Agricultural Reforms and Government Policy

Beyond the marketing and finance reforms discussed above, Indian agricultural policy since independence has included a wider set of reforms aimed at improving productivity, equity, and farmer welfare.

Land reforms: Soon after independence, the government undertook land reforms including (a) abolition of intermediaries such as the zamindari system, so that cultivators held land directly from the state; (b) tenancy reforms to regulate rent and give tenants greater security; (c) imposition of land ceilings on the maximum land an individual/family could hold, with surplus land redistributed to the landless; and (d) consolidation of scattered land holdings into more manageable, contiguous plots. Implementation varied considerably across states and remained incomplete in several respects.

Price and procurement policy: The Commission for Agricultural Costs and Prices (CACP) recommends Minimum Support Prices for major crops each season, and government agencies procure foodgrains at these prices, mainly to protect farmers' incomes and build public foodgrain stocks for distribution through the public distribution system.

Input subsidies: The government subsidises key inputs -- fertiliser, electricity/power for irrigation pump-sets, and canal water charges -- to keep the cost of cultivation affordable, though the fiscal burden and efficiency of these subsidies remain a subject of ongoing policy debate.

Crop insurance: The Pradhan Mantri Fasal Bima Yojana (PMFBY), launched in 2016, provides farmers insurance cover against crop loss due to natural calamities, pests, and diseases, at a low, uniform premium rate. …