Major crops cropping patterns in various parts of the country

Cropping pattern indicates the temporal and/or spatial arrangement of crops in a particular
area.
A cropping system is a broader term than cropping pattern and includes the sum total of all
crops and the practices used to grow those crops on a field or farm. It comprises all
components, such as water, soil, technology etc. required for the production of a particular
crop and the interrelationships between them and the surrounding environment.

Significance of Cropping System

● Maintain and enhance soil fertility : Growing of different crops such as nitrogen
fixing leguminous crops enhance the nitrogen content of soil. Growing perennial
forages and millets help to enhance soil organic content.
● Minimize spread of diseases: It encourages biodiversity by providing a habitat for a
variety of insects and soil organisms.
● Inhibit pest and insect growth: It reduces the homogeneity of the farm. This
heterogeneity increases the barriers against biological dispersal of pests in the field.
● Control weed: rotation of crops is the most effective means yet devised for keeping
land free of weeds.
● Use resources more effectively: Multiple activities, if scientifically planned, lead to
better usage of resources, For example, fodder crops can be used for livestock feed,
animal dung can be used as organic manure and dairy products help to enhance
farmers income.
● Reduce risk for crop failure: Different crops have different responses to the climate
vagaries and varied degree of susceptibility to disease attack. Due to such
heterogeneity, the risk of total crop failure is reduced.
● Improved food and financial security
Factors Affecting the Cropping Pattern
The cropping pattern and crop diversification in a particular geographical area depends on
different categories of factors.
● Agronomic/Technical
○ Climate and soil type (irrigation, topography, fertility, drainage etc.)
○ Availability of required inputs (fertilizer, chemical, credit, tractors etc.)
○ Plant/seed of high genetic quality
○ Management techniques and quality managers
○ Abundance of labour of appropriate mechanical technologies
● Economic
○ Flow of market signals ' and communication and information systems
○ Venture capital and entrepreneurship
○ Transparency of input and output prices
○ Information on export standards
○ market demand and relative profitability
○ Efficient marketing systems
● Government Policy
○ Non-distortionary policy that discriminate among crops
○ Efficient research and extension programmes, without any bias for major
crops or against high value crops.
 ○ Contract-farming opportunities
○ Rural credit
○ Off-farm employment opportunities
○ Marketing systems including quality standards
○ Involvement of the private sector
Types of Cropping Systems
Mono-Cropping
Mono-cropping or monoculture refers to growing of only one crop on a piece of land year
after year. It may be due to climatic and socio-economic conditions or due to specialisation
of a farmer in growing a particular crop. For example, groundnut or cotton or sorghum are
grown year after year due to limitation of rainfall in drought areas

Multiple Cropping
It is the intensification of cropping in time and space dimensions, i.e., more number of crops
within a year. It includes mixed-cropping, intercropping and sequence cropping.

Mixed Cropping: Two or more crops grown in the same field within a given year without a
definite row arrangement. It is a common practice in most dry land tracts of India. Seeds of
different crops are mixed in certain proportions and are sown. Ex: sorghum, pearl millet and
cowpea are mixed and broadcasted in rain-fed conditions.

Inter-cropping: It includes growing two or more crops simultaneously with definite row
arrangement on the same field with an objective of higher productivity per unit area in
addition to stability in production. Requirements for successful Inter-cropping:
● The timing of peak nutrient demands of component crops should not overlap.
● Competition for light should be minimum among the component crops.
● The difference in maturity of component crops should be at least 30 days.
E.g, maize + blackgram, groundnut + redgram

Advantages of intercropping
● It leads to better use of growth resources including light, nutrients and water.
● Intercropping of compatible plants also encourages biodiversity by providing a
habitat for a variety of insects and soil organisms. This in turn can help limit
outbreaks of crop pests by increasing predator biodiversity.
● Along with suppression of weeds it causes yield stability - even if one crop fails due
to unforeseen situations, another crop will yield and give income.
● Successful intercropping gives higher equivalent yields
● It reduces pest and disease incidences and improves soil health and
agro-ecological systems.
 ●

Sequence Cropping or Sequential Cropping or Crop Rotation:

It can be defined as growing two or more crops in a sequence on the same piece of land in a
farming year. Crop variation is done with respect only to time. There is no intercrop
competition. Rice→cotton, rice→rice→pulses

Major Crops in India

Rice
● Characteristics : Staple food crop of India. Kharif Crop,
● Climatic Condition : High temperature ( above 25° C), High Humidity with average
rainfall above 100 cm,
● Plains of North and North-Eastern India, coastal areas and the deltaic regions,
Punjab, Haryana, West UP and Parts of Rajasthan (with help of irrigation)
Wheat
● Characteristics : Second most important crop, Rabi Crop
● Climatic Condition : Requires a cool growing season and a bright sunshine at
the time of ripening. Winter temperature from 10°-15° C and summer temperature
from 21°-26° C, 50-75 cm of annual rainfall evenly distributed over the growing
seasons
● The Ganga-Satluj plains in the northwest and black soil region of the Deccan.
The major wheat-producing states are Punjab, Haryana, Uttar Pradesh, Bihar,
Rajasthan and parts of Madhya Pradesh.
Millets
● Characteristics : Jowar, bajra and ragi are important millets in India. Have high
nutritional value
● Jowar is a rain-fed crop mostly grown in moist areas which hardly need
irrigation. Kharif crop
● Bajra grows well on sandy soils and shallow black soil. (Temperature- 25°-30°
C, rainfall- 40-50 cm)
● Ragi is a crop of dry regions and grows well on red, black, sandy, loamy and
shallow black soils. ( Temperature- 20°-30° C; rainfall- 50-100 cm)
● Major Jowar producing States were Maharashtra, Karnataka, Andhra Pradesh and
Madhya Pradesh.
 ● Major Bajra producing States were: Rajasthan, Uttar Pradesh, Maharashtra, Gujarat
and Haryana.
● Major ragi producing states are: Karnataka, Tamil Nadu, Himachal Pradesh,
Uttarakhand, Sikkim, Jharkhand and Arunachal Pradesh.

CLIMATE-RESILIENT GRAINS
Why in the news ?
● The United Nations General Assembly unanimously approved the resolution
sponsored by India to declare 2023 as the International Year of Millets.
○ Help in raising awareness and direct policy action to nutritional and health
benefits of millets consumption and their suitability for cultivation under
adverse and changing climatic conditions.
Millets in India
● India is the largest producer of millets in the world with a 41.0% global market share.
● During 2017-18, the maximum area under millets was in Rajasthan, followed by
Maharashtra and Karnataka.
Benefits of Millets production
● Health benefits
○ Aid in fighting malnutrition as more nutritious
○ Gluten-free which is advantageous for people suffering from diabetes
○ help prevent obesity and heart diseases
○ Millets reduce inflammation and improve digestion.
● Ecological benefits
○ sequester carbon from the atmosphere while paddy fields emit methane,
○ less water intensive.
○ hardy, drought-tolerant, and heat-resistant crops that generally do not
succumb to pests and diseases.
○ grow on low fertility soil and many of them are also grown to reclaim soils.
● Economic security
○ called ‘Famine reserves’ as they have a short growing season of 65 days
and can keep well for two years or beyond.
○ Low investment needed for production
○ High demand for export
Challenges to millet production
● Disproportionate focus on rice and wheat: . While almost a third of all major food
grains in India constituted millets during 1950-51, this reduced to only around 15%
by 2018-19, a fallout of the green revolution
● Lack of awareness: recognized as ‘coarse grains’, they are looked down upon as
part of a poor person’s diet
● Changes in dietary habits: urban Indian’s wheat consumption almost doubled,
● Lower or near absence of production support, in terms of input supply and subsidy
Government measures to promote millet production
● Integrated Cereals Development Programmes in Coarse Cereals
● inclusion of “NutriCereals” in the Public Distribution System (PDS) and
mid-day meal scheme
● continuously increasing the minimum support price (MSP) of millets
● declared 2018 as National Year of Millets.
Way forward
● The inclusion of millet-based foods in international, national and state-level feeding
programs.
● strong integration of the schemes for millet promotion with other schemes such as
introduction of locally produced millets with ICDS (integrated child development
scheme) and PDS
● use of millets in commercial/packaged food will encourage farmers to grow millets

Pulses
● The dry, edible seeds of plants in the legume family, pulses are a category of
superfoods that includes chickpeas, lentils, dry peas and beans.
● India - Largest producer (about 25%), Largest consumer(about 27%), Largest
importer (about 14 per cent) of pulses in the world
● Pulses account for around 20 percent of the area under food grains and contribute
around 7-10 per cent of the total foodgrains production in the country.
● Though pulses are grown in both Kharif and Rabi seasons, Rabi pulses contribute
more than 60 per cent of the total production.
● Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh and Karnataka are the top
pulses producing States. Gram is the most dominant pulse having a share of around
40 per cent
Challenges in Indian Pulses Industry
● High Yield Gap: pulses yield gap (yield Achieved in Experimental Lab Conditions to
the actual Farmer’s field in India) in Pigeon Pea almost 50 per cent, followed by
Green Gram 45 per cent and so on.
● Inputs related challenges: for e.g., including non-availability of location
specific/recommended HYVs quality certified seeds at all levels, inability of farmers to
access institutional credit discourage them to purchase quality inputs and adopt
improved technology.
● Production Related challenges: Pulses are prone to numerous biotic and abiotic
stresses (like mid-season cold waves and terminal heat during Rabi, micronutrient
deficiency etc), soil alkalinity, salinity, waterlogging etc.
● Cultivation on marginalised lands: Around 84% area under pulses is rain-fed with
soils relatively of low fertility.
● Ineffectiveness of MSP: Lack of assured market make pulse production less
attractive for farmers compared to other crops.
● Lack of Post-Harvest infrastructure
● Price Volatility: Pulses follow cobweb phenomenon wherein production responds to
prices with a lag, causing a recurring cycle of rise and fall in output and prices. This
phenomenon can be attributed to a number of factors, including pricing policies,
import policies, production decisions, and the weather
Government Schemes
● Integrated Schemes of Oilseeds, Pulses, Oilpalm and Maize or ISOPOM
● NFSM-Pulses
● Price Support Scheme (PSS): It is a component of the umbrella scheme Pradhan
Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) that was launched to
ensure MSP to farmers.
Maize
● used both as food and fodder. Kharif Crop
● Temperature between 21°C to 27°C and grows well in old alluvial soil. 50-100 cm
rainfall,
● Major maize-producing states are Karnataka, Uttar Pradesh, Bihar,

Pulses
● Major source of protein in a vegetarian diet. Tur (arhar), urad, moong, masur, peas
and gram. leguminous crops
 ● less moisture and survive even in dry conditions. Gram prefers 20°-25°
temperature and 40-50 cm rainfall
● Major pulse producing states in India are Madhya Pradesh, Uttar Pradesh,
Rajasthan, Maharashtra and Karnataka.
Sugarcane
● Tropical as well as subtropical crop. Main source of sugar, gur (jaggery),
khandsari and molasses.
● Hot and humid climate with a temperature of 21°C to 27°C and an annual rainfall
between 75cm and 100cm
● Can be grown on a variety of soils and needs manual labour from sowing to
harvesting
● The major sugarcane-producing states are Uttar Pradesh, Maharashtra,
Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Bihar, Punjab and Haryana.
Tea
● Plantation Crop
● Grows well in tropical and sub-tropical climates endowed with deep and fertile
well-drained soil, rich in humus and organic matter. Ideal temperature- 20°-30°
C, Requires warm and moist frost-free climate all through the year.
● Frequent showers (150-300 cm) evenly distributed over the year ensure
continuous growth of tender leaves
● Tea is a labour-intensive industry. It requires abundant, cheap and skilled
labour.
● Major tea-producing states are Assam, hills of Darjeeling and Jalpaiguri districts,
West Bengal. Tamil Nadu and Kerala. Himachal Pradesh, Uttarakhand, Meghalaya

Coffee
● Requires hot and humid climate with temperature varying between 15°-28° C and
rainfall from 150-250 cm
● confined to the Nilgiri in Karnataka, Kerala and Tamil Nadu.

Rubber
● Equatorial Crop, Also grown in tropical and sub-tropical areas
● Moist and humid climate with rainfall of more than 200 cm. and temperature
above 25°C.
● Mainly grown in Kerala, Tamil Nadu, Karnataka and Andaman and Nicobar
islands and Garo hills of Meghalaya.
Cotton
● Fibre Crop, Kharif Crop and requires 6 to 8 months to mature. Cotton grows well
in drier parts of the black cotton soil of the Deccan Plateau.
● It requires high temperature (21° -30° C), light rainfall (50-100 cm) or irrigation,
210 frost-free days and bright sun-shine for its growth.
● Major cotton-producing states are– Maharashtra, Gujarat, MP, Karnataka, Andhra
Pradesh,

Jute
● Known as Golden fibre,
● Grows well on well-drained fertile soils in the flood plains where soils are
renewed every year. High temperature is required during the time of growth
 ● Major jute producing states are West Bengal, Bihar, Assam, Odisha and
Meghalaya.

The cropping system of a region is a cumulative result of long term agricultural

practices, social customs and traditions, physical conditions, Government policies,
monetary considerations and historical factors.
The change in land use pattern and cropping pattern is vastly affected by irrigation
expansion, infrastructure development, penetration of rural markets, development
and spread of short duration and drought resistant crop technologies, rapid
urbanization.

Some of the observable trends/issues in Indian agriculture system can be seen as under:
● Dominance of food crops over non-food crops : Gradually with commercialization
of agriculture, farmers in India have started shifting areas to non-food crops
mainly due to relatively better price realization. from 76.7% during 1950-51 to
65.8% during 1999-2000.
● Variety of Crops : Horticulture crop production (305.4 MT in 2017-18) has
recently overtaken the total foodgrain (279.5 MT in 2017-18) production in India.
Besides, medicinal plants, fruits, flowers and vegetables are gradually getting
special attention due to their demand in food processing and export potential.
○ Plantation crops are highly profitable but require huge capital and large
tracts of land. Thus it is confined to limited parts of the country. Emphasis is
placed now on production of oilseeds through various initiatives like
Integrated Scheme of Oilseeds, Pulses, Maize and Oilpalm (ISOPOM).
● Dominance of cereals among food crops : About 82 percent of the area under
food crops has been put to cultivation of cereals. This is due to better prices,
less risk in production and the availability of better seeds.
● Decline in coarse cereals : Jowar, Bajra, Maize, Millets, Barley etc. are called
coarse or inferior cereals. The area under these crops to the total area under
cereal crops has declined significantly from 48 per cent in 1950-51 to about 25
per cent in 2016. due to spread of irrigation facilities, improved inputs and a shift in
consumption patterns of the people.
● Declining importance of Kharif crops : The share of Kharif has declined from 71
per cent in the 1970’s to 49 percent in 2015-16. The Kharif crops are not reliable
because they are mostly dependent on monsoon rainfall which in itself is unreliable.

Categories of Crops in India

Based on end usage
● Food Crops :
● Cash Crops : tobacco, tea, coffee, cardamom, fruits and vegetables, grains, etc.
● Plantation Crops : those crops which are usually cultivated as a single crop on an
extensive scale in a large contiguous area, owned and managed by an Individual or a
company. high value commercial crops. E.g, tea, coffee, rubber, cocoa,
● Horticulture crops : growing and caring for plants, especially flowers, fruits, and
vegetables.
Based on Seasons
● There are three distinct crop seasons namely Kharif, Rabi, and Zaid.

●
● However, this type of distinction in the cropping season does not exist in
southern parts of the country. Here, the temperature is high enough to grow
tropical crops during any period in the year provided the soil moisture is available.
Cropping Patterns in India
Different parts in India follow different cropping patterns during a year. It is largely due to
variations in physical factors, size of land holdings, market facilities, government
policies, infrastructure facilities etc.
Crop diversification and intensification depends on various factors related to:
● Soil and climatic parameters
● Resource: It covers irrigation, rainfall and soil fertility
● Technology: Varieties of seeds, cultural requirements, mechanization, plant
protection, and access to information etc.
● Infrastructure facilities: Irrigation, transport, storage, trade and marketing,
post-harvest handling and processing etc.
● Condition of Household: Food and fodder self-sufficiency requirement as well as
investment capacity
● Socio-economic conditions: Financial resource base, land ownership, size and
type of land holding, household needs of food, fodder, fuel, fibre and finance, labour
availability etc.
● Pricing Structure: It includes output and input prices as well as trade policies and
other economic policies that affect these prices either directly or indirectly.
● Institutions: It covers farm size and tenancy arrangements, research, extension and
marketing systems and government regulatory policies.

Major Agricultural Regions or Zones of India

Rice region
● Rice is considered as the major crop in the vast region stretching from lower
Gangetic plain to Brahmaputra valley in the east and the circum-coastal alluvial tracts
of the peninsula region.
● Rice-Jute-Tea: This association of crops occurs in the far east, near Assam Valley,
north-west Bengal and lower Gangetic plains.
● Rice-Pulses-Millets-: This association occurs in the western section of the former
zone, covering central Bihar, eastern Madhya Pradesh and eastern Uttar
Pradesh.
 ● Rice-Millets: This zone comprises the entire Andhra Pradesh, southern Orissa
and some parts of Tamil Nadu.
● Rice-Coffee-Spices: This zone is found in the southern extremity of Kerala and
Tamil Nadu
Wheat region
● Wheat-Maize-Sugarcane: This region comprises a great part of wheat regions,
covering West Uttar Pradesh, Himachal Pradesh and Jammu.
● Wheat-Jowar-Bajra in Indus Plain covering Punjab and Haryana.
● Wheat-Jowar-Bajra in Vindhyan scarp land and Malwa Bundelkhand plateau.
Jowar-Bajra Region
This crop combination is practised in drought prone regions (rainfall 50-100 cm).
● Jowar-Cotton in Maharashtra.
● Jowar-Cotton-Oilseeds-Millets in Karnataka and Maharashtra.
● Jowar-Wheat in Rajasthan, Haryana and some parts of Uttar Pradesh.
● Bajra-Jowar-Pulses in Rajasthan desert and semi-desert areas

Cotton Region
● Cotton cultivation predominates in the black cotton soil (regur) region in North
West India. It covers the Deccan trap region and Gujarat plain. The Narmada,
Tapti, Purna, Sabarmati River Valleys are basically heartlands of cotton cultivation.
As a cash-crop, cotton cultivation is always associated with one food grain
cultivation, preferably Jowar, Bajra or oil seeds.
● Cotton-Jowar-Bajra grows in close association with one another in Maharashtra
and Western Madhya Pradesh.
● Cotton-Oilseeds combination developed in Gujarat
Millet-Maize Region
● The cultivation of millet, maize and ragi are found in close association with other
major cereals like bajra, wheat, rice etc.
● Maize cultivation dominates in Rajasthan, Gujarat, and Madhya Pradesh.
● In Himachal Pradesh, Maize-Barley-wheat combination has developed,
particularly in the foothills of the Himalayas.

Fruit & Spice Region

smallest region among the different crop regions. High-altitude hilly areas come under the
territory of this region. The ‘Duns’ and valleys in Himalayas, foothills of Nilgiri,
Annamalai, Palni and Cardamom hills in Tamil Nadu and Kerala may be classified as
fruit and spice regions. Here, the dominant agricultural activity is fruit orchards and
plantations.

Agro-ecological/climatic zoning (AEZ)

It defines zones on the basis of combinations of soil, landform and climatic
characteristics. Each zone has a similar combination of constraints and potentials for
land use and serves as a focus for the targeting of recommendations designed to
improve the existing land-use situation, either through increasing production or by limiting
land degradation.
India has seen significant progress towards increasing production, yield levels and
crop diversification in the last three decades. Still, the agricultural productivity in
India is among the lowest in the world. In this context, analyse the reasons for low
productivity and suggest some measures to improve the same.

India ranks second worldwide in farm outputs. As per 2018, agriculture employed
more than 50℅ of the Indian work force and contributed 17–18% to country's GDP.
According to the latest report, agriculture is the primary source of livelihood for 58% of
the population in India.

At 157.3 million hectares, India holds the world’s second largest agricultural land area. It has
about 20 agro-climatic regions, and all 15 major climates in the world exist here. Consequently, it
is a large producer of a wide variety of foods. India is the world’s largest producer of spices,
pulses, milk, tea, cashew and jute, and the second largest producer of wheat, rice, fruits and
vegetables, sugarcane, cotton and oilseeds. And while it may be second in global production of
fruits and vegetables. Agricultural export constitutes 10% of the country’s exports.

