After the green revolution Indian agriculture has become cereal based, region centric, input intensive and consumed higher land, water, fertilizers. A rainbow revolution is needed to ensure that pulses, fruits and vegetables too are given importance.

Per capita availability of water and arable land in India has been on the decline steadily. India needs to move to more from less strategy.

Problem of Minimum Support Price

Indian agriculture is focused on wheat and rice intensive where both are grown on most fertile land. They also consume most of the resources like water, M.S.P., fertilizers but have very low yields.

Unlike other countries the quantity of water used for a unit of crop is higher in India. Also India exports water intensive crops unlike china that imports water intensive crops.

Solution could be use of drip irrigation to save water and fertilizer. The key impediment to these are the high cost of initial installation and skill needed for maintenance.

When planting crops the farmers could use an option contract to safeguard his price of selling to make adequate returns. But this facility is available to only a few farmers. The government thus uses M.S.P to protect farmers interest.

Problem with M.S.P policy is that it is high for wheat and rice and low for pulses thus discouraging production of pulses which have to be imported. The farmers who know about M.S.P vary from state to state and crop to crop.

Thus in reality very few know about M.S.P. M.S.P is also not taking into account negative externalities like use of chemical fertilizers, destructive practices and overuse of groundwater. This leads to future problems and have to be accounted.


Farmers should also get advantage of Price Deficient Payment by D.B.T if the price of produce in A.P.M.C is less than the M.S.P. Such a system is also consistent with India’s obligation at WTO.

Agriculture research too is plagued with its own problems.

Chapter Review
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Q1:Rainbow revolution refers to
1.overall development of agriculture sector
2.fishery sector development
3.airplane sector growth processing sector

Q2:Open ended procurement is practised by

Q3:Method of saving the farmer from price shocks is
2.Option contract

Q4:Agriculture universities are suffering from
1.lack of talented faculty link with international organizations
3.lab to farm connect, resource crunch

Q5:National agriculture market will mean
1.boost to retail supply chain can sell anywhere
3.removal of monopoly of APMC
The states where agriculture has an important role too see fewer students joining the agriculture universities.

The institutions are suffering from lack of talented faculty, link with international organizations, lab to farm connect, resource crunch.

Scientists in agriculture research have low to very low productivity and hence their performance needs better monitoring.

National Agriculture Market
Agriculture is plagued with the problem of market segmentation due to poor connectivity in rural areas, local market domination, intermediaries, restricted entry, local storage capacity.

Farmers had been hit by demonetization as they faced cash shortage. This led to difficulty in paying back agriculture laborers and procuring inputs needed for farming or transporting stock to markets. However in the aftermath of demonetization the wholesale and retail prices of perishables remained above the farm gate prices i.e. price received by farmers for selling to middlemen at APMC’s. The monopoly in the supply chain means that farmers have to sell at any price. Meanwhile agri business chains can’t get access to the farmers. This means that prices of commodities remain high.

However the government can change this since it has the power conferred by the Union list entry “inter state trade and commerce”. The agriculture trade can be freed from shackles of APMC’s and a National market can be created for farm produce. This will also boost the trade at National Agriculture Market portal that is currently under performing.

A unified market for agriculture is needed.

Problems with the Seed industry

Monsanto and Indian seeds companies are in a conflict over the Patent fees payment. In India, the Indian patents Act excludes any method of patent related to agriculture or horticulture sector. The Intellectual property rights under this are covered by the Protection of plant varieties and farmer’s rights Act. Monsanto believes that the transgenic variety isn’t covered under PPVFR Act and wants a royalty from the Indian seeds companies. However the Indian seeds companies are expecting the PPVFR Authority to decide a reasonable royalty or patent fee for use of Bt-Cotton seeds.

Bt-Cotton seeds are created by transferring a gene from Bt-worm into cotton seeds. This gives them immunity from attacks by Bollworm. Bollworm attacks reduce the productivity of cotton fields.