ILP Advance - Module 3 VAN - Indian Agriculture Part 2

dGl0b3JlZGR5ODhAZ21haWwuY29t
ILP 2023 –INDIAN AGRICULTURE II
AGRICULTURE-2 Notes
Contents
FARM SUBSIDIES AND ISSUES ..................................................................................................... 6
MINIMUM SUPPORT PRICE ...................................................................................................... 20
M.S. Swaminathan Commission ........................................................................................... 28
PUBLIC DISTRIBUTION SYSTEM ................................................................................................. 32
BUFFER STOCK AND FOOD SECURITY ....................................................................................... 39
National Nutrition Mission ................................................................................................... 50
National Food Security Act (NFSA) ....................................................................................... 51
TECHNOLOGY MISSION IN AGRICULTURE ................................................................................ 59
www.iasbaba.com 1|P A G E
Previous Years Questions Notes
1. Under the Kisan Credit Card Scheme, short-term credit support is given to
farmers for which of the following purposes? - 2020
1. Working capital for maintenance of farm assets
2. Purchase of combine harvesters, tractors and mini trucks
3. Consumption requirements of farm households
4. Construction of family house and setting up of village cold storage
facility
Select the correct answer using the code given below:
a) 1, 2 and 5 only
b) 1, 3 and 4 only
c) 2, 3, 4 and 5 only
d) 1, 2, 3 and 4
2. In India, which of the following can be considered as public investment in

agriculture? - 2020
1. Fixing Minimum Support Price for agricultural produce of all crops.
2. Computerization of Primary Agricultural Credit Societies.
3. Social Capital Development.
4. Free Electricity supply to farmers.
5. Waiver of agricultural loans by the banking system.
6. Setting up of cold storage facilities by the government.
Select the correct answer using the code given below:
a. 1, 2 and 5 only
b. 1, 3, 4 and 5 only
c. 2, 3 and 6 only
d. 1, 2, 3, 4, 5 and 6
3. The FAO accords the status of ‘Globally Important Agricultural Heritage

System (GIAHS)’ to traditional agricultural systems. What is the overall goal
of this initiative? - 2016
1. To provide modern technology, training in modern farming methods
and financial support to local communities of identified GIAHS so as to
greatly enhance their agricultural productivity
2. To identify and safeguard eco-friendly traditional farm practices and
their associated landscapers, agricultural biodiversity and knowledge
systems of the local communities
3. To provide Geographical Indication status to all the varieties of
agricultural produce in such identified GIAHS
Select the correct answer using the code given below.
a) 1 and 3 only Notes

b) 2 only
c) (C) 2 and 3 only
d) 1, 2 and 3
4. With reference to 'Initiative for Nutritional Security through Intensive

Millets Promotion', which of the following statements is/are correct? - 2016
1. This initiative aims to demonstrate the improved production and post-
harvest technologies, and to demonstrate value addition techniques,
in an integrated manner, with cluster approach.
2. Poor, small, marginal and tribal farmers have larger stake in this
scheme.
3. An important objective of the scheme is to encourage farmers of
commercial crops to shift to millet cultivation by offering them free
kits of critical inputs of nutrients and micro-irrigation equipment.
Select the correct answer using the code given below.
a) 1 only
b) 2 and 3 only
c) 1 and 2 only
d) 1, 2 and 3
5. India has experienced persistent and high food inflation in the recent past.
What could be the reasons? - 2011
1. 1.Due to a gradual switchover to the cultivation of commercial crops,
the area under the cultivation of food grains has steadily decreased in
the last five years by about 30%.
2. 2.As a consequence of increasing incomes, the consumption patterns of
the people have undergone a significant change.
3. 3.The food supply chain has structural constraints.
Which of the statements given above are correct?
a) 1 and 2 only.
b) 2 and 3 only.
c) 1 and 3 only.
d) 1,2, and 3.
6. With reference to the provisions made under the National Food Security
Act, 2013 consider the following statements: - 2018
1. The families coming under the category of 'below poverty line (BPL)'
only are eligible to receive subsidized grains.
2. The eldest woman in a household, of age 18 years or above, shall be the
head of the household for the purpose of issuance of a ration card.
3. Pregnant women and lactating mothers are entitled to a take-home Notes

ration' of 1600 calories per day during pregnancy and for six months
thereafter.
Which of the statements given above is/are correct?
a) 1 and 2
b) 2 only
c) 1 and 3
d) 3 only
7. An objective of the National Food Security Mission is to increase the

production of certain crops through area expansion and productivity
enhancement in a sustainable manner in the identified districts of the
country. What are those crops? - 2011
a) Rice and wheat only
b) Rice, wheat and pulses only
c) Rice, wheat, pulses and oil seeds only
d) Rice, wheat, pulses, oil seeds and vegetables
Mains PYQ
1. How do Subsidies affect the cropping pattern, crop diversity and economy
of farmers? What is the significance of crop insurance, minimum support
price and food processing for small and marginal farmers? - 2017
2. What are the different types of agriculture Subsidies given to farmers at
the national and at state levels? Critically analyze the agricultural subsidy
regime with reference to the distortions created by it. - 2013
3. "In the villages itself no form of credit organization will be suitable except
the cooperative society." —All India Rural Credit Survey. Discuss this
statement in the background of agricultural finance in India. What
constraints and challenges do financial institutions supplying agricultural
finance face? How can technology be used to better reach and serve rural
clients? - 2014
4. Comment on the relationship between Credit availability and agricultural
growth in India. - 2007
5. What do you mean by Minimum Support Price (MSP)? How will MSP rescue
the farmers from the low-income trap? - 2018
6. What are 'Minimum Support Prices' in agricultural products? What are
their objectives? -2002
7. What is 'Procurement Price' for food grains? What purpose does it serve?
-1981
8. What are the basic objectives of agricultural Price Policy of the Government
of India and how is it implemented? -1989
9. Examine the controversy regarding the sharp rise in the Price of Sugar in Notes
India in the recent past. What steps have been taken by the Government to
curb it? -1985
10. Analyse the functioning of dual Pricing of Sugar in India. Offer your
comments. -1982
11. What are the reformative steps taken by the Government to make food
grain Distribution system more effective? - 2019
12. Comment on the recommendations of the Wadhwa Commission on the
Public Distribution System. -2010
13. What is (Revised) Targeted Public Distribution System? What are its main
features? -2000
14. What are the factors that ensure the success of the Public Distribution
System? -1991
15. Examine the working of the Public Distribution System in India, with
particular reference to its objectives and constraints. Suggest a set of
measures towards an improvement in the present system. -1987
16. What are the salient features of the National Food Security Act, 2013? How
has the Food Security Bill helped in eliminating hunger and malnutrition in
India? (Answer in 250 words) - 2021
17. Explain various types of revolutions, took place in Agriculture after
Independence in India. How these revolutions have helped in poverty
alleviation and Food Security in India? - 2017
18. India needs to strengthen measures to promote the pink revolution in food
industry for ensuring better Nutrition and Health. Critically elucidate the
statement. - 2013
19. Food Security Bill is expected to eliminate hunger and malnutrition in India.
Critically discuss various apprehensions in its effective implementation
along with the concerns it has generated in WTO. - 2013
20. The concept of Mid-Day Meal scheme is almost a century old in India with
early beginning in Madras Presidency in pre-independent India. The
scheme has again been given impetus in most states in the last two
decades. Critically examine its twin objectives, latest mandates and
success. - 2013
NOTE: Revisiting PYQs should be mandatorily done. It will expose you to the
kinds of questions UPSC asks and will help in better understanding of the
concepts.
FARM SUBSIDIES AND ISSUES Notes
• An agricultural or farm subsidy is a financial aid provided by the

government to the farmers, agribusiness owners, and agricultural raw
material suppliers. Farm subsidies help Indian farmers to get the best
rates for their crops and also simultaneously increase agricultural
productivity. It effectively helps in managing the demand and supply
of agricultural products.
• A survey shows that around 21% income of the farmers per hectare
is facilitated by the government subsidy. The farm subsidies are
provided to the farmers in two ways that can either be direct or
indirect. Direct subsidy usually implies any monetary aid provided by
the government to the farmers, while the indirect subsidy refers to
the non-cash benefit provided by the government for example
concession in fertilizer rates, relaxation in interest rates in crop loans,
etc.
What is the need for Farm Subsidies?

• India is an agricultural country and more than 80% of its population
relies upon the agricultural sector. Also, this sector has a significant
contribution to the Indian economy. Thus, the growth of the
agricultural sector is quite important for the Indian citizens as well as
the Indian Economy. It is one main reason why Govt. of India (GOI) is
trying to uplift the agricultural sector in India via direct and indirect
subsidies.
• Farm subsidies do not provide a complimentary income to the farmers
but also morally uplift them to increase agricultural production. Also,
the indirect subsidies in the agricultural sectors create new
employment opportunities. Subsidies for crops and fertilizer help
farmers increase their crop quality and productivity.
Types of Agricultural Subsidies
Direct Subsidy
• A direct subsidy is a kind of subsidy that is being provided to the farmer
by the government in form of cash while the indirect subsidy is being
provided via discounts on other agricultural purchases like crops and
fertilizers. The most common example of direct subsidy is the Farm
Loan Waiver Scheme, the PM Kisan Scheme, etc.
Explicit Input Subsidy
• This kind of subsidy is being paid to the farmer for purchasing Notes
agricultural products like crops and fertilizers. This kind of subsidy is
being paid to small and marginal scale farmers who are not able to buy
crops and fertilizers on their own.
Implicit Input Subsidy

• This kind of subsidy not directly helps farmers via money but it helps
them by cutting their extra costs. Like providing subsidies on electricity
bills, and relaxation in bank loan interests.
Output Subsidy
• This kind of subsidy, allows the government’s restrictive trade policies
to provide a good rate to the farmers for their crops and prevent traders
from charging arbitrary rates.
Subsidies Provided by the GOI to the Indian Farmers

The government of India offers various subsidies to the Indian farmers for
irrigation, fertilizer, equipment, seeds, and export. The total subsidy offered to
the Indian farmers accounts for 2% of the total GDP of India. Described below
are some of the subsidies offered to the Indian farmers by the GOI.
Fertilizer Subsidy: Under the fertilizer subsidy government let traders buy
fertilizers from the manufacturers and sell them at a discounted price to the
farmers. The difference amount is paid by the government to the trader.
Through the fertilizer subsidy government ensures the supply of good quality
fertilizers to the farmers at affordable rates. While also takes care that the
manufacturer and the trader also get a reasonable return. For the Financial
year, 2022-23 GOI finance ministry of India allocated a fund of Rs. 63,222.32 Notes
crores for the urea subsidy.
Seed Subsidy: The GOI provides a subsidy to the farmers in the purchase of
seeds and this subsidy varies with the crops for the cottonseed government
provides a subsidy of Rs 15 per Kg or 25% of the total order value. For certified
seed distribution the available subsidy is Rs. 20/Kg.
Credit Subsidy: Government offers credit subsidies to the farmers in many

ways like waving off the interest of loans, clearing bad debts, and offering low-
interest loans via regional rural banks (RRBs).
Irrigation Subsidy:
• Indian government provides irrigation facilities at the lower rates as
compared to the market rates. It is the difference between
maintenance and operating cost of irrigation infrastructure in the state
and irrigation charges recovered from farmers. This may work through
provisions of public goods such as canals, tube wells, dams, etc. which
the government constructs and charges no prices or low prices at all for
their use from the farmers. It may also be through low-priced private
irrigation equipment such as pumping sets.
• In India, micro-irrigation subsidy is covered under the Pradhan Mantri
Krishi Sinchayee Yojna or PMKSY, to encourage micro-irrigation and
promote its benefits through heavier subsidies based on the category
of farmers. It mainly aims at relieving farmers off the initial irrigation
investment burden to a considerable extent. PMKSY subsidy is a multi-
focused plan comprised of 4 elements.
• Accelerated Irrigation Benefit Program – It involves loan assistance to
states to help them complete the incomplete major/ medium-sized
irrigation projects that were at an advanced completion of the stage,
thus accelerating the execution of the irrigation projects.
• PMKSY (Har Khet ko Pani) – This mainly refers to increase the cultivable
land area under assured irrigation, and also increase the physical access
of water on the farm.
• PMKSY (More Crop per Drop) – The focus here is improving water use
efficiency in an organized and focused manner.
• PMKSY (Watershed Development) – This program focuses on prudent
utilization of water and land resources, through various mediums such
as prevention of soil erosion, increasing crop productivity, and
harvesting rainwater, etc.
• Through the micro-irrigation subsidy proposition that falls under the Notes
Per Drop More Crop element of PMKSY, both state and the central
government, on average, contribute to 55% and45% of the total
finances incurred in setting up irrigation systems for small and marginal
farmers and other farmers respectively. Nevertheless, state-specific
variations exist.
Water Subsidy:
• Under the water subsidy the government aims to ensure the delivery of
clean pumped water to every farmer. Thus, to achieve this aim GOI is
constructing new dams and canals for easy water management.
Food Subsidies
• This apart, there is a significant subsidy related to the agricultural sector
and that is the food subsidy. 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 keeping a buffer- stock of required quantity for national food
security, involved cost in the form of meeting the differences between
the economic cost and issue prices of food grains.
Power Subsidy
• The electricity subsidies suggest that the government charges low rates
for the electricity supplied to the farmers. Power is mainly used by the
farmers for irrigation objectives. It is the difference between the cost of
distributing and generating electricity to farmers and the price received
from farmers. The State Electricity Boards (SEBs) either generate the
power themselves or purchase it from other producers such as NHPC
and NTPC. Power subsidy “acts as an incentive to farmers to invest in
bore-wells, pumping sets, tube wells, etc.
Export Subsidy
• An export subsidy is given to the farmers to face international
completion. When an exporter or farmer sells agricultural products in a
foreign market, he earns money for himself, and also foreign exchange
for the country. So, agricultural exports are commonly encouraged as
long as these do not harm the domestic economy. Subsidies provided
to encourage exports are mentioned as export subsidies.
Notes
Agriculture/Farm Infrastructure Subsidy
• Private efforts in several areas do not prove to be sufficient to improve
agricultural production. Good roads, power, storage facilities,
information about the market, transportation to the ports, etc. are vital
for production and sale operations. These facilities are in the domain of
public goods, the costs of which are huge and whose benefits accrue to
all the cultivators in an area. No individual farmer will come forward to
provide these facilities because of their bulkiness and inherent
problems related to revenue collections. So, the government takes the
responsibility of providing these, and given the condition of Indian
farmers a lower price can be charged from the poorer farmers.
Subsidy for Organic Farming in India:

