Agriculture accounts for approximately 15 % of our GDP. In the agricultur sector Viksit Bharat @ 2047 goal aims to achieve food security, enhance climate resilience, boost rural prosperity, modernization by adoption of technology and sustainable practices and improved market access.
Liberating Agricultural Markets in India
India’s agricultural market system plays a vital role in ensuring fair pricing, efficient distribution, and overall rural economic development. While considerable progress has been made to liberalize these markets, several challenges persist that prevent farmers from realizing the full potential of their produce. The lack of uniform reforms, infrastructural constraints, limited private sector participation, and dependency on middlemen continue to hamper the growth of a transparent and competitive agricultural ecosystem.
One of the key issues is the uneven adoption of reforms. Certain states, such as Bihar and Kerala are yet to adopt the Model Agricultural Produce Market Committee (APMC) Act, which is designed to modernize and liberalize agricultural trade. This results in fragmented market policies, limiting the creation of a unified national agricultural market. Farmers in states without these reforms face restricted access to better markets, reducing their bargaining power and income. This leads to a policy gap, where the lack of a standardized regulatory framework discourages inter-state trade and hinders efficient price discovery.
Another major challenge is insufficient market infrastructure. At present, a single APMC mandi caters to an area of 406 square kilometers, whereas the recommended one per 80 square kilometers. This shortage forces farmers to travel long distances, increasing their transportation costs and leading to delays in selling perishable goods especially rural. Inadequate storage and cold chain facilities exacerbate the problem, resulting in significant post-harvest losses, especially in horticultural produce. This reflects a serious infrastructure gap that needs immediate attention to reduce wastage and improve market access.
Private participation in procurement and marketing remains limited due to over-regulation and lack of trust between farmers and private players. Farmers are often hesitant to enter into contract farming arrangements, especially for horticulture, due to fears of exploitation and weak enforcement of agreements. This represents both a technology gap, as digital solutions for transparent transactions are underutilized due to limited awareness, low digital literacy and inadequate training of farmers and a trust gap, as farmers lack confidence in private procurement systems.
Additionally, farmers remain heavily dependent on middlemen within mandis, who dominate the trade by charging high commissions and offering lower prices. The lack of direct linkages between farmers and buyers such as processors, exporters, and retailers perpetuates this cycle, restricting farmers’ income growth.
To address these issues, a multi-pronged strategy is needed. Policy reforms must be prioritized by encouraging uniform adoption of the Model APMC Act across all states. Simplifying and standardizing laws related to contract farming can create a secure environment for both farmers and private investors. Infrastructure development is essential, including the expansion of mandi networks, establishment of cold storages, and improvement of rural connectivity through public-private partnerships.
Promoting private sector participation through tax incentives and model agreements can boost procurement and processing, especially in high-value crops. At the same time, leveraging technology and digital solutions such as expanding the reach of e-NAM (National Agriculture Market) will enable transparent, real-time price discovery and broader market integration. Finally, strengthening Farmer Producer Organizations (FPOs) can enhance farmers’ collective bargaining power and reduce their dependence on middlemen.
By bridging policy, infrastructure, technology, and trust gaps, India can create a truly liberated and efficient agricultural market, ensuring fair returns for farmers while boosting rural prosperity and national food security.
Ramp Up Food Storage – Challenges, Gaps, and Solutions
India faces a significant challenge in food storage, which directly impacts food security, farmer incomes, and overall agricultural efficiency. A 2022 government survey revealed that upto 6% of cereals and 12% of fruits and vegetables are lost annually due to post-harvest issues. These losses occur mainly because of inadequate storage infrastructure, lack of cold storage at farm gates and mandis, and vulnerability to pests and unseasonal or excessive rains. Such wastage not only reduces the availability of food but also causes a decline in farmer earnings and increases the burden on the agricultural supply chain.
