Interventions in the market mechanism include the announcement of various administered prices such as Minimum Support Prices (MSP), statutory minimum prices, procurement prices, and issue prices.
- Minimum Support Prices (MSP): These guarantee that prices paid to farmers cannot be lower than the MSP.
- Procurement Prices: These are higher than the MSP and represent the prices at which the government buys from farmers. In recent years, the government has announced continuous procurement to enable farmers to sell to the government at procurement prices.
- Central Issues Prices (CIP) Central Issues Prices (CIP) represent the rates at which the government supplies produce to fair price shops and ration depots. Wheat and rice are distributed to State Governments/UTs at CIP for Public Distribution System (PDS). States have the option to offer additional subsidies, reducing prices below the CIP.
- Price Support through MSP Price support through Minimum Support Price (MSP) and procurement prices is limited to specific crops, leading to changes in the country’s cropping pattern. Crops like rice and wheat, with increased MSP, witness a shift in cultivation, benefiting farmers in states where these crops are prominent.
Food Security
- The World Food Summit of 1996 defined food security as the state where everyone has access to sufficient, safe, and nutritious food for an active and healthy life. India’s food security initiatives, including the Public Distribution System (PDS) and the National Food Security Act, 2013, aim to address these challenges.
Public Distribution System (PDS)
- Operated jointly by the Central and State Governments, PDS involves procurement, storage, transportation, and allocation of foodgrains. The Central Government, through FCI, manages bulk allocation, while operational responsibilities within states, identification of below-poverty-line families, and fair price shop supervision rest with State Governments.
- Commodities like wheat, rice, sugar, and kerosene are distributed, and some States/UTs include additional items. Targeted Public Distribution System (TPDS) was introduced in June 1997, and alternatives include Universal PDS, Food Coupons, and Direct Benefit Transfer (DBT).
Revamped Public Distribution System (RPDS)
- Launched in June 1992, RPDS aimed to strengthen and streamline PDS, especially in remote areas. It introduced an area approach, doorstep delivery, additional ration cards, and expanded commodities like tea, salt, pulses, and soap for distribution through PDS outlets.
Targeted Public Distribution System (TPDS)
- The previous operation of TPDS faced widespread criticism for not effectively serving the population below the poverty line. In response to the recommendations from the Chief Ministers Conference in July 1996, an effort was made to revamp the Public Distribution System, leading to the introduction of TPDS in June 1997.
- TPDS employs a two-tier subsidized pricing structure for families—Below Poverty Line (BPL) and Above Poverty Line (APL). States identify the poor based on state-wise poverty estimates from the Planning Commission. To enhance focus on the poor, the Antyodaya Anna Yojana was launched in December 2000, aiming to identify 10 million poor families and provide them with 25 kg of foodgrains per family per month at a low price.
Fortification of Rice and its Distribution
- The Centrally Sponsored Pilot Scheme Fortification of Rice and its Distribution under the Public Distribution System was approved by the Government of India on February 14, 2019, for three years starting 2019-20. Implemented in 15 districts across 11 states, the scheme aims to distribute fortified rice in the identified districts.
National Food Security Act (NFSA), 2013
- NFSA stands as a significant intervention in global food security. Encompassing the entire nation, the Act ensures that priority households receive 5 kgs of food grains per person per month, and Antyodaya households receive 35 kgs per household per month. The combined coverage extends to 75% of the rural population and 50% of the urban population.
- PDS issue prices are set at 3/2/11 per kg for rice/wheat/millets, subject to revision after three years. The Act addresses various age groups, providing meals for children, free mid-day meals for school-going children, and support for pregnant and lactating mothers.
- The Act lacks specific criteria for identifying eligible households, leaving it to the Central Government to determine state-wise coverage. State food commissions monitor implementation, ensuring a grievance redressal mechanism and transparency through social audits and technology use.
International Fund for Agricultural Development
- The International Fund for Agricultural Development (IFAD) is a specialized UN agency and international financial institution headquartered in Rome, serving as the UN’s food and agricultural hub.
International Fund for Agricultural Development (IFAD)
- IFAD represents a distinctive collaboration involving 165 members from the Organisation of the Petroleum Exporting Countries (OPEC), other developing nations, and the Organisation for Economic Co-operation and Development (OECD). It serves as a robust global platform for discussing rural policy matters and raising awareness about the crucial role of investing in agricultural and rural development to alleviate poverty and enhance food security.
Storage Capacity and Constraints
Three public-sector agencies play a pivotal role in constructing extensive storage and warehousing capacity:
- Food Corporation of India (FCI)
- Central Warehousing Corporation (CWC)
- 17 States Warehousing Corporations (SWCs)
- While FCI primarily utilizes its capacity for storing foodgrains, CWC and SWCs accommodate storage for both foodgrains and various other commodities.
Food Processing Industry (FPI)
- India holds the position of the world’s second-largest producer of fruits and vegetables, following China. The Indian food sector ranks fifth globally, contributing approximately 6% to GDP, 13% to Indian exports, and 6% to the overall industrial investment in the country.
