Presentation to Hon’ble Members of Parliament

on

Agriculture & Doubling

Farmers’ Income

Department of Agriculture & Farmers Welfare

Government of India

Ashok Dalwai
21.03.2018
 Overview of Agriculture

 India has achieved record foodgrain production of

275.11 million tonnes during 2016-17 and 300 million
tonnes of fruits & vegetables largely due to
favourable monsoon after two consecutive years of
deficit rainfall.
 48% of the population of India dependent on
agriculture.
 Crops including fruits and vegetables account for
59.0 percent of GDP in ‘agriculture, forestry and
fishing’ sector. Around 41.0 percent of GVA of this
sector based on livestock products, forestry and
fisheries.
 GDP contribution
Period 1960-61/ 1968-69/ 1975-76/ 1988-89/ 1995-96/ 2004-05/
1968-69 1975-76 1988-89 1995-96 2004-05 2014-15
Average GDP @2004-05 prices (Rs Billion)
Agriculture 1636 1955 2547 3473 4358 5771
Agriculture & Allied
2004 2401 3047 4116 5174 6911
Activities
Industry 725 1000 1676 2958 4773 9470
Services 1859 2517 4078 7286 13083 28991
Share of (%)
Agriculture 35.7 33.0 28.9 24.2 18.9 12.7
Agriculture & Allied
43.7 40.6 34.6 28.7 22.5 15.2
Activities
Industry 15.8 16.9 19.0 20.6 20.7 20.9
Services 40.5 42.5 46.3 50.7 56.8 63.9

Agro-processing (textiles, food, oil, etc.), retail,

credit, warehousing, transport, etc. are also GDP
contributors that rely on agriculture for their growth.
 Production Status of Crops
(as on 27.02.2018)
Name of the Crops 2015-16 2016-17 2017-18
Rice 104.41 109.70 111.01
Wheat 92.29 98.51 97.11
Jowar 4.24 4.57 4.66
Bajra 8.07 9.73 9.26
Maize 22.57 25.90 27.14
Ragi 1.82 1.39 1.96
Small Millets 0.39 0.44 0.42
Barley 1.44 1.75 1.99
Coarse Cereals 38.52 43.77 45.42
Cereals 235.22 251.98 253.54
Tur 2.56 4.87 4.02
Gram 7.06 9.38 11.10
Urad 1.95 2.83 3.23
Moong 1.59 2.17 1.74
Other Kharif Pulses 0.72 0.89 0.79
Other Rabi Pulses 2.47 2.99 3.07
Total Pulses 16.35 23.13 23.95
Total Foodgrains 251.57 275.11 277.49
 Not just foodgrains
Major produce type Quantity
Milk 165 mill tons
Eggs 83,929 mill pcs
Fish 10.79 mill tons
Meats including Poultry 7.02 mill tons
Fibre crops 7.52 mill tons
Cereals 252.73 mill tons
Pulses 22.95 mill tons
Oilseeds 32.1 mill tons
Sugar cane 306.72 mill tons
Horticulture 300.64 mill tons

In addition to this output from agro-forestry, tea, coffee, tobacco, wool,

leather, bamboo, etc. More than 1.1 billion tons of output from agricultural
sectors.
 Agriculture Growth Rates
(current prices)

Growth Rates in GVA (per cent)

Agriculture,
Total Economy Forestry and Fishing and
YEAR forestry & Crops Livestock
logging aquaculture
GDP GVA fishing
2012-13 13.8 13.5 11.5 10.9 12.7 10.5 17.5
2013-14 13.0 12.6 15.0 14.7 14.6 13.9 22.9
2014-15 11.0 11.0 8.7 3.5 20.7 10.9 18.7
2015-16 10.4 9.2 6.3 2.7 14.4 4.9 12.4
2016-17* 10.8 10.1 11.6 15.2 9.6 -1.0 1.9

Share of GVA of Agriculture * Allied Sector in Total Economy (per cent)

