This year is proving particularly difficult for Indian agriculture and its farmers. The prospect of a weak monsoon, rising oil and fertilizer prices, and subdued agricultural commodity prices has increased pressure on farm incomes. Yet agriculture remains central to the economy. Despite decades of policy support, manufacturing contributes only about 17 percent of GDP, while the IT sector, a key driver of services growth, faces uncertainties. Official data may indicate resilience, but underlying concerns remain significant. According to the latest estimates, India’s GDP grew by 7.7 percent in FY 2025-26, while agriculture and allied activities expanded by only 3 percent. This gap underscores the sector’s continuing challenges. Even with strong headline growth, both the government and the RBI have expressed concerns about the economy, reflecting deeper structural weaknesses.
The IMD has forecast this year’s monsoon rainfall to be below normal, at 90 percent of the Long Period Average (LPA). With nearly half of India’s agricultural land dependent on rainfall, any shortfall poses serious risks to farm production. At the same time, rising crude oil prices have pushed diesel prices up by Rs 7.53 per litre since May 2026, increasing cultivation costs. Concerns are also mounting over El Niño. While conditions are expected to remain weak during the first half of the monsoon, they could strengthen to a moderate level in August and September. A strong El Niño is forecast between November and January, meaning the monsoon season is likely to end before its full effects are felt. Although the monsoon arrived late and its overall performance will depend on the timing and distribution of rainfall across regions. A strong El Niño later in the year could reduce winter rainfall, potentially affecting rabi crops. The government must proactively mitigate their impact through timely support measures and risk-management strategies.
Fertilizer availability and pricing present another major challenge. The Gulf conflict triggered by attacks on Iran by the United States and Israel has disrupted global energy and commodity markets. Shipping through the Strait of Hormuz has been affected, posing risks for India, which imports a substantial share of its oil and natural gas, along with major part of fertilizers and fertilizer raw materials, through this route. As a result, India has been forced to import urea at nearly double its usual price, increasing the likelihood of a sharp rise in the fertilizer subsidy bill. While the government continues to regulate urea and DAP prices, other decontrolled fertilizers have become significantly more expensive.
This is not the first warning. The Russia-Ukraine conflict that began in February 2022 triggered a global fertilizer crisis and pushed import costs to record levels. Those records may be surpassed this year. Yet the lessons from that episode were not adequately translated into long-term measures to reduce import dependence. Policymakers are now paying greater attention to the issue, but the challenge remains urgent.
To explore possible solutions, the cover story of this issue of Rural World focuses on fertilizer self-reliance. Yashpal Singh Saharawat and colleagues from the Alabama-based International Fertilizer Development Center present scientific and practical strategies to reduce import dependence. In an exclusive interview, Dr. Siba Prasad Mohanty, MD of Hindustan Urvarak & Rasayan Limited, discusses available alternatives. It also carries an article by renowned soil scientist Prof. Rattan Lal, who outlines a roadmap for strengthening sustainable agricultural growth while reducing fertilizer imports.
Beyond the current crisis, agriculture requires much greater policy attention. Farm incomes continue to decline, while opportunities for farmers to move into non-farm sectors remain limited. Indian agriculture faces a striking paradox: the country has surpluses of several commodities, depressing prices and hurting producers, yet continues to import large quantities of edible oils, pulses, and cotton. Despite mission-mode initiatives, progress has been uneven and farmers are bearing the cost of these imbalances. Some agricultural economists argue that the current situation should be treated like the 1991 economic crisis and addressed through sweeping reforms. However, many such recommendations focus mainly on marketing reforms and subsidy reductions. The challenge extends far beyond subsidies or markets. Crop productivity has stagnated in many areas, and expected gains in farmers’ incomes have not materialised.