Agricultural marketing in India suffers from inefficiency, a disconnect between the prices received by producers and the prices paid by consumers, fragmented marketing channels, poor infrastructure and policy distortions. Urgent reforms are needed to address these inadequacies and check the excesses of middlemen. While encouraging new models that improve the bargaining power of producers and scaling up successful experiments, producers' companies and cooperative marketing societies could be promoted to provide alternative avenues for sale of produce.

The agriculture sector has gone through different phases of growth, embracing a wide variety of institutional interventions, and technology and policy regimes. From the late 1960s onwards, the green revolution helped the sector maintain steady growth for more than two decades. But the challenges that swept through the economy in the 1990s after the initiation of economic reforms arrested this growth. Conscious efforts have brought about a recovery of growth since the middle of the first decade of the 2000s.

The main reason for the continued low use of quality seed has been inadequate access. Though the private sector has taken a lead in harnessing technological innovation in some segments, it has concentrated on particular types of seed. It has also occasionally supplied spurious and low quality seeds and charged exorbitant prices. There is, thus, a strong need to promote competition, strengthen the role of the public sector and encourage investment in seed production.

During the 1960s and 1970s there was an intense debate on the observed inverse relationship between farm size and per hectare agricultural productivity in India. It was subsequently argued that the higher productivity of smallholdings would disappear with the adoption of superior technology, modernisation and growth in general. However, close to half a century later, National Sample Survey data from the initial years of the 21st century show that smallholdings in Indian agriculture still exhibit a higher productivity than large holdings.

The global economy has faced two serious but unconnected crises in quick succession during the past four years. The years 2007 and 2008 witnessed an unprecedented rise in food prices which forced the global community to pay more attention to the agricultural sector.

Agriculture is the core sector of Indian economy. The share of agriculture and allied sectors in total GDP presently is about 16 percent and it engages nearly 52 per cent of the national workforce. Agriculture therefore continues to remain the principal source of livelihood for the majority of households in India.