UPSC IAS exam preparation - Indian Agriculture and related issues - Lecture 10

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Agriculture and Indian economy - summary of issues

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1.0 Agriculture in 2017 and beyond 

"Most of the world's poor people earn their living from agriculture, so if we knew the economics of agriculture, we would know much of the economics of being poor." 

Theodore Schultz, Nobel prize winner 1979, Economic Sciences

The intimate connection of agriculture with Indian economy, and the general well-being of the people of India, is visible and intense. Bountiful crops in a blessed monsoon season bring cheer and joy not only to the growers, but more so to the economic planners and politicians whose fortunes are tied to the sentiment generated by the positivity. 

Although Indian agriculture is a huge sector, and we lead in several crops - Food crops like wheat and pulses grown for human consumption, Horticultural crops like fruits and vegetables grown for human consumption, Commercial crops like cotton and tobacco for sale or processing, and Plantation crops like tea and coffee grown on large plantations  - there are lingering issues in the sector that need to be addressed. Some key issues are low productivity in many regions and across several crops, poor landholding sizes, lack of investments in the sector etc.

A quick look at how agriculture has performed over the various Five Year Plans tells us that maintaining the growth rates is going to be a continuous challenge.

The rapid growth of the middle class in India has ensured that there is adequate demand for processed foods, and high-protein diets (eggs, milk, meat, fish, pulses). So supply-side has to keep up, else inflationary pressures will build up.

Despite all our growth as an IT power, our numbers of hungry put us to shame.

There are excellent initiatives that the present government is taking, which if executed well, can transform the income scenario for many farmers in India. One such initiative is the Mission for Integrated Development of Horticulture - MIDH - which will involve more than 21 central Ministry departments and institutions to ensure an integrated approach for horticulture development in India.

Overall simplification and technological integration across the entire Agriculture Value Chain in Indian agriculture is of high importance. It is important for initiatives like the electronic National Agriculture Market (eNAM) to succeed.

At the same time, by a simple realization of the extent of "wastage" that happens, we can try to minimize it, and thereby significantly increase the overall value of the Indian agriculture value chain.

The Food Subsidy given in India is huge. Here are some figures.

In light of this, the end-to-end computerization of the entire Targetted Public Distribution System (T-PDS) will have a big impact on the savings through plugging of all leakages.

Several positive consumer awareness initiatives, and regular education of the consumer will have a big bearing on minimizing corruption everywhere.

1.1 Range of issues for improved agriculture in India 

In 2016, a detailed review meeting of the concerned Ministries (Ministry of Agriculture and Farmers Welfare, Ministry of Food Processing Industries, and their concerned Departments) brought up a list of immediate issues of concern for 2016 and 2017. Given here is a detailed list, which is quite insightful.

Issues - There are 13 distinct issues.

1. Pulses & Oilseeds - strategy to improve productivity and production of pulses & oilseeds through improved technology package. (Domain - Agriculture)
2. Rice - Strategy to enhance productivity and production of paddy in stress prone areas (rainfed, flood prone etc.) as also in Eastern India. (Domain - Agriculture)
3. Cotton - management of cotton crop particularly pest & disease vulnerability by deploying appropriate technology management practices. (Domain - Agriculture)
4. Intervention and strategy needed to reduce cost of cultivation in farming through better input management. (Domain - Agriculture) 
5. Organic Farming - Promotion of organic farming in hilly areas to realize yield potential on a sustainable basis. (Domain - Agriculture)
6. Effective implementation of crop insurance scheme to achieve maximum coverage of the farmers over Kharif 2016  (Domain - Agriculture)
7. Technology led growth for achieving high productivity in Horticulture. (Domain - Horticulture)
8. Reducing post harvest losses and augmenting the production towards cold chain.  (Domain - Horticulture)
9. Enhancing animal productivity and production through better feed management and disease control. (Domain - Animal Husbandry, Dairying and Fisheries)
10. Financing and management of procurement, processing and marketing infrastructure on the dairy sector, particularly refurbishing of very old dairy plants. (Domain - Animal Husbandry, Dairying & Fisheries)
11. Reforms in agricultural marketing - implementation of National Agricultural Market. (Domain - Credit & Insurance, Reforms in Agricultural Marketing)
12. Improving access of farmers to institutional credit for both short-term and long term capital investment in agricultural sectors. (Domain - Credit & Insurance, Reforms in Agricultural Marketing)
13. Issues related to procurement of pulses and oilseeds at MSP under Price Support Scheme and its effective utilization to incentivize pulse and oil production in the country. (Domain - Credit & Insurance, Reforms in Agricultural Marketing)

Now we take a look at some major themes around which discussions on agriculture are usually centred.

