Agricultural Sector

• Agriculture is the primary Industry in India. The agriculture sector of India has occupied almost 43% of India’s geographical area. Agriculture and allied sectors forestry, logging and fishing accounted for 7% of the GDP in 2012-13.
• Contribution of Agriculture and allied sector to the Gross Domestic Product (GDP) of the country declined from 6% in 2009-10 to 14.5% in 2010-11 and further to 14.1% in 2011-12.

7.1 FEATURES OF INDIA AGRICULTURE SECTOR

• Largest Employment Providing Sector

Agriculture in India, is the most important source of employment.

• Basis for         Industrial Development Agriculture offers raw materials including (cotton, sugarcane and oilseeds) for

industries like textiles, sugar and oil-processing etc. Besides, it also offers market for the expanding industrial sector of the economy.

• Industries producing capital goods (like tractors, thrashers and harvesters) are directly dependent upon agricultural
• Development of Tertiary Sector Tertiary sector provides helpful services to the industries and agriculture like banking, warehousing
• Internal Trade is mostly done in agricultural produce, g., various means of transport get bulk of their business by the movement of agricultural goods.
• Contribution in Foreign Trade Agriculture plays an important role in the international trade, Jute, tea, coffee and spices are the country’s well known conventional
• Fertilizers, harvesters and thrashers are the notable import

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items meant exclusively for agriculture sector of the economy.

• International Importance India is the largest producer of coconuts, mangoes, bananas, milk and dairy products, cashew nuts,

pulses, ginger, turmeric and black pepper. It is also the 2nd largest producer of rice, wheat, sugar, cotton, fruits and vegetables.

MAJOR CROPS OF INDIA

Crop	Crop group	State with the highest area under cultivation	State with highest production
Bajra	Cereals	Rajasthan	Rajasthan
Castor	Oilseed	Gujarat	Gujarat
Cotton	Others	Maharashtra	Gujarat
Gram	Pulses	Madhya Pradesh	Madhya Pradesh
Groundnut	Oilseed	Gujarat	Gujarat
Jowar	Cereals	Maharashtra	Maharashtra
Jute	Others	West Bengal	West Bengal
Linseed	Oilseed	Madhya Pradesh	Madhya Pradesh
Maize	Cereals	Karnataka	Andhra Pradesh
Mesta	Others	Andhra Pradesh	Andhra Pradesh
Other Pulses	Pulses	Rajasthan	Rajasthan
Ragi	Cereals	Karnataka	Karnataka
Rapeseed and	Oilseed	Rajasthan	Rajasthan
mustard
Rice	Cereals	Uttar Pradesh	West Bengal
Sesamum	Oilseed	Rajasthan	Rajasthan
Small millets	Cereals	Madhya Pradesh	Uttarakhand
Tur	Pulses	Maharashtra	Maharashtra
Wheat	Cereals	Uttar Pradesh	Uttar Pradesh

7.2 FIVE YEAR PLANS AND AGRICULTURE

• 1st Plan (1951 – 56) The 1st Plan aimed at solving food crisis, hence, highest priority to

agriculture with allocation of more than 14% of the total plan outlay.

• 2nd Plan (1956 – 61) This plan saw significant reduction in

agricultural outlay. It was

11.7% of the total plan outlay.

• 3rd Plan (1961 – 66) 2nd Plan experience and recognition that agricultural production is the limiting factor, the 3rd Plan fixed ambitious targets of production for all agricultural crops. This plan also saw the introduction of Intensive Agricultural District Programme (IADP), followed by High Yielding Variety Programme (HYVP).
• 4th Plan (1969–74) This plan aimed at systematic application of science and technology to improve agricultural practices. This allocation to agriculture sector was 15% of the total plan outlay.
• 5th Plan (1974–78) The 5th Plan was the only period, when the actual food grain production exceeded the  targeted production.
• 6th Plan (1980–85) Agriculture growth rate in this plan was 3% as against the targeted 3.8%. The

year 1983-84, of the plan is hailed as the Second Green Revolution.

• It was the result of expansion in supplies of inputs and services to farmers, agricultural extension and better
• 7th Plan (1985–90) Total plan outlay on agriculture was 6% and except cotton, none of the targets fixed for various sectors was achieved.
• 8th Plan (1992–97) Agriculture growth rate in this plan was 44% on account of weather and climate conditions being favourable.
• 9th Plan         (1997–2002) Agriculture growth rate in this plan was 44%. All the set targets were not achieved and hence, 9th Plan was a failure on agriculture front.
• 10th Plan (2002–07) This plan adopted the prescription of the National Agricultural Policy (NAP), 200 and therefore, envisaged better management of resources, soil and water, so as to promote sustainable and inclusive agricultural

• 11th Plan (2007–12) This Plan witnessed an average annual growth of 6% in the Gross Domestic Product (GDP) from agricultural and allied sector against a target of 4.0%. While it may appear that the performance of the agriculture and allied sector has fallen short of the target, production has improved remarkably, growing twice as fast as population.

Agriculture in the 12th Plan

(2012 – 17)

• Agriculture witnessed a welcome turnaround during the 11th Plan, after the low growth rates achieved during the 9th Plan (2.44%) and the 10th Plan (2.3%) by growing at 3%
• Some of the challenges that agriculture might face during the 12th Plan include a shrinking land base, dwindling water resources, adverse impact of climate change, shortage of farm labour and increasing costs and uncertainties associated with volatility in international markets.

• The 12th Plan targets an average annual growth of 4% in agriculture.
• Some areas, where the plan will be focussed are as follow

• Public-Private Partnership for better extension and marketing services. This includes modifying Agriculture Produce Market Committee (APMC), Acts to encourage setting up of private markets and contract farming.
• Development of soil testing and product quality testing facilities.
• Distribution of more institutional credit equitably, greater focus on small and marginal farmers, improving productivity in rain-fed areas, retaining youth in agriculture and funding for research and

7.3  GREEN  REVOLUTION IN INDIA

• The introduction of high-yielding varieties of seeds after 1965 and the increased use of fertilizers and irrigation are known collectively as the Green Revolution, which provided the increase in production needed to make India self-sufficient in foodgrains.

• The term ‘Green Revolution’ is a general one that is applied to successful agricultural experiments in many Third World Countries. It is not specific to India. But is was most successful in
• There were three basic elements in the method of the Green Revolution.

