Indias Agricultural Sector: An Analysis

Indias Agricultural argona An Analysis agribusiness SectorSubmitted byIntroduction to Agriculture heavensAgriculture celestial sphere from an Indian Economic perspective constitute major(ip)ly the following four such as Food- jogs and oilseeds, Fiber, plantation crops, fruits and vegetables. As per the 2013 RBI statistics Indian farming sector contributed 11.36% of authentic GDP. This sector is a similar the highest employer in the country employing approximately 60% of the population.In H1 2013-2014 Agriculture sector of India recorded growth rate of 3.4% 1 and this is higher by a margin of 0.8% during H1 2012-13. The primary reasoning was attributed to a good and a normal monsoon during the year. This spike in the growth of the agricultural sector contributed to a better growth rate for the GDP of 4.6 considering it was a sluggish gunpoint for on the whole distinct sectors including services and manufacturing. Eventhough being one of the oldest sector, Agricultural sector is still contributing phenomenally to the GDP growth of the country. So, in this compensate an attempt is make to analyse salient aspects of the Agriculture sector from frugal perspective, g all overnment policy perspective and other(a) items that constitute the growth of the sector. Also, the report studies the major issues thats being faced by the facing and likely way to resolve them is being brought out.Key factors affecting the performance of Agriculture sectorClimatic factors Monsoons, soil degradation, water handiness, floods and droughts.Policy factors Government policies link up to denotation availability, support outlays, crop unique(predicate) programmes, ensuring availability of markets for the produce.Market factors Pricing, consolidation with downstream consumers, transp atomic number 18ncy.Macro-economic factors Supply and demand, change in consumption expressions.Technology factors entrance feeibility of farming technology, awareness of the available technology among the farmers, incentives to adopt upstart technology, educating farmers roughly the benefits of using technology.Global factors Export and import policies, trade clipions.Section IV Agriclutural Policies, Ramesh V VIssues faced by Indian Agriculture sectorUnequal growth of Agriculture sector at different areas of India addiction on seasonal rainfall The performance of the sector is highly symbiotic on the seasonal rainfall India receives during the monsoon season.Decrease in bolt down availability due to population growth and industrial sector growthNon availability of farm labourersLow level of mechanisation of the sector yielding set about productivityUnavailability of logistics affecting the returns from the sectorTraditional cultivation methods unemotional access to payLack of facilities for storage of the food grainsFragmentation of landLow quality seeds Using better quality seeds can cleanse the yield by 40%, adoption of Bt seeds can also ontogeny the yield, however higher appeal of seeds and activism are hindrances to adopt Bt seeds widely.Unbalanced fertilizer utilization It is one of the main reason for the stagnation of the yield, depletion of soil fertility and pollution of water bodies. Lacklustre government policies on fertilizer subsidies are one of the reasons for unbalanced use of Nitrogen based fertilizersCropping Patterns Sub-optimal crop pattern leads to low rates of profits. Geographical conditions vary and accordingly suitable crop patterns should be adopted, however farmers follow traditional practices which leads to lower profits.Policies and outlines towards AgricultureThe department of Agriculture Cooperation, Government of India, has been implementing motley schemes and programmes for the benefit of farmers through State Governments. The Guidelines and other expound of various programmes and schemes deliver been made available in their departmental scheme guidelines. Relevant details on the type and e xtent of benefits for different components promoted under various schemes are mentioned here. For simple understanding of subsidies and eligibility criteria of the same a handbook has also been constructed by the department. It has been prepared by categorizing various activities in 11 different themes such as, Soil Health, Soil Conservation Fertilizers, Seeds, Irrigation, information Extension for Farmers, Mechanization Technology, Agricultural book of facts, Agricultural Insurance, Plant Protection, Horticulture, Agricultural trade and co-ordinated Farming. Besides this, broad suggestions on practical aspects of each of these themes induce also been include.Schemes such as Rashtriya Krishi Vikas Yojana (subject to qualifying criteria for the States), National e-Governance Plan-Agriculture, National deputation on Agricultural Extension Technology Etc bedevil nation-wide coverage.A few other schemes such as National Food Security Mission, Mission