Indian Agriculture

2020-06-25 16:11:32

Indian Agriculture

16.5% of GDP, 55.4% of employment, 10% of export earning
It is the biggest private sector too since it carries no burden of individual income tax
It is the biggest unorganised sector in with more than 90% of unorganised labour share.
IN has 2.15% of worlds agriculture trade and net exporter of agri products.
1% inc in agricultural growth results in 0.5% inc in industrial output and 0.7% inc in national income of India.
66.1% of cropped area still depends on Monsoon for irrigation.
Consumers of low priced and middle priced consumer goods
- Maintains food security
- Change has a multiplier effect in the economy
Agricultural production

![[4.1 Agriculture#Types of Crops]]

Food Philosophy of India

First phase was the first 3 decades done to achieve physical food access for the population. Green revolution helped achieve it.
Second Phase was till 2000 there was enough food stock but still people were dying of hunger. There was a general lack of economic reach for the population and we are still struggling with this.
Third phase is moving towards organic food after knowing the ecological cost of green revolution.

Land Reforms

First Phase

Commenced just after Independence and had the objective of removing institutional discrepancies of agriculture ex size of landholdings, land ownership, land inheritance, tenancy reforms etc.
- Other objectives to achieve socio-economic equality since land ownership was intertwined with caste system.
- increasing agriculture production was the 3rd objective

Steps taken

Abolition of Intermediaries ex Zamindari, Mahalwari and Ryotwari..
Tenancy Reforms ie regulation of rent to be paid by share croppers to land owners, security of tenure to share cropper to secure his future income, ownership rights to tenants so that the landless can have access to land.
Reorganisation of agriculture
- redistribution of land after passing the ceiling laws
- consolidation of lands for Green revolution to succeed.
- Cooperative farming
Reasons for failure : Land was considered symbol of social prestige, status and identity. Lack of political will and rampant corruption.

Second Phase

Started since the economic reforms and engaged in issues like land acquisition, leasing, food related issues and agricultural provisions of WTO.
- the policy focused on mapping land and assigning title; Devising fair but speedy process of land acquisition;
- transparent and effective land leasing policy.
Digital India Land Record scheme DILRMP is being run as central sector scheme to give out conclusive title for land rights.
Leasing has become a better choice for farmers, Corporate farming has not grown in India on a big scale. Thus giving primacy to leasing instead of transfering ownership seems to be the right way.
Certain steps taken in this direction was the Model land leasing law that was advised by NITI Aayog.
But concern is the rising cost of land acquisition.

Green Revolution

There was no social opposition to Green Revolution like the land reforms.
GR had more positive impact on the social economic life of people than the land reforms.
GR is new techniques of agriculture. Wheat was first crop, 2nd was rice.
Centered around the use of HYV seeds that was developed by Norman Borlaug.

Various components of it were :

Use of HYV seeds called dwarf variety, these seeds were non photosynthetic hence non dependent on sun rays for targeted yields.
It needed huge amount of nutrition and required use of excessive chemical fertilizers.
Required area for crop to be free from floods and articicial water supply was constantly needed.
Required chemical pesticides and germicides; herbicides and weedicides.
Availability of easier and cheaper credit was required to grow then in huge numbers and get adequate grain quantity.

Impacts

Socio economic impact was that many countries became self sufficient and rise of food exporting economies. But it also inc inequality among farmers.
Ecological impact was most severe. Soil fertility got degraded, water levels kept on falling, env degradation due to deforestation.
Toxi levels in food chain increased.

![[4.1 Agriculture#Cropping Patterns]]

Challenge in Agriculture

A national agriculture market is missing mostly due to lack of political will among states to put up the right kind of APMC.
Need to promote corporate investment esp for farm mechanisation.
Labour reforms is hurdled by long tradition of complex labour laws.
R&D lacks; proper supply chain is missing
Need expansion in commodity trading in agri commodities.
Deceleration and achieve 4% growth rate.
Inadequate {productivity, growth}, high prices, lack of credit.
Crippling debt, uncertainty over weather, pests, lack of insurance.
Migration and rise of feminisation of agriculture.
Land fragmentation, negative terms of trade, marketing limitation.

Concerns

The pop dependent on agriculture has not declined.
Dec in average size of landholding - dec in productivity - not permits new tech due to high cost.
productivity declined.
More emphasis on subsidies rather than capital assets.

