Context

• India’s centennial year of independence in 2047 marks an ambitious milestone, with the goal of becoming a developed nation and a crucial aspect of achieving this status involves a significant transformation of the agricultural sector.
• This transformation is not just about enhancing productivity, but also about adopting sustainable practices to ensure long-term environmental health and economic stability.
• As India strives to increase its per capita Gross National Income (GNI) to six times the current level, the agricultural sector, which employs nearly 46% of the workforce, plays a pivotal role in this journey.

A Closer Examination of Challenges in Agricultural Sector

• Climate Change and Environmental Stress
  • The increasing frequency of extreme weather events such as unseasonal rains, droughts, floods, and heatwaves severely impacts crop yields and agricultural productivity.
  • For example, the 0.7% growth in agri-GDP in 2023-24 was primarily due to unseasonal rains, which damaged crops and reduced yields.
• Land Degradation and Fragmentation
  • Overuse of land for agricultural purposes, coupled with deforestation and unsustainable farming practices, has led to significant soil erosion, loss of arable land, and declining soil fertility.
  • This not only reduces the land's productive capacity but also increases the cost of farming, as more inputs are required to maintain yields.
  • Fragmentation of agricultural land due to inheritance laws and population growth further compounds the problem.
  • As land is divided among heirs, the average size of farms decreases, making it challenging to achieve economies of scale.
• Market Access and Price Realisation
  • Despite the introduction of initiatives like the Electronic National Agriculture Market (eNAM), many farmers still face difficulties in accessing markets where they can sell their produce at fair prices.
  • The integration of 1,361 mandis into eNAM by September 2023 is a positive step, but it only covers a fraction of the agricultural markets in the country.
  • Farmers often rely on traditional, local markets where they are subject to middlemen who take a significant portion of the profits, leaving the farmers with low returns.
  • The lack of infrastructure, such as roads, storage facilities, and transport systems, further exacerbates this issue, as farmers are unable to store their produce for better prices or transport it to more lucrative markets.
• Financial Challenges and Risk Management
  • Many farmers are trapped in a cycle of debt due to high input costs, low productivity, and fluctuating market prices.
  • The Pradhan Mantri Fasal Bima Yojana (PMFBY) has been instrumental in providing financial assistance to farmers in the event of crop losses, with claims totalling over ₹1.45 lakh crore since its inception.
  • However, the scheme's effectiveness is often hampered by delays in claim settlements, inadequate coverage, and challenges in assessing crop damage.

Analysis of Population Growth, Food Demand and the Imbalance of Contribution to the GDP

• Population Growth and Food Demand
  • India’s population is projected to reach 1.5 billion by 2030 and 1.59 billion by 2040, according to United Nations projections.
  • This increasing population will place immense pressure on the agricultural sector to meet the growing food demand.
  • With an estimated expenditure elasticity of food at 0.45, the demand for food is expected to grow by approximately 2.85% annually, considering the population growth rate of 0.85%.
  • India’s real per capita income increased by 41% from 2011-12 to 2021-22 and is projected to accelerate further.
  • However, the expenditure elasticity post-2023 is anticipated to be lower, correlating a 5% rise in per capita expenditure to a 2% growth in demand.
  • The anticipated food demand will vary among commodities, with meat demand growing by 5.42% and rice demand by a mere 0.34%.
• The Imbalance: Agriculture Contribution to the GDP
  • A stark imbalance exists in the Indian economy, where agriculture employs nearly 46% of the workforce but contributes only about 18% to the GDP.
  • If current growth trends continue, this disparity will only worsen. Since 1991-92, while the overall GDP has grown at an annual rate of 6.1%, agricultural GDP has lagged at 3.3%.
  • Under the Narendra Modi administration, overall GDP growth was 5.9%, while agriculture grew at a modest 3.6%.
  • This growth is insufficient for a sector that is so critical to the nation’s socio-economic fabric.
  • By 2047, the share of agriculture in GDP might shrink to 7%-8%, yet it could still employ over 30% of the workforce if significant structural changes are not implemented.
  • The anticipated 7.6% overall GDP growth for 2023-24 is promising, but the anaemic growth of 0.7% in the agri-GDP, primarily due to unseasonal rains, is alarming.

Government Initiatives to Boost Agricultural Growth

• The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)
  • The PM-KISAN, launched in 2019, disburses ₹6,000 annually to farmers in three instalments.
  • This scheme has already benefited over 11.8 crore farmers, offering much-needed financial support.
• Soil Health Card (SHC) Scheme
  • Another critical initiative, the SHC scheme, aims to optimise soil nutrient use, thereby enhancing agricultural productivity.
  • Over 23 crore SHCs have been distributed, providing farmers with crucial insights into soil health and nutrient management.
• Promotion of Nutritious Coarse Grains and Agricultural Infrastructure Fund
  • The government also championed the International Year of Millets in 2023, promoting nutritious coarse grains, both domestically and internationally.
  • The Agriculture Infrastructure Fund, with a ₹1 lakh crore financing facility, supports the development and modernisation of post-harvest management infrastructure.
  • Within three years, over 38,326 projects have been sanctioned, mobilising ₹30,030 crore in the agricultural infrastructure sector.
  • These projects have created employment for more than 5.8 lakh individuals and improved farmer incomes by 20%-25% through better price realisation.
• Survey of Villages and Mapping with Improvised Technology in Village Areas (SVAMITVA)
  • Moreover, the SVAMITVA initiative aims to ensure transparent property ownership in rural areas.
  • As of September 2023, over 1.6 crore property cards have been generated, enhancing land security, and facilitating credit access for farmers.

Government’s Strategic Planning Towards the Vision for 2047 and the Balanced Path Forward

• Strategic Planning
  • The government’s strategic planning for agriculture, leading up to 2047, focuses on several key areas: anticipated future demand for agricultural products, insights from past growth catalysts, existing challenges, and potential opportunities in the agricultural landscape.
  • Projections indicate that the total demand for food grains in 2047-48 will range from 402 million tonnes to 437 million tonnes, with production anticipated to exceed demand by 10%-13% under the Business-As-Usual (BAU) scenario.
• The Balanced Path Forward
  • However, to meet this demand sustainably, significant investments in agricultural research, infrastructure, and policy support are required.
  • The Budget for 2024-25, with an allocation of ₹20 lakh crore for targeted agricultural credit and the launch of the Agriculture Accelerator Fund, highlights the government’s proactive approach to creating agricultural innovation and growth.

Conclusion

• By embracing sustainable practices, leveraging technological innovations, and implementing strategic initiatives, India can enhance farmer incomes, meet the food demands of its growing population, and achieve inclusive, sustainable development.
• The road to 2047 will require a concerted effort to address the existing challenges, correct the imbalances in the economy, and ensure that the agricultural sector receives the support it needs to thrive in the coming decades.
• With careful planning and robust policy interventions, India can transform its agricultural landscape, paving the way for a prosperous and developed nation by 2047.