Although India has attained self-sufficiency in food staples, the productivity of its farms is
below that of Brazil, the United States, France and other nations. Indian wheat farms, for
example, produce about a third of the wheat per hectare per year compared to farms in
France. Rice productivity in India was less than half that of China.
Indian total factor productivity growth remains below 2% per annum; in contrast,
China's total factor productivity growth is about 6% per annum, even though China
also has smallholding farmers. Several studies suggest India could eradicate its hunger
and malnutrition and be a major source of food for the world by achieving productivity
comparable with other countries.
The low productivity in India is a result of the following factors:
● The average size of land holdings is very small (less than 2 hectares) and is
subject to fragmentation due to land ceiling acts, and in some cases, family
disputes. Such small holdings are often over-manned, resulting in disguised
unemployment and low productivity of labour. Some reports claim smallholder
farming may not be the cause of poor productivity, since the productivity is higher in
China and many developing economies even though China smallholder farmers
constitute over 97% of its farming population.
● Adoption of modern agricultural practices and use of technology is inadequate
in comparison with Green Revolution methods and technologies, hampered by
ignorance of such practices, high costs and impracticality in the case of small
land holdings.
● India's large agricultural subsidies are hampering productivity-enhancing
investment. According to a neo-liberal view, over-regulation of agriculture has
increased costs, price risks and uncertainty because the government intervenes
in labour, land, and credit markets. India has inadequate infrastructure and
services.
● The World Bank also says that the allocation of water is inefficient, unsustainable
and inequitable. The irrigation infrastructure is deteriorating.
● Illiteracy, general socio-economic backwardness, slow progress in
implementing land reforms and inadequate or inefficient finance and marketing
services for farm produce.
 ● Irrigation facilities are inadequate, as revealed by the fact that only 52.6% of the
land was irrigated in 2003–04
● A third of all food that is produced rots due to inefficient supply chains and the
use of the "Walmart model" to improve efficiency is blocked by laws against
foreign investment in the retail sector.

Food grain constitutes 64 percent of the gross cropped area (GCA), although it
accounts for less than 25 percent of the total value of output of agriculture and allied
activities. Give reasons for this existing imbalance in the current cropping pattern of
food grains in India and steps needed to correct such an imbalance.

Reasons of imbalance in Crop Pattern:

● Prices of food grains have been rising quite fast and the farmers have started
growing food crops in the similar way they grow commercial crops like cotton, oil
seed crops, sugarcane etc.
● Cultivation of food grains has become highly remunerative and productive
under the influence of new technology.
● Minimum Support Prices for wheat and rice have been maintained reasonably high
● Lack of market and storage facilities for horticultural products
● Absence of stable price regime for horticultural products
Various steps taken by government
● Government through National food security mission focussed on increasing
production of pulses, which India has been importing
● Oil seed production has also been emphasized under the National mission on
oilseed and oil palm.
● National horticulture Mission for promoting horticultural products.
Despite favourable demand and supply factors as well as high rate of return,
diversification towards horticulture crops has been slow. Examine. What steps are
required to achieve the potential of this sector?
Horticulture offers high rate of returns as:
● Fruits and vegetables give 4-10 times the return from other crop groups
namely cereals, pulses and oilseeds.
● A one per cent shift in area from non-horticultural crops to horticultural crops
adds 0.46 percentage points to the growth rate of the agriculture sector.
The higher rate of returns from horticulture is also backed by favourable demand and supply
factors. For example -
● Due to changes in taste, preferences and food habits, the consumption pattern
in India has been shifting towards fruits and vegetables.
● Increasing incomes - increase in demand for fruits and vegetables.
● India’s import of fruits is rising by 20 per cent per year. All these indicators
suggest that demand side prospects for fruits and vegetables are very bright.
 ● Technological developments in horticultural crops have facilitated some
diversification.
Despite these factors the area under horticulture crops in the country has remained
below 10 per cent. The major constraints for the growth in horticultural crops are:
● System of Marketing - with smaller size land holdings -> such farmers are severally
constrained by scale factor in marketing of produce.
● Inadequate processing facilities - Being perishable, these crops cannot be stored
at home to make an economical lot for taking to market. And if not sold, it results in
big post harvest loss
● Other constraints include very high growth in horticultural imports, large price
spread between producers and end users, frequent and often violent price
fluctuations, low level of processing, and very low post harvest value addition.
Various steps that are required in order to achieve the potential of this sector are as follows:
● Institutionalize cooperatives – It will help small growers to trade their produce in
the market as combined harvest will be sufficient to trade in markets.
● Provide favorable market conditions - It is needed to give complete freedom to
producers and buyers for sale/purchase throughout the country and take
horticulture produce out of the purview of APMC act.
● Development of modern value chain - If the sector is deregulated then many
innovative vegetable and fruit sellers in urban areas will be attracted to develop
back-end linkage to get direct supply from the producers.
● Free marketing – It will also attract large investments from the private sector as
happened in the case of milk production.

Problems with current cropping pattern:

● In India, there is an existing imbalance in the cropping pattern of the food grains
because a large proportion of the area under food grains is occupied by rice
and wheat.
● Cultivation of food grains has become highly remunerative and productive
under the influence of new technology and reasonably high Minimum Support
Prices for wheat and rice.
● There has been a change in the consumption pattern and people have moved
from coarse cereals to wheat and rice for their main dietary grain.
● Constant increase in the production of rice and wheat with little emphasis on
other cereals. This is the result of government's procurement at MSP, example
being Punjab
● Cultivation of water intensive crops despite low groundwater levels.
● Use of excess quantities of fertilizers without considering the existing soil quality
● Indiscriminate use of pesticides and insecticides resulting in water pollution and
reduction in soil fertility.
● Use of HYV which require high cost inputs
The Green Revolution which focused on cereals alone, combined with the MSP
regime in favor of cereals has skewed the cropping pattern, although a shift is being
witnessed towards other commercial crops and horticulture. Also, there is a strong need to
shift towards Integrated Farming Systems combining several enterprises like cropping
system, dairying, piggery, poultry, fishery, apiculture, etc. in a harmonious way. It would
also give a strong boost in achieving the much cherished vision of doubling the farmer's
income in the next 5 years.
Different types of irrigation and irrigation systems storage
For growing crops, irrigation is a major process. Irrigation is described as the artificial
application of water to the land or soil. It is used in dry areas and during periods of
insufficient rainfall. It is considered as basic infrastructure and vital input required for
agricultural production.
Agriculture that relies only on direct rainfall is referred to as rain-fed or dry-land farming.
In brief, irrigation also has many applications in crop production, which include:
● growing of agricultural crops and vegetation by maintaining with the minimum
amount of water required.
● maintenance of landscapes, and revegetation of disturbed soils.
● also used for dust suppression, removal of sewage
● Protecting plants against frost
● Suppressing weed growth in grain fields
● Preventing soil consolidation.

Types of Irrigation techniques in India

In India, the irrigated area consists of about 36 per cent of the net sown area. Irrigation in
India is done through wells, tanks, canals, perennial canal, and multi-purpose river valley
projects.
Well & Tube Irrigation
● Wells are mainly found in U.P., Bihar, Tamil Nadu, etc. There are various types of
wells – shallow wells, deep wells, tube wells, artesian wells, etc. From the shallow
wells water is not always available as the level of water goes down during the dry
months. Deep wells are more suitable for the purpose of irrigation as water from
them is available throughout the year.
● At places where groundwater is available, a tube-well can be installed near the
agricultural area. A deep tube well worked by electricity, can irrigate a much larger
area (about 400 hectares) than a surface well (half hectares). Tube wells are
mostly used in U.P., Haryana, Punjab, Bihar and Gujarat.
● Merits: Well is simplest, cheapest and independent source of irrigation and can be
used as and when the necessity arises. Several chemicals such as nitrate, chloride,
sulphate, etc. found in well water add to the fertility of soil. More reliable during
periods of drought when surface water dries up.
● Demerits: Only limited areas can be irrigated. In the event of a drought, the ground
water level falls and enough water is not available. Tubewells can draw a lot of
groundwater from its neighbouring areas and make the ground dry and unfit for
agriculture.
Canal Irrigation
● Canals can be an effective source of irrigation in areas of low level relief, deep
fertile soils, perennial source of water and extensive command area. Therefore,
the main concentration of canal irrigation is in the northern plain of India,
especially the areas comprising Uttar Pradesh, Haryana and Punjab.
● The digging of canals in rocky and uneven areas is difficult and uneconomic. Thus,
canals are practically absent from the Peninsular plateau area. However, the
coastal and the delta regions in South India do have some canals for irrigation.
● Two types: Inundation canals, which are taken out from the rivers without any
regulating system like weirs etc. at their head. Such canals provide irrigation mainly
in the rainy season when the river is in flood and there is excess water. Perennial
Canals are those which are taken off from perennial rivers by constructing a barrage
across the river. Most of the canals in India are perennial.
● Merits: Most of the canals provide perennial irrigation and supply water as and
when needed. This saves the crops from drought conditions and helps in increasing
the farm production.
● Demerits: Many canals overflow during the rainy season and flood the surrounding
areas. Canal irrigation is suitable in plain areas only.
Tank Irrigation
● A tank is developed by constructing a small bund of earth or stones built across a
stream. The water impounded by the bund is used for irrigation and other purposes.
Tank comprises an important source of irrigation in the Karnataka Plateau, MP,
Maharashtra, Odisha, Kerala Bundelkhand area of UP, Rajasthan and Gujarat.
 ● Merits: Most of the tanks are natural and do not involve heavy cost for their
construction and have longer life span. In many tanks, fishing is also carried on,
which supplements both the food resources and income of the farmer.
● Demerits: Many tanks dry up during the dry season and fail to provide irrigation
when it is required. Lifting of water from tanks and carrying it to the fields is a
strenuous and costly exercise.
Furrow Irrigation
● Furrow irrigation is a type of surface irrigation in which trenches or “furrows” are dug
between crop rows in a field. Farmers flow water down the furrows and it seeps
vertically and horizontally to refill the soil reservoir. Flow to each furrow is individually
controlled.
● One of the difficulties of furrow irrigation is ensuring uniform dispersion of water
over a given field. Another difficulty with furrow irrigation is the increased potential
for water loss due to runoff.
Drip Irrigation
● In drip irrigation, water is applied near the plant root through emitters or drippers,
on or below the soil surface, at a low rate varying from 2-20 liters per hour. The
soil moisture is kept at an optimum level with frequent irrigations.
● Among all irrigation methods, drip irrigation is the most efficient and can be
practiced for a large variety of crops, especially in vegetables, orchard crops,
flowers and plantation crops.
● Merits: Fertilizer and nutrient loss is minimized due to localized application and
reduced leaching. Field leveling is not necessary. Recycled non-potable water can
be used. Water application efficiency increases. Soil erosion and weed growth is
lessened.
● Demerits: Initial cost can be more, can result in clogging, wastage of water, time
and harvest, if not installed properly.
Sprinkler Irrigation
● In this method, water is sprayed into the air and allowed to fall on the ground
surface somewhat resembling rainfall. The spray is developed by the flow of water
under pressure through small orifices or nozzles. The sprinkler irrigation system is
a very suitable method for irrigation on uneven lands and on shallow soils.
● Nearly all crops are suitable for sprinkler irrigation systems except crops like paddy,
jute, etc. The dry crops, vegetables, flowering crops, orchards, plantation crops like
tea, coffee are all suitable and can be irrigated through sprinklers.
● Merits: Suitable to all types of soil except heavy clay. Water saving. Increase in
yield. Saves land as no bunds etc. are required.
● Demerits: Higher initial cost. Under high wind conditions and high temperature
distribution and application efficiency is poor.

Micro-Irrigation : The way ahead for sustainable agriculture

 ● India is facing the twin challenge of water scarcity and population explosion. The
ongoing water crisis has affected nearly 600 million people and is expected to only
worsen: The country’s population is touted to increase to 1.6 billion by 2050.
● India is home to 16% of the world’s population but has only 4% of the world’s
freshwater resources.
● Moreover, the country uses 2-3 times more water than major agricultural countries
such as China, Brazil, and the USA to produce one unit of food crop.
● The agriculture sector is the largest consumer of water in India. It accounts for
approximately 90 percent of ground water withdrawal.
● Climate change too has aggravated water scarcity concerns: It can, through its
impact on weather patterns, affect livelihoods and well-being of our farming
community.
● The impact of climate change is much more evident in Indian agriculture, where
around 85 per cent farmers are small and marginal and 60 per cent agriculture is
dependent upon the vagaries of monsoon. The role of irrigation, therefore, takes the
front seat.
● The continued irrigation through traditional practices since the introduction of Green
revolution in the 1960’s, however, has begun to show its multitudinous ill effects on
groundwater quality and height, water logging, soil salinity, soil health, crop
productivity, partial factor productivity and cost economics of farm practices.

Micro-Irrigation

● Micro-irrigation is a low-pressure, low-flow-rate type of irrigation that can reduce the

likelihood of overwatering a landscape. This form of irrigation delivers water directly
to where it is needed most-the root zone of plants and also delivers the water
slowly and over a longer period of time, preventing runoff and reducing
evaporation.
● E.g, Drip Irrigation
● Micro-irrigation can increase yields and decrease water, fertiliser and labour
requirements. By applying water directly to the root zone, the practice reduces loss
of water through conveyance, run-off, deep percolation and evaporation.
● These losses are unavoidable in traditional irrigation practices; micro-irrigation,
through its water-saving approach, has paved the way for higher water use efficiency
of around 75-95 per cent.
● Another resource saving practice possible through micro-irrigation is fertigation,
which comprises combining water and fertiliser application through irrigation.
Fertigation results in balanced nutrient application, reduced fertiliser requirement of
around 7 to 42 per cent (thus, saving expenditure cost incurred by farmer), higher
nutrient uptake and nutrient use efficiency.
● Energy Efficiency: Micro irrigation requires minimum pressure and low flow rate
only. Hence, this ensures energy consumption saving up to 30.5%.
● Irrigation cost saving: This technology reduces the overall cost of irrigation due to
decrease in labour requirement for irrigation, weeding and fertilizer application.
 ● Brings degraded land under cultivation:It is quite apparent that in the present
scenario, vertical expansion of agricultural lands is not possible. Therefore, in order
to increase the yield and productivity, we have to focus on degraded and waste
lands. Micro-irrigation provides this opportunity.

Way Forward

● Micro-irrigation practice needs wide scale adaptation in India, particularly in the

Indo-Gangetic plains where the soil salinity is high.
● Israel can be a good example — a desert nation with water scarcity has become a
water surplus nation because it adapted micro-irrigation practises, especially drip
irrigation that saves almost three-fourths of the water used for irrigation done
through open canals.
● Significant electricity savings — on an average 30.5 per cent — have been estimated
and high fertilizer-use efficiency reported, resulting in an average consumption
reduction of 28.5 per cent, according to a Federation of Indian Chambers of
Commerce and Industry report.
● Another advantage is maintenance of optimum soil moisture conditions that help
increase overall productivity and profitability.

PM Krishi Sichayee Yojana

● PMKSY is a Centrally Sponsored Scheme (Core Scheme) launched in 2015 with

implementation share of Centre- States in 75:25 per cent and in the case of the
north-eastern region and hilly states it will be 90:10.
● formulated by amalgamating 4 different schemes namely Accelerated Irrigation
Benefit Programme (AIBP) of Ministry of Jal Shakti; Integrated Watershed
Management Programme (IWMP) of Department of Land Resources; and
On-Farm Water Management (OFWM) component of National Mission on
Sustainable Agriculture (NMSA) of Department of Agriculture and Cooperation.
● PMKSY is to be implemented in an area development approach, adopting
decentralized state-level planning and execution.
● Launched in 2015 with the motto of “Har Khet Ko Paani”, the scheme aims to provide
end-to-end solutions in the irrigation supply chain (water sources, distribution
network and farm-level applications).
● The scheme focuses on creating sources for assured irrigation and protective
irrigation by harnessing rainwater at micro level through ‘Jal Sanchay’ and ‘Jal
Sinchan’.
 ● One of the most crucial components of the initiative is “Per Drop More Crop”. It
focuses on micro-irrigation systems (sprinkler, drip, pivots, rain-guns, etc.) to
promote precision farming by making water available in a targeted manner to the
root zone of crops.
● The Government has created a dedicated Micro Irrigation Fund with NABARD.
● This fund aims to facilitate the States in order to mobilize the resources for
expanding coverage of Micro Irrigation in the country.
● Integrated Watershed Management Programme
○ Run off management and water harvesting
○ Improved soil and moisture conservation
○ Converging with NREGA for creation of water sources
○ Renovation of water bodies

Challenges Faced by micro irrigation

● Energy crisis due to power outages and unscheduled interruptions across

rural and urban India: This problem may be solved by integrated drip irrigation with
a solar panel system which is considered as the best option for off-grid farmers.
● Expensive micro irrigation: Most of the adopters are wealthier farmers and poor
farmers cannot afford it. This problem is resolved by inventing low cost systems by
different agencies. International Development Enterprises (IDE), an NGO is actively
working in Maharashtra and Gujarat to innovate low cost micro irrigation systems and
create awareness among poor farmers.

ACCELERATED IRRIGATION BENEFITS PROGRAMME (AIBP)

● being implemented by the Ministry of Jal Shakti.

● launched the AIBP in the year 1996-97 to provide Central Assistance to
major/medium irrigation projects in the country.
● Objectives:
○ To accelerate implementation of such projects which were beyond the
resource capability of the states.
○ To focus on faster completion of ongoing Major and Medium Irrigation
including National Projects.
● Since its inception, 297 Irrigation / Multi-Purpose Projects have been included for
funding under AIBP.
● Shortcomings in AIBP
○ deficiencies in preparation and planning of Detailed Project Reports (DPRs)
like Inadequate surveys, Inaccurate assessment water availability
○ Deficiencies in financial management: non/short release of funds, delay in
release of funds at various levels
○ Instances of diversion of funds, short or non-realisation of revenue, tardy
implementations of projects
○ Deficiencies in monitoring: Lax monitoring by the central and state agencies is
also a major problem.

Way ahead
 ● Changes in implantation of the projects: The deficiencies in preparing and processing
of DPRs such as delays, inadequate surveys, and inaccurate assessment of
command area should be rectified.
● Transparency and Accountability : The PAC has advised that more DPRs of the
projects being implemented under AIBP should be open for audits
● Improving monitoring of the scheme: use of satellite imagery and field reports,
Strengthening the participatory model of irrigation through Water Users Associations
● Fiscal Management : strict actions on instances of short/non- realisation of revenue
○ A uniform parameter for calculation of CB ratio should be adopted.

Watershed Management

Rainfed Area Development Programme

● as a sub-scheme under Rashtriya Krishi Vikas Yojana (RKVY).
● Increasing agricultural productivity of rainfed areas in a sustainable manner by
adopting appropriate farming system based approaches.
● Enhancement of farmer’s income and livelihood support for reduction of poverty in
rainfed areas.
Rainfed areas account for nearly 57 per cent of the agricultural land in India. These areas
assume special significance in terms of ecology, agricultural productivity and livelihoods for
millions. With proper management, rainfed areas have the potential of contributing a larger
share to food grain production.
The basic endeavour of this programme is to encourage exploitation of different farming
systems based on the natural resource endowments created by the farmer or by schemes
like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Rashtriya
Krishi Vikas Yojana (RKVY), National Horticulture Mission (NHM).
This would reduce the risk of crop losses due to weather vagaries, harness efficiency of
resources, assure food and livelihood security etc.
The strategy would focus on multi-cropping, rotational cropping, inter-cropping,
mixed-cropping along with allied activities that include horticulture, livestock etc.
To do this the programme will focus on –
● Minimum tillage practice,
● Support of existing income generating activities like fisheries, agriculture,
mushroom etc.
● Conducting complementary activities like construction of ponds, land treatment,
wells, supply of pumps etc,
 ● Adoption of a cluster approach to utilize the potential of available or created
common resources,
● Support for value addition and storage structures to facilitate better returns for farm
produce.