Agriculture, forestry forestry and fishing and

Year Crops Livestock
& fishing logging aquaculture
2011-12 18.5 12.1 4.0 1.5 0.8
2012-13 18.2 11.8 4.0 1.5 0.9
2013-14 18.6 12.1 4.1 1.5 0.9
2014-15 18.2 11.2 4.4 1.5 1.0
2015-16 17.7 10.6 4.6 1.5 1.0
2016-17* 17.9 11.1 4.6 1.3 1.0
 India: strain on system
Population 17 India Water 4 India Land 2.4 India
% % %

83 96 97.6

 17% of Global Population  Stress on Supply side

 4% of Global Water Resources ◦ Soil fatigue
◦ Ground water depletion
 2.4% of Geographical Area ◦ Plateauing yield
◦ Climate change
 Changed Demand ◦ Post-harvest losses
◦ Economic growth
◦ 15% of GDP supporting
◦ Consumption shifts 48% of population
Redefining Agricultural Mandate

 Agriculture has the moral responsibility of meeting food

and nutritional security in consonance with the agro
ecological backdrop.
 It has to generate gainful employment resulting in income
gains to make the farmers more economically secure.
 It has to generate raw material that will directly support
agro-processing of food and non-food products to
support secondary agriculture.
 It has to support agro-processing industry to produce
primary and intermediate goods, which will feed the
manufacturing sector.
 Agricultural practices need to be on a sustainable basis.
 Budgetary Allocation
(Rs. In crore)
BE
Name of Grand Total
2015-16 2016-17 2017-18
Department (Last 3 years)

DAC&FW 17004.35 35983.69 41855.00 94843.04

DARE 3691.00 3700.00 6800.00 14191.00

AHDF 2136.16 2431.50 2921.00 7488.66

Total 22,831.51 42,115.19 51,576.00 116,522.70

 Flagship Schemes
1. Soil Health Management
 Setting up of new soil testing laboratories and strengthening the existing labs.
 raining of lab staff/extension officers/farmers/field functionaries on balanced use of
fertilizer.
 Promotion and distribution of micro nutrients.
 Issue of Soil Health Cards
2. Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)
 Developing long term solutions for mitigating the affect of drought.
 Increasing area under irrigation.

3. National Food Security Mission (NFSM)

 Under implementation in 638 Districts of 29 States.
 Promotes & extends improved technologies, i.e., Seed, Micro Nutrient, Soil
Amendments, Integrated Pest Management, Farm Machinery & Implements, Irrigation
Devices, Capacity Building of Farmers.
 Includes cluster demonstrations of rice, wheat, pulses & nutri-cereals, distribution of
improved seeds/need based inputs, resource & energy conservation techniques,
efficient water application tools, cropping system based training and local initiatives.
 Flagship Schemes

3. e-NAM
 Pan India electronic trading portal in selected regulated wholesale
markets in States that have undertaken reforms.
 Common tradeable parameters developed for 90 commodities.
 506 markets integrated on e-NAM till date. 585 markets to be
integrated by 31.03.2018.
4. Pradhan Mantri Fasal Bima Yojana (PMFBY)
 Available to farmers at very low rates of premium.
 Farmers to get full insurance. No capping of sum insured.
 Insurance cover at all stages of crop cycle.
 Focus on covering non-loanee along with loanee farmers.
 Target for area coverage 40% (2017-18) and 50% (2018-19)
 Flagship Schemes
6. . Rashtriya Krishi Vikas Yojana (RKVY - RAFTAAR)
 Incentivise States to increase public investment in agriculture &
allied sectors
 Provide flexibility & autonomy to States in process of planning and
executing schemes.
 Focus on pre and post-harvest infrastructure, integrated value
chains
7. Mission for Integrated Development of Horticulture
(MIDH)
 Launched on 1st April 2014 for holistic growth of horticulture
sector.
 Ensures forward and backward linkages through a cluster
approach with active participation of stakeholders.
 Includes supply of quality planting material, technology promotion,
productivity improvement, human resource development, creation
of post-harvest management infrastructure.
 Budget Announcements
Budget 2018-19: Agriculture requires a holistic approach and is not merely about cultivation. A
paradigm shift effected by adopting an enterprise approach for agricultural policies and programmes.

