Challenges of Small Farmers in UP & MP & role of Pub-Pvt Partnerships

Introduction and Background

Agriculture is the main livelihood for 43 percent of India’s population and accounted for 18.8 percent of the country’s GDP in 2020–21. Of this, approximately 85 percent comprise small or marginal farmers with less than two hectares of land. In MP 70 percent and in UP 60 % of the population is engaged in farming and allied occupations. The average landholding as per the Agri Census 2015-16 is 0.73 hectares for UP and 1.57 hectares for MP. Both show a gradual decline from the previous year’s census. 

The small units of land are frequently seen as unviable for farming as smallholder’s basic consumption generally exceeds their income and thus indebtedness is a constant feature in their lives. The root cause of this problem started due to the inheritance law. The small-holding character of Indian agriculture is much more prominent today than ever before.

Major challenges of Smallholder farmers.

  1. Smallholdings make agriculture uneconomic so long as sub-division and fragmentation of lands continue. This is because of difficulty in mechanization, the absence of better inputs, and practicing outdated agricultural practices like monocropping and products which leads to deterioration of land quality. This leads to high production costs and low productivity. 
  2. Impact of Climate Change & Poor Irrigation: In MP, with 72 percent area under rainfed cultivation and predominance of smallholders with low adaptive capacity, the agriculture sector is highly vulnerable to climate change. With groundwater depleting and larger dry spells, farmers have to use other sources of water. Large farmers capitalize on cheaper sources like canals while small farmers have to rent water. Unpredictable rainfall affects several agricultural operations and unexpected rainfall during harvest leads to total crop loss. Heavy rains that result in flooding can be detrimental to crops and soil. 
  3. Inadequate access to crop insurance schemes and credit availability: The major problems persistent with crop insurance schemes faced by farmers include a lack of proper awareness of insurance schemes, evaluation of the extent of damages caused due to crop losses, inadequate coverage of insurance schemes, and non-payment / delayed settlement of claims. Access to timely, adequate, and low-cost credit from financial institutional sources is more important, especially to marginal and small farmers. Along with all other inputs, capital is one of the most crucial inputs for increasing agricultural production. Farmers facing capital constraints would use fewer inputs by not investing in better technologies, machinery, and equipment in their production activities compared to others having no such constraints. This affects not only productivity but also the produce quality.
  4. Perpetual indebtedness and Poor economic status push small farmers to a poor quality of life which creates a vicious cycle through poverty, illiteracy, lack of awareness, and access to modern inputs resulting in productivity losses in every cycle and comparative decline as compared to large holders. 
  5. Absence of adequate policies, Public-Private convergent initiatives: Agriculture policies are largely drafted keeping the focus on big landholders and similarly private sectors target the same group since their initiatives and services are profitable working with larger landholders. The private sector is aggressively emphasizing building a strategic partnership with big farmers and other private organizations having the capacity for mechanization. This leaves the smallholders behind in getting their share of advancement from Public and Private sector initiatives.
  6. Others: Inability to procure quality seeds and fertilizers from the Government or open market due to admixture. Inability to market their produce to recover costs sometimes and wafer-thin margins at other times. Both do not correlate with the input costs of the farming activity. Lack of adequate infrastructure – rural road connectivity, rural power, cold storage, warehouses, etc. has impeded agricultural growth in UP and the interiors of M.P.

Role of Public-Private partnerships (PPPs) to Achieve Food and nutritional security 

For sustainable growth in agriculture and achieving food and nutritional security, it is very evident that there is a dire need for the holistic development of small and marginal farmer communities in India. Achieving food security for all is a tremendous challenge that cannot be done without investments from the private sector considering public funds would not be enough alone. PPPs are very much about tapping into the power of innovation in the private sector while pursuing sustainable development policy objectives. The partnership should use market mechanisms to improve agri-food systems, thereby reducing food insecurity and advancing the rural development of smallholders. This can be achieved by following methods:

1.    Improved credit access may facilitate optimal use of inputs and have a major impact on crop productivity. Availability of credit may allow farmers to satisfy their cash needs induced by the agricultural production cycle and requirements for consumption. Farm loan waivers for genuine reasons should be considered. Ensuring the crop loss compensations are correctly and timely disbursed.

2.    Improving agro-forestry landscape: minimize climate risk and food security in agriculture through developing a balanced agro-forestry geography of the states for long-term sustainable impact.

3.    Infrastructure development: Provision of smooth supply chain management and cold storage facilities. Enhancing rural road connectivity in UP and Interiors of MP. Making investments in irrigation and building rainwater harvesting mechanisms for mitigating impact during droughts. Fast-tracking pending Irrigation projects in the U.P. and M.P. Encouraging solar power and engaging crops that can grow with diffused light.

4.    Market access and Trade: Target procurement and fair-trade collection hubs and ensure remunerative pricing/ value addition through processing/ Fair and Remunerative Price and Revenue Sharing Formula. Price stabilization for food grains (wheat, rice, and pulses), milk, and sugarcane. Removal of all restrictions on licensing and trading for smaller landholders. Creation of assaying facilities in mandis to increase trade through e-NAM in the state. Creation of FPOs to increase the bargaining power of farmers. Introducing Electronic markets for direct trade.

5.    Research and Extension: Strengthening agricultural research and development for drought and disease resistance, encouraging diversification of crops. The government should revamp its agricultural extension system to assist farmers in adopting new technologies and build up and promote rural infrastructure and agro-based industries. Target skill development of rural youth.

6.    Innovation and Diversification: An increase in agricultural productivity will result from mixed farming including scientific animal husbandry. Diversification to High-Value Agriculture. Institutional Innovations to collectivize farmers to achieve economies of scale. Focus on food processing infrastructure, and innovative farming techniques, and value chain development for agriculture in UP and MP.


Indian farmer community is comprised mainly of small and marginal farmers. They face a lot of problems right from nature’s activities to man-made activities including climate change, soil erosion, biodiversity loss, water resource depletion, lack of capital, labour, and other inputs. A major cause of these problems is mainly due to lack of proper awareness, less adoption of modern technologies, lack of capital, or gap between farmers and government institutions. These problems cannot be fully solved but can be mitigated to a large extent by following wise agricultural practices, sustainable use of resources, and bridging the gap between rural farmers, government, and financial institutions. In a study, S Mahendra Dev (2012) identifies and establishes that Indian small farmers contribute to both diversification and food security. Only in the cases of pulses and oilseeds, their share is lower than other farmers. It also shows that from an efficiency point of view, small holdings are equal, to or better than large holdings. Keeping in mind the current scenario and future scope that smallholders hold, PPPs should work on Convergent and sustainable Innovations and Programmes to uplift the socio-economic stature of landholders and enhance agriculture productivity to achieve food and nutritional security for the greater good.

Reference: Includes various sources including census studies. 

Small Landholder farmer