2. Problem Statement
SCOPE OF THE BROAD
Increase in demand for food due to increasing population, rising income levels,
and other demographic changes will require continuous increase in agricultural
production and hence productivity
CAUSES
– Small land holdings reduce the rate of return for productive investments,
which disincentivizes farmers from undertaking capital expenditure.
– Overdependence on rainfall renders precarious the returns on agriculture.
– Unscientific methods of cultivation have led to the erosion of soil fertility,
depletion of water table levels and pre harvest losses.
– Nearly 80% of small and marginal farmers suffer from financial exclusion and
have no formal access to credit
– High inflation, delivery delays and the inclusion of small farmers from govt.
schemes
3. Reforms in laws related to land markets
and marketing of agricultural
products, promotion of farmers’
organization/groups, Self Help
Groups, etc., and appropriate
agricultural price and food
procurement and distribution policy
are needed
Farm subsidies should be rationalized
and better targeted to benefit the
poor.
Issues related to distributional aspects of
agricultural credit including better
access to small and marginal farmers,
decline in rural branches, declining
share of direct credit and significant
regional and inter-class inequalities
need to be addressed
Proposed Solution
Substantial increase in investment in agriculture research and development, rural infrastructure, post-
harvest and market infrastructure including storage and processing
Pricing of inputs such as electricity, irrigation water, and fertilizer needs rationalization
4. 3 Pronged Strategy
Technological
Agricultural R&D
Improved Seeds
Fertilizers
Irrigation Water
Agro-Chemicals
Farm Machinery
Value Addition & Agro-
processing
Economic
Investment in Agricultural
R&D, and infrastructure
Agricultural Prices and Terms
of Trade
Subsidies
Trade Policy
Taxation
Institutional
Land Reforms
Rural Credit
Extension Systems
Rural Development & Poverty
Alleviation Programmers
Market Sector Reforms
Crop Insurance
Implementation Strategy
5. Technological Improvements
• The Government should encourage more
investments in Agricultural Research &
Development by giving many incentives.
• Also steps should be taken to improve the seeds
quality, Fertilizers, Irrigation facilities, etc.
• Arrangements should be made to make available
proper Farm Machineries to the farmers.
• This steps will help in increasing the farm
productivity.
Technological Improvements
6. • Government needs to provide subsidies and tax
holidays to agriculture sector to make it
competent one.
• The agricultural infrastructure should be
improved and more should be spent towards
Research & Development.
• Also the minimum support prices and various
agricultural policies and practices should be
modified to incentivize the private sectors to put
money into this.
Economic Incentives
7. Institutional Improvements
• Government should undertake Land Reforms measures
so that the small land holdings can be combined so as
to increase the agricultural productivity.
• It can provide Crop Insurance to farmers to protect
their livelihoods. Also Market Sector reforms should be
introduced so as to increase the economic prospects of
agriculture.
• Moreover Rural credits should be provided to Farmers.
The commercial banks should increase their exposures
to this sector so as to ensure appropriate funding
towards this sector.
Institutional Improvements
