This document discusses key issues and policies related to Indian agriculture. It outlines three main goals: 1) achieving 4% agricultural growth to raise incomes through productivity increases and diversification, 2) promoting inclusive growth for small farmers and lagging regions, and 3) maintaining sustainability. Several challenges are also discussed, including low productivity, declining farm sizes, and climate change impacts. The document then examines seven policy topics in depth: macroeconomic policies, transforming agriculture through links to industry, ensuring sustainable food production, improving agricultural markets and trade, building resilience, developing healthy food systems, and strengthening institutions and governance. Throughout, the document emphasizes the importance of sensible policies and innovations to address the needs of small farmers and achieve the three overarching goals

1. Indian Agriculture: Issues and Policies
Prof. S.Mahendra Dev
Director and Vice Chancellor
IGIDR, Mumbai

2. Some good things on agriculture
Good things and concerns. Good things first
Economic survey says 4.1% during 11th plan
period. Last year 4.7%
Total foodgrain production 264.4 mil.ton in 2013-14.
Pulses 19.6 mil tons. Exports rose. Terms of trade.
Both public and private investment in agri
increased. Total investment 21% of agri GDP
Large expenditures on programs like RKVY, NHM,
NFSM and ATMA
On technology, well known cotton, hybrid maize
Diversification to high value: Horticulture 30%, l
Recognition of climate change issues
High growth in rainfed. e.g. Gujarat etc.

3. States 1994/95 to
1999/00 SDP gr
2000/01 to
2004/05 SDP gr
2005/06 to
2011/12 SDP gr
All India agri
GDP
3.3 1.7 3.7
High irriga.
States
3.2 1.7 2.7
Medium irrig
state
1.8 3.1 4.2
Low irrig States 2.8 1.5 4.5
High prod.
States
2.9 2.5 2.1
Medium prod
state
2.4 2.1 3.7
Low prod States 2.6 2.5 5.1
Source: 12th Five year plan document
Low prod. and low irrigation states recorded high growth.

4. Challenges in Agriculture
Concerns and challenges in Agriculture
-- Long term growth is still 2.5 per cent per annum.
-- India Productivity levels are still low compared to other
countries
-- 21% agri. investment led to only 3 to 3.5% growth
now. High capital output ratio of 7:1 low efficiency
-- cost of cultivation increased. Profitability declined
--Green Revolution technology have less impact on dry
land and rainfed areas. Also, yield growth plateaued in
the irrigated areas.
-- Yield gap in known technologies. Technology fatigue
-- Food inflation still 8 to 9%. Changing consumption
patterns. Shortage of non-cereals: pulses, oilseeds
etc. Demand for livestock, fish, meat increasing.

5. Challenges in Indian agriculture
 land degradation, water logging, soil quality problems.
 Long term factors: Steeper decline in per capita land
availability. Shrinking of farm size
In 2010-11, share in total holdings
-Marginal farmers 67.04%, Small farmers 17.93%
-- Small and marginal farmers together 85%
-- Medium 4.25%; Large 0.73%
 Raising productivity of small farmers is a challenge
Slow reduction in share of employment (still 48%)
Marketing is the main problem for farmers particularly
for small farmers.
How to improve agriculture marketing is a challenge.
Climate change problems are emerging issues

6. Three Goals of Agricultural Development
1.Achieve 4% growth in agriculture and raise
incomes. Increasing productivity (land, labor, total
factor productivity), diversification to high value
agri. and rural non-farm by maintaining food
security. Higher growth has to come from non-
cereals crops like fruits, vegetables and allied
activities like dairy, meat and fish.
2.Second goal is inclusive growth and equity: focus
on small and marginal farmers, lagging regions,
women etc. Share of women is increasing in agri.
On lagging regions, focus on Eastern India and
other rainfed areas.
3. Third is to maintain sustainability of agri. by
focusing on environmental concerns including
climate change issues.

7. 1. Macro level agricultural policies
Now I shift to the topics of the conference
Macro level agricultural policies are crucial for
agricultural development (e.g. investment
policy)
It would also be interesting to look at different
policy choices and impact on agri.
In analysing agri development, we examine
only agri policies.
Macro policies ,monetary, fiscal, trade,
industrial etc. are equally important for
agriculture.
For example, fiscal policy may decide how much
agricultural investments have to be made.

