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Lecture 27
National Agricultural policy

1. Agriculture is a way of life, a tradition, which, for centuries, has shaped thethought, the

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outlook, the culture and the economic life of the people of India. Agriculture, therefore, is and
will continue to be central to all strategies for planned socio-economic development of the
country. Rapid growth of agriculture is essential not only to achieve self-reliance at national

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level but also for household food security and to bring about equity in distribution of income and
wealth resulting in rapid reduction in poverty levels.

2. Indian agriculture has, since Independence, made rapid strides. In taking the annual foodgrains
production from 51 million tonnes of the early fifties to 206 million tonnes at the turn of the

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century, it has contributed significantly in achieving self sufficiency in food and in avoiding food
shortages in our country. The pattern of growth of agriculture has, however, brought in its wake,
uneven development, across regions and crops as also across different sections of farming
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community and is characterized by low levels of productivity and degradation of natural
resources in some areas. Capital inadequacy, lack of infrastructural support and demand side
constraints such as controls on movement, storage and sale of agricultural products, etc., have
continued to affect the economic viability of agriculture sector. Consequently, the growth of
agriculture has also tended to slacken during the nineties.
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3. Agriculture has also become a relatively unrewarding profession due to generally

unfavourable price regime and low value addition, causing abandoning of farming and increasing
migration from rural areas. The situation is likely to be exacerbated further in the wake of
integration of agricultural trade in the global system, unless immediate corrective measures are
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taken.

4. Over 200 million Indian farmers and farm workers have been the backbone of India's
agriculture. Despite having achieved national food security the well being of the farming
community continues to be a matter of grave concern for the planners and policy makers in the
country. The establishment of an agrarian economy which ensures food and nutrition to India's
billion people, raw materials for its expanding industrial base and surpluses for exports, and a

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fair and equitable reward system for the farming community for the services they provide to the
society, will be the mainstay of reforms in the agriculture sector.

5. The National Policy on Agriculture seeks to actualise the vast untapped growth potential of

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Indian agriculture, strengthen rural infrastructure to support faster agricultural development,
promote value addition, accelerate the growth of agro business, create employment in rural areas,
secure a fair standard of living for the farmers and agricultural workers and their families,
discourage migration to urban areas and face the challenges arising out of economic

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liberalization and globalisation. Over the next two decades, it aims to attain:

· A growth rate in excess of 4 per cent per annum in the agriculture sector

· Growth that is based on efficient use of resources and conserves our soil, water and bio-
diversity;

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· Growth with equity, i.e., growth which is widespread across regions and farmers;
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· Growth that is demand driven and caters to domestic markets and maximises benefits from
exports of agricultural products in the face of the challenges arising from economic liberalization
and globalisation;

· Growth that is sustainable technologically, environmentally and economically.

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Sustainable Agriculture

6. The policy will seek to promote technically sound, economically viable, environmentally non-
degrading, and socially acceptable use of country's natural resources - land, water and genetic
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endowment to promote sustainable development of agriculture. Measures will be taken to

contain biotic pressures on land and to control indiscriminate diversion of agricultural lands for
non-agricultural purposes. The unutilized wastelands will be put to use for agriculture and
afforestation. Particular attention will be given for increasing cropping intensity through
multiple-cropping and inter-cropping.

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7. The Government accords abiding importance to improving the quality of the country's land
and soil resources. Reclamation of degraded and fallow lands as well as problem soils will be
given high priority to optimize their productive use. Special emphasis will be laid on conserving
soils and enriching their fertility. Management of land resources on watershed basis will receive

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special attention. Areas of shifting cultivation will also receive particular attention for their
sustainable development. Integrated and holistic development of rainfed areas will be promoted
by conservation of rain water by vegetative measures on watershed basis and augmentation of
biomass production through agro and farm forestry with the involvement of the watershed

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community. All spatial components of a watershed, i.e. arable land, non-arable and drainage
lines will be treated as one geo-hydrological entity. Management of grazing land will receive
greater attention for augmenting availability of animal feed and fodder. A long-term perspective
plan for sustainable rainfed agriculture through watershed approach will be vigorously pursued

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for development of two thirds of India's cropped area which is dependent on rains.