One of the major issues is the limited availability of cold storage facilities, particularly in rural areas where farm produce is first collected. Most storage units are located near urban centers, far away from the actual point of production. This makes it difficult for farmers, especially small and marginal ones, to access proper storage facilities, leading to premature degradation of perishable goods like fruits, vegetables, and dairy products. Additionally, unpredictable weather patterns caused by climate change, such as sudden heavy rainfall or heatwaves, further damage harvested crops when proper storage is unavailable.
These challenges highlight several gaps in the current food storage ecosystem. Firstly, there is insufficient cold storage coverage, especially at the farm level. Secondly, small and marginal farmers lack awareness and access to affordable storage options, which forces them to sell produce immediately after harvest, often at lower prices. Thirdly, low private investment persists due to policy uncertainty and regulatory hurdles. Finally, there is an absence of an integrated system connecting farms, storage units, markets, and consumers, leading to inefficiencies and wastage throughout the agricultural value chain.
To address these issues, comprehensive solutions are needed. There is a need to expand cold storage infrastructure by establishing cold storage units at farm gates and rural mandis to reduce transportation delays and spoilage. Promoting solar-powered cold storage facilities can also help lower operational costs and improve sustainability. Additionally, policy reforms are essential. Offering tax benefits and subsidies can encourage private sector participation in building storage infrastructure.
Equally important is farmer support. Farmers must be trained in post-harvest handling and storage practices to minimize losses. Cooperative storage models can be developed to allow small farmers to pool resources and access shared facilities. Furthermore, creating integrated supply chains by connecting storage facilities to transportation networks, e-NAM markets, and retail chains will ensure smoother movement of goods and better market efficiency. Use of digital tracking and IoT sensors to develop smart storage is the way forward.
By addressing these challenges with a combination of infrastructure development, policy reform, technology integration, and farmer empowerment, India can significantly reduce post-harvest losses, improve food security, and enhance farmer incomes while creating a more resilient agricultural system.
Rethinking Ethanol Blending in India
India’s ethanol blending program is a significant step toward reducing dependence on fossil fuels and cutting crude oil imports, with a target of achieving 20% ethanol blending with petrol by 2025 which has already been achieved. While this initiative offers environmental and economic benefits, it also raises serious concerns regarding food security, water management, and agricultural sustainability. To ensure that the country’s energy needs do not compromise its food supply and ecological balance, there is an urgent need to rethink and redesign the strategy for ethanol production and usage.
One of the most pressing issues is food security. 20% blending requires approximately 1,000 crore litres of ethanol annually, which translates to nearly 11–12 million tonnes of grains and 275 million tonnes of sugarcane. Diverting such vast quantities of essential food crops like maize, rice, and wheat toward ethanol production can reduce the availability for human consumption. This diversion becomes particularly critical during drought years, when agricultural production declines, increasing the risk of food shortages and price spikes. Such outcomes would directly impact vulnerable populations dependent on the Public Distribution System (PDS) and threaten the objectives of the National Food Security Act (NFSA). Thus, while ethanol blending addresses energy concerns, it has the potential to undermine food security if not managed carefully.
There is also an inherent energy security trade-off. Ethanol blending reduces India’s reliance on imported crude oil, but heavy dependence on food-based ethanol makes the program vulnerable to agricultural uncertainties such as climate change, erratic rainfall, and crop failures. This could create a “food versus fuel” conflict, a situation previously witnessed globally during the 2007-08 food crisis, where diversion of crops to biofuel production led to widespread hunger and inflation.
Environmental sustainability is another challenge. Sugarcane, which is one of the primary crops for ethanol production, is extremely water-intensive, requiring nearly 2,000 litres of water to produce a kilogram of sugar. Expanding sugarcane cultivation, particularly in water-stressed states like Maharashtra and Uttar Pradesh, will exacerbate groundwater depletion, soil degradation, and water scarcity, threatening long-term agricultural productivity.
