Last Updated: Feb 2023
Introduction to Indian Agriculture
This article deals with ‘Introduction to Indian 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.
- The word “Agriculture” is a combination of two words, ‘Agri’ means ‘field’ and ‘Culture’ means ‘cultivation’. Hence, Agriculture is the art or science of producing crops and livestock on a farm.
- India is considered an agricultural economy because 42 % of its population is still dependent on agriculture for livelihood. Recognizing the importance of agriculture in the Indian economy, Mahatma Gandhi considered agriculture as the “Soul of India”. Pandit Jawahar Lal Nehru said, “Everything can wait, but not agriculture.”
Statistics about Indian Agriculture
With the development of the economy, the percentage of people engaged in agriculture is decreasing, and its contribution to the net GDP of India is decreasing as well.
a . Percentage of Indians employed in the Agriculture Sector
- In 2018, 42% of Indians were employed in the Agriculture sector.
b . Contribution of Agriculture to India’s GDP
- Its contribution to India’s total GDP has decreased from 51% (in 1951) to 17% (in 2018).
- It means that 42% of the population lives with only 17% of the total income, clearly substantiating the reason why the people who depend on agriculture are poor.
c . Growth rate of the Agriculture Sector
- The growth rate of Indian Agriculture is highly volatile because Agriculture in India is vulnerable to market forces and the vagaries of climate.
d . Target = Doubling Farmer’s Income till 2022
- Modi government has announced to ‘Double the income of farmers till 2022 wrt their 2015 income’. But this seems impossible considering the growth rate trends in previous years.
e . Production of Crops
- The production of crops has seen significant growth. India has become a food surplus country in contrast to a food deficit country in the 1950s.
Agriculture: Prime Moving Force?
- The Industrial Sector was selected as the PMF of the economy in the late 1940s (i.e. sector which would take the economy forward). But due to market failure, that sector failed to lead the economy.
- The policymakers understood that the market would not support the industries without increasing the income of people who depend on agriculture for their livelihood. As a result, in 2002, the Government of India announced agriculture as the PMF.
- It has been observed that 1% growth in the agriculture sector leads to 0.5% growth in the industrial sector & a 0.7% increase in national income.
Ministries related to Agriculture
Following ministries are related to Agriculture and Allied activities
1. Ministry of Agriculture and Farmer’s Welfare
- This Ministry looks after the agriculture sector in India.
- It has two departments viz.
- Department of Agriculture and Farmers Welfare: It is concerned with all the issues of agriculture and farmers.
- Department of Agriculture Research and Education: Mainly concerned with research work through the Indian Council of Agricultural Research (ICAR) and agricultural education through Central Agricultural Universities at Imphal (Manipur), Pusa (Bihar) and Jhansi (UP).
2. Ministry of Fisheries, Animal Husbandry and Dairying
- The government separated this department from the Ministry of Agriculture and made it a full-fledged ministry.
- It has two separate departments
- Ministry of Animal Husbandry and Dairying
- Ministry of Fishery
3. Ministry of Co-Operation
- A separate ministry named the Ministry of Co-operation was set up in 2021. Earlier, it was under the Ministry of Agriculture.
- The rationale of separate Ministry
- To cleanse the politicization, corruption and inefficiencies prevailing in the cooperative sector.
- Use cooperative societies to increase farmers’ income in a more efficient way.
4. Jal Shakti Ministry
- The Ministry of Jal Shakti looks after the irrigation needs of farmers.
- It has two separate departments
- Department of Water Resources, River Development and Ganga Rejuvenation
- Department of Drinking Water and Sanitation
MS Swaminathan Commission
Official Name: National Commission of Farmers (2004-06) headed by MS Swaminathan.
1. Farmer’s Income
- MSP should be at least 50% more than the weighted average cost of production. (Most Important)
- The “net take-home income” of farmers should be comparable to civil servants.
2. Land Reforms
- Distribute ceiling surplus and wastelands to the landless farmers.
3. Irrigation Reforms
- There should be more emphasis on rainwater harvesting.
- Aquifer recharge should become mandatory.
4. Credit and Insurance
- Establish an Agriculture Risk Fund to provide relief in natural calamities.
- Issue Kisan Credit Card.
- Develop an integrated Crop-Livestock-Human health insurance package for farmers.
Set up State level Farmers’ Commission with the representation of farmers for seeking dynamic government response wrt farmers’ problems.
From Core Schemes, those related to agriculture are
1. Rashtriya Krishi Vikas Yojana (RKVY) – Raftaar
- Rashtriya Krishi Vikas Yojana was started in the UPA regime to achieve 4% annual growth in the agriculture sector.
- In 2017, the Modi government renamed and rebranded it to RKVY-RAFTAAR.