Farmer Producer
Organic farming by Village Operation Greens on lines of
Organisations (FPO) of less Cluster based cultivation &
Producer Organisations (VPO) operation flood with a focus on
than Rs. 100 crore turnover development to achieve
and FPOs to be encouraged in agri-logistics, processing &
exempted income tax for first economy of scale in the
large clusters, preferably of professional management.
five years - to encourage horticultural supply chain
1,000 hectares each. Total of Rs. 500 crore
professionalism in post- though FPOs/VPOs.
allocated.
harvest value addition.

Agri-Market Infrastructure fund Institutional mechanism to

Institutional credit for Minimum Support Price (MSP)
of Rs. 2,000 crore to set up develop policies on price and
agriculture to be boosted by for unannounced kharif crops
22,000 GrAMs (rural level demand forecasts, futures &
enhancing the target of credit to be 1.5 times the cost of
markets & aggregation hubs), options and Exim policies for
tof Rs. 11 lakh crore. production.
and upgrade 585 APMCs. agriculture.

Irrigation development (PMSY)

Fisheries & Aquaculture Allocation to Ministry of Food
Launch a restructured Bamboo allocation increased to Rs
Infrastructure and Animal Processing Industries doubled
mission with Rs 1,290 crore to 2,600 crore. Focus on 96
Husbandry Infrastructure to Rs. 1,400 crore. To promote
promote the sector holistically. districts where less than 30%
Development Funds - total agro-processing financial
Bamboo is “green-gold”. land holding is with assured
corpus of Rs 10,000 crore. institutions for this.
irrigation.

Women Groups (SHGs) to be Govt to spend Rs 14.34 lakh PM’s Gram Sadak Yojna
Kisan Credit card opened to
encouraged in organic crore in rural areas for the Phase-III to include road links
Fisheries and Animal
agriculture under NRLM. creation of livelihood and to GrAMs, etc. GrAMs to also
Husbandry farmers to meet
Allocation to NRLM increased infrastructure (roads, houses, be on eNAM and exempt from
their working capital needs.
to Rs 5,750 crore toilets, etc.). APMC regulations.
 Doubling Farmers’ Income

 Hon’ble PM’s’ Vision to Double Farmers Income by 2022.

 To address agrarian distress, farmers welfare and in-
equitability.
 Income approach adopted shifting focus from production
to post-production, subsistence farming to commercial
farming systems.

An inter-ministerial Committee on Doubling Farmers Income was constituted

with members from civil society, different ministries, etc. Ten volumes of the
Report of DFI Committee already placed in public domain and parallel action to
implement some of its recommendations is already taken.
Farmer’s Net Income = Production x Price – Cost of Cultivation
 Current Status of Farmers’ Income and
Expenditure
 Based on sample survey by NSSO (July, 2012 to June, 2013) @
2011-12 prices
 Average monthly income/agril. household: Rs.6426
 Average monthly consumption exp./ag. household : Rs.6223

• Sources and composition of farmers’ income in percentage

Cultivation 47.9
Livestock 11.9 59.8

Wages / salary 32.2

Non-farm business 8.0 40.2

• Ratio of farm income:non-farm income: 60:40

Key Findings and Recommendations

 Real income growth rate (2002-03 to 2012-13)

 Cultivation 3.8%
 Livestock 14.7%
 Non-farm business 0.5%
 Wages & salaries 1.6%

Hence, emphasize more on livestock.

 Effect of Targeted Growth Rates on
Farm Income
Doubling in real terms (2016-17 to 2022-23) (2015-16, base year)
 Change income ratio of farm income: non-farm income from
60:40 to 70:30.
 Change in farmers’ income status @ 10.4% of annual G.R.
 Adopt fork to farm approach in production.
 Adopt sustainable production system.
Figure in Rs.

