"Other states need to be encouraged to adopt contract farming with the application of new technologies like in developed countries to increase the output," he said at the first meeting of a high-powered committee of Chief Ministers constituted by Prime Minister Narendra Modi.
Fadnavis said small farmers need to group together and increase their investment capacities.
"We are also deliberating on how small farmers can get access to modern technologies. We need to find ways so that our banking system becomes farmer-friendly," he said after the meeting was held at the NITI Aayog.
Chief Ministers of Haryana, Arunachal Pradesh and Gujarat besides Union Minister of Rural Development and Panchayati Raj Narendra Singh Tomar attended the meeting. Madhya Pradesh Chief Minister Kamal Nath joined the meeting via video-conferencing.
Fadnavis said Indian agriculture is witnessing a growth rate of three to four per cent per year. The food processing sector's growth is just about one per cent.
"Until the food processing growth rate does not exceed agricultural growth rate, farmers will not be able to realise the prices of their products," he said.
The state should also utilise the National Agriculture Market (eNAM), the online trading platform for agricultural commodities to expand their market access, said Fadnavis.
Prime Minister Modi had constituted the high-power committee comprising nine members for the transformation of agriculture and raising farmers' income.
The panel will examine various provisions of the Essential Commodities Act, besides ways to attract private investments in agriculture marketing and infrastructure.
It will also suggest a mechanism for linking market reforms with e-NAM, GRAM and other centrally-sponsored schemes.
The committee will further suggest policy measures to boost output in food processing and exports along with measures to build value chains and logistics.
The committee will submit its report within two months.