• Continued expansion of farming areas
• Double-cropping existing farmland
• Using seeds with improved yields.

Drawbacks of    First  Green Revolution

• While the first Green Revolution
  achieved many successes, there were also many flaws in its strategy, which were not envisaged at that time. These flaws include, negative impact on environment and health due to excessive use of fertilizers and pesticides; depletion of soil
  nutrients; depletion of water resources including ground water, higher costs of input etc.
• Certain other conditions have also emerged after the first Green Revolution, which are having a negative impact on agriculture like, land constraints due to diversion of land to other economic areas; climate change; diversion of crops to bio-diesel, fragmentation of land holdings making farming
• For these reasons and to ensure the food security of the country, there is a need for a Second Green Revolution in the country, which would address all the problems.

Second Green Revolution in India

• Second Green Revolution will consist of a number of different programmes working towards the same goals. Some of the initiatives, which will help in this direction are as follow
  • Increasing crop yields in eastern
  • Organic farming  and contract

farming.

• Amending the Agricultural Produce Market Committee (APMC)

Bringing Green Revolution in Eastern India Programme (BGER)

The BGREI was launched in 2010- 11, as a part of the Rashtriya Krishi Vikas Yojana. It was implemented in the eastern region of the country. It focused on resource allocation and utilisation. It has resulted in a robust increase in foodgrain production, growth rate being estimated at 11.9% during 2011-12 as against the overall growth rate of 2.2% of the country as a whole. The scheme is being continued, which an allocation of 1000 crore in 2013-

• Investing in research to drought- proof crops as well as to tackle climate change
  • Investing in supply chain and cold chains.

• Encouraging privateinvestments through tax law
• Use of  plant  breeding  and biotechnology
• Rain water   harvesting    and watershed
• Improving credit
• Refocusing on land

Major Agricultural Revolutions
Green Revolution	Cereals, Wheat and leguminous plants.
White Revolution	Milk and dairy products
Silver Revolution	Egg and Poultry
Yellow Revolution	Edible Oil
Blue Revolution	Fishery
Pink Revolution	Prawns/Meat Processing
Golden Revolution	Honey
Golden Fibre Revolution	Jute
Silver Fibre Revolution	Cotton

• Improving soil quality and reclaiming degraded

Evergreen Revolution

• The concept was given by renowned agricultural scientist MS Swaminathan. Evergreen Revolution emphasises  on               organic agriculture and green agriculture with the help of integrated pest management, integrated nutrient supply and integrated natural resource management. The core of the Evergreen Revolution is sustainability.
• Bringing Green Revolution to Eastern India, initiated in 2010- 11, intends to address the constraints limiting the productivity of ‘rice based cropping systems’ in Eastern India comprising seven states, viz, Assam, Bihar, Chhattisgarh, Jharkhand, Odisha, Eastern Uttar Pradesh and Paschim Banga.

Tricolour Revolution

• The reference to a Tricolour Revolution was made by Prime Minister Narendra Modi. This

phrase has three components These are as follows

• Saffron Energy Revolution for promotion and better utilisation of solar energy
• White Revolution to ensure cattle welfare and further the goals of White
• Blue Revolution for fishermen’s welfare, cleansing rivers and sea and conserving

7.4 NATIONAL COMMISSION ON FARMERS

• It was appointed in 2004, under the chairmanship of Dr. MS Swaminathan.
• The Commission suggested an Agricultural Renewal Plan, which has five components

1. Soil health enhancement with special focus on dry
2. Irrigation Water         Supply Augmentation and Demand Management.

• Credit and Insurance facilities like creation of Agriculture Risk

1. Technological reforms in the form of proper integration of production and post-harvest technologies, development of a cadre of rural

farm science managers and lab-to- land demonstrations.

1. Assured and       remunerative
   • The commission also suggested a

Risk Stabilisation Fund and a farmer centric Minimum Support Price and Market Intervention Scheme (MIS) and creation of Pani Panchayats.

AGRICULTURAL POLICY

Since independence, India has pursued a policy of food self-sufficiency, particularly in food grains, through strong government support of agriculture. The central government and state governments set the agricultural policy. The basic goal of the policy is to increase crop production by expanding irrigation, improving crop yields through adoption of high yielding varieties and increasing cropping intensity with multiple cropping. Though 72 Mha, that is 39 per cent of the cropped area, is irrigated, India’s agriculture is dependent on monsoon rains. India’s crop yields are relatively low by world standards. To increase yields, the public sector provides agricultural inputs such as fertilisers, power and irrigation water at subsidised prices.

The government makes significant public investments in agricultural research, extension and infrastructure development. The central government formulates national agricultural policies of price support, procurement, subsidies, investments, credits and trade. The central government fixes minimum support prices for major commodities and updates the prices each year. The commission for agricultural costs and prices recommends the support price for 24 crops.

The state governments have jurisdiction over grassroots functions of agricultural production, such as providing irrigation, power and fertilisers within the state. The government procures mainly food grains at support prices. It maintains public stocks for disbursement among low- income consumers at subsidised prices through the Public Distribution System (PDS). The subsidy equals the difference between the PDS price and the procurement cost. India spends a sizable part of its budget on food subsidies.

Production and price policies have generated a steady growth in agriculture since the Green Revolution of the 1960s. For many years, India’s domestic market was insulated from world trade by restrictive trade policies. High tariffs and non-tariff barriers limited market access. Only state trading companies were allowed to conduct agricultural trade at the behest of the government. With reforms, the restrictive trade policies are now loosening and total agricultural trade has more than doubled between 1991 and 1999.

7.5AGRICULTURAL INPUTS

• Agricultural inputs play a crucial role in determining yield levels and in turn augmentation of level of production in the long run. Improvement in yield depends on application of technology, use of quality seeds, fertilizers, pesticides, micro- nutrients and

Seeds (National Seeds Policy

2002)

• Seeds are a critical input for long-term sustained growth of agriculture. In India, more than four-fifths of farmers rely on farm-saved seeds leading to low seed replacement rate. Hence, the Central Government has been addressing this issue through various

programmes/schemes.

• Indian Seed Programme involving the participation of Central and                         State Governments, the Indian Council of Agricultural Research (ICAR), state agricultural             universities,

cooperative   and   the   private

sector and farmers and plant breeders.