8. Rational utilization and conservation of the country's abundant water resources will be
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promoted. Conjunctive use of surface and ground water will receive highest priority. Special
attention will be focused on water quality and the problem of receding ground-water levels in
certain areas as a result of over-exploitation of underground aquifers. Proper on-farm
management of water resources for the optimum use of irrigation potential will be promoted. Use
of in situ moisture management techniques such as mulching and use of micro overhead
pressured irrigation systems like drip and sprinkler and green house technology will be
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encouraged for greater water use efficiency and improving productivity, particularly of
horticultural crops. Emphasis will be placed on promotion of water harvesting structures and
suitable water conveyance systems in the hilly and high rainfall areas for rectification of regional
imbalances. Participatory community irrigation management will be encouraged.
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9. Erosion and narrowing of the base of India's plant and animal genetic resources in the last few
decades has been affecting the food security of the country. Survey and evaluation of genetic
resources and safe conservation of both indigenous and exogenously introduced genetic
variability in crop plants, animals and their wild relatives will receive particular attention. The
use of bio-technologies will be promoted for evolving plants which consume less water, are
drought resistant, pest resistant, contain more nutrition, give higher yields and are

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environmentally safe. Conservation of bio-resources through their ex situ preservation in Gene

Banks, as also in situ conservation in their natural habitats through bio-diversity parks, etc., will
receive a high priority to prevent their extinction. Specific measures will also be taken to
conserve indigenous breeds facing extinction. There will be a time bound programme to list,

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catalogue and classify country's vast agro bio-diversity.

10. Sensitization of the farming community with the environmental concerns will receive high
priority. Balanced and conjunctive use of bio-mass, organic and inorganic fertilizers and

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controlled use of agro chemicals through integrated nutrients and pest management (INM &
IPM) will be promoted to achieve the sustainable increases in agricultural production. A nation-
wide programme for utilization of rural and urban garbage, farm residues and organic waste for
organic matter repletion and pollution control will be worked out.

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11. Agro forestry and social forestry are prime requisites for maintenance of ecological balance
and augmentation of bio-mass production in the agricultural systems. Agro-forestry will receive
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a major thrust for efficient nutrient cycling, nitrogen fixation, organic matter addition and for
improving drainage. Farmers will be encouraged to take up farm/agro-forestry for higher income
generation by evolving technology, extension and credit support packages and removing
constraints to development of agro and farm forestry. Involvement of farmers and landless
labourers will be sought in the development of pastures/forestry programmes on public
wastelands by giving financial incentives and entitlements to the usufructs of trees and pastures.
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12. The history and traditional knowledge of agriculture, particularly of tribal communities,
relating to organic farming and preservation and processing of food for nutritional and medicinal
purposes is one of the oldest in the world. Concerted efforts will be made to pool, distill and
evaluate traditional practices, knowledge and wisdom and to harness them for sustainable
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agricultural growth.

Food and Nutritional Security

13. Special efforts will be made to raise the productivity and production of crops to meet the
increasing demand for food generated by unabated demographic pressures and raw materials for
expanding agro-based industries. A regionally differentiated strategy will be pursued, taking into

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account the agronomic, climatic and environmental conditions to realize the full growth potential
of every region. Special attention will be given to development of new crop varieties, particularly
of food crops, with higher nutritional value through adoption of bio-technology particularly,
genetic modification, while addressing bio-safety concerns.

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14. A major thrust will be given to development of rainfed and irrigated horticulture, floriculture,
roots and tubers, plantation crops, aromatic and medicinal plants, bee-keeping and sericulture,
for augmenting food supply, exports and generating employment in the rural areas. Availability

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of hybrid seeds and disease-free planting materials of improved varieties, supported by network
of regional nurseries, tissue culture laboratories, seed farms will be promoted to support
systematic development of horticulture having emphasis on increased production, post-harvest
management, precision farming, bio-control of pests and quality regulation mechanism and
exports.

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15. Animal husbandry and fisheries also generate wealth and employment in the agriculture
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sector. Development of animal husbandry, poultry, dairying and aqua-culture will receive a high
priority in the efforts for diversifying agriculture, increasing animal protein availability in the
food basket and for generating exportable surpluses. A national livestock breeding strategy will
be evolved to meet the requirements of milk, meat, egg and livestock products and to enhance
the role of draught animals as a source of energy for farming operations and transport. Major
thrust will be on genetic upgradation of indigenous/native cattle and buffaloes using proven
semen and high quality pedigreed bulls and by expanding artificial insemination network to
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provide services at the farmer's doorstep.

