Economic Survey

2022-23
Agriculture Sector
Economic Survey 2022-23 (Agri Sector)

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Economic Survey 2022-23 (Agri Sector)

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Economic Survey 2022-23 (Agri Sector)

India’s Economic Resilience and Growth Drivers

• India growth projections by various agencies for FY23

Agriculture and Food Management: from food security to

nutritional security
• The performance of the agriculture and allied sector has been buoyant over the past
several years, much of which is on account of the measures taken by the government to
augment crop and livestock productivity, ensure certainty of returns to the farmers through
price support, promote crop diversification, improve market infrastructure through
the impetus provided for the setting up of farmer-producer organizations and

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Economic Survey 2022-23 (Agri Sector)

promotion of investment in infrastructure facilities through the Agriculture

Infrastructure Fund.

• The Indian agriculture sector has been growing at an average annual growth rate of 4.6
per cent during the last six years. It grew by 3.0 per cent in 2021-22 compared to 3.3
per cent in 2020- 21. In recent years, India has also rapidly emerged as the net exporter
of agricultural products. In 2020-21, exports of agriculture and allied products from India
grew by 18 per cent over the previous year. During 2021-22, agricultural exports
reached an all-time high of US$ 50.2 billion.

Despite Covid-19 shock agriculture and allied sector shows resilient growth

Crowding in of Private investment in agriculture

Record Production of Food grains

• As per Fourth Advance Estimates for 2021-22, the production of food grains and oil seeds
has been increasing Year-on-Year (YoY).
• Production of pulses has also been notably higher than the average of 23.8 million
tonnes in the last five years.

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Economic Survey 2022-23 (Agri Sector)

• However, as indicated earlier changing climate has been impacting agriculture adversely.
The year 2022 witnessed an early heat wave during the wheat-harvesting season,
adversely affecting its production.
• The year experienced a decline in the sown area for paddy cultivation too in the
Kharif season due to delayed monsoons and deficient rainfall.
• As per First Advance Estimates 2022-23 (kharif only) the paddy area was about 3.8 lakh
hectares less than the sown area of 411.2 lakh hectare during 2021-22 (kharif season).
• Further, in the current rabi season the area under rabi paddy has expanded by 6.6 lakh
hectares as compared to last year (Crop Weather Watch Group 12 January 2023).
• Sustained increase in Foodgrains Production in India (Million Tonnes)

MSP to Ensure Returns Over the Cost of Production

• The Union Budget for 2018-19 announced that farmers in India would be given an MSP
of at least one and a half times the cost of production.
• Accordingly, the Government has been increasing the MSP for all 22 Kharif, Rabi and
other commercial crops with a margin of at least 50 per cent over the all-India weighted
average cost of production since the agricultural year 2018-19.
• Minimum Support Price for selected Kharif and Rabi Crops (₹/Quintal)

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Economic Survey 2022-23 (Agri Sector)

Enhanced Access to Agricultural Credit

• In 2021-22 also, it was about 13 per cent more than the target of ₹16.5 lakh crore. The
target for the flow of credit to agriculture for 2022-23 has been fixed at ₹18.5 lakh crore.
• Accordingly, the Kisan Credit Card Scheme (KCC) was introduced in 1998 for farmers to
empower them to purchase agricultural products and services on credit at any time.
• As of 30 December, 2022, banks issued Kisan Credit Cards (KCC) to 3.89 crore eligible
farmers with a KCC limit of ₹4,51,672 crore.
• With the Government of India extending the KCC facility to fisheries and animal husbandry
farmers in 2018-19, the number of such cards in the fisheries and animal husbandry
sector has also grown. As of 17 October 2022, 1.0 lakh KCCs have been sanctioned
for the fisheries sector and 9.5 lakh (as of 4 November 2022) for the animal
husbandry sector.

