DFI Volume 1

Ministry of Agriculture &
Farmers’ Welfare
Report of the Committee on

Doubling Farmers’ Income
Volume I
“March of Agriculture since

Independence and Growth Trends”
Historical Analysis and Examination of India’s

Agricultural Production and Farmers’ Income
Document prepared by the Committee on Doubling Farmers’ Income,

Department of Agriculture, Cooperation and Farmers’ Welfare,
Ministry of Agriculture & Farmers’ Welfare
August - 2017
Doubling Farmers’ Income – Volume I
March of Agriculture since Independence and Growth Trends
Foreword
The country has witnessed a series of concerted discussions dealing with the subject of
agriculture. In 1926, the Royal Commission of Agriculture was set up to examine and report
the status of India’s agricultural and rural economy. The Commission made comprehensive
recommendations, in its report submitted in 1928, for the improvement of agrarian economy
as the basis for the welfare and prosperity of India’s rural population. The urban population
was about 11 per cent of the whole, and demand from towns was small in comparison. The
Commission notes, that communication and physical connectivity were sparse and most
villages functioned as self-contained units. The Commission encompassed review of
agriculture in areas which are now part of Pakistan, Bangladesh and Myanmar. The net sown
area in erstwhile British India was reported as 91.85 million hectares and cattle including
buffaloes numbered 151 million. Almost 75 per cent of the cultivated area was under cereals
and pulses, with rice and wheat occupying 46 per cent of the net sown area. The area under
fruits and vegetables was about 2.5 per cent and that under oilseeds and non-food crops was
about 20 per cent. In the ensuing years, as well known, the country underwent vast changes in
its political, economic and social spheres.
Almost 40 years later, free India appointed the National Commission on Agriculture in 1970,
to review the progress of agriculture in the country and make recommendations for its
improvement and modernisation. This Commission released its final report in 1976. It refers to
agriculture as a comprehensive term, which includes crop production together with land and
water management, animal husbandry, fishery and forestry. Agriculture, in 1970 provided
employment to nearly 70 per cent of the working population. The role of agriculture in the
country’s economic development and the principle of growth with social justice, were core to
the discussions. The country was then facing a high population growth rate. After impressive
increase in agricultural production in the first two Five Year Plans, a period of stagnancy set in
and the country suffered a food crisis in the mid-1960s. The report in fifteen parts, suggested
ample focus on increased application of science and technology to enhance production.
Thirty years hence, the National Commission for Farmers was constituted in 2004 to suggest
methods for faster and more inclusive growth for farmers. The Commission made
comprehensive recommendations covering land reforms, soil testing, augmenting water
availability, agriculture productivity, credit and insurance, food security and farmers
competitiveness. In its final report of October 2006, the Commission noted upon ten major
goals which included a minimum net income to farmers, mainstreaming the human and gender
dimension, attention to sustainable livelihoods, fostering youth participation in farming and
post-harvest activities, and brought focus on livelihood security of farmers. The need for a
single market in India to promote farmer-friendly home markets was also emphasised.
The now constituted DFI (Doubling Farmers’ Income) Committee besides all these broad
sectoral aspects, invites farmers’ income into the core of its deliberations and incorporates it as
the fulcrum of its strategy. Agriculture in India today is described by a net sown area of 141
million hectares, with field crops continuing to dominate, as exemplified by 55 per cent of the
area under cereals. However, agriculture has been diversifying over the decades. Horticulture
now accounts for 16 per cent of net sown area. The nation’s livestock population counts at
more than 512 million. However, economic indicators do not show equitable and egalitarian
growth in income of the farmers. The human factor behind agriculture, the farmers, remain in
i
frequent distress, despite higher productivity and production. The demand for income growth
from farming activity, has also translated into demand for government to procure and provide
suitable returns. In a reorientation of the approach, this Committee suggests self-sustainable
models empowered with improved market linkage as the basis for income growth of farmers.
India today is not only self-sufficient in respect of demand for food, but is also a net exporter
of agri-products occupying seventh position globally. It is one of the top producers of cereals
(wheat & rice), pulses, fruits, vegetables, milk, meat and marine fish. However, there remain
some chinks in the production armoury, when evaluated against nutritional security that is so
important from the perspective of harvesting the demographic dividend of the country. The
country faces deficit of pulses & oilseeds. The availability of fruits & vegetables and milk &
meat & fish has increased, thanks to production gains over the decades, but affordability to a
vast majority, including large number of farmers too, remains a question mark.
The impressive agricultural growth and gains since 1947 stand as a tribute to the farmers’
resilience to multiple challenges and to their grit & determination to serve and secure the
nation’s demand for food and raw material for its agro-industries.
It is an irony, that the very same farmer is now caught in the vortex of more serious challenges.
The average income of an agricultural household during July 2012 to June 2013 was as low as
Rs.6,426, as against its average monthly consumption expenditure of Rs.6,223. As many as
22.50 per cent of the farmers live below official poverty line. Large tracts of arable land have
turned problem soils, becoming acidic, alkaline & saline physico-chemically. Another primary
factor of production, namely, water is also under stress. Climate change is beginning to
challenge the farmer’s ability to adopt coping and adaptation measures that are warranted.
Technology fatigue is manifesting in the form of yield plateaus. India’s yield averages for most
crops at global level do not compare favourably. The costs of cultivation are rising. The
magnitude of food loss and food waste is alarming. The markets do not assure the farmer of
remunerative returns on his produce. In short, sustainability of agricultural growth faces serious
doubt, and agrarian challenge even in the midst of surpluses has emerged as a core concern.
Farmers own land. Land is a powerful asset. And, that such an asset owning class of citizens
has remained poor is a paradox. They face the twin vulnerabilities of risks & uncertainties of
production environment and unpredictability of market forces. Low and fluctuating incomes
are a natural corollary of a farmer under such debilitating circumstances. While cultivation is
boundarised by the land, market need not have such bounds.
Agriculture is the largest enterprise in the country. An enterprise can survive only if it can grow
consistently. And, growth is incumbent upon savings & investment, both of which are a
function of positive net returns from the enterprise. The net returns determine the level of
income of an entrepreneur, farmer in this case.
This explains the rationale behind adopting income enhancement approach to farmers’ welfare.
It is hoped, that the answer to agrarian challenges and realization of the aim of farmers’ welfare
lies in higher and steady incomes. It is in this context, that the Hon’ble Prime Minister shared
the vision of doubling farmers’ income with the nation at his Bareilly address on 28th February,
2016. Further, recognising the urgent need for a quick and time-bound transformation of the
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vision into reality, a time frame of six years (2016-17 to 2022-23) was delineated as the period
for implementation of a new strategy.
At the basic level, agriculture when defined as an enterprise comprises two segments –
production and post-production. The success of production as of now amounts to half success,
and is therefore not sustainable. Recent agitations of farmers (June-July 2017) in certain parts
of the country demanding higher prices on their produce following record output or scenes of
farmers dumping tractor loads of tomatoes & onions onto the roads or emptying canisters of
milk into drains exemplify neglect of other half segment of agriculture.
No nation can afford to compromise with its farming and farmers. And much less India,
wherein the absolute number of households engaged in agriculture in 2011 (119 million)
outpaced those in 1951 (70 million).Then, there are the landless agricultural labour who
numbered 144.30 million in 2011 as against 27.30 million in 1951. The welfare of this
elephantine size of India’s population is predicated upon a robust agricultural growth strategy,
that is guided by an income enhancement approach.
This Committee on Doubling Farmers’ Income (DFI) draws its official members from various
Ministries / Departments of Government of India, representing the panoply of the complexities
that impact the agricultural system. Members drawn from the civil society with interest in
agriculture and concern for the farmers were appointed by the Government as non-official
members. The DFI Committee has co-opted more than 100 resource persons from across the
country to help it in drafting the Report. These members hail from the world of research,
academics, non-government organisations, farmers’ organisations, professional associations,
trade, industry, commerce, consultancy bodies, policy makers at central & state levels and
many more of various domain strengths. Such a vast canvas as expected has brought in a
kaleidoscope of knowledge, information, wisdom, experience, analysis and unconventionality
to the treatment of the subject. The Committee over the last more than a year since its
constitution vide Government O.M. No. 15-3/2016-FW dated 13th April, 2016 has held
countless number of internal meetings, multiple stakeholder meetings, several conferences &
workshops across the country and benefitted from many such deliberations organised by others,
as also field visits. The call of the Hon’ble Prime Minister to double farmers’ income has
generated so much of positive buzz around the subject, that no day goes without someone
calling on to make a presentation and share views on income doubling strategy. The Committee
has been, therefore, lucky to be fed pro-bono service and advice. To help collage, analyse and
interpret such a cornucopia of inputs, the Committee has adopted three institutes, namely,
NIAP, NCAER and NCCD. The Committee recognizes the services of all these individuals,
institutions & organisations and places on record their service.
Following the declaration of his vision, the Hon’ble Prime Minister also shaped it by
articulating ‘Seven Point Agenda’, and these have offered the much needed hand holding to
the DFI Committee.
The Committee has adopted a basic equation of Economics to draw up its strategy, which says
that net return is a function of gross return minus the cost of production. This throws up three
(3) variables, namely, productivity gains, reduction in cost of cultivation and remunerative
price, on which the Committee has worked its strategy. In doing so, it has drawn lessons from
the past and been influenced by the challenges of the present & the future.
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In consequence, the strategy platform is built by the following four (4) concerns:
 Sustainability of production
 Monetisation of farmers’ produce
 Re-strengthening of extension services
 Recognising agriculture as an enterprise and enabling it to operate as such, by
addressing various structural weaknesses.
Notwithstanding the many faces of challenges, India’s agriculture has demonstrated

remarkable progress. It has been principally a contribution of the biological scientists,
supplemented by an incentivising policy framework. This Committee recognizes their valuable
service in the cause of the farmers. It is now time, and brooks no further delay, for the new
breed of researchers & policy makers with expertise in post-production technology,
organisation and management to take over the baton from the biological scientists, and let the
pressure off them. This will free the resources, as also time for the biological scientists to focus
on new science and technology, that will shift production onto a higher trajectory - one that is
defined by benchmark productivities & sustainability. However, henceforth both production &
marketing shall march together hand in hand, unlike in the past when their role was thought to
be sequential.
This Report is structured through 14 volumes and the layout, as the readers will appreciate, is
a break from the past. It prioritizes post-production interventions inclusive of agri-logistics
(Vol. III) and agricultural marketing (Vol-IV), as also sustainability issues (Vol-V & VI) over
production strategy (Vol. VIII).The readers will, for sure value the layout format as they study
the Report with keenness and diligence. And all other volumes including the one on Extension
and ICT (Vol. XI), that connect the source and sink of technology and knowledge have been
positioned along a particular logic.
The Committee benefited immensely from the DFI Strategy Report of NITI Aayog. Prof.
Ramesh Chand identified seven sources of growth and estimated the desired rates of growth to
achieve the target by 2022-23. The DFI Committee has relied upon these recommendations in
its Report.
There is so much to explain, that not even the license of prose can capture adequately, all that
needs to be said about the complexity & challenges of agriculture and the nuances of an
appropriate strategy for realising the vision of doubling farmers’ income by the year of India’s
75th Independence Day celebrations.
The Committee remains grateful to the Government for trusting it with such an onerous
responsibility. The Committee has been working as per the sound advice and counsel of the
Hon’ble Minister for Agriculture and Farmers’ Welfare, Shri Radha Mohan Singh and Dr. S.K.
Pattanayak, IAS, Secretary of the Department of Agriculture, Cooperation and Farmers’
Welfare. It also hopes, that the Report will serve the purpose for which it was constituted.
12th August, 2017 Ashok Dalwai

Chairman, Committee on
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The first volume of the Report of the Committee on Doubling Farmers’ Income (DFI) intended
to examine the growth trends in farmers’ income since independence and analyse the growth
in associated support infrastructure (roads, electricity, irrigation, market yards, etc.). However,
it is observed, that there has been no uniform methodology in the past to specifically ascertain
farmers’ incomes, and comparable data benchmarks are thus not immediately available over
long periods.
This data gap has been bridged through analysis that accessed various measures to infer the
growth and included empirical assessments. The recent assessments by NITI Aayog and those
from ICAR have also been used. The need to develop a metric to monitor regularly and assess
farmers’ income in relation to farm output is suggested for good governance.
The evidence highlights, lack of correspondence between growth in domestic production -

measured as farm yield, and growth in income - a measure of monetisation of the yield. The
variance could be a result of poor physical connectivity between farm and markets, low level
of facilitation by the agricultural marketing system, poor resource use efficiency, inability of
farmers to take risk to upsell into other markets, delay in transfer of technology from lab to
farm, inherent impetus to foodgrain production vis-à-vis high value produce, inability of
market structure to keep in step with production enhancements, and the like. All these factors
examined in this volume from a status perspective, have been addressed in the ensuing volumes
of the DFI Report for resolution by suggesting suitable solutions.
Ashok Dalwai
--- --- ---
v
Volume I
“March of Agriculture since

Independence and Growth Trends”
Contents
About Volume I ----------------------------------------------------------------------------------- v
Chapter 1 Background ---------------------------------------------------------------------- 1
Chapter 2 Performance of Agriculture and Allied Sectors ----------------------- 25
Chapter 3 Technology and Cultivation Practices ----------------------------------- 41

Chapter 4 Marketing, Prices & Trade ------------------------------------------------- 85
Chapter 5 Identification of Vulnerable Zones ------------------------------------- 103
Chapter 6 Observations and Recommendations --------------------------------- 111
References ----------------------------------------------------------------------------------- 116
viii
List of Tables
Table 1.1 Movement of Indian Economy: trends in GDP/GVA across sectors ...................................................... 3
Table 1.2 Historical growth rates of crop categories, livestock and fisheries based on VoP at 2004-05 Prices .... 5
Table 1.3 Area shares of crop categories to Gross Cropped Area (GCA) .............................................................. 6
Table 1.4 Value shares of crop categories, livestock & fisheries to total VoP (2004-05 prices) ............................ 7
Table 1.5 Patterns and contribution of Agricultural Trade from India ................................................................... 8
Table 1.6 Total number of workers and share of Cultivators and Agriculture Labourers based on Agricultural
Census .................................................................................................................................................................. 11
Table 1.7 Number and average size of Land Holding across Land Size Classes.................................................. 12
Table 1.8 Average size of Land Holding across States and Size Classes (hectares) ............................................ 13
Table 1.9 Number of holdings across states by size group in 2010-11 (no. in ‘000) ............................................ 15
Table 1.10 Trends and patterns in consumption ................................................................................................... 17
Table 1.11 Disparities in Agriculture and Non-agriculture Income ..................................................................... 21
Table 2.1 Performance of Agriculture, Manufacturing and Service Sectors across States (Rs. billion @ 2004-05
prices) ................................................................................................................................................................... 27
Table 2.2 Performance of various sub-sectors of Agriculture across States (Rs. lakhs @ 2004-05 prices) ........ 28
Table 2.3 Real and Current Farm Income and Wage earnings of agricultural worker ......................................... 39
Table 3.1 State-wise Yields- actual, experimental and gaps in rice & wheat (2009-10 to 2013-14) .................... 42
Table 3.2 Yield Gap and Associated Parameters (2011-12 to 2013-14)............................................................... 44
Table 3.3 Growth in Total Factor Productivity ..................................................................................................... 45
Table 3.4 Studies on Determinants of TFP Growth .............................................................................................. 47
Table 3.5 Trends in Public Funding for Agricultural Research & Education (Rs. million).................................. 49
Table 3.6 International Comparison of Agricultural Research Funding, 2011-12 ................................................ 50
Table 3.7 State wise Irrigated Area ...................................................................................................................... 51
Table 3.8 Irrigation Potential Created and Utilised across States ........................................................................ 53
Table 3.9 Status of Potential and Actual area under Micro-irrigation in India as on 31 Mar 2015 (million hectares)
.............................................................................................................................................................................. 54
Table 3.10 Impact of Micro-irrigation across States............................................................................................. 55
Table 3.11 Impact of Micro-irrigation on Yield ................................................................................................... 56
Table 3.12 Evidences on impact of Irrigation on Crop Yield and Revenue (2013-14)......................................... 57
Table 3.13 Water Requirement for various Sectors .............................................................................................. 60
Table 3.14 Seed use (%) among Farmers in the country (2011-12 to 2013-14) ................................................... 60
Table 3.15 Seed use across States (%) .................................................................................................................. 61
Table 3.16 Normative and Actual use of N, P and K (triennium ending 2011–12) .............................................. 63
Table 3.17 State-wise Actual and Normative ratio of NPK use (2009–11) .......................................................... 63
Table 3.18 Nutrient Response Ratio ..................................................................................................................... 65
Table 3.19 Progress Report for Soil Health Cards: state-wise sample registration and test results (on 14-07-2017)
.............................................................................................................................................................................. 66
Table 3.20 Operative KCC accounts and Outstanding Amount as on 31.10.2015 (Rs. crore) ............................. 70
Table 3.21 Indebtedness and Credit Outstanding (2012-13) ................................................................................ 71
Table 3.22 Indebtedness and Credit Outstanding ................................................................................................. 71
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Table 3.23 Status of Road Length (as on 31.03.2013) .......................................................................................... 78

Table 3.24 Rural Electrification in India (as on 30.4.2017) ................................................................................. 79
Table 3.25 Details of Wholesale, Rural Primary and Regulated Markets in different States/UTs (As on 31.03.2015)
.............................................................................................................................................................................. 80
Table 3.26 Gap Analysis of Cold-Chain Infrastructure in India ........................................................................... 81
Table 3.27 State wise distribution of Registered Factories in Food Processing (2013-14) .................................. 82
Table 4.1 Marketed Surplus Ratio (MSR) and production growth of major agricultural commodities................ 86
Table 4.2 Price Realisation (Rs./kg) for major crops and farm categories (July-December 2012)...................... 88
Table 4.3 Price Realisation (Rs./kg) for major crops and farm categories (January-June 2013) ........................ 89
Table 4.4 Price Realisation (Rs./kg) from Local Private Traders and Government & Cooperative Agency in
different crops across States (July to Dec, 2012) .................................................................................................. 90
Table 4.5 Price Realization (Rs./kg) from Local Private Traders and Government & Cooperative Agency in
different crops across States (Jan to July, 2013) ................................................................................................... 91
Table 4.6 Price received for paddy (Rs. per kg) ................................................................................................... 94
Table 4.7 Extent of Volatility across commodities ............................................................................................... 97
Table 4.8 Trends and Composition of Agricultural Exports in India ................................................................... 98
Table 5.1 Double Stressed Districts in terms of Climate Vulnerability and Low Income .................................. 105
Table 5.2 Double stressed Districts in terms of Climate Vulnerability and Low Farm Income ......................... 107
Table 5.3 Major Attributes of Climate Vulnerable and Low Income States ....................................................... 109
List of Figures
Figure 1.1 Growth rates in GDP across sub-sectors at 2004-05 prices ................................................................... 4
Figure 1.2 Trends in agricultural Exports and Imports of India (Rs. Billion) ......................................................... 9
Figure 1.3 Contribution of Agricultural Trade to total National Trade .................................................................. 9
Figure 1.4 Movements in Consumer Price Index and Wholesale Price Index (at 2004-05 base) ......................... 10
Figure 1.5 Compound Annual Growth Rate of cultivators and agriculture labours (%) ...................................... 11
Figure 1.6 Shares of Farm Size Classes to total number of holdings across States (2010-11) ............................. 16
Figure 1.7 Shift in consumption expenditure (1993-94 to 2011-12) .................................................................... 18
Figure 1.8 Agriculture growth and poverty decline in rural India ........................................................................ 20
Figure 1.9 Output change in agriculture and poverty reduction across States ...................................................... 20
Figure 2.1 Composition of Output (VoP) from field crops ................................................................................... 31
Figure 2.2 Composition of Output (VoP) from horticulture and other crops ....................................................... 32
Figure 2.3 Composition of Output (VoP) from livestock, forestry and fisheries ................................................. 34
Figure 2.4 Sale of different commodities through various agencies (%) .............................................................. 37
Figure 3.1 State-wise Yield Gaps in rice and wheat during 2009-10 to 2013-14 ................................................. 42
Figure 3.2 Intensity and Distribution of Rainfall across States and Zones (TE 2012-13) .................................... 52
Figure 3.3 Micro-irrigation Potential utilised across States .................................................................................. 55
Figure 3.4 State-wise consumption of Plant Nutrients per ha of Gross Cropped Area (Biennium Ending 2012-13)
............................................................................................................................................................. 64
Figure 3.5 Direct Institutional Credit in Agriculture (amount outstanding in Rs. billion) .................................... 67
Figure 3.6 Contribution of different agencies in Agricultural Credit Delivery (Amount Outstanding in Rs. billion)
............................................................................................................................................................. 68
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Figure 3.7 Contribution of different agencies in Delivering Agricultural Credit (Short-term Credit Outstanding,
Rs. billion) ........................................................................................................................................... 68
Figure 3.8 Contribution of different agencies in Delivering Agricultural Credit (Long-run Credit Outstanding,
Rs. billion) ........................................................................................................................................... 69
Figure 3.9 Distribution of Crop and Term Loans across States, 2014-15 (Rs. crore) ........................................... 69
Figure 4.1 Trends in WPI of selected Agricultural Commodities ........................................................................ 95
Figure 4.2 Inflation Trends and Supply Response ................................................................................................ 96
Figure 5.1 Comparison of States/Districts in Vulnerability and Income Status ................................................. 104
Figure 5.2 Comparison of States/Districts in Vulnerability and Farm Income Status ........................................ 106
List of Boxes
Box 1.1 Projected Demand of Major Food Commodities in India 19

Box 2.1 Volumes of Different Commodities Produced in India, TE 2014-15, (‘000 Tonnes) 30
Box 2.2 Area, Volume and Value Pyramids 35
Box 2.3 Categorisation of States on the basis of Income (Monthly) 37
Box 3.1 Water Resource Situation in India 59
Box 3.2 Economics of Vegetable Cultivation 74
Box 4.1 Farmers’ Share for Various Commodities, Channels, States and Years 92
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The overall performance of agriculture and allied activities and dynamics of the agricultural sector
since India’s independence is discussed. An overview of the structure and changes in the land holding
pattern is also provided. Further, the pattern and shift of consumption preferences over time is
described to project demand of various food commodities in the near future.
Evolution of Indian Agriculture

India has been an agriculture based economy. Though in absolute terms agricultural GDP is
growing, as a ratio of the total GDP of the economy it has been declining. Simultaneously
notwithstanding that percentage of population dependent on agriculture declined to 48 per cent
in 2011, from a high of 85 per cent in 1951, seen in terms of absolute numbers, a sizable
population is still dependent on agriculture for its livelihood. Since this sector influences the
lives of the entire population, several efforts have been made since independence to evolve
appropriate agricultural policies affecting both the producers and the consumers. Given the
food deficiency that prevailed and the continued growth of population since independence, the
growth strategy for agriculture has been production-centric. The sector received incentives,
that have helped the nation to achieve high levels of production for its food security.
Various Commission and Committee Reports have influenced the agricultural policies of the
country beginning with pre-Independence period.
The first ever Commission was the Royal Commission on Agriculture constituted in 1926
under the chairmanship of Victor Alexander John, which was mandated primarily to examine
and report on the condition of agricultural and rural economy in British India and to make
recommendations for agricultural improvement. The Commission submitted its Report in 1928.
The first ever Committee, Food Grains Policy Committee (1943) was constituted under the
chairmanship of T. Gregory, which mainly focused on food availability, supplies, distribution
and control prices, which were the main challenges due to the Second World War. The country
also faced severe food shortage due to lower yield levels and the problem of refugees
immediately after attaining Independence, when the Government appointed a committee under
P. Thakurdas in 1947. Also known as the Foodgrain Policy Committee (1947), it studied the
aspects related to food distribution, and the main features of its recommendation were gradual
withdrawal of control and removal of restrictions on movements of foodgrains. Various other
Committees followed thereafter. These include Maitra Committee (1950), Mehta Committee
(1957), Venkatappaiah Committee (1966). These were mandated to enquire into food and
distribution problems and solve the issues. The recommendations of these Committees played
important role in the formulation of subsequent agricultural policies.
The policies that came to make a major and long standing impact in the agriculture sector were
adopted in mid-1960s. These measures adopted included production subsidies, minimum
support prices, public procurement, storage and distribution of foodgrains, as also trade
protection. During the 1960s and 1970s, widespread adoption of high yielding rice and wheat
1
varieties was promoted in response to glaring food deficit situation in the country. The country
also expanded its irrigated area, promoted increased use of chemical fertilizers and pesticides,
and improved access to institutional credit. Such a comprehensive policy package led to
considerable rise in agricultural production making India self-sufficient in foodgrains at the
national level.
The first comprehensive agricultural policy was brought out by the National Commission on
Agriculture constituted under the chairmanship of N. R. Mirdha, which submitted its Report in
1976. It mainly emphasised on production, land and water development by addressing the
conservation and issues of water management. Land reclamation and harvesting of ground
water, development at animal husbandry & fishery sector, besides forestry were recommended.
Development of subsidiary activities like poultry, piggery, sheep and goat rearing were also
emphasised. Further, it gave thrust on research, education and training for promotion of
agriculture and its application to field conditions. Along with the sectoral development,
promotion of employment potential in the agricultural sector was also a concern. A Committee
chaired by Bhanu Pratap Singh in 1990, made recommendations covering all major sectors of
agricultural economy and provided the base for the first draft of agricultural policy resolution,
which paved the way for introduction of the first ever comprehensive National Agricultural
Policy in 2000.
Then came the National Commission on Farmers (NCF) constituted in 2004, which
comprehensively studied the food situation, mostly addressing concerns regarding supplies for
the public distribution system and those related to production and productivity. Several
recommendations were made by the Commission for reforms in the Indian agriculture. Many
of these related to land reforms, irrigation, productivity enhancement through increase in public
investment in agriculture related infrastructure, particularly in irrigation, drainage, land
development, water conservation, research & development and road connectivity. The
Commission also laid stress on timely and adequate supply of credit to farmers, and improving
food security for the consumers by addressing of micronutrient deficiency and adoption of an
integrated food-cum-fortification approach. The Commission also made an important
suggestion to recognize farmer as an important stakeholder.
The Inter-Ministerial Committee on Doubling Farmers Income constituted by the Government

in April 2016 is a clear departure from all earlier intentions and mandates. The Committee
took shape following the vision shared by the Prime Minister in February 2016 to double the
income of the farmers by 2022, when the nation celebrates 75th years of independence. The
Committee has been assigned very clear & definitive terms of reference in this context. This
Committee is required to take a more holistic, contextual and outcome based approach to
agriculture. The Committee needed to redefine agriculture, and approach it not merely from a
production-centric perspective, but as an enterprise with an income-centric view point, before
formulating the strategies and major reforms required for fulfilling the mission of doubling of
income. The DFI Committee also considered agriculture sector as an Agri-value System and
recommended major market reforms and to bring increased focus on animal husbandry,
2
poultry, fisheries and other allied enterprises. The DFI Committee held consultations with
different stakeholders, including the farmers, scientists, professionals trade & and industry
bodies and public at large to benefit from international bodies associated with agriculture.
Trends in Agricultural Growth

Agriculture, not only makes the country secure in terms of food, fodder and other raw-materials
as feedstock for industries, it also serves as the source of livelihood for the majority of the
Indian population. India’s economy is classified into three sectors - Agriculture & allied;
Industry; and Services. Agriculture sector includes Agriculture (Agriculture proper &
Livestock), Forestry & Logging, Fishing and related activities. The agriculture sector
contributed about 14.5 per cent to the gross domestic product (GDP) of the country in 2016-
17. To evaluate trends and growth, the data used on GDP, gross value added (GVA) along
with value of production (VoP) of various sub-sectors, the price series in 2004-05 are used.
The agricultural sector grew at around 3.4 per cent per year during 2004-05 to 2016-17 and this
was quite impressive as compared to 2.3 per cent per annum during the previous decade (1995-
96 to 2004-05). During the recent decade of 2004-05 to 2014-15, crop, livestock and fisheries
registered growth of 2.93, 6.11 and 5.13 per cent per annum, respectively (Fig 1.1). The
pattern indicates that overall growth in agriculture moves parallel with the crop sector,
suggesting its relative dominance. The same is also confirmed from the year-on-year
fluctuations in different sub-sectors.
Table 1.1 Movement of Indian Economy: trends in GDP/GVA across sectors

Period 1960-61/ 1968-69/ 1975-76/ 1988-89/ 1995-96/ 2004-05/
1968-69 1975-76 1988-89 1995-96 2004-05 2016-17
Average GDP @2004-05 prices (Rs Billion)
Agriculture 1636 1955 2547 3473 4358 5771*
Agriculture & Allied 2004 2401 3047 4116 5174 7126
Activities
Industry 725 1000 1676 2958 4773 10021
Services 1859 2517 4078 7286 13083 32454
Share (%)
Agriculture 35.66 33.03 28.94 24.19 18.92 12.72*
Agriculture & Allied 43.68 40.57 34.62 28.66 22.47 11.63
Activities
Industry 15.80 16.90 19.04 20.60 20.73 20.30
Services 40.52 42.53 46.34 50.74 56.81 68.07
GDP growth rate (% p.a.)
Agriculture 0.7 2.19 2.74 2.69 2.23 3.88*
Agriculture & Allied 1.04 2.24 2.47 2.76 2.28 3.43
Activities
Industry 5.05 3.92 5.53 5.9 4.87 7.51
Services 5.03 3.37 5.4 6.15 7.86 8.69
Source: DFI Committee Estimates; Estimates for the period 2004-05 to 2016-17 are based on GVA
*upto 2015-16 only.
3
Such a robust growth of agriculture sector unleashes multiplier effect on the overall economy
of the nation, and therefore needs to be persisted with (Table 1.1).
Chand and Shinoj (2012) estimated the moving decennial growth rates by fitting a semi-log
trend to the smoothened data. The moving decennial growth rates were also computed in this
study to examine the performance of various sub-sectors. The decennial growth rates indicate
remarkable growth from 2004-05 onwards for all the sub-sectors, i.e. crop, livestock and
fisheries. Chand (2014), opined that the most important factor for improved performance of
agriculture, post 2004-05 period, has been the price received by the farmers caused by a
number of underlying factors viz., higher MSP, increase in foodgrain procurement, increase
in global agricultural prices and strong domestic demand for food.
It is interesting to note, that Livestock sub-sector is growing at an appreciable and sustainable

rate and is ahead among all sub-sectors. It is remarkable that the livestock sub-sector never
registered a negative growth in any of the years during the span of 34 years; which included
several drought years; the lowest growth rate being one per cent in the year 2003-04.
The livestock sub-sector demonstrated that it can be relied upon for risk mitigation and
minimizing the losses for the farmers even in case of worst outcomes from others sub-sectors
and is likely to emerge as engine of growth of agricultural sector. Previous studies have
unanimously reported that livestock is the best insurance against agrarian distress as the sector
is the source of sustained income. The frequency of income from livestock sector is more
perennial relative to season-bound crop sectors.
Figure 1.1 Growth rates in GDP across sub-sectors at 2004-05 prices

Moving Decadal Growth
8 Crop
7 Livestock
Fisheries
6
Total agriculture (Crops+Livestock+Fisheries)
5
4
30 Year-on-Year Growth
25 growth rate Crop Livestock Fishries Total agriculture incl. Fishries
20
15
10
5
0
-5
-10
-15
-20
-25
Source: DFI Committee Estimates
Overall growth in agriculture moves parallel with the crop sector, which is also established from the
year-on-year fluctuations in different sub-sectors. Livestock sector is growing at an appreciable and
sustainable rate and is ahead among all sub-sectors. Livestock sector is likely to emerge as engine of
growth of agricultural sector and can be relied upon for risk mitigation and minimizing the losses
for the farmers, given in case of worst outcomes from others sub-sectors.
Table 1.2 provides the existing growth rates for different crop categories based on Value of
Production (VoP) at 2004-05 prices.
Table 1.2 Historical growth rates of crop categories, livestock and fisheries
based on VoP at 2004-05 Prices
(% p.a.)
Pre-green Early green Wider Post-
Period of Recovery
revolution revolution technology reform
diversification period
Crops period period dissemination period
(1988-89/ (2004-05/
(1960-61/ (1968-69/ (1975-76/ (1995-96/
1995-96) 2014-15)
1968-69) 1975-76) 1988-89) 2004-05)
Paddy and wheat 1.53 2.49 3.34 2.20 0.40 2.40
Nutri-cereals 1.11 0.79 -0.29 -1.21 0.44 2.60
Pulses -2.23 0.26 0.79 -0.86 0.22 2.63
Oilseeds 0.40 2.99 3.49 3.38 -0.78 1.45
Sugar 1.48 1.64 1.68 3.05 3.70 2.69
Cotton and Jute -0.59 1.51 1.82 4.30 -0.31 5.35
Condiment & spice 0.65 3.62 4.24 3.24 4.95 5.58
Fruits & vegetables 5.44 5.16 3.08 4.07 3.38 4.85
Floriculture 4.60 5.70 3.41 5.29 10.15 6.44
All crops 1.14 2.15 2.57 2.04 1.78 3.10
Livestock 0.35 2.98 4.87 4.12 3.41 4.92
Fisheries 3.98 4.37 3.63 7.11 3.11 3.59
Overall 1.07 2.37 3.09 2.73 2.27 3.61
Livestock sector’s performance was found to be the best during the recovery phase. Pulses achieved
a growth of 2.63 per cent during the recovery phase. Fibres, condiments & spices, fruits & vegetables,
floriculture performed quite well during 2004-05 to 2014-15 in the crop category. As reported, the
important reason behind good performance of agricultural and allied sectors in recovery phase was
5
remunerative price received by farmers which incentivised higher production. Improved marketing
arrangements and innovations would help enhance the farmers’ share in consumer’s rupees.
As far as the trajectory of growth across various phases is concerned, it is evident that highest
growth is observed during the recovery phase, i.e. 3.61 per cent per year during 2004-05 to
2014-15; the same is evident for almost all crop categories. During the post-reform period of
1995-96 to 2004-05, except for floriculture, fruits & vegetables, condiments & spices and
sugar, performance of all other crop categories was found to be decelerating.
Area and Value Shares of Various Crops

Table 1.3 provides insight into the area share of different crop categories vis-à-vis the gross
cropped area (GCA) over time. The period has been categorised into six phases, namely, pre-
green revolution period (PGR) 1960-61 to 1968-69; early green revolution period (EGR) 1968-
69 to 1975-76; period of wider technology dissemination (WTD) 1975-76 to 1988-89; period
of diversification (DIV) 1988-89 to 1995-96; post-reform period (PR) 1995-96 to 2004-05; and
period of recovery (REC), 2004-05 to 2010-11 as delineated by Chand and Parappurathu
(2012). The recovery period was further extended up to 2014-15.
The area under almost all the major crops has increased over time, with exception of nutri-
cereals and pulses, (the category of coarse cereals is covered under the term nutri-cereals now
onwards. Recognised as an emerging and important category for assured health benefits, nutri-
cereals cover finger millets, pearl-millets, sorghum and other small millets). The percentage
area under these two crop categories has marginally declined in recovery period as compared
to pre-green revolution period (Table 1.3).
Table 1.3 Area shares of crop categories to Gross Cropped Area (GCA)
Pre-green Early green Wider

Period of Post-reform Recovery
revolution revolution technology
diversification period period
Crops period period dissemination
(1988-89/ (1995-96/ (2004-05/
(1960-61/ (1968-69/ (1975-76/
1995-96) 2004-05) 2014-15)
1968-69) 1975-76) 1988-89)
Paddy and wheat 31.34 33.99 36.04 36.12 37.21 37.27