8. 2. Transforming agriculture
First one is how to transform low income agri to high
income agriculture
Second, how to link transforming agri. to industry
and services. Although
For example, take agro processing :India ranks first
or second in world production of fruits and
vegetables. Only 10% of this is processed as
against 30% in China, 78% in Phillippines
Parikh et al study looked at the changes in structure
of food consumption over 2007 to 2039 with CGE .
Their study shows that high value products
constitute almost two-thirds of the total food
consumption exp. by 2039 with right policies
Milk products alone will have 31% share.

9. Transforming agriculture (contd.)
Need for growth in non-agriculture also for
transformation of agriculture.
Some say (like T.N. Srinivasan) solution for
agriculture lies in growth of non-agriculture
in order to absorb labour
Poverty can not be removed with 48% of
workers in agri. promote labour intensive
manufacture and rural non-farm
Even in 2011-12, around 78 per cent of rural
female, 56 per cent of rural males, 47 per cent of
urban females and 30 per cent of urban males
are either illiterate or have been educated upto
primary level.
Need for higher education and skills

10. Changing Face of Rural India
Significant changes in rural areas.
Increased connectivity, rise in public employment,
increase in expenditure on social protection like
MGNREGA, panchayat raj as power centres (Vyas,
2013), education, migration and remittances.
Significant rise in rural occupational diversification
Male Female
93/94 2011/12 93/94 2012/12
Agri 74.0 59.4 86.2 74.9
Manufa 7.0 8.2 7.1 9.8
Constru 3.2 13.0 0.8 6.6
Services 14.8 18.3 5.6 8.3

11. Importance Non-agri. income in rural areas:
Bihar village study (%) (Alakh & Gerry)
Caste Own
agri.
prod.
Wage
in agri
All
agri
incom
e
Non-
agri
own
prod
Casua
l wage
in
non-
agri
Regul
ar
emplo
incom
e
Other
incom
e
remitt
ances
Brahmi
n/kaya
32.7 0.2 33.0 10.5 0.5 13.1 23.0 20.0
Bhumi
har/ka
24.8 0.1 24.9 6.1 0.3 19.6 13.7 35.4
Kurmi 19.0 1.9 20.8 12.8 1.9 27.3 25.1 12.0
Yadav 45.4 2.2 47.6 8.4 2.4 10.0 14.0 17.6
Koeri 13.1 0.6 13.7 50.3 0.2 3.1 6.2 26.5
OBCII 14.2 1.3 15.5 32.0 9.9 14.4 10.9 17.4
OBCI 20.5 7.7 28.3 9.7 10.1 7.0 11.8 33.1
SC/ST 11.8 9.2 21.0 4.3 18.0 6.9 16.7 33.0
Muslim 18.8 3.9 22.7 4.4 15.8 7.6 16.9 32.5
Total 22.3 4.2 26.5 10.7 8.2 10.6 16.0 28.0

12. 3. Ensuring Sustainable Food Production
Sustainability issue is becoming important. Even
at global level sustainability development goals.
A crucial step is to provide farmers with a policy
environment that will make agricultural growth
more sustainable.
It also includes review of water, energy and
fertilizer subsidies that encourage unsustainable
resource use.
Particularly important encouraging agricultural
producers to adopt specific technologies that
increase agri productivity and enhance
environment sustainability.

13. Ensuring Sustainable Food Production
In India also we have to look at issues such as
energy, environment and natural resources.
For example, recent high growth during 11 th Five
Year Plan is due to high intensity of inputs. This is
not sustainable. We have to improve food
production with less intensive inputs and less
natural resources including organic farming.
Soil quality improvement is one of the major
issues; Many state governments have recognized
the need for improvement in soil health; similarly
water management.
We should have institutions, policies and
innovations that can improve sustainability.

