PrintFriendlyRecently, a significant gathering of farmers took place in Bhagalpur, during which Prime Minister Narendra Modi released the 19th instalment for farmers under the ‘Pradhan Mantri Kisan Samman Nidhi’. This scheme has marked an exceptional milestone in terms of delivery. The government has transferred over Rs 3.46 lakh crore directly to the bank account, benefiting approximately 9.5 crore farmers. If the average family size is 5, this scheme benefits about 50 crore people. After the free ration scheme, this is the second largest government scheme, which has impacted on such a vast scale. However, it is equally crucial to engage in a discourse regarding the transformations within the agriculture sector over the past decade under the stewardship of Prime Minister Modi. In what ways has the life of farmers evolved over time? What progress has been achieved in the agricultural sector in Modi’s decade?
In reviewing the agricultural reforms carried out by the PM Modi government, it is reasonable to refer to the Swaminathan Commission report as a foundational parameter, given that the agricultural policy under the current government appears to be significantly influenced by its recommendations. Over the past decade, a range of policies, including the ‘Pradhan Mantri Kisan Samman Nidhi’, have been introduced to support farmers, aligning closely with the suggestions put forth by the Swaminathan Commission. While the recommendations of the Swaminathan Commission encompassed several significant aspects, the most weighed point was the proposal to set the Minimum Support Price (MSP) at 50% above the cost of production. Even on this, the Modi government is the first to ensure MSP for 22 crops, which are 50% above the cost of production. Notably, the minimum support price for paddy saw a significant increase of 75% in the last 10 years, while wheat experienced a rise of approximately 63%. The rise has been particularly remarkable in certain crops. The minimum support price for Ragi has risen by 186%, for Niger seed by 149%, and notably for Sesame by 270%.
Affordable Credit and Comprehensive Crop Insurance
The Swaminathan Commission highlighted the importance of accessible credit and extensive crop insurance programs for farmers to mitigate risks. The Commission proposed an expansion of credit facilities for farmers, enabling them to transition from traditional farming to cash crops and encouraging the adoption of innovative farming practices. It was recommended because rural India perceives the bank loan process as a complicated and excessive documentation means of borrowing, leading them to rely more heavily on informal lenders (Sahukar). However, borrowing shaukars attracts heavy interest rates and can result in various forms of exploitation. In the case of poor cultivation, farmers suffer pathetically, forcing them to commit suicide. Agriculture is inherently unpredictable, influenced by climatic conditions, natural disasters, and external factors. A single crop failure can push farmers into a cycle of debt that is difficult to break. To address this, the Swaminathan Aayog recommended an effective insurance program to protect agricultural yields and ensure compensation for unexpected losses.
To tackle these critical challenges, the Modi government introduced key solutions by expanding the Kisan Credit Card (KCC) scheme and launching the Pradhan Mantri Fasal Bima Yojana (PMFBY). The KCC scheme has been impactful in addressing farmers’ financial needs, providing them with timely credit and reducing their dependency on informal lenders. Under this scheme, the limit of agricultural loans has been increased from ₹ 3 lakh to ₹ 5 lakh. Apart from this, banks can now provide collateral-free loans up to ₹ 1.60 lakh. Under the Modified Interest Subsidy Scheme (MISS), short-term agricultural loans are made available to farmers at an interest rate of 7%. If farmers repay the loan on time, they get an additional 3% discount, which reduces their effective interest rate to 4%. This is a significant relief measure for farmers, allowing them to quickly get capital at a lower interest rate. The impact of this scheme can be clearly seen in the figures. As of December 31, 2024, claims worth ₹1,08,336.78 crore were settled under this scheme, benefiting about 5.9 crore farmers. By March 2024, 7.75 crore KCC accounts were active in the country, with a total agricultural loan outstanding of ₹9.81 lakh crore. Another important change is that the share of agricultural loans given to small and marginal farmers increased from 57% in 2014-15 to 76% in 2023-24. This shows that small farmers directly benefit from the KCC expansion, making them economically more empowered and self-reliant.
