Green Revolution, Minimum Support Price and PDS
Between the 1960s and today India has moved from a food-importing country to a food-surplus one, and this transformation is explained through the Green Revolution, the minimum support price and the public distribution system. The three are connected: new technology raised production, the minimum support price gave farmers a guaranteed market, and public procurement fed the distribution system that supplies cheap food to the poor. For examinations this is a favourite cluster of questions on policy, institutions and cost concepts. These notes present the story in a clear sequence and flag the points that are tested most often.
The Green Revolution: meaning and background
The Green Revolution was a programme of technological change in agriculture based on high-yielding varieties of seeds, chemical fertilisers, pesticides, assured irrigation and mechanisation. In India it began in the mid-1960s under what was called the New Agricultural Strategy, at a time when the country depended heavily on food imports, especially wheat under American PL-480 assistance. The strategy started with wheat and was extended to rice. The scientist M.S. Swaminathan is regarded as the father of the Green Revolution in India, while Norman Borlaug, who developed the dwarf high-yielding wheat varieties, is called the father of the Green Revolution globally and received the Nobel Peace Prize in 1970. The Intensive Agricultural District Programme of 1960-61 prepared the ground for the High Yielding Varieties Programme launched in 1966-67.
Achievements and criticisms
The chief achievement was self-sufficiency in food grains. India's wheat and rice output rose sharply, buffer stocks with the Food Corporation of India grew, and dependence on food imports ended. The revolution was, however, uneven. Its benefits were concentrated in Punjab, Haryana and western Uttar Pradesh, which had assured irrigation, while the eastern and rain-fed regions lagged. Monoculture of wheat and rice replaced diverse crops, groundwater was over-exploited, and excessive use of fertilisers and pesticides degraded soil and water. Small farmers with less capital could not adopt the costly package, and income inequality widened. These limitations are why later policies speak of a second green revolution and of sustainable agriculture.
Minimum Support Price and the CACP
The minimum support price is the price at which the government assures farmers that it will buy their crop if market prices fall below it. It is recommended by the Commission for Agricultural Costs and Prices, established in 1965, and announced by the government before the sowing season. The Commission presently recommends the minimum support price for twenty-three crops, covering cereals, pulses, oilseeds and commercial crops such as cotton and jute. Costs are measured in several ways: A2 covers paid-out costs, A2 plus FL adds the imputed value of family labour, and C2 adds the imputed rent and interest on owned assets. The government has followed a policy of fixing the minimum support price at at least one and a half times the A2 plus FL cost.
Procurement and buffer stocks
The Food Corporation of India, set up in 1965, carries out procurement, storage and distribution of food grains. It buys wheat and rice at the minimum support price, maintains a buffer stock to meet shortages and emergencies, and releases grain for the public distribution system and welfare schemes. A buffer stock smoothens prices: it is built up in years of bumper harvest and released in lean years. Maintaining a large buffer stock, however, involves high storage cost, interest and wastage, and an excessive stock can suppress open market prices. The norms for the buffer stock and the strategic reserve are fixed by the government.
Public Distribution System and the National Food Security Act
The public distribution system supplies essential commodities, mainly rice, wheat, sugar and kerosene, through fair price shops at subsidised prices. It was universal in the beginning and became targeted in 1997, distinguishing households above and below the poverty line. The Antyodaya Anna Yojana of 2000 gave the poorest families a higher quantity at the lowest price. The National Food Security Act of 2013 gave the system a legal basis, covering about sixty-seven per cent of the population, and entitled priority households to five kilograms of food grain per person per month and Antyodaya families to thirty-five kilograms per family per month. Reforms such as end-to-end computerisation and One Nation One Ration Card have made the system more portable and transparent.
Agricultural subsidies
The government supports agriculture through several subsidies. The food subsidy is the difference between the cost of procuring and storing food grains and the price at which they are sold through the public distribution system. The fertiliser subsidy keeps urea and other fertilisers affordable, though it encourages excessive use of nitrogen. Irrigation and electricity subsidies lower the cost of pumping water, but free power has contributed to groundwater depletion. Credit subsidies provide cheaper loans through cooperatives and regional rural banks, and crop insurance under the Pradhan Mantri Fasal Bima Yojana protects against yield loss. Subsidies raise farm incomes, but economists argue for better targeting and for shifting support towards investment in irrigation and research.
