Transforming Indian Agriculture: Sustainability, Innovation, and Policy Reform

Syllabus:

GS-3:

Direct & Indirect Farm Subsidies , Public Distribution System (PDS) , Buffer Stocks & Food Security , Agricultural Marketing.

Focus:

The Union Budget 2025-26 consultations highlight the need for reforms in Indian agriculture. Experts emphasize increasing agricultural productivity, ensuring sustainability, and improving farmer incomes while addressing the environmental impact of current farming practices, soil health, and market inefficiencies. Policy changes and investments are crucial.

Transforming Indian Agriculture: Sustainability, Innovation, and Policy Reform

Farms as Sites of Nurturing: Ensuring Sustainability and Growth in Agriculture

  • Climate Change Impacts:
    • Rising temperatures (+0.7°C since 1951) and reduced precipitation (6% decline during July-September) are stressing agricultural production.
    • Climate-resilient agriculture is crucial and requires increased investment in agricultural research and development (R&D). Currently, India spends less than 0.5% of agri-GDP on R&D, which must double to 1%.
  • Degraded Soil Health:
    • Poor farming practices have reduced soil organic carbon and moisture retention.
    • Balancing fertilization using biofertilizers and chemical fertilizers is essential for soil nourishment.
  • Population Growth Pressure:
    • By 2050, India’s population is expected to reach 1.67 billion, increasing the demand for food and agricultural productivity.

Fertilizer Policy Reform

  • Subsidy Imbalances:
    • Urea is heavily subsidized, leading to overuse of nitrogen (N) and underuse of phosphorus (P), potassium (K), and micronutrients (iron, zinc, boron).
    • Technological innovations like nano-urea and nano-DAP have limited penetration due to the skewed subsidy policy.
  • Proposed Solutions:
    • Implement direct income transfers to farmers on a per-hectare basis, leveraging data from fertilizer sales and soil health cards.
    • Free fertilizer prices from controls to restore nutrient balance, improve efficiency, and reduce environmental damage.

Agriculture as a Comprehensive Food System

  • Beyond Production:
    • Agriculture should ensure food and nutritional security while improving farmer incomes.
    • Value chain development for agricultural commodities, similar to the dairy sector, is necessary.
  • Fruits and Vegetables Focus:
    • Farmers receive only a third of consumer prices for fruits and vegetables compared to 75-80% in the milk value chain.
    • Establishing a dedicated board for fruits and vegetables, similar to the National Dairy Development Board (NDDB), can drive transformation.
  • Learning from Milk Success:
    • India leads global milk production (239 million tonnes) due to cooperative and private sector initiatives.
    • Similar reforms can revolutionize the fruits and vegetables sector to curb inflation and stabilize markets.

Addressing Export Controls and Market Policies

  • Current Challenges:
    • Frequent export bans (on onions, rice, wheat, sugar) and dumping of commodities like rice and wheat at below-economic costs harm farmers and markets.
    • For instance, rice costing FCI Rs 39/kg is sold at Rs 29/kg in open markets, reflecting policy inefficiencies.
  • Impact on Farmers:
    • Such policies impose an “implicit tax” on farmers despite subsidies like fertilizers and loan waivers.
    • India’s Producer Support Estimate (PSE) is -15.5%, indicating significant negative market price support compared to OECD countries (14%) and China (14%).
  • Recommendations:
    • Rationalize policies to support markets and eliminate export restrictions.
    • Encourage private trade and improve market mechanisms like futures markets.

Prioritizing Agriculture in Policy and Budget

  • Sustainable Practices:
    • Policies must focus on sustainable agriculture that respects soil health and minimizes resource overuse.
    • Balancing productivity and environmental conservation is key to long-term food security.
  • Budgetary Priorities:
    • Increase allocations for R&D and climate-resilient farming practices.
    • Foster value chains that ensure equitable returns for farmers and fair prices for consumers.
  • Communicating Change:
    • Political leaders must earn farmers’ trust by effectively communicating policy benefits and reforms.
    • Collaborative efforts are needed to align agriculture policies with market realities and environmental goals.

Challenges in Indian Agriculture

  • Soil Health Degradation: Overuse of chemical fertilizers, particularly urea, leading to an imbalance in soil nutrients and reduced organic carbon levels.
  • Climate Change Impact: Rising temperatures and irregular precipitation patterns affecting crop productivity.
  • Fertilizer Subsidy Skew: Disproportionate subsidies favoring urea over other essential nutrients, resulting in unsustainable farming practices.
  • Low Agricultural R&D Investment: Investment in agricultural research and development remains below 0.5% of agri-GDP, insufficient to develop climate-resilient crops and practices.
  • Market Inefficiencies: Farmers receive only a fraction of consumer prices for fruits, vegetables, and other perishables due to inadequate value chains.
  • Export Restrictions: Frequent bans and export controls on key commodities create uncertainty and reduce farmers’ profitability.
  • Price Distortions: Government policies like dumping wheat and rice below economic costs depress market prices, harming farmer incomes.
  • Dependence on Monoculture: Heavy reliance on rice and wheat production contributes to ecological stress and limits diversification opportunities.

Way Forward for Sustainable Agriculture

  • Enhance Soil Health: Promote balanced fertilizer use, including biofertilizers and micronutrients, and implement direct income transfers based on landholding.
  • Increase R&D Spending: Allocate at least 1% of agri-GDP to research for developing climate-resilient crops and sustainable practices.
  • Foster Value Chains: Create robust value chains for perishables like fruits and vegetables, modeled on the success of India’s dairy sector.
  • Reform Subsidy Policies: Rationalize fertilizer subsidies and encourage the adoption of advanced products like nano-urea and nano-DAP.
  • Boost Market Efficiency: Establish separate boards for fruits and vegetables to reduce middlemen and increase farmer profits.
  • Promote Diversification: Encourage cultivation of high-value crops and adoption of agroforestry to reduce dependence on monoculture.
  • Ensure Market Stability: Reduce export bans and align domestic policies with global market dynamics to prevent price distortions.
  • Educate and Engage Farmers: Build trust and awareness among farmers regarding reforms like direct benefit transfers and modern technologies.
  • Leverage Technology: Utilize data from soil health cards and PM-KISAN to implement targeted interventions.
  • Policy Alignment: Align agricultural policies with environmental sustainability, farmer welfare, and food security goals.

Conclusion:

To ensure long-term food security, Indian agriculture must embrace sustainable practices, enhance productivity, and align with market dynamics. Policy reforms, especially in fertilization, market support, and agricultural R&D, are critical. A comprehensive approach that includes climate-resilient farming and equitable value chains will benefit farmers, the economy, and the environment.

Source: The Hindu

Mains Practice Question:

Discuss the challenges and proposed reforms for ensuring sustainability and profitability in Indian agriculture. How can the government improve soil health, productivity, and farmers’ income through budgetary policies and market reforms?