Droughts - 

1. agricultural planning gains a special significance in the backdrop two consecutive droughts the country has suffered and the Government's commitment to double the income of farmers by the year 2022. 
2. The two consecutive monsoons have caused decline in output of foodgrains from the record level of 264 million tonnes since 2013-14. The two less than normal crop seasons have left both the farmers and resources stressed. This calls for all concerned Departments  and agencies at Centre and State levels to ensure timely availability of adequate quantity of critical inputs like seeds, credit and fertilizers, etc.
3. The country is now better equipped to handle erratic rainfall situations. Despite high rainfall deficiency of 14% and 12% during the preceding two respective years, the total production of foodgrains in the country during 2015-16 is estimated to be marginally higher at 253.16 MT as against 252.02 MT produced during 2014-15. 
4. Given the vagaries of weather and small & marginal nature of farm holdings, the target of doubling farmers income in the next six years cannot be achieved based on crop  production alone and would require a comprehensive strategy of Integrated Farming Practices involving all the allied sectors of Agriculture viz., (a) Horticulture, (b) Animal Husbandry, (c) Dairying and Fisheries, (d) Credit & Cooperation & Marketing. 
5. As water is a critical resource, the Union budget 2016-17 has placed creation of water sources and enhancing water use efficiency as core concern of the farm sector. 
6. There is the need to promote balanced use of fertilizers and highlighted the relevance of Soil Health Card scheme (SHCs). 
7. States must try and achieve the recommended Seed Replacement Rates (SRRs) of 33% across all the crops. 
8. In order to make farming more viable, States should make crop-wise and district-wise and block-wise analysis of yield and provide special support to the farmers in areas wherethe actual yield is lower than district, States and national average. The farmers in such areas should be provided access to timely credit, seeds, fertilizers and technical advice to improve yield levels. 

Irrigation - 

1. The Pradhan Mantri Krishi Sinchai Yojna (PMKSY) launched in 2015-16 would not only enhance water resources in the country but also increase water use efficiency. Against the revised estimate (RE) of Rs.1550 crore during 2015-16, the allocation under PMKSY for 2016-17 has been raised significantly to Rs.2340 crore. 

Land and productivity - 

1. The availability of land being limited, higher income can be obtained only through increase in crop productivity which cannot be achieved without balanced use of fertilizers. 
2. The Government has launched a comprehensive Soil Health Card (SHC) Scheme to promote use of fertilizers needed as per requirement of soil nutrients in respect of 14 crore holdings of the country. 
3. The States had already collected 90 lakh soil samples (till April 2016) and tested more than 60 lakh samples. Considering the imbalanced use of fertilizers which has resulted in deterioration in the soil fertility, the need for creating awareness about Soil Health Cards is paramount. 
4. The need for special focus on improving productivity in eastern India is being felt. 

Organic farming - 

1. There is considerable scope for promoting organic farming without compromising on yield. 
2. The Paramparagat Krishi Vikas Yojana (PKVY) needs to be implemented in a mission mode to promote organic farming, particularly in the rainfed and hilly areas. Ensuring remunerative return to the farmers so as to enhance farmers' income is important. 

National Agriculture Market - 

1. Government is launching the scheme for establishing a National Agricultural Market (NAM), which will cover 200 markets by September 2016 and another 200 by March, 2017. This will help farmers in realizing of more competitive prices on their produce and lead to increase in their income. States need to complete their APMC reform process and join NAM as early as possible. 

Insurance schemes - 

1. To secure farmers against various risks and uncertainties, the Government is implementing a comprehensive Pradhan Mantri Fasal Bima Yojna (PMFBY). This is a path breaking initiatives for farmers' welfare, and all States are to finalize bids and assign district to various insurance companies so that farmers can take advantage of the PMFBY right from Kharif 2016.

Pulses production - 

1. In 2016, the Government has laid special emphasis on pulse production and in 2016-17 an additional amount of Rs.500 crores has been) allocated for promotion of pulses production in the country. A five year road map has been prepared to achieve an annual output of 24 million tonnes of pulses by 2020-21. 
   

Milk production - 

1. As milk production contributes to almost 1/3rd of the gross income of rural households, it is important that farmers take advantage of the breeding facilities like Artificial Insemination centers in an around their villages. Keeping in view the low productivity of the milk animals, the Government is actively engaged in the endeavor to bring the benefits of dairying to every farmer owning milk animal. To increase farmers' income from dairying, the Government aims to strengthen and create additional milk processing, marketing & procurement infrastructure for cooperative sector. 

Seeds - 

1. The ICAR is ready to meet the requirement of seed and planting materials sowing seasons. 
2. The ICAR has developed new drought tolerant seed varieties suitable for conditions of deficient rainfall and also varieties which have relatively shorter duration without much compromise on yield. The need to ensure adequate availability of quality seeds at the appropriate time is urgent, and hence State Governments must ensure that farmers do not suffer due to late supply of seeds.  
3. States should not use old variety seeds of pulses and oilseeds and use of better quality seeds available for oilseeds and pulses will improve productivity. In view of the availability of technology and quality seeds, it is hoped that the targets for production of pulses and oilseeds will be achieved. 

Livestock - 

1. The significance of livestock in farmers' income is very high, and they have so far been given peripheral treatment. 
2. The allied sectors is inclusive because it caters to the most marginalized and vulnerable section of society and the small and marginal famers are the major beneficiaries of the livestock sector. Although the country has highest number of livestock, their productivity is very low as compared to global average.  
3. The animal husbandry sector that makes almost 1/3rd contribution to the agricultural and allied sector's GDP, but does not get proportionate share in the allocation under RKVY.   
4. Also, while assessing the damage due to drought, floods etc., the losses on account of livestock are not being assessed properly and this needs to be corrected. Farmers should be adequately compensated for the losses of their livestock.   
5. In the context of the Government's commitment to double the income of farmers by 2022, State Governments will play an important role. The 20th Livestock Census will be conducted in 2017.

