Agriculture and Allied Sector Overview

Agriculture and Allied Sector Overview

Agriculture

The Indiana agriculture sector has been growing at an average annual growth rate of 4.6% during the last six years. It grew by 3.0% in 2021-22 compared to 3.3% in 2020-21.

In recent years, India has also rapidly emerged as the net exporter of agricultural products. In 2021-21, exports of agriculture and allied products from India grew by 18% over the previous year.

During 2021-22, agricultural exports reached an all-time high of US$50.2 BILLION.

Growth Rate of GVA at Basic Prices in %

2019-20 – 5.5
2020-21 – 3.3
2021-22 – 3.0
2022-23 – 3.5
1* RE, ** PE, 1AE

[Source: ES 2022-23]

Production of Foodgrains

• As per Fourth Advance Estimates for 2021-22, the production of food grains and oilseeds has been increasing Year-on-Year (YoY). Production of pulses has also been notably higher than the average of 23.8 million tonnes in the last five years.

• As per First Advance Estimates 2022-23 (kharif only), the paddy area was about 3.8 lakh hectares less than the sown area of 411.2 lakh hectares during 2021-22 (kharif season). Further, in the current rabi season, the area under rabi paddy has expanded by 6.6 lakh hectares as compared to last year (Crop Weather Watch Group, 12 January 2023).

• As per the First advance Estimates for 2022-23 (Kharif only), total food grain production in the country is estimated at 149.9 million tonnes, which is higher than the average Kharif food grain production of the previous five years (2016-17 to 2020-21).

• Despite a fall in the sown area of Kharif paddy, the total production of Kharif rice during 2022-23 is estimated at 104.9 million tonnes, which is higher than the previous five years (2016-17 to 2020-21) average Kharif rice production of 100.5 million tonnes.

Foodgrains Production

• Food-grain production increased from 265,05 million tonnes in 2013-24 to a record 329.69 million tonnes in 2022-23, which is the highest ever production.

• The agriculture production is 351.92 million tonnes, which is the highest ever (as per second advance estimates).

[Source: INDIA 2024]

International Year of Millets

The United Nations General Assembly, in its 75th session during March 2021, declared 2023 the International Year of Millets (IYM). Millets are Smart Food with high nutritional value, are climate resilient, and align with several UN Sustainable Development Goals (SDGs).

Organic and Natural Farming

Organic and natural farming provides chemical-free fertiliser and pesticide-free food grains and other crops, improves soil health, and reduces environmental pollution.

• India has 44.3 lakh organic farmers, the highest in the world, and about 59.1 lakh ha area was brought under organic farming by 2021-22.

• Sikkim voluntarily adopted going organic, and the process of getting the total cultivable land of 58,168 hectares under organic farming commenced at the ground level in 2010.

• It became the first State in the world to become fully organic, and other States, including Tripura and Uttarakhand, have set similar targets.

• The Government has been promoting organic farming by implementing two dedicated schemes, i.e., Paramparagat Krishi Vikas Yojana (PKVY) and Mission Organic Value Chain Development for North Eastern Region (MOVCDNER), since 2015 through cluster/Farmer Producer Organisations (FPOs) formation.

• PKVY Scheme is being implemented in a cluster mode (with min. 20 ha size).

Pradhan Mantri Fasal Bima Yojana (PMFBY)

• PMFBY was launched in the 2016 Kharif season to provide comprehensive insurance coverage to farmers in case of crop failure, helping stabilise their incomes.

• PMFBY is currently the largest crop insurance scheme in the world in terms of farmer enrolments, averaging 5.5 crore applications every year, and the third largest in terms of the premium received.

• The scheme promises minimal financial burden on the farmer, with farmers paying only 1.5% and 2% of the total premium for the Rabi and Kharif seasons, respectively, with the Centre and State Governments bearing most of the premium cost. During the last six years of its implementation, farmers paid a premium of 25,186 crore and received claims amounting to 1.2 lakh crore (as of 31 October 2022).

According to ES 2022-23, the agriculture sector in India has grown at an average annual growth rate of 4.6% during the last six years.

