Raising agricultural productivity and making farming remunerative for farmers

As a source of livelihood, agriculture (including forestry and fishing) remains the largest sector of Indian Economy. While its output share fell from 28.3% in 1993-94 to 14.4% in 2011-12, employment share declined from 64.8% to 48.9% over the same period. Therefore, almost half of the workforce in India still remains dependent on agriculture. Given the low share of this workforce in the GDP, on average, it earns much lower income poorer than its counterpart in industry and services. Therefore, progress in agriculture has a bearing on the fate of the largest proportion of the low income population in India. The paper identifies five important aspects of agriculture that need immediate attention to bring economic advantages to millions of farm families. First, output per hectare, which is a common measure of agricultural productivity, remains low for many crops when compared to many other countries. Second, on average, farmers do not realize remunerative prices due to limited reach of the minimum support prices (MSP) and an agricultural marketing system that delivers only a small fraction of the final price to the actual farmer. Third, the farm size of the majority of the household has declined to unviable levels inducing farmers to leave land and look for better job opportunities elsewhere. Fourth, relief measures in the event of natural disasters are inadequate and suffer from procedural inefficiencies and delays. Finally the potential of the eastern region needs to be harnessed with suitable interventions. The paper offers ideas on how these problems can be addressed so as to accelerate agricultural growth and bring remunerative prices to farmers.

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