Submitted to: Prof. K.M. Joshi

Prepared by: Digesh Shah Kunal Shah Kirti Chauhan Rajesh Bhatti Mehul Makwana

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.

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.

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.

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. Addressing problems of underemployment, unemployment, poverty and malnutrition in the rural areas. Diversification of agriculture and accelerating the development of horticulture, sericulture, animal husbandry, poultry and agriculture with necessary processing and marketing backup. Encouraging efficient use of marginal land and augmentation of biomass production through agro and farm forestry. 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. Providing critical inputs to the farmers in or near their villages. Revitalizing and democratizing the cooperatives for providing credit, input, extension, super marketing and processing facilities. Increasing involvement of non-governmental organizations in agricultural development and village upliftment programmes.

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Checking fragmentation of land and redressing the ecological imbalances resulting from increasing biotic pressure on land. Creating quality consciousness among the farmers and agroprocessors and promoting standardization of agricultural products.

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 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.

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.

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.

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. The need to ensure rational utilization of land, water and other productive resources The effect of price policy on rest of the economy; particularly on the cost of living, the level of wages, etc; The terms of trade between agricultural sector and nonagricultural 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.



iv. v.

Periodic directions from Government of India for intervention by the designated public and cooperation organization, to maintain the minimum support price. 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. Use of input subsidies and product price support as complementary instruments for promoting production and holding the price line. 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 antipoverty 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.

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 ³a 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 ³rational 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 ³package 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. 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.

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 µHAATHs¶. 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.

o Crops  Intensive Cotton Development Programme (ICDP) under MiniMission-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 (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 ³State of the Indian Farmer-A Millennium Study´ o TRADE  Small Farmers¶ Agri-Business Consortium o NATURAL DISASTER MANAGEMENT  Natural Disaster Management Programme.

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 ³food-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 ³organically-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.

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