The Political Economy of the Indian Farmer The Modi Chapter
India’s agricultural transformation: from welfare to enterprise, from production to retained income, and from analogue systems to digital governance.
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India’s agricultural story is no longer only about how much India produces. It is increasingly about how much value the farmer retains.
- 01
Welfare
Protecting the floor
Income support, insurance and basic security, so one bad season does not undo a household.
- 02
Productivity
Producing more with less
Water, soil health, seeds and technology that raise output while lowering the cost of each unit.
- 03
Markets
Capturing more value
Storage, price discovery and bargaining power that turn a harvest into income.
- 04
Enterprise
Building the ladder
Collectives, processing, diversification and exports that make the farmer an economic actor.
Protect the floor.
Build the ladder.
Agricultural transformation needs more than production growth. The farmer needs a floor beneath risk and a ladder toward opportunity, and the two are not rivals.
Without a floor
Opportunity is too risky to reach for. One failed monsoon can erase years of gains.
Without a ladder
Support becomes a permanent ceiling, and the household never moves beyond it.
- Exports
- Enterprise
- Processing
- Technology
- Farmer organisations
- Markets
- Infrastructure
- Income support
- Insurance
- Water
- Soil
- Financial access
The Modi Agriculture Architecture
Eight connected pillars, from direct support to enterprise. Select a pillar to see its instruments, the evidence, and where it sits in the book.
Income Security
Protecting the floor beneath the household
Predictable cash support now reaches the farm household directly, rather than only through subsidised inputs or prices. The analytical question is not just its size, but what a dependable floor does to a household’s willingness to invest, borrow and take risk.
- Instruments
- PM-KISAN
- Direct Benefit Transfer
- JAM trinity
- Key figure
- ₹4.47 lakh crtransferred through 23 PM-KISAN instalmentsSource: PIB, 31 July 2026
Risk Protection
Making a bad season survivable
A farmer who cannot survive a failed season will rarely try a better one. Insurance matters less as a payout than as permission to invest, and its credibility rests on coverage, fair assessment and claims that arrive on time.
- Instruments
- PMFBY
- Weather-based crop insurance
- Claims settlement
- Key figure
- ₹2.06 lakh crin crop-insurance claims paid, Kharif 2016 to Rabi 2025-26Source: PIB, 2026
Natural Resources
Restoring the productive base
Water and soil set the limits of what can be grown, at what cost and with what resilience. Irrigation and soil information shift the conversation from output targets to the long-term condition of the land that produces the output.
- Instruments
- PMKSY
- Per Drop More Crop
- Soil Health Card
- Key figure
- 25.17 crSoil Health Cards issued to farmersSource: PIB, July 2025
Infrastructure
Shortening the distance between farm and market
Storage, cold chains and logistics decide when, where and to whom a farmer can sell. Infrastructure is income policy by other means: it turns the day of harvest from a forced sale into a choice.
- Instruments
- Agriculture Infrastructure Fund
- Storage & cold chain
- Logistics
- Key figure
- ₹80,224 crsanctioned under AIF for 1.5 lakh+ projectsSource: PIB, January 2026
Markets
Where the second harvest happens
Production becomes income only through a sale. Price support, procurement, electronic trading and market rules together decide how much of the final price reaches the farmer, and they are also where reform is most contested.
- Instruments
- MSP
- PM-AASHA
- e-NAM
- Market reform
- Key figure
- 1,656mandis integrated with e-NAM across 23 states and 4 UTsSource: PIB, March 2026
Collective Enterprise
Scale without owning scale
Most Indian farms will remain small. Producer organisations and cooperatives can give them the bargaining power, input prices and market access of a larger enterprise, provided governance, capital and management keep pace with registration.
- Instruments
- 10,000 FPO scheme
- Cooperatives
- Ministry of Cooperation
- Key figure
- 10,000FPOs formed under the central scheme, target met February 2025Source: PIB, 2025
Digital Agriculture
Making the farmer visible to the system
Identity, land records and crop data let services find the farmer instead of the farmer chasing each service. The same systems raise hard questions about accuracy, consent, exclusion and who governs agricultural data.