Need for Improvement

5 aspects of agriculture that needs immediate attention as per NITI A. - Poor output per hectare mainly because of lack of tech - No realization of remunerative prices due to limited reach of MSP - Dec in farm size, problem of land leasing laws - Inadequate relief during natural disasters - Harness NE regions potential

Capital formation helps in :Sustainable production, Tech and Infra, ensure food security, makes it profitable

Areas Gov is Focusing to Improve Capital Formation

Focusing towards Horticulture cultivation
Agriculture marketing infra, restoration of water bodies
Micro {irrigation, finance, insurance}
Setting up Knowledge centre in every village, create new growth poles
PM Gram Sadak Yojana, Nutrient based fertilizer regime

Water Management and Irrigation

Participatory Irrigation Management PIM ensures water equitability and ensures tail enders get their fair share
PIM are democratically organised association that collect water charges, collect etc.
Warabandi is fixing turns for each farmer.

Drought

Meteorological drought : actual rainfall in an areas is significantly less than climatological mean.
Hydrological drought : depletion of surface water causes low stream flow.
Agricultural drought : inadequate soil moisture and fall in agricultural productivity.
If 20-40% of India is affected it is called drought year, more than 40 is severe.

Rainfed Agriculture

Region where crop production is exclusively dependent upon rainfall.
mostly conc in arid and semi-arid areas, Account for more than 68% of sown area.
Dryland has rainfall 75cm and more than 30% under irrigation.
National Rainfed Area Authority NRAA :
- To improve productivity of non-irrigated agricultural land, rural agri, water resources and environment
- Build synergy, prepare plan

NDRF/SDRF - National/State Disaster Response Fund

States contribute 10% to SDRF rest the Centre
Allocation was recom by 14th Fin commission

Irrigation

Were classified by Planning Commission as Major Irrigation scheme covering cultivable area of more than 10,000 hectares; Medium Irrigation scheme b/w 2000-10000 hectares and Minor below 2000 hectare
The ultimate irrigation potential of India is about 140 million hectares and a substantial gap b/w Irrigation Potential Created and Irrigation Potential Utilised.
Irrigation efficiency : Older irrigation system has become univable due to shrotage of water, wastage of water and salination of soil.
- Drip and Sprinkler irrigation can improve water use efficiency, reduce cost of production, can irrigate mroe area.
Programs launched to improve irrigation efficiency
- Micro Irrigation Fund MIF - Under NABARD, 5000 cr allocation to boost farmers income
- Long Term Irrigation Fund LTIF - under NABARD corpus of 20,000 cr
- PM Krishy Sinchayee Yojana and Per Drop more Crop.
World Meteorological Organisation WMO

![[2.2 Major Crops, Irrigation#Static Diff types of irrigation and irrigation systems storage]]

![[4.1 Environment, Pollutions, EIA and DM Feb 2020 Onwards#Accelerated Irrigation Benefit Programme]]

Soil

Soil Health : Soil Health Cards, Organic fertilizers, nutrient based fertilizer subsidy
Soil Reclamation :
- Through watershed dev
- Saline and sodic land needs treatment
- Acidic land needs treatment using waste from industry
- Sulphur deficiency, organic matter def, inadequate manuring and composting
ZBNF -

Agricultural Extension

is application of scientific research and new knowledge
Krishi Vigyan Kendras by ICAR
Institute Village Linkage Program IVLP by ICAR
Start-up training
Agribusiness centre provides paid services
Small Farmers Agribusiness Consortium SFAC - provides risk capital

Rural and Agricultural Credit

Agri Credit : Helps farmers to enhance productivity through investments in machinery, HVY seeds etc. Concerns regarding it :

informal sources of credit is predominant can be curbed by DBT to replace interest subvention.
Ratio of agri credi / Agri GDP has increase but share of long term credit has declined this needs to reversed.
Regional disparity in distribution of agri credit esp in NE.

NABARD

Refinancing, supplementing resources of co-operative banks, RRBs
Certain supervisory functions over co-op and RRBs
Funds that are operated by NABARD are National Adaptation Fund for Climate Change NAFCC.
Rural Infrastructure Development Fund RIDF to finance ongoing rural infrastructure projects under irrigation sector.
Tribal Development Fund TDF to promote sustainable agriculture, social empowerment, improvement in quality of life including health and women dev in tribal area.

