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The future of Indian agriculture

  • Categories
    Economy: Unlocking India’s future
  • Published
    4th Apr, 2022


Over the last 75 years, Indian agriculture has made rapid strides. From a meagre 55 million tonnes, production of foodgrains has increased to a record 308.65 million tonnes last season (July 2020-June 2021). Production of pulses, coarse cereals, natural fibres, sugarcane, vegetables and fruits have all increased manifold since Independence.

  • Agriculture is the dominant sector of our economy & contributes in various ways. Agriculture in India is a livelihood for a majority of the population and it holds a lot of potential in itself.
    • Agriculture is the primary source of livelihood for about 58% of India’s population. Gross Value Added by agriculture, forestry, and fishing was estimated at Rs. 19.48 lakh crore (US$ 276.37 billion) in FY20.
    • The share of agriculture and allied sectors in gross value added (GVA) of India at current prices stood at 20.2 % in 2020-21.
  • Although the contribution to the gross domestic product (GDP) has reduced to less than 20 per cent and the contribution of other sectors increased at a faster rate, agricultural production has grown.
  • The Indian food industry is poised for huge growth, increasing its contribution to the world food trade every year due to its immense potential for value addition, particularly within the food processing industry.
  • Technology and infrastructure in the future are going to bring considerable changes to the operating context of tomorrow’s consumers and farmers.
  • Lately, consumer spending in India is returning to normalcy after post the pandemic-led contraction. The recent series of reforms in the form of policies and legislations, a few of which are now in action and a few couldn’t make their way (Three Farm legislations) has once again raised the question about the future of Indian agriculture.
  • It raises questions not only about agriculture but also about the dwindling populations in rural India where small communities are already struggling to survive.

This brief aims to comprehensively analyse Indian agriculture as the future of agriculture in India is a very important question for policymakers and their stakeholders.


  • The Indian agriculture sector was among the few segments that remained robust amid the pandemic miseries, and as per experts, the country is expected to register a growth rate of 3.6 per cent in the current financial year that ended on March 2022.
  • Indian food and grocery market is the world’s sixth-largest, with retail contributing 70% of the sales.
  • The Indian food processing industry accounts for 32% of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth.
  • The total agricultural and allied products exports stood at US$ 41.25 billion in FY21.
  • We are now net exporters from once being the begging bowl for food. All of this has happened not in the blink of an eye but has taken decades of planning and execution of the same.
  • As per 2nd Advance Estimates for 2021-22 (Ministry of Agriculture and Farmers Welfare), total food-grains production in the country is estimated at a record 06 million tonnes which is higher by 5.32 million tonnes than the production of food grain during 2020-21.
  • India is blessed with large arable land with 15 agro-climatic zones as defined by ICAR, having almost all types of weather conditions, and soil types and capable of growing a variety of crops.
    • India is the top producer of milk, spices, pulses, tea, cashew and jute, and the second-largest producer of rice, wheat, oilseeds, fruits and vegetables, sugarcane and cotton.
  • Even after over seven decades of planning, Indian agriculture is still facing problems of poor production and poor returns in specific components.


  • Small and marginal holdings: Farming in India is plagued by Micro land holdings that also limit any farmer’s scope and scale to adopt mixed farming or shift to growing multiple crops simultaneously or even take up innovative approaches to grow a crop.

According to the 2015-16 Agriculture Census, the average size of operational holdings has decreased from 2.28 hectares in 1970-71 to 1.84 hectares in 1980-81, to 1.41 hectares in 1995-96 and 1.08 hectares in 2015-16.