Nutri-Cereals 25.52 21.24 19.79 15.28 14.00 12.67
Pulses 14.73 13.54 13.28 12.41 11.80 12.18
Oilseeds 9.48 9.85 10.52 13.39 13.16 13.87
Sugar 1.53 1.44 1.74 1.83 2.07 2.25
Cotton and jute 5.75 5.23 4.97 4.70 5.17 5.87
Condiments &
1.01 1.04 1.23 1.37 1.68 1.46
spices
Fruits & vegetables 1.90 2.27 2.96 3.68 4.37 6.48
Other crops 8.75 11.40 9.48 11.22 10.54 7.95
Rice and wheat still occupy more than 1/3 rd share in the cropping pattern. The share of nutri-cereals
has gone down substantially during the last about four decades. The area share of fruits and
6
vegetables has expanded overtime, signalling the orientation of demand and production for high
value crops.
A continuous and significant increase in share of area to GCA under fruits and vegetables
indicates the growing importance of these commodities, at both producer and consumer
levels. Short duration nature of horticulture crops and their growing market demand are the
incentives for increasing coverage. Short crop cycles enable the farmer to realise income
yields at shorter intervals.
As far as value share to total VoP is concerned, it was after early green revolution period that
the decline was more pronounced in case of nutri-cereals and pulses (Table 1.4), where it
declined from around 7 per cent in pre green revolution period to less than 3 per cent during
recovery period.
There is a clear consumption shift from foodgrains towards fruits and vegetables, livestock
products and fisheries. This is manifest in increasing area coverage and production in respect
of these sectors, and reflects in the increasing value share of these items over time. The
increasing demand for high value commodities like fruits and vegetables, livestock products
and fisheries can be tapped better, by a shift in policy to focus on what would constitute the
growth drivers in the coming years. This potential can be better harvested by reorienting the
policy, to enhance investments in these allied sectors for improving productivity, quality and
efficiency.
Table 1.4 Value shares of crop categories, livestock & fisheries to total VoP (2004-05 prices)
Pre-green Early green Wider Post-
Period of Recovery
revolution revolution technology reform
diversification period
Crops period period disseminatio period
(1988-89/ (2004-05/
(1960-61/ (1968-69/ n (1975-76/ (1995-96/
1995-96) 2014-15)
1968-69) 1975-76) 1988-89) 2004-05)
Paddy &
18.15 20.22 21.23 21.80 19.88 17.87
Wheat
Nutri-cereals 6.90 6.25 4.97 3.85 3.02 2.74
Pulses 7.25 6.06 4.97 4.08 3.33 2.97
Oilseeds 7.07 6.93 6.33 7.84 6.82 6.71
Sugars 4.52 4.57 4.14 4.15 4.73 4.50
Cotton and Jute 2.88 2.60 2.38 2.55 2.28 3.34
Condiments &
1.66 1.59 1.72 1.88 2.15 2.61
Spices
Fruits &
10.56 13.92 14.67 14.13 16.80 18.80
Vegetables
Floriculture 0.25 0.35 0.37 0.36 0.61 0.93
All crops 77.14 78.20 75.36 72.19 70.01 69.58
Livestock 20.01 18.59 21.38 23.74 25.28 25.78
Fisheries 2.85 3.21 3.26 4.08 4.72 4.65
The value shares present a little contrasting picture as far as the value shares of paddy and wheat
are concerned; the share has declined overtime despite increase in area, technological advancements
7
resulting in productivity improvement along with the increasing price trends. The value shares of
fruits and vegetables have increased substantially on account of significant area expansion,
productivity improvements along with increase in prices (though being highly volatile).
Trends in Agricultural Trade

Since the time the country achieved food self-sufficiency in early 1970s, Indian agri-export
performance compares more favourably than other sectors of the economy. Though the exports
of agricultural commodities picked up after 1970-71, greater impetus is seen after 1994-95 with
the launch of global trade reforms and trade integration with establishment of World Trade
Organization.
Over the last 25 years since India’s liberalisation, the foreign trade has expanded multi-fold
and seen significant structural shifts in product mix as well as geographic spread. Liberalisation
in trade policies related to easing of several trade restrictions, and reduction in tariff levels
across different products have assisted the growth of foreign trade especially in the first two
decades post liberalization phase. However, there exists much greater scope for agri-exports
from India, and it needs to be tapped in the interest of farmer-producers.
India’s exports increased from Rs. 0.32 lakh crores in 1990-91 to Rs. 17.16 lakh crores in 2015-
16. Imports also shot up from Rs. 0.43 lakh crores in 1990-91 to Rs. 24.90 lakh crore in 2015-
16 (Table 1.5 and Fig 1.2).
Table 1.5 Patterns and contribution of Agricultural Trade from India

Agriculture Agriculture Net Net
Agriculture Total Agriculture Total
Exports to Imports to Trade Agricultural
Years Exports Exports Imports Imports
total Exports total Imports (Rs Trade
(Rs. crore) (Rs. crore) (Rs.crore) (Rs.crore)
(%) (%) crore) (Rs crore)
1990-91 6013 32527 18.49 1206 43171 2.79 -10644 4807
1995-96 20398 106353 19.18 5890 122678 4.8 -16325 14508
2000-01 28657 201356 14.23 12086 228307 5.29 -26950 16571
2005-06 45711 456418 10.78 15978 660409 3.26 -203991 29733
2010-11 113047 1136964 10.28 51074 1683467 3.41 -546503 61973
2015-16 215396 1716378 12.55 140289 2490298 5.63 -773920 75107
Source: DFI Committee Estimates based on data available in Agricultural Statistics at a Glance, (various issues)
The composition of exports has undergone substantial changes post liberalisation. There is a
structural shift in India’s exports, away from primary, agricultural and traditional exports like
textiles towards more value added manufactured and technology-based items such as
engineering goods, refinery products, pharmaceuticals, etc. Overall, India’s export basket is
now diversified with non-traditional items and differential products are also gaining
importance.
8
Figure 1.2 Trends in agricultural Exports and Imports of India (Rs. Billion)
300000
Agriculture Exports
250000 Agriculture Imports
Net trade
(Rs. in Crore)
200000
150000
100000
50000
0
1991-92
2004-05
1990-91
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2005-06
2006-07
2007-08
2008-09
2009-10
2011-12
2012-13
2013-14
2014-15
2015-16
2010-11
Source: Agricultural Statistics at a Glance (various issues)
Agricultural exports and imports have also increased considerably during the last 25 years.
Since the year 2005-06, there can be seen marked surge both in the export and import of
agricultural commodities.
However, since 2013-14 there is deceleration in India’s net agricultural trade, primarily
because of decline in the exports of agricultural commodities. Though the absolute agricultural
trade has expanded, the share of both the agricultural imports and exports has declined
considerably in the overall trade during the last 25 years, on account of increased share of
manufactured and other value added products (Fig 1.3).
Figure 1.3 Contribution of Agricultural Trade to total National Trade

25
(Value in % of total imports/exports)
% Agriculture Exports to Total National Exports
20 % Agriculture Imports to Total National Imports
15
10
0
2002-03
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2011-12
2012-13
2013-14
2014-15
2015-16
2010-11
Source: DFI Committee
9
Prices Paid and Prices Received by Farmers

Prices determine the farmers’ farm income and hence his welfare and influence the welfare
cycle. The Wholesale Price Indices (WPI) for agricultural commodities may be considered as
a representative index for the prices received by the farmers. An increase in the prices received
will escalate the value of output even if the physical output remains the same.
On the other hand, changes in the Consumer Price Index (CPI) will reflect the changes in
overall expenditure and determine the cost of living. A higher increase in WPI relative to CPI
is more advantageous to the farmers, and yields positive impact on their welfare.
Fig 1.4 exhibits the changes in WPI Ag, WPI (all commodities) and CPI over last 22 years.
The WPI Ag index is not published by the Office of Economic Adviser; and has therefore been
derived by deducting the index of minerals (after adjustment with the category weight) from
the WPI index of primary commodities. It is noticed that the spread between the three indices
remained almost stagnant till 2004-05. However, the gap expanded after 2004-05, and WPI Ag
and CPI have increased at a higher rate.
Figure 1.4 Movements in Consumer Price Index and Wholesale Price Index (at 2004-05 base)
250 CPIAL WPI (All) WPI Ag
200
150
100
50
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: DFI Committee Estimates based on WPI data from Office of Economic Advisor data and CPI from RBI
Prominent increase in case of prices of agricultural commodities, often leads to the inflationary
situation in food commodities and affects overall well-being. The monthly and weekly WPI data for
selected agricultural commodities exhibit severe volatility and affect the farmers’ welfare.
Dependence on Agriculture
The livelihood dependence on agriculture can be ascertained from the number of workers
employed in agriculture, in the form of cultivators and agricultural labourers. The data on
agricultural workers is made available through population census, on a decadal basis. In
addition, the National Sample Survey Organisation (NSSO) conducts surveys on employment
and unemployment on quinquennial basis. The data from the two are dissimilar but a common
underlying trend can be observed.
10
Table 1.6 Total number of workers and share of Cultivators and Agriculture Labourers based
on Agricultural Census
Agricultural Workers Share in total workers (%)
Total Cultivators Agricultural Agricultural
Year Agricultural
Workers Cultivators Total in total labour in workers in
Labourers
workers total workers total workers
1951 139.5 69.9 27.3 97.2 50.11 19.57 69.68
1961 188.7 99.6 31.5 131.1 52.78 16.69 69.48
1971 180.4 78.2 47.5 125.7 43.35 26.33 69.68
1981 244.6 92.5 55.5 148.0 37.82 22.69 60.51
1991 314.1 110.7 74.6 185.3 35.24 23.75 58.99
2001 402.2 127.3 106.8 234.1 31.65 26.55 58.20
2011 481.9 118.8 144.3 263.1 24.65 29.94 54.60
Source: Agricultural Statistics at a Glance various issues
The decadal census is universal in nature and provides a truthful picture of ground level trends
in regards agricultural workers and cultivators in the economy. Table 1.6 represents that except
between 1961 and 1971, a continuous increase is observed in the number of total workers
engaged in agriculture. However, at the disaggregated level, the number of cultivators showed
a decline during 2001 and 2011, as well between 1961 and 1971. On the contrary, as regards
agricultural labourers, their absolute numbers have grown, and in the decade between 2001 and
2011, they increased from 107 million to 144 million. However, the ratio of agricultural
workers to total workers in the economy has been decreasing. The pattern indicated is, that
generally some number of the population is shifting out from agriculture into other sectors.
Figure 1.5 Compound Annual Growth Rate of cultivators and agriculture labours (%)
4.19
3.60 3.65
3.00 3.06
1.69 1.57 1.81

1.44 1.41
-0.69
Cultivators Agriculture labours
-2.39
1951-61 1961-71 1971-81 1981-91 1991-01 2001-11
Source: DFI Committee Estimates from NSSO data
Data from population census as well as NSSO indicate that, overall the interest of workers in
agricultural activity is declining and there is a higher growth rate of workers in other sectors. Discussed
in Volume II of the Report, one of the sources of income growth is a shift in working force from farming
into other economic activities. The degree of such a shift is dependent upon of the robustness of the
growth of manufacturing and service sectors - it would help if their growth rates are higher and they
are able to absorb a larger section of the transiting agricultural population. It is also important that
the jobs provided in these secondary and tertiary sector of economy, are more stable and income secure,
as it would make transition less painful. A policy would be required to hand-hold such transitions and
this will include training, professional skilling and social adjustment skill sets.
11
Considering the data from NSSO surveys on employment and unemployment, it shows that the
number of agricultural labourers declined from 92.7 million to 78.2 million from 2004-05 to
2011-12 (different from census data). As per NSSO data, every year around 22 lakh agricultural
labourers left the sector. At the same time, it indicates that the number of cultivators declined
at the rate of 1.80 per cent per year during 2004-05 to 2011-12. While the NSSO numbers may
be contrary to the census data, the indication is similar, that the trend is towards a general
reduction in cultivators and agricultural workers to total workers in the country.
Changes in Agrarian Structure

Between 1995-96 and 2010-11, the average farm size declined from 1.41 ha to 1.15 ha.
Smallholders now cultivate 42 per cent of operated land and constitute 83 per cent of total
landholdings (Table 1.7). This increase is most prominent in the case of marginal and small
farms. However, a decline in the number of holdings with medium and large farms is noticed
over the period which is a matter of concern.
Fragmented and scattered holdings (as is the case of most of the marginal and small farms in
India) do not allow efficient utilisation of farm resources and technology adoption by the
farmers, and as a result challenge economic productivity. Moreover, this also hinders the
diversification process, which is considered a key in adding to the income of farmers.
Table 1.7 Number and average size of Land Holding across Land Size Classes
1995-96 2000-01 2005-06 2010-11
Average Average Average Average
No. of No. of No. of No. of
Size of Size of Size of Size of
Holdings Holdings Holdings Holdings
Holding Holding Holding Holding
(‘000) (‘000) (‘000) (‘000)
(ha) (ha) (ha) (ha)
Below 0.5 0.24 48127 0.24 51254 0.23 57675 0.24 64679
0.5-1.0 0.72 23052 0.72 24154 0.71 26019 0.73 28147
1.0-2.0 1.42 21643 1.42 22695 1.38 23930 1.42 24779
2.0-3.0 2.4 9628 2.39 9549 2.36 9684 2.4 9649
3.0-4.0 3.42 4633 3.43 4472 3.38 4443 3.42 4247
4.0-5.0 4.43 2809 4.42 2627 4.38 2577 4.43 2431
5.0-7.5 6.03 3028 6.03 2829 5.97 2738 6.03 2511
7.5-10.0 8.52 1255 8.51 1122 8.45 1060 8.5 933
10.0-20.0 13.21 1142 13.16 1005 12.99 896 13.13 799
20.0 above 34.57 262 34.78 226 35.43 200 36.94 174
All classes 1.41 115580 1.33 119931 1.23 129222 1.15 138348
Source: Agricultural Census
12
Farm Land Holdings across States

The state wise patterns of change in land holding do not exhibit significant change within a
given category, except for the large farm category in a few states like West Bengal, North-
Eastern States and Kerala. In most of the states, number of holdings have increased in 2010-
11 from 2000-01, with Bihar showing highest increase in 2010-11 as compared to 2000-01.
Other states like Uttar Pradesh, Andhra Pradesh, Maharashtra, Rajasthan and Karnataka have
also noted an increase in the number of holdings, but the increase is not sizable.
In case of north eastern states and union territories, it was Tripura that represented the highest
increase from 2000-01 to 2010-11, which was followed by Nagaland. Minor increase was seen
in rest of the states and union territories. However, Daman & Diu, Delhi, Meghalaya and
Puducherry were among some that have reported a decline in number of holdings in the period.
It is clearly evident that small and marginal farmers, with around 85 per cent share, still
dominate the number of holdings at national level. The scenario is the same across states,
except for Nagaland where the majority of the farmers fall in medium and semi-medium
categories As far as number of holdings within state is concerned, Kerala topped the list with
the highest number of small and marginal farmers.
Average Size of Holdings across States and Size Classes

Between 2000-01 and 2010-11, the average size of holdings has declined from 1.3 ha to 1.2 ha
(Table 1.8). However, among different size classes of farmers, the average size of holdings has
shown an increase; except in case of small farmers, where it remained constant in the period.
A sizeable increase in case of marginal, small and semi-medium farms was noted in case of
Odisha, where all farms have generally shown an increase.
Table 1.8 Average size of Land Holding across States and Size Classes (hectares)
Semi-
Marginal Small Medium Large
Medium All Holdings
(<1 ha) (1-2 ha) (4-10 ha) (>10 ha)
(2-4 ha)
2000- 2010- 2000- 2010- 2000- 2010- 2000- 2010- 2000- 2010- 2000- 2010-
State/UT
01 11 01 11 01 11 01 11 01 11 01 11
Major States
Andhra Pradesh 0.4 0.4 1.4 1.4 2.7 2.6 5.7 5.6 16.3 15.5 1.3 1.1
Bihar 0.3 0.3 1.2 1.3 2.6 2.6 5.2 5.1 15.5 14.5 0.6 0.4
Chhattisgarh 0.4 0.4 1.4 1.4 2.8 2.7 5.9 5.7 12 16.3 1.4 1.4
Goa 0.3 0.5 1.3 1.8 2.6 2.9 5.6 6.2 23.8 24.2 0.8 1.1
Gujarat 0.5 0.5 1.5 1.5 2.8 2.8 5.8 5.7 16.9 20.9 2.3 2
Haryana 0.5 0.5 1.4 1.5 2.8 2.9 6 6.1 16.5 18 2.3 2.3
Himachal
0.4 0.4 1.4 1.4 2.7 2.7 5.7 5.7 15.9 15.5 1.1 1
Pradesh
Jammu &
0.4 0.4 1.4 1.4 2.7 2.7 5.4 5.4 21.1 22.3 0.7 0.6
Kashmir
Jharkhand 0.4 1.4 2.7 5.6 15.4 1.2
Karnataka 0.5 0.5 1.4 1.4 2.7 2.7 5.8 5.7 14.8 14.7 1.7 1.6
Kerala 0.1 0.1 1.3 1.6 2.5 2.8 5.3 5.3 40.9 64.6 0.2 0.2
Madhya
0.5 0.5 1.5 1.4 2.8 2.7 5.9 5.8 15.5 15.8 2.2 1.8
Pradesh
13
Semi-
Marginal Small Medium Large
Medium All Holdings
(<1 ha) (1-2 ha) (4-10 ha) (>10 ha)
(2-4 ha)
2000- 2010- 2000- 2010- 2000- 2010- 2000- 2010- 2000- 2010- 2000- 2010-
State/UT
01 11 01 11 01 11 01 11 01 11 01 11
Maharashtra 0.5 0.5 1.4 1.4 2.7 2.7 5.6 5.6 15.4 16 1.7 1.4
Odisha 0.5 0.6 1.4 1.6 2.7 3 5.6 6 16.5 23.7 1.3 1
Punjab 0.6 0.6 1.4 1.4 2.7 2.6 5.8 5.7 15.1 14.8 4 3.8
Rajasthan 0.5 0.5 1.4 1.4 2.9 2.8 6.2 6.1 18.2 17.5 3.7 3.1
Tamil Nadu 0.4 0.4 1.4 1.4 2.7 2.7 5.7 5.6 19.5 20.1 0.9 0.8
Uttar Pradesh 0.4 0.4 1.4 1.4 2.7 2.7 5.5 5.5 25.1 15 1 0.8
Uttarakhand 0.4 0.4 1.4 1.4 2.7 2.7 5.6 5.5 15.1 23.1 0.8 0.9
West Bengal 0.5 0.5 1.6 1.6 2.8 2.7 5.1 4.9 279 316.2 0.8 0.8
North-Eastern states
Arunachal
0.5 0.6 1.3 1.3 2.7 2.8 5.8 5.5 16.1 14.9 3.7 3.5
Pradesh
Assam 0.4 0.4 1.3 1.4 2.7 2.7 5.2 5.2 53 68.1 1.2 1.1
Manipur 0.5 0.5 1.3 1.3 2.5 2.5 4.9 4.9 11.4 11 1.2 1.1
Meghalaya 0.6 0.5 1.5 1.3 2.6 2.8 5.4 5.7 13.1 16.5 1.3 1.4
Mizoram 0.6 0.6 1.3 1.3 2.3 2.4 4.8 5.1 13.1 15.1 1.2 1.1
Nagaland 0.5 0.5 1.2 1.1 2.6 2.6 6.2 6.2 15.8 17.6 7.3 6
Sikkim 0.4 0.4 1.4 1.2 2.7 2.5 5.8 5.4 20.7 15.8 1.6 1.4
Tripura 0.3 0.3 1.4 1.4 2.6 2.5 5.2 5.1 78.8 14.3 0.6 0.5
UTs
A & N Islands 0.4 0.4 1.4 1.4 2.5 2.6 4.3 4.3 46.8 36.9 2 1.9
Chandigarh 0.4 0.5 1.4 1.4 2.7 2.9 5.8 5.7 16.5 11.1 1.6 1.3
Dadar & Nagar
0.5 0.5 1.3 1.4 2.8 2.8 5.8 5.7 16 15.5 1.5 1.4
Haveli
Daman & Diu 0.3 0.2 1.4 1.4 2.6 2.6 5.9 6.3 20.3 20 0.6 0.4
Delhi 0.4 0.4 1.4 1.3 2.9 2.7 5.8 5.6 15.3 15.1 1.5 1.5
Lakshadweep 0.2 0.2 1.3 1.4 2.6 2.5 5.5 6.1 22.3 24 0.3 0.3
Puducherry 0.3 0.4 1.4 1.5 2.7 2.9 5.7 5.7 19.5 16.9 0.7 0.7
Total 0.2 0.4 1.4 1.4 2.4 2.7 4.4 5.8 13.2 17.4 1.3 1.2
Source: Agricultural Census (various issues)
An in-depth analysis brings out an interesting fact that average land holding size under the
large farm category was quite high in few States/UTs like West Bengal, Assam, Tripura, Kerala
and A & N Islands, in both the periods as compared to other states. This was owing to the large
size of institutional holdings in few districts of these states. For example, in West Bengal,
institutional land holding size under large farm category size was more than 500 ha in
Darjeeling and Jalpaiguri districts in the year 2010-11.
Likewise, the landholding size under large farm size category was high in Wayanad, Kollam,
Idukki districts of Kerala, and in Hailakandi, Odalguri, Kokrajhar & Golapara districts of
Assam. Interestingly, land holding size under the same category exhibited notable changes
during the period 2000-01 and 2010-11 in these states, mainly because of change in size of
institutional holdings over the period.
The number and share of holdings for various size groups and states are given in Table 1.9 and
Fig 1.6, respectively.
14
Table 1.9 Number of holdings across states by size group in 2010-11 (no. in ‘000)
Marginal Small Semi-Medium Medium Large All Holding
Major States
Andhra Pradesh 8425 2918 1399 397 36 13175
Bihar 14744 948 415 81 3 16191
Chhattisgarh 2183 831 503 202 28 3746
Goa 60 10 6 2 1 78
Gujarat 1816 1429 1080 513 49 4886
Haryana 778 315 284 195 46 1617
Himachal Pradesh 670 175 85 28 3 961
Jammu & Kashmir 1207 167 64 11 1 1449
Jharkhand 1848 429 283 129 20 2709
Karnataka 3849 2138 1267 511 68 7832
Kerala 6580 180 57 12 2 6831
Madhya Pradesh 3891 2449 1655 789 89 8872
Maharashtra 6709 4052 2159 711 68 13699
Odisha 3368 919 311 64 6 4667
Punjab 164 195 325 298 70 1053
Rajasthan 2512 1511 1335 1127 404 6888
Tamil Nadu 6267 1181 502 151 17 8118
Uttar Pradesh 18532 3035 1334 398 25 23325
Uttarakhand 672 157 65 17 1 913
West Bengal 5853 980 267 23 1 7123
North-Eastern States
Arunachal Pradesh 21 19 34 28 7 109
Assam 1831 497 304 85 4 2720
Manipur 77 49 22 3 0 151
Meghalaya 103 58 41 8 0 210
Mizoram 50 30 10 2 0 92
Nagaland 6 20 48 78 25 178
Sikkim 40 17 11 6 1 75
Tripura 499 55 22 3 0 578
UTs
A & N Islands 5 2 3 2 0 12
Chandigarh 0 0 0 0 0 1
Dadar & Nagar Haveli 8 4 2 1 0 15
Daman & Diu 8 0 0 0 0 8
Delhi 11 5 3 2 0 20
Lakshadweep 10 0 0 0 0 10
Puducherry 28 3 1 0 0 33
All India 92826 24779 13896 5875 973 138348
Source: Agricultural census
Note: Figures are rounded off
15
Figure 1.6 Shares of Farm Size Classes to total number of holdings across States (2010-11)
Kerala 99 1
Lakshadweep 98 2
Daman & Diu 98 2
Bihar 97 3
West Bengal 96 4
Tripura 96 4
Jammu & Kashmir 95 5
Puducherry 94 6
Uttar Pradesh 92 7
Orissa (Odisha) 92 8
Tamil Nadu 92 8
Uttarakhand 91 9
Goa 89 10
Himachal Pradesh 88 12
Mizoram 87 13
Andhra Pradesh 86 14
Assam 86 14
Jharkhand 84 15
Manipur 83 17
Chandigarh 82 18
Dadar & Nagar Haveli 82 17
Chhattisgarh 80 19
Maharashtra 79 21
Delhi 77 22
Sikkim 77 22
Meghalaya 77 23
Karnataka 76 23
Madhya Pradesh 71 28
Haryana 68 30
Gujarat 66 33
A & N Islands 60 40
Rajasthan 58 36
Arunachal Pradesh 37 57
Punjab 34 59
Nagaland 15 71
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Marginal and small Medium Large
Source: DFI Committee Estimates based on Agricultural Census, states have been sorted according to the sha re of
marginal and small farms in all categories
The smallholders (including marginal farmer also) dominate the scene of Indian agriculture. The
situation is found to be worst in states like Kerala, Bihar, West Bengal, Jammu & Kashmir, Uttar
Pradesh, Odisha, Tamil Nadu and Uttarakhand along with few NE states and UTs where the share of
smallholders is found to be more than 90 per cent. Out of these, states like Bihar, West Bengal and
Uttar Pradesh have higher shares of geographical pockets with lowest incomes in the country. These
areas need more inclusive approach and package considering the situation of smallholders. States like
Punjab, Rajasthan Gujarat and Haryana along with few NE states and UTs have higher concentration
of medium and large farms as compared to other states.
16
A study by Chand et al., (2011) indicates that lower the size of holding, higher was the use of
inputs, crop intensity and coverage under HYVs, reflecting technology. Obviously, the greater
use of these factors would result in higher productivity, and those farm categories with the
higher value of these factors are also expected to realise higher productivity. However, the
results indicated that land productivity was inversely related to farm size class.
This study concluded that agriculture productivity in marginal and smallholdings was found to
be much higher than the average productivity for all size categories. However, per capita output
is low on smallholdings despite higher productivity due to lower per capita availability of land.
Shift in Consumption Pattern

Among consumers, an increasing trend towards non-food expenditure is clearly visible and one
would expect the trend to continue in near future. Around 15 per cent of household expenditure
budget has shifted towards non-food expenditure. Especially, expenditure on durable goods
has more than doubled, from 2.7 per cent in 1993-94 to 6.3 per cent in 2011-12 (Table 1.10).
While expenditure on fuel, light and other items have also registered consistent and marginal
improvements, doubling expenditure on durable goods can be appreciated as it reflects
household welfare, refer chapter 9, Vol. XIII (for clearer appreciation). More than 9 per cent
increase in expenditure on other goods and services also indicates increasing preference
towards non-food items than the food items. One would view these changes in line with Engel’s
law, implying an improvement in rural living standard. By 2011-12, while difference in food
and non-food expenditure shares was roughly equal in rural India, it was more than 20 per cent
in urban India. Amongst food groups, expenses on cereals have halved in both rural and urban
India, from 24 to 12 per cent, and 14 to 7 per cent respectively between 1993-94 and 2011-12.
Table 1.10 Trends and patterns in consumption

Share in total consumption expenditure (per cent)
Rural Urban
Item group
1993- 1999- 2004- 2009- 2011- 1993- 1999- 2004- 2009- 2011-
94 00 05 10 12 94 00 05 10 12
Consumption pattern of major items (Per person per month)
Cereals (Kg) 13.4 12.72 12.12 11.35 11.22 10.6 10.42 9.94 9.37 9.28
Pulses (Kg) 0.76 0.84 0.71 0.65 0.78 0.86 1.00 0.82 0.79 0.90
Milk (Litre) 3.94 3.79 3.87 4.12 4.33 4.89 5.10 5.11 5.36 5.42
Egg (Number) 0.64 1.09 1.01 1.73 1.94 1.48 2.06 1.72 2.67 3.18
Fish (Kg) 0.18 0.21 0.20 0.27 0.27 0.20 0.22 0.21 0.24 0.25
Mutton (Kg) 0.06 0.07 0.05 0.05 0.05 0.11 0.10 0.07 0.09 0.08
Chicken (Kg) 0.02 0.04 0.05 0.12 0.18 0.03 0.60 0.85 0.18 0.24
Consumption expenditure on major categories (MPCE Value shares)
Cereals 24.2 22.2 18.0 15.6 12.0 14.0 12.4 10.1 9.1 7.3
Gram 0.2 0.1 0.1 0.2 0.2 0.2 0.1 0.1 0.1 0.1
Cereal substitutes 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.1
Pulses & products 3.8 3.8 3.1 3.7 3.1 3.0 2.8 2.1 2.7 2.1
Milk & products 9.5 8.8 8.5 8.6 9.1 9.8 8.7 7.9 7.8 7.8
Edible oil 4.4 3.7 4.6 3.7 3.8 4.4 3.1 3.5 2.6 2.7
17
Share in total consumption expenditure (per cent)

Rural Urban
Item group
1993- 1999- 2004- 2009- 2011- 1993- 1999- 2004- 2009- 2011-
94 00 05 10 12 94 00 05 10 12
Egg, fish & meat 3.3 3.3 3.3 3.5 3.6 3.4 3.1 2.7 2.7 2.8
Vegetables 6.0 6.2 6.1 6.2 4.8 5.5 5.1 4.5 4.3 3.4
Fruits & nuts 1.7 1.7 1.9 1.6 1.9 2.7 2.4 2.2 2.1 2.3
Sugar 3.1 2.4 2.4 2.4 1.8 2.4 1.6 1.5 1.5 1.2
Salt & spices 2.7 3.0 2.5 2.4 2.4 2.0 2.2 1.7 1.5 1.7
Beverages, etc. 4.2 4.2 4.5 5.6 5.8 7.2 6.4 6.2 6.3 7.1
Food total 63.2 59.4 55.0 53.6 48.6 54.7 48.1 42.5 40.7 38.5
Pan, tobacco,
3.2 2.9 2.7 2.2 2.4 2.3 1.9 1.6 1.2 1.4
intoxicants
Fuel & light 7.4 7.5 10.2 9.5 9.2 6.6 7.8 9.9 8.0 7.6
Clothing &
5.4 6.9 4.5 4.9 6.3 4.7 6.1 4.0 4.7 5.3
bedding
Footwear 0.9 1.1 0.8 1.0 1.3 0.9 1.2 0.7 0.9 1.2
Misc. goods &
17.3 19.6 23.4 24.0 26.1 27.5 31.3 37.2 37.8 39.7
services
Durable goods 2.7 2.6 3.4 4.8 6.1 3.3 3.6 4.1 6.7 6.3
Non-food total 36.8 40.6 45.0 46.4 51.4 45.3 51.9 57.5 59.3 61.5
Total expenditure 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: MOSPI, Various Reports
As the dietary diversification is noticed, there is scope for shift towards more nutritious
consumption expenditure and nutrition-led marketing. Over the past two decades, share of food
in total expenditure (as explained by the monthly per capita expenditure, MPCE) has fallen in
rural India, roughly from two-third to one-half, signalling a clear shift in expenditure
behaviour. The physical consumption quantities display consistent decline in cereals in both
rural and urban India, and the trend holds true for pulses as well. Rather, rapid improvements
in consumption of allied agricultural products is observed, especially in urban India. Thus, a
shift from consuming staple crops and pulses towards allied agricultural products is evident, in
both physical as well as in value terms.
Figure 1.7 Shift in consumption expenditure (1993-94 to 2011-12)

65
60
55
Expenditure Share
50
45
40
35
30
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Food_R Non-food_R Food_U Non-food_U
18
Trends in components of non-food items remain more or less similar in rural (R) and urban (U)
domains. However, while in rural areas share of food and non-food expenditure equalled recently, in
urban India this happened in late 1990s, and the ratio of food expenses has continuously decreased to
corresponding increase in non-food expenses. While urban India shows no increase in shares among
any other food groups, rural India exhibits a marginal, but gradual increase in expenses on egg, fish
and meat, fruits and nuts, and beverages.
Projected Demand of Food Commodities

Owing to the increasing population over the years, demand for food is naturally expected to
increase in coming years. Various studies have projected the demand of foodgrains under
alternative assumptions of income growth, distribution of income and future dynamics of rural
and urban populations. Box 1.1 presents projected national demand of major food commodities
for the years 2030 and 2050 as estimated in different studies. Substantial increase in the
consumption of high-value food commodities like fruits, vegetables, milk, meat, fish and eggs
are visible from the projections.
Box 1.1 Projected demand of major food commodities in India

Projected Demand Projected Shift in demand in 2050
(million tons) (% change between 2030 and 2050)
Commodities 2030* 2050**
Cereals 284 359 196.1
Pulses 26.6 46
135.3
Edible Oils 21.3 39
98.2
Vegetables 192 342
72.9 83.1 78.1 72.4
Fruits 103 305 48.0 52.2
Milk 170.4 401 26.4
Sugar 39.2 58
Meat 9.2 14
Egg 5.8 10
Fish 11.1 22
Source : *Kumar et al. (2016) for projected demand in 2030,

**NCAP Vision 2050 for projected demand in 2050
It is encouraging to note that the outputs have outpaced the projections due to technological
improvements and better logistics. One can naturally expect that the rising food demand will be
accompanied by increasing demand for its safety and quality owing to rising health consciousness of
the masses. Thus, the main challenge will be to develop technologies, practices, varieties and breeds
that are high-yielding as well as safe to human health.
Agriculture-Poverty Linkages
Having direct and indirect linkages with rest of the economy, agriculture contributes to rural
prosperity through employment and income provision to the masses. Evidences suggest that
the speed with which agriculture sector reduces rural poverty is at least twice that what the rest
of the economy does. Following a growth deceleration in post-reforms period in India, the
19
sector recovered its momentum since mid-2000s. Output growth in agriculture1 shows notable
improvement since 2004-05 compared to the earlier period, from 2.4 per cent growth rate
during the pre-reforms period to 3.4 per cent growth between 2004-05 and 2011-12 (Fig 1.8).
Rural poverty estimates of pre- and post-reforms period help one to understand the role of
agriculture growth in rural poverty incidences. During the pre-reforms period, when growth in
agriculture was relatively slow, rate of rural poverty reduction was less than 1 per cent a year.
When growth in agriculture rejuvenated, poverty decline became faster and recorded a 2.32 per
cent annual decline (Fig 1.9). This positive influence is not felt at national level alone.
Figure 1.8 Agriculture growth and poverty decline in rural India
Agriculture growth Rural poverty decline

Growth & decline (% per
1993-94 to 2004-05 2004-05 to 2011-12 1993-94 to 2011-12

4 3.57
2.79
3 2.38
2
1
0
-1
-0.75
-2 -1.36
-3 -2.32
Figure 1.9 Output change in agriculture and poverty reduction across States
(2004-05 to 2011-12)
30
Odisha
25 Maharashtra
Decline in Rural poverty (HCR, %)
Uttarakhand
Andhra Pradesh Bihar Tamil nadu
20 Rajasthan
Himachal Pradesh Gujarat
West Bengal Madhya Pradesh
15
Punjab Haryana Karnataka
Uttar Pradesh
10 Chhattisgarh
5
Jammu & Kashmir
Assam
0
0 10 20 30 40 50 60 70
Change in NSDP (Agri. & allied/ha NSA, %)
Note: Jharkhand & Kerala are not displayed as they were outliers.
1Growth in value of output in agriculture and allied sector measured at 2004-05 prices.
20
Considerable poverty decline was observed among all states where output growth was high. Fig 1.4
plots the change in head count index against change in output growth in agriculture2 between 2004-05
and 2011-12. Barring few states viz., Jammu & Kashmir, Assam & Chhattisgarh, one could observe a
positive relation between output change and poverty reduction in almost all states, indicating
agriculture growth and rural poverty linkages.
Farm income, agrarian distress and farm poverty3

It is often felt that disparity between farm income and non-farm income is rising (Chand, 2008)
and that those who work outside agriculture are progressing much faster than those who work
in it. According to Chand et al., (2015), a cultivator earned three times of what an agricultural
labourer earned in 1983-84. A non-agriculture worker earned three times the income earned by
a farmer or his family members engaged in agriculture as their main economic activity.
In the next five years, there was a small decline in the disparity between farm income per
cultivator and the income of a labourer. The disparity fell by 2011-12 when the income of a
cultivator declined to 2.4 times the wage earnings of an agricultural labourer (Table 1.11).
In recent years, farmers’ suicides have been quoted as an indicator of farmers’ distress. The
issues related to farmers’ suicides have gained lot of political attention. Madhya Pradesh, a
state which was being seen as role model for robust and consistent growth in agriculture
experienced unrest among farmers, largely linked to low prices on their produce.
To help the farmers harvest complete benefits from enhanced output, overall supply chain
management is crucial, besides optimising the internal value chain of farmers. This will include
relevant aspects that will enable integrating the farmer as a value chain actor in the supply chain
of the associated industrial units, as well the ability to directly market their produce to markets
of choice.
Table 1.11 Disparities in Agriculture and Non-agriculture Income

Farm income (F) Wage earning per Income per non-
Year per cultivator agricultural agriculture Ratio L:F Ratio N:F
(Rs) labourer (L) (Rs) worker (N) (Rs)
1983–84 4,286 1,467 12,786 0.34 2.98
1987–88 5,653 2,201 18,036 0.39 3.19
1993–94 12,365 4,784 37,763 0.39 3.05
1999–00 24,188 8,938 78,565 0.37 3.25
2004–05 26,146 10,043 106,688 0.38 4.08
2011–12 78,264 32,311 246,514 0.41 3.15

Source: Chand et al (2015)
2
Change in NSDP (Agriculture & allied, 2004-05 prices) / ha net sown area.