16. Generation and dissemination of appropriate technologies in the field of animal production as
also health care to enhance production and productivity levels will be given greater attention.
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Cultivation of fodder crops and fodder trees will be encouraged to meet the feed and fodder
requirements and to improve animal nutrition and welfare. Priority attention will also be given to
improve the processing, marketing and transport facilities, with emphasis on modernization of
abattoirs, carcass utilization and value addition thereon. Since animal disease eradication and
quarantine is critical to exports, animal health system will be strengthened and disease free zones
created. The involvement of cooperatives and the private sector will be encouraged for

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development of animal husbandry, poultry and dairy. Incentives for livestock and fisheries
production activities will be brought at par with incentives for crop production.

17. An integrated approach to marine and inland fisheries, designed to promote sustainable

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aquaculture practices, will be adopted. Biotechnological application in the field of genetics and
breeding, harmonal applications immunology and disease control will receive particular attention
for increased aquaculture production. Development of sustainable technologies for fin and shell
fish culture as also pearl-culture, their yield optimization, harvest and post-harvest operations,

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mechanization of fishing boats, strengthening of infrastructure for production of fish seed,
berthing and landing facilities for fishing vessels and development of marketing infrastructure
will be accorded high priority. Deep sea fishing industry will be developed to take advantage of
the vast potential of country's exclusive economic zone.

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Generation and Transfer of Technology

18. A very high priority will be accorded to evolving new location-specific and economically
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viable improved varieties of agricultural and horticultural crops, livestock species and
aquaculture as also conservation and judicious use of germplasm and other biodiversity
resources. The regionalization of agricultural research, based on identified agro-climatic zones,
will be accorded high priority. Application of frontier sciences like bio-technology, remote
sensing technologies, pre and post-harvest technologies, energy saving technologies, technology
for environmental protection through national research system as well as proprietary research
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will be encouraged. The endeavour will be to build a well organized, efficient and result-oriented
agriculture research and education system to introduce technological change in Indian
agriculture. Upgradation of agricultural education and its orientation towards uniformity in
education standards, women empowerment, user-orientation, vocationalization and promotion of
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excellence will be the hallmark of the new policy..

19. The research and extension linkages will be strengthened to improve quality and
effectiveness of research and extension system. The extension system will be broad based and
revitalized. Innovative and decentralized institutional changes will be introduced to make the
extension system farmer-responsible and farmer-accountable. Role of Krishi Vigyan Kendras

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(KVKs), Non-Governmental Organizations (NGOs), Farmers Organizations, Cooperatives,

corporate sector and para-technicians in agricultural extension will be encouraged for organizing
demand driven production systems. Development of human resources through capacity building
and skill upgradation of public extension functionaries and other extension functionaries will be

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accorded a high priority. The Government will endeavour to move towards a regime of financial
sustainability of extension services through affecting in a phased manner, a more realistic cost
recovery of extension services and inputs, while simultaneously safeguarding the interests of the
poor and the vulnerable groups.

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20. Mainstreaming gender concerns in agriculture will receive particular attention. Appropriate
structural, functional and institutional measures will be initiated to empower women and build
their capabilities and improve their access to inputs, technology and other farming resources.

Inputs Management

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21. Adequate and timely supply of quality inputs such as seeds, fertilizers, plant protection
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chemicals, bio-pesticides, agricultural machinery and credit at reasonable rates to farmers will be
the endeavour of the Government. Soil testing and quality testing of fertilisers and seeds will be
ensured and supply of spurious inputs will be checked. Balanced and optimum use of fertilizers
will be promoted together with use of organic manures & bio-fertilizers to optimize the
efficiency of nutrient use.
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22. Development, production and distribution of improved varieties of seeds and planting
materials and strengthening and expansion of seed and plant certification system with private
sector participation will receive a high priority. A National Seed Grid will be established to
ensure supply of seeds especially to areas affected by natural calamities. The National Seeds
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Corporation (NSC) and State Farms Corporation of India (SFCI) will be restructured for efficient
utilization of investment and manpower.