• Paramparagat Krishi Vikas Yojana (PKVY) is a sub-component of the Soil
Health Management (SHM) scheme under the National Mission of
Sustainable Agriculture (NMSA) aims at the development of models of
excellence in organic farming through a mix of traditional wisdom and
modern science in value chain mode to install sustainability, ensure
long term soil fertility buildup, and healthy food grown through organic
practices without the use of agrochemicals. Paramparagat Krishi Vikas
Yojana also aims at empowering farmers through institutional
development through clusters for not only in farm practices
management, input production, quality assurance but also in value
addition and direct marketing through innovative means.
Organic Area Selection Criteria;

a) Organic farming under PKVY will be promoted preferably in hilly, tribal, and
rain-fed areaswhere utilization of chemical fertilizers and pesticides is less and
the area has good accessibilityfor developing market linkages.
(b) Cluster approach will be adopted in large patches of up to 1000 ha area.
(c) The cluster chosen shall be in a contiguous patch, as far as possible, maybe
extending over afew adjacent villages (but not over large areas in sparsely
distributed villages).
(d) The ceiling of subsidy a farmer is eligible will be for a maximum of one
hectare. In a cluster,there should be at least 65% of small and marginal farmers.
Women farmers/ SHGs should begiven preference.
www.iasbaba.com 10 | P A G E
Notes
Subsidies for Sericulture Farm in India
• Sericulture is the Silkworms rearing along with the cultivation of
Mulberry for silkworm food. Silk is the raw product of the Sericulture
Industry. While the demand for Silk in overseas and India is high and
increasing rapidly. Hence you should Start Sericulture and also, the
Profits in silkworm rearing are high. Below are the subsidies and
schemes for Sericulture Farming.
• Many farmers are unaware of schemes and loans for sericulture
farming. Central and states government are providing several schemes
to increase the silk production in the country. Banks and NABARD also
give loans for silkworm rearing.
Indian Government Subsidy for the Construction of Cold Storages

Government for the construction of cold storages under the following
schemes;
• Under the scheme of the National Horticulture Mission, support is
provided for the development of post-harvest infrastructure including
construction of cold storages.
• National Horticulture Board is executing the scheme of Capital
Investment Subsidy for construction/ modernization /Expansion of cold
storage and storage for horticulture produce, under which assistance is
provided for construction/ modernization /Expansion of cold storages.
• National Horticulture Board – Setting up cold storage and cold storage
modernization are eligible for assistance under the NHB Scheme of
Capital Investment subsidy for construction/ modernization /Expansion
of cold storage for Horticulture Products.
• Agricultural and Processed Food Products Export Development
Authority (APEDA) provides support under the scheme of Infrastructure
Development for setting up of integrated packhouses with cold storage
facilities.
• Ministry of Food Processing Industries provides support for cold chain
infrastructure development including that of cold storages under the
scheme for Value Addition, Cold Chain, and Preservation Infrastructure.
• National Horticulture Mission – Cold storage up to 5000 MT capacity
are eligible for support under the open-ended scheme of NHM. The
support is extended as subsidies to credit-linked projects at 35% of the
capital cost of a project in the general area and 50% in the case of
Scheduled and Hilly area.
• Small Farmer Agri-Business Consortium (SFAC) assistance to cold
storage – Setting up of cold storage as a part of an integrated value
chain project are eligible for subsidy provided the cold storage Notes
component does not exceed 75% of TFO (Total Financial Outlay).
Direct subsidies Indirect subsidies

• This subsidy is directly provided to the • Indirect subsidies are in-kind
farmers, generally paid in the form of subsidies in which provision of a
direct cash subsidy. product is at a lower price than the
• Thus, direct-subsidies play a vital role in market price. PDS ration,
increasing the purchasing capacity of subsidized urea are such examples.
farmers and raising the standard of living • The goods are made available at a
of rural underprivileged sections. lower/subsidized price, credit
• In direct subsidies, the product is bought facilities, loan waiver, and
at the same price, but the buyer is reduction in bills etc.
separately compensated for it in cash. It • Mostly in developing countries.
is also called Direct Cash Transfer. • Have implicit impacts, as some part
Conditional Cash Transfer is a subset of of money paid at the required end.
DCT subsidies. • Less efficient system, because of
• They also help in checking the misuse of less coordination.
public funds as they help in the proper • Mass target of the people to reach
identification of the beneficiaries. the benefits.
• Most importantly it gives choice to the • A popular type of indirect subsidy is
consumer to invest where he wants. a change to the tax code.
• The beneficiary purchases the good at Governments can device tax
market price and the subsidy is policies that considerably decrease
transferred to him in the form of cash the tax burden for anyone who
transfer. qualifies.
• More efficient system, because free • For example, the establishment of
hands to use money. a business empowerment zone is a
• Direct farm subsidies are very common type of indirect subsidy that gives
in most of the developed countries like businesses located in a designated
US and Europe, but India provides direct low-income geographical area
subsidies in a very limited form like Food special tax benefits to spur the local
Subsidy, MSP-based Procurement etc. economy.
• These can be given for purchasing input • India spends roughly 2% of the GDP
or unrealized cost or cost difference. in Indirect Subsidies. Among all
• For example: Bhavantar Bhugtan Yojna products, fertilizers account for
in MP. two thirds of total indirect
subsidies.
• It is found that indirect subsidies
are mostly beneficial to the big
farmers as small farmers are more Notes

dependent on cash to meet their
needs.
• Moreover, indirect subsidies do not
provide incentive to farmers to
invest in improving production
processes.
• Sometimes they also tend to distort
the usual trade at national as well
as global level.
Merits of Direct Farm Subsidy Merits of Indirect Farm subsidies
• Schemes like PAHAL in LPG and • These help in the development of
MGNREGA show the success of Direct priority areas which are not
Benefit Transfer. developed.
• With emerging technologies and usage • These are meant to provide
of AADHAR to form JAM trinity, training support and technical
payments can be made directly to the assistance to farmers to improve
beneficiary without any issue of productivity.
identification or execution error.
• This also helps in curbing inefficient
usage of inputs like fertilizers etc. and
behavioral change among farmers and
hence also helps in reducing inflation.
• The farmers could get the freedom to
grow the crops they want, promoting
crop diversification. They can also use it
for allied purposes or use it for value
addition to the produce.
• Will help in better nutrient crops with
better remuneration as cereal centric
food policy ignores this.
Demerits of Direct Farm Subsidy Demerits of Indirect Farm subsidies
• Direct subsidies also have disadvantages • These have led to cereal centric
in terms of poor IT penetration and agriculture with distorted cropping
computer literacy, lack of infrastructure, patterns. Natural resources like
lack of UID penetration, poor financial groundwater are declining at a
inclusion. Further, direct subsidies are heavy rate. They do not see any
also not insulated from inflation. incentive in saving the resources.
• There is a chance that the cash can be • Regional disparities and bias
mismanaged by the farmers and toward large farm holders is
diverted to non-farm unproductive another disadvantage. They are Notes

need. generally not successful in reaching
• This can hamper the food security of the the target beneficiaries because of
country, as the produce may decrease. loopholes like corruption,
• Farmers will be open to the volatile identification, lobbying by rich
market mechanisms and can be conned farmers etc.
by the middle man in the process. • It is generally misused to gain
• Lack of awareness and illiteracy among political mileage during elections
farmers can hamper the growth of for example, farm loan waiver etc.
agriculture in the country. • It does not lead to infrastructure
creations.
• Indirect subsidies have many
problems like ill targeting, not
being timely, pilferage and
corruption, higher logistics costs,
poor delivery mechanisms.
• Disadvantages associated with
them are the same as those
associated with a typical PDS
mechanism.
Benefits of Direct Subsidy over Indirect Subsidy
• Direct Subsidy does not distort the market as indirect subsidy
• Indirect benefits are cornered mostly by big farmers
• Cash subsidies reduce the chances of leakages
• Check misuse by identifying proper beneficiaries
Current Subsidy Scenario

• The government's subsidies on food, fertilisers and petroleum are
estimated to decline by 39 per cent to Rs 4,33,108 crore this fiscal and
fall further by 27 per cent to nearly Rs 3.18 lakh crore in 2022-23.
• In its revised budget (RE) estimate for the 2021-22 fiscal, the Notes
government has pegged total subsidies to be at Rs 4,33,108 crore
against the actual budget estimate of Rs 7,07,707 crore in the previous
financial year.
• Out of which, the food subsidy is estimated to decline to Rs 2,86,469
crore in the current fiscal from Rs 5,41,330 crore in 2020-21, while
petroleum subsidy is estimated to fall to Rs 6,517 crore from Rs 38,455
crore in the said period.
• However, fertiliser subsidy is estimated to increase to Rs 1,40,122 crore
during the ongoing fiscal from Rs 1,27,922 crore in the previous fiscal,
according to the Budget document.
• During the current fiscal, the Centre has hiked subsidy of non-urea
fertilisers several times due to a sharp rise in global prices. The move
was aimed to ensure that farmers continue to get Di-ammonium
phosphate (DAP) and other nutrients under the Nutrient based subsidy
(NBS) policy at a reasonable rate.
• For the next fiscal, the government said total subsidies are estimated to
further decline to Rs 3,17,866 crore from Rs 4,33,108 crore in the
current fiscal.
• Out of which, fertiliser subsidy is estimated to decline by 25 per cent to
Rs 1,05,222 crore during 2022-23 from Rs 1,40,122 crore this fiscal,
while food subsidy is estimated to fall by 28 per cent to Rs 2,06,831
crore against Rs 2,86,469 crore in the said period.
• Petroleum subsidies are estimated to decline by 11 per cent to Rs 5,813
crore during 2022-23 from Rs 6,517 crore in the current fiscal.
• Food subsidy is provided to meet the difference between the economic
cost of food grains procured by the government and their sales
realisation at the PDS rate called central issue price (CIP) under the
National Food Security Act (NFSA) and other welfare schemes.
• The government's food subsidy bill has increased substantially since the
outbreak of the COVID pandemic.
• In March 2020, the Centre had launched the scheme to provide free
foodgrains to over 80 crore beneficiaries covered under the National
Food Security Act (NFSA) as part of its effort to reduce the hardships of
people during the coronavirus pandemic.
• The additional foodgrains of 5 kilograms per person per month is over
and above the normal quota provided under the NFSA at a highly
subsidised rate of Rs 2-3 per kg.
• Similarly, the Centre provides fertiliser subsidies to manufacturers.
• The government fixes the MRP of urea being sold in the market. The Notes
difference between the selling price and production cost is provided as
a subsidy. A nutrient-based subsidy is also being provided on non-urea
fertilisers like DAP and MOP.
• In petroleum, subsidies are provided on LPG and kerosene.
Farm Subsidies and the World Trade Organization (WTO)

• India and China have jointly submitted a proposal to the World Trade
Organization (WTO) for rich countries to reduce high agricultural
subsidies.
• India’s agricultural subsidy is less than 10 per cent of the market value
of total agricultural production. It is far less compared to the developed
countries.
• The WTO has allowed them higher amounts beyond ceiling levels. Any
meaningful attempt at reforms in agriculture subsidies must address
the asymmetry between the developed members and developing
members.
Though it is a good measure to address the plight of the farmers, it can also
have an adverse effect in the free markets, which can be highlighted as follows:
• Subsidies directed by the United States government, particularly to corn
farmers, can have a spill over affect in developing countries like India.
Subsidies granted to the farmers of developed countries are way higher
than that given to Indian farmers, thus it can cause distortion to the
domestic market of domestic markets as well.
• Fertilizers subsidy, especially UREA when made available cheaply has
resulted in overuse, which degraded soil quality, and in return affected
the output productivity. Low productivity of Punjab in wheat can be
attributed to above cause.
• Also subsidise acts as a barrier for entry to the developed market like
European Union who held that India’s agricultural products are not up
to the mark of WTO’s phytosanitary measures.
• Farm related equipment production units are running inefficient in
countries like India owing to lack profits and efficient managements
due to irrational subsidies, which drain up their capital reserves in long
run thus affecting investment in cleaner technologies. These give rise to
environmental damages.
• While the developing countries like India and China are not in an
affordable position to breach the de-minimus level of Aggregate
measures of support (AMS), developed countries like US provides
subsidies exceeding 50% in some products such as Canola, cotton, sugar Notes
and more than 200% for wool.
• Most benefits of subsidies are allotted to big farmers while in India,
2/3rd farmers are marginal farmers which can’t utilize the benefit of
subsidy properly. Thus, the value of produce of such farmer’s decrease.
• It leads to overproduction of one crop over other like fruit, pulses.
Thus, sometimes grains are piled up for rotting in warehouse.
• Also in market, the trade of such cereals take place on the expanse of
other non- subsidised products.
• Example: The recent trade war between United and China is also the
political consequences of the ill effects of subsidies, provided by a
particular nation haphazardly. Therefore, complete compliances with
the WTO mandated de-minimus level for both developed and
developing countries have to committed by all parties.
• India and China have demanded the developed nations at WTO to cut
down the farm subsidies under the agreed multilateral trade rules. In
WTO parlance, the subsidies are called Aggregate Measurement of
Support (AMS) or Amber Box support. India and China believe that
elimination of AMS should be the starting point of reforms rather than
seeking reduction of subsidies by developing countries.
What could be done?