Key facts at a glance
- Green Revolution began in India in the mid-1960s under the New Agricultural Strategy.
- Father of the Green Revolution in India: M.S. Swaminathan.
- Father of the Green Revolution globally: Norman Borlaug, Nobel Peace Prize 1970.
- High Yielding Varieties Programme launched in 1966-67.
- Main beneficiaries: Punjab, Haryana and western Uttar Pradesh.
- CACP, set up in 1965, recommends the minimum support price.
- MSP now covers 23 crops.
- Cost concepts: A2, A2 plus FL and C2.
- MSP fixed at at least 1.5 times the A2 plus FL cost.
- Food Corporation of India set up in 1965.
- Targeted Public Distribution System introduced in 1997.
- Antyodaya Anna Yojana launched in 2000.
- National Food Security Act passed in 2013; covers about 67 per cent of the population.
- NFSA entitlement: 5 kg per person per month; AAY families 35 kg per month.
Quick revision points
- Green Revolution technology relied on HYV seeds, fertiliser, pesticides and irrigation.
- Wheat was the first crop to benefit, followed by rice.
- Self-sufficiency in food grains was the main achievement.
- Regional imbalance and environmental damage were the main criticisms.
- MSP protects farmers against a price crash and encourages procurement.
- FCI handles procurement, storage and distribution.
- PDS changed from universal to targeted in 1997.
- NFSA 2013 is the legal foundation of food security in India.
How to prepare this topic
- Learn the Green Revolution as a sequence of dates, crops and leaders.
- Prepare a two-column list of achievements and criticisms.
- Memorise the cost concepts A2, A2 plus FL and C2 with their meaning.
- Note the institutions, namely the CACP and the FCI, and their exact roles.
- Remember the key dates of the PDS reforms and the NFSA entitlements.
- Read the annual MSP announcement to keep the coverage and multiples current.
Common exam traps
- Confusing M.S. Swaminathan with Norman Borlaug; one is for India, the other for the world.
- Saying the Green Revolution benefited all regions equally; it was concentrated in the north-west.
- Attributing MSP recommendation to the FCI; the CACP recommends it.
- Mixing up the NFSA quantity per person with the AAY quantity per family.
- Forgetting that the PDS became targeted in 1997, not with the NFSA in 2013.
- Treating the food subsidy as free food; it is the difference between procurement cost and issue price.
Frequently Asked Questions
What was the Green Revolution and who led it in India?
The Green Revolution was a technological programme that raised food grain output through high-yielding seeds, fertilisers, pesticides and irrigation, beginning in India in the mid-1960s. M.S. Swaminathan is regarded as the father of the Green Revolution in India, while the American scientist Norman Borlaug, who developed the dwarf wheat varieties, is called its father globally and won the Nobel Peace Prize in 1970.
Who recommends and who announces the minimum support price?
The Commission for Agricultural Costs and Prices, set up in 1965, recommends the minimum support price after studying the cost of cultivation and market conditions. The government considers the recommendation and announces the minimum support price for major crops before the sowing season. The Food Corporation of India then undertakes procurement at that price.
What is the public distribution system and how did the National Food Security Act change it?
The public distribution system sells subsidised food grains and other essentials through fair price shops. It became a targeted system in 1997 and was given a legal foundation by the National Food Security Act of 2013, which covers about sixty-seven per cent of the population. Under the Act, priority households receive five kilograms per person per month and Antyodaya families receive thirty-five kilograms per family per month.
What are the cost concepts A2, A2 plus FL and C2?
A2 is the actual paid-out cost incurred by the farmer, such as seeds, fertiliser, labour wages and irrigation charges. A2 plus FL adds the imputed value of the farmer's own and family labour to this paid-out cost. C2 is the most comprehensive concept and additionally includes the imputed rent on owned land and interest on owned capital, so it gives the full economic cost of production.
Why is the Green Revolution criticised despite its success?
Although the Green Revolution made India self-sufficient in food grains, it widened regional disparities because its benefits were concentrated in irrigated areas of Punjab, Haryana and western Uttar Pradesh. It encouraged wheat and rice monoculture, depleted groundwater, degraded soil through excessive fertiliser and pesticide use, and favoured farmers who could afford the costly input package, thereby increasing income inequality.