From Green Revolution to Amrit Kaal

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From Green
Revolution
to Amrit Kaal
Lessons and Way Forward
for Indian Agriculture
NITI
Working Paper
02/2023
Ramesh Chand
and
Jaspal Singh
National Institution for Transforming India
Government of India, New Delhi
July, 2023 NITI Working Paper 02/2023
From Green Revolution
to Amrit Kaal

Lessons and Way Forward for
Indian Agriculture
Ramesh Chand and Jaspal Singh
1

National Institution for Transforming India
Government of India, New Delhi
July, 2023

1
Ramesh Chand and Jaspal Singh are Member and Consultant, NITI Aayog, respectively
III Contents
ABSTRACT ...........................................................................................................................................................................VIII
INTRODUCTION.............................................................................................................................................................................1
1. ACHIEVEMENTS IN AGRICULTURE DURING LAST 75 YEARS...............................................................................2
1.1 Agriculture, Economy and Population Between 1951 and 2021................................................................3
1.2 Performance at Sub Sector Level.........................................................................................................................5
1.3 Changes in Composition of Agriculture Sector..............................................................................................7
1.4 Achievements in Food Production.......................................................................................................................7
1.5 Sources of Growth....................................................................................................................................................10
1.6 Subsidies and Investments....................................................................................................................................10
1.7 Price Support and Output Growth.....................................................................................................................12
1.8 Growth at State Level..............................................................................................................................................13
1.9 Structural Changes in Output and Employment .........................................................................................15
1.10 Agriculture Trade......................................................................................................................................................16
1.11 Nutrition and Health................................................................................................................................................17
2. PLAN FOR AMRIT KAAL.....................................................................................................................................................19
2.1 Meeting Future Demand.......................................................................................................................................20
2.2 Drivers of Output Growth.....................................................................................................................................20
2.3 Challenges Facing and Related to Agriculture..............................................................................................21
2.3.1 Sustainability and Climate Change........................................................................................................21
2.3.2 Low Efficiency and Price Led Growth.................................................................................................22
2.3.3 Linking Food to Health and Nutrition..................................................................................................23
2.3.4. Export Competitiveness............................................................................................................................23
2.3.5. Technology Dissemination and R&D....................................................................................................24
2.3.6. Viability of Smallholders...........................................................................................................................24
2.4 Emerging Environment and Opportunities ...................................................................................................25
2.4.1 Quality and Food Safety...........................................................................................................................26
2.4.2 Market Reforms and E-commerce........................................................................................................26
2.4.3 Frontier Technology and Agri Start-ups.............................................................................................27
2.4.4 Agro Chemicals Based Farming to Natural Farming.....................................................................27
2.5 Way Forward..............................................................................................................................................................28
References ............................................................................................................................................................................33
ABBREVIATIONS.......................................................................................................................................................................34National Institution for Transforming India
V Tables
Table 1: Broad changes in Indian agriculture and economy between 1950-51
and 2021-22����������������������������������������������������������������������������������������������������������������������������������������������������������3
Table 2: Growth rate in value of output of various sub-sectors/segments of
agriculture and allied sector during various phases since 1950-51.................................................6
Table 3: Changes in composition of agriculture sector........................................................................................7
Table 4: Per capita production of major food commodities since 1960s (kg/year)..................................9
Table 5: Public investments and subsidies in agriculture,
2011-12 to 2020-21 (Rs. crore).......................................................................................................................11
Table 6: Growth rate of Gross State Value Added by sub sector, agricultural
land productivity, area under fruits and vegetables, and irrigation
coverage among States/Union Territories..............................................................................................14
Table 7: Share of agriculture and allied sectors in national income and
employment 1950-51 to 2020-21.................................................................................................................15
Table 8: FAO Estimates of number and prevalence of under nutrition, 1979 to 2021.............................17
Table 9: Incidence of nutrition indicators 2005-06 to 2020-21.......................................................................18
Figures
Figure 1: Decadal moving average of annual rate of change in GVA in
agriculture and allied sectors (1950-51 to 2021-22)............................................................................. 4
Figure 2: Trend growth rate in various phases of growth in Gross Value Added
in agriculture and allied sectors (1950-51 to 2021-22).........................................................................4
Figure 3: Per capita per day food produced in India, 1950-51 to 2021-22 (kg).............................................8
Figure 4a: Trend in import and export of agriculture including fishery,
1970-71 to 1990-91.............................................................................................................................................16
Figure 4b: Trend in import and export of agriculture including fishery, 1
990-91 to 2021-22.............................................................................................................................................17
Figure 5: Movement in terms of trade for agriculture computed from ratio
of implicit price deflator of GVA agriculture and non-agriculture
sectors (base 2011-12=100), 1970-71 to 2021-22................................................................................... 22
Box
Box 1: Classification of agricultural commodities in terms of public
intervention and output price support and input subsidies............................................................13National Institution for Transforming India
VI Disclaimer
Views expressed in the paper are personal.
Acknowledgement
Authors thank Sumedha Bajar for her valuable comments
and for editing the paper.

VII ABSTRACT
When India attained independence, the agriculture sector was in a poor state. The
situation was aggravated by the fact that the more productive and largely irrigated
areas fell in the newly-created Pakistan
2
. The first two decades after Independence
did not see any improvement in overall food availability – per capita annual production
of total food remained unchanged at 296 kg till 1966-67. The adoption of Green
Revolution technology led to an improvement in the situation, and per capita food
production reached the level of 365 kg (around 1 kg food per person per day) in the
early 1970s. Annual production of food has now reached 683 kg per person, or 1.87
kg/person/day. The twenty-first century has seen an acceleration in growth in per
capita food production, marking a significant departure from the trend growth rate
of the first 50 years after Independence. India recorded a 50 per cent increase in per
capita food production in the 50 years after 1950-51 (that is, till 2000-01). The next 50
per cent increase has been recorded in less than 25 years, that is, half of the previous
period. A further 50 per cent increase is likely to be achieved in less than 25 years.
However, several challenges – some old and some new – remain. Growth of the
agriculture sector has led to the unsustainable use of natural resources like land, water
and bio diversity, spread of insects and pests, indiscriminate use of agro chemicals
and adverse impact on ecology and environment. Despite noteworthy increase in per
capita food production, some sections of the population still suffer from undernutrition
and malnutrition. These challenges necessitate a paradigm shift in agriculture. In the
meantime, new opportunities have arisen in the sphere of science and technology,
information communication technology (ICT) and agri business which have the
potential to transform agriculture production and post-harvest activities. There is a
significant change on the demand side, with consumer preferences shifting towards
healthy, safe, trait-based and quality food and bios. These changes indicate that the
future of agriculture (and those engaged within) will face profound transformation
in the coming decades. There is a need to create an enabling environment for this
transition, through appropriate policies and institutions, an enabling regulatory
environment, development of frontier technologies, as well as public and private
investments in agriculture and agri-business. This will enable agriculture to play a key
role in achieving the goal of Viksit Bharat, inclusive development, green growth and
gainful employment during Amrit Kaal.
2
Productivity of rice, wheat, maize and gram and total foodgrains in Pakistan was 40 per cent higher than in India in 1945-46. Source: Estimated from data
taken from Bansil P.C. (1990). Agricultural Statistical Compendium, Vol. I, Foodgrains. Pp. 431-2., Techno Economic Research Institute, India, New Delhi.National Institution for Transforming India
VIII INTRODUCTION
In August 2022, India completed 75 years of Independence from colonial rule, making
this year a momentous one. It provides a advantage position to assess the nation’s
achievements, reflect on the progress made in socio-economic indicators and to draw
lessons for the future. Coinciding with this historical milestone, the Hon’ble Prime
Minister Shri Narendra Modi has described the next 25 years as Amrit Kaal (leading to
2047, when India will complete 100 years of Independence) and set a goal of making
India a developed nation or Viksit Bharat.
As is widely acknowledged, the agriculture sector continues to play a vital role in
the country’s socio-economic development and progress. Despite the relatively
higher growth of the non-agriculture sector, it is the agriculture sector that remains
the principal source of employment, with 45 per cent of the workforce engaged in
agricultural and allied activities. The sector contributed 18.6 per cent of the national
income at current prices during 2021-22.
This paper is organised in two parts. The first part discusses the achievements of
India’s agriculture in terms of (a) output growth at the aggregate and disaggregated
levels, (b) food and nutrition (c) agricultural income and (d) trade, since 1950-51. It
also analyses changes in the structure of agriculture output and their implications
for the future of Indian agriculture. The second part visualises the likely changes in
the agriculture sector during Amrit Kaal. The picture of agriculture during the next
25 years that is portrayed is based both on the underlying trend in agriculture as well
as the role that agriculture is expected to play in addressing the goals of food and
nutrition security, inclusive development, sustainability and climate change. It also
takes cognizance of the emerging challenges in agriculture, new opportunities for the
sector, the operating environment and the needs and goals of the nation and society.
This is followed by a suggested way forward for agriculture during Amrit Kaal.National Institution for Transforming India
1 ACHIEVEMENTS IN
AGRICULTURE
DURING LAST 75 YEARS
1 1.1 Agriculture, Economy and Population Between 1951 and 2021
Credible data on most economic indicators for the post-Independence period is available only
from 1950-51 onwards. Between 1951 and 2021, India’s population increased from 35.9 crore
to 136.9 crore. Food production increased from 106 million tonnes to 936 million tonnes
3
over
the same period. Thus, the increase in food production was more than twice the increase in
human population during the last seven decades (Table 1). Income from the agriculture sector, at
2011-12 prices, increased 7.2 times over this period, with an underlying annual trend growth rate of
2.83 per cent. The non-agriculture sector witnessed higher growth than agriculture, resulting in overall
national income increasing by 28.4 times, with an average annual growth rate of 4.83 per cent. However,
the number of agriculture workers increased from 9.72 crore in 1950-51 to 25 crore in 2021-22
4
.
Table 1: Broad changes in Indian agriculture and economy between 1950-51 and 2021-22
IndicatorUnit1950-51 2021-22
Increase
times
Compound
growth rate %
Population Person crore35.9 136.9 3.811.90
Food production Million tonne106 936 8.833.12
Agri sector income
Rs. lakh crore
at 2011-12 prices
2.91 21.15 7.272.83
Total economy
Rs. lakh crore
at 2011-12 prices
4.79 136.24 28.444.83
Agri workers crore 9.72 24.67 2.581.34
Total workers crore 13.95 54.27 3.871.92
Source: 1. Economic Survey, Ministry of Finance.
