Agriculture Sector Economic Survey 2023-2024 PDF

Economic Survey 2023-24 Agriculture Sector  Economic Survey 2023-24 (Agri Sector) Summary of the Indian Agriculture Sector 1. Growth and Livelihood Support: 1. The agriculture sector has grown at an average annual rate of 4.18% over the last five years...

Economic Survey 2023-24 Agriculture Sector  Economic Survey 2023-24 (Agri Sector) Summary of the Indian Agriculture Sector 1. Growth and Livelihood Support: 1. The agriculture sector has grown at an average annual rate of 4.18% over the last five years (2018-2023). 2. Provides livelihood support to 42.3% of the population. 3. Contributes 18.2% to India's GDP in 2023. 2. Foodgrain Stocks and Distribution: 1. Comfortable stock of food grains, with around 40% distributed to two-thirds of the population free of cost. 2. Exports over 7% of its food grains. 3. Government Initiatives: 1. Assured remunerative prices through Minimum Support Price (MSP). 2. Improved access to institutional credit. 3. Enabled crop diversification. 4. Promoted digitization and mechanization. 5. Encouraged sustainable practices like organic and natural farming. 6. Focused on productivity enhancement. 4. Challenges: 1. Low productivity levels. 2. Impact of weather variability. 3. Fragmented land holdings. 4. Inadequate marketing infrastructure leading to post-harvest losses. 5. Performance of Allied Activities: 1. Livestock and fisheries have outperformed traditional crops like cereals. 2. Increased share in agriculture Gross Value Added (GVA): livestock (from 24.38% in 2014-15 to 30.23% in 2022-23) and fisheries (from 4.44% in 2014-15 to 7.25% in 2022-23). 6. Growth Rate and Impact of Weather: 1. Agriculture sector growth rate at 1.4% in 2023-24, down from 4.7% in 2022-23 due to poor monsoons caused by El Niño. 2  Economic Survey 2023-24 (Agri Sector) 7. Crop Production and Government Support: 1. Second-largest producer of rice, wheat, and cotton; largest producer of milk, pulses, and spices. 2. Crop yields are lower compared to other major producers. 3. Majority of government support goes to rice and wheat. 8. Reasons for Low Yields: 1. Fragmented land holdings. 2. Low farm investment. 3. Lack of farm mechanization. 4. Insufficient access to quality inputs. 5. Dependency on rains and short growing seasons. 9. Digitalization and Welfare Schemes: 1. Digital initiatives are expected to empower farmers with better decision-making tools. 2. Welfare schemes discussed include PM Gareeb Kalyan Yojana (PMGKAY), the National Food Security Act (NFSA), and India's food management program, including food procurement and allocation. Interventions to Improve Productivity in Agriculture Doubling Farmers Income Report (DFI) 2016 Recommendations: 1. Strategies to increase crop and livestock productivity. 2. Enhancing cropping intensity. 3. Diversifying to high-value agriculture. 4. Providing remunerative prices on farmers' produce. Key Interventions: 1. Minimum Support Price (MSP): 1. Fixed at one and a half times the all-India weighted average cost of production in 2018-19. 2. Pradhan Mantri Kisan Samman Nidhi (PM-KISAN): Direct financial benefit of ₹6000/- per year to farmers. 3. Per Drop More Crop (PDMC): Micro irrigation scheme to promote efficient use of inputs. 4. National Mission on Sustainable Agriculture (NMSA): Promotes sustainable production methods and the use of alternative and organic fertilizers. 5. Digital Initiatives: Digital Agriculture Mission and e-National Agriculture Market (e-NAM) for smart agriculture technologies and better price discovery. Animal Husbandry and Fisheries: Recognized for their role in improving farmers' income, especially with reduced agriculture holdings. Key Schemes: 1. Rashtriya Gokul Mission (RGM): Focus on improving quality and developing indigenous breeds. 2. National Digital Livestock Mission (NDLM): Enables access to organized markets. 3. National Programme for Dairy Development (NPDD): 3  Economic Survey 2023-24 (Agri Sector) Supports dairy development initiatives. 