Agricultural Policy

Sin­gle com­mod­ity trans­fers (SCT) fol­low the over­all MPS pat­tern, but vary by com­mod­ity. Most com­modi­ties were implic­itly taxed by between 5% and 91% of com­mod­ity receipts in 2019-21. Com­modi­ties with pos­i­tive SCTs, rang­ing between 6% and 23% of com­mod­ity receipts in the same period, include sugar, chick­peas, other pulses and poul­try meat.

Bud­getary trans­fers to pro­duc­ers are dom­i­nated by sub­si­dies for vari­able input use, such as fer­tilis­ers, elec­tric­ity and irri­ga­tion water. How­ever, bud­getary allo­ca­tions to the direct income trans­fer pro­gramme, PM-KISAN, have been increas­ing since its imple­men­ta­tion in 2018.

Pub­lic expen­di­tures financ­ing gen­eral ser­vices to the sec­tor, Gen­eral Ser­vices Sup­port Esti­mate (GSSE), prin­ci­pally for infra­struc­ture-related invest­ments, are around half the level of sub­si­dies for vari­able input use. At 4% in 2019-21, expen­di­ture for GSSE rel­a­tive to the value of agri­cul­tural pro­duc­tion increased com­pared to 2000-02.

Mir­ror­ing the farm-price-depress­ing effect on pro­duc­ers through­out the period cov­ered, poli­cies pro­vide implicit sup­port to con­sumers. Poli­cies that affect farm prices, along with sub­stan­tially increased food sub­si­dies under the Tar­geted Pub­lic Dis­tri­b­u­tion Sys­tem dur­ing the COVID-19 pan­demic, reduced the costs for con­sumers, with a con­sumer sup­port esti­mate of 36% of expen­di­ture on aver­age across all com­modi­ties in 2019-21. Total bud­getary sup­port is esti­mated at 2.6% of GDP in 2019-21, con­tribut­ing to an over­all pos­i­tive total sup­port esti­mate (TSE) of 0.9% of GDP.

On 29 Novem­ber 2021, the par­lia­ment approved a bill with­draw­ing the three laws aimed at reform­ing agri­cul­tural mar­kets, which was ini­tially endorsed in Sep­tem­ber 2020. The laws were intended to allow farm­ers to sell their prod­ucts out­side of gov­ern­ment-reg­u­lated mar­kets, remov­ing lim­its on pri­vate stock­ing, trad­ing or buy­ing of agri­cul­tural com­modi­ties, to pro­mote bar­rier-free inter- and intra-state trade.

The gov­ern­ment raised the min­i­mum sup­port prices (MSP) for sum­mer planted (kharif) crops in mid-2021. This included an increase of 2% for soy­beans and sun­flower MSPs, 3.9% for rice, and 1.1% for maize. The cen­tral gov­ern­ment also raised the MSPs for win­ter planted (rabi) crops in Sep­tem­ber 2021. This included an increase of 7.8% for lentils MSP, 2.5% for chick­peas, 2% for wheat, 2.2% for bar­ley, and 8.6% for rape­seed. The gov­ern­ment allo­cated INR 286 bil­lion (USD 3.8 bil­lion) more for fer­tiliser sub­si­dies to off­set an increase in inter­na­tional prices for fer­tilis­ers in Octo­ber 2021.

The gov­ern­ment extended the Prad­han Mantri Garib Kalyan Anna Yojana (PMGKAY) food dis­tri­b­u­tion pro­gramme to Novem­ber 2021 in response to the sec­ond wave of the COVID-19 pan­demic.

As part of the drive to enhance self-suf­fi­ciency and reduce the veg­etable oil imports bill, India announced an INR 110 bil­lion (USD 1.48 bil­lion) plan (the National Mis­sion on Oilseeds and Oil Palm) in July 2021 to enhance domes­tic pro­duc­tion and pro­duc­tiv­ity of oilseeds, palm oil and pulses. Sup­port will be granted for the pur­chase of higher qual­ity seeds, tools and machin­ery; plant pro­tec­tion equip­ment, chem­i­cals and fer­tilis­ers; and tar­geted infra­struc­ture, tech­nol­ogy trans­fer, exten­sion and train­ing.

