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Issue Brief September 9, 2020

Transforming Indian agriculture: A policy framework to guide US-India partnership

By D. Narain

Agriculture has formed the backbone of India’s economy for many decades and remains crucial to providing food security for the country’s growing population. It constitutes a major pillar of India’s economic growth and a significant contributor to its growing exports sector. Indian agriculture is the country’s largest employer with one hundred and forty million smallholder farmers and an additional sixty million people employed directly or indirectly in farming operations. Together, these two hundred million people represent more than 40 percent of India’s working population.

Though India is one of the top five agricultural economies in the world, Indian agriculture is at a serious inflection point. This sector faces multiple challenges, including lagging yields in key crops as compared to global averages1“India’s crop yields lower than United States, India, and China,” The Economic Times, November 22, 2016, lower-than-us-europe-and-china/articleshow/55558872.cms?from=mdr., restricted market access, lack of competitive prices for produce, and limited water availability. The latter leaves farmers to rely on rain-fed agriculture severely impacted by climate change. All these factors have eroded farm incomes, created increased pressure on government subsidies, and affected rural livelihoods.

The growth and success of agriculture is important for India’s long-term economic growth, enhancing its global and export competitiveness, improving rural livelihoods, and creating a sustainable agricultural eco-system. This brief outlines the policy framework required to make these goals a reality.

In order to build effectively on these amendments, India needs a broader set of policy reforms targeting everything from farm input to output in order to facilitate a complete transformation of Indian agriculture. In addition to policy reforms, the transformation requires strong collaboration among all players in the agri-value chain to achieve three key goals:

  1. To help Indian farmers increase crop productivity with better yields per hectare of cultivable land. This has to be done while driving sustainable agricultural practices including water conservation and improved soil health.
  2. To enhance farm profitability and generate sustainable farm incomes.
  3. To deliver rural prosperity by helping job creation and creating better lives for farming communities.

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Image: An Indian farmer in his field. Source: Prasanna Pix