Unlocking the potential of India’s agricultural sector


Agriculture has been pivotal to India for the reason that daybreak of its civilization. With one of many largest arable lands complemented by favorable weather conditions, it allows the subcontinent to supply quite a lot of crops. Even right this moment regardless of speedy urbanization, the expansion of the agricultural sector is intrinsically tied to the expansion of the economic system as an entire.

When it comes to financial productiveness, it contributes to a minimum of 1/sixth of the nationwide earnings and helps preserve meals safety inside the nation. India’s complete agricultural and allied merchandise exports stood at US$ 41.25 billion in FY21. The sector employs over 50% of the Indian inhabitants and 70% of the Indian rural inhabitants depends on agriculture for his or her livelihood. By advantage of this, the productiveness progress within the agriculture sector is indicated to have essentially the most sweeping affect on poverty discount (roughly twice that of producing). Recognizing this, the federal government declared its objective to double farmer earnings by 2022.

Nevertheless, the sector has been fraught with challenges when it comes to the provision of formal capital, mechanization, logistics, and market accessibility. The severity of which was heightened by the pandemic-led chain of occasions however on the flipside, revealed the unexplored scope of agriculture.

The affect of Covid-19 on the agricultural sector

Although India is a web exporter of meals in recent times, the pandemic disrupted manufacturing and advertising, due to labor and logistical constraints. It has additionally wreaked havoc on the agricultural economic system because the unfavourable earnings shock restricted farmers’ entry to markets and elevated costs of meals commodities. Nevertheless, regardless that farming is taken into account a occupation with low margins and excessive prices, agriculture occurred to be one of many only a few sectors that absorbed a large workforce that underwent reverse migration.

It’s noteworthy that current quarterly GDP estimates post-COVID reveals agriculture as the one sector to register constructive progress of three.4% through the monetary yr (FY hereafter) 2020–21 (Quarter 1: April 2020 to June 2020). This can be a testomony to the robustness and resilience of India’s agricultural sector that cushioned the Indian economic system by the disaster. The heightened accountability and potential of the sector through the pandemic led to it being prioritized through the post-pandemic restoration. Now greater than is a compelling want for the ecosystem to leverage tech improvements to create a self-reliant agricultural sector that’s the gold normal for the remainder of the world.

Unlocking the potential of India’s agricultural sector

The Authorities of India acknowledges the potential agriculture holds and the general thrust of the Union Finances 2022 appears to be in the direction of constructing a extra strong and resilient agricultural infrastructure for farmers by fashionable technological intervention and intensive monetary investments inside the agritech start-up and bigger agri-value chain ecosystem.

The introduction of ‘Kisan Drones’ for land data, digitization, and crop evaluation will result in improved effectivity in key farm interventions particularly for small-holder farmers; it may additionally assist increase employment alternatives inside the rural panorama if the chance is catalyzed by the federal government. The breakthrough determination to deal with crop-diversification and promotion of home oilseeds manufacturing is essential, as it’ll promote each the growth and productiveness enhancement inside the typically uncared for horticulture sector.

The Authorities of India has launched varied schemes and coverage adjustments to help the expansion of agriculture in India, a lot of which have initiated the adoption of tech and offered higher entry to inputs to reinforce the present processes and constructions of agriculture and the prevailing meals system inside the nation. However these coverage initiatives have traditionally solely been targeted on rising agricultural productiveness and haven’t been profitable in effectively remodeling the worth chain.

Whereas there are indications of elevated enchancment within the yields by improved inputs. Intervention inside agriculture should transcend capital funding. For that reason, it was encouraging to see State Agricultural Universities (SAUs) being given their due diligence within the funds by elevated monetary help to advertise greater training, analysis, and coaching inside the sector.

There must be clear know-how of the issues of farmers on the grassroots which stretch past capital necessities. The answer to rising farmers’ earnings lies in rising farmers’ share within the ultimate client paid value by lowering the price of advertising, transaction price, and different intermediaries. As a sector that closely depends on the efforts of farmers (most of whom are small and marginal farmers), it’s in its greatest curiosity to empower them. One measure small-holder farmers have began to extend margins and pool assets is thru Farmer Producer Organisations and farmer collectives (FPC). A serious hindrance to that is the dearth of a strong worth chain method that solves end-to-end issues. Nevertheless, there’s a deliberate try to show this round by government-led coverage initiatives and on-ground intervention of personal gamers with the intention to spice up this scalability in confidence & collaboration with the farmer.

Speedy technological and infrastructure improvement has added a brand new dimension the place the problems similar to hyper localization and fragmented provide chains might be addressed. The just lately elevated entry to cell connectivity in India has additionally elevated the potential to unravel issues of data dissemination and supply verified market linkages at each the demand and provide sides.

This potential is being quickly tapped into by non-public gamers providing transparency and dealing straight with farmers, by empowering them to make the primary leap into digital transactions. A number of gamers inside the agritech ecosystem at the moment are making an attempt to extend the equilibrium inside the agri-value chain by offering custom-made options to the ache factors of small-holder farmers.

On the horizon

Agriculture is dependent upon connecting all stakeholders inside the agri worth chain and empowering the farmer. In truth, current studies point out that India’s agriculture know-how sector has the potential to develop to $24.1 billion within the subsequent 5 years which is indicative of the potential that the ecosystem is on the cusp of unleashing. As a extremely entrepreneurial nation, India’s farmers and entrepreneurs have the flexibility to co-create programs which are sustainable, environment friendly, and self-reliant. For that understanding, the on-ground information on the provide and demand sides is crucial to make knowledgeable and targeted choices. If we create an ecosystem the place all stakeholders throughout the agri-value chain have entry to the next equilibrium by monetary intermediation, market linkages, data, and many others. there is no such thing as a purpose why agriculture can’t be the largest contributor to our economic system.



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Views expressed above are the writer’s personal.



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