How can the Indian agricultural sector ensure that growth benefits are equitably shared among all stakeholders? Discuss the challenges involved and evaluate the effectiveness of government policies and institutional mechanisms in addressing these challenges. (15M, 250 words) [GS-2: Indian Governance]

Introduction

The Indian agricultural sector faces significant challenges in ensuring that the benefits of growth are equitably distributed among all stakeholders. This issue is compounded by a variety of structural and policy-related factors.
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Challenges in Equitable Sharing of Growth Gains

• Climate Change: The worsening climate crisis has led to unpredictable weather patterns, adversely affecting crop yields and farmer livelihoods.
• Global Trade Inequities: The World Trade Organisation’s policies often favor developed countries, with the dispute-resolution process frequently skewed against developing nations like India.
• Fragmented Land Holdings: About 85% of India’s arable land consists of small holdings, limiting the potential for small farmers to achieve economic stability and a dignified livelihood.
• Low Farm-Gate Prices: Global pressures to keep food prices low often result in artificially reduced farm-gate prices, making farming less economically viable and environmentally sustainable.
• Depleting Water Resources: Over-extraction of groundwater for agriculture is leading to aquifer depletion, especially in key agricultural regions, making water-intensive farming increasingly unprofitable.

Role of Government Policies and Institutional Mechanisms

• Investment in Research and Extension Services: Increasing funding for agricultural research and extension services is crucial to developing new technologies and practices that can help farmers adapt to changing conditions.
• Market Reforms: Agricultural markets are often biased, and coordination between state and central governments is lacking. Establishing a more unified market system can help ensure fairer pricing and distribution of resources.
• Public Distribution System (PDS) Reforms: The current PDS framework often depresses farm-gate prices, making farming less attractive.
• Reforming input subsidies, particularly for fertilizers, is essential to promote sustainable farming practices and protect environmental and human health.
• Sustainable Productivity Gains: Beyond merely increasing agricultural output, policies must focus on ensuring that productivity gains are sustainable and equitably shared among all stakeholders.

Conclusion

To ensure that the benefits of agricultural growth are shared equitably, India must address these multifaceted challenges through comprehensive policy reforms and strategic investments. By focusing on sustainable practices, fair market mechanisms, and coordinated government action, India can create a more inclusive and resilient agricultural sector.