Schemes - 

1. PMKSY - In order to increase irrigation facilities, the Pradhan Mantri Krishi Sinchai Yojna(PMKSY) has been streamlined and the allocation has now been increased to Rs.2400 crore. 
2. PKVY - For the rainfed and hilly areas where dependable sources of irrigation are not available, organic farming can be promoted for higher returns. For this, States can effectively take up the implementation of Parampragat Krishi Vikas Yojna (PKVY) and Organic Value Chain projects for Northeast.  
3. eNAM - Market reform is an important initiative in the agriculture sector after the economic liberalization in 1991. As a major break-through in this direction, the Prime Minister has launched the National Agriculture Market on e-platform as a pilot in 21 APMCs across eight States. It will be further scaled up to cover 400 markets by the end of 2016-17.  
4. Rural Credit - Recognizing the role of institutional credit in addressing agrarian distress, in the current year's budget, the target for agricultural credit has been raised to Rs.9 lakh crores. The loopholes in the existing interest subvention scheme are being plugged.  
5. Pradhan Mantri Fasal Bima Yojana - With the aim to have an effective system of risk mitigation, a new crop insurance scheme "Pradhan Mantri FasalBima Yojana" has been launched. States to take proactive steps to give vide publicity to PMFBY and take initiatives for speeding up the implementation of the scheme. 

Fertilizers - 

1. Availability - The availability position of fertilizers during 2015-16 was comfortable and sufficient quantities of fertilizers were available to meet the requirements for Kharif season 2016. 
2. Neem Coated Urea - There is a the need for extensive awareness campaign among farmers on the benefits of Neem Coated Urea, close coordination with suppliers, faster release of fertilizers rakes and strengthening of enforcement measures, etc. There is a the need to promote use of optimal doses of fertilizers based upon soil health status, micro-nutrients, organic fertilizers and water soluble fertilizers under NHM.

2.0 Small farmers and Indian agriculture

Indian agriculture is dominated (at least in numbers) by small and marginal farming households. The small farmer of India had a rough time through 2015 end and start of 2016, as the Weather Gods conspired against them. Ten states declared drought. The state support machinery also did not help regarding security against rising debt and crop failures. The number of farmer suicides nationwide rose to an average of 52 a day in 2015. There is clearly a lot that needs to be done in a sector that has more than 60 percent of the population dependent for their livelihoods and income, a sector that holds responsibility of food security for all, now and in the future.

The bulk of India's farmers are the "small farmers". Around 85 percent of the total 138 million farmers in India are small farmers having 45 percent of the total operated land under agriculture. And if the current trends continue, the small-holding nature of the agriculture is only going to increase in the coming years.  The 2020s will need a new apporach.

Not just the number of farmers and the size of the land, various studies have calculated the huge share of India's food production coming from small farmers. A 2002 report by FAO states 41 percent as the contribution by small farmers in the total food production (FAO, 2002). Another study by IGIDR in 2012 estimates 51.2 percent of the total food production coming from small farmers (Dev, 2012). There are no precise government estimates available on the relative share of food production from different categories of farmers.

Some clear conclusions -

1. Small holding character in Indian agriculture is a significant phenomenon both with respect to the total farmers involved and the amount of food produced in the country.
2. If the trend continues the small holding character is going to increase more than the status quo, as informed by the trends of the past.

2.1 Problems of India's small farmers

The country is facing widespread drought, without mechanisms of recovery of loss and damage. There are other facts too. 

Limited access to resources (financial, material and natural): Farmers in India, especially small farmers have limited access to financial credit. Average monthly savings of marginal and small farmers is negligible or negative, and their average investment in productive assets ranges from INR 422 to INR 540 (NSSO). Farmers need much more capital than they can afford to save and small and marginal farmers with meager savings require a higher input of capital. The average loan amount outstanding for a farm household in India today is INR 47,000, which is an extremely heavy burden.

Increase in vulnerabilities of practicing agriculture: Climate change is expected to reduce the total crop production and regional water availability for food production due to rising temperatures, changing precipitation patterns and increasing frequency of extreme weather events. Shrinking resource base with depleting natural resources and increasing natural resource demand is going to affect the food production processes of the country. 60 per cent of the country is still rain-fed and depends on monsoons for their crop, highly vulnerable to changing weather conditions.

Low price to the farm output: Various studies have corroborated the lack of market linkages to the small farmers resulting in low price to the farmer produce. Government procurement policies have also been criticised. In 1970, the minimum support price (MSP) for wheat given to farmers was Rs 76 per quintal. By 2015, the MSP for wheat had increased a mere 19 times, to Rs 1,450 per quintal. In the same period, the basic salary (plus dearness allowance) of government employees has increased by as much as 150 times, for college teachers and university professors by as much as 170 times, for school teachers by up to 320 times and for top corporate executives by a whopping 1,000 times. The combination of falling commodity prices, declining output and increasing input costs have meant that livelihood of crores of agriculture workers and cultivators are in peril, also threatening India's food security. In such a scenario, the Indian Union budget seems to have made some significant allocations. 