  • Subsistence Agriculture: In subsistence agriculture, crops fail or livestock dies placing the farmer at risk of starvation. Fixed costs of crops sown and interest on debt mean that losing even a portion of the crop or receiving low prices, can easily generate negative cash flow.
  • Low Credit supply: Low access to credit and the prominent role of unorganised creditors affect the decisions of farmers in purchasing of inputs and selling of produce. Access to institutional credit demands the ownership of assets and income that evaluates the creditworthiness of a potential borrower. Lack of such creditworthiness implies access exclusion.
  • Low penetration of Technology: Less use of technology, mechanisation and poor productivity for which the first two points are of major concern. While modern technology can be easily adopted by big farmers, it is the penetration within the marginal sector that will make the difference. The overall level of mechanization is less than 50%, as compared to 90% in developed countries; nearly 40% of the food produced in India is lost or wasted.
  • Less Value-addition at primary level: Very less value addition as compared to developed countries and negligible primary-level processing at the farmer’s level.

Value addition is a process in which for the same volume of a primary product, a higher price is realised by means of processing, packing, upgrading the quality or other such methods. Value-added agriculture refers most generally to the manufacturing process that increases the value of primary agricultural commodities.

  • Poor Irrigation Infrastructure: Poor infrastructure for farming makes more dependence on weather and marketing. More than half of India’s arable land depends largely on the amount of rainfall during the monsoon season, to make economic activities viable. However, care must be taken to safeguard against the ill effects of over-irrigation, especially in areas irrigated by canals. Large tracts in Punjab and Haryana have been rendered useless (areas affected by salinity, alkalinity and water-logging), due to faulty irrigation.

Water is a critical input for agriculture which accounts for about 80 per cent of the current water use in the country. The share of net irrigated area accounts for about 49 per cent of the total net sown area in the country and out of the net irrigated area, about 40 per cent is irrigated through canal systems and 60 per cent through groundwater.

  • Exhaustion of soils: Indian soils have been used for growing crops for thousands of years without caring much for replenishing. This has led to depletion and exhaustion of soils resulting in their low productivity. The average yields of almost all the crops are among t e lowest in the world. This is a serious problem that can be solved by using more manures and fertilizers.
  • Improper Supply Chain Management: Supply chain management of high-value crops and other agricultural commodities. Since a market is a primary medium for farmers to exchange their produce for money, a lack of logistics connectivity to ensure that their harvest reaches markets in time results in a lowering of the farmers’ ability to monetise their produce
  • Farming as a viable livelihood: younger generations do not want to follow in their parents’ footsteps, which pushes urbanisation. One bad yield, whether due to errant rains, pests, etc., and most farmers have no buffer available.
  • Exemption on Agricultural Income: Agricultural income is tax-free in India. This benefit is reportedly being misused by wealthy farmers with large incomes to evade taxes. It’s time to talk about the taxation of rich farmers, those who own more than 4 hectares of land. They form just 4% of the total agricultural households but hold over 20% of agricultural income.
  • Inadequate storage facilities: Storage facilities in rural areas are either totally absent or grossly inadequate. Under such conditions, the farmers are compelled to sell their produce immediately after the harvest at the prevailing market prices which are bound to be low.


