Strategy to step up Growth rate @ 6% in agriculture Sector in GDP
AssignmentTo step up contribution of Agriculture Sector in the Gross Domestic Product (GDP) from existing 3.8% to 6% in the next 5 years.
Group 7:Sunil Kumar, 140036, [email protected] Dhanavi 140016, [email protected] Vivek, 140027, [email protected] Anchan, 140006, [email protected] Soni, 140063, [email protected]
Overview of agriculture Indias share2
Key IndicatorsIndicators2008-092009-102010-112011-122012-13Growth in GDP6.728.598.916.694.47Agriculture & Allied sectorsIndustryServices
0.094.449.980.819.1610.58.607.559.675.027.816.571.420.966.96Share of Agriculture & Allied in Total GDP15.814.614.514.113.68Agriculture13.412.312.312.0Forestry & Logging1.61.51.41.4Fishing0.80.80.70.7Share of Agriculture & Allied Sectors in Gross Capital Formation (GCF)6.595.964.834.99Agriculture7.26.75.66.2Forestry & Logging0.10.10.00.1Fishing0.50.50.50.5Employment in the Agriculture Sector as share of Total workers58%Present ScenarioIndian Agriculture is broadly a success story. It has done remarkably well in terms of output growth, despite weather and price shocks in the past few years.The 11th Five Year Plan (2007-12) witnessed average annual growth of 3.6 % in Gross Domestic Product (GDP) from agriculture and allied sectors against targeted 4.0%.While it may appear that performance of agriculture & allied sectors has fallen short of target, production has improved remarkably growing twice as fast a s population.Indias agriculture exports are booming at a time when other leading producers are experiencing difficulties.The better agriculture performance is the result of (a)farmers response to better prices (b) continued technology gains(c) appropriate and timely policies coming together
Present Scenario Crop ProductionDuring 11th Plan period, foodgrains production recorded an increasing trend except in 2009-10.In 2009-10, production declined to a level of 218.1 million tonne due to severe drought experienced in various parts of the country.During 2011-12, foodgrains production reached an all time high of 259.32 million tonne.However, production in 2012-13 was affected adversely by deficiency in South West Monsoon and resultant acreage losses.Overall area coverage at 665 lakh hectare under foodgrains during Kharif 2012-13 showed a decline of 55.8 lakh hectare as compared to 720.86 lakh hectare during Kharif 2011-12.Output is expected to decline in all major cropsProduction in million tonneYearFoodgrainsPulsesOilseeds2000-01196.811.118.442006-07217.314.224.292009-10218.114.724.882010-11244.818.232.482011-12259.3217.0929.82012-13250.1417.5829.5CAGR3.63.84.2Present Scenario Area, Rainfall, A shift from mono cropping to double or multiple cropping, improvement in yield levels and shift in areas for certain crops hold the key to long term growth.There are limitations to the expansion of the area for cultivation.Performance of Indian agriculture is heavily dependent upon rainfall.South West Monsoon (July to September) comprising 75% of total annual rainfall, substantially affects production and productivity of agriculture.During 2012, out of 36 meteorological divisions, 23 received excess or normal rainfall and remaining 13 were deficient.With more than half of the cultivated area dependent upon monsoon, advance information about the intensity and spread becomes important.Monsoon PerformanceYear% of districts with normal/ excess rainfall% of long period average rainfall for the country as a whole2003761022004568720057299200660100200772106200876982009427820107010220117610120125892Present Scenario Fragmented landholdings, marketingA noticeable feature of the Indian Agriculture sector is the domination of small and marginal farmers with small landholdings.
Exerts immense pressure on land- MarginalisationImpacts everything from production to marketingTransaction costs become prohibitive for building business modelsEfficient but poor! Viability is under stress.affects Bankability too!
This poses a challenge for adoption of farm mechanisation (use of tractors, power tillers) and generating productive incomes from farm operations.
Declining per capita availability of foodgrains is a major concern in India.
