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Indian Agricultural Policy in the Reform Years

Centre for Education and Documentation

07 / 2009

The principle instrument of India’s public policy is its five year plans, which it has had since independence (1947) mainly as a means to ‘balanced development’. The Planning Commission is a highly respected body of experts acting directly under the Prime Minister. The various sectoral sub-committees and working groups are expected to represent the views of all sections of society from where they are drawn. In addition there are several commissions and committees that are set up from time to time, to examine the issues concerned and make recommendations.

Agriculture is a concurrent subject which means that both the centre and states are responsible for the sector. Implementation of agricultural policy except for centrally sponsored schemes is by and large in the hands of the state government. It is the landlord class, from the dominant caste groups, which hold sway and manage to corner the benefits of all policies and programmes particularly in agriculture and agro-based industry. These rural elite classes uses it to increase their patronage among the larger sections of middle farmers – particularly in areas like irrigation projects, subsidies, and largess in terms of loan waivers.

Five year plans

Since the days of the first five year plan the focus has been on Agriculture. The main thrust was on intensive agriculture. A new Intensive Agricultural District Programme (IADP) was launched in the closing years of the Second Plan (1960). The expressed objective of the programme was to concentrate resources and efforts in specially endowed areas with adequate production potential in terms of assured water and infrastructure facilities. This is to achieve a quick break-through in production. The programme was expanded in 1964 under the name of Intensive Agricultural Area Programme (IAAP) to cover more of the well-endowed areas.

The policy approach to agriculture has been to secure increased production through subsidies in inputs such as power, water and fertilizer. This seems to have induced inefficient use of scarce resources and aggravated environmental problems (see the sheet In India, the Green Revolution turns to brown).

This politicy seems to still keep out the small farmer, particularly those in the rainfed areas. The National Commission on Agriculture in 1974 did recognise that small farms as a class are more efficient units of production compared to large farms when considered from the point of view of productivity and employment potential. It also recognised that providing water to these small farms ‘would have by and large solved their problems’. But nothing substantial has been done for them. Till today only about 37% of Net Sown Area (NSA) is under irrigation and the remaining 67% is still rainfed. The rainfed areas are still having very low yield per hectare and irony is that most of the rural poor live in these rainfed areas. Therefore, special urgent attention has to be paid for increasing productivity in the rainfed areas through ground water development and watershed management.

Even the latest 11th Five Year Plan (2007-2012) for instance seems to be making the right noises. It says that Agriculture and allied activities are the main stay of state’s economy not only because they contribute about 26% of state domestic product but more so because they employ about 71% of the total work force. Improvement in agriculture growth is necessary for greater equity as also to provide market for industry and services. To achieve 5% rate of growth through this sector, the plan aims at increasing productivity through inputs like more irrigation in rainfed areas, improved seeds with increased seed replacement rate, increased and balanced use of fertilizers, encouraging organic farming through use of organic and green manures, bio-pesticides and bio-fertilizers, creating protective irrigation and improving water harvesting through micro-minor, improving ground water recharge through water conservation campaign, construction of field ponds etc.

Contradictory directions

However the overall direction of the agricultural plan seems to be schizophrenic. On the one hand, there is the rhetoric of encouraging organic farming, and rainfed systems which means diversification and multi-cropping. On the other hand the investment is in providing irrigation in hitherto rainfed areas, fertilizer, and pesticide subsidies. Thus the policy ends up incentivising a few farmers to go in for higher intensity mono-cropping, which is not suitable for small farms.

Experts speak of extension reforms through Agricultural Technology Management Agency (ATMA), institutional and capacity building, using Public Private Partnership (PPP) model and strengthening Agriculture Informatics and Communication through Agriculture Information System Net Work (AGRISNET). It is about promoting application of frontier sciences like bio-technology, remote sensing technology, post harvest management and processing technologies, energy saving technologies and technology for environment protection, all of these favouring companies who have that kind of technology.