- Instruments
- JAM
- AgriStack
- Digital Crop Survey
- Drones
- AI advisory
- Key figure
- 10.31 crFarmer IDs generated under AgriStackSource: Rajya Sabha reply, August 2026
Diversification
Turning production into enterprise
Growth in Indian agriculture increasingly comes from fruit, vegetables, milk and fish rather than cereals alone. Diversification widens both income and risk management, but depends on cold chains, quality standards and access to demanding markets.
- Instruments
- Horticulture
- Dairy & livestock
- Fisheries
- Food processing
- Exports
- Key figure
- 377.8 MThorticulture output in 2025-26, now on par with foodgrainsSource: DA&FW second advance estimates, June 2026
No single scheme transforms agriculture. Systems do.
Follow one farmer through thirteen connections, from a bank account to an export market. Each matters mostly because of the ones around it.
Farmer
The unit of analysis. Not a category in a scheme, but a household making decisions about land, labour, risk and money.
Bank Account
Financial identity comes first. Without an account linked to identity, direct support, insurance payouts and formal credit cannot reach the household.
PM-KISAN
₹6,000 a year in three instalments. Modest against the cost of cultivation, but it arrives directly, predictably and without conditions on what is grown.
Insurance
Cover against a failed season changes what a farmer is willing to attempt: a new input, a higher-value crop, a loan.
Irrigation
Assured water is the difference between one crop and two, and between rain-fed caution and planned cultivation.
Soil
A soil test turns fertiliser from habit into decision, lowering cost and protecting the land’s long-term productivity.
FPO
A producer organisation gives a smallholder scale: bulk inputs, shared equipment and a stronger hand when negotiating a sale.
Storage
A warehouse or cold room means the farmer no longer has to sell on the day of harvest, when prices are usually lowest.
Market
Competition among more buyers, whether in a mandi, on e-NAM or through a contract, decides what the harvest is finally worth.
Digital Identity
A Farmer ID linked to land records lets services find the farmer, rather than the farmer proving eligibility again for every scheme.
Credit
With records, stored produce as collateral and visible income, formal credit becomes easier to reach than the moneylender.
Processing
Cleaning, grading, drying and milling: each step of value addition captured near the farm keeps more of the final price in the village.
Export
Quality standards, traceability and aggregation connect the smallholder to demand far beyond the local market.
An analytical timeline
Not a list of achievements. What changed, why it mattered, and the question each moment left open.
The inherited system
What changed
- A new government takes office in May 2014.
- Agricultural support is still delivered mainly through input subsidies, MSP and procurement, built for an era of food scarcity.
Why it matters
The starting point matters. The system measured success in tonnes produced and procured, and reached farmers mostly through prices and inputs rather than directly as households.
The open question
What does a framework built for food security have to change to serve farmer income?
Soil, water and a new name
What changed
- Soil Health Card scheme launched at Suratgarh, Rajasthan (19 Feb 2015).
- Pradhan Mantri Krishi Sinchayee Yojana approved (1 Jul 2015), with ₹50,000 crore over five years.
- Ministry renamed Agriculture and Farmers’ Welfare (announced Aug 2015).
Why it matters
Attention shifts toward the conditions of production, water and soil information, rather than output alone. The renaming signals that the farmer, not just farm output, is the object of policy.
The open question
Do information and irrigation programmes change practice in the field, or mainly the administrative record?
Risk, markets and an income goal
What changed
- Goal of doubling farmers’ income by 2022 announced (Feb 2016); Dalwai Committee constituted.
- Pradhan Mantri Fasal Bima Yojana approved (Jan 2016); first season Kharif 2016.
- e-NAM launched with 21 mandis (14 Apr 2016).
Why it matters
The income goal changes the vocabulary of policy. Its first instruments address both ends of a season: insurance for the downside, and an electronic market for the price at which a good harvest is sold.
