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Informist, Monday, Jul 22, 2024

--EconSurvey: Farm sector performance to improve on normal rains
--EconSurvey: Need to improve price discovery mechanism for agri products

--EconSurvey: Must up crop diversification, cut disguised unemployment
--EconSurvey: Agriculture sector remains critical for economic growth
--EconSurvey: Agriculture sector grew at average 4.18% over last 5 years

--EconSurvey: Need to up oilseed output to stabilise domestic prices

--EconSurvey: Need to tap potential of animal husbandry, dairy sectors
--EconSurvey: Also need to tap potential of fisheries sector

--EconSurvey: Can examine expanding National Mission on Edible Oils

--EconSurvey: Smallholder farmers must move to high-value agri segments
--EconSurvey: More efforts needed to expand area under pulses
--EconSurvey: Need to develop storage facilities for seasonal vegetables

--EconSurvey: MSP has incentivised crop diversification
--EconSurvey: MSP has a positive effect on retail prices of all crops
--EconSurvey: MSP has stronger effect for crops such as paddy, wheat

--EconSurvey: Focus on post-harvest infrastructure can reduce wastage
--EconSurvey: Focus on food processing post-harvest can reduce wastage
--EconSurvey: Pvt-public partnership key to funding green transition

--EconSurvey: Need farmer-friendly policies to make agri a growth engine

--EconSurvey: E-NAM, promoting FPOs in agri-sales can improve market infra

--EconSurvey: World Bank sees 3% fall in commodity price index in 2024
--EconSurvey: World Bank sees 4% fall in commodity price index in 2025

NEW DELHI – India's agriculture sector has grown at an annual average rate of 4.18% in the last five years, and remains critical for the country's economic growth, according to the Economic Survey for 2023-24 (Apr-Mar). 

The survey said that India's agriculture sector provides livelihood support to about 42.3% of the population, and has a share of 18.2% in the country's GDP at current prices. "The sector has been buoyant, which is evident from the fact that it has registered an average annual growth rate of 4.18% at constant prices over the last five years," it said. 

Even though India is a major agricultural producer, crop yields in the country are much lower than other producers globally. "That this is so despite the fact that the bulk of the government support goes to rice and wheat is a cause for reflection," according to the survey.

"Fragmented land holdings, low farm investment, lack of farm mechanisation, insufficient access to quality inputs, and inadequate marketing infrastructure leading to post-harvest losses, dependency on rain and short growing seasons are a few reasons for the low yields," according to the survey, tabled in Parliament today. 

As per provisional estimates for 2023-24, the growth rate for the agriculture sector was 1.4%, significantly below 4.7% in 2022-23. The survey attributed the lower growth to a drop in foodgrain production on account of delayed and poor monsoon rainfall caused by the El Nino phenomenon last year. 

To improve productivity in agriculture, the government aims to identify strategies to increase crop and livestock productivity, enhance cropping intensity and diversify to high-value crops, which can provide remunerative prices for farm produce, the Economic Survey said.

According to the survey, the growing significance of allied sectors such as animal husbandry, dairying and fisheries suggests that greater emphasis must be placed on tapping into the potential of these activities to boost the income of farmers. "Smallholder farmers' incomes cannot be increased by producing rice, wheat, or even millets, pulses and oilseeds. They need to move to high-value agriculture – fruits and vegetables, fisheries, poultry, dairy and buffalo meat."

Additionally, the survey pointed out that promoting crop diversification towards oilseeds, pulses and horticulture requires addressing critical issues such as investment in agri-infrastructure, credit accessibility and appropriate market institutions. It said that minimum support prices have incentivised crop diversification and have had a positive effect on retail prices of all crops. Among all crops, MSP has had an even stronger effect on crops for which procurement is substantial, such as wheat and paddy. 

On technological developments in the agricultural sector, the Economic Survey said greater focus on post-harvest infrastructure and development of the food processing sector could reduce wastage or loss of crops. This could also increase the length of storage, ensuring better prices for farmers. 

The National Agriculture Market, promoting farmers' producer organisations, and allowing cooperatives to participate in agri-marketing could improve market infrastructure and allow better price discovery, according to the survey. It also said incentivising states for improving the market infrastructure could be explored. 

"This can be done by creating an index to rank states, allowing the participation of cooperatives, and enabling remunerative returns to investors according to the functioning of their APMCs (agricultural produce market committee) and other market institutions," according to the survey. The country, it said, must focus on private and public partnerships to fund the green transition, while bringing out farmer-friendly policies to make the farm sector India's growth engine. 

COMMODITY PRICES

The World Bank projects a 3% decline in the commodity price index in 2024, and a 4% decline next year, mainly driven by lower energy, food and fertiliser prices, according to the survey. The energy price index is expected to fall due to significant declines in coal and natural gas prices this year. "In general, the current downward movement in the prices of commodities imported by India is a positive for the domestic inflation outlook."

India's edible oil consumption has been increasing faster than domestic production, leading to greater dependency on imports. According to the survey, to reduce the dependency on imports and address high prices, expanding the scope of the National Mission on edible oils beyond palm oil to other major oilseeds is worth an examination, it said. 

Similarly, India faces a persistent deficit in pulses and consequent price pressures. Production of pulses is concentrated in a few states and districts in the country, and is vulnerable to biotic and abiotic stresses, according to the survey. "More efforts are needed to expand the area under pulses, particularly lentils, tur, and urad, in more districts and rice-fallow areas. It is also worth considering promoting the summer cultivation of urad and moong in areas with assured irrigation facilities."

For perishable commodities such as vegetables, an assessment of the progress in developing modern storage facilities conducive to specific crops, and evaluating the viability of such facilities whose services have high seasonal demand is crucial, according to the survey.  

Additionally, forecast of normal monsoon rainfall by the India Meteorological Department and the satisfactory spread of the southwest monsoon so far are likely to improve the agriculture sector's performance and support the revival of rural demand, the survey said.  End

Reported by Sayantan Sarkar

Edited by Avishek Dutta

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