Continued Increase in Institutional Credit to Agriculture Sector (₹ lakh crore)

Farm mechanization- Key to Improving Productivity

• Under the Sub Mission on Agricultural Mechanization (SMAM), State Governments
are being assisted in training and demonstrating agricultural machinery and helping
farmers procure various farm machinery and equipment besides setting up Custom Hiring
Centres (CHC).
• As of December 2022, 21628 CHCs and 467 Hi-Tech hubs and 18306 farm machinery
banks have been established. Increasing fragmentation of farm holdings (with the
average size of household ownership holdings declining from 1.23 ha in 2005-06 to
1.10 ha in 2010-11 and further to 1.08 ha in 2015-16) requires machines that are viable
and efficient for small farm holdings

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Economic Survey 2022-23 (Agri Sector)

Chemical-free India: Organic and Natural Farming

• Organic and natural farming provides chemical fertilizer and pesticide-free food grains and
other crops, improves soil health and reduces environmental pollution.
• India has 44.3 lakh organic farmers, the highest in the world, and about 59.1 lakh ha
area was brought under organic farming by 2021-22.
• Sikkim voluntarily adopted going organic, and the process of getting the total cultivable
land of 58,168 hectares under organic farming commenced at ground level in 2010. It
became the first State in the world to become fully organic, and other States, including
Tripura and Uttarakhand, have set similar targets.
• The Government has been promoting organic farming by implementing two dedicated
schemes, i.e., Paramparagat Krishi Vikas Yojana (PKVY) and Mission Organic Value
Chain Development for North Eastern Region (MOVCDNER) since 2015 through
cluster/ Farmer Producer Organisations (FPOs) formation.
• PKVY Scheme is being implemented in a cluster mode (with min. 20 ha size). Financial
assistance of ₹50,000 per ha for three years is provided to the farmer, out of which
₹31,000 is given as incentives for organic inputs provided directly through Direct Benefit
Transfer (DBT).
• MOVCDNER is dedicated to promoting organic farming of niche crops of the North East
Region through FPOs. Under the MOVCDNER, 177 FPOs/FPCs have been created,
covering 1.5 lakh farmers and 1.7 lakh hectares
• Promotion of natural farming began in 2019-20, when Bhartiya Prakratik Krishi
Paddhati (BPKP), a sub-scheme of PKVY, was launched to assist farmers in adopting
traditional indigenous practices for encouraging all forms of ecological farming, including
Zero-Budget Natural Farming (ZBNF).
• The scheme focuses on capacity building, training, handholding, and on-field
demonstration of natural farming through champion farmers. Under the BPKP, 4.09 lakh
ha of land have been brought under Natural farming in 8 States (Andhra Pradesh,
Chhattisgarh, Kerala, Himachal Pradesh, Jharkhand, Odisha, Madhya Pradesh and Tamil
Nadu).

Other Important Initiatives in Agriculture

• PM KISAN Scheme: It is a Central Sector Scheme to supplement the financial needs
of land-holding farmers. The financial benefit of ₹6,000 per year is transferred into the
bank accounts of farmer families through DBT. It is one of the largest DBT schemes in the
world. About 11.3 crore farmers were covered under the Scheme in its April-July 2022-23
payment cycle. The Scheme, through a span of over 3 years, has successfully provided
assistance of more than Rs. 2 lakh crore to crores of needy farmers.

• Agriculture Infrastructure Fund (AIF): AIF is a financing facility operational from the
year 2020-21 to 2032-33 for the creation of post-harvest management infrastructure and
community farm assets, with benefits including 3 per cent interest subvention and credit
guarantee support. Under this, a provision of ₹1 lakh crore for 2020-21 to 2025-26 has