The open question
Was ‘doubling income’ a measurable target or an organising idea, and does the difference matter?
Pricing the cost of production
What changed
- Budget 2018-19 sets MSP at a minimum of 1.5 times the cost of production, applied from Kharif 2018.
- PM-AASHA approved (Sept 2018) to widen procurement and price-deficiency support.
- Dalwai Committee completes its report on doubling farmers’ income.
Why it matters
The MSP formula becomes explicit. But a support price matters only where procurement reaches, so the real question becomes the gap between the announced price and the price farmers actually realise.
The open question
Can price support be widened without distorting cropping patterns or fiscal space?
Direct income support
What changed
- PM-KISAN announced in the Interim Budget (1 Feb 2019) and launched at Gorakhpur (24 Feb 2019).
- ₹6,000 a year in three instalments, paid directly into bank accounts.
- Extended to all landholding farmer families (May 2019).
Why it matters
For the first time, a national transfer reaches farm households directly and unconditionally. It relies on identity and banking rails built earlier, and makes the relationship between the state and the farmer more immediate.
The open question
What does an income floor tied to land ownership mean for tenants and landless workers?
Scale, infrastructure and contested reform
What changed
- 10,000 FPO scheme launched at Chitrakoot (29 Feb 2020), with ₹6,865 crore.
- Agriculture Infrastructure Fund approved (Jul 2020): a ₹1 lakh crore financing facility.
- Three farm Acts passed by Parliament (Sept 2020), followed by sustained farmer protests.
Why it matters
Policy moves beyond the farm gate, toward aggregation, storage and the rules of trade. The farm Acts show that market reform is as much about trust and process as about economic design.
The open question
Why did reforms framed as expanding farmer choice meet such resistance from farmers?
Repeal, cooperation and new tools
What changed
- Ministry of Cooperation created (Jul 2021).
- Farm Laws Repeal Act passed (Nov 2021).
- PMKSY extended to 2025-26 with ₹93,068 crore (Dec 2021).
- 100 Kisan drones flagged off (Feb 2022); Namo Drone Didi approved for women’s self-help groups (Nov 2023).
Why it matters
After the repeal, change proceeds through institutions and technology rather than headline legislation: cooperatives, extended schemes, and drones delivered through women’s collectives.
The open question
Is incremental, institution-led reform slower, or more durable?
Digital public infrastructure for agriculture
What changed
- Digital Agriculture Mission, including AgriStack, approved (2 Sept 2024), with ₹2,817 crore.
- KCC limit under interest subvention raised to ₹5 lakh (Budget 2025-26); PM Dhan-Dhaanya Krishi Yojana approved for 100 districts (Jul 2025).
- 10.31 crore Farmer IDs generated by Aug 2026; PM-KISAN continued to 2030-31.
Why it matters
The architecture becomes digital: identities, land records and crop surveys that let services find the farmer. Diversification widens what agriculture means, with horticulture output now matching foodgrains.
The open question
Who governs farmer data, and who is left out when the records are incomplete?
Evidence belongs in the argument.
Each figure comes with what it means, its source and date, and its place in the book.
-
43.0%
of India’s workforce is in agriculture
Agriculture produces under a fifth of national output but employs over two-fifths of workers. That gap is the heart of the income question.
Source: PLFS Annual Report 2025, MoSPIJourney I · The Inherited Question
-
1.08ha
Average operational holding
86% of holdings are small or marginal. Scale has to come from institutions, not from land.
Source: Agriculture Census 2015-16Journey I · The Inherited Question
-
₹4.47lakh cr
Transferred through PM-KISAN
Direct income support across 23 instalments; the latest reached 9.44 crore farmers.
Source: PIB, 31 July 2026Journey II · Building the Floor
-
₹2.06lakh cr
Crop-insurance claims paid
Paid under PMFBY since Kharif 2016, on 26.33 crore farmer applications.
