Has agriculture performed better under Modi govt?

A new NITI Aayog study says Indian agriculture has performed better in the last 10 years, but growth has come more from livestock, horticulture and fisheries than from crops.

India’s Agriculture is Growing

• India’s agricultural growth has undergone a remarkable transformation in recent years, surpassing previous decades with a focus on diversification and market-driven opportunities.
• Growth Rate: Annual agriculture growth averaged 3.7 percent during the last 10 years (2014-2024). 
  • Growth during UPA remained 3.5 while in previous years , it was 2.9 percent.

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Sectors that Witnessed this Growth

• Livestock Boom: The livestock sub sector has experienced an impressive average annual growth of 5.8 percent during 2014-15 to 2022-23.

• Aquaculture Surge: The fisheries sub sector has witnessed an even more remarkable growth of 9.1 percent per year in the same period.
• Horticulture Boom: Horticulture crops production grew at an impressive 3.9 percent annually during 2014-15 to 2022-23.

Divergent Trends

The growth in these sectors has been largely driven by rising consumer demand for protein-rich, nutritious foods. People have focused on livestock and fisheries to cater the demand by matching the supply.

• Diversification: States that have diversified their agricultural portfolios have reaped the benefits of growing market demand.
• Field Crops Stagnation: In contrast, field crops like rice and wheat saw a mere 1.6 percent average annual growth during the same period, despite the availability of the Minimum Support Price (MSP).
• High Growth States: Andhra Pradesh, Madhya Pradesh, Maharashtra, and Gujarat have seen the highest agricultural growth, driven by livestock, aquaculture, and horticulture.
• Low Growth States: Punjab and Haryana, with their focus on cereal and field crops, have witnessed relatively lower growth in recent years. Post-Green Revolution these states saw significant growth, but they are now lagging behind.
• Poor Growth: The demand for field crops has stagnated, highlighting the urgent need for an agricultural revolution. Production cannot be significantly increased with outdated practices; innovation and modernization are essential to meet the growing needs.
  • Growing pollution, depleting groundwater water level and the overuse of fertilisers have also impacted land fertility. Despite areas like western Uttar Pradesh, Punjabi and Haryana receiving MSP for field crops, they have not witnessed any substantial growth.

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Upcoming Powerhouses

• Dairy: Milk production has been a key driver of the livestock subsector’s impressive growth. There are many vegetarians in India that prefer dairy products rather than other sources of protein like eggs.
• Poultry: The poultry industry has also contributed significantly to the livestock growth story. There would be an increase in demand for eggs and meat products in the coming times.
• Aquaculture: The fisheries sub sector has experienced an even more remarkable growth trajectory and has potential to grow even more.

Policy Implementation

• Market-Oriented Approach: Farmers should be enabled to produce what the market demands, rather than relying on government interventions like MSP. There is a need to liberalise the agriculture sector. 
  • For instance, if there is a growing demand for protein-rich produce today, farmers should pivot their focus towards those crops to maximise their earnings.
• Income Assurance: Per-acre income transfers could provide a safety net for farmers while incentivizing risk-taking and market-oriented production.
  • If farmers are guaranteed a specific amount of money per acre, they’ll be more likely to align their cultivation with market demands.
• Facilitating Access: There is a prevailing hesitation among farmers towards market risks; they often prefer the security of MSP. The government needs to reassure them by providing credit, insurance, and technology to support their growth and confidence in adapting to market demands.
  • This could also prevent stubble burning witnessed in Haryana and accelerate growth in the agriculture sector.

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Conclusion

The crops subsector showing low growth particularly rice and wheat – being covered under the minimum support price regime only highlights the importance of demand-side factors. These, along with improvements in production technology, are more effective in promoting agricultural growth than government output price or input subsidy interventions.