AGRICULTURE

TOPICS TO BE COVERED
 Features of Indian Agriculture (IA)
 Subsidy

 Fertilizers

 Irrigation

 MSP

 Green Revolution

 Storage/Warehousing

 Marketing-APMC

 Crop Insurance

 eNAM

 Food Security-NFSA

 e-Technology
FEATURES OF INDIAN AGRICULTURE
 Majority of the population is involved in agriculture
 49% of the households derive their daily income
 Majority of the land under agriculture is dependent
on monsoon (monsoon is erratic)
 Traditional methods of irrigation
 Lower mechanization
 Disguised unemployment
 Too much oriented towards cereal production
 Per capita availability of land and water is low
 Central problem of agriculture is productivity
FEATURES OF INDIAN AGRICULTURE
 Growth of agriculture is targeted at 4% for the 12th Five
Year Plan
 Food grain estimation is 265.6 mn tonnes for 2013-14 and
for 2014-15 it is estimated to be 257.07 mn tonnes
AGRICULTURE GROWTH
 Share of agriculture in employment is 48.9% (2011-12)
whereas the GDP contribution has been 17.4% (2014-15)

 12th FYP has envisaged an average growth of 4%

Year Growth
2012-13 1.5%
2013-14 4.2%
2014-15 -0.2%
2015-16 1.1%

 Reasons for lower growth

 66% of cultivable land is dependent on monsoon
 Two successive failures of monsoons
 Expansion of irrigation and its efficiency
 Volatility in the market prices
 Distortion in the cropping patterns
LAND AND WATER AVAILABILITY
PRODUCTIVITY OR CROP YIELD
LOW PRODUCTIVITY
 Why low productivity
 Most of the irrigated land is under cereal cultivation
 Pulses are grown on un-irrigated lands and most of the
production comes from these lands
 India uses 2 to 4 times more water to produce a unit of major
food crop
 Usage of traditional methods (flood irrigation)
SUBSIDIES

 Transfer payments-are the one sided payments

without expecting any returns (taxes, subsidies)

 Subsidy-Subsidy is a support (financial or

otherwise) extended by the government to an
economic sector. These are unconditional transfers
 Direct/Indirect (cash/kind)
 Universal/Targeted
 Conditional/Unconditional
 Implicit/Explicit
SUBSIDIES
 Need for subsidy
 Improved production/Promoting better inputs
 Achievement of social objective
 Price control
 Increasing efficiency
 Export promotion

 Subsidy is provided by the government in

 Food grains-PDS,NFSA
 Fertilizers
 LPG
 Kerosene
SUBSIDIES
 Criticism against subsidy
 Ill-targeting
 Has an impact on cropping patterns
 Doesn’t allow for optimal utilization
 Creates inefficiencies in the market
FERTILIZERS
 Agricultural urea is most subsidized(74%), most produced
(86%), most consumed(74%), most imported(52%), most
physically controlled

 The urea subsidy accounts for 0.8% of GDP

 In case of DAP and MoP government pays the subsidy based

on the quantity used (per kg) whereas in case of urea
 Fixes maximum retail price
 Provides subsidy to the 30 domestic producers
 Provides subsidy to the importers
 Imports are canalised-only three agencies are
allowed(State Trading Corporation of India; Metals and
Minerals Trading corporation of India; India Potash Ltd)
 Half of the movement of fertilizer is directed
FERTILIZERS-LEAKAGES
 Black marketing

 Impact on the small farmers

 Inefficient subsidy given to domestic manufacturers

 Disparity in the usage

REFORMS
 Imports must be decanalised so that the number of importers
increase leading to better demand estimation, competition, more
competitive pricing overcome shortages etc

 Urea should be brought under NBS

 DBT in urea
 Identification of the small and marginal farmers
 Identification of tenant farmers
 Connecting beneficiaries wit the banking system

A preferred method would be to cap the number of bags of

subsidized fertilizer per household at the point of sales.
FERTILIZERS-REFORMS BY GOI
 Gas Pooling Policy 2015

 New Urea Policy

STANDING COMMITTEE REPORT
 Production & Consumption
1960s 2014-15
Agriculture Production 83 mn tn 252 mn tn

Fertilizer consumption 1 mn tn 25.6 mn tn

 Production, Consumption and Imports

2001-02 2012-13
Fertilizer Consumption 17.4 mn tn 25.5 mn tn
Domestic Production 14.5 mn tn 16.1 mn tn