• Rationalizing subsidies - Subsidising the cost of inputs is not going to
end the problems of the marginal farmers of India. Completely stopping
subsidies may not be possible now given its reach and popularity; but it
can be rationalised.
• Subsidies could be linked to the size of the farm-holding, rather than
offering them to every other farmer.
• Direct transfers - The government can see if these subsidies can be paid
via DBT (Direct Benefit Transfer) so as to plug leakages.
• Capital Investment - Gradually, the government should withdraw
subsidies and possibly convert them to capital investments in the
sector.
• The impact of capital investment on both agricultural yield and poverty
will be far higher than that of subsidies.
• The promised investments in agriculture (Rs. 25-lakh crore over 5
years) can be made in -
➢ building a national-level warehousing grid with smaller warehouses
near the farm-gate
➢ setting up of agri-processing centres
➢ providing assaying and grading machinery at mandis
• Exports - There is the need for long-term policies on export trade, for Notes
the government departments to engage with exporters on a regular
basis.
• This can help keep farmers aligned with the global demand/supply and
price situations.
• Technical committee - There are talks about a technical committee with
ICAR-NIAP as knowledge partner to work on building an agri-market
intelligence system.
• This process needs to be fast-tracked.
• The system will put out price and demand forecasts for various major
food grains and price-sensitive horticulture crops.
• Land - The government should look at ways of aggregating the small
land-holdings and help farmers draw benefit from farm mechanization.
Major Government Subsidies in Agriculture for Farmers
Pradhan Mantri Krishi Sinchai Yojana (PMKSY)

• The PMKSY is to ensure access to some means of protective irrigation
to all agricultural farms in the country – to produce ‘per drop more crop.
Thus, bringing much desired rural prosperity. PMKSY is strategized by
focusing on an end-to-end solution in the irrigation supply chain that
means distribution network, water sources, efficient farm level
applications, extension services on new technologies and information,
etc. based on the comprehensive planning process at the district/state
level.
PM-Kisan Scheme
• Pradhan Mantri Kisan Samman Nidhi Yojana is an initiative of the
Government wherein 120 million small and marginal farmers of India
with less than two hectares of landholding will get up to Rs. 6,000 per
year as minimum income support.
Rashtriya Krishi Vikas Yojana (RKVY)

• In this scheme, the government offers a 100% subsidy depending on the
ongoing project. Further, aims to support the advancement of the
farming sector. Also, this is a state plan scheme that is the state official
committee grants the subsidy is verifying the farmer’s proposal.
Moreover, the governments initiated this as a part of the National
Agriculture Development Programme. Despite other segments, it
focuses on, it significantly works on Agriculture Mechanization. Extra Notes

information is available on the scheme’s official portal.
National Food Security Mission (NFSM)

• This scheme is for improving the machinery instead of their purchasing.
Further, this scheme aids in maintaining machines such as tractor,
tillers, and so on in good condition. Therefore, increasing the
productivity on the farm. Even though, it’s main aim was to increase
productivity, it assists several clusters to attain the aim. Accordingly,
one such cluster that was immensely benefited from the scheme was
machines that aid the cultivator. Furthermore, details regarding this
scheme are available at the official portal.
Soil Health Card Scheme

• The Soil Health Card scheme gives information to farmers on the
nutrient status of their soil along with recommendations on the
appropriate dosage of nutrients to be applied for improving soil health
and its fertility.
NABARD Farm/Agriculture loans in India

• This scheme offers every farmer. Chance to purchase required
machines, importantly tractors. However, they expect a down payment
of 15% of the tractors or machinery cost. However, NABRAD provides
30% of the cost as a subsidy for tractor and 100% for other transport
machinery.
Common Objectives of Subsidiary Schemes Promoting Machineries;

• To adapt newer and faster machines
• Also, to facilitate machine purchasing
• Helping to reduce the cost of cultivation
• Moreover, to ensure the timeliness of cultivation timing
• Primarily, to improve the livelihood of the farmers
Notes
MINIMUM SUPPORT PRICE
What is the Minimum Support Price (MSP)?

• The MSP or Minimum Support Price is the price that is being decided
by the government on which the government purchases the crops
from farmers. The MSP was introduced in India in 1966-97, to provide
farmers with a price guarantee and safeguard their profit.
• In the Union Budget 2022-23 GOI has announced, MSP (Minimum
Support Price) of Rs. 2.37 Lac Crores for the farmers cultivating wheat
and paddy.
What is the need for MSP?

• The Minimum Support Price is declared by the GOI before every
sowing season based on the recommendation of the Commission for
Agricultural Costs and Price (CACP).
• The minimum support price is quite important for farmers as it
protects their profit. For example, if the cost of the crops is being
decided less in the open market, then the farmer holds an option to
sell his crops to the government on MSP. The MSP of every crop varies
with its type and also MSP doesn’t apply to all crops.
• The MSP mutually benefits both the government and farmers as the
government gets an ample amount of grains. To ensure the food
security in the nation as well as to export the extra ones, so that it
helps in boosting the economy as well.
Merits and Demerits of Minimum Support Price:

Merits:
•
• MSP helps the government in controlling the volatility in crop
prices and keeping the prices as low as possible.
• MSP acts as financial security for the farmers so that they can pay
back the loans taken for the crops and get back the money spent
on the cultivation of crops.
• MSP helps government buy the surplus amounts of good grains
from farmers and thus ensures that there should not be any food
shortage in the nation.
• MSP also helps financial institutions and banks and MSP allows Notes
farmers to pay back their loans. This helps in preventing waiving of
loans such that creating no debts on the banks and ensuring the
smooth functioning of the economy.
Demerits:
• MSP doesn’t seem to be much beneficial for the small-scale
farmers as they sell their crops in the open market and usually
borrow money from the private lenders and thus don’t get
benefited from government schemes.
• Often it is observed that farmers get a better value for their crops
by selling them directly to the FPI (Food Processing Industries)
and through govt. announces MSP for 23 crops, it procures only
one-third of those.
• The MSP eliminates the competition in the agricultural sector and
limits the opportunities for the farmers. Besides these, it puts
pressure on govt. finances.
The agricultural sector is the most flourishing sector of India and generates
more than 40% of the total employment in the country. Thus, this sector holds
significant economic importance and thus GOI should adopt strong measures
to ensure that these farm subsidies help each and every farmer of this nation.
Analysis of MSP:
• The buzzword in the debate on the recent protests by farmers has been
Minimum Support Price or MSP. Interestingly, MSP does not find
mention in any of the three bills against which the protests were
attributed.
• While the MSP system has been prevalent since the early 1960’s it came
into the spotlight only in recent years owing to the debate on the
stagnation of prices which farmers receive for their crops even with
increased production costs and the news reports from across the
country about farmers being forced to sell their produce below the
actual cost of production.
• The MSP system provides the guarantee of a minimum price which the
government is willing to pay in case the market price falls below the
level of MSP fixed for the crop. As of now, MSP is provided for 23 crops
which include pulses, cereals, oilseeds, and cash crops (sugarcane,
copra, jute, and cotton).
• The Government had explained that the MSP is fixed “on the basis of
recommendations of Commission for Agricultural Costs & Prices (CACP),
after considering the views of State Governments and Central Notes

Ministries/Departments concerned & other relevant factors.”
• Based on the recommendation of the CACP, the Cabinet Committee on
Economic Affairs (CCEA) fixes the final prices of the commodities for
every crop season. The CACP makes the recommendations on the MSP
so as to provide 50% return over the cost of production which includes
cost of inputs such as labour, fertilisers, hired labour, irrigation, seeds
and inputs plus the imputed cost of family labour.
• The 50% return over the cost of production which is sought to be
ensured by the government while fixing the MSP is in line with the
recommendation of the National Commission of Farmers through its
Fifth Report of 2006, popularly known as the Swaminathan Report since
the Commission was head by Dr. M.S. Swaminathan.
• The CACP considers that MSP incentivizes a rise in productivity and
uptake of modern technology due to the presence of a stable price
environment and encourages farmers. This view is supported by the
NITI Aayog in a 2016 report which considers that MSP should continue
as it has been an effective means in preventing prices of major
commodities from falling below the market price level and has
encouraged the use of improved methods of farming. No wonder that
94% percent of farmers from across the country covered in the report
wanted the MSP system to continue even though an overwhelming
majority of 79% were not satisfied with the system.
• This brings us to the current debate on whether the Government has
touched the MSP system which could rile the farmers. As of now, the
answer is no, and the Government has in fact declared a higher MSP for
the Kharif Crops this year and even allowed rapid procurement of key
crops such as Paddy by the Food Corporation of India. State
governments across party lines have also supported a system of support
prices, as was seen as the recent declaration of MSPs or plans for MSPs
for vegetables by Kerala, Haryana, Jharkhand, and Madhya Pradesh.
• Even at the international level, there is no immediate incentive for the
Government to remove the MSP since farm subsidies at very heavy
levels are widely prevalent even in the developed countries which have
farms at an industrial scale. In fact, subsidization of agriculture may
seem like bad economics but is a reality across the world, a status quo
which is unlikely to change in the near future, as mirrored by the
stalemate in the WTO talks. Countries continue to provide price support
in various forms inter alia as MSP in Bangladesh, Malaysia, etc., and as
‘public intervention’ in the European Union. A few other countries such
as the USA provide loans at the time of harvest and also disburse Notes
transport subsidies to assist farmers.
Pain vs Gain from the MSP
• The MSP system has not been helpful in promoting agricultural
practices that cover the need for all agricultural commodities required
in the country. This can be seen from the extremely high share of rice
and wheat in the value and quantity of crops procured under MSP, and
the minuscule share of oilseeds and pulses, crops which then have to
be imported. The prevalence of MSP procurement for only one or two
crops acts as a disincentive for planting other crops and in turn, puts an
excess burden on the entire government procurement system to
procure them even though there may not be a need or demand for
them.
• The MSP system also has failed to provide actual benefits to a large
section of farmers across the country and procurement at MSP is
limited to a few states (prominently Punjab, Haryana, and in recent
years Chhattisgarh) which have an efficient mechanism for
procurement under the system. Even for rice and wheat, the two crops
which are largely procured under the MSP mechanism, the Shanta
Kumar Committee of 2015 reveals that only 6% percent of the farmers
benefit from selling to a government agency. The above mentioned Niti
Aayog report also highlighted that large farmer received the ‘major
portion of benefits’ from the MSP prices at large market yards, and
small and medium farmers across many states sell their produce to
traders at their farm gate, at prices less than the MSP, in the absence of
transport mechanism, poverty or due to an immediate need for money.
• The need of the hour, therefore, is to ensure that more potential buyers
move into the system so that more farmers can have access to the
market. While the government can act as a safety mechanism, a
legislation mandating a price for the buyers which the farmers are
anyhow not able to obtain is probably not the ideal solution. MSP has
never been a part of a legislative framework and no attempt was made
to do so in the past indicating that a need to do so was never felt by any
government. Such a decision, if taken in haste now would involve
enormous long term financial commitments from the government and
would have ripple effects across the economy. Even if it is considered,
it would need a detailed prior review and such a major decision should
not be taken as a knee-jerk reaction.
• While certain problems can be seen on the surface, there are deeper
problems that have manifested underground. A 2018 report produced
in a study by NABARD and ICRIER cited that the water table in Punjab Notes
and Haryana has dropped alarmingly due to indiscriminate use of
groundwater for paddy cultivation. The report further highlights that a
shift to other less water-intensive crops is hindered by the presence of
an assured procurement system at MSP. The farmers admitted to
understanding the damage but want the market risk for other crops to
be covered by the state. It indicates that more than the MSP, there is a
need for a deeper debate on how the procurement system could be
improved to promote sustainable agriculture. This in turn would
ultimately mean farmers producing crops that are demanded in the
market and fetch remunerative prices for them. This report glaringly
highlights the role of price guarantee schemes behind the continued
production of water-intensive crops and recommends promoting crops
such as oilseeds and pulses which use less water as a much-needed
alternative.
Push for a Change

