Revitalizing Indian Agriculture and Boosting Farmer Incomes

February 8, 2022

The Indian food basket has been increasingly diversifying towards high value, protein and nutrition rich foods such as fruits and vegetables, milk, eggs, meat, and fish. Changing consumption preferences as a result of increasing incomes, rising population, and urbanization together with higher global demand have ushered in a demand-driven structural change in Indian agriculture. The fast-developing high value agricultural markets provide immense opportunity to India’s smallholders who constitute 86.1% of total farm holdings. Dairy and poultry have been exemplary in delivering inclusive growth. Despite being a smallholder economy, India has become self-sufficient in food production and is a leading producer of a number of agricultural commodities (Table 1). However, this record level of production has not been always accompanied by commensurate increase in farmers’ income. Agricultural value chains in India are subject to high fragmentation and intermediation, resulting in substantial losses in quantity and quality of produce, limited processing capacities, and high price volatility. Agricultural policies in India have been primarily cereal centric, focused on augmenting production, without giving due attention to development of efficient value chains. Intensive cultivation practices have led to environmental degradation including fast-depleting water resources and soil contamination due to unabated use of fertilizers and agrochemicals. With a diversifying production basket, policies should be aimed at holistic development of value chains.

SUMMARY