• The Protection of Plant Varieties and Farmers’ Rights (PPV and FRs) authority established in November 2005, at New Delhi, has been mandated to implement provisions of the PPV and FR Act, 2001.
• PPV and FR Act has been passed within the context of Sui Generis System of the WTO, so as to effectively block the efforts of MNCs to capture the seed market by getting patents in their favour and gradually buying out small seed growers in the

Sui Generis System

• TRIPS Agreement offers three options for plant varieties and their protection, viz, Patent System, Sui Generis Systems and combination of
• Under Sui Generis System, farmer has the right to save, use exchange share or sell the farm produce including

However, farmer cannot sell the branded seeds.

Seed Bank

• A scheme for the establishment and maintenance of a seed bank has been in operation since, 1999-2000.
• The basic objective of the scheme is to make available seeds for meeting contingent requirement and also develop infrastructure for production and distribution of
• The scheme is being implemented through National Seed Corporation of India and 12 State Seeds Corporations of various

Fertilizers

• India is meeting 85% of its urea requirement through indigenous production, but depends heavily on imports for its phosphatic and potash (P and K) fertilizer
• The Per hectare consumption of fertilizers in nutrient terms has been increasing, it increased from 118 Kg per hectare in 2006-

07 to 141.3 kg per hectare in

2011-12.

Fertilizer Subsidy

• Fertilizer subsidy is borne by the Union Government. The twin objectives of providing fertilizer subsidy are as follows- (i) Making fertilizers available to the farmers at affordable prices so as to encourage intensive cultivation. (ii) Attracting more investment to the domestic fertilizer
• Since 2010, government is implementing a Nutrient Based Subsidy Scheme (NBS) in which a fixed subsidy is announced on per kg of nutrient annually Additional subsidy is given to micro-nutrients. The prices of urea however, remain under statutory price

Irrigation

• It is one of the most important inputs for   enhancing productivity and is required at different critical stages of plant growth of various crops. The Government  of  India  has taken

up   irrigation   potential creation

through public funding and is assisting farmers to create potential on their own farms.

• The total irrigation potential in the country has increased from

81.1 million hectare in 1991-92 to 108.2 million hectare in March, 2010.

Initiation of the Accelerated Irrigation Benefit Programme (AIBP)

• From 1996-97, to extent assistance for the completion of incomplete irrigation schemes. Under this programme, projects approved by the Planning Commission are eligible for assistance. In the Budget 2012- 13, a government owned water resource finance company is being operationalised to mobilise large resources to fund irrigation.

National Mission on Micro Irrigation (NMMI)

• Irrigation consumes more than 80% of the water resources of the country. Availability of adequate quantity and quality of water is

the key to achieve higher productivity levels.

• This mission will result in 85 million hectare to be brought under micro irrigation; savings in use of irrigation water, fertilizer and electricity; increase in production and productivity of crops; convergence with other ongoing schemes of Department of Agriculture and Cooperation (DAC) and other ministries on creation of water harvesting structures and linking the same with Micro Irrigation System for higher water use efficiency and enhanced return to the farmers.

Rainfed Area Development Programme

• Given the importance of rainfed agriculture in India, the Rainfed Area Development Programme (RADP) was launched by the government as a pilot scheme under the RKVY focusing on small and marginal farmers and farming
• It adopted a holistic ‘end-to-end approach’ covering integrated

farming, on farm water

management, storage marketing and value addition of farm produce in order to enhance

Sprinkler Irrigation Under sprinkler irrigation, water is sprinkled under pressure on to the crop through a set of nozzles attached to a network of pipes in the form of rainfall. This system is suitable       forhighdensity horticultural crops. The sprinkler system sets could cover more than one hectare by shifting from one place to another.

Drip Irrigation

It is also known as trickle irrigation or micro irrigation, it is an irrigation method that saves water and fertilizer by allowing water to drip slowly to the roots of plants, either onto the soil surface or directly onto the root zone, through a network of valves, pipes, tubing and emitters. It is done through emitters fitted on a network of pipes (mains, sub- mains and laterals). The emitting devices could be drippers, micro sprinklers. Mini sprinklers, micro

farmers’ income in rainfed areas.

National Rainfed Area Authority (NRAA)

• The government has set-up National Rainfed Area Authority (NRAA), an expert body to provide the much-needed knowledge inputs regarding systematic upgradation and management of country’s dry land and rainfed agriculture. An order for setting up the authority was issued on 3rd November, 2006.
• The NRAA has a two tier structure. The 1st tier is the governing board that provides necessary leadership and appropriate coordination in implementation of
• The 2nd tier is the Executive Committee consisting of technical experts                          and representatives from stakeholder ministries.

Power and Irrigation Subsidies

• Since water and electricity fall within the state domain, power

and irrigation subsidies are provided by the State Governments.

• Irrigation subsidies are incurred on account of the pricing of irrigation water provided to the farmers by the State Governments.
• Consequences of Power and Irrigation
  • Increased fiscal
  • Less revenue available for investment in irrigation and other large scale
  • Over exploitation of ground water resources by
  • Inefficient use of irrigation water leading to water logging and

7.6FOOD SECURITY

• Food security is defined as a situation when ‘All people, at all times, have physical, social and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life’ according to FAO

(Food        and        Agriculture Organisation).

• India’s food security programme tries to tackle some of these problems through various intervention. The main interventions can be said to be the public distribution system and the National Food Security Act, 2013.

Public Distribution System

• Presently, PDS is operated under the joint responsibility of the Central and the State Governments. The Central Government, through FCI, has assumed the responsibility for procurement, storage, transportation and bulk allocation of foodgrains to the State
• The operational responsibility including allocation within states, identification of families below the poverty line, issue of ration cards and supervision of the functioning of fair price shops, rest with the State Governments.

• Under the PDS, presently, the commodities namely wheat, rice, sugar and kerosene are being allocated to the states/UTs for distribution. Some states/UTs also distribute additional/items of mass consumption oils, iodised salt, spices
• As of date, there are about 99 lakh Fair Price Shops (FPS) across India.
• The Targeted Public Distribution System (TPDS) was introduced with effect from June 1997.

