Agriculture In Indian Economy

Agriculture still shapes daily life for a huge share of Indians. This article covers its economic role, and the main policies built around it.

MCQ Questions

Indian Economy · Agriculture

173.33 MT

Record kharif foodgrain output, FY 2025-26

Up from 169.4 million tonnes in FY 2024-25

3.0%

Agriculture GVA growth, FY 2025-26 — down from 4.2%

First Advance Estimate

376.55 MT

Total foodgrain production, 2025-26 crop year

Up from 357.73 MT

Cost + 50%

MSP formula: minimum return over production cost

All mandated crops

⇩ Download as image
Indian Economy

Agriculture’s Workforce Share, MSP, and the Green Revolution Need to Know

• Agriculture employs a far larger share of India’s workforce than its share of GDP suggests. This gap is one reason rural incomes lag behind urban incomes.
• The Green Revolution (from the late 1960s) sharply raised foodgrain output. It relied on high-yield seed varieties, irrigation, and fertilizer, concentrated mainly in Punjab, Haryana, and western Uttar Pradesh.
• The government sets a Minimum Support Price (MSP) for key crops each season. MSP guarantees farmers a floor price, meant to protect them from a sudden crash in market prices.
• Most Indian farms are small and fragmented. This limits access to machinery, formal credit, and modern techniques that work better at larger scale.

FCI, Tax Exemption, and Market Reform Struggles Good to Know

• The Food Corporation of India (FCI) procures grain at MSP and manages buffer stocks. It also supplies grain to the Public Distribution System, which sells subsidized food to eligible households.
• Agricultural income is exempt from central income tax under the Constitution, since agriculture is a state subject. This exemption is regularly debated, since it can also shelter non-farm income disguised as farm income.
• Agricultural marketing reform has been a long-running policy struggle. The old APMC (Agricultural Produce Market Committee) mandi system required farmers to sell through regulated markets, which critics say limited competition and kept farmer margins low.
• India is both a major food producer and, at times, a major food importer for specific commodities like edible oils and pulses. Self-sufficiency varies sharply by crop, not uniformly across all agriculture.

Test Yourself

Please wait…

1. Unlike many countries that moved from agriculture to industry to services in order, India’s growth pattern is unusual because which sector grew unusually fast, even before industry fully matured?

The services sector

The mining sector

The defence sector

The fishing sector

 Loading…

 

The 2020 Farm Laws and Growth vs Distress Great to Know

• The 2020 farm laws attempted to loosen APMC’s grip and let farmers sell directly to private buyers outside regulated mandis. They triggered large, sustained farmer protests, mainly from Punjab and Haryana, and were repealed in 2021 — a rare instance of a major Indian economic reform being withdrawn under direct protest pressure.
• Economists distinguish agricultural growth from agricultural distress. Output can rise nationally even while individual farmer incomes stagnate or fall, if prices drop, input costs rise, or gains concentrate in a few crops or regions.
• India’s agricultural credit system includes both formal sources (banks, cooperatives) and informal ones (moneylenders). Farmers who cannot access formal credit often borrow informally at much higher interest rates, deepening rural debt cycles.
• India’s farmers also feature in global sustainability efforts. The World Economic Forum’s 100 Million Farmers platform, launched in 2021, works to shift food and water systems toward net-zero and nature-positive practices worldwide, through regional coalitions rather than direct funding. See IntlRel0089 — World Economic Forum (WEF).

Current Affairs

Latest

• India’s kharif foodgrain output hit a record 173.33 million tonnes for FY 2025-26, up from 169.4 MT the year before, helped by an above-normal southwest monsoon. (Source: DD News)
• Even so, agriculture GVA growth slowed to 3.0% in FY 2025-26, down from 4.2% in FY 2024-25, despite the record output — a reminder that production and value growth don’t always move together. (Source: Business Standard)

