New Delhi: Agricultural research offers one of the highest returns on investment. Hence, reinforcing the agricultural research ecosystem with human and financial resources will continue to pay rich dividends to farmers and the nation, according to Economic Survey 2023-24, tabled in Parliament by Finance Minister Nirmala Sitharaman.
It is promising to note that the Survey has underpinned the pivotal role of agriculture research in bolstering food security and enhancing the livelihoods of farmers. As per the survey, every rupee invested in agricultural research, including education, yields a remarkable payoff of ₹13.85. In the fiscal year 2022-23, a substantial ₹19.65 thousand crore was allocated to agriculture research, representing 0.43 per cent of the agricultural GVA.
The Survey highlighted the role of the Indian Council on Agricultural Research (ICAR) which stands at the forefront of this research revolution. It has spearheaded numerous initiatives spanning crop and seed production, bio-fortified grain and oil varieties, millet promotion, animal health, mechanisation, and post-harvest management. In the year 2022-23 alone, ICAR released 347 varieties/hybrids of 44 crops and notified 99 varieties of horticultural crops for commercial cultivation. This remarkable output underscores the organization’s critical role in advancing agricultural innovation and ensuring food security.
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Chief Economic Advisor V. Anantha Nageswaran remarked, “A return to roots, as it were, in terms of farming practices and policymaking, can generate higher value addition from agriculture, boost farmers’ income, create opportunities for food processing and exports, and make the farm sector both fashionable and productive for India’s urban youth.”
India’s agricultural sector, despite substantial subsidies and support, still faces numerous challenges. Current policies, often working at cross-purposes, are undermining soil fertility, depleting groundwater, and polluting the environment. The Economic Survey advocates for a re-orientation of these policies to untangle the knots that currently impede agricultural progress. By addressing these issues, India can restore faith in its ability to steer the nation towards a prosperous future.
The Economic Survey reveals that the shares of the agriculture, industry, and services sectors in overall GVA at current prices were 17.7 per cent, 27.6 per cent, and 54.7 per cent respectively in FY24. The agriculture sector’s GVA continued to grow, albeit at a slower pace, due to erratic weather patterns and uneven monsoon distribution in 2023, leading to a marginal decline in total foodgrain output by 0.3 per cent.
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Sanjiv Puri, President of CII, expressed optimism about India’s growth trajectory, stating, “The survey is positive about the India growth story, and I am confident that India’s GDP growth for FY25 will surpass the forecast given in the Survey. It has the potential to be at 8 per cent.”
Puri also highlighted the six key areas unveiled for Amrit Kaal, including boosting private investment, expanding MSMEs, positioning agriculture as a growth engine, financing green transitions, bridging the education-employment gap, and building state capacity and capability. These focus areas are expected to fast-track India’s vision of Viksit Bharat.
Chandrajit Banerjee, Director General of CII, added, “The Survey is pragmatic in its approach and offers a futuristic vision to move India boldly towards achieving the developed economy status by 2047. The focus on agriculture, capital expenditure, asset monetization, reducing the education-employment gap, expanding MSMEs, and promoting sustainability are noteworthy initiatives that would rev up the growth engines of the economy.”
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Sustainable agricultural practices, including the use of local seeds and natural farming methods, are emphasized in the Survey. The utilization of agricultural residue for mulching and composting is also advocated. The Open Network for Digital Commerce (ONDC) is noted for its potential to significantly enhance farmers’ and artisans’ livelihoods, with around 5,700 Farmer Producer Organisations (FPOs) joining the network and conducting over 23,000 transactions in Q4 of FY24.
The agriculture sector’s performance remains critical to the economy’s growth, having maintained an average growth rate of 4.18 per cent over the past five years. Allied sectors such as animal husbandry, dairying, and fisheries are gaining prominence for their potential to enhance farmers’ incomes. The Survey suggests a greater emphasis on high-value agriculture – fruits and vegetables, fisheries, poultry, dairy, and buffalo meat – to boost smallholder farmers’ incomes.
Promoting crop diversification towards oilseeds, pulses, and horticulture requires addressing issues such as investment in agri-infrastructure, credit accessibility, and appropriate market institutions. The Minimum Support Price (MSP) has been effective in incentivising crop diversification, with a positive impact on retail prices.
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To improve market infrastructure, initiatives such as e-NAM, promoting FPOs, and allowing cooperatives to participate in agri-marketing are recommended. Creating a competitive framework through an index to rank states and providing financial incentives for modernising agricultural marketing can drive significant improvements.
Investment in technology, production methods, marketing infrastructure, and reducing post-harvest losses is crucial for scaling up agricultural productivity. Private sector investment in these areas, along with the development of the food processing sector, can reduce wastage, increase storage duration, and ensure better prices for farmers.
Agricultural research and sustainable practices hold the key to transforming India’s agriculture sector into a robust growth engine. By addressing policy inconsistencies, enhancing infrastructure, and promoting high-value agriculture, India can secure a prosperous future for its farmers and the nation. The insights from the Economic Survey 2023-24 provide a roadmap for achieving these goals and reaffirm the significant returns on investment in agricultural research.