• As highlighted above, a faulty price guarantee system is a strict no-no
both from environmental sustainability as well as an economic
sustainability perspective. Instead of continuing with the path of MSP
primarily for two cereals, the need remains for promoting alternative
less water-intensive crops and improving procurement mechanisms to
benefit smaller farmers and a wider range of crops. For those
considering MSP as the only solution providing guaranteed income,
they would do well to note that the system is efficient in very few states
and only directly benefits farmers cultivating mainly wheat, rice, and
cotton in those states, a fact noted by the 2015-16 economic survey. A
dependence on MSP and procurement systems linked to it has led to a
glut of food grains (specifically Wheat and Rice) in FCI godowns and
large-scale pilferage and wastage.
• In all, the system needs a rethink beyond considering MSP as the one
pill to solve all ills which plague the agriculture system. A decision to
provide statutory backing to MSP as demanded would drive the
problems of sustainability and the need for deep reforms in the
agriculture sector under the carpet where it could snowball into bigger
problems for future generations. The agricultural system needs an input
of fresh capital and technical expertise which could help double farm
income. The path for such infusions comes from reforms that promote
farming crops in demand and encourages changes across the
production and supply system rather than holding on to a system which Notes
incentivises only cereal output and hinders innovation and change.
As of now, CACP recommends MSPs of 23 commodities, which comprise

• 7 cereals (paddy, wheat, maize, sorghum, pearl millet, barley and ragi),
• 5 pulses (gram, tur, moong, urad, lentil),
• 7 oilseeds (groundnut, rapeseed-mustard, soyabean, seasmum,
sunflower, safflower, nigerseed), and
• 4 commercial crops (copra, sugarcane, cotton and raw jute).
The government has formulated a price policy for agricultural produce that
aims at securing remunerative prices to farmers to encourage them to invest
more in agricultural production. Keeping this in mind, the government
announces minimum support prices for major agricultural products every year.
These prices are fixed by Cabinet committee on Economic Affairs (CCEA) after
taking into account the recommendations of the Commission for Agricultural
Costs and Prices (CACP).
Commission for Agricultural Costs and Prices (CACP)

• The CACP is an attached office of the Ministry of Agriculture and Farmers
Welfare. The Commission for Agricultural Costs & Prices (CACP since 1985,
earlier named as Agricultural Prices Commission) came into existence in
January 1965.
• 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.
The Commission of Agricultural Costs and Prices while recommending prices

takes into account important factors, such as:
Notes
Cost of
production
Effect on cost of Trends in market
living prices
Parity between
prices paid and
Input/Output
prices received
Price Parity
by farmers
(Terms of Trade)
Factors
International influencing Changes in input
market price
situation
MSP prices
Demand and Inter-crop Price

supply situation Parity
Effect on
Effect on general
Industrial Cost
price level
Structure
Fair and Remunerative Price (FRP)

FRP is the minimum price which the sugar mills have to pay to the farmers for
their sugarcane. FRP is dictated by the Union Government.
Central Issue Price (CIP)

• On an average, about 15-16 million tonnes of foodgrains are issued by
the FCI to the States at a uniform Central Issue Price (CIP) which is much
less than the economic cost incurred by the Central Government by way
of procurement, storage, transport and distribution.
• Wheat and rice are issued by the Central Government at uniform
central issue prices (CIPs) to States and Union Territories for distribution
under TPDS. The difference between the economic cost and issue price
of foodgrains is reimbursed to the FCI by the Central Government in the
form of subsidy. The Central Issue Price (CIP) under the existing
Targeted Public Distribution System (TPDS) has not been increased
since 2002.
Scheme of Decentralised Procurement (DCP) Notes

The Scheme of Decentralised Procurement (DCP) refers to the manner of
procurement of foodgrains to the central (federal) government stock, through
the state agencies, rather than through the central (Federal) agency of Food
Corporation of India (FCI).
The foodgrains are procured at the Minimum Support Price (MSP) declared by
the Central Government for ensuring
(a) a cost covering price for the producing farmers and
(b) to affect distribution of these foodgrains at affordable prices to the needy
and under-privileged through the public distribution system (PDS) of the
country so as to ensure food security.
Mechanism of DCP
• Under the decentralized procurement scheme (DCP), the State
Government itself undertakes direct purchase of paddy and/or wheat
on behalf of Government of India. Purchase centres are opened by the
State Governments and their agencies as per their requirements.
• Under this scheme, the State Governments themselves procure grains
for the Central pool, store and distribute these foodgrains for Targeted
Public Distribution System (TPDS) and other welfare schemes (eg: mid-
day meal, supply of foodgrains to Scheduled Cast /tribe/other backward
class hostels etc.), based on the allocation made by the Union or Central
Government.
• The surplus of foodgrains procured by DCP States, in excess of their
requirement is handed over to FCI for the Central Pool stocks and
deficit, if any, is met by FCI directly.
• The Central Government undertakes to meet the expenditure incurred
by the State Governments on the procurement operations as per
approved costing based on certain principles. The Central Government
also monitors the quality of foodgrains procured under the scheme and
reviews the arrangements made to ensure that procurement
operations are carried out smoothly. State Governments are not
mandated to participate in the Scheme but are encouraged.
M.S. Swaminathan Commission Notes

• The government of India constituted the National Commission on
Farmers (NCF) on November 18, 2004. The NCF was chaired by
Professor M.S. Swaminathan. It submitted five reports to the
government.
• The reports had suggestions for “faster and more inclusive growth” for
farmers as was envisaged in the Planning Commission’s Approach to
11th Five Year Plan. The fifth report was the most crucial as it contained
suggestions for inclusive growth of farmers and agriculture sector.
• NCF’s Swaminathan Commission Report aimed at working out a system
for food and nutrition security, sustainability in the farming system,
enhancing quality and cost competitiveness of farm commodities and
also to recommend measures for credit and other marketing related
steps.
• Dr Swaminathan had requested the government to implement the
recommendations given in the report so that it could provide minimum
support price for grains, safeguard the interest of small farmers and
addressing the issue of increasing risk overtaking agriculture as a
profession.
Observations
• The Commission observed that farmers needed to have an assured
access to and control over rightful basic resources. These basic
resources include land, water, bio-resources, credit and insurance,
technology and knowledge management, and markets.
• It observed that agriculture must be implemented in the concurrent list
from the state list — hence putting it as a matter of concern for both
the Union and the states.
Recommendations
One of the key reforms was land reforms. It was aimed to address the issue of
access to and for both crops and livestock. The commission said that the
inequality in landholdings in shown starkly in land ownership. It said that in
1991-92, the share of the bottom 50 per cent of the rural households in the
country’s total land ownership was only three per cent. The top 10 per cent
owned as much as 54 per cent.
• Land Reforms: Distribution of ceiling-surplus and waste lands;
prevention of diversion of prime agricultural land and forest to
corporate sector for non-agricultural use; to ensure grazing rights are
provided and seasonal access is allowed in forests to tribals and
pastoralists. It recommended access to common property resources.
One main case was establishing a National Land Use Advisory Service. Notes
The purpose of this service would be to connect land usage decisions
with ecological meteorological and marketing factors.
• Irrigation Reforms: It recommended framing a set of reforms to provide
farmers with “sustained and equitable” access to water for irrigation.
Ensuring boost in water supply by rainwater harvesting, water level
recharging by mandatory aquifers; Million Wells Recharge programme
to be initiated targeted at private wells. To target increase in
investment in irrigation sector under 11th five-year plan.
• Productivity Growth: NCF said that with the objective of achieving
higher productivity growth, it recommended “Substantial increase in
public investment in agriculture-related infrastructure particularly in
irrigation, drainage, land development, water conservation, research
development and road connectivity etc.” It also recommended a
national network of advanced soil testing labs with an aim to test areas
for apt micronutrient levels.
• Credit and Insurance: Expand outreach of formal credit system; reduce
crop loan interest rates to 4%; provide moratorium on debt recovery;
agricultural risk fund; kisan credit cards for women farmers; integrated
credit-cum-crop-livestock human health insurance package; crop
insurance across country for all crops with reduced premiums;
sustainable livelihoods for the poor, investment in human
development; institutional development services etc
• Food Security: The commission recommended Implementation of a
universal public distribution system; reorganising delivery of nutrition
support programmes on a life-cycle basis with panchayat participation
and that of local bodies; elimination of micronutrient deficiency
induced hunger and food cum fortification; community food and water
banks to be operated by women self-help groups; help small and
marginal farmers; formulate national food guarantee act with features
as food for work and employment guarantee programmes.
• Prevention of Farmer Suicides: Providing affordable health insurance
at primary healthcare centres in villages; national rural health mission
to be extended to suicide hotspots on priority basis; state level farmers’
commissions with representatives of farmers, restructuring of
microfinance policies that may serve as a sort of livelihood finance;
covering all crops by crop insurance; village to be the assessor and not
the block, social security net that gives old age support with health
insurance and aquifer recharge and rain water conservation; plans for
decentralised water usage etc.
Minimum Support Prices (MSP) for Minor Forest Produce (MFP) Notes
The Union Ministry of Tribal Affairs has launched the revised scheme
““Mechanism for Marketing of Minor Forest Produce (MFP) through
Minimum Support Price (MSP) & Development of Value Chain for MFP”
Background
• The MSP for MFP scheme was first launched in 2013 but largely
remained a non-starter in most tribal dominant states due to severe
gaps in its implementation process.
• It is centrally sponsored scheme aimed to ensure fair and remunerative
prices to MFP gatherers.
• It provides direct benefits to the tribal by institutionalizing various
avenues in the value chain of MFP such as training, sustainable
collection, procurement, value addition, infrastructure, marketing etc.
• The ministry has now issued revised guidelines to cover the gaps in its
implementation process.
Revised Guidelines
• Federation of SHGs: Self Help Groups for procurement and other
activities would be developed through a hierarchy within a federation
of SHGs at the National, State and District levels.
• Convergence: The Scheme will leverage convergences with various
Central and State Ministries, Departments, Agencies and PSUs such as
aspirational districts with majority tribal population under NITI Aayog.
• Risk Management Matrix: to identify, pre-empt under-performance Notes

and support SHGs which may not function as per expectations which
will be put in place
• Implementation Framework: would include the ministries of tribal
affairs at centre and state level along with agencies such as TRIFED,
District Implementation Unit and Primary Level Procurement at Haat
Bazaars etc. Now, the system would be decentralised with collectors
made responsible for the scheme implementation.
• Value Addition Centres: would be established to improve the rates
tribals get for the produce collected by them.
• Monitoring and Oversight: through audit and IT-enabled Management
information system (MIS)
Significance of this scheme

• Sustainable Development: Tribals traditionally have had an interest in
forest conservation and development. Hence, by promoting their
interest and well-being, the upkeep of forests is also taken care off.
• Social Security: Minor Forest Produce (MFP) collection and marketing
holds critical importance for tribals as they spend a major portion of
their time on it and derive a major portion of their income from it. By
providing the guaranteed minimum support price, this scheme protects
them from distress sale of their produce.
• Skill upgradation: through trainings would be given to the MFP
gatherers.
PUBLIC DISTRIBUTION SYSTEM Notes
Evolution:
• Public distribution of essential commodities has been in existence in
India since the inter war period.
• Its focus was on distribution of food grains in urban scarcity areas,
which emanated from the food shortages of 1960s. The outreach of
PDS was extended to tribal blocks and areas of high incidence of poverty
in the 1970s and 1980s. Until 1992, PDS was a general entitlement
scheme for all consumers without any specific targeting.
• Revamped Public Distribution System (RPDS) was launched in June 1992
in 1775 blocks throughout the country. The Targeted Public Distribution
System (TPDS) was introduced with effect from June 1997. Under the
TPDS, presently Wheat, Rice and Sugar from the Department of Food
and Public Distribution and Kerosene from are being allocated to the
States/UTs for distribution to the eligible ration cardholders.
Revamped Public Distribution System (RPDS)

• (RPDS) was launched in June 1992 with a view to strengthen and
streamline the PDS as well as to improve its reach in the far flung, hilly,
remote and inaccessible areas.
Targeted Public Distribution System (TPDS)

