AGRICULTURAL

POLICY AND
DEVELOPMENT IN
INDIA

Submitted to: Prepared by:

Prof. K.M. Joshi Digesh Shah
Kunal Shah
Kirti Chauhan
Rajesh Bhatti
Mehul
Makwana

INTRODUCTION:
Agriculture is described as the backbone of Indian economy, mainly because
of three reasons.

(1) Agriculture constitutes largest share of country's national income

though the share has declined from 55 percent in early 1950s to about 25
percent by the turn of the Century.

(2) More than half of India’s workforce is employed in its agriculture

sector.

(3) Growth of other sectors and overall economy depends on

performance of agriculture to a considerable extent.

Besides, agriculture is a source of livelihood and food security for large

majority of vast population of India. Agriculture has special significance for
low income, poor and vulnerable sections of rural society. Because of these
reasons agriculture is at the core of socio economic development and
progress of Indian society, and proper policy for agriculture sector is crucial
to improve living standards and to improve welfare of masses.

Agriculture has played a dominant role in the Indian economy. It

provides employment to about 65% of the working population. The
performance of this sector depends on numerous factors or agricultural
inputs such as farm mechanisation, land reforms, organized markets, credit
supply, irrigation, pesticides, fertilizers and financing industries. Cotton and
Jute textile industries, sugar, vanaspati and plantation-all these depend on
agriculture directly. Agricultural products like tea, sugar, oil seeds, tobacco,
spices, etc. constitute major part of exports. Broadly speaking, the
proportion of agricultural goods, which are exported, may amount to 50% of
exports.

1 BROAD CHARACTERISTICS OF AGRICULTURE

Agriculture in India is in the hands of millions of peasant households, a
bulk of which comprise tiny land holdings with preponderance of owner
cultivation. There is hardly any direct government intervention in the
production and investment decisions of the farmers but the government
does influence the legal, material and economic environment in which
farmers operate.

Though tremendous progress has been made to exploit irrigation

potential in the country still two third of area under cultivation is unirrigated
and there is thus heavy dependence of production on vagaries of nature i.e.
rainfall. Irrigated areas have experienced sharp increase in productivity level
and large part of output at such farms is for market. On the other hand,
productivity in unirrigated areas has remained either stagnant or
experienced very small growth and most of the farmers in such areas
produce for subsistence purpose.

At overall level, agricultural growth remained slow (below 3 percent) in

the country. Apart from that, agricultural growth remained confined to a few
well endowed pockets which have created regional disparities.

2 PHASES IN AGRICULTURAL POLICY

There is a close association between agricultural policy followed in the
country and the magnitude and sources of output growth. Based on these,
agricultural policy followed during the last five decades can be broadly
distinguished in 3 phases.

The period from 1950/51 to mid 1960s which is also called pre green
revolution period witnessed tremendous agrarian reforms, institutional
changes and development of major irrigation projects. The intermediary
landlordism was abolished; tenant operations were given security of farming
and ownership of land. Land ceiling acts were imposed by all the states to
eliminate large sized holdings and cooperative credit institutions were
strengthened to minimize exploitation of cultivators by private money
lenders and traders. Land consolidation was also affected to reduce the
number of land fragments.

Expansion of area was the main source of growth in the pre green
revolution period. The scope for area expansion diminished considerably in
the green revolution period in which growth rate in area was less than half
the growth rate in the first period. Increase in productively became the main
source of growth in crop output and there was significant acceleration in
yield growth in green revolution period. The main source of productivity
increase was technological breakthrough in wheat and rice. The country
faced severe food shortage and crisis in early 1960s which forced the policy
makers to realize that continuous reliance on food imports and aid imposes
heavy costs in terms of political pressure and economic instability and there
was a desperate search for a quick breakthrough in agricultural production.

One choice before the country was to go for spread of new seeds of
high yielding varieties (HYV) of wheat and rice which were available with
CGIAR institutes like CIMMYT and IRRI. Amidst a serious debate the then
Government took bold decision to go for the import and spread of HYV of
wheat and rice which involved use of fertilisers and irrigation. This marked
second phase of agriculture policy in the country. The strategy produced
quick results as there was quantum jump in yield. Consequently, wheat and
rice production in a short span of 6 years between 1965/66 and 1971/72
witnessed an increase of 30 million tonnes which is 168 percent higher than
the achievement of 15 years following 1950/51.

The biggest achievement of new agricultural strategy, also known as

green revolution technology, has been attainment of self sufficiency in
foodgrains. Since the green revolution technology involved use of modern
farm inputs, its spread led to fast growth in agro input industry. Agrarian
reforms during this period took back seat while research, extension, input
supply, credit, marketing, price support and spread of technology were the
prime concern of policy makers (Rao 1996).

