Ramesh Singh Summary: Agriculture & Food Management- 1 Notes | Study Indian Economy for UPSC CSE - UPSC

UPSC: Ramesh Singh Summary: Agriculture & Food Management- 1 Notes | Study Indian Economy for UPSC CSE - UPSC

The document Ramesh Singh Summary: Agriculture & Food Management- 1 Notes | Study Indian Economy for UPSC CSE - UPSC is a part of the UPSC Course Indian Economy for UPSC CSE.
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  • The First Phase : This phase continued for the first three decades after Independence. The main aim and the struggle of this phase was producing as much foodgrains as required by the Indian population, i.e., achieving physical access to food.
  • The Second Phase : The Supreme Court intervened after a PIL was filed by the People's Union for Civil Liberties (PUCL) and a national level Food for Work Programme came up (to be merged with the National Rural Employment Guarantee Scheme). The courts took the governments on task if food grains rot either in godowns or destroyed in oceans to manage market price for the food grains, or if the Centre had to go for exporting wheat at very low price.
  • The Third Phase : By the end of the 1980s, world experts started questioning the very way world was carrying on with different modes of production. Agricultural activity was one among them which had become hugely based on industries (chemical fertilizers, pesticides, tractors, etc.). All developed economies had declared their agriculture to be an industry.

Land reforms in India had three objectives similar to the other economies which opted for it in the past : 

  • Removing institutional discrepancies of the agrarian structure inherited from the past which obstructed increasing agricultural production, such as, the size of agricultural holding, land ownership, land inheritance, tenancy reforms, abolition of intermediaries, introduction of modern institutional factors to agriculture, etc.
  • The other objective of the land reforms in India was related to the issue of socioeconomic inequality in the country. The high inequality in land ownership not only had a its negative economic impact on the economy.
  • The third objective of land reforms in India was highly contemporary in nature, which did not get enough socio-political attention—it was the objective of increasing agricultural production for solving the inter-related problems of poverty, malnutrition and food insecurity.

Reasons for Failure of Land Reforms

  • Land in India is considered a symbol of social prestige, status and identity unlike the other economies which succeeded in their land reform programmes, where it is seen as just an economic asset for income-earning.
  • Lack of political will which was required to affect land reforms and make it a successful programme.
  • Rampant corruption in public life, political hypocrisy and leadership failure in the Indian democratic system.


  • The second phase of land reforms can be traced in the process of economic reforms. Economic reforms exposed the economy to the new and emerging realities, such as, land acquisition and leasing, food-related issues and the agricultural provisions of the World Trade Organization (WTO).
  • A scheme the Digital India Land Records Modernisation Programme (DILRMP), is being run as a central sector scheme aimed at moving from presumptive title.
  • The programme has been slow and uneven across states—to speed up the process lessons may be taken from some state initiatives such as the Bhoomi Project in Karnataka, the Rajasthan Urban Ceiling Act 2016 and the use of blockchain technology to prevent property fraud in Andhra Pradesh. 

Agriculture Holdings

  • The 10th Agriculture Census 2015-16 was released by the Government in October 2018.
  • The major highlights of the Census are as given below (all comparisons made in reference to the last and the 9th Census 2010-11) :
    (i) The total area under farming fell from 159.6 million hectares (Mha) to 157.14 Mha.
    (ii) Small and marginal farmers (owning less than two hectares) account for 86.2 per cent of all farmers in India, but own just 47.3 %of the crop area. In comparison, semi medium and medium land holding farmers (owning between 2-10 hectares) account for 13.2 % of all farmers, but own 43.6% of crop area.
    (iii) The proportion of small and marginal farmers grew from 84.9 per cent to 86.2 per cent, while the total number of operational holdings grew from 138 million to 146 million.
    (iv) The number of small and marginal farms rose by about 9 million during the period.
    (v) The small and marginal farmers (around 126 million in number) own about 74.4 Mha of land —or an average holding of just 0.6 hectares each—jrot enough to produce surpluses which can financially sustain their families, explaining the rising distress in Indian agriculture.