- Over the past five years until 2022, the Food Processing Industries (FPI) sector has displayed an average annual growth rate of approximately 11.18%. It offers employment to seven million people, accounting for 32% of India’s food market share and 10.4% of the country’s total exports.
- The expected output of the food processing sector in India is projected to reach $535 billion by 2025-26. The industry is categorized into sectors such as dairy, meat and poultry, seafood, bakery and confectionery, fruit and vegetables, grain, pulses and oilseeds, alcoholic and non-alcoholic beverages, and packaged foods. Although the classification is not distinct, many processed products span different segments.
- In FPI, 100% Foreign Direct Investment (FDI) is permitted under the automatic route. However, for trading food products manufactured and produced in India, including through e-commerce, 100% FDI is allowed under the government approval route.
Food Corporation of India (FCI)
- Established in 1965, the Food Corporation of India (FCI) has the primary responsibility of purchasing, storing, transporting, distributing, and selling food grains and other foodstuffs.
- It also manages buffer stocks of foodgrains on behalf of the government and serves as the exclusive repository for foodgrains meant for the Public Distribution System (PDS).
National Mission on Food Processing (NMFP)
- Launched under the 12th Plan, NMFP facilitates the decentralized implementation of various schemes under the Ministry of Food Processing with state government collaboration.
- Key schemes include technology upgradation of food processing industries, cold chain facilities for non-horticultural produces, modernization of abattoirs, primary processing centers/collection centers in rural areas, and upgrading the quality of street food.
National Food Processing Development Council (NFPDC)
- NFPDC is established to offer guidance on all Ministry of Food Processing schemes, including NMFP. Its composition includes the Agriculture Minister as Chairman, representatives of state governments, industry associations, and relevant government officials.
Prime Minister-Formalisation of Micro Food Processing Enterprises (PM-FME)
- As part of the Atmanirbhar Bharat Mission, the Ministry of Food Processing Industries (MoFPI) introduced the Prime Minister-Formalisation of Micro Food Processing Enterprises (PM-FME) scheme. With a total outlay of ₹10,000 crore for the period 2020-2025, the scheme grants One District One Product (ODOP) status to 137 unique products across 710 districts in 35 States/UTs.
Agricultural Marketing and Extension Services
- The country encourages the organized marketing of agricultural commodities through a network of regulated markets.
- Most states and Union Territories have enacted legislation, the Agriculture Produce Marketing Committee (APMC) Act, to regulate agricultural produce markets.
- Seventeen states or UTs have amended their APMC Acts, with the remaining in the process of doing so. India has 2,477 principal regulated primary agricultural markets, governed by APMC Acts and administered by separate Agricultural Produce Marketing Committees (APMCs), hindering the free flow of agricultural commodities.
e-National Agriculture Market (NAM)
- Launched on April 14, 2016, the National Agriculture Market (NAM) is a pan-India electronic trading portal for farm produce, integrating existing Agriculture Produce Market Committee (APMC) markets.
- This portal provides a single-window service for all APMC-related services and information, facilitating trade offers, commodity arrivals, prices, and other services.
e-Rakam (e-Rashtriya Kisan Agri Mand)
- The Union Government introduced the e-Rakam web portal to serve as a single digital platform for small and large farmers to sell and buy agricultural products in the global market. Payments for farmers are conducted through digital means, directly to their bank accounts.
National Agricultural Market Yojana
- The National Agricultural Market Yojana aims to create a common national market for agricultural commodities through an e-platform network. Launched as part of NAM, the national e-agriculture market integrates various vegetable markets across the country.
- Kisan Call Centre Scheme Launched in 2004, the Kisan Call Centre Scheme provides agricultural information to the farming community through toll-free telephone lines. A country-wide common 11-digit number, 1800-180-1551, has been allocated for Kisan Call Centres.
- Agri-clinic and Agri-business Centres Scheme Introduced in 2002, the Agri-clinic and Agri-business Centres Scheme provides extension services to farmers on a payment basis by establishing economically viable self-employment ventures. NABARD monitors the credit support to Agri-clinics through Commercial Banks.
Government Schemes Related to Agriculture
- Other major schemes related to agriculture include the SVAMITVA Scheme, launched in 2020, which focuses on providing rural residents with property documentation rights for economic purposes.
- Land parcel surveys will be conducted across the country as part of the proposed Central Scheme for the period 2020-2025. The pilot phase (FY 2020-21) has a projected outlay of ₹79.65 crores to cover all 6.62 lakh villages.
Green Revolution-Krishonnati Yojana
- Introduced in 2005, the Green Revolution Krishonnati Yojana aims to boost the agriculture sector.
- The scheme, encompassing 11 schemes and missions under a single umbrella, focuses on holistic and scientific development of the agriculture and allied sectors to increase farmer income. It strives to enhance agricultural production, productivity, and returns on produce.
National e-Governance Plan (NeGP-A)
- Key aims of the NeGP-A scheme include the improvement of the agricultural base, doubling farmers’ earnings, creating appropriate agricultural infrastructure, and ensuring an adequate market for the sale of produce.