Besides, the allied sectors like horticulture, animal husbandry, dairy, and fisheries have an important role in improving the overall economic conditions and nutrition of the rural masses.

To maintain the ecological balance, there is a need for sustainable and balanced development of both agriculture and the allied sectors.

Commercial Crops

• Commercial crops are those crops that are produced for trade purposes and not for self-consumption by the Indian farmers. It includes oilseed crops, Sugar crops, Fibre crops, Narcotic crops, and Beverage crops.

• To encourage the agricultural products, the government announces to minimum support price for important crops.

• The function of the Agriculture Cost and Price Commission (ACPC) is to decide the minimum support prices on behalf of the government.

• Minimum Support Price (MSP) announced by the government is the price at which the government is ready to purchase crops directly from the farmers, if the crop to be purchased falls below the MSP.

Sweet Revolution

Keeping in view the importance of beekeeping as part of the Integrated Farming System (IFS) in the country, the government approved the allocation of ₹ 500 crore for the National Beekeeping & Honey Mission (NBHM) for three years (2020-21 to 2022-23).

• The mission was announced as a part of the ANB scheme.

• NBHM aims for the overall promotion & development of scientific beekeeping in the country to achieve the goal of 'Sweet Revolution', which is being implemented through the National Bee Board (NBB).

• A total of 45 projects for assistance of 88.87 crores have been approved/sanctioned for funding under NBHM as on 17.12.2021.

• Beekeeping is an agro-based activity that is being undertaken by farmers/landless labourers in rural areas as a part of the IFS.

• India's export of honey has increased by about 110% between 2013-14 to 2019-20.

[Source: ES 2021-22]

Blue Economy 2.0

On 1st February 2024, the Interim Budget 2024 was introduced, and it highlights the promotion of 'Blue Economy 2.0'.

• 'Blue economy 2.0' will emphasise the sustainable development of coastal aquaculture, seas, and coasts.

• Mariculture, Aquaculture, Maritime Transport, Renewable Energy, Tourism, etc., are the pillars of the Blue Economy.

• It prioritises sustainable and climate-resilient activities and focuses on a balanced approach between environment and economic activities.

According to the World Bank, the blue economy is the "sustainable use of ocean resources for economic growth, improved livelihoods and jobs while preserving the health of the ocean ecosystem."

Agriculture Production Board

Allied Sectors

• The allied sectors of Indian agriculture—livestock, forestry & logging, and fishing & aquaculture—are gradually becoming sectors of buoyant growth and a potential source of better farm incomes.

• The livestock sector grew at a CAGR of 7.9% during 2014-15 to 2020-21 (at constant prices), and its contribution to total agriculture GVA (at constant prices) has increased from 24.3% in 2014-15 to 30.1% in 2020-21.

• The annual average growth rate of the fisheries sector has been about 7% since 2016-17 and has a share of about 6.7% in total agriculture GVA. Higher growth in allied sectors compared to the crop sector has obvious implications in terms of the increasing importance of the former in total agricultural GVA.

The dairy sector is the most critical component of the livestock sector, employing more than eight crore farmers directly, and is the most prominent agrarian product.

Other livestock products, such as eggs and meat, are also growing in importance. While India ranks first in milk production in the world, it ranks third in egg production and eighth in meat production in the world.

National Food Security Act (NFSA) 2013

Objective: To provide food and nutritional security in the human life cycle by ensuring access to an adequate quantity of quality food at affordable prices so that people can live a life with dignity.

The Act (notified on 10.09.2013) provides for coverage of up to 75% of the rural population and up to 50% of the urban population for receiving subsidised food grains under TPDS (Targeted Public Distribution System), thus covering about two-thirds of the population.

The Act also lays special focus on the nutritional support for women and children.

[Source: MOCAFPD]

Agricultural Revolutions

The credit for the Green Revolution in India is given to the Agricultural Scientist Dr. Norman Borlaug. However, the contribution of Dr. M.S. Swaminathan is no less. But, its termed name is the contribution of American scientist Dr. William Gande.

