Lesson 29 of 70 8 min Premium
Farm Issues, Schemes and Allied Sectors
GS3 · Agriculture
Structural issues
- Small holdings: the vast majority of farmers are small and marginal (below 2 hectares). As per the Agriculture Census 2015–16, they made up about 86% of all holdings.
- Water: about half of the net sown area still depends on rainfall. Groundwater is over-exploited in many districts.
- Market access: many sales are through intermediaries, and there is post-harvest loss due to poor storage and cold chains.
- Credit and risk: dependence on moneylenders; weather and price risk.
Key schemes (stable features)
| Scheme | Year | Feature |
|---|---|---|
| PM-KISAN | 2019 | ₹6,000 per year income support to landholding farmer families in three instalments, via DBT |
| PM Fasal Bima Yojana | 2016 | Crop insurance; low farmer premium (2% kharif, 1.5% rabi, 5% commercial/horticulture) |
| Soil Health Card | 2015 | Soil nutrient status and fertiliser advice for each farm |
| e-NAM | 2016 | Online national agriculture market linking APMC mandis |
| PM Krishi Sinchayee Yojana | 2015 | "Har Khet Ko Pani", "More Crop Per Drop" (micro-irrigation) |
| Kisan Credit Card | 1998 | Short-term credit for crops, extended to animal husbandry and fisheries |
Allied sectors
- White Revolution: Operation Flood (1970), led by Dr. Verghese Kurien (NDDB, Amul model). India is the world's largest milk producer.
- Blue Revolution – fisheries; Yellow Revolution – oilseeds; Golden Revolution – horticulture and honey.
- Food processing cuts waste and raises farm income – mega food parks and the PM Kisan SAMPADA Yojana.
Sustainable farming
- Crop diversification away from water-hungry paddy in Punjab.
- Micro-irrigation (drip and sprinkler), organic and natural farming, integrated pest management, and Farmer Producer Organisations (FPOs) to give small farmers bargaining power.
📝 Example
Mains frame – "Doubling farmers' income": raise productivity (seeds, irrigation) → cut costs (soil health, inputs) → better prices (e-NAM, FPOs, storage) → diversify (dairy, fisheries, horticulture) → reduce risk (insurance) → non-farm jobs.
Background: why farm incomes stay low
Indian farms are small and fragmented. Many depend on the monsoon. Productivity is low (rice and wheat yields are well below China's). Farmers face price risk, weather risk and credit risk together. The Situation Assessment Survey (NSS 77th round, 2019) found the average agricultural household's monthly income at about ₹10,218, with a large share coming from wages and livestock, not crops.
Key issues explained
| Issue | What it means | Remedies being tried |
|---|---|---|
| Land fragmentation | Average holding about 1.08 ha | Land pooling, cooperative farming, FPOs, leasing laws (NITI model act 2016) |
| Irrigation | About 55% of net sown area irrigated | PMKSY – "Har Khet Ko Pani", "Per Drop More Crop" (micro-irrigation) |
| Credit | Dependence on moneylenders in some regions | Kisan Credit Card, interest subvention, priority-sector lending (18% for agriculture) |
| Risk | Drought, floods, pests | PMFBY (2016) – low premium (2% kharif, 1.5% rabi, 5% commercial); tech-based yield estimation |
| Markets | Many intermediaries; distress sales | e-NAM (2016), FPOs (the 10,000 FPOs scheme), warehouse receipts, the Agriculture Infrastructure Fund |
| Soil health | Imbalanced fertiliser use (excess urea) | Soil Health Cards, neem-coated urea, nano-urea, natural farming |
| Technology | Slow adoption | Kisan drones, Digital Agriculture Mission (AgriStack – farmer IDs) |
Inputs: seeds, fertilisers, mechanisation
- Seeds: hybrids; Bt cotton (the only GM crop approved for commercial cultivation in India); GM mustard DMH-11 got environmental release approval (2022), but it is under judicial review.
- Fertilisers: NPK ideal ratio 4:2:1, but actual use is skewed towards nitrogen. Nutrient-Based Subsidy for P and K; urea under fixed MRP. PM-PRANAM encourages states to cut chemical fertilisers.
- Mechanisation: custom hiring centres for small farmers.
Allied sectors – the real growth engines
| Sector | Facts | Schemes |
|---|---|---|
| Dairy | India is No. 1 in milk (about a quarter of world output); Operation Flood (1970, Verghese Kurien – the "White Revolution") | Rashtriya Gokul Mission, National Dairy Plan |
| Fisheries | No. 2 in fish production; the "Blue Revolution" | PM Matsya Sampada Yojana (2020) |
| Poultry | Fast-growing; egg and broiler industry | Livestock mission |
| Horticulture | Production exceeds foodgrains | MIDH; Operation Greens (TOP – tomato, onion, potato) |
| Food processing | Low processing levels (under 10% for fruits and vegetables) → waste | PM Kisan SAMPADA, PMFME, PLI for food processing |
Land reforms – the unfinished agenda
After independence:
- zamindari abolition succeeded;
- tenancy reform (security of tenure, fair rent) succeeded in West Bengal (Operation Barga, 1978) and Kerala;
- land ceilings gave limited redistribution;
- consolidation of holdings succeeded in Punjab, Haryana and UP.
Today's priorities:
- digitisation of land records (DILRMP; ULPIN – the 14-digit land parcel ID);
- conclusive titling;
- legal leasing so tenants get credit and insurance;
- SVAMITVA (drone mapping of rural homes for property cards).
Causes and effects of agrarian distress
Causes:
- low and volatile prices;
- rising input costs;
- debt;
- crop failure;
- small size;
- poor non-farm job options.
