[RSTV Archive] Agriculture: Priorities & Challenges

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The Vice President a few months back had advised top priority and coordinated action by both the Centre and the states to bring in reforms. He suggested that the 4 Ps – Parliament, political leaders, policymakers and press – must proactively adopt a positive bias towards agriculture.

Observing that many people are leaving agriculture and migrating to urban areas because of rising input costs and unfavourable market conditions, he said the problems that are holding back Indian farmers from realizing their full potential must be identified and solved.

India Agriculture: A backgrounder

While agriculture’s share in India’s economy has progressively declined to less than 15% due to the high growth rates of the industrial and services sectors, the sector’s importance in India’s economic and social fabric goes well beyond this indicator as:

  • Population dependency: Nearly three-quarters of India’s families depend on rural incomes.
  • Rural sector: The majority of India’s poor (some 770 million people or about 70 percent) are found in rural areas.
  • Food Security: India’s food security depends on producing cereal crops, as well as increasing its production of fruits, vegetables and milk.

India is a global agricultural powerhouse. It is the world’s largest producer of milk, pulses, and spices, and has the world’s largest cattle herd (buffaloes), as well as the largest area under wheat, rice and cotton.

It is the second-largest producer of rice, wheat, cotton, sugarcane, farmed fish, sheep & goat meat, fruit, vegetables and tea.

Challenges to Indian Agriculture

Three agriculture sector challenges will be important to India’s overall development and the improved welfare of its rural poor:

[1] Raising agricultural productivity per unit of land

  • Raising productivity per unit of land will need to be the main engine of agricultural growth as virtually all cultivable land is farmed.
  • Water resources are also limited and water for irrigation must contend with increasing industrial and urban needs.
  • All measures to increase productivity will need exploiting, amongst them: increasing yields, diversification to higher value crops, and developing value chains to reduce marketing costs.

[2] Reducing rural poverty

  • Rural development must also benefit the poor, landless, women, scheduled castes and tribes.
  • Moreover, there are strong regional disparities: the majority of India’s poor are in rain-fed areas or in the Eastern Indo-Gangetic plains.
  • Hence, poverty alleviation is a central pillar of the rural development efforts.

[3] Food security needs

  • The sharp rise in food-grain production during India’s Green Revolution of the 1970s enabled the country to achieve self-sufficiency in food-grains and stave off the threat of famine.
  • However, the recent slow-down in agricultural growth has become a major cause for concern.
  • India’s rice yields are one-third of China’s and about half of those in Vietnam and Indonesia. The same is true for most other agricultural commodities.

Ground challenges

[a] Small and Fragmented Land Holdings:

  • Small and scattered land holdings apply to a small plot of land that is uneconomical.
  • An agricultural farm must have a certain amount of land in order to be cost effective in terms of purchasing and utilizing inputs, as well as harvesting.

[b] Quality seeds

  • The seed is a vital and essential inputs for the crops yields and maintaining agricultural production growth.
  • The delivery of high quality seeds is just as important as its processing.
  • Unfortunately, good superiority seed are out of reach for the majority of the farmers,  marginal farmers and particularly small, due to exorbitant seed  rates.

[c] Manures, Fertilizers and Biocides

  • For hundreds of years, Indian soil were used to produce crops with no regard for replenishment. As a result, soils have been depleted and exhausted, leading to low productivity.
  • Almost all of the crop has among the lowermost average yields in the world.
  • It is a critical concern that can be resolved by increasing the use of fertilizers and manures.

[d] Irrigation challenges

  • Despite  the  fact  that  India  is a  world’s 2nd  largest  moistened  country  after  the  China,  only  one 3rd  of  the  crop  production  is  irrigated. 
  • In  a  rainy  climate  country  like  India,  where  rainfall  is  unpredictable,  unreliable,  and  erratic,  irrigation  is  the  most  significant  agricultural  input. 
  • India will  not  be  able  to  make  sustainable  development in agriculture until and unless much than half of the collected area is irrigated.

[e] Lack of Mechanization

  • Despite the large scales mechanization of the agriculture in few part of the world, most agricultural operation are still carried out manually.
  • Irrigating, sowing, thinning, ploughing and pruning, harvesting threshing, weeding, and transporting the crops all make little or no use of machines.
  • This is particularly true for small and marginal farmers.  It leads to significant waste of labour and human labour yields per capita.

Priority Areas for Support

[A] Enhancing agricultural productivity, competitiveness, and rural growth

(1) Promoting new technologies and reforming agricultural research and extension:

  • Major reform and strengthening of India’s agricultural research and extension systems is one of the most important needs for agricultural growth.
  • These services have declined over time due to chronic underfunding of infrastructure and operations, no replacement of aging researchers or broad access to state-of-the-art technologies.
  • Research now has little to provide beyond the time-worn packages of the past.

