From Subsistence to Smart Agriculture in India | 04 Nov 2025

India's agriculture sector faces a stark paradox: while contributing only 10% to national GVA, it employs 35% of the workforce, signaling massive untapped potential for productivity growth. The sector stands at a critical juncture where rapid technological advancement, from AI-driven crop planning to drone-based monitoring clashes with a workforce where 35% lack basic literacy and most have received no formal technical training. Women farmers, comprising 41% of agricultural workers, face acute marginalization. The path forward demands urgent, targeted skilling interventions particularly for women and across identified geographical clusters to bridge the widening gap between technological capability and human capacity, transforming agriculture from a subsistence occupation into an engine of inclusive prosperity.

What are the Key Major Recent Developments in Indian Agriculture?

• Rollout of Digital Public Infrastructure (DPI) for Agriculture: The government is strategically building a Digital Public Infrastructure (DPI), known as AgriStack, to modernize governance and service delivery across the sector. 
  • This move will create an interoperable ecosystem that provides farmers with personalized and timely information, boosting efficiency and transparency in government schemes. 
  • The Digital Agriculture Mission has a goal of creating digital identities for 11 crore farmers over three years and launching a nationwide Digital Crop Survey (DCS) across all districts, moving from traditional manual methods to data-driven decision-making.
• Rapid Integration and Liberalization of Drone Technology: The deployment of drones (UAVs) for precision farming, particularly spraying and crop health monitoring, is a game-changer, addressing labor shortages and improving input use efficiency. 
  • The liberalized Drone Rules 2021 and financial assistance policies underscore the government's push to make this technology accessible to common farmers and Farmer Producer Organizations (FPOs).
  • The use of drones allows for up to 5 times faster pesticide application than manual methods and significantly reduces chemical exposure for farm workers, with the government providing a 40-50% subsidy for their purchase by FPOs and specific farmer categories.
• Surge and Maturation of the Agri-Tech Startup Ecosystem: India's Agri-Tech sector has seen a massive surge, moving beyond e-commerce to sophisticated solutions like AI/IoT-based precision farming (Agri-IOT), quality management, and supply chain technology. These startups bridge knowledge and market gaps, making farming a more profitable and predictable enterprise for smallholders. 
  • As of December 2023, nearly 2,800 AgriTech startups were recognized by Startup India, collectively raising approximately ₹6,600 crore in funding over the last four years, highlighting significant private sector investment and innovative capacity.
• Policy Focus on Promoting Millets (Shree Anna) and Crop Diversification: A strong push is observed towards crop diversification away from water-intensive staples like rice and wheat, centering on promoting nutri-cereals, termed 'Shree Anna' (Millets). This shift is crucial for addressing climate change resilience, improving nutrition, and correcting groundwater depletion. 
  • The year 2023 was declared the International Year of Millets, which correlates with total millets (Shree Anna) production being estimated at 174.08 LMT in 2023-24, showcasing policy-driven momentum towards their increased cultivation.
• Increased Emphasis on Farm Mechanization: With rural-to-urban migration leading to labor scarcity, farm mechanization is critical for maintaining productivity and reducing cultivation costs, especially for small and marginal farmers. Policy support for Custom Hiring Centers (CHCs) is key to making expensive machinery accessible. 
  • Under the Sub-Mission on Agricultural Mechanization (SMAM), the government has provided financial assistance, resulting in the establishment of thousands of CHCs, with 57,139 farmers trained in mechanization between 2021-25.
• Strengthening the Role of Farmer Producer Organizations (FPOs): FPOs are fundamentally transforming the market landscape by collectivizing small and marginal farmers, enhancing their collective bargaining power, and enabling better access to inputs, technology, and formal credit. 
  • This structure is vital for realizing economies of scale. The government is actively promoting the formation of 10,000 new FPOs to cover the entire country, which helps improve market linkage and allows farmers to receive better price realization for their produce.
• Sustained Growth in Horticulture and Non-Food Crops: The horticulture sector, encompassing fruits, vegetables, and spices, has continued its robust growth trajectory, driven by increasing domestic and export demand, diversification efforts, and better post-harvest management. 
  • This is essential for boosting farm income and value addition. The latest estimates show horticulture production at an impressive 352.23 Million Tonnes in 2023-24 (Second Advance Estimates), with fruit production specifically expected to reach 112.63 Million Tonnes, affirming its status as a high-value growth area.