3.0 Union Budget – measures for Indian agriculture

Union Budget 2019 - Agriculture Sector

 

To provide assured income to small and margiunal farmers, the Union Government has introduced a historic yojana- Pradhan mantra kisan samman nidhi. Under the yojana, the vulnerable farmers, who own around 2 hectares of land, will get direct income support of Rs 6000 per year.

• The Union Interim Finance Minister Piyush Goyal presented the Interim Budget 2019-20 on February 1, 2019. In Independent India, this will be the 89th budget and the sixth of the Narendra Modi-led NDA government.
• The Budget 2019 has identified Agriculture Sector as one of the key drivers of the economy. Accordingly, interim Finance Minister Piyush Goyal announced the following initiatives:

1. Farmer’s income doubled: All 22 crops have been put under Minimum Support Price. The various pro-farmer policies have led to the production of agricultural commodities in record quantities.
2. However, farming produce has reduced in recent times with that the income of farmer families have also reduced. 
3. Hence, there has been a need to provide structured income support to the poor farmer families to buy fertilizers and seeds etc.
4. The support is aimed to help the farmers in their indebtness and to enable them to live a respectable life. 
5. To provide assured income to small and margiunal farmers, the Government has introduced a historic yojana- Pradhan Mantri Kisan Samman Nidhi (KISAN). 
6. Under the yojana, the vulnerable farmers, who own around 2 hectares of land, will get direct income support of Rs 6000 per year. 
7. The income support will be transferred directly to the account of the beneficiary farmer in three equal installments of Rs 2000 each. It would be fully funded by the Government of India. 
8. The scheme is expected to benefit 12 crore farmer families. The programme will be implemented from December 2018.
9. Around Rs 75,000 crore will be borne by the Centre every year. The first installment will be issed soon after preparing a list. Rs 20,000 crore will be spent this financial year.
10. PM Kisan will provide assured supplementary income to vulnerable farmer families, enabling them to live a respectable life.
11. Besides this, farmers affected by natural calamities will be given 3 per cent interest subvention on crop loans.

Observations on the table - 

1. The allocations in insurance in agriculture might only be able to address the symptoms not the root cause of the distress in agriculture sector. 
2. Further, targeted allocations in irrigation and expanding the access to agriculture credit to the last mile farmers is a critical step that needs to be emphasised in the process of utilising this budget allocations.  
3. Much needs to be done in linking the farmers to the market, value additions by supporting relevant community institutions. The relatively stagnant minimum support prices for farmers of the country also needs due revisions.  
4. The government needs to attract investments by the private sector in infrastructure development like roads, transport, and storage infrastructure in the rural sector for ensuring better agriculture gains for farmers. 
5. The government has put forth an ambitious target to double the income of farmers by 2022. But a lot remains unclear regarding how it will be achieved.  
6. The Union Budget is surely a step up in the desperate conditions but is clearly not enough with respect to the quantum of the problems of the small farmers in agriculture sector and in order to achieve the target of doubling income of the farmers that it has set by 2022.

To ensure that a dramatic improvement does happen in Indian agriculture, here are some suggested and obvious measures, that require strict implementation.

4.0 NITI AAYOG AND ASSESSMENT OF INDIAN AGRICULTURE

In light of all the above issues listed in this booklet, it is apparent that urgent action is needed for an overhaul. The NITI AAYOG of India also did a detailed and careful assessment, and the Task Force on Agricultural Development concentrated on five major issues: agricultural productivity, remunerative prices for farmers, land policy, agrarian distress and eastern states that have lagged behind the rest of the country in farming. 

First Issue - Agricultural Productivity - A series of essential steps are required to raise agricultural productivity. At a broad level, this issue has two aspects: low average productivity at the national level and high variation in it regionally. As explained earlier, the average productivity in rice is low relative to most of the major rice producing counties. India does better in wheat but the scope for improvement exists in this crop as well. The same goes for other crops including oilseeds, fruits and vegetables as well as activities such as animal husbandry, fisheries and poultry. The second broad productivity concern relates to regional variation. It is also evident that while Punjab and Haryana exhibit high productivity nationally, states such as Madhya Pradesh, Rajasthan, Maharashtra, Chhattisgarh, Odisha, and Karnataka suffer from quite low yields per hectare. The scope for improved productivity in these latter regions is substantial. To increase productivity, progress is required along three dimensions: (i) Quality and judicious use of inputs such as water, seeds, fertilizer and pesticides; (ii) judicious and safe exploitation of modern technology including genetically modified (GM) seeds; and (iii) shift into high value commodities such as fruits, vegetables, flowers, fisheries, animal husbandry and poultry. In the longer run, productivity enhancement requires research toward discovery of robust seed varieties and other inputs, appropriate crops and input usage for a given soil type and effective extension practices. Agricultural research and development (R&D) in India has made impressive contribution in the past. But the system is under significant stress today with lack of clarity on focus and inefficient use of financial resources. Links among sister institutions have weakened and accountability declined over time. There is need for a rethink of the R&D system. 

