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Emerging Trends in Indian Agriculture: Challenges, Possibilities and Solutions

Emerging Trends in Indian Agriculture: Challenges, Possibilities and Solutions. Vijay Paul Sharma, Chairman Commission for Agricultural Costs and Prices (CACP) Ministry of Agriculture & Farmers Welfare Government of India Email: chairman-cacp@nic.in. Presentation Outline.

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Emerging Trends in Indian Agriculture: Challenges, Possibilities and Solutions

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  1. Emerging Trends in Indian Agriculture:Challenges, Possibilities and Solutions Vijay Paul Sharma, Chairman Commission for Agricultural Costs and Prices (CACP) Ministry of Agriculture & Farmers Welfare Government of India Email: chairman-cacp@nic.in

  2. Presentation Outline • Overview of Trends and Patterns in Indian Agriculture: Major Drivers • Key Challenges & Opportunities in Indian Agriculture • Policy Options and Strategies to Accelerate Agricultural Growth

  3. EMERGING TRENDS IN INDIAN AGRICULTURE

  4. Performance of Agriculture • Record Production in 2016-17 • Cereals – 250.98 Million Tonnes • Pulses – 22.4 Million Tonnes • Oilseeds – 32.5 Million Tonnes • Record Production of Horticulture Crops • Fruits – 92.8 Million Tonnes • Vegetables – 175.2 Million Tonnes Source: DAC&FW

  5. Performance of Agriculture • Livestock Sector • Largest Milk Producer – 155.5 Million Tonnes • Fish Production • 2nd Largest Producer (10.8 Million Tonnes) • Agri-Exports – ₹2.35 Lakh Crores • Growth in GVA from Agriculture & Allied Sectors – 4.9% in 2016-17 (0.7% in 2015-16)

  6. Structural Transformation Still Single Largest Employer in the Economy????? • Employs about half of Workforce • 138.3 Million Farming Households Source: CSO (2014)

  7. Changing Composition of Indian Agriculture:Rising Importance of High-Value Sub-Sectors

  8. VALUE OF OUTPUT FROM AGRICULTURE TE1993-84 TE2014-15 High-Value: From <40% to about 50% Source: CSO (2016)

  9. Major Drivers of Change:Demand-Supply

  10. Higher Disposable Income Expenditure on Non-Food Items Technology & Infrastructure Rising Demand for High-Value Agri. Products Drivers of Change Changing Demographics • 2/3rd Population <35 yr • ingUrbanization Increasing Trade Opportunities

  11. Composition of Consumer Expenditure: Rural Source: NSSO (2013)

  12. Composition of Consumer Expenditure: Urban Source: NSSO (2013)

  13. Diversification of Indian Diets: Rural Consumers High-Value: From <40% to >50% Source: NSSO (2013)

  14. Diversification of Indian Diets: Urban Consumers High-Value: From about 50% to >60%

  15. Expanding Agricultural Trade Opportunities Source: GoI (2017)

  16. MAJOR CONSTRAINTS FACING INDIAN AGRICULTURE

  17. ing & Fragmenting Farms Competition for Land Low Value-Addition & Poor Post-Harvest Infrastructure Major Constraints/Issues Rising Imports of Edible Oils & Pulses Low Prices Availability of Labor & Rising Wages Poor Access to Technology, Inputs, Services & Markets Land Tenure Systems Lack of Irrigation Facilities High Risks; Low Productivity; High Yield Gaps Climate Change?? Institutional Bottlenecks

  18. Marginalization of Farms & Swelling Bottom: Challenge of Linking Smallholders with Modern Markets/Food Chains Av. Size (ha): 2.28 1.84 1.55 1.33 1.15 Source: GoI (2014)

  19. Farm Size: Economic Viability Source: GoI (2014)

  20. Competition for Land: Agriculture & Non-Agri. Uses Source: MOA&FW

  21. Lack & Inefficient Use of Irrigation Facilities Low Coverage of Irrigation (48%) Maharashtra (18%); Jharkhand (15%) Punjab (99%), Haryana (89%) Inefficient Use of Water Resources Low Cropping Intensity - 141% <120% in Odisha, Jharkhand, Chhattisgarh >185% in Punjab, Haryana, West Bengal Source: GoI (2016)

  22. Low Growth & High Fluctuations in Agriculture Source: CSO (2017)

  23. LOW YIELDS & HIGH YIELD GAPS:Role of Technology & Extension Services

  24. High Yield Gaps - Wheat Source: ICAR & DAC&FW

  25. High Yield Gaps - Gram Source: ICAR & DAC&FW

  26. High Yield Gaps - Tur Source: ICAR & DAC&FW

  27. High Yield Gaps – Rapeseed & Mustard Source: ICAR & DAC&FW

  28. LACK OF AWARENESS ABOUT MSPs & QUALITY NORMS (FAQs)

  29. Low Awareness about MSP Less Coverage of Procurement Operations (Few States/Crops) Market Prices < MSP in some Crops/ Regions Source: NSS Report No.573: Some Aspects of Farming in India, 2012-13