Two very important institutions, namely Food Corporation of India and

Agricultural Prices Commission, were created in this period in the beginning
of green revolution period, to ensure remunerative prices to producers,
maintain reasonable prices for consumers, and to maintain buffer stock to
guard against adverse impact of year to year fluctuations in output on price
stability. These two institutions have mainly benefited rice and wheat crops
which are the major cereals and staple food for the country.

The next phase in Indian agriculture began in early 1980s. While there
was clear change in economic policy towards delicensing and deregulation in
Industry sector, agriculture policy lacked direction and was marked by
confusion. Agricultural growth accompanied by increase in real farm incomes
led to emergence of interest groups and lobbies which started influencing
farm policy in the country. There has been a considerable increase in
subsidies and support to agriculture sector during this period while public
sector spending in agriculture for infrastructure development started
showing decline in real term but investments by farmers kept on moving on
a rising trend. The output growth, which was concentrated in very narrow
pockets, became broad- based and got momentum. The rural economy
started witnessing process of diversification which resulted into fast growth
in non foodgrain output like milk, fishery, poultry, vegetables, fruits etc
which accelerated growth in agricultural GDP during the 1980s. This growth
seems largely market driven.

3 CHALLENGES IN AGRICULTURE:
The development of Agriculture in its comprehensive definition is
central to all strategies for the socio-economic development of India.
Agriculture, being a state subject, continues to receive the fullest attention
of the state government and the central government to ensure progress and
to minimize regional imbalances. Agricultural production has increased
several folds since independence. Indian farmers have brought glory and
pride to the nation by substantially increasing the production level to meet
the requirements of the growing population and the expanding industry,
while contributing to the growth of Indian economy; Indian agriculture faces
the following major challenges:

i. Increasing agricultural productivity and production to ensure food and

nutritional security for the rising population and generating surplus for
exports.
ii. Addressing problems of underemployment, unemployment, poverty
and malnutrition in the rural areas.
iii. Diversification of agriculture and accelerating the development of
horticulture, sericulture, animal husbandry, poultry and agriculture
with necessary processing and marketing backup.
iv. Encouraging efficient use of marginal land and augmentation of bio-
mass production through agro and farm forestry.
v. Addressing technology transfer and training needs of farmers,
especially women, small and marginal farmers, other disadvantaged
sections of the rural society and farmers living in tribal areas with a
view to increasing their productivity levels and augmenting their
income.
vi. Providing critical inputs to the farmers in or near their villages.
vii. Revitalizing and democratizing the cooperatives for providing credit,
input, extension, super marketing and processing facilities.
viii. Increasing involvement of non-governmental organizations in
agricultural development and village upliftment programmes.
ix. Checking fragmentation of land and redressing the ecological
imbalances resulting from increasing biotic pressure on land.
x. Creating quality consciousness among the farmers and agro-
processors and promoting standardization of agricultural products.

4 POLICY APPROACH
To meet the emerging challenges, new policy measures are envisaged
to accelerate all round development and economic viability of agriculture.
The policy will aim at infusing new dynamism through public investment,
infrastructure development and much higher impetus for private investment.
These would lead to accelerated agricultural growth and generation of higher
income in rural areas which would result in improving the quality of life in
villages, bridge the gap that exists in access to education, health and other
services between the rural and urban areas and create gainful employment
on a self-sustaining basis. Farming will be given the necessary support,
encouragement and thrust so that the rural people look to this noble
occupation for all round development and well-being. Agricultural research
and development programmes would be devoted to the challenges needed in
achieving these objectives:

a) Economic Upliftment:
Economic upliftment of the farming community, specially
agricultural labourers, small and marginal farmers, women and
members of the scheduled castes and tribes and others will
receive high priority through the promotion of wage employment
linked self-employment and increase in productivity levels. The
focus will particularly be on increased productivity to increase
their income levels rather than through subsidies and support
prices and reducing unemployment and underemployment of the
farmers and agricultural labour through diversification of
agricultural sector by promoting horticulture, aquaculture, dairy
livestock, husbandry, poultry, piggery, bee-keeping, agriculture
and promotion of village enterprises. Development of
horticulture in the north-eastern region will be a key thrust area.

b) Export Promotion:
 Our competitive advantage in agricultural exports will be fully
exploited by giving a special thrust to exports of foodgrains,
fruits, flowers, vegetables, cashew, spices, live stock and dairy
products.
In view of increasing agriculture trade, NAP aims at promotion of
agricultural exports. However, below Table shows the
agricultural exports as percent of total exports, which reveals
that the share of agriculture is declining.