Transport and Marketing of Agriculture Produce and Issues and

Agriculture is best served by reliable high urban, and international, demand. Agricultural
commodities produced have to go through a series of operations such as harvesting,
threshing, winnowing, bagging, transportation, storage, processing and exchange before
they reach the market, and as evident from several studies across the country. There are
considerable losses in crop output at all these stages. This is best brought about by an
efficient, high volume, transport and marketing system where the transporting and
marketing unit costs are low. If the margin between what the farmer receives from the sale
of his produce and what the urban consumer pays for his produce is high then the effective
demand transferred to the farmer will correspondingly be reduced. Likewise, if internal
transport costs in a country are considerably high then the scope for agricultural exports will
also suffer as compared to other more efficient countries.
For distribution of agriculture produce, road transport has a vital role because it is the major
means of transporting agricultural produce from the farms to the markets as well as to
various urban communities. It is the only means by which food produced at farm location is
transported to different homes as well as markets. Transport creates a market for
agricultural produce, improves interaction among geographical and economic regions and
opens up new areas to economic focus.
There are many issues and constraints associated with transportation of agricultural
produce. If transport services are uncommon, of poor quality or expensive than
agriculturalists will be at a disadvantage when they try to sell their crops. An expensive
service will naturally lead to low farm gate prices (the net price the farmer receives from
selling his produce).
Agricultural marketing system is described as a physical and institutional set up to perform
all activities involved in the flow of products and services from the point of initial
agricultural production until they are in the hands of ultimate customers.
This includes assembling, handling, storage, transport, processing, wholesaling, retailing
and export of agricultural commodities as well as accompanying supporting services such
as market information, establishment of grades and standards, commodity trade, financing
and price risk management and the institutions involved in performing the above functions.
Objectives of an efficient marketing system:
● To enable farmers to get the best possible returns.
● To provide facilities for selling the produce at an incentive price.
● To reduce the price difference between the primary producer and ultimate consumer.
● To make available all products of farm origin to consumers at reasonable price and
within reasonable time.
The Peculiar Characteristic of Agriculture Produce are:
● Bulkiness, Perishability, Wide Varietal Differences, Dispersed Production,
Processing need for consumption, Seasonality,
Selling of agriculture products depends upon Demand of product and Availability of storage.
Agricultural marketing in Indian Context
Facilities needed for efficient agricultural marketing
● Proper storing facilities.
● Holding capacity to wait till best prices are fetched.
● Adequate and cheap transport facilities so that farmers are able to reach Mandi
rather than disposing of it at his village only.
● Clear and timely information about the market prices so that he is not cheated.
● Organized and regulated markets so that he is not ripped off by Dalals and Adhtiyas.
As small as possible, the number of intermediaries.

One of the primary reasons for the stagnated growth(2-3% in the last decade) in the
agriculture sector is ‘Poor Agricultural Marketing’.
Agricultural Marketing
Commercial functions involved in transferring agricultural products from producer to
consumer. It includes storage, transport, processing and transferring ownership at various
levels of marketing channels.
Currently, considerable regional variations in forms of marketing across India
● Traditional Marketing Methods : Close to 50% of the agri-produce in India is sold
through these channels. Used mainly by marginal farmers, it gets only 15-20% of
the price paid by the final consumers.
○ Rural Primary Market : From farmers to traders via haats, Mandis etc.
○ Wholesale and Terminal market : from trader to consumer through wholesale
markets like mandis administered by APMCs.
● APMCs : a statutory market committee constituted by the state government in
respect of trade in certain notified agricultural products, under the APMC Act, 2003.
○ Part of the wholesale marketing system. Objectives : Increasing
transparency in the pricing systems, providing extension service to farmers,
value addition, data generation for agri-market information systems.
○ Facilities : auction halls, warehouses, soil testing labs, etc.
● Cooperative based Marketing : agri-produce directly procure from farmers through
the marketing network of NAFED(apex body of the cooperative marketing system),
thus eliminating middlemen. E.g, Anand Cooperative, Kerala Horticulture
Development Programme
● Emerging Models of agricultural marketing :
○ National Agriculture Market(e-NAM) : pan-India electronic trading portal
which networks the existing mandis to create a unified national market for
agricultural commodities.
○ Creation of FPOs : economies of scale for small producers and improved
bargaining power vis-a-vis the bulk buyer of produce and bulk supplier of
inputs
○ Contract Farming : an agreement between a buyer and farmers, which
establishes production and marketing conditions for farm products. E.g,
contract farming by PepsiCo India in potato, tomato, groundnut in Punjab
○ Commodities and Futures Market : for better price discovery for farmers. E.g,
National Spot Exchange Ltd.
○ Private Sector Initiatives : several startups and businesses have created
innovative solutions for agricultural markets. E.g, ITC’s e-choupal - set up a
 small internet kiosk at the village level to provide farmers real time market
and pricing related information
Necessity of a well functioning Agricultural Market
● Monetizing the produce : sale of agri-produce, integrates agriculture with the national
economy, promote competitive trade, supply agri-produce for FPIs, better realisation
of prices for the farmers
● Acting as a source of market information and price signals : like the demand of
particular product gives signal to the farmers about what to produce in how much
quantity and quality,
○ provides information that helps the supply chain to become efficient by
indicating logistical and infrastructural weaknesses such as post harvest
and storage losses.
● Reducing the role of intermediaries : replaced by institutional mechanisms or
structures leading to increasing economic efficiency and better remuneration to
farmers
● Capital formation and investment in technology : as efficient marketing increases
the growth potential in the sector, which increases investment and penetration of
better technologies in the sector
● Value addition in agriculture : Robust marketing systems provide access to
agri-produce to the FPIs, creating potential for large scale value addition.
● Growth, food security, employment.

Issues faced by the Agri-market in India

● Institutional Issues :
○ Licensing Barriers : compulsory requirement of owning a shop/godown for
licensing of commission agents/traders in the regulated markets has led to
the monopoly of certain licensed traders. Major entry barrier for new
entrepreneurs -> Cartelization & preventing competition
○ High incidence of market charges : by APMCs, as large as 15% of the value
of sale produce
○ Absence of standardised grading mechanism : hindering farmers from
fetching the prices commensurate with the quality of their produce
● Infrastructural Issues :
○ Limited access of Agri-produce Markets : due to a huge variation in the
density of regulated markets in different parts of the country
○ Poor infrastructure in Agricultural markets : lack of cold storage, drying
yards, grading facilities
● Market Information System Issues
○ Lag in demand signals : absence of efficient real time information channels
create a lag in demand signals
○ Limited information channels and contents : currently only in APMCs and
paper, thus inaccessible to illiterate farmers
○ Poor awareness about new channels of information
● Absence of a National Integrated Market
● Limited public investment
Initiatives by Government to overcome these issues
 ● AGMARKNET : G2C e-governance portal, provides agriculture related information
from a single window
● GrAM : developing and upgrading existing 22,000 rural haats into GrAMs. Several
features like
○ Physically strengthened infrastructure enabled through MGNREGA and other
schemes along with better road linkages with habitations
○ Linked to e-NAM , outside the APMC Act regulation
● Initiatives like Kisan Rail for movement of vegetables, fruits and other perishables.
Safe, reliable and fast transportation -> better price realisation for farmers
● Scheme for formation and promotion of FPOs : 10, 000 target by 2023-24,
handholding support to each FPOs
● PM Gram Sadak Yojana, PM Kisan SAMPADA Yojana, Mega Food Park Scheme,
Agri-infrastructure Development fund

How far can the recently enacted Agri-Reform Legislations solve these issues?
● Checking monopolies : Farmers Produce Trade and Commerce(Promotion &
Facilitation) Act, 2020 allows intra-state and inter-state trade of farmers’ produce
outside the APMC controlled areas -> freedom of choice of sale and purchase of
agri-produce -> ending the monopoly exercised by traders and other intermediaries
within the APMCs. E.g, a turmeric farmers now could sell her produce to Big Basket
in Delhi, without any trader commission
● Idea of one Nation, One Agri-market : Abolition of market fee for trading outside the
APMCs, electronic trading of agri-produce -> enable farm surplus to be traded
across India thus creating integrated agri-market
○ Currently agri-market very fragmented creating mismatch between local
demand and supply
● Encouraging private sector participation : Farmers (Empowerment and Protection)
Agreement on Price Assurance and Farm Services Act,2020 provides the legislative
framework needed to boost contract farming. Encourage direct participation of
private players in agri-production and direct link between farmers and FPIs
● Better inventory management of Agri-produce : EC(Amendment) Act removes
previous restriction on hoarding of food commodities by the government, thus
leading to better inventory management system and lesser interference by
authorities.
● Improve price discovery and realization for farmers : Contract farming -> provide a
ready market for growers for their produce and ready access to raw materials for the
entrepreneurs. It will transfer the risk of unpredictability from the farmer to the
sponsor. Reduce cost of marketing for farmers
● These reforms may act as a catalyst to attract investment for building supply chains
for supply of Indian farm produce to national and global markets, and in agricultural
infrastructure, accelerate growth in the cold storage, warehousing and processing
sector.
● May lead to increased access to high quality seeds, better technology, fertilisers
and pesticides
Major concerns against these reforms
 ● Dual Regulation : artificial distinction between ‘market areas’ and ‘trade areas’
● Impact on APMCs : trade areas have a clear regulatory advantage over market areas
vis-a-vis the mandi tax -> collapse of the APMC system
● Loss of revenue for state governments : due to losing of mandi tax
● No recognition to verbal contracts : According to the reforms, companies aren’t
required to have a written contract with the farmers, may lead to exploitation
● Danger of hoarding activities

Way Forward
Recommendation of Ashok Dalwai Committee
● Reform in APMCs : the present system of licensing of traders/commission agents
could be substituted with a modern and progressive system of registration with
open and transparent criteria for registration. E.g, facilitating online registration via
e-NAM.
○ Appointing independent regulator for market operation and capacity building
of existing personnel for efficient management of APMCs
○ Encouraging private sector participation in APMCs : provisions for setting up
of private wholesale markets, giving exemption on land ceiling to private
agriculture markets.
● Creating a National Integrated Market via strengthening e-NAM
○ Encouraging involvement of FPOs and other intermediaries through
incentives and awareness generation
○ Learning from best practices across the globe : E.g, electronic markets in
China
○ Generating trust in the quality of agri-commodities traded on the platform :
via a 3rd party assessment certification at the central level.
● Promotion of investment in Marketing Infrastructure Development
○ Long term national policy on storage and movement of agricultural produce
○ Investment in marketing infrastructure under RKVY can be Increased to
10-15% of RKVY spending.
○ PPP model for infrastructural development
● Creating more robust Information Dissemination System
○ Popularizing more accessible methods of information dissemination like self
operable kiosks at CSCs, mobile based advisories and relevant TV, radio
programmes
○ Broader information needs : from mere prices to trends, comparisons,
schemes, input suggestions etc.
● Promote contract farming : District level authority may be set up for registration of
contract farming and no market fee should be levied under it.
● Grading and Standardization : infrastructure for labs, trained manpower
● More consistent Export-Import policy
Indian Agriculture is moving from commoditization to commercialization, which demands
that the agriculture sector now be looked through the marketing lens.
Farmers Produce Trade and Commerce(Promotion and Facilitation) Act, 2020
● Allows intra-state and inter-state trade of farmers’ produce outside the premises of
market yards run by market committees formed under the state APMC Acts
● Electronic trading : permits the electronic trading of Scheduled farmers
produce(agri-produce regulated under any state APMC Act) in the specified trade
area,
● Market Fee abolished : prohibits state government from levying any market fee, cess
or levy on farmers, traders and electronic trading platforms for trade of farmers’
produce conducted in an outside trade area.

Farmers(Empowerment & Protection) Agreement on Price Assurance and Farm Services

Act, 2020
● Provides for a farming agreement between a farmer and a buyer prior to the
production or rearing of any farm produce. Minimum period of agreement : one crop
season or one production cycle of livestock
● Pricing of farming produce : should be mentioned in the agreement. For prices
subject to variation, a guaranteed price and a clear reference for any additional
amount above the guaranteed price must be specified in the agreement
● Dispute Settlement : agreement must provide for a conciliation board as well as a
conciliation process for settlement of disputes. If the dispute remains unresolved by
the Board after thirty days, -> Sub-divisional magistrate for resolution -> appeal to an
appellate authority(presided by collector)
● Under no circumstances, any action can be taken against the agricultural land of
farmer for recovery of any dues
Essential Commodities (Amendment) Act, 2020
● Removes the regulation of supply of certain food items including cereals, pulses,
potatoes, onions, edible oilseeds, and oils, except only under extraordinary
circumstances like war, famine, extraordinary price rise, and natural calamity of grave
nature.
● Imposition of any stock limit on agriculture produces only a price rise. 100% increase
in retail price of horticultural produce and 50% increase in retail price of
non-perishable agricultural food items.

ENDING APMC MONOPOLY

Presently, the marketing of agricultural commodities is governed by the Agricultural Produce
Market Committee (APMC) Act enacted by respective State Governments. First sale of crops
by farmers - after harvesting - can only take place in APMC authorized mandis (not at the
farm gates) through auctions.
Why do APMCs need reform?
● Market Segmentation: The monopoly of APMCs in the agriculture market reduces
buyer competition in comparison to integrated markets, as it limits the geographical
range of the mandis, number of buyers and sector specialization of buyers.
● High Spatial Price Dispersion: In India, the ratio of the highest price of a commodity
to its lowest price - a measure of price dispersion (Economic Survey 2015-16) - is
 almost thrice that observed in the US. This indicates that markets are not well
integrated and logistics cost is high.
● Cartelization: Cartelization by traders prevents price discovery mechanisms from
functioning in mandis.
● High Degree of Intermediation: Farmers’ share in consumer prices range from 15%
to 40% (Ashok Dalwai Committee). Missing credit markets (farmers borrow from
intermediaries, conditional to sale of harvest), lack of storage, high transportation &
processing costs add to the retail-farmgate gap. This prevents farmers from realizing
higher prices and consumers from buying food at lower prices.
● High License fees + APMC Cess and Taxes: High commission levied on both farmers
and buyers create artificial inflation. Final price to consumers is high but the benefit
does not reach the farmer.
● Wastage (poor storage and transportation): APMCs do no value addition in terms of
storage and transport facilities leading to high wastage.
Way Forward
● Creating Market Infrastructure:
○ Physical integration: Railroad expansion changed the landscape of
agricultural markets in the US. The Indian Railways has introduced the first
“Kisan Rail” from Devlali (Maharashtra) to Danapur (Bihar).
○ Digital integration: e-NAM (National Agricultural Market) where the entire
country must be treated as unified market
● Transport and storage infrastructure for perishables: Transport of perishable
commodities in Reefer trucks & freight subsidy would help in better supply and
availability of the produce.
● Setting up Farmer Producer Organizations and Cooperatives: It would provide better
avenues at collective bargaining to small & marginal farmers.
● Restructure Essential Commodities Act: To incentivize corporate companies to
invest in trading of agricultural commodities.
● Alternative marketing options: such as contract farming, direct marketing through
FPOs/cooperatives etc, commodity trading through National Commodity and
Derivatives Exchange, e-RaKAM (digital spot trading market),
● Nation-wide Price Dissemination Mechanism: Forward Market Commission (FMC)
has set up e-portal AGMARKNET that displays real time wholesale price of
agricultural commodities on e-portal connected with APMC markets, Kisan mandis,
Kisan Vikas Kendras (KVKs), State Agricultural Boards etc.

Gramin Agricultural Markets (GrAMs)

● The Centre has identified 1,878 rural haats for modernisation and development of
infrastructure through MGNREGA.
● GrAMs to be linked to e-NAM and to be outside the APMC Act regulation.
● Significance
○ ensure participation of small and marginal farmers to markets especially
eNAM.
○ Awareness, coupled with increase in Agricultural & Horticultural production,
will generate larger arrivals in Rural Markets.
○ proposed to build on the available infrastructure to establish large number of
primary rural agricultural markets to provide the following two services: Direct
 marketing between producers and consumers and aggregation platform for
farmers
AGRICULTURE EXPORT POLICY, 2018
Current Agriculture Trade Scenario
● While India occupies a leading position in global trade of agricultural products like
rice, its total agricultural export basket accounts for little over 2% of world
agriculture trade.
● Also, India has remained at the lower end of the global agricultural export value
chain given that the majority of its exports are low value, raw or semi-processed and
marketed in bulk.
● India is unable to export its vast horticultural produce due to lack of uniformity in
quality, standardization and its inability to curtail losses across the value chain.
● Agri-exports touched $41.8 billion in FY 2020-21, registering a growth of 18 per cent
over the previous year.
● The major export destinations are the USA, Saudi Arabia, Iran, Nepal, and
Bangladesh.
● Among the key agriculture commodities exported from India were marine products,
basmati rice, buffalo meat, spices, non-basmati rice, cotton raw, oil meals, sugar,
castor oil and tea.

Challenges in India’s agri export sector

● Lack of Stable Trade Policy Regime: tendency to utilize trade policy as an instrument
to attain short term goals of taming inflation.
● Infrastructure and Logistics: Poor connectivity of the land locked production areas
(E.g. Bihar, Jharkhand, NE states and hilly regions, etc.) to the ports or terminals is a
stiff challenge.
● Low volume of horticultural commodities
● Poor training & Skill level development :
○ Inadequate harvest and postharvest managements paving the way for
rejection of products by the importing country
○ Exporters lack awareness on existing schemes and policies related to exports
as well as about documentation and procedures to be followed for exports.
● Low yields and farm productivity; low focus on value addition; and large domestic
market are hindrances to India’s Agri-export potential.

Objectives
● To double agricultural exports from present $ 30+ Billion to $ 60+ Billion by 2022
and reach $ 100 Billion in the next few years thereafter, with a stable trade policy
regime.
The policy recommendations are organized in two broad categories: strategic and
operational
Strategic Recommendations
● Policy Measures
○ Stable Trade Policy Regime : Providing assurance that the processed
agricultural products and all kinds of organic products will not be brought
under the ambit of any kind of export restriction.
○ Reforms in APMC Act and streamlining of mandi fee : Using the
Directorate General of Foreign Trade (DGFT) field offices, Export
Promotion Councils, Commodity Boards and Industry Associations to act
as advocacy forum for reform by all the states including removal of
perishables from their APMC Act.
● Infrastructure and Logistics Support
○ Pre-harvest and post-harvest handling facilities, storage &
distribution, processing facilities, roads and world class exit point
infrastructure at ports facilitating swift trade.
○ Mega Food Parks, state-of-the-art testing laboratories and
Integrated Cold Chains.
○ Identifying strategically important clusters, creating inland
transportation links alongside dedicated agricultural infrastructure
at ports with 24x7 customs clearance for perishables.
● Holistic approach to boost exports
○ Involve important organizations related to agricultural production to make
special efforts towards promotion of export. Krishi Vigyan Kendras will be
involved to take export oriented technology to farmers and create
awareness among farmers about export prospects.
○ A holistic response to Sanitary and PhytoSanitary (SPS) and Technical
Barriers to Trade (TBT) barriers faced by Indian products.
● Greater involvement of State Governments in Agriculture Exports
○ nodal State Department / Agency, State Agri Export Policy, Infrastructure
and logistics,
○ Encourage the industry bodies/associations to play a more proactive role and
greater involvement of industry in R&D
Operational Recommendations
● Focus on Clusters
○ a transition to Agri Export Zones (AEZs) could facilitate value addition,
common facility creation and higher exports from such zones.
○ The concept of Agri Export Zone (AEZ) was introduced in 2001, through
EXIM Policy 1997-2001, to take a comprehensive look at a particular
produce/product located in a contiguous area for the purpose of developing
and sourcing the raw materials, their processing/packaging, leading to final
exports.
○ AEZ focuses on convergence of existing Central and State Government
schemes to take care of financial and policy interventions required at various
stages of value chain
○ In all 60 Agri Export Zones (AEZ) were notified by the Government till 2004 -
05. No new AEZs have been set up after 2004.
● Promoting value added exports
○ Product development for indigenous commodities and value addition
○ Promote value added organic exports
○ Promotion of R&D activities for new product development for the upcoming
markets
● Marketing and promotion of “Brand India”
● Attract private investments in export oriented activities and infrastructure
 ● Establishment of Strong Quality Regimen

E-Technology in the aid of farmers

How Technology can benefit agriculture and farmers in India?
The change in Indian agriculture began with the Green Revolution, which was trailed by
accomplishments of large achievements: Blue revolution, white revolution, yellow and
Bio-Technology revolutions. In India, agriculture is the core sector for food security,
nutritional security, and sustainable development & for poverty alleviation.
It contributes approx. 18 % of GDP and practically 40% of total rural NDP (Net Domestic
Product). Around 64% of the total labor force is occupied with horticulture or agribusiness
based businesses. After independence, there has been noteworthy development in Indian
agriculture with the grain production ascending to 273.83 million tons this year. All things
considered, there are enormous challenges to be analyzed to enhance the agricultural
growth in India.
Difficulties
● Conventional Farming related Issues - Over-pumping of water, falling in
groundwater levels in certain parts where water-logging is leading to salty soil.
● Low Agricultural Productivity : utilization of technology utilizing sensors and
GIS-based soil, climate prediction, water assets information, mobile-based farming,
broad market data information and data services and automation of farming using
robots seems unachievable.
● Lack of Knowledge : Technology can answer most difficulties farmers face. It can
assist them with predicting climate all the more precisely, decrease the use of water,
increase yield and their net profit margins.
● Precise Production : Big data can give farmers the information they have to create
high quality, desirable crops. They can utilize data to decide the best seeds and other
agri-items to use to get ideal outcomes. Artificial intelligence can assist them with
foreseeing weather conditions and plan accordingly. They can likewise use
cutting-edge e-platforms to chop down middle people and legitimately arrive at
merchants and demand the right price for their goods.
● Nano Science and Geo-Spatial Farming :
● Drones : They help in increasing production by diminishing expenses and
misfortune in agricultural produce by supervision work. Progressed sensors,
the ability of digital imaging, soil investigation, crop spraying, crop monitoring,
the examination of the health of yields including fungus infection is conceivable
with the assistance of drones.
Recently in Rajasthan, drones have ended up being significant in shielding agricultural
produce from locust attacks.