  • Increases in food production:
    • Indian agriculture has seen a dramatic increase in food production since introducing new technologies like the Green Revolution in agriculture practices. This trend is going to pick up more pace in the coming times.
    • There is a big shortfall between the amount of food we produce today and the amount needed to feed everyone in 2050. India’s population is expected to reach 1.64 billion people in 2050, up from its present population of 1.40 billion in 2022.
  • Changing Consumption Pattern:
    • Due to globalisation, increase in household incomes and health consciousness the demand for fruits and vegetables, dairy products, fish and meat is going to increase in future.
    • Research, technology improvements, protected cultivation of high-value greens and other vegetables will be more. There will be more demand for processed and affordable quality products.
  • Land Consolidation:
    • Fragmented land holdings and asset ownership will go through widespread consolidation, real, and virtual, to achieve economies of scale for smallholders.
    • Between 2010-2020, India lay down the foundations of taking rural citizens online. This decade will see the country’s agricultural ecosystem migrate into a digital architecture that helps overcome problems of fragmentation.
  • Increase in Demand for Processed Food:
    • Cities lead the way in diet diversification into high-value items, and export markets expand. Cities will look to secure their supply chains from external shocks in the upcoming decade. Consumers, driven by a desire for freshness and immediate fulfilment, will pull production of greens closer to them, and have them on demand
  • Increase in Competitiveness:
    • Due to more players in the field, more competition is expected among the private player. This is going to result in innovative products, better seeds, fertilisers, plant protection chemicals, customised farm machinery and feed for animals etc in cost-effective ways at competitive prices giving more returns on investment by farmers.
  • Agricultural Labour will move to more productive jobs:
  • Agricultural labour will contract and move towards higher productivity jobs, higher up in the value chain; agricultural training will respond and cater to a younger farmer.
    • The rural farm economy is steadily moving off-farm into allied industries of Agri-tech services and post-production activities, and becoming increasingly feminized.
    • India’s agricultural workforce will be smaller, younger, and more feminized in the future, which will shape how it is retained in higher productivity jobs of the future.
  • Crop Diversification:
    • Crop diversification can be used as a tool to promote sustainable agriculture, reduction in import dependence and higher incomes for the farmers.
    • Agriculture not only completes the demand for food grains, but it is also fulfilling other development needs. The farming industry is going to diversify itself to produce commercial and horticultural crops such as fruits, vegetables, spices, cashew, areca nut, coconut and flour products such as flowers, orchids, dairy, animal husbandry and products.
    • Biofuel (Energy Independence): Quest for Energy Independence will encourage the diversion of sugarcane for ethanol production, which results in a decrease in the sugar glut in the country.
Presently India consumes about one-third of the global average consumption of energy. We import about 84% of our oil and 56% of our gas for domestic use. In this context, biofuels have become a tool for achieving energy independence.
  • The National Policy on Biofuels in 2018 targets a 5% blending of biodiesel in diesel by 2030. Diversion of land use for biodiesel crops production can be seen taking place in the future. Agro-technologies will be developed toward mechanization and cost reduction to make an impact in this area.

Biodiesel is produced by transesterification of edible and non-edible oils obtained from a wide range of plants. Biodiesel has developed rapidly as an eco-friendly, renewable, alternative source of energy compared to the limited resources of fossil fuels. Ethanol and biodiesel are the two main transport biofuels. Ethanol production primarily involves distilling carbohydrates from sugarcane and beet or distilling starch from food grains such as maize, paddy, wheat, and potatoes through fermentation. First-generation biofuels are produced from different types of vegetable oils such as canola oil, palm oil, soybean oil, and sunflower oil. Second-generation fuels are produced from lignocellulosic biomass which is obtained from energy crops or waste biomass, such as agricultural and forest residue. Third generation biofuels are produced from micro-organisms like algae.

  • Use of Biotechnology:
  • A Quantum leap in biotechnology will produce plants that are more nutritious and resilient and regulate farm health more efficiently.
  • Short-term hybrids produce more in less time and thus use less water. Hybrid seeds with intrinsic properties can provide additional resistance to disease.
  • The use of biotechnology and breeding will be very important in developing eco-friendly and disease resistant, climate-resilient, more nutritious and tastier crop varieties.
  • Plant nutrition and protection will undergo a cultural shift this decade, as farmers begin to use organisms to fix problems, rather than synthesized chemicals.
  • Prudent Use of Land and New Growing Medium:
  • There will be more of vertical and urban farming and there will also be efforts in long term to find new areas for production like barren deserts and seawater.
  • Hydroponic farming, which is a soil-less, water-based farming operation, that may even be done in a tiny space is going to pick up the pace. Instead of employing soil for plant nourishment, crops are supplied with nutrient-rich water, which eliminates much of the baggage associated with soil-based approaches.
  • Precision farming:
  • Precision farming with soil testing-based decisions and automation using artificial intelligence will be focused on precise application inputs in agriculture. Sensors and drones will be used for the precision, quality, and environment cost-effectively.

Precision farming is an approach where inputs are utilised in precise amounts to get increased average yields, compared to traditional cultivation techniques. In India, one major problem is the small field size. More than 58 per cent of operational holdings in the country have a size of less than one hectare (ha).