for Integrated Developmen t of Horticulture (MIDH), National Mission on Oilseeds and Oil Palm (NMOOP), cotton wool Technology Mission, Jute and Mesta Technology and Bringing Green Revolution to Eastern India (BGREI) birth Crop/ Area / District wise applicability.The expert committee has jazz up an estimate of around 11172 crores in the next ten old age for infrastructure development for agriculture marketing as of 2008 and has make out up with some reforms in the Agriculture Produce Marketing Committee Act, (APMC)act, details from NABARD websiteSubsidies are helpful to farmers in India as nearly 11% of farmers oblige land but not have sufficient funding to water the land. Three main types of financing are required for agriculture sector. i.e., perfectly term, Medium term Long term finance. Subsidies in an agriculturally oriented ontogeny economy like India helps profit the productivity of the farmers.Institutionalized credit provisioning Credit raised by farmers from Non-institutional lenders, from 95% in 1951 to 40% in 2002, India has muster a long way in providing sustainable credit access to the farmers. Non-institutional lenders levy a high rate of interest and historically have manipulated the farmers, which led to poverty and its side effects like illiteracy.Analysis on the Agricultural SectorDemand vs SupplyThe agricultural sector in India is doing pretty good job to meet the domestic demand and also exporting food grains in certain categories. The heart and soul demand for Y2010 was 228Mt and the entirety tally was 270Mt. Not only in 2010, if you see the trend for the former(prenominal) 5 years before 2010, the supply more than demand. This clearly tells us India is a food surplus country and there is no received pressure on the demand-supply process.The supply is mainly increasing because of better and modern farming technique and high productivity per hectare. Storage facilities have alter over the last 2 decades and at affordable prices are help the farmers to preserve the crop thru the year.There is still a crapper of chain for improvement for our agro output storage facilities. Our storage facilities are not on par with other developed countries and our farmers end up with a lot of spoiled food grains.Table Agro Production Demand in INDIA amid 2005 and 2011(All Figures in Metric Tons)Source http//agcensus.nic.in/Focus on Agriculture- Union compute 2014.Government has proposed a technology driven green revolution and in this specifically protein revolution had more focus this year. Below par aspect of monsoon and its obvious impact on Agriculture was certainly considered this year. Keeping this in mindGovernment has proposed aRs.1,000 crore outlay for a new scheme named, Pradhan Mantri Krishi Sinchayee Yojana, which impart address sufficient irrigation facilities and mitigate some risk.To address the problem of price volatility, fund called Price Stabilization fund amounting to 500 crores was allocated.Agriculture credit target was set to 8lakh crores. Interest subvention for timely repayment of loans at 3% subvention has also been included a viewst the current 7% rate. country-bred infrastructure fund of 25000 crores was also institutionalized.Soil health is one major factor which is linked to productivity. In this regard, 100 crore project scheme was included which delivers every farmer a soil health card. In this mission, an additional 56 crores towards mobile soil testing laboratories was proposed.Agriculture research institutions to come up in Assam and Jharkand with an initial investment of 100 crores and an additional tryst of 200 crores for Andhra Pradesh and Rajasthan and telangana and Haryana for Agriculture and horticulture institutions respectively was also proposed.Kisan TV, a dedicated channelon various aspects of agriculture.Bhoomi Heen Kisan scheme, institutionalized through NABARD for landless farmers towards guarantee for finance was proposed. Funds leave cater to around 5 lac farmin g groups who will practice enunciate farming.Warehouse infrastructure fund of 5000 crores was allocated to address wastage loss in supply chain.Existing APMC, will be re-oriented in close association with enjoin governments which in potential must take care of markets and introduce reforms for farmers. superstar thing that was criticized was the denial of a policy of minimum price Scheme, mononuclear phagocyte system which figured in the previous governments budget.Impact of monetary Policies on Agricultural SectorMost Gov.s that came to power in India have implemented pro-agricultural policies and have given a lot of sop and benefits to this sector. Though the outlook might seem healthy, the short term discrepant policies have made the agricultural sector unproductive and unsustainable. If the situation continues like this, experts believe that Indian would become a net food gain importer in the next 20-30 years of time.SubsidyInput