AGRISTACK
● AgriStack is a collection of technologies and digital databases proposed by the
Union government that focuses on farmers and the agricultural sector.
● AgriStack may have a Farmers’ Stack, a Farm Stack and a Crop Stack integrated on a
technology platform linking existing digital land records, cadastral maps of farms
and information.
 ● Government’s schemes such as Pradhan Mantri Fasal Bima Yojana (PMFBY),
PM-KISAN and Soil Health Card will be integrated through a common database
along with land record details over a period of time.
● With an integrated database for farmers, information related to all benefits and
assistance provided through various schemes can be kept at one place.

●
● Concerns raised against agristack
○ Data Security : In the absence of data security legislation, exploitation of
farmers data by private entities
○ Financial Exploitation :
○ Exclusion Error : Digitalised land records full of loopholes. Exclusion of
landless farmers
○ Digital divide
Digitalisation in agriculture
● NITI Aayog has partnered with IBM to develop a crop yield prediction model backed
by AI to provide real-time data and communicate the required advisory to farmers.
 ● Kisan Suvidha: It is an omnibus smartphone app that helps farmers by providing
them relevant information regarding weather, dealers’ market prices, plant protection,
agro advisories, IPM practices etc.
● MKisan App: This app enables farmers and stakeholders to obtain advisories and
other information being sent by experts and govt. officials through mkisan portal
without registering on the portal.

Issues related to direct and indirect farm subsidies and minimum support prices

The Indian Government plays a vital role in agriculture sector development. This vital role
can take a number of forms such as import-export policies and domestic policies like price
support programmes, direct payments, and input subsidies to influence the cost and
availability of farm inputs like credit, fertilizers, seeds, irrigation water, etc. Of all the
domestic support instruments in agriculture, input subsidies and product price support are
the most common.
The subsidies may be direct or indirect, cash or kind, general or particular, budgetary or non
budgetary, etc. But their impact is practically visible on both the production and distribution.

An agriculture subsidy is a governmental financial support paid to farmers and

agribusinesses to supplement their income, manage the supply of agricultural commodities,
and influence the cost and supply of such commodities.
Why to give subsidies ?
● The economic rationale of subsidies lies in incentivising the producers to invest in
productive activities and increase production leading to high growth in national
income and obtaining a desirable structure of production.
● The social justification of subsidies lies in reducing interpersonal income
inequalities and inter- regional development imbalances.
● The justification gets strengthened if the subsidies promote agricultural development
besides equitable distribution of income.
● It is expected that subsidies contribute to better cropping patterns, employment and
income of the beneficiaries.

Types of Agriculture Subsidies in India

Explicit Input Subsidies

These are in the nature of explicit payments made to the farmer. For example, subsidy on
improved or high yielding variety seeds, plant protection chemicals and equipments

Implicit Input Subsidies

If inputs whose prices are administratively determined are priced low as compared to their
economic cost, it becomes a case of implicit subsidization.

Output Subsidies
Subsidization of the agricultural sector through output pricing means that by a restrictive
trade policy, the product prices in the domestic market are maintained at levels higher than
those that would have prevailed in the absence of restrictions on trade.

Food Subsidies
The twin policy of providing market support to the food grains producers and supplying at
least a part of the requirement to consumers at reasonable prices, along with the policy of
maintaining a buffer- stock of required quantity for national food security, involves cost in the
form of meeting the differences between the economic cost and issue prices of foodgrains.

Agriculture Subsidies on the basis of Mode of Payment

Direct Subsidies
Direct subsidies are money transfers by the government that reach the ultimate beneficiary
through a formal predetermined route. In the agriculture and allied sectors, subsidies are
given for crop husbandry, agricultural implements, minor irrigation, soil conservation,
horticulture, animal husbandry, pisciculture, sericulture and also for loss in agriculture during
natural calamities like droughts or floods.
Assessment of Direct Subsidies
Merits
● Direct benefit transfer has been successful in many schemes such as PAHAL in LPG
and MGNREGA.
● There would be no problem of identification, pilferage and corruption etc. as through
JAM trinity or Aadhaar, payments can be made directly to the beneficiaries.
● This would increase efficiency, as well as promote regional balance, and crop
diversification.
● People can decide for themselves which crop they would want to grow, according to
the profits and their local requirements. They can also use the amount in value
addition, mixed farming and other beneficial activities for their farms/lands.
● Behavioural change, as farmers will stop using excessive water or fertiliser in their
fields.

Demerits
● India is a poor country facing hunger, diseases, malnutrition etc. There is a huge
chance that the cash may get used in some non-priority activities or for some
non-productive works e.g. on marriage of girls, alcohol, etc. rather than being used
for the right purposes.
● The country may not be able to reach its desired goals such as food grain production
may not be enough to support the huge population and create the problem of food
security instead.
● Widespread illiteracy and lack of awareness may also hamper the prospect of
Agriculture in the country.
Indirect Subsidies
Indirect subsidies are provided through price reduction, welfare and other ways but do not
include a direct cash payment. They reach the farmers along with the use of inputs.
Generally, those farmers who use more inputs would naturally enjoy higher subsidies.
Example cheaper credit, farm loan waivers, reduced tariffs for electricity and irrigation etc.
Assessment of Indirect Subsidies
Merits
● In developing economies such subsidies help development of priority areas.
● These subsidies were introduced in India to provide incentives to the farmers to grow
food grains.
● Training support and technological assistance helps in enhancing the farmers’
knowledge.
Demerits
● It takes away incentives from other areas, such as Indian agriculture has become
cereal centric, regionally biased, and input intensive. Indirect subsidies are one of
the main reasons towards such a state.
● Farmers do not feel the incentive to save resources such as over exploitation of
ground water, indiscriminate use of fertilizers, etc. are resulting due to it.
● Indirect subsidies are not successful in reaching the target beneficiaries because of
several lacunas in identification, corruption, lobbying by rich farmers etc.
● It is liable for misuse for gaining political mileage especially during the time of
elections.

Issues related to Agriculture Subsidies and their Possible Resolution

● Heavy Fiscal Burden: The total outgo on fertilizer subsidy alone in 2017-18 was Rs.
70,000 crore.
○ Possible Resolution: A better targeting of subsidies with the usage of JAM
(JanDhan – AADHAAR- Mobile Number) trinity can reduce the fiscal burden.
● Excessive use of Groundwater: The power subsidy has led to overuse of groundwater
which has further resulted into dramatic fall in ground water levels.
○ Possible Resolution: Separate agriculture feeder network (under Deen Dayal
Upadhayay Gram Jyoti Yojna). This separate agriculture feeder will supply
electricity only for a few hours a day. The process has shown positive results
in arresting decline of ground water levels in Gujarat.
● Environmental Effects and decline in Soil Fertility : Indiscriminate use of fertilizers
(recommended ratio of NPK fertilizer is 4:2:1 while actual usage is 8:3:1. Similarly,
urea consumption has increased to 60% in 2017 from 55% in 2010-11) harms the soil
fertility, biodiversity, and also leads to eutrophication, bio-accumulation &
biomagnification.
○ Possible Resolution: Creating awareness among farmers, increasing
penetration of soil health card schemes, promoting organic farming and
innovative products like neemcoated urea will go a long way to check the
issue.
● No benefits to the targeted groups: Fertilizer subsidies are generally cornered by the
manufacturers and the rich farmers of Punjab, Haryana and Western UP.
○ Possible Resolution: Nutrient based subsidy and Neem-Coated Urea has
been introduced by the Government. There should be Direct Benefit Transfer
of fertiliser subsidy through Aadhaar authentication, organic farming should
be encouraged and there should be phased increase in the price of urea.
 ● Cereal Centric, Regionally Biased, and Input Intensive: Price subsidies have affected
Indian agriculture negatively. This has made Indian agriculture cereal centric, and
neglectful towards pulses, oil seeds and coarse cereals. This has led to import of
these crops and food insecurity in lower strata which depend upon coarse cereals.
Also, most of the subsidies go to the rich farmers, and the rich states which are able
to grow marketable surplus and have well developed infrastructure.
○ Possible Resolution: Crop diversification by including more crops under
MSP, Mission on Integrated Development of Horticulture, Organic and
Cooperative farming, food processing, mixed farming, Direct Benefit
Transfer.

FERTILISER SUBSIDY
● The Indian fertilizer industry can broadly be divided into two categories, - nitrogenous
fertilizers & phosphatic and potassic (P&K) fertilizers.
● third largest in the world in terms of production and second largest in terms of
consumption.

Concerns with Fertiliser subsidy

● High Fiscal Burden: Fertiliser accounts for large fiscal subsidies (about 0.73 lakh
crore or 0.5 percent of GDP), the second-highest after food subsidy.
○ With the increase in subsidy in DAP, Government of India will spend an
additional Rs 14,775 crore as subsidy in Kharif season.
● Large unpaid subsidy backlogs create question on the sustainability of current
subsidy regime.
● Import Dependency of Fertiliser sector : 72% is domestically produced while the rest
is imported
● Imbalanced use of fertilisers due to subsidy regime : ideal NPK ratio is 4:2:1, while
present ratio is 25:5:1. The resultant imbalance in fertiliser use is affecting crop yield,
leading to deterioration in soil health and is adversely impacting the environment.
● Ecological impact of excessive fertiliser usage
Way forward
● Direct cash transfer to Farmers
 ● Rationalisation of subsidy regime: A shift towards more rational use of fertilisers can
be made by capping the number of bags each farmer can purchase through the
point-of-sale (PoS) device each season.
● Awareness among farmers: regarding the benefits of balanced usage of fertilizers.
Also, modelling the fertilizer proportion according to different agro-climatic regions,
is needed
● Promoting Green alternatives to chemical fertilisers: E.g., Bio fertilisers (Algal, fungal
and bacterial) are cost effective, eco-friendly and can increase crop yield up to
15-25%.
Issues specific to Urea
● Urea receives the largest subsidy, in outlay terms (accounting for nearly 70 per cent
of total fertiliser’s subsidy).
● also the most physically controlled fertiliser. Government intervenes in Urea sector in
five ways:
○ Controlled MRP, Subsidy to domestic producer, Consignment specific subsidy
to importers, Canalised imports,

● Economic survey 2015-16 pointed out that as much as 24% of the urea subsidy is
spent on inefficient producers, 41% is diverted to non-agricultural uses including
smuggling to neighbouring countries, and 24% is consumed by larger, presumably
richer farmers.
Steps taken:
● New Urea Policy-2015 (NUP-2015) with the objective of maximizing indigenous urea
production, promoting energy efficiency in urea production and rationalizing subsidy
burden on the government.
● Neem Coated Urea (NCU): mandatory for all the domestic producers of urea to
produce 100% as NCU
● Gas Pooling: Pooling of domestic gas with Regasified Liquified Natural Gas (R-LNG)
to provide natural gas at uniform price to all-natural gas grid connected Urea
manufacturing plants.
● Soil Health Card (SHC)

Agriculture Subsidies and WTO

● Agreement on Agriculture (AoA) was signed by the WTO members.
● to establish a fair and market-oriented agricultural trading system. The reform
programme comprises specific commitments to reduce support and protection in
the areas of domestic support, export subsidies and market access.
● The Agreement also takes into account non-trade concerns, including food security
and the need to protect the environment, and provides special and differential
treatment for developing countries.
● Uruguay Round created two categories of domestic support
○ Support with no, or minimal, distortive effect on trade on the one hand (often
referred to as “Green Box” measures). For example, Government service
 programs such as Research Programs, Pest and Disease Control, training,
infrastructure etc. Direct Payment to producers but it must not influence type
or volume of production, also called Decoupled Payments.
○ Trade-distorting support on the other hand (often referred to as “Amber Box”
measures). For example, government buying-in at a guaranteed price (“market
price support”) falls into the Amber Box.
○ Blue Box: These are basically Amber Box subsidies but they tend to limit the
production. These measures are also exempt from reduction commitments.
● De Minimis: Minimal amounts of domestic support that are allowed even though they
distort trade. The 5 per cent threshold applies to developed countries whereas in the
case of developing countries the de minimis ceiling is 10 percent.
● Peace Clause : It stipulated that no country would be legally barred from food
security programs for its own people even if the subsidy breached the limits specified
in the WTO Agreement on Agriculture.
● 2013 Bali Ministerial Conference:
○ An agreement to negotiate a permanent solution to Public Stockholding for
food security purposes
○ A temporary peace clause was added in Bali. It stated that no country would
be legally barred from food security programmes even if the subsidy
breached the limits specified in the WTO agreement on agriculture. This
clause will remain in force for four years until 2017. However, the permanent
solution is still elusive after the 11th Ministerial Conference.
● 2015 Nairobi Package:
○ WTO members adopted a historic decision to eliminate agricultural export
subsidies. This step has been taken to fulfill the key target of the Sustainable
Development Goal on Zero Hunger by 2030.
○ Ministers also agreed to continue negotiations on a special safeguard
mechanism (SSM) that would allow developing countries to temporarily raise
tariffs on agriculture products in cases of import surges or price falls.

Indian Agriculture Subsidies and WTO

India had signed Agreement on Agriculture of WTO expecting that it would:
● reduce the domestic support given by OECD countries to their respective agricultural
sectors
● increase the prices of agricultural products in international markets
● improve export prospects for India.
But, to its surprise, the agricultural prices went down, putting agricultural countries like
India at disadvantage.
The agreement is heavily loaded in favour of developed countries due to following reasons:
 ● Developed countries have put their agricultural subsidies under Green Box. Highest
green box support to agriculture is provided by the USA which spends more than third
of its GDP from agriculture on this support.
● A developed country might need only 1-2% of its GDP to subsidise 50% of its
agriculture. Hence, distortions arising out of Green Box subsidies are significant but
are inadequately addressed.
● Post Uruguay (1994-98), the export of agricultural products from Asia actually
declined steeply to 0.5% from 8.2% in 1990-94. For India, the share in 1990-91 was
18.5%, it fell to 2.2% in 2015-16.
● Also, because of the high subsidies given by developed countries, the agricultural
products sell below the cost of production in the international market, and also
results in export dumping of products.
● The developed countries also make use of Agreement on Sanitary and
Phytosanitary Measure (SPS) and Agreement on Technical Barriers to Trade (TBT)

Agriculture Pricing Policies

The agricultural pricing policies and allied institutional mechanisms evolved in India in the
context of shortages in the availability and excess demand for food grains during the 1960s.
India’s agricultural price policy includes three main types of administered prices: support,
procurement, and issue price.

The support price is generally announced at sowing time, and the government agrees to buy
all grain offered for sale at this price. Support prices generally affect farmers’ decisions
indirectly, regarding land allocation to crops. The areas to be sown, however, depend upon
the actual prices farmers realized from the previous crop and their expectations for the
coming season.

Minimum Support Prices - These provide a long term guarantee to the producers, that in
case of glut, prices will not fall below these announced minimum prices.

Procurement Prices - These are higher than MSP and are meant essentially for the
purchase of quantities needed by the Government to maintain its PDS and for building up
the Buffer Stock.

Issue Prices - These indicate prices at which the Government supplies food grains through
Fair Price shops and ration depots.

Minimum Support Price

aimed at:
● Assuring remunerative and relatively stable price environments for the farmers by
inducing them to increase production and thereby augment the availability of food
grains.
● Improving economic access to food to people.
● Evolving a production pattern which is in line with overall needs of the economy.
Commission for Agricultural Costs & Prices (CACP) is an attached office of the Ministry of
Agriculture and Farmers Welfare, Government of India.
It is mandated to recommend minimum support prices (MSPs) to incentivize the cultivators
to adopt modern technology, and raise productivity and overall grain production in line with
the emerging demand patterns in the country.
MSP for major agricultural products are fixed by the government, each year, after taking
into account the recommendations of the Commission.
As of now, CACP recommends MSPs of 23 commodities, which comprise
● 7 cereals, 5 pulses, 7 oilseeds, 4 commercial crops
Need of MSP Policy
Rapid and violent fluctuations in agricultural prices can have negative consequences on the
economy of a country, such as:
● In case, the price of a particular crop declines steeply: growers will be left with little
income and no incentive to grow the same crop next year. - food security, import
may increase, fiscal burden
● In case, there is a steep rise in the price of a commodity: consumers will suffer. If
this happens to a necessary item of consumption, consumers will not have enough
income left to spend on some of the other items. This will have a disastrous effect on
other sectors of the economy.
How is MSP Calculated ?
● Cost A2 – Includes the actual costs paid by farmers for purchase of various inputs
like seeds, fertilisers, pesticides, hired labour, rent of land & machinery, if hired.
● Cost C2 – C2 stands for Comprehensive Cost. It includes notional costs of family
labour, notional rent of owned land and notional interest on owned capital. M.S
Swaminathan headed National Commission on Farmers recommended a 50 per cent
margin over C2.

Constraints in hiking MSP

The estimated cost of C2 components is about 35-40 per cent higher than cost A2+FL. This
would require a significant rise in MSPs. For example paddy MSP might go up by 46 per cent.

Critical Evaluation of Minimum Support Price

● Injects an element of certainty and confidence - provides an assurance to the
farmers and they can confidently invest in the crops.
● Contributions to inflationary trend: continuous hike in MSP and Procurement prices
due to the rich farmers’ lobby and it has pushed up the carrying cost of buffer
stocks of FCI considerably. This has pushed up the food subsidy bill to a very high
level.
● Bias in favour of surplus states: Almost all states produce wheat, but 95%
procurement is from Punjab, Haryana and Western UP. Similarly, around 20 states
produce rice, while 90% is procured from Punjab, Andhra Pradesh, Haryana, UP and
Tamil Nadu.
● Adverse impact on investment: Due to extra expenditure in food procurement, the
other sectors lose out on new investments.
 ● Distortion in cropping pattern: MSP of wheat and rice has generally been higher than
the cost of production and that of cereals and pulses has been less than the cost of
production.
● Faulty criterion being used for calculating MSP: Since cost of production is the
major criterion to decide MSP by CACP, inefficiency gets built up, land unsuitable for
cultivation of particular crop is being used. e.g. rice cultivation is being done in
semi-arid regions of Punjab & Haryana which is creating an environment and natural
resources problem.
● Bias in favour of large farmers:
● Deterrent to crop diversification: With the price support policy favoring food grains,
there is very little incentive for the farmer to move away from the food grains to the
production of other crops.
● Flaws in PDS: It is restricted mainly to wheat and rice only, while inferior grains which
are main food of the poor have been neglected, PDS coverage in rural areas have
been lesser than that in urban areas, high cost of running, and benefits not reaching
the targeted beneficiary are the major flaws in PDS.
The pricing policy has proved to be helpful in several ways. From a situation of massive
shortages, India has emerged as a grain surplus country with self reliance in food grains.
The policy has had a favorable impact on farm income and has led to an economic
transformation in the well-endowed, mainly irrigated regions.
However, the adverse effects can also be recognized as the food policy has been highly
asymmetric and skewed mainly towards the production of rice and wheat at the cost of
cultivation of pulses, oilseeds and other crops.
Similarly, the country has been facing large shortages of pulses and edible oils and now has
to meet about one-tenth of its demand for pulses and close to half of the demand for edible
oil through imports.
These imports are in turn having an adverse impact on producers in the unfavorable
dry-land areas. These changes necessitate a fresh look at the role and relevance of the
Minimum Support Price system in the country.
Announcing procurement prices has become one of the primary tools of intervention in
agriculture while other crucial issues like fall in capital formation, developing irrigation
facilities, need of changing land holding patterns etc. have been ignored.