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been made, and interest subvention and credit guarantee assistance will be given until
2032-33. AIF scheme has the facility of convergence with any other scheme of the State
or Central Government and can prove to be a milestone in investment in the agriculture
sector.
• Since its inception, an amount of ₹13,681 crore has been sanctioned for agriculture
infrastructure in the country, covering more than 18,133 projects. These include 8,076
warehouses, 2,788 primary processing units, 1,860 custom hiring centres, 937 sorting &
grading units, 696 cold store projects, 163 assaying units and around 3613 other kinds of
post-harvest management projects and community farming assets.
• Pradhan Mantri Fasal Bima Yojana (PMFBY): PMFBY is currently the largest crop
insurance scheme in the world in terms of farmer enrolments, averaging 5.5 crore
applications every year and the third largest in terms of the premium received. The scheme
promises minimal financial burden on the farmer, with farmers paying only 1.5 per cent
and 2 per cent of the total premium for the Rabi and Kharif seasons, respectively, with
Centre and State Governments bearing most of the premium cost.
• The scheme is implemented on an ‘Area Approach’ basis. Admissible claims are worked
out and paid directly to the insured farmer’s account by the insurance companies on the
yield data based on the requisite number of CCEs per unit area furnished to the concerned
insurance. However, losses due to localised risks of hailstorms, landslides, inundation,
etc., are calculated on an individual-insured farm basis.
• Mission for Integrated Development of Horticulture (MIDH): Several expert
groups have identified horticulture as a high-growth area and a source of buoyant income
and improved resilience for farmers. The scheme to promote horticulture covering fruits,
vegetables, root and tuber crops, spices, flowers, plantation crops etc., was introduced in
2014-15. The interventions include introducing improved varieties and quality seeds,
incentives for plantation crops, cluster development, and post-harvest management.
According to third advance estimates (2021-22), a record production of 342.3 million
tonnes in an area of 28.0 million hectares was achieved.
• National Agriculture Market (e-NAM) Scheme: The Government of India launched
the National Agriculture Market (e-NAM) Scheme in 2016 to create an online transparent,
competitive bidding system to ensure farmers get remunerative prices for their produce.
Under the e-NAM Scheme, the Government provides free software and assistance of ₹75
lakh per APMC mandi for related hardware, including quality assaying equipment and the
creation of infrastructure like cleaning, grading, sorting, packaging, compost unit, etc. As
on 31 December 2022, more than 1.7 crore farmers and 2.3 lakh traders have been
registered on e-NAM portal
• Climate-Smart Farming Practices: This is slowly gaining acceptance with farmers
using clean energy sources like solar for irrigation. The farmers have been incentivised to
transfer electricity generated through solar to the local grid. Crop yield prediction models
using artificial intelligence and drones for monitoring soil and crop health have been
initiated. Smart farming also enables crop diversification, which will help farmers reduce
their dependence on monsoons for water. There are over 1,000 agritech start-ups in India.
These assist farmers in improving farming techniques

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Economic Survey 2022-23 (Agri Sector)

• International Year of the Millets: Our traditional Staple and a healthier

alternative

• The United Nations General Assembly, in its 75th session during March 2021,
declared 2023 the International Year of Millets (IYM). Millets are Smart Food with high
nutritional value, are climate resilient, and align with several UN Sustainable Development
Goals (SDGs).
• India produces more than 50.9 million tonnes (as per fourth advance estimate) of
millet which accounts for 80 per cent of Asia’s and 20 per cent of global production.
The global average yield is 1229 kg/ha, whereas India has a higher average yield of 1239
kg/ha. In India, millets are primarily a Kharif crop mostly grown in rainfed conditions,
requiring less water and agricultural inputs than other staple crops.

Allied Sectors: Animal Husbandry, Dairying and Fisheries Catching Up

in Recent Years
• The livestock sector grew at a CAGR of 7.9 per cent during 2014-15 to 2020- 21 (at
constant prices), and its contribution to total agriculture GVA (at constant prices) has
increased from 24.3 per cent in 2014-15 to 30.1 per cent in 2020-21.
• Similarly, the annual average growth rate of the fisheries sector has been about 7 per cent
since 2016-17 and has a share of about 6.7 per cent in total agriculture GVA
• Though the Crop sector is still the major contributor to agriculture GVA, the livestock sector
is catching up (per cent)

