Agriculture in India: Backbone, Challenges & Future

Understanding the crucial sector that feeds the nation, provides livelihoods, and drives rural prosperity.

Introduction & Summary

Agriculture has been the backbone of the Indian economy for centuries and continues to be a crucial sector for the nation's socio-economic fabric. It plays a vital role in ensuring food security, providing livelihoods to a substantial portion of the population, and contributing to the Gross Domestic Product (GDP).

Despite its declining share in GDP, the sheer number of people dependent on agriculture makes its performance critical for inclusive growth and poverty reduction. Indian agriculture is characterized by diverse agro-climatic conditions, a predominance of small and marginal farmers, and significant dependence on monsoons. The sector faces numerous challenges, ranging from structural issues like land fragmentation to emerging threats like climate change, necessitating comprehensive and sustained policy interventions.

Source: Economic Survey, NITI Aayog Strategy for New India @75

9.1.1. Contribution to GDP, Employment, Food Security

Contribution to GDP (GVA)

  • Share declining over decades (structural transformation).
  • ~18.3% of GVA in FY 2022-23 (Provisional Estimates).
  • Vital for overall growth due to strong linkages.
  • Resilient during COVID-19, positive growth (3.5% in 2022-23).

Source: Economic Survey 2022-23, MoSPI

Contribution to Employment

  • Largest employer, though share decreasing.
  • Employed 45.5% of workforce in 2021-22 (PLFS).
  • High disguised unemployment/underemployment.
  • Challenge: Create remunerative non-farm jobs.

Source: Economic Survey 2022-23

Contribution to Food Security

  • Self-sufficiency in food grains (Green Revolution).
  • Record production: 329.7 MT in 2022-23 (4th AE).
  • Bedrock of PDS (NFSA 2013), PMGKAY extension.
  • Shift to nutritional security (millets - 'Shree Anna').

Source: MoA&FW, PIB, Union Budget 2023-24

Table: Agriculture's Contribution - Key Indicators

Indicator Status/Figure (Approx. & Recent) Source Reference
Share in GVA ~18.3% (FY 2022-23) Economic Survey 2022-23, MoSPI
Share in Employment ~45.5% (2021-22) PLFS, MoSPI / Eco Survey 2022-23
Foodgrain Production ~329.7 million tonnes (2022-23, 4th AE) Ministry of Agriculture & FW
Operational Landholdings 146.45 million (Agri Census 2015-16) Agricultural Census
Small & Marginal Farmers ~86% of total farmers Agricultural Census 2015-16

9.1.2. Structure of Indian Agriculture

Dominance of Small and Marginal Landholdings

  • High degree of fragmentation.
  • Average size: 1.08 hectares (2015-16 Agri Census).
  • Small & Marginal farmers (<2 ha): 86% of holdings, ~47% of cropped area.

Implications:

  • Limited mechanization & tech adoption.
  • Lower marketable surplus & bargaining power.
  • Difficulty accessing credit & inputs.
  • Higher overhead costs.

Source: Agri Census 2015-16, NITI Aayog

Dependence on Rain-fed Agriculture

  • About 51% of net sown area is rain-fed (~73 M ha).
  • Contributes ~40% foodgrain, supports 2/3 livestock.
  • Crucial for pulses, oilseeds, millets.

Implications:

  • Vulnerability to monsoon vagaries (droughts, floods).
  • Lower yields & higher risk.
  • Regional disparities.

Source: Economic Survey 2022-23, CRIDA. Govt. initiative: PMKSY

9.1.3. Challenges Facing Indian Agriculture

Land Issues
  • Fragmentation: Continuous decline in average landholding size, leading to diseconomies of scale.
  • Degradation:
    • Soil Health: Deterioration due to imbalanced fertilizer use (excessive urea), declining organic matter, micronutrient deficiencies. (~30% of India's geographical area affected).
    • Water Scarcity & Salinization: Over-extraction of groundwater, falling water tables. Waterlogging and salinization from canal irrigation.

Source: Agri Census 2015-16, ISRO, MoA&FW schemes: Soil Health Card, PKVY.