Table: Agriculture Exports

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

Agri-Exports as 13.5 13.5 11.9 11.9 10.2 9.6

percent of Total
Exports
Source: Department of Commerce (DGCI&S)
* April- October

c) Land Reforms:
Conferring ownership rights of land on small and marginal
farmers, women farmers and tenants and distribution of surplus
land will receive particular attention. Diversion of good
agricultural land for non-agricultural purposes will be
discouraged.

d) Input Supply:
Adequate and timely supply of quality inputs such as seeds,
fertilizers and agricultural implements and machinery at
reasonable rates and proximity to the farmers will be the
endeavor of the government. Adequate availability of
certified/quality seeds will be ensured through formulation of a
Nation Seed Budget and setting up seed depots in all districts
and block. Endeavour will be to increase cooperatives share in
the supply of inputs. Balanced and optimum use of fertilizers will
be promoted, based on large scale soil testing.

e) Water Management:
Conjunctive use of surface and ground water will receive high
priority. Proper on-farm management of water resources for the
optimum use of irrigation potential will receive special attention.
 Use of the most modern management techniques in agriculture
will receive particular emphasis for the efficient utilization of
water resources.

f) Credit Support:
The basic support for agricultural development is being provided
by the credit structure assistance built over the years.
Institutional credit flows to the agriculture sector will be
enhanced. An important objective of agriculture development will
be to ensure easy, adequate and timely availability of credit on
reasonable rates of interest. The Government will endeavor to
target the small and marginal farmers on a large scale and
create the necessary organizational structure for operationalising
the strategy.

5 RECENT TRENDS
Though green revolution has been widely diffused in irrigated areas
throughout the country, the dryland areas have not seen benefit of
technological breakthrough as witnessed through green revolution
technology. Of late, improved varieties of oilseeds and course cereals have
provided some opportunities for productivity growth in dryland areas. A new
phase was started in India’s economic policy in 1991 that marked significant
departure from the past. Government initiated process of economic reforms
in 1991, which involved deregulation, reduced government participation in
economic activities, and liberalization. Though much of the reforms were not
initiated to directly affect agriculture sector, the sector was affected
indirectly by devaluation of exchange rate, liberalisation of external trade
and disprotection to industry. Then came new international trade accord and
WTO, requiring opening up of domestic market. Initially there were strong
apprehensions about the impact of trade liberalisation on Indian agriculture
which later on turned out to be real threat for several commodities produced
in the country.
 Fig. Trends in government funding to agricultural research and education in India

All these changes raised new challenges and provided new

opportunities that required appropriate policy response. Besides, last two
decades had witnessed mainly price intervention that had a very limited
coverage, and there was a sort of policy vacuum. Because of this, there was
a strong pressure on the government to come out with a formal statement of
agriculture policy to provide new direction to agriculture in the new and
emerging scenario. In response to this, government of India announced New
Agricultural Policy in July 2000.

TYPES OF AGRICULTURAL POLICIES:

Agricultural price policy is concerned with prices which the farmers
received for the products and prices at other stages of distribution and
change. These policies generally concentrate on farm-gate prices and
generally stabilise agricultural prices. They can be pursued either at national
level or at state level.

Structural policies are designed to improve the structure of agricultural

production in size, layout and equipment of farms as well as the rural
infrastructure like electricity, water supply, education and advisory services.

Marketing policies are concerned with changes in distribution chain

between farmer and consumer. The objective here is to strengthen the
farmer’s bargaining position. For example, encouraging the development of
producer controlled marketing organization, improving the hygiene quality or
reduces the cost of marketing.
PRICE POLICY:
The main objectives of the Government's price policy for agricultural
produce, aims at evolving a balanced and integrated price structure in the
perspective of the overall needs of the economy and with due regard to the
interests of both producers and the consumers.

A positive price policy that has been followed for the major agricultural
commodities since the mid-sixties takes into account various conflicting
needs of the economy such as:

i. The need to provide incentives to the producer for adopting

improved technology.

ii. The need to ensure rational utilization of land, water and other
productive resources

iii. The effect of price policy on rest of the economy; particularly on

the cost of living, the level of wages, etc;

iv. The terms of trade between agricultural sector and non-

agricultural sector.

Towards the end, minimum support prices for major agricultural

products are announced each year which are fixed after taking into account,
the recommendations of the Commission for Agricultural Costs and Prices
(CACP) and organizes purchase operations through the designated public and
cooperative agencies such as Food Corporation of India, National Agricultural
Cooperative Marketing Federation (NAFED), Cotton Corporation of India, Jute
Corporation of India, etc.. The main elements of the present agricultural
price policy include:

i. Fixation of support prices for important agricultural commodities

before sowing. The commodities covered are paddy/rice, Jowar,
Bajra, maize, Ragi, wheat, barley, arhar, moong, urad, gram,
groundnut, soybean, sunflower-seed, rapeseed/mustard, toria,
safflower, copra, sesame, nigerseed, cotton, jute, tobacco and
sugarcane. In case of sugarcane, statutory minimum price payable
by the sugar factories to the growers is fixed by the government.
 ii. Periodic directions from Government of India for intervention by the
designated public and cooperation organization, to maintain the
minimum support price.
iii. Provision of levy on rice millers and sugar factories at prices linked
with support price for paddy and the statutory minimum price for
cane respectively.
iv. Use of input subsidies and product price support as complementary
instruments for promoting production and holding the price line.
v. Distribution of food grains at subsidized rates below economic cost
through the public distribution systems, targeted public distribution
systems, revamped public distribution scheme and various anti-
poverty programmes.