The program also poses risks for farmers’ livelihoods. Policies promoting ethanol production may encourage monocropping of crops like sugarcane or maize, reducing biodiversity and increasing vulnerability to pest attacks and market volatility. While farmers may initially benefit from higher prices due to ethanol demand, they face long-term risks of income instability if ethanol prices fluctuate or policies change suddenly.
Several gaps hinder the success of ethanol blending in a sustainable manner. These include heavy dependence on food crops for ethanol production, lack of investment in second-generation (2G) biofuel technologies that utilize agricultural residues and waste, inadequate coordination between food, energy, and water policies, poor farmer awareness regarding sustainable practices, and insufficient infrastructure for biomass collection and processing.
To address these issues, solutions must focus on diversifying ethanol feedstock. India should prioritize the production of 2G biofuels, using crop residues such as paddy straw, bagasse, bamboo and 3G biofuels made from algae instead of food grains. Also production of sweet sorghum and cassava may be incentivized for ethanol production. Region-specific crop planning is essential, with sugarcane cultivation limited to water-abundant areas like Bihar and Assam, while drought-prone regions should focus on sustainable crops like millets and pulses. Policy integration is critical, with the establishment of a National Biofuel Council to ensure coordination between the ministries of agriculture, petroleum, and environment. Flexible blending targets should be adopted, allowing for lower blending rates during years of poor harvests. Investment in bio-refineries, technology innovation, and ethanol infrastructure will strengthen the program’s foundation, while farmers should be supported through training, sustainable farming practices, and minimum price guarantees to reduce risks.
Finally, public awareness campaigns must be launched to educate consumers about the benefits and trade-offs of ethanol blending, encouraging more informed choices. By carefully balancing food and energy needs, India can develop a sustainable ethanol program that promotes energy independence without compromising food security or environmental health. This will create a resilient system supporting economic growth and social well being.
Focusing on Food Processing to Boost Agri Exports
India has immense potential to boost its agricultural and allied exports from the current $43 billion to $70 billion by strengthening its food processing sector and building robust value chains. Key products such as rice, spices, fruits, and vegetables hold significant promise in international markets. For instance, in FY25, India exported rice worth $12 billion and spices worth $4.5 billion, highlighting the strong base for further growth. However, this potential remains largely untapped due to several structural challenges, gaps in the system and limited private sector participation.
One of the major challenges is the low level of value addition in agricultural exports. A large portion of India’s agri-exports is shipped in raw or semi-processed form, which limits profitability and reduces global competitiveness. For example, while India is a leading producer of spices and fruits, much of it is exported without advanced processing or packaging, preventing it from fetching premium prices. Another pressing issue is poor infrastructure, including inadequate cold chains, modern storage facilities, and grading and packaging systems. This results in significant post-harvest losses and deterioration of export quality, particularly for perishable products such as fruits and vegetables.
India also faces quality and safety compliance issues, as many exporters struggle to meet global standards such as HACCP (Hazard Analysis Critical Control Point) and Good Agricultural Practices (GAP). As a result, several consignments are rejected in foreign markets, tarnishing the reputation of Indian produce. The fragmented nature of the supply chain further adds to inefficiencies, as there is often a disconnect between farmers, processors, and exporters. Moreover, private sector participation in food processing remains limited due to regulatory hurdles, policy uncertainty, and a lack of financial incentives. Global competition also poses a threat, as countries like Thailand, Vietnam, and Brazil have well-developed food processing ecosystems and strong international branding for their agricultural exports. Additionally, Indian products suffer from weak branding and marketing, which limits their visibility and acceptance in premium global markets.
Several gaps need to be addressed to overcome these challenges. First, there is a severe shortage of modern food processing units, restricting value addition. Second, complex export documentation procedures and the absence of harmonized quality standards act as barriers to trade. Farmers often lack awareness about export-oriented production practices, resulting in inconsistent quality of raw materials. Financing is another major gap, as small and medium enterprises in the food processing sector struggle to access affordable credit for modernization. Finally, inadequate market linkages between farmers, processors and international buyers create inefficiencies and allow middlemen to dominate the system.