Irrigation
  • Dependence on Monsoon: Over half of cropped area is rain-fed, leading to high vulnerability.
  • Water-use Efficiency: Very low (35-40% for surface, 65-70% for groundwater). Traditional flood irrigation causes massive waste.
  • Micro-irrigation: Crucial for efficiency but coverage still low (7.8 M ha under PMKSY 'Per Drop More Crop' since 2015-16). Micro Irrigation Fund (MIF) supports states.

Source: Economic Survey 2022-23, NITI Aayog, PIB. Govt. initiative: PMKSY.

Input Management
  • Seeds: Quality & access issues, low Seed Replacement Rate (SRR). Debates around GM crops.
  • Fertilizers:
    • Subsidy Burden & Imbalanced Use: High urea subsidy leads to fiscal strain and skewed N:P:K ratio (recommended 4:2:1, actual is high N).
    • Nutrient Based Subsidy (NBS) for P&K; Neem-coated urea; PM-PRANAM (Budget 2023-24) to promote alternatives.
    • One Nation One Fertilizer (ONOF) / Bharat brand (Oct 2022) for uniform branding.
  • Pesticides: Indiscriminate use causes resistance, pollution, health hazards. Need for Integrated Pest Management (IPM).

Source: Ministry of Agriculture, Budget Speech 2023-24, PIB.

Farm Mechanization
  • Low level of mechanization (~40-45%) compared to developed countries (>90%).
  • Varies across regions.
  • Small landholdings make individual ownership uneconomical.
  • Promoted by Sub-Mission on Agricultural Mechanization (SMAM) through custom hiring centers (CHCs).

Source: Ministry of Agriculture, FICCI reports.

Credit
  • Institutional vs. Non-institutional Sources: Institutional credit increased, but moneylenders still prevalent for small farmers.
  • Access & Adequacy: Timely and adequate credit remains a challenge.
  • Kisan Credit Card (KCC) Scheme: Major initiative for crop loans. Saturation is a priority.
  • Agricultural Credit Target: ₹20 lakh crore for FY24. Interest Subvention Scheme.
  • Debt Trap & Farmer Suicides: Grim reality linked to credit, crop failure, price volatility.
  • Agriculture Infrastructure Fund (AIF): ₹1 lakh crore for post-harvest infra & community assets.

Source: RBI, MoF, MoA&FW, Budget 2023-24.

Marketing & Supply Chain
  • APMC Issues: Monopolistic practices, high fees, lack of transparency, poor infrastructure. (Farm Acts aimed to address these, now repealed).
  • e-NAM (National Agriculture Market): Pan-India electronic trading portal, 1361 mandis integrated (July 2023), for unified market.
  • Storage: Inadequate warehousing (cold storage) leading to high post-harvest losses.
  • Transport: Poor rural connectivity, lack of refrigerated transport.
  • Post-harvest Losses: Significant (10-30% by crop).
  • Model APMC Act (2003) & Model APLM Act (2017) for states to adopt.

Source: e-NAM website, ICAR, NITI Aayog, MoA&FW.

Price Volatility & Market Access
  • Farmers face distress sales due to perishability, lack of storage/market access. Glut leads to price crashes.
  • Minimum Support Price (MSP): Announced for 23 crops, but effective procurement limited to wheat/paddy in few states. Demand for legal guarantee.
  • Other mechanisms: Price Support Scheme (PSS), Market Intervention Scheme (MIS), Price Stabilization Fund (PSF).
  • Farmer Producer Organizations (FPOs): Need for strengthening to improve bargaining power. Scheme for 10,000 FPOs.

Source: MoA&FW, CACP, MoCA.

Climate Change
  • Impact: Increased extreme weather (droughts, floods, heatwaves), erratic rainfall, pest outbreaks, impacting yields & incomes. India is highly vulnerable.
  • Adaptation & Mitigation:
    • Climate-resilient crop varieties.
    • Water conservation, efficient irrigation.
    • Crop insurance: PM Fasal Bima Yojana (PMFBY).
    • National Mission for Sustainable Agriculture (NMSA).

Source: Economic Survey 2017-18, PMFBY, NAPCC.

Research & Development (R&D)
  • Low Investment: Public investment is low (~0.3-0.4% of agri-GDP) vs. developed countries (2-3%) and China (0.62%).
  • Need for strengthening ICAR & State Agricultural Universities. Focus on biotechnology, precision farming, post-harvest tech.