• The PDS as it stood until 1997 was felt not to adequately serve the
population Below the Poverty Line (BPL). It was seen to have an urban
bias.
• Government of India launched the Targeted Public Distribution System
(TPDS) with special focus on the poor. Under the TPDS, States were
required to formulate and implement foolproof arrangements for
identification of the poor for delivery of food grains and their
distribution in a transparent and accountable manner.
Objectives of PDS
• PDS was continued as a deliberate social policy of the government with
the objectives of:
o Providing food grains and other essential items to vulnerable
sections of the society at reasonable (subsidised) prices
o to have a moderating influence on the open market prices of
cereals, the distribution of which constitutes a fairly big share of
the total marketable surplus; and
o to attempt socialisation in the matter of distribution of essential Notes

commodities PDS is a major State intervention in the country
aimed at ensuring food security.
Functioning of PDS
• Procurement of Food Grains.
• Identification of poor and needy.
• Issue of ration cards to poor people.
• Transportation of food grains to all Fai
• r price shops.
• Selling Food grains to all the needy people.
Identification of BPL in Rural areas

• The Census is to be conducted by State Governments/UTs with the
technical and financial support of the M/o Rural Development.
• The classification of households is to be done in three steps. First
step would be to apply an exclusion criteria. The exclusion criteria
would comprise of Households owning Motorized vehicles, having
Kisan Credit Card with the cred it limit of Rs.50,000 and above;
having any member as Government Employee or earning more than
Rs. 10,000 p.m.; paying income tax or professional tax; having land,
tubewell, etc.
• The categories of households that would be compulsorily included,
subject to exclusion criteria above, are those relating to Households
without shelter; Destitutes/living on alms; Manual scavengers;
Primitive Tribal Groups; and Legally released bonded labourers.
• The remaining households will then be assigned deprivation scores
depending on the number of deprivation indicators i.e. Households
with only one room, with kucha walls and kucha roof.
• The BPL Census would be conducted along with Caste Census being
conducted by the office of RGI.
Identification of BPL in Urban areas

• For urban areas, the Planning Commission set up an Expert Group
headed by Prof. S R Hashim methodology for identification of families
living below poverty line in the urban areas.
• Poverty be identified in urban areas through the identification of
specific vulnerabilities’ covering three broad categories namely,
residential, occupational and social.
Addressing the Nutritional Concerns Notes

• Supreme Court has directed that as a one-time measure, it is absolutely
imperative to reserve another 5 million tonnes of food grains for
distribution to the 150 poorest districts or the extremely poor and
vulnerable sections of our society.
• Wheat Based Nutrition Programme under the Integrated Child
Development Services (ICDS), Rajiv Gandhi Scheme for Empowerment
of Adolescent Girls (RGSEAG) of the Ministry of WCD and the Mid-Day
Meals Scheme of the Ministry of Human Resource Development,
among others. These schemes also contribute in addressing the
problem of malnutrition.
• Provisions may be made to have legal entitlements under the
schemes like ICDS, Mid Day Meal etc. and the use of coarse grains
while providing cooked food under such schemes should be
encouraged.
The Challenges
Allocation
• Non –availability /delay of utilization information to the Centre from
States.
• Non -availability / delay of closing balance details and updated card
status at State level from the districts, block and FPS levels.
• Inaccurate data reporting by FPS
• Longer time taken for allocation cycle
Movement
• Absence of truck tracking systemleading to delayed delivery, diversions,
siphoning etc.
• Non-standard transportation rates
• Cartel formation by transporters
• Late submission of demand drafts/cash by FPS for lifting leads to sub
optimal route planning.
Storage and Quality Control (QC) Notes

• Non-availability of stock positions in few states leads to inappropriate
allocation and excess stock build up at intermediary storage points
• Poor quality of packaging leads to loss of food grains
• Extensive use of hooks leads to spillage
• Insufficient godown capacity of intermediate storage points result in
multiple shipments
• Temperature fluctuations due to weather leads to variations in weight
of food grains
• Loss of food grains due to infestation
• Manpower shortage leads to delay in dispatches and non compliance to
policies
Finance
• Poor financial condition of FPS and GPSS /WCCS (in Assam)
• Cost and time incurred on preparation of multiple DDs by FPS results
in increased financial burden on the FPS/GPSS
Licensing and Regulation

• Inadequate monitoring leading to diversion of stock
• Selection of inappropriate dealer leading to malpractices
• Lack of standard selection procedure and guidelines
• Difficulty in identification of elapsed licenses
Grievance Redressal
• Absence of response and monitoring mechanism because of which,
higher authorities are unaware of number and status of grievances
registered and thus grievances are not getting resolved on time
• The service level agreements for grievance redressal are not clearly
defined
• Bogus complaints result in wastage of officials’ time
• Lack of integration between various complaint and registration
channels leads to multiple actions at different levels.
Measures taken for streamlining and strengthening of TPDS & reforms in Notes
TPDS
• Nine Point Action Plan: States should undertake a campaign to review
BPL/AAY list to eliminate ghost ration cards. Implementation of the
action plan has resulted in elimination of a total of 208.58 lakh
bogus/ineligible ration cards in 26 States.
• Strict action should be taken against the guilty to ensure leakage free
distribution of food grains.
• For sake of transparency, involvement of elected PRI members in
distribution of food grains should be ensured.
o Adoption and implementation of revised Model Citizens’
Charter
o To make TPDS operations transparent.
o Introduction of Monthly Certification of Delivery of Food Grains
at Fair Price Shops, and their Distribution to Ration Card Holders
monthly certification by village panchayats / urban local
bodies/vigilance committees/Women’s Self Help Groups
(SHGs).
o Publicity-cum-awareness Campaign
o To facilitate greater public scrutiny of functioning of TPDS
o Community participation in monitoring of PDS should be
encouraged by taking measures such as social audit by local
bodies/ community groups/ NGOs, SMS based information
made available to Ration Card holders, etc.
o There should be a responsive Grievance Redressal Mechanism,
display of information about rights and duties in every FPS,
helpline in the form of Call-centre with toll-free numbers and
web based complaint registration and monitoring system
o A scheme may be prepared to strengthen the Grievance
Redressal Mechanism.
o BPL/AAY lists should be displayed on all FPSs.
o District-wise and FPS-wise allocation of food grains should be
put up on websites and other prominent places, for public
scrutiny.
o Wherever possible, doorstep delivery of food grains should be
ensured by States, instead of letting private
transporters/wholesalers to transport goods.
o Timely availability of food grains at FPS level and fixed dates
of distribution to ration cardholders should be ensured.
• Training of members of FPS level Vigilance Committees should be Notes

ensured.
• Computerization of TPDS operations is undertaken.
o Digitization of ration cards (Andhra Pradesh, Chhattisgarh, Tamil
Nadu, Madhya Pradesh, Karnataka, etc.)
o Computerized allocation to fair price shops (Chhattisgarh, Delhi,
Madhya Pradesh, Tamil Nadu etc.),
o Issue of smart cards in place of ration cards (Andhra Pradesh,
Orissa, etc.),
o Grievance redressal (Andhra Pradesh, Chhattisgarh, Tamil Nadu,
Kerala, etc.)
o Other technology based initiatives are also being taken in the
field of TPDS like use of GPS technology (Chhattisgarh, Tamil
Nadu) for tracking of vehicles carrying TPDS commodities,
o SMS based monitoring of movement of vehicles and reporting
of dispatch/ arrival of TPDS commodities (Chhattisgarh, UP, TN)
and use of webbased citizens’ portal (Chattisgarh).
Aadhaar can be leveraged by PDS in a number of ways:

• Ration card registration
• Cutting down diversion and pilferage through elimination of fake
beneficiaries
• Providing authentication services
• Aadhaar-linked payments
Other Measures to improve the efficiency of FPS operations

• Distribution of wheat flour/fortified wheat flour under TPDS for
nutritional improvement of targeted beneficiaries.
• Cooperatives, Women’s Self Help Groups, Village Panchayats, Urban
Local Bodies Allotment of Fair Price Shops to Institutions and Groups.
• PDS coupled with employment generation programme should create a
scenario wherein price control and poverty alleviation can converge.
• Encourage community based storage facilities to tackle distribution and
availability problems.
• Track the movement of food grains by use of GPS.
Converting Targeted PDS to Universal PDS Notes

TN and CG have had success in following this scheme. (CPI recommends this
idea too). It will help with:
• Nullifying the requirement to identify the poor.
• (Although to a certain extent this has to be done and can be managed
by using Aadhar)
• It may reduce leakages to pvt retail since everyone will be able to buy
from the FPS.
# Creation of FPS-cum–godowns
• Financial Assistance from Central Government will be provided to the
extent of 50% of the cost of construction or a maximum of Rs.1 lakh per
FPS-cum-Godowns. The remaining 50% should be contributed by the
State/UT from its own resources.
• These FPS-cum-Godowns shall be opened in backward regions, tribal
areas, hilly and inaccessible areas only.
Need for providing essential items to public and adding more items under
TPDS
• Sale of non-PDS items in FPS
- To make operations of FPS economically viable, the State/UT
• Governments have been advised to allow FPS licensees to enlarge
the basket of commodities by allowing sale of non
- PDS items for daily use as per local requirements.
- Inclusion of non-PDS items like toothpaste, mobile recharge
etc. through PDS by negotiating intermediary margins would
involve further complex procedures of contracting, tracking
the inventories etc, which can complicate the administrative
procedures and lead to further leakages based on past
experience, expanding the basket of items is considered as one
of the effective measures to address the viability of FPSs.
- Increased commission to FPS dealers.
• As a measure to fight spurt in prices of common items and to protect
the consumers, the Market Intervention Scheme for providing
facilities of non
- formal PDS should be finalised at the earliest.
- As a measure to fight spurt in prices of common items and to
protect the consumers, the Market Intervention Scheme for
providing facilities of non
- formal PDS should be finalised at the earliest.
BUFFER STOCK AND FOOD SECURITY Notes
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). So, it neutralizes the fluctuation in production of a given
crop, so that the prices may remain stable.
In times of surplus production, government procures the crops from farmers
through MSP so that the farmers do not suffer negatively for producing more.
In times of deficit, government releases the buffer stocks in a phased manner
so that interests of the consumers do not suffer, and they are able to meet their
nutritional requirements at reasonable prices.
Buffer Stock Policy of India

The concept was introduced in the fourth five-year plan (1969-74), and a
buffer stock of food grain was to be maintained by FCI on behalf of the
Government of India to meet the monthly release of food grains for supply
through PDS (Targeted Public Distribution System, TPDS 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.
Food grain stocking norms refers to the level of stock in the central pool that
is sufficient to meet the operational requirements of food grains i.e. for
distribution under Targeted Public Distribution System TPDS, Other Welfare
Schemes (OWS) and exigencies at any point of time. Earlier this concept was
termed as Buffer Norms and Strategic Reserves.
Buffer norms are fixed by CCEA (Cabinet committee on Economic Affairs

chaired by PM) on quarterly basis as on 1st April, 1st July, 1st October, and 1st
January of every financial year. The buffer norms have been revised in January
2015.
Operational stock = Stocks earmarked for TPDS + OWS and Food security
stocks/reserves. In addition to the buffer norms, a strategic reserve of 30 lakh
tonnes of wheat and 20 lakh tonnes of rice is also maintained. This stock is
termed as Food Grain Stocking Norms. The Buffer norms of food grains in the
central pool have been revised in 2015 and Cabinet Committee on Economic
Affairs, CCEA has approved that in case the stock of food grains is more than
the revised buffer norm, the Department of Food and Public Distribution will Notes
offload excess stock in the domestic market through open sale or through
exports.
From 2015, 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 stock above the minimum buffer
norms are treated as ‘Excess Stock’, and government can liquidate them
through export, open market sales or additional allocation to states.
Food Corporation of India (FCI) is a Public Sector Undertaking, under the

Department of Food & Public Distribution, Ministry of Consumer Affairs, Food
and Public Distribution. FCI is a statutory body set up in 1965 under the Food
Corporations Act 1964. It was established against the backdrop of major
shortage of grains, especially wheat. Simultaneously, Commission for
Agricultural Costs and Prices (CACP) was created in 1965 to recommend
remunerative prices to farmers.
It has primary duty to undertake purchase, store, move/transport, distribute
and sell food grains and other foodstuffs. The flowchart below displays its
mode of functioning.
Notes
Objectives of FCI
• To provide remunerative prices to farmers
• To help in transforming the crisis management (as seen in recent
Corona virus crisis) oriented food security into a stable security system
to ensure availability, accessibility and affordability of food grains to
all people at all times so that no one, nowhere and at no time should go
hungry
• Ensuring food security of the nation by maintaining satisfactory level of
operational buffer stocks of food grains
• Distribution of food grains throughout the country for Public
Distribution System
• Effective Price Support Operations for safeguarding the interest of
farmers
Major Activities Undertaken by FCI