- It provides
- Funding for Infrastructure development (warehouse, cold storage, market facility etc.)
- Training & skill development (for beekeeping, floriculture, mushroom cultivation etc.)
- Financial support to farmers to start Agri-enterprise after getting the training.
- Fund Agri start-ups.
2. Green Revolution – Krishi Unnati Yojana
- It is an Umbrella Scheme consisting of 11 schemes or missions.
- The Ministry of Agriculture runs it.
- Schemes under this are
2.1 Mission for Integrated Development of Horticulture (MIDH)
- The scheme to promote horticulture covering fruits, vegetables, root and tuber crops, spices, flowers, plantation crops etc., was introduced in 2014-15.
- Under it, there are 6 sub-schemes
|1||National Horticulture Mission (NHM)|
|2||Horticulture Mission for North East & Himalayan States (HMNEH)|
|3||National Bamboo Mission (NBM)|
|4||National Horticulture Board (NHB)|
|5||Coconut Development Board (CDB)|
|6||Central Institute for Horticulture (CIH)|
This programme is designed to leverage the geographical specialization of horticulture clusters and the development of pre-harvest, harvest and post-harvest activities.
2.2 National Food Security Mission (NFSM)
- NFSM aims to increase the production of wheat, rice, pulses, commercial crops, coarse cereals and vegetable oils.
2.3 National Mission for Sustainable Agriculture (NMSA)
- To encourage organic manures, bio-fertilizers, and cropping practices for soil and moisture conservation measures.
- Soil Health Card and Paramparagat Krishi Vikas Yojana have been started under this scheme.
2.4 Submission on Agriculture Extension (SMAE)
- To provide extension services to farmers like Kisan Helplines, Kisan TV, information about market price, weather forecast etc.
2.5 Sub-Mission on Seeds and Planting Material (SMSP)
- To promote new technologies in seed production, processing, storage, certification etc.
2.6 Sub-Mission on Agricultural Mechanisation (SMAM)
- To increase farm mechanization to increase the productivity of Indian farmers.
2.7 Sub Mission on Plant Protection and Plan Quarantine (SMPPQ)
- To minimize crop damage by insects, pests, nematodes, weeds, rodents, etc. and to protect agricultural biosecurity from alien species like Lantana (Congress Grass).
2.8 Integrated Scheme on Agriculture Census, Economics and Statistics
- For agriculture data collection, which can be used for R&D and policymaking.
2.9 Integrated Scheme on Agricultural Cooperation (ISAC)
- To provide financial assistance to farmer cooperatives for agricultural marketing, processing, storage etc.
2.10 Integrated Scheme on Agricultural Marketing (ISAM)
- To do marketing of Indian agriculture.
2.11 National e-Governance Plan – Agriculture (NeGP- A)
- To enhance the reach of extension services- about cropping methods, market prices etc., to the farmers.
3. Agriculture Infrastructure Fund (AIF)
- It is a central sector scheme operational from 2020-21 to 2029-30.
- Aim: Provide medium- and long-term debt financing to create post-harvest management infrastructure and farming assets.
- Under the scheme
- Rs 1 lakh crore is planned to be given to banks and financial institutions, which will provide loans to farmers, cooperative societies, Farmer Producer Organizations etc., for the creation of assets.
- Interest subvention of 3% is provided if the loan is lesser than Rs 2 crore.
- The government provides a credit Guarantee if the loan is lesser than Rs 2 crores.
4. PM Kisan Sampada Yojana
- SAMPADA = Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters
- It is an umbrella scheme formed by incorporating all the schemes of the Ministry of Food Processing. These schemes include
- Mega Food Parks
- Integrated Cold Chain Infrastructure Scheme
- Food Safety Infrastructure Scheme
- Infrastructure for Agro-processing Clusters
- Creation of Backward and Forward Linkages
- Creation of Food Processing & Preservation Capacities.
- Operation Green for Tomato, Onion and Potato (for combating inflation in these vegetables)
- Objectives of the Sampada Scheme
- To create jobs in the food processing industry
- Reduce food wastage
- Boost Mega Food Parks and Cold Chain Infrastructure
5. Pradhan Mantri Krishi Sinchai Yojana
- Dealt in Chapter
Strengths & potential of Indian agriculture
- 17% share in GDP of Agriculture & allied activities.
- 42% population depends on agriculture & allied activities for employment.
- First rank in milk production, accounting for 17% of world production.
- India is the largest producer of fruits like banana, coconut, cashew, papaya, pea, cassava, pomegranate etc.
- India is the largest producer & exporter of spices.
- India is the second-largest producer of vegetables, fruits & fish.
- Weather permits multiple crops throughout the year.