4. Fisheries Infrastructure Development Fund (FIDF): Fund size of ₹7.52 Thousand Crore for infrastructure development. 5. Pradhan Mantri Matsya Sampada Yojana (PMMSY): Launched in May 2020 to strengthen fisheries infrastructure, enable technology infusion, and promote optimal water management. Resulted in an average annual growth of 7.4% in fish production from 2020-21 to 2022-23. Agriculture Production: Performance and Promoting Crop Diversification Foodgrain and Oilseed Production: 2022-23: Foodgrain production: All-time high of 329.7 million tonnes. Oilseeds production: 41.4 million tonnes. 2023-24: Foodgrain production: Slightly lower at 328.8 million tonnes due to poor and delayed monsoons. Increase in nutri-cereals and total oilseeds production. Tur production: 33.85 lakh tonnes (1% increase from previous year). Lentil (Masur) production: 17.54 lakh tonnes (1.95 LT increase from the previous year). Government Initiatives for Crop Diversification: 1. Crop Diversification Programme (CDP): Under Rashtriya Krishi Vikas Yojana (RKVY). Promotes better production technologies of alternate crops. Aims to divert paddy cultivation and restore soil fertility through legumes. 4  Economic Survey 2023-24 (Agri Sector) 2. National Food Security Mission (NFSM): Enhances production and productivity of foodgrain and commercial crops. Implements crop production and protection technologies. Provides access to high-yielding varieties, integrated nutrient and pest management techniques, and efficient water-saving devices. Focuses on capacity building of farmers. 3. Minimum Support Price (MSP) Increases: Higher increase in MSP over the average cost of production for oilseeds and pulses. 2023-24: Lentils (Masur): 89% over the cost of production. Tur: 58% over the cost of production. Coarse cereals/millets (Bajra): 82% over the cost of production. Safflower and soybean (yellow): 52% over the cost of production. 4. National Food Security Mission - Oilseeds & Oil Palm (NFSM-OS&OP): Implemented from 2018-19 to augment vegetable oil availability. Area Coverage: Increased from 25.60 million hectares in 2014-15 to 30.08 million hectares in 2023-24 (17.5% growth). Domestic Edible Oil Availability: Increased from 86.30 lakh tonnes in 2015-16 to 121.33 lakh tonnes in 2023-24. Percentage share of imported edible oil reduced from 63.2% in 2015-16 to 57.3% in 2022- 23. Incentives for Diversification: Remunerative MSP for rapeseed and mustard: 98% over the cost of production in 2022-23. Promoting Investment and Access to Credit in Agriculture and Allied Sectors Gross Capital Formation (GCF): GCF represents total investment in physical assets over a specific period. Includes new/existing fixed assets like machinery, buildings, land improvements, equipment purchases, and inventory changes. Indicator of investment in modernizing agriculture, enhancing productivity, and ensuring sustainability. GCF in agriculture grew by 19.04% in 2022-23. GCF as a percentage of GVA rose from 17.7% in 2021-22 to 19.9% in 2022-23. Average annual growth in GCF from 2016-17 to 2022-23 was 9.70%. 5  Economic Survey 2023-24 (Agri Sector) Need for Increased Investment: Doubling farmers' income requires annual income growth of 10.4% and agriculture investment growth of 12.5% (DFI 2016 report). Fragmentation of agricultural land negatively affects investment. Private corporate sector’s share in agriculture investment remains below 2%. Role of Subsidies: Subsidies influence farmer behavior towards adopting better quality seeds, using appropriate fertilizers, and accessing farm machinery. Agriculture sector subsidies more than doubled between 2011-12 and 2020-21. Public investments grew at the same rate as subsidies but remained about one-third of the subsidies. Input subsidies support short-term productivity and income increases. Higher investment levels needed for long-term modernization, requiring private sector participation, especially in post-harvest infrastructure. Government Initiatives to Promote Private Investment: 1. Agriculture Marketing Infrastructure (AMI) sub-scheme of ISAM: Capital subsidy provided to improve storage infrastructure. Subsidies of 25% (plains) and 33.33% (North-East and hilly regions). By April 30, 2024: 48,357 projects sanctioned, ₹4570 Crore released as subsidy. 