Food Corporation of India

• FCI was set-up in 1965 with the primary duty to undertake the purchase, storage, movement, transport, distribution and sale of foodgrains and other
• It has also been entrusted with maintaining buffer stocks of foodgrains on behalf of the government. It is the sole repository of foodgrains meant for the

Revamped  Public Distribution System (RPDS)

• The Revamped        Public Distribution System (RPDS) was launched in June, 1992, with a view to strengthen and streamline the PDS as well as to improve its reach in the far- flung, hilly, remote and inaccessible areas, where a substantial section of the poor live.
• Foodgrains for distribution in RPDS areas were issued to the states at 50 paise below the Central Issue Price. The scale of issue was upto 20 kg per
• The RPDS included areas approach for ensuring effective reach of the PDS commodities, their delivery by State Governments at the doorstep of FPSs in the identified areas, additional ration cards to the left out families, infrastructure requirements like additional Fair Price Shops, storage capacity etc. and additional commodities such as tea, salt, pulses, soap etc for distribution through PDS

• One of the emphasis of 12thFive Year Plan is to encourage public private partnership in agriculture so as to bridge the gap in dryland areas and rapidly diversity
• The main purpose of the Rainbow Revolution was to achieve the growth rate of over 4% per annum.

Targeted Public Distribution System (TPDS)

• The TPDS as it operated earlier had been widely criticised for its failure to serve the population below the poverty line. Therefore, on the basis of the recommendations of the Chief Ministers Conference held in July, 1996, an effort was made to streamline the PDS, through the introduction of the Targeted Public Distribution System (TPDS) in June,
• This system follows a 2 tier subsidised pricing structure for families, Below Poverty Line (BPL) and for those Above Poverty Line (APL).

• The identification of poor under the scheme is done by the states as per the state-wise poverty estimates of      Planning
• In order to make the TPDS more focused and targeted towards the poor, the Antyodaya Anna Yojana was launched in December, 2000.
• The scheme contemplates identification of 120 million poor families and providing them with 256 kg of foodgrains per family per month at a low price of Rs. 2 per kg for wheat and Rs. 3 per kg for

Agricultural Prices and Procurement

• The Government of India undertakes an agricultural pricing policy and procurement programme to        provide reasonable returns to the farmers and instill confidence in them.
• The procurement programme is also essential to the functioning of the Public Distribution System (PDS).

Minimum Support Prices and Procurement Prices

• The Commission for Agricultural Coats and Prices (CACP) announces minimum support prices, procurement prices and issue prices for a number of agricultural commodities every year, The Central Government usually accepts the CACP’s recommendation as
• Minimum Supports Prices (MSP) These are in the nature of a guarantee to the producers in that prices paid to the farmers cannot be lower than the
• Procurement Prices These are higher than the MSP and are the prices at which government buys from farmers. In recent years, government has been announcing endless procurement so, that farmers have been selling to the government at procurement prices.
• Central Issues Prices (CIP) It indicate the prices at which government supplies produce to the fair price shops and ration depots. Wheat and rice the issued

to the State Governments/UTs at

CIP for distribution through the PDS. States may choose to provide additional subsidy to the beneficiaries by reducing prices below CIP.

• Price support through MSP and procurement prices is extended only for specific crops. This has led to a change in cropping in the country towards certain specific crops such as rice and wheat whose MSP has increased a lot. It has also benefited farmers in those states where such crops are produced in a larger

Decentralised           Procurement Scheme

• In view of a this, a decentralised procurement scheme was started in 1997, under which State Governments themselves procure       and             distribute The difference between the economic cost fixed for the state, and the Central Issue Price (CIP) is passed on to the states as subsidy.
• The objectives of this scheme are

to cover more farmers under

MSP operations. Improving efficiency of PDS, providing foodgrains suited to local tastes and reducing transportation costs.

National   Food   Security  Act (NFSA) 2012.

• NFSA is the biggest intervention of its kind in the world in the realm of food security. It implemented property this law can improve the lives of millions in this

• Some of the highlights of this act are as follow

• It extends to the whole of India.
• Priority households are entitled to 5 kgs of food grains per person per month and Antyodaya households to

35 kgs per household per month.

• Combined coverage of priority and Antyodaya households will extend to 75% of the rural population

and 50% of the urban population.

• PDS issue prices will be 3/2/1 per kg for rice/wheat/millets. These may be revised after 3
• For children in the age group 6 months to 6 years, an age- appropriate meal will be provided through the local Anganwadi.
• For children aged 6-14 years, one free mid-day meal in all government and government aided schools up to class
• For children below 6 months ‘exclusive breast heeding will be promoted’.
• Every pregnant and lactating mother is entitled to a free meal at the local Anganwadi (during pregnancy and 6 months after) and maternity benefits of Rs. 6000 to be paid in
• The act does not specify criteria for identification of eligible households. Central Government will determine state-wise coverage and states

will then identify the beneficiaries.

• State food commissions will be created to monitor implementation of the
• Grievance Redressal system consists of the district Grievances Redressal officer and the State Food Commission.
• Transparency provisions include-placing PDS records in the public domain, conducting periodic social audits, use of information and communication technology and setting up of vigilance committees.
• The act also states that the central and State Governments will endeavour to undertake PDS

About NFSM

The National Development Council (NDC) in 2007 adopted a resolution to launch Food Security Mission comprising rice, wheat and pulses to increase the production of rice by 10 MT, wheat by 8 MT and pulses by 2 MT by the end Eleventh Five-Year Plan (2011-12).

Accordingly, a Centrally Sponsored Scheme ‘National Food Security Mission (NFSM)’ was launched from Rabi 2007-08 to operationalise above mentioned resolution.

Storage Capacity and Constraints

• There are 3 agencies in the public sector, which are engaged in building large scale storage/warehousing capacity namely. Food Corporation of India (FCI),                             Central Warehousing                   Corporation (CWC) and 17 State Warehousing          Corporations (SWCs).
• While the capacity available with FCI is used mainly for storage of

foodgrains that with CWC and SWCs is used for storage of foodgrains as well as certain other items. By the end of 2012, FCI had a total covered storage capacity of 341.35 lakh tonnes.

7.7   FOOD PROCESSING INDUSTRY

• India is the 3rd largest producer of food in the world, after China and the
• Food processing industry is the 5th largest industry in India, in terms of    production, consumption, exports and expected
• The Indian food processing industry stands at $135 billion and is estimated to grow with a CAGR of 10% to reach $200 billion by 2015.
• The industry is segmented into sectors namely, milk and allied products (dairy), meat and poultry, seafood, bakery and confectionery, fruit and vegetables, grain, pulses and oilseeds (staple) products, alcoholic and non-alcoholic

classification is not distinct as many processed products overlap different segments.