 Huge Disparity
 56% of the districts consume 85% of fertilizers
 Consumption-N:P:K::6.7:2.4:1
STANDING COMMITTEE REPORT
 The present policy doesn’t cover bio-fertilizers,
organic farming etc. Hence there is a need for new
policy

 There is a need to have a policy to promote organic

farming

 There is a need to set up a new institution, to

regulate the sales, imports etc of pesticides
 MSP (Minimum Support Price)-the price at which
the government would purchase the food grains from
the farmers. Announced by the GoI (recommended by
CACP for 23 crops). Introduced in 1970s to help the
farmers to protect the farmers from price
fluctuations.
 Crop diversion
 Higher cost of storage
 Imbalance in demand and supply

Procurement prices- is the price at which food

grains are procured by the GoI in order to provide
cheap food grains to people

Over the time both MSP and Procurement Prices

have become synonymous
 Food Subsidy = economic cost of food grains - issue price

 Economic cost of food grains = MSP + all other costs

MSP-NITI AAYOG
 More than 81% of the farmers have knowledge of
MSP

 67% of the farmers sell the crops through their own

means

 HLC headed by Shanta Kumar has pointed out that

only about 6% of the farmers get the benefits of
MSP
SUBSIDY ON FOOD GRAINS
 Food Security
 Availability
 Accessibility
 Affordability

 Food grain distribution chain

VARIOUS FOOD PROGRAMMES
Name Year Coverage note
PDS Up to 1992 Universal
RPDS 1992 Backward 20 kg of food
blocks grains
TPDS 1997 Poor and non- 35 kg of food
poor (APL and grains
BPL)
AAY 2000 Poorest of the 35 kg of food
poor grains
APS 2000 Indigent senior 10 kg of food
citizens grains
NFSA 2013 Priority 5 kg of food
households grains per
person per
month
LAND HOLDING PATTERN
 Agriculture census is conducted after every 5 years

 As per census of 2011

 Marginal(1 hectare or less)-67%
 small(1-2 hectares)-18%
 Medium(2-10 hectares)-14.3%
 Large(above 10 hectares)-0.7
LAND HOLDING PATTERN
AGRICULTURE MECHANIZATION
AGRICULTURE MECHANIZATION
AGRICULTURE MECHANIZATION
AGRICULTURE MECHANIZATION-CASE STUDY
 Madhya Pradesh-Custom Hiring Centers (CHCs)
and Yantradoot Scheme

 CHCs
 Centre to be set up at a cost of Rs 25 lakh
(government to give a subsidy of Rs 10 lakh or 40% of
the cost)
 Each centre to serve 200 to 300 farmers within a
radius of 10 kms

 Yantradoot Scheme

 Same model is followed in AP and Punjab

AGRICULTURE CREDIT
 Types
 Based on the term
 Based on the source

 Vyas Committee

 NSSO-70th Round

 Recent changes introduced

WAREHOUSING
 Uses/need

 Type

 Criticism

 Shanta Kumar Committee Report

Buffer stocks
IRRIGATION
 Need/Importance

 Classification of Irrigation Projects

 Types of Irrigation-Traditional and Micro

 Evaluation
WATER
EVALUATION-MICRO IRRIGATION
EVALUATION-MICRO IRRIGATION
EVALUATION-MICRO IRRIGATION
PROMOTION OF MICRO-IRRIGATION
PROMOTION OF MICRO-IRRIGATION
PROMOTION OF MICRO-IRRIGATION
APMC
MODEL APMC ACT
 Direct sales of farm produce to contract farming sponsors
 Provides for establishment of Farmers’ and consumers’
markets to facilitate direct sales of agriculture produce
 Setting up of special markets for specified agricultural
produce
 Permits private persons, farmers and consumers to
establish new markets for agricultural produce in any
areas
 Provides for a single levy of market fees on agriculture
produce
 Market functionaries have to get registered
 Creation of infrastructure from the revenues raised by
APMC
PROBLEMS WITH APMC ACT OF STATES
 Only few of the states have amended their APMC acts on
the lines of model act

 Presence of very large vested interests which prohibit

changes in the present mandi system

 State APMCs have been unable to improve the

infrastructure, provide access to information,
modernization of market facilities etc