Characteristics of Indian Agriculture
- Indian agriculture is mainly of the Subsistence type.
- Intensive farming is carried out in a limited area.
- Less-mechanized: The level of mechanization is deficient.
- Low-per-person productivity.
- Division of land throughout generations has led to land fragmentation.
- Poor forward & backward linkages.
- The underdeveloped food processing industry leads to low-value addition.
- Poor agro-infrastructure like cold storage, refrigerated vans etc.
- Indian agriculture is more focused on food grains (cereal crops).
- Diversity of crops: The variety of inter-crop and intra-crop is large.
- India has the highest percentage of the geographical area under cultivation globally.
- Mixed agriculture is practised in India, where farmers practice agriculture and livestock /fishery/ poultry.
- Indian agriculture is heavily dependent on rainfall for irrigation.
- Climate and edaphic factors in India are favourable for agriculture.
- Minimum attention is paid to fodder crops.
Problems of the Indian Agriculture Sector
Since independence, Indian agriculture has advanced significantly, with chronic food shortage giving way to food self-sufficiency despite a 1.5-fold rise in population. In 1966-67, before India’s Green and White Revolutions, Indian wheat and milk production was just around one-third of American output. Presently, Indian wheat output is 60 per cent higher than America’s, while Indian milk output is 50 per cent higher. However, these tremendous increases in aggregate production do mask some disquieting trends.
1. Excessively Cereal Centric
- Although India has become self-sufficient in food production, at the same time has become excessively cereal-centric and input-intensive as the present cropping pattern consumes a large amount of land, water, and fertilizer.
2. Reducing Per Capita land
- In India, 87% of farmers are Small and Marginal (i.e. owning less than 2 ha land).
3. Marketing Problems
There are a large number of marketing problems wrt Indian agriculture like
- APMC Act issues
- Lack of Warehouses
- The Food Processing Industry is not developed.
- Significant price fluctuations, especially sharp fall in prices.
- Monoculture uses the land to cultivate one crop type, usually for multiple years in a row. E.g., Punjab’s 83% land is devoted to rice and wheat alone.
- It decreases land productivity.
- It leads to an inadequate response to fertilizers.
- It decreases the health of the soil.
- Crops become more susceptible to pest attacks.
- It impacts nutritional security.
5. Water Challenge
- India grows water-intensive crops like sugar, which uses 2000 lt, and rice which uses 5000 lt of water to produce a kilogram.
- Despite being one of India’s most scarce natural resources, India uses 2 to 4 times more water than China or Brazil to produce a unit of a food crop.
- 70% of fresh water in India is used for Agriculture, which is the highest globally.
- India uses a “flood” irrigation method using the canal and well irrigation facilities, which is highly inefficient.
- Subsidies on power for agricultural use incentivize wasteful use of water.
- According to an analysis by NASA, India’s water tables are dropping by 0.3 metres annually.
6. Climate change
The increased frequency of extreme weather events adversely affects agricultural production through soil erosion, pest attack, crop failure etc.
7. Low Productivity
- India’s per-hectare yield is very low in all crops.
- Except for Punjab & Haryana, all other states fare poorly wrt China. Analysis of per hectare yield of rice corroborates this fact.
8. Second Generation problem of the Green Revolution
- Misuse and abuse of the technologies responsible for the Green Revolution, like fertilizer, groundwater, etc., have negatively impacted natural resources (soil, water, biodiversity) and, consequently, challenged the long-term sustainability of agriculture.
9. Faulty Government policies
- Due to vote bank politics, the government keeps increasing the Minimum Support Price of wheat, rice and sugarcane. On the other hand, MSP is not announced for vegetables and fruits, especially tomatoes, onions etc.
- Fertilizer subsidy, especially on Urea, leads to wrong usage practices & harms the fertility of the soil in the long run, apart from increasing the government’s fiscal deficit.
10. Minimum Export Price (MEP) issue
- Whenever International prices are higher than Indian prices, the Government sets the Minimum Export Price high so that farmers cannot export their products and benefit from higher international prices. It is mainly done to protect Indian consumers from inflation.
- E.g., if the Onion price in India is ₹50/kg and that in the international market is ₹100/kg, the Government will set MEP at ₹125/kg.
11. ECA (Essential Commodities Act)
- Whenever the price of any agricultural product (like an onion) increases, the government use provisions of this act to harass those farmers who have stored their product in warehouses for better price realization.
12. Inflation Targeting Policy
- The new Inflation Targeting Policy uses CPI to set monetary policy (which has a 46% food component). Hence, inflation increases when the price of food crops increases, and RBI takes steps to decrease agro-product prices.
Due to MEP, ECA & Inflation Targeting, we can say that Government policies have pro-consumer rather than pro-producer bias as far as agro products are concerned.