Context
∙ India’s farm sector Gross Value Added (GVA) is likely to see little or no growth in the second half of 2023-24, with the full year-clocking about 1% growth, rating firm ICRA said recently.
About
∙ It cites the weak kharif crop estimates, mixed trends in rabi sowing and concerns regarding crop yields.
∙ The mild growth in the agriculture, forestry and fishing GVA this fiscal, compared with FY23’s 4% uptick, would weigh on rural demand in the near term.
∙ It also added that if the coming monsoon was normal, sectoral GVA growth may recover to 3.4% in 2024-25.
Farm sector growth in India
∙ India is the second-largest producer of farm produce globally, contributing significantly to the national economy and rural livelihoods.
∙ India is the world’s largest producer of milk, pulses and jute, and ranks as the second largest producer of rice, wheat, sugarcane, groundnut, vegetables, fruit and cotton.
∙ Recent years have seen modest growth in the agricultural sector, averaging around 3%.
Recent trends
∙ The Economic Survey 2022-23 noted that the agriculture sector in the country grew by 3% in 2021-22, lower than an average growth of 4.6% in the last six years.
∙ In 2020-21, the growth in this sector was 3.3%. In 2016-17, the growth rate was 6.8%, followed by 6.6% in 2017-18, 2.1% in 2018-19 and 5.5% in 2019-20.
∙ The Survey said private investment in agriculture increased to 9.3% in 2020-21. The public investment, however, remained at 4.3%, the same as 2019-20.
∙ In 2011-12, the public investment in agriculture was 5.4%.
Challenges
∙ Low productivity: Despite being a large producer, India’s farm yields are significantly lower than global averages due to factors like fragmented landholdings, limited irrigation, and inadequate adoption of technology.
∙ Market volatility: Price fluctuations and inadequate market access make farm incomes unstable, discouraging investment and innovation.
∙ Climate change: Extreme weather events, rising temperatures, and water scarcity pose threats to agricultural productivity and farmer livelihoods.
∙ Post-harvest losses: Lack of proper storage, transportation, and processing infrastructure leads to significant losses, impacting farmer income and food security.
∙ Rural-urban migration: This creates a shortage of skilled agricultural labor, further hindering productivity growth.
Measures
∙ Investments in research and development: Focus on high-yielding, climate-resilient crop varieties, precision agriculture technologies, and improved irrigation methods.
∙ Improving market access: Develop and strengthen e-commerce platforms, farmer producer organizations (FPOs), and direct marketing channels to connect farmers to better markets.
∙ Investments in rural infrastructure: Build better roads, storage facilities, and cold chains to reduce post-harvest losses and improve market access.
∙ Climate-smart agriculture: Promote practices like conservation agriculture, water management, and drought-resistant varieties to adapt to climate change.
∙ Skill development: Train farmers in modern agricultural technologies, market awareness, and financial management to enhance their capabilities.
∙ Financial inclusion: Ensure easy access to credit and insurance schemes for farmers to invest in their farms and mitigate risks.
∙ Land reforms: Address issues like land fragmentation and tenancy regulations to improve land use efficiency and access to resources.
∙ Promoting diversification: Encourage farmers to adopt allied activities like horticulture, animal husbandry, and aquaculture to supplement their income and reduce dependence on traditional crops.
Government Initiatives
∙ The Agricultural Technology Management Agency (ATMA) Scheme: Grants-in-aid are released with the goal of supporting State Governments’ efforts to make available the latest agricultural technologies and good agricultural practices in various thematic areas of agriculture and allied sector.
∙ Krishi UDAN: The scheme proposes assistance and incentive for the movement of agri-produce by air transport.
∙ Pradhan Mantri Kisan Samman Nidhi Yojana (PM-Kisan: An income support of 6,000/- per year in three equal installments will be provided to all land holding farmer families.
∙ Pradhan Mantri Krishi Sinchai Yojana (PMKSY): Aimed at the development of irrigation sources for providing a permanent solution to drought.
∙ FDI: The Government of India has allowed 100% FDI in the marketing of food products and in food product E-commerce under the automatic route.
∙ Kisan Credit Card : Access to institutional credit is being provided through Kisan Credit Card and other channels.
∙ e-NAM initiative: Markets across the nation are now open to farmers, to enable them to get more remunerative prices for their produce.
∙ Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA): Ensures Minimum Support Price (MSP) to farmers for various Kharif and Rabi crops while also keeping a robust procurement mechanism in place.
∙ Pradhan Mantri Kisan SAMPADA Yojana (PMKSY): To increase the level of the food- processing industry and encourage rural entrepreneurship across the country including rural areas.
∙ PM Formalization of Micro Food Processing Enterprises (PMFME) Scheme: Provides financial, technical and business support for setting up/upgradation of 2 Lakh micro food processing enterprises through credit-linked subsidy.
Way Ahead
∙ Transforming Indian agriculture requires addressing challenges and leveraging opportunities.
∙ By investing in technology, infrastructure, market access, and farmer empowerment, India can achieve sustainable and inclusive farm sector growth, ensuring food security and rural prosperity.