In addition to the agricultural commodities which are covered under the

support price and the related regime, there are some other commodities
which are covered under the Market Intervention Scheme (MIS). The
scheme was initially implemented for potato and ginger but subsequently, on
the requests from the State governments, more items have been brought
under the purview of MIS. These include garlic, onion, chicory, grapes,
kinoo, Malta apples, oranges, black pepper, eggs, isabgol, chilies, castor
seed, etc. Under the MIS, on the basis of a specific request of the State
government, when the prices of any of these commodities falls below a
certain level and growers are likely to incur losses, the government
intervenes in the market.

The minimum support prices and the market intervention schemes are
in the nature of a guarantee to the producers that the prices will not be
allowed to fall below the level fixed by the government. In the event of the
prices falling below the stipulated level, the government intervenes in the
market through the designated agencies and undertakes procurement
operations at the minimum support price fixed by the government. This
policy of the government, along with the liberalization of some of the
controls on domestic and international trade, has improved the terms of
trade for the agricultural sector. It has not only helped to make the country
self-sufficient in food grains and meet raw material requirements of the
industry but also generated export surplus in certain agricultural
commodities.

The CACP while recommending prices takes into account all-important

factors, viz.
1. Cost of Production

2. Changes in Input Prices

3. Input/output Price Parity

4. Trends in Market Prices

5. Inter-crop Price Parity

6. Demand and Supply Situation

7. Effect on Industrial Cost Structure

8. Effect on General Price Level

9. Effect on Cost of Living

10. International Market Price Situation

11. Parity between Prices Paid and Prices Received by farmers (Terms of
Trade).

Of all the factors, cost of production is the most tangible factor and it
takes into account all operational and fixed demands. Government organises
Price Support Scheme(PSS) of the commodities, through various public and
cooperative agencies such as FCI, CCI, JCI, NAFED, Tobacco Board, etc., for
which the MSPs (Market Support Price) are fixed. For commodities not
covered under PSS, Government also arranges for market intervention on
specific request from the States for specific quantity at a mutually agreed
price. The losses, if any, are borne by the Centre and State on 50:50 basis.
The price policy paid rich dividends. The Government has raised substantially
the MSPs in recent years as may be seen from the statement enclosed.

STRUCTURAL POLICIES:
 These policies cover the actions taken by the central and the state
government regarding agricultural inputs like irrigation, fertilizers and
pesticides, high yield variety of seeds, land reforms and credit financing.
Policies in respect the above mentioned inputs are as follows:

1. Irrigation

The distribution of rainfall in India is highly erratic in space and time.

The country receives an annual rainfall of which 73% is through the
south-west monsoon. However, the availability of irrigation facilities is
highly inadequate and about 70% of cultivated land has to depend on
rains. That is why Indian agriculture is called “a gamble in the
monsoons”.

In April 1978, the major schemes were defined as those having

Cultivable Command Area (CCA) at more than 10,000 hectares, medium
schemes as those having CCA between 4,000 hectares and 10,000
hectares and minor schemes as those having CCA less than 4,000
hectares.

Main investments were made on irrigation during the planning periods.

From Rs 446 crores in the first plan, the outlay of expenditure on
irrigation grews to Rs. 17,534 crores in the seventh pan. Substantial
expenditure has gone for developing the major and medium irrigation
potential, especially the major river valley projects like the Bhakra Nangal
Project (Punjab), Beas Project (Punjab, Haryana), Hirakund Dam Project
(Orissa), Damodar Valley Corporation (Bihar and West Bengal), Nagarjun
Sagar Project (Andhra Pradesh and Karnataka), etc. Minor irrigation
continues to occupy an important place as it provides more than half the
irrigation potential available in the country.

According to official estimates, available water resources can provide

irrigation to 140 million hectares area (Tenth Five Year Plan Vol. 2 Ch. 8)
which can provide irrigation to 72 percent of gross cropped area,
assuming irrigated crop intensity to be 1.36, as compared to 40 percent
area under irrigation at present. Further, productivity of one hectare of
gross irrigated area is reported to be 2.75 times the productivity of
unirrigated area. A simple exercise based on this information reveals that
if irrigation potential is fully exploited it would raise present level of
output by 50 percent. This further implies that if the entire irrigation
potential is exploited by the year 2020 it would enable the country to
realize annual growth rate of the order of 2.00 percent per annum for two
decades. This would require decadal increment in gross irrigated area by
31.8 million hectare, which is more than double the irrigation potential
created during the decade of 1990s. In case the pace of irrigation
development is maintained at the level of decade of 1990s, it would help
in attaining only 0.78 percent growth rate in output.