To realize the export growth potential, a multi-pronged strategy is required. Developing integrated value chains for high-potential products such as rice, spices, and perishables is crucial. Investment in food processing infrastructure, including Mega Food Parks, cold storage facilities, and modern packaging units, should be expanded through public-private partnerships (PPP). Strict adherence to global quality and safety certifications must be promoted through farmer training and exporter support programs. Policy making should focus on simplifying export procedures, aligning domestic standards with global benchmarks, and providing tax incentives and subsidies to attract private investment. These policies should be FDI friendly. Branding initiatives, such as a national agri-export brand, can help position Indian products competitively in international markets. Additionally, skill development programs for farmers and workers, along with digital traceability systems like blockchain, can improve transparency and buyer trust.
By addressing these challenges and bridging existing gaps, India can significantly boost its agricultural exports while increasing farmers’ incomes, generating employment, and strengthening its position in global agri-trade. A focused approach to food processing will transform the agricultural sector from being production-driven to market-driven, ensuring sustainable and inclusive growth.
Enhancing Agricultural Productivity in India
India’s agricultural productivity remains relatively low compared to countries like China, posing a challenge to the country’s food security and rural economy. Several factors, including climatic conditions, soil health, irrigation facilities, and fertiliser usage, determine farm output. A major issue lies in the low yield of crops, primarily due to the continued reliance on traditional farming methods and limited adoption of modern technologies. Many farmers lack access to high-yielding, climate-resilient seeds, while weak agricultural extension services prevent knowledge transfer from research institutions to the field. To address this, there is a need to promote the use of high-yielding varieties, climate resistant seeds and strengthen extension services to ensure farmers are aware of innovative practices and technologies that can boost production.
Irrigation and water management remain critical bottlenecks. More than half of India’s agricultural land is still dependent on monsoon rains, making farming highly vulnerable to droughts and erratic weather patterns. Additionally, groundwater levels are rapidly declining due to inefficient water usage. The lack of adequate investment in irrigation networks, coupled with the slow adoption of water-saving techniques like drip and sprinkler irrigation, further aggravates the problem. Expanding irrigation infrastructure, building water harvesting structures, and incentivising micro-irrigation practices are essential steps to make Indian agriculture more drought-resistant. Community-based water management systems can also play a vital role in ensuring equitable and efficient use of resources.
Soil health is another critical concern. Over the years, the indiscriminate and imbalanced use of chemical fertilisers has led to declining soil fertility. Many farmers are unaware of the need for balanced fertiliser application and integrated nutrient management. The Soil Health Card scheme, though initiated to address this issue, has not been effectively implemented on the ground. Strengthening soil testing laboratories at the block level and promoting organic manure, bio-fertilisers, and sustainable agricultural practices can help restore soil health and ensure long-term productivity.
Mechanisation and technology adoption remain limited, especially among small and marginal farmers, due to the high cost of machinery and lack of infrastructure. Precision farming tools, artificial intelligence, and digital platforms have immense potential to optimise resource use and improve yields, but their penetration in rural areas is low. Establishing custom hiring centres and machinery banks can make equipment more accessible and affordable. Training farmers in modern techniques i.e. use of AI, IoT and remote sensing and encouraging the use of digital platforms for real-time updates on weather and crop conditions will further enhance productivity. Strengthening Krishi Vigyan Kendras and Farmer Field Schools would be a positive step in the right direction.
Crop diversification is also necessary to ensure sustainable agricultural practices. Currently, there is an overemphasis on water-intensive crops like rice and sugarcane, which are not always suited to local agro-climatic conditions. Policymakers must encourage region-appropriate cropping patterns by providing incentives and creating strong market linkages for alternative crops such as pulses, millets, and oilseeds. Developing value chains and promoting contract farming can help farmers transition to more profitable and sustainable cropping systems.