7.8 CAUSES OF LOW PRODUCTIVITY IN INDIAN AGRICULTURE

General Causes

• Social environment of villages like Indian farmers being illiterate, conservative and unresponsive to new agricultural techniques is a major obstacle in agricultural development.
• Pressure of population on land leading to fragmentation of holdings. Productivity of small uneconomic holdings is
• Land degradation is very high, Almost 43% of the land suffers from high degradation resulting in 33-67% yield

Institutional Causes

• Highly exploitative land tenure system, especially Zamindari System.
• Lack of credit and marketing

facilities.

• Uneconomic holdings in 2000-01, 81% of the total holdings had a size of less than 2

Technical Causes

• Outdated agricultural
• Inadequate irrigation facilities- even now more than 55% of the gross cropped area continues to depend on rains.

Agriculture Holdings in India

Type	Holdings (in hectare)	Percentage of Total
Marginal Holdings	Less than 1	59%
Small Holdings	01-Apr	32.20%
Medium Holdings	04-Oct	7.20%
Large Holdings	More than	1.60%

• LAND REFORMS
  • With the twin objectives of achieving social equality and ensuring economic growth, the

land reforms programme was built around three major issues

• Abolition of
• Settlement and regulation of tenancy.
• Regulation of size of

• After Independence, the government has undertaken many land reform measures g.
• Zamindari System, has been abolished. The actual cultivator has been given either the ownership right or the right of occupancy
• Tenancy System has been reformed by enacting various legislative measures in different
• Ceiling on landholdings has been
• By 2004, about 1633 lakh hectare of holdings have been consolidated.
• Co-operative farming has also been developed.
• In order to improve the conditions of landless farmers. Acharya Vinoba Bhave launched Bhoodan Movement in the

National Land Records Modernisation Programme (NLRMP)

• The Government of India decided to implement the centrally-sponsored scheme in the shape of the National Land Records Modernisation Programme (NLRMP) by merging two existing Centrally- Sponsored                    Schemes                of Computerisation of Land Records (CLR) and Strengthening of Revenue Administration and Updating of Land Records (SRA and ULR).
• The integrated programme seeks to achieve the following – modernise management of land records, minimise scope of land/property disputes enhance transparency in the land records maintenance system and facilities moving eventually towards guaranteed conclusive titles to immovable properties in the

• A single window to handle land records.

• The mirror principle, which refers to the fact that cadastral records mirror the ground reality.
• The curtain principle, which indicates that the record of title is a true depiction of the ownership
• Title insurance, which guarantees the title for its correctness and indemnifies the title holder against loss arising on account of any defect therein.

7.10AGRICULTURAL FINANCE AND CREDIT FACILITIES

• Agricultural credit is disbursed through a multi-agency network comprising of Commercial Banks (CBs), Regional Rural Banks (RRBs) and cooperatives. With their vast network (covering almost all villages in the country), wide coverage and outreach extending to the remotest parts of the country, the Cooperative Credit Institutions, both in short and long-term structure, are the main institutional agencies for

the dispensation of agricultural credit.

• After nationalisation, Commercial Banks have also started giving loans for farming operations. Regional Rural Banks and farmer service societies also strengthen the rural credit programmes.
• National Bank for Agriculture and Rural Development (NABARD) has been established as an apex agricultural finance institution.

Cooperative Credit Societies

• Rural cooperative credit institutions in India have been organised into short-term and long-term
• The short-term cooperative credit structure consists of three- tiers- Primary Agricultural Credit Societies (PACS) at the villages level, District Central Cooperative Banks (DCCB) at the district level and State Cooperative Banks (SCB) organised at the state
• For long-term          credit requirements of the farmers

long-term credit cooperatives

have been set-up. These are organised at two levels and differ from state to state. Generally they are of four types.

• Unitary structure in which state cooperative Agricultural and Rural Development                                Banks (SCARDBs) operate at state level through their branches and have direct membership of
• Federal structure in which Primary Cooperative Agricultural and Rural Development                                  Banks (PCARDBs) operate as independent units at the primary level and federate themselves into SCARDS at the state level
• Mix of federal and unitary types.
• No separate banks exist and long-term credit is provided by the long-term section of State Cooperative Banks (SCBs) cooperatives accounted for 2% of

institutional        agricultural credit in 2011-12.

Commercial Banks and Rural Credit

• Share of commercial banks in rural credit was meagre just after Independence. It was 9% in 1951-52 and 0.7% in 1961-62. However, in 2011-12 banks accounted for 72.1% of institutional credit provided to agriculture.

Regional Rural Banks (RRBs)

• RRBs were set-up to supplement the efforts of co-operatives and commercial banks. They were supposed to combine the local familiarity of cooperatives with the business organisation of the commercial banks. They were to be low cost, low profile credit institutions whose staff was reinvited from the neighbouring areas.
• Area of RRBs is limited to a specified region comprising one or more district of state. They grant direct loans and advances only to small and marginal farmers, rural artisans,

agricultural labourers and others of small means for productive purposes. Lending rates of RRBs cannot be higher than those of cooperative societies in any particular state. In 2011-12 RRBs accounted for 10.7% of institutional credit to agriculture.

Agricultural Debt. Waiver and Debt. Relief Scheme, 2008

• The Finance Minister, In his Budget speech for 2008-2009, announced a Debt Waiver and Debt Relief Scheme for farmers. The scheme covered direct agricultural loans extended to ‘marginal and small farmers’ and ‘other farmers’ by Scheduled Commercial Banks, Regional Rural Banks, Cooperative Credit Institutions (including Urban Cooperative Banks) and Local Areas
• Marginal Farmer meant a farmer cultivating (as owner or tenant or share cropper) agricultural land up to 1 hectare (5 acres), while the same limit for being   defined   as   a small

farmer was between 1 and 2

hectare.