 The modernization of market infrastructure requires huge

investment which can be obtained with the assistance of
private players
eNAM
eNAM
eNAM- so far
 Between April and August the platform has generated a
turnover of Rs 166 cr

 So far 32 mandis have been integrated (by September

2016200 mandis to be integrated)

 State’s share
Telangana-Rs 108.6 cr (maximum was turmeric)
Haryana- Rs 38.3 cr
UP- Rs 11.9 cr

 It was introduced to bring in transparency and increase

the returns to farmers and it has been found that the
trader cartel is still strong
PRADHAN MANTRI FASAL BIMA YOJANA
 NAIS MNAIS PMFBY
Premium rate Low High Lowest
(government to
contribute the
maximum)
One season one Yes No Yes
premium
Coverage Full Capped Full
Localized risk No Hailstorm, landslide Hailstorm,
coverage Landslide,
Inundation
Post harvest loss No Only coastal areas Pan India (cyclonic
coverage (cyclonic rain) and unseasonal
rains)
Use of No Intended Mandatory
technology
Awareness No No Yes (target to
double the
coverage to 50%)
PRADHAN MANTRI FASAL BIMA YOJANA
PULSES
PULSES
PULSES
PULSES
PULSES
PULSES
PULSES
PULSES
TECHNOLOGY IN AGRICULTURE
 Application of ICT in agriculture=E-agriculture

 E-agriculture involves-Conceptualization, Design, Development,

Application and Evaluation of innovative methods to use ICT

 ICT provides people to information and assists them to make

informed decisions

 ICT has three objectives-EEE (Expansion, Empowerment and

Enabling)

 e-agriculture is a component under NeGP

Need of e-technology

 Food security

 Sustain the growth in agriculture

 Poverty reduction

 Assist farmers-majority of farmers are into small and marginal

farming

 Helps rural and under-developed markets to become efficient and

productive

 ICT helps in dissemination of information-technology, market

demand, price information; weather, pest and best practices etc
SOME TECHNOLOGIES
 eNAM

 GM technology

 Mridaparikshak

 Soil Health Card

 Kisan call centre

 Kisan SMS portal

 Kisan credit card

 AGMARKNET Portal
GM TECHNOLOGY
MRIDAPARIKSHAK
MRIDAPARIKSHAK
PROBLEMS
 The reach of the technology is still very poor and large chunk
of farmers are still ignorant about such advancements.

 Usage of regional languages

 Abrupt power supply

 Duplication of the efforts

 Due to low literacy rate among farmers and digital divide

 The rural infrastructure for the use of ICT is also not uniform
and lot of regional disparity persists.
DOUBLING OF FARMERS’ INCOME BY 2022

Inputs
Storage and Marketing
•DBT in Fertilizer
Transportation •eNAM
•Quality Electricity
•Increase the storage •Amending
•Micro Irrigation
capacity APMC acts
•Pooling of resources
•NWRS •Food Processing
•HYV seeds-GM crops
•Rationalize MSP Parks
•Cheaper Credit-Small
•Procure pulses •Contract
Finance Bank
•Increase cold storage Farming
•Higher Mechanization
transportation
•Higher usage of ICT
•Land Leasing Act
QUESTIONS
In India, which of the following have the
highest share in the disbursement of credit
to agriculture and allied activities?(2011)

(a.) Commercial Banks

(b.) Cooperative Banks
(c.) Regional Rural Banks
(d.) Microfinance Institutions
QUESTIONS
Priority Sector Lending by banks in India
constitutes the lending to: (2013)

(a) agriculture
(b) micro and small enterprises
(c) weaker sections
(d) All of the above
QUESTIONS
 “The government has to make an investment in irrigation
to prevent Indian Agriculture from dancing to the tunes of
monsoons”-elaborate

 What measures can be taken by then government to

double the income of the farmers

 The APMCs set up under state government acts have not

only impeded the development of agriculture but also
have been the cause of food inflation in India. Critically
examine.

 What are subsidies? Critically examine the importance of

subsidies with the background of the fiscal discipline of
GoI

 The technology is essential to achieve food security in

India. Discuss
QUESTIONS
 Agriculture marketing is important for the
farmers to get better returns

 Importance of new crop insurance scheme

 Discuss the issue of GM crops in India. Is it an

imperative for India to adopt the GM crops to
achieve the food security and what would be the
pitfalls in the process of achieving it