What are the Major Issues Hindering Productivity and Growth in Indian Agriculture? 

• Extreme Fragmentation of Land Holdings and Small Farm Size: The highly fragmented nature of land ownership prevents economies of scale, making the adoption of large-scale mechanization and modern irrigation systems economically unviable for the majority of farmers. 
  • This structural constraint limits capital investment and results in suboptimal resource utilization, directly suppressing overall farm productivity. 
  • As per the latest Agriculture Census data, 86.2% of total operational holdings in India are marginal and small (less than 2 hectares), with the average size of operational holdings having declined to just 1.08 hectares, severely hindering efficiency.
• Under-investment in Post-Harvest Infrastructure and Supply Chain: A profound deficit in cold storage, warehousing, and processing infrastructure across the country leads to massive wastage and forces farmers into distress selling immediately post-harvest. 
  • This weak supply chain prevents farmers from realizing better value, thus making farming less profitable and discouraging investment in productivity-boosting inputs. 
  • Estimates suggest that post-harvest losses, particularly for perishable commodities like fruits and vegetables, range from 20% to 40%, representing an annual economic loss of thousands of crores of rupees.
• Persistent Dependence on Erratic Monsoon and Groundwater Depletion: A large portion of the net sown area remains rain-fed, making agricultural output highly vulnerable to the increasingly erratic and extreme weather events induced by climate change, despite extensive irrigation projects. 
  • The over-extraction of groundwater in irrigated areas, fueled by subsidized electricity and water-intensive cropping patterns, is leading to a major water-stress crisis. 
  • Only about 55% of the gross cropped area is currently irrigated, leaving nearly half dependent on the monsoon, while India is reported to have the highest rate of groundwater depletion globally.
• Widespread Decline in Soil Health and Imbalanced Nutrient Use: The decades-long, imbalanced application of chemical fertilizers, particularly the disproportionate use of Nitrogen (N) over Phosphorus (P) and Potassium (K), has severely degraded soil health, leading to nutrient deficiencies and loss of organic carbon. 
  • This degradation directly impacts crop yields and undermines the long-term sustainability of intensive farming practices. 
  • The ideal NPK ratio is 4:2:1, but the current usage ratio in India is often heavily skewed, with the national average reported to be around 6.7:2.4:1, highlighting severe nutrient imbalance.
• Limited Access to Timely Institutional Credit for Marginal Farmers: Despite significant efforts in financial inclusion, a large segment of small and marginal farmers still relies on high-interest informal money lenders due to insufficient collateral or complex bureaucratic procedures for formal credit. 
  • This lack of affordable, timely credit limits their capacity to purchase quality inputs, adopt technology, or make essential farm investments. 
  • The proportion of rural households with outstanding debt rose from 47.4% in 2016-17 to 52% in 2021-22, demonstrating a persistent gap in institutional financial outreach.
• Ineffective Agricultural Research and Extension Services: The linkage between cutting-edge agricultural research conducted by state and central institutions and its effective transfer to the grassroots level remains weak, often due to under-resourced and outdated extension systems. 
  • This crucial gap prevents the timely adoption of High-Yielding Varieties (HYVs), better techniques, and climate-resilient farming practices by the average farmer.
  • Public expenditure on agricultural R&D in India is estimated to be around 0.3-0.4% of Agri-GDP, which is significantly lower than the 1% to 2% target recommended for developing countries.
• Market Access Barriers and Price Volatility: Farmers face significant challenges in efficiently marketing their produce, including the dominance of local traders, lack of transparent price discovery mechanisms, and high intermediation costs in traditional markets (APMCs).
  • This market dysfunction leads to immense price volatility and low farm-gate prices, diminishing the incentive for farmers to increase production.
  • The e-NAM platform, despite efforts, has integrated only around 1,522 mandis, leaving thousands of local markets outside the digital network, which contributes to market fragmentation and limited price transparency.

