India's agricultural sector employs the largest number of poor in the world. The paper analyzed the structural flaws in organization and financing of the process of production in India. The paper presents a policy initiative for the establishment of formal economic institutions amongst the small and marginal farmers that will lead to economically efficient production processes and increase in productivity that will lead to real growth. It also described a method to infuse equity financing into agriculture by monetizing tenancy. It analyzed the benefits of integrating the food value-chain and aggregation on the income of producers. Today, the sector receives strong State intervention, and with the implementation of the steps proposed in the paper, the sector could be liberalized, which would lead to reduction in poverty. The policy is a disruptive innovation in the field. The implementation of the policy would have far reaching implications in charting an alternate course of public policy in the sector.

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