Challenges in the Agriculture Sector: Economic YouTube Lecture Handouts

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Major Challenges

  • Dependence on Monsoon: More than 60 % of farming in India is rain fed and any delay in monsoon arrival or inadequate rains severely affects agricultural productivity. It also leads to price, income and employment fluctuations.
    • Ever-increasing global temperature has made agriculture more prone to extreme weather events.
  • Land Ownership: Increasing demographic pressure, disguised employment in agriculture and conversion of agricultural land for alternative uses, have drastically reduced the average land holding. Few big farmers own large parcels of land, whereas majority of farmers have small tracts of land.
    • Peasants cannot generate sufficient marketable surplus. So they are not only poor but are often in debt.
  • Cropping pattern: Areas which are not suitable for certain crops experience cultivation of such crops because of technology, irrigational facilities etc. This has badly affected the soil health leading to problems like soil salinity, waterlogging etc.
  • Sub-Division and Fragmentation of Holding: 86 % of the farmers in our country are small and marginal farmers. This Indicates fragmentation of landholdings at unsustainable and uneconomic level.
    • Due to the growth of population and breakdown of the joint family system, there has occurred continuous sub-division of agricultural land into smaller and smaller plots. Migration has also led to fragmentation of land holding.
  • Agricultural Marketing: Due to the small size and scattered nature of agricultural holdings, the productivity per acre is low. Consequently, the collection of these surpluses for the purpose of marketing presents a serious problem as bargaining power of the farmer is little or negligible with less surplus.
    • Many farmers are uneducated and are not aware about usage of ICT tools and rely on middleman.
  • Agricultural Credit: Access to credit is key to enhance agricultural productivity. There is lack of easy access to credit and farmerีšs rely on informal sources like moneylenders etc.
  • Banks are less reluctance to extend credit due to default on account of crop failure.
  • Lack of Mechanisation: Iintroduction of latest technology has been limited due to various reasons like accessibility for credit and low awareness. Farmers are not aware about various policies on farm mechanization. Thus, outdated technology has led to low productivity.
    • Poor farming communities in the country, lack the understanding of modern agriculture methods to improve productivity and apply unsustainable level of Macro Nutrients.
  • Supply chain problems : Deficiencies in Agricultural Produce Market Committees (APMC) Act, lack of infrastructure facilities, Large gaps in storage, Cold chains, Absence of marketing infrastructure etc. has impacted the growth in the agriculture sector

Practice Question

Q 1. Which agency is responsible for procurement, distribution and storage of food grain production in India?

A. Ministry of Agriculture

B. Food Corporation of India



Answer: B

Q 2. Indian agriculture is typically characterized as? A. land surplus, labour scare economy

B. land surplus, labour surplus economy

C. land scare, labour surplus economy

D. land scare, labour scare economy

Answer: C

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