Second Issue - Remunerative prices for farmers - This issue has two aspects, one relating to the Minimum Support Price (MSP) and the other relating to the farmer's share in the price paid by the final consumer. Taking the MSP first, it effectively applies to a specified set of commodities, predominantly rice, wheat and cotton, and is available only in a subset of producer states. In the states in which no procurement is done by the public agencies at the MSP, farmers lack the guarantee offered by the MSP. Moreover, subsidized sales of cereals under the public distribution system (PDS) divert part of the demand thereby artificially lowering the price at which they must sell their produce. Likewise, for commodities such as fruits and vegetables, which are not subject to any procurement by official agencies, sometimes the market price can be excessively low due to perishability and localized nature of markets for them. The inadequate cold storage facility makes matters worse by discouraging farmers from opting for these crops in the first place. Agricultural marketing has not seen any significant reforms and modernisation for decades. The supply chain remains fragmented, scale of operations is low and there is excessive presence of intermediaries. The poor state of competitiveness is more pronounced during above normal or below normal production. A small increase in production above normal level often results in price crash for farmers and a below normal production is followed by skyrocketing prices in the post-harvest period with hardly any benefit for the farmers. The second aspect of the price received by the famer concerns the small fraction of the price paid by the final consumer that the farmer receives in the marketplace. The continued presence of regulations flowing from the Agricultural Produce Marketing Committees (APMC) Acts in most commodities in most states has meant that the farmer is compelled to sell her produce in the government-controlled marketing yards. These controls restrict transactions to the handful of local players and easy manipulations. The APMC market yards are subject to vast technical as well as marketing inefficiencies that undermine the prices that farmers receive. Only a genuine implementation of the model APMC Act of 2003, which introduces all-around marketing reform, can ensure that the farmer gets her fair share of the price paid by the final consumer. Additionally, some of the restrictive features of the Essential Commodity Act, which create an environment of uncertainty and discourage the entry of larger players into agricultural-marketing infrastructure, requires review and possibly revision. 

Third Issue - Land Policy - For understandable historical reasons, land leasing laws in India have taken forms that discourage formal leasing contracts between the owner and the tenant. Field studies have shown that most of tenancy in the country is concealed and, thus, unofficial. This fact has the implication that tenants are often not identified as actual cultivators in the records. The lack of identification of tenants as actual farmers has very serious implications for the conduct of public policy. Benefits intended for the tenant farmer such as disaster relief or direct benefit transfers risk being disbursed to the owner of the land who appears as the cultivator in the official records. In the absence of official records, tenants also lack access to formal credit and other benefits available to cultivators. In many states, leasing laws can effectively result in the loss of land to the tenant leading owners to eschew leasing land altogether. Over the generations, as families have grown, land holdings have come to be divided and fragmented into small economically unviable parcels and plots. Onerous leasing laws have prevented consolidation of these holdings. On the one hand, these smallholdings force owners to seek alternative means of livelihood and on the other their plots remain uncultivated with no prospect of being joined to other plots to produce more viable holdings. 

Closely related, ownership rights in India are also poorly defined. All ownership is presumptive and subject to challenge in the courts. This feature has undermined the development of a vibrant land sales market with the owner unable to get the true value of his piece of land. In turn, this discourages land sales as well when the farmer finds his piece of land too small to be a viable source of livelihood. Equally important, in the absence of ownership titles and the prospects of land disputes, banks hesitate to accept land as collateral. 

Fourth Issue - Agrarian Distress - Farmers are frequently affected by natural disasters such as droughts, floods, cyclones, storms, landslides, hails and earthquakes. Because most farmers lead subsistence existence, such disasters can lead to extreme distress and hardship. Though some crop insurance schemes have been tried in the past, they have not worked effectively. One critical problem is that these programs predominantly cover only farmers with outstanding bank loans. Because the poorest farmers are unable to access the banking system in the first place, they are rarely covered by the insurance. There is acute need to rectify this situation by providing for at least minimum quick relief to marginal and small farmers in case of natural calamities that destroy a large proportion of the crop. 

Fifth Issue - Eastern Indian states - We need to pay special attention to the problems of farmers in eastern states. Given fertile land and abundant water resources, these states have a high potential in agriculture. Yet, their productivity in various crops lags behind the national average. Despite favourable climatic conditions and water availability crop intensity in the region is low. Therefore, concerted effort is required to bring the Green Revolution to these states.

5.0 India and Foreign Direct Investment

The figures for FDI inflows are given sectorwise in the table. For comparison, you should see the figures for Food Processing Industries (No. 13) and Agriculture Services (No.28).

6.0 World agriculture scenario

In terms of value of output, the world economy can be divided as shown in the image. For any country, the darkest region is Services, the lighter indicates Industry, and the lightest is Services sector.

So we see that agriculture is contributing the least among all three sectors valuewise. But without food, the world cannot go on! The world population is growing, although with steadily decreasing total fertility rates. Still, from the 7.3 billion mark in 2016, it is likely to cross 9 billion in a few decades, and may even cross 10 billion in the medium to long range.

