AGRICULTURE

SIGNIFICANCE

 The share of agriculture in national income is about 17% in 2008-09 while it was
about 59% in 1950-51.
 Agriculture provides employment to about 52% of the total for labour force. Its
share in employment was 76% in 1960-61.
 Agriculture contributed about10% to the value of total exports and the share of
agricultural imports was about 5% in total imports in 2008-09.
 There is a two way relationship between agriculture and industrial growth.
Agriculture provides basic raw material to industries as well it creates demand for
industrial goods.
 Agricultural sector's share in capital formation was 2.4% of GDP in 2008-09.

Cropping seasons

(a) Kharif Crop : It is sown in July and harvested in October. Major Kharif crops include: -
Rice,Maize, Jowar, Bajra, Cotton, Sugarcane, Soyabean, Seasamum and Groundnut.
(b) Rabi Crop : It is sown in October/November and harvested in March/April. The major
rabi crops include : Wheat, Jowar, Barley, Gram, Mustard, Tur and Rapeseed.
(c) Zayad Crop : It is sown is march and harvested in June. Such crops include-Melon,
Watermelon, vegetables, cucumber, moong and urd.

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LAND REFORMS

Productivity in agriculture mainly depends upon two set of factors i.e. technological and
institutional. Technical factors are concerned with mechanization of agriculture, technique of
farming, use of improved seeds, fertilizers etc. Institutional factors are concerned with land
tenure system, land holdings, land distribution etc. The reforms related to institutional factors
are called land reforms. The primary objective of land reforms is to bring about a system of
land ownership which is socially just and economically efficient.

Major land reform measures

1. Abolition of intermediaries : The intermediary tehural systems like Zamindari, Jagirdari,

Inamdari etc. which prevailed over 40% of the country were abolished. The first act meant
for abolishing intermediaries was passed in 1948 in Madras province. It is the only land
reform measure, which has been successfully implemented in India.
2. Tenancy reforms : When the owner of land does not cultivate his land himself but gets it
cultivated by the tenants, then such a system is called tenancy system. The tenancy reforms
pertain to the following measures:
(a) Regulation of rent : It pertains to the fixation of maximum limit of rent. Most of the state
governments have fixed the amount of rent between l/4th to l/5th of the total produce.
(b) Security of_tenure : The main features of the laws passed in respect of security of tenure
are (l) Tenants should not be evicted from land unlawfully. (2) A land-owner can resume

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land only for self-cultivation however, subject to the condition that a minimum area is left
with the tenant.
c) Right of ownership for tenants : The main objective of land reform is "land to the tiller of the
soil". The ownership of land above the ceiling limit is automatically vested with the tenant on
payment of compensation.
3. Ceiling on land holdings : It implies fixation of maximum size of holding which could be
retained or owned by an individual or a family. As per the guidelines issued by the Union
Govternment in 1972, the land of ceiling varies from 4 hectares to 7 hectares for best category of land
capable of producing two crops a year and 22 hectares for the dry land.
4. Consolidation of land holdings : It is the process by which the farmers are provided, in place of
their several fragmented holdings, one or two compact farms of the same quality and of the same total
size.
5. Co-opertive farming : In the words of Indian Council of Agricultural Research (1CAR),
"Cooperative Farming Society is one in which ownership of land vests with individual cultivators but
cultivation operation is performed jointly." Cooperative farming is specially helpful in solving the
problem of subdivision and fragmentation of holdings.
6. Updation of Land Records : In most of the states records are being prepared with the help of the
Register of Annual crops. Of late, computers are increasingly being used to maintain records
concerning the land.
Green Revolution

Green Revolution refers to the phenomenon of rapid increase in the production of foodgrains
during mid-sixties. It was achieved as a result of adoption of the new agricultural strategy which was
based on High Yielding Variety (HYV) seeds. The increase in productivity and production was so
spectacular that William Gadd of USA referred to it, for the first time in 1968, as Green Revolution.
The Noble Prize winner Dr. Norman Borlaug developed new High Yielding Varieties of wheat in
Mexico during early 1960s .This technology was successfully tried in many countries. This new
agricultural strategy was put into practice for the first time in India in the Kharif season of 1966. It
was termed as High Yielding Variety Programme. This programme was implemented in Indian under
the guidance of Dr. M.S. Swaminathan, the noted agricultural scientist of India. This programme was
introduced in the form of a package programme, since it depended crucially on regular and adequate
supply of irrigation, fertilizers, high yielding seeds, pesticides and insecticides.