2. National Accounts Statistics, MoSPI, GOI.
3. Agricultural Statistics at a Glance, Ministry of Agriculture and Farmers Welfare, GOI.
4. Annual Report, Periodic Labour Force Survey, July 2021 to June 2022, NSO, MoSPI, GOI.
During the seven decades since Independence, the agriculture sector witnessed phases of high and low
growth. This can be seen from Figure 1, which presents ten yearly moving averages of annual growth rates in
gross value added (GVA) in agriculture and allied sectors at 2011-12 prices. Based on this growth trajectory,
the entire period of 72 years can be divided into seven broad phases (Figure 2). Each phase represents
the period between two successive turning points towards either acceleration or deceleration. The first
phase covers the period from 1950-51 to 1961-62 – the first decade of planned development. Agriculture
GVA showed annual growth rate of 2.77 per cent in this period. The main source of growth was expansion
in area under cultivation. This was followed by a deceleration in growth, which continued till 1968-69.
The adoption of Green Revolution technology, which started around 1966, reversed the deceleration in
growth rate in a short span of three years. The initial phase of the Green Revolution propelled growth in
certain well-endowed regions, which had irrigation facilities or where irrigation could be easily developed.
This phase continued till 1975-76 and registered a growth rate of 2.27 per cent. However, as the Green
Revolution technology, in the initial phase, remained confined to a few regions, growth in agriculture
output could not be sustained beyond a short period of time. The four years between 1975-76 and 1979-80
witnessed a decline in agriculture and allied sectors GVA at constant prices.
3
Food includes all cereals, pulses, edible oil (eight edible oilseeds, cotton seed and coconuts multiplied by oil per cent), sugar (11 per cent of sugarcane), milk,
fruits, vegetables, eggs, meat and fish. Some oilseeds like groundnut are eaten as seed; their entire quantity was converted into oil.
4
Based on PLFS data for the year 2021-22.National Institution for Transforming India
3 Figure 1: Decadal moving average of annual rate of change in GVA in agriculture and allied sectors
(1950-51 to 2021-22)
Source: Estimates based on National Accounts Statistics, MoSPI, GOI, 2011-12 series.
Figure 2: Trend growth rate in various phases of growth in Gross Value Added in agriculture and allied
sectors (1950-51 to 2021-22)
Source: Same as in Figure1.
Note: BGRI: Bringing Green Revolution to Eastern India
Serious efforts were then undertaken by the Union and States for wider dissemination of Green Revolution
technology and towards diversification in favour of high value crops. Along with this, technological
developments like cross breeding in the dairy sector and improved poultry breeds also started yielding
results. This was assisted by the spread of dairy co-operatives. This phase – combining the wider spread
of the Green Revolution in terms of area and crops and the White Revolution – delivered rich dividends
over a long period of 17 years from 1979-80 to 1996-97. The agriculture sector achieved a record growth
rate of 3.38 per cent during this period. National Institution for Transforming India
4 The next phase started one year after the World Trade Organization (WTO) Agreement on trade was
signed in 1995. This marked the beginning of the active globalisation and liberalisation of agriculture
trade, which led to the growing integration of domestic and global markets. Initially, this had a negative
impact on agriculture growth mainly due to increased competition and a decline in the international
prices of agricultural commodities, leading to a deterioration in the terms of trade (ToT) for agriculture
in the country. This phase continued till 2005-06, after which international prices started rising. The
growth rate of agriculture dropped to 2 per cent during this phase. As international agricultural prices
started rising from 2006-07, the growth rate of Indian agriculture also picked up. The phase of rising
global commodity prices culminated in the global food price crisis between 2008 and 2011. There
were substantial hikes in domestic prices through policy interventions in order to align them with
international prices, while open market prices also moved up in sync with international prices. The ToT
of trade for agriculture relative to the non-agriculture sector (with base 2011-12=100) increased from
85 in 2005-06 to 128 in 2020-21
5
. The growth rate of the agriculture sector also accelerated steadily in
response to the higher and rising ToT for the sector. The growth rate for agriculture during the 15 year
period ending 2021-22 is estimated at 3.61 per cent, which is the highest among all the phases so far.
The trajectory of agriculture growth presented in Figures 1 and 2 reveals the following important
policy messages:
zAgriculture growth during the first two Five Year Plans (1951-56 and 1956-61) was not sustainable
due to the absence of improved technology that was required for productivity-driven growth. This
created huge food shortages and culminated in the food crisis during the mid-1960s.
zGreen Revolution technology was the key in taking Indian agriculture out of the declining productivity
phase, and putting it on a respectable growth path in a short period.
zThe accelerated growth rate after the initial adoption of Green Revolution technology could not
be sustained for long, as this technology was restricted mainly to the irrigated and well-endowed
regions of Punjab, Haryana, Western Uttar Pradesh and the deltaic regions of the Deccan Plateau.
zThe wider dissemination of technology and diversification towards horticulture and livestock played
a significant role in raising and sustaining agriculture growth during the 1980s and the first half of
the 1990s.
zThe liberalisation of agriculture trade that was undertaken as a result of domestic economic reforms
as well as the requirements of the WTO Agreement was very favourable for the sector during the
initial years, when international prices were higher. However, due to their inherent cyclical nature,
international prices started falling after 1998 and their transmission to domestic prices pulled down
the ToT for agriculture for some years around the early 2000s. This, in turn, led to a deceleration in
agriculture growth, which continued till 2006-07, when international prices started moving up sharply.
1.2 Performance at Sub Sector Level
Agriculture is a diverse sector and its major sub sectors are (i) crops, (ii) livestock, (iii) fishery and (iv)
forestry. The crops sub sector has always dominated the agriculture and allied activities sector, though
its share in agricultural output and income and in the agriculture and allied sector has seen a significant
decline post the mid-1990s. It, however, continues to account for 55 per cent of the total income generated
5
Terms of trade is computed by taking the ratio of implicit price deflators of GVA agriculture and allied sectors and GVA non agriculture.National Institution for Transforming India
5 in the agriculture and allied sectors. Livestock constitutes around 30 per cent, fishery 7 per cent and
forestry and logging about 8 per cent of the sectoral income at current prices.
The crop sector is further divided in two groups – fruits and vegetables, and other crops. Table 2 presents
the performance of these segments during various phases of growth of aggregate agriculture sector.
Instead of using GVA as a metric of growth, the paper uses the value of output at constant prices to
estimate growth rates in various sub sectors, because the back series data on GVA (before 2004-05)
was found problematic, especially for separate series of crop and livestock.
Growth in the output of the crop and forestry sectors showed very high variation over the several phases
of growth of Indian agriculture mentioned earlier. In contrast, the output of the fishery sector showed
much smaller variation over time. Within the crop sector, horticulture picked up pace as early as the
1960s. The output of fruits and vegetables showed a very high growth rate of 6 per cent from 1961-62
to 1967-68, though this was from a very low base. The period from 1975-76 to 1979-80 was particularly
adverse for all segments of agriculture, except livestock and fruits and vegetables. After the adoption
of Green Revolution technologies, the performance of the livestock sector turned out to be much better
compared to that of the crop sector in all the phases. This points to the fact that the White Revolution
has had a much stronger impact than the Green Revolution in terms of output growth (Chand, 2023).
The fishery sector, growing at 7.10 per cent, has topped in growth in output during the period from
2005-06 to 2020-21. Livestock comes second, with an annual growth rate of 5.4 per cent. The output
of the crop sector after 2005-06 showed a growth rate of 2.55 per cent, mainly supported by fruits
and vegetables, which registered a 4.5 per cent trend growth rate. Excluding fruits and vegetables, the
growth in the output of the crop sector was below 2 per cent. The output of the forestry sector either
recorded a decline or miniscule growth in various phases after 1975-76.
Table 2: Growth rate in value of output of various sub-sectors/segments of agriculture and allied
sector during various phases since 1950-51
Sub sector/
segment
Pre-Green
Revolution
Food
crisis
period
1st phase
of Green
Revolution
Green
revolution
in restricted
area
Wider
adoption
and diver-
sification
Start of
global-
isation
BGRI+
Diversi-
fication
+Export
 
1950-51
to
1961-62
1961-62
to
1967-68
1967-68
to
1975-76
1975-76
to
1979-80
1979-80
to
1996-97
1996-97
to
2005-06
2005-06 to
2020-21
1. Crop sector 3.09 0.78 2.19 -0.01 2.88 1.60 2.55
1.1 Fruits and
vegetables
0.96 6.15 5.43 1.96 3.25 2.86 4.53
1.2 Other crops 3.36 0.09 1.65 -0.41 2.81 1.27 1.91
2. Livestock 1.45 0.49 2.70 4.45 4.41 3.44 5.36
3. Fishery 5.43 4.25 4.34 0.54 6.12 2.90 7.10
4. Forestry 0.68 4.25 2.03 -4.51 0.20 1.64 1.53
5. Total (1 to 4) 2.29 1.61 2.27 -0.24 2.88 2.07 3.44
Note: Output at 2011-12 prices.
BGRI: Bringing Green Revolution to Eastern India
Source: Estimates based on National Accounts Statistics, MoSPI.National Institution for Transforming India
6 1.3 Changes in Composition of Agriculture Sector
Due to differing growth rates registered by different items within agriculture commodities, the
composition of the agriculture (crop + livestock) sector has undergone significant change over the
decades (Table 3). These changes are largely driven by technology and market (demand), though
government intervention has also been a major determinant.
Table 3: Changes in composition of agriculture sector
Agri commodity/ group
Share (%)
1970-711995-962020-21
Cereals37.125.316.7
Pulses4.74.23.9
Oilseeds8.28.25.2
Fruits and vegetables12.414.619.4
Other crops, by products22.622.017.9
Milk group10.217.424.3
Meat group1.63.88.1
Eggs0.50.91.2
Other livestock products2.83.53.3
Source: Estimates based on National Accounts Statistics data, MoSPI.
Cereals constituted the largest commodity group within the agriculture sector in the early 1970s, with
a 37.1 per cent share in the value of total agriculture, that is, crop and livestock products. Their share
declined by one-third between 1970-71 and 1995-96 and by another one-third in the next 25 years. A
similar decline is also seen in the share of pulses and oilseeds and other crops. Fruits and vegetables
are the only group which show an increase in their share over time. It is interesting to note that in value
terms fruits and vegetables are almost as large as all cereals and pulses taken together.
The milk group constituted one-tenth of total agriculture output at the beginning of the Green Revolution.
This share increased to one-fourth over a span of 50 years because of significantly higher growth of the
dairy sector compared to the crop sector. Clearly, the White Revolution has played a much stronger role
in growth of the dairy sector than the Green Revolution has in the crop sector. These changes point to
a very clear trend in diversification towards horticulture and livestock products and away from cereals,
pulses and oilseeds throughout the period since 1970.
