Engine of Economic Revival – Indian Agriculture

Engine of Economic Revival – Indian Agriculture

S. B. Singh, Chairman Aryavart Bank & General Manager Bank of India

Indian agriculture sector is the biggest employment provider with prevalence of disguised and under employment, which is primary source of livelihood for about 58% population with close to 16% contribution in gross domestic product of the country. This sector can play significant role in revival of Indian economic growth with minimum per capita investment thereby limiting the workforce migration to urban and industrial centers and relieving the unban agglomerations from infrastructural bottlenecks due to migrant workforce. The Indian agriculture sector needs four types of interventions to achieve accelerated growth, which are as under:

I-                   Management of Food Wastage

II-                Commercialization of Indian Agriculture for Clean Energy

III-              Development of Irrigation Facilities

IV-             National Scientific Crop Plan   

I- Management of Food Wastage: India is facing massive food wastage which is valued at around $ 14 Billion (Close to rupees one lac crores) every year as estimated by Food and Agriculture Organization of United Nations. The gradual food waste reduction will go a long way in increasing the disposal income of agriculturists thereby promoting demand led growth in the economy.  This requires investment in sorting & grading, storage & cold chains, transport, food processing and marketing facilities across the country. With reduced industrial activities in this pandemic phase, this sector must attract priority investments for sustaining the growth momentum of the economy. The increased income levels of the farmers will lead to increase in personal productive asset base, which coupled with increased social assets in the form of social infrastructure will create multiplier effect for long term sustainable growth. This will also be instrumental in doubling the famers’ income by 2022.

II- Commercialization of Indian Agriculture for Clean Energy: India is paying huge bill for petroleum import, which in financial year 2019-20 was close to $ 102 Billion. The ethanol blending in is currently around 6%, which was below 1% in 2012-13, and is likely to be increased to 20% by 2030. If this programme can be fast tracked by 5% in two years, it will generate additional foreign exchange savings of about $5 Billion (About Rs 35,000 Crs) annually, majority of which will go to sugarcane growers and domestic industrial units. Since sugarcane is predominantly uses in ethanol production therefore we can develop dedicated cluster for sugarcane development having following potential impacts:

A-    It will enhance the income of the farmers.

B-    It will save precious foreign exchange.

C-    It will promote clean energy.

It will also be a step towards our avowed objective of Atma Nirbhar Bharat. This will create tremendous employment potential in terms of backward and forward linkage. Biodiesel is another promising area for agriculture and industry complementarity for clean energy. During last five to six years, good progress has been made in this direction, which needs to be fast paced.

III-Development of Irrigation Facilities: Irrigation is one of the overriding priorities of the governments for agriculture development. According to World Bank, about 36.7% land was irrigated in India in 2013-14 which has now increased to about 51% according to Wikipedia report. The increased irrigation facilities improve the extensive and intensive cultivation and river linking national project will go a long way in this direction. The improvement in irrigation facilities through development of local ponds & reservoirs, rainwater harvesting, dams, canals and interlinking of rivers with control and reduce the severity of draughts and floods, which are causing damages to agriculture, economic assets, human and animal lives apart from huge expenses for such disaster managements. According to India Today report ,the estimates of economic losses from flood and heavy rains have been approximately Rs  3,78,247 Crs between 1953 to 2017 apart from destruction of 8.07  Crore houses and 1.07 Lac loss of human lives. The expenses on relief and health related issues have also been quite substantial to manage these socio-economic disasters.

Apart from developing the irrigation potential, the Government is also popularizing the efficient means of irrigation through sprinkler and drip irrigation instead of flood irrigation for optimization of the use of water resources in an integrated manner by focusing on “Per Drop More Crop”.  This strategy will create balance regional growth of rural and underdeveloped areas by minimizing the vagaries of weather thereby creating local employment through agriculture and allied activities with focus on agro processing industries. Since we are self-sufficient in food grains, this increased irrigation potential can be used for cultivating commercial crops focusing on import substitution and export promotion. The farming for horticulture, spices, medicinal plants, sugarcane, cotton and jute can be accorded priority for promoting agro based industries by harnessing the economies of scale and scope by commercializing the agriculture.

IV-National Scientific Crop Plan: The country was divided into fifteen agro climatic zones in seventh five year plan, whereas National Bureau of Soil Survey and Land Use planning has divided the country in twenty agro-ecological zones, which were further sub divided in sixty sub zones. National Agriculture Research Project (NARP) of Indian Council of Agriculture Research has divided the country into one hundred twenty agro-climatic zones based on agro-ecological conditions and cropping patterns. These classifications in themselves reveal the biodiversity of the country. To leverage the natural, climatic and biodiversity of the country, the nation must focus on National Scientific Crop Plan for each agro climatic zone with dedicated research and extension services coupled with storage, processing, quality control and marketing facilities with minimum support price.

The national scientific crop plan will offer enabling infrastructure for improving the productivity and profitability of the agricultural operations. Some of the major advantages envisaged are as under:

A-    It will provide integrated support system in the form of pre-cultivation stage, cultivation, harvesting, processing, storing, grading and marketing support, which will improve operational efficiency, productivity and profitability.

B-    It will focus on quality of production rather on quantity of mass production by adopting organic farming or by minimizing the use of chemical fertilizers, insecticides and pesticides for better nutrient value fetching higher prices in domestic and international markets.

C-     The national scientific crop plan will optimally utilize the land resources based on soil texture and agro-ecological conditions thereby creating production hubs for specific crops both for domestic consumption and export.

D-   Since the cropping pattern will be based on soil texture, agro-ecological and climatic conditions confined to specific geographical area, scientific research will be more focused, which will ensure smoother transmission from lab to field.   

With introduction of single goods and services tax, the movement of goods within the domestic territory has been streamlined. Introduction of electronic national agriculture market (e-NAM) has improved the marketing infrastructure to a great extent. The changes in the outdates Agriculture Produce Marketing Act (APMC) has provided much needed flexibility to the farmers in selling their produce. All these developments have streamlined the logistic and marketing infrastructure of agriculture produce to a great extent and have pave way for National Scientific Crop Plan for the overall development of the economy.  We can pilot the project with fifteen to twenty agro- climatic zones on priority.

To sum up, India is richly endowed with diversified agro-ecological and climatic regions with diversified flora and fauna. The opportunities are galore ranging from clean energy, organic produce, management of food wastage, import substitution, export promotion and increased agriculture- industry interdependence. Corona led global pandemic has challenged the existing global economic order, which will certainly be at variance from the existing one in a significant manner. The growing concern for ecological balance is tilting in towards vegetarian consumption and Indian agriculture offers tremendous potential in this area.  The richness of Indian herbs and spices as immunity booster have also opened up new vista for Indian agriculture sector. Therefore the time has now come for focused attention for agricultural growth as industry by exploiting the synergies of industry agriculture interdependence, import substitution and export promotion in a focused manner by providing scientific, extension and infrastructural support with assured minimum support price. These strategies are overlapping in nature from the term perspective and cover short, medium and long term perspective.

The increased disposable income of the farming community will support the demand led growth of industrial and services sector by accelerating the multiplier effect for overall economic growth of the economy by creating huge employment opportunities. This will also strengthen the foundation for egalitarian society by focusing on the un and under developed regions of the country.

 (The article reflects the personal views of the writer.)

S. B. Singh

Chairman Aryavart Bank & General Manager Bank of India.