Indian Agriculture and Small Marginalized Farmers 


Agriculture is a vital sector of Indian economy. It has occupied almost 47% of the geographical area (Sharma et. al, 2018). Around 44% of the country’s population gets livelihood from agriculture (FICCI Report, 2020). 

It is the primary source of livelihood for about 58% of India’s population. Gross Value Added (GVA) by agriculture, forestry, and fishing was estimated at Rs. 19.48 lakh crore (US$ 276.37 billion) in FY20 (PE). Growth in GVA in agriculture and allied sectors stood at 4% in FY20 (IBEF, 2020). 

In India, agriculture contributes about sixteen percent (16%) of total GDP and ten percent (10%) of total exports. Over 60 % of India’s land area is arable making it the second-largest country in terms of total arable land.

The agriculture sector in India has undergone significant structural changes in the form of a decrease in the share of GDP from 51.90% in 1950- 51 to 17.00% in 2014-15 indicating a shift from the traditional agrarian economy towards a service dominated one (FICCI Report, 2020). 

Agricultural Census data 2010-2011 shows that the small and marginal holdings (below 2.00 ha.) constituted 85.01 percent in 2010- 11 against 83.29 percent in 2005-06 and the operated area at 44.58 percent in the current Census as against the corresponding figure of 41.14 percent in 2005-06. 

Small and marginal farmers consist of more than 80% of total farm households. But their share in the operated area is around 44%. Thus, there are significant land inequalities in India. The role of small farmers in the development process and poverty reduction is well recognized. 

Global analysis of growth and poverty reduction exhibits that GDP growth out of the agriculture sector is at least twice as effective in reducing poverty and bringing prosperity as GDP growth originating outside agriculture. Small-holdings play an important role in raising agricultural development and poverty reduction at the global level. 

The contribution of the agriculture sector in the economy has significantly decreased from 51% in 1951 to 19% in 2011.

As per the Economic Survey 2019-20, this has declined to 16.5% in 2019-20.5 Meanwhile, the share of workers who are dependent on agriculture has decreased at a lower rate from 70% in 1951 to 55% in 2011. 

It is interesting to note that 68% of the agricultural landholdings in the country belong to the marginal (less than one hectare) category.18 Another 18% belong to the small (between one to two hectare) category.

Further, the share of the marginal category in total agricultural landholdings has been increasing over the years, from 51% in 1970-71 to 68% in 2015-16 (PRS India, 2020). As of 2014-15, 49% of the country’s net sown area was under irrigation. The remaining agricultural area in the country depends on rainfall. Major irrigation sources for agriculture include tube wells (46%) and other wells (17%), and canals (24%).

State of Small and Marginalised Farmers

Small-scale farmers play a key role in food security; it is estimated that more than 50 percent of the food necessary to feed the 9 billion inhabitants of the globe in 2050 will be produced by small-scale farmers (FAO, 2013). 

In India, small and marginal holding farmers cultivate around 44 percent of the area, and they produce around 60 percent of the total food grain production (49% of rice, 40% of wheat, 29% of coarse cereals, and 27% of pulses) and over half of the country’s fruits and vegetables production (Agricultural census, 2011)

Small-holder farmers are vital for India’s agriculture and rural economy. They are defined as those marginal and sub-marginal farm households that own or/and cultivate less than 2.0 hectare of land and comprises 78 percent of the country’s farmers (Agricultural Census, 2010-2011).

Their contribution to household food security and poverty alleviation is significantly high – and is increasing day by day.

It is observed that as the national population increases, the number of small-holdings is directly proportional to it (Indira Gandhi Institute of Development Research, 2012). 


There are various schemes proposed by the Government for small and marginalized farmers, some of them are discussed below: 

Pradhan Mantri Fasal Bima Yojana (PMFBY) insures protection for food crops, oilseeds and annual horticultural/ commercial crops notified by the state government. 

Weather Based Crop Insurance Scheme (WBCIS): When the weather indices (rainfall/ temperature/relative humidity/wind speed etc.) is different (less or higher) from the Guaranteed Weather Index of notified crops, the claim payment equal to deviation/shortfall is payable to all insured farmers of the notified area.

