Future of Indian agriculture and small farmers: Role of policy, regulation and farmer agency -Sukhpal Singh

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published Published on Feb 2, 2021   modified Modified on Feb 3, 2021

-Down to Earth blog

The distress among small farmers in India is market-driven to a large extent in both ways — too much protection (minimum support price) or too little.

The question of future of Indian agriculture has been around for some time now since the agrarian distress and crisis in the sector. It has become important in the context of the spate of recent reforms that include permitting private wholesale markets, contract farming, direct purchase from farmers and land leasing across states both under the earlier state-level Acts, and now under the central Acts.

But before this question is answered, it is important to profile the Indian agricultural sector and its major stakeholders, that is, land operating farmers-owners, tenants or leases.

It is common knowledge that the farm production sector contributes only 13 per cent of the gross domestic product (GDP) and engages 44 per cent workforce. This presents a dismal picture of the sector as compared with other sectors, as the earnings are poor.

It is also known that 85 per cent of India’s farmers operate less than five acres of land, half of which in many parts of India may be dry / rain-fed and only a part of their income comes from farming activity now with others coming from wages, off-farm and non-farm activities.

Farmers (especially small) suffer from product and market risks and depend on non-institutional sources of credit for productive and non-productive purposes, which are interlocked with other markets like produce in states like Punjab.

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Down to Earth blog, 2 February, 2021, https://www.downtoearth.org.in/blog/agriculture/future-of-indian-agriculture-and-small-farmers-role-of-policy-regulation-and-farmer-agency-75325

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