4 August 2026

• On 4 August 2026, in Lok Sabha replies, the government detailed MSP support for 22 mandated crops. Total procurement rose from 6,987 lakh tonnes in 2004-14, to 12,819 lakh tonnes in 2014-26. MSP value paid to farmers rose from ₹7.41 lakh crore, to ₹27.80 lakh crore, over the same periods. A new Price Differential Payment component was added from 2024-25, for perishable crops. (Source: PIB)
• The government also clarified PMFBY’s coverage. Crop losses from wild animals, once excluded as preventable, can now be notified as an add-on cover. States bear this add-on’s cost. Inundation cover applies to all notified crops, except localized claims for hydrophilic crops like paddy and sugarcane. (Source: PIB)
• On soil degradation, the government cited 26.09 crore Soil Health Cards issued so far. These guide crop-wise fertilizer recommendations for farmers. Integrated Pest Management runs through 48 Centres, across 28 states and 2 Union Territories. (Source: PIB)
• Two organic-farming schemes have expanded steadily. PKVY has covered 18.93 lakh hectares, benefiting 33.63 lakh farmers, with ₹2,811.36 crore released. MOVCDNER, for the Northeast, has covered 2.36 lakh hectares, benefiting 2.74 lakh farmers, with ₹1,548.62 crore released. (Source: PIB)
• The National Mission on Natural Farming, launched 25 November 2024, has a ₹2,481 crore outlay. In FY 2025-26 alone, it formed 18,893 clusters, covering 10.32 lakh hectares and 20.93 lakh farmers. Farmers get ₹4,000 per acre yearly, for up to one acre, over two years. Over 22.47 lakh farmers have registered for certification; 14.43 lakh are certified. (Source: PIB)
• Under PM-PRANAM, which rewards states for cutting chemical fertilizer use, 5 States/UTs qualified in 2025-26. Dadra and Nagar Haveli, Delhi, Goa, Manipur, and Mizoram cut a combined 0.18 lakh tonnes. Incentive payouts have not yet been disbursed. (Source: PIB)
• On Farmer Producer Organisations, the government confirmed all 10,000 targeted FPOs have been formed, since 2020-21. Over 65 lakh shareholders, mostly small and marginal farmers, have been collectivized. ₹827.81 crore has been released as management cost, plus ₹631.98 crore as matching equity grants. (Source: PIB)
• ICAR has initiated Agricultural Roadmaps for 7 States and Union Territories: Assam, Goa, Maharashtra, Uttarakhand, Tamil Nadu, Andhra Pradesh, and Andaman & Nicobar Islands. These roadmaps align farming plans, with local agro-climatic conditions. (Source: PIB)
• Under “One Nation, One Fertilizer,” all subsidised Urea, DAP, MOP, and NPKS are sold under one “Bharat” brand, since 24 August 2022. Movement is tracked via the Integrated Fertilizer Management System. During Kharif 2026 (April-July), all-India urea availability (177.27 lakh tonnes) comfortably exceeded requirement (122.84 lakh tonnes). (Source: PIB)
• Separately, the government approved the Mission for Cotton Productivity (KAPAS KANTI) on 5 May 2026. It has a ₹5,659.22 crore outlay, over 2026-27 to 2030-31. The mission covers 140 districts, across 14 major cotton-growing states, and plans 50 new cotton testing laboratories. (Source: PIB)
• Also on 4 August, farmer leaders met Union Agriculture Minister Shivraj Singh Chouhan. The All India Kisan Coordination Committee voiced support for ethanol, but wants its benefits reaching farmers directly. (Source: PIB)

28 July 2026

• On 28 July 2026, Parliament reviewed India’s agri-marketing infrastructure. (Source: PIB)
• e-NAM now has 1.89 crore registered farmers, and 2.78 lakh traders. (Source: PIB)
• Under the AMI Scheme, 12,353 storage projects have been sanctioned, adding 369.18 lakh tonnes of capacity. (Source: PIB)
• FPOs have also crossed ₹20,340 crore in cumulative turnover, since the scheme began. (Source: PIB)
• Separately, 5,346 traditional farmer varieties are now registered, under the PPV&FR Act. (Source: PIB)
• The National Gene Fund has honoured farmers too: 45 Community Awards, and 69 Farmer Rewards. (Source: PIB)
• On horticulture, MIDH now runs 61 crop-specific Centres of Excellence, via Indo-Israel and Indo-Dutch cooperation. (Source: PIB)
• The government also confirmed a new Pesticides Management Bill, 2026, is in the works. (Source: PIB)
• It was opened for public comment in January 2026, drawing feedback from farmers and industry. (Source: PIB)

27 July 2026

• On 27 July 2026, Parliament reviewed kharif sowing progress, as of 24 July. (Source: PIB)
• Total area sown reached 787.37 lakh hectares, still down 38.82 lakh hectares from 2025. (Source: PIB)
• Separately, Maharashtra became the first state to qualify, for RKVY’s second installment. (Source: PIB)
• It had used over 75% of its first ₹335 crore tranche, unlocking another ₹335 crore. (Source: PIB)