This section has been drawn from Chand et al., (2015)
21
The disparity in farm and non-farm income declined to 1:3.15 and non-agricultural worker
earned 3.15 times in 2011-12 the income of a cultivator. Acceleration in growth of agricultural
output and a decline in the number of cultivators from 2004-05 to 2011-12 arrested and
reversed the rising disparity in the incomes of farmers and non-farmers (Chand et al., 2015).
Annotation
The agrarian distress in the farming community has increased overtime due to a number of
reasons. Chand (2016) attributed this distress to the widening disparities between agricultural
and non-agricultural sectors, resulting in a burgeoning gap between the incomes generated per
worker from the two sectors. In another study, Chand et al., (2015) reported that the growth
rate in per farmer income in this period was mere 1.96 per cent, which was the lowest during
1983-84 to 2011-12. The growth rate in per cultivator income accelerated to 7.29 per cent after
2004 resulting in associated socio-economic benefits.
Price factors are becoming increasingly important in ensuring the welfare of farmers and farm
labourers as consumer price index for agricultural labour (CPIAL) has risen at a faster rate than
that of the price received as measured through the WPI. This may also be a reason for lowered
agricultural income growth. The difference between CPIAL and WPI growth rates is an
obvious indicator of the low growth rate in net income from farms. Any increase in farmers’
income will reduce the agrarian distress and vice-versa.
The agricultural sector being the prime sector of the economy, has received continuous
attention of the policy makers and stakeholders. Earlier policies in agriculture were largely
concentrated on enhancing the productivity and output, there have been no appreciable policies,
that were directly targeted at enhancing farmers’ incomes. The agricultural policy focus has
now clearly shifted towards making farming more directly market-led and to direct its future
development towards enterprise mode, as an important contributor to the nation’s economy.
The vision & mission of "Doubling of Farmers’ Income" (DFI) in India have enthused and
fuelled lot of energy and motivation among the stakeholders and triggering an environment for
channelizing disparate efforts in a unified direction. The DFI goal is also concomitant to the
many associated and well-thought out schemes on insurance for mitigating losses (Pradhan
Mantri Fasal Bima Yojana), ensuring effective marketing through unified national agricultural
marketing platform (e-National Agricultural Market), GST roll out, and improving soil health
via promoting organic farming through Paramparagat Krishi Vikas Yojana, etc. All of these
will contribute towards maximising the gains from farming. These programmes and schemes,
implemented in true spirit, will lead to many improvements that will revolutionise agriculture,
enabling it to tap efficiently into the larger national market, be a market-led enterprise, and
become a truly vibrant business sector.
To ensure that the DFI mission moves in the desired direction within stipulated time frame i.e.
by India’s 75th independence, a systematic and scientific strategic framework is necessitated,
to provide the direction.
22
This DFI Report organised into 14 volumes outlines the strategies and provides a systematic
approach. And, Volume-I elaborates the historical changes in Indian agriculture on major
dimensions.
Key Extracts
 Overall growth in agriculture has moved correspondent to the crop sector. Livestock
sector is growing at an appreciable and sustainable rate and is ahead among all the
sub-sectors.
 During the period 2004-05 to 2011-12, data confirms that there was shift of both
cultivators and landless agricultural labour from agriculture to non-agriculture sector.
Such a shift is good provided they are productively and gainfully employed in alternate
sectors/industries.
 The smallholders (including marginal farmers also) dominate the Indian agriculture.
The situation is found to be sharper in the states like Kerala, Bihar, West Bengal,
Jammu & Kashmir, Uttar Pradesh, Odisha, Tamil Nadu, Uttarakhand along with few
NE states and UTs where the share of smallholders is found to be more than 90 per
cent. These states need more inclusive approach and package of intervention
considering the situation of smallholders.
 Considerable poverty decline was experienced in all the states where output growth
was high. Barring few states viz. Jammu & Kashmir, Assam and Chhattisgarh, one
could observe a positive relation between output growth in agriculture and poverty
reduction in almost all the states, indicating positive correlation agriculture growth and
rural poverty linkages.
 Trends in components of non-food items remain more or less equal in rural and urban
domains. Rather, while food and non-food expenditures are converging in rural sphere,
urban India shows a clear divergence, with a sharp fall in food expenses and a
corresponding increase in non-food expenses.
23
This chapter provides indicators of the performance of agricultural and allied sector across states. The
product mix of crop and livestock categories has been covered in detail. Further, a brief overview of
current status of farm and non-farm income along with major sources of farm household income across
states has been presented.
Growth in GSDP across States

The sectoral growth across states has been analysed using the data of gross state domestic
product (GSDP). During the recent years, states like Bihar, Goa, Madhya Pradesh and
Uttarakhand have shown impressive performance, growing at a rate of more than 9 per cent
per year during 2010-11 to 2014-15. The trend of declining share of agriculture in total output
has continued till 2014-15 (Table 2.1). In Tamil Nadu & Maharashtra, agriculture output share
in total output during TE 2014-15 is just 7 per cent and in Kerala and Uttarakhand, it is around
10 per cent. Highest share of agriculture doesn’t exceed one-third of the output in any of the
states.
Agricultural output as a highest share of the state output is in case of Madhya Pradesh with a
ratio of 28 per cent. In Punjab, Uttar Pradesh and Andhra Pradesh, the shares range between
20 per cent and 25 per cent. The pattern is not just confined to the said year, but has been so
from earlier itself. Between TE 2006-07 and TE 2014-15, output share declined in Bihar and
Punjab by 10 per cent, from 30 per cent to 20 per cent, and from 31 per cent to 21 per cent
respectively. The decline was 9 per cent in Uttarakhand, and 7 per cent in Jammu & Kashmir,
Kerala, Haryana and West Bengal. Notwithstanding its higher share than agriculture, in many
of the states, share of manufacturing also declined during this period. For example, share of
manufacturing declined from 48 per cent to 37 per cent in Jharkhand, 33 per cent to 28 per cent
in Haryana and 31 per cent to 27 per cent in Karnataka. While rest of the states as well
registered a decline, they were moderate, by less than 5 per cent.
The service sector has captured the momentum and compensated the decline in share in output
from agriculture and manufacturing. During TE 2014-15, Kerala produced 70 per cent of its
output through service sector, followed by West Bengal (65 per cent), Tamil Nadu and
Maharashtra (64 per cent both). As a pattern, none of the states recorded a negative change in
this sector’s output share. During the period TE 2006-07 to TE 2014-15, output share grew by
more than 10 per cent in Haryana, Jammu & Kashmir and Jharkhand, and by more than 9 per
cent in Uttar Pradesh, Kerala and West Bengal. Such trends and patterns clearly indicate
transformation across states and increasing dependence on non-farm sector for growth.
Output composition within agriculture sector shows mixed trends. Output shares in forestry
sector in most of the states have not seen major changes. Fisheries sector has gradually picked
up, albeit very marginally. Andhra Pradesh and Kerala have reduced their output share from
crop and livestock sector. Andhra Pradesh has marginally shifted towards fisheries sector
(Table 2.2). While output share in crop and livestock sector has declined by 7 per cent between
25
TE 2006-07 and TE 2014-15, output in fisheries sector has increased by 7 per cent. Kerala,
rather, has produced more from forestry than in fisheries. A decline of 4 per cent output share
in agriculture and livestock has been compensated by a 3 per cent increase in fisheries. On the
other hand, Jharkhand, Madhya Pradesh, Chhattisgarh and Bihar have expanded their output
primarily through crop and livestock sector.
Many states like Uttar Pradesh, Kerala, Andhra Pradesh, Himachal Pradesh, Jharkhand, Madhya
Pradesh, Meghalaya, Sikkim etc. have performed well in the second period (2010-11 to 2014-15) where
agriculture sector reported an increase in growth in GSDP. Apart from this, in few states like Andhra
Pradesh, Himachal Pradesh, Arunachal Pradesh and Sikkim, the increase in growth rate in agriculture
sector surpasses the growth in manufacturing sector and in case of Sikkim service sector also. Not just
the agriculture reflects declining contribution, but the manufacturing sector as well between TE 2006-
07 and TE 2014-15. Seven out of twenty major states have reduced their output in crop and livestock
sector, nine have increased.
What Comprises Indian Agriculture and Allied Sector?

Agriculture and its allied sectors play an important role in the Indian economy by contributing
towards the Gross Domestic Product (GDP) which is estimated in terms of Gross Value Added
(GVA) using the production approach. In this context, information on value of output is of
utmost importance. With this in view, the contribution in terms of value of output from different
sectors in the TE 2014-15 (with base year 2011-12) has been presented in subsequent charts.
Agriculture & allied sectors consist of four sub-sectors namely, Crop sector, Livestock,
Forestry and Fisheries. The share of crop sector in the total Value of Production (VoP) from
agriculture and allied activities at 61.31 per cent is the highest. Livestock comes next with a
share of 26.80 per cent and is followed by forestry (7.39 per cent) and fisheries (4.50 per cent)
sectors.
The economic activities

included in these sectors are
further divided. Crop sector Crop Sector
Livestock Fisheries Forestry
includes field crops, (Field + Horti.)
(26.80%) (4.50%) (7.39%)
plantation crops, horticultural (61.31%)
crops, drugs and narcotics
crops amongst others.
Similarly in case of livestock
it includes production of milk, meat, eggs, wool, dung, etc.
The milk group contributes highest (66.6 per cent) share in the VoP within the livestock sector.
Meat group comprises all meats (including mutton, pork, poultry, etc.), meat products and meat
by-products comprising hides and skins and other by-products. The share of this sector in the
total VoP from livestock is 20 per cent, and is followed by dung (6.31 per cent), eggs (3.43 per
cent) and others (3.05 per cent).
26
Table 2.1 Performance of Agriculture, Manufacturing and Service Sectors across States (Rs. billion @ 2004-05 prices)
Agricultural and Allied Sector Manufacturing Sector Service Sector Overall
Growth in Growth in Growth in Growth in
GSDP GSDP GSDP GSDP
States GSDP GSDP GSDP GSDP
TE2006/ TE2014/ Period- Period- TE2006/ TE2014/ Period- Period- TE2006/ TE2014/ Period- Period- TE2006/ TE2014/ Period- Period-
2007 2015 I II 2007 2015 I II 2007 2015 I II 2007 2015 I II
Odisha 187.9 233.7 3.67 0.32 289.3 464.5 9.02 3.16 364.8 705.4 10.48 5.99 841.9 1403.5 8.54 4.07
Jammu & Kashmir 77.0 86.6 1.95 -1.69 82.1 113.1 4.23 5.38 130.2 248.2 8.88 6.41 289.3 447.9 5.84 4.46
Punjab 321.2 367.9 1.98 1.38 276.7 485.0 11.55 2.13 443.5 887.0 8.47 9.43 1041.3 1739.8 7.45 5.48
Uttar Pradesh 794.2 1029.1 2.67 3.69 679.5 1004.0 7.64 1.68 1322.6 2631.9 9.50 7.91 2796.3 4664.9 7.22 5.53
Kerala 210.8 201.1 -1.46 1.59 298.3 456.4 6.80 2.53 798.4 1537.8 10.44 7.73 1307.4 2195.3 7.93 6.01
Andhra Pradesh 402.4 595.9 4.71 6.43 323.2 498.8 7.88 2.45 721.4 1376.9 9.28 7.28 1447.1 2471.6 7.73 6.05
Karnataka 329.3 477.8 5.97 2.98 564.2 863.7 7.96 2.64 952.2 1877.1 9.44 8.78 1845.6 3218.5 8.38 6.11
Tamil Nadu 277.3 347.7 4.04 1.46 793.6 1397.6 9.36 3.11 1449.4 3068.2 11.28 8.18 2520.3 4813.4 9.96 6.12
Rajasthan 336.2 511.1 5.54 1.77 437.7 813.3 8.40 6.34 613.5 1260.0 10.17 8.09 1387.4 2584.4 8.55 6.17
Chhattisgarh 111.9 183.2 5.42 5.19 229.1 403.5 9.15 6.15 178.5 369.5 10.68 7.37 519.6 956.1 8.94 6.43
Himachal Pradesh 63.7 82.8 1.88 6.53 102.2 177.6 10.23 3.63 96.3 198.3 10.12 9.35 262.2 458.7 8.34 6.52
Maharashtra 499.8 657.1 4.78 0.07 1462.6 2600.3 9.62 4.92 2774.5 5676.7 10.39 8.16 4736.9 8934.2 9.61 6.55
West Bengal 510.4 608.1 2.39 2.72 475.4 709.5 5.27 5.52 1245.9 2408.9 9.05 8.16 2231.7 3726.5 6.83 6.70
Haryana 228.8 301.4 4.01 2.25 343.5 555.2 7.32 4.56 483.5 1148.2 13.07 9.43 1055.8 2004.8 9.42 6.89
Gujarat 376.5 534.0 4.35 5.47 922.1 1698.2 10.96 4.81 1003.2 2111.8 10.93 9.44 2301.8 4343.9 9.97 7.08
Jharkhand 95.2 182.6 6.48 11.05 280.5 408.7 3.40 3.64 213.7 504.0 12.23 9.72 589.4 1095.4 7.25 7.49
Uttarakhand 54.8 71.2 2.23 3.63 88.7 279.4 19.04 11.45 140.8 362.3 16.34 7.34 284.4 713.0 14.83 8.50
Madhya Pradesh 329.7 650.5 4.28 17.99 334.1 599.9 10.64 3.42 542.1 1062.3 8.98 7.95 1205.8 2312.7 8.24 9.20
Goa 10.9 10.3 -1.80 2.49 64.7 98.1 8.36 0.66 62.5 184.2 12.22 16.79 138.1 292.6 9.52 9.84
Bihar 244.4 355.3 3.77 3.74 120.2 320.4 16.96 6.18 445.7 1064.7 9.94 13.46 810.3 1740.4 9.41 9.89
North east
Mizoram 6.4 10.1 9.09 -0.91 5.3 8.7 10.30 2.48 16.8 35.2 11.58 6.51 28.5 54.1 10.80 4.36
Assam 139.8 179.7 3.16 3.30 143.6 199.5 2.90 6.03 271.3 487.8 8.16 7.03 554.6 867.0 5.61 6.00
Nagaland 20.7 28.9 3.56 4.25 8.8 15.5 9.25 8.99 34.5 69.5 9.49 7.63 64.0 113.9 7.64 6.91
Manipur 12.7 16.2 4.16 5.51 19.9 21.3 1.78 2.65 21.3 43.4 7.64 11.15 53.9 80.9 4.85 7.57
Arunachal Pradesh 12.4 17.9 3.51 4.38 11.4 17.4 7.93 3.62 12.4 23.6 11.23 5.63 36.1 58.8 7.73 4.62
Tripura 23.4 40.0 8.73 4.66 24.0 41.6 7.69 9.10 47.6 97.9 8.85 11.68 95.1 179.4 8.54 9.39
Meghalaya 15.8 21.3 2.04 6.99 19.0 41.4 10.75 8.34 36.1 70.9 8.93 8.77 70.9 133.6 8.02 8.34
Sikkim 3.3 5.7 3.48 12.29 5.5 35.7 35.56 9.49 10.0 17.9 9.96 6.02 18.9 59.3 19.26 8.63
All India 5723 7841 3.52 4.94 8385 15538 8.99 6.78 16020 33959 10.00 9.70 30128 57338 8.58 8.22
Source: DFI Committee Estimates based on the data from MOSPI
Note: States have been sorted by growth in GSDP for the period-II. Period 1: 2004-05 to 2010-11; Period-II: 2010-11 to 2014-15
27
Table 2.2 Performance of various sub-sectors of Agriculture across States (Rs. lakhs @ 2004-05 prices)
Crops and Livestock Sector Forestry Fisheries Agriculture and allied Total
Growth in Growth in Growth in Growth in
State GSDP GSDP GSDP GSDP
GSDP GSDP GSDP GSDP
TE2006/ TE2014/ Period- Period- TE2006/ TE2014/ Period- Period- TE2006/ TE2014/ Period- Period- TE2006/ TE2014/ Period- Period-
2007 2015 I II 2007 2015 I II 2007 2015 I II 2007 2015 I II
Jammu &Kashmir 61.6 71.6 2.64 -1.97 13.9 13.2 -1.49 -0.13 1.5 1.8 3.27 -1.69 77.0 86.6 1.95 -1.69
Maharashtra 391.2 517.9 5.59 -1.38 93.6 123.1 1.92 6.44 14.9 16.2 0.41 2.21 499.8 657.1 4.78 0.07
Orissa 150.2 189.1 4.07 -0.23 26.5 26.9 0.95 -0.85 11.1 17.6 4.26 8.95 187.9 233.7 3.67 0.32
Goa 7.1 6.3 -2.74 0.34 0.8 1.1 2.69 9.28 3.0 2.9 -0.80 4.70 10.9 10.3 -1.80 2.49
Tamil Nadu 238.4 298.0 4.12 1.20 17.2 21.0 1.83 3.63 21.7 28.6 5.10 2.73 277.3 347.7 4.04 1.46
Punjab 305.9 347.6 1.91 1.23 12.3 16.6 3.30 4.46 3.0 3.7 3.12 2.53 321.2 367.9 1.98 1.38
Kerala 172.0 157.0 -2.25 1.35 21.1 25.3 2.80 2.66 17.7 18.8 0.57 2.08 210.8 201.1 -1.46 1.59
Rajasthan 287.7 455.1 6.08 1.77 47.5 54.2 1.78 1.56 1.0 1.8 8.80 7.77 336.2 511.1 5.54 1.77
West Bengal 406.5 471.1 2.10 1.86 24.2 35.5 1.98 13.86 79.6 101.6 3.96 3.20 510.4 608.1 2.39 2.72
Haryana 216.8 285.1 4.00 2.16 10.7 13.2 2.58 3.07 1.4 3.2 14.70 7.27 228.8 301.4 4.01 2.25
Uttarakhand 40.7 51.9 2.14 2.52 14.1 19.2 2.46 6.76 0.1 0.1 6.84 1.14 54.8 71.2 2.23 3.63
Karnataka 280.6 405.7 6.07 2.97 41.9 59.4 4.49 3.31 6.8 12.7 10.54 2.06 329.3 477.8 5.97 2.98
Bihar 206.3 314.2 4.57 3.75 26.7 22.8 -2.00 -1.88 11.4 18.3 1.79 12.61 244.4 355.3 3.77 3.74
Uttar Pradesh 718.3 934.9 2.65 3.82 65.6 77.7 2.13 2.19 10.3 16.5 7.29 3.66 794.2 1029.1 2.67 3.69
Andhra Pradesh 319.3 432.2 4.52 3.95 20.7 26.2 2.19 4.89 62.4 137.5 6.40 15.91 402.4 595.9 4.71 6.43
Chhattisgarh 80.4 139.8 6.18 5.46 25.9 30.8 1.90 2.77 5.7 12.6 9.56 8.51 111.9 183.2 5.42 5.19
Gujarat 314.5 463.9 4.92 5.83 45.2 50.2 0.63 2.75 16.7 19.8 3.53 3.15 376.5 534.0 4.35 5.47
Himachal Pradesh 47.9 61.0 0.70 6.94 15.4 21.4 5.30 5.34 0.4 0.5 2.03 7.56 63.7 82.8 1.88 6.53
Jharkhand 72.7 150.6 6.90 12.79 20.9 27.7 3.98 2.95 1.6 4.4 18.13 12.62 95.2 182.6 6.48 11.05
Madhya Pradesh 292.8 607.6 4.61 19.43 34.1 38.5 1.58 0.91 2.8 4.3 1.47 12.85 329.7 650.5 4.28 17.99
North east
Mizoram 3.7 7.3 14.40 -1.77 2.4 2.3 -0.57 0.43 0.3 0.5 0.97 7.01 6.4 10.1 9.09 -0.91
Tripura 19.3 27.1 6.44 1.83 2.6 8.2 18.20 9.42 1.6 4.7 16.05 15.43 23.4 40.0 8.73 4.66
Assam 118.0 147.5 2.92 2.67 13.5 19.2 4.78 4.43 8.2 13.1 3.81 9.61 139.8 179.7 3.16 3.30
Nagaland 16.2 22.5 3.16 4.41 4.2 5.9 4.58 3.70 0.3 0.5 11.15 3.46 20.7 28.9 3.56 4.25
Manipur 9.6 12.8 5.22 6.14 1.9 1.9 -0.23 -0.21 1.2 1.5 1.69 8.22 12.7 16.2 4.16 5.51
Meghalaya 11.5 16.7 2.55 9.14 4.0 4.2 1.07 -0.34 0.3 0.3 -4.65 6.17 15.8 21.3 2.04 6.99
Sikkim 2.9 5.4 4.13 13.14 0.4 0.3 -2.18 0.85 0.0 0.0 3.64 35.36 3.3 5.7 3.48 12.29
All India 4824 6676 3.64 5.10 619 736 2.08 2.16 280 426 4.57 7.21 5732 7841 3.52 4.94
Source: DFI Committee Estimates based on the data from MOSPI
Note: States have been sorted by growth in GSDP for the period-II. Period 1: 2004-05 to 2010-11; Period-II: 2010-11 to 2014-15
28
The forest products are classified into two broad groups as below:
a) major products comprising industrial wood (forest and trees outside forest) which
comprises of around 49 per cent of total value of output from forestry and firewood (32.28
per cent) and
b) Non-Timber Forest Products comprising 18.66 per cent of Value of Production (VoP) in
forestry.
The fishing sector comprises the following:

a) Inland fishing which retains highest share (59 per cent) in VoP of fisheries sector and
b) Marine fishing contributing 41 per cent in the VoP of fisheries sector in the country.
Being the largest sector in agriculture, crop sector holds large number of contributors. These
include a range of field crops, namely, cereals (27.24), pulses (4.46), oilseeds (8.30), sugar (6.24)
and fibres (6.21) each of them contributing to the total VoP from sector as shown in respective
parentheses (Fig 2.1).
Among the cereals, paddy and wheat alone contribute around 86 per cent share to the VoP and
dominate. Similarly in case of pulses, gram, arhar and urd are the highest contributor to the VoP
are gram, arhar and urad, while in oilseeds, soybean, rapeseed & mustard, groundnut and coconut
are the major contributors. Cotton (kapas) is the lone highest contributor with 94.45 per cent share
in the total VoP from fibres.
The other shares in the VoP from crop sub-sector are those from plantation & horticultural crops
including medicinal & narcotics (3.75%); and condiments & spices (4.04%). Of these, it is the
horticultural crops including fruits & vegetables that contribute the highest accounting for 25.17
per cent (Fig 2.2). This contribution is next only to that from cereals. Other contributors VoP shares
from crop sub-sector include various crops like rubber, guar seed, fodder, grass, mulberry etc (8.19
per cent); by-products (5.56 per cent); and kitchen garden (0.45 per cent).
The share to VoP from livestock sector and the composition thereof are detailed in Fig. 2.3.
India is the land of diverse agro-ecologies and produces a number major and minor agri-based
commodities. In terms of diversity of agro-ecologies and the potential for producing a cafeteria of
agri-products, India is uniquely placed in the world and is incomparable.
Box 2.1 provides the total production of all major agri-commodities in India. Currently, the country
produces approximately 1.13 billion tonnes of agricultural produce. These commodities vary in
terms of their importance for food, feed & fodder, clothing as also raw and intermediate products
for industry.
29
Box 2.1. Volumes of different commodities produced in India, TE 2014-15, (000’ tonnes)
Cereals
Pearl
Paddy Wheat Sorghum Barley Maize Finger Millet Small Millets
millet
105790 91961 5423 1732 23564 1873 417
9059
Pulses
Gram Pigeonpea Black Gram Green Gram Lentil Horse Gram Moth Peas
8564 3002 1876 1431 1062 229 300 4176
Oilseeds
Rapeseed &
Linseed Sesamum Groundnut Castor Seed Coconut Niger Seed Safflower
Mustard
148 743 7270 1853 14862 92 104
7396
Sunflower Soybean
494 12300
Sugar and Jaggery
Sugarcane
351891
Fibres
Cotton Jute Sunhemp Mesta
34976 10681 619 568
Indigo, Dyes & Tanning Material Drugs & Narcotics
Tea Coffee Tobacco Opium Saffron Cocoa
1180 316567 220 345 1 15
Condiments & Spices
Cardamom Chillies Black Pepper Dry Ginger Turmeric Arecanut Garlic Coriander
21 1467 56 699 997 659 1312 433
Fennel Cumin Carom Fenugreek Tamarind Nutmeg Cloves
91 465 21 111 197 13134 1
Fruits
Banana Cashewnut Mango Grapes Papaya Apple Mosambi Lemon Orange
28485 750 18320 2630 5311 2182 3878 2770 3346
Other Citrus Pine
Litchi Sapota Almonds Jack Fruit Watermelon Muskmelon Pear
Fruit Apple
564 1526 11 1612 1883 831 305
970 1764
Passion Pomegranat
Walnut Guava Gooseberry Plum Peach Strawberry Other Fruits
Fruit e
237 3620 1222 501 96 5 5875
118 1293
Vegetables
Sweet Green
Potato Tapioca Onion Cabbage Cauliflower Okra Tomato
Potato Peas
44969 6583 18381 8719.3 8129 6135 17783
1149 4176
Other
Radish Beans Bittergourd Bottlegourd Capsicum Carrot Cucumber Pumpkin
Vegetables
2401 1614 839 1912 168 1062 666 637
25791
Other Crops
Rubber Guar Seed Mushroom Floriculture
777567 3023 34 1565
Livestock
Milk Group Meat Eggs Wool
138810 6291 413 47
Fisheries
Inland Fish Marine Fish
6260 3422
30
Figure 2.1 Composition of Output (VoP) from field crops
Field Crops
Cereals Pulses Oilseeds Sugars Fibres

(27.24%) (4.46%) (8.30) (6.24%) (6.61%)
Gram Linseed Sugarcane Cotton

Paddy (75.27%) (94.45%)
(51.26%) (43.83%) (0.45%)
Gur Jute
Pigeonpea Sesamum
Wheat (5.25%)
(18.49%) (3.06%) (24.38%)
(34.65%)
Blackgram Groundnut Sunhemp

(12%) (22.05%) Others (0.04%)
Sorghum (0.35%)
(2.61%)
Grengram R&M Mesta
(9.75%) (23.39%) (0.22%)
Pearlmillet
(2.61%)
Lentil Castor Others
(6.21%) (0.05%)
(8.57%)
Barley
(0.61%)
Horse gram
(0.74%) Coconut
(12.19%)
Maize
(7.53%) Moth
(1.06%)
Niger seed
(0.26%)
Fingermillet Cow pea
(0.59%) (0.26%)
Safflower
(0.26%)
Lakh/Khesr
i (1.22%)
S Millets Sunflower
(0.11%) (1.34%)
Peas
(3.75%) Soybean
(27.72%)
Other
Cereals Other Pulses
(0.02%) (2.68%) Taramira
(0.33%)
Others
(0.39%)
31
Figure 2.2 Composition of Output (VoP) from horticulture and other crops
Plantation, Horticultural and Other Crops
Drug & Condiment & Spices Other Crops By Products

Narcotics (4.04%) (8.19%) (5.56%)
(3.75%)
Cardamom Straw &
Tea (16.67%) Rubber
(16.67%) Stalks
(15.07%)
(88.51%)
Chillies
Coffee (16.67%) Guar Seed
(14.83%) (33.24%)
Others
Black (11.49%)
Pepper Misc food
Tobacco (16.67%) crop
(16.68%) (0.03%)
Dry Ginger
(16.67%) Misc non
food crop
Opium
(0.10%) Turmeric (1.57%)
(16.67%)
Fodder
Betel leaves Arecanut (31.93%)
(18%) (16.67%)
Garlic
(16.67%) Grass
Isabgol (17.79%)
(1.01%)
Coriander
(16.67%)
Mulberry
(0.04%)
Saffron Fennel
(0.09%) (16.67%)
Mushroom
Cumin (0.34%)
(16.67%)
Cocoa
(0.45%) Carom
(0.26%)
Other Fenugreek
(32.17%) (0.47%)
Tamarind
(1.83%)
Nutmeg
(0.93%)
Cloves
(0.01%)
Others
(4.09%)
32
Fruits & Vegetables
Fruits
Vegetables
Pineapple (0.87%)
Banana (8.09%) Brinjal (5.58%)
Sapota (0.77%)
Cashewnut (1.49%) Cabbage (2.93%)
Cherry (0.02%)
Potato (7.58%) Cauliflower (4.20%)
Sweet Potato (0.47%) Almonds (0.05%)

Okra (3.32%)
Tapioca (1.22%) Jack Fruit (0.58%)

Tomato (6.32%)
Onion (4.34%) Pear (0.23%)

Drum Sticks (0.74%)
Mango (12.03%) Walnut (0.74%)

Green Peas (2.35%)
Floriculture (5.66%) Guava (1.29%)

Beans (1.29%)
Grapes (1.41%) Gooseberry (0.59%)

Bittergourd (0.43%)
Papaya (1.56%) Plum (0.24%)

Bottlegourd (0.48%)
Passion Fruit (0.05%)

Apple (1.21%)
Capsicum (0.10%)
Mosambi (0.64%) Peach (0.19%) Carrot (0.38%)
Lemon (1.76%) Pomegranate (1.11%)

Cucumber (0.20%)
Orange (3.91%) Other Temperate Fruits (0.01%)

Muskmelon (0.22%)
Other Citrus Fruit (0.29%) Other Fruits (2.35%)

Parmal (0.08%)
Litchi (0.76%)
Radish (0.84%)
Pumpkin (0.15%)
Watermelon (0.92%)
Other Vegetables (7.97%)
33
Figure 2.3 Composition of Output (VoP) from livestock, forestry and fisheries
Livestock (26.80%)
Fisheries (4.50 %) Forestry (7.89%)
Milk Meat Eggs Wool & Silk worm & Dung Increment in
Group Group (3.43%) Hair Honey (6.31%) Livestock
(66.1%) (20.60%) Cocoon (2.09%) Inland Fish Marine Fish
(0.10%)
(0.87%) (58.67%) (41.33%)
Meat
(92.36%)
Wool
Bovine (72.16%)
(12.58%)
Mutton
(31.92%) Hair &
Bristle
Pork (4.09%) (27.78%) Industrial Firewood Non Timber
Wood Forest
Dung Fuel Dung Manure (32.28%) Product
Poultry Meat (49.05%)
(34.88%) (65.12%) (18.66%)
(43.06%)
Meat Products
(3.31%)
By-products
(4.33%)
Hides (1.86%)
Skins (1.15%)
Other by Products
(1.32%)
34
Value of any agricultural produce is a manifestation of its demand, and the value realised from
it depends on a number of factors. In some cases, demand is linked to administered and
allocated prices, and in some cases the terms of trade many not be favourable, despite untapped
demand, such as in the case of nutri-cereals (nutri-cereals were erstwhile called coarse grains).
It would be worthwhile to evaluate the relationship between acreage and value and use this to
plan future actions, to make the most of agricultural assets, outputs and markets.
Specifically in case of India, agriculture produces surplus foodgrains, which contributes vastly
to food security; however, grains alone cannot assure nutritional security, as also the desired
gains in farmers’ income. The DFI Committee analysed the area used and value generated and
no direct correlation is observed. As depicted in Box 2.2, the area & value pyramids show that
in case of field crops, 42 per cent of the area under major cereal crops (rice, wheat and maize)
contributes only 19 per cent in value; and in contrast horticulture with just 12 per cent of area
contributes is 24 per cent to the value created.
Box 2.2 Area, Volume and Value Pyramids

Area share Value share
Horticulture 24%
Others 3%
Milk 24%
Nutricereals
7%
Rice, Wheat and Maize 19%
Commercial Crops
9% Commercial Crops 8%
Horticulture 12 % Meat 8%
Oilseeds 6%
Pulses 13%
Fisheries 6%
Oilseeds 13%
Pulses 3%
Rice Wheat and Maize 42% Nutricereals

1%
Marketing Interventions
Price policy is an important instrument for providing incentives to farmers for motivating them
to go in for production oriented investment and technology, and thereby plays a pioneering role
in the economic development of a country. The agricultural price policy in India is basically
aimed at intervening in agricultural produce markets to influence the level of fluctuations in
prices and price-spread from farm gate to the retail level (Government of India [GoI] 2010).
India’s agricultural price policy includes three main types of administered prices: support,
procurement, and issue price. The support price is generally announced before the
sowing/planting time in respect of select crops raised in kharif and rabi seasons. The support
35
price is notified in the form of minimum support price (MSP). It is recommended to the
Government by the Commission on Agricultural Costs and Prices (CACP) and the Government
notifies it after due consideration. The MSP is based on cost of production with a certain margin
of profit added to it, and serves as a price signal to the market. The intention of such a price
signal was to assure the farmer that, in the event of markets failing to discover appropriate
prices, and if there is a fall below the MSP, then the government shall enter the market to
procure from the farmers. While this is in practice since 1971, prior to that and beginning 1965,
government used to notify two separate prices, namely support price and procurement price.
While support price served as a price signal to the farmer, procurement price was the one at
which the government itself undertook procurement.
The government had historically stepped in to procure stocks regularly, mainly of paddy and
wheat, for which there is robust procurement mechanism. Paddy and wheat have been
integrated into the food public distribution system in which Government issues these
commodities to state governments at a concessional rate. The state governments are free to add
further concessions on this issue price. In case of pulses and others the procurement
intervention has mainly been driven by market demand, under the price support scheme of the
Ministry of Agriculture, and is therefore not as robust. While, under the National Food Security
Act (NFSA) 2006, there exists the provision for the inclusion of other commodities like pulses,
millets etc., as of now this is not in practice. Procurement of paddy and wheat and integration
into PDS has created a sustainable cycle for the two.
On account of the subsidised issue price, not only does the central government bear substantive
fiscal obligations, but market forces also stand to get distorted. The areas sown for the majority
of crops, are influenced by the actual prices farmers realise for the previous crop and their price
expectations from the crop in the coming season’s market. The support prices should generally
effect farmers’ decisions, regarding land allocation to crops, however, the notified price is
realised by farmers only where regular government procurement is made possible (mainly
paddy and wheat), and this in turn became an influencing market force.
The three-pronged market intervention sketched above, combined with new cropping
technologies for wheat and paddy, resulted in a total shift towards rice-wheat cropping and
consumption since the launch of green revolution in the country. Between 1960s and 2010,
wheat consumption of urban Indians almost doubled from 27 kg to 52 kg per capita per annum.
However, this happened at the cost of consumption of traditional cereals like sorghum and
other millets, reducing the average annual per capita consumption from 32.9 kg to 4.2 kg in the
corresponding period. In result of this approach, the area under millets has shrunk by 23 per
cent for pearl millets, 49 per cent for finger millets, 65 per cent for sorghum and 85 per cent
for small (or minor millets).
While it is generally believed that this dietary shift has been demand led, (since wheat and rice
are perceived as superior to millets), studies indicate that the shift is significantly supply driven.
The supply push has come from a higher MSP assured procurement, concessional rate of issue
price and a systematic channelisation through PDS. The unseen consequence of this calorie-
36
dominant food security approach has been nutritional deficiency in the consumer. This is borne
out by the latest findings of national family health survey conducted by NSS in 2015-16.
India fares badly in terms of Infant Mortality Rate (IMR), Maternal Mortality Rate (MMR),
and anaemia among women in reproductive age. Nutrition related diseases like Kwashiorkar
are high. To exemplify through a specific case, the NSS study shows that anaemia in women
of reproductive age has increased in Telangana (part of erstwhile Andhra Pradesh) from 49.8
per cent in its first survey (1999-2000) to 55 per cent in its latest survey of 2015-16. There is
clearly the need to revisit the strategy for demand and supply including PDS system (as well
through ICDS, Mid-Day Meal scheme, etc.) for balancing the nutritional requirements and
nutritional security of the country.
Marketing plays a crucial role in affecting the agricultural situation of a country. The major
problem faced by farmers is where to sell the produce. In this context, the role of a selling agent
is important and choosing between agencies is governed by several factors; price offered, being
the primary. Crops sold through various agencies by farmers is shown in Fig 2.4.
Figure 2.4 Sale of different commodities through various agencies (%)
Sugarcane 52 21 27
Wheat 19 74 7
Paddy 14 73 13
Maize 9 82 9
Cotton 7 74 19
Onion 3 94 3
Groundnut 3 77 20
Coconut 1 95 4
Greengram 1 98 1
Gram 1 94 5
Rapeseed & mustard 1 95 4
Soybean 1 95 4
Pigeonpea 1 92 7
Blackgram 1 94 5
Pearlmillet 1 91 8
Sorghum 1 92 7
Jute 96 4
Fingermillet 90 10
Potato 95 5
Lentil 88 12
Barley 98 2
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Sale through govt and cooperatives Sale through local private and mandi Sale through other modes
Source: DFI Committee Estimates based on NSSO (2014)
As observed, in almost all of the crops the majority of sale is through local private and mandis
and only a few are sold through government and cooperative agencies. Only in case of
37
sugarcane, the majority of sale is done through government and cooperative agencies. The
major crops like paddy and wheat whose procurement is governed and monitored through Food
Corporation of India (FCI) also shows lower volume of sales through a government or
cooperative agency in the country. This raises a question on the effectiveness of procurement.
Procurement of foodgrains at MSP is carried out by FCI. However, FCI operates in only certain
states and selected districts, that initially had a surplus of foodgrains. The quantity to be
procured is determined by the government’s stocking needs and under the public distribution
system. The role of FCI has evolved over time, from being an agency to procure food grains
and distribute to states for the public distribution system (PDS), to one that is expected to be a
device to maintain MSP rates by procuring whatever is offered. Over the years, FCI has
encouraged decentralised procurement through the states, in preference to direct purchase.
With this, the procurement zone has expanded to cover states like Madhya Pradesh, Odisha etc.
Farm Households’ Income: Major Sources at State Level

It is difficult to fully demarcate and identify different categories on the basis of sources of
income. Box 2.3 provides estimates of income and sources of income across states. The share
of income from crop cultivation is relatively higher in Punjab, Haryana, Chhattisgarh, Madhya
Pradesh, Uttar Pradesh and Uttarakhand; this is least in case of Jammu & Kashmir, Tamil Nadu
and West Bengal. The composition of different sources of income is quite similar, even in the
best performing state, viz. Punjab, and the least performing state, viz. Bihar. The income from
farming of animals occupies a larger share in Haryana, Gujarat, Odisha, Jharkhand and Andhra
Pradesh; while its share is the least in Kerala, Chhattisgarh, Karnataka and West Bengal.
Box 2.3 Categorisation of States on the basis of Income (monthly)

18000
16000 Non-farm Business Farming of Animals Crop Cultivation Wages
14000
12000 All India Monthly

Income 6426
10000
8000
6000
4000
2000
0
TR
HR
TN
HP
TE
RJ
OD
WB
PB
UTs
JH
BH
JK
KE
MZ
KR
MH
CH
MN
MG
GJ
MP
UP
UK
INDIA
AR
NG
SK
AP
AS
Source: DFI Committee Estimates based on NSSO (2014)
38
Farmers rely on multiple sources to secure their livelihood. As far as non-farm business and wages &
salary are concerned, states like Kerala, Jammu & Kashmir, Himachal Pradesh, Tamil Nadu and West
Bengal earn maximum from these two sources. As these states are special states in terms of the typology
i.e. the states fall into either hilly or coastal typology and thus dominated by specialised horticultural
and/or fishery products. These states need to develop a differentiated strategic framework. It is also
noted that Chhattisgarh farmers derive their total income only from crops and wages; hence, the state
would need to take this into consideration for preparing an appropriate strategic plan.
In Punjab, the state with highest farmer income in the country, the share in income among crop
cultivation, farming of animals, wages and non-farm income stands at 60, 9, 26 and 4
respectively. In Bihar, the state with the lowest farmer income, the respective share of aforesaid
income sources are 48, 8, 37 and 7. While these ratios will vary from state to state depending
on local situation, on the whole, the desirable strategy should be to increase the share of income
from farming sources (crops and animals). This is critical if farming is to be rendered more
viable.
Current Status of Farm and Non-Farm Income across States

Chand et al., (2015) provided the farm income details for the income earned by a cultivator,
per unit of net sown area per household/holding along with the income earned by a labour.
Between 1983–84 and 2011–12, the real farm income per cultivator deflated by CPIAL (base
year 2004–05) rose 2.7 times, from Rs. 16,103 to Rs. 42,781; in 2011–12, a cultivator earned
an annual income of Rs 78,200 at current prices; while one hectare of net cultivated area
generated an income of Rs 80,800 to a farmer (Table 2.3).
Table 2.3 Real and Current Farm Income and Wage earnings of agricultural worker
Per hectare of Per Wage earning per

Year Per cultivator
net sown area holding worker
Real income (Rs.)

