Agriculture: A Season of Scarcity, Ripe for Reform
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500+ questions on Economy with explanations
📌 Summary:
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India's agricultural sector faces structural distortions from decades of input subsidies (fertiliser, power, water) that have encouraged overuse, depleted groundwater, and degraded soil health
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MSP regime, while protecting farmer incomes, creates market distortions — procurement concentrated in rice and wheat has led to neglect of pulses, oilseeds, and millets critical for nutritional security
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Fertiliser subsidy (₹1.75 lakh crore annually) is fiscally unsustainable; bulk of benefits captured by large landholders, not marginal farmers
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Free/subsidised power for agriculture drives wasteful groundwater extraction — Punjab and Haryana water tables falling at alarming rates (1 metre/year in some areas)
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Reform path proposed: (a) direct benefit transfer (DBT) for input subsidies instead of price subsidies; (b) expand MSP to include more crops; (c) shift procurement from FCI-led to decentralised cooperative models; (d) agri-climate zonation to align cropping patterns with resource endowments
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Politically difficult reforms require building farmer consent through transparent communication of long-term trade-offs
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PM-KISAN provides floor income support but does not address structural supply-side distortions
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