The temperatures are rising not only politically, but also atmospherically. It is now confirmed that 2023 was the warmest year on record since 1850 as per the National Oceanic and Atmospheric Administration (NOAA) in the US. The 2023 temperatures were 1.18 degrees Celsius higher than pre-industrial levels, and many scientists are predicting that 2024 could be even worse.
Against this backdrop of rising temperatures, the moot question for us in India is: Will Indian agriculture be able to feed our growing population in the medium to long run, and whether our farmers will also be prosperous in Viksit Bharat@2047 — an aspirational slogan given by Prime Minister Narendra Modi.
Although 2047 is still 23 years away, and it is very difficult to arrive at such long-term projections, a rough idea can be obtained by looking at what happened since reforms began in 1991 and continued, in one way or the other, under various governments. But more interesting would be to see the growth story in the last 10 years under the Narendra Modi government since 2014 and compare it with the 10 years of the Manmohan Singh government. Given that the incumbent government feels very confident of coming back to office with a thumping majority, it is likely to continue its policies of the last 10 years, or may even accelerate to realise its aspiration of a Viksit Bharat by 2047.
The infographic gives average annual growth rates (AAGR) of overall GDP and agri-GDP (2011-12 base, revised series). While the long-term growth rate from 1991-92 to 2023-24 (second advance estimate) of overall GDP is 6.1 per cent, for agri-GDP it is 3.3 per cent. However, during the last 10 years of the Modi government, overall GDP has grown only by 5.9 per cent (compared to 6.8 per cent during Manmohan Singh’s period) and agriculture growth has been 3.6 per cent (compared to 3.5 per cent during the Manmohan Singh period). There is not much of a difference between the two governments with respect to agri-GDP growth.
Agriculture is critical for India’s development as it still engages about 45 per cent of the working population (2022-23, PLFS data). So, if Viksit Bharat has to be an inclusive Bharat, it must develop its agriculture to its full potential. Productivity needs to rise, water consumption needs to be reduced, groundwater needs to be re-charged, soil degradation needs to be arrested, and greenhouse gas (GHG) emissions from agriculture need to be curtailed. Business as usual, with the current set of policies, is not likely to deliver this dream of inclusive Viksit Bharat by 2047.
What we know today is that agriculture contributes roughly 18 per cent to the overall GDP but engages 45 per cent of the workforce — as pointed out earlier. If our growth rates of overall GDP and agri-GDP keep growing as they have during the last 20 years, or even last 10 years, the likely chances are that by 2047, agriculture’s share in overall GDP may drop to just 7-8 per cent but it may still be saddled with more than 30 per cent of the country’s workforce. More people need to move out of agriculture to higher productivity jobs with better skills. Therefore, the skill formation of rural people for rapidly growing and urbanising India has to be a top priority. Else I am afraid, Viksit Bharat will be Viksit only for the top 25 per cent population, while the remaining may remain stuck in the low-medium income category.
The expected overall GDP growth of 7.6 per cent in 2023-24 is a good foundation to build on. The Ministry of Finance and RBI both feel upbeat and expect the final numbers of this year may even be higher. It is good news and many in the tribe of economists feel that this can be maintained for the long run. But how many of us have noted that the agri-GDP growth rate of 2023-24 is a pitiably low 0.7 per cent (second advance estimate)? Do we want a situation where the economic conditions of the masses improve at less than one per cent while overall GDP grows at 7.6 per cent? The answer is obviously “no”.
Remember that agriculture growth dropped to this low level (0.7 per cent) primarily because of unseasonal rains during the last kharif season. And there are no positive signals that the situation will improve. If there are any signals, the risks of extreme weather events are going to increase, as humanity is falling far behind in arresting global warming. Is India in general, and agriculture in particular, ready for that? Not really.
Indian agriculture in Viksit Bharat cannot be on a weak and risky wicket. Two years of successive droughts can spoil the party of Viksit Bharat. Even without a drought, RBI has been fighting almost this entire year to control food inflation. GoI has put export controls, stocking limits on traders, suspended futures trading in many agri-commodities, and unloaded wheat and rice at prices below their economic costs. These are all signs of panic, and policy tools of the 1960s, when India was living from “ship to mouth”. This policy toolbox cannot be carried on in Viksit Bharat.
So, what should be the agenda for agriculture in Viksit Bharat? Rationalise food and fertiliser subsidies, and put the savings to augment agri-R&D, agri-innovations, agri-extension, soil and water recharge through check dams and watersheds, promoting water saving techniques in agriculture (drip and sprinklers, fertigation, protected cultivation, etc). More importantly, Indian agriculture has to move to high-value agriculture (poultry, fishery, dairy, fruits and vegetables) with a value chain approach, from plate to plough, that is, a demand-driven system.
For that, we need to think of policies and institutions through which our farmers can access pan-India markets, and even export markets on a regular basis. Be it through cooperatives or farmer producer organisations (FPOs) on digital commerce (E-NAM, ONDC type) or through contract farming with large processors, retailers, and exporters. And, don’t forget to step off from the brakes on futures trading. The price messenger can’t be shot down in Viksit Bharat.
Gulati is distinguished professor at ICRIER. Views are personal
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