• In the case of a small or marginal farmer, the entire eligible amount was waived. In the case of ‘other farmers’, there was a One Time Settlement (OTS) Scheme, under which the farmer was given a rebate of 25% of the ‘eligible amount’ subject to the condition that the farmer pays the balance of 75% of the ‘eligible amount’.
• A National Level Monitoring Committee to monitor the implementation of the scheme was also

Kisan Credit Card (KCC) Scheme

• Kisan Credit Cards were started by the Government of India, Reserve Bank of India (RBI) and National Bank for Agricultural and Rural Development (NABARD) in August 1998, to help the farmers access timely and adequate credit. Since 1998, about 78 crore KCCs had been issued up to October 2011.
• The scheme includes reasonable components of consumption

credit and investment credit within the overall credit limit sanctioned to the borrowers, to provide adequate and timely credit support to the farmers for their cultivation needs. Budget 2012-13, has expanded the scope of KCCs as now they can be used as smart cards and ATMs.

NABARD : An Overview

• NABARD was set-up by the Government of India as a development bank with the mandate of facilitating credit flow for promotion and development of agriculture and integrated rural
• The mandate also covers supporting all other allied economic activities in rural areas, promoting sustainable rural development and ushering in prosperity in the rural
• It is an apex institution handling matters concerning policy, planning and operations in the field of credit for agriculture and for other economic and developmental activities in rural

• Essentially, it is a refinancing agency for financial institutions offering production and investment credits for promoting agricultural and developmental activities in rural

7.11   AGRICULTURAL MARKETING AND EXTENSION SERVICES

• Organised marketing of agricultural commodities is being promoted in the country through a network of regulated markets. Most of the states and union territories have enacted legislations (the Agriculture Produce Marketing Committee [APMC] Act) to provide for regulation of agricultural produce markets.
• Seventeen states/UTs have amended their APMC Act and the remaining are in the process of doing
• Presently, wholesale prices of 300 commodities and about 2000 varieties are being reported on the Agricultural Marketing Information Network (AGMARKNET) portal from

more than 1900 markets.

• Setting up of Terminal Market Complexes (TMCs) for fruits, vegetables and other perishables is important in urban centres in those states, which provide for market reforms as per the Model Act.
• Support to State Extension Programmes for Extension Reforms was launched in 2005-06, with the aim of making the extension system farmer driven and farmer
• The Kisan Call Centre Scheme was launched in 2004, to provide agricultural information to the farming community through toll-free telephone lines. A country-wide common 11 digit number-1800-80-1551 has been allocated for
• The Agri-clinic and Agri- business Centres Scheme was launched in 2002, to provide extension services to farmers on payment basis through setting up of economically viable self employment ventures. NABARD monitors the credit support to Agri-clinics through Commercial

Banks.

TRIFED

• The government established TRIFED (Tribal Co-operative Marketing Development Federation of India Limited) in August, The basic aim of TRIFED was to save tribals  from exploitation from private players for their minor forest produce and surplus agricultural product. TRIFED plays the role of an agent of FCI.

NAFED

• NAFED (National Agricultural Cooperative Marketing Federation of India Limited) has been established in cooperative sector at national level for marketing of agricultural product.

Agriculture Insurance

• There are various major crop insurance schemes under implementation in the

National Agricultural Insurance Scheme (NAIS)

• The NAIS is a government sponsored central sector crop insurance scheme being implemented in the country since

1999-2000, season with the

objective of providing financial support to farmers in the event of failure of crops as a result of natural calamities, pests and diseases. The Agriculture Insurance Company of India Limited is the implementing agency for the scheme.

Modified NAIS (MNAIS)

• With the aim of further improving crop insurance schemes, the MNAIS is under implementation on pilot basis in 50 districts in the country from rabi 2010-11
• Some of the major improvements made in the MNAIS are actuarial premium with subsidy in premium at different rates, all claims liability to be on the insurer, unit area of insurance reduced to village panchayat level for major crops, indemnity for prevented/sowing/planting risk and for post-harvest losses due to cyclone, on accounts payment up to 25%, advance of likely claims as immediate relief, more proficient basis for calculation of threshold yield and allowing

private-sector insurers with adequate infrastructure.

• Only upfront premium subsidy is shared by the Central and State Governments on 50 : 50 basis and claims are the liability of the insurance

Pilot Weather Based Crop Insurance Scheme (WBCIS)

• Similarly, the WBCIS is also being implemented as a central- sector scheme from kharif 2007 The scheme is intended to provide insurance protection to farmers against adverse weather incidence such as deficit and excess rainfall, high or low temperature and humidity that are deemed to adversely impact crop production.
• The WBCIS is based on actuarial rates of premium, but to make the scheme attractive, premium actually charged from farmers has been restricted to be on a par with the NAIS from kharif 2007-08 to kharif 2010-11.

Commodity Futures Market

• The commodity futures market facilitates the price discovery process and provides a platform for price risk management in commodities. Currently, 113 commodities are notified for futures trading of which 51 are actively traded in 5 national and

16 regional commodity specific exchanges.

Forward Markets Commission

• The Forward Markets Commission (FMC) is the regulator for commodity futures trading, which it regulates under the provisions of the Forward Contracts (Regulation) Act, 1952. Its chief responsibilities are

• To ensure the participation of physical                 market stakeholders,            especially farmers, as hedgers in the commodity futures market by increasing the level of awareness of physical market participants and policy markers about the economic role of the

• It also ensures the dissemination of spot and future prices of agriculture commodities at Agricultural Produce Market Committees (APMCs).
• It also grants recognition to the new commodity exchanges under the Forward Contracts (Regulation) Act,

7.12 MAJOR SCHEMES OF AGRICULTURE

• There are various major schemes related to agriculture, which is given below

Mega Food Park Scheme

• The 10th plan scheme of Food Parks was renamed as the Mega Food Park Scheme (MFPS) in The scheme has been launched with the objective of implementing the express objectives of the Vision 2015, document through creation of excellent infrastructure.
• At present, 13 mega food parks are at various stages of implementation.