Another critical issue is supply chain management in agriculture marketing in India.
It is necessary to evolve mechanisms for linking wholesale processing. Logistics and retailing with farm production activities so as to generate enhanced efficiency and remunerative farm prices.Category-wise number of land holdings
8
Category-wise land holdings : Area operated
9
Avg. size of land holdings across categories
Hectares10
Challenges - IrrigationOut of the net cropped area of 168 million hectares in the country, about 110 million hectares (i.e. 65%) are rainfed. Even at the full development of surface and groundwater resources for irrigation in the near and distant future, about half of the cropped area i.e. approximately 70 million hectares would remain rainfed.The country gets from rainfed areas about 42% of the total foodgrain production, 70% of coarse cereals, 90% of the pulses and oilseeds and substantial quantities of cotton and other raw materials. It supports 66% cattle and 40% of our population.Production in the rainfed areas is greatly affected by the irregularity of the monsoon, as the rainfall fluctuates widely between years and there are wide variations in the onset, continuity and withdrawal of monsoon. The risk of crop failure due to the vagaries of weather reduces the individual farmers willingness to invest in costly inputs and better crop management.
A relook at what agriculture means12 Agriculture is the science and practice of activities relating to production, processing, marketing, distribution, utilization and trade of food, feed and fibre. implies that agricultural development strategy must address not only farmers, but also those in marketing, trade, processing and agri-businessS.S. Acharya, Agricultural Marketing & Rural Credit for strengthening Indian Agriculture ADB,2006
A relook at strategy to step up growth rate in agricultureMultiple cropping, improvement in yield levels and shifts in areas./regions, which hold the key to long term output growth.Any strategy aimed at boosting agriculture output and growth upto the level of 6% needs a minimum time horizon of 4-5 years.Measures are capital intensive and hence, private investment may not come forth due to the cost of capital.These measures have long gestation period and low income stream spread over longer time horizon., Borrowed capital having high servicing cost can not be relied upon.IRRIGATIONThere are limitations to the expansion of area under cultivation.Efforts need to be directed at bringing entire cultivable land under assured irrigation.Accelerated Irrigation Benefit Programme (AIBP) implemented by GOI need to be replicated at a massive scale.Assured irrigation helps in bringing about a Shift from mono-cropping to double cropping or Multiple cropping, improvement in yield levels and shifts in areas./regions, which hold the key to long term output growthA relook at strategy to step up growth rate in agricultureAgricultural inputs:
SEEDS:Seeds are critical inputs.Farmers normally rely on farm saved seeds.Over use of farm seeds leads to a low seed replacement rate and poor yield.A Central Sector Scheme for developing and Strengthening Infrastructure facilities for Production and Distribution of Quality Seeds is under implementation since 2005-06.As a result availability of certified seeds has increased from 140.5 lakh quintals in 2005-06 to 328.6 lakh quintals in 2012-13.426 Seed processing plants have been sanctioned.A Sub Mission on Seed and Planting Material under the national Mission for Agriculture Extension and Technology with an allocation of Rs.2088 crore is under consideration for the 12th Five Year Plan.
