The Changing Face of Indian Agriculture

Agriculture remains the backbone of India’s economy, employing nearly 45% of the workforce and contributing around 17% to the GDP. Yet, farmers’ incomes remain volatile, productivity growth has slowed, and environmental stresses are mounting. In a century marked by climate uncertainty, market disruptions, and technological change, India’s challenge is to make agriculture sustainable, profitable, and resilient — ensuring food security while empowering its farmers.

Current State: Productivity, Income, and Subsidy Burden

India is self-sufficient in staples like rice, wheat, and pulses, but productivity levels lag behind global standards. For instance, the average yield of paddy and wheat in India is 30–40% lower than in China.

Farmers’ incomes have not kept pace with costs, and despite government initiatives such as PM-KISAN, Soil Health Cards, and PM Fasal Bima Yojana, profitability remains limited. The subsidy burden — especially on fertilizers, food, and power — exceeds ₹3 lakh crore annually, straining fiscal resources while often distorting resource use.

To achieve the goal of “Doubling Farmers’ Income”, India needs to shift focus from input subsidies to productivity enhancement, infrastructure, and market reforms.

Issues: Fragmentation, Climate Stress, and Soil Health

Land fragmentation is a key structural problem: the average landholding size has declined to 1.08 hectares (Agricultural Census 2021). Small and marginal farmers, who constitute over 85% of holdings, face challenges in mechanization, credit access, and market reach.

Climate stress is another major threat. Erratic monsoons, rising temperatures, and frequent droughts or floods are reducing yields and increasing risk. The IPCC estimates that India could see yield losses of up to 10–40% by 2050 under high-emission scenarios.

Additionally, soil degradation due to overuse of chemical fertilizers, declining organic matter, and groundwater depletion pose serious ecological challenges. The path ahead requires a paradigm shift toward climate-smart, resource-efficient agriculture.

MSP, Procurement, and Minimum Support Systems

The Minimum Support Price (MSP) mechanism remains a cornerstone of India’s agricultural policy, providing price assurance to farmers. However, the system is heavily skewed toward rice and wheat procurement, benefiting primarily farmers in Punjab and Haryana.

With 23 crops under MSP, but procurement limited to a few, diversification remains constrained. Moreover, open-ended procurement leads to excessive foodgrain stocks with the Food Corporation of India (FCI), adding to storage and subsidy costs.

Experts suggest transitioning from price-based to income-based support, improving market access, and expanding MSP coverage through direct benefit transfers and price deficiency payment schemes (like those in Madhya Pradesh and Haryana).

A more market-linked and regionally balanced procurement policy would better align with nutritional and environmental goals.

Diversification, Value Chains, and Agro-Processing

To make farming profitable, India must move beyond cereals toward high-value crops, horticulture, livestock, and fisheries. The National Mission on Oilseeds and Oil Palm (NMOOP) and National Horticulture Mission are steps in that direction.

Developing agro-processing value chains can add significant income at the farm gate. Food processing industries currently process less than 10% of total produce, leaving enormous untapped potential. Investments in cold chains, warehousing, and logistics can reduce post-harvest losses and stabilize prices.

Integration of farmers into value chains through contract farming, food parks, and e-commerce platforms (like e-NAM) will help bridge the gap between producers and markets.

Role of Cooperatives and Farmer Producer Organisations (FPOs)

Cooperatives and FPOs play a crucial role in collectivizing smallholders, enabling economies of scale in inputs, credit, and marketing.

Models like Amul, IFFCO, and new-age digital FPOs have demonstrated how aggregation can empower farmers and enhance bargaining power. The government’s plan to create 10,000 FPOs by 2027 aims to institutionalize this collective model across sectors.

However, for FPOs to succeed, they require capacity building, access to credit, digital tools, and professional management — transforming them into market-oriented enterprises rather than subsidy-dependent entities.

Policy Reforms: Land Leasing, Crop Insurance, and Infrastructure

Structural reforms are critical to rejuvenate the sector.

• Land Leasing: Legalizing and simplifying leasing arrangements can enable consolidation, facilitate credit access, and attract private investment in farming. States like Andhra Pradesh and Uttar Pradesh have piloted successful leasing laws.
• Crop Insurance: The PM Fasal Bima Yojana (PMFBY) needs better implementation, timely compensation, and inclusion of more crops and regions to protect farmers against climate risk.
• Infrastructure: The Agriculture Infrastructure Fund (AIF) and Rural Infrastructure Development Fund (RIDF) should focus on farm-to-market connectivity, irrigation, storage, and digital marketplaces.

Long-term sustainability demands that reforms in land, water, and markets proceed in tandem, guided by federal cooperation between Centre and states.

Conclusion: Towards a Resilient and Empowered Farming Future

Agriculture in 21st-century India must evolve from subsistence to sustainability, value, and empowerment. The focus should shift from “production-centric” to “income-centric” and “resilience-driven” policies.

By integrating technology, promoting diversification, strengthening cooperatives, and ensuring fair markets, India can secure both farmer prosperity and national food security.

The vision should be clear: a self-reliant, climate-smart, and inclusive agricultural system where farmers are not mere producers but empowered stakeholders in India’s growth story.