20,878 projects in progress, ₹2084 Crore released as subsidy. 2. Agriculture Infrastructure Fund (AIF): Launched with a financing facility of ₹1 lakh Crore (FY 2020-21 to FY 2025-26, support till FY 2032-33). Provides medium-term debt financing for post-harvest management and community farming projects. As of July 5, 2024: ₹73194 Crore mobilized, supporting: o 17,196 custom hiring centers. o 14,868 primary processing units. o 13,165 warehouses. 6  Economic Survey 2023-24 (Agri Sector) o 2,942 sorting and grading units. o 1,792 cold storage projects. o 18,981 other projects. 3. Pradhan Mantri Kisan SAMPADA Yojana (PMKSY): Provides credit-linked financial assistance through grants-in-aid. Aims to build efficient supply chain management from farm to retail, reduce wastage of perishables, and extend food shelf life. By March 2024: 1,044 projects completed. 1,685 projects with a project cost of ₹32.78 Thousand Crore and an approved subsidy of ₹9.3 Thousand Crore approved. Empowering Farmers through Affordable and Enhanced Access to Credit Dominance of Small Landholders: 89.4% of farm households own less than 2 hectares of land. Access to Affordable Credit: Focus on providing timely, cost-effective, and adequate credit. Reduced share of non-institutional credit from 90% in 1950 to 23.4% in 2021-22. Total credit disbursed to agriculture as of January 31, 2024: ₹22.84 lakh Crore total. ₹13.67 lakh Crore for crop loans (short-term). ₹9.17 lakh Crore for term loans. Kisan Credit Card (KCC): Streamlined agricultural credit accessibility. As of January 31, 2024: 7.5 crore KCCs issued with a limit of ₹9.4 lakh Crores. KCC extended to fisheries and animal husbandry in 2018-19. Collateral-free loan limit increased to ₹1.6 lakh (up to ₹3 lakh with Tri-Partite Agreement). As of March 31, 2024: 3.49 lakh KCCs for fisheries. 34.5 lakh KCCs for animal husbandry. Joint Liability Groups (JLGs): Source of credit for tenant farmers and marginalized segments. JLG accounts grew at a CAGR of 43.76% over the past five years. Insurance Schemes: Pradhan Mantri Fasal Bima Yojana (PMFBY): Provides a safety net against crop losses due to natural calamities, pests, or diseases. Largest crop insurance scheme globally by farmer enrollment and third largest by insurance premiums. Covers comprehensive risk from pre-sowing to post-harvest. Insured area in 2023-24: 610 lakh ha (up from 500.2 lakh ha in 2022-23). Since 2016-17, 5549.40 lakh farmer applications insured, ₹150589.10 Crore paid as claims. 7  Economic Survey 2023-24 (Agri Sector) Challenges: high premium costs, delays in settling claims, lack of transparency, uniform premium rates, cumbersome procedures, lack of nearby bank facilities, poor awareness among small and marginal farmers. Assured Remunerative Prices and Other Income Support Measures Agricultural Price Support and MSP: Ensures farmers receive remunerative returns and helps stabilize staple supply prices. Minimum Support Price (MSP) influences farmers' sowing decisions. Price policies encourage the production of food grains, pulses, oilseeds, and nutri-cereals. Government guarantees a minimum price to protect farmers from market volatility. Since 2018-19, MSP for 22 Kharif, Rabi, and other commercial crops set at least 50% above the all-India weighted average cost of production. PM-KISAN Scheme: Launched on 24 February 2019. Provides ₹6000 per year to land-holding farmers in three equal four-monthly installments via Direct Benefit Transfer (DBT). Over ₹3.24 lakh Crore released to more than 11 crore farmers as of 10 July 2024. Pradhan Mantri Kisan Maandhan Yojna (PMKMY): Provides a monthly pension of ₹3000 to enrolled farmers upon reaching 60 years of age. Nominal premium between ₹55 to ₹200 per month for applicants aged 18 to 40 years, subject to exclusion criteria. 