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• The dairy sector is the most critical component of the livestock sector, employing more
than eight crore farmers directly, and is the most prominent agrarian product. Other
livestock products, such as eggs and meat, are also growing in importance.
• While India ranks first in milk production in the world, it ranks third in egg
production and eighth in meat production in the world.
• As a part of the Aatmanirbhar Bharat (ANB) stimulus package, the Animal Husbandry
Infrastructure Development Fund (AHIDF) worth ₹15,000 crore was launched in
2020. Under this scheme, the Central Government provides a 3 per cent interest
subvention to the borrower and credit guarantees up to 25 per cent of total borrowing. As
of 14 October 2022, 116 projects have been approved under the scheme involving project
costs of ₹3,731.4 crore.
• National Livestock Mission (NLM) scheme has been restructured for 2021-22 to 2025-
26. The scheme focuses on entrepreneurship development and breeds improvement in
poultry, sheep, goat and piggery, including feed and fodder development.
• Also, the Livestock Health and Disease Control (LH&DC) Scheme is being
implemented to supplement the State/UT governments’ efforts towards preventing,
controlling and containing animal diseases of economic and zoonotic importance by
vaccination.
• National Animal Disease Control Programme (NADCP) is being implemented to
control Foot & Mouth Disease and Brucellosis by completely vaccinating cattle, buffalo,
sheep, goat and pig populations against Foot & Mouth Disease and bovine female calves
of 4-8 months of age against brucellosis
• 1 In May 2020, as a part of the ANB package, the Government of India launched its
flagship scheme Pradhan Mantri Matsya Sampada Yojana (PMMSY), with a total
outlay of ₹20,050 crore. PMMSY marks the highest-ever investment in the fisheries
sector in India, to be implemented over five years from FY21 to FY25 in all States/Union
Territories to drive sustainable and responsible development of the fisheries sector while
ensuring socio-economic development of the fishers, fish farmers and fish workers.
• A dedicated Fisheries and Aquaculture Infrastructure Development Fund (FIDF) was
established for five years, from 2018-19 to 2022-23, with an investment of ₹7,522 crore.
Under the FIDF, as of 17 October 2022, proposals to the tune of ₹4,923.9 crore have been

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approved and have benefitted over 9.4 lakh persons, through direct and indirect
employment, in fishing and allied activities.

Sahakar-Se-Samriddhi: From Cooperation to Prosperity

• Cooperatives hold the key to rural economic transformation. There are 8.5 lakh
registered cooperatives in the country, having more than 29 crore members mainly
from the marginalized and lower-income groups in the rural areas, and 98 per cent
of villages are covered by Primary Agriculture Credit Societies (PACS).
• To realise the vision of “Sahakar-see-Samriddhi”, a renewed impetus was given to the
growth of the cooperative sector. Currently, around 19 per cent of agriculture finance is
through cooperative societies.
• A full-fledged Ministry of Cooperation was established in July 2021 to provide greater
focus to the cooperative sector. In addition, the Government has taken various initiatives
to promote and strengthen PACS, like the computerization of 63,000 functional PACS and
the preparation of by-laws for enabling PACS to expand their activities.
• The Multi-State Cooperative Societies Act, 2002 (MSCS) was enacted after repealing
the Multi-State Cooperative Act 1984, to facilitate the democratic functioning and
autonomous working of Multi-State Cooperative Societies in line with the established
Cooperative Principles. As of date, there are 1528 registered societies under the
Multi-State Cooperative Societies Act 2002. The MSCSs include 66 Multi-State
Cooperative Banks with deposits of approx. ₹2.6 lakh crore. Maharashtra leads 661
cooperatives, followed by Delhi and Uttar Pradesh.

Top ten states with Multi-State Cooperative Societies as on 20 October 2022

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Economic Survey 2022-23 (Agri Sector)