1.4 Achievements in Food Production
India’s progress and achievements in the food sector can be captured by three types of indicators
representing (i) quantity of aggregate food, (ii) composition and (iii) quality. The progress made in the
quantity of aggregate food produced in the country between 1950-51 and 2020-21 has been presented
in Table 1, while the growth trajectory of GVA in the agriculture and allied sectors has been presented in
Figure 1. Food commodities constituted 62 per cent of the total value of output of the agriculture and
allied sector in 1950-51, which gradually increased to 80 per cent around 2019-20. This shows that the
dominance of food in the agri-food sector has increased over time.National Institution for Transforming India
7 The ultimate goal of food production is to provide food security and nutrition to the human population.
This can happen only if the growth rate in food production remains above the growth rate in human
population. Therefore, achievements in food production are better represented by per capita food
production. This is presented in Figure 3 for the period from 1950-51 to 2021-22.
During the initial years following Independence, food production
6
in the country was sufficient to supply
0.81 kg of food per person per day or 296 kg per year. This increased marginally to reach 0.936 kg by
1964-65. However, in the next two years, food production dropped to the level that prevailed in 1950-51.
Thereafter, per capita food production got on to a rising trend and touched 1.258 kg/person/day or 459
kg/person for the whole year around 2000-01.
Figure 3: Per capita per day food produced in India, 1950-51 to 2021-22 (kg)
Source: Authors’ estimates based on production of food and population data.
The twenty-first century has seen an acceleration in growth in per capita food production, marking a
departure from the trend growth rate of the first 50 years after Independence. India recorded a 50 per
cent increase in per capita food production in the first 50 years after 1950-51. The next 50 per cent
increase has been recorded in less than 25 years, that is, half of the previous period. This is the result
of two factors: (a) slowdown in population increase and (b) acceleration in the growth rate of food
production, especially after 2006-07. The next 50 per cent increase in per capita food production is likely
to be achieved in less than 25 years.
Table 4 depicts disaggregated data on per capita production of various food commodities during
various decades since 1960-61. Over a period of six decades, per capita production of all commodity
groups, except pulses, followed moderate to high increase. Per capita production of cereals in the last
five decades increased by 80 per cent and oilseed production by 60 per cent. Per capita production
of pulses during the 2011–20 period came down to 15.7 kg from 23.3 kg during the decade of 1960s.
Per capita production of fruits, vegetables, meat and fish and milk tripled between the 1960s and the
decade after 2011, while egg production recorded an eight-fold increase over the same period. These
changes show that there was a clear shift in the composition of food output in the country in favour of
horticultural commodities and livestock commodities.
6
See footnote 2 for items included in food.National Institution for Transforming India
8 It clearly emerges from Table 4 that growth in the quantity of food produced in the country was
accompanied by changes in the composition of food. Food production and the food basket show
significant diversification over time, especially after 1981. The share of livestock products in the total
value of agri-food output increased from 17.6 per cent in 1980-81 to 27.4 per cent in 2001. This increased
further to 36.9 per cent in 2020-21. A similar story is seen in the case of fruits and vegetables. Their
share in the crop sector doubled twice in the last 70 years and the current share is around 30 per cent.
Table 4: Per capita production of major food commodities since 1960s (kg/year)
Item 1961–70 1971–80 1981–90 1991–00 2001–10 2011–20
Cereals121.0 135.1 151.8 169.0 173.1 215.0
Pulses23.3 18.4 16.3 14.6 12.3 15.7
Oilseeds15.3 15.3 16.8 23.2 21.6 24.1
Sugar24.1 24.5 26.0 30.3 27.9 29.5
Fruits23.2 31.8 33.1 41.2 49.7 69.7
Vegetables 47.6 68.9 72.4 77.3 97.7 133.5
Egg0.4 0.7 1.0 1.4 2.1 3.3
Meat & Fish 4.3 4.6 5.0 6.9 8.3 13.3
Milk43.2 42.1 55.6 70.8 88.0 121.2
Source: Authors’ estimates based on production data of Directorate of Economics and Statistics and population data
of National Accounts.
While major food groups indicate diversification towards broad-based food, which is considered
healthier, intra-group diversity shows a decline in some cases like cereals and vegetables. Both these
food groups present different stories. The story of cereals is a matter of serious concern, as it shows
not only a steep decline in the share of millets in total cereals but also in per capita production. Per
capita millet production declined from more than 30 kg during the early 1970s to 13 kg in recent years;
this brought down their share in total cereals from more than 20 per cent to 6 per cent over the last
50 years.
In the case of vegetables, potato accounted for 15.8 per cent and onion constituted 5.2 per cent of total
vegetable output in the country during the decade of 1970s. Their share during 2011–20 increased to 27.1
per cent and 11.9 per cent, respectively. Thus, potato and onion together constitute close to 40 per cent
of total vegetable production in India. However, the saving grace is the fact that despite this increase in
the concentration of these two items in the total vegetables basket, the per capita production of other
vegetables increased after 2000-01.
The long-term trend in commodity composition shows that, except for pulses and millets, the production
of all other commodities exceeded growth in human population. Between 1950-51 and 2020-21, the
highest growth was achieved in eggs followed by meat, fish and milk. Cereals have shown a steady
increase throughout this period. Production of oilseed crops in the country barely matched the growth
in population between 1961 and 1980. However, their production picked up after 1981. The per capita
production of pulses became less than half during the 50 years ending with 2001. However, there has
been a significant improvement in per capita production of pulses after that. Nevertheless, on a per
capita basis, India produces much less pulses now than in 1951.National Institution for Transforming India
9 Per capita production, though an important indicator of food adequacy, does not reveal the true status
of food intake, as it does not factor in import, export, industrial use, feed, change in stocks, wastage etc.
The per capita net availability of cereals in India has stabilised around 168 kg for several years now and
much of the increase in the production of cereals is now being exported. India has seen an extraordinary
increase in the per capita usage of edible oil plus vanaspati, which first doubled from 4 kg to 9 kg in the
25 years between the early 1970s and the mid 1990s. It had doubled again in the next 20 years ending
2015. The current net availability of edible oil plus vanaspati has reached 20 kg per person, which is far
higher than the domestic output of vegetable oil. As a result, around half of the total demand for edible
oil in the country is met through imports.
1.5 Sources of Growth
Indian agriculture has achieved a long-term growth rate of 2.74 per cent between 1950-51 and 2020-
21. Within this period, the growth rate accelerated to 3.5 per cent between 2000-01 and 2020-21. The
overall performance of the sector is considered satisfactory, though some challenges remain. The main
factors underlying this growth are:
zFavourable policy environment and timely institutional reforms initiated by the Union and State
Governments.
zAgriculture research and development (R&D) and extension for improved technology generation and
its dissemination.
zPublic and private (farmers’) investments in building irrigation capacities.
zUse of modern farm inputs, including seeds.
zInstitutional credit supply.
zOutput price and market support.
zInput subsidies.
1.6 Subsidies and Investments
Input subsidies and investments in various types of infrastructure and institutions are important policy
instruments contributing to the growth and development of the agriculture sector and the income
of producers. Both the Union and the State Governments have used these instruments to promote
agriculture as well as the welfare of producers and consumers. Initially, input subsidy was provided
mainly for fertilizers. The primary aim of this was to encourage the use of chemical fertilizers, which was
found to significantly enhance growth in productivity and output. Fertilizer subsidy is mainly provided
by the Union Government. The other major subsidies provided to the agriculture sector are: interest
subvention on institutional agricultural credit, subsidy on crop insurance and subsidy on power supply
to agriculture (which is borne by State Governments). The second policy instrument – public investment
in agriculture – includes public expenditure on medium, major and minor irrigation, agriculture R&D and
extension, cooperative institutions, and land and soil improvement programmes.
Table 5 gives figures on both subsidies and public investment in agriculture. Subsidies to the agriculture
sector have more than doubled between 2011-12 and 2020-21. Subsidies on power have risen the fastest,
as more and more States provide subsidised or free electricity to farmers. While public investments
have also increased at almost the same rate as subsidies, their level has remained around one-third of National Institution for Transforming India
10 subsidies. Subsidies constitute close to 7 per cent of income generated in agriculture and allied sectors.
In contrast to this, only a little more than 2 per cent of sectoral income is spent on public sector capital
formation. Fertilizer subsidy forms the biggest component of total subsidies for the agriculture sector,
closely followed by power subsidy. Fertilizer subsidy is estimated to reach Rs. 2.25 lakh crore in financial
year 2022-23 due to skyrocketing int ernational prices of plant nutrients following the Russia-Ukraine war.
Table 5: Public investments and subsidies in agriculture, 2011-12 to 2020-21 (Rs. crore)
Year
Public
investment
Subsidy including
power
Public investment as %
GVA agri & allied
Subsidies as % GVA
agri and allied
2011-12355761180632.377.86
2012-13396171319962.377.88
2013-14404671276002.106.62
2014-15470041386892.256.62
2015-16558701641302.517.37
2016-17663621589942.636.31
2017-18667861946892.366.88
2018-19794732056782.636.82
2019-20726962206662.166.57
2020-21*768522501952.136.93
Note: The data on investments and subsidies, except power subsidy, is available from the National Accounts Statistics
of MoSPI, and budget documents. The amount spent on power subsidy was computed from the data provided by
the Power Finance Corporation.
Several studies have pointed out that the level of input subsidies and the manner in which they are
dispensed is reaching unsustainable levels and leading to a lot of adverse effects. The fertilizer subsidy,
for example, is highly skewed in favour of urea, a nitrogenous fertilizer, and this has resulted in imbalance
in the use of major plant nutrients, nitrogen-phosphorus-potassium (NPK). This affects the efficiency of
fertilizer use and the quality of soil as well as output.
In most States, power supply for agriculture use is either totally free or highly subsidised. Some States
charge a flat rate, irrespective of electricity consumed by the farmers. This has resulted in the over
exploitation of ground water almost everywhere in the country. Free power has also distorted cropping
patterns towards water-intensive crops, showing disregard for agro-climatic conditions of various
States and regions. Withdrawal of groundwater beyond recharge capacity is on the rise and the severity
of this problem is increasing.
Data from groundwater monitoring wells at the level of blocks/mandals/talukas indicate that water
withdrawal exceeded sustainable levels in 28.7 per cent area in 2004. In 2020, this had increased to 36.4
per cent area. Excessive withdrawal is also affecting the quality of groundwater, due to the intrusion of
salt from aquifers having brackish water and higher arsenic content in some areas.
About 80 per cent of investments in agriculture comes from private sources – mainly farmers. The share
of the corporate sector in total public and private investment in agriculture
7
has remained meagre,
below 0.2 per cent, pointing towards the scope of expansion available for the corporate sector. The rest
of the investment comes from public sources.
