Farm sector buoyant, but faces climate risks: Economic Survey

The agriculture sector grew 3% in 2021-22 compared to 3.3% in 2020-21, the survey stated. India has emerged as a net exporter of farm products, with overseas shipments in 2021-22 touching a record $50.2 billion.

India’s agriculture sector, which accounts for nearly 15% of the country’s GDP and is the largest provider of employment, has seen resilient growth despite Covid-19 shocks, expanding 4.6% on average in the past six years, the Economic Survey tabled in Parliament said on Tuesday.

The performance of the agriculture sector remains “critical to growth and employment” in the country, the survey said.

The sector grew 3% in 2021-22 compared to 3.3% in 2020-21, the survey stated. India has emerged as a net exporter of farm products, with overseas shipments in 2021-22 touching a record $50.2 billion, it added.

The annual statement on the state of the economy, however, said the sector needed reorientation as it faced increasing risks from climate change, fragmented landholdings, low level of mechanization and rising costs of cultivation. “While Indian agriculture has performed well, the sector needs reorientation in the backdrop of certain challenges,” it said.

The performance of the agriculture sector remains “critical to growth and employment” in the country, the survey said, adding that investment “must be encouraged” through an affordable, timely and inclusive approach to “credit delivery”.

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The agriculture sector saw “buoyant growth” because of the measures taken by the government to augment crop and livestock productivity, ensure certainty of returns to the farmers through minimum support price and focused interventions to enhance credit availability, the survey said.

The annual Economic Survey was presented in Parliament , a day before the finance minister will unveil the Union budget for 2023-24.

The country’s foodgrains production touched a record 315.7 million tonne in 2021-22 despite challenges from climate change. As per the First Advance Estimates for 2022-23 (kharif only), total foodgrain production in the country is estimated at 149.9 million tonne, which is higher than the average kharif foodgrain production of the previous five years (2016-17 to 2020-21), the survey said.

The production of pulses has also been notably higher than the average of 23.8 million tonne in the past five years.

To further remove the financial burden of the poor, the government will spend more than Rs. 2 lakh crore in this period on food subsidies under National Food Security Act and other welfare schemes, the survey said.

“The survey has highlighted higher inputs cost as a key hurdle, especially for small farmers,” said Rahul Chouhan of IGrain, a private commodities tracker. “We hope the budget offers something concrete to help offset rising input costs.”

Policies such as Soil Health Cards, Micro Irrigation Fund, and organic and natural farming have helped the farmers to optimise resource use and reduce the cultivation costs. The promotion of Farmer Producer Organisations and the National Agriculture Market extension platform have “empowered farmers”, enhancing resources, the survey said.

The federal Agri Infrastructure Fund has boosted creation of various agriculture infrastructure and the Kisan Rail service has exclusively catered to the movement of perishable agricultural commodities, it added.