Achievements
• Productivity: The new technology has brought about a sharp rise in the yield of land in respect of
foodgrains. The yield of foodgrains per hectare has improved from 783 Kg in 1967-68 to 872 Kg in
1970-71 to 1032 Kg in 1980-81. The average yield of land in respect of wheat which was around 830
Kg. per hectare in the mid-1960s, rose sharply to 1303 Kg. in 1970-71.
• Production : The total production of foodgrains was 50.8 million tonnes in 1950-51 which
increased to merely 72.4 million tonnes in 1965-66. However, in just five years after the adoption of
HYV Programme, it rose to 108.4 million tonnes in 1970-71. While during this period, the production
of wheat was more than doubled from 10.4 million tonnes in 1965-66 to 23.8 million tonnes in 1970-
71.
• Intensive cultivation : Most of the HYV seeds mature into plants in a shorter period of time. It
provided an opportunity for growing more than one crop on a field during an year i.e. multiple
cropping.

Limitations
• The HYV programme was restricted to only five crops—Wheat, Rice, Jowar, Bajra, and Maize.
Out of these wheat has made the most rapid stride, while coarse cereals—Jowar, Bajra, Maize have
shown little increase in production.

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• This programme had been applied to the areas which had adequate and assured irrigation facilities.
So, it largely remain confined_to Punjab, Haryana and WesternJLIttar Pradesh.
• The programme accentuated jtll£ income disparities as the agricultural inputs like chemical
fertilizers were largely cornered by rich landlords.
• The programme envisaged application of chemical fertilizers, pesticides, insecticides etc, in large
quantities which has threatened agricultural sustainability and ecological balance.

White Revolution and Operation Flood

White Revolution refers to the rapid increase in the production of milk during 1970s. In order to
accelerate the production of milk government launched a programme called Operation Flood
in 1970. Operation Flood programme was initiated by the National Dairy Development
Board (NDDB), under the leadership of Dr. Varghese Kurien.
Operation Flood is the world's largest integrated dairy development programme. The
programme was implemented through the establishment of a chain of dairies in the form of
cooperative societies. It has resulted in substantial increase in the production of milk as
shown in the table (given above).

Yellow Revolution
Yellow Revolution is associated with sharp increase in production of oilseeds during the
latter half of 1980s. National Oilseeds Development Project (NODP) was launched in 1985-
86 on the initiative of the then scientific advisor to PM, Mr. Sam Pitroda. Technology
Mission on Oilseeds was launched in 1986 for ensuring optimum utilization of production,
processing and management technology in oilseeds crops. The objective of these programmes
was to achieve self-sufficiency in the production, of oilseeds.

Seed Bank Scheme

It was introduced in 1999-2000 with the basic objective to make available seeds for meeting
any contingent requirement and also develop infrastructure for production and distribution of
seeds.

Agricultural Credit

Credit needs of the agricultural sector are classified into the following three categories.
(1) Short term credit : It extends up to a period of 15 months and is generally paid back on
harvesting of crops. This is needed to fulfill the -current financial requirements of the farmers
such as purchase of seeds and fertilizers or the payment of wages.
(2) Medium-term credit : It extends upto a period of 5 years. It is needed for the purchase of
agricultural equipments, animals, construction of wells etc.
(3) Long-term credit : Such credit is provided for over 5 Years and generally extend upto 15
to 20 years. It is needed for the purchase of land, tractors, repayment of old debts etc.

Sources of credit
The sources of credit for the Indian agricultural sector can be classified into two categories
i.e. institutional and non-institutional. Institutional sources include the governments,
commercial banks, cooperative credit institutions, various agricultural finance corporations,
Regional Rural Banks (RRBs) and the National Bank for Agriculture and Rural
Development. Non-institutional sources on the other hand, includes the private money
lenders both professionals and agriculturists, commission agents, relatives and

