Since 1950, the share of agriculture in the country’s Gross Domestic Product (GDP) declined substantially but there was only marginal decline in the number of persons dependent on agriculture. The Agriculture sector currently contributes nearly 14 percent of total GDP, while still accounts for about 55 percent of total employment (GoI, 2014). India had over 138 million farm holdings as per the Agricultural Census, 2011. Of this, about 92.8 million were marginal farm holdings i.e. having individual operational landholding of less than 1 hectare while another about 24.8 million were small farm holdings with individual operational landholding size less than 2 hectares. Therefore, the marginal and small farm holdings together accounted for a whopping 85.0 percent of the total farm holdings in India in 2010-11. The size of operational holdings in India is continuously declining with every successive generation. The situation has raised serious questions on the survivability of these smallholders.
On the other hand, the rapid increase in population coupled with a substantive increase in incomes and purchasing power has led to increased demand for quality food and agricultural products. According to the XII plan Working Group, "The small and marginal farmers are certainly going to stay for a long time in India - though they are going to face a number of challenges". Therefore, what happens to them has larger implications for the agrarian sector in particular and the entire economy in general which, has an implication on people’s livelihood.
Being smallholders, these farmers suffer from some inherent problems such as the absence of economies of scale, access to information, and their inability to participate in the price discovery mechanism. The participation of farmers is observed to be restricted by limitations like poor vertical and horizontal linkages and limited access to market, training, and finance. Poor information flow along the chain has also been identified as a vital constraint. The problem of access to the market is even more pronounced for small and marginal farmers.
So to overcome these challenges Arising Bihar is established to transform agriculture of Bihar towards high-value commodities into agri-food markets caused by liberalization, globalization, improved purchasing power, demand for safe and quality food, through the integration of smallholders with the agricultural markets so that benefits from transforming agriculture, trade environment and growing economy may be optimized and help in realizing higher income of small and marginal farmers, hence lead to more inclusive growth.