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Chapter # 5.Doubling Farmers’ Income (I): Modernizing Agriculture


• Modernize agricultural technology, increase productivity, efficiency and crop diversification.

• Generate income and employment through a paradigm shift that ensures food security while maximizing value addition in agriculture.

Current Situation

The existing yield levels of a majority of crops remains much lower than the world average. The predominant causes are low irrigation, use of low quality seeds, low adoption of improved technology, and knowledge deficit about improved agricultural practices. Close to 53 per cent of cropped area is water stressed. Rainwater management practices and services are resource starved. This limits a farmer’s capacity to undertake multiple cropping and leads to inefficient utilization of land resources.

Inefficient extension delivery systems have led to the presence of large yield gaps as well. Yield gaps exist at two levels in India. First, there is a gap between best scientific practices and best field practices. The second gap exists between best field practices and the average farmer. There exist significant yield gaps both amongst and within states. Yield gaps have been found to exist in even highly productive states such as Punjab. Closing these gaps provides an opportunity to enhance productivity and incomes significantly. This further implies that states with low productivity (or large yield gaps) have significant potential for catch-up growth in their productivity levels.

Demand side factors favour the expansion of area under fruits and vegetables, and livestock products. These enterprises also offer better income. Staple crops (cereals, pulses and oil seeds) occupy 77 per cent of the total gross cropped area (GCA) but contribute only 41 per cent to the output of the crop sector. High value crops (HVCs) contribute an almost similar amount to total output as staples do, but they occupy only 19 per cent of the GCA.1 Research has also shown that diversification to the fruits and vegetables segment is likely to benefit small and medium farmers more than large ones.2

Over the past few years, new development initiatives aimed at modernising agriculture have been introduced. Pradhan Mantri Krishi Sinchai Yojana (PMKSY) aims to expand irrigation coverage whilst promoting water use efficiency. Area under micro irrigation has grown 2.5 times in the last four years. The second cycle of the Soil Health Card (SHC) scheme is underway, which will focus on job creation and entrepreneurship development through local entrepreneurship models. So far,

3.76 crore SHCs have been distributed under the second cycle.


1. Use of outdated and inappropriate technology is the main reason for low productivity of crops and livestock.

2. Given the pre-dominance of small and margin-al farmers in Indian agriculture, affordability becomes a significant constraint on technology adoption by farmers.

3. There exist several bottlenecks hampering on-farm adoption of technology developed in public sector.

4. Agricultural research in the country is constrained by resource inadequacy, regulations and intellec-tual property rights (IPR).

5. Multiple private and public sources supplying different information to farmers create confusion.

6. A huge gap exists between the demand for and supply of skills in agriculture, hindering diversification, adoption of precision agriculture and on farm post-harvest value addition.

7. India has not caught up to the rest of the world in terms of technology, which has led to the dominance of inefficient production practices, such as flood irrigation, at the farm level. Renewed focus on on-ground absorption of technology, market intelligence, skills and extension and modernizing trade and commerce in agriculture are needed to modernize agriculture in India.

8. Both production and marketing suffer due to the absence of adequate capital.

9. Low scale is a serious constraint on the adoption of improved practices and in the input and output market.

Way Forward

Productivity and efficiency

Increase area under irrigation: Irrigation coverage needs to be increased to 53 per cent of gross cropped area (GCA) by 2022-23.3 The focus should be on increasing coverage through micro-irrigation.

Increase adoption of hybrid and improved seeds: States should take the lead through the following measures:

• Dynamic seed development plans are required. These may be based on crop wise area (each season separately), seed rate per hectare used, desired/targeted seed replacement rate and crop wise seed requirement. Crop wise require-ment should be worked out based on histor-ical trends, introduction of new varieties and replacement of poor yielding varieties.

• States should aim to increase the seed replace-ment rate (SRR) to 33 per cent for self-pollinated crops and 50 per cent for cross-pollinated crops in alternative years.

Increase Variety Replacement Ratio (VRR): Phase out old varieties of seeds and replace them with hybrid and improved seeds to enhance productivity. The Indian Council of Agricultural Research (ICAR) along with State Agricultural Universities (SAUs) should develop climate resilient varieties of crops suitable for the 128 agro-climatic zones of the country, through farmer participatory plant breeding and adopting farm varietal trials from the third year of the development of the seed.

Strengthen seed testing facilities: Seed testing facilities need upgradation in terms of both personnel and technical expertise. Regular performance monitoring is required to maintain the quality of test results.

Uniform national procedure for seed licensing: To tackle the problem of heterogeneity in seed licensing procedures across states, the central government should develop model guidelines for seed licensing and support states in implementing these.

Efficient fertilizer usage: Strengthen the SHC scheme and include not merely nine but all sixteen parameters in the tests. This will ensure SHC based fertilizer distribution at the ground level. Seed SHCs with the integrated fertilizer management system. Link SHCs with Kisan credit cards and make SHCs mandatory for subsidies. Ensure proper functioning of the SHC labs.