Food Processing Sector-The Sunrise Sector

• During the last five years ending FY21, the food processing industries sector has been
growing at an average annual growth rate of around 8.3 per cent.
• As per the latest Annual Survey of Industries (ASI) 2019-20, 12.2 per cent of persons in
the registered manufacturing sector were employed in the food processing sector. The
value of agri-food exports, including processed food exports, was about 10.9 per cent of
India's total exports during 2021-22.
• The NITI Aayog Strategy for New India identifies the lack of adequate and efficient cold
chain infrastructure as a critical supply-side bottleneck that leads to massive post-
harvest losses (mostly of perishables) estimated at ₹92,561 crore annually
• Given that countries worldwide have stringent guidelines for importing food and
agricultural products, the probability of exports from India getting rejected increases with
the lack of adequate cold chain infrastructure. Further, logistical barriers relating to
connectivity also pose supply-side challenges. For instance, Indian national highways,
while accounting for 2 per cent of the total road network, carry 40 per cent of all cargo –
exemplifying the burden on the existing road networks and potential for congestion, which
is detrimental to food (and particularly perishables) transport.
• The Ministry of Food Processing Industries, through the component schemes of Pradhan
Mantri Kisan SAMPADA Yojana (PMKSY), provide financial assistance for the overall
growth and development of the food processing sector. Under PMKSY, 677 projects have
been completed till 31 December 2022.
• The Ministry also launched in 2020 the Prime Minister's Formalisation of Micro Food
Processing Enterprises (PMFME) Scheme as part of the ANB Abhiyan to enhance the
competitiveness of individual micro-enterprises in the unorganised segment and promote
the formalisation of this sector by providing financial, technical and business support for
upgradation/setting up of 2 lakh micro units in the country. As of 31 December 2022,
15,095 loans of ₹1402.6 crore were sanctioned.
• The scheme adopts the One District One Product (ODOP) approach to reap the benefit
of scale in procuring inputs, using shared services and marketing products. So far, 713
Districts with 137 unique products were approved under the ODOP in 35 States/ UTs
• The Production Linked Incentive Scheme for Food Processing Industry (PLISFPI),
launched in March 2022, has the specific mandate to incentivise investments to create
global food champions. Sectors with high growth potential, like marine products,
processed fruits & vegetables, and ‘Ready to Eat/ Ready to Cook’ products, are covered
for support. In phase -I, 149 applications have been selected for assistance under the
PLISFPI. Subsequently, a PLI Scheme for millet-based products was also introduced with
an outlay of ₹800 crore. In phase-II, 33 applications (both organic and millet products)
have been selected.

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Food Security- Social & Legal Commitment to the People of the Nation
• Food security is not only a question of the ability to produce food but also of the ability to
access food. The Government is currently running the most extensive legislation-based
food security programme in the world, covering about 80 crore of India's population
under the National Food Security Act (NFSA), 2013.
• Till December 2022, the NFSA provided, for coverage of up to 75 per cent of the rural and
up to 50 per cent of the urban population highly subsidised food grains at ₹1/2/3 per
kg for coarse grains/ wheat/rice, respectively, at the rate of 35 kg per family per
month to households covered under Antyodaya Anna Yojana (AAY) and at the rate of 5
kg per person per month to priority households.
• In a recent decision, the government has decided to provide free foodgrains to about 81.35
crore beneficiaries under the NFSA for one year from January 1, 2023.
• Under this, the Government will provide 5 kg of foodgrains per person to Priority
Households (PHH) beneficiaries and 35 kg per household to Antyodaya Anna Yojana
(AAY) beneficiaries (poorest of the poor) free of cost for the next year.
• Allocation of Foodgrains under NFSA and Other Welfare Schemes in 2022-23 and
as of 1 January 2023 (LMT)

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Total Food Subsidy released by the Government of India since 2014-15. (In ₹
thousand crore)

Conclusion
• The performance of the agriculture sector remains critical to growth and employment in
the country. Investment in the sector must be encouraged through an affordable, timely
and inclusive approach to credit delivery.
• Intervention by the Government through PM Kisan to provide income support,
strengthening of institutional finance and insurance through the PMFBY and the push
given to Kisan Credit Cards as also access to machines and tools that improve productivity
have been significant.
• A focus on the horticulture sector and the thrust towards allied activities have diversified
farmers’ income making them more resilient to weather shocks. All these initiatives have
led to sustainable and inclusive development of the sector.

Climate Change and Environment: Preparing to Face the Future

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Source:- https://www.indiabudget.gov.in/economicsurvey/

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