Economic Survey Volume 2 Chapter 7 (Latest)
CHAPTER – 7
AGRICULTURE AND FOOD MANAGEMENT
OVERVIEW OF AGRICULTURE AND ALLIED SECTORS
- Fluctuating growth rates of agriculture and allied sectors – as more than 50% of agriculture in India is rainfall dependent which
aggravatethe production risks.
Growth rate (in %)
- Gross Capital Formation (GCF) to GVA has been showing a fluctuating trend from 18.2% in 2011-12 to 16.4% in 2015-16.
- The Gross Capital Formation in agriculture and allied sectors as a proportion to the total GCF showed a decline from 8.3 percent in 2014-15 to 7.8 percent in 2015-16. This decline can be attributed to
reductionin private investment.
As per the Fourth Advance Estimate for 2016-17, the country achieved a record production of food grains estimated at 275.7 million tons, which is higher by 10.6 million tons than the previous record production of food grains in 2013-14.
The production of rice is estimated at 110.2 million tons during 2016-17 which is also a new record.
Growth (in %)
Reason of growth
– Very good rainfall during monsoon 2016-17
– Various policy initiatives
Kharif Production 2017-18
As per the First Advance Estimates,
DYNAMICS OF AGRICULTURAL GROWTH
There has been a gradual structural change in agriculture – the share of livestock in GVA has been rising gradually while the share of the crop sector in GVA has been on the decline (impacting sources of incomes of the farm households.
Need of reorientation in policies-
Strengthening the value chain by focusing on allied activities like dairying and livestock development along with gender-specific interventions.
Policy for Women Farmers:
With growing rural to urban migration by men, there is ‘feminisation’ of
The following measures have been taken to ensure mainstreaming of women in agriculture sector:
- India ranks first, with 179.8 Mha (9.6% of the global net cropland area) of net cropland area according to United States Geological Survey 2017.
- The Index of Crop Diversification has been computed to examine whether there
hasbeen major changes in the cropping patterns across States.
- Two of the States HP and Jharkhand have shown increasing values in crop diversification while Odisha (80% of the cropped area under rice) and Punjab (wheat and paddy 83%) follow monoculture facing issues such as – declining productivity, lower fertilizer response ratio, degradation of soil health and declining profitability of cultivation.
- Need to diversify into
high valuecrops and horticulture crops: to improve soil health, productivity and reduce risk( as inverserelationship between change in crop diversification index and variability of output)
- Crop Diversification Programme is being implemented in the original green revolution states to diversify paddy areas towards less water requiring crops (like oilseeds, pulses, coarse cereals) and shifting of tobacco farmers to alternative crops in tobacco growing states.
INPUT MANAGEMENT IN AGRICULTURE
Operational Holdings by Educational Status
- The educational level of farmers has a significant impact on the capacity of farmers to adopt and inculcate new methods of cultivation and input management.
- As per Input Survey (2011-12), about 69.3% of farmers were literate.
% of farmers
Level of education
Graduation and above
Use of Inputs by Agricultural Holdings
- The use of inputs like fertilizers, hybrid seeds
andorganic manure arecritical in increasing productivity in agriculture.
- In order to promote Seed Replacement Rate (SRR) and Varietal Replacement Rate (VRR), Seed Project entitled, “Seed Production in Agricultural Crops” is being implemented.
- However, the use of fertilizers and hybrid seeds can bring about better yields if there is adequate coverage of irrigation since agriculture in India is largely
- The all India percentage of net irrigated area to total cropped area was 34.5%, which makes a large segment of
cultivation dependenton rainfall.
- Only 2 states – Punjab and UP have more than 50% net irrigated area to total cropped area and only 7 states have above 34% in 2014-15.
- To increase the coverage of irrigated area- Prime Minister’s Krishi Sinchayee Yojana (PMKSY) was launched in 2015 with an outlay of Rs.50,000 crore in five years.