Reorient fertilizer subsidy policy: The current lopsided fertilizer subsidy policy needs to bring secondary and micro nutrients on the same nutrient-based subsidy (NBS) platform as phosphorus (P) and potash (K).

Regulate pesticide use: Align the pesticide regulatory framework with food safety laws to make adoption broad based. Strengthen extension activities to ensure that best practices reach the average farmer.

Custom hiring centres: Madhya Pradesh has had demonstrable success with their custom hiring centre model to hasten the pace of farm mechanization. This model should be replicated nationwide by employing rural youth and promoting entrepreneurship.

Subsidies on liquid fertilizers: Targeted subsidy should be provided on liquid fertilizers to encourage fertigation with micro-irrigation.

Investment subsidies for micro-irrigation: Rather than power and water subsidies, investment subsidies for micro-irrigation can be provided through the DBT mode.

Strengthening extension systems

Synergy between Agriculture Technology Management Agency (ATMA) and Krishi Vigyan Kendras (KVKs): The ATMA programme needs to be reoriented to include bottom up planning at the district and block levels to develop Strategic Research Extension Plans (SREP).4 Further decentralization and autonomy are essential to the success of this programme. Subject matter specialists at KVKs should orient their research to the block action plans developed by ATMA.

Public Private Partnership in KVKs: The guiding principles of ATMA provide for the promotion of PPP in extension delivery. With each KVK in possession of approximately 50 acres of land, KVKs should incubate private sector initiatives in extension delivery.

Market led extension: Give priority to extension services that disseminate information to farmers regarding (i) crop selection (ii) demand for and supply of crop produce, (iii) expected price of commodity and (iv) availability of infrastructure facilities for storage, transport and marketing of produce.

Value added extension: Prioritise value added extension services to enable a reduction in post-harvest losses by converting raw agricultural produce to processed products. This allows for increased price realization and contributes towards increasing farmers’ income.

District level skill mapping: ICAR and SAUs should map the demand for and supply of skills in agriculture at the district level and coordinate with skill development missions to impart the required skills to farmers and agricultural labour.

Replicate dealer training programme in state agricultural universities: The National Institute of Agricultural Extension Management’s (MANAGE) dealer training programme should be replicated in SAUs, with diploma holders granted licences to conduct extension activities.

Sustainable water use in agriculture: About 83 per cent of water is used in agriculture. The solution to resolving India’s imminent water crisis lies in conserving water in agriculture. Therefore, more efficient irrigation technologies, water harvesting and better crop selection must be encouraged.

Diversification: promotion of high value crops (HVCs) and livestock

High value crops

Encourage diversification to HVCs: Design an incentive mechanism to wean farmers away from cereal crops to HVCs. The area under fruits and vegetables needs to increase by 5 per cent every year.5

Establish regional production belts: As in the cluster-based approach, regional production belts for HVCs need to be identified and supported through the Mission on Integrated Development of Horticulture (MIDH). Make SHCs mandatory in these belts.

Use of hybrid technology in vegetables: Shift to using hybrid varieties for vegetables. At present,
10 per cent of the cropped area under vegetables is under hybrids. Shifting to hybrids has the potential to increase yields by 1.5 to 3 times and provide a significant increase in income.6

Rootstocks for production of fruits: Rootstock technology has shown the capacity to double production and be resilient to climate stress.
Measures should be taken to standardize and promote usage of rootstocks to produce fruits.

Smart horticulture: There have been pockets of success spread throughout the country, using techniques such as high-density plantation, protected cultivation and organic production. These methods need to be documented and replicated at the national level. It is recommended that a mission on smart horticulture may be setup to identify and promote new technologies. This mission must work in synergy with various agricultural research institutions in the country.

Strengthen market for organic products: Targeted efforts to create a market for niche products is recommended. Spices unique to a state can be branded by the Spice Board to encourage the production of organic spices.

Convert agricultural waste: Recycling and utilizing agricultural waste would give a further filip to farmers’ income.

Livestock and fisheries

Breed indigenous cattle with exotic breeds: Breeding of indigenous cattle with exotic breeds needs to be encouraged to arrest the issue of inbreeding. This will enable greater gene coverage, reduced diseases and greater resilience to climate change.7

Promote and develop bull mother farms: Employing multiple ovulation and embryo transfer technologies, these farms can significantly enhance milk productivity through the supply of cattle with enhanced milk potential to farmers.

Village level procurement systems: Installing of bulk milk chillers and facilities for high value conversion of milk are needed to promote dairy in states. The private sector should be incentivized to create a value chain for HVCs and dairy products at the village level.

Convergence of schemes in fisheries sector: Integrate the Blue Revolution scheme with MGNREGA. Ponds created through MGNREGA should be used to promote aquaculture and can be used to create potential clusters as well.

Capacity building for fish breeders and farmers: Establish fish co-operative organisations and run vil-lage level schemes in coordination with panchayats to disseminate best practices and research.

NITI AYOG - New India @ 75

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