Economy

How Indian Agriculture Has Helped Rural Economy To Flourish Over The Last 10 Years

Farmers in a field in Madhya Pradesh. (Rajarshi Mitra/Wikimedia Commons)
Snapshot
  • Indian agriculture has undergone a phenomenal change over the last decade that it is no more dependent on just foodgrains or one sector.

    It has emerged as a versatile sector that still provides employment to over 50 per cent of the country’s population and keeps the economy ticking in rural areas despite the vagaries of weather.

The last decade has seen India’s agriculture sector contribute significantly to the economy despite the challenges thrown up by the unpredictable monsoon.

During 2014-15 and 2015-16, agricultural growth was hampered by deficient rainfall during the south-west monsoon. With rainfall being normal during 2016-17 onwards, agricultural growth turned positive.

The gross value added (GVA) by agriculture to the economy at 2011-12 prices has been erratic between fiscals 2012-13 and 2018-19. The chart below shows how the growth has been up and down during the review period, mainly because of the vagaries of weather.

According to India Brand Equity Foundation (IBEF), gross value added by Indian agriculture and allied sectors witnessed a compounded annual growth (CAG) of 2.75 per cent between 2011-12 and 2017-18. GAV of agriculture and allied sectors increased to $274.23 billion (Rs 19.32 lakh crore) in 2017-18 from $266.37 billion (Rs 18.76 lakh crore) in 2011-12. During 2013-14 and 2014-15, GAV dropped from $249.68 billion to $249.21.

According to the Ministry of Agriculture, in the 10 years from 2007 to 2017 India’s foodgrain sector has witnessed a negligible growth in area of cultivation, though production has increased 18 per cent and yield 16 per cent.

In contrast, area under coarse cereals like millets and maize (corn) had dropped 12 per cent, while its production and yield increased nearly 20 per cent and 40 per cent respectively. This has been possible as more hybrid varieties have been cultivated.

On the pulses front, too, there has been significant growth with acreage and yield rising 18 per cent and 19 per cent respectively, while production has gone up by over 60 per cent.

Sugarcane has been the only crop where the growth has been minimal, while cotton has seen a rise in area and production, though yield has increased 10 per cent only. Oilseeds farmers shifting to cotton and pulses has resulted in its coverage dropping 2 per cent, while production and yield have increased over 10 per cent and 15 per cent respectively.

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But India’s agriculture has just not been sustained by these elements. The Centre has been increasing the minimum support price for foodgrains every year. But globally, prices for agricultural produce have been ruling low over the last couple of years.

How then has GVA of Indian agriculture been rising? How have we witnessed a boom in rural wealth? The answer is simple: Indian agriculture story is just not one of foodgrains or pulses. It is much more.

One of the success stories of Indian agricultural has been the growth of horticulture crops. Indian horticulture crops have witnessed a 5 per cent CAG compared with the 3 per cent in foodgrains sector.

Rise in acreage and productivity is behind the phenomenal growth in horticulture. Productivity alone has increased by about 35 per cent in 13 years, starting 2004. This has made India the second largest vegetables and fruits producer after China.

Horticulture production was 167 million tonnes (mt) during 2004-05 and it topped 250 mt in 2011-12. During 2017-18 it was estimated to have increased to 305 mt — one third of it being fruits and the rest vegetables. Foodgrains production was 198 mt during 2004-05. It touched 245 mt during 2011-12 and was estimated to have gone up to 280 mt during 2017-18.

During 2014-15 and 2015-16, when deficient rainfall affected foodgrain production, horticulture gave a helping hand. Again, there have been other allied sectors in agriculture that have helped rural economy thrive.

The livestock and fisheries sectors have also contributed to the rural economy development. One of the important developments in the livestock sector is the phenomenal growth in milk production.

From less than 100 mt in 2006, India’s milk production touched a record 163.7 mt in 2016-17. Per capita availability of milk increased to 355 grams a day against the global per capita availability of 299 grams.

Meat production — from buffalo, sheep, goat, pig and poultry — during the period increased from 2.3 mt to 7.4 mt. Egg production, too, during the same period increased by 60 per cent from 50.66 billion to 88.13 billion. Fish production rose from 6.87 mt to 11.41 mt.

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The contribution of horticulture, livestock and fishery sectors is not confined just to rise in production or meeting domestic demand. These sectors have helped increase share of Indian agricultural exports in the global market to 2.1 per cent from a meagre 0.95 per cent.

The value of fish exports, especially marine products, has increased 29 per cent between 2013-14 and 2016-17 to Rs 397 crore . Buffalo meat has been contributing a constant Rs 260 plus crore between 2013-14 and 2016-17. Spices and vegetables, too, have contributed handsomely to India’s export basket totalling Rs 750 crore during 2016-17 from around Rs 690 crore during 2013-14.

Thus, the allied sectors contribution in agriculture has come in handy for the rural economy over the last 10-12 years. This is the main reason why rural India has contributed to India’s development even when urban parts have struggled.

In short, Indian agriculture has undergone a phenomenal change over the last decade that it is no more dependent on just foodgrain or one sector. In fact, it has emerged as a versatile sector that still provides employment to over 50 per cent of the country’s population (per 2011 census) and keeps the economy ticking in rural areas despite the vagaries of weather.

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