The imbalance between subsidy expenditure and expenditure on public investment in

agriculture calls for a long-term strategic re-orientation. Analyse.

Almost 80% of the public expenditure going to agriculture is in the form of input subsidies
(fertilizers, power, irrigation) and only 20% as investments in agriculture.
Rationalisation of subsidies and better targeting of beneficiaries through direct transfers
would generate part of the resources for the public investment that is essential in research,
education, extension, irrigation, water-management, soil testing, warehousing and
cold-storage, whether research, education, and extension.
Although the necessity of some subsidies cannot be written off but they need to be
rationalized so that money thus saved can further be invested for making Indian agriculture
an attractive and profitable profession. Proper balance between investment and subsidies
can make the agriculture engine of Indian economy.
Highlight the strengths and weaknesses of the current MSP regime. What are the changes
required to strengthen it and help it achieve its stated policy objectives?

Major objectives
● to support the farmers from distress sales and to procure food grains for public
distribution.
● As incentive to induce the farmers to make capital investment for the improvement
of their farm and to motivate them to adopt improved crop production technologies
to step up their production and thereby their net income.
Fixing of MSP to cover the full costs of cultivation imposes a heavy burden on the
government’s finances. Although the MSP is supposedly based on cost plus formula, the
actual price offered in practice is higher and influenced by high expectations of rich farmers
represented by politically strong farm lobbies.

Suggestion to revamp the MSP regime in India

● MSP policy should extend to all regions
● MSP should be national level floor price, rather than remaining confined to certain
regions.
● Procurement should be at market prices
● The MSP should be supplemented with variable import and export tariff for effective
price stabilization
● Private trade should be encouraged.

With reference to the Bali decision clearly stating that the Peace clause under Agreement
on Agriculture (AoA) would remain in force, until permanent solution is found, can we say
that India was at least partially successful in placing ‘Food Security Box’ and ‘Development
Box’ alongside ‘Green Box’? Analyze. Also, suggest some remedies to counter the adverse
effects of huge Green Box subsidies offered by developed nations to their farmers.

With the recent rise in global food prices, many countries have begun giving higher subsidies
to farmers to promote agriculture, putting them in danger of breaching the 10 per cent cap
under the de minimis levels.

So we can definitely say that with the Bali statement regarding peace clause, India was at
least partially successful in placing the ‘Food Security Box’ and ‘Development Box’ alongside
the ‘Green Box’. However India and other developing countries should be cautious of
following issues.
 ● If the clause expires before a permanent solution is in place, food security
programmes and policies to protect farmers, such as Minimum Support Prices,
would come under siege.
Hence there is a need for a permanent solution in this regard to ensure food security
programmes in developing countries.
The WTO agreement with its complex structure provides enough room for maneuvering
subsidies to provide protection to domestic produce under the Green Box subsidies. Level of
subsidies is so high in developed countries that leveling the playing field in agriculture trade
is a far cry. To counter adverse effect of such support and subsidies following suggestions
are made:
● Developing countries should seek clubbing of all kinds of support to agriculture in
one category and seek some parity among developed and developing countries.
● Other member countries should have the freedom to impose protective tariffs linked
to differences in domestic support.
In order to counter the adverse impact of GBS in other countries on domestic produce, we
need to pay serious attention to infrastructure development, which has been deteriorating for
quite some time.

Agricultural subsidies are hotly contested at the WTO negotiations. What are the concerns
of developing countries, especially India, vis-a-vis the attitude of developed countries on
the issue? What is Special Safeguard Mechanism (SSM)? In this context, what are the
reasons underlying India’s keenness on a permanent solution on public stockholding for
food security?

The concern of developing countries regarding the attitude of the developed countries can
be summed up thus:
● Whereas the developed countries want subsidies to be removed, the developing
countries view agricultural subsidies as crucial for their farm livelihood and food
security.
● The box-shifting practices and use of green box as well as amber box subsidies by
rich countries such as the US cause concern in developing countries.
● While developed countries including the US, Australia, the EU oppose public
stockholding of food crops, it is crucial for India’s food security programme.
● The developing countries are concerned about the issue of import surges and tariffs
to be imposed in case of livelihood threatening. This is perhaps most visible in the
differences over the structure of the Special Safeguard Mechanism (SSM).
Special Safeguard Mechanism (SSM) is a trade remedy that allows developing countries to
impose additional safeguard duties in the event of an abnormal surge in imports or the entry
of unusually cheap imports.
India and the G33 insist that the SSM mechanism can come into play if imports rise by about
10%, while developed countries want it as 40%.

Excess subsidies are doubly detrimental to Indian agriculture; on one side they cause
market distortion and a burden on national exchequer; on the other, they lead to
environmental degradation. It is also true that Indian agriculture can’t sustain without the
subsidies. Subsidies are a kind of imbroglio. Analyze.
There are major agriculture subsidies in India, - for fertilizer, electricity and irrigation. In all,
subsidies account for roughly 2.5 percent of India’s GDP.
There is a trade-off between allocating money through subsidies for agriculture or increasing
investments for agriculture development such as irrigation, backward infrastructure etc. The
investment option is much better than subsidies for sustaining long-term growth in
agricultural production and also to reduce burden on national exchequer.

Public Distribution System- objectives, functioning, limitations, revamping; issues of buffer

stocks and food security;

Public distribution system is a government-sponsored chain of shops entrusted with the

work of distributing basic food and non-food commodities to the needy sections of the
society at very cheap prices.
Objectives
● to provide essential consumer goods at cheap and subsidized prices to the
consumers.
● to insulate them from the impact of rising prices of these commodities.
● to maintain the minimum nutritional status of our population.
It is supplemental in nature and is not intended to make available the entire requirement of
any of the commodities distributed under it to a household or section of the society. Yet, it
acts as a safety net and attempts socialization in matters of distribution of essential
commodities.
● In 1997, Targeted PDS (TPDS) was launched with focus on the poor families.
● In December 2000, Antyodaya Anna Yojana (AAY) was introduced for poorest of the
poor people (the hungry) and 25kg/month per household (increased to 35kg in 2002)
was provided at the highly subsidised rate of Rs 2/kg of wheat and Rs 3/kg of rice.
● In 2013, National Food Security Act (NFSA) was enacted. It introduced individual
entitlement of 5 kg per person per month foodgrains to around 82 crore of
population.
The PDS seeks to provide to the beneficiaries two cereals, rice and wheat and four essential
commodities viz. sugar, edible oil, soft coke and kerosene oil. However, state governments,
which actually manage the system at the ground level, are exhorted to add other essential
commodities like pulses, salt, candles, matchboxes, ordinary clothes, school text
books/copies and the like.
Making available the six essential commodities (rice, wheat, sugar, edible oil, soft coke and
kerosene oil) to the state government is the responsibility of the central government.

Coarse grains (jowar, bajra, maize, etc) virtually remained absent from it as their combined
sales have amounted to less than 1% of the total PDS sales. Pulses, which are an important
source of protein for the poor, constitute only about 0.2% in total PDS sales.

Limitations of PDS In India

 ● Limited benefits to the poor from PDS : residential requirements for ration cards, a
large number of homeless people, migrants etc. are automatically left out of the
food security.
● Urban Bias: For quite a longer period of time, PDS remained limited mostly to urban
areas. Its effectiveness in terms of timely and adequate availability remains meager
in rural areas.
● The burden of food subsidy: After inclusion of NFSA-2013, the burden of food
subsidy has become huge(Rs. 1.16 Lakh crore). increasing stock with FCI. The
procurement prices have been rising continuously due to rich farmers’ lobby and
issue prices are getting lower due to populist policies. All of this together is making
the PDS unsustainable.
● Inefficiencies in the operations of FCI: The economic cost of FCI food grains
operation has been rising on account of increase in procurement prices and other
costs (distribution cost, carrying cost, etc.) and also due to inefficiencies caused by
highly centralised and bureaucratic mode of operations.
● PDS results in Price increases: Due to large procurement of food grains every year
by the Government, the net quantities available in the open market reduces. This
leads to an increase in Price. This dual market system i.e. PDS and Open market
operate to the disadvantage of the poor, especially those who are excluded from the
food security system.
● Leakages from PDS
Issues related with TPDS
● Targeting: definition of eligibility for BPL status based on income poverty line does
not cover a large number of vulnerable populations. Identification has been
considered as the biggest challenge. A high Inclusion Error is also reported as APL
were having unacceptably large amounts of subsidised grains.
● Leakages and diversion: Planning commission estimation, more than half (54%) of
the grain taken off for TPDS disappeared before they reached buyers in the fair
price shop.
● Late and irregular arrival of grains in fair price shop
● Burden of subsidy has increased

Recent PDS Reforms

● Digitization of almost all of 23 crore ration cards.
● 56% of the digitised cards have been seeded with unique identification number
Aadhaar.
● Installation of ePOS (electronic point of sale) devices by many states at the fair
price shops to track the sale of foodgrains to actual cardholders on a real time
basis.
● Three UTs-Chandigarh, Puducherry and Dadra and Nagar Haveli have implemented
DBT on a pilot basis.
Revamping of PDS
Procurement Side
● States which have gained sufficient experience (Andhra Pradesh, Chhattisgarh,
Punjab, Haryana and MP) should be encouraged to procure for PDS directly from the
farmers.
 ● FCI should focus on states which suffer from distress sale at prices much below
MSP, and which are dominated by small holdings, like Eastern Uttar Pradesh, Bihar,
West Bengal, Assam etc.
● Private sector should be encouraged to shoulder the responsibility of procuring,
storage and distribution of PDS commodities.
● Negotiable warehouse receipt systems (NWRs) should be taken up on priority and
scaled up quickly.
● GoI should widen its procurement basket so as to incorporate adequate nutrient
mix. It will prevent skewed incentives to wheat and rice only and promote crop
diversification.
● A transparent liquidation policy is the need of the hour, which should automatically
kick-in when FCI is faced with surplus stocks than buffer norms.
Supply Side
● End to end computerization: Mapping of FPS and the registered customers at each
FPS will help to identify exact requirements at each FPS. Timely and adequate
allotment of goods at Fair Price Shops (FPS) in adequate quantities.
● Monthly declaration of sales by FPS to prevent piling up of excess inventories.
● Truck dispatch information & stock availability at FPS through SMS to registered
users.
● GPS based tracking of trucks carrying PDS goods.
● FPS should be operated through Gram Panchayats, Cooperatives, Self Help Groups

Consumer Side
● Proper identification of beneficiaries and creating a web database with allotted
quantity of each goods as per entitlement.
● Computerized entry via AADHAAR authentication at Point of Sale (POS).
● Pilot testing of cash transfers in PDS
● Toll Free Number for complaint registration.
Alternatives to PDS
● Shanta Kumar Committee : gradual introduction of cash transfers in PDS, starting
with large cities with more than 1 million population; This will help in better targeting,
and plugging leakages.
● Food coupons can be provided to the beneficiaries through which they can buy food
grains from stores, and the dealer could be reimbursed on production of these
coupons at the Government treasury. This will remove the problems of
procurements, diversion and black marketing of food grains
● A Universal Basic Income to all.

Food Corporation of India (FCI)

a statutory organisation set up in 1965 under Food Corporation Act 1964. It is the main
agency providing foodgrains to the PDS. Its primary duty is to undertake the purchase,
storage, movement, transport, distribution and sale of food grains and other foodstuffs.
three basic objectives:
● effective price support to the farmers,
 ● to procure and supply grains to PDS for distributing subsidized staples to
economically vulnerable sections of society.
● keep a strategic reserve to stabilize the market (for basic food grains).

Recommendations of High Level Committee on Restructuring of FCI

Shanta Kumar Committee(2014)
On Procurement Related Issues:
● FCI should hand over procurement to those States which have gained sufficient
experience (Andhra Pradesh, Chhattisgarh, Punjab, Haryana and MP). It should focus
on states which suffer from distress sale at prices much below MSP, and which are
dominated by small holdings
● Negotiable warehouse receipt systems (NWRs) should be taken up on priority and
scaled up quickly.
● GoI needs to revisit its MSP policy which gives skewed incentive to wheat and rice
only and neglects crop diversification.
● MSP policy should work in coordination with trade policy so that the landed costs of
imported crops are not below their MSP.

On PDS And NFSA Related Issues:

● GoI should defer implementation of NFSA in states that have not done end to end
computerization; have not put the list of beneficiaries online for anyone to verify,
and have not set up vigilance committees to check pilferage from PDS.
● The current coverage of 67% Population under NFSA is a huge fiscal burden. It
should be brought down to 40%.
● Gradual introduction of cash transfers in PDS, starting with large cities with more
than 1 million population
○ Cash transfers can be indexed with overall price level to protect the amount
of real income transfers.
○ Cash can be given in the name of the lady of the house.
○ JAM Trinity
● On stocking and movement related issues: FCI should outsource its stocking
operations to the private sector.
● On Buffer Stocking Operations and Liquidation Policy: the current system is
extremely ad hoc, slow and costs the nation heavily. A transparent liquidation policy
is the need of the hour, which should automatically kick-in when FCI is faced with
surplus stocks than buffer norms.
● On direct subsidy to farmers: Farmers be given direct cash subsidy (of about Rs
7000/ha) and the fertilizer sector can then be deregulated.
○ This will plug diversion of urea to non-agricultural uses
○ This will also help raise the efficiency of fertilizer use.
The new face of FCI as envisioned by Shanta Kumar committee:
 ● an agency for innovations in Food Management System
● to create competition in every segment of the foodgrain supply chain-from
procurement to stocking to movement and finally distribution in TPDS.
● reduce the overall costs of the system substantially, plug leakages, and will serve a
larger number of farmers and consumers.
● It will upgrade the entire grain supply chain towards bulk handling and end to end
computerization by bringing in investments, and technical and managerial expertise
from the private sector.
● It will be more business oriented with a pro-active liquidation policy to liquidate
stocks in OMSS/export markets, whenever actual buffer stocks exceed the norms.
Buffer Stocks
A buffer stock is a system or scheme which buys and stores stocks at times of good
harvests to prevent prices falling below a target range (or price level), and releases stocks
during bad harvests to prevent prices rising above a target range (or price level).

Buffer Stock Policy of India

to be maintained by FCI on behalf of the Government of India to meet the monthly release
of food grains for supply through PDS and Other Welfare Schemes (OWS) to meet
emergency situations arising out of unexpected calamities such as crop failure, natural
disasters, etc. and for market intervention to augment supply in case of deficit production
of food grains, so that, the open market prices get moderated.
Buffer norms are fixed by CCEA (Cabinet committee on Economic Affairs chaired by PM)

Operational stock = Stocks earmarked for TPDS + OWS and Food security stocks/reserves.

From 2015, the Government has decided to create a buffer stock of 1.5 lakh tonnes of
pulses to control fluctuation in their prices. NAFED, SFAC and FCI will procure pulses for
buffer stock.

Food stocks above the minimum buffer norms are treated as ‘Excess Stock’, and the
government can liquidate them through export, open market sales or additional allocation
to states.

Critical Evaluation of Buffer Stocks in India

● Open-ended procurement: FCI has to procure a large amount of grain from the
market due to increasing commitment of the government, and has become a buyer
of last resort.
● Procurement Prices have become Support Prices: Procurement prices which were
kept for maintaining the buffer stock have virtually become the prices for purchasing
whatever amount the farmer offers for sale. The quantity purchased exceeds the
storing capacity of FCI and leads to excessive damage of procured grains.
● One tool serving many objectives: to fulfill the interlinked objectives of supporting
food producers and food consumers, and of ensuring food availability at the
national level. By implication, this entails a huge gap between the purchase price and
issue price, and consequently a larger subsidy bill.
● Inefficient Inventory management:
 ○ First, the FCI’s inventory management policy has a counter-cyclical character.
The government should procure grain in times of abundant supplies in the
market, and release it in times of scarcity.
○ Inefficient Inventory management: Even after allocating to the mandated
schemes and maintaining reserves, an excess of millions of tons of grain
remains in the FCI godowns. There is no pro-active, pre-defined, sustainable
policy practiced for this residual grain.

● Rising cost of Operation: Under grain management, FCI’s main heads of costs are
acquisition costs, which include the pooled cost of grain and procurement
incidentals, and distribution costs. This cost has more than doubled since 2001-02.
due to: The economic costs of FCI for acquiring, storing and distributing food grains
is about 40 per cent more than the procurement price.
○ Higher storage costs and losses due to inadequate capacity
● De-facto nationalization of the grain market: With more than 75 percent of the
marketable surplus procured by the government, very little grain is available for the
open market.
● Inefficiencies in the targeted public distribution system: Along with high amount of
pilferage, inclusion and exclusion errors, the economic cost of operation has also
increased more than 100% in the last decade, while the issue price has remained
constant. The huge amount of financial implication can be observed by following
facts (2014)
○ India’s food subsidy bill has grown more than 25 times (in nominal terms)
during the last two decades
○ is nearly one-third of all subsidies given by the central government

Food Security
In FAO report on ‘The State of Food Insecurity, 2001’ , food security is defined as a “ ---
situation that exists when all people, at all times, have physical, social and economic
access to sufficient, safe and nutritious food that meets their dietary needs and food
preferences for an active and healthy life”.
The World Summit on Food Security stated that the "four pillars of food security” are
availability, access, utilization, and stability i.e. food security over time.
To accomplish all the above criteria, requires not only an adequate supply of food but also
enough purchasing power capacity with the individual or household to demand an adequate
level of food.

Food Security vis-a-vis Constitution of India

Article 21 & Article 47
SDG Goal 1 : No Poverty
SDG Goal 2 : No Hunger

Qualitative and Quantitative Dimensions of Food Security

Quantitative Dimension of Food Security in India
India gained self-sufficiency in the food grains in the 1970s mainly because of the green
revolution and has sustained it since then.
277.49 million tonnes in the crop year ending June 2018
Thus, in terms of per capita food requirements, India is self-sufficient in the production of
major food crops like wheat and rice.

Qualitative Dimension of Food Security in India

While the per capita food availability is sufficient, food is not equally distributed. Due to
anomalies in the distribution channels and disproportionate purchasing power capacity of
people, the nutritional requirements of vulnerable sections are not adequately addressed.
● Recently released NFHS-4 report also shows similar facts i.e. 53% women (15-49
years of age) and 58.4% of children (6-59 months) are anaemic and 35.7% of
children (under 5) are underweight.
● According to Global Hunger Index 2017 (published by International Food Policy
Research Institute), India ranks 94 out of 107 countries.
Why is Securing Food a Challenge?
Over the coming decades, a changing climate, growing global population, rising food prices,
poor agricultural growth rate and environmental stress factors will have significant yet
highly uncertain impacts on food security.
To tackle the quantitative and qualitative aspect of food security problem, India provides
three food-based safety nets
● Public Distribution System (PDS)
● Integrated Child Development Scheme (ICDS)
● Mid-Day Meals Program (MDM)

Critical Appraisal of ICDS and MDM

● Due to meager allocation of resources and faulty policy designs, the overall impact
of ICDS and MDM over malnutrition has remained very limited.
● The states with high degree of malnutrition, have low coverage of both the schemes.
● Poor quality of nutrient deficient meals is being served at most of the schools.
● Since food is nutrition deficient in ICDS as well, children are facing the problem of
hidden hunger i.e. prevalence of Iodine, calcium, iron or Vitamin A deficiency.
● FOCUS reports, corruption is the main reason for failure of ICDS and MDM in
removing malnutrition.
● MDM is falling prey to private contractors. Also, political leaders and influential
business people have formed SHGs and mahila mandals to gain such contracts.
National Food Security Act, 2013
It marks a paradigm shift in approach to food security – from a welfare to rights based
approach.
The Act legally entitled up to 75% of the rural population and 50% of the urban population to
receive subsidized foodgrains under Targeted Public Distribution System.
There is a special focus in the Act on nutritional support to pregnant women and lactating
mothers and children up to 14 years of age by entitling them to nutritious meals.
Pregnant women will also be entitled to receive cash maternity benefit of Rs. 6,000 in order
to partly compensate her for the wage loss during the period of pregnancy and also to
supplement nutrition.
Keeping in view the important role that women play in ensuring food security of the family,
the Act contains an important provision for women empowerment by giving status of head
of the household to the eldest woman of the household, for the purpose of issuing ration
cards.
The Act brings the Right to Food within the framework of legally mandated entitlements.