7
Investments in agriculture mainly refers to land, input and production related investments. It does not include investments in markets, storage, transport,
grading and other post-harvest infrastructure.National Institution for Transforming India
11 1.7 Price Support and Output Growth
The system of minimum support prices (MSP), which was started in 1965 for wheat, now covers 24
crops (barring sugarcane). The Union Government announces a fair and remunerative price (FRP) for
sugarcane, which is a statutory minimum price. The system of guaranteed prices to producers has
been implemented through procurement by public agencies. For a long time, MSP was effectively
restricted to rice and wheat in the states which were early adopters of Green Revolution technology.
However, MSP operations in wheat, rice and cotton have now been expanded to many other parts of
the country. Similarly, output price support has been extended, through the Price Support Scheme and
Price Stabilization Fund, to pulses and oilseeds in many producing states.
Experience shows that MSP, supported by public procurement, provides a very stable price
environment and protects producers against any market and price risk. Over time, MSP has been made
more remunerative by including new items of imputed costs and by raising margins over the cost of
production. In 2018, the Union Government ushered in a significant shift in the MSP structure by making
it mandatory to keep a margin of at least 50 per cent over A2 cost (all paid out costs) plus the imputed
value of family labour. This has resulted in MSP being higher than open market prices in many cases.
Agricultural commodities can be divided into five groups in terms of price support, subsidies and other
government support measures (Box 1). The first group comprises rice, wheat, sugarcane and cotton. Of
these, rice and wheat derive maximum benefit from the MSP regime as well as input subsidies, because
of the higher use of fertilizers and higher proportion of area under irrigation, both of which are highly
subsidised. The second category comprises coarse cereals, oilseeds and pulses. Though they are covered
by MSP, only a small quantity of the produce is procured under this regime. The subsidy benefit for
these crops is insignificant as they are mostly rain-fed and use lower amounts of fertilizers. Horticultural
crops (fruits and vegetables) belong to the third group, which is not covered by MSP or any other price
assurance scheme and hardly benefits from price intervention measures by the government. However,
they benefit from subsidies on irrigation, power and fertilizers. The fourth group comprises the livestock
sector, for which there is no price intervention by the government, nor is any input subsidy provided. The
dairy segment of the livestock sector benefits in terms of institutional support through co-operatives
which procure milk from producers at assured prices, linked to the percentage of fat. The fifth group
comprises fishery (inland and marine), which also gets no price support and hardly any subsidy on inputs.
The last column in the box presents the annual rate of growth in output of these five groups of
commodities during the 2011-12 to 2020-21 period. Rice, wheat, sugarcane and cotton, which get highest
input subsidy and output price support among all agri commodities, show an annual growth rate of 1.39
per cent in this decade. Even coarse cereals, oilseeds and pulses put together show much higher growth
than the much vaunted crops like wheat and rice. On the other hand, horticultural crops, for which there
is no price intervention by the government, experienced annual growth of 3.47 per cent. The output of
the livestock sector increased at the rate of 5.84 per cent per annum, which is four times the growth in
crops highly supported by the government. The highest growth rate is achieved in the fishery sector,
which is largely free from government intervention in the form of input subsidies and output price. National Institution for Transforming India
12 Box 1: Classification of agricultural commodities in terms of public intervention and output price
support and input subsidies
CommoditySupport on output side Input subsidy
Total direct
support
Growth rate during
2011-12 to 2020-21
Rice, wheat, cotton and
sugarcane
Very strong MSP and
procurement.
Very high. Very high 1.39
Coarse cereals, pulses,
oilseeds
MSP for some produce. Small Small2.44
Fruits and vegetablesNilHigh Small3.47
Dairy and other
livestock products
Institutional support through
cooperative marketing of milk
Nil Little5.84
FisheryNilNil Nil8.97
A clear picture emerges from this that the commodities receiving higher government support in the
form of input and output prices are witnessing a lower rate of growth in their output. On the other hand,
the segments of agriculture not receiving much government support and intervention are registering
much higher growth. Thus, it is not wrong to infer that Indian agriculture has now reached a stage
where government intervention in the form of output price support and input subsidies is not leading
to higher growth in output. The underlying reason for this is that the power of demand side factors in
pulling growth is much stronger than the power of government support in pushing growth. The shift
in dietary preference towards horticulture, livestock and fishery produce, in both the domestic and
overseas markets, is offering producers a more remunerative environment to raise production.
MSP was a major factor in improving the economy of wheat, rice and sugarcane in the early stages of
adoption of improved technology, when the market was under-developed and suffered from several
imperfections. Over time, as markets developed and started passing on demand signals to producers,
the demand side factors have been stronger than public support in helping realise the growth potential
of various commodities. This trend has strong implications for policy intervention in the agriculture
sector. While the paper is not advocating for free market solutions, it does point to inefficiencies within
the existing system/institutions that call for greater scrutiny. This can help provide efficient public
intervention to existing groups and opportunities to expand support where it is most required.
1.8 Growth at State Level
The State-level experience further corroborates what is observed at the national level. This is revealed
by the level of land productivity (value of crop output/hectare) and growth rate of the crop sector
being achieved across States (Table 6). Surprisingly, the States with highest productivity of land are
not the States with highest productivity of rice and wheat. Productivity of wheat and rice is highest in
Punjab, followed by Haryana, while the top three States in aggregate land productivity are West Bengal,
Himachal Pradesh and Andhra Pradesh. Similarly, the crop sector in Andhra Pradesh is growing at more
than 4.8 per cent as compared to 0.5 per cent in Haryana and Punjab. The key takeaway from this is that
States which have shifted their area allocation and crop pattern in tune with changing demand patterns
perform much better compared to those States which have remained more or less rigid.
It is also pertinent to point out that the top three States in per hectare crop productivity have much
lower coverage of irrigation as compared to Punjab, Haryana and Uttar Pradesh.National Institution for Transforming India
13 Table 6: Growth rate of Gross State Value Added by sub sector, agricultural land productivity, area
under fruits and vegetables, and irrigation coverage among States/Union Territories
State Annual trend growth rate during 2011-12 to 2020-21 Crop pro-
ductivity
(Rs./ha)
TE 2019-
20
Area
share
F&V (%)
TE 2018-
19
GIA as %
of GCA
Crops Live-
stock
ForestryFisheryAgri-
culture
(C+L)
Agri-
culture
and
allied
Andhra Pradesh 4.81 8.26 0.68 19.57 6.05 8.33 195211 10.64 49.40
Assam5.40 20.98 -1.15 6.62 6.36 5.79 140016 8.75 11.89
Bihar-2.158.89 4.14 8.32 1.32 1.95 126772 5.87 71.96
Chhattisgarh 3.48 7.68 4.70 9.95 4.00 4.58 72495 2.53 33.82
Goa-0.01-1.48 24.16 2.01 -0.41 2.66 157411 49.79 23.13
Gujarat2.93 5.90 18.11 4.78 3.29 4.28 122036 8.94 50.57
Haryana0.53 7.51 0.41 9.09 3.21 3.08 174538 1.14 91.03
Himachal Pradesh 1.54 8.83 1.61 8.46 2.96 2.26 204321 15.86 22.45
Jharkhand 4.15 6.33 11.02 11.49 4.35 4.68 180552 6.14 13.67
Karnataka 4.73 9.67 2.35 1.59 5.83 5.33 107750 5.92 31.82
Kerala-4.80 0.87 0.70 0.90 -2.66 -2.01 151751 18.70 20.07
Madhya Pradesh 7.79 14.74 4.63 14.60 8.68 8.28 154041 1.63 45.99
Maharashtra 4.10 6.35 6.58 0.71 4.46 4.58 86299 7.37 21.12
Odisha4.83 4.49 4.60 10.76 4.42 4.77 133326 0.11 27.13
Punjab0.51 5.44 1.07 6.51 2.17 2.11 183565 2.31 98.62
Rajasthan 1.71 11.14 3.50 8.82 5.35 5.12 60204 0.73 42.34
Tamil Nadu 1.38 11.58 5.95 3.65 5.18 4.99 183181 10.27 56.26
Telangana 6.45 8.32 0.39 7.54 6.44 6.23 122217 4.68 52.32
Uttar Pradesh 2.50 2.70 1.52 6.78 2.49 2.48 136348 4.57 80.46
Uttarakhand -1.40 5.15 1.42 4.30 0.92 0.99 163176 4.75 51.27
West Bengal 2.29 4.59 2.03 2.72 2.87 2.79 269607 16.77 65.46
Andaman &
Nicobar Islands
-1.663.40 20.46 1.80 0.04 1.84 NA 20.02 0.72
Arunachal Pradesh -0.53 6.89 7.41 5.65 0.16 3.08 144009 12.40 17.75
Chandigarh 1.61 1.65 32.84 6.36 1.43 2.47 137310 2.93 5.05
Delhi -11.68-4.28 -12.13 0.49 -5.93 -5.93 265660 40.15 64.02
Manipur10.56 2.06 3.46 3.14 7.51 5.77 112770 21.98 16.19
Meghalaya 2.85 3.24 6.61 18.14 2.91 3.47 122964 30.03 45.72
Mizoram3.33 14.27 46.73 4.20 7.43 14.84 122172 52.82 15.76
Nagaland4.21 -8.67 2.64 3.62 0.92 1.14 128439 16.39 23.35
Puducherry -5.12 1.16 0.83 2.72 -0.32 0.46 319156 3.90 84.01
Sikkim6.32 8.55 7.09 10.45 6.44 6.47 296474 34.75 9.90
Tripura7.56 19.57 6.84 16.48 8.72 8.83 372625 17.82 24.04
C+L: crops + livestock F&V: Fruits and vegetables TE: Triennium ending
GIA: Gross irrigated area GCA: Gross cropped area
Source: Estimate based on Land Use Statistics, and National Accounts Statistics data.National Institution for Transforming India
14 1.9 Structural Changes in Output and Employment
The theory of economic development clearly states that the share of agriculture in the total economy
declines with economic progress or growth of the economy. This share refers to both share in national
income (output) and total employment (workforce). In 1950-51, 69 per cent of the total workforce of
the country was engaged in agriculture and they contributed 53 per cent of the national income. Thus,
a worker in agriculture earned half of the income earned by a worker in the non-agriculture sector at the
time of Independence. By 1970-71, the share of the agriculture sector in employment turned out to be
slightly higher, but its share in national income declined by close to 20 per cent. This raised the disparity
in per worker income between agriculture and non-agriculture to 1:3 in 1970-71.
The next 40 years witnessed faster structural change in the economy, in which the share of agriculture
declined in both employment as well as national income. The decline in agriculture’s share in national
income was faster than the decline in its share in the national workforce and this meant that disparities
in per worker income between agriculture and non-agriculture further widened. In 2010-11, the income
of one agricultural worker turned out to be less than one-fifth of the average income accruing to
a non-agriculture worker. This trend in rising income disparity reversed after 2010-11, as the share
of agriculture in the workforce fell much faster than the drop in its share in national income. As a
result, income per agriculture worker in 2020-21 turned out to be 29 per cent of the income of a
non-agriculture worker – significantly higher than the 19 per cent registered in 2010-11. A major factor
in this has been the relatively faster increase in agricultural prices, translating into faster growth in
nominal income of the agriculture sector in recent years. In 2020-21, agriculture constituted one-fifth
of the Indian economy at current prices and 16.3 per cent at constant (2011-12) prices (first revised
estimates (RE), 2020-21).
