Pariksha SaathiLesson 7 of 10 · Indian Economy
Agriculture, MSP, Public Distribution and Food Security
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Land reforms
After independence the states passed land reform laws in three main areas. Abolition of intermediaries ended the zamindari, jagirdari and similar systems and was largely done in the 1950s. Tenancy reforms regulated rent, gave tenants security of tenure and, in some states, ownership. Land ceiling laws fixed the maximum land a family could hold and gave the surplus to the landless. Consolidation of scattered holdings was most successful in Punjab, Haryana and western Uttar Pradesh. The First Amendment (1951) created the Ninth Schedule to protect land reform laws from challenge in court. Vinoba Bhave began the voluntary Bhoodan movement at Pochampally in Telangana in 1951, and West Bengal's Operation Barga (1978) recorded the rights of sharecroppers. Kerala and West Bengal carried land reform furthest.
The Green Revolution
In the mid-1960s, after two droughts and heavy food imports, India adopted a strategy of high-yielding variety (HYV) seeds, mainly wheat derived from Norman Borlaug's Mexican varieties, together with chemical fertilisers, pesticides, assured irrigation and credit. M.S. Swaminathan is called the father of India's Green Revolution, and C. Subramaniam was the Agriculture Minister who backed it; the High Yielding Varieties Programme began in 1966-67. Wheat output rose sharply in Punjab, Haryana and western Uttar Pradesh, and India became self-sufficient in food grains. Its limits were regional inequality, a narrow focus on wheat and later rice, and environmental costs such as falling groundwater and damaged soils. Operation Flood (from 1970, led by Verghese Kurien) later brought a White Revolution in milk.
MSP and the CACP
The Minimum Support Price is the price at which the government stands ready to buy a crop, so that a bumper harvest does not crash farm prices. It is recommended by the Commission for Agricultural Costs and Prices (CACP), set up in 1965 as the Agricultural Prices Commission and renamed in 1985, and approved by the Cabinet Committee on Economic Affairs. MSP is announced for 22 mandated crops (14 kharif crops, 6 rabi crops and two commercial crops, jute and copra), while sugarcane gets a Fair and Remunerative Price. Since 2018-19 MSP has been fixed at no less than 1.5 times the all-India weighted average cost of production (the A2+FL cost, which adds the value of family labour to paid-out costs).
FCI and the public distribution system
The Food Corporation of India (FCI), set up in 1965 under the Food Corporations Act 1964, buys grain at MSP, stores it, moves it across the country, keeps buffer stocks and hands it to the states for distribution. Under decentralised procurement (from 1997-98) some states buy and distribute grain themselves. The public distribution system (PDS) grew out of wartime rationing in the 1940s and supplies grain through fair price shops, under the joint responsibility of the Centre and the states. The Revamped PDS (1992) focused on hilly and remote areas, the Targeted PDS (1997) separated families below and above the poverty line, and the Antyodaya Anna Yojana (AAY, December 2000) targeted the poorest families with 25 kg of grain per family per month at launch, later raised to 35 kg.
The National Food Security Act 2013
The NFSA, notified in September 2013, made subsidised food grain a legal right. It covers up to 75 per cent of the rural and 50 per cent of the urban population, about two-thirds of all people. Priority households are entitled to 5 kg of grain per person per month and AAY households to 35 kg per household, at Rs 3, 2 and 1 per kg for rice, wheat and coarse grains as set in the Act; the Centre later decided to supply this grain free of cost. Pregnant women and lactating mothers get a maternity benefit of at least Rs 6,000 and meals, and children from 6 months to 14 years get meals through anganwadis and schools. The eldest woman of the household, aged 18 or above, is treated as its head for ration cards, and each state has a State Food Commission.
Crop insurance and income support
The first nationwide crop insurance scheme was the Comprehensive Crop Insurance Scheme (1985), followed by the National Agricultural Insurance Scheme (1999) and its modified version. The Pradhan Mantri Fasal Bima Yojana (PMFBY, 2016) charges farmers a premium of only 2 per cent for kharif crops, 1.5 per cent for rabi crops and 5 per cent for commercial and horticultural crops. The Kisan Credit Card (1998) gives farmers flexible short-term credit, and PM-KISAN, launched in February 2019 with effect from December 2018, pays Rs 6,000 a year in three instalments of Rs 2,000 into the bank accounts of landholding farmer families.
Agricultural marketing
Agriculture and markets are state subjects, so produce is sold in regulated markets (mandis) set up under each state's Agricultural Produce Market Committee (APMC) Act. The Centre has promoted reform through the Model APMC Act 2003, the Model Agricultural Produce and Livestock Marketing Act 2017 and e-NAM, a national electronic trading platform launched on 14 April 2016 that links mandis online. AGMARK quality grading rests on the Agricultural Produce (Grading and Marking) Act 1937, and the Central Warehousing Corporation (1957) provides scientific storage.
Key facts
- Land reforms: abolition of intermediaries, tenancy reform, land ceilings, consolidation of holdings; Ninth Schedule added by the First Amendment 1951.
- Bhoodan: Vinoba Bhave, Pochampally (Telangana), 1951; Operation Barga: West Bengal, 1978, for sharecroppers.
- Green Revolution (mid-1960s): HYV wheat, fertilisers, irrigation; M.S. Swaminathan and C. Subramaniam; Punjab, Haryana, western UP.
- White Revolution: Operation Flood from 1970, Verghese Kurien; Yellow Revolution: oilseeds, Technology Mission on Oilseeds 1986.
- MSP: recommended by the CACP (1965, renamed 1985), approved by the CCEA; 22 mandated crops; FRP for sugarcane; at least 1.5 times the A2+FL cost since 2018-19.
- FCI: 1965 under the Food Corporations Act 1964; procurement, storage, buffer stocks; decentralised procurement from 1997-98.
- PDS stages: Revamped PDS 1992, Targeted PDS 1997, Antyodaya Anna Yojana December 2000 (25 kg per family per month at launch, now 35 kg).
- NFSA 2013: up to 75% rural and 50% urban population; 5 kg per person per month; AAY 35 kg per household; maternity benefit at least Rs 6,000; eldest woman (18+) as head of household.
- PMFBY 2016: farmer premium 2% kharif, 1.5% rabi, 5% commercial and horticultural; KCC 1998; PM-KISAN 2019: Rs 6,000 a year in 3 instalments.
- Marketing: state APMC Acts; Model APMC Act 2003; e-NAM 14 April 2016; AGMARK under the 1937 Act; Central Warehousing Corporation 1957.
Quick revision
Land reforms: intermediaries abolished, tenancy reform, ceilings, consolidation; Ninth Schedule 1951; Bhoodan 1951; Operation Barga 1978; Green Revolution mid-1960s (Swaminathan, HYV wheat); MSP by CACP (1965), 22 crops, at least 1.5 x A2+FL since 2018-19; FCI 1965; TPDS 1997, AAY 2000; NFSA 2013 (75% rural, 50% urban, 5 kg); PMFBY 2016 (2/1.5/5%); KCC 1998; PM-KISAN 2019 Rs 6,000; e-NAM 2016.