This report assesses the performance of agricultural and food policy in India and calculates a set of policy indicators providing a comprehensive picture of agricultural support. These indicators, developed by the OECD, are already used regularly in the analysis of the agriculture and food sector in 51 OECD countries and emerging economies and are now available for India for the first time. Government intervention in India is found to provide both negative and positive support to agriculture, with market and trade interventions often depressing prices, while subsidies to fertilisers, water, power and other inputs incentivise their use. This reveals the inherent difficulty in attempting to secure remunerative prices and higher incomes for farmers, while at the same time keeping food prices low for consumers. The report also points to policy-induced pressures on natural resources such as water and soil. Detailed recommendations are offered which, if implemented, have the potential to improve farmers' welfare, reduce environmental damage, alleviate some of the pressure on scarce resources, better prepare the sector for climate change, improve food and nutrition security for the poor, improve domestic market functioning and position India to participate more fully in agro-food global value chains.
A major question for India concerns the agriculture sector’s contribution to national food security. India is the world’s second most populous country, and it has the largest number of farmers and rural population. About one-quarter of the world’s total food insecure people live in India.
Faced by a serious and persistent water crisis owing to a growing imbalance of supply and demand, as well as poor water resource management and climate change, India is projected to face severe water stress by 2050.
The Agricultural Outlook 2014-2023 shows that there are good prospects in India for rapid agricultural development and that India’s trade surplus in agricultural commodities is expected to remain stable.