Problems of Indian Agriculture & Government Programmes

Part 2 · Structural and land problems

The Basic Problems: Subsistence, Pressure and Land

Subsistence farming, too many people on the land, slow mechanisation, stagnant output, rising costs, climate change and land issues.

The problems in Indian agriculture

Subsistence Agriculture: Most parts of India have subsistence agriculture. This type of agriculture has been practised in India for several hundreds of years and still prevails in a larger part of India in spite of the large scale change in agricultural practices after independence.
Pressure of population on Agriculture: Despite increase in urbanization and industrialization, nearly 70% of population is still directly or indirectly dependent on agriculture.
Mechanization of farming: Green Revolution took place in India in the late sixties and early seventies. After more than forty years of Green Revolution and revolution in agricultural machinery and equipments, complete mechanization is still a distant dream.
Stagnation in Production of Major Crops: Production of some of the major staple food crops like rice and wheat has been stagnating for quite some time. This is a situation which is worrying our agricultural scientists, planners and policy makers. If this trend continues, there would be a huge gap between the demand of ever growing population and the production threatening the food security.
High cost of Farm Inputs: Over the years rates of farm inputs have increased manifold. Farm inputs include fertilizer, insecticide, pesticides, HYV seeds, farm labour cost etc. Such an increase puts low and medium land holding farmers at a disadvantage.
Adverse impact of Global Climatic Change: It has been predicted that impact of climate change on agriculture would be immense. Climate change is related to unpredictable rainfall, sea level rise, more intense cyclones, faster melting of glaciers impacting river flow, decline in crop productivity, higher pest attacks etc. Thus it adversely impacts the production and productivity of agriculture.
Inadequate agricultural education and extension services: Effective agricultural education (both for farmers as well as researchers) leads to better economic and technical decision making in agricultural processes, which is further reflected in increase in agricultural productivity.
- Challenges faced in this regard are inadequate finance, lack of quality education at agriculture universities, lack of association among different national and international universities for academic activities etc.
- Less than 1% of the Agricultural GDP in India is spent on research.
Large number of farmers want to quit – The survey of 5,000 farm households across 18 states says that 76% farmers would prefer to do some work other than farming.
Rural Distress & Farmer Suicides: According to National Crime Records Bureau (NCRB) report (2015), over 8000 farmers and 4500 agricultural labourers have committed suicide.

Issues with land use

Fragmentation of land: India's 85 per cent of landholdings are below 2 Ha making it harder to achieve economies of scale. These farmers mainly cultivate low value, subsistence crops. Due to this, they are facing various problems like: low productivity, low income, low investment and capital formation, low prices, high production costs, low purchasing power, infrastructure deficits, etc.
Example: A tractor or a harvester costs the same whether it works 1 acre or 100; on a 1-acre plot the cost per quintal of grain is far higher, so small farmers stay with bullocks and manual labour.
These small and marginal farmers earn 9 per cent of total income while the rest earn 91 per cent. It hinders the modernisation process due to lack of capital availability as well as lack of adoption of new technology.
Ever shrinking land availability due to conversion of agricultural land into the non-agricultural uses, rising pace of urbanisation, population pressure etc.
Under-utilisation of the available agricultural land: land use issues with tenancy, fragmented land, leaving land uncultivated.
Soil Exhaustion and Land degradation: Nearly 30% of its land area, as much as the area of Rajasthan, Madhya Pradesh and Maharashtra put together, has been degraded through deforestation, over-cultivation, improper use of chemical fertilisers, soil erosion and depletion of wetlands.
Computerisation of land records, an essential prerequisite for the successful implementation of consolidation of land holdings and land ceiling laws has yet to be fully implemented.

Part 3 · Issues with the inputs to agriculture

Water, Credit, Fertiliser, Seeds and Pesticides

Every input a farmer needs comes with its own problems of access, cost and misuse.

Since independence, there has been a rapid expansion of irrigation infrastructure. Despite the large scale expansion, nearly 60 percent of area sown is dependent upon rainfall. The monsoon in India is uncertain and unreliable. This has become even more unreliable due to change in climate. Further, three-fourths of the rainfall is received in four months of the year (i.e. June to September).
The utilisation of the extended irrigation potential and its distribution raises certain issues that need to be addressed.
Regional disparities in irrigation development e.g. the water resource development in north-eastern India is much less than northern India.
The structure of the existing system has become increasingly ground water dependent partly because of the farmers' control over the system, the price-subsidisation of use of electricity for operating the tube wells and also because of the lack of access to the surface water irrigation.
- Almost 89% of groundwater in India is extracted for irrigation.
During and after green revolution, most of the irrigation in dry areas of Punjab, Haryana and Western Uttar Pradesh was carried out by excessive use of ground water resulted in the depletion of ground water as well as the uranium, arsenic etc contamination of groundwater.
Inefficient irrigation practices have led to water-logging and soil salinity in many areas.

Part 4 · Profitability, marketing, investment and globalisation

Prices, Markets, Investment and Trade

Even a good harvest can mean a loss: harvest-time price falls, fragmented markets, middlemen, low investment and unequal global competition.