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landlords/Their relative position as a source of lending has been changing in over time. As
per an estimate of the RBI the share of non-institutional credit in the total agricultural credit
has declined from 83% in 1961 to 25% in 1995.
Until the nationalization of banks in 1969, the responsibility of providing institutional credit
to agricultural was entrusted on the cooperative credit institutions i.e. cooperative banks (for
short and medium term credit) and land development banks (for long term credit). In 1969,
the commercial banks were providing only 1.6,% of the rural institutional credit. At the time
of nationalization, government had adopted the multi-agency approach to
agricultural and rural credit. Government launched lead bank scheme in 1969 to actively
involve the commercial banks in the provisioning institutional credit to the agricultural
sector. In 1975, government established specialized commercial banks called Regional Rural
Banks (RRBs) for providing rural credit. In 1982, government established an apex bank
called National Bank for Agriculture and Rural Development (NABARD) to assist, direct
and coordinate the activities of the institutional sources of finance for the rural and
agricultural sector, In 1996, the Government has granted permission to establish Local Area
Banks (LABs) in the private sector to promote rural savings and to provide credit for viable
economic activities in rural areas

Prof. Y.S. Vyas Committee

The RBI had set up an Advisory Committee on the flow of credit to agriculture and' related
activities under the chairmanship,of Prof. V.S.Vyas. It submitted its report on June 30, 2004.
Several recommendations of the committee have been accepted and communicated to the
banks for Implementation. These include waiving off margin / security requirements up to Rs.
50,000 for loahs and upto Rs 5 lakh for loans to agri-business and agri-clinics ; dispensing
with the restrictive .provisions of Service Area Approach.
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Kisan Credit Card (KCC) Scheme
The Kisan Credit Card Scheme was introduced in 1998-99 for the farmers who are eligible
for production loans of Rs 5000/- or more. It is a revolving credit facility where any number
of withdrawals and repayments can be made within a year.
Budget 2002-03, provided automatic insurance cover to the KCC holders. The amount of
compensation is Rs. 25,000 in case of permanent disability and Rs 50,000 in case of
accidental death. Recently, the scope of KCC scheme has been enlarged to include term-
loans (long-term) for agriculture and allied activities and a reasonable component to meet the
consumption needs. Over 435 Lakh KCC with cumulative credit of Rs 1,11,459 crore had
been issued up to September 30, 2004 by 27 commercial banks, 378 cooperative banks and
196 RRBs.

Self Help Group (SHG) Bank linkages Programme : It is the major micro-finance
programme in the country. 563 districts of the nation are covered under this programme. The
number of SHGs linked to the banks is about 1.27 million with the disbursement of bank loan
of Rs. 5,038 crore as on December 20, 2004.

Rural Infrastructure Development Fund (RIDF): It was established in 1995 by the

NABARD. The contribution to this fund is made by the commercial banks to the extent of
the shortfall in their priority sector lending. This fund is used to provide assistance to states
for the development of rural infrastructure. In 2004, RIDF was restructured into Loknayak Jai
Prakash Narayan Fund for Agriculture and Credit (LNJPFAC)

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 Agricultural Insurance
National Agricultural Insurance Scheme (NAIS) or Rashtriya Krishi Bima Yojana
NAIS was launched in Rabi season of 1999-2000. It replaced Comprehensive Crop Insurance
Scheme (CCIS) of 1985. Its objective is to protect farmers against the crop failure due to
natural calamites. It is being implemented by the General Insurance Corporation (GIC) on
behalf of the agricultural ministry.

Salient Features
* The scheme covered all food-crops, oilseeds,horticulture and commercial crops.
* There is no upper limit on the sum insured.
* It is compulsory for the loanee farmers.
* Premium rates vary between 1.5% to 3.5% of the sum insured.
* 50% of the premium for the people below poverty line (BPL) is subsidized. The subsidy
is to be shared equally by the centre and state governments and it is to be phased out in 5
years.
The scheme is operating on the basis of 'Area Approach' i.e. defined areas for each
notified crops for widespread calamites. Cumulatively, 5.9 crore farmers have been covered
under NAI& in the last ten seasons i.e. from Rabi 1999-2000 to Kharif 2004.

Farm Income Insurance Scheme (FIIS)

The scheme was launched during Rabi 2003-04 in 18 selected districts of 12 states for wheat
and paddy. The scheme is being jointly implemented by the Ministry of Agriculture and the
Agriculture Insurance Company of India Ltd. The scheme will provide 'broader risk
insurance' for the loss in agriculture income due to adverse natural calamities and fluctuation
in market prices of the crop i.e. it will cover both production as well as market risks.
Salient Features :
* If the actual income of the farmers falls short of the guaranteed income (product of
average yield and MSP) of the farmers, they would be compensated to the extent of the short
fall by the Agriculture Insurance Company of India Ltd. (AICI).
* As in the case of NAIS, Area Approach would Jbe used for actual yield and price
measurement of the insured crop.
* Initially the scheme will cover paddy and wheat only.
* The scheme will be compulsory for the loanee farmers.
* NAIS will be withdrawn for the crops covered under FIIS but would continue to be
applicable for other crops.

