The Economic Survey 2024 said that the Indian agriculture sector has registered an average annual growth rate of 4.18% at constant prices over the last five years and as per provisional estimates for 2023-24, the growth rate of the agriculture sector stood at 1.4%.
It said that the agriculture sector provides livelihood support to about 42.3% of the population and has a share of 18.2% in the country’s GDP at current prices.
The survey said in 2022-23, Rs 19.65 thousand crore was spent on agriculture research. It is estimated that for every rupee invested in agricultural research (including education), there is a payoff of ₹13.85.
In 2022-23, foodgrain production hit an all-time high of 329.7 million tonnes, and oilseeds production reached 41.4 million tonnes. In 2023-24, food grain production is slightly lower at 328.8 million tonnes, primarily because of poor and delayed monsoons.
The domestic availability of edible oil has risen from 86.30 lakh tonne in 2015-16 to 121.33 lakh tonne in 2023-24. The total area coverage of all oilseeds has increased from 25.60 million hectares in 2014-15 to 30.08 million hectares in 2023-24(17.5% growth), the survey said.
This has reduced the percentage share of imported edible oil, from 63.2% in 2015-16 to 57.3% in 2022-23, despite rising domestic demand and consumption patterns, it added.
Gross Capital Formation (GCF) grows:
The Economic Survey further stated that the Gross Capital Formation (GCF) of the agriculture sector grew at the rate of 19.04% in 2022-23, and the GCF as a percentage of GVA rose from 17.7% in 2021-22 to 19.9% in 2022-23, suggesting an increase in investment in agriculture.
The average annual growth in GCF from 2016-17 to 2022-23 was 9.70%.
In terms of agricultural infrastructure, the Economic Survey shows that as of 30th April 2024, 48357 projects were sanctioned for storage infrastructure with ₹4570 Crore released as subsidy, and 20878 other projects are also under progress with ₹2084 Crore released as subsidy.
Further, the Agriculture Infrastructure Fund (AIF), which provides medium-term debt financing, as of 5th July 2024, AIF mobilised an investment of ₹73194 Crore, supporting 17196 custom hiring centres, 14868 primary processing units, 13165 warehouses, 2942 sorting and grading units,1792 cold storage projects, and 18981 other projects.
Five policy recommendations from the Economic Survey:
The Survey further notes that, we need more pulses, millet, fruits and vegetables, milk, meat and their demand is growing faster than that of basic staples.
So, farm sector policies should align more with a ‘demand-driven food system’ that is more nutritious and aligned with Nature’s resource endowments, suggests the Survey.
The first recommendation is not banning futures or options at the first sign of price spikes. The intelligent regulatory design of such markets can obviate the need for bureaucratic interference in the futures market for agricultural commodities, adds the Survey.
The second recommendation by the Survey talks about invoking export bans only under exceptional circumstances and allowing domestic consumers to substitute, especially if the agricultural commodities in question are not essential consumption items such as foodgrains.
“Farmers should be allowed to benefit from higher international prices”, states the Survey.
As the third step, the Survey talks about re-examining the inflation-targeting framework.
The fourth recommendation talks about the need for increasing the Total Net Irrigated Area. It highlights the need for better water utilisation farming practices and technologies like drip and fertigation.
The fifth and final suggestion by the Survey is about making farming consistent with climate considerations.