(2) Improving Water Resources and Irrigation/Drainage Management

  • Agriculture is India’s largest user of water.
  • However, increasing competition for water between industry, domestic use and agriculture has highlighted the need to plan and manage water on a river basin and multi-sectoral basis.
  • As urban and other demands multiply, less water is likely to be available for irrigation. Ways to radically enhance the productivity of irrigation (“more crop per drop”) need to be found.
  • Piped conveyance, better on-farm management of water, and use of more efficient delivery mechanisms such as drip irrigation are among the actions that could be taken.

(3) Facilitating crop diversification to higher-value commodities

  • Encouraging farmers to diversify to higher value commodities will be a significant factor for higher agricultural growth, particularly in rain-fed areas where poverty is high.
  • Moreover, considerable potential exists for expanding agro-processing and building competitive value chains from producers to urban centers and export markets.
  • While diversification initiatives should be left to farmers and entrepreneurs, the Government can, first and foremost, liberalize constraints to marketing, transport, export and processing.

(4) Promoting high growth commodities

  • Some agricultural sub-sectors have particularly high potential for expansion, notably dairy.
  • The livestock sector, primarily due to dairy, contributes over a quarter of agricultural GDP and is a source of income for 70% of India’s rural families, mostly those who are poor and headed by women.
  • Growth in milk production, at about 4% per annum, has been brisk, but future domestic demand is expected to grow by at least 5% per annum.
  • Milk production is constrained, however, by the poor genetic quality of cows, inadequate nutrients, inaccessible veterinary care, and other factors.

(5) Developing markets, agricultural credit and public expenditures

  • India’s legacy of extensive government involvement in agricultural marketing has created restrictions in internal and external trade.
  • Even so, private sector investment in marketing, value chains and agro-processing is growing, but much slower than potential.
  • While some restrictions are being lifted, considerably more needs to be done to enable diversification and minimize consumer prices.
  • Improving access to rural finance for farmers is another need as it remains difficult for farmers to get credit.

[B] Poverty alleviation and community actions

  • While agricultural growth will, in itself, provide the base for increasing incomes, for the 170 million or so rural persons that are below the poverty line, additional measures are required to make this growth inclusive.
  • For instance, a rural livelihoods program that empowers communities to become self-reliant has been found to be particularly effective and well-suited for scaling-up.
  • This program promotes the formation of self-help groups, increases community savings, and promotes local initiatives to increase incomes and employment.

[C] Sustaining the environment and future agricultural productivity

(1) Over-use management

  • In parts of India, the over-pumping of water for agricultural use is leading to falling groundwater levels. Conversely, water-logging is leading to the build-up of salts in the soils of some irrigated areas.
  • In rain-fed areas on the other hand, where the majority of the rural population live, agricultural practices need adapting to reduce soil erosion and increase the absorption of rainfall.
  • Watershed management programs can be implemented where communities engage in land planning and adopt agricultural practices that protect soils.
  • This can lead to increase in water absorption and raise productivity through higher yields and crop diversification.

(2) Climate change mitigation

  • More extreme events – droughts, floods, erratic rains – are expected and would have greatest impact in rain-fed areas.
  • The watershed program, allied with initiatives from agricultural research and extension, may be the most suited agricultural program for promoting new varieties of crops and improved farm practices.

[D] Marketing reforms

  • In the absence of properly organized market and sufficient transportations facilities, Indian farmers face a problem of the low incomes from their vendible surplus crops.
  • As a result, farmers have fallen prey to distributers for the fast discarding of their crop at the lower price and uneconomic.
  • Price fluctuations in agricultural product are also a significant threat in Indian agriculture.
  • Price stability is important not only for farmers, but also for buyers, exporters, and agro-based industry.
  • The price movements of the agricultural product in India are neither the smooth nor the uniform, resulting in a fluctuating pattern.

Various govt initiatives

The Government of India has taken several steps which include:

  • Improvement in soil fertility through the Soil Health Card scheme.
  • Providing improved access to irrigation and enhanced water efficiency through Pradhan Mantri Krishi Sinchai Yojana (PMKSY).
  • Supporting organic farming through Paramparagat Krishi Vikas Yojana (PKVY).
  • Support for creation of a unified national agriculture market to boost the income of farmers.
  • A new scheme, Pradhan Mantri Fasal Bima Yojana (PMFBY) has been launched for implementation from Kharif 2016 to mitigate the risk of crop loss in agriculture sector.
  • Marketing reforms through the three farm laws.


  • Among the major sources of agrarian distress are low levels of farmers’ incomes and their fluctuations over the years.
  • The problem is acute and is getting severe with the passage of time, affecting large chunks of the population that make living with agriculture.
  • Persistent low levels of income may also adversely affects the future of agriculture sector in India.
  • Adequate attention is required to improve the agricultural incomes and thus the welfare of the farmers to secure future of agriculture in the country.
  • Reaching this end will reduce persistent disparity between farm and non-farm income, alleviate agrarian distress, encourage inclusive growth and infuse dynamism in the farming sector.
  • Decent incomes in farm sector will also attract youth towards the farming profession relieving the non-farm job sector of the continuing burden.
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