Table 7: Share of agriculture and allied sectors in national income and employment 1950-51 to 2020-21
Year Agri. share in
workforce %
Agri. share in national income % Ratio of income of agriculture
worker to non agri. worker
At constant prices At current prices
1950-51 69.261.753.20.51
1970-71 69.749.643.10.33
1990-91 59.035.129.80.29
2010-11 54.618.318.40.19
2020-21 46.516.320.00.29
Source: Based on Population Census data, NSO-PLFS data and National Accounts Statistics data
The key reasons for the very wide sectoral disparities in income between agriculture and non-agriculture
are low productivity of agriculture in the country and failure of the non-agriculture sector, especially the
manufacturing sector, to absorb the extra workforce from the agriculture sector by offering remunerative
employment opportunities.National Institution for Transforming India
15 1.10 Agriculture Trade
Over the last 50 years, agricultural trade has seen two varying patterns. The first two decades beginning
1970-71 did not show any clear trend in net trade – exports exceeded imports in some years while it
was the opposite in others. This appears to have been the result of very high year-to-year instability in
domestic production and inward-looking trade policies. However, beginning 1990-91, exports exceeded
imports by a sizeable margin, and the difference only increased over time. This was a result of (i) steady
and accelerated growth in agriculture production, (ii) slow-down in population growth which affected
growth in domestic demand and (iii) liberalisation of agriculture trade – first, following the economic
reforms initiated in 1991 and, subsequently, as a result of the WTO agreement. Not only did exports and
imports increase in dollar terms, they also increased as a proportion of value of output.
In the beginning of the 1990s, exports constituted 2.80 per cent of the value of domestic production,
while imports constituted only 0.56 per cent of the value of agricultural output. Recent data shows that
the fraction of output exported by India increased to 6.98 per cent in 2020-21. Imports constituted 3.49
per cent of output in the same year. The agriculture sector fetched net foreign exchange earnings of
$20.79 billion in 2021-22, which is another significant contribution of agriculture to the Indian economy.
Agri exports and imports now constitute more than 10 per cent of total production in the country. The
trade share in the produce that enters market is much higher, as producers retain some part of production
for self-use. There is now strong integration of the domestic market with global markets and changes in
global prices are promptly transmitted to the domestic market. This necessitates careful regulation of
agricultural trade to safeguard domestic producers and consumers against the normal volatility in global
prices without causing adverse effects on exports.
Figure 4a: Trend in import and export of agriculture including fishery, 1970-71 to 1990-91National Institution for Transforming India
16 Fig 4b: Trend in import and export of agriculture including fishery, 1990-91 to 2021-22.
Source: Agricultural Statistics at a Glance, Ministry of Agriculture and Farmers Welfare, GOI, various issues. National
Accounts Statistics, MOSPI, GOI.
1.11 Nutrition and Health
Nutrition and health have remained important goals of development policy in India. Comparable and up-
to-date estimates on nutrition outcomes are available from country-wise estimates from the Food and
Agricultural Organization of the United Nations (FAO) of the number of persons who are undernourished
and prevalence of undernourishment. FAO also refers to undernourishment as hunger and uses the
term undernourished and hungry interchangeably. According to this data, which is available from 1979
onwards, the number of undernourished persons in India declined from 262 million in the 1979 to 1981
period to less than 200 million around 2010. The prevalence of undernutrition also shows a steady
decline. According to FAO, more than 38 per cent population of India was undernourished in the early
1980s. The prevalence of undernourishment dropped to below 14 per cent during 2015–2019 (Table 8).
There was some deterioration in hunger indicators during the Covid-period (2019-20 and 2020-21), but
that cannot be attributed to food shortage, as food production remained normal during this time.
Table 8: FAO Estimates of number and prevalence of under nutrition, 1979 to 2021
Year:
3 years period
Number of people undernourished
(million)
Prevalence of undernourishment (per cent)
1979-81261.537.95
1990-92215.625.03
2000-02198.318.40
2001-03219.320.10
2002-04239.321.50
2003-05249.622.10
2004-06247.821.60National Institution for Transforming India
17 Year:
3 years period
Number of people undernourished
(million)
Prevalence of undernourishment (per cent)
2005-07228.819.60
2006-08207.217.50
2007-09199.016.60
2008-10198.016.30
2009-11195.915.90
2010-12193.115.40
2011-13189.014.90
2012-14190.814.90
2013-15192.014.80
2014-16190.514.50
2015-17184.113.90
2016-18176.313.20
2017-19180.213.30
2018-20200.014.60
2019-21224.316.30
Source: FAO-State of Food Insecurity various issues.
The second source of data on nutrition and health is the National Family Health Survey (NFHS). This
data is available from 2005-06 to 2019–21. The main findings of NFHS related to nutrition and health are
presented in Table 9. It shows a steady improvement in child stunting and the number of underweight
children in the last 15 years, though the incidence is still high. Similarly, there is consistent and significant
improvement in health indicators for women – the percentage of women with Body Mass Index below
normal has almost halved from 35.5 per cent to 18.7 per cent over this period. However, the incidence
of anaemia is found to be very high and even shows an increase after 2015-16 – two-thirds of children
under the age of five years and 52.2 per cent pregnant women in the age group of 15-49 years are
reported to be anaemic in the country.
Table 9: Incidence of nutrition indicators 2005-06 to 2020-21
IndicatorNFHS year
2020-21 2015-16 2005-06
Children under 5 years who are stunted (%)35.5 38.4 48.0
Children under 5 years who are underweight (%)32.1 35.8 42.5
Women whose Body Mass Index (BMI) is below normal (%)18.7 22.9 35.5
Women who are overweight or obese (%)24.0 20.6 12.6
Children under 5 years who are anaemic (%)67.1 58.6 69.4
Pregnant women age 15-49 years who are anaemic (%)52.2 50.4 57.9
Source: National Family Health Survey (India fact sheets of different years)National Institution for Transforming India
18 PLAN FOR
AMRIT KAAL
2 The first part of this paper highlighted how the Indian agriculture story in the post-Independence
period – especially after 1970 – was largely one of success. The growth went through various phases,
and the highest growth in agricultural output and income has been realised in the phase that began
in 2005-06. The country is now planning for the next 25 years, which will conclude with 100 years of
India’s Independence. This period has been described as Amrit Kaal. Planning and policy formulation for
agriculture during this period should be based on the following factors:
1. Future demand for agri-food.
2. Lessons from past experience, especially relating to drivers of growth.
3. Challenges facing the sector and those arising from the sector.
4. Emerging opportunities and changes in the operating environment of agriculture.
5. Needs and goals set for the society and the nation.
2.1 Meeting Future Demand
There are four main sources of demand for agricultural produce: (i) food for human population, (ii)
feed and fodder for livestock, (iii) feedstock for energy and (iv) raw material for industrial and non-
agricultural uses.
Demand for food is driven by population, rural-urban population distribution, per capita income and
consumers’ tastes and preferences. According to United Nations population projections of 2019
8
,
India’s population will increase from 1.38 billion (138 crore) in 2020 to 1.5 billion (150 crore) in 2030 and
1.59 billion (159 crore) in 2040. These estimates imply that the population will increase at the rate of
0.857 per cent per year between 2020 and 2030 and 0.577 per cent between 2030 and 2040. Besides
meeting the demand for the additional population, there is also a pressing need to increase per capita
intake of food to address issues relating to hunger and undernutrition.
Growth in per capita income is another important factor affecting demand. The expenditure elasticity
of food is estimated to be around 0.45 (NITI Aayog, 2018)
9
, based on the consumer expenditure data
of 2011-12. Expenditure elasticity tends to decline with increase in per capita income. The per capita
income in India in real terms (2011-12 prices) increased by 41 per cent between 2011-12 and 2021-22 and
is expected to increase at a much faster rate in the coming years. This implies that expenditure elasticity
for the period beyond 2023 will be much lower than 0.45. Corresponding to these parameters, a 5 per
cent rate of increase in per capita expenditure will translate into a growth in demand of around 2 per
cent. With population growth of 0.85 per cent per year, growth in overall demand for food commodities
is projected to be around 2.85 per cent in the short term and is likely to decline with the passage of time.
2.2 Drivers of Output Growth
The experience of the last 50 years clearly highlights the fact that Indian farmers strongly respond
to market signals. These signals could come from public policy (like MSP, procurement) or emanate
from demand side changes. Demand-driven factors are also found to have much a stronger effect on
8
https://population.un.org/wpp/Publications/Files/WPP2019_Volume-I_Comprehensive-Tables.pdf . p. 27 medium variant.
9
Expenditure elasticity for aggregate food was taken as the weighted average of the elasticities estimates for cereals, pulses, edible oils, fruits and
vegetables, milk and meat reported in The Working Group Report on Demand and Supply Projections constituted by NITI Aayog. It worked out to be 0.51
for rural, 0.28 for urban and 0.45 for combined population. Expenditure shares and rural and urban population were used as weights. National Institution for Transforming India
20 growth of output, as compared to the effect of price support. This is evident from the fact that fruits
and vegetables, milk, eggs, meat and fish experienced much higher growth than cereals and sugarcane,
both which are heavily supported by the government and covered under effective price support.
The policy message emerging from this is that the strong and healthy growth of the agriculture sector
is predicated on changes in production in tune with the changes in demand. This approach should avoid
price distortions and ensure well-functioning markets to transmit demand signals to producers.
2.3 Challenges Facing and Related to Agriculture
Soon after the spread of modern technology in Indian agriculture, there was much discussion on the
first-generation problems of the Green Revolution. These problems became more severe over time and
some were aggravated by government policies. These challenges are related to sustainability of natural
resources, efficiency, the plight of farmers with small holdings, food safety, profitability, fiscal effect
and equity. Agriculture policy should address these challenges during Amrit Kaal. These are briefly
described below.
2.3.1 Sustainability and Climate Change
The way agriculture is practised has significant bearing on the quality of air, water and land, which are
the pillars of sustainability. The bulk of water usage in the country is for agriculture, and more than 40
per cent of land area is under agriculture. Agriculture growth in India has led to the over exploitation of
natural resources, especially water, across the country.
Water withdrawal far exceeds water recharge. As a result, the groundwater table shows small to very
high decline in 36 per cent blocks of the country. This is happening even in the high-rainfall, water-rich,
middle Indo-Gangetic region. Farmers in some parts of the country are chasing groundwater beyond
1,000 feet below ground level. This has increased the cost of irrigation and also led to deterioration
of water quality in many regions, due to the ingress of brackish water and arsenic content into good
quality water.