  • Accurate farming involves collecting data through integrated hardware such as tractors equipped with GPS or sensors. Farmers can then make a specific decision for the field zone in their day-to-day operations.
  • Drone in Agriculture:
  • Aerial farm Management: Around the world drones are completely changing the whole process of cultivation and harvesting. Industry estimates suggest that the use of drones could increase crops yields by 15 to 20 per cent. The government has already flagged off 100 Kisan Drones in different cities to spray pesticides on farms across India.
Kisan Drones are already being put to use to boost the agricultural sector in the country, the use of Kisan Drones will be further promoted for crop assessment, digitization of land records and spraying of insecticides and nutrients. Kisan Drone will usher in a new edge revolution as high-capacity drones will be used to carry vegetables, fruits, fishes to the market directly from the farms.
  • Use Nano-Technology:
  • The agricultural sector is dealing with enormous challenges such as rapid climatic changes, a decrease in soil fertility, macro and micronutrient deficiency, overuse of chemical fertilizers and pesticides, and heavy metal presence in the soil.
  • Nano-materials in agriculture will reduce the wastage in the use of chemicals, minimise nutrient losses in fertilisation and will be used to increase yield through pest and nutrient management. IFFCO has already done successful tests in nano-fertilisers.

Application of Nano-Technology in Agriculture:

  • Nano-pesticides and nano-herbicides
  • Nanomaterials for disease management
  • Nano-fertilizers
  • Nano-technology in seed development
  • Nano-biosensors
  • Digital Agriculture:
  • Use of digital technology to integrate agricultural production from the paddock to the consumer. These technologies can provide the agricultural industry with tools and information to make more informed decisions and improve productivity. Farmers will be behaving more smartly with mobiles in their hands and would be able to be more aware and connected with different stakeholders.
  • Digital resources at farmers’ disposal not only led to the efficient utilization of capacity but also have the scope to improve processes on the field. This approach will thus lead to effective utilization of the available resources and add immense value to the agricultural value chain Government will be making wide use of digital technology for generating awareness among farmers, information sharing, and government schemes using digital technology for direct transfers of money.
  • Niche Marketing:
  • There will be more niche marketers in operations, area, and crop-specific small equipment which will make operations even at small farms easier and more efficient.
Niche marketing is an advertising strategy that focuses on a unique target market. Instead of marketing to everyone who could benefit from a product or service, this strategy focuses exclusively on one group—a niche market—or demographic of potential customers who would most benefit from the offerings.
  • Improved Storage and Supply-Chain Facilities:
  • While not precisely known, India wastes some 20% of its fruits and vegetables and highly perishable/seasonal ones. Supply chains between the farmer and the consumer in India will undergo an existential shift, becoming fully transparent and observable systems for participants. Due to a poor supply chain, with a lack of cold storage and efficient transport.
  • Food wastage will be a less and better use of waste materials in agriculture will be more. The number of warehouses in the private sector will be more and linkages between government and private warehouses will be increasing. This will help in balancing supply with demand and stabilisation of prices of Agri-outputs in the market.
  • Digitisation of Retail outlets:
  • A study estimates that over 90 per cent of Kirana stores across the country will be digitalised by 2025 with modern traceable logistics and a transparent supply chain. Many players have already taken Kirana stores to the doorsteps of consumers like Amazon and Jio Mart.
  • Automation in Agriculture:
  • Modern farming tools and agricultural automation will smooth the production cycle and make it more efficient.
  • The mechanisation of farms is an approach that has provided great benefits to farmers across the world and the same will be true for India.
  • Autonomous and semi-autonomous farm robots will substitute labour intensive human tasks and drudgery in major commercial crop and animal value chains.
  • Organic Farming will Prosper:
  • Organic agriculture will prosper in India and will contribute to feeding 1.6 billion people in the coming decade.
  • To sustain growing demand and supply, agriculture must have sustainable intensity and diversity, giving priority to organic farming. High consumption of high-value food and cash crops, and demand for bio-energy will create a favourable business environment by activating policies for high-value organic agriculture.
  • Gene Editing Boom for Climate Change in Agriculture:
  • There will be gene-edited crops, and it will trigger a much wider variety of crops being grown. Experts anticipate major changes in the industry in the future. Gene editing will provide a greater variety of crops that can be grown by editing out traits hampering widespread production.
  • In the future, gene editing will enable farmers to select specific crop varieties that have features like resistance to different diseases, drought tolerance or more desirable oil content and increasing abiotic stress tolerance in plants, for example, Draught tolerant rice and maize, Salinity tolerant rice.