The Swaminathan Commission emphasized the need for a robust crop insurance scheme to shield farmers from natural disasters and mitigate agricultural risks. In response, the Modi government introduced the PMFBY in 2016. Today, the scheme is implemented across 22 states and over 500 districts, covering more than 40 crops and providing farmers with critical financial protection against unforeseen losses. In this scheme, farmers get insurance coverage at very low premium rates—2% for Kharif crops, 1.5% for Rabi crops, and 5% for commercial and horticultural crops. The rest of the premium amount is borne by the central and state governments together, reducing farmers’ burden. The policy has also covered post-harvest losses. If a crop remains cut and lying in the field for 14 days after harvesting, it also gets insurance protection. Earlier, this scheme was only for loanee farmers, but now it has also been made voluntary for non-loanee farmers. It resulted in a massive participation of non-loanee farmers, which increased to 55% in 2023-24, which shows its increasing popularity. So far, claims worth ₹1.70 lakh crore have been paid under this scheme. Due to such a large-scale coverage and large participation of farmers, PMFBY has become the largest crop insurance scheme in the world today.
Expanding Agricultural Infrastructure: Digitalization and Modernization
The Swaminathan Commission advocated enhancing agricultural infrastructure as a crucial element of agricultural reforms. The agricultural sector in India has persistently faced obstacles, including access to market routes, inadequate storage facilities, and limited digital connectivity. Following independence, the emphasis shifted to boosting agricultural output rather than making real attempts to modernize it. However, significant developments have taken place in this direction during the tenure of the Modi government.
To ensure the digitalization of the Agri-market, the e-NAM platform was launched, which connected agricultural mandis across the country to a single digital network. It is an online trading platform that provides transparent and convenient marketing to farmers, traders and buyers. Its most significant advantage is that farmers are getting better prices for their crops. By 2024, 1,400 mandis (from 23 states and 4 union territories) have been connected to this platform. So far, 1.78 crore farmers, 2.62 lakh traders and more than 4,250 Farmer Producer Organizations (FPOs) have registered on this platform. Agricultural trade worth ₹3.79 lakh crore has been done through this platform. Recently, the government launched the ‘ Digital Agriculture Mission ‘ to make Indian agriculture modern and technologically strong. Financial assistance of ₹2,817 crore has been given under this scheme, promoting cutting-edge technologies like Artificial Intelligence (AI), Machine Learning (ML), Blockchain and Internet of Things (IoT) in the agriculture sector.
Additionally, to boost the existing agricultural infrastructure, the ‘Agricultural Infrastructure Fund (AIF)’ was launched in 2020. Since its inception, the scheme has achieved significant milestones. Under this fund, 6,623 warehouses, 688 cold storage units, and 21 silo projects have been established, significantly improving the storage and preservation of agricultural produce. This has led to an additional 500 lakh metric tonnes (LMT) of storage capacity. So far, ₹47,575 crore has been sanctioned for 74,508 projects, strengthening the agricultural infra across the country.
Rise of Agripreneurship intent: Farmer Producer Organization (FPO)
India has approximately 14-15 crore agricultural families, with 85% being small and marginal farmers. Farmers with small landholdings often struggle to earn significant profits or hesitate to explore modern farming methods. However, when small farmers unite to form a group, shift beyond traditional farming, and engage in cash crops or commercial agriculture while operating like a business, it can transform the sector. With this vision, the Farmer Producer Organization (FPO) was introduced to promote entrepreneurship in agriculture, empowering farmers to enhance productivity, profitability, and sustainability. The country’s 10,000th FPO was formed recently, an essential achievement in this direction. The basic idea of FPO is that farmers work in an organized manner by forming groups. It brings small farmers together and gives them the power of collective bargaining. This allows farmers to get better prices, access to modern technology, and connectivity to the market. This reduces dependence on middlemen, reduces production costs and increases farmers’ profits. Today, about 30 lakh farmers in the country are associated with FPOs, 40% of whom are women.
All these developments, ranging from irrigation to insurance, MSP to mechanization, have led to a significant transformation. The result of these efforts is that there has been a steady increase in food grain production in India. The total food grain production reached 332.3 million tonnes in 2023-24, which was 204.6 million tonnes in 2004-05 and 252 million tonnes in 2014-15. The cultivation area has also continuously increased from 124.3 million hectares in 2014-15 to 132.1 million in 2023-24. Additionally, crop productivity has also improved from 1248 kg per hectare in 2019 to 1337 kg per hectare in 2024. The Modi government’s commitment to the agriculture sector can also be seen in the budget allocation. The agriculture budget was ₹11,915.22 crore in 2008-09, which increased to ₹1,22,528.77 crore in 2024-25. In summary, the current agri-centric policies, schemes, and programs are well-aligned with the right intent and direction. Given the efforts underway, Viksit Bharat 2047 is set to progress through a path that prioritizes the upliftment and prosperity of farmers.
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(The views expressed are the author's own and do not necessarily reflect the position of the organisation)