14. 4. Markets and Trade
Over regulation of domestic trade, agro
processing, enterprise size, and land and credit
market can discourage private investment.
There is a need for consistent policies regarding
domestic and international trade.
There is need for long term policy on exports
and futures markets. Frequent export bans.
Reducing inflation: Some of the measures
needed are : (a) reducing cereal stocks; (b)
diversification (c) marketing reforms (d) post-
harvest handling (e) fiscal and monetary policies
(f) opening trade (g) better information system

15. Markets and Trade
Marketing: Look at farm-to-fork value chain. Higher
prices for farmers and low prices for consumers
The Economic Survey indicates the following
reforms needed for a national common market
--Examine the APMC Act, EC Act, Land Tenancy Act
which are restrictive and barriers to free trade
--Pursue direct marketing and contract farming
-- Examine inclusion of agri related taxes under GST
-- Establish stable trade policy based on tariff
interventions instead of non-tariff trade barriers
-- Develop and initiate competition in the agro
processing sector. Incentivize the private sector to
scale up investment

16. 5. Building Resilience
Resilience is becoming is an important area for
research and policy. Recently, IFPRI organized
2020 conference on resilience at Addis Ababa
Natural disasters, conflicts, financial crisis, volatile
food prices have hit poor people hard in several
countries in the last decade including India.
We will have increasing shocks in future. Risk and
vulnerability is rising in agriculture
Resilience means recovery and improve well
being and not just recovery.
We have to identify policies and instruments for
managing risk and building resilience for
individuals, communities, states, regions and
ecosystems.

17. Building Resilience
E.g. Agricultural insurance. It has not worked
effectively in India. Better methods are required
Climate smart agriculture: Emerging area of research
and policy
There is some improvement in resilience of countries.
For example, Bangladesh, India, Ethiopia.
The 1991 cyclone in Bangladesh killed 138,000
people. 2007 cyclone killed 2000 lives
In Ethiopia severe droughts. 2011 had worst drought
in 60 years. The drought effect is mitigated by Ethiopia
Productive Safety net program
Some improvement in India. Better in 2009 and 2012
droughts compared to 2003
But, long way to go for resilience many parts of India

18. 6. Healthy Food Systems
Food safety is becoming an important issue for
countries like India.
In other countries too: e.g. Food safety was
headlines in China in 2013 with reports Of
China’s rice supplies containing excessive levels
of cadmium which could induce multiple organ
damage.
How to make food safer and nutritious along the
value chain?
More nutritious foods like animal sources, fruits
and vegetables have more food safety
problems. Others: Maize, groundnut, sorghum
aflatoxin problems.

19. Healthy Food systems
Notwithstanding the focus on market-based
solutions, it is likely that specific, well-targeted
interventions will be required to support poor
people on food safety
The targeting should consider opportunities for
groups of poor people to benefit (including
comparative advantage for certain foods such as
dairy or vegetables
Livestock sector should also be focused to help
the poor regarding food safety.
Also look at water, sanitation and hygiene etc.
Agriculture, nutrition, health linkages are
becoming important for research and policy.

20. 7. Institutions and Governance
Political economy of agricultural policy making
Subsidies vs. investments
Food subsidies and grain management
Fertilizer subsidies
Collective action for managing natural resources
and water management
Institutions and governance for effective delivery
systems in public services
Governance is important for all policies of
agricultural sector.

21. Institutions for Small farmers
One of the example is the need for institutions for
viability and sustainability of small farmers.
Small farmers have difficulties to access inputs,
credit and extension or to market their output.
Many institutional innovations are coming up to link
small farmers to high value agriculture and help
increasing their productivity and marketing.
ICT revolution in India is also helping small farmers
with information, input supplies and marketing
12th plan focuses on Farmer producer organizations
Unless we increase their incomes, agri will not be
sustainable for them.

22. Conclusion
Among the three goals of agriculture (growth, sharing
growth and sustainability), Sustainability and climate
change issues are going to be important in future. Role
of women crucial in all the three goals.
High productivity can be achieved but not with high input
intensity in agriculture.
Similarly viability of small holdings particularly marginal
holdings forming nearly 70% (with size of 0.39 ha) have
to be improved.
To face the challenges of achieving three goals of agri-
development, and covering the seven topics of the
conference, sensible policies are needed. Agriculture is
a state subject. State policies crucial.
The Indian farmer and Indian agriculture has never
let down a sensible policy regime

23. THANK YOU