Act includes three schedules:

● Schedule 1 prescribes issue prices for the PDS.
● Schedule 2 prescribes nutritional standards for MDM, take home rations and related
entitlements
● Schedule 3 lists various provisions to advance food security under 3 broad headings:
○ revitalisation of agriculture (land reform, R&D, etc.)
○ procurement, storage and movement of food grains, and
○ other provisions (safe drinking water, sanitation, healthcare, adequate
pensions for vulnerable, etc.)

Critical Evaluation of NFSA

● Cost Of Implementation: It will take around Rs 1.3 lakh crore (1.3% Of GDP at current
market prices) to provide annual food subsidy under NFSA.
● Risk of Leakages: NSSO data shows a huge leakage of 37% from PDS in 2011-12.
● Identification Of Beneficiaries: Identification is an inherent problem in targeted
schemes. It amounts to a huge exclusion error in India, mainly because of prevalent
illiteracy and corruption.

With overflowing godowns and the presence of one of the largest populations of hungry in
the world, there seems to be a paradox in the Indian system. Comment and provide
suggestions to rectify it.
More than 45 years after the Green Revolution began; India provides a unique spectacle of
overflowing godowns and rotting grains on the one hand while millions go to bed hungry.
GHI - India’s rank 94th among 107 countries.
Recent record on the food grain stock in the country shows that the government of India is
piling up one of the world’s largest stockpiles of food grains amounting to around 667 lakh
tonnes, as of January 2013. This is much higher than the government's rule of stocking up
buffer stock of 250 lakh tonnes which must be maintained in a year.
The entire food production and distribution system therefore needs an urgent overhaul. If
only the government was to focus on agricultural production, procurement and distribution
in a decentralized manner, much of the agrarian crisis would disappear.
There is a need is to take the following steps to address this paradox -
Institutional Set up
● Invest in setting up a network of grain silos, warehouses and godowns across 50
places spread throughout the country. The public-private partnership model to
improve storage facilities is a promising solution.
● Thrust on food processing industries thereby setting food processing centres
across the country.
Policies and legislations
 ● Strengthening PDS- The public distribution system should be strengthened and
should be designed to reach the unreached.
● Bringing food security bill based on right based approach - effective bill on food and
nutrition security, address the issue of rotting food grains -- a criminal waste when
people still die of starvation-- and rely on bottom-up methods that complement the
top-down administrative structure to identify the poor and reduce both exclusion
and inclusion errors in targeting
● Longer term policies of restoring purchasing power need to be started on an urgent
basis, and the stepping up of food-for-work programmes to cover every state
whether drought affected or not
● Decentralised procurement and decentralised storage will help to minimise
transport and transaction costs. The storage can be done through a national grid of
Community Food Banks (CFBs) managed by self-help groups

Food and nutritional security, increasing farm income, poverty alleviation and minimizing
crop production risks on account of climate change are the priority challenges faced by
Indian agriculture. Comment. Also, suggest measures to address these challenges on
priority basis.
Some remedial measures to tackle above mentioned challenges on priority basis:
● Increasing agricultural productivity - focusing on technology development and its
effective dissemination; focus on access to inputs in a timely manner along with
attention to output sector.
● Attention to rainfed regions of India – can constitute Rainfed Authority of India –
focus on crop diversification, availability of modern technology.
● Linking farmers with markets with least possible intermediaries.
● Increasing investment in agriculture, collaboration with the private sector with proper
legal reforms creating a conducive environment.
● The introduction of climate-smart agriculture to adapt the sector to changing
environment and climate characteristics.
● All the above measures should inter alia include the sustainable development
approach – tackling climate change challenges.
Despite being amongst the top agricultural producers, there exists a huge gap between
production and availability of food grains and vegetables in India. Analyse the reasons for
the same with special focus on post-harvest losses. Also enumerate the steps taken by the
government to address the problem.
India’s is the world’s largest producer of milk, many fruits and vegetables, and some staples.
In recent years India has achieved a record production in food grains.
Even though India has enough food it is home to about 25 percent of the world’s hungry
poor.
Reasons for the low per capita availability
● Poverty
● Exports : When demand is low, an increase in local production need not translate into
increased availability as a larger portion of the produce may be exported.
● Government stocks: Huge public stocks have been built up, foregoing consumption.
The food in these stocks is deteriorating because of poor management, reducing
availability.
 ● Huge leakages in Public Distribution System
● Post-Harvest losses: Around 25-30% of the production is wasted which means the
inefficient utilisation of production and lowering of its availability.
● Absence of a unified Agricultural market which creates wide differentials in prices
for the same commodity in different regions. It also leads to sharp seasonal
variation of prices.
These higher levels of post-harvest losses are caused by the following:
● Inefficient supply chain for the distribution of the fruits and vegetables because of
several problems: Numerous stakeholders working in isolation, Lack of system
integration, Presence of large number of unorganized retailers.
● Lack of temperature controlled vehicles and cold chain facilities.
● Unavailability of enough processing facilities for the agricultural produce
● Lack of vertical integration of production with processing.
The government has adopted multi-pronged strategy to improve food availability in India:
● Increase production through various programmes such as Rashtriya Krishi Vikas
Yojana, ISOPOM etc.
● Increasing purchasing power through welfare measures such as MGNREGA, NSAP
etc.
● Reducing leakages by improving PDS through Aadhaar and Direct Benefit Transfer.
● Rationalising buffer stocks
● E-NAM- pan-India electronic trading portal which networks the existing APMC
mandis to create a unified national market for Agriculture.
Several steps have also been taken to reduce post-harvest losses:
● Scheme for Development of Infrastructure for Food Processing having components
of Mega Food Parks, Integrated Cold Chain, Value Addition and Preservation
Infrastructure
● Scheme for Quality Assurance, Codex Standards, Research & Development and
Other Promotional Activities.
● Central Sector Scheme of Cold Chain, Value Addition and Preservation
Infrastructure.
● Various departments and ministries are providing assistance for setting up cold
storages under different schemes.

The government of India has taken several initiatives to promote diversification of

agriculture, remove regional bias and reduce input intensity. These include:
● Promotion of cultivation of pulses and coarse cereals under National Food Security
Mission (NFSM) and oilseeds under National Mission on Oilseeds and Oil Palm
(NMOOP)
● Crop Diversification Programme in Original Green Revolution States as a sub scheme
of Rashtriya Krishi Vikas Yojana (RKVY) since 2013-14
● Technology Mission for the Integrated Development of Horticulture in the
Northeastern Region. This will ameliorate the regional bias.
● Initiative for Nutritional Security through Intensive Millet Promotion (INSIMP),
National Horticulture Mission (NHM) and Technology Mission on Integrated Scheme
of Oilseeds, Pulses, Oil Palm and Maize (ISOPOM)
 ● Promoting water conservation techniques like Direct Seeded Rice (DSR), System of
Rice Intensification (SRI), alternate wetting & drying method, laser land levelling,
adoption of short duration and drought tolerant varieties, etc (NFSM) through
programs like Bringing Green Revolution to Eastern India (BGREI), National Food
Security Mission (NFSM), etc.
● Promoting organic farming through various schemes/ programmes like National
Mission for Sustainable Agriculture (NMSA)/ Paramparagat Krishi Vikas
Yojana(PKVY) , Rashtriya Krishi Vikas Yojana (RKVY) etc.

FCI rice to be used for ethanol production

● The Central government has allocated 78,000 tonnes of rice procured for food
security purposes to be diverted to ethanol production instead this year, at a
subsidised rate of ₹20 a kg.
● part of the government’s plan to double distilling capacities by 2025, partly by
encouraging an increase in the share of grain based ethanol production from the
current focus on molasses based production.
● achieving 20% blending of ethanol in petrol by five years to 2025. The last two years
have seen blending levels of around 5%, which is likely to jump to 8.5% in the current
year.

Technology Missions
Technology Missions are mission-mode projects aiming towards rejuvenating the
agriculture sector & its sub-sectors via technological enhancements.
Techniques adopted for such purposes are generally scientific and mechanized, and support
is provided by the Government to procure such advancements by ways of subsidy,
promotion, credit-linked subsidy, soft loans, etc.
Horticulture
About Horticulture
● Horticulture includes production, utilisation and improvement of horticultural crops,
such as fruits and vegetables, spices and condiments, ornamental, plantation,
medicinal and aromatic plants.
● Horticulture crops are characterised by high-value crops, higher productivity per unit
of area and lower requirement of irrigation and input cost.
● India accounts for 13% of the global production of fruits and 21% of vegetables,
making it the second largest producer, after China.
Significance of Horticulture
● Sunrise sector: owing to its potential to raise farm income, provide livelihood security
 and earn foreign exchange through export.
● High export value: Horticultural sector accounts for about 37% of the total exports of
agricultural commodities in India.
● Increasing production: The production of Horticulture crops has outpaced the
production of food grain since 2012-13
● High productivity as compared to food grains:
● The demand for horticulture produce is on the rise due to increasing population,
changing food habits, realization of high nutritional value of horticultural crops and
greater emphasis on value addition.
Constraints in development of horticulture
● characterized by small, segregated farms, rain fed crops, inadequate supply of
quality planting material (like seeds and saplings) which leads to low per hectare
yields.
● Inadequate Post harvest infrastructure
● Huge Wastage: Of the total annual production, 30-40 per cent is wasted before
consumption.
● Limited support by Government: For instance, Horticulture crops are not covered
under minimum support prices (MSP) available for grains and pulses.
● Constraints on exports: Low exportable surplus, stiff competition in the global
market, poor market intelligence, lack of brand status to the commodities, and export
in the form of raw materials are the major market related constraints inhibiting
exports growth.
● Non trade barriers like sanitary and Phyto sanitary measures have also affected
market access due to poor or non-uniform standards of commodities.
Horticulture Cluster Development Programme (CDP)
● a central sector programme, implemented by National Horticulture Board
● It will leverage geographical specialisation and promote integrated and market-led
development; making Indian horticulture clusters globally competitive.
Mission for Integrated Development of Horticulture (MIDH)
● approved in 2013
● Centrally Sponsored Scheme for the holistic growth of the horticulture sector
covering fruits, vegetables, root & tuber crops, mushrooms, spices, flowers, aromatic
plants, coconut, cashew, cocoa and bamboo.
● (GOI) contributes 85% of total outlay for developmental programmes in all the states
except the states in North East and Himalayas(100%)
● Similarly, for development of bamboo and programmes of National Horticulture
Board (NHB), Coconut Development Board (CDB), Central Institute for Horticulture
(CIH), Nagaland and the National Level Agencies (NLA), GoI contribution is 100%..
Strategy of the MIDH
● on production of quality seeds and planting material
● production enhancement through productivity improvement measures along with
support for creation of infrastructure to reduce post harvest losses
● improved marketing of produce with active participation of all stakeholders,
particularly farmer groups and farmer producer organisations.
● The interventions under MIDH will have a blend of technological adaptation
supported with fiscal incentives for attracting farmers as well as entrepreneurs
 involved in the horticulture sector.
● subsumed 6 ongoing schemes:
○ National Horticulture Mission (NHM)
○ Horticulture Mission in NE and Himalayan Region (HMNEH)
○ Restructured National Bamboo Mission :
■ To increase the area under bamboo plantation in non-forest
Government and private lands to supplement farm income and
contribute towards resilience to climate change.
■ To improve post-harvest management through establishment of
innovative primary processing units, treatment and seasoning plants,
primary treatment and seasoning plants, preservation technologies
and market infrastructure.
■ To promote product development at micro, small and medium levels
and feed bigger industry
■ To promote skill development, capacity building, awareness
generation for development of bamboo sector.
● National Horticulture Board (NHB) schemes
● Coconut Development Board (CDB) schemes
MIDH works closely with National Mission on Sustainable Agriculture (NMSA)
National Mission on Agriculture Extension and Technology (NMAET)
Sub Mission on Agriculture Extension (SMAE):
● It focuses on Awareness Creation and enhanced use of appropriate technologies in
agriculture & allied sectors.
● Personnel are trained under ACABC (Agri-clinic and Agri-Business Centres
schemes) and DAESI (Diploma in Agriculture Extension Services for input dealers).
● To restructure & strengthen agricultural extension to enable delivery of appropriate
technology and improved agronomic practices to the farmers through interactive
methods of information dissemination, use of ICT, capacity building & institution
strengthening;
Sub Mission on Seed and Planting Material (SMSP):
● development of quality seeds
● protection of rights of farmers and plant breeders and
● to encourage development of new varieties of plants.
● To make available quality seeds and increase Seed Replacement Ratio
Sub Mission on Agricultural Mechanisation (SMAM)
● needs of small and marginal farmers through institutional arrangements such as
Custom hiring, mechanisation of selected villages, subsidy for procurement of
machines and equipment, etc.
Sub Mission on Plant Protection and Plant Quarantine (SMPP)
● keeping the crops disease free using scientific and environment friendly techniques
through promotion of Integrated Pest management.
Farmers’ skill training and field extension as contained in all 4 sub missions will be
converged with similar farmer related activities going on through ATMA (Agriculture
technology management agency).

National Mission on Oilseeds and Oil Palm (NMOOP)

India is heavily dependent on imports to meet its edible oil requirements and largest
importer of vegetable oils in the world (15% share) followed by China & USA. Of
imported edible oils , the share of palm oil is about 60%.
The strategy involves
● increasing seed replacement ratio
● irrigation coverage and
● use of wastelands and watersheds.
The mission includes three mini missions:
● to increase production and productivity of oilseeds
● bringing an additional area of 1.25 Lakh hectare under Oil Palm cultivation by the
end of 2016-17 and production of Fresh fruit bunches.
● aims at enhancing seed collection of Tree Borne Oil
revised in 2017. Contribution of the Centre and State is 75:25.
Centre to boost oil palm farming
● The Centre will offer price assurances, viability gap funding and planting material
assistance to oil palm farmers to boost domestic production and reduce dependence
on imports via a new mission
● Over a five year period, the financial outlay for the National Mission on Edible Oils –
Oil Palm (NMOOP) will amount to ₹11,040 crore of which ₹8,844 crore is the share of
 the Central government
● The Mission hopes to increase oil palm acreage by an additional 6.5 lakh hectares by
2025­26 and grow production of crude palm oil to 11.2 lakh tonnes by 2025­26 and up
to 28 lakh tonnes by 2029­30.
● “The government will develop a mechanism to fix and regulate palm oil prices. So if
the market is volatile, then the Centre will pay the difference in price to the farmers
through direct benefit transfer
● This is the first time the Centre will give oil palm farmers a price assurance, with
industry mandated to pay the viability gap funding of 14.3% of crude palm oil prices.
● In a bid to encourage oil palm cultivation in northeastern India and in the Andaman
and Nicobar islands, the Centre will bear an additional cost of 2% of the crude palm
oil prices in these States.
● Biodiversity Concern : an assessment by the Indian institute of Oil Palm Research
had found 28 lakh hectares across the country which could be safely used for oil
palm cultivation. Less than four lakh hectares are currently planted with oil palm.
● The decisions would benefit farmers and make it viable for the industry to continue
contributing towards making the country self-sufficient in edible oil requirements and
consequently save foreign exchange
National Saffron Mission

Technology Mission on Citrus

Technology Mission on Coconut

Integrated Scheme of Oilseeds, Pulses, Oil Palm and Maize (ISOPOM)

● To increase production of oilseeds including soybean in the country in 14 major
oilseeds growing States.
● Under this scheme, financial assistance is provided to farmers for purchase of
breeder seed, and other inputs including free distribution of seed minikits of
oilseeds and maize to encourage all types of farmers including small and marginal
farmers to grow these crops.
● The Government fixes Minimum Support Price (MSP) for agricultural commodities
including Soybean on the recommendations of the Commission for Agricultural
Costs and Prices (CACP) to ensure remunerative prices to the growers for their
produce.

National Mission for Sustainable Agriculture (NMSA)

● one of the eight missions under NAPCC (National Action Plan for Climate Change).
● It aims at making agriculture more productive, sustainable, and remunerative and
climate resilient by
○ promoting location specific integrated farming system
○ soil and moisture conservation measures
○ comprehensive soil health management
○ efficient water management practices and
○ mainstreaming rainfed technologies.
 ● Rain-fed Area Development and Soil Health Management are its two components.

Green Revolution – Krishonnati Yojana

It aims to bring together 11 agricultural schemes besides their effective monitoring.
The schemes are:
● Mission for Integrated Development of Horticulture (MIDH)
● National Food Security Mission (NFSM)
● National Mission for Sustainable Agriculture (NMSA)
● Sub-Mission on Agricultural Mechanisation (SMAM)
● Integrated Scheme on Agricultural Marketing (ISAM).
● Submission on Agriculture Extension (SMAE)
● National e-Governance Plan – Agriculture (NeGP-A).
These schemes look to develop the agriculture and allied sector in a holistic and scientific
manner to increase the income of farmers by enhancing production, productivity and better
returns on produce.

Explain the role of agricultural extension in boosting agricultural productivity. Also, discuss
in brief the importance of the National Mission on Agricultural Extension & Technology.
Agricultural extension is the application of scientific research and knowledge to agricultural
practices through farmer education.
Agriculture Extension services are of 3 types:
● Technology transfer – the traditional model of the transfer of advice, knowledge and
information.
● Advisory – the use by farmers of experts as a source of advice in relation to specific
problems faced by them.
● Facilitation – the aim is to help farmers to define their own problems and develop
their own solutions.
Thus, different types of extension services help increase the agricultural productivity:
● By replacing traditional farming mechanisms by modern and advantageous systems
● By enabling pooling of resources to achieve economy of scale
● Changing attitude of farmers towards new and productive farming approaches
● Efficient utilisation of resources such as water, soil, pesticides, weedicides etc.
National Mission on Agricultural Extension & Technology focuses on:
● Sustainable farm agriculture especially in rainfed areas, through an integrated
farming systems approach which incorporates natural resource management,
minimizing external cost and maximizing return through value addition in crops,
horticulture, livestock, fisheries etc.
● Capacity building of farmers, extension functionaries, institutions and other
stakeholders is provided through knowledge centres.
● Partnering with knowledge generators public - private, formal and informal to collect
and disseminate the knowledge through all channels.
● The power of ICT has been fully leveraged for linking the mission from national to
field level through farmers portal, Kisan call centres etc.
Discuss the potential of Information and Communication Technology (ICT) to improve the
livelihood of farmers in India. What are the initiatives taken by the government under
'National e-Governance Plan in Agriculture (NeGP-A)' in this regard?
The potential role of ICT in agriculture
● Information dissemination throughout the crop-cycle - through technologies (like
Satellite Communication, Geographic Information System (GIS), computer network,
video and mobile phones) regarding weather conditions, input requirements like soil
health, fertilizers etc. Example – DD kisan.
● Increasing productivity – by precision farming, popular in developed countries, which
extensively uses IT to make direct contribution to agricultural productivity.
● Agriculture marketing - Awareness of up-to date information on prices for
commodities, inputs and consumer trends help improve farmer’s livelihood. For
example National agriculture market is possible only due to ICT
● Collectivization of producers – to facilitate appropriate alliances and overcoming
the barrier of small landholdings and achieving economies of scale. Example –
farmer producer organizations.
● New employment opportunities - in the rural sector- eg:- information kiosks .This will
reduce the disguised unemployment.
● Effective monitoring and analysis – of agricultural performance through ICT to
reduce losses at various levels of supply chain.
● Increasing effectiveness of government service delivery – in quick estimation and
timely compensation to farmers in wake of disaster.
● Insurance: PMKSY aims to assess the damage to crops for insurance purposes
through satellite and Drone imagery. This will improve accuracy and compensation.

