Shift from cereals to horticulture gains pace across Indian farms

The past decade has seen farmers slowly but steadily expand acreage under more lucrative fruits and vegetables, signalling a gradual diversification away from cereal crops

Among several quiet transformations that India’s farm sector is undergoing, the gradual shift in acreage away from cereals towards high-value fruits and vegetables is one of the more notable ones.  Data shows that from 2014-15 to 2024-25, the area under horticulture crops—largely fruits and vegetables—has grown at a compound annual growth rate (CAGR) of 1.66 per cent, while that under cereals has risen by 1.08 per cent. However, while the area under vegetables has risen faster at a CAGR of 1.93 per cent, fruits’ acreage has shown a mild de-growth of 0.05 per cent (CAGR) during the same period.  In simple percentage terms, the increase is even more striking.  From 2014-15 to 2024-25, acreage under fruits has grown by 17.35 per cent, under vegetables by almost 23 per cent, and overall horticulture by 26 per cent. In contrast, cereals acreage has risen by only 10.45 per cent.  Over the past five years, too, the trend has remained constant. Prior to 2014-15, though horticulture acreage outstripped cereals then as well, the pace seems to have accelerated and firmed up since then.  The CAGR growth in acreage of fruits between 2019-20 and 2024-25 has been 1.15 per cent, and 2.56 per cent for vegetables. Overall, the area under horticulture crops has grown at a rate of 2.17 per cent annually, while that under cereals has grown 1.57 per cent in that period.  A major reason for this, of course, is that realisations from horticulture are higher than from cereals and crops.  According to a paper by agriculture economist and NITI Aayog member Ramesh Chand, between 2014-15 and 2023-24, the average annual growth rate in value of output (VOP) of cereals at 2011-12 prices was 2.36 per cent, while the same in fruits was 3.68 per cent and 2.77 per cent in vegetables. Among food crops, cereals also recorded the lowest growth rate.  Within the crop sector, the highest growth was seen in the value of output of fodder and grasses at 7.39 per cent. “This is consistent with growth in output of livestock, which rose from 6.20 per cent between 2004-05 and 2013-14 to 7.17 per cent between 2014-15 and 2023-24,” the paper said.  The paper, based on Chand’s Presidential Address at the 24th annual conference of the Indian Association of Social Science Institutions (IASSI) in October last year, pointed out that high-value products saw higher growth compared to average or low-value products such as cereals, oilseeds, and common vegetables.  Rising incomes, changing diets boost horticulture demand  The growth in high-value products such as horticulture is also driven by changing consumer habits, supplemented by rising income levels.  Data show that fruits, along with condiments and spices, clocked the fastest growth in VOP between the three years ending 2013-14 as well as the triennium ending 2023-24 at current prices. In contrast, cereals, cotton, and jute recorded a negative growth of -1.84 per cent and -1.44 per cent, respectively.  According to a NITI Aayog working group report, there has been a significant change in food preferences across all expenditure classes and in rural and urban areas, away from staple foodgrains towards high-value food commodities such as fruits, vegetables, animal-source foods, and processed foods and beverages.  “Thus, the household demand for pulses and high-value food commodities, including fruits, vegetables, and animal-source foods, has been increasing faster compared to other food commodities,” the report said.  As per the working group projections, by 2047-48, India’s demand for vegetables is expected to increase to 365 million tonnes (MT), and of fruits to 233 MT in the Business As Usual (BAU) scenario, and 385–417 MT and 252–283 MT in High Income Growth (HIG) scenarios, respectively.  BAU is defined as a scenario where there is continuance of recent economic growth (6.34 per cent); in such a circumstance, overall food demand is expected to grow at an annual rate of 2.44 per cent through 2047-48. If economic growth accelerates faster than the BAU scenario, food demand is expected to grow to 3.07 per cent.  As per second advance estimates for the cropping season 2024-25 - which runs from June to July - India’s fruit production is estimated at around 115 MT, while vegetable production was estimated at around 220 MT.