Promoting Non-Farm Activities
Rural economic diversification is crucial for reducing pressure on agriculture, providing hedges against crop failures, and reducing the vulnerability of rural households. Non-farm activities such as fishing, dairying, poultry, and beekeeping offer significant potential for supplementary income generation and rural employment creation.However, rural non-farm sectors face substantial challenges including skill and information asymmetries, limited access to institutional finance, restricted access to larger markets, and intense competition from established urban enterprises.
Promoting non-farm activities requires comprehensive rural infrastructure development including transportation networks (potentially including state expressways), rural electrification, internet connectivity expansion, and storage facility development that can support diverse economic activities. Skill development and training programs specifically designed for rural non-farm sectors are essential for building human capital and improving productivity. Enhanced credit access through collaboration with finance companies and microfinance institutions can provide necessary capital for non-farm enterprise development.
Market access facilitation through e-commerce platforms and initiatives like the Open Network for Digital Commerce (ONDC) can connect rural producers with larger markets, overcoming geographical barriers and reducing dependence on local intermediaries.
Smoothening Farm Credit Flow
Farm credit is fundamental to agricultural growth, given agriculture’s contribution of 15% to GDP and employment of 46% of the workforce. The sector’s credit requirements are particularly acute for small and marginal farmers who constitute 86% of land holdings, as land fragmentation has reduced average holding sizes from 2.26 hectares in 1971-72 to just 1.08 hectares in 2015-16.
Climate change has intensified credit needs as farmers face increasing weather variability and need resources for climate adaptation and risk management. However, the formal credit system faces several challenges including continued reliance on informal moneylenders, credit diversion for consumption needs and emergencies, inequitable distribution favoring large farmers, and inadequate financial literacy among rural populations. Optimising farm credit flow requires strengthening policy interventions like the Kisan Credit Card scheme while working toward the objective of doubling farmers’ incomes. Collaboration with finance companies and microfinance institutions can expand credit access and improve service delivery to underserved areas.
Direct Benefit Transfer for Subsidies
The current subsidy system for power, fertilizers, and seeds suffers from significant leakages and inefficiencies that reduce their effectiveness in supporting farmer welfare. These inefficiencies not only waste public resources but also fail to provide adequate support to intended beneficiaries.
Direct Benefit Transfer (DBT) to farmers’ accounts has eliminated leakages, empowered farmers through direct financial support, and promoted transparency and accountability in subsidy delivery. However, implementation faces challenges including beneficiary identification difficulties, digital divide constraints, stakeholder resistance from fertilizer companies and middlemen, exclusion errors due to documentation gaps, and variations in state administrative systems. A particular concern is the status of tenant farmers, who constitute approximately 30% of all farmers but often lack formal recognition in government databases, raising questions about their inclusion in DBT systems.
Even more successful DBT implementation requires developing comprehensive farmer databases that accurately identify all beneficiaries, including tenant farmers and sharecroppers. Awareness campaigns are essential for educating farmers about DBT benefits and registration procedures. Phased implementation with state-specific customization can address administrative variations while ensuring smooth transition. Integration with existing schemes like PMFBY and PM-Kisan through Aadhaar-based verification can create synergies and improve service delivery efficiency.
Replacing MSP with Farm Income Insurance
The Minimum Support Price (MSP) system, while providing price assurance, fails to address comprehensive farmer risks including yield losses due to weather, pests, and market fluctuations. The system’s coverage is limited and primarily benefits larger farmers with better market access, while smallholders often cannot access MSP benefits effectively. Farm income insurance can provide more comprehensive protection for all farmers, including smallholders, representing a significant improvement in farmer welfare support. However, the transition faces challenges including farmer resistance due to uncertainty about new systems, implementation complexities arising from inadequate data systems, and potential exclusion of marginal farmers, tenant farmers, sharecroppers, and women farmers without formal land ownership.
Transitioning to farm income insurance requires developing comprehensive farmer databases that include all categories of farmers, regardless of land ownership status. Awareness campaigns and phased transition strategies can help overcome farmer resistance while ensuring system stability. Diversified coverage options and private insurance participation can improve service quality and financial sustainability. Technology utilization including satellite imagery, AI, and IoT can enhance risk assessment accuracy and claim processing efficiency.
