India’s Agriculture

Indra Sharma has some interesting data about India’s agriculture:

  • Share of agriculture sector has come down from 61% in 1951 to 24% in GDP.
  • Population dependent on rural economy has gone up from 299 million in 1951 to 709 million in 2001.
  • Gross investment in economy is about 26% but the government’s investment in agriculture is only 1.3%. Agriculture’s contribution of 24% to GDP demands an investment of at least 6% of GDP (Som Pal, the former Chairman of the National commission of Farmers, NCF)
  • Growth rates in agriculture sector dropped to 1.7% in 1997-2001 from 3.5% in 1980-90.
  • Food processing is only 2% of the produce. An investment of Rs 1,40,000 crore is needed to raise the food processing to 10%.
  • Over 60% of the price paid by the consumers goes to the traders.
  • Food grain production is about 220 million tones, but the storage capacity is only 70 million tones. Private investment is required in increasing the storage capacity.
  • Power subsidies total to Rs 25,000 crore.
  • Interest on credit is strangely higher for agricultural equipment. One can buy a car on credits from banks at 7% interest but for tractors, the credit interest rates are 12%.
  • National Insurance Scheme covers 41.7 million farmers. But insurance does not cover failure of crops of individual farmers.
  • Investment on irrigation has dropped from 22.6% in 1950s to 5.6%. Over 400 irrigation projects worth Rs 79,000 crore that can irrigate 21 million hectares remain stalled since 1960.
  • Farming in nearly 70% of cultivable land – 100 million hectares out of 142 million hectares is dependent on the mercy of monsoon..
  • Indian farmers use poor quality of 1960 vintage seeds. Practices are primitive to a great extent.
  • India is the second largest food producer in the world. But India has the lowest yield.

  • Published by

    Rajesh Jain

    An Entrepreneur based in Mumbai, India.