Pradhan Mantri Krishi Sinchai Yojana (PMKSY): The vision of PMKSY is to ensure access to some means of protective irrigation to all agricultural farms in the country – to produce ‘per drop more crop’. Thus bringing much desired rural prosperity.

PMKSY is strategized by focusing on end-to-end solutions in the irrigation supply chain, viz. water sources, distribution network, efficient farm level applications, extension services on new technologies & information etc. based on a comprehensive planning process at district/State level (Department of Agriculture, Cooperation & Farmers Welfare, 2019)

Issues and Challenges for Small Holders 

Credit and Indebtedness: Small holdings need credit for both consumption and investment purposes. Increasing inflation is one of the main reasons for indebtedness among these farmers in recent years. The dependence on money lenders is the highest for sub-marginal and marginal farmers. 

Impact of climate change: Climate change is a major challenge for agriculture, food security, and rural livelihoods for millions of people including the poor in India. The adverse impact will be more on small-holding farmers.

Climate change is expected to have an adverse impact on the living conditions of farmers, fishers and forest-dependent people who are already vulnerable and food insecure. Rural communities, particularly those living in already fragile environments, face an immediate and ever-growing risk of increased crop failure, loss of livestock, and reduced availability of marine, aquaculture and forest products.

They would have adverse effects on the food security and livelihoods of small farmers in particular. In order to have climate change sensitive and pro-poor policies, there is a need to focus on small farmers. 

Water problems: Water is a vital input in agriculture. Improvement in irrigation and water management is fundamental for raising the standard of living in rural areas.

Agriculture has to compete for water with urbanization, drinking water, and industrialization. Small holding farmers depend more on groundwater as compared to large farmers who have more access to canal water and tube wells.

Day by day, groundwater is depleting in many parts of the country. Marginal and small farmers face a lot of problems regarding water in their everyday lives. 


Major problems which have disturbed the income of small and marginal farmers during the last few years can be summarized as below:

  • Increasing cost of inputs, small and fragmented land holdings, and rising labor costs have led to the high cost of production and lower crop yields.
  • Low level of formal education and skills: It is important for small and marginalized farmers to have an optimum level of awareness related to information on agriculture. The low literacy level amongst farmers limits the proper dissemination of knowledge, awareness, and information.
  • In the absence of decentralized storage and processing facilities, small and marginal farmers could neither hold their produce till the realization of higher prices nor process for value addition.
  • Inefficient agricultural extension and information services in regard to the selection of suitable crops, improved technologies, weather forecasts, types of pests and disease etc. leads to an information gap that can not empower the farmers market to take suitable corrective measures on time.
  • Lack of required credit to procure various inputs well on time, high prices for crop insurance, and delay in settling the claims of farmers, creates a financial problem that is beyond their ability to address  (Kumar. S, 2019) 

The agriculture sector has a lot of challenges in current uncontrollable environmental factors. There is a need for government intervention in agriculture investment, supporting policies for the growth of agro-productivity, export-import, and contribution in GDP.

Role of agro-industry, agro-allied business needs proper management of their inputs into outputs to achieve the objectives of Prosperity and meet all the demands of food security.

Small and Marginalized farmers are a very important part of the Indian economy therefore their marginalization has created a gap in the agriculture sector which is obstructing the growth of these farmers and agriculture itself.

Hence an effective policy framework is needed for solving the problems of small farmers and to ensure the proper functioning of agriculture ecosystem. 



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  • Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW). (2019).  Farmer Friendly Handbook Schemes & Programmes 2018 – 19.
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  • India Brand Equity Foundation. (2017, July 17). Indian Agriculture Industry.


  • Indira Gandhi Institute of Development Research, Mumbai. (2012). Small Farmers in

India: Challenges and Opportunities.

  • Present Position of Agriculture in India. (2016). International Journal of Science and

            Research (IJSR), 5(4), 240–243.

  • Sharma, A. (2018). Present and Past Status of Indian Agriculture. Agricultural Research &
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  • Small and Marginal Farmers : Assets or liability of Indian Agriculture. (2019).




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