Procurement
• The Central Government extends price support for procurement of
wheat, paddy and coarse grains through the FCI and State Agencies. All
the food grains conforming to the prescribed specifications are
procured by the public procurement agencies at the Minimum Support
Price (MSP) plus incentive bonus announced, if any.
• Procurement is undertaken both in direct and in-direct mode.
• Under Decentralized Procurement Scheme (DCP), introduced in 1997-
98, food grains are procured and distributed by the State Governments
themselves. The designated States procure, store and issue food grains
under Targeted Public Distribution System (TPDS) and other welfare
schemes of the Government.
• The decentralized system of procurement was introduced to enhance
the efficiency of procurement for PDS and to encourage procurement
in non-traditional States as well as to save on transit losses and costs.
• Before the start of each procurement season, Central Government Notes

announces uniform specification for quality of wheat, paddy, rice and
coarse grains.
• Quality Control Division of FCI ensures procurement of food grains from
procurement centres strictly in accordance with Govt. of India's uniform
quality specifications.
• FCI has also been nominated as an additional nodal Agency for
procurement of Pulses and Oilseeds.
Distribution
• FCI meets the requirements of TPDS through grains procured which are
issued at Central Issue Price fixed by Government to fulfill the objective
of helping the economically vulnerable sections of society.
• FCI delivers food grains to State Government/ State Agencies from its
base depots for distribution by the latter through Fair Price Shops.
• The role of FCI becomes even more important in the backdrop of
National Food Security Act, 2013, that commits to distribute grains
through TPDS and other welfare schemes, at highly subsidized prices.
Strategic Reserve of Food Grains

• The FCI, Central Warehousing Corporation (CWC), State Warehousing
Corporation (SWC) and state agencies have sufficient capacity for
storing the strategic reserve of food grains.
• The buffer stock is meant for supplying food grains under the Public
Distribution System (PDS) and other welfare schemes.
• FCI is the nodal agency for procurement and distribution of food grains.
• Rice, wheat stocks and in the Central Pool managed by the Food
Corporation of India (FCI) were 51.14 million tonnes (mt) as of October,
which is 66 per cent higher than the buffer norm and strategic reserve
of 30.77 mt.
Issues with Buffer Stocks of Food grains in India:

• Since 2010, the problem of insufficient foodgrain storage capacity in
India has attracted both political and media attention. It is useful to
break up the issue into two questions: how much storage capacity is
required for public stocks, and second, what policies will bring capacity
in line with grain purchases.
• Crop harvests occur at particular points in time (rabi, or spring, in the
case of wheat and predominantly kharif, or autumn, in the case of rice)
while consumption is continuous through the year. Hence, crops need
to be carried from the harvest months to the other months when there
is no harvest. This constitutes the demand for seasonal storage. As Notes

there is no seasonal pattern in the consumption of either rice or wheat,
the demand for seasonal storage (both public and private) can be
worked out from the timing of crop harvests and the principle that grain
must be allocated equally over time.
• The Food Corporation of India (FCI)—the Central government agency
responsible for procurement and storage of grain for the public
distribution system (PDS).
• Suppose FCI has a storage capacity of 50 mt, of which about half is hired.
• But the government buys far in excess (more than 200mt) of what it
distributes. That’s because of government’s commitments to the PDS.
However, what the government buys from farmers (procurement) does
not match the PDS requirements. Since the early 1990s, procurement
has consistently exceeded PDS sales.
• This is why there have been recurrent crises of excess stocks and
consequently, of storage capacity.
• It is clear that the difference between procurement and distribution is
too large to be explained by the need for emergency reserves. Nor can
excess procurement be explained by an intent to stabilise consumption
and prices. If that was the case, distribution ought to exceed
procurement in years of low availability. Stabilization re-orders supplies
over time but does not alter the total supplies over a long enough
period of time.
• One implication is that the averaged difference between procurement
and subsidised distribution ought to be zero. This has clearly not
happened in the last two decades.
• High procurement prices and large government stocks displace private
trade and, therefore, bumper procurement and stocks continue until
the momentum is broken by an exceptional event such as a drought or
by ad-hoc dumping of grain in the domestic (open market sales) or
international market (exports).
• India does not have an announced protocol for stock depletion by way
of sales to the domestic or to the international market because of the
bureaucratic and political caution that lead to excessive stocks in the
first place. In addition, high procurement prices typically mean that
stocks have to be sold at a loss. As this would show up immediately as
an increase in food subsidy, the finance ministry is typically
unenthusiastic. Even when the government ultimately sees reason, the
financial implications mean that the chain of decision-making is long
and subject to frequent review. Speedy response to excess stocks is not Notes
part of the government DNA.
• The implication is that as long as the key structure of the procurement
system is unreformed, there will always be a tendency to accumulate
excess stocks. Indeed, it is likely, that an expanded PDS (consistent with
the National Food Security Act) will reinforce this tendency. With a Food
Security Act, the government has an explicit legal obligation to meet the
requirements of the PDS. A failure, here, would not only be politically
costly but could also result in legal sanctions for the officials concerned.
• The ideal reform would be to move procurement from being open-
ended to being closed-ended so that it meshes better with the PDS.
Currently, the procurement system is open-ended in the sense that the
government is committed to buy whatever farmers wish to sell. A
closed-ended procurement process would be one where the
government buys only that much grain as to meet its distribution
requirement. Such reform of the procurement process will be hard.
• States that gain from open-ended procurement will oppose such a
move. While a closed-ended procurement process would meet political
difficulties, incremental reform may be possible. First, if the expanded
obligations under the Food Security Act are met by a mix of transfers in-
kind and in cash, it will restrain the pressures on procurement. Of
course, the problem vanishes in a world where cash transfers
completely replace the transfers in-kind.
• Second, it is important to unbundle the procurement for PDS from the
procurement for buffer stocks. This can be done by creating a new
agency called, say, the Risk Management Agency (RMA). The FCI’s
liability will remain limited to the grain purchased for distribution
requirements. The stocks in excess of this requirement should be
transferred to the books of the RMA. Such an arrangement will make
excess stocks visible in financial accounts and therefore garner
attention from economic and political observers. This might, therefore,
force the government to take excess stocks into account when deciding
procurement prices.
Food Security Notes

• The definition of food security has evolved over a period of time. As a
concept, food security originated in the mid-1970s, in the wake of
global food crisis.
• The initial focus of attention was assuring the availability and to some
degree the price stability of basic foodstuffs at the international and
national level. This was then broadened to incorporate the demand side
of food security in early eighties.
• During the 90’s issues such food safety, nutrition, dietary needs and
food preferences were also considered important ingredients of 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”.
• 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 adequate level of food.
Food Security vis-a-vis Constitution of India

• In the Indian context, the underpinnings for food security of the people
can be found in the Constitution, though there is no explicit provision
on right to food.
• The fundamental right to life enshrined in Article 21 of the Constitution
has been interpreted by the Supreme Court and National Human Rights
Commission to include right to live with human dignity, which includes
the right to food and other basic necessities.
• Under Directive Principles of State Policy, it is provided under Article 47
that that the State shall regard raising the level of nutrition and the
standard of living of its people and the improvement of public health as
among its primary duties.
• Providing food security has been focus of the Government of India’s
planning and policy.
• Attainment of self-sufficiency in foodgrains production at the national
level has been one of the major achievements of the country. In order
to address the issue of food security at the household level,
Government is implementing the Targeted Public Distribution System Notes

under which subsidized foodgrains is provided to eligible households.
To further strengthen the efforts to address the food security of the
people, the Government enacted the National Food Security Act, 2013.
Qualitative and Quantitative Dimensions of Food Security

The adequate supply of food involves two dimensions:
• Quantitative Dimension or overall food availability in the economy.
• Qualitative Dimension pertaining to the fulfillment of nutritional
requirements.
Quantitative Dimension of Food Security in India

• India gained self-sufficiency in the food grains in 1970s mainly because
of green revolution and has sustained it since then.
• India's foodgrains production is estimated at a record 315 million
tonnes in the 2021-22 crop year.
• 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.
This can be gauged from the following facts:

• According to State of Food Security and Nutrition in The World 2020
Report of FAO, the number of undernourished people in India declined
from 249.4 million in 2004-06 to 189.2 million in 2017-19. (Focus on
trend).
• The number of undernourished people in India has declined in the last
15 years to 224.3 million in 2019-2021, from 247.8 million in 2004-06.
according to a U.N. Report
• It further said that the prevalence of stunting in children under 5 years
of age in India declined from 47.8% in 2012 to 34.7% in 2019 or from 62
million in 2012 to 40.3 million in 2019.
• It estimated that the number of adults (18 years and older) who are
obese grew from 25.2 million in 2012 to 34.3 million in 2016, growing
from 3.1 % to 3.9 %. The number of obese adults in India, which has a
population of over 1.38 billion, grew to 34.3 million in 2016 from 25.2
million in 2012.
• The number of women of reproductive age (15-49) affected by anaemia Notes

grew from 165.6 million in 2012 to 175.6 million in 2016.
• The number of infants 0-5 months of age exclusively breastfed grew
from 11.2 million in 2012 to 13.9 million in 2019.
• 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.
• NFHS-5: The level of stunting among children under five years has
marginally declined from 38% to 36% in the country since the last four
years. Stunting is higher among children in rural areas (37%) than urban
areas (30%) in 2019-21.
• Global Hunger Index 2022. India's ranking in Global Hunger Index 2022
is 107 (slipped from the 2021 index of 101) out of 121 countries.
Challenges in Ensuring Food Security
• Over the coming decades, a changing climate, growing global

population, rising food prices, poor agricultural growth rate (trends
shown below) and environmental stress factors will have significant yet
highly uncertain impacts on food security.
• Moreover, a significant proportion of population is economically
backward to be able to afford adequate food for fulfilling their dietary
requirements. Despite the availability of government support
programs, there have been numerous questions at international forums
like WTO over government public procurement and distribution of food
grains to the needy people.
• To tackle the quantitative and qualitative aspect of food security
problem, India provides three food-based safety nets and one
monitoring programme.
• Public Distribution System (PDS)
• Integrated Child Development Scheme (ICDS)
• Mid-Day Meals Program (MDM)
• National Nutrition Mission (POSHAN ABHIYAAN) Notes
Integrated Child Development Scheme (ICDS)
A centrally sponsored scheme launched in 1975, it is a one of the largest child

intervention programs in the world with a holistic package of 6 basic services
for children up to 6 years of age, and for pregnant and lactating mothers. These
services are:
a) Supplementary feedings (Child-500 calories, 12-15gm protein for 300 days,
Pregnant
mothers-600 calories, and 18-20 gm protein)
b) Immunization
c) Health Checkups
d) Referral services
e) Health and nutrition education to adult women
f) Non-formal pre-school education to 3-6 years old.
Mid-Day Meal (MDM) Scheme

MDM is the world’s largest school feeding program reaching out to about
12crore children in Schools and Education Guarantee centres (EGS) across the
country. National Program of nutritional support to primary education, also
called MDM scheme was launched in 1995. It is a nationwide central scheme
intended to improve:
• the enrolment and regular attendance and
• to reduce the dropouts in schools.
• to improve nutritional status of primary school children.
From 2008-09, Children from upper primary level i.e., till Class VIII were also
included in the scheme. For primary students-450 calories and 12 gm protein
and for upper primary students-700 calories and 20 gm protein has been kept
as norm.
Critical Appraisal of ICDS and MDM Notes

India’s one of the biggest flagship programs, the Rs 8,000 crore-a-year
Supplementary Nutrition Program (SNP) to fight child malnourishment under
ICDS suffers from gross violations and misuse of rules and has failed in meeting
its ends.
• 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 meal is being served at most of the
schools.
• ICDS has limited itself with just one function of Supplementary
Nutritional Program (SNP) and is not concerned about other functions.
Also, it focuses on children 3-6 years of age, so, 0-3 years (when
maximum nutrition is required) old suffer neglect.
• 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.
• Child Immunization and pre-school education is neglected under ICDS,
except in Tamil Nadu (FOCUS report). ICDS is poorly implemented. Also,
several posts such as of CDPO and supervisors remain vacant in many
states.
• Rampant corruption, fudged records and bland panjiri has become the
reality of ICDS.
• FOCUS reports (Focus on Children Under Six Report by Right to Food
Campaign NGO) show that corruption is the main reason for failure of
ICDS and MDM in removing malnutrition.
• It was found that ‘panjiri’ (ready-to-eat energy mix) meant for children
is being used illegally to feed the cattle of rich and influential in Uttar
Pradesh.
• 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 Nutrition Mission Notes
National Nutrition Mission or Poshan Abhiyaan aims to improve the nutritional

health of children, adolescents, lactating mothers and pregnant women.
Besides this, take a look at the following objectives of the National Nutrition
Mission that this scheme aims to fulfil:
• Prevention and reduction of stunted growth and under-nourishment

among children between 0 to 6 years by 2% per year.
• Reduction of anaemia among children aged between 6 - 59 months and
women and adolescent females aged between 15 - 49 years by 3%.
• Reduction of low birth weight of a baby by 2%.
• It is a flagship programme which is executed by the Ministry of Women
and Child Development (WCD) as the nodal ministry along with other
ministries like Ministry of Drinking Water and Sanitation, Ministry of
Health and Family Welfare etc. which ensures convergence with various
programmes.
Target: The mission, to be implemented in three phases, has a target to reduce

stunting, undernutrition, and low birth weight by 2 per cent per annum, and
anaemia among children (of 6-59 months) and women/adolescent girls (15-49
years) by 3 per cent annually. It would also strive to achieve reduction in
stunting from 38.4% to 25% by 2022 (Mission 25 by 2022).
The salient features of India’s National Nutritional Mission include the

following:
• NNM as an apex body will monitor, supervise, fix targets and guide the
nutrition related interventions through the life cycle concept.
• Mapping of various schemes contributing under malnutrition
• ICT (Information and Communication Technology) based real time
monitoring system.
• Incentivizing states/UTs for meeting targets
• Incentivizing Anganwadi Workers (AWW) for using IT based tools and
eliminating the need for registers
• Measurement of height of children at Anganwadi Centres
• Social Audits to track the health progress of the children
• Setting-up Nutrition Resource Centres
National Food Security Act (NFSA) Notes
National Food Security Act, 2013