Mechanisation and Technology:Tractors are the main source for various farm operations in India.For small land holdings, power tiller is the alternative.India is the world leader in tractor production with 5 lakh tractors produced annually.Studies reveal that adoption of appropriate mechanisation of farm operations can increase production and productivity by 10-15 percent.Progress in farm mechanisation is hindered by low and erratic availability of farm power and shrinking holding sizes.This requires setting up of custom hiring centres/ high tech machinery banks so that small and marginal farmers can reap the benefits of farm mechanisation.Government has initiated a sub mission on Agriculture mechanisation in the 12th FYP with a focus on custom hiring.A relook at strategy to step up growth rate in agricultureAgricultural inputs:
Integrated Nutrient Management:India meets 80% of its urea requirement through indigenous production.However, it is largely dependent upon import for its requirements of Potassic (K) and phosphatic (P) fertilisers.Consumption of fertilisers in nutrient terms has shown improvement.But, over use of nitrogenous and limited use of K and P fertilisers are matters of great concern.Need for appropriate price incentives and reduction in fertiliser subsidy is the need of the hour to encourage sustainable practices.Agriculture Research and Education:Agriculture Research has played a vital role in agricultural transformation.ICAR undertakes basic, strategic and applied research focusing primarily on rainfed agriculture.State Agriculture Universities focus on applied and adaptive research to local problems.Public spending on R & D to agriculture GDP in India is in the range of 0.5 to 0.59.A number of technologies are being used by the farmers include 9838 tonnes of breeder seed, 13,228 tonnes of foundation seed, 20,541 tonnes of certified seed, 14,860 tonnes of truthfully labelled seed and 40,000 tissue culture plantlets of filed crops.Awareness through Mobile on weather information, agro advisory and prices of 3 commodities in nearest three mandis has helped the farmers in selling their produce at remunerative price. (OBAMA VISIT to India).Value addition three stepsModerate risk Moderate investmentModerate returns Complex value addition changing form, conversion to products- Low risk-Low investment- saving in costsSimple Value Addition cleaning,drying,grading,packing,storing, andtransportationHigh riskHigh investment High returns Product marketing Brand powerEconomies of Aggregation Bargaining & claim making power from joint purchase, production, and sale Challenges of SmallholdersShift from subsistence to market oriented productionAdaptation to new production standards grades, quality Food safety regulations Elusive links to higher value marketsAdverse terms of exchangeInadequate surpluses and access to extension, quality input supplies, finance and marketing services;Deficient InfrastructureProducers OrganisationsSmallholder farmers, like the enterprises they supply, are perennially cash constrained. POs can consolidate the harvests of smallholder producers and negotiate competitive prices on domestic and international marketsPOs can offer Package of services includingFinancial services including credit and insuranceInput Supplies including extension, augmenting irrigation and energy infrastructureValue added marketing Agricultural cooperatives and private enterprises represent farmer suppliers at the base of many global agri value chainsChallenges of SmallholdersShift from subsistence to market oriented productionAdaptation to new production standards grades, quality Food safety regulations Elusive links to higher value marketsAdverse terms of exchangeInadequate surpluses and access to extension, quality input supplies, finance and marketing services;Deficient InfrastructureCritical Bottlenecks -1Access to Institutional CreditUnfortunately, institutional credit is insufficiently geared to meet even production credit needs that too through limited range of products like crop loans and KCC.Producers Collectives need to be recognized as channels - like SHGs and their federations are recognized - by NABARD, RBI & SLBCCs.SFAC and others promoting PCs need to work towards creating enabling and conducive conditions for PCs to access institutional credit.
Critical Bottlenecks-2Dearth of Promotional Organizations capable to provide Organizational Life Cycle Support Lack of Entrepreneurial and Business Orientation in Promotional OrganizationsMost Promotional Organizations can not provide end to end package of comprehensive servicesThere is an urgent need for such promotional organizations and very few among existing NGOs can rise to meet the need
Critical Bottlenecks -3Lack of Techno-Managerial Manpower with proper values orientation, appropriate ethos to work with Producers Collectives and Promotional Organizations.New Promotional Organizations must be able to offer comprehensive package of financial, organizational and techno-managerial support more on the lines of the ways in which Dairy Cooperatives are supported by First Operation Flood Programme.