Table: Changes in net and gross cultivated area and area under
irrigation: 1950/51 to 1999-00 (Million hectare)

This shows that tremendous efforts are needed in development of

irrigation in the country to help attain growth rate stipulated in National
agricultural Policy. This would require very sharp increase in public
investments in agriculture, which has remained either stagnant or
followed decline during the last two decades. It would not be an
exaggeration to say that for creating such a magnitude of irrigation
potential would require trebling of public investments in real terms.
Second, expansion of irrigation through conventional means like major
irrigation projects is likely to face resistance from various environmental
groups.

According to some scholars availability of ground water for irrigation

would emerge as a critical bottleneck for self sufficiency in foodgrain by
the year 2020 as demand for irrigation would exceed its availability by
nearly 30 percent. Similarly, National Commission for Integrated Water
Resource Development Plan has projected that requirement for irrigation
water in India would grow by more than 50 percent by 2050. Evidence is
accumulating that water table in several states is getting depleted at a
fast rate. Based on various assessments it is concluded that even after
fully exploiting available water resources water supply can match the
demand only if there is a big improvement in efficiency of irrigation.

In the light of this scenario, National Agricultural Policy announces that

“rational utilization and conservation of the country’s abundant water
resources will be promoted”. It is somewhat surprising that against all
evidence of scarcity the NAP feels water resources are abundant. It
seems the importance and implications of growing stress on water
resources are not adequately recognized by the policy. This requires
efforts on several fronts. One, there is a need for creating awareness
about the value of water and its sustainable use. The policy should lead to
concrete measures for conservation of water resources through measures
like rainwater harvesting and groundwater recharging and ensure
judicious use of water. This would require first of all placing value on
water that reflects its opportunity cost. Second, improvement in water
use efficiency is crucial. According to one estimate a 10 percent
improvement in the efficiency of water use would be equivalent to 14
million hectare of gross irrigated area which is as large as the total
irrigation potential created during whole decade of 1990s. Achieving them
would involve addressing property rights in water, institutions and public
policy (pricing etc.).

2. Fertilizers

Indian farmers use only one-tenth of the amount of manure that is

necessary to maintain the productivity of soil. Accordingly, proper use of
manure and fertilizers alone can considerable enhance the productivity of
soil. India’s soil is deficient in nitrogen and phosphorus and this deficiency
can be made good by an increased use of fertilizers. The use of fertilizers
in Indian agriculture has received a boost at the initiation of the High
Yielding Varieties Programme (HYVP) in 1966. This was a “package
programme” wherein due emphasis had been given to the use of chemical
fertilizers.

In the case of degradation of cultivable land the problem seems to be

less complex compared to the wastelands. In some cases use of chemical
fertiliser is held responsible for soil degradation. This is somewhat
surprising because level of use of inorganic fertilizer in the country is
quite low. The reason for adverse impact of chemical fertilizer in the
country does not seem to be because of excessive use but because of
indiscriminate and non-judicious use. The problem can be tackled by
creating awareness among farmers about proper use of fertiliser, and
appropriate price structure for various formulations of fertiliser.

Another healthy way to take advantage of chemical fertilizer is by

using them along with organic fertilizer. There is lot of wastage and
diversion of valuable animal dung. Similarly, lots of agricultural bio mass
go waste that can be decomposed to produce organic fertilizer. In some
parts of the country like North West India lakhs of tonnes of rice and
wheat straw is disposed off by burning. This not only causes wastage of
biomass but also causes lot of air pollution. Efficient and quick methods
for decomposing such biomass would increase availability of organic
matter for application in agricultural land.

The increases in agricultural production and productivity during the

Green Revolution resulted from the conjunctive use of modern cultivars,
irrigation, and fertilizers and other agro-chemicals. For the agro-chemical
inputs, a 1991-92 follow-up survey to the 1990-91 censuses indicates
that 87 % of irrigated holdings - regardless of size - received
manufactured fertilizer; of the non- irrigated farms 46% - though
somewhat less on the largest farms - received such fertilizers. Farm-yard
manure applications were on average slightly more prevalent (35 %) on
irrigated farms than on non- irrigated (29 %); however, with or without
irrigation, applications were more prevalent on small-holdings than on
larger farms.

3. High Yielding Varieties of Seeds

Under the new agricultural strategy, special emphasis has been placed
on the development of high yielding varieties of seeds. Also the
Government has been paying attention to induce qualitative improvement
in seeds ever since the initiation of planning process in the country, the
real impetus to this effort was given by the adoption of the new
agricultural strategy in the Kharif season of 1966.

One choice before the country was to go for spread of new seeds of
high yielding varieties (HYV) of wheat and rice which were available with
CGIAR institutes like CIMMYT and IRRI. Amidst a serious debate the then
Government took bold decision to go for the import and spread of HYV of
wheat and rice which involved use of fertilisers and irrigation. This
marked second phase of agriculture policy in the country. The strategy
produced quick results as there was quantum jump in yield.
Consequently, wheat and rice production in a short span of 6 years
between 1965/66 and 1971/72 witnessed an increase of 30 million tonnes
which is 168 percent higher than the achievement of 15 years following
1950/51.