Source: PIB, 2026Journey II · Building the Floor
-
7.72crore
Operative Kisan Credit Card accounts
The main channel of formal short-term farm credit, with ₹10.2 lakh crore outstanding.
Source: PIB, March 2026Journey III · Building the Market
-
10,000FPOs
Farmer producer organisations formed
Under the central scheme launched in 2020. The harder test now is their viability, not their number.
Source: PIB, February 2025Journey III · Building the Market
-
₹80,224cr
Sanctioned under the Agriculture Infrastructure Fund
For more than 1.5 lakh storage, processing and logistics projects beyond the farm gate.
Source: PIB, January 2026Journey III · Building the Market
-
10.31crore
Farmer IDs under AgriStack
Digital identities linked to land records, the base layer for targeted services.
Source: Rajya Sabha reply, August 2026Journey IV · The Digital Turn
Seven journeys through the argument.
Not a table of contents: a thematic route through the political economy of Indian agriculture.
Read before you buyIThe Inherited QuestionWhat was the structural condition of Indian farming?
Every agricultural policy inherits a structure before it attempts a reform. This journey begins with that structure: millions of small and fragmented holdings, a workforce far larger than agriculture’s share of output, dependence on the monsoon, and a support system designed in an era of scarcity to maximise production and procurement. It asks why record harvests did not reliably translate into secure farm incomes, and why the measure of success had to move from what India produces to what the farmer retains. The questions set here frame everything that follows.
- Food-security legacy
- Fragmented holdings
- Monsoon dependence
- Production vs income
IIBuilding the FloorPM-KISAN, insurance, water, soil and basic security.
Before a farmer can climb, the downside has to become survivable. This journey examines the instruments that form a floor under the farm household: direct income support through PM-KISAN, crop insurance under PMFBY, irrigation under PMKSY, and soil health information. It treats them not as isolated schemes but as layers that reduce exposure to a bad season. It asks what they have and have not achieved, where coverage and claims have fallen short, and how a dependable floor changes a household’s willingness to invest.
- PM-KISAN
- PMFBY
- PMKSY
- Soil Health Card
- Direct Benefit Transfer
IIIBuilding the MarketInfrastructure, marketing, MSP, credit and FPOs.
Production becomes income only in the market. This journey follows the crop past the farm gate: storage and logistics financed through the Agriculture Infrastructure Fund, price discovery through mandis and e-NAM, the politics and economics of minimum support prices, formal credit through Kisan Credit Cards, and collective bargaining through farmer producer organisations. It asks where value is lost between field and final buyer, and which institutions let a smallholder capture more of it without needing to own more land.
- Agriculture Infrastructure Fund
- e-NAM
- MSP
- Kisan Credit Card
- FPOs
IVThe Digital TurnJAM, digital public infrastructure, AgriStack, drones and AI.
India’s most distinctive agricultural experiment may be digital. This journey traces how bank accounts, Aadhaar and mobile phones made direct transfers possible, and how AgriStack now aims to give every farmer a verifiable identity linked to land and crop records. It also examines drones, remote sensing and AI-based advisory. The emphasis is institutional rather than technological: who is made visible, who is left out when records are wrong, who governs the data, and how farmers can contest what the system says about them.
- JAM trinity
- AgriStack
- Farmer ID
- Digital Crop Survey
- Drones & AI
VFrom Farmer to EnterpriseDiversification, processing, allied sectors and exports.
The farm household is increasingly a portfolio, not a single crop. This journey looks at horticulture, dairy, livestock and fisheries, where output has expanded fastest, and at food processing and exports as ways of keeping more value close to the producer. It considers what it takes for a smallholder to operate as an enterprise, from working capital and quality standards to aggregation and market access, and why diversification is as much a strategy for managing risk as for raising income.
- Horticulture
- Dairy & livestock
- Fisheries
- Food processing
- Exports
VIThe Political EconomyReform, federalism, trust and the farmer as citizen.
