Agriculture Sector in India: Trends, Issues and Challenges

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28 October 2021

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Agriculture is a critical sector of the Indian economic system. Though manufacturing and repair sector industries gained attention over the past couple of decades, agriculture remains to be an important contributor of development in India. Nearly two-thirds of India’s population depends instantly on agriculture for its livelihood. It meets the food necessities of the folks and produces several uncooked materials for industries.

From agricultural viewpoint, India has huge expanse of level land, wild climatic variations fitted to numerous types of crops, rich soils, plentiful sunshine and a long harvesting season (rabi and kharif).

Approximately, 140-145 million hectares of land is underneath agriculture. Post Independence, massive areas in India have been brought beneath irrigation however only one-third of the cropped area is definitely irrigated. There are many reasons answerable for the low productiveness of agriculture. Farming depends primarily upon monsoon rain and farmers own small pieces of land and grow crops primarily for consumption. Another cause for low productivity of agriculture is inadequate storage facilities for crop yield.

About one-third of land holdings are very small and fewer than one hectare in dimension. Due to small dimension of land holdings, fashionable method of cultivation can’t be used. Even today the farmers are using very old strategies, tools and implements for farming. Artificial ways of cultivation aren’t implemented in India. Because of various reasons like lack of awareness, most farmers do not use better quality of seeds, fertilizers and pesticides. There is lot of exploitation of marginal farmers.

There can also be low productiveness due to growing pressure on land and absence of financial institution credit score.

Agriculture contributes in foreign trade of our nation. India exports agricultural merchandise and earns foreign foreign money. Agricultural exports have helped India in earning valuable foreign trade and thereby enhancing economic development.


India is an emerging market and the objective of this project is to study the important position that the agricultural sector will play in the economic growth in India. Though greater than 70% of the population depends on the Indian agriculture, the productivity has decreased post independence space. Lot of emphasis is given on the service sector which has shown super progress in the earlier couple of years. It’s time now that insurance policies are launched to care for the different issues and challenges within the Agricultural sector.

Performance of agriculture sector in india

The agriculture sector in India has undergone significant adjustments within the form of decrease in share of GDP from 30 % in 1990-91 to 14.5 percent in 2010-11 indicating a shift from the traditional agrarian financial system towards a service dominated one. The identical is mirrored from the beneath Figure 1. This lower in agriculture’s contribution to GDP has not been accompanied by a matching discount within the share of agriculture in employment. About 52% of the total workforce continues to be employed by the farm sector which makes more than half of the Indian population dependant on agriculture for sustenance. However, non-farm actions additionally contributed to the expansion from rural economy.

Source: CSO
Figure 1: Sectoral Composition of GDP

“The average size of operational holdings in India has diminished progressively from 2.28 ha in 1970-71 to 1.55 ha in 1990-91 to 1.23 ha in 2005-06 (Figure 2). As per Agriculture Census 2005-06, the proportion of marginal holdings (area lower than 1 ha) has elevated from 61.6 % in 1995-96 to 64.eight p.c in 2005-06. This is followed by about 18 percent small holdings (1-2 ha.), about sixteen percent medium holdings (more than 2 to less than 10 ha.) and less than 1 p.c giant holdings (10 ha. and above).”(Reference #3)

Source: Department of Agriculture and Cooperation, Agricultural Census Division, Ministry of Agriculture. Figure 2: Average dimension (ha) of holdings as per totally different Agriculture Census Because of increasing population, land fragmentation is increasing which is lowering availability of cultivated land space per household. Added to this, as a outcome of rising challenges in agriculture sector, this stays to be least contributor of employment alternatives in rural areas. Because of this additional employment alternatives in the non-farm and manufacturing sector (especially in agro based rural industries) need to be created. Because of this, individuals have to enhance their abilities in corresponding sectors to achieve employment. This means, increasingly employment opportunities could be created which shall be useful in making agriculture practical in a sustainable manner.

Figure three: Farms in rural India. Most farms in India are small plots such as in this image. “The growth performance of the agriculture sector has been fluctuating across the plan periods (Fig 4). It witnessed a growth fee of 4.8 per cent through the Eighth plan period (1992–97). However, the agrarian scenario noticed a downturn in the direction of the beginning of the Ninth plan interval (1997–2002) and the Tenth plan interval (2002–07), when the agricultural development fee got here all the way down to 2.5 p.c and a pair of.4 p.c respectively.

This crippling development price of 2.4 p.c in agriculture as in opposition to a robust annual average overall development fee of seven.6 per cent for the economic system during the tenth plan period was clearly a cause for concern. The trend fee of development in the course of the interval 1992-93 to 2010-11 is 2.8 % whereas the typical annual rate of development in agriculture & allied sectors-GDP throughout the identical interval is three.2 p.c.”(Reference 3).

Source: CSO
Figure four: Growth Rates: GDP (overall) and GDP (Agriculture & Allied Sectors)

Note: Figures are at 2004-05 costs.
Source: CSO.

Figure 5: Comparative Performance of Growth of GDP and Agri-GDP Government insurance policies in agriculture sector

The Indian authorities has employed a number of steps to enhance the situation of agriculture sector in the country.

Land Reforms:

Land reforms had been introduced. The government has inspired consolidation of land holdings to advertise use of recent farm machines. The government took lands of huge land homeowners away and redistributed to landless laborers. The authorities abolished the Zamindari System.