The biggest achievement of new agricultural strategy, also known as

green revolution technology, has been attainment of self sufficiency in
foodgrains. Since the green revolution technology involved use of modern
farm inputs, its spread led to fast growth in agro input industry. Agrarian
reforms during this period took back seat while research, extension, input
supply, credit, marketing, price support and spread of technology were
the prime concern of policy makers.

4. Pesticides

It has been estimated that in India, monetary loss in agriculture due to

weeds, diseased, insects, pests, rodents and birds runs into about Rs
6,000 crores pr annum. Although the importance of pest control
measures and the necessity of using pesticides is self-evident, use of
pesticides brings with it a number of problems the first being that
pesticides by their very nature are poisonous. Accordingly, they can kill
non-target organisms and this includes man. Another problem is that the
targeted pests develop resistance towards specific pesticides. It is also
important to note that pesticide application needs a scientific approach
and this approach is lacking in most of our farmers.

The major thrust of the government policy on plant protection in the

coming years is proposed to be on Integrated Pest Management (IPM).
The IPM approach implies the adoption of cultural, mechanical, biological
and chemical methods of control. It is necessary to emphasize the safe
use of pesticides in this approach. In addition, more specific highly active
chemicals need to be developed. Training to the farmers should be
provided through the communication media like radio and television
regarding the correct use of pesticides so that their indiscriminate
application is avoided. The packages for integrated management of pests
and plant nutrients, along with pest tolerant varieties are expected to
reduce the use of pesticides to the extent of 50 percent. Pesticides usage
increased with farm size - particularly for irrigated farms; and
applications were much more prevalent on irrigated farms (39 % on
average) than on non- irrigated (10%).
Table: Proportion (%) of land area receiving manufactured fertiliser, farm-yard manure, and
pesticides (all crops, 1991-2): Irrigated and non-irrigated: Various farm sizes

5. Land Reforms
i. Policies and Measures regarding Abolition of Intermediaries:
In 1948, steps were taken for the actual abolition of intermediaries
with the enactment of legislation in Chennai. Legislation was passed
in all states, but for a few minor territories as in Assam, Gujarat,
Chennai and Maharashtra.

ii. Measures of Tenancy Reforms: They pertain to regulation of

rent, security of tenure and conferment of ownership on the
tenants.

iii. Ceiling on Land Holdings: All land belonging to the landlords

would be taken over by the states and allotted to small proprietors
to make their holdings economical or to landless labourers to meet
their demand for land.

1) Reason for Poor Performance of this Programme:

a. Judiciary should not be involved at any stage in the implementation
of the reforms as they are time consuming.
b. Organisation of the poor farmers into trade unions is a precondition
of land reforms.
6. Credit Plan Schemes

The credit division operates centrally sponsored Central Sector Plan

Schemes for strengthening the cooperative credit institutions so as to
enable them to disburse (pay) agricultural credit to the farmers for
purchase of inputs, etc. for seasonal agricultural operations as well as for
investment purposes, such as in minor irrigation, land development,
horticulture, etc. These schemes are as follows:

1) Investment in debentures of State Land Development Banks

(SLDBs): Under this scheme, investments are made in the debentures
of SLDBs. The proceeds from the floatation of debentures are used for
extension of long-term agricultural credit.

2) Credit Planning and Monitoring: This scheme is intended to

strengthen the credit division by creating infrastructure for monitoring
the flow of credit.

3) Centre for International Cooperation and Training in

Agricultural Banking (CICTAB): It serves as an international forum
in agricultural banking and as sub regional centre for Bangladesh,
Nepal, Sri Lanka and India. The CICTAB conducts international training
programmes for member countries and countries of SAARC.

4) Assistance to Cooperative Credit Institutions: Under this scheme,

assistance is provided to weak District Central Cooperative Banks
(DCCBs) to enable them to fully utilize the credit limits sanctioned by
NABARD. Assistance under the scheme is provided for bringing the
deficit in non-overdue cover of DCCBs.

5) Agricultural Credit Stabilization Fund: The scheme provides

assistance to meet the deficit in the stabilisation of funds at the State
Cooperative Banks level. These funds are used to help farmers by way
of conversion of short-term loans into medium-term loans, when they
are affected by natural calamities.

6) Special Scheme for SCs/STs: The scheme aims at making SCs/STs

active members of credit cooperatives and at strengthening these
cooperatives to enable them to undertake schemes for the welfare of
SCs/STs.
7) Comprehensive Crop Insurance Scheme (CCIS): The CCIS is
being implemented to provide financial support to farmers in the event
of crop failure following natural calamities. All farmers who avail crop
loans from commercial banks, cooperative banks and regional rural
banks for growing wheat, cereals including millets, oilseeds and pulses
are eligible for insurance coverage.

