Indian Agriculture: A brief Outlook
- Agriculture accounted for 14% of India’s GDP in 2016-17 and provided employment to more than half a billion people. The share of Agriculture in employment is close to 54% as on 2016-17.
- Indian Agriculture is dominated by the small-scale farming and is characterised by low productivity.
- The average size of land holding in Indian Agriculture is less than 2 hectares.
- The low land holding size means that most of the Indian farmer practices subsistence farming, where they consume the majority of what they produce and sell whatever is left.
- The Indian Agriculture remains the largest employer of the female labour force in India. The share of women labour force out of total women labour force employed in agriculture is close to 65%.
- The Indian agriculture suffers from the twin problem of low productivity and excess workforce employed in it. Due to which the per capita productivity of workforce is very low.
- The low productivity results in depressing the wages in the agriculture sector leading to high level of poverty.
- Agriculture’s importance in India’s Trade is declining, but it still has a share of about 10% in India’s total exports.
- Compare to the high growth in other sectors of the Indian economy, the performance of the Indian agriculture remains poor due to slow and erratic growth rates. The average growth rate of India’s agriculture over the past decades remains low at less than 2%.
- At such a low growth rate of the agriculture sector, it is impossible to uplift millions of rural poor out of poverty.
- The agriculture sector in India has undergone very limited liberalisation. The state still plays a predominant role in the Indian agriculture.
- Concerns about food security and poverty with respect to the second largest population in the world lead the government to remain strongly involved in regulating India’s agriculture through fixing prices for key agricultural products at the farm and consumer levels, high border protection, bans on or support for exports, and massive subsidies for key inputs such as fertilisers, water and electricity.
- The Indian agriculture remains one of highly subsidised sector of the economy.
- Total foodgrains production in India is estimated to be 272 million tonnes in the year 2016-17.
- The estimated production of key cereals like wheat, rice and pulses will be 96.6 million tonnes, 106.7 million tonnes and 22.1 million tonnes respectively in the year 2016-17.
- The other major crops grown in India are oilseeds with an estimated production of 33.6 million tonnes, sugarcane at 309 million tonnes, cotton at 32.5 million bales.
- As per the land use statistics 2013-14, the total geographical area of the country is 328.7 million hectares, of which 141.4 million hectares is the reported net sown area and 200.9 million hectares is the gross cropped area with a cropping intensity of 142 %.
- The net sown area works out to be 43% of the total geographical area. The net irrigated area is 68.2 million hectares.
- The sharp deceleration in the growth of the agricultural sector against the backdrop of an impressive growth of the larger economy is widening disparities between the incomes of workers in non-agricultural and agricultural activities.
Role of Agriculture in Indian Economy
- A growing agriculture sector is a prerequisite for the development of India.
- The growing surplus form the agriculture sector is needed to feed the millions of people who live below poverty line and can hardly sustain themselves.
- The agriculture sector has to maintain a very high growth rate of above 4% in order to sustain the pressure of rising population.
- A growing agriculture sector controls inflation because increased food supplies and agricultural raw materials keep the prices down and stable.
- The agriculture sector has an important backward linkage with the industrial sector. The rural consumers are an important source of demand for the industrial goods.
Doctoral Scholar in Economics & Senior Research Fellow, CDS, Jawaharlal Nehru University