Gene editing is a method to generate DNA modifications at precise genomic locations. These modifications can result in the knockout or knockdown of one or multiple genes without the permanent insertion of any foreign DNA. Alternatively, genes from within the organism's gene pool or from other organisms can be inserted into precise locations within the genome to knock in a new trait.

  • Insured Farming:
  • Deepened scope of crop insurance and the creation of a social security mechanism dedicated to the farming community will be strengthened with policy level measures that may improve their financial wellbeing in the future. With diverse crop insurance products in the market, the financial brunt of natural disasters on the farmers will be reduced to a great extent.

Farmer centric Policies and Schemes:

  • The government should create a conducive economic environment for capital formation and increase farmers' investment by removal of distortions. Our rich traditional knowledge and advanced technology will make agriculture highly productive, improve the overall socio-economic condition of farmers and attract young people to farming.
  • Therefore, with a determined vision for better policy and better infrastructure for Indian agriculture in the years to come, cascading benefits and ecosystem protection can be achieved in the future.
  • Improved Farmer-Consumer Relationship:
    • Farmers will improve their relationship with global and local consumers, offer enhanced safety & quality, and improve income. As India moves into a future driven by tech-enabled modern retail, each food product will become traceable and its production story- from farm to fork, visible to the consumer.
    • Due to end-to-end transparency, farm to fork connectivity through traceability, certification, and the “online” farmer, the decade will see food become an increasingly personal subject for households and establishments as consumers look for high standards of trust and safety in everything they consume, and producers and retailers provide this using technologically-aided production and supply chains.


  • Robust Demand: A large population and rising urban and rural income is driving the demand. External demand is driving export from the agriculture sector.
  • Attractive Opportunities: Demand for agricultural inputs such as hybrid seeds and fertilizers and allied services like warehousing and cold storage is increasing in India at a fast pace.
  • Policy Support: The government has recently announced a Product linked incentives (PLI) scheme for the food processing sector with an incentive outlay of Rs 10,900 crore (US$ 1,484 million) over a period of six years starting from FY22. The success of PLI is expected to add 1.7 percent to the country's GDP by 2027. The Krishi UDAN 2.0 scheme proposes assistance and incentive for the movement of Agri-produce by air transport. Policy formation on similar lines is going to add confidence to the farmer's community.
  • Competitive Advantage: High proportion of agricultural land, and diverse agro-climatic conditions encourage the cultivation of different crops.

The key driver of exponential growth in coming years: Cost, quality and reliability

  • Labour is becoming costly and inaccessible, and so, is being replaced by technology.
  • Inputs are becoming prohibitively expensive, necessitating more efficient use.
  • Precision technology is becoming cheaper and more powerful
  • The “shared economy” is disrupting expensive outright ownership models for farm tech


  • Increasing population, increasing average income and globalisation effects in India will increase demand for quantity, quality and nutritious food, and variety of food. Therefore, pressure on decreasing available cultivable land to produce more quantity, variety and quality of food will keep on increasing.
  • Although the constraints in agriculture make the productivity and return complex but still a high untapped potential is there in India’s agriculture sector. Efforts are being made to convert all the challenges in agriculture into opportunities and this process is the future of agriculture.
  • While predictions can shed light on the future, we are still not there. A whole new generation of growers, who are not yet born, will be farming mid-century, and much will happen between now and then that we cannot predict. But if the past and present are a clue to the future, Indian growers will continue to seek better ways to produce crops by embracing innovation. Issues such as social-equity, gender-equality, and environmental justice will remain the critical pillars of agricultural and societal progress, and India must make giant leaps in the coming years.

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