1983–84 16,103 14,798 22,603 5,513
1987–88 17,030 16,770 22,298 6,630
1993–94 21,110 21,345 27,147 8,168
1999–00 26,875 26,437 31,325 9,931
2004–05 26,146 30,755 34,103 10,043
2011–12 42,781 44,176 44,688 17,662
Income at current prices (Rs.)
2011–12 78,264 80,817 81,753 32,311
Growth in farm income (Rs.)
Period Total Per Cultivator Per Holding Per hectare of NSA
1983-84 to 1993-94 3.67 2.74 1.85 3.73
1993-94 to 2004-05 3.30 1.96 2.10 3.38
2004-05 to 2011-12 5.36 7.29 3.94 5.31
Source: Chand et al (2015)
39
A decent growth in farm income requires some cultivators moving away from agriculture along with
high growth in output and favourable prices for farm produce as has been also opined by Chand et al.,
(2015). This again emphasized the need of employment in non-farm sectors and income from wages
and salaries to reduce the income disparities and promotion of inclusive growth.
The farm income in real terms increased at the rate of 3.67 per cent per year between 1983–84
and 1993–94. The annual growth rate of the income of farmers accelerated to 5.36 per cent
after 2004-05. The growth figures measured on the basis of different denominators, like per
cultivator, per holding or per hectare of NSA basis, also appeared promising in 2004-05 to
2011-12 as compared to the previous period i.e., 1993-94 to 2004/05. A higher growth in farm
income on per cultivator basis in 2004-05 to 2011-12 could be due to decline in number of
cultivators, as estimated by NSSO from 16.7 crores in 2004–05 to 14.6 crores in 2011–12.
Key Extracts
 States like Bihar, Goa, Madhya Pradesh and Uttarakhand have shown impressive
performance and have grown at the rate of more than 9 per cent per year during 2010-
11 to 2014-15. The trend of declining share of agriculture in total output has continued
till recent times. Not only agriculture, but the manufacturing sector also reflects a
declining share in contribution to GDP. Despite a higher share than agriculture, in
many of the states, share of manufacturing has also declined during this period.
 Service sector has captured the momentum and compensated the decline in output in
agriculture and manufacturing.
 The share of income from cultivation of crops is relatively higher in Punjab, Haryana,
Chhattisgarh, Madhya Pradesh, Uttar Pradesh and Uttarakhand while income from
farming of animals occupies the larger share in Haryana, Gujarat, Odisha, Jharkhand
and Andhra Pradesh. Surprisingly, Chhattisgarh is found to derive total income from
crops and wages; thus the state needs to take this into consideration for preparation of
strategic plan for agricultural sector.
 As far as non-farm and wages & salary as alternate sources of income are concerned,
states like Kerala, Jammu and Kashmir, Himachal Pradesh, Tamil Nadu and West
Bengal earn maximum from these two sources. As these states are having special
typology, i.e. the states fall into either hilly or coastal typology, agriculture in these
states are dominated by horticultural and fishery products. Again these states need to
take special attention and separate strategic framework for doubling income of farmers.
 As moving away from agriculture has been reported as an important factor for growth
in farm income, the diversification in the sources of income like employment in non-
farm sectors and earnings from wages and salaries, should also be the policy focus of
the connected ministries of the government.
40
Various technology and cultivation practices are followed across states. There exist exigent challenges
in terms of yield gaps and there is need to consider the contribution of total factor productivity (TFP)
to bridge these gaps. This chapter also provides a description of regional use pattern of various inputs
like irrigation, seed, fertilizer and credit; and brings out the role and importance of technology and
infrastructure in enhancing the farmer’s income and meeting the objective of doubling farmer’s income.
Managing Yield Gaps

There exist large yield gaps in the agricultural sector. A study by Planning Commission
estimated these yield gaps between 6 to 300 per cent in cereals, 5 to 185 per cent in oilseeds
and 16 to 167 per cent in sugarcane (Planning Commission, 2007). Such gaps exist at two levels
— one, between the best scientific practices and the best field practices; and second, between
the best field practices and the average farmer practices. These gaps are caused by a number of
environmental factors. If these yield gaps are addressed through proper scientific and
management interventions, there can be significant gain in output.
An examination of the production portfolio of the country reveals that rice and wheat are the
staple crops of India, and are viewed as important in terms of food security for majority of the
population in the country. Rice is grown throughout the country under different agro-climatic
conditions. The total domestic demand for rice is estimated to be 113.3 million tonnes and this
requires 28-29 per cent yield enhancement to achieve an average yield of 2.65 tonnes per
hectare for the year 2021-22 (Kumar et al., 2009). Considering the limited scope for area
expansion under rice cultivation, the National Food Security Mission was launched in 2007-08
to enhance the production of rice, wheat and pulses via the higher productivity route. Despite
many technological breakthrough, especially in rice and wheat crops, the crop yield realised at
farmers’ field remain considerably lower than the experimental yields demonstrated. Table 3.1
provides the yield gaps for rice and wheat across major producing states of the country. The
average state yield in all the producing states is much lower than the experiment station yield;
however, the magnitude of yield differential varies across the states.
The yield gap in rice (percentage difference between state average yield and average potential
yield of rice) was found to be highest in Madhya Pradesh (57.6%), followed by Chhattisgarh
(53.4%), Maharashtra (49.7%), Odisha (45%), Assam (43.7%), Karnataka (39.5%), Haryana
(35.3%), U.P. (34.1%), and Tamil Nadu (32.5%). The yield gap in these states was also found
to be higher than the national average (30.8%). Thus, it means that these states possess a higher
potential yield as compared to the existing average yield. If these yield gaps are addressed, it
would significantly contribute to higher production.
The average yield gap (i.e., differences between the state average yield and average
experimental yield) of wheat in the three states, namely, Haryana, Punjab, and West Bengal
was lower than the national level of 7.88 qtl/ha (Table 3.1). Minimum yield gap of 1.83 qtl/ha
was recorded in case of West Bengal. However, the average state yield and average
experimental yield was much less compared to the major producing states of Punjab and
Haryana. Punjab and West Bengal are the only two states which have realized more than 90
41
per cent of yield potential of wheat expressed by experimental yields, while Haryana has
realized about 87.4 per cent of yield potential expressed by experimental yields conducted in
the respective states.
Table 3.1 State-wise Yields- actual, experimental and gaps in rice & wheat (2009-10 to 2013-14)
Rice (Q/ha) Wheat (Q/ha)
States State Experimental Yield States State Experimental Yield
Yield Yield Gap Yield Yield Gap
Karnataka 26.6 43.9 17.3 Karnataka 9.3 36.2 26.9
Madhya Pradesh 12.8 30.1 17.3 Madhya Pradesh 22.2 41.2 19.0
Maharashtra 18.1 35.9 17.9 Maharashtra 16.0 33.6 17.6
Uttar Pradesh 23.0 34.9 11.9 Uttar Pradesh 30.5 46.3 15.8
West Bengal 26.8 32.4 5.6 West Bengal 27.6 29.4 1.8
Gujarat 20.4 26.6 6.3 Gujarat 30.3 40.2 9.9
Haryana 30.7 47.5 16.8 Haryana 46.1 52.7 6.6
Punjab 50.4 64.6 14.2 Punjab 47.3 52.1 4.8
Odisha 16.6 30.1 13.5 Himachal Pradesh 15.4 28.1 12.7
Andhra Pradesh 30.6 35.2 4.6 Rajasthan 30.7 45.5 14.8
Assam 18.9 33.5 14.7 Uttarakhand 23.3 37.7 14.4
Chhattisgarh 15.8 33.9 18.1 Bihar 22.0 40.4 18.4
Jharkhand 20.1 28.9 8.8 India 30.6 38.4 7.8
Kerala 25.7 35.2 9.5
Source: NFSM, Govt. of India
Tamil Nadu 31.9 47.3 15.4
(http://nfsm.gov.in/fld.aspx), Siddiq (1998)
India 23.27 33.63 10.36
Figure 3.1 State-wise Yield Gaps in rice and wheat during 2009-10 to 2013-14
Yield Gaps in of Rice (%) Yield Gap of Wheat (%)

74.4
100.0
80.0
90.0
80.0
70.0
52.5
60.0
57.6
70.0
46.2
45.4
45.3
53.4
49.7
60.0 50.0
38.4
45.0
43.7
34.2
39.5
32.6
50.0
35.3
40.0
34.1
32.5
30.8
30.5
24.7
26.9
40.0
20.5
23.5
30.0
17.2
30.0
12.6
13.0
20.0
9.2
20.0
6.2
10.0 10.0
0.0 0.0
India
Haryana
Maharashtra
U.P.
Kerala
West Bengal
Andhra Pradesh
M.P.
Chattisgarh
Odisha
Assam
Karnataka
Gujarat
Karnataka
Maharashtra
Gujarat
M.P.
U.P.
India
Haryana
Bihar
H.P.
Rajasthan
Punjab
West Bengal
Jharkhand
Tamil Nadu
Uttarakhand
Source: DFI Committee Estimates based on the data above
If these yield gaps are addressed for rice and wheat crops, these can contribute significantly
to the output of these crops and meeting future production requirements of the country.
42
Yield Gap and Yield Improvement Strategies

Technology adoption helps in reducing yield gap at farm level. The estimates derived for 2011-
12 and 2013-14 show considerable yield gap across states for different crops (Table 3.2). Yield
gap in paddy varied around one-fourth to one-third. The estimates with respect to the best
performing farmers in major paddy growing states like West Bengal, Uttar Pradesh, Andhra
Pradesh and Punjab are 33, 29, 29 and 28 per cent, respectively. In wheat, the estimates are
slightly less. For Punjab and Haryana, it stands at 19 and 23 per cent, whereas for Uttar Pradesh
and Madhya Pradesh, the corresponding figures are 27 and 33 per cent.
There exist considerable yield gap in nutri-cereals (coarse cereals earlier) and pulses. The states
like Maharashtra and Karnataka in jowar, and Rajasthan in bajra, have yield gap of more than
50 per cent. Among pulses, while yield gap stands at 32 per cent in Madhya Pradesh for gram,
it stands at 45 per cent in Rajasthan and Maharashtra. In case of tur, the yield gap stands at 60
per cent in Maharashtra and Karnataka.
The yield gap estimate for maize stands at 33 per cent in Andhra Pradesh, whereas it is higher
at 45 per cent and 58 per cent in Karnataka and Bihar, respectively. In Rajasthan, the estimates
stand highest at 63 per cent. Gap estimates for cotton stand at around 45 per cent in Gujarat
and Maharashtra. In Andhra Pradesh, it is slightly less (38 per cent). The estimates of
sugarcane, the other major cash crop are 25 per cent, 35 per cent and 41 per cent for Uttar
Pradesh, Karnataka and Maharashtra, respectively.
The issue can be addressed by expanding irrigation, use of improved seeds for sowing and
better credit access. For example, the paddy yield levels can be appreciably raised in West
Bengal through irrigation, where just around half of the area is irrigated. The yield differential
between irrigated and unirrigated farms is significant, and is more by 6 quintals/ha in irrigated
farms.
The strategy of irrigation expansion holds true for maize as well. Area covered under irrigation
in major states like Andhra Pradesh and Karnataka are 50 per cent and 36 per cent, respectively.
The other major state - Bihar, also suffers with less use of improved seeds. Only two-third of
the farmers use hybrids and improved seeds use, and irrigation coverage is just 65 per cent.
Being an input responsive crop, yield levels can be raised by better seed delivery and irrigation.
Irrigated cotton farms produce higher yield than the rest. The yield margins in irrigated farms
are 11 qtl/ha and 6 qtl/ha in Gujarat and Maharashtra, respectively.
Nutri-cereals like jowar and bajra are barely irrigated in practice. Higher use of improved and
hybrid seeds can help in bridging yield gaps. Pulses are mainly grown as a rainfed crop.
Despite, yield responses are positive and significant for irrigation, and better seeds provide
better yields. The gram yield levels are higher by 2.0 and 4.6 quintals/ha in Madhya Pradesh
and Rajasthan, and in case of tur, it is more than 5 quintals/ha in Maharashtra and Madhya
Pradesh. Moreover, higher yields also correspond with improved seeds use. The yield that the
hybrids and improved seeds provide are relatively higher, and thus could be thought of as a
potential way of addressing the yield gap.
43
Table 3.2 Yield Gap and Associated Parameters (2011-12 to 2013-14)

Actual Benchmark Improved & Area under
Yield gap
Crop State yield yield hybrid seeds irrigation
(%)
(qtl/ha) (qtl/ha) (%) (%)
West Bengal 41 61 33 98 48.2
Uttar Pradesh 39 55 29 100 83.1
Paddy
Andhra Pradesh 55 78 29 95 96.8
Punjab 59 82 28 100 99.6
Uttar Pradesh 36 50 27 98 98.4
Punjab 48 59 19 100 98.9
Wheat
Madhya Pradesh 33 50 33 100 90.8
Haryana 46 60 23 96 99.5
Maharashtra 14 30 53 59 9.5
Jowar
Karnataka 11 24 56 66 11.5
Rajasthan 13 26 50 78 3.3
Bajra
Uttar Pradesh 22 33 35 83 8.9
Andhra Pradesh 55 82 33 99 49.5
Maize Karnataka 39 70 45 98 36.0
Bihar 26 61 58 67 65.2
Madhya Pradesh 11 16 32 100 57.9
Gram Rajasthan 11 20 46 50 49.2
Maharashtra 12 23 45 84 24.2
Maharashtra 20 51 61 70 1.5
Tur Madhya Pradesh 10 15 36 52 1.6
Karnataka 11 26 59 23 5.1
Gujarat 19 35 47 - 58.7
Cotton Maharashtra 18 33 45 - 2.7
Andhra Pradesh 16 26 38 - 13.9
Uttar Pradesh 515 688 25 - 95.1
Sugarcane Maharashtra 989 1667 41 - 100.0
Karnataka 778 1200 35 - 100.0
Source: DFI Committee Estimates. Yield gaps and seeds use are estimated based on MoAFW data (various years);
irrigation coverage is based on Agricultural Statistics at a glance, 2015.
Note: Estimates of yield gap and seed use are obtained for 2011-12 to 2013-14. Yield at 90th percentile is used
as bench mark in computing the estimates. Irrigation figures correspond to the year 2012-13.
Cash crops like maize and cotton also show high yield gaps across states. Expanding irrigation
and delivering improved seeds together could help in addressing yield gap in gram and tur
successfully. Sugarcane and wheat require special attention. Almost entire area is irrigated,
and all the area under wheat are sown with improved and hybrid seeds. Still, there exist yield
differences across and within the states.
Contribution of Total Factor Productivity (TFP)

A significant contributor to output growth would be the total factor productivity (TFP). A
number of studies have been conducted on TFP, which dealt with disaggregated regions and
crops. The summary is provided in Table 3.3. A recent exhaustive study completed at ICAR-
NIAP established that annual TFP growth in agriculture was around 1.55 per cent during the
44
period of 1980-81 to 2011-12 and it improved to 5.49 per cent during 2004-05 to 2011-12,
(Jain and Chand, 2015). According to another study, estimated TFP growth was 2.33 per cent
per year for crop sector, 2.66 per cent per year for livestock sector and 2.41 per cent per year
for crops and livestock combined during 1981 to 2001 (Avila and Evenson, 2004).
A study by the Reserve Bank of India establishes the TFP trend growth rate during 2000-08 at
0.7 per cent based on value added function framework (Goldar et al., 2014). Chand et al.,
(2012) estimated crop-wise and state-wise TFP and the given growth ranged from as low as -
0.69 in red gram to as high as 1.92 in wheat during 1975 to 2005.
Table 3.3 Growth in Total Factor Productivity

TFP TFP
Author(s) Commodity Period Growth Author(s) Commodity Period Growth
(%) (%)
Evenson et Jain and 1980-81 to
1956-65 1.1 1.55
al., (1999) Crops Chand Agriculture 2011-12
(2015) 2004-05 to
1966-76 1.39 5.49
2011-12
1977-87 1.05 Chand et 1975-85 0.9
Rice
Birthal et 1951-70 -0.04 al., 1986-95 0.74
Livestock (2011)
al., (1999) 1970-80 0.93 1996-05 0.4
1980-95 1.79 1975-2005 0.67
Fan et al., 1970-79 1.55 1975-85 1.6
(1999) Crops and 1980-89 2.52 Wheat 1986-95 2.51
Livestock
1990-94 2.29 1996-05 1.61
1970-94 1.75 1975-2005 1.92
Coelli and Crops and
1980-00 0.9 1975-85 0.06
Rao (2003) Livestock Gram
Avila and Crops 1961-80 1.54 1986-95 0.09
Evenson 1981-01 2.33 1996-05 0.34
(2004)
Livestock 1961-80 2.63 1975-2005 0.16
1981-01 2.66 1975-85 0.49
Crop and 1961-80 1.92 1986-95 0.55
Groundnut
Livestock 1981-01 2.41
1996-05 1.3
Joshi et al.,
1980-90 3.5
(2003) Rice (IGP) 1975-2005 0.77
1990-99 2.08 1975-85 2.84
1980-90 2.44 Cotton 1986-95 0.92
Wheat (IGP)
1990-99 2.14 1996-05 0.8
Kumar et 1971-86 1.28 1975-2005 1.41
al., (2008) Wheat
1986-00 0.68 Rada
1971-86 0.52 (2016)
Pulses
1986-00 -0.39
Agriculture 1980-2008 1.90
1971-86 0.14
Oilseeds
1986-00 0.33
1971-86 0.79
Sugarcane
1986-00 -0.1
45
A study on change and efficiency of rice production in India by Suresh (2013) revealed that
the mean TFP change for rice has been to the tune of 0.2 per cent per year during the overall
period of 1980-2009; the decomposition analysis indicated that the change in TFP was
associated with the technical progress of 0.3 per cent and the deterioration of technical
efficiency to the tune of -0.1 per cent, indicating that technical efficiency could not catch up
with the technical progress and was pulling down the TFP growth.
Kumar et al., (2008) indicated that the productivity gains occurred for sugarcane during the
early years of green revolution have exhausted their potential. About 90 per cent area under
sugarcane during 1990s was facing stagnated TFP status, thus, the technological stagnation or
decline is apparent in case of sugarcane. This is an area of priority for the present and future
agricultural research.
Murali (2012) compared the productivity in the period of pre-introduction of the variety
Co86032, with after introduction of variety Co86032. It showed that greater improvement in
productivity was recorded after introduction of variety Co86032. The annual TFP growth over
the whole period was 7.6 per cent. The improvement was more due to technological progress
rather than improvement in efficiency. The study indicates greater TFP changes after
introduction of variety Co86032 than pre introduction of this variety.
This Co86032 variety is an early season variety which performs well in all soil types and
extremely well in garden land condition, yielding good quality cane with higher yield having
multi ratooning capacity and can be grown throughout the year.
Determinants of TFP
Understanding TFP and its various components help in increasing productivity and output. The
major determinants from few previous standards on TFP growth and its determinants in Indian
context are extracted here, for reference. Table 3.4 lists the major determinants from studies
conducted on TFP.
These studies raise the issues of nature of TFP, its measurement, and its contribution. The
studies highlight that TFP change is most influenced by government expenditure on research
and development and agricultural extension, development of infrastructure like rural roads and
regulated markets, along with balanced use of fertilizers and assured irrigation.
Most of the studies (Table 3.4) suggested that investment in public sector research is an
important determinant for total factor productivity. They suggest that India is benefiting from
its investments on research and development. This calls for increasing research and extension
programs, but such a development should be supported by careful review of existing projects
and programs.
46
Table 3.4 Studies on Determinants of TFP Growth

Significant
Study
Sector/ determinants and
Study reference Region TFP trends
crop respective
period
contribution
Evenson, R., Pray, 1956-87 For the All-India For the period of Public sector
C. and Rosegrant, major level 1956–65 was 1.27, research and
M. (1999). crops 1.49 for the period of extension and
Agricultural 1966–76 and for the private sector
research and period of 1977–87 the research
productivity TFP was 1.1.4. Overall (invention) and
growth in India for the period of 1956– adoption of modern
87 the TFP was 1.31. varieties
Ramesh Chand, 1975-2005 For the All-India Annual rate of TFP Public investment
Praduman Kumar major level growth was 1.9 per in research;
and Sant Kumar crops cent for wheat, 1.4 per Public investment
(2012). Total cent each for maize in the transfer of
factor productivity and barley, 1 per cent technology
and returns to for pearl millet, 0.7 per (extension) ;
public investment cent for rice and 0.6 Natural resources
on agricultural per cent for sorghum. management and
research in India The TFP growth in the infrastructure ;
edible oilseeds varied Assured irrigation
in the range of 0.7 - water along with
0.8 per cent annually. balanced use of
Among pulses, TFP fertilizers, Road
growth for green gram density and
(0.5per cent), chickpea electricity supply
(0.2 per cent). 1.4 per
cent for cotton and 1.3
per cent for jute during
1975-2005.
Suresh K. and 1990-2009 Ragi Karnataka TFP for ragi increased Public research,
M.G. (finger state, India from 1.27 in 1991 to road density and
Chandrakanth millet) 2.88 in 2009. The rural literacy
(2015). Total average TFP index for significantly
factor productivity 20 years was 1.87. contributed to TFP
and returns to growth in ragi.
investment in Ragi
(finger millet) crop
research in
Karnataka state,
India
Kannan E. (2011). 1980-81 to Paddy, Karnataka Most crops have Government

Total factor 2007-08 jowar, registered a decline in expenditure on
productivity maize, productivity growth research, education
growth and its ragi, arhar, during the nineties. and extension,
determinants in groundnut, During 2000-01 to canal irrigation,
Karnataka sunflower, 2007-08, all crops rainfall, and
agriculture safflower, have showed positive balanced use of
cotton and growth in TFP. fertilisers are the
sugarcane important drivers
of crop
productivity in
Karnataka.
47
Significant
Study
Sector/ determinants and
Study reference Region TFP trends
crop respective
period
contribution
Bhupat M Desai 1966-67 to For the All-India The average annual Government
and N V 1989-90 major level Compound Growth expenditure on
Namboodiri crops Rate TFP index for the agricultural
(1997). said period is 1.699. research and
Determinants of education and crop
total factor production
productivity in programme, Gini
Indian agriculture ratio of operational
land distribution,
(OPLE), per cent
of rural literacy,
Gini ratio of owned
land distribution
(ONLE) and
density of rural
roads.
Mark W. 1956-1987 Rice, For 271 Total factor Agricultural

Rosegrant and wheat, districts productivity for 1957- extension, public
Robert E. sorghum, covering 13 67 is 1.10, for 1967-76 research, foreign
Evenson, pearl states in it is 1.39 and for 1976- private (research
1995,Total factor millet, and India, 1956- 86 is 1.05 overall for and development)
productivity and maize 87. the period 1957-86 the and domestic
sources of long- along with TFP value is 1.13. private (research
term growth in fourteen and development).
Indian agriculture minor
crops
Note: The detailed sources have been cited in References
These studies provide sufficient evidence to conclude that investment in agricultural research has
resulted in good returns. Thus, policies for supporting and further strengthening of research and
extension system of the nation should be continued.
It is clear that India has achieved significant total factor productivity which enabled the nation
to increase food production despite limited scope for increasing its cropland as a source of
output growth. Besides these, infrastructure in terms of rural roads, electricity, markets, literacy
etc., play important role in enhancing the total factor productivity.
Table 3.5 depicts the trend of funding for agricultural research and education in India over
various years. Growth is evident especially since the late 1990s and there has been continuous
increase in funding by the governments at both central and state levels.
Investment for agricultural research and education for the year 2014 stood at stood at Rs. 108.5
billion. Of this, the Union Government contributed around 43.5 per cent and the rest 56.5 per
cent was the contribution of the State Governments (Pal, 2017).
48
Table 3.5 Trends in Public Funding for Agricultural Research & Education (Rs. million)
Ratio of central
Year Centre State Total funding to state
funding
1981 730 893 1624 0.82
1982 873 1003 1876 0.87
1983 1019 1056 2075 0.96
1984 1175 1257 2433 0.93
1985 1319 1512 2831 0.87
1986 1425 1772 3197 0.80
1987 1622 2024 3646 0.80
1988 1719 2226 3945 0.77
1989 2046 2779 4826 0.74
1990 2513 3313 5826 0.76
1991 3172 3965 7137 0.80
1992 3429 4289 7718 0.80
1993 3644 4685 8329 0.78
1994 4270 5329 9600 0.80
1995 4956 6107 11063 0.81
1996 5349 6801 12150 0.79
1997 5651 8012 13663 0.71
1998 6846 8311 15157 0.82
1999 9820 10105 19925 0.97
2000 13029 10792 23821 1.21
2001 12989 12865 25854 1.01
2002 12743 12462 25204 1.02
2003 12990 13810 26800 0.94
2004 14356 13906 28262 1.03
2005 15883 14992 30875 1.06
2006 18751 17172 35923 1.09
2007 20658 19514 40172 1.06
2008 21806 23009 44815 0.95
2009 28227 26431 54658 1.07
2010 32073 31363 63436 1.02
2011 53831 36720 90551 1.47
2012 47293 43803 91096 1.08
2013 45097 50901 95998 0.89
2014 47263 61314 108576 0.77
Source: Pal (2017)
Table 3.6 provides the comparison of agricultural research funding for the year 2011-12 in
India with other developing countries. China spends nearly 9,366 million 2011 PPP dollars on
agricultural research and the intensity of funding (funding as percentage of AgGDP) has
reached 0.62 per cent of AgGDP (Pal, 2017). Further, against 10,242 FTE (Full-Time
Equivalent) scientists in India, China has got around 43,000 FTE scientists.
49
Table 3.6 International Comparison of Agricultural Research Funding, 2011-12

Number of Funding in
Research intensity
SN Country scientists, Full-time million 2011 PPP
(%)
equivalent dollars
1 Brazil 5,869.4 2,704.0 1.8
2 Bangladesh 2,121.0 250.6 0.4
3 China 43,000.0 9,366.0 0.6
4 Malaysia 1,609.4 592.3 1.0
5 Pakistan 3,678.3 333.0 0.2
6 Sri Lanka 618.8 61.8 0.3
7 South Africa 746.3 294.5 2.0
8 India 10,242.0 3,533.0 0.4
Source: Pal (2017)
The recent study by Pal (2017) reported that research and development for the Indian
agriculture has so far responded well to the national challenges; now the basic thrust must be
for developing local capacity to carry forward the findings at the top level so that the people at
the grass root level harness the maximum benefit from these researches. The system is to be
developed in such a way that it not only complies with international commitments and scientific
principles, but also seeks participation of stakeholders and incorporates social voice in decision
making along with the consideration of development challenges at different levels; these
include efficient and inclusive development, sustainability of natural resources, nutritive and
value products, environmental safety, etc., which are sometimes cumulative and conflicting
needing more research resources and their targeting (Pal, 2017).
Irrigation Management in India

It has been reported that irrigation management can bring substantial growth in output through
increase in productivity and saving of resources. As far as irrigation scenario is concerned, the
gross irrigated area in the country increased by 13 per cent between TE 2006-07 and TE 2014-
15 (Table 3.7). Irrigation intensity, expressed as the ratio of gross irrigated area (GIA) to gross
cropped area (GCA), increased by 9 per cent. States like Madhya Pradesh, Chhattisgarh,
Karnataka, Bihar, Gujarat and Rajasthan have shown appreciable increase in GIA and thereby
increase in irrigation intensity. The growth performance (growth in GSDP) of these states has
also been much ahead of other states.
The country has steadily brought more land under irrigation. Between TE 2006-07 and TE
2014-15, area brought under irrigation in Madhya Pradesh alone was 3.5 million hectares,
followed by Rajasthan (2.2 million ha), and Uttar Pradesh (1.5 million ha). Note, that around
half of the total cropped area in the country lies in the states of Uttar Pradesh, Rajasthan,
Madhya Pradesh & Maharashtra. Average areas irrigated in these states respectively during the
TE 2014-15 are 78 per cent, 38 per cent, 39 per cent and 19 per cent, respectively. This shows
notable scope to bring more area under irrigation, especially in Maharashtra.
50
Table 3.7 State wise Irrigated Area
Gross Cropped Area (Th ha) Net Irrigated Area (Th ha) Gross Irrigated Area (Th ha) Irrigation Intensity
States
TE 06/07 TE 14/15 % Change TE 06-07 TE 14/15 % Change TE 06-07 TE 14/15 % Change TE 06-07 TE 14/15 % Change
Nagaland 391 496 27 66 91 38 106 99 -6 27 20 -26
Sikkim 123 142 16 12 13 6 16 13 -21 13 9 -31
Tripura 279 477 71 66 79 20 103 110 7 37 23 -38
Manipur 230 356 55 52 62 19 52 62 19 23 17 -24
Mizoram 95 125 31 15 15 2 16 17 8 17 14 -19
Odisha 8869 5136 -42 1976 1250 -37 2964 1495 -50 33 29 -12
Punjab 7886 7858 0 4040 4125 2 7683 7744 1 97 99 2
Jammu & Kashmir 1110 1165 5 311 326 5 457 496 9 41 43 4
West Bengal 9563 9589 0 3151 3094 -2 5541 5643 2 57 59 3
Arunachal Pradesh 264 293 11 50 57 13 50 57 13 19 19 2
Haryana 6441 6461 0 2960 3002 1 5447 5735 5 85 89 4
Maharashtra 22498 22915 2 3269 3245 -1 4090 4296 5 18 19 4
Uttar Pradesh 25415 25955 2 13169 14115 7 19042 20520 8 75 79 5
Tamil Nadu 5922 5677 -4 2815 2682 -5 3264 3232 -1 55 57 4
Goa 171 159 -7 24 38 58 39 38 -3 23 24 3
Rajasthan 21432 24769 16 6223 7677 23 7623 9830 29 36 40 10
Himachal Pradesh 947 941 -1 104 113 8 185 199 8 20 21 6
Uttarakhand 1219 1107 -9 345 332 -4 551 547 -1 45 49 10
Andhra Pradesh (with Telangana) 12897 13690 6 4242 4844 14 5684 6647 17 44 49 10
Gujarat 11520 12620 10 3891 4233 9 4774 5955 25 41 47 15
Bihar 7505 7677 2 3219 2991 -7 4389 5246 20 58 68 18
Kerala 2967 2611 -12 396 402 2 468 465 -1 16 18 11
Meghalaya 256 342 34 60 72 19 70 126 81 27 37 37
Karnataka 12757 12087 -5 2912 3522 21 3521 4102 16 28 34 21
Chhattisgarh 5731 5705 0 1246 1459 17 1391 1754 26 24 31 28
Madhya Pradesh 19974 23662 18 6029 9196 53 6205 9728 57 31 41 33
Jharkhand 1611 1628 1 106 211 99 150 231 54 9 14 58
Assam 3870 4086 6 140 307 119 152 375 147 4 9 130
ALL INDIA 192074 197852 3 60937 67595 11 84037 94825 13 44 48 9
Source: DFI Committee Estimates based on data compiled from DACNET
The states has been sorted according to the change in irrigation intensity during TE 06-07 and TE 14-15
Between TE 2006-07 and TE 2014-15, irrigation intensity stagnates around 18%. Maharashtra has shown very little improvement despite a higher irrigation
share, while Madhya Pradesh and Uttar Pradesh registered an 8 per cent and 3 per cent increase in irrigated area. Higher expansion has been realized in
Bihar (10%), Karnataka (6.4%), Gujarat (6.1%) and Chhattisgarh (5.8%). Having less land under irrigation, these states also provide future opportunity to
expand irrigation, with appropriate planning.
51
It is also important to examine whether states with low irrigation intensity are able to meet
some of the irrigation requirement from rainfall. Examining the distribution of rainfall pattern
across states (Fig 3.2), it is observed that in case of southern states of Kerala and Karnataka the
rainfall intensity was high. However, one can observe that these states were among the least
irrigated states. Haryana and Punjab on the other hand succeeded in creating comparatively
higher irrigation potential, but have low rainfall intensity.
Figure 3.2 Intensity and Distribution of Rainfall across States and Zones (TE 2012-13)
ANDAMAN & NICOBAR ISLANDS