23. Protection to plant varieties through a sui generis legislation, will be granted to encourage
research and breeding of new varieties particularly in the private sector in line with India's
obligations under TRIPS Agreement. The farmers will, however, be allowed their traditional
rights to save, use, exchange, share and sell their farm saved seeds except as branded seeds of

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protected varieties for commercial purpose. The interests of the researchers will also be
safeguarded in carrying out research on proprietary varieties to develop new varieties.

24. Integrated pest management and use of biotic agents in order to minimize the indiscriminate

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and injudicious use of chemical pesticides will be the cardinal principle covering plant
protection. Selective and eco-friendly farm mechanization through appropriate technology will
be promoted, with special reference to rainfed farming to reduce arduous work and to make
agriculture efficient and competitive as also to increase crop productivity.

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Incentives for Agriculture

25. The Government will endeavour to create a favourable economic environment for increasing
capital formation and farmer's own investments by removal of distortions in the incentive regime

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for agriculture, improving the terms of trade with manufacturing sectors and bringing about
external and domestic market reforms, backed by rationalization of domestic tax structure. It will
seek to bestow on the agriculture sector in as many respects as possible benefits similar to those
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obtaining in the manufacturing sector, such as easy availability of credit and other inputs, and
infrastructure facilities for development of agri-business industries and development of effective
delivery systems and freeing movement of agro produce.

26. Consequent upon dismantling of Quantitative Restrictions on imports as per WTO

Agreement on Agriculture, Commodity-wise strategies and arrangements for protecting the
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grower from adverse impact of undue price fluctuations in world markets and for promoting
exports will be formulated. Apart from price competition, other aspects of marketing such as
quality, choice, health and bio-safety will be promoted. Exports of horticultural produce and
marine products will receive particular emphasis. A two-fold long term strategy of
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diversification of agricultural produce and value addition enabling the production system to
respond to external environment and creating export demand for the commodities produced in
the country will be evolved with a view to providing the farmers incremental income from export
earnings. A favourable economic environment and supportive public management system will be
created for promotion of agricultural exports. Quarantine, both of exports and imports, will be

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given particular attention so that Indian agriculture is protected from the ingress of exotic pests
and diseases.

27. In order to protect the interest of farmers in context of removal of Quantitative Restrictions,

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continuous monitoring of international prices will be undertaken and appropriate tariffs
protection will be provided. Import duties on manufactured commodities used in agriculture will
be rationalized. The domestic agricultural market will be liberalized and all controls and
regulations hindering increase in farmers' income will be reviewed and abolished to ensure that

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agriculturists receive prices commensurate with their efforts, investment. Restrictions on the
movement of agricultural commodities throughout the country will be progressively dismantled.

28. The structure of taxes on foodgrains and other commercial crops will be reviewed and
rationalized. Similarly, the excise duty on materials such as farm machinery and implements,

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fertilizers, etc., used as inputs in agricultural production, post harvest storage and processing will
be reviewed. Appropriate measures will be adopted to ensure that agriculturists by and large
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remain outside the regulatory and tax collection systems. Farmers will be exempted from
payment of capital gains tax on compulsory acquisition of agricultural land.

Investments in Agriculture

29. The Agriculture sector has been starved of capital. There has been a decline in the public
sector investment in the agriculture sector. Public investment for narrowing regional imbalances,
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accelerating development of supportive infrastructure for agriculture and rural development

particularly rural connectivity will be stepped up. A time-bound strategy for rationalisation and
transparent pricing of inputs will be formulated to encourage judicious input use and to generate
resources for agriculture. Input subsidy reforms will be pursued as a combination of price and
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institutional reforms to cut down costs of these inputs for agriculture. Resource allocation regime
will be reviewed with a view to rechannelizing the available resources from support measures
towards asset formation in rural sector.

30. A conducive climate will be created through a favourable price and trade regime to promote
farmers' own investments as also investments by industries producing inputs for agriculture and
agro based industries. Private sector investments in agriculture will also be encouraged more

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particularly in areas like agricultural research, human resource development, post-harvest

management and marketing.