Pradhan Mantri Kisan Maan Dhan Yojana
- Launched on September 12, 2019, the PM-KMY scheme is a Central Sector Scheme for farmers aged between 18 to 40 years. Farmers can become members by registering under the Pension Fund managed by LIC. Members contribute monthly to the Pension Fund, with the Central Government providing an equal contribution. The scheme is applicable to small and marginal farmers.
PM Kisan Samman Nidhi Yojana
- Implemented in 2018, the PM Kisan Samman Nidhi Yojana aims to augment the income of farm families. It provides financial assistance to small and marginal farmers for purchasing seeds, fertilizers, etc.
- The scheme transfers funds directly to farmers’ bank accounts in three equal installments every four months.
KUSUM Scheme
- The Union Government has announced the Kisan Urja Suraksha evam Utthan Mahaabhiyan (KUSUM) scheme, with an allocation of ₹1.4 lakh crore for decentralized solar power production of up to 28,250 MW to assist farmers. The scheme includes a 60% subsidy on solar pumps, shared between the Centre and States, with 30% provided through bank loans, and the remaining cost borne by farmers.
One Nation-One Ration Card
- The Ministry of Consumer Affairs, Food and Public Distribution initiated the One Nation One Ration Card pilot scheme in 2019 across four locations. This national ration card facilitates migrant workers and their families to access Public Distribution System (PDS) benefits from any fair price shop across the country.
Gobardhan Yojana
- The Ministry of Drinking Water and Sanitation introduced the GOBAR (Galvanising Organic Bio-Agro Resources) – Dhan scheme as part of the Swachh Bharat Mission (Gramin).
- This scheme aims to positively impact village cleanliness, generate wealth and energy from cattle and organic waste, and create new rural livelihood opportunities, thereby enhancing income for farmers and rural communities.
Aajeevika Grameen Express Yojana
- Launched in August 2017 under the Deen Dayal Antyodaya Yojana National Rural Livelihood Mission (DAY-NRLM), the Aajeevika Grameen Express Yojana (AGEY) provides an alternative livelihood source for Self Help Groups (SHGs) members.
- The objective is to facilitate SHGs to operate public transport services in backward rural areas, offering safe, affordable, and community-monitored rural transport services to connect remote villages with essential services and amenities.
Pradhan Mantri Fasal Bima Yojana
- Approved by the Union Cabinet in January 2016, the Pradhan Mantri Fasal Bima Yojana replaces existing insurance schemes (NAIS and Modified NAIS). Emphasizing the theme of One Nation-One Scheme, it addresses shortcomings and weaknesses of previous schemes while incorporating their best features.
Highlights of the Scheme:
- Uniform premium of 2% for all Kharif crops and 1.5% for all Rabi crops paid by farmers.
- Premium for annual commercial and horticultural crops set at 5%.
- Low premium rates for farmers, with the government bearing the balance premium to provide full insured amounts against crop loss due to natural calamities.
- No upper limit on government subsidy, eliminating previous capping to ensure farmers receive full sum insured without reduction.
- Encouragement of technology use, including smartphones for capturing and uploading crop cutting data to expedite claim payments, and remote sensing to reduce the need for cutting experiments.
Pradhan Mantri Kisan SAMPADA Yojana
- Introduced in 2016 by the Ministry of Food Processing Industries, the Umbrella Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters of SAMPADA was later renamed as the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) in 2017.
- The PMKSY encompasses various component schemes, including Mega Food Parks, Integrated Cold Chain and Value Addition Infrastructure, Infrastructure for Agro-processing Clusters, Creation of Backward and Forward Linkages, Creation/Expansion of Food Processing and Preservation Capacities, Operation Greens, and Food Testing Laboratories.
Soil Health Card Scheme
- Launched by Prime Minister Narendra Modi in 2015, the Soil Health Card Scheme (SHCS) aims to address deteriorating soil quality and enhance farm productivity.
- The scheme intends to provide all 145 million farm owners in the country with a Soil Health Card in the next three years.
- The announcement of this ambitious scheme was made during the presentation of the first budget by Finance Minister Arun Jaitley in July 2014.
Mega Food Park Scheme (MFPS)
- Originally known as the Food Parks Scheme in the 10th Plan, it was later renamed the Mega Food Park Scheme (MFPS) in 2008.
- With the goal of implementing the objectives outlined in the Vision 2015 document, the scheme focuses on creating excellent infrastructure.
- As of August 1, 2021, there are 22 Mega Food Parks operating in the country. The objectives include providing state-of-the-art infrastructure for food processing on a pre-identified cluster basis, ensuring value addition of agricultural commodities, establishing a sustainable raw material supply chain for each cluster, facilitating the induction of the latest technology, and ensuring quality assurance through better process control and capacity building.
- Launched in 2007-08 with an initial outlay of ₹25,000 crore in the 11th Plan, the Rashtriya Krishi Vikas Yojana (RKVY) incentivizes states to enhance public investment to achieve a 9% growth rate in agriculture and allied sectors.
- The RKVY allows for taking up national priorities as sub-schemes, providing flexibility in project selection and implementation.
