Indian farm sector performed well but needs re-orientation: Economic Survey

India’s Chief Economic Adviser V. Anantha Nageswaran
| Photo Credit: Reuters

Indian agriculture has performed well but the sector needs “re-orientation” in the backdrop of certain challenges like adverse impacts of climate change, and rising input costs, the Economic Survey for 2022-23 tabled in Parliament on January 31 said.

The other challenges are fragmented landholdings, sub-optimal farm mechanisation, low productivity, disguised unemployment, and rising input costs, among others.

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“While Indian agriculture has performed well, the sector needs re-orientation in the backdrop of certain challenges…,” it said.

Stating that the performance of the agriculture sector remains critical to growth and employment in the country, the Survey said investment in the sector must be encouraged through an affordable, timely and inclusive approach to credit delivery.

It may be noted that more than 75% of rural female workers are employed in the agriculture sector. This implies a need to upskill and create employment for women in agriculture-related sectors such as food processing.

“Here, the self-help groups (SHGs) can play a crucial role in shaping rural women’s potential into concrete developmental outcomes of financial inclusion, livelihood diversification, and skill development,” the Survey said.

According to the Survey, the agriculture sector has grown at an average annual growth rate of 4.6% during the last six years. It grew by 3%in 2021-22 compared to 3.3% in 2020-21.

In recent years, India has also rapidly emerged as the net exporter of agricultural products. During 2021-22, agricultural exports reached an all-time high of $50.2 billion.

The Survey said this growth is partly attributable to good monsoon years and partly to the various reforms undertaken by the government to enhance agricultural productivity.

Policies such as Soil Health Cards, the Micro Irrigation Fund, and organic and natural farming have helped the farmers optimise resource use and reduce the cultivation cost. The promotion of Farmer Producer Organisations (FPOs) and the National Agriculture Market (e-NAM) extension platform have empowered farmers, enhanced their resources, and enabled them to get good returns.

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Agri Infrastructure Fund (AIF) has supported the creation of various agriculture infrastructures. Kisan Rail exclusively caters to the movement of perishable agri-horti commodities. The Cluster Development Programme (CDP) has promoted integrated and market-led development for horticulture clusters.

Support for creating a startup ecosystem in agriculture and allied sectors is also being provided to the farmers.

All these measures are directed towards supporting the growth in agricultural productivity and sustaining its contribution to overall economic growth in the medium term, the Survey added.