Critical Bottlenecks-4Right Institutional FrameworkPoliticization and bureaucratization has weakened faith in cooperativesProducers Companies are facing the pressures from some quarters against their continuing existence under Companies Act.New Generation Cooperatives organized under Parallel Cooperative Acts are facing uncertainties in the wake of repeal of these Acts in some StatesRight to form cooperatives is recognized now but legal frameworks deny opportunity for benefitting from practice of cooperative principles
A relook at strategy to step up growth rate in agriculture Sum upIt may be observed that objective of stepping up growth rate of agriculture from 4 to 6% involve two pronged strategy - of critical factors, such as increase in output alongwith remunerative prices of farm produce.This requiresRole of Government in the spheres of extension in the coverage of irrigated areas through construction of major and medium irrigation projects,improved variety of breeder, foundation and certified seeds appropriate pricing policy of fertilisers to promote use of K and P fertilisers and less dependence on urea Increasing awareness among farmers through Central/State Agriculture universities. State extension agencies Increased sensitivity of the farmers to adoption of the new technologies, development of farmers collectives for remunerative and well bargained price of the farm produce.Chart1356801343010680107004452014730116701065050120160701245010240561501792013250984062110199701391093007117921643142618496754082269514021780783694239301412774719235624705138406856
No. MillionsMarginalSmallSemi MedMed + Large
Sheet1MarginalSmallSemi MedMed + LargeLarge70-7135,68013,43010,68010,7002,770076-7744,52014,73011,67010,6502,440080-8150,12016,07012,45010,2402,170085-8656,15017,92013,2509,8401,920090-9162,11019,97013,9109,3001,670095-9671,17921,64314,2618,4961,404001-0275,40822,69514,0217,8071,230005-0683,69423,93014,1277,4711,096010-1192,35624,70513,8406,8561,00013,4701070013,0901065012,4101024011,760984010,97093009,90084969,03778078,5677471
Chart1145501928030000982901751020900324309250019730231703465086250220402571036670801402462028710383507394028121307223895365561298143213938193592893202633101378985529835410351363754751088
Million. Ha.MarginalSmallSemi MedMed + Large
Sheet1MarginalSmallSemi MedMed + LargeLarge70-7114,55019,28030,00098,29050,060076-7717,51020,90032,43092,50042,870080-8119,73023,17034,65086,25037,710085-8622,04025,71036,67080,14033,000090-9124,62028,71038,35073,94028,890095-9628,12130,72238,95365,56124,163001-0229,81432,13938,19359,28921,072005-0632,02633,10137,89855,29818,715010-1135,41035,13637,54751,08817,379148,35098290135,37092500123,96086250113,14080140102,830739401737989,7246556180,3615928974,01355298
Chart10.40779147981.43559195832.8089887649.18598130840.39330637921.41887304822.77892030858.68544600940.39365522751.44181705042.78313253018.42285156250.39252003561.43470982142.76754716988.14430894310.39639349541.43765648472.75700934587.95053763440.39507438991.41948898032.73143538327.71669020720.39536919161.41612690022.72398545047.59433841420.38265586541.38324279152.68266440157.40168652120.381.422.717.4515752625
MarginalSmallSemi MedMed + Large
Sheet1MarginalSmallSemi MedMed + LargeLarge70-710.411.442.819.1918.07076-770.391.422.788.6917.57080-810.391.442.788.4217.38085-860.391.432.778.1417.19090-910.401.442.767.9517.30095-960.401.422.737.7217.21001-020.401.422.727.5917.13005-060.381.382.687.4017.0802010-110.381.422.717.4517.37AreaMSSMMLM+L14,55019,28030,00048,23050,06098,29017,51020,90032,43049,63042,87092,50019,73023,17034,65048,54037,71086,25022,04025,71036,67047,14033,00080,14024,62028,71038,35045,05028,89073,94028,12130,72238,95341,39824,16365,56129,81432,13938,19338,21721,07259,28932,02633,10137,89836,58318,71555,298NumberMSSMMLM+L35,68013,43010,6807,9302,77010,70044,52014,73011,6708,2102,44010,65050,12016,07012,4508,0702,17010,24056,15017,92013,2507,9201,9209,84062,11019,97013,9107,6301,6709,30071,17921,64314,2617,0921,4048,49675,40822,69514,0216,5771,2307,80783,69423,93014,1276,3751,0967,471