Agricultural policy is never only technical. Agriculture sits on the State List of India’s Constitution, farmers are a decisive electorate, and reform touches powerful intermediaries. This journey examines the politics that shape outcomes: centre–state coordination, the passage and repeal of the 2020 farm Acts, the role of protest and consultation, and the changing relationship between the state and a farmer who now receives support directly. Its recurring theme is trust: reform endures when farmers understand it, can influence it and believe in its implementation.
- Federalism
- Farm Acts 2020–21
- Trust & legitimacy
- Farmer politics
VIIThe Road to 2047What comes next?
The final journey looks toward the centenary of India’s independence. If Viksit Bharat is to include rural India, agriculture will need to employ fewer people more productively, raise incomes faster than output, withstand a changing climate and connect smallholders to higher-value markets. This journey sets out the choices that will decide whether that happens, from the future of price support and the governance of agricultural data to climate adaptation and the balance between food security and farmer prosperity.
- Viksit Bharat 2047
- Climate resilience
- Data governance
- Security & prosperity
Arguments worth returning to.
Short essays on the concepts that organise the book, from the first ten of a series of twenty-five.
-
Idea 01
Production Is Not Income
A record harvest can coexist with a fragile household budget. The measure that matters to the farmer is what remains after cost, risk and the market have taken their share.
3 min read · Journey I -
Idea 02
Protect the Floor. Build the Ladder.
Agricultural policy has two jobs that are often treated as rivals: making bad seasons survivable, and making good opportunities reachable.
3 min read · Journey II -
Idea 03
The Second Harvest Happens in the Market
What happens to a crop after it leaves the field can matter as much as what happened to it in the field.
3 min read · Journey III -
Idea 04
A Small Farmer Needs Scale Without Owning Scale
India’s farms are small and will stay small. The question is how to give a one-hectare farmer the bargaining power of a large one.
3 min read · Journey III -
Idea 05
Digital Agriculture Begins With Identity
Before a digital system can serve a farmer, it has to see the farmer accurately. That is an institutional problem before it is a technical one.
3 min read · Journey IV -
Idea 09
Trust Is Agricultural Infrastructure
Reforms fail not only when their design is wrong, but when the people they affect do not trust the process that produced them.
3 min read · Journey VI
Agricultural transformation is neither linear nor uncontested.
Seven questions the book takes seriously, each with the strongest case on both sides.
Did direct transfers change the farmer–state relationship?
A cash floor built reach and predictability—but does a transfer amount to a new relationship?
What did the farm-law episode teach about reform and trust?
Were the 2020 Acts undone by what they contained, or by the way they were made?
Can digital agriculture remain inclusive?
Digital rails promise precision and reach—yet data can entrench exclusion as easily as end it.
Does MSP need to evolve?
A price guarantee that anchors incomes may also lock cropping patterns into the past.
Can FPOs solve the scale problem?
Aggregation can give smallholders bargaining power—if collectives become businesses rather than registrations.
Can smallholders participate in global value chains?
Export markets reward quality and consistency—precisely what fragmented farms find hardest to guarantee.
How should India balance food security and farmer prosperity?
Affordable food for consumers and remunerative prices for producers rarely move in step.
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Buy the bookInterview Deepak Pareek on…
Synopsis, bios, cover images, talking points and interview topics, all in one place.
Visit the media centre- Farmer income versus agricultural production
- The economics of PM-KISAN
- The future of MSP
- FPOs and aggregation
- Digital agriculture and AgriStack
- AI and drones in farming
- India’s agricultural transformation
- Agriculture and Viksit Bharat 2047
A concise monthly note on the political economy of Indian agriculture.
Policy, markets, technology and the farmer economy, written for people who need to understand them. Not a book promotion.
- No. 1One NumberThe figure that explains the month in Indian agriculture.
- No. 2One PolicyA scheme, rule or budget line, read for what it changes.
- No. 3One IdeaA concept from the farmer economy, argued in a few hundred words.
- No. 4One ChartEvidence you can see, with its source attached.
- No. 5One Thing to WatchThe decision, data release or debate coming next.
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