9- India’s Agriculture and Food Management: The Future of Sustainable Growth
Introduction
India’s agricultural sector has been the backbone of its economy, providing employment, food security, and export revenues. With 16% of the Gross Domestic Product (GDP) contribution and 46.1% of the population dependent on it, agriculture remains a critical sector despite its declining share in the economy. Over the years, government initiatives, technological advancements, and market reforms have helped Indian agriculture evolve from a subsistence-based system to a more diversified and market-oriented sector.
However, climate variability, soil degradation, water scarcity, low productivity, and market inefficiencies pose significant challenges. The sector has demonstrated resilience with an average growth rate of 5% from FY17 to FY23, but it requires further transformation to ensure sustainable growth, increased farmer incomes, and global competitiveness.
This chapter covers:
- Agricultural Growth Trends
- Crop Production and Diversification
- Climate Change and Irrigation Challenges
- Agriculture Finance and Credit
- Technological Interventions in Farming
- Food Processing and Supply Chain Efficiency
- Policy Recommendations for the Future
The Government of India’s focus on modernization, infrastructure investment, and digital transformation can further strengthen agricultural resilience and productivity, ensuring food security for 1.4 billion Indians while positioning India as a global agricultural powerhouse.
1. Agricultural Growth Trends and Economic Contribution
1.1 Growth Performance of Agriculture
- Agriculture and allied activities contributed 16% to India’s GDP in FY24.
- Growth rate in Q2 FY25 was 3.5%, recovering from 0.4%–2% in the previous four quarters.
- Agricultural income grew at 5.23% annually over the past decade, compared to 6.24% for non-agriculture sectors.
- Kharif foodgrain production in 2024 reached 1647.05 Lakh Metric Tonnes (LMT), an increase of 89.37 LMT from the previous year.
1.2 State-Wise Agricultural Growth
- Andhra Pradesh (8.8% CAGR), Madhya Pradesh (6.3%), and Tamil Nadu (4.8%) have led agricultural growth.
- These states have diversified into high-yield crops like jowar, moong, and maize.
- Inter-state yield variation highlights the need for productivity improvements and agricultural infrastructure investments.
2. Crop Production and Diversification
2.1 Performance of Major Crop Segments
- India is the world’s second-largest cereal producer (11.6% of global output).
- Crop yields remain below global averages, highlighting the need for productivity enhancement.
- Crop diversification is shifting towards horticulture, livestock, and fisheries due to higher economic returns.
2.2 Floriculture: India’s Rising Export Sector
- Floriculture exports reached ₹717.83 crore (USD 86.63 million) in FY24.
- Key export markets: USA, Netherlands, UAE, UK, Canada, Malaysia.
- Maharashtra, Karnataka, Tamil Nadu, and Madhya Pradesh are leading floriculture hubs.
2.3 Oilseeds and Pulses: Addressing Import Dependence
- Oilseeds’ slow growth (1.9% CAGR) is concerning, given India’s dependence on edible oil imports.
- Higher Minimum Support Prices (MSP) for pulses and oilseeds aim to incentivize domestic production.
- Nutri-cereals (millets) received a 77% MSP hike to encourage sustainable farming.
3. Climate Change and Irrigation Challenges
3.1 Rainfall Variability and Agricultural Risks
- 55% of India’s net sown area is rain-fed, making it highly vulnerable to climate fluctuations.
- 35% probability of drought occurrence nationally, with arid regions at 40% risk.
- Frequent extreme weather events, including heatwaves and unseasonal rains, impact productivity.
3.2 Expanding Irrigation Coverage
- Irrigated area increased from 49.3% to 55% of the gross cropped area (FY16–FY21).
- Punjab (98%), Haryana (94%), and Telangana (86%) have the highest irrigation coverage.
- Jharkhand and Assam have less than 20% irrigation coverage, necessitating urgent expansion.
3.3 Micro-Irrigation Initiatives
- India’s micro-irrigation area is just 8%, compared to USA (68.6%) and China (13.7%).
- Per Drop More Crop (PDMC) initiative has covered 95.58 lakh hectares since FY16.
- Micro-Irrigation Fund (MIF) allocated ₹4,709 crore, supporting farmers with 2% interest subvention.
4. Agricultural Finance and Credit Expansion
4.1 Growth in Credit to Farmers
- Kisan Credit Card (KCC) covers 7.75 crore farmers, with a loan portfolio of ₹9.81 lakh crore.
- Government interest subvention (7% loans) with Prompt Repayment Incentive (3%) supports timely repayment.
- Ground-Level Credit (GLC) grew from ₹8.45 lakh crore (FY15) to ₹25.48 lakh crore (FY24).
4.2 Crop Insurance and Risk Mitigation
- Pradhan Mantri Fasal Bima Yojana (PMFBY) covers 4 crore farmers, insuring 600 lakh hectares.
- Advanced data technologies (YES-TECH, WINDS, CROPIC) enhance insurance transparency.
- Premium rates have reduced by 32% due to increased participation of state governments and insurers.
5. Digital and Technological Advancements in Agriculture
5.1 Digital Agriculture Initiatives
- e-National Agriculture Market (e-NAM) connects 1.78 crore farmers and 2.62 lakh traders.
- 9,204 Farmer Producer Organizations (FPOs) are registered, promoting direct market linkages.
- Agri-stack and AI-powered analytics improve price discovery and input efficiency.
5.2 Mechanization and Drone Technology
- Sub-Mission on Agricultural Mechanization (SMAM) has established 26,662 Custom Hiring Centers (CHCs).
- 15,000 Women Self-Help Groups (SHGs) received financial assistance for agri-drones.
- 80% subsidy (₹8 lakh per drone) is provided for SHG-led rental services.
6. Food Processing and Supply Chain Modernization
6.1 Expansion of Food Processing
- Food processing accounts for 12.41% of India’s organized manufacturing employment.
- Agri-food exports reached USD 46.44 billion, with processed food comprising 23.4% of total exports.
- Pradhan Mantri Kisan Sampada Yojana (PMKSY) has completed 1,079 projects, strengthening cold storage and logistics.
6.2 Strengthening Food Security
- National Food Security Act (NFSA) covers 81.35 crore people.
- Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) extended free food grain distribution.
- Smart Warehousing and e-NWR Credit Guarantee Scheme improve post-harvest lending.
Conclusion: The Future of Indian Agriculture
Key Strategies for Sustainable Growth
- Expand crop diversification and agroforestry for climate resilience.
- Boost irrigation efficiency and water management through micro-irrigation.
- Strengthen FPOs and cooperative societies for market-driven agriculture.
- Accelerate digital agriculture adoption to enhance productivity.
- Expand food processing and cold chain logistics to minimize post-harvest losses.
By integrating climate-smart agriculture, financial reforms, technology adoption, and sustainable farming practices, India can ensure long-term food security and global competitiveness.