The Indian agriculture sector supports approximately 42.3% of the population and contributes 18.2% to the country’s GDP. The sector has been robust, with an average annual growth rate of 4.18% over the past five years, however the growth has been historically low for 2023-24 at 1.4%.
Several initiatives and measures have been undertaken by the government, including assured remunerative prices through the Minimum Support Price (MSP), improved access to institutional credit, enabling crop diversification, promoting digitization and mechanization, encouraging sustainable practices through organic and natural farming, and focusing on productivity enhancement. These efforts have positively impacted the sector.
Challenges in Agriculture:
- Productivity Issues: Despite being a significant agricultural producer, India's crop yields are lower compared to other major producers. This is due to fragmented land holdings, low farm investment, lack of mechanization, insufficient access to quality inputs, inadequate marketing infrastructure, dependency on rains, and short growing seasons.
- Specific Challenges: The agriculture sector faces challenges such as low productivity levels, the impact of weather variability, fragmented land holdings, and inadequate marketing infrastructure which affect overall performance.
Government Interventions:
- MSP and Income Support: The government has implemented various interventions, such as fixing MSP at one and a half times the all-India weighted average cost of production to provide assured remunerative prices to farmers. Other income support measures include the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), which offers farmers a direct financial benefit of ?6000 per year.
- Sustainable Practices: Initiatives like Per Drop More Crop (PDMC), a micro-irrigation scheme, and the National Mission on Sustainable Agriculture (NMSA), which promotes the use of alternative and organic fertilizers, aim to improve productivity and sustainability.
- Digital Agriculture: Digital initiatives such as the Digital Agriculture Mission and e-National Agriculture Market (e-NAM) facilitate the adoption of smart agriculture technologies and better price discovery.
Allied Sectors - Livestock and Fisheries:
- Livestock Sector: The importance of livestock and fisheries in enhancing farmers’ income is recognized, especially as agricultural holdings reduce. Programs like the Rashtriya Gokul Mission (RGM), National Digital Livestock Mission (NDLM), and National Programme for Dairy Development (NPDD) aim to improve quality, access to organized markets, and the development of indigenous breeds. The livestock sector has shown impressive growth, with a Compound Annual Growth Rate (CAGR) of 7.38% from 2014-15 to 2022-23, contributing 30.38% to the total GVA in agriculture and allied sectors.
- Fisheries Sector: The fisheries sector has seen support through infrastructure development programs like the Fisheries Infrastructure Development Fund (FIDF) and Pradhan Mantri Matsya Sampada Yojana (PMMSY). These initiatives have contributed to an average annual growth of 7.4% in fish production from 2020-21 to 2022-23. Fisheries production reached 17.54 million tons in 2022-23, making India the third-largest producer globally.
Agricultural Production and Crop Diversification:
- Record Production: In 2022-23, India achieved record food grain production of 329.7 million tons and oilseeds production of 41.4 million tons. Although 2023-24 saw a slight decline to 328.8 million tons due to poor monsoons, nutri-cereals and oilseeds production marked marginal increases.
- Diversification Programs: The government has promoted crop diversification to address sustainability challenges, shifting from water-intensive crops to pulses, oilseeds, and nutri-cereals. The Crop Diversification Programme (CDP) and the National Food Security Mission (NFSM) enhance the production and productivity of food grain and commercial crops through various demonstration and support initiatives.
Investment and Credit Access:
- Gross Capital Formation (GCF): GCF in agriculture grew by 19.04% in 2022-23, with the share of GCF as a percentage of agricultural Gross Value Added (GVA) increasing from 17.7% to 19.9%. This growth is mainly due to increased public investment.
- Credit Schemes: The Kisan Credit Card (KCC) scheme has streamlined agricultural credit accessibility, issuing 7.5 crore KCCs with a limit of ?9.4 lakh crores as of January 31, 2024. The scheme has been extended to fisheries and animal husbandry activities, enhancing credit access for these sectors.
Insurance and Risk Management:
- Crop Insurance: The Pradhan Mantri Fasal Bima Yojana (PMFBY) offers a safety net against crop losses due to natural calamities, pests, or diseases. It is the world’s largest crop insurance scheme by farmer enrollment and third-largest by insurance premiums. In 2023-24, the insured area reached 610 lakh hectares, with claims paid amounting to ?1.50 lakh crore since 2016-17.
- Technological Interventions: Innovations like the Digi-Claim-Payment Module and Yield Estimation Based on Technology (YES-Tech) aim to improve claim settlements and transparency in the insurance process.
Marketing and Price Support:
- e-NAM Scheme: The e-NAM scheme enhances efficiency in agricultural marketing and price discovery, with over 1.77 crore farmers and 2.56 lakh traders registered on the portal. The scheme provides free software and assistance for creating infrastructure for quality assaying and better marketing practices.
- MSP Increases: The government has consistently increased MSP for major crops, ensuring a margin of at least 50% over the all-India weighted average cost of production. This policy aims to provide a safety net for farmers against market price volatility.
