Agriculture, a strategic sector for the Indian economy

The weight of the primary sector in the formation of GDP is in decline due to the steady growth of the industrial and services sectors. Within these dynamics, typical of a country experiences strong economic development, agriculture is not loosing importance but is increasing productivity. Dependence on climatic and weather factors and the fragmentation of land ownership are the persistent critical components in the agricultural system which is, however, differentiated according to region and reasoning

The contribution of the primary sector to India's GDP has been declining in recent years while the service industry and manufacture have been growing, going from 18.5% registered two years ago to the 13.7% reported by the Indian government for the fiscal year 2012-13. This is a very different figure from the 51% recorded in 1950-51 and it indicates the profound transformations of the economy in India. Agriculture does however still play a very important role in India: more than 833 million people, in a population of 1.21 billions, live in rural areas and work in the primary sector, a sector that employs 52% of the labor force and is the direct or indirect source of sustenance for two thirds of the country's population.

The fact that agriculture in the Indian economy plays a smaller role does not however indicate a decrease in agricultural productivity, which has on the contrary increased constantly in recent years. Data reported for the fiscal year 2011-12 indicate a series of record highs in the production of food grain at 259.3 Mt, among which rice coming to105.3 Mt and wheat reaching 94.9 Mt and in the production of cotton, that came to 35.2 million of 170 kg. bales. Also in the horticulture sector, a sector that according to the definition given in India includes fruit, vegetables, roots and tubers, flowers, aromatic and medicinal plants, spices and plantation crops, an increase of the arable land of 23.2 Mha and of production to 257.20 Mt has been reported. Fruit in particular, of which India is the second largest supplier in the world, has been produced in great quantity, 76.4 Mt, while the output of vegetables was estimated at 156.3 Mt.

However a detailed analysis of production data indicates a wide gap still to be bridged between current levels and levels that could be obtained by applying best technologies and best practices in agriculture. It has in fact been calculated that it would be possible to bring the rice harvest, for instance, from the present 2.9 tons per hectare to 5.0, that wheat production could rise from 3.8 to 5.5 tons per hectare, pulse from 0.7 to 1.5 and potatoes from 19.3 to 35. The achievement of these levels of productivity in farming would allow India to complete the Second Green Revolution, i.e. food self sufficiency, a condition India was able to attain in the 1970s but not maintain because of constant population growth and lack of modernization of agricultural techniques.

L'aumento della produttività dei campi è solo una delle sfide che l'agricoltura indiana dovrà affrontare nei prossimi anni: l'introduzione del MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) nel 2005, ai sensi del quale un membro di ciascuna famiglia abitante in zone rurali ha diritto ad un posto di lavoro nello Stato, ha causato negli anni un declino della forza lavoro disponibile in agricoltura, a cui solo l'adozione di nuove macchine ed attrezzature può sopperire. L'agricoltura indiana deve anche ridurre sempre più la propria dipendenza dalle piogge monsoniche, dipendenza che ha portato l'ex Ministro delle Finanze ed attuale Presidente dell'India Pranab Mukherjee ad affermare che "il monsone è il vero Ministro delle Finanze dell'India".

The increase of productivity of arable land is only one of the challenges that Indian agriculture must face in the coming years. The introduction of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2005, according to which one member of every family residing in rural areas is entitled to a government job, has over the years lead to a decline in the available work force in agriculture, a situation that only the employment of modern machinery and equipment can counter. Indian agriculture must also reduce its dependence on monsoon rains: the former Finance Minister and current president of India Pranab Mukherjee once declared that "the Finance Minister of India is actually the real monsoon."

Indian agriculture must also deal with the growing fragmentation of farmlands. In October 2012 the Minister of Agriculture released the first results of the 9th Agriculture Census carried out in 2010-11 which indicated that the average dimension of a plot of land had decreased in size compared to the previous census carried out in 2005-6, going from an average size of 1.23 ha to 1.16 ha meaning that 85% of the 138 million properties registered in India can be classified as marginal or small, covering a surface smaller than 2 ha, while only 0.7% cover a surface larger or as big as 10 ha.

If we analyze the geography of agriculture in India, a federation of 28 states and 7 union territories, it is possible to identify some states in which the primary sector still plays an important role, and others in which it has been surpassed by the service sector and by manufacture. In the North of the country, in the Ganges-Yamuna Doab region that is surrounded by the Himalaya and occupies almost the entire flat alluvial tract between the Ganges and Yamuna rivers, agriculture has always been the most important sector from an economic and social point of view. The states of Punjab and Haryana in particular, have always been the known colloquially as the breadbasket of India and, together with Uttar Pradesh, they produce two thirds of all the grain in the country. The governments of the states in northern India are also the main promoters of a process of farm diversification and land-conversion, with a trend towards reduced wheat cultivation and an increased cultivation of the so-called value added crops, products with a high added value such as fruit, both fresh and dried, and vegetables, that guarantee a larger profit for farmers.

The eastern states of West Bengal and Bihar provide roughly one fourth of the national output of vegetables, while in other eastern states, Orissa and Jharkhand, the contribution to the primary sector is marginal. Economic and geographic conditions in the north-eastern states, to the east of Bangladesh, the so called Seven Sisters States, have not allowed intensive farming to develop, although the climate is extremely favorable to a series of tropical crops.

The state of Madhya Pradesh, in central India, is the only state where agriculture is still one of the most important activities. In Gujarat and Maharashtra, on the other hand, the importance of agriculture has diminished as a result of increasing industrialization, although these states are among the biggest producers of cotton and fruit. Madhya Pradesh could indeed aspire to become the leading state of the country in the agricultural sector if a series of solutions were adopted to improve land productivity. Finally, we conclude this overview of the characteristics of agriculture in India with a look at the states in the south where most of the coffee, tea and rubber plantations are to be found, and in particular Andhra Pradesh, which is the main producer of fruit and one of the most important states for rice cultivation.