- Sub-schemes under RKVY include Bringing Green Revolution to Eastern regions, Integrated development of 60,000 pulses and oilseeds villages in rainfed areas, Promotion of oil palm, Initiative on village clusters, Nutri-cereals, National Mission for protein supplements, Accelerated Fodder Development Programme, Rainfed Area Development Programme, and National Mission on saffron-economic revival of Jammu and Kashmir saffron.
National Food Security Mission (NFSM)
- Launched in Rabi 2007-08, the National Food Security Mission (NFSM) aims to increase production through area expansion and productivity, create employment opportunities, and enhance the farm-level economy to restore the confidence of farmers.
- The components during the 12th Five Year plan include NFSM-Rice, NFSM-Pulses, NFSM-Wheat, NFSM-Commercial crops, and NFSM-Coarse cereals.
Some other Schemes
- Kisan Rail: Launched on August 7, 2020, the Kisan Rail facilitates the transportation of fresh fruits and vegetables from farmers to markets across India.
- The Operation Greens – TOP to Total scheme provides a 50% subsidy to farmers, covering the transportation costs of popular produce like Tomato, Onion, and Potato (TOP). The inaugural Kisan Rail journey took place on August 7, 2020, between Devlali (Maharashtra) and Danapur (Bihar).
- Krishi UDAN Yojana: Initiated in August 2020, Krishi UDAN operates on international and national routes to aid farmers in transporting agricultural products, enhancing their value realization. Krishi UDAN 2.0 will specifically focus on transporting perishable food products from hilly areas, North-Eastern states, and tribal regions.
- Digital and Hi-tech Services Scheme: In a forthcoming scheme under public-private partnership (PPP), farmers will receive digital and hi-tech services. Public sector research and extension institutions, along with private agri-tech players and agri-value chain stakeholders, will collaborate in the implementation of this initiative.
- Start-up Fund Scheme: Emphasizing the agriculture start-up ecosystem, a blended capital fund will be facilitated through NABARD. The co-investment model aims to finance startups in agriculture and rural enterprises relevant to the farm produce value chain. Startups will engage in activities such as providing machinery on a rental basis at the farm level and offering IT-based support for Farmer Producer Organizations (FPOs).
- Ken-Betwa Link Scheme: Estimated at 44,605 crore, this scheme aims to provide irrigation benefits to 9.08 lakh hectares of farmers’ lands, drinking water supply for 62 lakh people, and generate 103 MW of Hydro and 27 MW of solar power. Draft Detailed Project Reports (DPRs) for five river links, including Damanganga-Pinjal, Par-Tapi-Narmada, Godavari-Krishna, Krishna-Pennar, and Pennar-Cauvery, have been finalized. After consensus among beneficiary states, the Centre will provide support for project implementation.
- Kisan Drones Scheme: The use of Kisan Drones will be promoted for crop assessment, digitization of land records, and the spraying of insecticides and nutrients.
- Chemical-free Natural Farming: A pan-India promotion of chemical-free natural farming with a focus on lands within 5 km wide corridors along the Ganga River will be implemented in the first stage.
- Support for Millet Products: The budget provides for post-harvest value addition, enhancing domestic consumption, and branding millet products nationally and internationally.
- Oilseed Production Scheme: To reduce dependency on oilseed imports, a comprehensive scheme to boost domestic oilseed production will be implemented.
- Food Processing: A comprehensive package, in collaboration with state governments, will assist farmers in adopting suitable varieties of fruits and vegetables, utilizing appropriate production and harvesting techniques.
Agricultural Finance and Credit Facilities:
- Agricultural Finance and Credit Facilities: Agricultural credit is disbursed through a multi-agency network, including Commercial Banks (CBs), Regional Rural Banks (RRBs), and cooperatives. Cooperative Credit Institutions play a crucial role, covering almost all villages and extending credit in short and long-term structures.
- Post-nationalization, Commercial Banks extended their lending services to agricultural operations. Concurrently, Regional Rural Banks (RRBs) and farmer service societies fortified rural credit initiatives. The National Bank for Agriculture and Rural Development (NABARD) emerged as the apex agricultural finance institution.
Co-operative credit institutions
- In India, cooperative credit institutions for rural areas have been structured into short-term and long-term entities.
- The short-term cooperative credit structure encompasses three tiers:
- Primary Agricultural Credit Societies (PACS) at the village level, District Central Co-operative Banks (DCCB) at the district level, and State Co-operative Banks (SCB) organized at the state level.
- For long-term credit needs, various types of long-term credit co-operatives have been established, including Unitary, Federal, Mix of Federal and Unitary, and those providing long-term credit through the long-term section of State Co-operative Banks (SCBs).
- In 2011-12, co-operatives accounted for 17.2% of institutional agricultural credit.
- The Agricultural Export Policy of 2018 aimed to enhance productivity, pre and post-harvest management, value addition, and technological upgrades in the agricultural sector.
- The policy envisioned leveraging India’s agricultural potential to emerge as a global force in agriculture through suitable frameworks and policies.
Commercial Banks in Rural Credit
- Initially, the share of Commercial Banks in rural credit was limited after independence.
- To supplement the efforts of co-operatives and Commercial Banks, Regional Rural Banks (RRBs) were established in 1976 through the Regional Rural Banks Act, 1976. RRBs receive equity contributions from the Central Government, concerned State Government, and sponsor banks.