23.41 lakh farmers enrolled as of 07 July 2024. Farm Mechanisation: Powering Agriculture Agricultural mechanisation, from simple tools to complex machinery, is crucial for modern agriculture and productivity. Custom hiring can boost farm mechanisation adoption among small and marginal farmers. 8  Economic Survey 2023-24 (Agri Sector) The Sub Mission on Agricultural Mechanization (SMAM) assists states in training, machinery demonstrations, setting up Custom Hiring Centres (CHC), and aiding farmers in machinery procurement. Total funds allocated under SMAM from 2014-15 to 2023-24: ₹7.26 Thousand Crore. Allocation in 2023-24: ₹859.45 Crore. Farm Machinery Banks promote high-tech machinery access for small and marginal holdings. 25,527 CHCs established from 2014-15 to 2023-24, with 607 set up in 2023-24. Making Agriculture Sustainable Sustainability challenges include overexploitation, resource degradation, and climate change impacts. Unsustainable practices like excessive fertiliser use and water overexploitation harm soil health and fertility. Climate variability affects production, particularly in rainfed agriculture. Sustainable agriculture is vital for long-term productivity, income stability, and food security. 11 of the 17 Sustainable Development Goals (SDGs) are linked to agriculture. Climate Change Impact Government assessments show the need for adaptation in agriculture. Without adaptation, rainfed rice yields may drop by 20% by 2050 and 47% by 2080; irrigated rice yields may reduce by 3.5% by 2050 and 5% by 2080. Wheat yield may decline by 19.3% by 2050 and 40% by 2080. National Mission for Sustainable Agriculture Part of the National Action Plan on Climate Change (NAPCC) to make Indian agriculture more climate-resilient. Rainfed Area Development (RAD) under NMSA enhances productivity and minimizes climate variability risks. ₹1.74 Thousand Crore released, covering 7.33 Lakh hectares under RAD. Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) Promotes irrigation extension and water efficiency. Irrigated area coverage increased from 49.3% of gross cropped area (GCA) in 2015-16 to 55% in 2020-21. Irrigation intensity rose from 144.2% in 2015-16 to 154.5% in 2021-22; cropping intensity increased by 12.8 percentage points. Micro Irrigation Fund (MIF) and PDMC Scheme Initial corpus of ₹5 Thousand Crore created with NABARD for expanding micro irrigation. PDMC supports micro-level water management. 90.0 Lakh hectares covered under micro irrigation from 2015-16 to 2023-24 (as of 6th February 2024). PM-PRANAM Initiative Incentives for Chemical Fertiliser Reduction: Encourages states to reduce chemical fertiliser use by promoting alternatives like Nano Urea, Nano DAP, and organic fertilisers. Financial Incentive: States/UTs receive 50% of the fertiliser subsidy saved by reducing chemical fertiliser consumption compared to the previous three years' average. Soil Health Card Scheme: Optimises nutrient usage. Introduction of Urea Gold: Urea infused with sulphur to address soil sulphur deficiencies. 9  Economic Survey 2023-24 (Agri Sector) Organic and Natural Farming Chemical-Free Agriculture: Enhances soil health and reduces environmental pollution. Area Under Organic Farming: 68.05 Lakh hectares by 2022-23. Fully Organic States: Sikkim is the first fully organic state, with Tripura and Uttarakhand setting similar targets. Promotion Schemes: o Paramparagat Krishi Vikas Yojana (PKVY): Cluster mode implementation with financial assistance of ₹31,500 per hectare for three years. o Mission Organic Value Chain Development for North Eastern Region (MOVCDNER): Focuses on organic farming in the North East. o PKVY Achievements: 48,144 clusters covering 13.98 Lakh hectares and 24.22 Lakh farmers by 2022-23. Crop Residue Management Scheme Implementation: Since 