31. Rural electrification will be given a high priority as a prime mover for agricultural

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development. The quality and availability of electricity supply will be improved and the demand
of the agriculture sector will be met adequately in a reliable and cost effective manner. The use
of new and renewable sources of energy for irrigation and other agricultural purposes will also
be encouraged.

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32. Bridging the gap between irrigation potential created and utilized, completion of all on-going
projects, restoration and modernization of irrigation infrastructure including drainage, evolving
and implementing an integrated plan of augmentation and management of national water
resources will receive special attention for augmenting the availability and use of irrigation
water.

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33. Emphasis will be laid on development of marketing infrastructure and techniques of
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preservation, storage and transportation with a view to reducing post-harvest losses and ensuring
a better return to the grower. The weekly periodic markets under the direct control of panchayat
raj institutions will be upgraded and strengthened. Direct marketing and pledge financing will be
promoted. Producers markets on the lines of Ryatu Bazars will be encouraged through out the
width and the breadth of the country. Storage facilities for different kinds of agricultural products
will be created in the production areas or nearby places particularly in the rural areas so that the
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farmers can transport their produce to these places immediately after harvest in shortest possible
time. The establishment of cold chains, provision of pre cooling facilities to farmers as a service
and cold storage in the terminal markets and improving the retail marketing arrangements in
urban areas will be given priority. Upgradation and dissemination of market intelligence will
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receive particular attention.

34. Setting up of agro-processing units in the producing areas to reduce wastage, especially of
horticultural produce, increased value addition and creation of off-farm employment in rural
areas will be encouraged. Collaboration between the producer cooperatives and the corporate
sector will be encouraged to promote agro-processing industry. An inter-active coupling between

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technology, economy, environment and society will be promoted for speedy development of
food and agro-processing industries and build up a substantial base for production of value added
agro-products for domestic and export markets with a strong emphasis on food safety and
quality. The Small Farmers Agro Business Consortium (SFAC) will be energized to cater to the

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needs of farmer entrepreneurs and promote public and private investments in agri-business.

Institutional Structure

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35. Indian agriculture is characterized by pre-dominance of small and marginal farmers.
Institutional reforms will be so pursued as to channelize their energies for achieving greater
productivity and production. The approach to rural development and land reforms will focus on
the following areas:

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· Consolidation of holdings all over the country on the pattern of north western States.

· Redistribution of ceiling surplus lands and waste lands among the landless farmers,
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unemployed youth with initial start up capital;

· Tenancy reforms to recognize the rights of the tenants and share croppers;

· Development of lease markets for increasing the size of the holdings by making legal
provisions for giving private lands on lease for cultivation and agri business;
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· Updating and improvement of land records, computerization and issue of land pass-books to the
farmers; and

· Recognition of women's rights in land.

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36. The rural poor will be increasingly involved in the implementation of land reforms with the
help of Panchayati Raj Institutions, Voluntary Groups, Social Activists and Community Leaders.

37. Private sector participation will be promoted through contract farming and land leasing
arrangements to allow accelerated technology transfer, capital inflow and assured markets for
crop production, especially of oilseeds, cotton and horticultural crops.

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38. Progressive institutionalization of rural and farm credit will be continued for providing
timely and adequate credit to farmers. The rural credit institutions will be geared to promote
savings, investments and risk management. Particular attention will be paid to removal of
distortions in the priority sector lending by Commercial Banks for agriculture and rural sectors.

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Special measures will be taken for revamping of cooperatives to remove the institutional and
financial weaknesses and evolving simplified procedure for sanction and disbursement of
agriculture credit. The endeavour will be to ensure distribution equity in the disbursement of
credit. Micro-credit will be promoted as an effective tool for alleviating poverty. Self Help

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Group - Bank linkage system, suited to Indian rural sector, will be developed as a supplementary
mechanism for bringing the rural poor into the formal banking system, thereby improving banks
outreach and the credit flows to the poor in an effective and sustainable manner.

39. The basic support to agriculture has been provided by the cooperative sector assiduously

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built over the years. The Government will provide active support for the promotion of
cooperative-form of enterprise and ensure greater autonomy and operational freedom to them to
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improve their functioning. The thrust will be on:

· Structural reforms for promoting greater efficiency and viability by freeing them from
excessive bureaucratic control and political interference;

· Creation of infrastructure and human resource development;

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· Improvement in financial viability and organizational sustainability of cooperatives;

· Democratisation of management and increased professionalism in their operations; and

· Creating a viable inter-face with other grass-root Organizations.