ARUNACHAL PRADESH
ASSAM & MEGHALAYA
BIHAR
CHATTISGARH
COASTAL KARNATAKA
COSTAL ANDHRA PRADESH
EAST RAJASTHAN
EAST MADHYA PRADESH
EAST UTTAR PRADESH Jan-Feb
GANGETIC WEST BENGAL Mar-May
GUJARAT REGION, DADRA & NAGAR HAVELI
HARYANA, DELHI & CHANDIGARH
Jun-Sep
HIMACHAL PRADESH Oct-Dec
JAMMU & KASHMIR
JHARKHAND
KERALA
KOKAN & GOA
LAKSHADWEEP
MADHYA MAHARASHTRA
MARATWADA
NAGALAND, MANIPUR, MIZORAM,TRIPURA
NORTH INTERIOR KARNATAKA
ORISSA
PUNJAB
RAYALSEEMA
SAURASHTRA KUTCH & DIU
SOUTH INTERIOR KARNATAKA
SUB-HIMALAYAN W BENGAL & SIKKIM
TAMIL NADU & PONDICHERRY
TELENGANA
UTTARANCHAL
VIDARBHA
WEST MADHYA PRADESH
WEST RAJASTHAN
WEST UTTAR PRADESH
0 500 1000 1500 2000 2500 3000 3500 4000

Source: Computed based on https://data.gov.in/resources/area-weighted-monthly-seasonal-and-annual-rainfall-mm-36-
meteorological-subdivisions/download
Utilisation of Irrigation Potential in India

Various steps have been taken by the central and state governments for development of
irrigation potential and its utilisation in the country. The irrigation potential created and utilised
till 2009-10 is given in Table 3.8. The irrigation potential across states (expressed as the share
of ultimate irrigation potential) indicates that the states have created the potential ranging from
as low as 36 per cent in Assam up to 112.7 per cent in Rajasthan. An examination of irrigation
52
potential exhibits that, states like Himachal Pradesh, Maharashtra, Gujarat, Karnataka and
Rajasthan have created significant irrigation potential during 1985-2010. States like Gujarat,
Tamil Nadu, Karnataka and Rajasthan created more than 100 per cent irrigation potential by
2010. However, of these only Karnataka utilised more than 100 per cent irrigation potential.
Rajasthan and Gujarat could utilise only 50-60 per cent of the potential created. Thus, the gap
between the irrigation potential created and utilised needs to be bridged to realise higher
production efficiency.
Table 3.8 Irrigation Potential Created and Utilised across States

Ultimate Irrigation Potential Created (IPC) as per cent of Ultimate Total
Irrigation Irrigation Potential (UIP) IPC as
State
Potential Before 1985- 1990- 1992- 1997- 2002- 2007- % of
(Th ha) 1985 90 92 97 2002 07 10 UIP
Assam 970 10.1 4.7 3.3 2.1 4.9 6.1 4.8 36.0
Madhya Pradesh 4853 32.8 4.6 3.0 7.3 -19.2 11.2 5.4 45.3
Himachal Pradesh 50 12.0 4.0 0.0 5.2 5.6 4.2 15.0 46.0
Bihar 5224 48.9 3.6 0.4 0.7 -2.3 3.8 0.3 55.4
Orissa 3600 34.3 3.3 1.5 4.1 7.5 4.1 2.0 56.8
Kerala 1000 37.5 2.7 1.4 9.7 9.6 6.0 2.3 69.3
Haryana 3000 64.1 3.3 0.5 1.5 0.7 3.1 0.4 73.5
Uttar Pradesh 12154 51.2 3.7 1.1 2.1 7.0 7.2 7.2 73.6
West Bengal 2300 51.5 2.6 4.7 4.0 10.4 3.1 7.2 76.7
Andhra Pradesh 5000 58.0 1.8 0.2 0.9 5.2 5.9 7.2 79.3
Jammu & Kashmir 250 61.2 2.0 0.0 6.3 2.4 3.0 5.2 80.1
Punjab 3000 75.1 3.1 0.8 4.9 1.0 1.1 2,5 88.2
Maharashtra 4100 42.0 6.4 1.1 6.9 22.6 6.2 7.0 92.2
Gujarat 3000 35.2 4.8 1.6 3.5 2.7 26.7 28.9 103.2
Tamil Nadu 1500 99.9 2.7 0.4 0.0 0.3 0.9 7.2 105.0
Rajasthan 2750 62.3 7.3 3.1 10.0 7.6 13.8 8.7 112.7
Karnataka 2500 46.6 5.7 2.8 11.6 18.2 20.7 6.9 112.4
Chhattisgarh 1147 0.0 0.0 0.0 0.0 80.4 18.7 5.4 104.6
Source: Central Water Commission (P&P Dte.) and Planning Commission.
The states have been sorted according to the last column
Owning to the fact that irrigation can increase production efficiency and thus the output, the
Government of India has been implementing Centrally Sponsored Scheme on Micro Irrigation.
The objective is to enhance water use efficiency in the agriculture sector by promoting
appropriate technological interventions like drip & sprinkler irrigation systems and encourage
the farmers to use water saving and conservation technologies (Government of India, 2014). It
has been established that micro-irrigation can bring substantial increase in productivity and
also result in water saving (Government of India, 2009). According to the report, increase in
productivity ranged from 3 per cent in cow pea and cabbage, and 27 per cent in gram. At the
same time, micro-irrigation resulted in water saving of 16 per cent in Lucerne, and 56 per cent
in bajra and barley.
Among different sources of irrigation, minor irrigation has certain advantages as it is less
capital intensive and requires less time to construct. Thus, in recent years, emphasis is being
laid on the creation of minor irrigation schemes to cover both surface and ground water.
53
The recent statistics reveal that only 18 per cent of the potential area of 42.24 million hectares
in the country is under minor irrigation (Table 3.9).
Table 3.9 Status of Potential and Actual area under Micro-irrigation in India as on 31 Mar 2015
(million hectares)
Drip Irrigation Sprinkler irrigation Total
State
Potential Actual Potential Actual Potential Actual
Andhra Pradesh 0.73 0.83 0.39 0.33 1.12 1.16
Bihar 0.14 0.00 1.71 0.10 1.85 0.10
Chhattisgarh 0.02 0.02 0.19 0.24 0.21 0.26
Gujarat 1.60 0.41 1.68 0.42 3.28 0.83
Haryana 0.40 0.02 1.99 0.55 2.39 0.57
HP 0.01 0.00 0.10 0.00 0.12 0.00
Jharkhand 0.04 0.01 0.11 0.01 0.16 0.02
Karnataka 0.75 0.43 0.70 0.42 1.44 0.85
Kerala 0.18 0.02 0.04 0.01 0.21 0.03
Madhya Pradesh 1.38 0.17 5.02 0.19 6.39 0.35
Maharashtra 1.12 0.90 1.60 0.37 2.71 1.27
Odisha 0.16 0.02 0.06 0.08 0.22 0.10
Punjab 0.56 0.03 2.82 0.01 3.38 0.04
Rajasthan 0.73 0.17 4.93 1.51 5.66 1.68
Tamil Nadu 0.54 0.29 0.16 0.03 0.70 0.32
UP 2.21 0.02 8.58 0.02 10.79 0.04
West Bengal 0.95 0.00 0.28 0.05 1.23 0.05
Others 0.15 0.04 0.23 0.02 0.38 0.05
Grand Total 11.66 3.37 30.58 4.36 42.24 7.73

Source: http://midh.gov.in/AtGlance/MI-AT-A-Glance.pdf and Palanisami (2011)
Andhra Pradesh has utilized more than 100 per cent of the potential under minor-irrigation (Fig
3.3). As already highlighted in the preceding paragraph, micro-irrigation systems like drips and
sprinklers would significantly increase water-use efficiency and productivity.
An impact evaluation study of National Mission on Micro-Irrigation (NMMI) reported that the
irrigated area has increased in all the surveyed states after the introduction of NMMI Scheme.
Maharashtra topped the list with 22.28 per cent growth in irrigated area, followed by
Chhattisgarh. The scheme did well in reducing the input cost and resource saving. The
irrigation cost reduced by 20-50 per cent with an average of 32.3 per cent. Saving of fertilizers
with average reduction of about 28 per cent in total fertilizer consumption was reported in the
surveyed states (Table 3.10).
54
Figure 3.3 Micro-irrigation Potential utilised across States

140
(Actual utilization as % to potential)
122 Drip irrigation potential utilized
120
Sprinkler irrigation potential utilized
104
Overall potential utilization
100
80
59
60
47 46 46
40
30
25 24
18
20 14 13
10
6 6 4
1 1 0
0
AP BH CH GJ HR HP JH KR KE MP MH OD PB RJ TN UP WB OTH INDIA
Source: http://midh.gov.in/AtGlance/MI-AT-A-Glance.pdf
Micro irrigation has generated benefits to the farmers in terms of enhancement of the
productivity. The average productivity of fruits and vegetables has increased by about 42.3 per
cent and 52.8 per cent, respectively, mainly because of crop spacing, judicious use of water
and other inputs etc. The detail have been elaborated in Table 3.10 and 3.11. The overall
benefits accrued from the micro-irrigation system get reflected in the income enhancement of
the farmers.
Table 3.10 Impact of Micro-irrigation across States

Increase in productivity
(%) Decrease in cost Electricity Fertilizer
State
of irrigation (%) saving (%) saving (%)
Fruits Vegetables
Andhra Pradesh 19.37 34.09 20.50 22.33 28.85
Bihar 15.18 31.62 28.60 40.00 7.59
Chhattisgarh 62.00 98.85 36.50 37.78 40.36
Gujarat 73.48 68.59 49.30 39.92 42.73
Haryana 38.25 22.13 49.00 49.39 37.52
Karnataka 28.20 29.00 24.70 26.75 28.21
Maharashtra 49.18 28.76 31.00 33.48 22.96
Odisha 34.97 28.19 26.50 22.46 20.90
Rajasthan 70.56 39.42 45.40 42.08 43.83
Sikkim 6.82 66.62 27.90 35.11 40.86
Tamil Nadu 17.36 26.40 24.80 15.10 27.08
Uttar Pradesh 34.14 30.71 27.60 18.43 22.77
Uttarakhand 32.42 49.65 23.30 29.89 17.96
Total 42.34 52.76 30.65 28.48
Source: Impact Evaluation Report by Global Agri-System
55
Table 3.11 Impact of Micro-irrigation on Yield

Crops Water Saving (%) Yield Increase (%)
Bajra 56 19
Barley 56 16
Bhindi (Okra) 28 23
Cabbage 40 3
Cauliflower 35 12
Chillies 33 24
Cotton 36 50
Cowpea 19 3
Fenugreek 29 35
Garlic 28 6
Gram 69 57
Groundnut 20 40
Jowar 55 34
Lucerne 16 27
Maize 41 36
Onion 33 23
Sunflower 33 20
Wheat 35 24
Source: Micro Irrigation Division of Ministry of Agriculture, GOI
Gains from Irrigation: Impact on Crop Yield and Income

Table 3.12 provides evidence on the differences in yield and revenue in irrigated and
unirrigated plots based on the plot level cost of cultivation data. The evaluation for gains in
yield and revenue was done for major crops and results are discussed subsequently.
Paddy: States practising Irrigated paddy growing states have definite yield advantages. Among
major paddy producing states, Punjab and Andhra Pradesh grow almost the entire crop under
irrigated conditions (paddy area under irrigation in these states are 99.6 per cent and 96.8 per
cent during 2012-13, respectively). Irrigated area is relatively less in Uttar Pradesh (83.1 per
cent during 2013-14). There exists huge potential to expand irrigation in West Bengal which
has half of its area irrigated, with significant yield differentials. Irrigated fields, on an average,
record 8 quintals/ha higher yield than the unirrigated. Among others, Odisha offers scope to
improve yield levels to a sizeable extent under irrigated environment.
Wheat: All major wheat producing states grow almost the entire crop under irrigation, and
hence, offer limited scope to expand irrigation based cultivation. While Madhya Pradesh has
91 per cent area under irrigation, Uttar Pradesh, Punjab, Haryana and Rajasthan have more than
98 per cent wheat area under irrigation. But yield differentials are high, with scope to achieve
high production. Average yield levels are around 50 qtl/ha in Punjab and Haryana. In Uttar
Pradesh and Rajasthan, it stands around 30 qtl/ha and in Madhya Pradesh it is 24 qtl/ha during
2013-14. Hence, efforts to achieve high wheat production seem to depend on factors other than
irrigation.
Gram & Tur: Madhya Pradesh, Maharashtra and Rajasthan account for around 70 per cent of
total gram production. While the former two states have sizeable irrigation, just one-fourth of
56
the gram area is irrigated in Maharashtra. In terms of yield gains due to irrigation, while
Madhya Pradesh offers limited scope, Rajasthan and Maharashtra provide better output. The
average yield gains in irrigated farms in Rajasthan and Maharashtra are 5.3 qtl/ha and 2.4 qtl/ha,
respectively. In respect of tur, its share of irrigation is almost negligible. Information from
Maharashtra and Gujarat indicate significant positive responses to irrigation.
Groundnut: Groundnut provides higher scope for irrigation. Extent of irrigation is relatively
less among major producers and yield margins are positive almost in all major states. Margins
due to irrigation are around 8 qtl/ha in Andhra Pradesh and around 5 qtl/ha in Tamil Nadu and
Gujarat. These states offer high scope of expanding irrigation and output.
Maize: Yield response to irrigation is high in maize. All major maize producing states offer
high scope to expand irrigation, as substantive produce is from unirrigated farms. Irrigated area
in largest maize producing states viz. Andhra Pradesh, Maharashtra and Karnataka stands at 49
per cent, 36 per cent and 13 per cent, respectively. Despite low contribution, Tamil Nadu has
highest yield with an irrigated area of 39 per cent. In converse, while Bihar produces maize
with 65 per cent of irrigated area, yield levels are relatively less. Tamil Nadu, Bihar and Andhra
Pradesh offer high scope to expand irrigation. The yields, that the irrigated farms produce, in
these states produce are 32 qtl/ha, 22 qtl/ha and 18 qtl/ha, respectively.
Cotton: Major share of cotton comes from Gujarat, Maharashtra and Andhra Pradesh. While
around 60 per cent of area under cotton is irrigated in Gujarat, it is just 3 per cent in
Maharashtra. Although yield differential is not that large, expanding irrigation in Maharashtra
could help in achieving higher production. While yield differential in Andhra Pradesh is not
substantive, it is relatively high in Gujarat. Irrigated cotton fields produce around 8 quintals of
more cotton per hectare. Expanding irrigation could be a better choice for Gujarat, and the
strategy could be combined with other yield improving factors for Maharashtra.
West Bengal and Odisha provide scope to expand output oriented irrigation expansion in
Paddy. In terms of wheat, factors other than irrigation could be thought of in attaining yield
convergence. Millets, pulses and groundnut exhibit huge potential for irrigation expansion.
Among commercial crops, while maize provides higher scope followed by cotton, sugarcane
has limited potential as almost entire area is irrigated.
Table 3.12 Evidences on impact of Irrigation on Crop Yield and Revenue (2013-14)
Yield difference Revenue
in quintal/ha difference Rs./ha
Crop State P-value P value n(0) n(1)
(irrigate- (irrigate-
unirrigated) unirrigated)
WB 6.08 0.00 7414 0.00 5,805 1,477
UP 3.72 0.00 1699 0.06 559 2,281
AP -4.19 0.00 -4802 0.00 1,305 1,457
Rice PJ 5.32 0.02 -1147 0.43 34 1,565
OD -3.96 0.00 -6858 0.00 5,190 78
BH -1.90 0.00 1499 0.00 1,676 1,683
CTG 3.34 0.00 3209 0.00 997 187
57
Yield difference Revenue

in quintal/ha difference Rs./ha
Crop State P-value P value n(0) n(1)
(irrigate- (irrigate-
unirrigated) unirrigated)
TN -0.76 0.07 2780 0.00 751 1,530
UP 7.64 0.00 9699 0.00 479 3,646
PJ 2.91 0.00 3560 0.00 276 1,626
Wheat MP -5.45 0.00 -5822 0.00 213 1,380
HR 1.05 0.03 1633 0.02 113 1,111
RJ -2.18 0.00 -3057 0.00 329 1,330
AP 19.78 0.00 24909 0.00 199 345
KR 7.27 0.00 9795 0.00 356 203
MH - - - -
BH 23.72 0.00 23347 0.00 156 248
Maize
MP - - - -
TN 21.03 0.00 27632 0.00 85 237
RJ 3.70 0.03 5866 0.00 353 52
UP -0.28 0.39 2257 0.06 118 84
MP 2.00 0.00 12647 0.00 259 631
RJ 4.59 0.00 16660 0.00 127 200
MH 3.93 0.00 11998 0.00 249 581
Gram
KR -0.22 0.42 -513 0.44 114 26
AP 0.73 0.25 3274 0.19 164 5
UP 0.91 0.05 1794 0.17 186 128
MH 5.48 0.00 20649 0.00 832 142
MP 5.51 0.00 14752 0.00 65 12
KR -2.13 0.05 -9550 0.02 186 16
Tur GJ 6.58 0.00 25183 0.00 127 111
JRK - - - -
AP 10.39 0.00 36047 0.00 89 9
UP -0.80 0.04 -3864 0.02 241 71
GJ 5.04 0.00 21437 0.00 130 510
TN 5.32 0.00 24047 0.00 108 232
Groundnut
AP 8.67 0.00 37434 0.00 173 174
KR -0.37 0.35 4765 0.16 106 66
RJ - - - -
RJ 3.68 0.00 12478 0.00 180 1,016
MP -1.39 0.01 -4785 0.01 34 72
Rapeseed HR 3.56 0.00 11431 0.00 42 371
& Mustard UP 2.80 0.00 9275 0.00 248 983
WB 2.05 0.00 6494 0.00 87 742
GJ 9.24 0.00 28300 0.00 14 255
MP - - - -
Soybean MH 4.47 0.00 13025 0.00 1,530 113
RJ 5.36 0.01 22208 0.00 443 10
GJ 10.74 0.00 49012 0.00 258 1624
MH 6.15 0.00 23310 0.00 606 630
AP 2.79 0.00 10850 0.00 414 100
Cotton
HR -1.93 0.03 -7848 0.04 41 333
KR 3.02 0.00 15668 0.00 259 81
PJ 1.13 0.02 3777 0.07 137 232
UP -94.37 0.00 -25890 0.00 76 1214
Sugarcane* MH -42.58 0.15 -35244 0.00 66 1474
KR -68.07 0.25 -8171 0.36 5 233
TN 68.02 0.16 22461 0.05 16 857
Source: DFI Committee Estimates *The yield difference for sugarcane has been expressed in terms of Tons/Ha.
58
Water Availability and Requirement

India with 2.4 per cent of the world's total geographical area and more than 17 per cent of the
world's population has only 4 per cent of the total available fresh water. Fortunately, at a macro
level India is not short of water. Though the total water resource availability in the country may
remain constant, the per capita availability of water is steadily declining due to population
growth. Per capita per year availability of less than 1700 cubic metres (m3) is termed as water
stressed condition while if it falls below 1000 cubic meters, it is termed as water scarcity
condition. India’s per capita water availability is continuously declining and as per Kapadia
(2016), India will be a water stressed country on the basis of per capita water availability in
2050 with only 686 cubic meter per year.
The water resource potential of the country has been assessed from time to time by different
agencies. The different estimates are shown in Box 3.1. It may be seen that since 1954, the
estimates have stabilized and are within the proximity of the currently accepted estimate of
1869 Billion Cubic Meter (BCM) which includes replenishable groundwater that gets charged
on annual basis.
National Commission on Integrated Water Resources Development (NCIWRD) estimated the

requirement of water for various sectors in the year 2000. Agriculture sector mainly demands
water for irrigation purposes. This requirement was estimated by NCIWRD based on the
assumption that the irrigation efficiency will increase to 60 per cent from the present level of
35 to 40 per cent.
Water required for irrigation purpose is estimated at around 75-85 per cent share in the total
demand by the Standing Sub-Committee of MoWR. However, NCIWRD estimates are based
on the assumption that the irrigation efficiency will increase, and thus demand share will be
slightly lesser at around 70 to 80 per cent (Table 3.13).
Box 3.1 Water Resource situation in India

India’s Per Capita Water Availability Estimates of Water Resources of India
Estimate
Agency
in BCM
4555 First Irrigation 1443
Commission (1902-03)
Dr. A.N. Khosla (1949) 1673
3008 Central Water & Power 1881
Commission (1954-66)
1981 National Commission on 1850
Agriculture
1283
943 Central Water Commission 1880
686 (1988)
1901 1951 1971 1991 2025 2050 Central Water Commission 1869
(1993)
Source: Kapadia, 2016
59
Table 3.13 Water Requirement for various Sectors

Water Demand in km3 (or BCM)
Sector
Standing Sub-Committee of MoWR NCIWRD
Year 2010 2025 2050 2010 2025 2050
Irrigation 688 910 1072 557 611 807
Drinking Water 56 73 102 43 62 111
Industry 12 23 63 37 67 81
Energy 5 15 130 19 33 70
Others 52 72 80 54 70 111
Total 813 1093 1447 710 843 1180
Source: Standing Sub-Committee of MoWR
These estimates only provide an idea about the projected requirement of water for irrigation in the
changing climate and circumstances; and such estimates might not stand realistic. However, a clear
indication may be drawn that irrigation requirement would increase continuously due to its
contribution in enhancing crop yields and revenue. Objective estimates related to water requirement
and availability based on the current situation would help plan the strategies for doubling farmer’s
income more efficiently.
Seed Use Pattern in India

The type of seeds used determines the yield. Still, the reach of improved and hybrid seeds seem
to be limited to specific crops. Major food crops like paddy and wheat are grown using
improved seeds in general. And the reach of hybrids is however much limited. Just 2 per cent
of paddy and wheat growers use hybrids. In turn, adoption improved and hybrid seeds is
relatively higher in millets, especially bajra. Just 10 per cent of the growers use local varieties
and improved and hybrid seed use is equally shared between them in the remaining 90 per cent
space. Around 63 per cent of the jowar growers use improved varieties, whereas 37 per cent
use seeds of local varieties (Table 3.14). A greater spread of hybrid seed use is possible in
millet growing areas, to benefit farmers in gaining higher yield and potentially higher income.
Among pulses, tur offers scope to adopt hybrid and improved seeds, and among oilseeds,
groundnut provides some chance.
Table 3.14 Seed use (%) among Farmers in the country (2011-12 to 2013-14)
Crop Hybrid &Improved Local Total Sample Size
Paddy 87 13 100 12164
Wheat 91 9 100 6222
Jowar 63 37 100 409
Bajra 89 11 100 959
Maize 77 24 100 1361
Gram 79 20 100 961
Tur 59 41 100 694
Groundnut 78 22 100 625
Rapeseed & Mustard 88 12 100 1494
Soybean 94 6 100 1361
Sunflower 86 14 100 42
Jute 97 3 100 351
Source: Estimated based on cost on cultivation plot level data.
The pattern holds true across states of major growers. Leaving Chhattisgarh and Andhra
Pradesh, none of the states uses hybrids in paddy cultivation, with use of seeds of improved
60
varieties dominating. Odisha has higher use of local seeds to the extent of 10 per cent. Since
there are less hybrid varieties for wheat, almost all the states use improved seeds in its
cultivation. An exception is Rajasthan, where 16 per cent of wheat growers use hybrid seeds
and 26 per cent growers use local seeds.
Around 30 per cent of jowar and bajra growers in Maharashtra and Rajasthan use improved
seeds. While around 50 per cent of jowar cultivation involves use of local seeds, around half
of the bajra cultivation involves use of hybrid seeds.
Except for Andhra Pradesh, Tamil Nadu and Madhya Pradesh, hybrid seeds use is marginal in
major maize producing states. In Andhra Pradesh and Tamil Nadu, 80 per cent of the maize
cultivation involves hybrid seeds use. The figure stands at 60 per cent for Madhya Pradesh.
Rest of the states depend on other seed types. Karnataka and Bihar depend on improved seeds
for growing maize, about 95 and 63 per cent, respectively.
Gram offers better scope to shift from traditional seeds to improved seed type. Barring Madhya
Pradesh, which produces almost entire gram using improved seeds, use of local seeds are
relatively higher in rest of the states, particularly Rajasthan. Highest among all, around 10 per
cent of the farmers in Andhra Pradesh use hybrid gram seeds. Similar pattern exists for tur
(Table 3.15).
Table 3.15 Seed use across States (%)

Hybrid & Sample
Crop State Local
Improved Size
Paddy West Bengal 98 2 2394
Uttar Pradesh 100 0 913
Andhra Pradesh 92 8 926
Punjab 100 0 434
Odisha 90 10 1732
Bihar 97 3 1027
Chhattisgarh 100 0 423
Tamil Nadu 100 0 739
Wheat Uttar Pradesh 99 1 1366
Punjab 100 0 639
Madhya Pradesh 100 0 564
Haryana 97 3 396
Rajasthan 74 26 546
Maize Andhra Pradesh 100 0 197
Karnataka 98 2 182
Bihar 63 37 124
Tamil Nadu 100 0 101
Rajasthan 40 60 126
Gram Madhya Pradesh 100 0 273
Rajasthan 47 53 143
Maharashtra 82 18 285
Karnataka 68 33 40
61
Hybrid & Sample

Crop State Local
Improved Size
Tur Maharashtra 72 27 318
Karnataka 17 83 75
Gujarat 51 49 79
Groundnut Gujarat 81 19 243
Tamil Nadu 97 3 93
Karnataka 67 33 60
Rapeseed & Rajasthan 89 11 408
Mustard Madhya Pradesh 100 0 36
Haryana 99 1 146
West Bengal 97 3 259
Gujarat 76 24 115
Soybean Madhya Pradesh 100 0 577
Maharashtra 100 0 625
Rajasthan 47 53 148
Source: Derived based on Cost of Cultivation: Plot level data
In general, while paddy offers potential scope to shifting to hybrid seeds, millets offer for expanding
both improved and hybrid seed use, shifting from seeds of local varieties. Directing policies towards
shift from local seeds use to improved and hybrid seeds could potentially increase national production
and farmers’ income.
Fertiliser Use Pattern

The total fertilizer use in India has increased from 2.65 million tonnes in 1971–72 to 28.12
million tonnes in 2010–11. This corresponds to an annual compound growth of over 6 per cent.
The actual and normative levels of fertilizer use were computed for various states for the
triennium 2009–10 to 2011–12 are presented in Table 3.16. The actual use of nitrogenous
fertilizer is higher than the normative level in the states of Andhra Pradesh, Assam, Punjab,
Bihar, Haryana and Jharkhand and it is near optimal in Odisha. In all other states, the actual
nitrogen use remains below the recommended norms (Chand and Pavithra, 2015).
The study indicated that the normative level of nitrogen for India as a whole is about 17 MT,
not significantly different from the actual use of N; in case of phosphorus, the normative use is
about 9.46 MT whereas the actual use is about 7.65 MT. Their estimates indicated that use of
‘P’ in case of Madhya Pradesh, Uttar Pradesh and West Bengal is far lower than what is
recommended for the prevailing cropping pattern in these states (Table 3.16). They suggested
that this imbalance in use can partly be handled by creating awareness on use of fertilizers with
respect to the recommended levels. The Government has issued soil health cards, which
provides current nutrient availabilities in the soil, and recommended level of input use for a
given field. This would greatly benefit in addressing fertilizer use imbalance as the normative
levels are derived at field level than at the state level.
62
Table 3.16 Normative and Actual use of N, P and K (triennium ending 2011–12)
Normative Use: Thousand Tonne Actual Use: Thousand Tonne
States
N P K Total N P K Total
Andhra Pradesh 1,138 679 474 2,291 1,884 984 433 3,300
Assam 124 90 70 284 140 52 72 265
Bihar 688 368 245 1,301 921 265 136 1,322
Chhattisgarh 498 298 208 1,005 323 167 61 552
Gujarat 1,247 450 456 2,153 1,198 483 174 1,855
Haryana 807 339 202 1,348 996 350 51 1,397
Himachal Pradesh 82 43 33 158 33 11 11 54
Jharkhand 84 51 42 177 97 45 14 156
J&K 95 57 29 181 73 32 12 117
Karnataka 1,043 655 651 2,349 1,028 668 395 2,091
Kerala 227 164 349 740 116 60 91 267
Madhya Pradesh 1,080 1,181 449 2,710 967 667 109 1,742
Maharashtra 1,745 1,176 654 3,575 1,606 1,067 560 3,233
Odisha 313 177 176 666 316 156 83 555
Punjab 951 375 235 1,561 1,377 421 65 1,863
Rajasthan 1,335 742 130 2,206 832 371 33 1,235
Tamil Nadu 673 270 298 1,241 643 283 298 1,224
Uttarakhand 162 75 51 288 117 30 11 158
Uttar Pradesh 3,210 1,436 1,085 5,731 2,997 1,044 269 4,310
West Bengal 1,412 762 764 2,938 753 491 381 1,624
Others 114 82 73 270 30 13 7 50
All India 17,030 9,469 6,675 33,174 16,466 76,578 3,264 27,387
Source: Chand and Pavithra (2015)
Chand and Pavithra (2015) estimated normative ratio of fertilizer use for the states based on
the state-specific and crop-specific fertilizer recommendations and the current cropping
pattern, the results related to normative ratio and ratio based on actual use of N, P and K across
the states are presented in Table 3.17. The study indicated that the optimum ratio or norm for
balanced use of N, P and K for India should be 2.6:1.4:1 based on the current cropping pattern.
Table 3.17 State-wise Actual and Normative ratio of NPK use (2009–11)
Actual Ratio Normative Ratio
States
N P K N P K
Andhra Pradesh 4.41 2.28 1 2.40 1.43 1
Assam 1.94 0.73 1 1.77 1.28 1
Bihar 6.79 1.95 1 2.81 1.50 1
Chhattisgarh 5.27 2.72 1 2.39 1.43 1
Gujarat 6.89 2.78 1 2.73 0.99 1
Haryana 19.55 6.87 1 3.99 1.67 1
Himachal Pradesh 3.00 1.02 1 2.48 1.29 1
63
Actual Ratio Normative Ratio

States
N P K N P K
Jharkhand 7.20 3.31 1 1.99 1.20 1
J&K 6.16 2.72 1 3.26 1.96 1
Karnataka 2.6 1.69 1 1.60 1.01 1
Kerala 1.28 0.66 1 0.65 0.47 1
Madhya Pradesh 8.90 6.14 1 2.41 2.63 1
Maharashtra 2.87 1.91 1 2.67 1.80 1
Odisha 3.79 1.88 1 1.78 1.01 1
Punjab 21.2 6.48 1 4.05 1.60 1
Rajasthan 25.08 11.18 1 10.3 5.72 1
Tamil Nadu 2.16 0.95 1 2.26 0.91 1
Uttarakhand 10.24 2.63 1 3.18 1.47 1
Uttar Pradesh 11.14 3.88 1 2.96 1.32 1
West Bengal 1.98 1.29 1 1.85 1.00 1
Others 4.01 1.70 1 1.55 1.12 1
All India 5.04 2.35 1 2.55 1.42 1
Source: Chand and Pavithra (2015)
State-level norm for NPK estimated in their study show that the existing norm of 4:2:1 was
close to estimated norm only in traditional Green Revolution belt of north-west India. Further,
the optimum mix of NPK in other states except for Rajasthan implies a lower share of N and
higher share of P and K than what is implied by the ratio of 4:2:1. The study indicated the worst
deviation or imbalance in case of Rajasthan followed by Punjab and Haryana, though it was
severe even in other states like Uttar Pradesh, Bihar, Jharkhand and Madhya Pradesh. Fig 3.4
shows fertilizer consumption per hectare of the gross cropped area in the major states.
Figure 3.4 State-wise consumption of Plant Nutrients per ha of Gross Cropped Area
(Biennium Ending 2012-13)
250
K2O P2O5 N
200
Kg per hectare
150
100
50
64
The consumption of fertilizers varies significantly from states. All-India per-hectare

consumption of total nutrients was 133.95 kg in BE 2012-13. Punjab consumes maximum
fertilizer at the rate of 246.8 kg per ha, while Rajasthan consumes the least (51.9 kg) which is
significantly lower in comparison to all-India average and also other states. Even the
consumption of N, P and K varies across states. Kerala, West Bengal and Tamil Nadu consume
higher levels of ‘K’ as compared to other states. While the North and South zones have a
consumption of more than 135 kg/ha, the consumption is lower than 130 kg/ha in the East and
West zones. The state-level norms for the optimum mix of NPK are far away from the all-
India average. Hence, the fertilizer promotion and policy should be specific to each state-region
and there is need to attain state-specific optimum mix and use of NPK.
Yield Response to Nutrients

As per the study conducted by Satyanarayana and Tewatia (2009), the major factor contributing
to declining yield response is continuous nutrient mining due to imbalanced nutrient use,
leading to depletion of some of the major secondary and micro nutrients like P, K, S, Zn, Mn,
Fe and B from the soil. Study exposes that during 1991-2000, Nutrient Response Ratio (kg
grain/kg applied nutrient) were 6 kg grain/kg applied nutrient which had been declined from
17.9 kg grain/kg applied nutrient during 1960-1970 (Table 3.18).
Table 3.18 Nutrient Response Ratio

Nutrient Response
Increase in Nutrient Increase in Food
Period Ratio (kg grain/kg applied
Consumption (mt) Production (mt)
nutrient)
1960-1970 1.47 26.40 17.9
1971-1980 2.44 31.09 12.7
1981-1990 5.28 46.80 8.90
1991-2000 3.18 19.53 6.00
Source: Satyanarayana and Tewatia (2009)
Chaturvedi (2006) revealed that the wheat yield responded significantly to increasing levels of
nitrogen, compared to control. The study reveals that the highest yield of grain on the basis of
two years combined average was 4667 kg/ha from the crop receiving dose of 125 kg N/ha and
was statistically similar to 100 kg N/ ha (4577 kg/ha ). Straw yield is also significantly affected
with increasing levels of nitrogen. The highest straw yield (5884 Kg/ha) observed was in
response to application of 125 kg N/ha, followed by (100 kg N/ha).
Chatterjee et. al., (2010) reported that the yield will increase up to a limit with increasing dose
of fertilizer and beyond which the yield will increase but at decreasing rate and after a limit it
will be decrease following the ‘Law of Diminishing Return. Fertilizer application based on
targeted yield approach was found to be superior to general recommended dose. The study
reported that organic manure alone gave B:C ratio unity, indicating equal amount of cost of
organics and net benefit. Highest benefit cost and response ratio was found with farmyard
manure 10 tonnes/ha + yield target 2000 kg/ha.
65
Soil Health Card: The Soil Health Card Scheme has been implemented in all States/UTs to
assist the state Governments to evaluate fertility in farms across the country. The soil health
cards, provide information to farmers on nutrient status of their soil.
Table 3.19 Progress Report for Soil Health Cards: state-wise sample registration and test results
(on 14-07-2017)
No. of Samples No. of Farmers Samples
SN State / UT SHC Printed
Entered Covered Tested
I. Southern Zone
1 Andhra Pradesh 1438801 4289693 1335261 2120561
2 Karnataka 1657054 8986387 1442110 7662360
3 Kerala 225470 805392 173047 595770
4 Tamil Nadu 1377086 5375278 1211082 4401408
5 Telangana 1060529 3021679 989924 2268492
II. West Zone
6 Gujarat 2522833 4658012 1979085 2061466
7 Madhya Pradesh 693590 1522486 371027 620093
8 Maharashtra 2292753 5953026 1952379 3363664
9 Rajasthan 874665 945649 785436 47
10 Chhattisgarh 804461 4995109 708064 4316969
11 Goa 29845 30246 25003 24187
III. Northern Zone
12 Haryana 861372 2648974 680835 1538945
13 Punjab 24540 25144 9782 5635
14 Uttarakhand 136822 527241 119915 420793
15 Uttar Pradesh 2513852 7623526 1738070 5177224
16 Himachal Pradesh 126745 673941 102853 507818
17 J&K 175195 739163 137906 534602
IV. Eastern Zone
18 Bihar 4471 4477 3759 0
19 Jharkhand 127507 524142 39442 136795
20 Odisha 422138 1518994 301160 1056519
21 West Bengal 88362 234633 6908 11184
V. North Eastern Zone
22 Arunachal Pradesh 13636 13654 13348 12947
23 Assam 19472 67021 5479 16743
24 Manipur 403 403 356 0
25 Meghalaya 34740 184047 30050 150608
26 Mizoram 10008 10096 8019 4503
27 Nagaland 13411 13422 13326 13328
28 Sikkim 12144 50546 11134 45063
29 Tripura 29434 97708 26372 92329
VI. Union Territories
30 Andaman & Nicobar 8226 8227 6570 3563
31 Dadar Nagar & Haveli 58 58 58 0
32 Puducherry 4934 5281 4004 3883
Total 17,604,557 55,553,655 14,231,764 37,167,499
Source: http://soilhealth.dac.gov.in
The southern region exhibits good performance in terms of number of sample targeted and
number of sample tested, Andhra Pradesh achieved a target of 103.56 per cent. Gujarat,
Maharashtra and Goa were good performers in western zone. Odisha and Bihar were identified
as good performers in eastern zone.
66
Agricultural Credit in India