Effects:
- farmer suicides (NCRB data – with marginal farmers and agricultural labourers most affected);
- protests;
- migration;
- disguised unemployment.
Case study: Amul and the cooperative model
Amul began in Anand, Gujarat (1946) to free milk producers from exploitative middlemen. Its three-tier structure – village cooperative → district union → state federation (GCMMF) – lets millions of smallholders, many of them women, own the value chain. Farmers get a large share of the consumer rupee. The Operation Flood programme replicated this nationally. The lesson: collective marketing and processing can raise small-farmer incomes – the idea behind FPOs and the new Ministry of Cooperation (2021).
Common misconceptions
- "Farm loan waivers solve distress." – They give temporary relief but do not address structural causes. They can also hurt credit culture and state finances (RBI caution).
- "Organic farming can immediately replace chemical farming everywhere." – A sudden shift can reduce yields (the Sri Lanka 2021 example). A gradual, science-based shift is needed.
- "Agriculture's falling GDP share means it is unimportant." – It is still the largest employer and is central to food security and rural demand.
How UPSC asks it
Mains themes include doubling farmers' incomes, crop insurance effectiveness, FPOs, e-NAM and agricultural marketing, land leasing, allied sectors, and food processing. Prelims asks about schemes and their features and GM crops.
Mains answer framework
Q-type: "Allied sectors can be the key to raising farm incomes. Discuss."
- Intro: the income structure of farm households (SAS data).
- Body: high growth in livestock and fisheries; lower risk; women's participation; market linkages (dairy cooperatives).
- Challenges: animal health, feed and fodder, cold chains, credit.
- Measures: veterinary services, breed improvement, cold storage, processing, insurance, FPOs and cooperatives.
- Conclusion: diversify the farm household's portfolio, not just the crop.
Major farm schemes at a glance
| Scheme | Purpose |
|---|---|
| PM-KISAN (2019) | ₹6,000 a year income support to landholding farmer families in three instalments |
| Pradhan Mantri Fasal Bima Yojana (2016) | Crop insurance with low farmer premiums |
| Soil Health Card (2015) | Soil testing and fertiliser advice |
| PM Krishi Sinchayee Yojana (2015) | "Har khet ko pani" and "per drop more crop" |
| e-NAM (2016) | Online trading platform linking mandis |
| Formation of 10,000 FPOs (2020) | Support for farmer producer organisations |
| Agriculture Infrastructure Fund (2020) | Financing for post-harvest infrastructure |
Allied sectors
Dairy, poultry, fisheries and horticulture grow faster than crop agriculture and provide steadier incomes. India is the world's largest milk producer, built on the cooperative model of Operation Flood. Fisheries have their own ministry and the PM Matsya Sampada Yojana (2020).
Mains practice question
Q. What are the main constraints on doubling farmers' incomes? Outline: small and fragmented holdings, low productivity, dependence on rainfall, price volatility and weak market access, high input costs, limited credit and insurance coverage; solutions include FPOs, irrigation efficiency, diversification into allied activities, better storage and processing, and agricultural research.
Check your understanding
- What is a farmer producer organisation? A registered group of farmers that buys inputs and sells produce collectively.
⚡ Quick revision
- Small and marginal farmers ≈ 86% of holdings (Agri Census 2015–16)
- PM-KISAN ₹6,000 per year; PMFBY premiums 2 / 1.5 / 5%
- Operation Flood 1970 – Verghese Kurien
A central scheme launched in February 2019 that pays ₹6,000 a year to landholding farmer families in three equal instalments of ₹2,000, transferred directly into their bank accounts, as income support for farm inputs and household needs.A government reform launched on 1 January 2013 to transfer subsidies and benefits directly into the bank or postal accounts of beneficiaries, mostly linked to Aadhaar, instead of routing them through intermediaries or in-kind delivery.The Pradhan Mantri Fasal Bima Yojana (PMFBY), launched in 2016, is India's main crop insurance scheme. Farmers pay a small premium, and the Centre and states pay the rest, to cover crop losses from natural risks such as drought, flood, pests and unseasonal rain.India's three main agricultural seasons, set by the monsoon and temperature cycle: kharif crops sown with the south-west monsoon (June–July) and harvested in autumn, rabi crops sown after the monsoon (October–November) and harvested in spring, and the short zaid season between rabi and kharif in summer.State-regulated agricultural markets and the national online trading platform linking them. Full coverage: Agricultural Marketing: APMCs, e-NAM, FPOs and Supply Chains.Use of living organisms and genetic engineering, including crops such as Bt cotton. Full coverage: Biotechnology, Health and Emerging Technologies.The power of the Supreme Court and High Courts to examine laws and executive actions and to strike them down if they are unconstitutional.A central scheme of the Department of Animal Husbandry and Dairying, started in 2014, to develop and conserve indigenous cattle and buffalo breeds and to raise milk productivity through better genetics, mainly by expanding artificial insemination, sex-sorted semen and embryo technology.A set of central schemes launched from 2020 that pay manufacturers a cash incentive, usually a percentage of the additional sales they make in India over a base year, to attract large-scale production in chosen sectors.Disguised unemployment exists when more people are engaged in a job than are actually needed, so that the marginal productivity of the extra workers is zero or close to zero: removing them would not reduce total output. It is most common in family farms in developing countries such as India.India's central bank, set up on 1 April 1935 under the RBI Act 1934 and nationalised in 1949, which runs monetary policy, issues currency, regulates banks and payment systems and manages foreign exchange.The market value of all final goods and services produced within a country's borders in a given period. This hub page shows where GDP turns up across the syllabus as a yardstick; the measurement methods are covered in the linked lesson.
