Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

Farm Bills latest step in sequential freeing up of farm sector


From UPSC perspective, the following things are important :

Prelims level : APMC Act

Mains level : Paper 3- Need for agri reforms

The recently passed agri bills seek to expand the choices and opportunities available with the farmers and will help in increasing their income.

Diversified product segment

  • The Minimum Support Price (MSP) evolved as a mechanism to guard farmers against supply and demand shocks in the cereals segment. 
  •  Now, however, farmers and agricultural producers have diversified their product segments, cereals no longer dominate production.
  • In the last decade itself, India has witnessed tremendous change in the GVA composition of the agri-sector.
  • The share of crops has decreased from 65.4% in 2011-12 to 55.3% in 2018-19, projected to further fall to 45.6% in 2024-25.
  •  In the same period, value add of livestock and fishing & aquaculture is steadily increasing, as are the total value outputs of sub-segments like horticulture, milk and meat.
  • With differentiated production strategies that are less reliant on cereals and more on other segments, farmers are accruing better incomes.
  • By diversifying their produce, they are moving away from one-crop risks.

Government schemes and policies

  • Keeping farmers dependent on subsidies and restricted by APMCs, and acts like the Essential Commodities Act wasn’t in the nation’s long-term interests.
  • Recognising this, the government has been making sequential changes in the system.
  • It started with the introduction of the National Agriculture Market (e-NAM) to facilitate online trading of agri-produce.
  • Then PM-KISAN was introduced to provide minimum income support to nine crore marginal farmers, at Rs 6,000 annually.
  • The KISAN credit card with an allotment of a total of Rs 2 lakh crore credit to maintain larger workforces and implements during harvest season is helping farmers plan and organise their harvests better.
  • The Rs 1 lakh crore Agri Infrastructure Fund as part of Atmanirbhar Bharat Abhiyan will help by the creation of agri-infrastructure.

Need for structural changes

  • The government recently passed three agri-bills, these are:-
  • 1) The Farmers’ Produce Trade and Commerce Bill.
  • 2) Farmers Agreement on Price Assurance and Farm Services Bill.
  • 3) Essential Commodities (Amendment) Bill.
  • They enable farmers the freedom to diversify their crops and produce, which reduces mono-crop dependence and increases income avenues.
  • They can also now sell their produce anywhere, to the highest bidder across the country.
  • The farmers are no longer are they required to go to the mandis where they are subject to middlemen and layers of bureaucracy.
  • Contract farming enable farmers them to boost the value-add of their products via contracts and assured procurement by the food processing industries.
  • Retaining the MSP system means the government is underwriting the whole network for certain crops to ensure farmers receive assured income for those crops.

Focusing on the export market

  • The passage of agri bills gives India the long-awaited opportunity to orient its agriculture sector towards export markets.
  • By catering to just the Indian economy, the exposure is hardly $3 trillion ; instead, export-orientation caters to an $82 trillion global economy —a 27x expansion.
  • India’s agri exports in 2018 were at $38.5 billion.
  • India can comfortably triple this by providing infrastructure for grading, sorting, and supply chain distribution.


The farm Bills are liberating farmers at a pivotal juncture, the nation and farmers have a generational opportunity here to break out of a 70-year sectoral stagnation and aim bigger.


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