Food policy

A similar direction is promoted by the food policy which is very closely linked to the agricultural policy. Food commodities are procured by the Food Corporation of India (FCI) and other para-state institutions. The Commission for Agriculture Costs and Prices (CACP) sets Minimum Support Price (MSP) for 24 commodities and Statutory Minimum Price (SMP) for one. A buffer stock is maintained in order to meet shortage as well as control price. Subsidised food is supplied to poor through Public Distribution System (PDS). All this seems fine, but the main problem is that both the procurement and the subsidies and distribution system is restricted to the main commodities like rice, wheat, sugar, and certain oilseeds. Thus, the main traditional staple which is more suited for local production and consumption, is totally left out, and thereby discouraged. Incidentally these are the very commodities, which require less external inputs – namely seeds, fertilizers, pesticides. Thus the policy seems to favour the mainstream corporate and marketing lobbies.

Seeds and inputs policy

Such a direction in policy is even more clear in the case of seeds. Traditionally the farmers grew seed himself. With the onset of High Yield Varieties, the farmer is forced to buy seeds afresh every year. This is a major source of the problem for small farmers. Yet the policy encourages the corporatisation of seed. The Indian Seed market is valued at $1.3 billion, 70% of which is controlled by the private section, in which we have more 200 companies. However, an overwhelming portion of this business is controlled by just three companies. The policy on seed development to enable corporatisation of the seed business was adopted in 1988. Soon after the Industrial policy signalled the beginning of the “economic reforms” and allowed foreign investment in seeds. Then followed the Seeds’ Bill 2004, which seeks to deprive farmers their right to save or exchange patented seeds. It also seeks to help seed companies by relaxing the norms for compensating farmers for crop loss due to seed failure, by removing controls of price of seeds, and not fixing any liabilities on patents. The policy also provide for a single window clearance of seed production and distribution licensing, this opening the door for corporate control over the seed industry as well as risking the bio-diversity of seed, particularly the natures capacities of the countryside to generate in situ newer varieties which are adaptive to the changing local environment.

Another prominent recommendations is the rationalization of subsidies on inputs. In July 2009, the finance Minister has announced a scheme to pass on the subsidies directly to the farmer rather than to the fertiliser companies. The stock prices of the Indian fertiliser companies crashed, perhaps sensing that a so called “level playing field” has been offered to international companies.

National Policy for Farmers 2007

All these policies are in line with the economic reforms consisting of Liberalisation, Privatisation and Globalisation. This came at a time when the world started taking cognisance of a bigger problem, that of climate change. In this background we had two major National Commissions relating to agriculture in India : the National Commission of Sustainable Agriculture, which is part of the Prime Minister’s flagship National Action Plan on Climate Change, and the National Commission on Farmers under the chairmanship of Dr. M S Swaminathan (1) who contributed greatly to the implementation of the Green Revolution.

The Report of the Commission was adopted as the National Policy for Farmers 2007. The important features and provisions of the policy could be divided into two opposing approaches

Chemical/Genetic ApproachesAgro Ecological Approaches
Use of New Technology to enhance productivity per unit of land and water: biotechnology, information and communication technology (ICT), renewable energy technology, space applications and nano-technology. Objective: an “Evergreen Revolution”Human Dimension: Focus to be on the economic well-being of the farmers rather than just on production and productivity Definition of Farmers: Expanded to include all categories of persons engaged in the sector so that they can be extended the benefits of the Policy.
Credit & Insurance: Credit counselling centres to be established where severely indebted farmers can be provided a debt rescue package to help them out of debt trap. Need for both credit and insurance literacy in villages, Gyan Chaupals to help in the task.Asset Reforms: To ensure that every man and woman, particularly the poor, in villages either possesses or have access to a productive asset.
Inputs and services: Good quality seeds, disease free planting material, including in-vitro cultured propagulesSoil Health: Every farm family to be issued with a Soil Health Passbook.
Gyan Chaupals to be established in as many villages as possible to harness the help of ICT.Setting up of Farm Schools in the fields of outstanding farmers to promote farmer to farmer learning and to strengthen extension services.
Minimum Support Price (MSP) mechanisms to be implemented effectively across the country so as to ensure remunerative prices for agricultural produce.Income Per Unit of Water: adoption of the concept of maximizing yield and income per unit of water.
Market Intervention Scheme to be strengthened to respond speedily to exigencies, specific crops to be identified. Community Food Grain Banks: To be promoted to help in the marketing of unutilized crops.Expanding Food Security Basket to include nutritious crops like millets and sorghum mostly grown in dry land farming areas.
Single National Market: to be develop by relaxing internal restrictions and controls. A Cabinet Committee on Food Security is to be constituted.Farmers of the future: Farmers may adopt cooperative farming, create service cooperatives, undertake group farming through self-help groups, establish small holders’ estates, adopt contract farming and create farmers’ companies.