The indiscriminate use of fertilizer and other agro-chemicals is contributing to the degradation of land,
water and air. Free or subsidised power to agriculture has promoted the cultivation of water-intensive
crops and use of excess water for agriculture. The decline in the water table in some of the regions
has reached alarming levels and there is a serious danger of water shortage for future generations.
The distortions in output and input prices has led to India exporting water-intensive crops like rice and
sugar and importing crops that are less water consuming like pulses and edible oil. Even with its small
share in global exports, India is now the biggest exporter of virtual water, that is, the water embedded
in exported agri food products. On the other hand, large sections of the population do not get adequate
water for drinking and other uses.
Greenhouse gases (GHG) emitted from agricultural activities are generally not visible. The emission
results from the application of organic and inorganic inputs to the soil, decomposition of biomass and
dead plant residues, plant respiration, livestock rearing, enteric fermentation in ruminants, manure
handling and burning of crop residues. Agriculture is responsible for about 17 per cent of GHG emission
in India, which is almost same as its share in gross domestic product (GDP). This share will increase
significantly if the burning of crop residue, which is now spreading to all states, is taken into account fully. National Institution for Transforming India
21 2.3.2 Low Efficiency and Price Led Growth
Growth in India’s agriculture sector – though impressive in most products and states – still suffers from
low productivity levels, especially when compared with growth in other major agricultural countries.
The pace of modernisation is slow. The much-needed changes in technology, method of production
and post-harvest value addition are not visible at a large scale. Agricultural practices involving the
prolific use of inputs like flood irrigation and broadcasting of fertilizer have not shown any significant
change. For many crops, the increase in productivity has been accompanied by an increase in the
average cost of production (Srivastava, et al., 2017), which necessitates increase in output prices to
maintain profitability levels. The dependence of the agriculture sector on government support is rising.
Consequently, the sector is losing its competitive edge.
While non-price factors create potential for growth, remunerative prices incentivise farmers to harness
this potential. Thus, both sets of measures are crucial for the future growth and development of the
agriculture sector. Over time, the focus of various farmers groups has moved towards better price
support and subsidies and little attention is being paid to non-price factors like extension, R&D,
market regulation and infrastructure which create opportunities for growth in output and farm income.
Excessive reliance on price factors and subsidies also has implications for the fiscal burden of Union
and State Governments.
The policy shift towards price factors is visible from the trend in prices in agriculture relative to prices in
the non-agriculture sector – also called terms of trade (ToT) for agriculture (Figure 5). The ToT was taken
as the ratio of the implicit price deflator of the agriculture sector relative to the implicit price deflator of
the non-agriculture sector using data series with a 2011-12 base. The ToT did not follow any clear trend
during the 1970-71 to 2006-07 period. After that, ToT for agriculture moved on a steeply rising trend
(Figure 5). This implies that price trends have become more and more favourable for agriculture and
farmers during the 15 years following 2006-07.
Figure 5: Movement in terms of trade for agriculture computed from ratio of implicit price deflator of
GVA agriculture and non-agriculture sectors (base 2011-12=100), 1970-71 to 2021-22.
Source: Author’s estimate derived from data on Macro Economic Aggregates in National Accounts Data, Back Series
with base 2011-12, MoSPI, GOI.National Institution for Transforming India
22 Increase in real prices for the agriculture sector in the recent period has played an important role in the
growth of the sector. This option may not always be available during the Amrit Kaal. The country would
need to depend more on yield-enhancing and cost saving technologies to sustain past growth trends.
2.3.3 Linking Food to Health and Nutrition
According to the National Family Health Surveys, the incidence of stunted and underweight children
as well as prevalence of anaemia among children and women remains high. At the same time, India
has achieved very high increase in per capita net intake of all types of foods, except cereals, which
include fruits, vegetables, milk, eggs, meat and fish after 2005-06 (Table 4 and Figure 3). The per capita
production of all food items taken together has registered a 50 per cent increase between 2004-05 and
2020-21. There is a need to explain why this increase in per capita food availability is not adequately
reflected in nutrition and health outcomes. The fact that the percentage of women who are overweight
doubled between 2005-06 and 2020-21 raises serious questions about the low availability of food as
the reason for undernutrition and anaemia. The Ministry of Agriculture and Farmers’ Welfare and the
Ministry of Health need to reconcile the contradiction between high growth in food availability and slow
improvement in nutrition and health indicators.
There is need for a country-wide survey to ascertain the true status of health and nutrition, as well as
the role of food availability, food distribution, awareness about nutrition, eating habits and preferences,
hygiene and food diversity in determining nutrition intake and health outcomes.
As the country has moved from a situation of food shortages to that of food surplus, the focus of
production should be on nutritive and healthy food. There should be emphasis on bio-fortification of
major foods and increased dietary diversity. The promotion of millets and green and leafy vegetables is
very important in order to improve the nutrition and health of all age groups.
2.3.4. Export Competitiveness
India has remained a net exporter of food since 1988-89. Net exports have shown an increase, even as a
percentage of domestic production. This implies that domestic production has been growing at a faster
rate than domestic demand. A similar trend is expected to continue for a decade or so.
The dependence on export markets to dispose of domestic surplus will be much greater for some
commodities like rice and sugar. India already exports more than 12 per cent of the domestic production
of rice. The expenditure elasticity for cereals in the country is reported to be negative (-0.10). This implies
that low growth in domestic demand for cereals – attributed to growth in population – necessitated the
need for their export. Similarly, the per capita production of milk and dairy products has crossed the
level recommended by nutrition authorities like the Indian Council for Medical Research (ICMR) and the
National Institute of Nutrition (NIN). With production growing at more than 5 per cent, India would be
surplus in milk. Export markets are also very important for a large number of horticultural commodities,
condiments and spices and beverage.
On the supply side, Indian agriculture is poised to move on a growth trajectory of 3-4 per cent in the
next decade, as there is still large untapped potential to raise the productivity of crops and livestock as
well as crop intensity. Aggregate food demand is projected to increase around 2.85 per cent per year.
These estimates imply that food surplus in India will witness accelerated growth. At present, exports
constitute more than 7 per cent of the value of total production of the agriculture and allied sector. This National Institution for Transforming India
23 must increase in coming years. This requires agri exports to be more competitive and action is needed
in three areas:
zprices in primary markets should be sufficiently lower than international prices;
zthe price spread in various stages of marketing should be reduced; and
zproducers should be integrated with global value chains.
2.3.5. Technology Dissemination and R&D
Agricultural problems are becoming more complex and research is turning more capital intensive.
Climate change, the share of agriculture in GHG emissions and sustainability concerns add to the
challenges, which need to be tackled by a robust R&D system. The scope for spill over from research
in the developed world is shrinking, as intellectual property rights issues are complicating matters and
making it costly for the transfer of technology from abroad and the private sector. Thus, India needs to
enhance domestic strength in agricultural research.
Agriculture is also becoming more competitive globally, with the emergence of many innovations.
However, the rate of adoption of improved as well as frontier technology in the country remains low,
mainly due to poor extension. Taking technology from laboratory to land and advisory services to
farmers were primarily undertaken by the States. Of late, State-level extension systems have considerably
weakened, both in terms of resources and manpower. Effective mechanisms like digital technology
need to be put in place for speedy and cost-effective extension.
Of late, R&D in agriculture in India is not keeping pace with that of major agricultural countries. This is
evident from the rising yield gap, lack of adoption of precision and smart farming techniques, and lower
application of advance sciences in agriculture. Except in the case of rice and wheat, India is not able
to keep pace with the world yield. Major crops like cotton, soybean, groundnut, and rapeseed mustard
are crying for breakthroughs in yield that have already been witnessed at large scale in many countries.
Though agricultural research and higher education is largely a responsibility of State Agriculture
Universities (SAUs), the Indian Council of Agriculture Research (ICAR) is required to respond to any
challenges and issues concerning the agriculture sector. Public opinion at large holds ICAR responsible
for any adverse development in the agriculture sector. As a result, the portfolio of ICAR has been
getting bigger and bigger over time. Its load has risen manifold, with the responsibility to operate Krishi
Vigyan Kendras throughout the country. Many questions are raised about effectiveness of ICAR to play
the larger role it has been assuming and is expected to play in the field of agriculture R&D, education
and extension. Several committees have been formed over the years for organizational reforms in ICAR.
Similarly, many policy documents have recommended an increase in agriculture R&D spend to at least
1 per cent of agriculture GDP. However, the allocation (by Union and State Governments together)
remains below 0.5 per cent. This is highly inadequate to address the needs and challenges of the
agriculture sector. India needs a vibrant and future-ready national research system for agriculture. R&D
by private sector also needs to be encouraged. The agri R&D policy and R&D system in the country
need radical changes to serve the goals set during Amrit Kaal.
2.3.6. Viability of Smallholders
Agriculture in India and most of the Asian countries is dominated by small land holdings. According
to Agricultural Census for 2015-16, 68 per cent farm holdings operate on less than 1 hectare land area. National Institution for Transforming India
24 Further, 85 per cent of farm households undertake farming on land holdings of less than 2 hectares.
Though small holders are found to be more efficient than large sized farms (Chand, et al., 2011), small
farm holdings operating within the usual agricultural practices and products do not generate adequate
income for good living.
There are two paths to raise the income of such farm holdings. One, to enable these farmers to go for
high value crops and livestock activities where they can make optimum use of the workforce in their
families. Two, supplement agriculture income with income from non-agriculture sources like wages and
salaries, some kind of business and trade. Small holders also face the problem of scale economy in both
input and output markets, which require a different type of institutional help.
Income from non-farm sources constitutes an important part of the income of farm households.
According to the Situation Assessment of Agricultural Household 2019, published by NSO, on an average,
an agricultural household earns 47.35 per cent income from non-agricultural economic activities. This
share was 40 per cent in 2012-13. This shows that the importance of non-agriculture sources of income
is increasing. Therefore, in order to increase the income of farm households at a faster rate, both
agriculture as well as non-agriculture sources need to be tapped.
2.4 Emerging Environment and Opportunities
There are immense opportunities for new ways of doing agriculture, for creating new types of products,
accelerating the sector’s growth, value addition and employment, thanks to technological breakthroughs,
e-commerce, newer uses of agri-food commodities, trait-based demand and employment etc. There is a
growing opinion that farms will become factories of the future for meeting various needs of consumers.
The industry and services sectors are becoming increasingly capital intensive and deploying labour
saving and labour displacing technologies like artificial intelligence (AI), robotics and machine learning.
