Circular Economy in Agriculture: Waste to Wealth

UPSC Syllabus: Gs Paper 3- Indian economy

Introduction

Agricultural waste is emerging as a major environmental and economic challenge, especially in agriculture-dependent economies like India. Large quantities of crop residues, food losses, and biodegradable waste create pollution while remaining underutilised resources. The circular economy approach promotes converting waste into energy, organic inputs, and valuable materials. By transforming waste into wealth, circular agriculture offers a practical pathway to improve resource efficiency, environmental sustainability, and long-term agricultural resilience.

Understanding Circular Economy in Agriculture

1. Waste to wealth approach: Circular economy treats waste as a valuable resource instead of an environmental burden or economic liability.
2. Systemic transformation of production and consumption: Circular economy redesigns material flows to recover, reuse, and reintegrate value across product life cycles to improve resource efficiency.
3. Six Rs principles: Circular economy follows Reduce, Reuse, Recycle, Refurbish, Recover, and Repair to keep materials in productive use for longer periods.
4. True recycling concept: Circular systems convert waste back to its original form without quality loss, enabling higher value recovery.
5. Nature inspired sustainability model: Circular economy draws inspiration from regenerative natural systems that use resources efficiently and generate minimal waste.

Sources and Types of Agricultural Waste in Circular Economy

1. Farm to food plate waste chain: Agricultural waste is generated at every stage, including cultivation, livestock rearing, processing, and consumption.
2. Crop residues and stubble: Post-harvest biomass such as straw, stalks, and husk forms a major share of agricultural waste, though a part is reused while some is burned.
3. Biomass as a waste resource category: Biomass includes organic material from plants and animals that forms an important component of agricultural waste streams.
4. Animal manure, byproducts, and carcasses: Livestock farming generates large quantities of dung, bedding waste, and animal remains, forming a major category of agricultural waste.
5. Post-harvest losses: Losses during storage, transport, and handling reduce both quantity and quality of agricultural produce.
6. Food waste at consumption stage: Edible food discarded at markets, retail outlets, and households forms a major waste stream in the agricultural value chain.

Importance of Circular Economy in Agriculture in India

1. Environmental pollution reduction: Proper waste management prevents methane emissions, air contamination, groundwater pollution, and environmental degradation.
2. Magnitude of agricultural waste challenge: India generates about 350 million tonnes annually, making efficient management essential for resource recovery and environmental protection.
3. Renewable energy generation potential: Agricultural residues can generate more than 18,000 MW of power annually, showing strong energy recovery opportunities.
4. Soil health improvement: Residue-based organic fertilisers enhance nutrient quality and reduce dependence on chemical inputs.
5. Climate change mitigation need: Organic waste decomposition in landfills releases greenhouse gases, making circular utilisation essential for emission reduction.
6. Economic growth and employment potential: Circular economy may reach $2 trillion market value and create 10 million jobs by 2050.
7. Global food waste burden: Around 1.3 billion tonnes of food is wasted annually worldwide, highlighting the need for efficient resource use and recovery systems.
8. Household waste contribution: Nearly one-third of biodegradable municipal waste originates from household kitchens, increasing pressure on waste management systems.
9. Landfill environmental impact: Improper decomposition of organic waste releases methane, pollutes groundwater, and produces harmful odours.

Government Initiatives Promoting Circular Economy in Agriculture

1. GOBARdhan

• It is a multi-ministerial programme to convert cattle dung, crop residues, and food waste into compressed biogas and organic manure.
• It promotes waste-to-wealth by turning organic waste into clean energy and soil nutrients.
• Unified GOBARdhan portal improves monitoring and coordination. Carbon credit inclusion, tax relief, and simplified fertiliser norms support adoption.
• Implementation progress: Covers 51.4% of India’s districts with 979 operational biogas plants by January 2026.

2. Crop Residue Management (CRM)

• It is a national initiative to manage crop residues through in-situ soil incorporation and ex-situ collection for composting, biogas, and bioenergy.
• It reduces stubble burning, improves soil health, and supports productive use of agricultural biomass.
• Custom Hiring Centres provide residue management machinery to farmers for effective implementation.
• Implementation progress: Rs 3,926.16 crore released (2018–19 to 2025–26) with over 42,000 Custom Hiring Centres established and 3.24 lakh machines supplied.

3. Agriculture Infrastructure Fund (AIF)

• It is a financing facility providing medium to long-term institutional credit for post-harvest infrastructure and farm-level assets.
• The fund supports the establishment of warehouses, cold storage facilities, sorting and grading units, processing centres, and community farm assets to strengthen post-harvest management.
• Implementation progress: Rs 66,310 crore sanctioned across 1,13,419 projects, mobilising Rs 1,07,502 crore investment, including 545 organic input projects worth Rs 850 crore.

4. Animal Husbandry Infrastructure Development Fund (AHIDF)

• It is a financial support programme to strengthen infrastructure across the livestock value chain.
• Under the fund, Multi-State Cooperative Societies promote organic manure production, biogas generation, and scientific management of animal by-products to ensure sustainable waste utilisation.
• Implementation progress: Launched with a Rs 15,000 crore corpus under Atmanirbhar Bharat Abhiyan.

5. Jal Shakti Initiatives

• They are programmes promoting wastewater treatment, reuse, and water conservation for sustainable agriculture and resource efficiency.
• They improve irrigation water availability, reduce groundwater pressure, and support sustainable water management.
• Implementation progress: Jal Jeevan Mission provides 55 litres per capita per day functional household tap water supply in rural areas.

Circular Economy in Agriculture and Sustainable Development Goals

1. Support for SDG 2: Circular agriculture supports SDG 2 by promoting sustainable farming systems that improve nutrition and strengthen food security.
2. Resilient farming systems: Composting, biomass recycling, and biochar improve soil fertility and reduce dependence on chemical inputs, supporting sustainable and resilient agriculture.
3. Global food waste reduction: Circular practices help reduce 1.05 billion tonnes of food waste generated in 2022, including 60% from households, improving resource efficiency and sustainability.

Conclusion

India’s transition towards circular agriculture shows that waste can become a productive resource rather than an environmental burden. Converting agricultural waste into energy, organic fertilisers, and reusable resources strengthens soil health, resource efficiency, and farm resilience. Continued policy support, infrastructure expansion, and coordinated implementation can scale waste-to-wealth systems, ensuring long-term food security, climate resilience, and sustainable rural development.

Question for practice:

Discuss how the circular economy in agriculture can transform waste into valuable resources while promoting environmental sustainability, economic growth, and resource efficiency in India.

Source: PIB