Considering the potential of ICT in this sector government has taken many initiatives under
NeGP-A. Some of which are as follows:-
● Agricultural services like Pesticide registration, Display on the Web of Seed Testing
Results, Prices and arrival details, District level Agromet advisories, Information on
fertilizers/seeds/pesticides etc.
● Mobile applications for increasing awareness by providing information – Example:
Kisan Suvidha, Pusha Krishi, India weather etc.
● Development of web portals - Farmers’ Portal where a farmer can get information on
a range of topics, mKisan Portal where officials and scientists can send targeted
advisories to farmers, Crop Insurance Portal.
● e-Mandi: has been launched to make procurement of agricultural products smoother
● Modernisation of land records - Many States have computerized their land records
and are providing computerized copies of Records of Rights on demand.
 ECONOMICS FOR ANIMAL REARING

Ever since the beginning of civilization, humans have depended on animals for many
requirements, such as that of food (milk, meat and egg), clothing (hide or wool), labour
(pulling, carrying load) and security etc. The development of desirable qualities in all such
animal species, through creating better breeds, has been an important human achievement.
The branch of science, which deals with the study of various breeds of domesticated
animals and their management for obtaining better products and services from them is
known as Animal Husbandry.
When it incorporates the study of proper utilization of economically important domestic
animals, it is called Livestock Management.

Present Status of Animal Rearing in India

● According to NSSO 68th round survey, 16.44 million people are engaged in the
activities of farming of animals, mixed farming, fishing and aquaculture.
● It contributes around 4% of GDP and 25% of Agricultural GDP.
● India is the largest producer of milk in the world with 165.4 million tonnes in
2016-17, and per capita availability of 355 g/day.
 ● India is the second largest producer of Fish (marine + fresh water) and also, the
second largest producer of Fresh Water Fish. Due to its large coastline, India has
high potential for fisheries.

Challenges faced by Animal Husbandry Sector

● Lack of access to organized markets and meager profits : Informal market
intermediaries often exploit the producers.
● Shrinking and degrading pastures coupled with limitations of fodder, lack of
sufficient veterinary care and apathy to assisted reproductive technologies
● Livestock extension services are almost absent : only 5.1% of the farm households
were able to access any information on animal husbandry against 40.4% for crop
farming.
● Sufficient facility / setup for disease diagnosis, reporting, epidemiology,
surveillance and forecasting are not on board.
● Testing of milk for safety and quality parameters at the collection centers is almost
nonexistent. Due to quality concerns of milk, value addition and export potential has
not been fully exploited.
● India has a huge diversity of animals, which are adaptable to harsh climate, limited
nutrition, and resistance to diseases and stress. Populations of most of these
breeds have alarmingly gone down due to comparative preferences for highly
productive exotic breeds.

Government Initiatives to Overcome the Challenges

National Livestock Mission
● designed to cover all the activities required to ensure quantitative and qualitative
improvement in livestock production systems and capacity building of all
stakeholders.
● four sub-missions as follows:
○ Sub-Mission on Fodder and Feed Development : address the problems of
scarcity of animal feed resources.
○ Sub-Mission on Livestock Development : provisions for productivity
enhancement, entrepreneurship development and employment generation
■ strengthening of infrastructure of state farms with respect to
modernization, automation and biosecurity
■ conservation of threatened breeds,
■ minor livestock development
○ Sub-Mission on Pig Development in North-Eastern Region
○ Sub-Mission on Skill Development, Technology Transfer and Extension
National Mission on Bovine Productivity (NMBP)
● implemented as a part of Rashtriya Gokul Mission under umbrella scheme White
Revolution-Rashtriya Pashudhan Vikas Yojna.
● The objective is to enhance milk production and productivity of the bovine
population, increase trade of livestock and its products, e-market for bovine
germplasm and to double farmers’ income by 2022.
 ● 4 components: Pashu Sanjivni, Advanced breeding technology, e-Pashuhaat,
National Bovine Genomic Centre for indigenous breeds
National Program for Bovine Breeding and Dairy Development
The aim is to integrate milk production and dairying activities in a scientific and holistic
manner, so as to attain higher levels of milk production and productivity, to meet the
increasing demand for milk in the country.
● NPBB focuses on ensuring quality Artificial Insemination services at farmers
doorstep. Rashtriya Gokul Mission comes within it.
● NPDD will focus on creating infrastructure related to production, procurement,
processing and marketing by milk unions/federations and also extension activities
including training of farmers.
The challenges faced by the dairy sector are:
● Small herd size and poor productivity
● Inadequate budgetary allocation over the years
● Lack of equity with crop production
● Inadequate availability of credit
● Poor access to organized markets deprive farmers of proper milk price
● Shortage of manpower and funds
● Disease outbreaks: mortality & morbidity
● Deficiency of vaccines and vaccination set-up
● Majority of grazing lands are either degraded or encroached

More feed, better productivity

● Major challenge in animal husbandry : lack of affordable good quality feed and
fodder for livestock
○ one of the chief reasons why Indian livestock’s milk productivity is 20%­60%
lower than the global average. If we break down the input costs, we find that
feed constitutes 60%­70% of milk production costs.
● Importance of animal husbandry : livestock is the major source of cash income for
about 13 crore marginal farmers and is an insurance in the event of crop failure. As
about 200 million Indians are involved in dairy and livestock farming, the scheme is
important from the perspective of poverty alleviation.
● Sub­Mission on Fodder and Feed : recently announced by the Indian government
○ When the National Livestock Mission was launched in 2014, it focused on
supporting farmers in producing fodder from non forest wasteland/grassland,
and cultivation of coarse grains. However, this model could not sustain fodder
availability due to lack of backward and forward linkages in the value chain.
○ This programme focuses primarily on assistance towards seed production
and the development of feed and fodder entrepreneurs. It now provides for
50% direct capital subsidy to the beneficiaries under the feed and fodder
entrepreneurship programme and 100% subsidy on fodder seed production to
identified beneficiaries.
○ intends to create a network of entrepreneurs who will make silage (the hub)
and sell them directly to the farmers (the spoke). It is premised on the idea
that the funding of the hub will lead to the development of the spoke.
 ○ The large scale production of silage will bring down the input cost for farmers
since silage is much cheaper than concentrated feed.
○ Private entrepreneurs, self help groups, farmer producer organisations, dairy
cooperative societies, and Section 8 companies (NGOs) can avail themselves
of the benefits under this scheme.
○ The scheme will provide 50% capital subsidy up to ₹50 lakh towards project
cost to the beneficiary for infrastructure development and for procuring
machinery for value addition in feed such as hay/silage/total mixed ration.
○ The revised scheme has been designed with the objectives of increasing
productivity, reducing input costs, and doing away with middlemen (who
usually take a huge cut).
● A major challenge in the feed sector emanates from the fact that good quality green
fodder is only available for about three months during the year.
● The ideal solution would be to ferment green fodder and convert it into silage. Hence,
under the fodder entrepreneurship programme, farmers will receive subsidies and
incentives to create a consistent supply chain of feed throughout the year. The idea
is that farmers should be able to grow the green fodder between two crop seasons
and entrepreneurs can then convert it into silage and sell it at nearby markets at one
tenth of the price of concentrate/dry feed ensuring affordable quality fodder to dairy
farmers.
● Since India has a livestock population of 535.78 million, an effective implementation
of this scheme will play a major role in increasing the return on investment for our
farmers.

Pink Revolution
Pink Revolution is a term used to denote the technological revolutions in the meat and
poultry processing sector.
● In 2014, India surpassed Brazil and Australia to become the largest bovine meat
exporting country in the world. India’s top agricultural export item
● India is home to the largest population of cattle and buffalo in the world (58% of
world’s buffalo population).
● Cost of production of meat is much lower in India. Also, India is geographically well
placed in terms of export to the consuming nations(Middle-East and SouthEast Asia)
Challenges faced by Indian Meat Sector
● Largely Unorganized (90% unorganized)
● Lack of adequate meat hygiene
● Inadequate infrastructure like outdated abattoirs (slaughter houses), poor cold
storage facilities etc.
● Animals are not specifically bred for meat.
● Poor quality of meat because spent animals (old age farm animals) are generally
used for meat production.
● Lack of awareness about food safety norms and packaging standards.

Fisheries
Fisheries is a sunrise sector with varied resources and potential, engaging over 14.50
million people at the primary level and many more along the value chain. Constituting about
6.30% of the global fish production and 5% of global trade, India has attained the second
largest fish producing and second largest aquaculture nation in the world.
Besides being a source of protein, income and livelihood to poor fishermen, the fishery
sector is also responsible for engaging the rural population in ancillary activities like
marketing, retailing, transportation etc.

Challenges Faced by the Fisheries Sector

● Inland fish production has declined due to proliferation of water control structure,
loss of habitat and indiscriminate fishing.
● Marine fishing has declined due to depleting resources, energy crisis and resultant
high cost of fishing.
● Low investment in the sector coupled with limited capabilities of fishermen and fish
farmers.
● Slow development and adoption of new and improved farming technologies.
● Inadequate cold chain, market, trade and safety.
● Environmental integrity and a vicious circle of low productivity.
● The sector is also experiencing loss of biodiversity on account of adverse climate
change.
● Water pollution; unscientific management of aquaculture and contamination of
indigenous germplasm resources.
Blue Revolution – Neel Kranti Mission(Integrated Development and Management of
Fisheries)
Vision
● Creating an enabling environment for integrated development of the full potential of
fisheries of the country, along with substantially improvement in the income status
of fishers and fish farmers keeping in view the sustainability, bio-security and
environmental concerns.

Objectives
● To fully tap the total fish potential of the country both in the inland and the marine
sector and triple the production by 2020.
● To transform the fisheries sector as a modern industry with special focus on new
technologies and processes.
● To double the income of the fishers and fish farmers with special focus on increasing
productivity and better marketing post harvest infrastructure including e-commerce
and other technologies and global best innovations.
● To triple the export earnings by 2020 with focus on benefits flow to the fishers and
fish farmers including through institutional mechanisms in the cooperative, producer
companies and other structures.
● To enhance food and nutritional security of the country.

Strategy – Central Sector Assistance Schemes

 ● merging all the ongoing schemes under an umbrella of Blue Revolution.
● following components:
○ National Fisheries Development Board and its activities: increasing fish
production, enhancing its exports, applying modern tools and techniques,
creation of employment etc.
○ Development of Inland Fisheries and AquaCulture : Construction and
renovation of ponds, establishing fish hatcheries, stocking of fingerlings,
training and skill development etc.
○ Development of marine fisheries, infrastructure and post-harvest operations:
○ Institutional arrangements for fisheries sector
○ Strengthening of database and Geographical Information System of the
fisheries sector
○ National scheme of welfare of fishers
An Integrated National Fisheries Action Plan 2020 has been developed to achieve the
concept of Blue Revolution.

National Policy on Marine Fishery, 2017

provides guidance for promoting 'Blue Growth Initiative' which focuses on ushering 'Blue
Revolution' (NeeliKranti) by sustainable utilization of fisheries wealth from the marine and
other aquatic resources of the country for improving the lives and livelihoods of fishermen
and their families.

DRAFT BLUE ECONOMY POLICY FOR INDIA

● Ministry of Earth Sciences (MoES) has rolled out the Draft Blue Economy policy for
India
● According to World Bank, Blue Economy refers to sustainable use of ocean resources
for economic growth, improved livelihood and jobs, and ocean ecosystem health.

The document recognizes the following seven thematic areas-

● National accounting framework for the blue economy and ocean governance
● Coastal marine spatial planning and tourism
 ● Marine fisheries, aquaculture, and fish processing
● Manufacturing, emerging industries, trade, technology, services, and skill
development
● Logistics, infrastructure and shipping, including trans-shipments
● Coastal and deep-sea mining and offshore energy
● Security, strategic dimensions, and international engagement

Operation Flood
world's biggest dairy development program, launched in 1970 by National Dairy
Development Board (NDDB). It transformed India from a milk-deficient nation into the
world's largest milk producer. (20% of the global output)
In 30 years it doubled milk available per person, and made dairy farming India’s one of the
largest self-sustainable rural employment generators.
● It helped dairy farmers direct their own development, placing control of the
resources they create in their own hands.
● A National Milk Grid links milk producers throughout India with consumers in over
700 towns and cities, reducing seasonal and regional price variations while ensuring
that the producer gets fair market prices in a transparent manner on a regular basis.
● The bedrock of Operation Flood has been village milk producers' cooperatives, which
procure milk and provide inputs and services, making modern management and
technology available to members.
Criticism
● Operation Flood failed to replicate the success of Amul (Anand Milk Union Limited) in
states other than Gujarat.
● Analysts cited reasons for this failure: political interference, bureaucratic apathy,
lack of a professional approach, lack of knowledge among the co-operative board
and committee members of how to run co-operatives

Need of a Second White Revolution to Overcome Supply Side & Demand Side Challenges
Supply-Side Challenges:
● Eighty per cent of Indian cattle is owned by farmers with a herd size of up to four
animals. But a number of factors impact the sustenance of these traditional small
farms, such as:
○ the subsidiary nature of dairying as an activity
○ stagnant yields
○ rising feed/fodder costs
○ a shift in rural areas towards other vocations
Demand-Side Challenges:
India is slated to witness a boom in dairy demand of over 6 percent annually, due to
increasing population and increase in income. However, the average annual growth in
supply is only about 4%.
Way Forward
● Large scale dairy farms: Large scale cooperatives and corporates can establish
integrated dairy farms, with automated milking, feeding, processing, integrated feed
production and in-house breed improvement.
● Hub and Spoke Model: The main farm (hub), owned by an anchor has all the
integrated facilities for milking, feed production and milk processing. The
connected/satellite farms (spokes), with 50 to 200 cattle each, have basic
infrastructure for milking and cattle management. The anchor provides technical
support (veterinary care, feed management, and training) to the satellite farms. This
model will be socially inclusive.
● Community Model: Community ownership and management of common
infrastructure for housing, breeding, feeding and milking under a
cooperative/producer company model shall be applicable here.

Animal rearing is a key livelihood and risk mitigation strategy for tribals and small and
marginal farmers, particularly across the rainfed regions of India. Substantiate. Also,
discuss some strategies to realize the potential of this sector.

Livestock contribute over 1/4th to the agricultural GDP and about 5% of the country’s GDP
and engage about 9% of the agricultural labor force.
Its growth has special significance for small and marginal farmers, landless laborers and
tribals and farmers in rain-fed areas as they are more dependent on livestock for
supplementing incomes and generating gainful employment.
● In India, livestock wealth is much more equitably distributed than wealth associated
with land. About 70 per cent of the livestock market in India is owned by 67 per cent
of the small and marginal farmers and by the landless.
● The small ruminants and poultry livestock provide livelihood support to the poor
underprivileged landless, and marginal farm households as their upkeep cost is low
and are a source of milk, eggs and meat.
● Rain-fed regions face uncertain and erratic weather conditions which negatively
impact crop productivity. Animals as an insurance against income shocks of crop
failure, natural calamities and climate change.

Following steps can be taken to improve the potential of the sector:

● Livestock producers, including traditional pastoralists and smallholders, are both
victims of natural resource degradation and contributors to it. Corrective action
related to environmental protection, ecosystem services, community led
interventions and through incentives for private investment should be taken.
● Improving livestock-related technologies for livestock feed, breeding, processing,
technical manpower and infrastructure.
● Frequent outbreak of diseases and poor productivity should be tackled with improved
focus on animal health and outreach of veterinary services.
● Development of better paying markets for livestock and commercialization of
livestock.
With only 2.29% of the land area of the world, India is maintaining about 10.71% of the
world’s livestock.
India’s livestock sector is one of the largest in the world. In 2010-11 livestock generated
outputs worth Rs 2075 billion (at 2004-05 prices) which comprised 4% of the GDP and 26%
of the agricultural GDP. The total output worth was higher than the value of food grains.
There are number of socio-economic, environmental, technological and other challenges
that need to be overcome through appropriate policies, technologies and strategies in order
to harness the pro-poor potential of animal husbandry.

Nutrition: Fodder and Feed

With only 2.29% of the land area of the world, India is maintaining about 10.71% of the
world’s livestock. The nutritive value of feed and fodder has a significant bearing on
productivity of livestock. The gap between the demand and supply of fodder is fast
increasing.
Challenges
● A majority of the grazing lands have either been degraded or encroached upon
restricting their availability for livestock grazing.
● Due to increasing pressure on land for growing food grains, oil seeds, and pulses,
adequate attention has not been given to the production of fodder crops.
● A substantial amount of crop residues is burnt by the farmers after harvesting of
main crops like wheat and paddy.
Way Forward:
● A reliable data-base is required for assisting in realistic planning.
● The forest department can play a major role in augmenting fodder production in the
country. The degraded forest areas, mostly under the Joint Forest Management
Committees (JFMCs)
● There is a need for undertaking an effective Extension campaign in major states for
efficient utilization of crop residues.
● Production of seeds of high yielding fodder varieties needs to be increased in the
organized/cooperative sector.
FOOD PROCESSING AND RELATED INDUSTRIES IN INDIA – SCOPE AND SIGNIFICANCE,
LOCATION, UPSTREAM AND DOWNSTREAM REQUIREMENTS, SUPPLY CHAIN
MANAGEMENT

Food processing is a large sector that covers activities such as agriculture, horticulture,
plantation, animal husbandry and fisheries. It also includes other industries that use
agriculture inputs for manufacturing of edible products.

Supply Chain of the Food Processing Sector

A supply chain is a network between suppliers (farmers) of raw material, company (food
processor) and distribution network to market the finished products.

Backward and Forward Linkages

Backward Linkage: It means the connectivity of the FPIs with sources of raw material
supply. For example, supply of raw material like tomatoes to a ketchup manufacturer.
Forward Linkage: It means the connectivity of FPIs with the markets through a distribution
network comprising physical infra like storages, road and rail network etc.

Significance of Linkages
● It encourages and enables farmers to grow products of appropriate quality
● It helps the farmers fetch appropriate and remunerative return for their produce,
especially the marginal and medium farmers.
 ● It helps to reduce the food wastage especially of perishable products with low shelf
life like fruits, vegetables, dairy products etc.
● It ensures timely delivery of food products to the consumer markets
● High quality products and better infrastructure results in cost saving and enhanced
efficiency.
● Helps to improve hygiene and food safety standards leading to greater acceptability
of processed food domestically and in the international market.

Existing Challenges in Establishing Robust Linkages

● Small and dispersed marketable surplus due to fragmented holdings
● High seasonality of raw material production
● Large number of intermediaries
● Poor infrastructure facilities like cold storage, transport facilities, electricity etc.
● Industry is highly fragmented and is dominated by the unorganized sector
● Substandard levels of processing industries
● Inadequacy of information with farmers and small processors.
● Underdeveloped food testing network
Scope and Significance of the Food Processing Sector in India
The scope can be gauged from the following:
● In 2016, the FPIs constituted more than 8% to India’s GDP through manufacturing.
● It is the fifth largest industry in our country in terms of production, consumption,
export and growth.
● India's organic food market is expected to increase by three times by 2020.
● India is a country with a population of over 1.25 billion. With a rising middle class
having a considerable disposable income, the domestic market offers significant
demand opportunities.
● 100% FDI is allowed in the sector. CII estimates that this sector has the potential to
attract as much as US $33 billion of investment over the next 10 years and also to
generate employment of nine million person-days.
● India ranks no. 1 in the world in the production of milk, ghee, ginger, bananas, guavas,
papayas and mangoes. Further, India ranks no. 2 in the world in the production of
rice, wheat and several other vegetables & fruits. If the surplus production of cereals,
fruits, vegetables, milk, fish, meat and poultry, etc. are processed and marketed both
inside and outside the country, there will be greater opportunities for the growth of
the sector.

Potential of Processed Food Sector in India

● Demand: With a population of more than one billion individuals and food constituting
a major part of the consumer’s budget.
● A well-developed food processing industry is expected to increase farm gate prices,
reduce wastages, ensure value addition, promote crop diversification, generate
employment opportunities as well as export earnings. This sector is also capable of
addressing critical issues of food security and providing wholesome, nutritious food
to our people.
 ● Scope for development: Out of the country’s total agriculture and food produce, only
2 per cent is processed.
● Raw material: Being an agrarian economy, there is sufficient supply of raw material
in India.
● Employment generation: It has the potential to generate non-farm employment,
especially in rural areas. reduce disguised unemployment.

