Agriculture Policy Briefing

Economic Survey Wants Rural Schools for Farmers to Transform Them Into Entrepreneurs

The option of setting up rural agricultural schools for hands-on training may be explored to transform agricultural producers into entrepreneurs, says the Economic Survey tabled in Parliament on 29 January. It says the allied sector, including animal husbandry, dairying and fisheries have become significant sources of farm income and employment. Measures need to be taken to increase their productivity along with provision for marketing their products.

Agriculture and allied activities were the sole bright spot amid the slide in GDP performance in other sectors, the survey notes. They grew by 3.4 percent in inflation-adjusted terms during 2020-21.

Agriculture is undergoing a churn. Its share in total national gross value added (GVA) at current prices was 17.8 percent in 2019-20 – or 0.4 percentage points down from 18.2 percent in 2014-15. Within this, the share of crops has declined to 9.4 percent – or 0.8 percentage points lower from 11.2 percent in 2014-15. The share of livestock has increased to 5.1 percent – or 0.7 percentage points higher from 4.4 percent six years ago. The share of fishing and aquaculture is flat. It was 1.2 percent last year against 1 percent in 2014-15. The share of forestry and logging has shown a slight decrease.

Fish production reached a high of 14.16 million tonnes in 2019-20. The GVA of the fisheries sector was Rs 2.13 lakh cr or 7.28 percent of agricultural GVA. Fish and fish products were the largest export items fetching $6.7 billion in 2019-20, followed by rice at $6.4 billion in total agri-exports of $35 billion.

The contribution of livestock to agricultural and allied sector GVA in constant prices increased from 24.32 percent in 2014-15 to 28.63 percent in 2018-19. Milk production has increased from 146.3 million tonnes in 2014-15 to 198.4 million tonnes in 2019-20. The annual growth rate of milk production has decreased from 6.27 percent in 2014-15 to 5.68 percent last year. Per person milk availability was 407 grams per day. It is below this level in nine states including Bihar, Karnataka, Tamil Nadu, West Bengal, Kerala, Odisha, J&K, Uttarakhand and Assam.

In 2019-20, food grain production was 296.76 million tonnes or 11.44 million tonnes higher than the previous year. It was also higher by 26.87 million tonnes than the average of the previous five years.

During the current year 76.96 million tonnes of rice, wheat and coarse grains were procured. Till December, 94.35 million tonnes were allocated under various welfare schemes. In other words, there was a drawdown of stocks because of enhanced subsidized grain provision to poor people affected by the lockdown.

The survey says the food subsidy bill “is becoming unmanageably large.” The central issue price (CIP) will need to be raised. The CIP of wheat and rice for National Food Security Act (NFSA) beneficiaries has not been revised since the introduction of the Act in 2013. It remains Rs 2/kg for wheat and Rs 3/kg for rice. But the economic cost of wheat for FCI has increased from Rs 1,908.32 per quintal in 2013-14 to Rs 2,683.84 in 2020-21. (The minimum support price of wheat was Rs 1,925 in 2020-21).

The economic cost of rice for FCI has risen from Rs 2,615.51 per quintal in 2013-14 to Rs 3,723.76 per quintal in 2020-21. (The minimum support price for rice was Rs 1,868 per quintal in 2020-21. Economic cost includes FCI’s handling, storage, transportation and interest charges).

The survey says the three central farm laws will help farmers. The law that allows cess-free trading outside the regulated markets will ensure competitive alternative trading channels for efficient, transparent and barrier-free inter-state and intra-state trade. It lists several committees and surveys that had recommended the changes which the central government has enacted.

(Finance Minister Nirmala Sitharaman serving halwa ahead of the Budget Session of Parliament. Photo courtesy of PIB)

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