- NABARD regulates RRBs, and their lending rates cannot exceed those of co-operative societies in a particular state.
- The area of operation for RRBs is limited to specified regions comprising one or more districts of a state, focusing on providing direct loans to small and marginal farmers, rural artisans, agricultural laborers, and others with small means for productive purposes.
RRB (Amendment) Act, 2015
- The Regional Rural Banks (Amendment) Act aims to modify the existing legislation to raise the authorized capital of each Regional Rural Bank (RRB) from 5 crore to 2000 crore, divided into 200 crore fully paid shares of 10 each.
- The bill stipulates that the authorized capital of any RRB shall not be reduced below 1 crore, with shares in all cases being fully paid-up shares of 10 each. It also ensures that the issued capital of each rural bank remains at least 1 crore.
- Currently, 43 RRBs are performing well. The proposed amendment to increase the authorized capital to 2000 crore will fortify these institutions, contributing to the deepening of financial inclusion.
Kisan Credit Card (KCC) Scheme
- Initiated in August 1998 by the Government of India, Reserve Bank of India (RBI), and National Bank for Agricultural and Rural Development (NABARD), the Kisan Credit Card (KCC) Scheme facilitates farmers’ access to timely and adequate credit.
- The scheme incorporates components of consumption and investment credit within the overall credit limit, offering farmers sufficient and timely credit support for their cultivation needs.
- Budget 2012-13 expanded the scope of KCCs, allowing them to function as smart cards and ATMs. The card remains valid for three years, subject to annual renewals.
Essential Commodities Act (ECA)
- Enacted in 1955, the Essential Commodities Act (ECA) empowers the government to regulate the production, supply, and distribution of various essential commodities to ensure fair prices for consumers.
- Items under the Act include drugs, fertilizers, pulses, edible oils, and petroleum products. The Essential Commodities (Amendment) Act, 2020, brought modifications in line with the 2020 Indian farm reforms.
NABARD (An Overview)
- Established by the Government of India as a development bank, the National Bank for Agriculture and Rural Development (NABARD) focuses on facilitating credit flow for the promotion and development of agriculture and integrated rural development.
- Its mandate extends to supporting all economic activities in rural areas, promoting sustainable rural development, and fostering prosperity in rural areas.
- As an apex institution, NABARD deals with policy, planning, and operations in the field of credit for agriculture and other economic and developmental activities in rural areas.
- Essentially, it serves as a refinancing agency for financial institutions providing production and investment credits for agricultural and developmental activities in rural areas.
NAFED
- The National Agricultural Cooperative Marketing Federation of India Limited (NAFED) functions as the apex cooperative organization at the national level. Established in 1958, NAFED engages in the procurement, distribution, export, and import of selected agricultural commodities.
TRIFED
- The Tribal Cooperative Marketing Development Federation of India Limited (TRIFED) came into existence in 1987 and was registered under the Multi-State Cooperative Societies Act, 1984, which later became the Multi-State Cooperative Societies Act 2002.
Recommendations from the Task Force on Credit-Related Issues of Farmers (led by Chairman Umesh Chandra Sarangi):
- The task force addressed the concern of a significant number of farmers who, having borrowed from private moneylenders, were not covered by the loan waiver scheme.
- Conduct financial literacy and counseling campaigns to raise awareness among farmers about the Kisan Credit Card (KCC).
- Encourage banks to educate their rural branch staff about the KCC.
- Utilize farmers’ cooperatives and Self-Help Group (SHG) federations as banking correspondents to enhance outreach.
- Implement technology-enabled enhancements to the KCC, including the transition to a smart card with withdrawal and remittance capabilities at Automated Teller Machines (ATMs), Points of Sale (PoS), and through handheld machines. Banks should expedite the implementation of Core Banking Solutions (CBS) to maximize technological benefits for farmers.
- Set a fixed KCC limit for five years based on the banker’s assessment of the farmer’s total credit needs for a full year. Allow the borrower to operate the limit as needed, without sub-limits for Kharif and Rabi or different stages of cultivation.
- Ensure automatic renewal and an annual increase in the credit limit linked to the inflation rate.
Agricultural Insurance Schemes:
- National Agricultural Insurance Scheme (NAIS): A government-sponsored crop insurance scheme since 1999-2000, providing financial support to farmers in case of crop failure due to natural calamities, pests, or diseases. The Agriculture Insurance Company of India Limited implements this scheme.
- Modified NAIS (MNAIS): Implemented on a pilot basis in 50 districts from Rabi 2010-11 to enhance crop insurance schemes. Both NAIS and MNAIS have been replaced by the unified and comprehensive Pradhan Mantri Fasal Bima Yojana.
- Pilot Weather-Based Crop Insurance Scheme (PWBCIS): Implemented as a Central Sector scheme from Kharif 2007 season, providing insurance protection to farmers against adverse weather conditions affecting crop production.
Commodity Futures Market:
- The commodity futures market aids in price discovery and offers a platform for price risk management in commodities.
- Currently, 113 commodities are notified for futures trading, with 51 actively traded in 5 national and 16 regional commodity-specific exchanges.
