Introduction

The environment for Indian agriculture and policy has been changing since the post-independence era. Rapid economic growth and urbanisation are strengthening and diversifying consumer demand and placing pressure on existing production systems, marketing institutions, and infrastructure. Increased trade openness, whether unilateral or negotiated under a multilateral agreement, is challenging policies and structures that were established in a closed economy. The stream of benefits that flowed to producers and consumers from the adoption of Green Revolution technology has slowed. And, with the advent of competitive, multi-party and regional politics, the political environment for making and conducting agricultural policy has also changed.

Alongside the accelerating growth and investment now occurring in India's industrial and service sectors, agriculture has, by most accounts, been faring poorly. Productivity levels for most crops remain well below world averages and output and yield growth have been slowing down. Budget outlays for subsidies on food grains and farm inputs have been rising while rates of new public and private investment in agriculture have remained low compared to other sectors. The apparent mismatch between buoyant consumer demand and sluggish farm productivity has begun to threaten India's long term pattern of food price stability. And, while there are both traditional and modern examples of international competitiveness, most of India's fragmented agricultural marketing and processing systems and supporting institutions remain unready to compete in global markets.

For many good reasons, it has proven difficult to transform Indian agricultural policy and institutions to perform in this new environment. Long standing policies are hard to change because they did, in fact, succeed in achieving the goal of food grain self-reliance.