8) Experimental Crop Insurance Scheme (ECIS): As a first step

towards coverage of non-loanee farmers under the Crop Insurance
Scheme, an Experimental Crop Insurance Scheme (ECIS) covering all
small and marginal farmers in 24 districts of 8 states for one year from
Rabi 1997-98 has been implemented. 100% insurance charges
payable by the small and marginal farmers will be borne by the central
and state Governments. The scheme will be operated as far as
possible in low unit areas preferably a Gram Panchyat.
AGRICULTURAL MARKETING AND WAREHOUSING
a) The Present State of Agricultural Marketing in India: There are
many ways by which the farmer may dispose off his surplus produce.
1. The first and the most common method is to sell away his
surplus produce to the trader. It is estimated that in Punjab, 60
percent of wheat, 70 percent of oils and 35 percent of cotton is
sold in the village itself.
2. The second method adopted by the Indian farmer is to dispose
off his produce in the weekly village markets, known as
‘HAATHs’.
3. The third method of agricultural marketing is through the mandis
in small and large towns.
b) Steps taken to Improve Agricultural Marketing: The government
has taken various steps to improve the conditions of agricultural
marketing. It has set up the All-India Warehousing Corporation to
construct and manage a whole network of warehouses in all towns and
mandis. To promote warehousing in villages the cooperative societies
are given necessary financial and technical facilities. Foodgrain prices
are being stabilized by the government through the recommendations
of the Agricultural Prices Commission.
c) Regulated Markets: The purpose of regulated market is to eliminate
unhealthy market practices, to reduce marketing charges and to
ensure fair prices. All the states have now passed legislation for the
establishment of regulated markets. In 1951, there were more than
200 regulated markets in India and by the end of the Second five year
plan, i.e., in 1961, there were nearly 1,000 regulated markets. By the
end of March, 1996 nearly 6,970 agricultural markets in the country
had been regulated.
d) Cooperative Marketing: The marketing of agricultural products
through cooperatives, has registered a remarkable growth. Agricultural
cooperatives require godowns for undertaking various functions like
marketing of agricultural produce, supply of agricultural inputs and
distribution of consumer goods.
e) Warehousing in India: Warehousing facilities are necessary to
prevent the loss arising out of defective storage and also to equip the
farmers with a convenient instrument of credit.
 At present, there are three main agencies in the public sector
which are engaged in building large storage/warehousing capacity viz.
the Food Corporation of India (FCI), Central Warehousing Corporation
(CWC) and State Warehousing Corporation (SWC). FCI provides
storage capacity for food-grains. It has its own godowns and it is also
hires storage capacity from other sources such as CWS, SWCs, and
private parties. The total capacity with FCI is about 16 million tonnes.
The main functions of the CWCs and SWCs are to acquire and build
warehouses at suitable places and operate them for storage of
agricultural produce, fertilizers, etc. In 1993-94, the Central
Warehousing Corporation (CWC) owned and managed 465 warehouses
with a total capacity of 6.4 million tonnes. In the same year, the
number of warehouses owned and managed by State Warehousing
Corporation (SWCs) were about 1,350 with a storage capacity of 9.9
million tonnes.
VARIOUS PROGRAMMES AND SCHEMES:
o Crops
 Intensive Cotton Development Programme (ICDP) under Mini-
Mission-II of Technology Mission on Cotton
 Mini kit Programme for Rice, Wheat & Coarse Cereals

o Technology Mission on Oilseeds & Pulses

 Oilseeds Production Programme (OPP)
 Accelerated Maize Development Programme (AMDP)
 Sub-programme on Maize-based Cropping Systems for Food
Security in India under GOI-UNDP Food Security Programme
 National Pulses Development Project (NPDP)
 Oil Palm Development Programme (OPDP)
 Post Harvest Technology in Oilseeds, Pulses & Maize
 National Oilseeds and Vegetable Oils development Board (NOVOD)
– (On-going Scheme)

o Horticulture
 National Horticulture Board Schemes
 Coconut Development Board
 Technology Mission for Development of Horticulture in North
Eastern Region including Sikkim
 Human Resource Development in Horticulture
 Integrated Programmes For Development of Horticulture In Tribal/
Hilly Areas

o Seeds
 Central Sector Scheme on Transport Subsidy for the movement of
Seeds to the North-Eastern States, Sikkim, Himachal Pradesh,
Jammu & Kashmir, Uttaranchal and Hill Areas of West Bengal
 Pilot scheme on Seed Crop Insurance
 Quality Control Arrangement on Seeds
 Central sector scheme for establishment & maintenance of seed
bank
 Central sector scheme for implementation of legislation on plant
varieties and farmers rights protection
o FERTILIZER:
 National Project on Development and Use of Bio fertilizers.
 Strengthening of Central Fertiliser Quality Control & Training
Institute and its Regional Labs

o PLANT PROTECTION
 Promotion of Integrated Pest Management
 Implementation of Insecticides Act, 1968
 Expansion of Plant Quarantine Facilities in India
 Locust Control and Research
 Training in Plant Protection