Components of the Green Revolution

  • The HYV Seeds : These seeds were popularly called the 'dwarf variety of seeds. With the help of repeated mutations, Mr. Borlaug had been able to develop a seed which was raised in its nature of nutrients supplied to the different parts of the wheat plant—against the leaves, stem and in favour of the grain.
  • The Chemical Fertilizers : The seeds were to increase productivity provided they got sufficient level of nutrients from the land.
  • The Irrigation : For controlled growth o f crops and adequate dilution of fertilizers, a controlled means of water supply was required. It made two important compulsions—firstly, the area of such crops should be at least free of flooding and secondly, artificial water supply should be developed.
  • Chemical Pesticides and Germicides : As the new seeds were new and non-acclimatised to local pests, germs and diseases than the established indigenous varieties, use of pesticides and germicides became compulsory for result-oriented and secured yields.
  • Chemical Herbicides and Weedicides : To prevent costlier inputs of fertilisers not being consumed by the herbs and the weeds in the farmlands, herbicides and weedicides were used while sowing the HYV seeds.
  • Credit, Storage, Marketing/Distribution : For farmers to be capable of using the new and the costlier inputs of the Green Revolution, availability of easy and cheaper credit was a must.
  • Socio-economic Impact : Food production increased in such a way (wheat in 1960s and rice, by 1970s) that many countries became self-sufficient and some even emerged as food exporting countries.
  • Ecological Impact : The most devastating negative impact of the Green Revolution was ecological. When the issues related with it were raised by the media, scholars, experts and environmentalists, neither the governments nor them asses were convinced. But a time came when the government and other government agencies started doing studies and surveys focused around the ecological and environmental issues.


  • The set and combination of crops which farmers opt for in a particular region, in their farm practices, is cropping pattern of the region.
  • Multiplicity of cropping systems has been one of main features of Indian agriculture and it is attributed to rainfed agriculture and prevailing socio-economic situations of the farming community.
  • These decisions with respect to choice of crops and cropping systems are further narrowed down under influence of several other forces related to infrastructure facilities, socio-economic and technological factors, all operating interactively at the micro-level.
  • These factors are :
    (i) Geographical factors : Soil, landforms, precipitation, moisture, altitude, etc
    (ii) Socio-cultural factors : Food habits, festivals, tradition , etc.
    (iii) Infrastructure factors : Irrigation , trans-port, storage, trade and marketing, post-harvest handling and processing, etc.
    (iv) Economic factors : Financial resource base, land ownership, size and type of landholding, household needs of food, fodder, fuel, fibre and finance, labour availability, etc.
    (v) Technological factors : Improved varieties of seeds and plants, mechanisation, plant protection , access to information, etc.


  • The economics of animal rearing plays a very vital role in the country. The agriculture sector in India is predominantly a mixed crop-livestock (animals, birds and fishes ) farming system.
  • Animal rearing has always rem ained an integral part of it. Animal rearing (which includes rearing of cows, camels, buffaloes, goats, pigs, ships, etc.), besides directly contributing to the national income and socio-economic development.
    (i) Dairy Sector : India ranks first in the world in milk production with a production of around 190 million tonne and the per capita availability (pea) of 394 grams (world pea is 296 grams) by the end of 2018-19.
    (ii) Pig Rearing Scheme : This scheme is aimed to assist farmers / land less labourers / co-operatives and the tribals particularly in the North-Eastern states by rearing pigs under stall fed condition for quality pork production and organised pork marketing in rural areas and semi-urban areas.
    (iii) Animal Health : With the improvement in the quality of livestock through launching of extensive cross-breeding programmes, the susceptibility to various diseases, including exotic diseases has increased. In order to reduce morbidity and mortality, efforts are being made by the state / UT governments to provide better health care through polyclinics/veterinary hospitals / dispensaries / first-aid centres including mobile veterinary dispensaries.