World food production has to keep pace, alongwith many climate-related changes taking place all around us.

Land is playing increasingly playing a minor role in increasing overall agricultural productivity. Total Factor Productivity (TFP) which is a sum total of all positive productivity changes that come through better management and understanding of processes, is the key element in productivity augmentation for the future. The first green revolution worldwide was driven by sheer inputs - more fertilizers, more HYV seeds, more irrigation - but now that will not work in the future.

In low-income countries (some of which are now renamed as low-middle-income countries), this relationship is even more true.

To sum it up all, here is an excellent compilation of facts about the future of world agriculture.

7.0 TWELVE ISSUES IN INDIAN AGRICULTURE - SUMMARISED

Indian agriculture has sustained the population through its growth phase, and our farmers and scientists deserve credit for a fantastic performance. Now, in the 2020s, there are 12 key issues facing Indian agriculture. We present a summary below.

7.1 Issue 1 - Very small and fragmented land-holdings

• The abundance of net sown area of 141.2 million hectares and total cropped area of 189.7 million hectares (1999-2000) pales into insignificance when we see that it is divided into economically unviable small and scattered holdings. 
• The average size of holdings was 2.28 hectares in 1970-71 reduced to 1.82 hectares in 1980-81 and 1.50 hectares in 1995-96. The size of the holdings will further decrease with the infinite Sub-division of the land holdings. 
• The tenth Agriculture Census of India (2015-16) gave the total number of farms as 14.57 crores, with average farm size at 1.08 hectares (1.15 ha in 2010-11).
• The problem is more serious in densely populated and intensively cultivated states like Kerala, West Bengal, Bihar and eastern part of Uttar Pradesh where the average size of land holdings is less than one hectare and in certain parts it is less than even 0.5 hectare.
• Rajasthan with vast sandy stretches and Nagaland with the prevailing ‘Jhoom’ (shifting agriculture) have larger average sized holdings of 4 and 7.15 hectares respectively. States having high percentage of net sown area like Punjab, Haryana, Maharashtra, Gujarat, Karnataka and Madhya Pradesh have holding size above the national average.
• The key reason is the nature of inheritance laws. The land belonging to the father is equally distributed among his sons. This distribution of land does not entail a collection or consolidated one, but its nature is fragmented. Different tracts have different levels of fertility and are to be distributed accordingly. If there are four tracts which are to be distributed between two sons, both the sons will get smaller plots of each land tract. In this way the holdings become smaller and more fragmented with each passing generation.
• Irrigation becomes difficult on such small and fragmented fields. Further, a lot of fertile agricultural land is wasted in providing boundaries. Under such circumstances, the farmer cannot concentrate on improvement.
• The answer to this is the consolidation of holdings which means the reallocation of holdings which are fragmented, the creation of farms which comprise only one or a few parcels in place of multitude of patches formerly in the possession of each peasant.
• Legislation for consolidation of holdings has been enacted by almost all the states, it has been implemented only in Punjab, Haryana and in some parts of Uttar Pradesh.
• The other solution to this problem is cooperative farming in which the farmers pool their resources and share the profit.

7.2 Issue 2 - Seeds

• Seed is a critical and basic input for attaining higher crop yields and sustained growth in agricultural production. 
• Distribution of assured quality seed is as critical as the production of such seeds. 
• High quality seeds are out of reach of the majority of farmers, especially small and marginal farmers mainly because of prices.
• To solve this problem, the Government established the National Seeds Corporation (NSC) in 1963 and the State Farmers Corporation of India (SFCI) in 1969. Thirteen State Seed Corporations (SSCs) were also established to augment the supply of improved seeds to the farmers.
• High Yielding Variety Programme (HYVP) was launched in 1966-67 as a major thrust plan to increase the production of food grains in the country.
• The Indian seed industry had exhibited impressive growth in the past and is expected to provide further potential for growth in agricultural production: The role of seed industry is not only to produce adequate quantity of quality seeds but also to achieve varietal diversity to suit various agro-climatic zones of the country.
• Indian seeds programme largely adheres to limited generation system for seed multiplication. The system recognises three kinds of generation - breeder, foundation and certified seeds. Breeder seed is the basic seed and first stage in seed production. Foundation seed is the second stage in seed production chain and is the progeny of breeder seed. Certified seed is the ultimate stage in seed production chain and is the progeny of foundation seed. Production of breeder and foundation seeds and certified seeds distribution went up at an annual average rate of 3.4 per cent, 7.5 per cent and 9.5 per cent respectively, between 2001-02 and 2005-06).
• GM crops made an entry in early 2000s, but only Bt Cotton is allowed till date.

