Growth Trend in Indian Agriculture

Rights since India’s independence, the growth in agriculture has been roughly in the range of 1.7 to 4%. The below graphics shows the growth of agriculture sector vis-à-vis the growth in overall GDP in different decades.

One notable point is that out of all the five year plans India made so far; growth targets in agriculture was achieved only in sixth plan. In that plan, the annual growth rate of 4.3% was achieved against the target of 3.8%. For rest of the plans, agriculture growth remained around 2 or 3%.  Even for the first three years of the 12th Five-Year plan (2012-17), the rate of agri-GDP growth was a meagre 2 percent per annum against a target of at least 4 percent. In 2014-15, the growth in Indian agriculture was only 1.1%.  Further, except food grains, India has never seen a spectacular growth in any other agricultural commodities.

The highest growth in agricultural sector was achieved during the mature green revolution period between 1980-81 and 1989-90. The growth was mainly due to impressive rise in productivity or yield.  After that, land under cultivation of most crops declined except Rice, Wheat and other crops supported by either government or market incentives. This was particularly true for North West India where market incentives were in force in terms of price support, assured government procurement for wheat and rice and favourable policy environment for providing inputs to farmers at subsidised rates. Despite growth in yield, the negative growth in area led to fall in production of several crops including coarse cereals.

The other key reasons for low agriculture growth include

• Population pressure and mindless urbanization that leads to conversion of cultivable land to non-agricultural purposes.
• Slow rate of conversion of a wasteland to cultivable land.
• Average farm holding size is declining
• The higher rate of growth of the non-agricultural sectors; these sectors outperformed agriculture.
• Faulty, stereotyped policies of the Government
• Lack of institutional credit to farmers.
• Obsolete Agricultural Techniques and slow adaptation of new techniques
• Inadequate irrigation and dependency on rains
• Declining soil health due to unbalanced use of fertilizers.