Seed Crop Insurance Scheme : It was introduced in Rabi 1999-2000 paddy, wheat,
jowar, hajra, maize, gram, red-gram groundnut, soyabean, sunflower and cotton. It aims to
provide financial security to seed breeders/growers in the event of failure of seed crops.

Livestock Insurance :It is being implemented by the General Insurance Corporation (GIC)
and its four subsidiaries. Under various livestock insurance policies, cover is provided for the
sum insured of the market value of the animal at the time of death, whichever is less.
Animals are insured upto 100% of their market value.

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 Agricultural Marketing

Agricultural Marketing encompasses, all such activities which are related to the
procurement, grading, storing, transportation and finally selling the agricultural produce. It
comprises all the operations involved in the movement of farm produce from the farmers to
the ultimate consumers. The marketing of farmer's surplus is required to payoff rents, debts
and to meet his other requirements.
Agricultural marketing system in India suffers from, various defects. Major defects of
agricultural marketing are distress sale, inadequate storage facility, lack of grading and
standardization, lack of standard weights and measures, inadequate transportation facilities,
presence of large number of middle-men, malpractices in unregulated markets, inadequate
credit facilities and lack of market information. As a result, farmers are often deprived of fair
price for their produce.

Government measures to improve Agricultural Marketing

Regulated Markets : Regulated markets have been established by all the state governments
to protect the farmers from the malpractices of the brokers. Such markets are managed by a
committee representing traders brokers, farmers and members of local bodies. At present
there are over 7,000 regulated markets operating at block / tehsil level throughout the
country.
Cooperative Marketing -: Government has encouraged the organization of cooperation
marketing societies of farmers for the collective sale of the produce of their members.

National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED)

It was established in 1964 as the apex cooperative marketing organization. It deals in
procurement, distribution, export and import of selected commodities.

Tribal Cooperative Marketing Development Federation of India Ltd. (TRIFED)

It was established in 1987 to protect tribals from exploitation by private traders and to offer them
remunerative prices for their minor forest products and agriculture produce. Like NAFED, it also
serves as an agency of food corporation of India (FCI) for procurement of wheat and rice.

Grading and standardisation of agricultural commodities : Agricultural Produce (Grading

and Marketing) Act was passed in 1937. The government set up Central Quality Control
Laboratory, Nagpur and some regional laboratories for the issue of AGMARK (Agricultural
Marketing) certificates to quality products.
Standardization of weights and measures :- The government introduced metric system of
weights and measures in 1958 to ensure uniform weights and measures all over the country.
Storage facilities : National Cooperatives Development and Warehousing Corporation
was established in 1956 for the construction of godowns. Storage facilities are also provided
by the Central Warehousing Corporation and state Warehousing Corporations.
Directorate of Marketing and Inspection: It was established to Assist and coordinate the
agri- marketing activities of various agencies. It focuses on three activities research,
development and grading.
Price Support Policy:- (discussed in the next section)

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 Dissemination of Market Information:- The government has arranged for the
dissemination of marketing information for the benefit of farmers. The information about the
prices prevailing in different markets is broadcast by All India Radio, Doordarshan, News
papers etc.
Futures trading in agricultural commodities
The central government in 2003-04 had initiated major steps towards introduction of futures
trading in commodities. It included removal of prohibition on futures trading in all
commodities and setting up of the National Level Commodity Exchanges. These are '
1. National Commodity and Derivative Exchange, Mumbai
2. Multi-Commodity Exchange, Mumbai
3. National Multi Commodity Exchange, Ahmedabad
The establishment of these exchanges would hedge the price risk on the trading
platform of an exchange prior to harvest. The major agricultural commodities traded at these
exchanges were soya oil, guar seed, guar gum, chana, jute, rubber, pepper, turmeric, wheat,
kapas (cotton) etc. These exchanges have introduced various innovations which would
increase efficiency of agricultural marketing in the country.

