost
Vermicompost is a mixture of earthworms and decomposed food, leading to the breakdown of organic matter.
Benefits of Vermicompost:
Increase in soil aeration by earthworms.
Enriches soil with microorganisms.
Water retention of soil capacity increases.
Easy to produce at an affordable cost.
3. Biofertilizer
Biofertilizer uses Micro-Organisms to produce impact similar to Fertilizers. Eg
Last Update: Jan 2025 (Water and Irrigation (Agricultural Inputs))
Table of Contents
Water and Irrigation (Agricultural Inputs)
This article deals with ‘Water and Irrigation (Agricultural Inputs).’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Introduction
Water is a critical input for successful agriculture. This water can be provided naturally through rainfall or artificially through human efforts.
Irrigation is the process of supplying water to the crops by artificial means such as canals, wells, tubewells, tanks, etc., from freshwater sources such as rivers, tanks, ponds, or underground reserves.
India and Irrigation
India has 18% of the world population but just 4% of freshwater resources. Hence, freshwater is a scarce resource in India.
40% of India’s total area under agriculture has irrigation facilities & the rest 60% is rainfed.
There are regional disparities in irrigation facilities. While Punjab, Tamil Nadu and UP have more than 50% of agricultural land under irrigation, other states like Maharashtra and Rajasthan have less than 50%.
Due to lower levels of irrigation,
Indian agriculture is vulnerable to the vagaries of nature. E.g., due to El-Nino induced drought conditions in 2014, the agriculture growth rate dipped to -0.2%.
Farmers can’t grow multiple crops reducing the overall productivity of farms and farmers.