Posted in: Agriculture

Agriculture: Support to Indian economy during covid Pandemic .

The history of Agriculture in India dates back to Indus valley civilization and even before that in some places of Southern India. India ranks  second worldwide in farm outputs. As per 2018, agriculture employed more than 50℅ of the Indian work force and contributed 17–18% to country’s GDP.

In 2016, agriculture and allied sectors like animal husbandry, Forestry and fishery accounted for 15.4% of the GDP (gross domestic product) with about 41.49% of the workforce in 2020. India ranks first in the world with highest net cropped area followed by US and China. The economic contribution of agriculture to India’s GDP is steadily declining with the country’s broad-based economic growth. Still, agriculture is demographically the broadest economic sector and plays a significant role in the overall socio-economic fabric of India.

When the whole world was shut down and a tragedy was faced by the whole due the deadly virus known as covid-19, it not only affected just health of people but also affected or even destroyed many Developed, Growing and even the countries whose economy was already in crises. But before knowing how the covid-19 affected the growing Indian economy we should understand some basic regarding GDP.

GDP: It is the value of all final goods and services produced within a country.

Components of GDP:

  • In general GDP is sum of the following: 
  •     Y = C+ I+ G+ NX

1. Consumption (C):

     Spending by households on goods services with the exception of purchases of new housing.

2. Investment (I): Spending of capital equipment and structure, including new housing.

3. Government Purchases (G):

    Spending on goods and services by local, state and federal governments.

4. Net Exports (NX):

     Exports minus imports.

What happened to Indian economy during the Covid-19 crises?

The answer to this question is:

  • First quarter Report for FY21 came out with Disastrous Figures especially for Indian economy. As GDP Contracts by 23.9% in First quarter FY21 as compared to First Quarter FY2020 5.2% and Q4 FY020 3.1%.showed the highest ever fall in GDP for any quarter in particular FY. 

But it was not the stop of decline here, when the quarter 1st of FY2020 came out the figures was the worst in the history of Indian economy, yes can blame the pandemic for this but reality and the figures will always remain in history. 

All the sectors of the nation which may be Service, Construction all had contraction in their growth with figures like

Industries-38.1
Services-20.6
Manufacturing-39.3
Hotels-4.7
Mining-23.3
PWRE gas-7
Public Admin-10.3
Construction-50.3
Real estates-5.3

All above the sector which contributed the most and was in positive was the sector of agriculture- which is ultimately known as backbone of India and also proved why it is called as backbone of the world largest democracy. But in reality when we look the real scenario the contribution of Agriculture in GDP is just 16-17% and the nation like China and Brazil who has less agriculture land as compared to India contributes more in there GDP, Despite of low rainfall per mm in china which is just 600mm to India 1000mm the production of Agri-products is more than India. The reasons behind such kind of situation are many but one major reason is the lack of technology and investment in the field of as agriculture-sector.

How India can boost its agriculture sector.

To boost and to make agriculture contribute more in Indian economy the government should try to invest more and more in Agri-applied industries and provide more support to Agri Export- Which will for sure the farmer income and can solve the majority of the farmers financial problems.

India ranks amongst the top 10 exporters of agricultural products in the world. According to the WTO’s World Trade Statistical Review 2020, the country’s share in global agricultural exports increased from 1.1% in 2000 to 2.2% in 2017, valued at $39 billion, but fell to 2.1% in 2019, valued at $37 billion. While the US witnessed a decline in its share of global agricultural exports from 13% in 2000 to 9.3% ($165 billion) in 2019, Brazil’s share increased from 2.8% to 5% ($89 billion), and that of China increased from 3% to 4.6% ($82 billion). In order to catch up with Brazil and China, India needs to bring about structural reforms in the agricultural sector, including a stable trade policy regime.

According to the Agricultural and Processed Food Products Export Development Authority (APEDA), during April-October 2020, India’s exports of top three Agri-commodities, viz. basmati rice, non-basmati rice and buffalo meat, in terms of value (in dollars) grew by 9%, 104.4% and 10.5%, respectively, compared to the corresponding period of the previous year. The sharp rise in exports of non-basmati rice can be attributed to lower prices compared to that of major rice exporters, Thailand and Vietnam, and also because these countries stopped exports due to the lockdown. Taking advantage of this, Indian non-basmati rice exporters have been able to meet the increasing import demands from China, Bangladesh and African countries.

With global trade in organic products estimated to be around $90 billion, there is a huge opportunity for exports of value-added organic products from India, which exported $689 million worth of organic food in 2019-20. Madhya Pradesh, Rajasthan, Maharashtra, the North Eastern Region (NER), Uttarakhand and Goa are major producers of organic products. It’s desirable to create Organic Product Export Zones (OPEZs) in these states and the NER, with common infrastructure for processing, standardization, storage, logistics, and connectivity to ports and airports. Branding of products and registration as GI could further facilitate exports of value-added organic products. FPOs of organic farmers could be formed and linked to the OPEZs, to ensure higher income for farmers.

Some other opportunity where India can boost its export is by keeping following points in regular manner.

Economic diplomacy and promotion of Brand India can play an effective role in increasing Agri-exports.

—The AEP has recommended the establishment of Agriculture Export Zones (AEZs), to facilitate value addition of Agri-commodities for increasing exports in a WTO-compatible manner. In order to ensure higher income for farmers, FPOs need to be linked to AEZs to supply SPS-compliant Agri-products.

—Higher investments in R&D and technology, viz. the Internet of Things, artificial intelligence and block chain, for improving agricultural productivity, resource-use efficiency and export competitiveness.

—Linking farmers/FPOs to the export market and skilling of surplus farmers for their absorption in Agri-export value chains could be an important strategy to sustainably raise farmers’ income.

Agriculture is the backbone of India I am hearing since started studying, But covid-19 pandemic showed me in reality why it is called as backbone. Accordingly I also now have a understanding that it’s a time to make agriculture sector more strong and make it so reliable that one day I can proudly hear and say Agriculture is the sector which contribute more to the Indian economy as compared to other sectors.

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Comments (5) on "Agriculture: Support to Indian economy during covid Pandemic ."

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