DEVELOPMENT OF ELECTRONIC SPOT EXCHANGES

The Government has allowed the National Commodity Exchanges to set up three spot
exchanges in the country, namely the National Spot Exchange Ltd. (NSEL), NCDEX spot
Exchange Ltd. (NSPOT) and National Agriculture Produce Marketing Company of India Ltd.
(NAPMC). During 2009, there was significant expansion of spot exchanges’ trading facilities
in India. These spot exchanges have created an avenue for direct market linkage among
farmers, processors, exporters and end users with a view to reducing the cost of
intermediation and enhancing price realization by farmers. They will also provide the most
efficient spot price inputs to the futures exchanges. The spot exchanges will encompass the
entire spectrum of commodities across the country and will bring home the advantages of an
electronic spot trading platform to all market participants in the agricultural and
nonagricultural segments.

.Agri-trade and Foreign Trade Policy 2004-09

The Foreign Trade Policy 2004-09, emphasized the importance of agricultural exports and
announced the following policy measures to boost agri-exports .
 A new scheme called the Vishesh Krishi Upaj Yojana (Special Agricultural
Produce Scheme) for promoting the export of fruits, vegetables, flowers, minor
forest produce and their value added products has been introduced.
 Funds shall be earmarked under ASIDEC (Assistance to States for
Infrastructure Development of Exports) for development of Agri-Export Zones
(AEZs).
 Capital goods imported under EPCG (Exports Promotion Capital Goods Scheme)
shall be permitted to be stalled anywhere in the AEZ.

Vishesh Krishi Upaj Yojana

The objective of the scheme is to promote export of fruits, vegetables, flowers, minor forest
produce, and their value added products, by incentivising exporters of such products.

Agri-Export Zones (AEZs)

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AEZs were introduced by the Exim Policy 2001-02, to promote agricultural exports. A
cluster approach is adopted for identifying the potential products, geographical areas in
which they are grown and setting up AEZs in such areas for those specific products. Under
the scheme, the state government would identify products with export potential which have
comparative advantage in local production. Agricultural and Processed Food Products
Development Authority (APEDA) is the nodal agency of the central government to promote
setting up of AEZs.
Till December 2003, the Central Government has sanctioned and notified 46 Agri-Export
Zones (AEZs) which are being set up in 19 states.

Agricultural Price Policy

The Agricultural Price Policy is the policy formulated by the government in relation to the
prices of agricultural products. It aims at bringing stability in« agricultural prices, encourage
agriculturists to invest in order to increase production, encouraging agriculturists to employ
latest technology and making agricultural products available to the consumers in adequate
quantities and at reasonable prices.
The procurement / support prices are fixed on the basis of the recommendations of the
Commission for Agricultural Costs and Prices (CACP), which was established in 1965.
Based on these recommendations, the central government fixes these prices by taking into
account the views of the state governments, central ministries and concerned
organizations/The CACP takes the following factors into consideration while recommending
procurement / support prices for various crops.
• Cost of paid out inputs and imputed cost of land and family labour
• Demand and supply conditions
• General price level
• Price prevailing in the international markets
• Cost of living
• Input-output price parity
• Inter-crop parity in prices etc.

Minimum Support Price (MSP) : It is the floor price at which government is prepared to
purchase any amount of the commodity offered by farmers (i.e. open-ended procurement
policy). It is announced before the sowing season. It aims to protect the interest of the
farmers. Government announces MSP for 24 major crops such as paddy, wheat, jowar, bajra,
pulses, oilseeds, sugarcane etc.
Procurement Price . It is the price at which government purchases predetermined quantity
of a commodity (i.e. targeted procurement policy) for distribution through the Public
Distribution System (PDS) and for maintaining buffer stocks. These prices are fixed keeping
in view the incentive to the farmer on the one hand and * the interest of the consumers on the
other. These are usually announced after the harvest.

Ceiling Price : This is the maximum price, which can be charged in any market. It is
announced in order to protect the interest of consumers or to check inflation.
Issue Price • It is the price at which commodities are sold to the consumers through Fair
Price Shops (FPSs).

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Central Issue Price : It is the price charged by the Food Corporation of India (FCI) from the
state governments, for commodities to be distributed under Public Distribution System
(PDS).