Source: Economic Survey, ICRIER.

Agricultural Diversification
  • Moving from cereal-based to high-value crops (fruits, vegetables), livestock, fisheries, agro-forestry.
  • Benefits: Higher income, risk mitigation, improved nutrition, sustainable land use.
  • Challenges: Market linkages, cold chain infrastructure, price risks.
  • Government promotes horticulture (MIDH). Allied sectors growing faster.

Source: MoA&FW.

Prelims-Ready Notes

  • Agri GVA Share: ~18.3% (FY23). Employment: ~45.5% (2021-22).
  • Foodgrain Output (2022-23, 4th AE): ~329.7 million tonnes.
  • Average Landholding: 1.08 ha (Agri Census 2015-16). Small & Marginal Farmers: ~86%.
  • Rain-fed Area: ~51% of net sown area.
  • Key Challenges: Land fragmentation, degradation, irrigation gaps, input quality/cost, poor mechanization, credit access, marketing inefficiencies (APMC), price volatility, climate change impact, low R&D spend.
  • Key Schemes:
    • PM-KISAN: Income support.
    • PMFBY: Crop insurance.
    • PMKSY: Irrigation ('Per Drop More Crop').
    • e-NAM: Online agri-marketing.
    • Soil Health Card: Soil info.
    • KCC: Agricultural credit.
    • AIF: Post-harvest infra financing.
    • PM-PRANAM: Reduce chemical fertilizer.
    • ONOF (Bharat Brand): Uniform fertilizer branding.
    • 10,000 FPOs Scheme: Collective farming.
    • International Year of Millets 2023: 'Shree Anna'.

Mains-Ready Analytical Notes

Debates/Discussions
  • MSP Legal Guarantee: Pros (assured income) vs. Cons (fiscal burden, market distortion, WTO issues).
  • Fertilizer Subsidy: Economic rationale vs. political sensitivity. Need for DBT, balanced fertilization (PM-PRANAM).
  • Farm Loan Waivers: Moral hazard, impact on credit culture vs. temporary relief.
  • GM Crops: Food security vs. environmental/health concerns, farmer autonomy.
  • Water Crisis: Groundwater depletion vs. flood irrigation. Shift to micro-irrigation, less water-intensive crops, pricing of water/electricity.
Historical/Long-term Trends, Continuity & Changes
  • Green Revolution (mid-1960s): Transformed India to food-sufficient. Focused on wheat/rice, HYV seeds, irrigation, fertilizers. Led to disparities, environmental concerns.
  • Continuity: Dominance of smallholders, monsoon dependence (reducing), government intervention (subsidies, MSP).
  • Changes: Declining GDP share, increasing diversification to horticulture & allied; growing climate change impact; rise of organized retail/food processing; tech interventions (e-NAM, FinTech).
  • Post-1991 Reforms: Limited direct impact initially; trade liberalization affected certain crops; subsidies remain high.
Contemporary Relevance/Significance/Impact
  • Doubling Farmers' Income (DFI): Ashok Dalwai Committee roadmap. Many schemes aligned.
  • Atmanirbhar Bharat: Self-reliance in agriculture, reducing import dependence (e.g., edible oils via Oil Palm Mission).
  • Farmer Protests (2020-21): Highlighted deep issues in marketing, need for wider consultation.
  • Supply Chain Disruptions (COVID-19): Emphasized resilient local food systems, shorter supply chains.
Real-world/Data-backed Recent Examples
  • Impact of Heatwaves (2022, 2023): Affected wheat, led to export ban (May 2022), food inflation.
  • Lumpy Skin Disease (2022-23): Significant cattle mortality, impacted dairy sector.
  • Success of FPOs: Amul (dairy cooperative) is a classic example. Smaller FPOs emerging, supported by NABARD/SFAC.
  • Water conservation efforts: Maharashtra (Jalyukt Shivar Abhiyan), Telangana (Mission Kakatiya).
Integration of Value-added Points
  • Global Hunger Index: India's ranking highlights nutrition challenges despite food self-sufficiency.
  • Agricultural Export Policy (2018): Aims to double agri exports.
  • Blue Revolution (Neel Kranti Mission): Fisheries development.
  • Agri-tech startups: Growing ecosystem (precision farming, supply chain, market linkage).

