You are here: Home » Economy & Policy » Features
Business Standard

'Agriculture presents contrasting picture of stagnation & change induced by consumption'

The CII-Mckinsey Report says India's farm output may rise by 130% in next 20 years

BS Reporter  |  New Delhi 

RBI governor recently talked of changing consumption pattern in rural areas towards protein diet which has led to higher inflation in these items. In a different context, a CII-report also pointed towards this trend. The third Food and Agriculture Integrated Development Action Report titled: ‘India as an agriculture and high-value food powerhouse: A new vision for 2030’, prepared jointly by and and Company, said the story of Indian agriculture in the past decade or so has been changing gears to some extent with a significant alteration in consumption patterns skewed towards high-value food items prompting higher production of these crops and rise in output per agriculture worker. Barring this small tract, however, India’s agriculture presents a dismal scenario with stagnating yield and low farmers income. This change in consumption pattern has significantly improved India's per capita farmer output, the report said. It said food consumption in India is gradually shifting towards premium food items across rural and urban landscapes which is fuelled by increasing disposable incomes and rapidly evolving consumer needs. “Indians are now spending much more on high-value foods. In fact, the ratio of cereals and pulses in the overall food budget of the average Indian consumer has dropped by more than 25 per cent. Consumption has been shifting from plant-based proteins such as pulses, to animal-based protein such as milk and meat,” the report said. It said that between 2000 and 2010, the contribution of cereals and pulses in the overall per capita food expenditure reduced from 40 per cent to 28 per cent, while that of animal-based products and fruits and vegetables rose from 36 per cent to 42 per cent. This change in consumption pattern has improved productivity of Indian farmers as well and studies show agricultural output per worker increased two times between 2000 and 2010, the report pointed out. “There has been a marked shift in production from basic foodgrains to high-value produce, especially fruits and vegetables.

In 2000, basic foodgrain formed 60 per cent of the total produce by weight, while fruits, vegetables and meat and fibre formed only 38 per cent. By 2010, there was a shift to high-value crops, which formed 45 per cent of total production,” the report said. The increase in the production of certain high-value foods such as soybean, potato, mango, banana and poultry has been up to four times faster than basic produce like rice and wheat. “The study shows a distinct shift by farmers to the high-value portfolio in “pockets of excellence”, where strong demand–supply links have been forged, and increased yields and quality of produce have allowed successful exports in addition to catering to domestic demand agriculture rose as well,” the report said. However, beneath this rosy picture there lies the sordid tale of stagnating yields and slowing farmer income. The report points out number of reasons for the same, which include a slowdown in per hectare yields across all crops, poor quality of seeds, insufficient technology, ineffective extension services, lack of awareness and adoption of best practice methods among farmers, and low adoption of the latest technology, adversely affecting yields. The other main cause of stagnating yields and flat farm growth is the use of outdated practices and inputs, low involvement of organised sector and unfulfilled export potential. “India has made good progress in exports, going from ~90,000 crore from 2006 to 2010 to ~1.35 lakh crore in 2012. However, still the share of exports is about 12 to 14 per cent of production, which is much lower than the world standards,” the report said. It showed that only 35 to 40 per cent of cultivated land in India is irrigated and there is minimal penetration of new water saving technologies like drip irrigation. “The agricultural sector is at yet another cusp of change, which could play out over the next two decades. The past few decades have shown the resilience of India’s farmers in satisfying the nation’s food requirements. India is no longer a calorie-deficit nation and must broaden its horizons and start thinking like a global agricultural powerhouse,” the report said.

First Published: Sat, April 13 2013. 20:39 IST