Agriculture is one of the strongholds of the Indian economy and accounts for 14.6 per cent of the country's gross domestic product (GDP) in 2009-10, and 10.23 per cent (provisional) of the total exports. Furthermore, the sector provided employment to 58.2 per cent of the work force.
The Indian Agricultural Scenario
The total geographical area of India is 328.7 million hectares of which 140.3 million hectares is net sown area, while 193.7 million hectares is the gross cropped area, according to the Annual Report 2009-10 of the Ministry of Agriculture.
Production
According to Annual Report 2009-10 of the Ministry of Agriculture, production of foodgrains during 2009-10 is estimated at 216.85 million tonnes (MT) as per 2nd Advance Estimates.
India has become the world's largest producer across a range of commodities due to its favourable agro-climatic conditions and rich natural resource base.
India is the largest producer of coconuts, mangoes, bananas, milk and dairy products, cashew nuts, pulses, ginger, turmeric and black pepper. It is also the second largest producer of rice, wheat, sugar, cotton, fruits and vegetables.
The US Department of Agriculture (USDA) has pegged India's rice output up by 13 per cent at 99 million tonnes in 2010-11.
About 85 per cent of the country's total rice output is grown during the kharif season (between June and September), while the rest of the 15 per cent is cultivated during the rabi season (between November and February).
Further, according to the USDA, India's cotton production may increase by over 6 per cent to a record 25 million bales in 2010-11, provided India receives normal monsoon this year.
Cotton output is pegged at 23.5 million bales (one bale equals 170 kg) in 2009-10 marketing season (August-July).
Exports
According to the government's agri-trade promotion body, Agricultural and Processed Food Products Export Development Authority (APEDA), India's exports of agricultural and floricultural products, fruits and vegetables, animal products and processed food products was worth US$ 8.1 billion in 2008-09, an increase of 13.88 per cent from US$ 7.11 billion in 2007-08.
Exports during April-December 2009-10 were worth US$ 54.16 million.
At present, around 70 per cent of the country's agricultural and processed food exports are to developing countries in the Middle East, Asia, Africa and South America.
Indian seed companies are eyeing the export markets in SAARC (South Asian Association for Regional Cooperation) and African countries with a host of hybrid seeds and best farm practices. While some of the companies like J K Seeds, Namdhari Seeds, Nuziveedu Seeds, Nath Seeds, Rasi and Vibha Seeds have already ventured into the export markets in the region.
Investments
The public and private sector investment in agriculture have been steadily increasing since 2004-05. While public sector investments in agriculture have increased from US$ 3.61 billion in 2004-05 to US$ 5.5 billion in 2008-09, private sector investment has increased from US$ 14 billion in 2004-05 to US$ 25.5 billion in 2008-09, according to the Annual Report 2009-10 of the Ministry of Agriculture.
Government Initiatives
in the Union Budget 2010-11, the Finance Minister, Mr Pranab Mukherjee has made the following announcements for the agriculture sector:
• Provision of US$ 86.9 million to extend the green revolution to the eastern region of the country comprising Bihar, Chattisgarh, Jharkhand, Eastern Uttar Pradesh, West Bengal and Orissa
• Provision of US$ 65.2 million to organise 60,000 pulses and oil-seed villages in rain-fed areas in 2010-11 and to provide an integrated intervention for water harvesting, watershed management and soil health to improve productivity of the dry land farming areas
• Provision of US$ 43.4 million for sustaining the gains already made in the green revolution areas through conservation farming, which involves concurrent attention to soil health, water conservation and preservation of biodiversity
• Banks have been consistently meeting the targets set for agricultural credit flow in the past few years. For the year 2010-11, the agricultural credit flow target has been set at US$ 81.5 billion
• Under the Agricultural Debt Waiver and Debt Relief Scheme (2008), time frame for the repayment of the loan has been extended till June 30, 2010 from six months up to December 31, 2009 in the previous year
• In addition to the 10 mega food park projects already being set up, the government has decided to set up five more such parks
• External commercial borrowings are to be available for cold storage or cold room facility, including for farm level pre-cooling, for preservation or storage of agricultural and allied products, marine products and meat
A number of other initiatives are already in place for the agriculture sector, which include
• The National Food Security Mission was launched in 2007-08, with an outlay of US$ 1.24 billion during the 11th Five Year Plan (2007–2012). It aims at enhancing the production of rice, wheat and pulses by 10 million tonnes (MT), 8 MT and 2 MT respectively, by the year 2011-12
• The Rashtriya Krishi Vikas Yojna (RKVY) was operationalised with effect from August 2007 with an outlay of US$ 5.3 billion during the 11th Five-Year Plan (2007-12). The RKVY scheme aims at incentivising states to increase outlays for agriculture and allied sectors in order to achieve 4 per cent growth in the sector in the current five-year plan. RKVY has encouraged states to step up allocations to this sector. Allocation to agriculture and allied sectors was 5.11 per cent of total State Plan Expenditure in 2006-07 and this has gone up to 5.84 per cent in 2008-09, according to the Annual Report 2009-10 of the Ministry of Agriculture
• The government has allocated US$ 1.43 billion this fiscal to the states under RKVY, 87 per cent more than in 2009-10 at US$ 763.3 million
• According to the Annual Report 2009-10 of the Ministry of Agriculture, the National Horticulture Mission (NHM) was launched in 2005-06. During 2009-10, 201 new nurseries were set up under NHM
• 100 per cent foreign direct investment (FDI) is allowed under automatic route in Floriculture, Horticulture, Development of Seeds, Animal Husbandry, Pisciculture, Aquaculture and Cultivation of Vegetables and Mushrooms under controlled conditions and services related to agro and allied sector. Besides the above, FDI is not allowed in any other agricultural sector/activity, according to the Department of Industrial Policy and Promotion’s (DIPP), consolidated FDI Policy
• The Planning Commission is working on an ambitious action plan to boost secondary agriculture, which includes value-addition to farm products, in the 12th Five Year Plan (2012-17). According to K Kasturirangan, Planning Commission Member, the sector was estimated worth over US$ 12.8 billion three years back and now it could be more than US$ 21.3 billion
• The government will provide US$ 6.43 billion in 2010-11 as subsidy to decontrolled fertilisers under the nutrient-based subsidy policy that came into effect from April 1, 2010, according to Mr Srikant Kumar Jena, Minister of State for Chemicals and Fertilisers. Under the new nutrient-based subsidy policy (NBS), the government provides subsidy on decontrolled (whose MRP is not decided by the government) nutrients such as Phosphorus (K) and Potash (S). A budget estimate of US$ 11.9 billion has been set for fertiliser subsidy during the 2010-11
• In April 2010, the Cabinet Committee on Economic Affairs (CCEA) approved US$ 142.5 million for the National Horticulture Board to implement its existing schemes and promote 25,000 integrated commercial horticulture projects in the 11th Plan period ending 2012
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