Current Affairs and Recent Developments (Last 1-2 years)

  • PM-PRANAM Scheme (Budget 2023-24): Promote alternative fertilizers, reduce chemical use.
  • Digital Agriculture Mission (2021): Federated farmers' database, AI/ML, IoT for services.
  • One Nation One Fertilizer (ONOF) / PMBJP (Oct 2022): All subsidized fertilizers under 'Bharat' brand.
  • Extension of PMGKAY (Nov 2023): Free foodgrains scheme extended for five years from Jan 2024.
  • Increased MSP for Rabi/Kharif crops: Government continues 1.5x cost of production.
  • Promotion of Millets (Shree Anna): International Year of Millets 2023, India a global hub (Budget 2023-24).
  • Nanotechnology in Fertilizers: Nano Urea, Nano DAP by IFFCO for efficiency.
  • Climate Change Impact: Increased focus on climate-resilient agriculture, new crop varieties by ICAR.
  • Agriculture Export Fluctuations: Export bans/restrictions (wheat, rice, onions) to control domestic prices.

UPSC Previous Year Questions (PYQs)

Prelims MCQs

1. With reference to the provisions made under the National Food Security Act, 2013, consider the following statements: (UPSC CSE 2018)

  1. The families coming under the category of ‘below poverty line (BPL)’ only are eligible for subsidized food grains.
  2. The eldest woman in a household, of age 18 years or above, shall be the head of the household for the purpose of an issue of a ration card.
  3. Pregnant women and lactating mothers are entitled to a ‘take-home ration’ of 1600 calories per day during pregnancy and for six months thereafter.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(c) 1 and 3 only

(d) 3 only

Answer: (b) 2 only

Hint/Explanation: NFSA covers up to 75% rural and 50% urban population (priority households & Antyodaya Anna Yojana), not just BPL. Calorie norms for take-home ration vary and 1600 is high for this specific entitlement; the focus is on specified nutritional standards. Statement 2 is correct.

2. Consider the following statements: (UPSC CSE 2017)

  1. The nation-wide ‘Soil Health Card Scheme’ aims at expanding the cultivable area under irrigation.
  2. The nation-wide ‘Soil Health Card Scheme’ aims at enabling the banks to assess the quantum of loans to be granted to farmers on the basis of soil quality.
  3. The nation-wide ‘Soil Health Card Scheme’ aims at checking the overuse of fertilizers in farmlands.

Which of the above statements is/are correct?

(a) 1 and 2 only

(b) 3 only

(c) 2 and 3 only

(d) 1, 2 and 3

Answer: (b) 3 only

Hint/Explanation: Soil Health Card scheme is primarily about informing farmers about the nutrient status of their soil and recommending appropriate dosage of fertilizers to optimize use and improve soil health, thus checking overuse. It is not directly for expanding irrigation or for banks to assess loan quantum based on soil quality.

3. What are the advantages of fertigation in agriculture? (UPSC CSE 2020)

  1. Controlling the alkalinity of irrigation water is possible.
  2. Efficient application of Rock Phosphate and all other phosphatic fertilizers is possible.
  3. Increased availability of nutrients to plants is possible.
  4. Reduction in the leaching of chemical nutrients is possible.

Select the correct answer using the code given below:

(a) 1, 2 and 3 only

(b) 1, 2 and 4 only

(c) 1, 3 and 4 only

(d) 2, 3 and 4 only

Answer: (c) 1, 3 and 4 only

Hint/Explanation: Fertigation is applying fertilizers through an irrigation system. It allows for controlled application (reducing leaching), makes nutrients readily available. Some acidic fertilizers can help manage alkalinity. However, rock phosphate and some other phosphatic fertilizers are not fully soluble and thus not ideal for fertigation; soluble forms are used.

