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4.4. Frequent interventions are made, when necessary, including through import and export restrictions, and to ensure stability in supply and prices in the domestic market. Most recently, following a heavy monsoon, India banned exports of onions, to ensure sufficient domestic supplies and stabilize domestic prices. The Agricultural Export Policy suggested that such frequent changes "break export supply chains and affect India's image as a reliable supplier", and recommended that, apart from a few products that are essential for food security, export restrictions should not be used for processed agricultural products and organic products.3 To ensure stable domestic production, input subsidies and price support are also provided.

4.11. According to the Agriculture Export Policy (AEP), the objectives are: (...) to promote novel, indigenous, organic, ethnic, traditional and non-traditional agriculture exports; (...)

4.12. Acknowledging that frequent use of export and import restrictions tends to reduce certainty in policy, the Agriculture Export Policy (AEP) aims to provide assurance that processed agricultural products and organic products will not be subject to export restrictions, [10] (...)

[10] There is no change to the policy of export and import restrictions on primary or non-organic agricultural products.

4.23. A World Bank report notes that, as a result of such cross-subsidization, electricity for agriculture was priced around 70% lower than the average cost of production in 2016/17. The report further estimates that removing the cross subsidies could increase India's net manufacturing exports by between 1% and 3%, depending on the sector. Farmers also have access to water at no cost; as a result of the lower cost of water and electricity, the use of groundwater has grown rapidly. [30] The Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), launched on 1 July 2015, aims to increase the use of more sustainable methods of irrigation, such as drip and sprinkler irrigation. (...)

[30] Ministry of Finance, Economic Survey of India (2017-18), Chapter 6 notes that there has been a steady decline in the water table in recent years. In 2017, the Central Ground Water Board estimated that annual groundwater consumption in some states in north India is higher than the annual extractable groundwater. Central Ground Water Board, National Compilation on Dynamic Ground Water Resources of India, 2017. Viewed at: http://cgwb.gov.in/GW-Assessment/GWRA-2017-National-Compilation.pdf.

4.27. In June 2020, the Government issued an ordinance amending the Essential Commodities Act.39 Under the amendment, the supply of cereals, pulses, potatoes, onions, and edible oilseeds (and oils) may only be regulated under extraordinary circumstances (which may include war, famine, extraordinary price rises, and natural calamities). (...)

4.45. Through the NABARD, India provides grants for a portion of selected projects aimed at enhancing investment, income and employment in sectors of national importance, such as the dairy sector, livestock and other animal husbandry, and the production of organic/biological inputs. (...)

Table 4.4 Credit-related subsidies/other assistance schemes, 2019-20
(...)
Capital Investment Subsidy Scheme for Commercial Production Units for Organic/Biological Inputs
(...)
Assistance: subsidy is 25%, 33% or 40% of the capital cost of the project, subject to a ceiling of INR 4 million to INR 6 million, depending upon the type of activity (e.g. fruit and vegetable waste compost production or soil-testing laboratory at village level)
(...)

4.47. The Interest Subvention Scheme (Kisan Credit Card Scheme) for farmers aims to provide short-term credit to farmers at subsidized interest rates. The Scheme came into force in 2006/07 and is being continued in 2018/19 and 2019/20. The subvention varies according to the type of loan; there are loans for short-term crops, post-harvest loans, and relief for farmers affected by natural disasters. (...)

4.48. The Agriculture Infrastructure Fund was established in 2020 for funding infrastructure projects. It will provide an interest subvention of 3% per year for seven years for short-term agricultural loans of up to INR 20 million for post-harvest management projects. [70]

[70] Including supply-chain services, such as e-marketing platforms, warehouses, silos, pack-houses, assaying units, sorting and grading units, cold chains, logistics facilities, primary processing centres, ripening chambers, and other viable projects for building community farming assets, such as organic input production, bio-stimulant production units, infrastructure for smart and precision agriculture, and supply-chain infrastructure for clusters of crops, including for export. Department of Agriculture, Cooperation & Farmers Welfare, Circular regarding FAQs on implementation of Central Sector Scheme of Financing Facility under Agriculture Infrastructure Fund. Viewed at: http://agricoop.nic.in/sites/default/files/FAQs%20on%20AIF.pdf.

4.49. To provide relief to farmers affected by natural calamities [72], an interest subvention of 2% is available to banks on restructured loans for the first year. An additional subvention of 2% is available to banks for three years and up to a maximum of five years, to provide relief to farmers affected by severe natural disasters. (...)

[72] The granting of such benefits in cases of severe natural calamities is determined by the High-Level Committee, based on the recommendations of the Inter-Ministerial Central Team and the Sub-Committee of the National Executive Committee.