Therefore, the labour shift from agriculture to industry, as envisaged in the classic work of Lewis (1954),
is not taking place at the pace it was expected to (Chand, et al., 2017). Consequently, employment
is emerging as the biggest challenge in developing countries. This necessitates exploring the scope
for remunerative and decent jobs in and around agriculture – in secondary agriculture, processing,
packaging, value chains and value addition.
There is an increasing preference for bio-based products for uses such as alternative sources of energy,
building material, chemicals, polymers, medicines, cosmetics, insect/pest control, fertilizer and nutrition,
among other things. The use of agri produce like grains, oilseeds and sugarcane as biofuel is growing.
These sources of energy are renewable, and emit much lower levels of GHG compared to hydrocarbons.
India produces more than 650 million tonnes of crop residue, only a part of which is used as dry fodder
for livestock; the rest just goes waste. A relatively recent phenomenon has been that of farmers burning
a part of the crop biomass, like paddy and wheat stubble and scrubs, in order to clear the fields quickly
for the next crop. Not only is this a waste of biomass, but it is also detrimental to the environment, air
quality and human health. Initially, this practice was limited to the States of Punjab and Haryana, but it
is now spreading across the country. National Institution for Transforming India
25 Recent studies have demonstrated the utility of lignocellulosic crop biomass – which has low or no
economic use – for the production of gaseous biofuel, using anaerobic digestion by microorganisms.
This offers a win-win situation for crop producers, cattle owners and the environment.
For example, the residue or slurry left after anaerobic digestion is very good manure for plants. In
addition, producing compressed bio gas (CBG) from crop residue creates market value for the latter,
and gives farmers an additional source of income. Public sector oil companies buy the CBG at an assured
price within a 25 km radius of their production units. There are already around 300 units producing CBG
and the target is to raise this number to 5,000 by 2025. Thus, gases like carbon monoxide and nitrous
oxide present in crop biomass become a source of green energy, rather than harming the environment.
All these are excellent examples of the circular economy and of the concept of waste to wealth, and
offer opportunities for improving the economic viability of cattle and other livestock.
A strong sentiment against chemicals in general, and agro chemicals in particular, has emerged in
recent times. Health hazards like anti-microbial resistance are necessitating the search for alternatives,
like the use of bio molecules as substitute for antibiotics. Globally, strong markets are emerging for
bio-based industrial products. Bio-based products include commodity and specialty chemicals as well
as fuels. Similarly, demand for new attributes in food commodities like specific tastes, aroma, immunity,
therapeutic value and special health effects is on rise.
2.4.1 Quality and Food Safety
Consumers are increasingly becoming fastidious about food quality and showing preference for food
with specific attributes. This requires integrating demand with supply through well designed supply
chains and direct linkages between producers and consumers.
Food safety is emerging as a major concern among consumers, with increasing reports of excessive and
unsafe use of chemicals and hormones in crops, livestock and fish food and the presence of chemical
residue in food. This requires the framing of rigorous regulations and their strict enforcement at both
the production and post-harvest stages. Awareness should be created among producers, middlemen in
the value chain and processors about safe levels and methods of usage of agro chemicals in the entire
food system.
New interest has emerged in the therapeutic values of food and its proper usage in order to maintain
overall immunity and for good health. As a result, the demand for medicinal plants and varieties with
specific attributes is on the rise. Some entrepreneurs are connecting consumers and producers through
innovative value chains for the supply of such products. Large-scale supply of such products will require
the creation of value chains with traceability and labelling.
2.4.2 Market Reforms and E-commerce
The existing market infrastructure is inadequate to handle the increasing marketable surplus. Almost half
of this surplus is sold outside Agricultural Produce Marketing Committee (APMC) markets. The traditional
market system involves bulk selling and buying through a large number of intermediaries and transactions.
This system has some serious disadvantages and, therefore, alternative options and systems of marketing
need to be developed. Agri-produce with specific attributes and traits (like high zinc or iron content or National Institution for Transforming India
26 high protein levels), which cannot be ascertained by the naked eye, require special market chains with
traceability and labelling. This is not possible through bulk buying, selling and pooling. Many producers/
groups directly market such produce to consumers to meet the latter’s preferences and earn much higher
price compared to prices in APMC mandis. App-based sale of farm produce by farmers or farmers groups,
e-commerce and digital commerce are also opening up new avenues for marketing. This requires a new
ecosystem of agriculture marketing where the APMC system and alternative markets compete with each
other and offer farmers choices to earn the best price for their produce.
2.4.3 Frontier Technology and Agri Start-ups
There are many fascinating technological changes taking place in agriculture in developed countries,
with machines replacing humans in various operations. This is helping to improve efficiency, precision,
safety, apart from other gains. However, the pace of diffusion of these frontier technologies in developing
countries is very slow, when the need for technology-led transformation of agriculture is much greater
in these countries.
Agriculture in developing countries is in dire need of improved efficiency and productivity, food safety
and quality, enhanced profitability, lowering vulnerability and improving sustainability of the environment
and natural resources, among other things. An effective response to these challenges is not possible
with the current tools available to agricultural sciences like agronomy, soil science, entomology, etc.
Frontier technologies, offering immense benefits available for ready application in agriculture can
be classified as: (i) biotechnology, (ii) digital technology, (iii) nanotechnology, (iv) space science and
global positioning system (GPS) tools and (v) advance engineering technologies, including sensors and
unmanned aerial vehicles (UAV). Breakthroughs in these fields have immense potential for application
in crop production, animal husbandry, fishing and agri-business. These technologies have immense
potential to benefit producers, consumers, society, economy and ecology by contributing towards:
zproductivity enhancement,
zcost reduction,
zhigher efficiency levels,
zbetter decision making in production and marketing,
zlowering pre and post-harvest losses,
zreducing drudgery,
zquality enhancement,
zlowering emissions and
z fostering climate change mitigation and adaptation.
Most of these emerging technologies with vast potential for application in agriculture are being
developed in non-agricultural disciplines and institutes. Since their application is expected to help usher
in future revolutions in agriculture, there is a need to create an enabling environment within agriculture
for absorbing these. Agri start-ups have emerged as significant players in introducing innovations in the
entire agricultural chain.
2.4.4 Agro Chemicals Based Farming to Natural Farming
Following the adoption of the Green Revolution, the application of agro chemicals and inorganic fertilizers
has seen rapid increase, at the expense of traditional methods of farming based on bio resources and
inorganic fertilizers. Since 1970, the use of chemical fertilizers has grown seven times faster than that of National Institution for Transforming India
27 farm yard manure, compost, etc. Though the per hectare use of agro chemicals in India is still much lower
than in most developed countries, there has been growing awareness about the adverse effect of agro
chemicals on human health, soil, environment and sustainability and the overall safety and benefits of
food grown using natural inputs or organic products. Some consumers are willing to pay higher prices
for food produced without using agro chemicals. Many countries are promoting the use of bio control
methods against pests and diseases. The Government of India has started several initiatives to promote
alternative methods of production like organic farming, natural farming and zero budget farming to
reduce and replace dependence on agro chemicals. While this looks desirable, there are concerns about
the reduced or zero use of agro chemicals, including inorganic fertilizers leading to a fall in yield.
Agro chemicals play a productive role (in terms of enhancing yield) as well as a protective role (against
attacks by insects, pests and diseases). There is adequate and credible scientific evidence in India
and globally about non-use of agro chemicals or their replacement by natural and organic inputs and
methods of production leading to reduction in yields. A review article, based on meta-analysis of a
large number of peer-reviewed articles, published in Archives of Agronomy and Soil Science (Roberto,
2021) conclude that “the yields under organic farming were on average 25 per cent lower than the
conventional ones, reaching a yield gap of 30 per cent for cereals. The intensity of soil use was also
lower in organic systems. Combining the yield gap with the reduction in the number of crops harvested
in rotation, a productivity gap of 29 per cent to 44 per cent was estimated depending on the type of
crops included in the rotation” (Roberto, 2021). Similar findings are reported for India for crop yield
and income without application of synthetic fertilizer (Ghasal et al., 2023). In addition, there is concern
about the source of growth in organic and natural farming. The food and economic crisis in Sri Lanka
caused by the ban on synthetic fertilizer and agro chemicals in 2021 underscores the need for adopting
a cautious approach in curbing the use of agro chemicals.
Striking a balance between the production of safe, healthy, quality and environmentally sustainable food
on the one hand and adequate food on the other, is indeed a challenge. Food demand in India is projected
to grow between 2.5 per cent and 3 per cent per year. Past trends and future potential indicate that
food output is likely to register a 3.5 per cent growth rate in the next decade. These growth parameters
indicate that India can afford to shift some area from conventional methods of farming to organic or
natural farming (ONF) without causing imbalance between domestic demand and supply. Assuming a
growth rate of 3.5 per cent in output, 2.8 per cent growth rate in demand and 30 per cent yield penalty
in organic farming, India can safely shift 2 per cent area each year from conventional farming to organic
farming without creating any shortfall in supply to meet domestic demand. This will mean sacrificing
some exports, as some surplus over demand will be lost due to lower yields under ONF. These numbers
imply that India has scope to replace around 20 per cent of area from conventional farming to ONF by
2030, while maintaining the balance between growth in demand and supply of agri-food.
2.5 Way Forward
Agriculture is vital for livelihood, food and nutrition security, sustainability of the natural resource
system, health of the environment, climate change, employment and growth. In addition, the United
Nations’ Sustainable Development Agenda 2030 cannot be achieved without paying attention to
agriculture, as 11 out of the 17 Sustainable Development Goals (SDGs) are directly linked to agriculture. National Institution for Transforming India
28 The two biggest challenges facing the planet are climate change and overexploitation and degradation
of natural resources. The type and methods of farming have a significant bearing on these. All this has
led to a renewed interest in agriculture and the future of agriculture remains a core concern for all the
countries, regardless of the level of development. In India, agriculture has to play a key role in achieving
the goal of Viksit Bharat, inclusive development, green growth and gainful employment during Amrit
Kaal. A roadmap to achieve these goals is suggested below.
zSignificant and sustained increase in farmers’ income and transformation of agriculture requires
a paradigm shift in the approach towards the agriculture sector. Changes in old regulations and
liberalisation of the sector are necessary for creating an enabling environment for a modern and
vibrant agriculture during Amrit Kaal. Advancement in science-led technology, an enhanced role for
the private sector in both pre and post-harvest phases, liberalised output markets, an active land
lease market, and emphasis on efficiency will equip agriculture to address the challenges of the
twenty-first century and contribute towards the goal of Viksit Bharat.
zCompetition among States to improve “Ease of doing Farming and Farm Business” needs to be
promoted.
zThe future progress of agriculture requires action on several fronts involving Union and State
Governments. A well-coordinated action and strategy between the two levels of government is
needed to ensure that agriculture marches to the next stage of development, along with other sectors.
zThe shift towards modernisation of agriculture will involve the introduction and promotion of
knowledge and skill intensive practices within agriculture, private and corporate sector investments
in agriculture, new institutions of producers, integrated food system-based mechanisms, and new
types of linkages between producers and end users. These changes, in turn, require liberalisation of
the agriculture sector in the form of providing a facilitating regulatory environment and responsible
public and private investments in and for agriculture.
zIndia has done well in achieving growth targets but lags when it comes to efficiency gains. The
emphasis should shift from growth to efficient growth – cost effective increase in production. This
requires deployment of state-of-the-art technology in agriculture, smart farming and maximising the
value of main and by-products.
zThe main yardstick to measure progress of agriculture is yield per unit of land. This ignores other
more limiting and cost-related factors like water usage, fertilizer application and labour intensity.