• As passed by the Parliament, Government has notified the National
Food Security Act, 2013 on 10th September, 2013 with the objective to
provide for food and nutritional security in human life cycle approach,
by ensuring access to adequate quantity of quality food at affordable
prices to people to live a life with dignity. The Act provides for coverage
of upto 75% of the rural population and upto 50% of the urban
population for receiving subsidized foodgrains under Targeted Public
Distribution System (TPDS), thus covering about two-thirds of the
population. The eligible persons will be entitled to receive 5 Kgs of
foodgrains per person per month at subsidised prices of Rs. 3/2/1 per
Kg for rice/wheat/coarse grains. The existing Antyodaya Anna Yojana
(AAY) households, which constitute the poorest of the poor, will
continue to receive 35 Kgs of foodgrains per household per month.
• The Act also has a special focus on the nutritional support to women
and children. Besides meal to pregnant women and lactating mothers
during pregnancy and six months after the child birth, such women will
also be entitled to receive maternity benefit of not less than Rs. 6,000.
Children upto 14 years of age will be entitled to nutritious meals as per
the prescribed nutritional standards. In case of non-supply of entitled
foodgrains or meals, the beneficiaries will receive food security
allowance. The Act also contains provisions for setting up of grievance
redressal mechanism at the District and State levels. Separate
provisions have also been made in the Act for ensuring transparency
and accountability.
Salient features of the National Food Security Act, 2013

• Coverage and entitlement under Targeted Public Distribution System
(TPDS): Upto 75% of the rural population and 50% of the urban
population will be covered under TPDS, with uniform entitlement of 5
kg per person per month. However, since Antyodaya Anna Yojana (AAY)
households constitute poorest of the poor, and are presently entitled
to 35 kg per household per month, entitlement of existing AAY
households will be protected at 35 kg per household per month.
• State-wise coverage: Corresponding to the all India coverage of 75%
and 50% in the rural and urban areas, State-wise coverage will be
determined by the Central Government. Planning Commission has
determined the State-wise coverage by using the NSS Household
Consumption Survey data for 2011-12 and also provided the State-wise Notes
"inclusion ratios”.
• Subsidised prices under TPDS and their revision: Foodgrains under
TPDS will be made available at subsidised prices of Rs. 3/2/1 per kg for
rice, wheat and coarse grains for a period of three years from the date
of commencement of the Act. Thereafter prices will be suitably linked
to Minimum Support Price (MSP).
• In case, any State’s allocation under the Act is lower than their current
allocation, it will be protected upto the level of average offtake during
last three years, at prices to be determined by the Central Government.
Existing prices for APL households i.e. Rs. 6.10 per kg for wheat and Rs
8.30 per kg for rice has been determined as issue prices for the
additional allocation to protect the average offtake during last three
years.
• Identification of Households: Within the coverage under TPDS
determined for each State, the work of identification of eligible
households is to be done by States/UTs.
• Nutritional Support to women and children: Pregnant women and
lactating mothers and children in the age group of 6 months to 14 years
will be entitled to meals as per prescribed nutritional norms under
Integrated Child Development Services (ICDS) and Mid-Day Meal
(MDM) schemes. Higher nutritional norms have been prescribed for
malnourished children upto 6 years of age.
• Maternity Benefit: Pregnant women and lactating mothers will also be
entitled to receive maternity benefit of not less than Rs. 6,000.
• Women Empowerment: Eldest woman of the household of age 18
years or above to be the head of the household for the purpose of
issuing of ration cards.
• Grievance Redressal Mechanism: Grievance redressal mechanism at
the District and State levels. States will have the flexibility to use the
existing machinery or set up separate mechanism.
• Cost of intra-State transportation & handling of foodgrains and FPS
Dealers' margin: Central Government will provide assistance to States
in meeting the expenditure incurred by them on transportation of
foodgrains within the State, its handling and FPS dealers’ margin as per
norms to be devised for this purpose.
• Transparency and Accountability: Provisions have been made for
disclosure of records relating to PDS, social audits and setting up of
Vigilance Committees in order to ensure transparency and
accountability.
• Food Security Allowance: Provision for food security allowance to Notes

entitled beneficiaries in case of non-supply of entitled foodgrains or
meals.
• Penalty: Provision for penalty on public servant or authority, to be
imposed by the State Food Commission, in case of failure to comply
with the relief recommended by the District Grievance Redressal
Officer.
Responsibilities under NFSA

• NFSA defines the joint responsibility of the Centre and State/UT
Government. While the Centre is responsible for allocation of
required foodgrains to States/UTs, transportation of foodgrains up
to designated depots in each State/UT and providing central
assistance to States/UTs for delivery of foodgrains from designated
FCI godowns to the doorstep of the FPSs, the States/UTs are
responsible for effective implementation of the Act, which inter-alia
includes identification of eligible households, issuing ration cards to
them, distribution of foodgrain entitlements to eligible households
through fair price shops (FPS), issuance of licenses to Fair Price Shop
dealers and their monitoring, setting up effective grievance
redressal mechanism and necessary strengthening of Targeted
Public Distribution System (TPDS).
Coverage and entitlement under NFSA

• NFSA covers upto 75% of the rural population and 50% of the urban
population under under Antyodaya Anna Yojana (AAY) and priority
households. While AAY households, which constitute poorest of the
poor are entitled to 35 kg of foodgrains per family per month,
priority households are entitled to 5 kg per person per month.
Corresponding to the all India coverage of 75% and 50% in the rural
and urban areas, State-wise coverage under NFSA was determined
by the erstwhile Planning Commission (now NITI Aayog) by using the
NSS Household Consumption Survey data for 2011-12. Within the
coverage under TPDS determined for each State, the work of
identification of eligible households is to be done by States/UTs. It
is the responsibility of the State Governments/UTs, to evolve
criteria for identification of priority households and their actual
identification. Section 10 of the Act provides that within the number
of persons determined for coverage under TPDS, the State
Government shall identify the households under AAY as per
guidelines applicable to the said scheme and the remaining
households as priority households to be covered under TPDS, in Notes

accordance with such guidelines as the State Government may
specify.
Central issue price under NFSA

• Foodgrains under NFSA were to be made available at subsidized
prices of Rs. 3/2/1 per kg for rice, wheat and coarse grains
respectively for an initial period of three years from the date of
commencement of the Act (July 13, 2013). Thereafter, prices were
to be fixed by the Central Government from time to time, but not
exceeding MSP. Government has decided from time to time to
continue the above mentioned subsidized prices under NFSA and
their validity has last been extended upto June, 2019.
Tide over allocation

• The Act provides that in case any State/UT’s allocation under NFSA
is lower than their current allocation, it will be protected upto the
level of average offtake under erstwhile normal TPDS during 2010-
11 to 2012-13, at prices to be determined by the Central
Government. Prices for APL households under erstwhile TPDS i.e.
Rs. 6.10 per kg for wheat and Rs 8.30 per kg for rice has been
determined as issue price for the additional allocation under Tide
Over.
Direct Benefit Transfer (DBT)

• National Food Security Act (2013) provides for reforms in the TPDS
including schemes such as Cash transfers for provisioning of food
entitlements. In pursuance of enabling provisions under section 12
of NFSA for cash transfer, Govt. notified ‘Cash Transfer of Food
Subsidy Rule, 2015’ in Aug 2015. The DBT experiment aims to (i)
reduce the need for huge physical movement of foodgrains (ii)
provide greater autonomy to beneficiaries to choose their
consumption basket (iii) enhance dietary diversity (iv) reduce
leakages (v) facilitate better targeting (vi) promote financial
inclusion
• Direct Cash Transfer in food was started in UTs of Chandigarh and
Puducherry from the month of September, 2015 and part of Dadra
& Nagar Haveli from March, 2016. In these UTs, NFSA is being
implemented in cash transfer mode under which cash equivalent of
subsidy is being transferred directly into the Bank accounts of
eligible households to enable them to purchase foodgrains from
open market. The Scheme is optional for States/UTs and operates Notes
in "Identified areas” in a State or Union territory or any specified
area within the State or Union territory for which there is a written
consent of the State Government for implementation of the
Scheme. Prevailing system of distribution of food grains through
Public Distribution System may continue in the remaining areas not
covered under the Scheme.
Role of TPDS in shaping Household & Nutritional Security in India

• The National Food Security Act focuses on providing food security via
expansion of the PDS.
• Greater access to subsidised grains for the poor was expected to reduce
malnutrition, leading to a concomitant fall in the number of
underweight children. However, most national level surveys conducted
during this period including the National Family Health Survey-4 did not
find any correlation between PDS use and decline in malnutrition.
• Another expectation which has been belied is that with a rise in
incomes, households would increasingly buy higher quality grains from
the market rather than the PDS shops. Rather than declining, PDS use
has risen sharply in both urban and rural areas for the poor as well as
the non-poor. These trends have been covered in detail below.
Pilot Scheme on Fortification of Rice and its Dispersal Through
Public Distribution System (PDS)

• Department of Food and Public Distribution under the Ministry of
Consumer Affairs recently approved a centrally-sponsored pilot scheme
on fortification of rice and its dispersal through Public Distribution
System (PDS).
• Financial assistance of up to 90 per cent in case of North- Eastern, Hilly
and Island States and up to 75 percent in case of rest of the States has
been extended by GOI.
• Government of India has also advised all states and UTs especially those
states and UTs, which are distributing wheat flour through PDS, to
distribute fortified wheat flour through PDS.
Notes
Food Fortification
• Food fortification is the deliberate addition of one or more
micronutrients to food so as to correct or prevent a deficiency and
provide a health benefit. These nutrients may or may not have been
originally present in the food before processing. Food fortification is a
“complementary strategy” and not a replacement of a balanced &
diversified diet to address malnutrition.
It has the following benefits:

• Can improve the health of a large section of the population, all at once
since the nutrients are added to staple foods that are widely consumed.
• is safe method of improving nutrition among people as the quantity
added is very small and well-regulated as per prescribed standards.
• is a socio-culturally acceptable way to deliver nutrients to people as it
does not require any changes in food habits and patterns of people and
does not alter the characteristics of the food—the taste, the feel, the
look.
• is cost effective and delivers quick results. The Copenhagen Consensus
estimates that every 1 Rupee spent on fortification results in 9 Rupees
in benefits to the economy.
Need for Food Fortification

Nearly 70% of people in India consume less than half of their recommended
dietary allowance (RDA) of micronutrients. The deficiency of micronutrients is
also known as “hidden hunger” and leads to various diseases like Night
Blindness, Goitre, Anaemia and various birth defects.
According to the National Family Health Survey (NFHS-4):

• 58.4 percent of children (6-59 months) are anaemic.
• 53.1 percent women in the reproductive age gro up are anaemic.
• 35.7 percent of children under 5 are underweight. Around 50-70% of
these birth defects are preventable, caused due to deficiency of Folic
Acid.
Challenges to food fortification Notes

• Voluntary nature: Fortification continues to be voluntary rather than
mandatory leading to limited efforts to fortify by state governments
and private sector.
• Poor implementation by states: Although some states have adopted
fortification in ICDS, MDMS and PDS, but due to lack of definitive policy
guidelines, budgetary constraints,
• technical knowledge and logistic support, states have not adopted
fortification in a holistic manner.
• Weaknesses of FSSAI: It lacks resources and manpower to effectively
carry out its mandate.
• Lack of awareness: There is a lot of misinformation and ignorance about
the usage and benefits of fortified food as of now.
WTO and Food Security
• According to WTO, people are considered food secure when they have
access to sufficient, safe, nutritious food to maintain a healthy and
active life. Public Stockholding is a policy instrument used by
government to procurement, stock and distribute the food whenever
the need arises. Minimum Support Price (MSP) is one of the instruments
of Public Stockholding.
• Stockpiling and distributing food are considered legitimate policy
objectives and are hence permitted under WTO Rules. However,
purchasing of food at fixed prices or “administered” prices which are
higher than market is considered an act of subsidizing. This kind of
support for purchasing food at fixed price is counted towards the
Country’s overall ceiling on trade distorting support under the WTO
Rules.
• Currently, there is cap of 10% (fixed subsidy) for procurement of food
from farmers in order to feed the needy and the poor. This cap can
constrain procurement of food grains and also implementation of food
aid programs in developing countries. As per the Agreement on
Agriculture (AoA) of WTO, purchase of farm produce at higher prices
than the market is considered as subsidizing the farmers.
The methodology that is used for subsidy calculation is based on price index of
1986-1988 and Student Notes:
o that does not take into consideration the inflation. The WTO has
a provision that Member countries may give subsidy in order to
maintain the local market. For example, Agreement on Notes