(i) Minimum Support Price

  • Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices — a guarantee price to save farmers from distress sale.
  • The MSPs are announced at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP, 1985). The major objectives are to support the farmers from distress sales and to procure food grains for public distribution.
  • In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, government agencies purchase the entire quantity offered by the farmers at the announced minimum price.

(ii) Market Intervention Scheme
The Market Intervention Scheme (MIS) is similar to MSP, which is implemented on the request of state governments for procurement of perishable and horticultural commodities in the event of fall in market prices.

(iii) Procurement Prices In 1966-67

  • The Government of India announced a 'procurement price' for wheat, a bit higher than its MSP (the purpose being security of food procurement for requirement of the PDS).
  • The MSP was announced before sowing, while the procurement price was announced before harvesting—the purpose was to encourage farmers to sell a bit more and get encouraged to produce more.

(iv) Issue Price

  • The price at which the government allows offtake of foodgrains from the FCI (the price at which the FCI sells its foodgrains).
  • The FCI has been fetching huge losses in the form of food subsidies. The food grains procured are transported to the godowns of the FCI located across the country (counted in the buffer stock). 
  • From here they head to the sale counters—to the TPDS or Open Market Sale.

(v) Economic Cost of Foodgrains

  • The economic cost of foodgrains consists of three components, namely the MSP including central bonus (the price paid to farmers), procurement incidentals, and the cost of distribution.
  • The government set up a High Level Committee (HLC) in 2015 (Shanta Kumar as its Chairman) to suggest inter-alia restructuring or unbundling of the FCI with a view to improve its operational efficiency and financial management.

(vi) Open Market Sale Scheme

  • The FCI has been undertaking sale of wheat at pre-determined prices (reserve prices) in the open market from time to time, known as the Open Market Sale Scheme (OMSS).
  • This is aimed at serving the following objectives :
    (i) To enhance market supply of foodgrains;
    (ii) To exercise a moderating influence on open market prices.
    (iii) To offload surplus stocks.

Price Stabilisation Fund

The Government of India, by late March 2015, launched the Price Stabilisation Fund (PSF) as a Central Sector Scheme to support market interventions for price control of perishable agri horticultural commodities.


  • Buffer stock refers to a 'reserve' of commodity to offset price fluctuations and unforeseen emergencies.
  • Introduced in 1969 (4th Plan, 1969-74), under it, Government of India maintains a buffer stock of selected food grains (wheat and rice) in the Central Pool for —
    (i) Meeting the prescribed minimum buffer stock norms for food security.
    (ii) Monthly release of food grains for supply through Targeted Public Distribution System (TPDS) and Other Welfare Schemes (OWS).
    (iii) Meeting emergency situations arising out of unexpected crop failure, natural disasters, etc.
    (iv) Price stabilisation or market intervention to augment supply so as to help moderate the open market prices.

Decentralised Procurement Scheme
The decentralised procurement (DCP) scheme was operationalised by the government in 1997 (together with the Centre and some of the states also procure foodgrains from the farmers, locally).

  • Under this scheme, the designated states procure, store and also issue food grains under the TPDS.
  • The difference between the economic cost of the states and the central issue price (CIP) is passed onto the states by the Government of India as subsidy.
  • Government took two steps— firstly, a limit was put on its procurement from the states paying bonus over and above the MSP upto the needs of TPDS and Other Welfare Schemes, and secondly, FCI stopped taking part in MSP operations in the case of non-DCP states declaring bonus.

Farm subsidies form an integral part of the government's budget. In the case of developed countries, the agricultural or farm subsidies compose nearly 40 percent of the total budgetary outlay, while in India's case it is much lower (around 7.8% o f GDP) and of different nature.

  • Direct farm subsidies : These are the kinds of subsidies in which direct cash incentives are paid to the farmers in order to make their products more competitive in the global markets.
  • Indirect farm subsidies : These are the farm subsidies which are provided in the form of cheaper credit facilities, farm loan waivers, reduction in irrigation and electricity bills, fertilizers, seeds and pesticides subsidy as well as the investments in agricultural research, environmental assistance, farmer training, etc. These subsidies are also provided to make farm products more competitive in the global market.