2018-19, supports Punjab, Haryana, Uttar Pradesh, and NCT of Delhi to manage crop residue and address air pollution. Bio-Decomposer Usage: Microbial consortium used in 7.00 Lakh hectares during the 2023 season for in-situ decomposition of paddy straw. Financial Support: ₹3.34 Thousand Crore released to states and implementing agencies from 2018-19 to 2023-24. CHCs and Machinery: Over 40,000 Custom Hiring Centres (CHCs) and more than 2.95 lakh crop residue management machines supplied. Reduction in Paddy Stubble Burning: Incidents in Punjab, Haryana, and Uttar Pradesh reduced by 24% in the 2023 season compared to the previous year. Allied Sectors: Animal Husbandry, Dairying, and Fisheries Growth and Contribution Livestock Sector Growth: CAGR of 7.38% from 2014-15 to 2022-23 (at constant prices). Contribution to agriculture and allied sector GVA increased from 24.32% in 2014-15 to 30.38% in 2022-23. Contributed 4.66% of total GVA in 2022-23, enhancing the availability of milk, eggs, and meat. Fisheries Sector Growth: Contributed 6.72% to agricultural GVA. CAGR of 8.9% from 2014-15 to 2022-23 (at constant prices). Supports around 30 million people, especially marginalised and vulnerable communities. Government Initiatives Animal Health and Productivity: Livestock Health and Disease Control Programme: Focuses on improving animal health. National Livestock Mission: Encourages entrepreneurship development and per-animal productivity. Promotion of FPOs and SHGs: Facilitates infrastructure development and productivity. Animal Husbandry Infrastructure Development Fund (AHIDF): 10  Economic Survey 2023-24 (Agri Sector) Supports investments in dairy processing, meat processing, animal feed plants, and breed improvement technology. Provides 3% interest subvention and a credit guarantee of up to 25% of total borrowing. As of May 2024: 408 projects sanctioned worth ₹13.861 Crore, generating 40,000 jobs, benefiting over 42 lakh farmers. Record Fish Production: India achieved a record production of 17.54 million tons in 2022-23. Ranks third globally, contributing 8% to global fish production. Pradhan Mantri Matsya Sampada Yojana (PMMSY): Aims to enhance seed and fish production and extension services. Fisheries and Aquaculture Infrastructure Development Fund (FIDF): Introduced in 2018-19 with a total fund size of ₹7.52 Thousand Crore. 121 proposals recommended for ₹5.59 Thousand Crore at a concessional rate. Cooperative Societies: Empowering Farmers by Strengthening Communities Role and Importance Aggregation and Market Access: Cooperatives enhance bargaining power and market access for small and marginal farmers. Dairy Cooperative Movement: Focused on small rural producers with 1-2 hectares of land. Primary Agriculture Credit Societies (PACS) Facilitating Convergence: PACS are seen as vehicles for implementing various schemes for farmers' welfare. Expansion Plan: A scheme was approved in 2023 to set up PACS in Panchayats/Villages not yet covered, with a target over the next five years. Increase in Cooperatives Single-State and Multi-State Cooperatives (MSCs): As of March 2024, there are 8.03 lakh single- state and 1614 multi-state cooperatives. New MSCs: Three new MSCs have been established under the Multistate Cooperative Societies Act 2002: National Cooperative Exports Limited (NCEL) Bhartiya Beej Sahakari Samiti Limited (BBSSL) National Cooperative Organics Limited (NCOL) Objectives: Promote exports. Facilitate access to improved seeds. Production, distribution, and marketing of organic products. Membership and Achievements NCEL: Received 7,318 applications from 19 States & 3 UTs. Permissions for exports of various commodities to multiple countries. BBSSL: Received 16,775 applications from 32 States/UTs. NCOL: 11  Economic Survey 2023-24 (Agri Sector) Received 5,154 applications from 26 States/UTs. Launched 11 products under the Bharat Organics Brand. Governance Improvements Multistate Cooperative Societies (Amendment) Act, 2023: Effective