India’s agricultural growth story


Since the 2000s, a large section of the rural population has been migrating to the urban centres in pursuit of employment and survival from life-threatening poverty& drought, as happiness is a long way to go. Rural Reporter P. Sainath warned that the migration from a rural economy to urban is “…perhaps the greatest distress-driven migrations we’ve seen in independent India”. At that hour, inclusive growth through collective efforts in agriculture and allied sector was madea first priority in the BJP poll promise of ‘SabkaSath, SabkaVikas’ before it came to power.At the time, the annual average growth rate for agriculture sector was reported to bearound 3.7 per cent during 2004-05 to 2013-14. Which slipped to 2.5 per cent during 2014-15 to 2017-18 period, as the growth rate was around -0.2per cent in 2014-15, 1.1 per cent in 2015-16 and 4.9 in 2016-17 (typically, after a drought, agriculture growth register a higher rate due to low baseline level) and 2.1 per cent is expected in 2017-18. Low growth in the agricultural and allied sector has its likely impact on employment and rural poverty. About 87 per cent of agriculture farmers are small and marginal with less than 2 hectares of land and cannot afford a decent living standard.However, it was 2.6 per cent per annum during 1995-96 to 2004-05.

It would be a travesty of truth to say that the sector is in greater distress than in was it the last decade. However, the decline in the sector is due to low budget allocations and unofficial policy neglect, by the union as well as state government over the last three decades. Which continued with no noticeable increase in public investment in agriculture and allied sector as promised in BJP’s manifesto. The agriculture sector faced two drought years i.e. 2014-15 and 2015-16, and in the year 2018-19, 6 major states have already declared drought including Rajasthan, Karnataka, Maharashtra, Gujarat, Andhra Pradesh and Jharkhand. Some northern states such as Punjab, Haryana, north Uttar Pradesh and Himachal Pradesh are dealing with the hailstorms and unseasoned rain. In these previous droughtyears, the average growth was just 0.1 per cent per annum and public investment was reported to be around 1.9 per cent& 2.0 per cent respectively. The ratio of allocation for agricultural sector to GDP remained in the range of 0.3 to 0.4 per cent during 2014-15 and 2018-19.

Insufficient public investment in this sector discouraged improvement in private investment also. Throughout 2014-15 and 2016-17, investment by private entities to GDP ratio came miserably down from 2.2 per cent to 1.8 per cent of GDP, which led to a general decline in investment from 2.6 per cent to 2.1 per cent in these respective years. This decline in overall investment adds up to rural crisis and agrarian distress in the country, which echoed via marches and protests across the country in the last 4 years. The farm income support scheme infused Rs. 75, 000 crore in the sector, but it’s not going to solve the problem at all, except it may provide some much-needed votes to BJP in the upcoming poll.

The promise of doubling farmers’ income by 2022 dangled heavily as reports of severe agrarian distress started pouring in from the country. Farmers dumping their produces for lack of fair price made headlines throughout 2017 and 2018. The report pointed out that agriculture and rural sector is currently in a deep crisisbecause during 2004-14 the country’s agriculture sector witnessed its highest ever growth “recovery phase”. Despite the highest ever food grain production the year 2016-17 (275 million tonnes) and 274.55 million tonnes in 2017-18, the rural economy has completely collapsed.

Poorer rate of growth in public expenditure and GDP indicates that agriculture and allied sector remained the least priority of the Government, even after the change in power structure.  The two successive drought years could have been effectively managed if the focus would have been given on strengthening irrigation potential of the country and rolling out of informed and credible insurance scheme. Regional diversities are hardly looked at while preparing an agriculture policy and/or building a healthier platform for sustainable growth in agriculture sector. Government remedies itwith short term measures either in the form of loan waiver or minimum income guarantees to appease farmers in election years.  The appeasement policy is hardly sustainable for continuous growth. Therefore, every year, the country witnesses increased farmers’ suicide rate, resultant, no data on farmers’ suicide have been released in the last 2 years. The much-expected land reforms, after passing of the LARR Act 2013, and by maintaining land records in all states have remained an unfinished agenda in the policy books.

Agriculture sector has received an unprecedented 144% rise in allocation in the interim budget—from Rs 57,600 crore in the 2018-19 budget estimates to Rs 1,40,764 crore. The budgetary allocation of the agriculture ministry in the total union budget rose to 5.2%, from around 2.3%-2.4% since 2014-15.However, this unprecedented hike, in a poll year, will be inadequate to deal with the enduring agricultural crisis that has led to widespread farm agitations across India. Minimum income/price support scheme or farm loan waiver can help the sector, temporarily, but much needed long term structural reform and continuous investment in farm infrastructure to survive decently are still awaited.

Nilesh Jain , Swaraj Abhiyan

Twitter – @neilconnection



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