Sustainability and Climate Resilience:
- Sustainable Agriculture Practices: The National Mission for Sustainable Agriculture (NMSA) and Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) promote efficient water use and climate-resilient practices. Irrigation coverage increased from 49.3% of gross cropped area in 2015-16 to 55% in 2020-21.
- Water Management: The Micro Irrigation Fund (MIF) and Per Drop More Crop (PDMC) schemes support micro-irrigation initiatives. The PM-PRANAM initiative incentivizes states to reduce chemical fertilizer use, promoting alternatives like Nano Urea and organic fertilizers.
- Soil Health Initiatives: The Soil Health Card Scheme and the introduction of Urea Gold (urea infused with sulfur) aim to optimize nutrient use and improve soil health.
Digital Agriculture:
- Digital Agriculture Mission: The Digital Agriculture Mission 2021-2025 aims to modernize agriculture through advanced technologies like AI, remote sensing, and drones. This mission includes building a robust ecosystem of agri-tech startups and implementing digital public infrastructure.
- Agri Stack: Agri Stack includes foundational registries such as the Farmers' Registry, Geo-referenced Village Maps, and Crop Sown Registry, supporting data-driven decision-making.
- Krishi Decision Support System (Krishi-DSS): The Krishi-DSS integrates geospatial and non-geospatial data to aid in agriculture planning and implementation.
Cooperative Societies:
- Role of Cooperatives: Cooperatives enhance market access and bargaining power for small and marginal farmers. Recent initiatives include computerizing Primary Agriculture Credit Societies (PACS) and setting up new multi-state cooperatives like National Cooperative Exports Limited (NCEL) and Bhartiya Beej Sahakari Samiti Limited (BBSSL).
- Growth of Cooperatives: As of March 2024, there are 8.03 lakh single-state cooperatives and 1,614 multi-state cooperatives. The new cooperatives focus on promoting exports, improving seed access, and marketing organic products.
Agricultural Research and Education:
- Investment in Research: Investment in agricultural research yields high returns, with ?19.65 thousand crore spent in 2022-23, equating to 0.43% of agricultural GVA. The Indian Council on Agricultural Research (ICAR) released 347 varieties/hybrids of 44 crops in 2022-23, focusing on bio-fortified varieties and sustainable practices.
- ICAR Contributions: Significant contributions include developing high-yielding crop varieties, promoting millets, and enhancing farmers' skills through outreach programs and technology demonstrations.
Food Processing Sector:
- Importance of Food Processing: India is the largest producer of milk and the second-largest producer of fruits, vegetables, and sugar. The food processing industry is crucial for reducing wastage, enhancing shelf life, and adding value to agricultural produce.
- Sector Employment and Exports: The food processing sector employs 12.02% of the total workforce in the organized sector and accounts for 11.7% of India's total exports in 2022-23, valued at USD 46.44 billion. Government initiatives under schemes like Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) support the development of efficient supply chains, reduce wastage, and extend the shelf life of perishable produce.
About the Author
Deepak Pareek is a visionary in the agriculture technology domain, renowned for his unparalleled expertise as a serial entrepreneur, investor, and ecosystem builder. With a rich tapestry of 25 years of diverse experience spanning 34 countries, Deepak has spearheaded numerous groundbreaking projects that have revolutionized the agri-tech landscape. His accolades speak volumes about his impact and dedication. Honored as one of the Top 10 Agropreneurs of 2019 by Future Agro Challenge, Greece, and recognized as a Technology Pioneer in 2018 by the World Economic Forum, Switzerland, Deepak’s contributions are globally acknowledged. His advisory roles with various private, public, and multilateral organizations have driven significant advancements in agriculture and technology.
Deepak’s extensive experience and deep understanding of agri-tech make him an invaluable asset. His insights can help streamline operations and uncover new technological opportunities. With a history of successful collaborations with startups, government bodies, and agricultural corporations, Deepak has consistently delivered results that drive growth and innovation. As a trusted advisor and mentor, Deepak offers strategic guidance that can help organizations navigate complex challenges and leverage emerging technologies. His engagement in policy advocacy ensures that your organization stays ahead of regulatory changes and benefits from favorable policies. Additionally, his expertise in evaluating investment opportunities can help identify and capitalize on lucrative ventures in the agri-tech sector.
VP of Supply Chain @ Zespri International with MBA in Supply Chain
7 个月As always, very insightful commentary on the Indian Agriculture sector Deepak Pareek
Make India's Agriculture Efficient, Equitable and Environmentally Friendly
7 个月It would be great to know how far these policies and programs are making an impact at the ground level. whether the outputs and outcomes accomplished are optimal relative to the costs involved, and what else can or should be done to make these policies and programs more cost-effective, efficient and equitable?
Formerly, Special Officer, Medical College at Palghat, Government of Kerala
7 个月A very good text book narrative. The government is not focusing on decentralisation. Unless cutting edge level officials takes responsibilities growth will be only natural growth not withstanding the govt policies
Zonal Head @ Inera | Agriculture Sales l Marketing I Farm Mechanization l Agriculture Tech
7 个月The Indian agriculture sector is showing strong resilience, and government efforts are helping it grow and improve, even with recent challenges. Thanks for Sharing!