from 03 August 2023. Enhances transparency and accountability. Improves election processes in MSCs. Introduces provisions from the 97th constitutional amendment: o Appointment of an ombudsman. o Introduction of concurrent audit. o Criteria for the appointment of the chief executive officer. Food Processing Sector (FPI): Processing Potential Importance and Contributions Largest Producer: India is the largest producer of milk and second largest of fruits, vegetables, and sugar. Key Role: Reduces wastage of perishable produce. Enhances shelf life of food products. Adds value to agricultural produce. Incentivizes diversification and commercialization of agriculture. Employment: Major employer in organized manufacturing with a 12.02% share in total employment. Significant exporter, with agri-food exports valued at USD 46.44 Billion in 2022-23. Processed food exports increased from 14.9% in 2017-18 to 23.4% in 2022-23. 12  Economic Survey 2023-24 (Agri Sector) Growth and Economic Impact Annual Growth Rate: The sector grew at an average annual rate of 5.35% from 2013-14 to 2022-23. GVA in the sector increased from ₹1.30 lakh Crore in 2013-14 to ₹1.92 lakh Crore in 2022- 23. Constituted 7.66% of GVA in manufacturing in 2022-23. Government Initiatives Production Linked Incentive Scheme (PLISFPI): Supports creation of global food manufacturing champions. Promotes branding and marketing abroad. Currently covers 173 applications with ₹7.69 Thousand Crore invested. Released an incentive amount of ₹1.07 Thousand Crore in FY 2021-22 and FY 2022-23. PM Formalization of Micro Food Processing Enterprises (PMFME): Total outlay of ₹10 Thousand Crore. Provides credit-linked subsidy and capacity building. Convergence with other schemes like National Rural Livelihood Mission, One District One Product, etc. Received 3,53,608 applications, sanctioned ₹6.94 Thousand Crore to 86,342 applicants. 522 Master Trainers and 1068 District Level Trainers trained. Operation Green (TOP Value Chain): Launched in 2018-19 to develop the value chain for Tomato, Onion, and Potato (TOP). Expanded to cover 22 perishable crops including fruits, vegetables, and shrimp. Objectives: o Enhance value realization for farmers. o Reduce post-harvest losses. o Increase food processing capacities. Provides 50% subsidy on transportation and storage costs during glut situations. Grant-in-aid ranging from 35% to 50% for setting up food processing projects in identified production clusters. 13  Economic Survey 2023-24 (Agri Sector) Conclusion: Enhancing Agricultural Sector Performance Sector Growth and Importance Agriculture Growth: Average growth rate of 4.18% over the last five years. Allied Sectors: Animal husbandry, dairying, and fisheries are significant for enhancing farmers' incomes. High-Value Agriculture: Emphasis on fruits, vegetables, fisheries, poultry, dairy, and buffalo meat to boost smallholder farmers' incomes. Crop Diversification and Market Support Diversification Needs: Investment in agri-infrastructure, credit accessibility, and appropriate market institutions. MSP Impact: Positive effect on retail prices of all crops, stronger for those with substantial procurement like paddy and wheat. Geographical Practices: Promote production patterns consistent with agro-climatic characteristics. Technological and Investment Focus R&D and Digital Technologies: Improve sustainable agriculture practices and farm income. Private Sector Investment: Enhance technology, production methods, marketing infrastructure, and reduce post-harvest losses. Post-Harvest Infrastructure: Reduce wastage and ensure better prices for farmers. Market Infrastructure and Competitive Framework E-NAM and FPOs: Improve market infrastructure and price discovery. Cooperatives in Agri-Marketing: Allow cooperatives' participation to modernize agricultural marketing. State Incentives: Create an index to rank states based on their market infrastructure and provide financial incentives for modernization. 14