Co-operative Banks

Short term credit structure is managed by State Co-op Banks SCBs, District Central Co-op Banks DCCBs, Primary Agri Credit Societies PACSs
Long term managed by State Co-op and Agri Rural Dev Banks SCARDBs and Primary CARDBs

RRBs - ownership Centre 50% State 15 and Sponsor Commercial Bank 35

Local Area Banks

For rural and semi-rural areas
Min paid up capital Rs 5 crore, promoters contribution 2cr
Max 3 contiguous district as area of operation

Microfinance

SHGs play a dominant role here

Malegam #Committee

Charge 24% interest on loans less than Rs 25,000
Create separate NBFC - Micro Finance Company
75% loans for income generation purposes
National Mission on Food Processing - gives greater role to states and Uts ![[2.2 Major Crops, Irrigation#^91ec67]]

Precision Agriculture

site specific crop management or satellite farming.
3rd wave of modern Agricultural Revolution.
1st wave will increased mechanisation, 2nd will be use machine data for precise planting.
Aims to optimize crop science, environmental protection, economics.

Animal Rearing

Supplements family income particularly the landless labourers, provides cheap nutritional food, insurance against drought, famines and promotes sustainable agriculture.
Has higher growth rate than 4.5% than farm sector, contributes 29% to agri.
Dairy farming, pig farming and animal health are some of its dimensions.

Food Management

![[2.1 Food Security, MSP, Farm Subsidies#MSP]]

Announced at the beginning of sowing season for Kharif and Rabi on the recom of Commission for Agri Cost and Prices CACP
24 major agri commodities, farmers sell to FCI.
Procurement price during harvesting takes inflation into account.
It takes into account
- Cost of production, Price parity,
- changes in Input prices, demand and supply.
Criticism
- Need diversification from Rice and Wheat
- Helps big farmers, subsidy burden increasing
- Changing food habits towards protein
MS Swaminathan #committee headed the National commission on Farmers.

Market Intervention Scheme ![[2.1 Food Security, MSP, Farm Subsidies#^d9c7c1]]

Similar to MSP

Issue Price : Price at which FCI sells its foodgrains they are kept lower than the procurement price and the difference b/w them is called the food subsidy.

Economic cost of foodgrains :

Includes MSP, Procurement Incidentals and cost of distribution.
It has inc steadily with the rise in MSP.
Shanta Kumar #committee was set up to suggest restructuring or unbundling of FBI.

Open Market Sale Scheme OMSS

selling in open market not to TPDS. To enhance market supply, to exercise moderating influence on market prices and offload surplus stocks.
Price at which it is sold is called at Reserve price which is kept above MSP but below the economic cost of foodgrain to attract buyers.

Price Stabilisation Fund

launched in 2015 as a central sector scheme to support onion and potato
market intervention takes place and cost is borne by centre and state equally

Buffer Stock

Reserve commodity to offset price fluctuation and unforseen emergencies.
Done to meet minimum stock norms for food subsidy, monthly release of foodgrains through TPDS, meeting emergency, market intervention for price stabilisation.
4 months requirement under TPDS and Other Welfare Scheme are earmarked as operational stocks the surplus over it is the Buffer stock.
This idea of Buffer stock was removed in 2015 and now anything over 4 mnths is treated as excess stock.

Storage

Food agencies do not have proper storage for even half of wheat and rice.
No effective strategy to control inflation of perishables
Low capacity of Cold storage
Need to construct godowns implemented in PPP scheme, Construct steel silos in PPP mode, Online Depot Mgt system to improve functional efficiency.

![[2.1 Food Security, MSP, Farm Subsidies#Subsidy]]

Food Security

It means making food available at affordable prices at all times to everyone.
As per FAO report 14.5% of population is under nourished, 51% women b/w 15-49 are aneamic, 40% children under 5 are stunted.
India is ranked below Pakistan, Nepal at 102 in Global hunder Index.
Challenges are high population under BPL having high expenditure on food; Volatility in agricultural food production.
Need to enhance food production and strengthen supply chain.

Agriculture Marketing

APMC Act enacted by the state govts regulate agrimarkets in India.
Act notifies agricultural commodities produced in region such as cereals, pulses, edible oilseed, fruits, chicken, goat, sheep, sugar etc.
Such markets have places for auctions, weigh bridges, godowns, shops for retailers, canteens, roads etc.
Major issues are :
- charging market fees from buyers and licensing fees from intermediaries.
- comission fees for agents which is very high and is charged on the entire value of the produce sold.
- high taxes at first level of trading has significant cascadin effects on commodity price.
- APMC is an arm of the state and market fees are taxes and has very little scope for price discovery
- Its operations are independent of scrutiny
- important positions at market committees and market board are held by politically influential people which makes them prone to corruption.

