Indian Agriculture

NEW DELHI: Agriculture and allied sectors grew by 2.8 per cent in the first quarter of 2010-11 fiscal, higher than 1.9 per cent in the same period last year.

In 2009-10 fiscal, the agriculture and allied sector had recorded the lowest growth in five years, at 0.2 per cent, due to widespread drought that affected almost half of the country. Foodgrain production had declined by 16 million tonnes to 218.2 million tonnes.

While compiling the farm GDP during the April-June quarter of this fiscal, the government has used the performance of agriculture and allied activities during the rabi season, which ended June 2010.

According to the official data, cereal production declined by 2.2 per cent to 104.07 million tonnes in the rabi season this year, against 106.45 million tonnes in the year-ago period.

Whereas pulses output showed an increase of 4.2 per cent to 10.29 million tonnes from 9.88 million tonnes in the review period.

Cotton production grew by 7.5 per cent to 23.93 million bales of 170 kg each, while sugarcane output declined by 2.6 per cent to 277 million tonnes from the year-ago period.

The government has set a target of 4 per cent agriculture growth per annum in the 11th Five-Year Plan (2007-12).

Source- Economictimes.com

The high-value agricultural segment, comprising livestock and fisheries, has to show higher growth for the farm sector to expand at a faster pace, the Planning Commission has said.

The 11th Five-Year Plan (2007-2012) had set an average agricultural growth target of 4 per cent. However, the mid-term appraisal of the plan acknowledges that the average growth in agriculture will fall by 2-3 per cent. Though one of the obvious reasons being cited for the shortfall is the drought that hit foodgrain production in 2009-10, the crop segment is still expected to grow by 2-3 per cent, close to the projected estimate of 2.7 per cent for the Plan period.

However, the livestock segment, which contributes 23.8 per cent to the entire agricultural growth rate, is expected to fall significantly short of the projected average growth rate of 6 per cent. Till 2009-10, the average growth for this segment has been 4.1 per cent. Fisheries, which had grown by 3.7 per cent in the 10th Plan period is also expected to fall short of the 11th Plan period average growth projection of 6 per cent.

“I think the real reason is that investment in logistics like storage and distribution has been quite limited. Though it has happened in some sectors, like milk, others, like meat, have lacked. What we need is better infrastructure at the retail marketing level,” said Shashanka Bhide, senior fellow at the National Council of Applied Economic Research.

Moreover, Bhide adds these sectors have been considered “supplementary” and there are no incentives to turn to these sectors, which are less profitable than traditional farming of crops like wheat, rice and pulses.

The growth in the high-value segment has been declining even as the demand for these products has been on the rise. Analysts say in a high-growth economy, the demand for high-value agricultural products sees a rise and this has been the case with India, too. The demand for livestock and allied products has increased at the rate of 7 per cent every year, while the growth in production has been slowing and is between 3 per cent and 5 per cent.

This has, in turn, led these high-value food items like milk, meat, eggs and fish to have one of the most consistent and rapid inflation rates. Contrary to popular perception that cereals, pulses and sugar have seen the sharpest increase in prices, it is animal husbandry where the Wholesale Price Index (WPI) inflation has been constantly pronounced.

“With growth in the overall economy, the demand for these (food items) has gone up much faster than the supply. I think we got trapped in a mindset that the demand would be slower,” Planning Commission Principal Advisor Pronab Sen told Business Standard in a recent interaction.

In 2009, the average rate of inflation in food articles was 12.42 per cent. The average rate of inflation for eggs and meat had been 14.57 per cent in 2009, up from 3.7 per cent in 2008. Milk, which has had an annual average inflation rate of 6 per cent for three years, registered an average annual inflation rate of 9.03 per cent in 2009.

NEED FOR SUPPORT
Sub-sector-wise growth rate in the Agriculture and allied sectors (in %)
Share in overall output Eleventh Plan target Average growth
in 2005-2009
Crops 42.4 2.7 1.7
Cereals 18.6 2.3 1.8
Pulses 2.7 2.3 3.0
Livestock 23.8 6.0 4.1
Fisheries 4.5 6.0 4.8
Milk NA 5.0 4.9
Meat and poultry NA 10.0 5.1
Overall 100.0 4.0 3.0

This, when foodgrain, which constitute cereals and pulses and has 5 per cent weight in the entire index, registered an average inflation rate of 14.27 per cent, up from 6.4 per cent in 2008, primarily on account of the drought.

Moreover, given the preoccupation of addressing food security concerns through the traditional foodgrain segment, there is no policy framework till now to address the gradually decelerating growth in the livestock and fisheries segments.

The mid-term appraisal notes that currently “no Central assistance or schemes are available for the meat sector”. Moreover, it also observes how value addition in the meat sector has been non-existent, especially in the domestic market. Similarly, the production of marine fish has reached stagnation and “there seems to be no further scope to increase the production”, while India still has the potential to increase production in the indigenous fish segment through more active participation of the private sector.

Source – businessstandard.com

Montek Singh Ahluwalia, deputy chairman of the Union planning commission, on Saturday held state governments responsible for failure to achieve an annual four per cent growth in agriculture during the ongoing 11th five-year plan period. He, however, said the Commission was happy that by the end of the current plan period (2012), the agriculture growth rate would be 3-3.5 per cent, better than the two per cent achieved in the 10th plan. “Even during the 12th plan period, we are looking at fixing four per cent growth target for the agriculture sector,” said.

source – business-standard.com

NEW DELHI: India needs to focus on improving farm technology and creating an efficient water management system to achieve the targetted four per cent growth in the agriculture sector, a top agriculture Ministry official said on Tuesday.

“If agriculture has to grow at four per cent, the focus will have to be on technology infusion, farm mechanisation, reforms and efficient water management,” Agriculture Secretary PK Basu said at a CII function in New Delhi.

Stating that the climate change would have a major impact on the health of the farm sector, Basu said that the water management would thus be critical to the country’s long-term food security.

The agriculture sector, which contributes around 17 per cent to the country’s total economy, recorded the lowest growth in five years, at 0.2 per cent, in the last fiscal due to widespread drought in 2009.

Agriculture and its allied sectors grew at 1.6 per cent in 2008-09.

The country was not able to achieve the targeted 4 per cent growth in the farm sector in the 10th five-year plan and it seems unlikely even in the current plan period ending 2012.

The four per cent growth in agriculture is critical if the country’s economy has to grow by nine per cent.

India is estimated to have produced 218.2 million tonnes of foodgrains in the last crop year against a record 234.47 million tonnes in the previous year.
Source- Economictimes.com