In 2022, agriculture sector demonstrated resilience

The year 2022 kicked off on an optimistic note with the world emerging from the reeling impact of the Covid pandemic and indications of green shoots of economic recovery. However, the exhilaration was short-lived when, in February, Russia invaded Ukraine, adversely impacting the global economy and India felt its ripple effects as well. As the year draws to an end, there is a lingering concern about the worldwide risk of recession next year and hence, expectations for economic growth have scaled back. Notwithstanding such a challenging external environment, India’s economy has shown resilience and amid worldwide economic headwinds. The country is seen as an oasis in the sinking ocean of economies.

In FY22, India’s agricultural sector experienced buoyant growth and sustained its progress on expected lines. The government budgeted ₹1.24 lakh crore for the Department of Agriculture, Cooperation, and Farmers’ Welfare, and earmarked another ₹8,514 crore for Agricultural Research and Education . Added policy support came in the form of the announcement of a PLI scheme for the food processing sector at an incentive outlay of ₹10,900 crore — starting in 2022 and continuing for six years — to augment India’s manufacturing capabilities and exports. The country’s agriculture exports crossed $50 billion this year, which was the highest ever. Furthermore, to ensure that the farmers benefit from exports, the government made special efforts to provide export market linkage directly to farmers and farmer producer organizations.

International Year of Millets

It is worth mentioning that the government formulated an action plan to promote exports of millets and value-added products of millets. The thrust on millets exports coincides with the UN’s International Year of Millets to be observed in 2023. This year the Prime Minister also flagged off 100 kisan drones to spray pesticides on farms across India, encouraging chemical-free natural farming. In addition, it will also help in crop assessment and digitization of land records.

While commodity prices are rising globally, on Indian shores, the agriculture sector has provided a comfort level for food security. The recent IMF report praised India’s food subsidies and highlighted Pradhan Mantri Garib Kalyan Anna Yojana’s emergency safety net policy of distributing subsidized food to eligible households.

Food granaries in India maintained enough buffer stock, which will not only contain the prices of the food commodities in the market but also leverage the distribution of food to the needy. Reportedly, the central pool stock of wheat was well above the food grains stocking norms. Additionally, during the summer, to control the rising prices of wheat in the domestic market and meet (domestic) demand, the government suspended wheat export and also banned rice exports later in the year. Besides, food inflation eased significantly to 7.04 per cent in October after spiking to a 22-month high of 8.4 per cent in September, due to moderation in fruit, oils, and fat prices.

Surge in Rabi Acreage

The monsoon in India lasted longer than expected thereby leaving enough moisture in the soil for Rabi season crops. This led to a surge in the sowing area of ​​the winter crops resulting in the production of crops like wheat, mustard, and oil seeds. Especially, the focus on oilseeds to reduce import dependency on edible oils and an increase in wheat sowing area bode well for the country as domestic production had dropped in the previous year.

Considering that India is committed to achieving the UN’s Sustainable Development Goals, the country implements a sustainable and climate-smart agricultural system to thwart the threat to food security and environmental sustainability. The government recently announced that for enhanced soil health, it was committed to promoting natural farming, which is favorable for the environment. As a result, the country has decided to retreat to its roots and embrace the Indian Natural Farming System (an ancient technique) for agriculture. Already States like Andhra Pradesh, Gujarat, Himachal Pradesh, Odisha, Madhya Pradesh, Rajasthan, Uttar Pradesh, Tamil Nadu, and a few others have started to innovate to promote natural farming. Additionally, to encourage natural farming, the government has given its nod to a separate scheme named ‘National Mission on Natural Farming’ with an outlay of ₹ 1,584 crore.

Hike in MSP

Concerning farmers’ income, the government has raised the MSP for all authorized kharif, Rabi, and other commercial crops for 2022–23. This not only ensures remunerative prices to the farmers but also encourages the diversification of crops. Besides, a recent report from the State Bank of India indicates 1.3-1.7 times growth in the average farmer’s income between FY18-FY22.

In the year under review, other important developments in the agriculture sector include setting up a special food processing fund of ₹2,000 crore with NABARD to provide affordable credit for investments in setting up Mega Food Parks (MFPs) as well as processing units in the MFPs .

Overall, the agriculture sector is expected to generate better momentum in the next few years due to added investment in infrastructures such as irrigation facilities, warehousing, and cold storage. Thus, agriculture is likely to maintain its growth momentum in the coming year.

(The writer is Deepak Sood , Secretary-General of ASSOCHAM)

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