1.1 Key problems faced by the Indian Agricultural Sector
A number of factors curtails India’s agricultural output – while some of them are systemic or historical in nature, the others are environmental or technological (See Figure 2). The systemic factors have evolved over centuries of agricultural activity dating back to ancient times while the geographical features of agrarian land and weather patterns primarily dictate the environmental factors. The technological factors have emerged primarily due to lack of advancement of agricultural techniques, and affordability of machinery and equipment. Let us look at all these factors one by one:
a. Cropping pattern: In many areas, continued application of obsolete cropping patterns inhibits agricultural productivity. Practices like mono-cropping not only lead to lesser output but also lead to soil degradation.
b. Land ownership/ Fragmented land holdings: The average size of landholding in India is less than 2 hectares. This makes it difficult to achieve economies of scale and introduce new technologies and machinery
c. Land tenure: Due to absentee landlordism (despite the abolished zamindari system), the tenure of land holdings for farmers is not secure. This makes it an adverse environment for the application of modern farming techniques, crop rotation, etc.
d. Agricultural credit: There is lack of systematic financing provisioning for farmers. Co-operatives and other financial institutions have not been able to eliminate village money lenders who lend money at exorbitant interest rates, thereby making finance unaffordable for farmers.
a. Erratic Monsoon: One of the key factors influencing agricultural productivity in India is the unpredictable behavior of monsoons. This problem is aggravated due to the lack of irrigation facilities across India.
b. Soil infertility: Increasing pressure on agricultural land in India has led to overuse of fertilizers, increase in tillage, abandonment of traditional organic soil revival techniques, and insufficient rotation of crops. This has resulted in soil degradation and loss of fertility.
c. Water sources: Water sources are not effectively linked to fulfill demand for irrigation to all farming areas.
d. Topography: The diverse topography of India’s land makes it essential to identify the right crops for the various soil variants and climatic conditions.
a. Lack of farm equipment: Farm mechanization in India is low despite growth over the decades. A good measure to gauge mechanization is power availability per hectare, which is low in India.
b. Lack of new farming techniques: Due to lack of awareness regarding new farming techniques and over-adherence to old traditional ways of agriculture, farmers in India have not been successful in widely adopting new farming techniques.
c. Lack of water supply: There is lack of efficient ways of water supply for irrigation. Groundwater supplies more than half of India’s demand for irrigation mostly by flooding through open channels. This, however, is an inefficient means of water supply as it leads to depletion of the water table. 39% of wells in India are already showing decrease in groundwater levels.
d. Lack of storage facilities: Even if production factors are enhanced, lack of storage facilities inhibits production. Estimates suggest that about 1.35 billion USD worth of food grains are wasted in India every year due to lack of storage facilities.
a. Lack of agriculture marketing: A number of factors lead to the unorganized nature of the agricultural industry, for example, the small scale of operations managed by small households, over-dependence on monsoon and other natural water sources, etc. This makes proper marketing of Indian agricultural products difficult.
b. Agriculture pricing: Unlike other industries, here, the farmer is more often a price taker rather than being the price maker. This is because of the ownership contracts, people involved in logistics as well as other intermediaries. Illiteracy among farmers is also a key factor that makes it difficult for farmers to get a fair value for their produce.