Issues with profitability

Price fluctuations in harvest season: It is harvest season prices, which are relevant for the farmer. Fluctuation mainly arises out of the vagaries of rainfall.
A system of Minimum Support Prices (MSP) acts as an insurance against excessive price fall in the years of boom. But only 6% of the country's farmers take advantage of MSP.
- Further, the price interventions by the Government by way of MSP have resulted in some distortions in the cropping pattern, the growing stocks of foodgrains, high carrying and storage costs and increasing food subsidies.
The biggest challenge for horticulture farmers is the sale and post-harvest loss. The post-harvest loss accounts for about 25 per cent to 30 per cent of production of fruits and vegetables.

Investment and globalisation

According to the Food and Agriculture Organisation (FAO), insufficient investment in the agriculture sector in India over the past 30 years has resulted in low productivity and stagnant production.
Over the years, the share of agriculture investment in the total investment has a declining trend. e.g. from 11.4% of GDP in 1980s to 7.4% of GDP in 2005-06.
The agriculture sector has been sustaining on private investments, mostly from the debt-ridden farmers. The corporate sector investment and public investment has remained extremely low.
During 2011-12 and 2014-15, gross capital formation in agriculture in fact dipped: from Rs. 2.74 lakh crore to Rs. 2.54 lakh crore. Out of this private contribution was Rs. 2.38 lakh crore in 2011-12 and Rs. 2.20 lakh crore in 2014-15.
- Public contribution was just Rs. 35,715 crore in 2011 and Rs. 36,061 crore in 2014.
Negative impacts of Globalisation: Trade liberalization exposes these farmers to competition from highly subsidized production in the developed world. While Indian agriculture exports face non-tariff barriers: stringent sanitary and phytosanitary (SPS) standards, residue Limits for various pesticides, antibiotics, etc in attractive markets such as Europe.
The WTO Agreement on agriculture also has some adverse impact. While giving farm subsidies and promoting agriculture export, under the agreement India has to ensure that the support doesn't cross the de minimis entitlement.

Fragmentation of markets – Absence of a National Integrated Market. For e.g. Thousands of APMC markets under respective State Government, with no linkages between them, operating in monopolistic silos.
High logistics costs: India's cost of logistics is currently around 14% of GDP – higher than developed country exporters like the US (9.5%).
Lack of unrestricted movement:
- Obsolete APMC act mandates that farmer's first sale shall only be to commission agents, which forces farmers to sell their produce in the immediate market yards.
- This creates problem of plenty at one market and scarcity at another market, resulting either in price-depression and loss to producer, or inflation and loss to the consumer.
Institutional Issues like licensing barriers for owning a shop or godown, very high incidence of market charges (as large as 15% in some cases) and absence of standardized grading mechanism of agricultural produce.

Gross capital formation in agriculture (Rs lakh crore)

2011-122.74
2014-152.54

Logistics cost (% of GDP)

India14%
USA9.5%

Fertiliser response ratio

1970s13.4
20004.1

Part 5 · Ways to remove the problems

How to Remove These Problems

Previous commissions and committees like the National Commission on Farmers (2004) and the Ashok Dalwai Committee on Doubling Farmers' Income have provided solutions.

Improving land use:
- Incentivising Land pooling, Model Land Leasing Act, 2016, drafting Model Contract Farming Act, digitisation of land records, encouraging Farmer producer organisations, etc.
- The implementation of several land reform and land development programmes. Computerisation of land records, Land consolidation etc to deal with the issue of land fragmentation.
- Comprehensive inventory of land resources and usage patterns: It should be made with information on the location of each property, its dimensions, legal title, current & planned use etc. to enable effective identification of land usage pattern.
- Early Finalisation of National Land Reforms Policy.
Farmers should be incentivised to adopt water-efficient practices in order to avert a looming water crisis; the previous economic survey called for shifting the focus in agriculture to 'irrigation water productivity' from 'land productivity'.
Adopting agricultural diversification, organic farming, zero budget natural farming etc. for sustainable agriculture with less input cost with higher return.

Part 6 · Major programmes for Indian agriculture

The Government's Major Programmes

Soil, fertiliser, credit, pensions, marketing, FPOs, income support, insurance, processing, irrigation and organic farming, plus Bihar's own steps.

Soil Health Card scheme: To keep the need for balanced use of fertilizers. It aims to promote soil management practices and restore soil health by ensuring judicious use of inputs/soil nutrients.
Nutrient Based Subsidy scheme: Under this, government announces a fixed rate of subsidy (in Rs. per Kg basis), on each nutrient of subsidized P&K fertilizers, namely Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S). It is applicable to 22 fertilizers (other than Urea) for which MRP will be decided taking into account the international and domestic prices of P&K fertilizers, exchange rate, and inventory level in the country.
Recently passed three farm laws:
- The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020,
- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 and
- The Essential Commodities (Amendment) Act, 2020.

Conclusion

Thus, agriculture has multidimensional problems and government is trying to bring out the solutions for these issues. Agriculture in India is not just an economic activity, it also has social and cultural significance. Only when the issues related with this sector are fixed, India can realise the goals of sustainable development.

Exam preparation

BPSC Mains Previous Year Questions

Every question this page prepares you for, with the parts that answer it.

Q163rd BPSC · 2019

Presently highlight the major problems of Indian agriculture and suggest way to remove them and discuss the major programs being run by the Government for the development of Indian agriculture.

Study:Key Ideas Basic Problems Input Problems Prices & Markets Way to Remove Them Govt Programmes

Quick revisionInput problems at a glance Quick revisionWays to remove the problems Quick revisionConclusion

Problems of Indian AgricultureAnd How to Fix Them

The Backbone of the Economy, Under Strain