The positive role of credit in raising agricultural productivity is well known. While short-term
loans are generally used for timely farm inputs to help reap better output, medium and long-
term credit help in creation of farm assets such as deepening of wells and bore wells, purchasing
of machineries like tractors, construction of post-production facilities and farm houses. In short,
access to credit influences investment decisions of the farmers. Institutional credit has
consistently increased over years.
The outstanding credit in agriculture and allied sector in the post-reforms period shows that
both short-term and long-term credit has increased remarkably, especially since 2000s (Fig
3.5). Further, while long-term credit outstanding increased steadily after 2000, short-run credit,
which helps in meeting direct inputs in agriculture, has increased exponentially. This increase
in credit outstanding, especially since mid-2000s in short-run credit, and a consistent increase
in long-run credit could have helped in part to the recovery of agriculture sector registered
following growth deceleration.
Figure 3.5 Direct Institutional Credit in Agriculture (amount outstanding in Rs. billion)
6000
5000
Short-term credit Long-term credit
4000
3000
2000
1000
0
1990 1995 2000 2005 2010 2015
A glance at Fig 3.6 provides a brief trend in credit outstanding of different agencies in
agriculture. The co-operative banks, regional rural banks and the scheduled commercial banks
have been delivering both short-term and long-term credit to agriculture (Fig 3.7, 3.8 & 3.9),
but the quantum delivered had been very less by all agencies during 1990s. The scenario
improved in the following decade, especially in delivering long-term credit by the co-operative
and scheduled commercial banks. However, the RRBs lagged behind. The trend had not been
permanent. Since mid-2000s, both the co-operative banks and RRBs had been overtaken by
the commercial banks in providing both short and long-term credits. As mentioned, both the
kind of credits have witnessed an exponential increase since mid-2000s, indicating extension
67
of credit to the farmers in creating both variable and fixed farm capital equally. The recent
period has witnessed a remarkable increase in short-term credit over its counterpart. Though
the predominance of commercial banks over the cooperatives and regional rural banks is
encouraging, the inclusiveness in access needs to be examined. Extent of access by marginal
and small farmers needs special attention as they generally lack capital assets. Further,
production efficiencies in different class of farmers in presence and absence of credit need to
be examined so that credit policies can be effectively reoriented in increasing income of
different class of farmers.
Figure 3.6 Contribution of different agencies in Agricultural Credit Delivery

(Amount Outstanding in Rs. billion)
6000
RRB Coop SCB

5000
4000
3000
2000
1000
0
1990 1995 2000 2005 2010 2015
Figure 3.7 Contribution of different agencies in Delivering Agricultural Credit

(Short-term Credit Outstanding, Rs. billion)
4000
RRB Coop SCB

3000
2000
1000
0
1985 1990 1995 2000 2005 2010 2015 2020
68
Figure 3.8 Contribution of different agencies in Delivering Agricultural Credit

(Long-run Credit Outstanding, Rs. billion)
2000
1800
1600 RRB Coop SCB
1400
1200
1000
800
600
400
200
0
1985 1990 1995 2000 2005 2010 2015 2020
Figure 3.9 Distribution of Crop and Term Loans across States, 2014-15 (Rs. crore)

Uttarakhand 4747 839
Crop Loan
Chhattisgarh 6060 1812
Delhi 9602 5662 Term Loan
Puducherry 15165 765
Odisha 14745 2525
Bihar 15305 7558
Telangana 22632 7885
West Bengal 22846 14448
Gujarat 28730 10597
Haryana 32554 7884
Madhya Pradesh 40679 6370
Andhra Pradesh 39411 14525
Kerala 44425 12784
Karnataka 40621 19612
Rajasthan 56072 9672
Maharashtra 40088 26733
Uttar Pradesh 57431 15180
Punjab 64528 8435
Tamil Nadu 69554 30671
0 20000 40000 60000 80000 100000 120000
Source: Fertilizer Statistics
69
Government of India has initiated several policy measures to improve the accessibility of
farmers to the institutional sources of credit; and the emphasis has been on institutionalization
for providing timely and adequate credit support to all farmers along with particular focus on
small and marginal farmers and weaker sections of society. This would enable them to adopt
modern technology and improved farm practices for increasing agricultural productivity.
In order to ensure that the farmers are provided with timely credit for their agricultural
operations, the Government of India introduced the Kisan Credit Card (KCC) Scheme during
1998, for hassle-free credit access for the farmers. The scheme enables the farmers to purchase
agricultural inputs such as seeds, fertilizers, pesticides, etc., and draw cash to satisfy their
consumption needs. The status of cumulative number of KCCs as on 31 October, 2015 and the
outstanding loan amount is given in Table 3.20 below:
Table 3.20 Operative KCC accounts and Outstanding Amount as on 31.10.2015 (Rs. crore)
Total operative Amount outstanding Out of these ATC Enabled
Agency
KCC Accounts (Rs. Crore) RuPay KCC-cum-Debt Cards
Commercial Banks
2,25,24,560 3,30,384.51 76,14,956
(as on 31.03.2015)
Cooperative Banks 3,88,40,776 1,13,324.37 2,50,086
Regional Rural
1,25,26,342 84,235.03 31,01,504
Banks
Total 7,38,91,678 5,27,943.91 1,09,66,546
Source: RBI and NABARD.
Credit access and extent of indebtedness

Credit forms a basic need for farm operation in modern agriculture. The access to credit by the
agricultural households has improved with time. The extent of farmers’ access to credit can be
assessed from the share of indebted agricultural households in a state. This is not uniform
across states (Table 3.21).
Agricultural households in southern states appear to have high access to credit, with more than
75 per cent (Table 3.22) of the agri-households having taken credit. This share in the states of
Andhra Pradesh, Telangana, Tamil Nadu, Kerala and Karnataka for the year 2012-13 was 93
per cent, 89 per cent, 82 per cent, 78 per cent and 77 per cent, respectively. The average credit
outstanding per agricultural household is also high in these states. The corresponding figures
for the above states respectively are Rs.1,23,400/-, Rs.93, 500/-, Rs.1,15,900/-, Rs.2,13,600/-
and Rs.97,200/-.
At the other end, households of Assam, Jharkhand, Chhattisgarh and Bihar appear to have poor
access to credit. The share of indebted households in these states is 17 per cent, 29 per cent, 37
per cent and 42 per cent respectively, against the all-India average of 52 per cent. Average
outstanding amounts in these states are also less i.e. Rs. 3,400/-, Rs. 5,700/-, Rs. 10,200/- and
Rs. 16,300, respectively.
70
Table 3.21 Indebtedness and Credit Outstanding (2012-13)

Share of Average outstanding (Rs./agri. household)
indebted
Low Medium High
households (%)
Low Assam, Bihar, Haryana -
Chhattisgarh, Jharkhand
Medium West Bengal Gujarat, Uttar Pradesh, Punjab
Madhya Pradesh, Maharashtra,
Odisha, Rajasthan
High - Telangana Karnataka, Kerala, Tamil
Nadu, Andhra Pradesh
Note: The categorization of states is based on 25th and 75th percentile values of loan outstanding and number of
indebted households of states.
Source: Based on Key Indicators SAS 2012-13.
To note, share of credit to total household income is also high among the southern states. The
share stands at 21 per cent for Andhra Pradesh, the highest among the southern states, followed
by Kerala (18%), Tamil Nadu (17%), Telangana (15%) and Karnataka (11%). The figures in
rest of the states are lower (Table 3.22). Other than Rajasthan (10%), rest of states have a share
of not more than the all-India average of 7 per cent. Expanding credit, especially the fast
growing states like Bihar, Madhya Pradesh and Maharashtra that are converging faster with the
high productivity states can immensely help in realizing better income to the agricultural
households.
Table 3.22 Indebtedness and Credit Outstanding

Indebted Outstanding Share of credit outstanding
State
agri. households (%) (Rs. ’00/agri. household) in total income (%)
Andhra Pradesh 92.9 1234 21
Assam 17.5 34 1
Bihar 42.5 163 5
Chhattisgarh 37.2 102 2
Gujarat 42.6 381 5
Haryana 42.3 790 5
Jharkhand 28.9 57 1
Karnataka 77.3 972 11
Kerala 77.7 2136 18
Madhya Pradesh 45.7 321 5
Maharashtra 57.3 547 7
Odisha 57.5 282 6
Punjab 53.2 1195 7
Rajasthan 61.8 705 10
Tamil Nadu 82.5 1159 17
Telangana 89.1 935 15
Uttar Pradesh 43.8 273 6
West Bengal 51.5 178 4
All-India 51.9 470 7
Source: Based on Key Indicators, SAS 2012-13.
71
Loan Waiver: Boon or Bane for Agriculture

A working paper by the Indian Council for Research on International Economic Relations
(ICRIER) reported that, despite the successive efforts made by the government, the latest All
India Debt and Investment Survey (AIDIS) by the NSSO shows that non-institutional agencies
still accounted for as much as 44 per cent of outstanding dues in 2012-13, an increase from the
36 per cent level in 1990-91. The report also stated that, in addition to subvention on short-
term credit introduced in 2006-07, there has been an intensification in use of the instrument of
debt waivers, which results not only in a waste of financial resources, but also has adverse
consequences for the banking system, and seriously impairs its ability to deliver agricultural
credit on a regular basis.
It has been reported that generalised debt relief or loan waivers hamper the repayment system.
As per the RBI report of Trends & Progress of Banking in India, the massive write-off of loans
has taken its toll on the banking system and the non-performing assets of commercial banks
have risen three-fold in nominal terms between 2009-10 and 2012-13.
Recently, four states namely Uttar Pradesh, Maharashtra, Punjab and Karnataka, announced
farm loan waivers in June 2017. As per the report, the Maharashtra government waived off
loans amounting to Rs.30,000 crore owed by farmers owing upto five acres of land. Uttar
Pradesh government decided that it would waive off the loans of Rs. 36,359 crore taken by
about 94 lakh small and marginal farmers in the state. Punjab government allocated Rs. 1,500
crore for farm loan waivers to provide the benefit 10.25 lakh farmers. Karnataka government
announced the crop loan waiver of Rs 8,165 crore, for the benefit of more than 22 lakh farmers
(compiled from recent news clippings).
Chand and Srivastava (2017) identified several drawbacks with respect to the loan waivers and
concluded that,
i. it covers only a tiny fraction of farmers;
ii. it provides only a partial relief to the indebted farmers as about half of the institutional
borrowing of a cultivator is for non-farm purposes;
iii. in many cases, one household has multiple loans either from different sources or in the
name of different family members, which entitles it to multiple loan waiving;
iv. loan waiving excludes agricultural labourers who are even weaker than cultivators in
bearing the consequences of economic distress;
v. it severely erodes the credit culture, with dire long-run consequences to the banking
business; and
vi. the scheme is prone to serious exclusion and inclusion errors, as evidenced by the
Comptroller and Auditor General’s (CAG) findings in the Agricultural Debt Waiver and
Debt Relief Scheme, 2008.
They suggested that a more inclusive alternative approach is to identify the vulnerable farmers
based on certain criteria, and give an equal amount as financial relief to the vulnerable and
distressed families.
72
Role of Technology4
ICAR Institutes have developed a number of cost-effective technologies, techniques and
products, not only to enhance the productivity of various crops and commodities, but also the
quality of produce for remunerative agriculture and enhancing farmers’ incomes. Details of
important technologies extracted from various ICAR publications are given below:
Varietal Development
Role of ICAR is extremely crucial in developing and spreading the use of better yielding
varieties suitable for different typologies which can contribute to farmers’ incomes. Besides,
the development of improved varieties/hybrids of food crops and their cultivation are central
to increased farm production and consequently national food and nutritional security. During
2015-16, high-yielding varieties of cereals (21), oilseeds (16), pulses (8), forage crops (6)
and commercial crop (3) were released from ICAR institutions for cultivation in different
production ecologies of the country. Bio-fortified rice variety CR Dhan 310 was
commercialized successfully in the Indo-Gangetic Plains belt and Swarna Shreya, a new rice
variety for drought–prone conditions was released. To ensure a faster spread to farmers’
fields, 978, 17562, 12847, 14000, and 3418 tonnes of breeder, foundation, certified,
truthfully labelled seed and planting material, respectively, were produced.
Pusa Basmati 1121: Pusa basmati 1121 was released in the year 2003 and recommended for
Punjab, Haryana, western Uttar Pradesh, and Uttarakhand along with other Basmati growing
areas. The crop has the productivity of 4.0-4.5 t/ha and matures in 140-145 days, a fortnight
earlier than Taraori basmati. The grain is longer (8 mm) with cooked grain length of
approximately 20 mm and it is better in cooking compared to that of Taraori basmati. It
requires low input and provides high yield with better quality rice for export.
Integrated Farming Solutions

Integrated farming is one of the solutions for enhancing the income and gains to farmers.
An integrated farming system (1 ha) model comprising cropping systems (0.52 ha) +
horticulture (0.32 ha) + dairy including bio-gas and vermi-compost unit (0.08 ha) + fish cum
poultry (0.1 ha) + mushroom developed in western Himalayas, provided round the year
improved production (21.52 tonnes REY (rice equivalent yield)/year), profit (3.06 lakh/year)
and employment (731 man days/year).
By rice-wheat-mungbean or rice-potato-mungbean cropping system, an increase of 12-15

per cent in total productivity and a net profit of Rs. 15000 to 22000/ha can be obtained as
compared to rice-wheat cropping system. Cotton-wheat, pigeonpea-wheat, maize-vegetable
pea/potato-sunflower, soybean-vegetable pea/potato sunflower and groundnut-wheat-
mungbean cropping systems are economically acceptable and environmentally sustainable
option for rice-wheat system. African mustard/Indian mustard based intercropping systems
with potato (1:3 replacement series), wheat (1:4 or 1:6), linseed (1:6), and chickpea (1:4 or

This section has been extracted from ICAR Annual Reports and Annual Reports of ICAR Institutes.
73
2:8) are more productive and profitable than their sole stand. African mustard at 90 cm + 2
rows of peas, coriander, fenugreek or radish are more productive and remunerative compared
to their sole stand. Horticulture will also assure substantial gains to the farmers. Nutrient
management schedule for organic production of Grand Naine and Nendran banana; the
technology for production of iron-fortified oyster mushrooms (Hypsizygus ulmarius);
fertilizer adjustment equation for targeted yield (690–1140 kg/ha) of Appangala 1 and Green
Gold varieties of cardamom and integrated nutrient management schedule with improved
corn yield of turmeric variety Sudarsana, were developed. An integrated cropping system
having coconut + cocoa + banana + pineapple with net income of 3.77 lakh/ha was developed
and successfully demonstrated at Aliyarnagar, Tamil Nadu.
Protected Cultivation
Protected cultivation is a cropping technique for growing horticultural crops under protective
structures to shield them from pests and weather for assured, climate-resilient and enhanced
production of quality products.
Naturally ventilated polyhouse technology: This is a special structure made of G.I. pipes,
insect proof nets and transparent plastic sheets, which protect the crops from adverse climatic
conditions, insect-pests and different viruses. In this type of polyhouse, all four sides of the
greenhouse are covered with an insect-proof, 40 mesh nylon net. Rollable plastic curtains
from the ground are used to cover sides. During summer, this plastic curtain is rolled up and
down in winter for proper cross ventilation with the help of a pipe. The roof is covered with
200 micron thick, transparent polythene film. An insect-proof nylon net is also used in place
of roof ventilators for natural air flow and insect free ventilation. This kind of polyhouse
does not require electricity (Box 3.2). For irrigation, low pressure drip irrigation system is
used. This type of structure is suitable for peri-urban areas where high value vegetables like
tomato, capsicum, parthenocarpic cucumber etc. and flowers like rose, chrysanthemum and
gerbera can be grown easily.
Box 3.2 Economics of Vegetable Cultivation

Parthenocarpic
Main components Tomato Capsicum
Cucumber
Expected yield 15 tonnes 6-7 tonnes 12 tonnes
Total cost of crop production 90,000/- 2,00,000/- 1,20,000/-
Expected gross income (15 x 15,000 kg) 2,25,000/- 3,50,000/- 2,40,000/-
Expected net return 1,35,000/- 1,50,000/- 1,20,000/-
Cost-benefit ratio 1:2.50 1:2.56 1:2.0
Source: ICAR Annual Report, 2015
Integrated Pest Management (IPM): The major contributions relate to validation and
dissemination of IPM in the targeted crops (rice, cotton, pulses, oilseeds, vegetables and
fruits). During 2008 to 2014, area covered under IPM programmes in different target crops
increased from 658-1587 ha. The e-Pest Surveillance and Advisory System covering 14
States with emphasis on Maharashtra and Odisha were established; this resulted in reduction
in the use of insecticides for pest management without compromising the productivity of
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crops. The IPM module developed by the Centre for pest management in basmati rice was
found to be very effective in Uttarakhand, Haryana and Uttar Pradesh. IPM practices helped
in increasing cotton productivity by 20-25 per cent. The IPM modules developed for cotton
also gave significant reduction in mealybug infestation in Punjab. IPM also showed good
promise in pulse production. A major impact of IPM was observed in improving productivity
of pigeonpea in Karnataka. A GIS-based automated crop pest mapping system has been
developed for major pests and diseases of soybean, cotton, chickpea and pigeonpea.
Resource Conservation Technologies

Resource use efficiency may also contribute significantly to the savings on cost front and
thus enhancing the revenues to farmers. Land resource inventory on 1:10,000 scale was
prepared taking Landscape Ecological Unit (LEU) consisting of landforms, land use and
slope as the base map while bio-climatic map of India was revised. Electronic atlas of water
resources, developed for Odisha and Himachal Pradesh, is a useful tool for catch assessment
and developing GIS based Decision Support System. The information will help planners to
concentrate efforts, allocate resources and deploy manpower according to the distribution of
fishery resources.
Zero–Tillage Technology: In zero tillage (ZT) technology, soil is not ploughed, but sowing
of crop is done by using a specially designed zero-till seed-cum fertilizer drill/planter, which
disturbs soil to the least possible extent. At the time of seeding, fertilizers are simultaneously
placed beneath the seeds. Several modern seeding machines, such as happy seeder, turbo
seeder, multi-crop planter, rotodouble disc planter are necessary for sowing in residue-laden
conditions. Zero tillage proves better for direct-seeded rice, maize, soybean, cotton,
pigeonpea, mungbean, cluster bean, pearlmillet during kharif season and wheat, barley,
chickpea, mustard and lentil during rabi season. Wheat sowing after rice can be advanced
by 10-12 days by adopting this technique compared to conventionally tilled wheat, and wheat
yield reduction caused by late sowing can be avoided. ZT provides opportunity to escape
wheat crop from terminal heat stress. Zero tillage reduces cost of cultivation by nearly 2500-
3000/ha through reduction in cost of land preparation, and reduces diesel consumption by
50-60 litres per hectare. Zero tillage reduces water requirement of crop and the loss of
organic carbon by oxidation. Zero tillage reduces Phalaris minor problem in wheat. The
carbon status of soil is significantly enhanced in surface soil (0-5 cm), particularly under
crop residue retention with zero tillage.
Bed planting technology for enhancing crop productivity: Bed planting is a promising
technique of crop establishment during kharif season. It increases the productivity of crops
like cotton, maize, pigeonpea, green gram, soybean, cowpea, vegetables, etc., which are
grown in kharif and prone to water logging. Raised bed planting increases grain yield and
economic returns, improves resource use efficiency and reduces weed problem. Bed planting
system helps in efficient use of water under rainfed as well as irrigated conditions because
of optimum water storage and safe disposal of excess water. Furrow irrigated raised-bed
system (FIRBS) of wheat usually saves seed by around 25 per cent, water by 25-30 per cent
75
and nutrients by 25 per cent without affecting wheat grain yield. It reduces weed populations
on the top of beds, and lodging of wheat crop. The productivity of cotton-wheat, pigeonpea-
wheat and maize wheat systems is higher under ZT bed planting with crop residue than in
CT flat sown crops. In cotton-wheat cropping system, zero till-broad bed + residue is more
remunerative, giving higher system productivity, net returns, and system water productivity
than those in conventional till-flat planting. Cotton-wheat cropping system under ZT broad
bed with residues of both crops gave higher system productivity and net returns than that in
the transplanted rice-conventional till wheat cropping system. Therefore, it can be an
alternative option for rice-wheat system under irrigated conditions.
Direct-Seeded Rice: Direct-Seeded Rice (DSR) avoids water required for puddling and
reduces overall water demand compared to conventional puddled Transplanted rice (TPR).
DSR is a labour, fuel, time, and water-saving technology, which gives comparable yield as
that of TPR. Soil health is maintained or improved, and fertilizer and water-use efficiencies
are higher in DSR (saving of 30-40 per cent irrigation water). Therefore, DSR is a technically
and economically feasible alternative to TPR. In north Indian conditions, summer mungbean
can be adopted before DSR. It gives grain yield of 0.8-1.0 t/ha and usually adds 40-60 kg
N/ha in soil, reducing N requirement for the subsequent crop.
Livestock Technologies
Livestock sector is supposed to contribute maximum among all sub-sectors to the farmers’
incomes. India has been holding the position of leading milk producing nation in the world
for the last several years with sustainable increase in the annual milk production wherein the
research developments played a crucial role. Studies showed that average first lactation 305
days milk yield of cows was 3,703.6±31.3 kg and average age at first calving was
1,036.6±10.2 days. Under Conservation and Genetic Improvement of Indigenous Cattle
Breeds, the milk yield showed an increasing trend among the progenies of different sets, and
average 305 days milk yield increased from 1,958 kg in first set to 2,604 kg in 10th set.
Certain pockets in the country are dominated by the existence of small ruminants, proper
management of which may contribute significantly to the incomes. The implementation of
goat husbandry technologies in famers’ flock provided average employment ranging
between 80 and 140 man days in a year; and income improved from 67 to 257 per cent of
investment in Assam hill goat.
Peste des Petits Ruminants (PPR) and Foot and Mouth Disease (FMD) Vaccine: PPR or
goat plague is the most important disease of sheep and goats causing an economic loss to the
tune of Rs. 1800 million/annum. The mass scale use of PPR vaccine developed by IVRI
resulted in reduction of > 75b per cent disease incidence (< 300 outbreaks as against 1200
outbreaks/annum) thus saving an annual loss of about Rs. 1200 million. The application of
this vaccine has a very high impact on livelihood security of poor people, who depend on
sheep and goat rearing. The technology has been transferred to four industries. FMD is the
most important infectious disease of cattle and buffaloes causing an economic loss of Rs.
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20000 crores/annum. FMD vaccine production technology in India was first implemented at
IVRI, Bangalore campus in late 1970s. About 52 million doses of trivalent vaccine has been
produced and supplied till date for FMD prophylaxis throughout the country. The reduced
incidence of the disease has ultimately impacted on livelihood security of poor people, who
depend on these animals for milk and draught purposes.
Mineral Mixture Supplementation: The mineral deficiency is manifested in the form of loss
of hairs, skin disorders, anemia, loss of appetite, bone abnormalities and suboptimum
production and reproductive problems. Thus, supplementation of minerals is inevitable to
achieve optimum health and production. The technology is available for the formulation of
mineral mixtures as per the recommendations of Bureau of Indian Standards for different
species i.e. cattle, buffalo and goat to supplement major and trace minerals like Ca, P, Mg,
Fe, Zn, Mn, I and Co etc. There are two types of formulations of mineral mixture, one is with
salt and the other is without salt. It should be mixed in the concentrate mixture @ 2 kg per
100 kg (without salt) and @ 3 kg/100 kg (with salt). Supplementation increases the feed
intake, feed conversion efficiency and productive performance of animals in terms of
growth, reproduction and milk production. Mineral supplementation was found to enhance
productive and reproductive performances of ruminant species, particularly to those who are
deficient in particular types of minerals.
Fisheries Sector: ICAR extends support for multiple breeding of Indian major carps for year
round seed production. The technologies related to intensive carp culture and production
levels of 10-15 tonnes/ha/yr along with improved rohu (Jayanti) with 17 per cent higher
growth realization per generation after eight generations through selective breeding have
been developed. Besides these, the breeding, seed production and culture technology for
important brackishwater and marine finfishes such as milkfish (Chanos chanos), pearlspot
(Etroplus suratensis), Asian seabass (Lates calcarifer), cobia (Rachycentron canadum) and
Silver pompano (Trachinotus blochii), etc. have also been developed.
Source: Annual Reports of ICAR and ICAR Institutes
Role of Infrastructure
Infrastructure is important to trigger and sustain high growth of agriculture. This calls for
higher Gross Capital Formation (GCF) in agriculture, besides in domain outside the sector, that
include roads, electricity, markets etc. Hence resource prioritization is essential. An efficient
market structure would enable the farmers to realise optimal remunerative returns on their
produce and break the inverse relation between production and income. The condition of rural
infrastructure (roads, irrigation, electricity and markets) in a number of states is a matter of
serious concern. The studies suggest that basic infrastructure can improve the total factor
productivity, and hence the need for suitable attention to GCF.
Studies show that in terms of impact on farm income, rural connectivity and logistics services
hold tremendous importance. Besides delivering a host of other benefits, road connectivity has
the potential to lower input cost, reduce post-harvest losses, and address issues related to gap
between farm-gate price and consumer price. Approximately, 15 per cent of crop produce is
77
lost between the farm gate and the consumer, because of poor roads and improper storage
facilities thus badly influencing the income of farmers (World Bank, 1997). Proper transport
linkage is equally important. Availability of road network provides the basics to facilitate trade,
transportation, social integration and economic development. Table 3.23 provides the status of
national highways, state highways, rural roads and urban roads. Length of National Highways
increased from 19,811 kilometres in 1951 to 70,93476,817 kilometres in 2012.
Table 3.23 Status of Road Length (as on 31.03.2013)

National
Area State Highways Rural Roads Urban Roads
Highways
State/U.T. (km²) Per 100 Per 100 Per 100 Per 100
Total Total Total Total
sq. km sq. km sq. km of sq. km
(Km) (Km) (Km) (Km)
of area of area area of area
Andhra Pradesh 275045 5022 1.8 10700 3.9 168516 61.3 13628 5.0
Bihar 94163 4168 4.4 4483 4.8 167579 178.0 8760 9.3
Chhattisgarh 135191 2289 1.7 5240 3.9 30295 22.4 8109 6.0
Goa 3702 269 7.3 279 7.5 5851 158.0 518 14.0
Gujarat 196024 3828 2.0 18506 9.4 53288 27.2 22199 11.3
Haryana 44212 1633 3.7 2416 5.5 4622 10.5 10211 23.1
Himachal Pradesh 55673 1506 2.7 1504 2.7 15145 27.2 1852 3.3
Jammu & Kashmir 222236 1695 0.8 - - 13451 6.1 1185 0.5
Jharkhand 79714 2374 3.0 1960 2.5 17097 21.4 620 0.8
Karnataka 191791 4642 2.4 20749 10.8 163957 85.5 42909 22.4
Kerala 38863 1457 3.7 4341 11.2 124864 321.3 18923 48.7
Madhya Pradesh 308245 5116 1.7 10934 3.5 117722 38.2 14729 4.8
Maharashtra 307713 4498 1.5 38765 12.6 262371 85.3 20455 6.6
Orissa 155707 4416 2.8 3607 2.3 213446 137.1 18922 12.2
Punjab 50362 1557 3.1 1477 2.9 62900 124.9 15517 30.8
Rajasthan 342239 7180 2.1 10465 3.1 103441 30.2 12636 3.7
Tamil Nadu 130058 4943 3.8 10764 8.3 144583 111.2 22509 17.3
Uttar Pradesh 240928 7818 3.2 7703 3.2 113531 47.1 76549 31.8
Uttarakhand 53483 2042 3.8 3788 7.1 6933 13.0 4159 7.8
West Bengal 88752 2681 3.0 3952 4.5 184088 207.4 93774 105.7
N.E States
Assam 78438 2940 3.7 3134 4.0 222087 283.1 4518 5.8
Arunachal Pradesh 83743 2027 2.4 - - 5262 6.3 18 0.0
Manipur 22327 1317 5.9 715 3.2 7635 34.2 166 0.7
Meghalaya 22429 1171 5.2 858 3.8 1793 8.0 30 0.1
Mizoram 21081 1027 4.9 310 1.5 2561 12.1 388 1.8
Nagaland 16579 494 3.0 1204 7.3 23783 143.5 98 0.6
Sikkim 7096 149 2.1 179 2.5 3343 47.1 133 1.9
Tripura 10486 400 3.8 689 6.6 18165 173.2 280 2.7
Union Territories
A. & N. Islands 8249 300 3.6 264 3.2 - - 139 1.7
Chandigarh 114 24 21.1 158 138.6 - - 1802 1580.7
D. & N. Haveli 491 - - 42 8.6 - - - -
Daman and Diu 112 - - - 0.0 111 99.1 39 34.8
Delhi 1490 80 5.4 - - - - 29510 1980.5
Lakshadweep 32 - - - - - - 5 15.6
Puducherry 492 53 10.8 41 8.3 1219 247.8 948 192.7
Source: Ministry of Road and Statistics
Some of the states with immense potential to become leading agricultural producers in India
are poor in terms of road infrastructure.
78
Table 3.24 Rural Electrification in India (as on 30.4.2017)

Balance
Total Un- Proportio Total Rural Proportion
Households
Inhabited Electrified n of Rural Households of Un-
State Villages Villages Electrified Households
Electrified
to be Electrified
(Millions)
(Numbers) (Numbers) Villages (Millions) Electrified Households
(Millions)
Andhra Pradesh 26286 0 100 111.8 111.8 0 0.0
Bihar 39073 424 99 122.56 55.16 67.4 55.0
Chhattisgarh 19567 321 98 45.17 38.66 6.51 14.4
Gujarat 17843 0 100 66.94 66.94 0 0.0
Haryana 6642 0 100 34.18 27.12 7.06 20.7
Himachal
17882 0 100 14.56 14.42 0.14 1.0
Pradesh
Jammu &
6337 102 98 12.88 10.18 2.7 21.0
Kashmir
Jharkhand 29492 579 98 56.82 22.58 34.24 60.3
Karnataka 27397 25 100 96.08 83.95 12.13 12.6
Kerala 1017 0 100 70.97 70.73 0.24 0.3
Madhya Pradesh 51929 52 100 113.61 67.74 45.87 40.4
Maharashtra 40956 0 100 140.16 118.02 22.14 15.8
Odisha 47677 555 99 84.05 45.62 38.43 45.7
Punjab 12168 0 100 36.89 36.89 0 0.0
Rajasthan 43264 1 100 91.09 68.79 22.3 24.5
Tamil Nadu 15049 0 100 102.85 102.85 0 0.0
Uttar Pradesh 97813 6 100 304.87 147.78 157.09 51.5
Uttarakhand 15745 53 100 17.02 14.83 2.19 12.9
West Bengal 37463 5 100 138.13 136.85 1.28 0.9
N.E States
Assam 25372 558 98 51.85 27.49 24.36 47.0
Arunachal
5258 1229 77 2.32 1.51 0.81 34.9
Pradesh
Manipur 2379 77 97 3.88 2.81 1.07 27.6
Meghalaya 6459 230 96 4.63 3.24 1.39 30.0
Mizoram 704 18 97 1.08 0.97 0.11 10.2
Nagaland 1400 4 100 1.6 0.72 0.88 55.0
Sikkim 425 0 100 0.37 0.32 0.05 13.5
Tripura 863 0 100 7.96 5.73 2.23 28.0
Source: Deendayal Upadhyaya Gram Jyoti Yojana (Scheme of Govt. of India for Rural Areas)
India is home to around 35 per cent of the global population without access to electricity and
only 44 per cent of all rural Indian households are electrified (Samanta, 2015). According to
the 2011 Census, 16.6 crore households use electricity as the primary source of lighting, out of
a total of 24.6 crore households in the country. Table 3.24 gives an overview of the status of
village electrification across the 27 states of India. Of these, 4 states have achieved 100 per
cent village electrification as on the 30 April, 2017.
Well-organized marketing is essential for the development of the agricultural sector as the
marketing system contributes greatly to monetisation of the farmers’ agri-produce. An efficient
79
system of price discovery in a market can incentivise the farmers to make investments for
higher productivity & production. The National Commission on Farmers (2007) had
recommended that the facility of regulated markets should be available to the farmer within the
radius of 5 km. This recommendation flows from the initial recommendation made by the
Royal Commission on Agriculture (1928). Considering the critical importance of a robust
agricultural market infrastructure and the vastly transformed transportation & communication
infrastructure of the country, this subject finds contemporaneous examination and appropriate
recommendation in Volume IV of this Report.
The total number of regulated markets in India as on 31.3.2014 was about 7000, and the number
of rural periodical markets was 22759; the area covered by each regulated market was as low
as 118 per sq. km in Punjab to 1031 per sq. km in Himachal Pradesh considering major states
(AGMARKNET). Table 3.25 gives detail about the wholesale markets and rural primary
markets in India; as also the status of their regulation. These are more than 2,400 principal
markets and more than 4,200 sub market yards in the country. The number of regulated markets
are relatively more in geographically large states viz. Maharashtra, Uttar Pradesh, Madhya
Pradesh, Karnataka, West Bengal and Rajasthan. These six states account for more than half
of the regulated markets in the country. The states of Punjab and Haryana though
geographically small still have a large number of regulated markets. Increasing of farmers’
incomes requires that adequate infrastructure is provided nearer to farmers’ fields, connecting
smallholders to the markets and strengthening supply chain linkages. Farmers’ income is
closely linked to market infrastructure. Small and marginal farmers in particular require good
market nearer their farming gates, with robust market linkages.
Table 3.25 Details of Wholesale, Rural Primary and Regulated Markets in different States/UTs
(As on 31.03.2015)
Number of Markets Regulated Market

Total Regulated
Rural Sub Total
Wholesale Total markets per Principal Market per
States/UTs Primary Market Regulated
Markets Markets lakh ha of Markets lakh ha of
Markets Yards Markets
GCA GCA
Andhra Pradesh 190 157 347 4.3 190 157 347 4.3
Bihar 325 1469 1794 23.7 - - - -
Chhattisgarh 2 1132 1134 19.9 69 118 187 3.3
Goa 4 24 28 17.7 1 7 8 5.1
Gujarat 205 129 334 2.7 213 187 400 3.2
Haryana 281 195 476 7.4 107 174 281 4.3
Himachal Pradesh 42 35 77 8.2 10 44 54 5.7
Jammu & Kashmir 0 8 8 0.7 11 0 11 1.0
Jharkhand 201 602 803 48.0 28 173 201 12.0
Karnataka 315 730 1243 10.1 157 356 513 4.2
Kerala 348 1014 1362 52.1 - - - -
Madhya Pradesh 0 0 0 0.0 254 284 538 2.2
Maharashtra 881 3500 4381 18.8 305 603 908 3.9
Odisha 398 1150 1548 30.0 54 382 436 8.4
Punjab 424 1390 1814 23.1 150 274 424 5.4
Rajasthan 446 312 758 2.9 134 312 446 1.7
Tamil Nadu 0 0 0 0.0 277 6 283 4.8
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Number of Markets Regulated Market