o MACHINERY
 Strengthening of Farm Machinery Training & Testing Institutes at
Budni(MP), Hissar (Haryana), Garladinne (A.P) and Biswanath
Chariali(Assam)
 Establishment of Farm Machinery Training & Testing Institute in
Tamil Nadu
 Conducting study and formulating long term Mechanisation
strategies for each Agro- Climatic Zone
 Productionising of Industrial Design of Agricultural Implements

o RAIN FED FARMING SYSTEM

 Watershed Development Council (WDC)

o NATURAL RESOURCES MANAGEMENT

 National Land Use and Conservation Board (NLCB)
 EEC assisted project for Reclamation and Development of Alkali
Soils in Bihar and Uttar Pradesh
 Watershed Development Project in Shifting Cultivation Areas
(WDPSCA)
 All India and Land Use Survey and application of Remote Sensing
Technology

o CREDIT
  Investment in Debentures of State Land Development Banks
(SLDB)/State Cooperative Agriculture and Rural Development
Banks (SCARDB)
 Centre for International Cooperation in Agricultural Banking
(CICTAB)
 National Agricultural Insurance Scheme (NAIS)

o COOPERATION
 Cooperative Education & Training
 Assistance of National Cooperative Federations
 Development of Multi-State Cooperative Societies and
Strengthening of the Cooperation Division
 Integrated Cooperative Development Projects in Selected Districts
(ICDP)
 Cooperative Marketing, Processing, Storage etc. programmes in
cooperatively under/least developed States
 Share Capital participation in Cooperative Sugar Factories
 Share capital participation in growers cooperative spinning mills
 Development of Rural Growth Centres in Bihar EEC
 EEC assisted Coconut Development Project in Kerala
 Assistance to National Agriculture Cooperative Marketing Federation
of India. (NAFED)

o DIRECTORATE OF EXTENSION
 UNDP-funded Programme on National Food Security
 Human Resource Development Training Support to Agriculture
 Information Support/Management Information System
 Innovations in Technology Dissemination Component of National
Agriculture Technology Project (NATP)
 Central Sector Scheme of Women in Agriculture
 Strengthening of Agricultural Extension Services Sub-components

o DIRECTORATE OF ECONOMICS & STATISTICS & AGRICULTURE

CENSUS
 Assistance to the States/UTs for the conduct of Livestock Census
 Timely Reporting Scheme (TRS)
 Establishment of an Agency for Reporting of Agricultural Statistics
(EARAS)
  Improvement of Crop Statistics (ICS)
 Crop Estimation Survey for Fruits and Vegetables (CES-F&V)
 Strengthening of Agricultural Statistics and Policy Formulation
 Quarterly Estimation of Agriculture Production for Special Data
Dissemination Standards (SDDS)
 Agro-Economic Research Scheme
 National Centre for Crop Forecasting (NCCF)
 The Comprehensive Scheme for Studying the Cost of Cultivation of
Principal Crops in India
 Decentralisation of Planning-Evaluation/Research Studies of CACP
 Agricultural Census

o AGRICULTURE MARKETING
 Agmark Grading and Standardisation
 Scheme for Estimation of Marketable Surplus and Post-Harvest
Losses of Food grains in the country
 Scheme for Market Survey, Investigation and Research Grants in
the field of Agricultural Marketing
 Agricultural Marketing Information Network
 National Institute of Agricultural Marketing (NIAM)

o INFORMATION TECHNOLOGY
 Promoting Use of Informatics in Agriculture

o POLICY AND PLAN

 Macro Management of Agriculture
Supplementation/Complementation of States’ Efforts through Work
Plan’
 Policy and Management in Agriculture “State of the Indian Farmer-A
Millennium Study”

o TRADE
 Small Farmers’ Agri-Business Consortium

o NATURAL DISASTER MANAGEMENT

 Natural Disaster Management Programme.
CONCLUSION:
Looking ahead, higher growth of the economy can be sustained only if
agriculture and allied activities grow at an average annual rate of 4 percent
or so. To ensure this, the policy framework must encourage high investment
in rural assets and channel public expenditure toward supportive
infrastructure, including rural roads, irrigation, agricultural research and
extension services and soil conservation.

In the medium- and the longer-term, India will need to negotiate

within the World Trade Organization’s forums and procedures to ensure -
perhaps through a “food-security box” facility - that its small- holder
agriculture is protected against unfair competition and against excessive
fluctuations in international prices for commodities. Correspondingly, India’s
small- holders shall need to be assisted to trade internationally to exploit
their comparative advantages in producing herbal medicines and certified
“organically-grown” foods.

Second, the existing restrictions to movement of agricultural produce

between states should be eliminated so that farmers can benefit from a
single national market. Similarly, remaining restrictions on exports of
agricultural commodities and services also be phased out. Furthermore, a
concrete effort needs to be made to revamp and revitalize the system of
rural credit to put it on a firmer footing.