Forward Markets Commission:
- The Forward Markets Commission (FMC) regulated commodity futures trading under the Forward Contracts (Regulation) Act, 1952.
- In 2015, FMC merged with the Securities and Exchange Board of India (SEBI), consolidating into a single regulator for both stock and commodity markets in India.
- Mobile Apps for Farmers On December 23, 2015, Union Agriculture and Farmers Wealth Minister, Shri Radha Mohan Singh, introduced two mobile apps for farmers, outlined below:
- Mobile App Crop Insurance: This app enables farmers to access comprehensive information about the available insurance cover in their area. It calculates the insurance premium for notified crops, coverage amount, and loan amount for farmers with loans.
- Mobile App Agrimarket Mobile: This app automatically captures the user’s location through mobile GPS and retrieves market prices of crops within a 50 km range. Users also have the option to manually input market and crop details if they prefer not to use GPS.
Role of Research and Development in Agriculture
- Research and development, when applied to agriculture and allied sectors, can significantly contribute to achieving sustainable agricultural practices that meet nutritional security and improve farm income.
- The global food system is responsible for approximately one-fifth of Global Greenhouse Gas (GHG) emissions.
- Agriculture plays a crucial role in meeting half of the 17 Sustainable Development Goal (SDG) targets, including eliminating poverty and hunger. Climate-resilient varieties that resist multiple pests, diseases, and abiotic stress are crucial for climate and food security.
National Mission for Sustainable Agriculture (NMSA)
- NMSA is part of the National Action Plan on Climate Change (NAPCC) and will be implemented during the Twelfth Five-Year Plan.
- It aims to transform agriculture into an ecologically sustainable, climate-resilient production system while maximizing its potential for food security and economic stability.
- Objectives include developing strategic plans at the agro-climatic zone level, enhancing agricultural productivity through customized interventions, expanding weather station networks to the Panchayat level, promoting laboratory-to-land research, and strategizing long-term interventions for emission reduction.
Indian Council of Agricultural Research (ICAR)
- ICAR, an autonomous organization under the Department of Agricultural Research and Education, Ministry of Agriculture, Government of India, serves as the apex body for coordinating, guiding, and managing research and education in agriculture, horticulture, fisheries, and animal sciences throughout the country.
- Established on July 16, 1929, ICAR plays a crucial role in advancing agricultural research and education in India.
Other Crucial Agricultural Sectors
Several other pivotal sectors in agriculture are highlighted below:
- Livestock Sector: According to National Accounts Statistics (NAS) 2020, the Gross Value Added (GVA) of livestock in total agriculture and allied sectors has increased from 24.32% (2014-15) to 29.35% (2019-20).
- In 2018-19, this sector contributed significantly, producing 187.7 million tonnes of milk, 103,318 million eggs, 44.73 million kg of wool, and 5.51 million tonnes of meat.
- The government initiated the National Animal Disease Control Programme (NADCP) from 2019 to 2024 to combat Foot and Mouth Disease (FMD) and Brucellosis. This program, aiming for eradication by 2030, is the largest-ever vaccination initiative globally, covering both human and animal vaccinations.
- As part of the Animal Husbandry Infrastructure Development Fund (AHIDF) under the ANB stimulus package, a fund worth 15,000 crores was launched in 2020. AHIDF supports investments in dairy and meat processing infrastructure and animal feed plant establishments by various entities.
Dairy Sector:
- The dairy sector is the largest agricultural commodity, contributing 5% to the national economy and providing direct employment to over 8 crore farmers.
- India ranks first in global milk production, contributing 23% to the overall output, with the largest bovine production globally.
- Key schemes implemented by the Ministry of Agriculture in the dairy sector include the Intensive Dairy Development Programme, Infrastructure Strengthening for Quality and Clean Milk Production, and Assistance to Cooperative and Dairy Entrepreneurship Development Scheme.
The National Dairy Plan
- The National Dairy Plan, aiming for 180 million tonnes of milk production by 2021-22, focuses on breed improvement, cattle feed augmentation, and expansion or strengthening of milk processing infrastructure.
- The government, in Budget 2020, announced its target to double the milk processing capacity from 53.5 million tonnes to 108 million tonnes.
Livestock Insurance:
- A Centrally Sponsored Scheme for livestock insurance operates in all states, aiming to provide a protection mechanism for farmers and cattle bearers against losses due to animal death.
- The scheme is implemented in 300 selected districts, benefiting farmers and cattle bearers with indigenous/cross-breed milch cattle and buffaloes. Subsidies are restricted to two animals per beneficiary per household.
Sericulture Sector:
- India stands as the world’s second-largest producer of silk, contributing 18% to the global raw silk production.
- The country boasts all four varieties of silk: Mulberry, Eri, Rasar, and Moonga.
- Sericulture emerges as a highly profitable cash crop requiring minimal investment, providing employment to approximately 6 million individuals.
- The development of the silk industry in India is overseen by the Government of India, primarily through the Central Silk Board (CSB), established under the Central Silk Board Act, 1948.
- India holds the second position globally, particularly in Mulberry silk production, following only China.
