Economic Survey 2021 | Need to see agriculture sector as 'modern enterprise', urgent reforms required

Lauding the farm sector for demonstrating resilience during the pandemic, the Economic Survey on Friday suggested the government to see farm sector as a "modern business enterprise" for which "urgent reforms" are required to enable sustainable and consistent growth.

India's agricultural sector has shown its resilience amid the adversities of Covid-19 induced lockdowns, the Survey noted.

The agriculture and allied activities were the sole bright spot amid the slide in GDP performance of other sectors, clocking a growth rate of 3.4 per cent at constant prices during 2020-21, it added.

According to the Survey, the farm sector has got "renewed thrust" due to various measures on credit, market reforms and food processing under the Aatmanirbhar Bharat announcements.

Various interventions of the government for the development of allied sectors including animal husbandry, dairying and fisheries exhibit its resolve towards tapping the potential of allied sectors to further enhance farm welfare.

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In addition to various measures aimed at increasing productivity and improving marketing of agricultural produce, the government also carries out a large food management programme with a significant financial implication in terms of food subsidy.

The survey, however, noted that "the objective of inclusive development in India cannot be realised without the development of rural sector which crucially depends on agriculture".

Stating that the progress in agriculture (including forestry and fisheries) has a bearing on the fate of the largest low-income group in India, the Survey said: "There is a need for a paradigm shift in how we view agriculture from a rural livelihood sector to a modern business enterprise."

In this context, both production and post-production in agriculture needs urgent reforms to enable sustainable and consistent growth, it said.

Increase in area under irrigation, adoption of hybrid and improved seeds, increasing variety replacement ratio and augmentation in seed testing facilities will help address low productivity concerns.

Further, adequate storage and remunerative markets for agricultural products should be the main focus of post-production management. It is also important to integrate agriculture with nutritional outcomes by means of food fortification of staples, it added.

On the post-production front, the Survey suggested that measures like village level procurement centres, linkages between production and processing, development of rural markets, option of selling outside the APMC markets – warehouse upgradations and strengthening of railways freight operations, dedicated freight corridors among others are needed and are being taken up.

"These measures will not only reduce post-harvest losses but will also help realise the objective of doubling farmers’ income," it noted.

Stating that all business enterprises need to optimise on inputs - both knowledge and materials, the Survey said therefore it is also essential to impart farmers with basic education and training to transform his/ her role from that of a producer to an entrepreneur.

Read | Economic Survey hints at a 'paradigm shift' in agriculture sector through farm laws

"The option of setting up of rural agricultural schools for hands-on training may be explored in this regard," the Survey suggested.

With regard to allied sectors including animal husbandry, dairying and fisheries, the Survey said they have gradually become a significant source of farm income and employment.

"Measures need to be taken to increase the productivity of the allied sectors along with sufficient provision for marketing of their products," it said.

Another area of emphasis is the need to strengthen agriculture extension services which are extremely important as they provide technical information to the farmer about improved agricultural practices, guidance on the use of these inputs and other services in support of their production, it added.

Agriculture and allied activities engage almost half of India's workforce and contributes close to 18 per cent of the gross value added of the country.