Deep Roots

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their human and natural resource endowment and respond to

a slew of incentives to unlock their productive potential.

Over the course of almost three decades beginning in the

early 1950s, the key pillars of this ecosystem were gradu-

ally erected and strengthened. Looking back, the decision of

India’s political and economic leadership to place its trust in

what were then weak and unproductive family farms stands

out as a remarkable testament of faith in the inherent strength

and potential of smallholder agriculture, rejecting the obvious

successes achieved through collectivization in some countries

and corporate farming in others.

Five features of the enabling ecosystem created to support

smallholder family farms stand out for mention.

Creating a network of agricultural research institutions

was the first and most important pillar of this ecosystem. In a

country with over 27 agroecological zones ranging from the

high Himalayas to desert and coastal conditions, localization

of plant and animal varieties holds the key to sustainable and

viable agriculture. Over 100 research institutions supported

by the national and provincial governments, more than 50

agricultural universities and over 500 district-level research

and training stations, together manned by over 15,000 agri-

cultural scientists, make up this pillar.

Tasked with carrying the outputs generated by the research

network to farmers, the countrywide extension system with

over 100,000 field agents constitutes the second vital pillar of

the agricultural ecosystem. These lab-to-land messengers have

been a critical factor in rushing the breakthroughs achieved in

the research laboratories and testing stations to farmers, provid-

ing guidance, mentoring, advice and experience sharing.

As technological options increased and success was demon-

strated in one area, the challenge of scaling up rapidly was

met by creating an elaborate system of village-level coopera-

tives, which supplied everything from credit to inputs such as

improved seeds, farm machinery and fertilizer. Currently, over

50,000 cooperatives serve India’s 600,000 villages. Together

with the commercial banking system, they delivered over

US$115 billion in agricultural credit in 2013. The role of this

third pillar in helping to channel credit and inputs to family

farms to build capital stock and ensure provisioning of working

capital is a major contributor to India’s agricultural success.

A mechanism for signalling price incentives was put in

place as the fourth pillar. The national-level Commission

for Agriculture Costs and Prices (CACP) was mandated

to constantly review costs and propose support prices for

major crops to the Government. Currently, CACP recom-

mends minimum support prices for 26 crops to the national

Government, which announces these in advance of each agri-

cultural crop cycle (typically twice every year). This gives

farmers adequate time to plan their crop mix and achieve the

ideal output from their farms.

Finally, to assure farmers of a safety net in case of market

failure, especially in remote parts of the hinterland, the national

Government, acting in partnership with the provincial adminis-

trations, created a vast system of direct purchases of cereals from

farmers to maintain a national buffer food stock. In 2013, this

system held over 80 million MTs of wheat and rice purchased

from farmers, valued at approximately US$13.5 billion. The

stocks are gradually released through the public distribution

system, and are also provided to bulk users in the private sector

to maintain price stability and availability in the open market.

A defining feature of the supporting ecosystem for agricul-

ture in India is the backing it has received from across the

political spectrum. Thus, even with changes in the political

composition of governments, the five pillars described above

have enjoyed continued patronage and financial support. This

Image: Reuters Market Light India (RMLI)

The supporting ecosystem for agriculture in India has received continued support from across the political spectrum

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