• By February, 2013, the government had approved a total of 30 mega food
• 11th Plan (2007-12), aimed at setting up 30 mega food parks. In line with this, Budget 2011- 12, announced setting up another 15 mega food parks in addition to the already existing, 12th Plan (2012-17), has targeted to set-up 50 mega food parks during the plan
• Objectives of the Mega Food Park Scheme are
• To provide state of the art infrastructure for food processing in the country on a pre-identified cluster
• To ensure value addition of agricultural
• To establish a sustainable raw material supply chain for each cluster.
• To facilitate induction of latest
• Quality assurance through better process control and capacity

National Mission on Food Processing (NMFP)

• NMFP has been launched under the 12th Plan for a decentralised implementation of various schemes under the Ministry of Food Processing with the help of State
• It consists of the following main schemes technology up gradation of food processing industries, cold chain facilities for non-horticultural produces, modernisation of abattoirs, primary processing centres/collection centres in rural areas, up gradation of quality of street food

National Food Processing Development Council (NFPDC)

• NFPDC has been set-up to provide guidance to all schemes of the ministry of food processing including NMFP. It will comprise the Agriculture Minister as Chairman, representatives of State Government, Industry associations and related government

National Food Security Mission (NFSM)

• It was launched in rabi 2007-08.
• The mission aims to increase production through area expansion and productivity; create employment opportunities and enhance the farm level economy to restore confidence of
• The NFSM is being implemented in 476 districts of 17
• To intensify the pulses production programme, since 2010-11, two additional programmes have been adopted under NFSM, These are

 

• Merging of the pulse component of the Integrated Scheme of Oilseeds, Pulses, Oil Palm and Malze (ISOPOM) with the NFSM Jharkhand and Assam have also been included under the
• Accelerated Pulse Production Programme (APPP) was initiated to boost the production of pulses by active

promotion of technologies in 1000 clusters of 100 hectare each.

RashtriyaKrishiVikasYojana (RKVY)

• The RKVY was launched in 2007- 08, with an outlay of Rs. 25000 crore in the 11th Plan for incentivising states to enhance public investment to achieve a 9% growth rate in agriculture and allied sectors. The RKVY permits taking up national priorities as sub-schemes allowing flexibility in project selection and implementation.
• The sub-scheme under RKVY are

– Bringing Green Revolution to Eastern region – Uttar Pradesh, Jharkhand, Bihar, Paschim Banga, Asom, Odisha and Chhattisgarh introduced in 2010- 11.

• Integrated development of 60000 pulses and oilseeds villages in rainfed areas introduced in 2010-11.
• Promotion of Oil
• Initiative on village
• Nutri-cerals.

• National Mission for protein supplements
• Accelerated Fodder Development Programme.
• Rainfed Area Development Programme and
• National Mission on saffron- economic revival of Jammu and Kashmir Saffron introduced in 2010-11.

Precision Farming

Also known as satellite farming, it uses satellite technology,                information technology and GIS Systems to improve Crop management. It is based on observing and responding to intra-fields variations. It helps in matching farming practices with Crop needs, reducing ecological footprint      and             boosting competitiveness through more efficient practices like improved management of fertilizer usage etc.

National Mission for Sustainable Agriculture (NMSA)

• NMSA is one of the 8 plans, under the National Action Plan on Climate Change (NAPCC) and will be implemented during the

12th Five Year Plan. It seeks to transform agriculture into an ecologically sustainable climate resilient production system, while at the same time, exploiting its fullest potential and thereby ensuring food security, equitable access to food resources, enhancing                                          livelihood opportunities and contributing to economic stability at the national level.

Objectives of NMSA

• The objectives of NMSA are as follow
  • To devise strategic plans at   the

agro-climate zone level.

• To enhance agricultural productivity through customised interventions such as used of
• To facilitate access to information and institutional support by expanding automatic weather station networks to the Panchayat level and linking them to existing insurance mechanisms.
• To promote ‘laboratory to land’

research by creating model

villages and model farm units in

rainfed and dryland areas.

• To strategise long-term interventions for emission reduction from energy and non- energy uses by way of introduction of suitable crop varieties and farm practices, livestock and        manure
• To realised the enormous potential of growth in dryland farming.

Organic Farming

• Organic farming is a form of agriculture that relies on techniques such as crop rotation, green manure compost and biological pest
• The main objectives of National Project on Organic Farming include
• Capacity building through service providers.
• Financial and technical support for setting up of organic input production unit such as fruits and vegetable market, waste compost, bio-fertilizers and bio-pesticides and vermiculture

• Human resource development through training     and
• Awareness creation and market development.
• Quality control of organic
• Biological assessment of soil

NEW INITIATIVE

National Mission on Sustainable Agriculture in the Context of Climate Change

With a view to manage the challenging task of the impact of climate change on the country, a National Action Plan on Climate Change (NAPCC) was prepared by the Prime Minister’s Council on Climate Change. As a follow-up to NAPCC recommendations, eight National Missions have been constituted and the National Mission on Sustainable Agriculture (NMSA) relates to the Ministry of Agriculture. The strategy for minimising the adverse impact to climate change consists of research, adaptation and mitigation. The following areas which are already part of the Ministry’s current strategy will need more flexibility, enhancement of scope, a special thrust and accelerated

implementation in the context of climate change:

• Strategic research, including the application of recent agricultural technologies tools for increasing productivity and reducing vulnerability due to climatic aberrations.
• Sustained increase in food grain production to counter reduced productivity due to the increase in temperature and extreme
• Improvement in water use efficiency.
• Strengthening risk management systems to minimise the adverse impact of climatic variability risks and pests/ diseases
• Other supportive measures for farmers and other

• ICAR is an autonomous organisation, under                  the Department of Agricultural Research and Education, Ministry of Agriculture, Government of India. The council is the apex body for coordinating, guiding and managing research and education in        agriculture                                 including

National e-Governance Plan in Agriculture (NeGP-A)

The Mission Mode Project has been introduced during last phase of the 11th plan to achieve rapid development of agriculture in India through use of ICT for ensuring timely access to agriculture related information for the farmers. Information on various IT initiatives/schemes currently undertaken by DAC which are aimed at providing information to the farmers is intended to be provided to farmers through multiple channels including Common Service Centres, Internet Kiosks and SMSs. 12 clusters of services are sanctioned for implementation in 7 States i.e. Assam, Himachal Pradesh, Karnataka, Jharkhand, Kerala, Madhya Pradesh and Maharashtra. The services include information on pesticides, fertilisers and seeds, soil health, information on crops, farm machinery, training and Good Agricultural practices (GAPs), weather advisories, information on prices; arrivals, procurement points, and providing interaction platform; electronic certification for exports and imports; information on marketing infrastructure; monitoring implementation/evaluation of schemes and programmes; information on fishery inputs; information on irrigation infrastructure; drought relief and management; livestock management.

IndianCouncilofAgricultural Research (ICAR)

horticulture, fisheries and animal sciences in the entire country. It was established in 16th July, 1929.

