Agriculture remains the backbone of the Indian economy, contributing 16% to the GDP and supporting more than 46% of the workforce. It is crucial for ensuring food security, generating employment, and driving rural development. While facing challenges like climate change and fragmented land holdings, government policies and technological innovations are empowering the sector.
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Picture Courtesy: NEWSONAIR
The Principal Scientific Advisor to the Prime Minister highlighted the significance of agriculture at the Dialogue NEXT event, under the theme "Take it to the Farmer", the event also announced the National Plant Health Mission to address crop losses due to diseases and pests.
Contribution to Gross Value Added (GVA)
The "Agriculture and Allied Activities" sector contributed about 16% to India's GVA at current prices for the financial year 2023–24.
The sector demonstrated consistent growth, averaging 5% annually between FY17 and FY23, showing resilience through challenges such as the COVID-19 pandemic.
Employment generation
As of the Economic Survey 2024–25, the agriculture sector provides livelihoods for about 46.1% of the population.
The share of women in the agricultural workforce increased to 64.4% in 2023–24.
Food security
India's foodgrain production hit a record 353.95 million tonnes in 2024–25, and maintains self-sufficiency in key staples like rice and wheat.
The government maintains strategic buffer stocks of foodgrains to manage market prices and support the Public Distribution System (PDS).
Foreign exchange earnings
Total agricultural exports amounted to $48.15 billion in 2023–24.
Agro-based industries
Agriculture supplies raw materials to agro-based industries such as food processing, textiles, and sugar.
Boost industrial demand
As rural incomes rise, so does the demand for industrial products, strengthening the link between agriculture and the broader manufacturing and services sectors.
Small and fragmented land holdings
Dominance of smallholdings: According to the 10th Agriculture Census (2015–16), 86.2% of operational holdings belonged to small and marginal farmers with less than two hectares of land.
Low modernization: Fragmentation restricts the adoption of modern machinery, limits economies of scale, and leads to lower productivity and higher per-unit production costs.
Economic hardships
Low farmer income: A 2021–22 NABARD survey revealed that the average monthly income of farming households was just ₹13,661, with a mere ₹4,476 (33%) coming from cultivation alone. This forces many farmers to depend on other sources of income, such as wage labor.
Poor market access: Limited access to organized markets, inadequate price discovery mechanisms, and the dominance of middlemen leave farmers vulnerable to price volatility and distress sales.
Environmental and climate-related issues
Water scarcity and depletion: Reports from the Central Groundwater Board (CGWB) highlight that over 250 districts are experiencing critical groundwater levels, due to over-irrigation and water-intensive crops.
Soil degradation: Decades of intensive monocropping and indiscriminate use of chemical fertilizers have degraded soil quality, reduced fertility, and altered soil pH.
Climate change impacts: Extreme weather events, such as erratic rainfall, prolonged droughts, and floods, disrupt crop cycles and reduce yields. Projections indicate that in the absence of adaptation, rainfed rice yields could drop by 20% by 2050. (PIB)
Inadequate infrastructure and supply chain
Post-harvest losses: Due to insufficient storage and cold chain facilities, poor transport, and inefficient handling, affects farmer profitability and food security.
Lack of mechanization: Limited mechanization and low adoption of modern technology hamper productivity.
Policy and market inefficiencies
Skewed subsidies: Overdependence on input-based subsidies (e.g., fertilizer and power) has led to their overuse, which degrades soil and water quality.
Market-distorting policies: Some Minimum Support Price (MSP) policies have skewed cropping patterns toward rice and wheat, leading to surpluses of certain crops while others, like pulses and oilseeds, remain underproduced.
Low R&D investment: Public investment in agricultural research and extension remains low compared to international standards.
Financial Support & Credit
PM-KISAN: Provides ₹6,000 annually in three installments to farmer families as income support.
PM-AASHA: Ensures Minimum Support Price (MSP) for certain crops through procurement, compensating farmers if market prices fall.
Kisan Credit Card (KCC): Offers timely, low-interest credit for farming needs. In Budget 2025–26, the loan limit was increased from ₹3 lakh to ₹5 lakh.
Infrastructure & Market Access
Agriculture Infrastructure Fund (AIF): Provides medium-to-long-term debt for post-harvest infrastructure like cold storage and processing facilities.
e-National Agriculture Market (e-NAM): A pan-India electronic trading portal that creates a unified market for agricultural commodities.