Sev­eral mea­sures were taken to reduce trade bar­ri­ers. The Min­istry of Com­merce and Indus­try removed selected pulses from the list of import quo­tas in May 2021, with effect until Novem­ber 2021. In July 2021, the Min­istry of Finance tem­porar­ily elim­i­nated tar­iffs applied to lentils. In Octo­ber 2021, the gov­ern­ment sus­pended tar­iffs on crude palm oil, crude soy­bean oil, and crude sun­flower oil until 31 March 2022. In May 2021, the Min­istry of Con­sumer Affairs reduced the sugar export sub­sidy by 33% to INR 4 000 (USD 55) per tonne. The noti­fied rate affects con­tracts signed between sugar mills and export­ing par­ties on or after 20 May 2021. The grad­ual reduc­tion in export sub­si­dies aims to accel­er­ate diver­sion of sugar toward ethanol pro­duc­tion in sup­port of increas­ing the blend­ing rate to 20% by 2025.

The Union Bud­get 2021-22 includes new gen­eral ser­vices pro­grammes tar­get­ing pest and dis­ease inspec­tion and con­trol as well as stor­age, mar­ket­ing and infra­struc­ture. The Union Bud­get 2022-23, released in Feb­ru­ary 2022, intro­duces mea­sures to improve finan­cial ser­vices to farm­ers. A new fund will be set up for 2022-23 through the National Bank for Agri­cul­ture and Rural Devel­op­ment to finance start-ups in agri­cul­ture and other rural enter­prises. New pro­grammes will focus as well on dig­i­tal­i­sa­tion in agri­cul­ture, mar­ket­ing and exten­sion ser­vices. The Union Bud­get 2022-23 also fore­sees pro­vid­ing direct pay­ments to wheat and rice farm­ers of INR 2.4 tril­lion (USD 31.2 bil­lion) of MSP value from April 2022 to March 2023.

Key terms#

Sin­gle Com­mod­ity Trans­fers (SCT)

The annual mon­e­tary value of gross trans­fers from con­sumers and tax­pay­ers to agri­cul­tural pro­duc­ers, mea­sured at the farm gate level, aris­ing from poli­cies linked to the pro­duc­tion of a sin­gle com­mod­ity such that the pro­ducer must pro­duce the des­ig­nated com­mod­ity in order to receive the trans­fer.

High Yield­ing Vari­eties (HYV)

Seed vari­eties bred to give much higher yields than tra­di­tional vari­eties, pro­vided they get enough water, fer­tiliser and care.

Com­mon ques­tions#

What are the basic ele­ments of Green Rev­o­lu­tion?#

There were three basic ele­ments in the method of the Green Rev­o­lu­tion:

Con­tin­ued expan­sion of farm­ing areas

• As pre­vi­ously stated, the amount of land under cul­ti­va­tion has increased since 1947. How­ever, more was needed to ful­fill expand­ing demand.
• Other approaches were needed. Nonethe­less, the growth of arable land had to con­tinue.
• As a result, the Green Rev­o­lu­tion’s quan­ti­ta­tive growth of agri­cul­ture pro­ceeded. How­ever, this is hardly the Rev­o­lu­tion’s most remark­able fea­ture.

Dou­ble-crop­ping exist­ing farm­land

• The Green Rev­o­lu­tion was char­ac­ter­ized by dou­ble-crop­ping. Instead of hav­ing just one agri­cul­tural sea­son per year, the deci­sion was taken to have two.
• The prac­tice of hav­ing only one sea­son each year was founded on hav­ing only one nat­ural mon­soon per year.
• As a result, each year is required to have two “mon­soons.” One would be the nat­ural mon­soon, and the other a man-made one.
• The arti­fi­cial mon­soon arrived in the form of mas­sive irri­ga­tion sys­tems. Dams were erected to cap­ture vast amounts of nat­ural mon­soon water that would have oth­er­wise been wasted.

Using seeds with improved genet­ics

• The sci­en­tific side of the Green Rev­o­lu­tion was this. In 1965 and again in 1973, the Indian Coun­cil for Agri­cul­tural Research was reor­gan­ised. It devel­oped new high-yield­ing vari­ety (HYV) seed strains, pri­mar­ily for wheat and rice but also for mil­let and corn.