Finally integration with existing schemes like PMFBY and PM-Kisan can create a unified “One Nation – All Farmers – One Account” system that simplifies farmer interactions with government support systems.
Ensuring Clear Land Ownership Titles
Clear land ownership titles are fundamental for accessing institutional credit, reducing land disputes, accessing government schemes, and promoting equity and social justice in rural areas. However, land records suffer from several challenges including the need for constant updates, multiple ownership claims creating disputes, complex tribal and customary land rights, and legal and administrative complexity varying across states. Implementation challenges include corruption in land administration systems and inadequate coordination between revenue, judiciary, and registration departments.
Addressing land title issues requires comprehensive digitisation of land records to improve transparency and accessibility. Regular land surveys using modern technology can ensure accuracy and resolve boundary disputes. Developing “One Nation – One Record” systems can standardize land records across states while accommodating local variations. Providing incentives for maintaining clean and updated records can encourage compliance and reduce administrative burdens. Enhanced collaboration between revenue, judiciary, and registration departments is essential for coordinated implementation and dispute resolution.
Digital Infrastructure and Financial Inclusion
India has achieved a remarkable mobile coverage, creating unprecedented opportunities for digital inclusion and service delivery. However, this technological reach contrasts sharply with low literacy levels and limited digital literacy among farmers. The JAM (Jan Dhan Account, Aadhaar, Mobile) trinity provides a foundation for comprehensive data collection and unification, enabling effective delivery of government schemes and services. The vision of “One Nation – All Farmers – All Records – One Account” can integrate farmer identity, financial services, and government benefits into a unified digital platform. This integration presents significant opportunities for IT firms to develop comprehensive “Farmer Book” applications that can serve as one-stop solutions for farmer needs. Digital platforms can provide real-time guidance, weather updates, market information, and access to government schemes, transforming rural service delivery and empowering farmers with information and tools for better decision-making.
Implementation Framework and Coordination
Successful implementation of this comprehensive agricultural transformation framework requires coordinated action across multiple government levels, departments, and stakeholders. The interconnected nature of these reforms means that progress in one area can accelerate advancement in others, while delays or failures in any component can constrain overall transformation. Policy coordination between central and state governments is essential for ensuring uniform implementation while accommodating regional variations. Institutional mechanisms for inter-departmental coordination can prevent duplication of efforts and ensure synergistic implementation. Establishing robust monitoring and evaluation systems is crucial for tracking progress, identifying bottlenecks, and making necessary course corrections. Key performance indicators should be developed for each reform area, with regular assessment of outcomes and impacts on farmer welfare and agricultural productivity.
Feedback mechanisms that capture farmer experiences and concerns can ensure that implementation remains responsive to ground-level realities and challenges.
Conclusion
India’s agricultural transformation requires comprehensive reforms addressing market access, infrastructure development, technology adoption, financial inclusion, and institutional strengthening. The framework presented in this paper provides a roadmap for achieving sustainable agricultural growth and rural prosperity. The success of this transformation depends on coordinated implementation, adequate financial resources, technological innovation, and sustained political commitment. Most importantly, keeping farmers at the center of all reforms ensures that development outcomes translate into improved livelihoods and rural prosperity. The digital infrastructure foundation, combined with improving literacy and financial inclusion, provides unprecedented opportunities for leapfrogging traditional development constraints. By leveraging technology while addressing fundamental structural challenges, India can achieve its vision of a prosperous and sustainable agricultural sector that supports both food security and farmer welfare.
The path forward requires sustained effort, but the potential rewards in terms of rural prosperity, food security, environmental sustainability, and overall economic growth justify the comprehensive reforms outlined in this framework. The time for incremental changes has passed; transformative action is now essential for realizing India’s agricultural potential and ensuring the welfare of its rural population.