Per Drop More Crop
Rs. 1556.7 cr
Rs. 1991.2 cr
Rs. 3400 cr
Area brought under micro-irrigation
5.7 lakh ha
8.4 lakh ha
12 lakh ha
- Farm mechanization and crop productivity has a direct correlation– saves time &
labour, reduces drudgery, cut down production cost in the long run, reduces post-harvest losses, boosts crop output and farm income.
- At present, Indian farmers are adapting farm mechanization at a faster rate in comparison to recent past. Indian tractor industries have emerged as the largest in the world and account for about one-third of total global tractor production.
- Need to enhance the level of farm mechanization in the country– estimated that percentage of agricultural workers of
total work forcewould drop to 25.7% by 2050 from 58.2% in 2001
- Human power availability in agriculture also increased from about 0.043 KW/ ha in 1960-61 to about 0.077 KW/ha in 2014-15. However, as compared to tractor growth, increase in human power in agriculture is quite slow.
- Need to consolidate land holdings to reap the benefits of agricultural mechanization
MITIGATING RISKS IN AGRICULTURE: CROP INSURANCE AND CROP LOSS
- The NSSO Report indicated that a very small share of agricultural households engaged in crop production activities was insuring their crops. For wheat and paddy, less than 5% of the cultivating agricultural households insured their crops.
- Need of proper awareness along with enhanced geographical coverage and simplification of procedures – as major reasons for not
insuringthe crops- lack of awareness, improper coverage and reach and complicated procedures and lack of resources etc.
Policy to promote
Climate-smart agriculture (CSA) is an approach that helps to guide actions needed to transform and reorient agricultural systems to effectively support
It aims to tackle 3 main objectives:
AGRICULTURAL CREDIT AND MARKETING INITIATIVES
- Credit is a critical input in achieving high productivity and overall production in the agricultural sector. A sum of Rs.20339 crore has been approved by the Government of India in 2017-18 to meet various obligations.
- The electronic National Agriculture Market (e-NAM) was launched by Government on
April,2016 aims at integrating the dispersed APMCs through an electronic platform and enable price discovery in a competitive manner, to the advantage of the farmers.
- Farmers need to store their produce in the accredited warehouses, to avail themselves of post-harvest loans (to avoid distress sales). The loans are available to KCC (Kisan Credit Card) holding small and marginal farmers at interest subvention of 2% on such storages for a period of 6 months.
Interest Subvention Scheme (ISS) is a scheme which will help farmers avail
It will be implemented by NABARD and RBI.
The salient features are-
AGRICULTURAL RESEARCH AND MANAGEMENT
- Agricultural R&D is the main source of innovation, which is needed to sustain agricultural productivity growth in the long-term. The actual expenditure of DARE/ICAR has increased from Rs. 5393 crore in 2010-11 to Rs. 6800(BE) crore during 2017-18.
total209 new varieties/hybrids tolerant to various biotic and abiotic stresses with enhanced quality have been developed for Cereals, Pulses, Oilseeds, Commercial and Forage crops.
The food security system in India is managed by intertwined organizational framework between Centre and States that involves centralized and decentralized procurement of food grains through price support operations, allocation and distribution of food grains at reasonable prices to consumers/beneficiaries through TPDS (Targeted Public Distribution System) and the maintenance of buffer stocks for price stabilization.
Pooled cost of grains (weighted MSP of stock) + procurement incidentals + cost of distribution
There has been an increase in the economic cost (both wheat and rice) due to increase in MSPs and proportionate increase in the incidentals.
Open Market Sale Scheme (Domestic)
FCI on the instructions from the Government sells excess stocks out of Central Pool through Open Market Sale Scheme (Domestic) [OMSS (D)] to achieve following objectives:
THE WAY FORWARD
The transformation of agriculture and allied sector is imminent by way of appropriate policy interventions related to prices, trade, adoption of Climate Smart Agriculture, increased focus on small, marginal and women farmers.
Though the share of agriculture and allied sector in GVA is on the decline, in the quest for inclusive economic development in India, agriculture sector will remain an engine of