subsidies are a major part of the policy in A gricultural sector in India. The major subsidies aresubsidies on electricity used in farming bounty in fertilizer prices tribute in seed corruptIndian agricultural sector is more dependent on gossip subsidies than any other major emerging countries. The youthful Gov. order passed by the Chief Min of the newly farmed Andhra state to waive off all the agro loans taken by its farmers is an example of this Input bonus and illustrates how heavily this is impacting the Agro sector. The subsidy on fertilisers has been increased to 67% in 2010 from 41% in 2004. This usurious subsidy was possible because Gov. kept the nominal fertilizer prices unchanged in spite of high inflation and allowed real subsidized fertilizer prices to fall. The total Gov, input subsidy stood at 9.6% of the total Agro sector output.Among all the subsidies fertilzer subsidy amounts to 11 Billion dollars out of the total 60 Billion subsidy provided by GOI. This also plays a key role in the increase in non plan ex penditure and which in turn increases the fisical deficit.The input subsidies have also produced some unintended side effects like over utilization of land, soil degradation, nutrient imbalance of soil and reduction in ground water level.Minimum Support PriceThe Govt had setup the delegating of Agricultural Costs and Prices (CACP) to define the minimum support price for around all the major crops. The intention is to help the farmers but it interferes with the demand and supply. valuate SubsidiesIndirect taxes for farm output is almost nil.InflationThe GOI expansionary policies and fiscical stimulus in 2009-10 has resulted in increase in inflation. This has resulted in the increase in cost of the farm labour and non subsidized farm equipment procurement. This has put pressure on the margins of the farmers.Restriction on Exports/ImportsWhenver the supply was lower than demand for a crabby crop happens i.e in supply shock scenario Govt generally tends to look to restricy exports. T his has been an commonplace pattern with recent incident when the prices of onion and sugar increased as a result of lower production and the got wa quick to restrict the exports of these commoditiesImpact of Monetary Policies on Agricultural SectorAgricultural loans are available for various farming cerebrate activities. Farmers may apply for loans to purchase inputs for the cultivation of food grain crops as vigorous as for horticulture, aquaculture, wolf husbandry, floriculture and sericulture businesses. There are also certain special loans made available by many public sector banks and co-operative agriculture banks to finance the purchase of agricultural machinery such as tractors, harvesters and trucks. Construction of biogas plants and irrigation systems as considerably as the purchase of agricultural land can also be financed through different types of agricultural finance.NABARD offers a Kisan Credit Card Scheme and crop loans under the Rashtriya Krishi Bima Yojana. Kisan Credit Card Scheme helps farmers raise short funds for agriculture and other farm-based activities, on an on-going basis, with very flexible and golden repayment terms. It also offers an agricultural loan for development of agriculture related industries, purchase of machinery and other agricultural purposes.Interest RatesConclusionThe agriculture community must be weaned off the subsidies gradually one time sufficient development is made so as to increase the sustainability of Indian agriculture by providing them the right price for the cultivated produce, introducing highly effective storage facilities, providing necessary training to the farmers regarding use of technology and equipment thereby trim back wastage considerably and enhancing the sector as a whole. Agricultural subsidies can be a blunt instrument that can impede progress and windy down economic growth if theyre implemented without heed to the situation and specific date of expiry.Agriculture and industry has shown remarkable vigour and dynamism in contributing to a healthy growth in exports in the recent past. Indias food security depends on producing cereal crops, as well as increasing its production of fruits, vegetables and milk to meet the demands of a outgrowth population with rising incomes.Policy makers will thus need to novitiate and/or conclude policy actions and public programs to shift the sector away(p) from the existing policy and institutional regime that appears to be no all-night viable and build a solid foundation for a untold more productive, internationally competitive, and diversified agricultural sector.Referenceshttp//www.finmin.nic.in/http//indiatoday.intoday.in/ fib/budget-2014-green-revolution-kisan-tv-channel-agri-institutes-arun-jaitley-finance-ministry-narendra-modi/1/370753.htmlhttp//businesstoday.intoday.in/story/agriculture-gets-priority-in-narendra-modi-govt-budget-2014/1/208042.html