  • India attained self-sufficiency in food by late 1980s, though food security still evades the country.
  • Food security means making food available at affordable price sat all times, to all, without interruptions
  • Though India's GDP growth has been impressive and the agricultural production has also increased over the past few decades, hunger and starvation still persist among the poorer sections of the population.
  • Two important things need attention regarding India's food security :
    (i) Around 23 percent of India's population is BPL and a greater portion .
    (ii) There is a strong correlation between stability in agricultural production and food security. Volatility in agricultural production impacts food supplies and can result inspikes in food prices, which adversely affect the lowest income groups of the population.



  • The Public Distribution System strives to ensure food security through timely and affordable distribution of food grains to the BPL population as this section cannot afford to pay market prices for their food.
  • This involves procurement of foodgrain at MSP by the Government, building up and maintenance of food stocks, their storage, and timely distribution, making food grain s accessible at reason ab le prices to the vulnerable sections of the population.

Food subsidy
Food subsidy comprises of

  • Subsidy provided to FCI for procurement and distribution of food grains under NFSA (National Food Security Act), other welfare schemes (OWS) and maintaining their strategic reserve.
  • subsidy provided to States for undertaking 'decentralized procurement'. The acquisition and distribution costs of food grains for the central pool together constitute the economic cost.


  • India's agri market is presently regulated by the Agricultural Produce Market Committee (APMC) Act enacted by the state governments.
  • There are about 2,477 principal regulated agri markets and 4,843 sub-market yards regulated by the respective APMCs in India.
  • This Act notifies agricultural commodities produced in the region such as cereals, pulses, edible oilseed, fruits and vegetables and even chicken, goat, sheep, sugar, fish, etc., and provides that first sale in these commodities can be conducted only under the aegis of the APMC through the commission agents licensed by the APMCs set up under the Act.
  • The scope of the Essential Commodities Act, 1955 (EC Act) is much broader than the APMC Act. It empowers the central and state governments concurrently to control production, supply and distribution of certain commodities, including pricing, stock-holding and the period for which the stocks can be kept and to impose duties.
  • The APMC Act on the other hand, controls only the first sale of the agricultural produce.
  • Apart from food-stuffs which are covered under the APMC Act, the commodities covered under the EC Act generally are : drugs, fertilisers, textiles and coal.

The Model Agriculture Produce & Livestock Contract Farming and Services (Promotion & Facilitation ) Act, 2018 was released by the Government in May 2018. Salient features of the Act are as given below :

  • Contract farming to be outside the ambit of APMC Act.
  • Farmers have been considered weaker in case of contract farming.
  • Other than contract farming, it covers all 'services contracts' related to pre-production, production and post-production.
  • Contracted produce covered under crop and live stock insurance.
  • No permanent structure can be developed on farmers' land or premises.
  • No right, title of interest of the land shall vest in the sponsor (i.e., the contact farmer).
  • If farmers authorise, FPOs (Farmer Producer Organizations), FPCs (Farmer Producer Companies) can be contract farmers.
  • The entire pre-agreed quantity of agri produce to be bought by the contact farmer.
  • RARC (Registering and Agreement Recording Committee) or an officer to be appointed for online registration of the contract agreement (at district, block and taluka levels).
  • CFFG (Contract Farming Facilitation Group) to be set up to promote contract farming (at village and panchayat levels).
  • To settle disputes an accessible and simple mechanism to be set at lowest level possible.
  • In structure, the Act is facilitative and promotional rather than being regulatory .
The document Ramesh Singh Summary: Agriculture & Food Management- 1 Notes | Study Indian Economy for UPSC CSE - UPSC is a part of the UPSC Course Indian Economy for UPSC CSE.
All you need of UPSC at this link: UPSC
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