Agriculture (AoA) excludes certain policies from reduction
commitments (Green Box).
o Public Distribution programs of developing countries are
included in the trade distorting Amber box measures which
requires reduction in the commitments. G33 Countries (a group
of 47 nations) of which India is a prominent member, are
demanding that the programs for food security measures should
be exempted from subsidy reduction commitment of WTO.
These food security measures; Public Stockholding programs
should be removed from amber box to green box subsidies
which are exempted from reduction commitments.
o However, there is strong opposition from US, EU and such other
developed countries to provide unrestrained or unlimited
market price support under the banner of Food Security
Measures or Public Stockholding.
Recent debates in WTO meets over Food Security: India’s Position

• India has been repeatedly demanding permanent legal solution to this
problem. India has agreed to WTO's Trade Facilitation Agreement on a
promise that the public stockholding issue shall be resolved. There has
to be a workable solution to the issue of public stockholding issue which
is better than mere peace clause.
• A proposal by India and China has called on developed countries to
eliminate their “amber box” support with an argument that this type of
support would remove one of the biggest imbalances in the current
farm trade rules by obliging the biggest subsidizers to reduce their
special entitlements.
• India’s Public Stockholding Program under the National Food Security
Act (NFSA) is much more than a mere welfare program. India is being
accused of giving high price to the procurement as compared to the
market price. However, in fact, the procurement prices are not always
higher than the market prices. Farmers generally sell their produce to
the Government because of the stability of the prices.
• In a nutshell, following are India’s demands:
o to find out a permanent solution for its public stockholding
programmes for food security.
o special safeguard mechanism for millions of farmers from
unforeseen surges in agricultural imports.
o an agreement for removing bottlenecks for facilitating trade in
services.
TECHNOLOGY MISSION IN AGRICULTURE Notes
• E-technology is broadly understood to include the Internet and

related information technologies
• The early intervention of e-Technology coming to farmer’s aid
o It was introduced as early as in 2007, when National Policy
for farmers was launched with focus on ICTs
o Further, National Telecom Policy was launched in 2012,
with focus on broadband connectivity and mobile
penetration
Government initiatives in Digital Agriculture
AGMARKNET
• Agricultural Marketing Information Network (AGMARKNET) was
launched in 2000 by the Union Ministry of Agriculture
• The Directorate of Marketing and Inspection (DMI), under the
Ministry, links around 7,000 agricultural wholesale markets in
India with the State Agricultural Marketing Boards and
Directorates for effective information exchange.
• This e-governance portal AGMARKNET, implemented by National
Informatics Centre (NIC), facilitates generation and transmission
of prices, commodity arrival information from agricultural
produce markets, and web-based dissemination to producers,
consumers, traders, and policymakers transparently and quickly.
e-Choupal
• An initiative by ITC provides alternative marketing channel,
information on weather, agricultural practices, input sales, etc.
• It is a kiosk located in a village and equipped with computer and
internet access, which is managed by trained sanchalak.
Direct benefit transfer (DBT) Central Agri Portal

• Launched in 2013, the DBT Agri Portal is a unified central portal
for agricultural schemes across the country
• The portal helps farmers adopt modern farm machineries through
government subsidies
National Agriculture Market (e-NAM) Notes

• The National Agriculture Market scheme (e-NAM) envisages
initiation of e-marketing platform at national level and to support
creation of infrastructure to enable e-marketing in regulated
markets across the country
• This innovative market process is revolutionizing Agricultural
markets by ensuring better price discovery, bringing in
transparency and competition to enable farmers to get improved
remuneration for their produce in moving towards ‘One Nation
One Market’
Kisan Call Centre

• In order to harness the potential of ICT in Agriculture, Ministry of
Agriculture & Farmers Welfare launched the scheme in 2004
• Main aim of the project is to answer farmers’ queries on a
telephone call in their own dialect
Village Resource Centres

• Village Resource Centres provide space-based services in the rural
areas. They are one of the unique initiatives that use Satellite
Communication (SATCOM) network and Earth Observation (EO)
satellite data to reach out to the villages to address the needs of
the local people in villages themselves.
Digital Agriculture Mission

• The Digital Agriculture Mission (2021–2025) aims to support and
accelerate projects based on new technologies, like AI, block
chain, remote sensing and GIS technology and use of drones and
robots
Unified Farmer Service Platform (UFSP):

• UFSP is a combination of Core Infrastructure, Data, Applications
and Tools that enable seamless interoperability of various public
and private IT systems in the agriculture ecosystem across the
country. UFSP is envisaged to play the following role:
o Act as a central agency in the agri ecosystem (like UPI in the
e Payments)
o Enables Registration of the Service Providers (public and
private) and the Farmer Services.
o Enforces various rules and validations required during the
service delivery process.
o Acts as a Repository of all the applicable standards, API’s Notes

(Application Programming Interface) and formats.
o Act as a medium of data exchange amongst various
schemes and services to enable comprehensive delivery of
services to the farmer
AgriStack
• The Ministry of Agriculture and Farmers Welfare has planned
creating ‘AgriStack’ – a collection of technology-based
interventions in agriculture.
o It will create a unified platform for farmers to provide them
end to end services across the agriculture food value chain
Other State level Initiatives
Esagu
• ‘eSagu’ is a web-based personalized agro-advisory system which
uses Information Technology to solve the unscientific agricultural
practices.
• Sagu means cultivation in Telugu-local language of Telangana
Andhra Pradesh, the region in which the project started.
• E-Sagu means electronic cultivation.
• It exploits the advances in Information Technology to build a cost -
effective agricultural information dissemination system to
disseminate expert agriculture knowledge to the farming
community to improve the crop productivity
AGRISNET
• The AGRISNET project was conceptualized with the vision of
creating interconnected technology enabled network to deliver
informational services effectively to the farming community.
• The project aimed to integrate cross-functional processes of the
Department of Agriculture in Tamilnadu, so as to effectively and
efficiently communicate informational services to the farming
community.
Jio Agri (JioKrishi) Platform Notes

• Launched in 2020, it digitises the agricultural ecosystem along the
entire value chain to empower farmers
• The core function of the platform uses stand-alone application
data to provide advisory, the advanced functions use data from
various sources, feed the data into AI/ML algorithms and provide
accurate personalised advice.
• The pilot project for this initiative will take place at Jalna and
Nashik (Maharashtra).
Constraints in e-Technology implementation
Financial Implications
• It is a big challenge to bring rural India on a communication
highway keeping in mind the diversity that they have in terms of
language, culture, geographical limitations, and poor knowledge
base.
• Moreover, with limited exposure and expertise of rural populace,
it is a momentous challenge to educate them in handling and
usage of modern communication tools and services
Inadequate access to telecommunication infrastructure

• Marred by poor infrastructure and flawed implementation, rural
populace is still years behind their urban counterparts when it
comes to comparison of quality and access level of ICT services
Access to hardware
• The access to e-technology is primarily dependent on the
availability and access to hardware equipment like smartphones
and computers along with the network connectivity.
• Further, if the equipment is available, the information access
should also be available at equitable cost.
• This creates a digital divide between those having the access and
those not having the access to the digital services due to the
financial constraints
Language and content limitations

• The main hurdle in utilization of information by rural populace is
the absence of content in their regional languages.
• Although, sufficient work is being done in this regards, the efforts Notes
aren’t sufficient enough to absorb the agriculture dependent
population completely.
Impact of ICT in agriculture

• Information technology is a tool for direct contribution
to agricultural productivity and is an indirect tool
for empowering agriculturalists to take informed and quality
decisions, which will have positive impact on agriculture and allied
activities conducted
• In India, it has made an impact on how information is shared, and
being able to use this information for the advancement of the
agricultural sector gives a great positive impact that is beneficial
for everyone.
• Agricultural biotech and InfoTech together are helping to create
new tools to tackle the problem of rural poverty, generate
employment in farm production, exploring more income
generating opportunities as well
• Also, different IT interventions support rural and under-developed
markets to become efficient and productive, for innovative
methods in agriculture, such as for precision agriculture,
computerized farm machinery etc.
• Access to price information, access to agriculture information,
access to national and international markets, increasing
production efficiency are all the beneficial outcomes, which can
eventually enhance the quality of farmers’ lives
Future of Digital infrastructure in India

• As the Indian Agriculture and Allied sector is on the verge of
adopting modern technologies, such as IoT, AI/ML and agri-drones
for unmanned aerial surveying, Indian and foreign agritech players
can play a vital role in supplying these advanced technologies to
farmers.
• Currently, there are few players in the market, but catering to
~267 million farmers in a country exhibits a huge opportunity for
private and foreign entities to expand their footprint in the
country.
• However, influential factors that will define the success of digital
agriculture in India are technology affordability, ease of access
and operations, easy maintenance of systems and supportive Notes

government policies.
• Adopting a holistic ecosystem approach to address challenges
faced by the Indian agriculture sector is of national interest, to
achieve objectives, like doubling farmer incomes and sustainable
development.
• Thus, a multi-stakeholder approach will be required for the wide-
scale adoption of digital agriculture in India, with the government
playing a key enabler’s role in the ecosystem.
Copyright © by IASbaba
All rights are reserved. No part of this document should be reproduced,
stored in a retrieval system or transmitted in any form or by any means,
electronic, mechanical, photocopying, recording or otherwise, without prior
permission of IASbaba.

ILP Advance - Module 3 VAN - Indian Agriculture Part 2

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ILP Advance - Module 3 VAN - Indian Agriculture Part 2

Uploaded by

Copyright:

Available Formats

dGl0b3JlZGR5ODhAZ21haWwuY29t

ILP 2023 –INDIAN AGRICULTURE II

ILP 2023 –INDIAN AGRICULTURE II

Previous Years Questions Notes

2. In India, which of the following can be considered as public investment in

3. The FAO accords the status of ‘Globally Important Agricultural Heritage

ILP 2023 –INDIAN AGRICULTURE II

a) 1 and 3 only Notes

4. With reference to 'Initiative for Nutritional Security through Intensive

ILP 2023 –INDIAN AGRICULTURE II

3. Pregnant women and lactating mothers are entitled to a take-home Notes

7. An objective of the National Food Security Mission is to increase the

ILP 2023 –INDIAN AGRICULTURE II

ILP 2023 –INDIAN AGRICULTURE II

FARM SUBSIDIES AND ISSUES Notes

• An agricultural or farm subsidy is a financial aid provided by the

What is the need for Farm Subsidies?

Types of Agricultural Subsidies

Explicit Input Subsidy

ILP 2023 –INDIAN AGRICULTURE II

Implicit Input Subsidy

Subsidies Provided by the GOI to the Indian Farmers

ILP 2023 –INDIAN AGRICULTURE II

Credit Subsidy: Government offers credit subsidies to the farmers in many

ILP 2023 –INDIAN AGRICULTURE II

ILP 2023 –INDIAN AGRICULTURE II

Subsidy for Organic Farming in India:

Organic Area Selection Criteria;

(b) Cluster approach will be adopted in large patches of up to 1000 ha area.

ILP 2023 –INDIAN AGRICULTURE II

Indian Government Subsidy for the Construction of Cold Storages

ILP 2023 –INDIAN AGRICULTURE II

Direct subsidies Indirect subsidies

ILP 2023 –INDIAN AGRICULTURE II

farmers as small farmers are more Notes

ILP 2023 –INDIAN AGRICULTURE II

diverted to non-farm unproductive another disadvantage. They are Notes

Current Subsidy Scenario

ILP 2023 –INDIAN AGRICULTURE II

ILP 2023 –INDIAN AGRICULTURE II

Farm Subsidies and the World Trade Organization (WTO)

ILP 2023 –INDIAN AGRICULTURE II

What could be done?

ILP 2023 –INDIAN AGRICULTURE II

Major Government Subsidies in Agriculture for Farmers

Pradhan Mantri Krishi Sinchai Yojana (PMKSY)

Rashtriya Krishi Vikas Yojana (RKVY)

ILP 2023 –INDIAN AGRICULTURE II

focuses on, it significantly works on Agriculture Mechanization. Extra Notes

National Food Security Mission (NFSM)

Soil Health Card Scheme

NABARD Farm/Agriculture loans in India

Common Objectives of Subsidiary Schemes Promoting Machineries;

ILP 2023 –INDIAN AGRICULTURE II

MINIMUM SUPPORT PRICE

What is the Minimum Support Price (MSP)?

What is the need for MSP?

Merits and Demerits of Minimum Support Price:

ILP 2023 –INDIAN AGRICULTURE II

ILP 2023 –INDIAN AGRICULTURE II

after considering the views of State Governments and Central Notes

ILP 2023 –INDIAN AGRICULTURE II

ILP 2023 –INDIAN AGRICULTURE II