The mix of these approaches is perhaps indicative of the situation where no one path will be acceptable to all bio-regions or all sections of the farming community.

However the problem in plurality is that unless the less powerful, both politically and economically, are not provided for, or protected then there is every danger in the dominant market system that the system supporting high value inputs, by the very force of its dollar value will wipe out the diversity and the alternatives.

Devinder Sharma, a critic of the predominant policy exposes the same issue when analysing the proposal of the National Commission on Sustainable Agriculture:

“The Rs 83,000-crore project is to be introduced in 100 districts across the country, and will operate for five years. Under the garb of sustainable agriculture new technologies and machinery is getting ready to be introduced. The sub-committee that has prepared the approach paper for the National Mission on Sustainable Agriculture is dominated by people who were actually part of the system that turned agriculture completely unsustainable in the past 40 years of Green Revolution. The agriculture part of the 11th Plan document too has been written by experts who were largely responsible for the agrarian crisis that we witness today.”

Scientist & planners use the right sounding words but continue the old agenda. For example, Conservation agriculture has come to means ‘sustainable agricultural intensification’. Whereas conservation agriculture is about “no tillage based on minimal soil disturbance, organics residue retention and crop rotation”, new conservation technologies require : “laser land leveller, which is so far being imported but some of its parts are now being fabricated locally; zero till planters, including the second generation ‘happy seeders’ and ‘turbo seeders’; rotatory disc drill used for intensive soil working; and of course a range of herbicides.”

Devinder’s assertion seems to be borne out by the fact that the Tamil Nadu government recently initiated legislation to regulate Agricultural Practice and to provide for the establishment of Agricultural Council and the maintenance of register of persons having qualification in agriculture or horticulture. Farmers have raised objections to the bill saying that it would allow only persons with agriculture qualification to practice as agricultural practitioners and punish others like farmers, who had traditional knowledge. He termed it a ‘surrender to multi-national companies’.

NGOs also have been very sceptical about the agricultural policy. M. V. Sastri of the Centre for World Solidarity recalls when he was part of the Working Group on Civil Supplies of the Planning Commission for the formulation of the 10th Five Year Plan. There was a suggestion to encourage the production of so called coarse cereals in the areas covered by watershed development and including coarse cereals in the Public Distribution System (PDS). This would incidentally economise on water, apart from reviving more healthy dietary habits. There was even the nod of appreciation of positive experiences by a civil society organisation.

But the enthusiasm stopped there. The officials pointed out that in any case, it would be for the states to announce Minimum Support Prices (MSP) for coarse cereals and give back-up measures like procurement. Thus radical, good suggestions find a way of getting lost.

The fear is that only convenient parts of the alternative are picked up, while leaving the basic structure of expropriation of agriculture into money intact. This basically result “business as usual” albeit under the rhetoric of sustainability or environmental safety - resulting in co-option of the alternative without basic structural change.

(1) A Normal Borlaug prize winner, Dr M. S. Swaminathan set up his post retirement project himself under a new organisation M. S. Swaminathan Research Foundation (MSSRF), whose main centre in Chennai is called Centre for Research on Sustainable Agricultural and Rural Development.


agricultura, política agrícola

, Índia


Small scale farming in India


This sheet is also available in French: La politique agricole indienne et la réforme libérale.

Dr. Malla Reddy was interviewed by CED in 2009. M. Reddy is the Director of Accion Fraterna, which works in Anantapur district of Andhra Pradesh in the semi-arid regions of Rayalseema.

Further readings:


Texto original

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