New agri pricing strategy can protect farmers, households

India needs a market-driven approach to agriculture, the Economic Survey 2024-25 said, advocating policies that allow farmers to receive "unimpeded price signals" while protecting vulnerable households from cost-of-living shocks.

- Dhirendra Kumar

Unimpeded price signals refer to market prices that accurately reflect supply and demand without distortions from external interventions like subsidies, price controls or trade restrictions.

The survey underscored the urgency of shifting away from excessive cereal production and encouraging diversification into pulses and edible oils to correct supply imbalances and improve agricultural sustainability.

The call for reform comes at a time when Indian agriculture is grappling with structural inefficiencies. Despite contributing nearly 20% to the country's Gross Value Added (GVA), the sector faces challenges such as low productivity, excessive reliance on input subsidies, and environmental stress from overproduction.

Allowing farmers to hedge price risks and aligning cultivation patterns with market demand, the survey argued, would enhance productivity while preserving natural resources.