Thanks to the prompt intervention and proactive exemptions from restrictions implemented on the agriculture sector, the Rabi and the Kharif crop sowing happened at the right time — primarily the reason why the country’s agricultural-based economy not only survived the lockdown onslaught but also recorded a positive growth, concludes Anushka Singh.
The agriculture sector in India employs nearly half of the workforce in the country. According to the Economic Survey 2020-2021, the share of agriculture in gross domestic product (GDP) reached 19.9 per cent for the first time in the last 17 years. The contribution stood at 17.8 per cent in 2019-20.
The agriculture sector stayed insulated from the effects of the lockdown. This was primarily due to the timely intervention and proactive exemptions from Covid-19 lockdown restrictions implemented on the agriculture sector. ‘The steps ensured uninterrupted harvesting of the Rabi crops and sowing of the Kharif crops in a timely fashion,’ according to ‘State of the Economy in 2020-21: A Macro View’ report, part of the Economic Survey.
Agriculture sector remains resilient
Union Minister for Finance and Corporate Affairs Nirmala Sitharaman had presented the Economic Survey 2020-21 in the Parliament on 29 January 2021. The survey was primarily dedicated to the Covid Warriors.
The report further adds that the supply chain disruptions impacted the ‘flow of agricultural goods leading to high food inflation and adverse initial impact on some major agricultural exports.’
When all other sectors slumped, Agriculture was the only one that showed positive growth of 3.4 per cent at constant prices in 2020-21. ‘Agriculture is set to cushion the shock of the Covid-19 pandemic on the Indian economy in FY21’ according to the report.
Agriculture remained the silver lining while contract-based services, manufacturing, construction were hit hardest during the lockdown, and were recovering steadily.
Agriculture and Allied Sectors show growth
The share of Agriculture and Allied Sectors in Gross Value Added (GVA) of the country at current prices was 17.8 per cent for the year 2019-20 (CSO-Provisional Estimates of National Income, 29th May, 2020).
The report further detailed that the total food grain production in the country in the agriculture year 2019-20 (as per Fourth Advance Estimates) was 11.44 million tonnes more than during 2018-19.
The actual agricultural credit flow was ₹ 13,92,469.81 crores against the target of ₹ 13,50,000 crores in 2019-20. The target for 2020-21 was ₹ 15,00,000 crores and a sum of ₹ 9,73,517.80 crores was disbursed till 30 November 2020. This includes:
As part of the Prime Minister’s Aatmanirbhar Bharat Package after the budget announcement of February 2020, 1.5 crore dairy farmers of milk cooperatives and milk producer companies’ were targeted to provide Kisan Credit Cards (KCC). As of mid-January 2021, a total of 44,673 Kisan Credit Cards (KCCs) were issued to fishers and fish farmers and an additional 4.04 lakh applications from fishers and fish farmers were with the banks at various stages of issuance.
The Pradhan Mantri Fasal Bima Yojana covers over 5.5 crore farmer applications year on year. The claims included: As of 12 January 2021, claims worth ₹ 90,000 crore were paid. Speedy claim settlements were done directly into the farmer accounts through Aadhaar linkage. Seventy 70 lakh farmers benefitted and claims worth ₹ 8,741.30 crores were transferred during Covid-19 lockdown period.
Proactive government protects farmers
On 25 December 2020, Prime Minister Narendra Modi released the next instalment of financial benefit under the PM Kisan Samman Nidhi through video conference. Speaking on the occasion, he said “₹ 18,000 crore have been deposited directly in the bank accounts of more than nine crore farmer families in the country. Ever since this scheme started, more than 1 lakh 10 thousand crore rupees have reached the account of farmers.”
The government is working towards reducing the input cost of the farmers by supporting initiatives such as scheme for distribution of solar pumps, neem coating of urea, soil health card, etc. The PM crop insurance scheme has been extremely beneficial and crores of farmers now have better crop insurance cover. The government is also proactively creating suitable environment for new markets for the farmers to sell their crop, particularly aiming at small farmers and encouraging them to work collectively. More than a thousand agricultural markets or mandis have been added online and incorporated into the system, trading more than ₹ one lakh crore.
Additionally, financial help is being rendered to Farmer Producer Organisations (FPO) that are ‘agricultural cooperatives formed to empower smallholder farmers and ensure their interests.’ Efforts are underway to form more than 10,000 FPOs for the welfare of smallholder farmers.
Schemes upholding farmers’ interests
Another issue often faced by farmers is to receive a fair price for their crop. Government has increased the number of crops for which MSP (minimum support price) is available and has implemented the recommendations of the Swaminathan Committee report by fixing the MSP as one and a half times of the production cost.
Today, farmers are reaping benefits of several government schemes such as getting a pucca house, toilet, clean drinking water, free electricity and gas connection, free treatment up to ₹ five lakh under Ayushman Bharat Scheme, etc.
According to the Prime Minister, agricultural reforms are providing better options to the farmers. The new farm laws that were enacted in 2020 further uphold farmers’ interests. He said, “After these laws, farmers can sell their produce to whomsoever they want. They can sell their produce wherever they get the right price. Farmers can sell their produce at MSP or sell it at market or export or sell it to the merchant, or sell it in another state, or sell it through FPO or be part of the value chain of biscuits, chips, jam, other consumer products, etc.”
Agriculture remains mainstay sector
Agriculture, in India, has come a long way since Independence. Agricultural revolutions such as the Green Revolution and White Revolution helped the sector tremendously in the nascent years.
The production of food grains in the country has been steadily increasing every year. India is among the top producers of wheat, rice, sugarcane, cotton, pulses, etc. in the world. It’s also the highest producer of milk in the world and the second highest producer of fruits and vegetables. India has the largest livestock population of around 535.78 million, which translates to around 31 per cent of the world population.
As per Indian Brand Equity Foundation (IBEF) data, during the 2019-20 (as per third advance estimates, PE-Provisional Estimates) crop year:
Food grain production was estimated to reach a record 295.67 million tonnes (MT). In 2020-21, Government of India is targeting food grain production of 298 MT.
Production of horticulture crops in India was estimated at a record 320.48 million metric tonnes (MMT) in FY20 as per second advance estimates.
Milk production in the country is expected to increase to 208 MT in FY21 from 198 MT in FY20, registering a growth of ten per cent y-o-y.
Sugar production in India reached 26.46 MT between October 2019 and May 2020 sugar season according to Indian Sugar Mills Association (ISMA).
India is among the 15 leading exporters of agricultural products in the world. Agricultural export from India reached USD 38.54 billion in FY19 and USD 35.09 billion in FY20. The total agricultural export was USD 10.40 billion between April and October 2020.
The organic food segment in India is expected to grow at a CAGR of 10 per cent during 2015-25 and is estimated to reach ₹ 75,000 crore (USD 10.73 billion) by 2025 from ₹ 2,700 crore (USD 386.32 million) in 2015.
With schemes and laws favouring the farmers’ interest and impetus on improving the sector as a whole, India is expected to achieve the goal of doubling farm income by 2022. The sector is set to generate more revenue and help farmers due to ‘increased investment in agricultural infrastructure such as irrigation facilities, warehousing and cold storage.’