Enhancing agri-productivity

India’s Path to Sustainable Agricultural Development

By Amit Kapoor

Introduction

As India sets sail towards its vision of a developed nation by 2047, it stands on the cusp of comprehending, reassessing, and charting a road map to grow at 8-9% for the next three decades. This requires a focus on improving the key competitiveness fundamentals, i.e. labour mobilisation and labour productivity. India must enhance both to achieve upper middle-income status. A big factor influencing the overall shifts in labour productivity and employment is the structural shift from agriculture to services and, to a lesser extent, industry. While this transition has been notable in terms of value-added, its impact on employment has been less pronounced. Agriculture is the bedrock and pivotal driver of Indian economy due to its unique composition.

The Importance of Agriculture in India

The agriculture sector in India constitutes 18.97% of the country’s gross value added (GVA) and employs around 43% of its workforce. It also contributes significantly to exports and has shown remarkable resilience and adaptability, making substantial contributions to India’s economic resurgence. Over the past six years, India’s agriculture and allied sectors have grown at 4.4% per annum, with the country being a leading producer and exporter of commodities such as spices, milk, and pulses. The sector has a direct and indirect effect on allied activities, as well as manufacturing and services. It also holds the key to reducing India’s twin burden of malnutrition and overnutrition, which has a direct impact on public health and workforce productivity.

Trends in Agriculture Sector

At the start of the 1990s, the agriculture sector embarked on a journey marked by both triumphs and challenges. The value-added and employment shares in 1990-91 were around 29.47% and 64%, respectively, according to the KLEMS database. This has gradually declined over the last three decades, signalling a diminishing role in the economic landscape. Even though structural transformations have led the sector to account for less than 20% of all value added, its employment share is still high. The years following 2018-19 witnessed a subtle shift in the tide. Both GVA and employment shares within agriculture experienced a modest uptick.

Productivity Trends in Agriculture

When we analyzed the average wages in agricultural products, inputs, and services in India from 2017-18 to 2021-22 using Periodic Labour Force Survey (PLFS) data, it revealed significant insights into productivity trends. Over the last five-year period, the compound annual growth rate stands at a notable 7.28%, indicating a consistent upward trajectory in average wages within the sector. The fact that average wages continued to increase during the Covid-19 year of 2020-21 suggests that the agricultural workforce managed to weather the storm and maintain productivity levels. However, the question still remains the same: is this growth sustainable, and is it going to be enough?

Government Initiatives and Policies

The Centre has boosted the agricultural budget five times, from `1.37 trillion in 2007-14 to `7.27 trillion in 2014-25, to prioritize farmer-centric projects. Since 2015-16, it has provided assistance through various schemes and policies. Over the last decade, the Pradhan Mantri Fasal Bima Yojana has grown to become the world’s biggest crop insurance system. PM Kisan Samman Yojana offers direct financial support to 11.8 crore farmers per year, including marginal and small farmers, with about `2.80 trillion received so far. The Agriculture Infrastructure Fund and the Pradhan Mantri Kisan Sampada Yojana are being used to boost post-harvest infrastructure investment in order to increase productivity and efficiency. Sustainable agricultural methods and natural farming promotion are altering agriculture by increasing its resilience and encouraging sustainable practices.

Challenges and the Way Forward

Despite the positive trends in average wages within agriculture, there remains a pressing need for India to enhance the productivity of its agricultural sector to ensure sustained growth and prosperity. Indian agriculture has been grappling with issues such as low yields, inadequate infrastructure, limited access to modern technologies, and fragmented landholdings. These factors have hindered the sector’s ability to compete effectively in both domestic and international markets.

India needs to accelerate its agricultural policies to boost productivity and competitiveness, foster the food processing industry, and boost other sectors. Agriculture needs to be sustainable and productive to address environmental changes and market regulation while also addressing increasing farmer distress, suicides, and debts. To achieve upper middle-income status, doubling farmers’ income, providing access to formal banking systems, and providing insurance facilities for crop losses are crucial.

The Role of Technology

The future trajectory of India, as it aspires to transition into a developed economy by 2047, hinges significantly on enhancing agricultural productivity. However, this time, the emphasis must be on a farmer-centric approach that prioritizes sustainability and is propelled by technological transformations. India can create a new era of inclusive and sustainable agricultural development by harnessing digital technologies. Replicating successful initiatives like the Unified Payments Interface is crucial for agricultural digitalization, laying the foundation for a prosperous future.

The author is the Chairperson of Institute for Competitiveness and lecturer, Stanford University. With inputs from Sheen Zutshi.

Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.

SDGs, Targets, and Indicators in the Article

1. SDGs Addressed or Connected to the Issues Highlighted in the Article

   • SDG 1: No Poverty
   • SDG 2: Zero Hunger
   • SDG 8: Decent Work and Economic Growth
   • SDG 9: Industry, Innovation, and Infrastructure
   • SDG 12: Responsible Consumption and Production
   • SDG 13: Climate Action
   • SDG 15: Life on Land

   The article discusses various issues related to agriculture, productivity, sustainability, and economic growth, which are connected to these SDGs.

2. Specific Targets Under the SDGs Based on the Article’s Content

   • Target 1.2: By 2030, reduce at least by half the proportion of men, women, and children of all ages living in poverty in all its dimensions according to national definitions.
   • Target 2.3: By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists, and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets, and opportunities for value addition and non-farm employment.
   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation, including through a focus on high-value added and labour-intensive sectors.
   • Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries.
   • Target 12.3: By 2030, halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses.
   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
   • Target 15.1: By 2020, ensure the conservation, restoration, and sustainable use of terrestrial and inland freshwater ecosystems and their services, in particular forests, wetlands, mountains, and drylands, in line with obligations under international agreements.

   The article’s content relates to these specific targets under the SDGs.

3. Indicators Mentioned or Implied in the Article

   • Proportion of population living below the national poverty line
   • Agricultural productivity growth rate
   • Average wages in agricultural products, inputs, and services
   • Investment in agriculture
   • Access to modern technologies in agriculture
   • Yield per hectare of crops
   • Percentage of agricultural land with sustainable farming practices
   • Percentage of farmers with access to formal banking systems
   • Number of farmers covered by crop insurance
   • Percentage of agricultural workforce affected by climate change

   The article implies these indicators that can be used to measure progress towards the identified targets.

Table: SDGs, Targets, and Indicators

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Fuente: financialexpress.com

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