Along with yield, the productivity of other inputs should also be maximised.
zThe system of MSP for farm produce is essential to guard against poor competitiveness and malpractice
in agri markets. MSP also becomes important during periods of glut, even if markets are competitive.
However, the system of MSP should not cause distortions in market signals and incentives. India
should use a combination of two instruments, namely procurement and price deficiency payment,
to pay MSP to farmers. Public procurement should be linked to the quantity needed for the public
distribution system, price stability and strategic stocks. Other than this, MSP in mandated crops
should be implemented through price deficiency payment. This system was earlier attempted in
Madhya Pradesh and is currently being successfully implemented for a few crops in Haryana.
zIndian agriculture is heading towards increase in surplus in many products. This necessitates disposal
of more quantity through exports. However, if MSP is higher than exportable price and implemented
through the system of procurement, then their export without subsidisation becomes impossible.
Many competing countries object to this on grounds of violation of the WTO Agreement. The best National Institution for Transforming India
29 solution to such situations is to pay farmers the difference between MSP and average market price at
the State level, as is the practice in many countries (Chand 2019). This practice is also WTO compliant.
zAgriculture markets are characterised by large price spreads, large number of intermediaries operating
on small quantity of produce, several imperfections and poor infrastructure and storage facilities
(Chand, 2012). They need to be upgraded, modernised and liberalised. They should be equipped
with grading, packaging, storage and assaying facilities, digital transactions and e-marketing options.
Alternatives like electronic platforms, direct marketing, contract farming are the need of the hour.
Market innovations should be encouraged through agri start-ups, farmers producer organizations
(FPOs) and cooperatives.
zThe private corporate sector is sensing several opportunities for expanding agribusiness. This will
bring modern capital in warehousing, logistics, cold chain, food processing and integrated value
chain development and, will, in turn, increase competition and improve market integration over time
and space. State Governments should facilitate producers to take advantage of these opportunities.
zThere is a strong shift in preference towards “bios” and plant-based medicines, therapies,
nutraceuticals, cosmetics, disinfectants, pesticides, insecticides, and a range of other consumer
products. Popular sentiment is turning away from chemicals and synthetics towards natural products.
Bio control measures are expected to replace chemicals for crop protection to a significant extent.
Some experts feel that many chemicals-based industries will turn towards bio-based products to be
used as raw material and final products in the future. This points towards Amrit Kaal witnessing the
emergence of a new type of industry in agriculture, with the possibility of making farms as factories.
zStates must undertake comprehensive reforms in agriculture and replace restrictive regulations with
a new set of regulations that are in tune with the new reality of agriculture, emerging opportunities,
capacity and willingness of modern capital to invest in pre and post-harvest processes and changes
in the investment environment, new institutional mechanisms, ICT and consumers’ preferences.
zIndian agriculture will continue to be dominated by small holders in the foreseeable future. They
should be empowered through self-help groups, FPOs, cooperatives and agri start-ups to access
credit, new knowledge and better markets. Some of these small holders will leave farms for better
opportunities in other sectors, while others would like to expand their base by leasing land from other
farmers. This is already happening on a large scale in some States. Due to various issues relating to
tenancy, the land lease market operates in an informal setting, which deprives both the lessor (land
owner) and the lessee (tenant) farmers of various benefits and opportunities. States must liberalise
the lease of agricultural land to encourage land owners to rent out their land formally without any
fear of losing title or control of land.
zIndia should plan for skill development and employment opportunities for part-time farmers, so they
can get some work opportunity in non-agriculture activities near their home and also operate their
small farms.
zRealising the adverse effects of the use of agro chemicals in agriculture and shifting consumer
preference towards safe and healthy food, India has taken several steps to promote natural farming
and organic farming. These methods are slowly gaining popularity among farmers. However, there
are concerns related to yield penalty in natural farming, compared to farming practices using agro
chemicals and modern inputs, at least in the short run. Given the present surplus in food production
and projected trends in food supply and demand, India can afford to put one-fourth of area under
natural farming and similar practices by 2032-33, without any threat to food security at the aggregate
level. However, it will entail diverting some exportable surplus to meet domestic demand. In the National Institution for Transforming India
30 meantime, the country should invest in R&D in natural farming and explore possibilities of higher
yield and growth using the system of natural farming. Any further decision on promoting natural
farming should be taken based on the experience of these ten years.
zData on cost of cultivation shows nil use of agro chemical on 6 per cent of total area under cultivation.
Further, fertilizer use is below 8 kg/acre on 7.6 per cent area. These areas should be given priority for
promoting natural farming, which will also enhance production and farm incomes.
zThere is immense scope to reduce the use of agro chemicals, and its consequent adverse effects,
through their judicious use. This requires educating and helping farmers on correct diagnosis,
treatments, dosages and methods of use. Methods like Integrated Pest Management and bio control
are also useful in reducing the use of agro chemicals.
zRegulation and its effective implementation are very important in enforcing the proper use of
insecticides, pesticides, preservators, weedicides, growth hormones and other agro chemicals.
Agriculture and farmers suffer from low quality, sub-standard and spurious products and inputs.
Strict regulation is needed to check these.
zConscious efforts should be made to promote production patterns and practices in various
geographies that are consistent with their agro-climatic characteristics and natural endowments.
Rather than sacrificing long-term gains for short-term gains, a balance should be struck to maintain
sustainability.
zThere is huge scope for raising tree plantations and agroforestry on arable land and culturable
waste lands. Complete removal of restrictions on tree felling on private lands, timber marketing and
wood-based industry will pave the way for greening India, environment improvement as well as raise
employment and income.
zEmployment is becoming a serious challenge, with the manufacturing sector increasingly adopting
labour displacing or labour saving capital-intensive technologies and automation. Industry 4.0
is deploying technologies and options like robotics, AI, internet of things (IOT), machine learning,
cloud computing and analytics, advance sensors and digital twins to revolutionise manufacturing
and distribution. This has already affected the structural transformation of developing economies,
as the employment share of manufacturing is not keeping pace with its share in output. As a result,
labour is stuck in low productivity, low paying and seasonal employment in the agriculture sector.
India and other emerging economies have to find a mechanism in the normal development process
to suitably employ the excess labour
10
in agriculture which is not finding employment in the non-
agriculture sector. One possibility is to develop post-harvest value chains and small manufacturing
facilities around farms to produce various types of bio-based industrial products to meet the rising
preference for such products.
zTechnologies have now become available to produce bio energy (CBG or ethanol) from crop
and livestock bio mass and waste. Already around 300 units of public sector oil companies are
producing CBG and the target is to raise this number to 5,000 by 2025. This is a good example
of circular economy and the Government of India is supporting this practice through the GOBAR-
dhan (Galvanising Organic Bio Agro Resources) scheme and SATAT (Sustainable Alternative Towards
Affordable Transportation) scheme. Such schemes should be expanded to cover more rural areas.
zIn order to check further overexploitation of water resources, there is need to create a policy
environment that leads to crop patterns and practices consistent with the natural resource
endowment of various agro ecological zones. Further, the country cannot address the issue of stress
on water resources and meet future water requirements without improving the efficiency of water National Institution for Transforming India
31 use in agriculture through modern methods of irrigation (drip, sprinkler, sensors).
zFree or highly subsidised power to the agriculture sector is known to be the main cause of
overexploitation of groundwater and unsustainable use of water resources. Despite this, the
phenomenon of providing free power to agriculture is on the rise. The issue is considered politically
sensitive as it has a strong effect on farm income. One solution is to pay the subsidy amount to
farmers directly and shift to metered power supply, which will be paid for.
zDuring the last five decades, the usage of chemical fertilizers has increased by 1,100 per cent, whereas
the use of farm yard manure has increased by a mere 75 per cent. As a result, organic matter in Indian
soils is getting depleted and soil fatigue is occurring in many places. Promoting the use of organic
and bio fertilizers, compost, farm yard manure and green manuring need to be given top priority in
order to restore and sustain soil fertility.
zDigital technology can play a significant role in improving the efficiency of agriculture through easy
dissemination of technology and knowledge to farmers. Digital technology is particularly important,
given the weakening of the conventional extension system for agriculture. Some States are already
advancing in this direction. Agri start-ups are playing a significant role in the application of digital
technology and other transformative innovations in the entire chain of agriculture. Their participation
can bring game changing solutions to the agri food systems.
zThe agriculture sector offers some useful experiences to fulfil India’s dream of becoming a developed
country by 2047. The dairy, poultry and fishery sectors are close to the growth rate required to make
India a developed country. Such growth is also possible in horticulture and agro-forestry. The country
needs to liberalise these sectors to unleash their potential. While the non-farm sector can give
higher growth than agriculture, the latter is important for inclusive growth, employment generation,
renewable energy resource and sustainability – all of which are an integral part of the goal to become
Viksit Bharat. Thus, we must plan for Viksit Bharat by according a central role to the agriculture sector
during Amrit Kaal.National Institution for Transforming India
32 References
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33 ABBREVIATIONS
AI Artificial Intelligence
APMC Agriculture Produce Marketing Committee
CBG Compressed bio gas
FAO Food and Agricultural Organization of the United Nations
FPO Farmers Producer Organization
FRP Fair and Remunerative Price
GDP Gross Domestic Product
GHG Green-house Gases
GOI Government of India
GPS Global Positioning System
GVA Gross Value Added
ICAR Indian Council of Agriculture Research
ICMR Indian Council for Medical Research
ICT Information and Communication Technologies
IPR Intellectual Property Rights
MoSPI Ministry of Statistics and Programme Implementation
MSP Minimum Support Price
NFHS National Family Health Survey
NIN National Institute of Nutrition
NPK Nitrogen-Phosphorus-Potassium
NSO National Statistical Office
ONF Organic or Natural Farming
PLFS Periodic Labour Force Survey
R&D Research and Development
SAUs State Agriculture Universities
SDG Sustainable Development Goal
To T Terms of Trade
UAV Unmanned Aerial Vehicle
WTO World Trade OrganizationNational Institution for Transforming India
34