Mains Questions

1. What are the major challenges of Public Distribution System (PDS) in India? How can it be made effective and transparent? (UPSC CSE 2022)

Direction/Value Points:

  • Introduction: Define PDS, its objectives (food security, price stabilization). Mention NFSA.
  • Challenges: Identification errors (inclusion/exclusion), leakages/diversion, quality of foodgrains, storage issues & wastage, limited choice for beneficiaries, lack of transparency, financial burden.
  • Measures for Effectiveness & Transparency: End-to-end computerization, Aadhaar seeding & biometric authentication (One Nation One Ration Card), DBT (in specific areas), GPS tracking of vehicles, social audits, grievance redressal mechanisms, improving storage (silos), diversification of commodities.
  • Conclusion: PDS is vital, continuous reforms needed.

2. What are the main constraints in transport and marketing of agricultural produce in India? (UPSC CSE 2020)

Direction/Value Points:

  • Introduction: Importance of efficient marketing for farmer income.
  • Transport Constraints: Poor rural roads, lack of all-weather connectivity, high cost of transportation, inadequate refrigerated transport for perishables.
  • Marketing Constraints:
    • APMC issues: monopoly, high fees, lack of transparency, poor infra.
    • Fragmented markets, long supply chains with multiple intermediaries.
    • Lack of grading, sorting, packaging facilities at farm gate.
    • Inadequate storage (warehouses, cold storages) leading to post-harvest losses.
    • Information asymmetry, limited access to regulated markets.
  • Solutions/Reforms: e-NAM, Model APLM Act, promoting FPOs, investment in agri-logistics (warehouses, cold chains via AIF), direct marketing, contract farming frameworks.
  • Conclusion: Holistic approach needed for improving market efficiency.

3. How has the emphasis on certain crops brought about changes in cropping patterns in recent past? Elaborate the emphasis on millets in view of India’s National Food Security. (UPSC CSE 2018 - modified slightly to fit current context)

Direction/Value Points:

  • Introduction: Define cropping patterns, factors influencing them.
  • Changes due to Emphasis on Certain Crops:
    • Green Revolution: Focus on wheat & rice led to their dominance, decline in pulses, coarse cereals.
    • Impact on soil health, water tables. MSP & procurement reinforcing this.
  • Emphasis on Millets (Shree Anna) for Food/Nutritional Security:
    • Nutritional benefits (high protein, fiber, micronutrients).
    • Climate resilience (drought tolerant, less water).
    • Good for dryland farming, small farmers.
    • International Year of Millets 2023, government promotion. Diversifying food basket.
  • Challenges for Millets: Low yields, processing difficulties, consumer preference shifts, weak supply chains.
  • Conclusion: Need for balanced cropping patterns, millet promotion is a positive step.

Trend Analysis (Last 10 Years)

Prelims Trend
  • Schemes & Policies: High frequency on PMFBY, PM-KISAN, e-NAM, NFSA, Soil Health Card, KCC. Focus on objectives, beneficiaries, key features.
  • Basic Concepts: Irrigation types (micro-irrigation), MSP, PDS, landholding patterns, types of farming.
  • Current Affairs Linkage: Questions on new initiatives, committees (e.g., related to DFI), impact of climate events.
  • Technical Aspects: Sometimes questions on specific agricultural practices (fertigation, zero tillage), inputs (GM crops, biofertilizers).
  • Trend: Increasing focus on application of schemes, specific data points (if prominent in government reports), and environmental aspects.
Mains Trend
  • Problem-Solution Oriented: Questions predominantly focus on challenges (marketing, credit, irrigation, climate change, farmer distress) and expect practical, policy-oriented solutions.
  • Government Schemes & Policies: Critical analysis of major schemes (PDS, MSP, crop insurance) – their performance, limitations, and suggestions for improvement.
  • Structural Issues: Land reforms, fragmentation, terms of trade for agriculture.
  • Contemporary Themes: Doubling Farmers' Income, food processing, agricultural exports, impact of climate change, agricultural subsidies.
  • Trend: More analytical and less descriptive questions. Expectation of interlinking various aspects (e.g., linking water scarcity to cropping patterns and farmer income). Growing emphasis on sustainability and technology in agriculture.

