Revisiting the Farmer Question

UPSC Syllabus: Gs Paper 3- Indian economy

Introduction

India’s agriculture sector contributes only about 15–18% of GDP but employs around 46% of the workforce, making it central to rural livelihoods despite the economy’s shift towards industry and services. Agriculture has also recorded 3.6% average annual GDP growth from 2004–05 to 2023–24 and agricultural exports of around $51 billion over the last three years. Yet small holdings, water stress, climate risks, rising input costs and weak market linkages continue to limit farm incomes.

Major Challenges Facing Indian Agriculture

1. Small and fragmented landholdings: About 86% of farmers own less than two hectares, limiting economies of scale, diversification and technology adoption, and making it difficult to sustain satisfactory farm incomes.
2. Water stress and groundwater depletion: Around half of farmed land depends entirely on unpredictable rainfall, while intensive irrigation is depleting groundwater and increasing competition for scarce water resources.
3. Climate change and rising input costs: Erratic rainfall, floods, droughts and heat waves cause crop losses, while rising costs of seeds, fertilizers, pesticides and fuel reduce farm margins.
4. Weak agricultural value chains: Poor storage, processing and fragmented supply chains, along with intermediaries, reduce bargaining power and farmers’ share of final value.
5. Global trade and price pressures: Small farmers cannot remain insulated from global markets, while low global food-price priorities and external trade pressures can make farm-gate prices less remunerative.
6. Resource and policy constraints: Skewed fertilizer subsidies encourage excessive fertilizer use, while public debt can limit governments’ financial flexibility for long-term support.
7. WTO and trade governance pressures: WTO-related weaknesses and problems with dispute settlement can create difficulties for India in protecting its agricultural interests.
8. Governance and accountability concerns: Ineffective leadership and weak responsibility within agriculture departments can reduce the effectiveness of policies at national and state levels.

Major Policy Initiatives for Farmer Welfare

1. National Commission on Farmers (2004–06): Constituted under Prof. M. S. Swaminathan, the NCF submitted five reports addressing farmer distress, productivity, profitability, sustainability, credit, insurance, markets and access to productive resources.
2. National Policy for Farmers, 2007: Formulated largely on the basis of NCF recommendations, the policy provided a broader framework for addressing farmers’ economic and livelihood concerns.
3. Inter-Ministerial Committee, 2016: The Government constituted an Inter-Ministerial Committee to implement NCF and NPF recommendations and develop a strategy for doubling farmers’ income.

Core Recommendations of the National Commission on Farmers

1. Shift from productivity to farmer welfare: The NCF treated agricultural distress as an income and livelihood issue and judged policy by farmers’ well-being, not only production or yield.
2. Assured access to productive resources: Farmers need timely access to land, water, technology, credit, insurance, knowledge and markets; the NCF also proposed placing agriculture in the Concurrent List.
3. Research, extension and sustainable farming: Closer research–farmer links should support better farming practices, while efficient water use, conservation farming, soil health and biodiversity should protect long-term productivity.
4. Stronger agricultural infrastructure and markets: The NCF proposed irrigation, drainage, water conservation, transport, soil testing, storage, grading, packaging and processing to improve farm competitiveness and market access.
5. Better bargaining power and price protection: Direct marketing, wider markets, farmer aggregation, remunerative prices and import protection during global price falls can reduce market vulnerability.
6. Land and resource-use planning: Land reforms and a National Land Use Advisory Service can link land-use decisions with ecological, weather and market conditions and protect prime agricultural land.
7. Farmer-centric contract farming: The NCF supported contract farming but sought comprehensive agreements covering quality, payment, pricing, withdrawal, calamities and arbitration to prevent farmer exploitation.
8. Diversified rural livelihoods and social security: Rural security should include agriculture and allied activities, rural enterprises and non-farm employment, alongside credit, insurance, healthcare and other social support.

Relevance of the NCF Vision in a Changing Agricultural Economy

1. Incomplete implementation: Several NCF recommendations have been implemented through separate schemes, but its broader vision of economically viable farming, risk reduction and stronger farmer bargaining power remains incomplete.
2. Integrated policy approach: The NCF’s broader vision requires linking production, markets, livelihoods, risk management and sustainability instead of addressing these concerns through separate measures.
3. Global market integration: India cannot remain insulated from global markets, but small farmers also cannot be exposed to them without adequate protection from market-related vulnerabilities.
4. Trade and farmer protection: Greater global market integration should create opportunities for farmers while protecting small producers through carefully designed trade safeguards and stronger domestic market capacity.

Way Forward

1. Combine income security with productivity: Agricultural policy should combine remunerative prices, productivity, risk management and farmer aggregation rather than treating production growth as the sole objective.
2. Strengthen value addition and market access: Better storage, processing, transportation, direct marketing and value addition can help farmers capture a larger share of agricultural value.
3. Invest in sustainable infrastructure and research: Public investment should strengthen irrigation, water conservation, soil health, transport, agricultural research and extension while keeping productivity gains ecologically sustainable.
4. Improve access to credit and insurance: Formal credit and insurance should reach small and needy farmers adequately and on time, reducing vulnerability to production and income shocks.
5. Complete the NCF vision through policy reform: The task is to update the NCF’s approach through long-term reforms connecting resources, production, markets, livelihoods, sustainability and trade safeguards.

Conclusion

India’s farmer question requires moving beyond production growth towards economically viable, sustainable and secure livelihoods. The NCF provides a broad framework linking productive resources, farmer incomes, risk management, stronger value chains and diversified rural employment. Its vision needs to be updated through integrated policy, sustainable infrastructure, better market access, farmer aggregation, value addition, credit, insurance and carefully designed trade safeguards.

Question for practice:

Evaluate the relevance of the National Commission on Farmers’ recommendations in addressing the contemporary challenges of Indian agriculture.

Source: The Hindu