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Innovations in Agriculture – Doubling Farmers’ InCome By 2022

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PRESENT THE ULTIMATE CHALLENGE TO

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Innovations in Agriculture – Doubling Farmers’ Income by 2022

The Hon’ble Prime Minister, while discussing income of farmers in a Kisan Rally in Bareilly in Feb 2016, shared his dream of doubling farmers’ income by 2022 – when India completes 75 years of its Independence. The commitment to double the farmers’ income in 5 years was reiterated in the Budget Speech of 2017 – 18 as one of the key themes identified for “Transform, Energise and Clean India”.

Strategies focused on the development of agriculture sector in the past have focused primarily on raising agricultural output and ensuring food security, and may not have explicitly recognised the need to raise farmers’ income. These strategies, including: a) technology enabled i.e. quality seed, fertiliser, irrigation and agrochemicals, b) incentive enabled i.e. remunerative prices for crops and subsidies, c) public investments and d) facilitating institutions, have paid dividends in addressing food shortage in the past decades. India’s food production has multiplied by 3.7 times in the past 50 years (1965 – 2015), since the adoption of green revolution. While the growth in output has led to overall increase in farmers’ income, the rate of such an increase has been low.  The NSSO data on Consumption Expenditure Survey for 2011-12 reveals that more than a fifth of rural households with self-employment in agriculture as their principal occupation had their income below the poverty line.

Agriculture is the primary source of livelihood for majority of India’s population, and hence policy, market and technology interventions are the need of hour to ensure prosperity for the largest section of India’s population. To the Finalists of the YES Bank Transformation Series 2017: Atal Innovation Mission, NITI Aayog and YES Bank are eager to hear your ideas and solutions for using agriculture based technologies (AgriTech) towards precision agriculture and enabling doubling of famers’ income by 2022.

Here is a short background on the agriculture sector in India and prospects of AgriTech globally and in India to help you in your quest.


  1. Overview of Agriculture Sector in India

Key insights:

  1. Agriculture is undoubtedly the backbone of India’s economy, and an estimated 58% of the rural households of the country depend on agriculture for their livelihood (NSSO 70th round data, Jan – Dec 2013)
  2. India’s production of food grains has been increasing every year, and India has been among the top producers of several crops such as wheat, rice, pulses, sugarcane and cotton. It also holds one of the leading ranks in production of milk, fruits and vegetables.
  3. Agricultural yields (quantity of a crop produced per unit of land) of major crops have seen growth over the last several decades, however they are low as compared to other top producing countries such as China, Brazil and the United States
  4. Agricultural growth has been fluctuating in recent past: 1.5% in 2012-13, 5.6% in 2013-14, -0.2% in 2014-15, 0.7% in 2015-16 and 4.9% in 2016-17 (PE)
  5. Key issues affecting agricultural productivity include the small and ever decreasing sizes of agricultural land holdings, continued dependence on the monsoon (55% of agriculture in India is rainfall dependent) and less than ideal access to irrigation as a result, indiscriminate use of soil nutrients resulting in loss of fertility of soil, uneven access to modern technology in different parts of the country, lack of access to formal agricultural credit, limited procurement of food grains by government agencies etc.

Pattern of agricultural landholdings:

As per the results of NSSO 70th round data, Jan – Dec 2013, approximately 69% of the agricultural households in rural India possessed less than 1 hectare of land, and another 17% had land between 1 and 2 hectares. Only 0.4% of the agricultural households had more than 10 hectares of land. The average farm size in India is small (1.15 ha) and has shown a steady declining trend since 1970-71. The predominance of small operational holdings leads to limitation to economies of scale in agriculture. Further, the small and marginal farmers have low bargaining power, since they have very little marketable surplus and are effectively price takers in a market

Profile of agricultural households:

The median agricultural incomes (as measured by income from cultivation, net of cost and unsold produce valued at local market rates) is at about Rs19,250 in 2012-13 or about Rs. 1,600 per month (NSS, 2012-13). The pattern of agricultural holdings and the profile of agricultural households in India indicate that there is dominance of small farmers / small farm holdings in the agriculture sector, who are highly indebted and are vulnerable to shocks and poverty. This mandates detailed assessment of various risks that farmers face, and requires ways to reduce and mitigate such risks, so as to make agriculture a viable economic activity.


  1. Taxonomy of risks in agriculture in Indian context

Type of risks

Causes

Reasons for severity

Production risks

Pests, diseases, shortage of inputs like seeds / irrigation

Low productivity, declining yield

Weather and disaster related risks

High share of rain fed agriculture, low irrigation coverage, drought, flooding, hailstorm and unseasonal rains

Production loss, lower than potential production

Price risks

Lower than remunerative price

Absence of marketing infrastructure, presence of and excessive profiteering by middlemen

Credit risks

Predominance of informal sources of credit, money lenders, lack of capital for short term and long term loans

Absence of stable incomes / profits lead to defaults / indebtedness

Market risks

Changes in demand / supply domestic or international

Loses market / market share

Policy risks

Uncertain policies, regulations

Impact of Government policies, APMC Act and other regulations

Source: Economic Survey 2016-17        

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