• The speedy increase in the field of milk production is called White Revolution.

• To increase the pace of White Revolution, the Operation Flood was started.

• The Father of Operation Flood was Dr. Verghese Kurien.

• The Operation Flood was the largest integrated dairy development program in the world. It was started by the National Dairy Development Board in 1970.

• The increase in oilseed production was due to Yellow Revolution.

• The progress in the increase of fish production was called the Blue Revolution.

Plan Outlay on Agriculture and Allied Sectors

• The percentage of plan outlay on agriculture and allied sectors to total plan outlay varied between 31% and 14.9% from the First Plan to the Tenth Plan.

• Actual outlay on the agricultural sector ranged between 18 and 24% of the total Plan outlay (except during the First Plan, it was as high as 31%).

• During the Eleventh Plan (2007-12), the plan outlay on agriculture has declined to only 18.5%.

• During the first decade of planning (1951-61), when the First and Second Five-Year Plans were implemented, the annual rate of growth in agriculture was 3.3%.

• A rate of GDP 5.7% has been achieved in the agricultural and allied sectors. This is short of the target of 4% but is better than the achievement of 2.4% in the 10th plan.

• The Tenth Plan was the first plan that did not set targets for crop production.

• The green revolution did not cover barley, ragi, and minor millets.

• The Green Revolution was confined only to High-Yielding Varieties (HYV), mainly rice, wheat, maize, and jowar. The 

• National Agricultural Insurance Scheme was Implemented in October 1999.

Land Reforms Programmes in India

Land Reforms Programmes in India include:

• Elimination of intermediaries

• Tenancy Reforms

• Determination of the ceiling of holdings per family

• Distribution of surplus land among landless people

• Consolidation of holdings (Chakbandi)

By the end of the first five-year plan, middlemen had been removed (except in small areas).

The following measures were made effective for the betterment of farmers:

1. Regulation of tax

2. Security for the rights of farmers

3. Right of land ownership for the farmers

For the reorganisation of agricultural land holdings, mainly two measures were taken:

1. Land ceiling

2. Chakbandi

The land ceiling determines the maximum land that can be held by a farmer. Holding more than that area will be illegal.

Chakbandi of land means to aggregate the divided and broken land.

• Land within an area of less than 1 hectare is called a marginal land holding

• 1 to 4 hectares is called a small land holding

• Land within an area of more than 4 hectares is called a large land holding

Chakbandi was implemented first time in India in the year 1920 in Baroda.

Key Figures

MS Swaminathan, an Indian geneticist and international administrator, is renowned for his leading role in India's Green Revolution, while Norman E. Borlaug is called 'The Father of Green Revolution' in the world.

Green Revolution was started in the Third Five-Year Plan. The most positive effect of the Green Revolution was on wheat. There was a 500% increase in crop production.

Agricultural Finance

• Unorganised sources of agriculture finance are money-lenders, money-dealers, relatives, businessmen, landlords, and commission agents.

• Organised sources of agriculture finance are Co-operative Committees, Co-operative Banks, Commercial Banks, Regional Rural Banks, the Government, etc.

• Co-operative Credit Organisation was first time in 1904. Primary Co-operative Committees provide credit for a short period.

• State Co-operative Agriculture and Rural Development Banks provide credit for a long period.

• Land Development Bank was established in the year 1919 in the form of Land Mortgage Bank. Land Development Bank provides long-term loans.

National Bank for Agriculture and Rural Development

• (NABARD) Apex Institution of Rural Credit. It is the apex was established on 12th July, 1982 by the merger of the Agriculture Credit Department and the Agriculture Development Corporation of the Reserve Bank of India. Its establishment is based on the recommendations of the Shivraman Committee.

• The authorised share capital of NABARD was Rupees 500 crore. However, after an amendment, its authorized share increased up to 5,000 crore with effect from 1st February, 2001.

• Further, a bill (The National Bank for Agriculture and Rural Development (Amendment) Bill, 2017) to increase its authorised capital by six times to Rs. 30,000 crore and enable the exit of the Reserve Bank of India (RBI) was passed in January 2018.