What Measures can be Implemented to Boost Productivity in Indian Agriculture?

• Mandatory Mechanization Pooling and Digitally-Managed Land Leases: The government must proactively enforce community land use by mandating Custom Hiring Centers (CHCs) to operate on a time-bound, pooled-asset model across defined village clusters. 
  • This should be combined with a digitally-secured land leasing framework that guarantees ownership retention while facilitating temporary consolidation for mechanized farming and large-scale precision input application. 
  • This bypasses the fragmentation hurdle, achieving economies of scale for key operations like planting and harvesting.
• Incentivizing Precision Water-Use through Smart Grid Tariffing: Shift the focus from free or subsidized electricity/water to outcome-based water management by introducing a "Smart Water Grid" tariff structure. 
  • This system would charge higher progressive rates for over-extraction beyond a scientifically determined threshold per crop, while offering significant carbon/water credits for adopting micro-irrigation (drip/sprinkler) and implementing rainwater harvesting structures. 
  • The strategy effectively rationalizes resource use and tackles the looming groundwater crisis.
• Establishment of Climate-Smart Crop-Genetic Hubs (CGH): Revolutionize the R&D-to-farm process by establishing regional Climate-Smart Crop-Genetic Hubs (CGHs) that function as integrated centers for research, seed multiplication, and farmer training. 
  • These hubs must prioritize the development and rapid dissemination of drought-resistant, heat-tolerant, and nutrient-efficient high-yielding seed varieties tailored precisely to the local Agro-Ecological Zones (AEZs), reducing reliance on conventional staples and promoting diversification.
• Integrated E-Post-Harvest Logistics and Cold-Chain-as-a-Service (CCaaS): Implement a national digital platform that seamlessly integrates farm-gate inventory, nearest modular cold storage units, and final market demand points, transforming the current fragmented supply chain into an end-to-end Cold-Chain-as-a-Service (CCaaS) network. 
  • This system, driven by IoT and blockchain, would dramatically reduce storage losses, enable just-in-time value addition, and empower farmers to access remunerative spot and forward markets building upon Dalwai Committee's recommendations for doubling farmers' income.
• Re-engineering Agricultural Extension via FPO-Tech Interface: Overhaul the moribund extension system by structurally integrating all Krishi Vigyan Kendras (KVKs) and agricultural universities with Farmer Producer Organizations (FPOs), turning the FPOs into the primary interface for technology diffusion and knowledge transfer. 
  • This re-engineering must involve deploying Agri-Tech entrepreneurs at the FPO level to provide personalized, AI-driven advisory services on soil health, pest management, and market intelligence, ensuring faster technology adoption.
• Soil Carbon Sequestration and Regenerative Farming Subsidies: Pivot fertilizer subsidies towards rewarding regenerative agriculture and soil health improvement by introducing a direct, tiered subsidy for farmers actively increasing Soil Organic Carbon (SOC) levels. 
  • This measure directly addresses soil degradation by incentivizing practices like cover cropping, zero-tillage, and crop rotation, thereby promoting sustainable intensification and reducing the reliance on chemical inputs over the medium term.
• Securitization of Future Farm Output for Credit Enhancement: Create a novel financial instrument by allowing FPOs to securitize their members' projected future harvests (based on historical production and forward contracts) to secure credit at favorable institutional rates, bypassing the requirement for traditional land collateral. 
  • This measure directly addresses the credit barrier for smallholders, enabling them to invest in high-value inputs and technology, thus fundamentally linking production potential to capital access.

Conclusion:

India’s agriculture stands at a transformative crossroads—where technology, innovation, and human capital must converge to unlock its true potential. Bridging gaps in skills, infrastructure, and credit will empower farmers, especially women, to drive inclusive and sustainable growth. Strengthening agri-value chains, promoting climate-smart practices, and ensuring equitable access to resources align directly with SDG 1 (No Poverty), SDG 2 (Zero Hunger), SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), and SDG 12 (Responsible Consumption and Production), paving the way for a resilient and prosperous rural India.