Base Year: 2015-16 Terminal Year: 2022-23 Terminal Year: 2022-23

Farmers At 2015-16 Prices At 2015-16 Prices At Current Prices
Income
Non- Non- Non-
Farm Total Farm Total Farm Total
Farm Farm Farm

All India 58,246 38,457 96,703 1,16,165 76,529 1,92,694 1,63,456 1,07,922 2,71,378
 Seven Sources of Income Growth

DFI Committee identified Seven Sources of Income Growth:

I. Improvement in crop productivity

II. Improvement in livestock productivity
III. Resource use efficiency or savings in cost of production
IV. Increase in cropping intensity
V. Diversification towards high value crops
VI. Improvement in real prices received by farmers
VII. Shift from farm to non-farm occupations

Report of DFI Committee on website-

http://agricoop.nic.in/doubling-farmers
 Investment in Agriculture

 Positive correlation between investments in

agriculture and agricultural growth
 Increase public investments ‘for agriculture’
 Rural roads, rural electricity, irrigation

• Private investments by farmers growing, but not by

corporate sector – policy support needed
• Current growth rate/annum of investments – around 10%
 Additional and Cumulative
Investments Required
 DFI needs an annual farm income growth rate of 9.23%.

Futuristic Public and Private Investments (Rs. billion) and required annual rate of growth
Private Investment in Agriculture Public Investment ‘for’ Agriculture
2015-16 2016-17 to Total (base 2015-16 2016-17 to Total (base
(Base Year) 2022-23 year plus (Base Year) 2022-23 year plus
(additional additional) (additional additional)
7 years) 7 years)
At 2015-16 Rs.610 Rs.645 Rs.1255 Rs.1171 Rs.1900 Rs.3071
price (Rs.61,000 (Rs.64,449 (Rs.1,25,448 (Rs.1,17,000 (Rs.1,90,000 (Rs.3,07,100
crore) crore) crore) crore) crore) crore)

Required 9.15% 10.9% -- 12.45% 14.8%

annual rate (2002 to (2000 to
of growth 2012) 2013)

 Division of Agri-Investment and Infrastructure

 Principles of Strategy

 Production not a Challenge – productivity is.

 De-risk Agriculture

 Monetise the Output

 Address structural issues

 Sustainability to form the basis

 Assuring Returns to Farmers

 Government’s historical Budget, 2018 announcements

 In case of 25 MSP notified commodities:
 Minimum MSP of 1.5 time the cost of production
 Committed to honouring MSP – robust procurement policy

 Niti Aayog mandated to finalize fool proof mechanism

for delivery of MSP to farmers in consultation with
central and state govts.
 Policy objective – ensure remunerative prices on
farmers’ produce – DFI.
Remunerative Prices to Farmers
• Two-fold intervention
 Market driven – ensure prices above MSP
 Market imperfections will exist – intervention policy needed –
MSP based procurements.
• New market architecture
 GrAMs as aggregation platforms
 Competitive agricultural wholesale markets
 Export promotion
• Facilitate Optimal Value realization while continuing
to provide support where needed.

Aggregate - Retail - Wholesale - Exports

 Reforms of Wholesale Markets
 Model APLM Act, 2017
 Bouquet of reforms – transparency, competitiveness,
integration, online
 Certain non-negotiable provisions
 Creation of alternate markets
 Level playing field to public (APMCs) and private sector
markets
 Separation of roles & responsibilities and authority between
developmental (MD, Marketing Board) and regulatory (Director
Marketing ) authorities
 Elected market committees
 Online trade and multiple platforms
 States must adopt Model APLM Act making suitable
modifications, as needed.
 MSP and Procurement Instruments

 MSP (notified for 14 kharif, 7 rabi, 4 seasonal crops)

 Robust procurement policy @ 1.5 times cost of production

 FCI and State procurement

 Private Procurement & Stockist Scheme (PPSS) (new)

 Market Assurance Scheme (MAS)

 Price Deficiency Payment Scheme (PDPS)

 NITI Aayog holding discussions with States on other options

Thank You