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Indian agriculture and its problems

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Agriculture has been the backbone of Indian economy for several thousand years and it still remains to be. It contributes to the overall economic growth of the country and determines the standard of life for more than 60 per cent of our people. Over the years, with the advent of industrialization, agriculture’s contribution is reduced, currently it offers around 14 per cent to the overall Gross Domestic Product (GDP).

What is the market size?

Despite the falling contribution to GDP, Indian agriculture and grocery market are huge. It is the world’s sixth largest, with retail contributing around 65 to 70 per cent of the sales. The Indian food processing industry accounts for 32 per cent of the country’s total food market, one of the largest industries and it is ranked fifth in terms of production and expected growth. During 2017-18 crop year, food grain production is expected to touch 277.49 million tonnes. During 2016-17, it was around 275.68 million tonnes. When it comes to dairy, India is the world's largest producer of milk for the past 20 years and its contribution to the world milk production is 19-20 per cent. India is gradually emerging as the leading exporter of instant coffee. Tea exports from India reached a 36 year high of 240.68 million kgs (2017). When it comes to crops, total area in India, sown with rabi crops reached 64.29 million hectares in 2018. India is the second largest fruit producer in the world. India's horticulture output reached 300.64 million tonnes in 2016-17 and is expected to reach 305.43 million tonnes in 2017-18. Exports in agriculture constitute 10 per cent of the country’s exports. Agricultural exports from India reached USD 28.09 billion during the April 2017-January 2018 with exports of basmati. India is the largest producer, consumer and exporter of spices and spice products. Spice exports from India grew by 6 per cent year-on-year between April-September 2017 to USD 1.37 billion.

Obstacles in Indian Agriculture

Despite the overwhelming market size, agricultural sector continues to lag in various sections. One of the major parts is that the yields per hectare of crops in India are generally low compared to international standards.

Irrigation problems

The majority of the agricultural land is monsoon dependent. If there is a good monsoon, the entire agricultural sector) is upbeat. But if the monsoon fails, every farmer is affected, resulting fall in production. Experts in the field of agriculture have pointed out that proper management of water is the primary reason. Irrigation which consumes more than 80 per cent of the total water use in the country is not properly overhauled. Over usage of water usage and unplanned water management methods has spoiled the irrigation system in many parts of the country, if systematic water resource management techniques are followed, the country can improve agricultural output greatly.

Outdated farming technology

One of the primary reasons for fall in agricultural productivity is the lack of implement advanced farming technology. Besides, poor farming communities in the country, lack the understanding of modern agriculture methods to improve productivity. For example, excessive usage of fertilizer not only makes the plants dependent on artificial fertilisers but also erodes the natural quality of the land, polluting ground water table and in many cases, pollutes the nearby water bodies, when there is heavy rain or flooding.

The practice of planting crops which require more water like rice on the basis of irrigation facilities are expand to the water deficient areas. The problem is that the water deficient area consumes more water than required. Moreover, the excessive evaporation causes natural salts to deposit and accumulate on the fields, which enables land to lose their fertility quickly.

Supply chain problems

Along with these problems, the majority of the farmers, lack proper marketing channels and mediums to sell his/her products. Such problems make them victims in the hands of middlemen who reduce their revenues. An inadequate storage facilities and improper marketing channels, leads wastage and results poor agricultural exports due to problems in maintaining quality and in many cases. It should be noted that food wastage running into thousands of crores of rupees every year. According to a World Bank report (2016), India has the most number of people who live below the international poverty line of USD1.90 a day.

What are the government initiatives?

Some of the recent major government initiatives in the sector are:

  • Government of India is planning to provide air cargo support to promote agriculture exports from India.
  • Government of India has allotted Rs 2,000 crore (USD 306.29 million) for computerisation of Primary Agricultural Credit Society (PACS) to ensure cooperatives are benefitted through digital technology.
  • Distribution of soil health app and health cards to help Indian farmers. Around 100 million Soil Health Cards (SHCs) have been distributed in the country during 2015-17
  • New AGRI-UDAAN programme launched to boost innovation and entrepreneurship in agriculture
  • Development of irrigation sources for providing a permanent solution from drought, Government of India has launched the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) with an investment of Rs 50,000 crore (USD 7.7 billion)
  • Government has committed Rs 6,000 crore for developing mega food parks.
  • Government of India has allowed 100 per cent FDI in marketing of food products and in food product e-commerce.
  • e-Rakam a new platform for selling agricultural produce launched. It is a joint initiative of Metal Scrap Trade Corporation Limited and Central Railside Warehouse Company Limited (CRWC).
  • Government of India extended the urea subsidy to the farmers till 2020. Urea subsidy for 2018-19 is estimated at Rs 45,000 crore (USD 6.95 billion).

Road Ahead

India has set a target of achieving an ambitious target of doubling farm income by 2022. It has also plans to increase the average income of a farmer household at current prices to Rs 219,724 (USD 3,420) by 2022-23 from Rs 96,703 (USD 1,505) in 2015-16. With increased investments in agricultural infrastructure such as irrigation facilities, warehousing and cold storage the agriculture sector in India is expected to generate better yield and growth in the next few years. Agriculture experts hope that India is expected to be self-sufficient in pulses in few years. This is mainly due to great hard work of scientists to get early-maturing varieties of pulses supported by the increase in minimum support price.

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