Poultry:
- Four regional Central Poultry Development Organizations, situated in Chandigarh, Bhubaneshwar, Mumbai, and Hessarghatta, focus on producing stocks suitable for backyard rearing and provide training to farmers for skill enhancement.
- The Poultry Development Scheme, consisting of Assistance to State Poultry Farms, Rural Backyard Poultry Development, and Poultry Estates, is currently in implementation.
Fisheries:
- India ranks as the second-largest fish-producing country globally, contributing 7.56% to the global production. It accounts for 1.24% of the country’s Gross Value Added (GVA) and over 7.28% to the agricultural GVA.
- The fisheries sector has experienced remarkable double-digit annual growth of 10.87% since 2014-15, achieving a record fish production of 145 lakh tons in FY 2020-21 (provisional).
- The fisheries sector provides livelihood support to over 28 million people in India, particularly benefiting marginalized and vulnerable communities.
- The working capital for fishers and fish farmers includes costs such as fuel, ice, labor charges, and mooring/landing charges.
- The credit limit for existing Kisan Credit Card (KCC) holders is 3 lakhs, while new KCC holders in the fisheries sector have a limit of 2 lakhs.
National Fisheries Policy, 2020:
- To accelerate fisheries sector development, the government will formulate fisheries management and fisheries spatial plans.
- A National Fisheries Development Council will be established to provide guidelines for policy implementation and review objectives and progress.
- A clustered approach to aquaculture development will be adopted to increase fishermen’s income and boost exports.
India’s Position in World in Agriculture Production
| Produce | Global Rank (2020) |
| Wheat | 2nd |
| Rice/Paddy | 2nd |
| Total Pulses | 1st |
| Groundnut (in shell) | 2nd |
| Vegetables (with melons) | 2nd |
| Fruits (excluding melons) | 2nd |
| Sugarcane | 2nd |
| Tea | 3rd |
| Jute and Jute like fibres | 1st |
| Cotton (lint) | 2nd |
| Total Milk | 3rd |
| Total Eggs | 5th |
| Total Meat | 5th |
Prelims Facts
- Agriculture in India serves as a means of livelihood[UPPSC (Pre) 2003]
- The size of marginal landholding in India is less than 1 hectare [BPSC (Pre) 2017]
- ‘History of Agriculture’ was written by MS Randhawa [UPPSC (Mains) 2015]
- Karnataka is the largest coffee-producing state in India [UPPSC (Mains) 2004]
- Jammu and Kashmir is the largest producer of saffron in India [UPPSC (Mains) 2004]
- The birthplace of the Indian ‘Green Revolution’ is Pant Nagar [MPPSC (Pre) 2006]
- The average yield of cotton is highest in Andhra Pradesh [BPSC (Pre) 2017]
- The net crop sown area in India is about 14 crore hectares [UP RO/ARO (Pre) 2016]
- The average cropping intensity of India is about 135% [UPPSC (Mains) 2012]
- ‘Handbook of Agriculture’ is published from the Indian Council of Agricultural Research (ICAR) [UPPSC (Mains) 2012]
- Blue Revolution is related to Pisciculture [UPPSC (Pre) 1997, CGPSC (Pre) 2016)
- The Kisan Credit Card scheme was announced in 1998 and 1999 [UPPSC (Mains) 2008, UPPSC (Pre) 2010]
- More quantity of gypsum is required for Paddy crop[UPPSC (Mains) 2007]
- India is the main producer of pulse crops and the largest consumer
- Uttar Pradesh is the largest sugarcane-producing state in India[UPPSC (Mains) 2013]
- India is the leading mulberry silk-producing state
- The most critical stage for irrigation in wheat is the CRI stage[UPPSC (Pre) 2005]
- Rainfed Area Development Programme (RADP) was launched in2011-2012 [UPPSC (Mains) 2015]
- The National Agriculture Technology Project (NATP) is funded by the World Bank [UPPSC (Mains) 2002]
- Mexican Wheat is the plant (crop) used in the Green Revolution [UKPSC (Pre) 2012]
- NAFED (National Agricultural Cooperative Marketing Federation of India Limited) is the apex organization for marketing cooperatives at the national level [UPPSC (Mains) 2007]
- The Second Green Revolution proposed by the Prime Minister does not include encouraging Foreign Direct Investment in agriculture[UPPSC (Mains) 2008]
- The most impact of the Green Revolution was felt in the production of wheat[UPPSC (Mains) 2004]
- ‘Neeru-Meeru’ Water Harvesting Programme was launched in Andhra Pradesh in the year 2000 [UPPSC (Mains) 2016]
- ‘Yellow Revolution’ is related to Rapeseed-mustard production[UPPSC (Mains) 2012, UPPSC (Pre) 2022]
UPSC NCERT Practice Questions
1.The importance of antibution to which economy is indicated by its contribution to which of the following UPPCS (Pre) 2006
(a) National income and employment
(b) Industrial development and international trade
(c) Supply of foodgrains
(d) All of the above
2. Consider the following statements.
1. Agriculture and allied sectors contribute more than
15% of Gross Domestic Product of India.