Public funding:

Modern methods of cultivation have been introduced in the nation. The government has improved on offering infrastructure facilities corresponding to irrigation, electrical energy and transportation. Agricultural gear similar to pesticides, pump harvesters, tractors, fertilizers were made obtainable to farmers. Constructing irrigation reservoirs has helped in supplying water for irrigation within the areas of water shortage. To guarantee a significant growth on this sector, the government is taking steps to provide the required infrastructure in terms of chilly storage, food grain storage, meals processing, refrigerated transported as the trade is estimated to be shedding 20% of its produce because of poor storage facilities. The governments have allowed international equity participation of as a lot as 51% in cold chain tasks.

Major policies

* The government has launched vital modifications in Incentive insurance policies and Input subsidies. Getting finance from banks was made simpler for the farmers. * The crop insurance was another step to guard the farmers towards losses brought on by crop failure on account of pure calamities like flood cyclone, drought etc. * High-yielding varieties of seeds, fertilizers and irrigation gave birth to Green Revolution. All these led to tremendous enhance within the manufacturing of crops.

Output subsidies
* Procurement-cum-distribution policies
* Minimum support prices announced by Commission for Agricultural Costs & Prices
* (CACP) during sowing
* Food Corporation of India (FCI) buys all of the grains supplied for sale at these prices

(Above factors are from class PPTs)

suggestions–new policy measure to assist agriculture sector

* The Eleventh Five Year Plan has highlighted such a holistic framework and suggested the following technique to lift agricultural output. * Rate of growth of irrigated space has to be doubled

* Water management, watershed improvement and rain water harvesting has to be improved * Degraded land to be reclaimed and focusing on soil high quality * Reducing the information gap by organizing awareness camps * Diversification of excessive worth outputs like fruits, vegetables, flowers however with sufficient measures to make sure meals security * Animal husbandry and fishery to be promoted

* Reforms in enhancing the incentive structure and functioning of markets * Provide quick access to credit score at reasonably priced rates

* Agriculture can impression poverty alleviation and rural growth with far reaching capacity. There are several areas of significance for the agriculture sector growth. These embody, increasing public sector investment in research, efficient transfer of expertise along with institutional reforms in the analysis set as much as make it more accountable and geared towards conservation of land, water and organic resources, the development of rain fed agriculture, supply, the event of minor irrigation, timely and adequate availability of inputs, help for advertising infrastructure, a rise in circulate of credit notably to the small and marginal farmers.

* Achievement of meals and diet security and alleviation of poverty and unemployment on a sustainable foundation rely upon the efficient and considered use of pure assets (land/soil, water, agri-biodiversity and climate). Inefficient use and mismanagement of productive assets, especially land, water, vitality and agro-chemicals has vastly decreased fertility and damaged to the bodily, chemical and biological properties of the soil. The limitation on availability of agricultural land has already reached. We have continuous didn’t utilize the non-renewable natural resources and this can have serious implications.

* Three fourths of total investments in agriculture are by personal investments. These are the primary drivers of transition from conventional to excessive value agriculture. To guarantee easy transition from traditional to high value agriculture, government ought to help personal investments by the use of providing larger investments in R&D, public irrigation, roads and other infrastructural amenities. * A strategic imaginative and prescient for agriculture should consider three necessary elements: (a) India’s comparative benefit; (b) efficient markets at home and freer commerce; and (c) environmental sustainability. There is a lot of scope for major reforms, from advertising to funding and institutional change, particularly in water administration, new applied sciences, land markets and creation of efficient worth chains.


The country on an average has sufficient in stock to fulfill the meals requirements of its citizens. There is a big improve within the productiveness of the land through the years, however there’s nonetheless a huge gap between the present productivity and international productivity ranges. Indian agriculture is quite diversified into varied sectors and contributes largely to the nation’s economy. But the approaching years pose a lot of challenge on this area with an estimated outburst of inhabitants that may attain to roughly 1500million. This would require an enormous amount of food grains along with non-food grains. India has to use its huge potential of agriculture in a systematic and planned method together with reforms in export and import policies of agricultural merchandise.

Indian agriculture sector stays to be one of the most fascinated topics for academicians around the globe. Nobel Memorial prize winner, Prof. Gunar Myrdal of Stockholm University, has rightly remarked, “It is the agricultural sector that the battle for long run financial growth of India will be won or lost.” In reality the prosperity of agriculture is the prosperity of Indian economy. We mustn’t construct industries at the price of agricultural land.

2. Reserve Bank Of India – 3.

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"Agriculture Sector in India: Trends, Issues and Challenges" StudyScroll, 28 October 2021,

StudyScroll. (2021). Agriculture Sector in India: Trends, Issues and Challenges [Online]. Available at: [Accessed: 25 June, 2022]

"Agriculture Sector in India: Trends, Issues and Challenges" StudyScroll, Oct 28, 2021. Accessed Jun 25, 2022.

"Agriculture Sector in India: Trends, Issues and Challenges" StudyScroll, Oct 28, 2021.

"Agriculture Sector in India: Trends, Issues and Challenges" StudyScroll, 28-Oct-2021. [Online]. Available: [Accessed: 25-Jun-2022]

StudyScroll. (2021). Agriculture Sector in India: Trends, Issues and Challenges. [Online]. Available at: [Accessed: 25-Jun-2022]

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