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40. The Legislative and regulatory framework will be appropriately amended and strengthened to
achieve these objectives.

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Risk management

41. Despite technological and economic advancements, the condition of farmers continues to be
unstable due to natural calamities and price fluctuations. National Agriculture Insurance Scheme

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covering all farmers and all crops throughout the country with built in provisions for insulating
farmers from financial distress caused by natural disasters and making agriculture financially
viable will be made more farmer specific and effective. Endeavour will be made to provide a
package insurance policy for the farmers, right from sowing of the crops to post-harvest

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operations, including market fluctuations in the prices of agricultural produce.

42. In order to reduce risk in agriculture and impart greater resilience to Indian agriculture
against droughts and floods, efforts will be made for achieving greater flood proofing of flood
prone agriculture and drought proofing of rainfed agriculture for protecting the farmers from

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vagaries of nature. For this purpose, contingency agriculture planning, development of drought
and flood resistant crop varieties, watershed development programmes, drought prone areas and
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desert development programmes and rural infrastructure development programmes will receive
particular attention.

43. The Central Government will continue to discharge its responsibility to ensure remunerative
prices for agricultural produce through announcement of Minimum Support Prices policy for
major agricultural commodities. The food, nutrition and other domestic and exports requirements
of the country will be kept in view while determining the support prices of different
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commodities. The price structure and trade mechanism will be continuously reviewed to ensure a
favourable economic environment for the agriculture sector and to bring about an equitable
balance between the rural and the urban incomes. The methodology used by the Commission on
Agricultural Costs & Prices (CACP) in arriving at estimates of costs of production will be
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periodically reviewed. The price structure of both inputs and outputs will be monitored to ensure
higher returns to the farmers and bring about cost effectiveness throughout the economy.
Domestic market prices will be closely monitored to prevent distress sales by the farmers. Public
and cooperative agencies undertaking marketing operations will be strengthened.

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44. The Government will enlarge the coverage of futures markets to minimize the wide
fluctuations in commodity prices as also for hedging their risks. The endeavour will be to cover
all important agricultural products under futures trading in course of time.

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Management Reforms

45. Effective implementation of policy initiatives will call for comprehensive reforms in the
management of agriculture by the Central and the State Governments. The Central Government

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will supplement/complement the State Governments' efforts through regionally differentiated
Work Plans, comprising crop/area/target group specific interventions, formulated in an inter-
active mode and implemented in a spirit of partnership with the States. The Central Government
will move away from schematic approach to Macro-Management mode and assume a role of
advocacy, articulation and facilitation to help the States in their efforts towards achieving

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accelerated agricultural development.

46. The Government will focus on quality aspects at all stages of farm operations from sowing to
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primary processing. The quality of inputs and other support services to farmers will be improved.
Quality consciousness amongst farmers and agro processors will be created. Grading and
standardization of agricultural products will be promoted for export enhancement. Application of
science and technology in agriculture will be promoted through a regular system of interface
between S&T institutions and the users/potential users, to make the sector globally competitive.
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47. The database for the agriculture sector will be strengthened to ensure greater reliability of
estimates and forecasting which will help in the process of planning and policy making. Efforts
will be made to significantly improve and harness latest remote sensing and information
technology to capture data, collate it, add value and disseminate it to appropriate destinations for
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managing the risk and in accelerating the growth process. The objective will be to engage in a
meaningful continuous dialogue with the external environment in the changing scenario and to
have on-line and real time system of 'Agriculture on line' capacity to analyze the signals
emanating from the farms and the markets for the benefit of the farmers.

48. The Government of India trust that this Statement of National Agriculture Policy will receive
the fullest support of all sections of the people and lead to sustainable development of

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agriculture, create gainful employment on a self sustaining basis in rural areas, raise standards of
living for the farming communities, preserve environment and serve as a vehicle for building a
resurgent national economy.

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Source: Ministry of Agriculture, Department of Agriculture & Co-operation, GOI

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