2. Share in total employment by agriculture as high as 48.9%.
Which of the statements) given above is/are correct?
(d) Neither 1 nor 2
3. Agricultural inputs (fertilisers/credit) balanced fertilisers are used UPPSC (Mains) 2008
(a) to increase production
(b) to improve the quality of food
(c) to maintain the productivity of the land
(d) All of the above
4. National Horticulture Mission was launched in which of the following Five Year Plans?
(a) Ninth Five Year Plan
(b) Tenth Five Year Plan
(c) Eleventh Five Year Plan
(d) None of the above
5. The National Food Security Mission (NFSM) aims to enhance the production of
4. Coarse Cereals
Select the correct answer by using the codes given below.
6. The price at which the government purchases foodgrains for maintaining the Public Distribution System and for building up buffer stocks are known as IAS (Pre) 2001
(a) Minimum Support Prices
(b) Procurement Prices
(d) Ceiling Prices
7. The Government of India fixes the Minimum Support Prices after taking into account the recommendations of which among the following bodies?
(a) Ministry of Consumer Affairs, Food and Public Distribution
(b) Cabinet Committee of Economic Affairs
(c) Planning Commission
(d) Commission for Agricultural Costs and Prices
8. The Green Revolution in India has contributed to WBCS (Pre) 2007
(a) inter-regional inequality
(b) inter-class inequality.
(c) inter-crop inequality
(d) All of the above
9. Bringing Green Revolution to Eastern India in a sub scheme of
(a) National Mission on Agriculture Extension and
(b) National Mission for Sustainable Agriculture
(c) Rashtriya Krishi Vikas Yojana
(d) It is not a sub-scheme.
10. Consider the following statements.
1. The concept Evergreen Revolution was given by renowned agricultural scientist Norman Borlaug.
2. Evergreen Revolution emphasises on organic agriculture and green agriculture with the help of integrated post management, integrated nutrient supply and integrated natural resource management.
Which of the statements) given above is/are correct?
(d) Neither 1 nor 2
11. ‘Yellow Revolution’ is related with UPPSC (Mains) 2012, UPPSC (Pre) 2022
(c) rapeseed-mustard production
(d) wheat production
12. Among the followings which one is related to Blue Revolution in India? UPPSC (Pre) 1997, CGPSC (Pre) 2016
13. Consider the following statements about the National Agricultural Insurance Scheme (NAIS).
1. The -2000 seasonen implemented from Rabi
2. The scheme is available non-loanee farmers only.
Which of the statement (s) given above is/are correc
(d) Neither 1 nor 2
14. outie in ae folowing is a way to increase productivity in agriculture? BPSC (Pre) 2018
(a) Efficient irrigation
(b) Quality seeds
(c) Use of pesticides
(d) Use of fertilisers
(e) None of the above/More than one of the above
15. Consider the following statements about Rashtriya Krishi Vikas Yojana and state which one of them is incorrect? UPPSC (Pre) 2009
(a) It was launched during 2007 to 2008.
(b) It envisages an outlay of ? 25000 crore for the Eleventh Five Year Plan.
(c) Additional central assistance under the scheme would be available as 80% grant to the states.
(d) Activities under the yojana include integrated development of food crops, agriculture mechanisation, development of rainfed farming, etc.
16. Assertion (A) The Union Budget 2020-21 has focused on Rural Development with aim of doubling farmers income.
Reason (R) The 16 Action points announced in the budget is centred around agriculture, irrigation and rural development. UPPSC (Pre) 2020
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true.
Know Right Answer
Frequently Asked Questions (FAQs)
Q1: Why is agriculture considered a crucial sector in the Indian economy?
A1: Agriculture is considered crucial in the Indian economy for several reasons. Firstly, it is the primary source of livelihood for a significant portion of the population, especially in rural areas. Secondly, it contributes substantially to the country’s GDP, although its share has been declining over the years. Additionally, agriculture plays a vital role in food security, ensuring a stable and affordable food supply for the growing population. The sector also provides raw materials for various industries, contributing to economic diversification.
Q2: How do UPSC NCERT notes emphasize the challenges faced by the Indian agricultural sector?
A2: UPSC NCERT notes highlight several challenges faced by the Indian agricultural sector. These include fragmented land holdings, outdated farming techniques, inadequate irrigation facilities, and the dependency on monsoon rains. The notes also discuss issues such as the lack of access to credit for farmers, post-harvest losses, market inefficiencies, and the need for agricultural reforms. Understanding these challenges is essential for formulating policies and initiatives to address them and promote sustainable growth in the agricultural sector.
Q3: What role do government policies play in shaping the Indian agricultural landscape, as outlined in UPSC NCERT notes?
A3: UPSC NCERT notes underscore the significant role of government policies in shaping the Indian agricultural landscape. These policies cover areas such as land reforms, irrigation infrastructure, credit facilities, agricultural research and development, and market reforms. The notes discuss the impact of various policy measures on farmers’ income, productivity, and overall economic well-being. Additionally, the notes analyze the evolution of agricultural policies over time and their influence on the sector’s growth, emphasizing the need for well-targeted and dynamic policies to address emerging challenges in Indian agriculture.
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