Original MCQs for Prelims

1. Consider the following statements regarding the Pradhan Mantri Fasal Bima Yojana (PMFBY):

  1. It is compulsory for all farmers availing crop loans through Kisan Credit Card (KCC).
  2. It covers post-harvest losses due to cyclone and unseasonal rain for crops dried in 'cut and spread' condition in the field.
  3. There is a cap on the premium rates payable by farmers, with the balance subsidized by the government.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 3 only

(d) 1, 2 and 3

Answer: (b) 2 and 3 only

Explanation:

  • Statement 1 is incorrect: Under PMFBY 2.0 (revised guidelines), enrollment is voluntary for all farmers, including loanee farmers.
  • Statement 2 is correct: Post-harvest losses for crops dried in 'cut and spread' condition up to 14 days after harvesting due to specified perils like cyclone, unseasonal rain are covered.
  • Statement 3 is correct: Farmer premium is capped (e.g., 2% for Kharif, 1.5% for Rabi food/oilseed crops, 5% for commercial/horticultural crops). The difference between actuarial premium and farmer share is subsidized by Centre and State.

2. Which of the following are actively promoted under the "Shree Anna" initiative, highlighted in the Union Budget 2023-24 and the International Year of Millets?

  1. Jowar (Sorghum)
  2. Bajra (Pearl Millet)
  3. Wheat
  4. Ragi (Finger Millet)
  5. Paddy (Rice)

Select the correct answer using the code given below:

(a) 1, 2 and 4 only

(b) 1, 2, 3 and 4 only

(c) 3 and 5 only

(d) 1, 2, 4 and 5 only

Answer: (a) 1, 2 and 4 only

Explanation: "Shree Anna" refers to millets. Wheat and Paddy are major cereals but not classified as millets. Jowar, Bajra, and Ragi are prominent millets. Others include Kodo, Kutki, Kangni, Cheena, Sanwa.

Original Descriptive Questions for Mains

1. "Despite being a critical sector for India's food security and employment, Indian agriculture is plagued by low productivity and income instability for farmers." Analyze the structural and institutional factors responsible for this situation and suggest measures to revitalize the sector with a focus on sustainability and equity.

Key Points/Structure for Answering:

  • Introduction: Acknowledge the paradox – importance vs. performance.
  • Structural Factors for Low Productivity & Income Instability: Small & fragmented landholdings, high dependence on monsoon/inadequate irrigation, land degradation/soil health, low farm mechanization.
  • Institutional Factors: Input management issues (seeds, fertilizers, credit access), inefficient agricultural markets (APMC limitations), price volatility/ineffective MSP, weak R&D/extension, climate change impact.
  • Measures for Revitalization (Sustainability & Equity Focus):
    • Sustainability: Micro-irrigation, soil health (PM-PRANAM), climate-resilient agriculture, crop diversification (millets), agroforestry.
    • Equity: Strengthen FPOs, improved credit (KCC), better price realization (e-NAM), allied activities, direct income support (PM-KISAN).
    • General: R&D investment, post-harvest infra (AIF), skill development.
  • Conclusion: Multi-pronged, long-term strategy with stakeholder involvement.

2. Critically examine the role of agricultural subsidies in India. While they aim to support farmers, what are their unintended economic and environmental consequences? Suggest a roadmap for rationalizing subsidies to make them more targeted and efficient.

Key Points/Structure for Answering:

  • Introduction: Define agricultural subsidies (input/output). State objectives (support farmers, food security).
  • Positive Role/Intended Benefits: Reduced cultivation cost, enhanced input adoption, income support, encouraged production (Green Revolution).
  • Unintended Economic Consequences: Huge fiscal burden, market distortions, inefficiencies/leakages, can hinder diversification, WTO issues.
  • Unintended Environmental Consequences:
    • Fertilizer subsidy: Imbalanced NPK use, soil degradation, water pollution.
    • Power/Irrigation subsidy: Over-extraction of groundwater, inefficient water use, waterlogging.
    • MSP for water-intensive crops in water-scarce regions.
  • Roadmap for Rationalization:
    • Better targeting (DBT for inputs). NBS for urea. PM-PRANAM.
    • Gradual increase in power/water tariffs with improved service.
    • Promote micro-irrigation, water-efficient crops.
    • Invest subsidy savings in R&D, infrastructure, FPOs.
    • Decoupled income support (PM-KISAN).
  • Conclusion: Reforms must be gradual, well-communicated, ensure farmers' welfare.