Model APMC Act 2003

It provides for direct sale of farm produce by farmer
Setting up special markets for specified agri commodities esp perishables.
private markets can be established
single levy of market fee; licenses replaced with registrations.
Creation of marketing infra from revenue earned by APMC etc

Model Contract Farming Act

Contract farming outside ambit of APMC act.
Covers all services contracts related to pre production, post production.
No permanent structure on farmers land.
settiling of disputes in an accessible and simple mechanism.

Agri Commodity Trading

aimed at stabilising prices by maket based price discovery. It is market oriented price determination.
Stable prices benefit sellers, price volatilities are minimised.
Stock variations due to export and import are minimised.
National Commodity and Derivatives Exchange NCDEX, National Multi Commodity Exchange NMCE etc are some exchange markets.
Biggest challenges are storage, logistics and financing.

Upstream, Downstream, Midstream

Upstream : Upstream stage of production process involves searching and extracting raw materials. No value addition on raw material takes place.

Downstream : Involves processing of materials collected during upstream process to turn it into a finished product. It includes actual sale and has direct contact with customers through finished products.

Midstream : depends on points of reference for a manufacturer considers suppliers as upstream and customers as downstream.

Bottlenecks in upstream and downstream in India :

Retail trading(downstream) is fragmented in India -> uncertainities, in monitoring and regulation.
Outsourcing of raw material from local producer is difficult. Due to this upstream segment has remained weak.
For manufacturing sector heavy dependence on unorganised sector is a challenge.

Supply Chain Management

Supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer. It is done to reduce their costs and remain competitive in the market.
It covers Product developement, sourcing, production, logistics, information systems.

FDI in upstream, downstream, supply chain management to get international experience and best practices. Will lead to an organised retail sector, proper levels of logistics etc.

Other Concepts

Farm Mechanisation : to reduce drudgery, save time and labour, inc productivity, minimise wastage.

India has more rural-urban migration, shift from agri to services etc
high proportion of female workforce it will enhance their safety and comfort.
quick rotation of crops will inc yields.
small holdings, access to power, credit cost and procedures, uninsured markets etc are reasons for low farm mechanisation.

Seed Development : Quality of seed account for 20-25% of productivity Challenges to adoption of quality seeds are :

Inadequate research inputs
Early ripening and resistant varieties
High cost of seeds
shortage in supply of quality seeds Affordability, Availability, R&D, GM crops and seeds require immediate attention.

Feritiliser :

Need now is for

crop responsive and balanced use of Fertilisers depending on soil health and fertility
fert need micro nutrients to inc yields since Indian soils lack micro-nutrients ex by using organic fert.
Nutrient mgt through judicious use, using IT etc to improe testing.
Bridging gap b/w regional disparity

Various Gov schemes targeting this are :

DBT for fertiliser subsidies which are disbursed on basis of actual sales made by retailers to beneficiaries.
New Urea Policy to maximise indigenous urea production, promote energy efficiency etc.
P, K fertilisers have nutrient based subsidy NBS scheme under which fixed subsidy is given based on content

Pesticide : India uses very low amt of 0.5kg per ha of pesticide. Major challenges are use w/o proper guidelines, using sub standard pesticide, lack of awareness about pesticide use.

Agricultural Extension services : aims at providing timely advisory services to farmers to adopt best practices, tech etc. These services are not efficient due to

lack of functional autonomy
rigid hierachical structure and
lack of innovation and coordination failures. Steps for improvement :
Implementing new scheme or additonal outlays in existing schemes
One stop shop for both software and hardware needs
value added activities in the farm
minimise wastage in input and produce. Govt steps are
Kisan TV
Agri Clinic and Agri Business
National Center for Mgt of Agricultural Extension
Ekta Portal etc

Climate Smart Agriculture : transform agri food system towards green and climate resilient practices. CSA supports reaching towards SDG goals and Paris Agreement.

It aims to sustainable increase agricultural productivity and incomes
adapting and building resilience to climate change
reducing and/or removing greenhouse gas emissions.

![[2.4 Food Processing#Static - Food Processing and Related Industries - scope significance location upstream downstream requirements supply chain management]]

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Prelims PYQ

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