Total Regulated
Rural Sub Total
Wholesale Total markets per Principal Market per
States/UTs Primary Market Regulated
Markets Markets lakh ha of Markets lakh ha of
Markets Yards Markets
GCA GCA
Telangana 150 110 260 4.1 150 110 260 4.1
Uttar Pradesh 584 3464 4048 15.6 250 365 615 2.4
Uttarakhand 36 30 66 6.0 26 32 58 5.3
West Bengal 279 3250 3529 36.7 20 464 484 5.0
N.E States
Assam 405 735 1140 27.8 20 206 226 5.5
Arunachal Pradesh 5 66 71 24.0 0 0 0 0.0
Manipur 24 95 119 31.6 - - - -
Meghalaya 35 85 120 35.0 2 0 2 0.6
Mizoram 7 218 225 197.6 - - - -
Nagaland 19 174 193 38.7 18 0 18 3.6
Sikkim 7 12 19 12.9 - - - -
Tripura 84 470 554 - 21 0 21 -
Union Territories
A & N Islands 0 28 28 115.3 NIL NIL NIL -
Chandigarh 1 0 1 51.2 1 0 1 51.2
D & N Haveli 0 0 0 0.0 - - - -
Daman & Diu 0 0 0 0.0 - - - -
Delhi 30 0 30 84.9 7 8 15 42.5
Lakshadweep 0 0 0 0.0 - - - -
Puducherry 4 5 9 35.6 4 5 9 35.6
Source: Directorate of Marketing and Inspection
This Committee reviewed the All India Cold-chain Infrastructure Capacity study undertaken
by National Centre for Cold-chain Development (NCCD) in 2015. The study assessed the
status and gaps in cold-chain, and informs that the country had already created 31.82 million
tons of cold storage space as on 31.3.2014, almost 90 per cent of the overall capacity required
with a current gap of 3.28 million tons in cold storage space (comprising Bulk storage &
distribution Hubs). The Committee took note that there existed higher and critical gaps in other
infrastructure needed for enabling the cold-chain to function as a medium that directly connects
farms with markets. The status and gaps reported in cold-chain are at Table 3.26.
Table 3.26 Gap Analysis of Cold-Chain Infrastructure in India

Infrastructure Infrastructure Shortfall
Type of Infrastructure All India Gap
Requirement Created (%)
Integrated Pack-house 70,080 nos. 249 nos. 69,831 nos. 99.6
Reefer Transport 61,826 nos. <10,000 nos. 52,826 nos. 85
Cold Storage (Bulk) 341,64,411 MT
318,23,700 MT 32,76,962 MT 10
Cold Storage (Hub) 9,36,251 MT
Ripening Units 9,131 nos. 812 nos. 8,319 nos. 91
Infrastructure in number, refers predefined unit size; in MT denotes metric tonnes Source: NCCD 2015
Since this study by NCCD, additional cold-chain capacity has been created in the country,
though mostly as cold stores. However, cold storages are only one segment of the cold-chain,
which should facilitate the smooth transfer of harvested value from farms to distant locations.
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What needs to be borne in mind is, that mere creation of cold storage facilities would not
probably serve this purpose; it needs to be coupled with other logistics support like pack-
houses, reefer transport, ripening chambers, etc. to connect farmer and consumers more
effectively. This subject is further discussed in detail in Volume-III of this Report. Lack of
cold-chain denies the farmers the ability to reach out and connect with a large number of
consumers. This lack of connectivity is the key cause that results in huge post-harvest losses
of perishable agricultural produce.
In case of dry warehouses and godowns, the current capacity created is estimated to be between
150 million tons and 180 million tons as the capacity created under private sector is not been
fully evaluated. Similar to the evaluation carried out for cold-chain, a need appraisal is also
recommended for the other infrastructure elements that empower farmers to integrate into the
supply chain, and be better linked directly with markets. A comprehensive and holistic
assessment of infrastructure items such as dry warehousing, silos, rail and road transport, etc.,
mapped against market demand and with production is required.
Table 3.27 informs about the number of registered factories in food processing sector for the
year 2013-14 across various states in India. The states having large number of registered
factories in food processing sector are Andhra Pradesh, Tamil Nadu, Telangana and
Maharashtra. Punjab and Uttar Pradesh, which are the largest producers of food crops and milk
are at fifth and sixth position, respectively.
Table 3.27 State wise distribution of Registered Factories in Food Processing (2013-14)
Name of the State/UTs Registered units (nos) N.E States Registered units (nos)
Andhra Pradesh 5,739 Assam 1,294
Bihar 794 Arunachal Pradesh 5739
Chhattisgarh 1,049 Manipur 21
Goa 86 Meghalaya 18
Gujarat 1,904 Nagaland 15
Haryana 631 Sikkim 21
Himachal Pradesh 172 Tripura 71
Jammu & Kashmir 144 Union Territories Registered units (nos)
Jharkhand 198 A. & N. Islands 5
Karnataka 2,033 Chandigarh 19
Kerala 1,460 D. & N. Haveli 3
Madhya Pradesh 672 Daman and Diu 31
Maharashtra 3,040 Delhi 166
Orissa 932 Puducherry 69
Punjab 2,786 Source: Ministry of Food Processing Industries, Annual
Rajasthan 862 Report 2016-17
Tamil Nadu 5,204
Telangana 3,850
Uttar Pradesh 2,037
Uttarakhand 380
West Bengal 1,739
82
All states need to focus on upgrading food processing facilities, so as to maximise capturing
all possible value from food production, bring greater market integration and organisation over
time and enable farmers with access to assured demand for their produce. In addition, non-food
processing industries will also require focus, so that agricultural diversification finds the
needed forward linkages.
Key Extracts
 Notwithstanding many technological breakthroughs, the yields realised at farmers field
are considerably lower than demonstrated yield. Yield gaps can be addressed by
expanding irrigation, use of improved/hybrid seeds and better credit access.
 Access by marginal and small farmers to financial institutions needs special attention.
Further, production efficiencies in different class of farmers in the presence and absence
of credit need to be examined, so that credit policies can be effectively reoriented in
increasing income of different class of farmers.
 The state-level norms for the optimum mix of NPK are at variance from the all-India
average. Fertilizer promotion and policy should be state-specific and strive to attain area
specific optimum mix and use of NPK.
 Millets, pulses and groundnut exhibit potential for irrigation expansion. Maize provides
higher scope for irrigation followed by cotton, but sugarcane has limited potential as
almost entire area is irrigated.
 Only 2 per cent of paddy and wheat growers use hybrids. The spread of hybrid seed in
cereals and millet growing areas has potential to benefit from gaining higher yield.
Among pulses and oilseeds, some crops show higher potential in adoption of hybrids.
 The condition of rural infrastructure (roads, irrigation, electricity & markets) in a number
of states is a matter of serious concern. Farm incomes are a function of high agricultural
growth. Infrastructure is important to trigger and sustain high growth, which entails
enhanced Gross Capital Formation (GCF). Both public & private sector investments need
to be channelized to strengthen and upgrade support infrastructure like roads, electricity,
markets etc.
 Marketing infrastructure includes facilities that enable physical connectivity of farmers
with markets, such as transport linkages integrated with assembly, aggregation and
storage to maintain a state to steady supply to markets.
83
Marketing, price and trade dimensions have a vital role in doubling the income of farmers. This chapter
provides the realistic picture of marketed surplus and price realization in various crops across states
and farm size classes. Awareness and participation in Minimum Support Price (MSP) scheme across
the region and farm size classes has also been discussed in detail. Subsequently, a brief overview of
price volatility of different crops has been presented. The role of agricultural trade in enhancing income
of farmers, along with a brief illustration of trade policy is also discussed.
Marketed Surplus and Price Spread for Various Crops across States
Indian agriculture has witnessed remarkable growth during last few decades. Agricultural
production in India has undergone a phenomenal change since the dawn of green revolution.
Many technological breakthroughs have changed the face of Indian agriculture. Witnessing the
contributions of various in the agricultural sector, the country today is not only self-sufficient
in food sector, but is also a net exporter of several agricultural commodities.
Various other interventions and policies led to a remarkable increase in the output of oilseeds,
horticultural and livestock & fish products. Besides production growth per se, the quality of
growth has also seen considerable improvement and there has been progress relating to
inclusiveness, regional equity and nutritional security (Chand, 2014). In the course of
development, the agriculture sector has gone through different phases of growth, embracing a
wide variety of institutional interventions, and technology and policy regimes (Chand and
Parappurathu, 2012).
Some of the important crops like maize, gram, urad, cotton, onion and potato witnessed positive
and comparatively high production growth rate during 2004-05 to 2013-14. These noticeable
achievements on the production front led to increasing commercialisation of Indian agriculture,
moving beyond its erstwhile status of a subsistence scale economic activity.
Larger marketable surpluses across crops and regions are being generated, reflected in higher
marketed surplus ratios. The marketed surplus quantity depends upon the farmers’ individual
requirement of a crop, to be used for home consumption, seed and feed, besides losses in
handling. The Marketed Surplus Ratio (MSR), expressed as the ratio of output marketed to
output produced, is expressed in Table 4.1. The marketed surplus ratio for most of the crops
has increased appreciably during last 16 years from 1999-00 to 2014-15. The increase was
much more noticeable during 1999-00 to 2004-05. Among the foodgrains, maize is the highest
marketed crop in India. The MSR is highest for cotton and some of the oilseeds due to obvious
reasons.
The growing MSR clearly indicates the increasing commercialisation of Indian agriculture.
This increasing commercialisation requires that equal impetus is given to putting in place the
required marketing infrastructure and market network to ensure optimal returns to farmers.
85
Table 4.1 Marketed Surplus Ratio (MSR) and production growth of major agricultural
commodities
Production growth Marketed Surplus Ratio (%)

(2004-05 to 2013-14) 1999-00 2004-05 2014-15
I. Foodgrains: Cereals
Rice 2.0 60.32 71.37 84.35
Wheat 4.3 54.48 63.33 73.78
Maize 6.4 62.79 76.22 88.06
Jowar -3.8 46.83 53.44 66.64
Bajra 1.6 65.22 69.39 68.42
Ragi -2.8 41.15 57.74 48.92
II. Pulses
Arhar 1.1 62.93 79.52 88.21
Gram 6.5 65.63 93.76 91.10
Urad 4.4 80.91 85.76 85.56
Moong 4.6 70.13 76.79 90.65
Lentil 1.7 59.87 85.86 94.38
III. Oilseeds
Groundnut 0.5 63.34 88.75 91.63
Rapeseed & Mustard -1.1 71.57 89.66 90.94
Soybean 8 94.95 94.99 97.60
Sunflower -12.3 99.3 98.32 100.00
Sesamum 1.3 84.45 87.38 93.80
Safflower -26.5 86.8 91.34 100.00
IV. Other Commercial Crops
Sugarcane 3.7 82.5 98.23 85.37
Cotton 10.3 94.58 94.94 98.79
Jute 1 97.5 90.72 98.59
V. Vegetables
Onion 12.9 - 82.91 91.29
Potato 10.6 45.9 85 89.28
Source: DACNET & Agricultural Statistics at a Glance
Currently, marketed surplus data is available only at the aggregate level which does not factor
in the importance from the point of view of product movement from one region to the other or
from one market to the other markets. It would be appropriate, for balancing supply and
demand situations, if the market level surplus is also assessed and acted upon. This will also
help reduce the situation of price volatility and price triggers from certain locations/markets.
Agricultural Marketing Scenario and Challenges

The achievement on the cultivation side in terms of a significant increase in production would
translate into higher farm incomes, consumer welfare and poverty reduction, only when it is
supported by an efficient and competitive marketing system. Agricultural marketing system
plays a pivotal role in fostering and sustaining the tempo of rural development and it also
86
triggers the process of agricultural development. An efficient and competitive agricultural

marketing system is crucial not only to ensure an effective transfer of agricultural commodities
from farmer to the consumers but also in achieving its broader objectives of providing market
incentive and production signals to farmers, balancing the demand and supply of agricultural
commodities and in ensuring efficient utilisation of agricultural resources.
An excellent example for the role of good marketing system in facilitating the spread of
technology on the production front and enabling its gains to reach the farmers in terms of higher
profitability is provided by the case of Bt-Cotton in India, wherein, the increased production
resulting from the introduction of Bt technology, led to increased gains from trade and farmers
profitability (Gulati, 2009).
In India, poor marketing linkages and infrastructure constraints have led to high and fluctuating
consumer prices, resulting in only a small share of consumer rupee being transferred to the
farmer. In addition to this, the issues of poor produce handling, loss of produce, lack of
scientific grading and storage facilities have also affected the efficiency of agricultural
marketing in India. There has been large gap in the development of the storage infrastructure,
transportation, mechanisation, grading standards, export promotion, processing industry
support and market intelligence in India which requires upgradation.
The agricultural marketing policy of India has aimed to address the issues related to market
inefficiencies through regulatory mechanisms (Agricultural Produce Market Regulation Act-
APMC Act), legal provisions like the Essential Commodities Act (with various Control Orders
thereunder); and creation of market infrastructure and institutions. However, the inefficiencies
in the agricultural marketing system have continued to persist. Thanks to impressive growth in
agricultural production and market surpluses across several commodities, a new approach is
now needed in the marketing domain. This indicates the need to have policies that can readily
and easily evolved and remain more contextual and relevant to current day situations. The
underlying principle has to be competition based on agricultural liberalisation. Market
Intelligence or the dissemination of information on market demand and availability is an
important area which could play a significant role in farmers’ decision making in respect of
both production and marketing of agricultural commodities. As more marketed surpluses are
generated, farmers will need to know which market to transfer their produce, what price to
expect, availability of marketing infrastructure and status of competing supply.
Agricultural marketing in India has been facilitated through a network of regulated markets
established under the APMC Act. The objective of such a network was to ensure regulation of
marketing practices and protect the farmers from the exploitation of intermediaries. However,
there is an argument that over a period, market regulation has taken the form of restrictive and
monopolistic trade and the balance of power in transactions has moved in the favour of middle
men and traders (Chand, 2012). As a result, the prices realized by the farmers still remain low.
In fact, Acharya (2006) attributes the failure of agricultural marketing system in India to
excessive state intervention.
87
Price Realisations across States, Crops and Farm Size Classes

Despite the structural transformation in terms of its linkage with the international economy as
well as the increasing role of private players, the farmer’s share in consumer’s rupee is quite
low. Long supply chains having a number of intermediaries has resulted in high marketing
costs, while the share of producer in consumer rupee is found to be as low as 20 per cent in the
case of fruits and vegetables. This reflects the extent of inefficiencies existing in the agricultural
marketing system of India (Gulati, 2009).
It has been established that a higher share in final value will be one of the major sources of
growth even if the status quo in the production is maintained. It does not imply here that prices
need to be increased essentially; but infers the need to improve farmers’ share in consumer
price and need to minimise the chain of costs, margins and inefficiencies. Table 4.2 and Table
4.3 provide the details of price realisation by the farmers for selected crops based on the
Situation Assessment Survey of Agricultural Households.
Table 4.2 Price Realisation (Rs./kg) for major crops and farm categories
(July-December 2012)
Farm Sugar
Agency Paddy Jowar Bajra Maize Arhar Urad Moong Cotton
category cane
Local Marginal 12 13 11 12 36 29 37 2 37
Private Small 11 4 10 11 38 28 38 3 39
Semi-medium 14 9 11 12 31 28 41 2 39
Medium 14 9 11 12 36 27 34 3 40
Large 11 11 12 35 40 3 37
Mandi Marginal 13 6 10 12 37 28 38 3 37
Small 13 13 11 12 36 29 35 2 40
Semi-medium 16 12 11 12 37 30 32 3 39
Medium 14 14 10 12 34 28 38 4 40
Large 15 12 13 12 38 27 44 3 37
Input Marginal 11 13 10 12 34 29 46 2 37
dealers Small 12 12 11 13 33 29 47 2 41
Semi-medium 13 14 11 12 33 30 40 2 37
Medium 12 13 12 12 32 28 53 2 40
Large 14 10 11 26 2 38
Cooperat- Marginal 13 20 15 25 2 37
ives & Small 14 24 13 13 40 12 50 3 36
Govt.
Semi-medium 13 12 11 12 32 27 2 38
Agency
Medium 13 14 13 13 36 31 5 37
Large 14 15 13 42
Processors Marginal 12 13 3 37
Small 13 14 2 39
Semi-medium 13 11 3 38
Medium 14 3 34
Large 15 3 38
Source: Computed from NSSO Unit Record Data on Situation Assessment Survey (2014)
88
Table 4.3 Price Realisation (Rs./kg) for major crops and farm categories
(January-June 2013)
Agency Farm category Rapeseed/
Paddy Jowar Wheat Barley Gram Lentil
Mustard
Local Marginal 13 20 13 10 28 44 29
Private Small 12 14 13 12 30 41 30
Semi-medium 14 20 13 12 31 41 31
Medium 15 15 13 10 33 43 30
Large 14 12 13 11 35 39 29
Mandi Marginal 14 14 14 13 28 33 31
Small 12 14 14 10 30 35 31
Semi-medium 13 15 14 12 30 37 31
Medium 14 17 14 11 31 33 31
Large 13 14 14 28 33 31
Input Marginal 12 25 12 30 46 29
dealers Small 13 14 12 13 30 35 30
Semi-medium 12 14 13 13 29 34 31
Medium 12 16 14 11 31 35 31
Large 13 14 38 29
Cooperat- Marginal 14 14 30
ives & Small 13 14 28 30
Govt.
Agency Semi-medium 14 14
Medium 14 14 32 32
Large 18 14
Processors Marginal 15 16 30 20
Small 10 13 28
Semi-medium 11 11 20
Medium 9 14 28
Large
In general, it is observed that small and marginal farmers receive lower price as compared to
relatively larger farm size categories. In case of maize and sugarcane there is not much variation
in prices across different agencies, however in case of paddy jowar, bajra, pulses and cotton
prices offered by different agencies shows variation.
The information would potentially be different for other types of produce, such as milk, fruits
and vegetables, as these involve a different type of market access, network, production and
selling cycles.
At the state level, it was observed that there is high variation in prices of almost all the
commodities and this variation is not only among the states but also among the agencies in
both the season (Table 4.4 and 4.5).
89
Table 4.4 Price Realisation (Rs./kg) from Local Private Traders and Government &
Cooperative Agency in different crops across States (July to Dec, 2012)
Paddy Bajra Maize Arhar Urad Sugarcane Cotton
States
LPT G&C LPT G&C LPT G&C LPT G&C LPT G&C LPT G&C LPT G&C
Andhra 13 11 6 9 32 28 34 3 7 38 34
Pradesh
Bihar 11 11 10 2 2
Chhattisgarh 11 13 10 53 38 2 2
Gujarat 12 15 11 15 11 33 30 34 2 2 42 41
Haryana 17 19 11 13 3 3 42 39
Himachal 12 12 50
Pradesh
Jammu & 19 10 13 60
Kashmir
Jharkhand 10 11 9 10 41 24
Karnataka 16 16 13 16 12 13 37 38 40 4 2 40 43
Kerala 12 17 33 47 12 22
Madhya 14 13 11 13 13 37 27 2 3 40
Pradesh
Maharashtra 18 13 12 18 11 12 37 35 22 3 3 39 40
Odisha 11 12 12 31 54 34
Punjab 31 14 11 12 17 3 3 41 39
Rajasthan 12 10 12 12 16 33 30 40 40
Tamil Nadu 14 14 14 14 2 2 41 42
Telangana 12 13 11 12 33 40 25 2 36 35
Uttar Pradesh 11 13 11 11 11 44 30 3 3 4
Uttarakhand 15 12 15 60 3 3
West Bengal 10 12 26 17
North Eastern States
Assam 10 9 12 40 17 18
Arunachal 19 8 50 20
Pradesh
Manipur 11 12
Meghalaya 19 4
Mizoram 17 5 8 11
Nagaland 22 23
Sikkim 39 31 80
Tripura 10
Union Territory
Delhi 21
90
Table 4.5 Price Realization (Rs./kg) from Local Private Traders and Government &
Cooperative Agency in different crops across States (Jan to July, 2013)
Wheat Gram Masoor Rapeseed/ Mustard

States
LPT G&C LPT G&C LPT G&C LPT G&C
A.P 31
Bihar 12 13 37 42 28
Chhattisgarh 12 31 38 31
Gujarat 14 15 25 30 31
Haryana 13 14 30 32 31
J&K 14 21
Jharkhand 15 28 35 40
Karnataka 13 14 38
Kerala 365
M.P 14 15 32 32 31 28
Maharashtra 15 13 30 32 42
Odisha 13 37 55 37
Punjab 13 14 28
Rajasthan 14 16 30 28 45 30 31
T.N 40
Telangana 31 32
Uttar Pradesh 12 13 32 39 29
Uttarakhand 14 15 50 47 12
W. Bengal 12 32 35 27
North Eastern States
Arunachal Pradesh 50 24
Assam 32 33
Manipur 10 20
Meghalaya 47
Union Territory
Delhi 13 15 28
The price offered by local private agency is comparatively higher than the government/
cooperative price. In some states the difference between both the prices is much higher, as seen
in case of paddy in Punjab and Maharashtra and urad in Kerala. However, situation is reverse
in case of jowar and moong where government agency has offered better price to the farmers.
These statements may not however hold good uniformly across the country, indicating absence
of market integration across the country.
Price Realisation: Meta-analysis of Available Studies

As deliberated, output growth alone will not drive sufficient growth for farmers; income growth
will require efficient marketing arrangements so that production is submitted for optimal
exchange. Many innovative marketing arrangements have shown that farmers’ share can be
magnified and marketing costs and margins of the chain can be managed efficiently. The meta-
analysis of some studies conducted at regional level and published in various journals,
evaluates the temporal and spatial evidence on price realisation across various commodities
and regions. The summary results presented on this basis are presented in Box 4.1.
91
Box 4.1 Farmers’ Share for Various Commodities, Channels, States and Years
Source: Compiled from various studies in Agricultural Marketing
92
The price realisation to farmers, expressed as share in consumer rupee, indicates that it is lowest
for fruits and vegetables after pulses. Of course, it varies according to the marketing channel
selected, within a given geography for the selected commodity. It is surprising to note that the
farmers’ share in onion remains lower, around 43-44 per cent. Banana trading seems to be more
efficient as only 15-18 per cent of the consumer rupee is eroded in the marketing process.
The e-NAM (electronic National Agricultural Market) is the latest initiative rolled out by
government to provide a platform to unify the country’s agricultural markets. Such enhanced
integration should benefit the farmers by bringing better price realisation through information
connectivity and transparency. An ex-ante analysis may be conducted in those mandis which
have already been connected through the e-NAM to evaluate the impact. Promoting private
sector participation can bring in competition to greater benefit of farmers. Effective post-
harvest management will yield not only in terms of increased availability, but also improve the
physical connectivity of farmers produce with a choice of various market channels. The
scenario is indicated by the situation of price realisation across commodities, states and over
time. A detailed analysis needs to be conducted at national, regional and local level to present
a realistic scenario status and decide on the most suitable strategies accordingly.
Price realisation by the farmer can be best computed from the price data on the Farm Harvest
Price (FHP) available at state and district level and the wholesale price data during the peak
season in the APMC’s. FHP data is available only at the state or district level with a certain
time lag. Appropriate mechanisms for collection of most recent FHP at more disaggregated
level like blocks/villages would be desirable.
The Minimum Support Price Scheme (MSPS): Awareness and

Participation across Farm Size Classes
The volatile behaviour of market prices for agricultural commodities creates the situation of
uncertainty in crop and resource allocation for farmers. Frequent and rampant market volatility,
as witnessed in India, is also due to the marketing system being ineffective in design and
operations to manage even slight variations in supply and demand. Such ineffective systems
add to inefficiencies, which are passed down to the weakest actor in the chain, the farmer.
A remunerative and stable price environment is essential for farmers; and the price policy of
India, especially MSP support is one of the initiatives in this direction. It is important to
examine the efficacy of any such support programme, which may be analysed in terms of its
awareness and the participation of farmers. As paddy is one the major crops in the country in
terms of production as well as consumption, the details regarding MSP awareness and price
realised were examined based in the Situation Assessment Survey. It presents that only 32 per
cent of the paddy growers in the nation were aware of MSP policy and only 27 per cent of total
paddy sales were made at MSP.
Table 4.6 provides the average price of paddy received by the farmers across states. There are
certain states where the price realized by the farmer remains less than the MSP. The open
market price remains higher than the MSP in states like Assam, Andhra Pradesh, Uttarakhand,
93
Maharashtra, Madhya Pradesh, Tamil Nadu and Punjab. In other major states, the MSP is
higher than the open market rates. However, except in the state of Chhattisgarh, very little
quantity is flowing through the cooperative and government agencies.
Table 4.6 Price received for paddy (Rs. per kg)

Agency
Cooperative &
States Local Input
Mandi Government Processors Others
Private dealers
Agencies
With Negligible Procurement
Himachal Pradesh 12 13 13 12
Jammu & 19 9 26 11 10
Kashmir
Rajasthan 12 20
Open Market Price > MSP
Assam 10 9 9 9 9
Andhra Pradesh 13 18 13 11 13 13
Uttarakhand 15 10 12 12 10
Maharashtra 18 21 16 13 18 25
Madhya Pradesh 14 15 15 13 17
Tamil Nadu 14 14 15 14 19 12
Punjab 31 14 13 14 19 13
MSP > Open Market
Bihar 11 11 10 11 10 9
West Bengal 10 10 10 12 11 10
Odisha 11 12 11 12 11 10
Telangana 12 13 12 13 11 13
Chhattisgarh 11 12 11 13 13
Uttar Pradesh 11 16 11 13 9 9
Gujarat 12 11 11 15
Jharkhand 10 10 10 11 10
Karnataka 16 18 17 16 18 14
Kerala 12 20 17
Haryana 17 17 25 19 17
Source: Computed from NSSS Unit Record Data on Situation Assessment Survey (2014)
Over the last four and a half decade, the price policy implementation has boosted mainly wheat
and rice crops among foodgrains and sugarcane and cotton among other crops (Chand, 2003).
This did not leave resources for other crops, and created an imbalance in demand and supply
of other important agricultural commodities like pulses, oilseeds and coarse cereals. In absence
of an effective price support mechanism, in case of these crops, market prices often fall below
MSP. Moreover, the trade policy works independently of MSP policy, to create disconnected
supply variations, to the disadvantage of farmers. The current price and trade policy needs to
be restructured to meet the existing challenges faced by the agricultural community.
In this context, the Shanta Kumar Committee Report on restructuring of Food Corporation of
India (FCI), recommended that pulses and oilseeds deserve priority and Government of India
(GoI) must provide better price support operations for them, and dovetail their MSP policy
with trade policy, so that the landed costs of imports are not below the domestic MSP rate.
Shanta Kumar Committee Report states that in 2012-13, only 6 per cent of total farmers in the
country gained from selling wheat and paddy directly to any procurement agency. The second
94
major criticism of the price policy is that a large number of crops and states are not covered by
effective implementation of the MSP (Chand 2003). The prices received by farmers are often
below the MSP in a large number of crops and in a large number of markets where it is not
supported by effective procurement (Planning Commission 2007b: 67-68).
Reorienting the current price policy in an effective and sustainable manner can bring change
in the agricultural price scenario. Various price support options need to be considered to
buttress markets, assure market price to farmers, along with the development of infrastructural
and market intelligence facilities for agriculture, to allow the farmer to transcend into a
powerful market force in his own right.
Price Behaviour of Agricultural Commodities

In the recent years, the issue of high price volatility in agricultural commodities in domestic as
well as international market has assumed critical importance. Recently, the prices of many
agricultural commodities have shown a high degree of volatility.
Food inflation has remained higher than non-food inflation for several years. This relationship
persisted both when overall inflation was high and also when it turned low (in last two years).
The food inflation remaining stubbornly high has remained a matter of concern for the
policymakers. The prices of agricultural commodities have typically been more volatile than
those of the non-farm commodities. Fig 4.1 reflects the trends in inflation for various food
commodities. The changes have been depicted on the basis of both annual series as well as
monthly series of Wholesale Price Index (WPI).
Figure 4.1 Trends in WPI of selected Agricultural Commodities

900
Rice Wheat
800 Maize Gram
Arhar Potato
700 Onion Banana
Raw Cotton Groundnut Seed
600 Soyabean
500
400
300
200
100
0
Jul-07
Jul-12
Jun-05
Jun-10
Nov-05
Apr-06
May-08
Apr-11
May-13
Jun-15
Apr-16
Aug-09
Nov-10
Aug-14
Nov-15
Jan-05
Oct-08
Sep-06
Feb-07
Dec-07
Mar-09
Jan-10
Sep-11
Feb-12
Dec-12
Mar-14
Jan-15
Sep-16
Oct-13
95
Fruits and vegetables exhibit the highest price volatility among various agricultural
commodities. Some commodities in this category, like onion, have many a times created a
crisis like situation due to extreme volatility in their prices. In the case of products like onion,
potato, tomato and some other horticultural products; prices have shown violent rise and sharp
falls, even within short time periods. Onion is viewed as a highly price sensitive commodity in
the fruits and vegetables category, whose WPI touched the highest peaks of 619 in January,
2011 and 846 in September, 2013 and 782.8 in September, 2015.
Low price elasticity of demand and low income elasticity and inherently instable production
are considered as important factors for high volatility in food prices. Despite farmers showing
robust response by increasing supply, inflationary pressure resurfaced. Fig 4.2 shows the
correlation in decadal trend of inflation rate (WPI and food items) with production of high
value foods.
Figure 4.2 Inflation Trends and Supply Response
Source: NCCD analysis
Food is now the prime driver of WPI with perishable commodities contributing the highest. On
the surface, the trend can indicate that demand for perishable produce continues to outstrip
supply. Actually, the inflationary pressure is from a lack of efficient supply system – the
existing logistics system, intended to function as a conduit to markets, is unable to cope rate of
96
growth in production. The inability to connect production with markets, feeds losses and results
in a supply shortfall in the face of higher production growth, and in turn causes inflation in
perishable food items. Continual demand for food distribution and agricultural logistics is
foreseen over the coming decades.
The extent of volatility is also examined from Table 4.7, which also indicates that the major
drivers of food inflation are the horticultural commodities mainly potato and onion which have
shown a higher instability in prices in both the periods taken under consideration. Apart from
horticultural commodities, gram in particular (among pulses) has shown an unstable behaviour
in the prices in the later phase. Such volatile behaviour in agricultural commodities brings about
frequent changes in price at consumer end and uncertainty of income at producers end.
Table 4.7 Extent of Volatility across commodities

Commodity Mean WPI Range Instability Index
2005-10 2011-16 2005-16 2005-10 2011-16 2005-10 2011-16 2005-16
Under MSP based Price Support
Rice 131.1 216.6 173.9 101-171 167-255 4.0 5.3 9.4
Wheat 138.6 204.4 171.5 96-182 164-252 4.0 4.5 8.0
Maize 134.7 241.2 187.9 104-172 175-297 3.0 5.5 10.9
Gram 143.4 254.7 199.0 98-183 152-582 11.2 28.5 15.8
Pigeon Pea 144.9 250.9 197.9 89-263 176-421 14.0 16.4 16.0
Groundnut 131.4 227.4 179.4 90-178 154-288 7.3 11.2 13.7
Soybean 108.3 198.7 153.5 67-153 125-268 12.7 14.6 15.4
Raw Cotton 121.5 216.3 168.9 82-220 177-306 10.6 11.2 14.9
Under MIS based Price Support
Potato 139.4 206.7 173.0 72-304 99-427 31.5 34.4 16.4
Onion 165.6 325.9 245.8 75-469 134-846 33.7 49.3 25.3
Banana 128.9 242.1 185.5 93-178 150-364 6.1 10.0 15.5
No Price Support
Mutton 137.8 244.3 191.1 102-197 186-289 7.6 3.4 5.6
Source: DFI Committee based on the data available with Office of Economic Advisor
The price support from the government, besides MSP support and operations, is also available through
Market Intervention Scheme (MIS). MIS includes horticultural commodities and other agricultural
commodities which are perishable in nature and not covered under the MSP scheme. It is intended to
safeguard the farmers from making a distress sale when prices fall to very low level in the event of a
bumper crop. The scheme is implemented on the request of a concerned State government for a given
commodity and the losses accrued from such an intervention are shared on 50:50 basis between central
and the state government.
Role of Agricultural Trade in Enhancing Gains to Farmers

Trade among nations has remained an important economic activity and has played a significant
role in the economic development of trading partners. Typically, geographical proximity is one
of the major determinants of trade and also important explanation for regional trade groupings
or blocs. One would expect trade to take place based on inherent comparative and competitive
97
advantages, but often, in case of sectors like agriculture, trade occurs to meet the objectives of
food security and achieving price stability.
If one looks at the trade matrix of the country; cotton, cereals, edible fruits and vegetables and
tea and coffee comprise the major share (Table 4.8). Growth in exports of most of agricultural
commodities seems to be encouraging during the 2001-16 period. Meat and meat products
witnessed the highest growth in this period.
Table 4.8 Trends and Composition of Agricultural Exports in India

Exports (Billion Dollars) Growth Composition of Exports
Product
TE 2003 TE 2010 TE 2016 (2001-16) TE 2003 TE 2010 TE 2016
Overall exports 51.1 193.0 281.0 14.7 100.0 100.0 100.0
Meat and edible meat 0.3 1.4 4.5 24.5 0.6 0.7 1.6
offal
Fish and crustaceans 1.3 1.6 5.0 12.0 2.5 0.8 1.8
Dairy produce 0.1 0.3 0.4 12.1 0.1 0.1 0.1
Edible vegetables 0.3 0.8 1.1 12.1 0.5 0.4 0.4
Edible fruit and nuts; 0.6 1.1 1.6 8.5 1.1 0.6 0.6
peel of citrus fruit or
melons
Coffee, tea, mate and 0.7 1.8 2.9 12.3 1.4 0.9 1.0
spices
Cereals 1.3 3.3 7.5 16.1 2.5 1.7 2.7
Preparations of meat 0.0 0.2 0.2 15.5 0.1 0.1 0.1
and fish
Sugars 0.4 0.9 1.5 16.9 0.7 0.5 0.5
Miscellaneous edible 0.1 0.3 0.6 13.2 0.3 0.1 0.2
preparations
Tobacco and products 0.2 0.8 1.0 13.9 0.4 0.4 0.3
Rubber and articles 0.5 1.5 2.5 14.0 1.0 0.8 0.9
Raw hides and skins 0.5 0.7 1.1 6.5 1.0 0.4 0.4
Articles of leather. 0.9 1.5 2.4 8.2 1.7 0.8 0.9
Wood and wood 0.0 0.2 0.4 18.1 0.1 0.1 0.1
articles
Paper and paperboard 0.2 0.6 1.1 13.5 0.5 0.3 0.4
articles
Cotton 2.1 4.9 7.5 11.6 4.2 2.5 2.7
Source: Computed from International Trade Statistics
More than 10 per cent growth in exports is also witnessed in products like cereals, rubber,
plantation crops, fish, edible vegetables, dairy produce, wood and paper, cotton and sugar.
However, the starting base is minimal and multi-fold opening of export markets has to be a top
priority to empower the next phase of growth in Indian agriculture.
The major and regular agricultural imports in India comprise animal and vegetable fats and oil,
edible vegetables and edible fruits and nuts (Table 4.9). Palm oil, soybean oil and safflower oil
are the major items being imported under the category of animal and vegetable fats. Chick pea
comprises more than two-third share in the category of edible vegetables. Certain commodities
are imported to meet the crises situations related to shortages in domestic supply.
98
Table 4.9 Trends and Composition of Agricultural Imports in India