Crop Insurance & Water Management
PM Fasal Bima Yojana (PMFBY): Provides insurance coverage against crop losses from natural calamities.
PM Krishi Sinchayee Yojana (PMKSY): Promotes water conservation and efficiency. The 'Per Drop, More Crop' component focuses on micro-irrigation systems.
Sustainable Farming & Technology
National Mission on Natural Farming (NMNF): Promotes chemical-free farming and provides financial incentives for eco-friendly practices.
Digital Agriculture Mission (DAM): Create a digital ecosystem for farmers, providing end-to-end services and a unique digital ID linked to Aadhaar.
Soil Health Card (SHC) Scheme: Provides soil health reports and fertilizer recommendations to farmers based on scientific analysis.
Allied Sector Development
Rashtriya Gokul Mission: Focuses on the conservation and development of indigenous cattle breeds to boost the livestock sector.
National Programme for Dairy Development (NPDD): Strengthens dairy infrastructure to improve milk procurement and quality.
PM Matsya Sampada Yojana (PMMSY): Promotes sustainable fisheries development to boost income for fishing communities.
Technology and digital integration
Encourage Agri-Tech: Promote the use of AI, remote sensing, GIS, and drones for precision farming, crop monitoring, and resource optimization.
Bridge the digital divide: Address barriers like digital illiteracy and patchy network coverage to ensure that small farmers can also benefit from technological advancements.
Boost digital platforms: Expand the reach and services of platforms like e-NAM to improve market access, price discovery, and transparent transactions.
Policy and market reforms
Restructure subsidies: Shift from input-based subsidies (fertilizers, power) to more sustainable, outcome-based incentives that encourage resource conservation and diversification.
Reform the MSP system: Align the Minimum Support Price (MSP) regime to encourage farmers to grow diverse and high-value crops, moving beyond a monoculture of rice and wheat.
Strengthen FPOs: Empower Farmer Producer Organizations (FPOs) with access to markets, technology, and finance, which gives small farmers collective bargaining power and better market linkages.
Sustainable farming
Promote natural farming: Expand initiatives like the National Mission on Natural Farming (NMNF) to encourage chemical-free agriculture, reduce input costs, and improve soil health.
Enhance water efficiency: Scale up the "Per Drop More Crop" initiative under PMKSY to promote micro-irrigation systems like drip and sprinkler irrigation and manage groundwater sustainably.
Invest in R&D: Increase public investment in agricultural research and extension services to develop climate-resilient and high-yielding crop varieties.
Infrastructure and value addition
Develop robust supply chains: Utilize schemes like the Agriculture Infrastructure Fund (AIF) to invest in warehouses, cold storage, and rural connectivity, which reduces post-harvest losses.
Strengthen food processing: Encourage micro-food processing enterprises to add value to farm produce, create jobs, and increase rural incomes.
Promote allied activities: Diversify farmer livelihoods by supporting allied sectors like animal husbandry, fisheries, and beekeeping, which are less dependent on climate patterns.
Financial inclusion and social security
Ensure timely credit: Provide affordable and timely institutional credit to small and marginal farmers, reducing their reliance on informal, high-interest loans.
Strengthen crop insurance: Reform and strengthen schemes like PM Fasal Bima Yojana (PMFBY) to ensure faster, transparent, and more efficient claim payments.
Support rural women: Focus on gender-inclusive policies that empower women in agriculture by improving their access to credit, technology, and land rights.
The Indian agriculture sector is the backbone for economic growth, food security, and rural development. By adopting a holistic approach—integrating technology, policy reforms, and sustainable practices—India can ensure sustainable livelihoods, environmental resilience, and global leadership in agriculture as it progresses toward the goal of Viksit Bharat @2047.
Source: NEWSONAIR
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PRACTICE QUESTION Q. Critically analyze the challenges faced by the agricultural sector in India, and suggest viable solutions. 150 words |
Agriculture contributes about 16% to India's economic output.
Around 60% of the Indian workforce is supported by the agriculture sector.
Rabi crops are sown in winter (October-December) and harvested in spring (April-June), while Kharif crops are sown with the onset of monsoon (June-July) and harvested in autumn (September-October).
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