Factors Responsible for Success of Food Processing Sector in India

● Integrated Supply Chain and Scale of Operations
○ While India ranks second in production of fruits & vegetables, nearly 20 to 25
percent of this production is lost in spoilage in various stages of harvesting.
The key issues are poor quality of seeds, planting material and lack of
technology in improving yield. Hence there is a need to establish backward
linkages with the farmers with the help of arrangements such as contract
farming to improve the quality of the produce.
○ Nearly 90 per cent of the food processing units are small in scale and hence
are unable to exploit the advantages of economies of scale. This is also true
with land holdings.
● Processing Technology
○ Currently, most of the processing in India is manual. There is limited use of
technology like pre-cooling facilities for vegetables, controlled atmospheric
storage and irradiation facilities.
● Increasing Penetration in Domestic Markets
○ India has a large untapped customer base and even a small footprint in the
domestic market would enable the player to gain significant volumes.
● Acceptance in the domestic market and hence higher penetration is driven by the
following factors:
○ Competitive Pricing : Consumers of processed foods are extremely price
sensitive. Even a small change in pricing can have a significant impact on
consumption.
○ Brand Competitiveness : Share of branded products in purchases of Indian
consumers has also increased substantially.
○ Product Innovation : Innovation in packaging and product usage is an
important success factor for processed foods. Increasing time constraints
amongst the working middle class has boosted consumption of products like
instant soups, noodles and ready-to-make products.
India’s Strengths in the Food Processing Sector
● Favourable-Factor Conditions : Due to its diverse agro-climatic conditions, it has a
wide-ranging and large raw material base suitable for food processing industries.
Presently a very small percentage of these are processed into value added products.
○ India’s comparatively cheaper workforce can be effectively utilized to set up
large low cost production bases for domestic and export markets.
● Related and Supporting Industries : India has a large number of research
institutions like Central Food Technological Research Institute, Central Institute of
Fisheries Technology, National Dairy Research Institute, National Research and
 Development Centre etc. to support the technology and development in the food
processing sector in India.
● Government Regulations and Support : The government has been developing
agri-zones and mega food parks to promote the food processing industry in India. In
order to promote investment in the food processing sector, several policy initiatives
have been taken during recent years, such as allowing 100% FDI.
● Large Number of Players : The organized sector is small but growing - for example, it
forms less than 15 percent of the dairy sector and around 48 per cent of the fruits
and vegetable processing. The sector offers potential for growth and a large number
of MultiNational Corporations have entered into India to leverage this opportunity.
Apart from above-mentioned strengths, the following areas have been identified by the
Ministry of Food Processing Industries where investments are required:
● Mega food parks
● Agri-infrastructure and supply chain integration
● Logistics and cold chain infrastructure
● Fruit and vegetable products
● Animal products, meat and dairy, Fisheries and seafood, Cereals, consumer foods
and ready-to-eat foods, Wine and beer, Machinery and packaging
Policy Initiatives and Measures Taken by the Government to Support the Food Processing
Sector
The government has sought to address the low scale of processing activity in the country by
setting up the mega food parks, with integrated facilities for procurement, processing,
storage and transport.
● Automatic approval for foreign equity up to 100 per cent is available for most of the
processed food items except alcohol, beer
● Zero duty import of capital goods and raw material for 100 percent export oriented
units
● dairy processing infra fund worth Rs 8,000 crore (2017-18)
● FSSAI plans to invest around Rs 482 crore (US$ 72.3 million) to strengthen the food
testing infrastructure in India
● Pradhan Mantri Kisan SAMPADA Yojana has been launched (Scheme for
Agro-Marine Processing and Development of Agro-Processing Clusters)
PM Kisan SAMPADA Yojana
It is a comprehensive package which will result in creation of modern infrastructure with
efficient supply chain management from farm gate to retail outlet.
It will not only provide a big boost to the growth of food processing sector in the country
but also help in providing better returns to farmers and is a big step towards doubling of
farmers income, creating huge employment opportunities especially in the rural areas,
reducing wastage of agricultural produce, increasing the processing level and enhancing
the export of the processed foods.
The following schemes will be implemented under PM Kisan SAMPADA Yojana :
● Mega Food Parks
● Integrated Cold Chain and Value Addition Infrastructure
● Creation / Expansion of Food Processing & Preservation Capacities
● Infrastructure for Agro-processing Clusters
● Creation of Backward and Forward Linkages
 ● Food Safety and Quality Assurance Infrastructure
● Human Resources and Institutions
Operation Green
Tomato, Onion and Potato processing Operation Green has been launched to promote FPOs,
agro logistics, processing facilities and professional management.

Fisheries and Aquaculture Infrastructure Development Fund (FAIDF) for the fisheries sector
and an Animal Husbandry Infrastructure Development Fund (AHIDF) for financing
infrastructure requirements of the animal husbandry sector.

Infrastructure Development in the Food Processing Sector

Scheme for Cold Chain, Value Addition and Preservation Infrastructure

The objective of the scheme is to facilitate creation of integrated cold chain and
preservation infrastructure facilities without any break from farm to consumer.
The scheme mentions three types of facilities to be created such as:
● Minimal processing centre at the farm gate level having facilities like weighing,
sorting, grading, pre-cooling etc.
● Mobile pre- cooling vans and reefer trucks
● Distribution hubs having facilities such as multi-purpose cold stores, variable
humidity stores, Quick Freezing and blast freezing etc.

Modernization of Abattoirs
promoting scientific and hygienic slaughtering, application of modern technology for waste
management, better by product utilization, provision of chilling facilities, retail cold chain
management etc. under PPP mode.

Make In India
As part of the Make In India campaign, the food processing sector was identified as one of
the 25 focus areas.

Food Processing Fund

A special fund in the NABARD worth INR 2,000 crore, designated as the Food Processing
Fund - for providing affordable credit to food processing units in Mega & Designated Food
Parks.

Mega Food Parks Scheme

It aims at providing a mechanism to link agricultural production to the market by bringing
together farmers, processors and retailers so as to ensure maximizing value addition,
minimizing wastage, increasing farmers’ income and creating employment opportunities
particularly in the rural sector.
Mega food parks typically consist of supply chain infrastructure including collection
centers, primary processing centers, central processing centers, cold chains and around
30-35 fully developed plots for entrepreneurs to set up food processing units.
Common facilities include cold storage, food testing and analysis lab, effluent treatment
plant, common processing facilities, packaging centre, power supply, water supply, seminar/
conference / training facilities etc.
The Mega Food Park Scheme is a “Cluster” approach on the Hub and Spoke model.
The Mega Food Park project is implemented by a Special Purpose Vehicle (SPV) which is a
Body Corporate registered under the Companies Act.
PM FORMALIZATION OF MICRO FOOD PROCESSING ENTERPRISES SCHEME
as part of Atmanirbhar Bharat Abhiyan
To provide financial, technical and business support for upgradation of existing micro food
processing enterprises.
Aim is to generate a total investment of Rs 35,000 crore, 9 lakh skilled and semi-skilled
employment and benefit 8 lakh units through access to information, training, better
exposure and formalization.

Challenges that still remain despite Government Initiatives

● fragmentation of land holdings which has resulted in lack of scale and has made
investments in automation unviable;
● regional climatic variations which impact the production;
● constraints in land availability due to competing pressure from urbanization,
constructions and industrialization
● issues of quality and quantity of raw produce
● low labor productivity with slow adoption of technology
● supply chain and wastage related problems and low levels of value addition
● impaired access to credit;
● inconsistency in state and central policies, which requires both the Center and the
State to work as one single cohesive unit.
According to CII's estimates, the food-processing sector has the potential of attracting US
$33 billion of investment in 10 years and generating employment of 9 million person-days.

Suggestions and Way Forward

Policy initiatives to plug supply side and infrastructure bottlenecks
● Foster development of backward linkages by evolving conducive regulatory
framework for contract and corporate farming
● The North Eastern Region, the Hilly States (J&K, HP and Western UP), the Islands
(A&N, Lakshadweep) areas in the country should be given special consideration as
they are naturally conducive for Food Processing Industries.
● Encourage commodity clusters and intensive livestock rearing.
● Promote private sector participation with well-defined roles of the participants for
creation of infrastructure for logistics, storage and processing
● Encourage technology up gradation of existing facilities and investment in
development of ancillary industries like research and development, packaging, food
processing equipment manufacturing, food safety certifying agencies by extending
fiscal incentives to investors.

Streamlining the regulatory structure

● Remove impediments of multiple departments and laws in seeking approvals by
bringing them under a single window
● Ensure uniform implementation of the APMC act to encourage private sector
investment in infrastructure development
Human resource development-to meet increasing demand for skilled manpower
● Encourage State Agricultural Universities to commence courses in food packaging,
processing, bio-technology, information technology in agriculture and such allied
fields.

“Despite continuous efforts and initiatives of the Government to provide the required
stimulus to the food processing sector, processing activity is still at a nascent stage in
India with low penetration”. In the above context, examine the challenges ailing the food
processing sector in India.
Following are the major factors hampering the growth of food processing sector:
● Inadequate Infrastructure Facilities
● Food Safety Laws & Inconsistency in State and Central policies
● Lack of adequate trained manpower
● Uncontrollable and controllable factors which affected the growth of the sector :
The uncontrollable factors include fragmentation of land holdings which has
resulted in lack of scale and has made investments in automation unviable, regional
climatic variations which impact the production and constraints in land availability
due to competing pressure from urbanisation, constructions and industrialization.
Controllable factors include issues of quality of raw materials, low labour
productivity, with slow adoption of technology etc.
Forward & Backward Linkages
if one makes jams on a small scale, his backward linkage is the infrastructure, which
connects him with his source of raw fruits, and his forward linkage is the infrastructure
which connects him with the market

Explain the backward and forward linkages across the supply chain in the Food Processing
Sector. Also discuss their importance in ensuring the success of Supply Chain
Management in the Food Processing Industry of India.

Food processing industry needs a fillip in the form of better logistics, access to credit,
technology indigenisation and implementation of food safety laws. Discuss.
Food and food products are the biggest consumption category in India, with spending on
food accounting for nearly 21% of India’s GDP. But the overall processing level is just 10%
in India whereas it has reached nearly 80% in some developed countries.

Some of the major constraints to the food processing industry are: inadequate logistics,
access to credit, technology indigenisation and implementation of food safety laws.
Need for better logistics
● national highways are highly strained by low capacity and high traffic volumes, Rail
freight network suffers due to lack of last mile connectivity, inefficiency, low
availability of wagons,
● urgent need to develop dedicated freight corridors in rail, supplemented by
concretised dual carriageways for the State and national highways.
● a need to support development of organised strategic logistics hubs and incentivise
operators in setting up end-to-end logistics and warehousing.
Technology Indigenisation
● Most R&D institutions have not been able to develop innovative products, processes
and machinery of a global stature. The key reasons for this are segregation of
academics from applied research, inadequate industry interface, low commercial
orientation.
● In order to achieve global standards and self-sufficiency there is an urgent need for
technology indigenisation in the food processing industry.
Implementation of Food Safety Laws
● The Government should ensure enforcement of the Food Safety and Standards Act
(FSSA) in spirit, including increasing radically the number of trained inspectors and
state-of-the-art lab facilities.

Despite numerous schemes and programmes the growth of the food processing industry
has been very slow in India. In this context examine the problems with respect to various
government initiatives to boost the food processing sector in India.
Accounting for about 32% of India’s total food market, the Food Processing Industry (FPI) is
ranked 5th in terms of consumption, export and expected growth.
following initiatives for the growth of the sector:
● Government passed the Food Safety and Standard Act, 2006 to act as a single
reference point for regulation.
● 100% FDI in industry
 ● Infrastructure Facilities: Mega Food Parks, Packaging centers, Integrated cold chain
facility, Value Added Centre, Irradiation Facilities, Modernization of Abattoir
● National Mission on Food Processing for all round development of industry.
● Reforms in APMC Act and rationalization of Food Laws
Government schemes have not been adequately able to address the following problems that
arise due to inadequacy and poor implementation of reforms.
● The inadequate support infrastructure is the biggest bottleneck in expanding the
sector, in terms of both investment and exports.
● Long and fragmented supply chain, inadequate cold storage and warehousing
facilities, road, rail and port infrastructure, lack of modern logistics infrastructure
such as logistics parks, integrated cold chain solutions, last mile connectivity
● Inconsistency in State and Central policies. FICCI, absence of comprehensive
national level policy on the food processing sector has been identified as the second
most critical factor hampering Industry’s growth.
● Declining support to R&D.
● Constraints in raw material availability because of inconsistent and insufficient
supply of raw material due to seasonality of crops, poor quality of raw material
supply and high losses during transport from farm to factory.
● Lack of enthusiastic private sector participation in important schemes like Mega
Food Parks
● Failure to integrate land holdings and promote contract farming, which are key to the
success of industry.

FPIs faces a number of challenges:

● Supply side bottlenecks: Small and dispersed marketable surplus due to fragmented
holdings, Low farm productivity, Low level of linkage between the industry and the
farmers for the raw materials, High seasonality, Indian agriculture focuses on
traditional crops rather commercial crops desired by the market
● Infrastructure bottlenecks: Inadequate cold chain infrastructure and inadequate
logistics
● Deficiencies in the regulatory environment: Multiplicity of laws and rules which leads
to contradictions and delays, Absence of a comprehensive National Policy on food
processing for a long time, Delays in Commissioning of Food Processing Projects,
obtaining Licenses/ Statutory Clearances, pending reforms in APMC act by State
governments etc.
● Low Research & Development

AGRICULTURE INFRASTRUCTURE FUND (AIF)

● a Central Sector Scheme, under the Ministry of Agriculture & Farmers Welfare, to
provide medium - long term debt financing facility through interest subvention and
credit guarantee.
● Beneficiaries include farmers, Primary Agricultural Credit Societies (PACS), Farmer
Producers Organizations (FPOs), Agri-entrepreneurs, Startups, APMCs etc.
● Eligible projects include:
○ Post-Harvest Management Projects : Supply chain services including
e-marketing platforms, Warehouses, Silos, Sorting & grading units, Cold
 chains, Logistics facilities etc.
○ Building community farming assets : like Organic inputs production,
Infrastructure for smart and precision agriculture, supply chain infrastructure
● help in strengthening the Mandi infrastructure.
● These steps are in addition to the creation of the Agri-market Infrastructure Fund
(AMIF) created in 2018-19 for development and upgradation of Agricultural
Marketing Infrastructure in Gramin Agricultural Markets (GrAMs) and registered
APMC markets.
● Under AIF, Rs. 1 Lakh Crore will be provided by banks and financial institutions as
loans with interest subvention of 3% per annum on loans up to Rs. 2 crore.
● AIF will be managed and monitored through an online Management Information
System (MIS) platform. National, State and District Level Monitoring Committees
Agricultural Infrastructure
● Input based infrastructure: Seed, Fertilizer, Pesticides, Farm equipment and
machinery etc.
● Resource based infrastructure: Water/irrigation, Farm power/energy
● Physical infrastructure: Road connectivity, Transport, storage, processing,
preservation, etc.
● Institutional infrastructure: Agricultural research, extension & education technology,
information & communication services, financial services, marketing, etc.
Need for a better agricultural Infrastructure
● For ~58% of total population of India, agriculture and allied activities are the primary
income source and adequate infrastructure raises farm productivity and lowers
farming costs.
● India has limited infrastructure connecting farmers to markets leading to wastage of
produce.
● Value addition, packing, branding and good marketing network also adds to the
income of the farmer.
● Provide testing facilities to assess the quality of product thereby help in fixing better
rates in the market.
Other schemes that impact agricultural infrastructure
● Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)
● Integrated Scheme for Agricultural Marketing (ISAM): To promote creation of
agricultural marketing infrastructure, creation of scientific storage capacity, framing
of grade standards and quality certification etc.
● Pradhan Mantri Gram Sadak Yojana (PMGSY)
● National Agriculture Market (eNAM)

SUSTAINABLE FOOD SYSTEMS

● A sustainable food system (SFS) is a food system that delivers food security and
nutrition for all in such a way that:
○ It is profitable throughout (economic sustainability)
○ It has broad-based benefits for society (social sustainability)
 ○ It has a positive or neutral impact on the environment (environmental
sustainability)
○ Need of future generations are not compromised.
● Challenges for Sustainable Food Systems in India
○ Scarcity of Land: Scarcity of land combined with poverty and inability to take
risks, lack of access to credit and inputs and poor market access, severely
limit the sustainability of food and agriculture systems.
○ Low productivity of agriculture : low capital formation (15-19% of GDP)
○ Green House Gas Emissions from agriculture: through the production and use
of agricultural inputs - water, fertilisers, and pesticides.
○ Stubble Burning
○ Low water use efficiency : The overall irrigation project efficiency in developed
countries is 50 – 60% as compared to only 38% in India.
○ Outdated legacy incentives and policy support : Subsidies on irrigation water
and power have led to overexploitation of groundwater. Fertiliser subsidies,
particularly urea, have led to imbalanced application of nutrients. Policy
biased in favour of rice and wheat
● Way forward
○ Sustainable farming practices : use of organic manures, bio-fertilizers and
bio-pesticides
○ Adoption of modern irrigation methods
○ Crop diversification : To tackle the twin challenges of climate change and
malnutrition, diversifying existing cropping systems to more nutritious and
environment-friendly crops is need of the hour.
○ Adoption of technology: E.g., Turbo Happy Seeder (THS) machine can uproot
the stubble and also sow seeds in the area cleared.
○ Research and Innovation: goal of sustainable and nutritious food systems by
development of suitable crop varieties
○

ORGANIC FARMING
● As per Food and Agriculture Organisation “Organic agriculture is a unique production
management system which promotes and enhances agro-ecosystem health,
including biodiversity, biological cycles and soil biological activity, and this is
accomplished by using on-farm agronomic, biological and mechanical methods in
exclusion of all synthetic off-farm inputs”.
● The general principles of organic production
○ protect the environment, minimize soil degradation and erosion,
decrease pollution, optimize biological productivity and promote a
sound state of health
○ maintain long-term soil fertility by optimizing conditions for biological
activity within the soil
○ maintain biological diversity within the system
○ recycle materials and resources to the greatest extent possible within
the enterprise
 ○ rely on renewable resources in locally organized agricultural systems
● Benefits
○ Healthy Foods
○ Ecological benefits : Improvement in Soil Quality, building a fertile living soil
through the application of organic matter inputs like green manures and by
implementing low soil disturbance tillage.
○ Due to healthier soil and absence of harmful pesticide and fertilizer, organic
farming reduces water and air pollutants.
○ Low Incidence of Pests
○ Efficient use of resources: Improving water infiltration and retention capacity,
Lower Energy Use
○ Economic Benefits :
■ In the long run the input cost decreases significantly and the yield of
organic crops improves which provides income security to the
farmers.
■ Employment Opportunities
■ Eco-tourism
● Government Initiatives to promote Organic Farming in India
○ Paramparagat Krishi Vikas Yojana (PKVY): a part of National Mission of
Sustainable Agriculture (NMSA).
■ Under the scheme, Organic farming is promoted through adoption of
organic villages by cluster approach and Participatory Guarantee
System (PGS) certification.
○ Soil Health Card: The scheme aims to improve Soil Health by providing
nutrients information to the farmers. It has led to a decline of 8-10% in the use
of chemical fertilizers and raised productivity by 5-6%.
○ Agri-export Policy 2018: It focuses on marketing and promotion of organic
agriculture products and foods to aid organic farming in India.
○ Zero Budget Natural Farming: Government is actively promoting Zero budget
natural farming.
● Certification Confusion

○
 ○
● Challenges faced by Organic sector in India
○ Low Coverage: only two per cent of the 140.1 million ha net sown area in the
country under organic cultivation
○ Reluctancy of the Farmers: Due to high initial cost and potential impact on
immediate income, most of the farmers are reluctant to undertake organic
farming.
○ Lack of support for inputs: The government provides subsidies for chemical
fertilisers and pesticides but there is no such provision for organic inputs.
○ Confused Certification Framework
○ High Price of Organic Produce