Agricultural Policy: Irrigation, MSP & Farm Credit

The pillars of India's agricultural policy β€” water for farms, guaranteed prices, and access to affordable credit.

πŸ’§ Irrigation & Water Policy

Government schemes like PM Krishi Sinchayee Yojana (PMKSY) aim to expand irrigation coverage ('Har Khet Ko Pani') and improve water-use efficiency ('More Crop Per Drop') through micro-irrigation (drip/sprinkler), since a large share of Indian farmland still depends on erratic monsoon rainfall.

πŸ’² MSP Formula & Land Reforms

Minimum Support Price (MSP) is the government-guaranteed floor price for select crops, currently calculated using the A2+FL formula (actual paid-out costs plus imputed family labour cost) β€” the demand for a C2 formula (which also adds imputed rent/interest on owned land and capital) is a recurring farmer-movement demand. Land reform issues include incomplete implementation of land ceiling laws, tenancy reform, and land record digitisation.

🏦 Agricultural Credit

Institutional agricultural credit flows through Kisan Credit Cards (KCC) (short-term crop loans at subsidised interest), NABARD (apex refinancing body for rural credit), and cooperative/regional rural banks β€” aimed at reducing farmers' dependence on informal, high-interest moneylenders. PM-KISAN supplements this with direct income support of β‚Ή6,000/year to eligible farmer families.

🎯 Exam relevance

APPSC frequently tests the A2+FL vs C2 MSP formula distinction and the objectives of PMKSY and PM-KISAN β€” directly relevant given Andhra Pradesh's agriculture-heavy economy, already covered in this site's separate 'Agriculture in AP' page.

πŸ’‘ Key Facts

  • MSP currently uses the A2+FL formula; farmer groups demand the broader C2 formula.
  • PMKSY β€” 'Har Khet Ko Pani' + 'More Crop Per Drop' (micro-irrigation).
  • KCC (short-term credit) + NABARD (apex refinancing) + PM-KISAN (β‚Ή6,000/yr direct support).

πŸ”– 60-Second Revision

  • PMKSY β€” irrigation coverage + water-use efficiency.
  • MSP: A2+FL (current) vs C2 (demanded, broader).
  • KCC + NABARD (credit) + PM-KISAN (β‚Ή6,000/yr income support).

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