7.3 Issue 3 - Manures, Fertilizers and Biocides

• Indian soils have been used for growing crops for millennia without really caring for replenishing. This has depleted and exhausted the soils resulting in their low productivity. 
• The average yields of many crops are among the lowest in the world. This problem can be solved by using more manures and fertilizers.
• Manures and fertilizers play the same role in relation to soils as good food in relation to body. 
• Increase in the consumption of fertilizers is a barometer of agricultural prosperity. There are practical difficulties in providing sufficient manures and fertilizers in all parts of a country of India’s dimensions inhabited by poor peasants. Cow dung provides the best manure to the soils.
• Its use as such is limited because much of cow dung is used as kitchen fuel in the shape of dung cakes. Reduction in the supply of fire wood and increasing demand for fuel in the rural areas due to increase in population has further complicated the problem. 
• Chemical fertilizers are costly and are often beyond the reach of the poor farmers. The fertilizer problem is, therefore, both acute and complex.
• It has been felt that organic manures are essential for keeping the soil in good health. 
• The government has given high incentive especially in the form of heavy subsidy for using chemical fertilizers. 
• In order to maintain the quality, fertilizer quality control laboratories were set up in different parts of the country. 
• Pests, germs and weeds cause heavy loss to crops which amounted to about one third of the total field produce at the time of Independence. Biocides (pesticides, herbicides and weedicides) are used to save the crops and to avoid losses. The increased use of these inputs has saved a lot of crops, especially the food crops from unnecessary wastage. But indiscriminate use of biocides has resulted in wide spread environmental pollution which takes its own toll.

7.4 Issue 4 - Irrigation

• Although India is the second largest irrigated country of the world after China, only one-third of the cropped area is under irrigation. 
• Irrigation is the most important agricultural input in a tropical monsoon country like India where rainfall is uncertain, unreliable and erratic. 
• India cannot achieve sustained progress in agriculture unless and until more than half of the cropped area is brought under assured irrigation.
• This is testified by the success story of agricultural progress in Punjab Haryana and western part of Uttar Pradesh where over half of the cropped area is under irrigation! Large tracts still await irrigation to boost the agricultural output.
• However, care must be taken to safeguard against ill effects of over irrigation especially in areas irrigated by canals. Large tracts in Punjab and Haryana have been rendered useless (areas affected by salinity, alkalinity and water-logging), due to faulty irrigation. 
• In the Indira Gandhi Canal command area also intensive irrigation has led to sharp rise in sub-soil water level, leading to water-logging, soil salinity and alkalinity.
• At the same time, more than half of all irrigation in India is done by individual farmers using their own wells and tubewells, thereby creating individual micro-irrigation, and a consequent drop in water tables across Indian states.
• The PM  Krishi Sinchai Yojana was brought from 2015 onwards to handle this mega problem.

7.5 Issue 5 - Lack of technology and mechanisation

• Most of Indian agricultural operations in larger parts are carried on by human hand using simple and conventional tools and implements like wooden plough, sickle, etc.
• Little or no use of machines is made in ploughing, sowing, irrigating, thinning and pruning, weeding, harvesting threshing and transporting the crops.
• This is specially the case with small and marginal farmers. It results in huge wastage of human labour and in low yields per capita labour force.
• There is urgent need to mechanise the agricultural operations so that wastage of labour force is avoided and farming is made convenient and efficient. Agricultural implements and machinery are a crucial input for efficient and timely agricultural operations, facilitating multiple cropping and thereby increasing production.
• The need was specially felt with the advent of Green Revolution in 1960s. Strategies and programmes have been directed towards replacement of traditional and inefficient implements by improved ones, enabling the farmer to own tractors, power tillers, harvesters and other machines.
• A large industrial base for manufacturing of the agricultural machines has also developed. Power availability for carrying out various agricultural operations has also increased.
• This increase was the result of increasing use of tractor, power tiller and combine harvesters, irrigation pumps and other power operated machines. 

7.6 Issue 6 - Soil erosion

• Large tracts of fertile land suffer from soil erosion by wind and water. This area must be properly treated and restored to its original fertility.
• The issue of soil health cards to crores of farmers (and farms) is a step in the direction of training farmers about the need to build a proper system for applying fertilizers and preserve their soils too.
• Deforestation in large parts of India too has led to soil erosion on a large scale. That takes many years to replenish.

7.7 Issue 7 - Agricultural Marketing

• Agricultural marketing still continues to be in a bad shape in rural India. In the absence of sound marketing facilities, the farmers have to depend upon local traders and middlemen for the disposal of their farm produce which is sold (by farmers) often at low prices.
• In many cases, farmers are forced, under socio-economic conditions, to carry on distress sale of their produce. In most of small villages, the farmers sell their produce to the money lender from whom they usually borrow money.
• Lack of farm gate collection centres that can professionally manage the foodgrains, while paying good prices, is a big dampener.
• The situation that poor farmers cannot wait for long after harvesting their crops, leads to low price sales at farms itself, in the villages. They do not get the MSPs at all.
• To run the PDS, governments undertake large-scale procurement at central level (via FCI) and State levels (via state agencies). Sadly, few farmers benefit from it, and actually earn the actual MSP on produce.
• In the absence of an organised marketing structure, private traders and middlemen dominate the marketing and trading of agricultural produce. The remuneration of the services provided by the middlemen increases the load on the consumer, although the producer (farmer) does not derive similar benefit.
• The APMC Acts have helped build Mandis across India. These are regulated markets, where a system of competitive buying exists. That can help in eradicating malpractices, ensure the use of standardised weights and measures and evolve suitable machinery for settlement of disputes.
• The e-NAM project (electronic National Agricultural Markets) is the road ahead for 2020s. Farmers will be able to sell online, at the best discovered price, and if there can be a proper pan-India cold chain infrastructure that can carry all produce (agricultural and horticultural) then it will be miraculous for everyone.

