Project On Economics 2

Project On
Need for Agricultural Reforms
Submitted by
Anshika Malik
Roll number : 11
Student ID : 202003702
Class : B.A.LL.B (2st Semester) (Regular)
Under the guidance of
Prof. Azharuddin Ansari
Associate Professor, Faculty of law
Jamia Millia Islamia
New Delhi
1
ACKNOWLEDGEMENT
I would like to thank the Almighty as without his grace it was not possible to
complete this project.
I would like to express my earnest and deepest gratitude to Prof. Azharuddin

Ansari, Associate Professor, Faculty of Law, Jamia Millia Islamia, for giving me this
opportunity to do a project on such a valuable topic “Need for Agricultural Reforms”
and allowing me to present my view point in a liberal manner. His help and support
gave me the strength to complete this project with complete understanding. I am ever
thankful and indebted to Sir for his valuable guidance and friendly encouragement
throughout the period of research. His constructive comments and suggestions made
the study very meaningful. I acknowledge the sincere support and efforts of my
esteemed and learned teacher and guide.
Lastly, I would like to thank all the staffs of the library, Academic section and all the
members of JMI family for their full support and assistance.
Thanking You
Anshika Malik
2
Contents:
1. Introduction………………………………………………………………4
2. Problems in Agricultural Sector
2.1. Low crop yields……………………………………………………..4
2.2. Dependence on monsoon……………………………………………4
2.3. Low share in global market…………………………………………4
2.4. Changing land holding patterns…………………………………….4
2.5. Indebtedness and farmer suicides…………………………………...5
3. Agricultural Reforms……………………………………………………5
4. Significance of these acts………………………………………………..5
5. The need for reforms…………………………………………………….6
6. Conclusion……………………………………………………………….6
3
Introduction
In its quest for food security, India pursued high-productivity agriculture with state support,
which was gradually withdrawn resulting in agrarian distress, as also environmental damage.
Agricultural reforms in India need to be tailored keeping this context in mind. While linking
agriculture to private corporate sector can be part of the strategy, the thrust has to be on the
cooperative movement for storage, processing and marketing of agricultural products.
According to the Organisation for Economic Co-operation and Development (OECD)
database, while OECD and European countries provided production subsidy in the range
between 15% and 20%, India’s production subsidy was consistently in the negative. Within
India, two states that receive subsidy and major shares of procurement support have much
higher productivity of foodgrains compared to other states and the national average.
While agricultural productivity in India is quite low compared to the developed world, it is
quite comparable in the case of Punjab in India. This indicates that it is difficult to achieve
and sustain high agricultural productivity without state support.
Problems in Agriculture Sector
1. Low crop yields -
India has reported a record foodgrain production of an estimated 296.65 million
tonnes in 2019-20. It is largest producer of pulses and third largest producer of cereals
in the world. Likewise, yield of foodgrains has increased as well; however,
it lags when compared with other agrarian economies.
“Pulse cultivation in India is mostly concentrated in the rainfed area (around
80 percent of the area), on marginal lands, on low fertile soil by resource poor
farmers. Moreover, low seed replacement rate, high susceptibility to pests especially
pod borer, inadequate market linkages, etc., are the primary reasons for low yield of
pulses,” the State of Indian Agriculture (SIA) 2017 report states.
2. Dependence on Monsoon -
Reliance on seasonal rainfall hampers productivity as “yields in rainfed areas remain
low”. Additionally, change in climatic conditions and erratic weather patterns--such
as cyclones and droughts --can impact yields of agricultural crops.
3. Low share in global markets -

Another positive development amidst the pandemic for the sector has been an uptick
in exports of agriculture commodities between March and September this
year. Overall, while India has emerged as an agri-exporter nation with regards to
crops such as rice, spices, tea, sugar etc., the share of India’s agricultural exports in
world trade remains low (2.15 percent in 2018), according to the ministry of
agriculture’s annual report 2019-20.
4. Changing landholding patterns -
The average size of agricultural land-holding has reduced from 2.28 hectares in 1970-
71 to 1.08 hectare in 2015-16. The change in land-holding pattern is similar among
fellow agri-economies as well. Therefore it is important to focus on improving
4
productivity of small and marginal farmers rather than trying to reverse the trend, the
SIA 2017 report notes.
5. Indebtedness and farmer suicides -

“As the proportion of small and marginal holdings is significantly large, land reform
measures like freeing up land markets can help farmers in improving their income.
Small holdings of land can be better harnessed through appropriate use of farm
mechanisation,” the 2019-20 economic survey said.
Agricultural Reforms
 The Government with the aim of transforming agriculture in the country and raising
farmers’ income have passed three important legislation from Parliament.
 These legislations sought to bring much needed reforms in the agricultural
marketing system such as removing restrictions of private stock holding of
agricultural produce or creating trading areas free of middlemen and take the market
to the farmer.
o The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act,
2020,
o The Farmers (Empowerment and Protection) Agreement of Price Assurance
and Farm Services Act, 2020,
o Essential Commodities (Amendment) Act, 2020.
Significance of these Acts

 The reforms are expected to accelerate growth in the sector through private sector
investment in building infrastructure and supply chains for farm produce in national
and global markets.
 They are intended to help small farmers who don’t have means to either bargain for
their produce to get a better price or invest in technology to improve the productivity
of farms.
 The legislation on contract farming will allow farmers to enter into a contract with
agri-business firms or large retailers on pre-agreed prices of their produce.
 It will also help farmers of regions with surplus produce to get better prices and
consumers of regions with shortages, lower prices.
 It will promote the creation of Farmer Producer Organisations (FPO) on a large
scale and will help in creating a farmer-friendly environment for contract farming
where small players can benefit.
5
 Competition is the best protector of stakeholders whether it is consumer or the
farmers. Having a variety of buyers will protect farmers from exploitation and by
having more sellers (farmers), consumers can buy better products at better deals.
The need for reforms

As a result of these multiple challenges and issues, India’s agriculture sector is shrinking. The
share of agriculture to total employment in the country has reduced from 44 percent (PLFS
2017-18) to 42.5 percent (PLFS 2018-19), while it was almost 60 percent a couple of decades
ago.
Likewise, the share of agriculture and its allied sectors in national income has declined from
18.2 percent in 2014-15 to 16.5 percent in 2019-20, “reflecting the development process and
the structural transformation taking place in the economy”, the Economic Survey 2019-
20 states.
Conclusion
 The above mentioned legislation basically aims at creating additional trading
opportunities outside the APMC market yards to help farmers get remunerative prices
due to additional competition.
o It proposes an electronic trading in transaction platform for ensuring a

seamless trade electronically.
 None of the legislation affects the Minimum Support Price in any way as the MSP
is an administrative decision not a law.
 Agricultural Produce & Market Committee (APMC) will still be available as a
choice to sell their products.
 The sale, lease or mortgage of farmers’ land is totally prohibited and farmers’ land is
also protected against any recovery.
6
References
1. Agricultural Reforms by Drishti IAS
2. Agriculture Reforms by moneycontrol
3. Why agriculture reforms needed by economic times

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Project On

Need for Agricultural Reforms

Class : B.A.LL.B (2st Semester) (Regular)

Under the guidance of

Prof. Azharuddin Ansari

Associate Professor, Faculty of law

Jamia Millia Islamia

I would like to express my earnest and deepest gratitude to Prof. Azharuddin

3. Low share in global markets -

4. Changing landholding patterns -

5. Indebtedness and farmer suicides -

Significance of these Acts

The need for reforms

o It proposes an electronic trading in transaction platform for ensuring a

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