Public Distribution System (PDS)

PDS refers to the distribution of essential commodities such as wheat, rice, edible oil, kerosene, soft
coke, cloth etc. through the Fair Price Shops (i.e. Ration Shops) at the government .controlled prices
to the consumers. The PDSs aims at ensuring food security to the vulnerable sections. Food
Corporation of India (FCI) is the nodal agency of the government for the operationalisation of the
PDS.
FCI was established in 1965, to undertake the purchase, storage, transport and sale of selected
agricultural commodities. It also maintains buffer stocks of foodgrains on behalf of the government.
Buffer stocks are maintained for the following reasons.
(a) A certain minimum quantum of stocks are required for sustaining food security at any point of
time.
(b) Operational stocks for distribution through the PDS.
(c) Market intervention stocks to moderate / stabilize the prices of foodgrains from time to time.
The foodgrains stock with the FCI was 21.7 million tonnes in January 2005 against the buffer stock
norm of 16.8 million tonnes. The foodgrain stocks reached a peak of 64.7 million tonnes, an all time
record, in June 2002.

Minimum Buffer Stock Norms (million tonnes)

January April July October
Wheat 8.4 4 14.3 11.6
Rice 8.4 11.8 10.0 6.5
Total 16.8 15.8 24.3 18.1
The PDS has been periodically revamped, the last being in mid-1997 on the basis of the
recommendations of the Chief Ministers' Conference in 1996. In June 1997, PDS was renamed as
Targetted Public Distribution System (TPDS).

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Salient Features of TPDS
• The entire population was divided into two categories i.e. Below the Poverty Line (BPL) and
Above the Poverty Line (APL). The maximum income level for population covered under the BPL
category was kept at Rs 15,000 per annum per family. Recently, it has been increased to Rs. 20,000
per annum.
• The central issue price charged for the BPL sections for the rice and wheat, is half the 'economic
cost' incurred by the FCI and the APL are charged the entire economic cost. (Economic cost includes
procurement prices paid by FCI, cost associated with procurement like labour costs, mandi fees,
costs of distribution like storage, transportation etc.).
• The cereal allocation for the BPL families was originally fixed at 10 kg per month. Government
increased the allocation for BPL families from 10 kg to 20 kg in 2000, then from 20 kg to 25 kg is
2001 and finally to 35 kg on April 1, 2002.

Decentralised Procurement Schemes

The decentralized procurement scheme of the Government is in operation since 1997. Under this
scheme, the designated states procures, store and also issue foodgrains as per allotment indicated by
the central government under TPDS. The difference between the economic cost pf the State
Governments and the Central Issue Price is passed on to the State Governments as subsidy.

National Commission on Farmers .It was constituted in 2004 under the chairman ship of Dr. M.S.
Swaminathan. It aims at examining various issues confronting the Indian farmers and to suggest
appropriate interventions for improving the economic viability and sustainability of diversified
agriculture, including horticulture, livestock, dairy and fisheries and for doubling the farmers' income.

Taskforce for Farm Research

On October 26, 2004, the Union Government set up a task force under the Chairmanship of
Dr. M.S.Swaminathan, a renowned agriculture scientist, to suggest measures for
strengthening and revamping farm research. The task force suggested :
 measures to make farm research sensitive to the emerging scenario of domestic and
external trade against the backdrop of WTO agreement on agriculture.
 ways to attract and retain good scientists in public research institutions,
 methods for involving panchayati raj institutions in participatory research and
knowledge management.
 ways and means to foster crop-livestock-fish integrated farming systems and enhance
the productivity and profitability of rain fed , semi-arid, desert, coastal and hill areas.

National Food Security Mission (NFSM)

With a view to enhancing the production of rice, wheat and pulses by 10 million tonnes, 8
million tonnes and 2 million tonnes respectively by the end of the Eleventh Plan, the
Centrally sponsored NFSM has been launched from the rabi 2007-08 season. The three
major components of the Mission are NFSM-rice, NFSM-wheat and NFSM-pulses. The
Mission aims to increase production through area expansion and productivity
enhancement; restore soil fertility and productivity; create employment opportunities; and
enhance the farm-level economy to restore confidence of farmers. The NFSM is presently
being implemented in 312 identified districts of 17 States of the country.

Rashtriya Krishi Vikas Yojana (RKVY)

The RKVY, a flagship scheme of the Government in the agriculture and allied sectors
was launched in August 2007 to reorient current agricultural development strategies to

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meet the needs of farmers and rejuvenate the agricultural sector so as to achieve 4 per
cent annual growth during the Eleventh Five Year Plan. The scheme has an envisaged
outlay of Rs 25,000 crore for the Plan period in the form of Additional Central Assistance
(ACA).