Imports (Million Dollars) Growth Composition of Imports
Product (2001-16)
TE 2003 TE 2010 TE 2016 TE 2003 TE 2010 TE 2016
Overall imports 60185 310714 402273 16.4 100.0 100.0 100.0
Animal or vegetable 1883 4849 10539 16.2 3.1 1.6 2.6
fats and oils
Edible vegetables and 617 1802 3465 15.3 1.0 0.6 0.9
certain roots and
tubers
Edible fruit and nuts; 354 1197 2804 17.0 0.6 0.4 0.7
peel of citrus fruit or
melons
Cotton 426 526 807 5.2 0.7 0.2 0.2
Sugars and sugar 20 675 740 29.6 0.0 0.2 0.2
confectionery
Coffee, tea, maté and 102 290 718 16.1 0.2 0.1 0.2
spices
Raw hides and skins 213 455 668 8.8 0.4 0.1 0.2
(other than furskins)
and leather
Cereals 1 135 224 37.4 0.0 0.0 0.1
Other vegetable 53 129 330 15.7 0.1 0.0 0.1
textile fibres; paper
yarn and woven
fabrics of paper yarn
Wool, fine or coarse 183 295 368 5.7 0.3 0.1 0.1
animal hair; horsehair
yarn and woven
fabric
Cocoa and cocoa 12 80 234 27.2 0.0 0.0 0.1
preparations
Silk 197 380 209 0.1 0.3 0.1 0.1
Source: Computed from International Trade Statistics
As international market may prove to be more lucrative for farmers, it was analyse how the
unit value realised (UVR) from the trade vary in domestic and international markets. This is
examined for one of the traditional commodities i.e. cotton and one for an emerging commodity
i.e. bovine meat and the details are provided in Box 4.2. In case of bovine meat, the UVR
realised from the domestic and international markets vary significantly. Thus, in case of
carabeef (buffalo meat) international markets provide a lucrative situation to the farmers.
Enhancing the exports of bovine meat may be gainful for animal farmers. However, the meat
exports require very sophisticated kind of logistics and are subject to many quality and policy
restrictions. A detailed probe in this regard would be further useful.
Cotton category comprises various products like raw cotton, cotton yarn, and other value added
products. Cotton yarn (other than sewing thread, containing >= 85 per cent cotton by weight)
is the major product being exported from the country and comprises around 49 per cent share
in value. Besides this, cotton, neither corded nor combed is the other major product being
exported under this category. The exports of cotton yarn do not seem to be particularly
lucrative, as the UVRs realized from international markets is quite close to the domestic
99
market. However, the UVR realized from the export of cotton yarn is much higher than the
UVR of cotton in the domestic market. Cotton yarn is a value added product and would also
involve the cost of value addition.
Box 4.2 Evidences of Gains in Trade

Unit 2011 2012 2013 2014
Bovine Meat
Total Meat Exports 000 US $ 2593017 2995860 4486552 4800183
Share of bovine exports % 96.5 95.2 94.1 94.6
Unit Value Realized (UVR) Exports Rs/kg 131 157 173
UVR, Domestic market Rs/kg 93 100 101
Impact of change in Export Price to Proportionate 0.362 0.089
Domestic Price change
Impact of change in Exports to Domestic Proportionate 0.768 0.018
Price change
Cotton
Cotton Exports (5201) Ton 1871156 1918283 2367741 1528379
Cotton Exports (5205) Ton 647838 917830 1361509 1245726
Share of 5201 and 5205 in cotton exports % 78.82 79.38 82.23 77.86
UVR, Exports (5201) Rs/kg 86.79 103.45 115.33 112.87
UVR, Exports (5205) Rs/kg 203.84 187.05 212.10 201.00
UVR, Domestic market Rs/kg 124 109 122 108
Impact of change in Export Price to Proportionate 1.48 0.88 2.15
Domestic Price (5205) change
Impact of change in Export Price to Proportionate -0.64 1.03 5.29
Domestic Price (5201) change
Impact of change in Exports to Domestic Proportionate -1.61 0.50 0.30
Price (5201) change
Impact of change in Exports to Domestic Proportionate -0.84 0.23 0.79
Price (5205) change
Exchange rate Rs. per US$ 47.92 54.41 60.5 61.1
Source: Computed based on International Trade Statistics and National Accounts Statistics
A detailed analysis may be carried out for all potential commodities to examine the impact on domestic
prices and supply, thereby, the impact on farmers’ gains. This is extremely important so as to
concentrate efforts on the optimal products and achieve the market related objectives. The commodities
having significant trade potential need to be governed by sustained policies and regulates to protect
the interest of exporter and fulfil the commitments with foreign buyers. The gains from trade can further
be enhanced by promoting networking among academic, research institutions and practicing
organisations for proper technical supervision and guidance.
Agriculture marketing in India is governed through various kinds of interventions by the central
and state governments. The trade related interventions include subsidies, tariff or non-tariff
barriers and other trade policy instruments. Exports of agricultural commodities have been
restricted through export prohibitions, licenses, quotas, marketing controls, and Minimum
Export Prices (MEPs).
To protect the interests of domestic consumers, the controls on export were enforced through
trading enterprises. There are few essential commodities like onion, which have been
100
exhibiting extreme price fluctuations. In such cases, MEP has been administered several times
to control its price in the domestic market. Such short-term policy options may settle the current
crises, but have long term impact on trade relations. These ad-hoc measures need to be properly
examined to prevent the potential threats on the country’s image as a reliable trade partner.
Generating foreign revenues not only improves the fiscal budget of the country but also builds
global competitiveness. A stable trade policy helps build credibility as a reliable supplier-
partner. DFI Committee feels that a more ‘farmer centric” approach to trade policy is
required, to allow farmers avail the advantage of domestic as well as global markets.
Key Extracts
 Poor market linkages and infrastructure constraints have led to high and fluctuating
consumer prices, and resulting in only a small share of consumer rupee reaching the
farmers. In the case of fruits and vegetables this is as low as 20 per cent, reflecting
the extent of inefficiencies existing in the agricultural marketing system of India.
 There is high variation in prices of almost all the commodities, and this variation is
not only among the states but also among the agencies in both the season.
 The price offered by local private agency is comparatively higher than the
government/cooperative price. In some states the difference between both the prices
is quite large, as seen in case of paddy in Punjab and Maharashtra and urad in Kerala.
However, situation is reverse in case of jowar and moong where government agency
has offered better price to the farmers.
 Price policy needs to be restructured. Over the last four and a half decades, the price
policy implementation has boosted mainly wheat and rice crops among foodgrains
and sugarcane and cotton in other crops. The prices of other crops often dip below
MSP due to lack of effective market support mechanism for them. Moreover, trade
policy also works independently of MSP policy, and many a time, imports of pulses
happen at prices much below their MSP, disincentivising diversification.
 In the recent years, the issue of high price volatility in agricultural commodities in
domestic as well as international markets is evidenced. Fruits and vegetables seem to
exhibit highest price volatility among all agricultural produce. On surface, the
situation indicates that demand for perishable produce continues to outstrip supply.
Actually, the problem is absence of efficient supply systems which means supply
failure in the face of large output, that in sequel feeds inflation in food items.
101
This chapter establishes the link between climate vulnerability with farmers’ income at disaggregated
level and the most vulnerable districts have been identified from climate and income perspective.
Further, profiling of vulnerable states based on major attributes of farm and farmer’s income has been
carried out.
Vulnerable Districts from Farmer Income and Climate Perspective

Climate change and variability is one of the most important matters of concern in terms of
livelihood and income of farmers. Impending threat of climate change on agriculture and thus
income and livelihood of farmers has been widely recognized by scholars across the globe.
Several studies have also been conducted in Indian context and significant inverse relation
between climate change and farm income has been unanimously established. In one such
attempt Rao et al., (2013) assessed vulnerability of agriculture to climate change and variability
at district level considering the fact that most of the development planning and programme
implementation are done at district level in India. They used a number of indicators that reflect
the three components of vulnerability – Exposure, Sensitivity and Adaptive Capacity based on
reviews from previous standard studies and discussion with experts.
This Committee compared the 150 districts which topped under very high vulnerability status
category in their study, with the 150 districts having lowest income status of farmers as per
NSSO-SAS survey, 2013. Fig 5.1 represents the proportion of districts within State/UTs which
bear very high vulnerable to climate change and those that have low farmer income. Low
income reduces the adaptive capacity of the farmers to withstand climate shocks and thus
increases their vulnerability.
It can be seen that most of the districts with very high vulnerability status are in the state of
Rajasthan. Interestingly, agriculturally developed states like Gujarat and Karnataka, where the
proportion of districts falling under low farmer income category is zero and 4 per cent
respectively (Fig 5.1) are also having major proportion of districts (around 60 per cent) under
high vulnerability category.
With the exception of Daman and Diu where entire area is reported to be vulnerable, all north-
eastern states and UTs have either negligible proportion or very low (for example Assam)
proportions of districts under high climate vulnerability status, along with low farmers’ income
status. The situation seems to be more grievous in 33 out of 150 districts, which on the one
hand are highly vulnerable to climate change, and on the other are agriculturally undeveloped,
and fall in the bottom 150 having lowest agricultural income (Table 5.1).
Therefore, these 33 districts need priority attention in terms of area specific policy formulation
as well as implementation to enhance income of farmers, thereby thus raising their adaptive
capacity and reducing vulnerability of agriculture to climate change in these areas.
103
Figure 5.1 Comparison of States/Districts in Vulnerability and Income Status
A. Distribution of Low Farmers’ Income Districts B. Distribution of Climate Vulnerable Districts
Andhra Pradesh 18 Andhra Pradesh 14

Bihar 70 Bihar 30
Chhattisgarh 38 Chhattisgarh 6
Goa Goa
Gujarat 0 Gujarat 64
Haryana 11 Haryana 16
Himachal Pradesh 8 Himachal Pradesh 8
Jammu & Kashmir Jammu & Kashmir
Jharkhand 72 Jharkhand 22
Karnataka 4 Karnataka 59
Kerala Kerala
Madhya Pradesh 24 Madhya Pradesh 40
Maharashtra 21 Maharashtra 45
Odisha 53 Odisha 0
Punjab 0 Punjab 12
Rajasthan 13 Rajasthan 94
Tamil Nadu 21 Tamil Nadu 21

44 Uttar Pradesh 24
Uttar Pradesh
62 Uttarakhand 31
Uttarakhand
71 West Bengal 6
West Bengal
Tripura 0 Tripura 0
Arunachal Pradesh 0 Arunachal Pradesh 0
4 Assam 4
Assam
Manipur 0
Manipur 0
Meghalaya 0
Meghalaya 0
Mizoram 0
Mizoram 0
Nagaland 0
Nagaland 0
Sikkim 0
Sikkim 0
A & N Islands 0
A & N Islands 0
Chandigarh 0
Chandigarh 0
Dadar& Nagar Haveli 0
Dadar& Nagar Haveli 0
Daman & Diu 100
Daman & Diu 0
Delhi 0
Delhi 0
Lakshadweep 0
Lakshadweep 0
Puducherry 0
Puducherry 0
0 50 100
0 50 100
Low income districts Remaining districts High vlnerable districts Remaining districts
104
Table 5.1 Double Stressed Districts in terms of Climate Vulnerability and Farmers’ Income
SN Districts State 18 Dungarpur Rajasthan
1 Karbi-Anglong Assam 19 Banswara Rajasthan
2 Kishanganj Bihar 20 Udaipur Rajasthan
3 Madhubani Bihar 21 Perambalur Tamil Nadu
4 Araria Bihar 22 Dharmapuri Tamil Nadu
5 Darbhanga Bihar 23 Ramanathapuram Tamil Nadu
6 Supaul Bihar 24 Chitrakut Uttar Pradesh
7 Bhagalpur Bihar 25 Banda Uttar Pradesh
8 Saran Bihar 26 Hamirpur Uttar Pradesh
9 Saharsa Bihar 27 Ballia Uttar Pradesh
10 Siwan Bihar 28 Deoria Uttar Pradesh
11 Godda Jharkhand 29 Shravasti Uttar Pradesh
12 Sahibganj Jharkhand 30 Bageshwar Uttarakhand
13 Dindori Madhya Pradesh 31 TehriGarwal Uttarakhand
14 Ratlam Madhya Pradesh 32 Almora Uttarakhand
15 Sidhi Madhya Pradesh 33 Malda West Bengal
16 Aurangabad Maharashtra
17 Jaisalmer Rajasthan
Some districts that ranked high on vulnerability status, were however more developed in terms
of farmers’ income. Agro-climatic positioning of the districts will play a role for suitable
policies for reducing climate vulnerability and augmenting income of the farmers. It may be
noted that farmer’s income is a combination of farm income and non-farm income.
Vulnerable Districts from Farm Income and Climate Perspective

Considering the mandate of this DFI Committee and the mandate of the Department of
Agriculture, Cooperation & Farmers’ Welfare, an examination of the poorest districts based on
farm income, which is typically a major component of farmers’ income, and climate
vulnerability was done. The poorest 150 districts in terms of lowest farm income (income from
crops and animals derived from NSSO-SAS survey, 2013) were compared with very high
climate vulnerable districts (see the previous section). Interestingly on this basis, out of 150,
the number of double stressed districts identified is 29 (see Table 5.2).
One can easily notice that the percentage of districts falling under low farm income in states
like Bihar, Uttar Pradesh and Madhya Pradesh has declined, as compared to when the poor
districts were identified on the basis on farmer’s total income. It appears that income from crop
and livestock is a more reliable and prominent factor than that of income from non-farm sources
like wages and salary. Special attention needs to be given to these areas in terms of technology
package, infrastructure and targeted policy support.
In a few southern states like Kerala, Andhra Pradesh and Tamil Nadu, and hilly states like
Jammu and Kashmir and Himachal Pradesh, income from non-farm sources is seen to play a
critical role in farmer’s income, as indicated by the increase in the percentage of districts falling
under low farm income status in these states.
105
Figure 5.2 Comparison of States/Districts in Vulnerability and Farm Income Status

A. Distribution of Low Farm Income Districts B. Distribution of Climate Vulnerable Districts
Andaman and… 0
Andaman and… 0
Andhra Pradesh 14
Andhra Pradesh 22
Arunachal Pradesh 0
Arunachal Pradesh 0
Assam 4
Assam 4
Bihar 30
Bihar 50
Chandigarh 0
Chandigarh 0
Chhattisgarh 6
Chhattisgarh 11
Dadar & Nagar Haveli 0
Dadar & Nagar… 0
Daman & Diu 100
Daman & Diu 0
Delhi 0
Delhi 0
Goa
Goa 0
Gujarat 64
Gujarat 12
Haryana 16
Haryana 10
Himachal Pradesh 8
Himachal Pradesh 25
45 Jammu & Kashmir
Jammu & Kashmir
67 Jharkhand 22
Jharkhand
Karnataka 59
Karnataka 3
Kerala 14 Kerala
Lakshadweep 0
Lakshadweep 0
Madhya Pradesh 40
Madhya Pradesh 10
17 Maharashtra 45
Maharashtra
Manipur 0 Manipur 0
Meghalaya 0 Meghalaya 0
Mizoram 0 Mizoram 0
Nagaland 0 Nagaland 0
Odisha 53 Odisha 0
Pondicherry 0 Pondicherry 0
Punjab 0 Punjab 12
Rajasthan 18 Rajasthan 94
Sikkim 0 Sikkim 0
Tamil Nadu 41 Tamil Nadu 21
Tripura 0 Tripura 0
Uttar Pradesh 23 Uttar Pradesh 24
Uttarakhand 62 Uttarakhand 31
West Bengal 84 West Bengal 6
0 100 0 100
Low farm income Others High vlnerable districts Others
106
Table 5.2 Double stressed Districts in terms of Climate Vulnerability and Low Farm Income
SN. State Districts

1. Bihar Madhubani
2. Bihar Araria
3. Bihar Bhagalpur
4. Bihar Gopalganj
5. Bihar Saran
6. Bihar Saharsa
7. Bihar Siwan
8. Chhattisgarh Bijapur
9. Gujarat Surendranagar
10. Himachal Pradesh Hamirpur
11. Jharkhand Godda
12. Jharkhand Sahibganj
13. Madhya Pradesh Ratlam
14. Madhya Pradesh Mandla
15. Maharashtra Jalna
16. Maharashtra Aurangabad
17. Rajasthan Nagaur
18. Rajasthan Jaisalmer
19. Rajasthan Pali
20. Rajasthan Udaipur
21. Rajasthan Dungarpur
22. Rajasthan Banswara
23. Tamil Nadu Ramanathapuram
24. Uttar Pradesh Banda
25. Uttar Pradesh Deoria
26. Uttar Pradesh Ballia
27. Uttar Pradesh Chamoli
28. Uttarakhand Bageshwar
29. Uttarakhand Almora
These 29 districts are highly vulnerable and disadvantaged in terms of double stress created
from low farm income as well as high climate vulnerability. Special programmes need to be
designed to support these disadvantaged districts.
These districts can be taken up for focussed mentoring and works progressed in coalition with
state agencies and line departments to create favourable and facilitating environment to
trigger the path of doubling of farmers’ income.
107
Profiling of Vulnerable States

Various governments over the years have made efforts in different ways to increase income
levels of growers through initiation of various schemes, incentives etc. But, still there exist a
large number of districts in India which are backward in terms of agricultural income because
of various reasons.
This section looks into various attributes associated with climate vulnerable and low income.
Based on the number of climate vulnerable and low income districts falling in different states,
the states have been identified as poor income or climate vulnerable states.
As far as poor income states are concerned, all these states except Jharkhand have a larger
percentage of small holders with average size of holding, ranging from 0.4 hectare in Bihar to
1.2 hectare in Jharkhand (Table 5.3). The productivity of wheat in 2011-12 in these states
ranged from a high of 3,113 kg/ha in Uttar Pradesh to a low of 1,644 kg/ha in Odisha. In case
of rice productivity, it ranged from 2,688 kg/ha in West Bengal to 1,450 kg/ha in Odisha.
In terms of infrastructure, West Bengal possesses the highest intensity of rural road network
with figures of 207 km per 100 sq. km of area and Jharkhand the minimum with only 21.4 km
per 100 sq. km of area.
Based on Rao et al., (2013), the top five states having maximum number of climate vulnerable
districts are shown in the Table 5.3. Various attributes of these states were studied to identify
important factors contributing to vulnerability for proper policy suggestions.
Among these states which are most climate sensitive, UP has got the highest number of small
and marginal farmers (92.46 per cent), whereas Rajasthan has got the lowest share (58.4 per
cent). The land holding size is small, ranging from 3.07 hectare in Rajasthan to 1.55 hectare in
Karnataka. Also, the number of people depending on non-farm income are in a minority in
these states, thus the majority of people in all these states are dependent on agriculture.
In all the selected climate change sensitive states, the percentage of gross irrigated area to total
cropped area is less than 50 per cent ranging from states with maximum number of districts,
thus making them more prone to rainfall fluctuations.
It can also be seen that the area under horticultural crops is also quite low in all these states,
ranging from 407.27 thousand hectares in 2014-15 in Karnataka to 39.27 thousand hectares in
Rajasthan.
All these states are also marked by high population and low literacy level in rural areas. The
length of rural roads, which is considered an important factor while evaluating the returns from
agriculture, is also found below par, especially in states of Gujarat, Rajasthan and Madhya
Pradesh.
108
Table 5.3 Major Attributes of Climate Vulnerable and Low Income States
Attributes States with maximum coverage of Common States with maximum coverage of
climate vulnerable districts state lowest farmers’ income districts
Madhya Gujarat Karnatak Rajasthan Uttar Jharkh Odisha West Bihar
Pradesh a Pradesh and Bengal
Share of Small 71.5 66.4 76.4 58.4 92.5 84.1 91.9 95.9 96.9
holders (%, including
Marginal farmers,
2011)
Average size of 1.8 2.0 1.6 3.1 0.8 1.2 1.0 0.8 0.4
holding (ha., 2011)
Monthly Agriculture 6210 7926 8832 7350 4923 4721 4976 3980 3558
household income
(Rs., 2013)
Dependence on non- 23.5 38.6 37.4 44.1 31.0 44.0 45.3 69.8 43.9
farm income (%,
2013)
Area under rice and wheat 2011-12 (% to GCA)
Wheat 5.5 13.1 2.3 16.1 58.8 11.5 0.0 6.0 40.8
Rice 10.8 8.1 14.3 0.7 35.9 106.2 89.1 103.8 1.3
Productivity (kg/ha.) 2011-12
Rice 1340 2141 2793 1886 2358 2131 1450 2688 2155
Wheat 2360 3014 858 3175 3113 1908 1644 2765 2206
Area under horticulture 2014-15 (000 ha.)
Fruits 1.4 3.6 4.1 0.2 2.8 6.8 7.3 4.4 5.8
Vegetables 4.4 5.6 4.7 0.9 6.9 22.9 14.9 26.5 16.0
Flowers 0.1 0.2 0.3 0.0 0.1 0.1 0.2 0.5 0.0
Irrigation intensity 33.7 45.9 32.8 32.0 76.3 12.0 28.3 58.2 61.8
(2010-11, GIA as %
to GCA)
Government intervention in procurement (000 tonnes)
Procurement of 43.0 2.6 - 14.0 11.4 - - - 11.8
Wheat (% to
production, 2011-12)
Procurement of Rice 28.5 23.9 49.3 13.9
(% to production,
2011-12)
Credit availability
(Rs. per hectare)
Crop Loan per 26377 27888 40935 30695 34710 1242 32803 43652 29140
hectare (Rs ) 4
Term Loan per 4131 10287 19764 5295 9175 5782 5617 27606 14390
hectare (Rs )
Population (Million 72.6 60.4 61.1 68.5 199.8 33.0 42.0 91.3 104.1
Number, 2011)
Literacy (%, 2011) 69.3 78.0 75.4 66.1 67.7 66.4 72.9 76.3 61.8
Rural literacy 65.3 73.0 68.9 62.3 67.6 62.4 70.8 73.0 61.8
Road network
Area (000 km²) 308 196 192 342 241 80 156 89 94
Total rural road (000 118 53 164 103 114 17 213 184 168
km)
Rural road per 100 38.2 27.2 85.5 30.2 47.1 21.4 137.1 207.4 178
sq. km of area
109
Key Extracts
 Livelihood and income of farmers are closely linked to the influence of climate
change and variability. There exists an inverse correlation between the two.
 Impact of climate vulnerability is relatively higher on small & marginal farmers.
 Low income of farmers reduces the adaptive capacity of the farmers to withstand
climate shocks and in consequence increases their vulnerability.
 Vulnerable states are seen to be growing more of high yielding varieties as compared
to low income group states but productivity differences are not significant. Irrigation
intensity was lower in both the cases and varied between 12 per cent in Jharkhand to
61.8 per cent in Bihar except Uttar Pradesh which has comparatively better status in
terms of irrigation.
 Special programmes need to be designed to support these disadvantaged districts. It
would be appreciable if SAUs/KVKs and state extension agencies adopt these districts
and work in coalition with state agencies and line departments to create favourable
and facilitating environment to trigger special action plan.
 Comparison of 150 districts most vulnerable to climate change with 150 districts
suffering from lowest agricultural incomes (crops + livestock) yields 33 double-
stressed districts.
 A similar comparison as above taking into account only incomes from crop sector
yields 29 districts.
110
A number of interventions and initiatives have been taken for the promotion of agriculture sector in the
country as discussed in this first volume of the DFI Report. Some of the major observations on the
march and growth trends of agricultural economy and broad recommendations are introduced.
Major Observations
Overall and Agricultural Economy

 Agriculture & allied economy consists of four sectors, namely crop sector, livestock,
forestry and fisheries. The share of crop sector in the total VoP from agriculture and allied
activities is highest (61.31 per cent during the triennium 2012-13 to 2014-15). Livestock comes
next with a share of 26.80 per cent followed by forestry (7.39 per cent) and fisheries (4.50 per
cent) sector.
 Overall growth in agriculture has moved in parallel with the crop sector, as established
from comparing the year-on-year fluctuations among the four sectors. The growth has not
been consistent across regions and crops. Livestock sector is growing at an appreciable and
sustainable rate and is ahead of all other sectors, and hence is likely to emerge as an engine
of growth of agricultural sector. It can also be relied upon for risk mitigation and minimizing
the losses to the farmers in case of even worst outcomes from other sub-sectors, that may be
highly dissatisfactory.
 Livestock sector’s performance was found to be the best during the recovery phase
(2004/05-2014/15). Pulses achieved a growth of 2.63 per cent during the recovery phase.
Within the crop category, fibres, condiments & spices, fruits & vegetables, floriculture
performed quite well during 2004-05 to 2014-15. As reported, the important reason behind
good performance of agricultural and allied sectors in recovery phase was remunerative price
received by farmers which further encouraged further production. While it is necessary to
incentivise farmers to push up their production, simultaneously, improved and innovative
marketing arrangements are required to enhance the economic returns to the farmers.
 Rice and wheat still occupy more than 1/3 rd share in the cropping pattern. The share
of nutri-cereals has gone down substantially during last more than five decades. However,
there are clear signals in favour of high value crops as evident from expanding area under
fruits and vegetables over the years.
 A continuous and significant increase in share of area to GCA under fruits and
vegetables indicates growing importance of these farm commodities both at producer as well
as consumer levels. Short duration nature and growing market for horticulture crops along
with quicker cash inflow from these crops are important reasons that have led the farmers to
take to more fruits and vegetables, the latter in particular.
111
 The small and marginal farmers account for 85 per cent share in total number of
holdings at national level. The share is still higher in states like Kerala, Bihar, West Bengal,
Jammu & Kashmir, Uttar Pradesh, Odisha, Tamil Nadu, Uttarakhand and few NE states and
UTs, where it is found to be more than 90 per cent. Of these, states like Bihar, West Bengal
and Uttar Pradesh have higher shares of geographical pockets with lowest incomes in the
country. These areas need more inclusive approach and dedicated developmental package
considering the situation of smallholders.
 In Chhattisgarh where farmers derive major income from crops and wages; there is need
for a strategic plan to broadbase agriculture. As far as non-farm activities and wages & salary
as alternate sources of income are concerned, it is the states like Kerala, Jammu & Kashmir,
Himachal Pradesh, Tamil Nadu and West Bengal that earn maximum from these two sources.
These states are special states in terms of the typology, i.e. the states fall into either hilly or
coastal typology and thus being dominated by specialised horticultural and fishery products.
Thus, farmers rely on alternate sources to ensure their livelihood. These states need special
attention and separate developmental framework for doubling of farmers’ income.
 A decent growth in farm income of farmers requires some cultivators moving away
from agriculture to non-agriculture sector, along with high growth in output and favourable
prices for farm produce.
Technology and Management Practices

 Technology adoption helps in reducing yield gap at farm level. If yield gaps are
addressed for major crops like rice and wheat, these can contribute significantly to higher
output and in meeting the food security of the country, while releasing land now under these
crops for other high value crops and activities. The estimates derived for 2011-12 and 2013-14
show considerable yield gap across states among different crops.
 Access to institutional credit and robust extension in transfer of technology to the

farmers will help in bridging yield gaps.
 Micro irrigation has generated benefits to the farmers in terms of enhancement of

productivity and water use efficiency. Irrigated paddy growing states have definite yield
advantages. There exists huge potential to expand irrigation in West Bengal. Irrigated fields,
on an average, record 8 quintals/ha higher yield than the unirrigated. Among others, Odisha
offers scope to improve yield levels to a sizeable extent under irrigated environment.
 In case of wheat, all major wheat producing states grow almost entire crop under
irrigation; hence, the scope for expansion of irrigation is limited. While Madhya Pradesh has
91 per cent area under irrigation, Uttar Pradesh, Punjab, Haryana and Rajasthan have more than
98 per cent area under irrigation in respect of wheat. But yield differentials are high, enabling
scope to achieve still higher production. West Bengal and Odisha provide scope to expand
112
output oriented irrigation expansion in paddy. In terms of wheat, factors other than irrigation
could be thought of in attaining yield convergence.
 A clear indication may be drawn that demand for irrigation would increase continuously
due to its contribution in enhancing crop yields and revenue. Objective estimates related to
water requirement and availability based on the current situation would help plan the strategies
for optimally harvesting the utilisable water in the country.
 The type of seeds used determines the yield, so as the income. Still, the reach of
improved and hybrid seeds seems to be limited to specific crops. Major food crops like paddy
and wheat are grown using improved seeds in general, but use of hybrids is low. Spread of
hybrid seed use in millet growing areas would potentially benefit farmers in gaining higher
yield and income. Among pulses, tur offers scope to adopt improved seeds; and among
oilseeds, groundnut provides good scope. In general, while paddy possesses scope to enhance
use of hybrid seeds, millets offer potential to expand use of both improved and hybrid seeds by
substituting local varieties dominating now. Hence, seed substitution should occupy an
important place in achieving higher production and incomes.
 Developing and spreading the use of better yielding varieties suitable for different
typologies can contribute to farmers’ incomes. Besides, the development of improved
varieties/hybrids of food crops and their cultivation are central to increased farm production,
and consequently national food and nutritional security. Integrated farming is one of the
solutions for enhancing risk management and income gains.
 Investment in agricultural research has resulted in good returns, and thus policies for
supporting and further strengthening of research and extension system of the nation should be
continued. Also, it is clear that India has achieved significant efficiency in total factor
productivity. Besides these, infrastructure in terms of rural roads, electricity, markets, literacy
etc. play important role in enhancing the total factor productivity. Hence, investments in both
R&D, and infrastructure need upgradation.
Marketing, Prices and Trade

 Current price policy needs to be restructured. Over the last four and a half decades, the
price policy implementation has boosted mainly wheat and rice crops among food grains and
sugarcane and cotton among other crops. This situation that has disfavoured other important
agricultural commodities like pulses, oilseeds and millets need correction. The market prices
often go below MSP due to lack of effective price support mechanism or them. Moreover, trade
policy also works independently of MSP policy. Hence the need for a comprehensive price
support and trade policy that supports various crops is necessary.
 In the mission for doubling farmers’ income, priority attention needed is post-harvest
segment, including marketing.
113
Vulnerable Districts
 Climate change and variability constitute one of the most important matters of concern
in terms of livelihood and income of farmers. Vulnerable states are seem to be growing more
of high yielding varieties as compared to low income states, but productivity differences are
not significant. Irrigation intensity was lower in both the cases and varied between 12 per cent
in Jharkhand to 61.8 per cent in Bihar except Uttar Pradesh which has comparatively better
status in terms of irrigation.
 Climate vulnerability impacts small and marginal farmers more adversely.
Recommendations
Data related
 Price realization by the farmer can be best computed from the price data on either the
Farm Harvest Price (FHP) available at state and district levels or wholesale price data during
the peak season in the APMCs. The data on FHP is available only at the state or district level
with a certain time lag. Appropriate mechanisms for collection of recent FHP at more
disaggregated level like blocks/villages would be desirable.
 Currently, the marketed surplus data is available at the aggregate level which does not
hold much importance from the point of view of product movement from one region to another
or from one market to the other markets. It would be appropriate if the market level surplus is
assessed, for managing and balancing supply and demand. This will also help reduce the price
volatility arising at certain locations/markets.
 A detailed analysis may be carried out for all potential commodities to examine the
impact on domestic prices and supply, thereby, the impact on farmers’ gains.
Policy related
 The technological interventions will increase productivity and profitability. But as has
been experienced in the past producers become the victims of increased supply when demand
cannot match with it, and therefore, loose on market returns. A pro-farmer policy framework
consisting of robust procurement, logistics and marketing interventions will help optimise the
revenues to farmers. The time has come when things are to be dealt in totality and not in
isolation. Neither the productivity centric nor the marketing and price centric approach can
work in isolation. Every commodity has to be dealt in a holistic manner to tackle issues along
all the stages of its supply chain, which is addressed as a value based system. Commodity
outlooks would be extremely important for efficient planning and management of the supply
chain.
 It is extremely important that concerted efforts are made to achieve market related
objectives. The commodities having significant trade potential need to be supported by stable
and long term trade policies. The gains from trade can further be enhanced by networking
114
among academic & research institutions and practising organisations, for meticulous technical
supervision and guidance.
 A paradigm shift in the resource allocation in favour of rural connectivity, electricity

supply and availability of markets to sell agricultural produce is the need of the hour. The
condition of rural infrastructure (roads, irrigation, electricity and markets) in a number of states
is a matter of serious concern and this needs priority attention. The studies have reported that
basic infrastructure can improve the total factor productivity and this should be kept in mind.
 There are 29 districts which are highly vulnerable and disadvantaged in terms of double
stress created from low income as well as high climate vulnerability. Special programmes need
to be designed to support these disadvantaged through higher growth. Technological support
will be needed and therefore agricultural science centres like ICAR, SAUs, KVKs etc. may
adopt and mentor these districts in association with state governments.
 Marketing infrastructure is key to in enhancing the farmers’ welfare and progress, as it

not only provides incentives for higher production but also promotes commercialization of
subsistence farming. Agriculture markets need total reforms for liberalisation.
 Role of agricultural credit is extremely important in meeting capital needs of crop

cultivation, animal rearing and other sub-sectors. The sector needs easy access to timely and
adequate volumes of institutional credit. More importantly, in addition to agronomic and
commercial crops (cotton and sugarcane), new growth engines, namely, animal husbandry &
fishery sectors need to be offered such KCC-enabled facilities at interest subvention on par
with crops.
 The agricultural land structure in the country is dense with high population dependence,
leading to land division and fragmentation. Majority of landholdings are small and marginal
at more than 85 per cent of the total land holdings, challenging viability of operations. In order
to improve efficiency by effecting scales of operations, it is necessary to mobilise farmers and
aggregate produce, by promoting farmer producer organisations (FPOs), contract farming etc.
What is needed is an income approach to agriculture, where under agriculture is practised as

an enterprise. In addition to improving incomes from farming, growth of manufacturing and
service sectors, and their ability to absorb manpower shifting from agriculture will also be
important.
-- X --
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Ministry of Agriculture &

Report of the Committee on

“March of Agriculture since

Historical Analysis and Examination of India’s

Document prepared by the Committee on Doubling Farmers’ Income,

Notwithstanding the many faces of challenges, India’s agriculture has demonstrated

12th August, 2017 Ashok Dalwai

The evidence highlights, lack of correspondence between growth in domestic production -

--- --- ---

“March of Agriculture since

Chapter 2 Performance of Agriculture and Allied Sectors ----------------------- 25

Chapter 3 Technology and Cultivation Practices ----------------------------------- 41

Chapter 4 Marketing, Prices & Trade ------------------------------------------------- 85

Chapter 5 Identification of Vulnerable Zones ------------------------------------- 103

Chapter 6 Observations and Recommendations --------------------------------- 111

References ----------------------------------------------------------------------------------- 116

Table 3.23 Status of Road Length (as on 31.03.2013) .......................................................................................... 78

Box 1.1 Projected Demand of Major Food Commodities in India 19

Evolution of Indian Agriculture

The Inter-Ministerial Committee on Doubling Farmers Income constituted by the Government

Trends in Agricultural Growth

Table 1.1 Movement of Indian Economy: trends in GDP/GVA across sectors

It is interesting to note, that Livestock sub-sector is growing at an appreciable and sustainable

Figure 1.1 Growth rates in GDP across sub-sectors at 2004-05 prices

Source: DFI Committee Estimates

Area and Value Shares of Various Crops

Pre-green Early green Wider

Paddy and wheat 31.34 33.99 36.04 36.12 37.21 37.27

Trends in Agricultural Trade

Table 1.5 Patterns and contribution of Agricultural Trade from India

Figure 1.3 Contribution of Agricultural Trade to total National Trade

% Agriculture Exports to Total National Exports

20 % Agriculture Imports to Total National Imports

Source: DFI Committee

Prices Paid and Prices Received by Farmers

250 CPIAL WPI (All) WPI Ag

1.69 1.57 1.81

Changes in Agrarian Structure

0.5-1.0 0.72 23052 0.72 24154 0.71 26019 0.73 28147

1.0-2.0 1.42 21643 1.42 22695 1.38 23930 1.42 24779

2.0-3.0 2.4 9628 2.39 9549 2.36 9684 2.4 9649

3.0-4.0 3.42 4633 3.43 4472 3.38 4443 3.42 4247

4.0-5.0 4.43 2809 4.42 2627 4.38 2577 4.43 2431

5.0-7.5 6.03 3028 6.03 2829 5.97 2738 6.03 2511

7.5-10.0 8.52 1255 8.51 1122 8.45 1060 8.5 933

10.0-20.0 13.21 1142 13.16 1005 12.99 896 13.13 799

Farm Land Holdings across States

Average Size of Holdings across States and Size Classes

Marginal and small Medium Large

Shift in Consumption Pattern

Table 1.10 Trends and patterns in consumption

Share in total consumption expenditure (per cent)

Figure 1.7 Shift in consumption expenditure (1993-94 to 2011-12)

Projected Demand of Food Commodities

Box 1.1 Projected demand of major food commodities in India

Source : *Kumar et al. (2016) for projected demand in 2030,

Figure 1.8 Agriculture growth and poverty decline in rural India

Agriculture growth Rural poverty decline

1993-94 to 2004-05 2004-05 to 2011-12 1993-94 to 2011-12