24 July 2026

• On 24 July 2026, the government detailed AI use across agriculture. (Source: PIB)
• A National Pest Surveillance System now covers 73 crops and 436 pests, used by 10,000-plus field workers. (Source: PIB)
• IMD’s AI-based weather advisories have reached about 5.28 crore farmers. (Source: PIB)
• The BharatVistaar platform has served 3 lakh farmers, answering over 72 lakh queries. (Source: PIB)
• Separately, more than 10.18 crore Digital Farmer IDs have now been created. (Source: PIB)
• On fertilizers, 6 new urea plants added 76.2 lakh tonnes of capacity, this year. (Source: PIB)
• India’s total urea capacity now stands at 269.42 lakh tonnes annually. (Source: PIB)
• DAP prices, meanwhile, stayed capped at ₹1,350 per 50-kg bag, via special government support. (Source: PIB)
• On Natural Farming, its institutional backbone has grown too: 527 KVKs, 76 Agricultural Universities, and 194 local training institutes. (Source: PIB)
• So far, 33,257 Krishi Sakhis have been trained, to handhold farmers on natural-farming practices. (Source: PIB)

29 June 2026

• On 29 June 2026, PIB profiled Kisan Sarathi, India’s largest integrated digital agro-advisory platform, launched in 2021. It connects farmers with 730+ Krishi Vigyan Kendras, 100+ ICAR institutes, and 65+ agricultural universities. (Source: PIB)
• As of 25 June 2026, the platform reached 36 States/UTs, across 768 districts and 6.63 lakh villages. It had 2.95 crore registered farmers, including 56.16 lakh women. (Source: PIB)
• Kisan Sarathi has released 21,900 advisories so far, covering 351 commodities. It has also handled 19.21 lakh farmer queries to date. (Source: PIB)
• The platform also hosts scheme information: 610 schemes are listed, of which 102 are central government schemes, including PM-KISAN status tracking. (Source: PIB)

26 June 2026

• As of 26 June 2026, early kharif sowing data showed a slower start. Total area sown reached 182.72 lakh hectares, down from 236.46 lakh hectares on the same date in 2025. (Source: PIB)
• The steepest early declines were in cotton (down 15.70 lakh hectares) and soybean (down 13.05 lakh hectares). Sowing typically continues through July, so this was a mid-season snapshot, not a final result. (Source: PIB)

24 June 2026

• On 24 June 2026, APEDA concluded the first cohort of its BHARATI startup programme. That’s short for Bharat’s Hub for Agritech, Resilience, Advancement and Incubation for Export Innovation. (Source: PIB)
• The cohort had 100 startups, from 22 states and 2 union territories. They were picked from over 700 applications. (Source: PIB)
• Participants completed a 120-hour export-focused course. Topics included market access, regulatory compliance, packaging, and investor readiness. (Source: PIB)
• APEDA sent the top eight BHARATI startups to Gulfood 2026, in Dubai. They held more than 100 B2B meetings with international buyers. (Source: PIB)
• Within just three months, BHARATI startups had already shipped real exports. These include GI-tagged Jardalu mangoes to Dubai, and India’s first sea shipment of millet-based functional foods, to Auckland, New Zealand. (Source: PIB)
• BHARATI feeds into APEDA’s wider export goal too: USD 50 billion in scheduled agri-food exports, by 2030. (Source: PIB)

23 June 2026

• On 23 June 2026, Agriculture Minister Shivraj Singh Chouhan reviewed Kharif preparedness, amid El Nino concerns. Monsoon rainfall was running about 43% below normal at the time. (Source: PIB)
• The Centre identified 315 potentially affected districts. Of these, 111 were high priority, 76 medium priority, and 128 low priority, based on irrigation coverage. (Source: PIB)
• States were told to prioritise short-duration, low-water crops. Pulses, millets, and oilseeds got special emphasis, alongside crop diversification and intercropping. (Source: PIB)
• An “El Nino Monitoring Cell” and a “Crop Weather Watch Group” were set up in New Delhi, to track conditions. PMFBY, KCC, and PM-KISAN were named as farmers’ three key financial safety nets. (Source: PIB)

22 June 2026

• On 22 June 2026, the government reported Kharif area coverage as on 19 June. Total area sown reached 119.90 lakh hectares, up from 117.95 lakh hectares on the same date in 2025. (Source: PIB)
• Rice led the gains, with 12.36 lakh hectares sown against 8.09 lakh hectares a year earlier. Pulses and Shri Anna coarse cereals also grew, while oilseed sowing lagged slightly behind last year’s pace. (Source: PIB)