Economic Survey on Agriculture

January 29, 2018, saw the opening of the budget session of Parliament.

The Economic Survey on Agriculture

On the 29th, the Economic Survey 2017-18 was tabled in Parliament. The survey authored by the Chief Economic Adviser to the government, Arvind Subramanian, was optimistic about the overall growth of the country’s economy in 2018-19 but did not hesitate to point out that the agricultural sector was undergoing a crisis and needed urgent attention.

The agricultural sector employs more than half of the total workforce in India and contributes some 17-18 percent to the country’s GDP.

Mechanisation is increasingly being adopted by Indian farmers, says the Survey, and in recent times this use of mechanisation is happening at a faster rate than before. “Although, the sale of tractors in India cannot be taken as the only measure of farm mechanisation but to a great extent it reflects the level of mechanisation,” says Subramanian. This may be encouraging but there is a need to further enhance mechanisation as it is estimated that percentage of agricultural workers of total workforce would drop to 25.7 percent by 2050 from 58.2 percent in 2001. The cost of production of crops in India is quite high mainly because of intensive labour input.

The Survey pointed out that though human power availability in agriculture increased from about 0.043KW/ ha in 1960-61 to about 0.077 KW/ ha in 2014-15, as compared to tractor growth, increase in human power in agriculture is quite slow.

The predominance of small operational holdings in Indian agriculture prevented optimum production. These landholdings need to be consolidated if the benefits of agricultural mechanisation are to be reaped.

High-cost farm machinery, furthermore, may not be within the means of most farmers, so there is a need to innovate custom service or a rental model by institutionalisation for farm machinery such as combine harvester, sugarcane harvester, potato combine, paddy transplanter, laser guided land leveller, rotavator, etc. to reduce the cost of operation.

The Economic Survey has important things to say on the impact of climate on agriculture. It found that during the years when rainfall levels drop 100 mm below average, farmer incomes would fall by 15 percent during Kharif (summer) and 7 percent during the rabi (winter) crop seasons.

“Climate change could reduce annual agricultural incomes in the range of 15 percent to 18 percent on average, and up to 20 percent to 25 percent for unirrigated areas,” the Survey said; at current levels of farm income, that implies more than Rs3,600 per year for the median farm household.There are at least three channels through which climate change would impact farm incomes — an increase in average temperatures, a decline in average rainfall and an increase in the number of dry-days – all of them correlated.Elaborating on the impact of climate change, the Survey said “between the 1970s and the last decade, Kharif rainfall has declined on an average by 26 mm and rabi rainfall by 33 mm. Annual average rainfall for this period has on an average declined by about 86 mm.” Similarly, the average increase in temperature during this period is about 0.45 degrees and 0.63 degrees in the Kharif and rabi seasons, respectively.

The Survey calls for steps to impel farmers to diversify their activities.

On future reforms in the agriculture sector,a distinction had to be made between “two agricultures” in India.In the input-intensive and irrigated cereal-growing areas in northern India, price support and input subsidies have to make way for “less damaging” direct benefit or cash transfers, while in the rain-dependent and low public procurement states in central, western and southern India, the focus needs to be on investing in research and technology for non-cereal crops, removing market barriers, improving post-harvest facilities, and developing a better livestock policy.

Irrigation is of great importance but it would be a challenge to fully irrigate India where at present more than half the crop area is rain-fed. The Survey suggested the need for ‘dramatic’ improvement in irrigation, use of new technologies and better targeting of power and fertiliser subsidies.“Against the backdrop of water scarcity and limited efficiency in existing irrigation schemes… technologies of drip irrigation, sprinklers and water management—captured in the ‘more crop for every drop’ campaign—may well hold the key to the future of Indian agriculture,” it said.

The Survey pinpointed the recent trends of deceleration in rural wages beginning just ahead of the Kharif crop season last year, lower planting of crops during 2017-18 which reduced demand for labour, and rather low prices for those growing pulses and oilseeds.

Income uncertainty for farmers has been also due to significant price fluctuation in perishables such as onions, potatoes and tomatoes.

“The past few seasons have witnessed a problem of plenty: farm revenues declining for a number of crops despite increasing production and market prices falling below the minimum support price,” the Survey said.

The Economic Survey 2018 points towards the ‘feminisation of the agricultural sector’, as more men are migrating from rural to urban centres. According to Census 2011, of the total female main workers, 55 percent are agricultural labourers and 24 percent are cultivators. “For sustainable development of the agriculture and rural economy the contribution of women to agriculture and food production cannot be ignored,” says the Survey. As women taking on more proactive roles in agriculture, they need better access to resources such as land, credit, water, technology and training. If agricultural productivity is to be improved, the entitlements of women farmers will have to be kept mind.

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