7.8 Issue 8 - Inadequate storage facilities

• Storage facilities in the rural areas are either totally absent or grossly inadequate. Under such conditions the farmers are compelled to sell their produce immediately after the harvest at the prevailing market prices which are bound to be low. 
• distress sales deprives the farmers of their legitimate income.
• post-harvest losses are not insignificant, and a lot of it is due to poor storage conditions alone. Scientific storage is, therefore, very essential to avoid losses and to benefit the farmers and the consumers alike.
• Warehousing and storage activities are being undertaken by the Food Corporation of India (F.C.I.) and the Central Warehousing Corporation (C.W.C.). Also, various State Warehousing Corporation do it. These agencies help in building up buffer stock, which can be used in the hour of need. 
• The entire PDS runs on this backbone.
• However, large scale investments (public and private) are needed to ensure that creation of a pan-India, modern rural storage network is created to serve the economic interests of the farming community.

7.9 Issue 9 - Inadequate transport

• A handicap with Indian agriculture is the lack of cheap and efficient means of transportation, from the farm gate.
• Lakhs of villages are not well connected with main roads or with market centres. The PM Gram Sadak Yojana has had a positive impact in the past 15 years, though.
• Most roads in the rural areas used to be Kutcha (bullock- cart roads) and the farmers were not able to carry their produce to the main market. Hence linking each village by metalled roads was undertaken in the PMGSY.
• Creation of Mega Food Parks across India from 2015 onwards is pushing this need further, and linking is becoming more important.

7.10 Issue 10 - Institutional credit, and capital for investment

• Agriculture requires capital, for infrastructure creation.
• The role of capital input is important with the advancement of farm technology. Since the agriculturists’ capital is locked up in his lands and stocks, he is obliged to borrow money for stimulating the tempo of agricultural production.
• The main suppliers of money to the farmer are the money-lenders, traders and commission agents who charge high rate of interest and purchase the agricultural produce at very low price. 
• Various 'All India Rural Credit Surveys' showed that 51 the share of money lenders stood high as as a percent of total rural credit in initial years.
• Over time, the moneylender lost ground but is still a large contributor of agricultural credit. 
• Rural credit scenario has undergone a significant change now, and institutional agencies such as Central Cooperative Banks, State Cooperative Banks, Commercial Banks, Cooperative Credit Agencies and some Government Agencies are extending loans to farmers on easy terms.
• Since the GoI and RBI have clearly determined priority sector norms for lending, the flow of institutional credit to agriculture over the years has grown.

7.11 Issue 11 - Water shortage

• Indian agriculture has become the biggest consumer of water in the country, severely stressing the water resources of India.
• Due to most farmers becoming micro irrigation entrepreneurs, the water table across India has gone down.
• That is an existential threat for the future, and strong steps are needed to replenish the same.
• NITI Aayog's Composite Water Management Index report indicates the coming water stress in India.

7.12 Issue 12 - Trade policies

• The import and export of agricultural goods from India happens on a large scale.
• India is a giant producer of agricultural commodities, and exports hugely across the world.
• All trade is covered under the WTO GATT - Agreement on Agriculture - norms, and questions have been raised by the Western world on the amount of subsidies given in India breaking the stipulated maximum 10% limit under the Amber Box.
• India has fiercely resisted all such fradulent claims on technical grounds, and protected its terms of trade so far.
• Problem lies in domestic management. Due to the need to control food inflation at any cost, agri trade policies of India have not remained consistent.
• Agri trade partners of India are not entirely convinced of the sustainability in policy, as things can change overnight.
• In addition, huge imports of edible oils is straining the exchequer, but no immediate solution is in sight.

ZERO BUDGET NATURAL FARMING

• Zero Budget Farming is a variation on natural farming developed in, and primarily practiced in southern India. It is also called spiritual farming. The method involves mulching, intercropping, and the use of several  preparations which include cow dung. 
• Zero Budget Natural Farming (ZBNF) has spread to various states in India. The movement in Karnataka state was born out of collaboration between Mr Subhash Palekar, who put together the ZBNF practices, and the state farmers association Karnataka Rajya Raitha Sangha (KRRS). Palekar was recently awarded India's fourth highest civilian award, the Padma Shri, in 2016. 
• The neoliberalization of the Indian economy led to a deep agrarian crisis that is making small scale farming an unviable vocation. Privatized seeds, inputs, and markets are inaccessible and expensive for peasants. Indian farmers increasingly find themselves in a vicious cycle of debt, because of the high production costs, high interest rates for credit, the volatile market prices of crops, the rising costs of fossil fuel based inputs, and private seeds. 
• Zero Budget : Under such conditions, 'zero budget' farming promises to end a reliance on loans and drastically cut production costs, ending the debt cycle for desperate farmers. The word 'budget' refers to credit and expenses, thus the phrase 'Zero Budget' means without using any credit, and without spending any money on purchased inputs. 'Natural farming' means farming with Nature and without chemicals. 

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