Animal Husbandry, Dairying and Fisheries

• The 12th Five Year Plan envisaged overall growth of 5% per annum, for the sector. In 2011-12, this sector contributed 127 million tonnes of milk, 45 billion eggs, 44.73 million kg wool and 5.51 million tonnes of meat. The 18th Livestock Census (2007) has placed total livestock population at 529.7 million and total of poultry birds at 648.8 million.

Dairy Sector

• India ranks first in the world in milk production. The per capita availability of milk has also increased from 176 g per day in 1990-91 to 290 g in 2011-12. However, world average per capita availability was 31 g per day in 2011 compared to 273 g per day for India.

• The Ministry of Agriculture is implementing important schemes, namely the intensive Dairy Development Programme, Strengthening Infrastructure for Quality and Clean Milk Production and Assistance to Cooperative   and Dairy Entrepreneurship Development Scheme, in the dairy sector. A major programme for genetic improvement called the National Project for Cattle and Buffalo Breeding (NPCBB) was also launched in 2000.

National Dairy Plan

• It is a strategic plan prepared by NDDB for achievement of

180 million tonnes of milk production by 2021-22. Under the plan, districts are separated into 324 high potential districts for intensive development and

282 low potential districts for further expansion.

• The plan envisages breed improvement through Artificial Insemination and through

natural service, setting up

plants to augment cattle feed, by-pass protein and mineral mixture        and

expanding/strengthening milk processing infrastructure.

• The first phase of the plan, which is a 6 year project was launched in April 2012. It will be implemented in the 14 major milk producing States of Uttar Pradesh, Punjab, Haryana, Gujarat, Rajasthan, Madhya Pradesh, Bihar, Paschim Banga, Maharashtra, Karnataka. Tamil Nadu, Andhra Pradesh, Odisha and Kerala.

• Minimum Support Prices (MSPs) was implemented with basic aim for 24 major agricultural commodities each season and organise purchase operation.

 

• The Forward        market Commission (FMC) is the regulator for commodity futures, which it regulates under the provision of the

Forward                     Contracts (Regulation Act, 1952.)

 

Livestock Insurance

• A centrally sponsored scheme for livestock insurance is being implemented in all the states with the twin objectives of providing protection mechanism to farmers and cattle bearers against any eventual loss of their animals due to death and to demonstrate the benefit of the insurance of livestock and popularise it with the ultimate goal of attaining qualitative improvement in livestock and its

• The scheme benefits farmers and cattle bearer        with indigenous/cross-breed milch cattle and buffaloes in 300 selected districts. The benefit of subsidy is to be restricted to two animals per beneficiary per household.

Poultry

• Four regionalCentralPoultry Development                  Organisation

located        at       Chandigarh,

Bhubaneshwar, Mumbai and Hessarghatta are focusing on production of stock suitable for backyard rearing, training to the farmers to upgrade their technical skills.

• The Poultry Development Scheme comprising three components, namely Assistance to State Poultry Farms, Rural Backyard Poultry Development and Poultry Estates is being implemented.

Fisheries

• Fish is an important source of and also an important source of livelihood, production of fish, both marines and inland, has gone up from 6 million tonnes in 2000-01 to 8.7 million tonnes in 2011-12. The exports of marine products have increased significantly in the year 2011-12.

Marine Fishing Policy, 2004

• The policy’s objectives are

– To augment marine fish production of the country up to sustainable    level    in    a

responsible   manner,   so   as  to

boost export of sea food from the country and also increase per capita fish protein intake of masses.

• To insure socio-economic security of the artisanal fishermen, whose livelihood solely depends on this

• To ensure        sustainable development of marine fisheries, with due concern for ecological integrity and bio- diversity.

• This policy        advocates, protection, consideration and encouragement of subsistence level farmers and not just the deep-sea sector. It seeks to promote                 conservation, management and sustainable utilisation of India’s invaluable marine

India’s Position in World Agriculture Production

Produce	Global Rank
Wheat	2nd
Rice/Paddy	2nd
Total Pulses	1st
Groundnut (in shell)	2nd
Vegetables (with melons)	2nd
Fruits (excluding melons)	2nd
Sugarcane	2nd
Tea	3rd
Jute and Jute like fibres	1st
Cotton (lint)	2nd
Total Milk	1st
Total Eggs	3rd
Total Meat	5th

• The Fair and Remunerative Price (FRP) of sugarcane is approved by the (CSE 2015)
  1. Cabinet Committee on Economic Affairs
  2. Commission for Agricultural Costs and Prices
  3. Directorate of Marketing and Inspection, Ministry of Agriculture
  4. Agricultural Produce Market Committee

3. In the context of Indian economy, which of the following is/are the purpose/purposes of ‘Statutory Reserve Requirements’? (CSE 2014)

UPSC Previous Year Questions :

1. In India, markets in agricultural products are regulated under the(CSE 2015)
   1. Essential Commodities Act,

1955

1. Agricultural Produce Market Committee Act enacted by States
2. Agricultural Produce (Grading and Marking)

Act, 1937

1. Food Products Order,1956 and Meat and Food Products Order, 1973

1. To enable the Central Bank to control the amount of advances the banks can create
2. To make the people’s deposits

with banks safe and liquid

3. To prevent the commercial banks from making excessive sprofits
4. To force the banks to have sufficient vault cash to meet their day-to-day requirements

Select the correct answer using the code given below:

1. 1 only
2. 1 and 2 only
3. 2 and 3 only

1. d) 1, 2, 3 and 4

4. With what purpose is the Government of India promoting the concept of ‘Mega Food Parks’? (CSE 2011)
   1. To provide good infrastructure facilities for the food processing industry.
   2. To increase the processing of perishable items and reduce wastage.
   3. To provide emerging and eco- friendly food processing technologies to

Select the correct answer using the codes given below

1. a) 1 only b) 1 and 2

1. 2 and 3 d) 1, 2 and 3

5. An objective of the National Food Security Mission is to increase the production of certain crops through area expansion and productivity enhancement in a sustainable manner in the Identified districts of the country. What are those crops? (CSE 2010)

1. Rice, wheat, pulses, oil seeds and

1. Rice and Wheat
2. Rice, wheat and pulses
3. Rice, wheat, pulses and oil seeds only.

ANSWERS :

1.(c)             2. (a)         3. (b)         4. (d)         5.(b)