Micro Irrigation
A Centrally sponsored scheme on micro irrigation (MI) was launched in January 2006
for promoting water-use efficiency by adopting drip and sprinkler irrigation. All States
and Union Territories and all horticultural as well as agricultural crops are covered under
the scheme. The National Committee
on Plasticulture Applications in Horticulture (NCPAH) provides the required technical
guidance in association with Precision Farming Development Centres (PFDCs) at 22
locations.

National Agricultural Policy, 2000

On 28 July, 2000 the Union Government announced the National Agricultural Policy (NAP)
envisaging over 4% growth rate per annum in the next two decades. This growth is to be achieved
through a combination of measures including structural, institutional, agronomic and tax
reforms. The focus of the new policy is an efficient use of resources and technology,
adequate availability of credit to farmers and to protect them from seasonal and price
fluctuations. -
Salient features
• Annual growth rate of 4% to be achieved by 2005.
• Private sector participation to be promoted through contract farming and land leasing.
• Commodity wise strategies in post-QR regime to protect farmers from price fluctuations
in the world market and promote exports.
• Wider coverage of futures market to minimise fluctuations in price and hedge risks.
• National Livestock breeding strategy to meet requirements of milk, meat, egg and
livestock products.
• Plant varieties to be protected through legislation to encourage Research and
Development.
• Animal husbandary, poultry, dairy and acquaculture to receive high priority to
diversify agriculture.
• Restrictions on movement of agricultural commodities will be dismantled.'
• Review of tax structure.
• Institutionalisation of farm credit.
• Priority to rural electrification.
• National Agricultural Insurance Scheme (NAIS) to cover every aspect of agriculture.
Follow up Action
Various Central Sector and Centrally Sponsored Schemes are being implemented
by the Government of India and the State Governments for development of agriculture
and allied activities as per guidelines of the Agriculture Policy. Following major
initiatives have been taken to accelerate the pace of developmental activity and
implement the objectives of the Agriculture Policy:
 Macro Management Scheme has been launched after integrating 27 ongoing
Centrally Sponsored Schemes to enable a shift from programmatic approach to a
macro mangement mode of assistance to the states in the form of work plans

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 based on crop/area specific, regionally different strategies, to provide flexibility to
State Governments and to ensure timely and effective application of limited
financial resources.
 Common guidelines have been issued for National Watershed Development
Project for Rainfed Areas to harmonize the implementing norms with other
watershed development programmes. A Watershed Development Fund with a
corpus of Rs.200 crores each from NABARD and the Department of Agriculture
& Cooperation, has been created.
 A Technology Mission for the Integrated Development of Horticulture in the
North-Eastern Region has been launched.
 Seed Legislation is under revision to provide fillip to varietal research and plant
breeding. Enactment of legislation on the “Protection of Plant Varieties and
Farmers Rights”.This is likely to stimulate investment and initiative both in
public and private sector for development of new plant varieties and a vibrant
seed industry. A National Seed Policy is under formulation. A Scheme for Seed
Crop Insurance has been launched to cover the risks involved in seed production.
A Seed Bank has been established to meet contingent requirements of seed in the
wake of natural calamities.
 Increasing availability, flexibility and security in the flow of credit to the farmers.
All eligible farmers are proposed to be covered under the Kisan Credit Cards
scheme within the next 3 years. A personal insurance package is proposed to be
extended to Card Holders covering them against risk to life and injury.
 A scheme has been introduced for provision of capital subsidy for
construction/modernization and expansion of cold storages and storages for
horticultural produce.
 Rural Infrastructure Development Fund corpus has been increased in 2001-02
from Rs. 45,00,00,00 thousands to Rs.5,00,00,000 thousands and the interest rate
charged by NABARD reduced.
 Market Information Network has been launched with the objective to provide
farmers latest information on price movements of agricultural commodities and
other essential data.
 Cooperative Sector Reforms: a new Bill has been formulated and introduced in
Parliament for replacing the existing Multi-State Cooperative Societies Act,
1984.
 Formulation of new subsidy linked scheme for establishment of rural godowns.
 Promotion of Food Processing Industries and value addition in agriculture through
the excise exemptions and other interventions.
 Standing Committee of Union Ministers and Chief Ministers constituted to
consider issues concerning agricultural strategies, food management and
promotion of agriculture exports. The Committee has approved the outline of the
proposed Grain Bank Scheme which will be extended to BPL families in
identified areas and developed on the contours of the recently launched
Sampoorna Grameen Rozgar Yojana.

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