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

Some Basic Facts about Indian Farmers


From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Economics behind Indian Agriculture


  • Amidst the ongoing farmer protests, the demand for a legal assurance backing Minimum Support Prices (MSPs) has taken center stage, sparking debates and polarizing opinions.
  • Delving into the intricacies of MSPs is crucial to grasp the gravity of this contentious issue.

Deciphering MSPs: A Primer

  • Fundamental Concept: MSPs, or Minimum Support Prices, signify the price floor set by the government for various crops, serving as a safety net to safeguard farmers’ incomes.
  • Ramifications: The significance of MSPs transcends mere agricultural economics, influencing farmers’ livelihoods, consumer prices, and even governmental budgetary allocations.

Backdrop of Farmer Protests

  • Escalating Tensions: The introduction and subsequent repeal of three farm laws by the current Union government in 2020 have catalysed widespread farmer protests, drawing attention to the MSP debate.
  • Polarized Discourse: The discourse surrounding farmer protests has veered into a realm of political polarization, overshadowing the substantive issues at hand.

Key Insights into India’s Agricultural Landscape

[1] Shift in Economic Dynamics

  • Historical Perspective: Post-Independence, agriculture commanded a significant share of India’s workforce and economic output, with around 70% of the workforce engaged in the sector.
  • Contemporary Scenario: Despite a decline in agriculture’s contribution to GDP, the proportion of the agricultural workforce remains relatively high, signaling a skewed economic paradigm. In 2011, approximately 6% of the workforce was engaged in agriculture.

[2] Transition in Farming Patterns

  • Rising Labour Dependency: The shift from cultivators to agricultural laborers underscores the evolving nature of farming practices, reflecting growing challenges in sustaining agricultural livelihoods. In 1951, 72% of all farm workers were cultivators, whereas by 2011, this proportion decreased to 45%.
  • Small Holdings and Indebtedness: Small and marginal landholdings coupled with high levels of indebtedness paint a grim picture of the financial vulnerability faced by Indian farmers. According to a 2019 survey, around 70% of all agricultural households have a land holding size of less than 1 hectare, and almost 50% are indebted.

[3] Income Disparities and Debt Burdens

  • Regional Disparities: Regional variations in farm incomes and indebtedness highlight the multifaceted nature of agrarian distress. In 2019, the average monthly income per household was Rs 10,218, while 50% of all farm households were indebted.
  • Terms of Trade Dynamics: Fluctuating terms of trade between farmers and non-farmers further exacerbate farmers’ financial woes, reflecting structural imbalances in the agricultural sector. The Terms of Trade (ToT) between farmers and non-farmers have remained stagnant or negative since 2010-11.

[4] Global Perspectives on Agricultural Support

  • Comparative Analysis: India’s standing in terms of producer protection and agricultural support reveals stark disparities, challenging misconceptions about excessive financial assistance to Indian farmers.
  • India is Lagging: India ranks last among the countries compared by the OECD on producer protection and lags in terms of the “total support estimate” (TSE) relative to other countries and regions.

Navigating the Complexities

  • Beyond MSPs: While MSPs occupy a prominent position in the discourse, addressing India’s agricultural woes requires a holistic approach encompassing structural reforms, income augmentation, and infrastructural development.
  • Long-standing Challenges: Structural deficiencies within the agricultural sector necessitate comprehensive interventions, transcending short-term fixes and political rhetoric.


  • As India grapples with the intricacies of farmer protests and MSP demands, a nuanced understanding of agricultural dynamics is imperative to devise sustainable solutions.
  • Addressing the root causes of agrarian distress demands concerted efforts aimed at bolstering farmers’ resilience, fostering equitable economic growth, and ushering in transformative reforms to ensure the viability of India’s agricultural ecosystem.

Try this question from CS Mains (2018)

What do you mean by Minimum Support Price (MSP)? How will MSP rescue the farmers from the low-income trap? [150 Words, 10 Marks]

Post your answers here.
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