  30. Paddy & Wheat Production & Procurement: TE2016-17 Rice Wheat Source: FCI (2017)

  31. Rice Price Trends: Prices Below MSP in Eastern States Source: http://agmarknet.gov.in/

  32. Market Prices Below MSP: Tur Source: http://agmarknet.gov.in/

  33. Market Prices Below MSP: Mustard Source: http://agmarknet.gov.in/

  34. Rising Imports of Pulses & Edible Oils

  35. Issues in Capital Formation & Agricultural Credit • Slow Down in Capital Formation in Agriculture • Declining Share of Public Investment • Significant  in Credit Flow to Agriculture (Rs. 1.25LakhCrore in 2004-05 to 9.6LakhCrore in 2016-17 • Interest Subvention Scheme – Crop Loans Only • Declining Share of Investment Credit • Regional and Inter-Farm Inequalities

  36. Decline in Gross Capital Formation (at 2011-12 Prices) Source: CSO (2016)

  37. Share of Public & Private Sector in Capital Formation Source: CSO (2016)

  38. Share (%) of Crop Loan & Term Loan in Agricultural Credit Source: NABARD (2017)

  39. Agency-Wise Share (%) of Credit Flow to Agriculture Source: NABARD (2017)

  40. DRIVERS OF GROWTH IN FARM INCOME

  41. Divert Surplus Labour from Agriculture: Skill Building

  42. III. POLICY INSTRUMENTS FOR AGRICULTURAL DEVELOPMENT The Four Pillars

  43. The Four Pillars of Agri. Development Infrastructure Technology Incentives Institutions • Strong R&D • HYV Seeds • Fertilizers • Farm Machinery • Irrigation Water Management • Value-Addition • Post-harvest Management • ………….. • Price Policy: MSP, Proc. & PDS • Subsidies: Inputs & Services • Trade Policy • ……………. • Extension Services • Land Reforms • Rural Financial Institutions • Risk Management Instruments • Market Information & Intelligence • Investment • Basic Rural Infrastructure Roads, Power, Communication • Irrigation • Post-Harvest & Market Dev • Agro-processing • ……….. INNOVATIONS

  44. Recent Initiatives • Focus on Irrigation and Water Management • Pradhan Mantri Krishi Sinchai Yojana (PMKSY): Har Khet Ko Pani; Per Drop More Crop (Micro-Irrigation), Water Conservation, AIBP • Improve Crop Productivity & Increase Cropping Intensity • Improving Soil Productivity: Soil Health Card Scheme • Need to Promote Balanced Use of Fertilizers (N:P:K) & Micro-Nutrients • Risk Management • Pradhan Mantri Fasal Bima Yojna (PMFBY): Low Premium & More Coverage; 40% of Cropped Area to be Covered

  45. Recent Initiatives • Organic Farming: Paramparagat Krishi Vikash Yojana(PKVY) • Agricultural Market Sector Reforms • APMC Act Amendments – Establishment of Private Mandis; Delisting of Perishables; Contract Farming, Direct Producer-Consumer Linkages; Unified Single License and Single Point Levy of Market Fee • e-National Agriculture Market (e-NAM) • Dairy Processing and Infrastructure Development Fund: Corpus of Rs. 8,000 crores over 3 years

  46. Recent Initiatives • Increased Flow of Credit to Agriculture • Target for 2017-18: Rs. 10 Lakh Crore • Interest Subvention Scheme for Crop Loans • National Food Security Mission • Rice, Wheat, Pulses, Jute, Sugarcane, Cotton, Coarse Cereals; • 60% Allocation for Development of Pulses • National Mission on Oilseeds & Oil Palm (NMOOP) • Mission for Integrated Development of Horticulture • Digital Agriculture: Use of ICT - Kisan Call Centres, DD Kisan Channel, Radio, …….

  47. POLICY PRIORITIES TO ACCELERATE GROWTH

  48. Policy Priorities • Improve Crop Productivity • Increase in Public Investment in Agri. R&D, Extension, Rural Infrastructure, Post-harvest & Market Infrastructure including Storage & Processing • Bridge Yield Gaps • Accelerating Pace of Reforms in Lawsrelated to Land Markets and Marketing of Agri. Products • Promotion of Farmers’ Organization/Groups, SHGs • Effective Price & Procurement Policy • Create Awareness about MSP & Quality Norms • Effective Participation of States - Decentralized Procurement • Effective Use of Price Stabilization Fund Scheme

  49. Policy Priorities • Rationalization of Pricing of Inputs • Irrigation Water, Power, and Fertilizers (Imbalanced use of N:P:K and Micro-nutrient Deficiency) • Address Distributional aspects of Agri. Credit • Access to Small and Marginal Farmers & Poorer Regions • Strengthen Rural Branch Network • Significant Regional and Inter-class Inequalities • Better Targeting of Input Subsidies – Without hurting Small and Marginal Farmers

  50. Thank you !

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